1933 Act File No. 33-46431
1940 Act File No. 811-6607
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 X
Pre-Effective Amendment No. .........................
Post-Effective Amendment No. 16............................ X
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 X
Amendment No. 19................................................ X
DG INVESTOR SERIES
(Exact Name of Registrant as Specified in Charter)
Federated Investors Tower, Pittsburgh, Pennsylvania 15222-3779
(Address of Principal Executive Offices)
(412) 288-1900
(Registrant's Telephone Number)
John W. McGonigle, Esquire,
Federated Investors Tower,
Pittsburgh, Pennsylvania 15222-3779
(Name and Address of Agent for Service)
It is proposed that this filing will become effective:
immediately upon filing pursuant to paragraph (b)
_X on August 31, 1997, pursuant to paragraph (b)
_ 60 days after filing pursuant to paragraph (a) (i) on pursuant to paragraph
(a) (i) 75 days after filing pursuant to paragraph (a)(ii) on
_________________ pursuant to paragraph (a)(ii) of Rule 485.
If appropriate, check the following box:
This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
Registrant has filed with the Securities and Exchange Commission a declaration
pursuant to Rule 24f-2 under the Investment Company Act of 1940, and:
X filed the Notice required by that Rule on April 15, 1997; or intends to file
the Notice required by that Rule on or about ____________; or
during the most recent fiscal year did not sell any securities pursuant to
Rule 24f-2 under the Investment Company Act of 1940, and, pursuant to Rule
24f-2(b)(2), need not file the Notice.
Copies To:
Matthew G. Maloney, Esquire
Dickstein Shapiro Morin & Oshinsky LLP
2101 L Street, N.W.
Washington, D.C. 20037
<PAGE>
CROSS-REFERENCE SHEET
This Amendment to the Registration Statement of DG INVESTOR SERIES
which consists of nine portfolios: (1) DG U.S. Government Money Market Fund, (2)
DG Limited Term Government Income Fund, (3) DG Government Income Fund, (4) DG
Equity Fund, (5) DG Municipal Income Fund, (6) DG Opportunity Fund, (7) DG Prime
Money Market Fund, (8) DG International Equity Fund and (9) DG Mid Cap Fund
(currently in registration), relates only to portfolio (7) and is comprised of
the following:
PART A. INFORMATION REQUIRED IN A PROSPECTUS.
Prospectus Heading
(Rule 404(c) Cross Reference)
Item 1. Cover Page....................(1-9) Cover Page.
Item 2. Synopsis......................(1-6) Synopsis; (7,8,9) General
Information; (1-9) Summary of
Fund Expenses; (1-6) Financial
Highlights.
Item 3. Condensed Financial
Information (1-9) Performance Information.
Item 4. General Description of
Registrant....................(1-6) Objectives and Policies of
Each Fund;(7,8,9) Investment
Information; (8,9) Investment
Objective; (8,9) Investment
Policies; (1-6)
Portfolio Investments and
Strategies; (8) Risks Associated
With Financial Futures Contracts
And Options on Financial Futures
Contracts; (8) Non-Diversified;
(1-9) Investment Limitations.
Item 5. Management of the Fund........(1-6,9) DG Investor Series
Information;(7,8) Trust
Information; (1-9) Management of
the Trust; (1-9) Distribution of
Fund Shares; (1-6)
Administration of the Funds;(7,
8,9) Administration of the Fund;
(8,9) Distribution and
Shareholder Services Plans; (8,
9) Shareholder Servicing
Arrangements; (6) Shareholder
Services Plan; (1-9) Brokerage
Transactions; (9) Expenses of
the Fund.
Item 6. Capital Stock and Other
Securities....................(1-6,9) Dividends and
Distributions; (7, 8) Dividends;
(1,7,8,9) Capital Gains; (1-6,9)
Shareholder Information; (7,8)
Account & Shareholder
Information; (1-9) Voting
Rights; (1-9) Tax Information;
(1-9) Federal Income Tax; (5)
Additional Tax Information for
Municipal Income Fund; (5)
Other State and Local Taxes; (9)
State and Local Taxes; (1-9)
Effect of Banking Laws.
Item 7. Purchase of Securities Being
Offered.......................(1-9) Net Asset
Value; (1-6)
Investing in the
Funds; (7,8,9)
Investing in the
Fund; (1-9) Share
Purchases; (1-9)
Minimum Investment
Required; (1-9)
What Shares Cost;
(2-6) Reducing the
Sales Charge;
(1-9) Systematic
Investment
Program; (1-9)
Certificates and
Confirmations;
(1-9) Exchanging
Shares; (1-9)
Exchange
Privilege.
Item 8. Redemption or Repurchase......(1-9) Redeeming Shares; (1-9)
Through the Banks; (1-9)
Systematic Withdrawal Program;
(1-9) Accounts With Low
Balances.
Item 9. Pending Legal Proceedings.....None.
<PAGE>
PART B. INFORMATION REQUIRED IN A STATEMENT OF ADDITIONAL INFORMATION.
Item 10. Cover Page.......................(1-9) Cover Page.
Item 11. Table of Contents................(1-9) Table of Contents.
Item 12. General Information and
History .........................(1-6) General Information About the
Funds; (8,9) General Information About
the Fund.
Item 13. Investment Objectives and
Policies.........................(1-6,8,9) Investment Objective(s) and
Policies; (7) Investment Policies;
(4,6) Equity Fund and Opportunity
Fund; (2,3) Limited Term Fund and
Government Income Fund; (5) Municipal
Income Fund; (1) Money Market Fund;
(1-6) Investment Policies and
Strategies; (1-9) Investment
Limitations;(1,7) Regulatory
Compliance.
Item 14. Management of the Fund...........(1-9) DG Investor Series Management.
Item 15. Control Persons and Principal
Holders of Securities............(1-6,9) Trust Ownership; (7,8) Share
Ownership; (1-9) Trustees'
Compensation; (1-9) Trustee Liability.
Item 16. Investment Advisory and Other
Services.........................(1-9) Investment
Advisory Services;
(1-6) Adviser to
the Funds; (7,8,9)
Investment
Adviser; (8,9)
Sub-Adviser;(1-9)
Advisory Fees;
(2-6) Sub-Adviser
to the Funds;
(8,9) Sub-Adviser;
(2-6,8,9)
Sub-Advisory Fees;
(1-8) Other
Services; (1-6)
Administration of
the Trust; (8,9)
Fund
Administration;(1-6)
Custodian; (7,8,9)
Custodian &
Portfolio
Accountant; (1-6)
Transfer Agent,
Dividend
Disbursing Agent
and Shareholder
Servicing Agent;
(7,8,9) Transfer
Agent; (1-9)
Independent
Auditors.
