THE WACHOVIA FUNDS & THE WACHOVIA MUNICIPAL FUNDS
CLASS A SHARES
CLASS Y SHARES
(ALL PORTFOLIOS)
CLASS B SHARES
(WACHOVIA EQUITY FUND)
(WACHOVIA QUANTITATIVE EQUITY FUND)
(WACHOVIA BALANCED FUND)
(WACHOVIA FIXED INCOME FUND)
SUPPLEMENT TO PROSPECTUSES DATED JULY 31, 1997
Please delete the fourth sentence of the first paragraph under the section
entitled "Wachovia Fixed Income Fund" and replace it with the following:
"The Fund pursues its investment objectives by investing primarily in a
diversified portfolio of fixed income securities that, at the time of
purchase, are rated in the top four investment categories by a nationally
recognized statistical rating organization (NRSRO) or, if unrated, are of
comparable quality to securities with such ratings."
In addition, please insert the following as a second bullet-point within the
same section:
"with respect to 5% of the Fund's total assets, corporate debt
obligations, including demand master notes rated at the time of
purchase Baa by Moody's or BBB by S&P or, if unrated, of comparable
quality as determined by the Fund's investment adviser;"
Please insert the following as a second bullet-point within the sub-section
entitled "Characteristics" under the section entitled "State Municipal
Securities":
"with respect to 5% of total Fund assets, rated Baa by Moody's or BBB by
S&P at time of purchase;"
Please delete the second paragraph within the sub-section entitled
"Collateralized Mortgage Obligations" under the section entitled "Portfolio
Investments" and replace it with the following:
"A Fund may invest in CMOs which are rated AAA by an NRSRO or are of
comparable quality as determined by a Fund's investment adviser, and which
may be: (a) collateralized by pools of mortgages in which each mortgage is
guaranteed as to payment of principal and interest by an agency or
instrumentality of the U.S. government; (b) collateralized by pools of
mortgages in which payment of principal and interest is guaranteed by the
issuer and such guarantee is collateralized by U.S. government securities;
or (c) collateralized by pools of mortgages without a government guarantee
as to payment of principal and interest, but which have some form of
credit enhancement. The FIXED INCOME FUND may also invest up to 5% of its
total assets in CMOs which are rated Aa, A, or Baa by Moody's or AA, A, or
BBB by S&P."
Please insert the following as the fourth sentence of the first paragraph within
the sub-section entitled "Asset-Backed Securities" under the section entitled
"Portfolio Investments":
"The FIXED INCOME FUND may invest up to 5% of its total assets in
asset-backed securities rated Baa by Moody's or BBB by S&P."
Please insert the following biographical information under the section entitled
"Adviser's Background":
"Roger L. Glenski is a portfolio manager of the SPECIAL VALUES FUND. Mr.
Glenski joined Wachovia Asset Management in 1996, specializing in the valuation
of closely-held businesses and small companies. Prior to joining Wachovia, he
was employed by the accounting firm of Deloitte & Touche LLP in Chicago,
Illinois. Mr. Glenski received a Bachelor's degree from the University of
Missouri-Kansas City and an MBA from the University of Chicago. He is a
Certified Public Accountant.
Wayne F. Morgan is a portfolio manager of the BALANCED FUND and the FIXED
INCOME FUND. He is a Senior Vice President of Wachovia Asset Management. Mr.
Morgan joined Wachovia in June, 1997 as a senior fixed-income portfolio manager.
Prior to joining Wachovia, he served as the Director of Investments at The
University of North Carolina at Chapel Hill, where he oversaw the management of
the University's endowment fund. Mr. Morgan is a native of North Carolina. He
received both a BBA and an MBA from the University of North Carolina at Chapel
Hill. Mr. Morgan is a Chartered Financial Analyst.
Michael G. Sebesta is a portfolio manager of the BALANCED FUND and the
FIXED INCOME FUND. He is a Vice President and Fixed-Income Portfolio
Manager for Wachovia Asset Management. Mr. Sebesta joined Wachovia's
Columbia, South Carolina Funds Management area as assistant vice
president/portfolio manager in July, 1989. He became a mortgage securities
trader for the Bond and Money Market Group in February, 1992 and was
elected Vice President in 1993. In June, 1995 he became the investment
portfolio manager for the Wachovia Bank Funds Management Group and joined
Wachovia Asset Management as a fixed-income portfolio manager in July,
1997. Mr. Sebesta is a native of Jacksonville, Florida. He has a BA in
Economics from Wake Forest University."
