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BILTMORE U.S. TREASURY MONEY MARKET FUND
(A PORTFOLIO OF THE BILTMORE FUNDS)
INVESTMENT SHARES
SUPPLEMENT TO THE PROSPECTUS DATED JANUARY 31, 1996
A. Please delete the "Summary of Fund Expenses" table which appears on
page 1 and replace it with the following table:
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BILTMORE U.S. TREASURY MONEY MARKET FUND
SUMMARY OF FUND EXPENSES
<TABLE>
<S> <C>
INVESTMENT SHARES
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Load Imposed on Purchases
(as a percentage of offering price).................................................... None
Maximum Sales Load Imposed on Reinvested
Dividends (as a percentage of offering price).......................................... None
Contingent Deferred Sales Charge (as a percentage of original
purchase price or redemption proceeds, as applicable) (1).............................. 0.00%
Redemption Fees (as a percentage of amount redeemed, if applicable)...................... None
Exchange Fee............................................................................. None
ANNUAL INVESTMENT SHARES OPERATING EXPENSES
(As a percentage of average net assets)
Management Fee (after waiver) (2)........................................................ 0.12%
12b-1 Fees............................................................................... 0.40%
Other Expenses........................................................................... 0.20%
Total Investment Shares Operating Expenses
(after waiver) (3)......................................................... 0.72%
</TABLE>
(1) Shareholders who purchase Investment Shares of the Fund through
exchange of Class B Shares of another Biltmore Fund, may be
charged a contingent deferred sales charge by the Trust's
distributor according to the following schedule:
<TABLE>
YEAR OF REDEMPTION CONTINGENT DEFERRED
AFTER PURCHASE SALES CHARGE
<S> <C>
First......................................................................... 5.00%
Second........................................................................ 4.00%
Third......................................................................... 3.00%
Fourth........................................................................ 3.00%
Fifth......................................................................... 2.00%
Sixth......................................................................... 1.00%
Seventh and thereafter........................................................ 0.00%
</TABLE>
The contingent deferred sales charge is based upon terms and
conditions applicable to redemptions of the Class B Shares of the
Biltmore Fund originally purchased. See "Exchanges."
(2) The management fee has been reduced to reflect the voluntary
waiver by the investment adviser. The adviser can terminate this
voluntary waiver at any time at its sole discretion. The maximum
management fee is 0.50%.
(3) The Annual Investment Shares Operating Expenses were 0.66% for
the fiscal year ended November 30, 1995. The Annual Investment
Shares Operating Expenses are expected to be 1.10%, absent the
voluntary waiver described above in Note 2.
The purpose of this table is to assist an investor in understanding
the various costs and expenses that a shareholder of Investment
Shares of the U.S. Treasury Money Market Fund will bear, either
directly or indirectly. For more complete descriptions of the various
costs and expenses, see "The Biltmore Funds Information" and
"Investing in Investment Shares".
Long-term shareholders may pay more than the economic equivalent of
the maximum sales charge permitted under the rules of the National
Association of Securities Dealers, Inc. However, in order for a Fund
investor to exceed the NASD's maximum sales charge of 6.25%, a
shareholder not subject to the contingent deferred sales charge would
have to maintain a continuous investment in the Fund for 125 years. A
shareholder subject to the contingent deferred sales charge would
have to maintain a continuous investment in the Fund for 42 years.
<TABLE>
<CAPTION>
Example 1 Year 3 Years 5 Years 10 Years
<S> <C> <C> <C> <C>
You would pay the following expenses on a $1,000 investment
assuming: (1) 5% annual return;
(2) redemption at the end of each time period; and
(3) payment of the maximum contingent deferred
sales charge: $59 $57 $65 $89
You would pay the following expenses on the same
investment, assuming no redemption: $7 $23 $36 $89
</TABLE>
THE ABOVE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST
OR FUTURE EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE
SHOWN.
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B. Please add the following as the fourth paragraph of the section
entitled "Exchanges" which begins on page 17:
"Shareholders may exchange Class B Shares of another Biltmore Fund for
Investment Shares of the Biltmore U.S. Treasury Money Market Fund.
Such an exchange will not be subject to a contingent deferred sales
charge. However, if the shareholder redeems the exchanged-for shares
within seven years of the original purchase of Class B Shares, a
contingent deferred sales charge will be imposed. For purposes of
computing the contingent deferred sales charge, the length of time the
shareholder has owned Class B Shares will be measured from the date of
original purchase according to the following schedule and will not be
affected by the exchange:
<TABLE>
YEAR OF REDEMPTION CONTINGENT DEFERRED
AFTER PURCHASE SALES CHARGE
<S> <C>
First............................................................................. 5%
Second............................................................................ 4%
Third............................................................................. 3%
Fourth............................................................................ 3%
Fifth............................................................................. 2%
Sixth............................................................................. 1%
Seventh and thereafter............................................................ 0%
</TABLE>
No contingent deferred sales charge will be imposed on: (1) the
portion of redemption proceeds attributable to increases in the value
of the account due to increases in the net asset value per Share, (2)
Shares acquired through reinvestment of dividends and capital gains,
(3) Shares held for more than seven years after the end of the
calendar month of acquisition, (4) accounts following the death or
disability of a shareholder, or (5) minimum required distributions to
a shareholder over the age of 70-1/2 from an IRA or other retirement
plan."
July 31, 1996
Cusip 090297888
G00807-15 (7/96)