Item 17. Brokerage Allocation.............(1-9) Brokerage Transactions.
Item 18. Capital Stock and Other
Securities Not Applicable.
Item 19. Purchase, Redemption and
Pricing of Securities Being
Offered..........................(1-9) Purchasing
Shares; (1-9)
Conversion to
Federal Funds;
(1-9) Exchange
Privilege; (1-9)
Requirements for
Exchange; (1-9)
Making an
Exchange; (1-9)
Determining Net
Asset Value;
(2-4,6)
Determining Market
Value of
Securities; (5)
Valuing Municipal
Securities; (1)
Use of the
Amortized Cost
Method; (1-9)
Redeeming Shares;
(1-9) Redemption
in Kind; (1-9)
Massachusetts
Partnership Law.
Item 20. Tax Status.......................(1-9) Tax Status (1-6) The Funds' Tax
Status; (7,8,9) The Fund's Tax Status;
(1-9) Shareholders' Tax Status;
Item 21. Underwriters.....................(1-5,7) Distribution Plan; (6,8,9)
Distribution and Shareholder Services
Plans;
Item 22. Calculation of Performance
Data.............................(1-9) Performance Comparisons; (1-9)
Yield; (1,7) Effective Yield; (1-9)
Total Return; (5) Tax-Equivalent Yield;
(5) Tax-Equivalency Table;
Item 23. Financial Statements.............(1-6) Incorporated herein by reference
to the Trust's Annual Report dated
February 28, 1997 (File Nos. 33-46431
and 811-6607); (7) Filed in
supplement to Part A; (8,9) To be
filed by amendment.
DG PRIME MONEY MARKET FUND
(A Portfolio of DG Investor Series)
- --------------------------------------------------------------------------------
SUPPLEMENT TO THE COMBINED PROSPECTUS DATED JUNE 30, 1997
A. Please insert the following "Financial Highlights" table for Prime Money
Market Fund immediately following the section entitled "Financial Highlights"
which begins on page 4 of the prospectus:
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED)
JUNE 30, 1997
---------------
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $1.00
- -------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- -------------------------------------------------------------------------------------
Net investment income 0.02
- -------------------------------------------------------------------------------------
LESS DISTRIBUTIONS
- -------------------------------------------------------------------------------------
Distributions from net investment income (0.02)
- ------------------------------------------------------------------------------------- ---------
NET ASSET VALUE, END OF PERIOD $1.00
- ------------------------------------------------------------------------------------- ---------
TOTAL RETURN (B) 1.51%
- -------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- -------------------------------------------------------------------------------------
Expenses 0.69%*
- -------------------------------------------------------------------------------------
Net investment income 4.93%*
- -------------------------------------------------------------------------------------
Expense waiver/reimbursement (c) 0.26%*
- -------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
- -------------------------------------------------------------------------------------
Net assets, end of period (000 omitted) $163,763
- -------------------------------------------------------------------------------------
</TABLE>
* Computed on an annualized basis.
(a) Reflects operations for the period from March 10, 1997 (date of initial
public investment) to June 30, 1997.
(b) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
B. Please delete the third paragraph of the section entitled "Voting rights"
which begins on page 17 of the prospectus and replace it with the following:
"As of August 1, 1997, National Financial Services Corp., for the exclusive
benefit of its customers, was the owner of record of 148,923,506 shares (100%)
of Prime Money Market Fund, and therefore, may, for certain purposes, be deemed
to control the Fund and be able to affect the outcome of certain matters
presented for vote of shareholders."
C. Please insert the following "Financial Statements" for Prime Money Market
Fund immediately following the section entitled "Performance Information" on
page 19 of the prospectus.
DG PRIME MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS
JUNE 30, 1997 (UNAUDITED)
-----------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ----------- ----------------------------------------------------------- ------------
<C> <C> <S> <C>
(A)COMMERCIAL PAPER--82.7%
- ------------------------------------------------------------------------------
BROKERAGE--3.6%
-----------------------------------------------------------
$ 6,000,000 Merrill Lynch & Co., Inc., 5.671%, 10/6/1997 $ 5,909,790
----------------------------------------------------------- ------------
CONSUMER PRODUCTS--3.0%
-----------------------------------------------------------
5,000,000 Gillette Co., 5.626%, 7/11/1997 4,992,264
----------------------------------------------------------- ------------
ELECTRICAL EQUIPMENT--3.0%
-----------------------------------------------------------
5,000,000 General Electric Co., 5.658%, 7/9/1997 4,993,789
----------------------------------------------------------- ------------
FINANCE--AUTOMOTIVE--9.1%
-----------------------------------------------------------
5,000,000 Daimler Benz North America Corp., 5.549%, 7/16/1997 4,988,500
-----------------------------------------------------------
5,000,000 Ford Motor Credit Corp., 5.649%, 7/2/1997 4,999,222
-----------------------------------------------------------
5,000,000 Toyota Motor Credit Corp., 5.562%, 8/26/1997 4,957,144
----------------------------------------------------------- ------------
Total 14,944,866
----------------------------------------------------------- ------------
FINANCE--COMMERCIAL--9.1%
-----------------------------------------------------------
5,000,000 CIT Group Holdings, Inc., 5.603%, 8/5/1997 4,973,021
-----------------------------------------------------------
5,000,000 IBM Credit Corp., 5.594%, 8/20/1997 4,961,528
-----------------------------------------------------------
5,000,000 MetLife Funding, Inc., 5.586%, 8/22/1997 4,960,061
----------------------------------------------------------- ------------
Total 14,894,610