Please delete R. Emery Pike's biography and insert the following in its place:
"Robert E. Pike is a Chartered Financial Analyst and Senior Vice President
of Wachovia Asset Management. Mr. Pike joined Wachovia Bank, N.A. in 1985 as a
bond sales associate and assumed his present position in June, 1989. He is a
portfolio manager of the BALANCED FUND and the FIXED INCOME FUND. Mr. Pike holds
both a BA in History and an MBA from Wake Forest University."
In addition, the biographies of Samuel M. Gibbs II and Michael W. Holt should
reflect that they also manage the BALANCED FUND and the FIXED INCOME FUND. The
biography of Harold (Rick) Nelson III should reflect that he also manages the
FIXED INCOME FUND.
Please delete the section entitled "Administration of the Funds" and replace it
with the following:
"Federated Services Company, Pittsburgh, Pennsylvania, a subsidiary of
Federated Investors, through its various subsidiaries, provides the Funds
with the administrative personnel and services, portfolio recordkeeping
and transfer agency services necessary to operate the Funds. Such services
include legal, accounting and other administrative services. Federated
Services Company provides these at an annual rate, computed and payable
daily, as specified below:
AVERAGE AGGREGATE DAILY NET
ASSETS OF THE WACHOVIA FUNDS
MAXIMUM (EXCLUDING WACHOVIA PRIME CASH MANAGEMENT FUND)
ADMINISTRATIVE FEE AND OF THE WACHOVIA MUNICIPAL FUNDS
0.10 of 1% on the first $3.5 billion
0.06 of 1% on assets in excess of $3.5 billion
Federated Services Company may choose voluntarily to waive or reimburse a
portion of its fee at any time."
Please note that the Wachovia Balanced Fund and the Wachovia Fixed Income Fund
may each invest in foreign government bond futures contracts. Although these
futures will be entered into primarily for hedging purposes only, such
transactions do involve certain risks. These risks include a lack of correlation
between the futures contract and the price of the underlying obligation, as well
as the risk of fluctuation in the value of foreign currencies in which the
underlying obligation may be denominated. Please see the Funds' prospectus and
Statement of Additional Information for a discussion of the risks generally
associated with futures contracts, investment in foreign issuers and foreign
currency transactions.
December 19, 1997
G02165-02 (12/97)
[GRAPHIC OMITTED]
WACHOVIA EMERGING MARKETS FUND
WACHOVIA FIXED INCOME FUND
(PORTFOLIOS OF THE WACHOVIA FUNDS)
WACHOVIA GEORGIA MUNICIPAL BOND FUND
WACHOVIA NORTH CAROLINA MUNICIPAL BOND FUND
WACHOVIA SOUTH CAROLINA MUNICIPAL BOND FUND
(PORTFOLIOS OF THE WACHOVIA MUNICIPAL FUNDS)
SUPPLEMENT TO STATEMENT OF ADDITIONAL INFORMATION DATED JULY 31, 1997
Please insert the following new section immediately after the section entitled
"Variable Rate U.S. Government Securities":
"RATINGS
The Fixed Income Fund, Georgia Municipal Bond Fund, North Carolina
Municipal Bond Fund, and South Carolina Municipal Bond Fund may invest up
to 5% of their respective total assets in securities rated Baa by Moody's
or BBB by S&P. These securities have speculative characteristics. Changes
in economic conditions or other circumstances are more likely to lead to
weakened capacity to make principal and interest payments than higher
rated bonds. Downgrades will be evaluated on a case by case basis by the
adviser. The adviser will determine whether or not the security continues
to be an acceptable investment. If not, the security will be sold."
In addition, within the section entitled "Investment Philosophy of the Emerging
Markets Fund," please revise the second to the last sentence to include Romania,
Russia, and South Africa.
December 19, 1997
[GRAPHIC OMITTED]
G02165-03 (12/97)
[GRAPHIC OMITTED]
Cusip 929901684
Cusip 929901304
Cusip 929901833
G02165-05 (12/97)
[GRAPHIC OMITTED]
WACHOVIA PRIME CASH MANAGEMENT FUND
WACHOVIA TAX-FREE MONEY MARKET FUND
WACHOVIA U.S. TREASURY MONEY MARKET FUND
INSTITUTIONAL SHARES
(PORTFOLIOS OF THE WACHOVIA FUNDS)
SUPPLEMENT TO PROSPECTUS DATED JULY 31, 1997
Please delete the section entitled "Administrative Services" on page 14 and
replace it with the following:
"ADMINISTRATIVE SERVICES. Federated Services Company, Pittsburgh,
Pennsylvania, a subsidiary of Federated Investors, through its various
subsidiaries, provides the Funds with the administrative personnel and
services, portfolio recordkeeping and transfer agency services necessary
to operate the Funds. Such services include legal, accounting and other
administrative services. Federated Services Company provides these to the
Prime Cash Management Fund at an annual rate, computed and payable daily,
of 0.05 of 1% of average daily net assets of the Prime Cash Management
Fund. Federated Services Company provides the services listed above to the
Tax-Free Fund and the U.S. Treasury Fund at an annual rate, computed and
payable daily, as specified below:
AVERAGE AGGREGATE DAILY NET
ASSETS OF THE WACHOVIA FUNDS
MAXIMUM (EXCLUDING WACHOVIA PRIME CASH MANAGEMENT FUND)
ADMINISTRATIVE FEE AND OF THE WACHOVIA MUNICIPAL FUNDS
0.10 of 1% on the first $3.5 billion
0.06 of 1% on assets in excess of $3.5 billion
Federated Services Company may choose voluntarily to waive or reimburse a
portion of its fee at any time."
December 19, 1997
Cusip 929901106
G02165-06 (12/97)
[GRAPHIC OMITTED]
WACHOVIA MONEY MARKET FUND
INSTITUTIONAL SHARES
(A PORTFOLIO OF THE WACHOVIA FUNDS)
SUPPLEMENT TO PROSPECTUS DATED JULY 31, 1997
Please delete the section entitled "Administrative Services" on page 7 and
replace it with the following:
"ADMINISTRATIVE SERVICES. Federated Services Company, Pittsburgh,
Pennsylvania, a subsidiary of Federated Investors, through its various
subsidiaries, provides the Fund with the administrative personnel and
services, portfolio recordkeeping and transfer agency services necessary
to operate the Fund. Such services include legal, accounting and other
administrative services. Federated Services Company provides these at an
annual rate, computed and payable daily, as specified below:
AVERAGE AGGREGATE DAILY NET
ASSETS OF THE WACHOVIA FUNDS
MAXIMUM (EXCLUDING WACHOVIA PRIME CASH MANAGEMENT FUND)
ADMINISTRATIVE FEE AND OF THE WACHOVIA MUNICIPAL FUNDS
0.10 of 1% on the first $3.5 billion
0.06 of 1% on assets in excess of $3.5 billion
Federated Services Company may choose voluntarily to waive or reimburse a
portion of its fee at any time."
December 19, 1997
Cusip 929901205
Cusip 929901403
Cusip 929901825
G02165-04 (12/97)
[GRAPHIC OMITTED]
WACHOVIA MONEY MARKET FUND
WACHOVIA TAX-FREE MONEY MARKET FUND
WACHOVIA U.S. TREASURY MONEY MARKET FUND
INVESTMENT SHARES
(PORTFOLIOS OF THE WACHOVIA FUNDS)
SUPPLEMENT TO PROSPECTUS DATED JULY 31, 1997
Please delete the section entitled "Administrative Services" on page 16 and
replace it with the following:
"ADMINISTRATIVE SERVICES. Federated Services Company, Pittsburgh,
Pennsylvania, a subsidiary of Federated Investors, through its various
subsidiaries, provides the Funds with the administrative personnel and
services, portfolio recordkeeping and transfer agency services necessary
to operate the Funds. Such services include legal, accounting and other
administrative services. Federated Services Company provides these at an
annual rate, computed and payable daily, as specified below:
AVERAGE AGGREGATE DAILY NET
ASSETS OF THE WACHOVIA FUNDS
MAXIMUM (EXCLUDING WACHOVIA PRIME CASH MANAGEMENT FUND)
ADMINISTRATIVE FEE AND OF THE WACHOVIA MUNICIPAL FUNDS
0.10 of 1% on the first $3.5 billion
0.06 of 1% on assets in excess of $3.5 billion
Federated Services Company may choose voluntarily to waive or reimburse a
portion of its fee at any time."
December 19, 1997