----------------------------------------------------------- ------------
FINANCE--RETAIL--3.0%
-----------------------------------------------------------
5,000,000 Commercial Credit Co., 5.605%, 8/14/1997 4,966,083
----------------------------------------------------------- ------------
</TABLE>
DG PRIME MONEY MARKET FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ----------- ----------------------------------------------------------- ------------
<C> <C> <S> <C>
(A)COMMERCIAL PAPER--CONTINUED
- ------------------------------------------------------------------------------
FINANCIAL SERVICES--3.3%
-----------------------------------------------------------
$ 5,400,000 National Rural Utilities Cooperative Finance Corp., 5.547%,
7/23/1997 $ 5,381,850
----------------------------------------------------------- ------------
FOOD & BEVERAGE--6.1%
-----------------------------------------------------------
5,000,000 Anheuser-Busch Cos., Inc., 5.625%, 8/18/1997 4,963,000
-----------------------------------------------------------
5,000,000 PepsiCo, Inc., 5.546%, 7/14/1997 4,990,069
----------------------------------------------------------- ------------
Total 9,953,069
----------------------------------------------------------- ------------
INDUSTRIAL--9.1%
-----------------------------------------------------------
5,000,000 Cargill, Inc., 5.665%, 9/30/1997 4,929,728
-----------------------------------------------------------
5,000,000 Engelhard Corp., 5.700%, 8/11/1997 4,967,997
-----------------------------------------------------------
5,000,000 Fluor Corp., 5.621%, 7/31/1997 4,976,792
----------------------------------------------------------- ------------
Total 14,874,517
----------------------------------------------------------- ------------
INSURANCE--9.1%
-----------------------------------------------------------
5,000,000 AIG Funding, Inc., 5.686%, 10/1/1997 4,928,700
-----------------------------------------------------------
5,000,000 Prudential Funding Corp., 5.599%, 8/28/1997 4,955,372
-----------------------------------------------------------
5,000,000 USAA Capital Corp., 5.697%, 7/21/1997 4,984,389
----------------------------------------------------------- ------------
Total 14,868,461
----------------------------------------------------------- ------------
PHARMACEUTICALS--HEALTH CARE--6.0%
-----------------------------------------------------------
5,000,000 Glaxo Wellcome PLC, 5.638%, 9/23/1997 4,935,133
-----------------------------------------------------------
5,000,000 Schering Plough Corp., 5.630%, 10/28/1997 4,908,767
----------------------------------------------------------- ------------
Total 9,843,900
----------------------------------------------------------- ------------
TELECOMMUNICATIONS--9.2%
-----------------------------------------------------------
5,000,000 AT&T Corp., 5.559%, 7/1/1997 5,000,000
-----------------------------------------------------------
5,000,000 NYNEX Corp., 5.536%, 7/18/1997 4,986,990
-----------------------------------------------------------
5,000,000 Southwestern Bell Telephone Co., 5.572%, 7/29/1997 4,978,533
----------------------------------------------------------- ------------
Total 14,965,523
----------------------------------------------------------- ------------
UTILITIES-ELECTRIC--9.1%
-----------------------------------------------------------
5,000,000 Alabama Power Co., 5.634%, 7/25/1997 4,981,433
-----------------------------------------------------------
</TABLE>
DG PRIME MONEY MARKET FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ----------- ----------------------------------------------------------- ------------
<C> <C> <S> <C>
(A)COMMERCIAL PAPER--CONTINUED
- ------------------------------------------------------------------------------
UTILITIES-ELECTRIC--CONTINUED
-----------------------------------------------------------
$ 5,000,000 Florida Power & Light Co., 5.523%, 7/7/1997 $ 4,995,417
-----------------------------------------------------------
5,000,000 Southern California Edison Co., 5.623%, 9/19/1997 4,938,333
----------------------------------------------------------- ------------
Total 14,915,183
----------------------------------------------------------- ------------
TOTAL COMMERCIAL PAPER 135,503,905
----------------------------------------------------------- ------------
GOVERNMENT AGENCIES--9.1%
- ------------------------------------------------------------------------------
(B) FEDERAL FARM CREDIT BANK, DISCOUNT NOTE--3.0%
-----------------------------------------------------------
5,000,000 5.485%, 9/4/1997 4,952,424
----------------------------------------------------------- ------------
(B) FEDERAL HOME LOAN BANK, DISCOUNT NOTE--3.0%
-----------------------------------------------------------
5,000,000 5.729%, 9/25/1997 4,934,306
----------------------------------------------------------- ------------
(B) FEDERAL NATIONAL MORTGAGE ASSOCIATION, DISCOUNT NOTE--3.1%
-----------------------------------------------------------
5,000,000 5.452%, 8/7/1997 4,972,969
----------------------------------------------------------- ------------
TOTAL GOVERNMENT AGENCIES 14,859,699
----------------------------------------------------------- ------------
U.S. TREASURY NOTE--3.7%
- ------------------------------------------------------------------------------
6,000,000 6.500%, 8/15/1997 6,007,677
----------------------------------------------------------- ------------
(C)REPURCHASE AGREEMENTS--4.9%
- ------------------------------------------------------------------------------
8,047,100 Eastbridge Capital, 6.000%, dated 6/30/1997, due 7/1/1997 8,047,100
----------------------------------------------------------- ------------
TOTAL INVESTMENTS (AT AMORTIZED COST)(D) $164,418,381
----------------------------------------------------------- ------------
</TABLE>
(a) Each issue shows the rate of discount at the time of purchase for discount
issues, or the coupon for interest bearing issues.
(b) Discount rate at time of purchase.
(c) The repurchase agreement is fully collateralized by U.S. government and/or
agency obligations based on market prices at the date of the portfolio.
(d) Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets
($163,763,466) at June 30, 1997.
The following acronym is used throughout this portfolio:
PLC -- Public Limited Company
(See Notes which are an integral part of the Financial Statements)
DG PRIME MONEY MARKET FUND
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1997 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- -------------------------------------------------------------------------------
Total investments in securities, at amortized cost and value $164,418,381
- -------------------------------------------------------------------------------
Cash 84
- -------------------------------------------------------------------------------
Income receivable 147,861
- ------------------------------------------------------------------------------- ------------
Total assets 164,566,326
- -------------------------------------------------------------------------------
LIABILITIES:
- -------------------------------------------------------------------------------
Income distribution payable 658,830
- --------------------------------------------------------------------
Accrued expenses 144,030
- -------------------------------------------------------------------- --------
Total liabilities 802,860
- ------------------------------------------------------------------------------- ------------
Net Assets for 163,763,466 shares outstanding $163,763,466
- ------------------------------------------------------------------------------- ------------
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PROCEEDS PER SHARE:
- -------------------------------------------------------------------------------
$163,763,466 / 163,763,466 shares outstanding $1.00
- ------------------------------------------------------------------------------- ------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
DG PRIME MONEY MARKET FUND
STATEMENT OF OPERATIONS
PERIOD ENDED JUNE 30, 1997 (UNAUDITED)*
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
- ---------------------------------------------------------------------------------------------
Interest $2,561,615
- ---------------------------------------------------------------------------------------------
EXPENSES:
- ---------------------------------------------------------------------------------------------
Investment advisory fee $ 227,862
- --------------------------------------------------------------------------------
Administrative personnel and services fee 46,525
- --------------------------------------------------------------------------------
Custodian fees 7,048
- --------------------------------------------------------------------------------
Transfer and dividend disbursing agent fees and expenses 4,527
- --------------------------------------------------------------------------------
Directors'/Trustees' fees 757
- --------------------------------------------------------------------------------
Auditing fees 2,448
- --------------------------------------------------------------------------------
Legal fees 1,166
- --------------------------------------------------------------------------------
Portfolio accounting fees 13,061
- --------------------------------------------------------------------------------
Distribution services fee 113,931
- --------------------------------------------------------------------------------
Share registration costs 11,022
- --------------------------------------------------------------------------------
Printing and postage 1,619
- --------------------------------------------------------------------------------
Insurance premiums 1,262
- --------------------------------------------------------------------------------
Miscellaneous 1,005
- -------------------------------------------------------------------------------- ---------
Total expenses 432,233
- --------------------------------------------------------------------------------
Waivers--
- --------------------------------------------------------------------------------
Waiver of investment advisory fee $(91,145)
- ---------------------------------------------------------------------
Waiver of administrative personnel and services fee (25,547)
- --------------------------------------------------------------------- --------
Total waivers (116,692)
- -------------------------------------------------------------------------------- ---------
Net expenses 315,541
- --------------------------------------------------------------------------------------------- ----------
Net investment income $2,246,074
- --------------------------------------------------------------------------------------------- ----------
</TABLE>
* For the period from March 10, 1997 (date of initial public investment) to June
30, 1997.
(See Notes which are an integral part of the Financial Statements)
DG PRIME MONEY MARKET FUND
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PERIOD ENDED
(UNAUDITED)
JUNE 30, 1997*
---------------
<S> <C>
INCREASE (DECREASE) IN NET ASSETS:
- ---------------------------------------------------------------------------
OPERATIONS--
- ---------------------------------------------------------------------------
Net investment income $ 2,246,074
- --------------------------------------------------------------------------- --------------
DISTRIBUTIONS TO SHAREHOLDERS--
- ---------------------------------------------------------------------------
Distributions from net investment income (2,246,074)
- --------------------------------------------------------------------------- --------------
SHARE TRANSACTIONS--
- ---------------------------------------------------------------------------
Proceeds from sale of shares 225,989,469
- ---------------------------------------------------------------------------
Net asset value of shares issued to shareholders in payment of
distributions declared 1,587,242
- ---------------------------------------------------------------------------
Cost of shares redeemed (63,813,245)
- --------------------------------------------------------------------------- --------------
Change in net assets resulting from share transactions 163,763,466
- --------------------------------------------------------------------------- --------------
Change in net assets 163,763,466
- ---------------------------------------------------------------------------
NET ASSETS:
- ---------------------------------------------------------------------------
Beginning of period --
- --------------------------------------------------------------------------- --------------
End of period $ 163,763,466
- --------------------------------------------------------------------------- --------------
</TABLE>
* For the period from March 10, 1997 (date of initial public investment) to June
30, 1997.
(See Notes which are an integral part of the Financial Statements)
DG PRIME MONEY MARKET FUND
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1997 (UNAUDITED)
- --------------------------------------------------------------------------------
(1) ORGANIZATION
DG Investor Series (the "Trust") is registered under the Investment Company Act
of 1940, as amended (the "Act") as an open-end, management investment company.
The Trust consists of eight portfolios. The financial statements included herein
are only those of DG Prime Money Market Fund (the "Fund"), a diversified
portfolio. The financial statements of the other portfolios are presented
separately. The assets of each portfolio are segregated and a shareholder's
interest is limited to the portfolio in which shares are held. The Fund's
investment objective is current income consistent with stability of principal.
(2) SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.
INVESTMENT VALUATIONS--The Fund uses the amortized cost method to value its
portfolio securities in accordance with Rule 2a-7 under the Act.
REPURCHASE AGREEMENTS--It is the policy of the Fund to require the
custodian bank to take possession, to have legally segregated in the
Federal Reserve Book Entry System, or to have segregated within the
custodian bank's vault, all securities held as collateral under repurchase
agreement transactions. Additionally, procedures have been established by
the Fund to monitor, on a daily basis, the market value of each repurchase
agreement's collateral to ensure that the value of collateral at least
equals the repurchase price to be paid under the repurchase agreement
transaction.
The Fund will only enter into repurchase agreements with banks and other
recognized financial institutions, such as broker/dealers, which are deemed
by the Fund's adviser to be creditworthy pursuant to the guidelines and/or
standards reviewed or established by the Board of Trustees (the
"Trustees"). Risks may arise from the potential inability of counterparties
to honor the terms of the repurchase agreement. Accordingly, the Fund could
receive less than the repurchase price on the sale of collateral
securities.
INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS--Interest income and expenses
are accrued daily. Bond premium and discount, if applicable, are amortized
as required by the Internal Revenue Code, as amended (the "Code").
Distributions to shareholders are recorded on the ex-dividend date.
DG PRIME MONEY MARKET FUND
- --------------------------------------------------------------------------------
FEDERAL TAXES--It is the Fund's policy to comply with the provisions of the
Code applicable to regulated investment companies and to distribute to
shareholders each year substantially all of its income. Accordingly, no
provisions for federal tax are necessary.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS--The Fund may engage in
when-issued or delayed delivery transactions. The Fund records when-issued
securities on the trade date and maintains security positions such that
sufficient liquid assets will be available to make payment for the
securities purchased. Securities purchased on a when-issued or delayed
delivery basis are marked to market daily and begin earning interest on the
settlement date.
USE OF ESTIMATES--The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the amounts of assets, liabilities,
expenses and revenues reported in the financial statements. Actual results
could differ from those estimated.
OTHER--Investment transactions are accounted for on the trade date.
(3) SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Trustees to issue an unlimited number of
full and fractional shares of beneficial interest (without par value). At June
30, 1997, capital paid-in aggregated $163,763,466.
Transactions in shares were as follows:
<TABLE>
<CAPTION>
PERIOD ENDED
JUNE 30, 1997*
----------------
<S> <C>
Shares sold 225,989,469
- ---------------------------------------------------------------------------
Shares issued to shareholders in payment of distributions declared 1,587,242
- ---------------------------------------------------------------------------
Shares redeemed (63,813,245)
- --------------------------------------------------------------------------- --------------
Net change resulting from Institutional Shares transactions 163,763,466
- --------------------------------------------------------------------------- --------------
</TABLE>
* For the period from March 10, 1997 (date of initial public investment) to June
30, 1997.
(4) INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE--ParkSouth Corporation, the Fund's investment adviser
(the "Adviser"), receives for its services an annual investment advisory fee
equal to 0.50% of the Fund's average daily net assets. The Adviser may
voluntarily choose to waive any portion of its fee. The Adviser can modify or
terminate this voluntary waiver at any time at its sole discretion.
ADMINISTRATIVE FEE--Federated Administrative Services ("FAS") provides the Fund
with certain administrative personnel and services. The fee paid to FAS is based
on the level of average aggregate net assets of the Trust for the period. FAS
may voluntarily choose to waive a portion of its fee.
DG PRIME MONEY MARKET FUND
- --------------------------------------------------------------------------------
DISTRIBUTION SERVICES FEE--The Fund has adopted a Distribution Plan (the "Plan")
pursuant to Rule 12b-1 under the Act. Under the terms of the Plan, the Fund will
compensate Federated Securities Corp. ("FSC"), the principal distributor, from
the net assets of the Fund to finance activities intended to result in the sale
of the Fund's shares. The Plan provides that the Fund may incur distribution
expenses up to 0.25% of the average daily net assets of the Fund, annually, to
compensate FSC.
TRANSFER AND DIVIDEND DISBURSING AGENT FEES AND EXPENSES--Federated Services
Company ("FServ"), through its subsidiary, Federated Shareholder Services
Company ("FSSC") serves as transfer and dividend disbursing agent for the Fund.
The fee paid to FSSC is based on the size, type, and number of accounts and
transactions made by shareholders.
PORTFOLIO ACCOUNTING FEES--FServ maintains the Fund's accounting records for
which it receives a fee. The fee is based on the level of the Fund's average
daily net assets for the period, plus out-of-pocket expenses.
ORGANIZATIONAL EXPENSES--Organizational and start-up administrative service
expenses of $30,000 were borne initially by FAS. The Fund has agreed to
reimburse FAS for the organizational and start-up administrative expenses during
the five year period following effective date. For the period ended June 30,
1997, the Fund paid $0 pursuant to this agreement.
GENERAL--Certain of the Officers and Trustees of the Trust are Officers and
Directors or Trustees of the above companies.
August 31, 1997
DG INVESTOR SERIES
DG PRIME MONEY MARKET FUND
LOGO
SUPPLEMENT TO THE COMBINED PROSPECTUS
A Portfolio of DG Investor Series,
an Open-End Management Investment Company
ParkSouth Corporation
Jackson, MS
Investment Adviser
August 31, 1997
LOGO FEDERATED INVESTORS
Cusip 23321N707
G01258-17 (8/97)
LOGO
DG U.S. GOVERNMENT MONEY MARKET FUND
(A Portfolio of DG Investor Series)
Supplement to the Combined Prospectus dated June 30, 1997
Effective August 1, 1997, DG U.S. Government Money Market Fund (the "Fund")
will, pursuant to the existing Shareholder Services Plan, accrue and pay
shareholder services fees of 0.15% of the Fund's average daily net assets.
July 24, 1997
[GRAPHIC OMITTED]
Cusip 23321N608
G01258-16 (7/97)
[GRAPHIC OMITTED]
DG INVESTOR SERIES
MONEY MARKET FUNDS
PROSPECTUS
DG Investor Series (the "Trust") is an open-end, management investment company
(a mutual fund). This combined prospectus offers investors interests in the
following two separate investment portfolios (individually or collectively
referred to as the "Fund" or "Funds" as the context requires), each having a
distinct investment objective and policies:
- DG Prime Money Market Fund; and
- DG U.S. Government Money Market Fund.
THE SHARES OFFERED BY THIS PROSPECTUS ARE NOT DEPOSITS OR OBLIGATIONS OF DEPOSIT
GUARANTY NATIONAL BANK, ARE NOT ENDORSED OR GUARANTEED BY DEPOSIT GUARANTY
NATIONAL BANK, AND ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION,
THE FEDERAL RESERVE BOARD, OR ANY OTHER GOVERNMENT AGENCY. INVESTMENT IN THESE
SHARES INVOLVES INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL. THE
FUNDS ATTEMPT TO MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER SHARE; THERE CAN
BE NO ASSURANCE THAT THE FUNDS WILL BE ABLE TO DO SO.
This prospectus contains the information you should read and know before you
invest in the Funds. Keep this prospectus for future reference.
The Funds have also filed a Statement of Additional Information dated June 30,
1997 with the Securities and Exchange Commission ("SEC"). The information
contained in the Statement of Additional Information is incorporated by
reference into this prospectus. You may request a copy of the Statement of
Additional Information or a paper copy of this prospectus, if you have received
your prospectus electronically, free of charge by calling 1-800-530-7377. To
obtain other information, or make inquiries about the Funds, contact the Trust
at the address listed in the back of this prospectus, or you can visit the DG
Investors Series' Internet site on the World Wide Web at (www.dgb.com). The
Statement of Additional Information, material incorporated by reference into
this document, and other information regarding the Funds is maintained
electronically with the SEC at Internet Web site (http://www.sec.gov).
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
Prospectus dated June 30, 1997
TABLE OF CONTENTS
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SYNOPSIS 1
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SUMMARY OF FUND EXPENSES 2
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FINANCIAL HIGHLIGHTS 4
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OBJECTIVE AND POLICIES OF EACH FUND 6
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Prime Money Market Fund 6
Investment Risks 8
Government Money Market Fund 9
PORTFOLIO INVESTMENT AND STRATEGIES 10
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Repurchase Agreements 10
When-Issued and Delayed
Delivery Transactions 10
Lending of Portfolio Securities 10
INVESTMENT LIMITATIONS 10
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DG INVESTOR SERIES INFORMATION 11
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Management of the Trust 11
Distribution of Fund Shares 12
Administration of the Funds 13
Expenses of the Funds 13
NET ASSET VALUE 13
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INVESTING IN THE FUNDS 14
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Share Purchases 14
Minimum Investment Required 14
Systematic Investment Program 14
EXCHANGE PRIVILEGE 15
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Exchanging Shares 15
REDEEMING SHARES 15
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Through the Banks 15
Systematic Withdrawal Program 17
ACCOUNT AND SHARE INFORMATION 17
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EFFECT OF BANKING LAWS 18
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TAX INFORMATION 18
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Federal Income Tax 18
State and Local Taxes 19
PERFORMANCE INFORMATION 19
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ADDRESSES 20
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SYNOPSIS
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The Trust was established as a Massachusetts business trust under a Declaration
of Trust dated February 7, 1992. The Declaration of Trust permits the Trust to
offer separate series of shares of beneficial interest representing interests in
separate portfolios of securities. The shares in any one portfolio may be
offered in separate classes. Shares of the Funds are designed for retail and
trust customers of Deposit Guaranty National Bank and its affiliates as a
convenient means of participating in professionally managed portfolios.
As of the date of this prospectus, the Trust is composed of eight portfolios.
The following two portfolios are offered in this prospectus:
- DG Prime Money Market Fund ("Prime Money Market Fund")--seeks to provide
current income consistent with stability of principal; and
- DG U.S. Government Money Market Fund ("Government Money Market
Fund")--seeks to provide current income consistent with stability of
principal and liquidity by investing primarily in a portfolio of
short-term U.S. government securities.
For information on how to purchase shares of either of the Funds, please refer
to "Investing in the Funds." A minimum initial investment of $1,000 is required
for each Fund. Subsequent investments must be in amounts of at least $50.
The Funds attempt to stabilize the value of a share at $1.00. Shares are
currently sold and redeemed at that price.
SUMMARY OF FUND EXPENSES
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SHAREHOLDER TRANSACTION EXPENSES
<TABLE>
<CAPTION>
U.S. GOVERNMENT
PRIME MONEY MONEY MARKET
MARKET FUND FUND
------------ ---------------
<S> <C> <C>
Maximum Sales Charge Imposed on Purchases (as a percentage of
offering price)................................................... None None
Maximum Sales Charge Imposed on Reinvested Dividends (as a
percentage of offering price)..................................... None None
Contingent Deferred Sales Charge (as a percentage of original
purchase price or redemption proceeds, as applicable)............. None None
Redemption Fee (as a percentage of amount redeemed, if
applicable)....................................................... None None
Exchange Fee........................................................ None None
ANNUAL OPERATING EXPENSES
(As a percentage of average net assets)*
Management Fee (after waiver)(1).................................... 0.30% 0.30%
12b-1 Fee(2)........................................................ 0.25% 0.00%
Total Other Expenses................................................ 0.15% 0.20%
Shareholder Services Fee(3)......................................... 0.00% 0.00%
Total Fund Operating Expenses(4)................................ 0.70% 0.50%
</TABLE>
(1) The management fees of Prime Money Market Fund and U.S. Government Money
Market Fund have been reduced to reflect the voluntary waivers by the Adviser.
The Adviser can terminate these voluntary waivers at any time at its sole
discretion. The maximum management fee for these Funds is 0.50%.
(2) As of the date of this prospectus U.S. Government Money Market Fund is not
paying or accruing 12b-1 fees. The Fund will not accrue or pay 12b-1 fees until
a separate class of shares has been created for certain institutional investors.
U.S. Government Money Market Fund could pay 0.25% as a 12b-1 fee to the
distributor.
(3) As of the date of this prospectus, the Funds are not paying or accruing
shareholder services fees. If the Funds were paying or accruing the shareholder
services fee, the Funds would be able to pay up to 0.15% of their average daily
net assets for the shareholder services fee.
(4) Total Fund Operating Expenses for Prime Money Market Fund in the table above
are based on expenses expected during the fiscal year ended February 28, 1998.
Total Fund Operating Expenses above for U.S. Government Money Market Fund
reflect those for the period ended February 28, 1997. Total Fund Operating
Expenses for U.S. Government Money Market Fund were 0.70% absent the voluntary
waiver described above in note (1).
* Annual Fund Operating Expenses for Prime Money Market Fund are based on
projected average net assets for the fiscal year ending February 28, 1998.
THE PURPOSE OF THIS TABLE IS TO ASSIST AN INVESTOR IN UNDERSTANDING THE
VARIOUS COSTS AND EXPENSES THAT A SHAREHOLDER OF THE FUNDS WILL BEAR, EITHER
DIRECTLY OR INDIRECTLY. FOR MORE COMPLETE DESCRIPTIONS OF THE VARIOUS COSTS AND
EXPENSES, SEE "DG INVESTOR SERIES INFORMATION" AND INVESTING IN THE FUNDS."
Wire-transferred redemptions of less than $5,000 may be subject to additional
fees.
<TABLE>
<CAPTION>
EXAMPLE 1 Year 3 Years 5 Years 10 Years
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<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 sales charge. The Funds charge no contingent
deferred sales charges.
Prime Money Market Fund.......................................... $ 7 $ 22 -- --
U.S. Government Money Market Fund................................ $ 5 $ 16 $ 28 $ 63
</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. THE
PRIME MONEY MARKET FUND EXAMPLE IS BASED ON EXPENSES EXPECTED TO BE INCURRED FOR
THE FUND'S FISCAL YEAR ENDING FEBRUARY 28, 1998.
NOTES
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FINANCIAL HIGHLIGHTS
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(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
The following table has been audited by KPMG Peat Marwick LLP, the Government
Money Market Fund's independent auditors. Their report, dated April 11, 1997, on
the Fund's financial statements for the year ended February 28, 1997, and on the
following table for each of the periods presented, is included in the Annual
Report, which is incorporated by reference. This table should be read in
conjunction with the Government Money Market Fund's financial statements and
notes thereto, which may be obtained from the Government Money Market Fund.
<TABLE>
<CAPTION>
DISTRIBUTIONS
TO
NET ASSET SHAREHOLDERS
VALUE, NET FROM NET
YEAR ENDED BEGINNING INVESTMENT INVESTMENT
FEBRUARY 28 OR 29, OF PERIOD INCOME (LOSS) INCOME
----------------------------------------------------------------------------------------
<S> <C> <C> <C>
U.S. GOVERNMENT MONEY MARKET FUND
1993(a).................................. $1.00 0.02 (0.02)
1994..................................... $1.00 0.03 (0.03)
1995..................................... $1.00 0.04 (0.04)
1996..................................... $1.00 0.05 (0.05)
1997..................................... $1.00 0.05 (0.05)
</TABLE>
(a) Reflects operations for the period from July 1, 1992 (date of initial public
investment) to February 28, 1993. For the period from March 31, 1992 (start
of business) to June 30, 1992, all income was distributed to the
administrator.
(b) Based on net asset value, which does not reflect the sales load or
contingent deferred sales charge, if applicable.
(c) Computed on an annualized basis.
(d) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
The Prime Money Market Fund had no public investment at February 28, 1997.
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<TABLE>
<CAPTION>
RATIOS TO AVERAGE NET ASSETS
----------------------------------------
NET ASSET NET NET ASSETS,
VALUE, END TOTAL INVESTMENT EXPENSE END OF PERIOD
OF PERIOD RETURN (B) EXPENSES INCOME WAIVER (D) (000 OMITTED)
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$ 1.00 1.97% 0.41%(c) 2.88%(c) 0.38%(c) $189,024
$ 1.00 2.74% 0.54% 2.70% 0.20% $189,315
$ 1.00 4.06% 0.53% 3.96% 0.20% $162,515
$ 1.00 5.48% 0.51% 5.33% 0.20% $245,647
$ 1.00 4.83% 0.50% 4.74% 0.20% $273,453
</TABLE>
OBJECTIVE AND POLICIES OF EACH FUND
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PRIME MONEY MARKET FUND
The investment objective of Prime Money Market Fund is current income consistent
with stability of principal. This investment objective cannot be changed without
shareholder approval. While there is no assurance that Prime Money Market Fund
will achieve its investment objective, it endeavors to do so by complying with
the diversification and other requirements of Rule 2a-7 under the Investment
Company Act of 1940 which regulates money market mutual funds and by following
the investment policies described in this prospectus.
Prime Money Market Fund pursues its investment objective by investing in a
portfolio of money market securities maturing in 13 months or less. The average
maturity of the securities in Prime Money Market Fund's portfolio, computed on a
dollar-weighted basis, will be 90 days or less. Unless indicated otherwise, the
investment policies may be changed by the Board of Trustees without shareholder
approval. Shareholders will be notified before any material change in these
policies becomes effective.
ACCEPTABLE INVESTMENTS. Prime Money Market Fund invests in high quality money
market instruments that are either rated in the highest short-term rating
category by one or more nationally recognized statistical rating organizations
("NRSROs") or are of comparable quality to securities having such ratings.
Examples of these instruments include, but are not limited to:
- domestic issues of corporate debt obligations, including variable rate
demand notes;
- commercial paper (including Canadian Commercial Paper and Europaper);
- certificates of deposit, demand and time deposits, bankers' acceptances
and other instruments of domestic and foreign banks and other deposit
institutions ("Bank Instruments");
- short-term credit facilities;
- asset-backed securities;
- obligations issued or guaranteed as to payment of principal and interest
by the U.S. government or one of its agencies or instrumentalities; and
- other money market instruments.
The Fund invests only in instruments denominated and payable in U.S. dollars.
VARIABLE RATE DEMAND NOTES. Variable rate demand notes are long-term debt
instruments that have variable or floating interest rates and provide Prime
Money Market Fund with the right to tender the security for repurchase at
its stated principal amount plus accrued interest. Such securities
typically bear interest at a rate that is intended to cause the securities
to trade at par. The interest rate may float or be adjusted at regular
intervals (ranging from daily to annually), and is normally based on a
published interest rate or interest rate index. Most variable rate demand
notes allow Prime Money Market Fund to demand the repurchase of the
security on not more than seven days prior notice. Other notes only permit
Prime Money Market Fund to tender the security at the time of each interest
rate adjustment or at other fixed intervals. See "Demand Features." Prime
Money Market Fund treats variable rate demand notes as maturing on the
later of the date of the
next interest rate adjustment or the date on which the Fund may next tender
the security for repurchase.
BANK INSTRUMENTS. Prime Money Market Fund only invests in Bank Instruments
either issued by an institution having capital, surplus and undivided
profits over $100 million, or insured by the Bank Insurance Fund ("BIF") or
the Savings Association Insurance Fund ("SAIF"). Bank Instruments may
include Eurodollar Certificates of Deposit ("ECDs"), Yankee Certificates of
Deposit ("Yankee CDs") and Eurodollar Time Deposits ("ETDs"). Prime Money
Market Fund will treat securities credit-enhanced with a bank's letter of
credit as Bank Instruments.
ASSET-BACKED SECURITIES. Asset-backed securities are securities issued by
special purpose entities whose primary assets consist of a pool of loans or
accounts receivable. The securities may take the form of beneficial
interests in special purpose trusts, limited partnership interests, or
commercial paper or other debt securities issued by a special purpose
corporation. Although the securities often have some form of credit or
liquidity enhancement, payments on the securities depend predominantly upon
collections of the loans and receivables held by the issuer.
SHORT-TERM CREDIT FACILITIES. Prime Money Market Fund may enter into, or
acquire participations in, short-term borrowing arrangements with
corporations, consisting of either a short-term revolving credit facility
or a master note agreement payable upon demand. Under these arrangements,
the borrower may reborrow funds during the term of the facility. Prime
Money Market Fund treats any commitments to provide such advances as a
standby commitment to purchase the borrower's notes.
CREDIT ENHANCEMENT. Certain of Prime Money Market Fund's acceptable investments
may be credit-enhanced by a guaranty, letter of credit, or insurance. Any
bankruptcy, receivership, default, or change in the credit quality of the party
providing the credit enhancement will adversely affect the quality and
marketability of the underlying security and could cause losses to Prime Money
Market Fund and affect its share price.
DEMAND FEATURES. Prime Money Market Fund may acquire securities that are subject
to puts and standby commitments ("demand features") to purchase the securities
at their principal amount (usually with accrued interest) within a fixed period
(usually seven days) following a demand by Prime Money Market Fund. The demand
feature may be issued by the issuer of the underlying securities, a dealer in
the securities, or by another third party, and may not be transferred separately
from the underlying security. Prime Money Market Fund uses these arrangements to
provide Prime Money Market Fund with liquidity and not to protect against
changes in the market value of the underlying securities. The bankruptcy,
receivership, or default by the issuer of the demand feature, or a default on
the underlying security or other event that terminates the demand feature before
its exercise, will adversely affect the liquidity of the underlying security.
Demand features that are exercisable even after a payment default on the
underlying security may be treated as a form of credit enhancement.
RESTRICTED AND ILLIQUID SECURITIES. Prime Money Market Fund may invest in
restricted securities. Restricted securities are any securities in which Prime
Money Market Fund may invest pursuant to its investment objective and policies
but which are subject to restrictions on resale under federal securities law.
Under criteria established by the Trustees, certain restricted securities are
determined to be liquid. To the extent that restricted securities are not
determined to be liquid, Prime Money Market Fund will
limit their purchase, together with other illiquid securities including
non-negotiable time deposits, and repurchase agreements providing for settlement
in more than seven days after notice, to 10% of its net assets.
Prime Money Market Fund may invest in commercial paper issued in reliance on the
exemption from registration afforded by Section 4(2) of the Securities Act of
1933. Section 4(2) commercial paper is restricted as to disposition under
federal securities law, and is generally sold to institutional investors, such
as Prime Money Market Fund, who agree that they are purchasing the paper for
investment purposes and not with a view to public distribution. Any resale by
the purchaser must be in an exempt transaction. Section 4(2) commercial paper is
normally resold to other institutional investors like Prime Money Market Fund
through or with the assistance of the issuer or investment dealers who make a
market in Section 4(2) commercial paper, thus providing liquidity. Prime Money
Market Fund believes that Section 4(2) commercial paper and possibly certain
other restricted securities which meet the criteria for liquidity established by
the Trustees of Prime Money Market Fund are quite liquid. Prime Money Market
Fund intends, therefore, to treat the restricted securities which meet the
criteria for liquidity established by the Trustees, including Section 4(2)
commercial paper, as determined by Prime Money Market Fund's Adviser, as liquid
and not subject to the investment limitation applicable to illiquid securities.
CONCENTRATION OF INVESTMENTS. As a matter of policy which cannot be changed
without shareholder approval, Prime Money Market Fund may invest 25% or more of
its total assets in commercial paper issued by finance companies. The finance
companies in which Prime Money Market Fund intends to invest can be divided into
two categories, commercial finance companies and consumer finance companies.
Commercial finance companies are principally engaged in lending to corporations
or other businesses. Consumer finance companies are primarily engaged in lending
to individuals. Captive finance companies or finance subsidiaries which exist to
facilitate the marketing and financial activities of their parent will, for
purposes of industry concentration, be classified in the industry of their
parent's corporation. In addition, Prime Money Market Fund may invest 25% or
more of the value of its total assets in instruments issued by a U.S. branch of
a domestic bank or savings association having capital, surplus, and undivided
profits in excess of $100,000,000 at the time of investment. Concentrating
investments in one industry may subject Prime Money Market Fund to more risk
than if it did not concentrate.
INVESTMENT RISKS
ECDs, ETDs, Yankee CDs, Canadian Commercial Paper, and Europaper are subject to
different risks than domestic obligations of domestic banks or corporations.
Examples of these risks include international economic and political
developments, foreign governmental restrictions that may adversely affect the
payment of principal or interest, foreign withholding or other taxes on interest
income, difficulties in obtaining or enforcing a judgment against the issuing
entity, and the possible impact of interruptions in the flow of international
currency transactions. Risks may also exist for ECDs, ETDs, and Yankee CDs
because the banks issuing these instruments, or their domestic or foreign
branches, are not necessarily subject to the same regulatory requirements that
apply to domestic banks, such as reserve requirements, loan limitations,
examinations, accounting, auditing, recordkeeping, and the public availability
of information. These factors will be carefully considered by Prime Money Market
Fund's Adviser in selecting investments for the Fund.
CERTAIN OTHER PORTFOLIO STRATEGIES. Prime Money Market Fund may also invest or
engage in repurchase agreements, lending of portfolio securities and when-issued
and delayed delivery transactions. See "Portfolio Investments and Strategies."
GOVERNMENT MONEY MARKET FUND
The investment objective of Government Money Market Fund is current income
consistent with stability of principal and liquidity. While there is no
assurance that the Fund will achieve its investment objective, it endeavors to
do so by complying with the diversification and other requirements of Rule 2a-7
under the Investment Company Act of 1940 which regulates money market mutual
funds and by following the investment policies described in this prospectus.
Government Money Market Fund pursues its investment objective by investing
primarily in a portfolio of short-term U.S. government securities. The average
maturity of U.S. government securities in its portfolio, computed on a
dollar-weighted basis, will be 90 days or less, and the Fund will invest only in
securities with remaining maturities of 13 months or less at the time of
purchase.
ACCEPTABLE INVESTMENTS. The U.S. government securities in which Government
Money Market Fund invests are either issued or guaranteed by the U.S.
government, its agencies, or instrumentalities. These securities include, but
are not limited to:
- direct obligations of the U.S. Treasury, such as U.S. Treasury bills,
notes, and bonds; and
- notes, bonds, and discount notes of certain U.S. government agencies or
instrumentalities, such as the Farm Credit System, including the National
Bank for Cooperatives, Farm Credit Banks, and Banks for Cooperatives;
Federal Home Loan Banks; and Student Loan Marketing Association.
The obligations issued or guaranteed by agencies or instrumentalities of the
U.S. government in which Government Money Market Fund invests are not backed by
the full faith and credit of the U.S. Treasury. No assurances can be given that
the U.S. government will provide financial support to these agencies or
instrumentalities, since it is not obligated to do so. These agencies and
instrumentalities are supported by:
- the issuer's right to borrow an amount limited to a specific line of
credit from the U.S. Treasury;
- the discretionary authority of the U.S. government to purchase certain
obligations of an agency or instrumentality; or
- the credit of the agency or instrumentality.
Not more than 50% of Government Money Market Fund's net assets will be invested
in obligations issued or guaranteed by agencies or instrumentalities of the U.S.
government.
CERTAIN OTHER PORTFOLIO STRATEGIES. Government Money Market Fund may also
invest or engage in repurchase agreements, lending of portfolio securities and
when-issued and delayed delivery transactions. See "Portfolio Investments and
Strategies."
PORTFOLIO INVESTMENTS AND STRATEGIES
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REPURCHASE AGREEMENTS
Certain securities in which the Funds invest may be purchased pursuant to
repurchase agreements. Repurchase agreements are arrangements in which banks,
broker/dealers, and other recognized financial institutions sell securities to
the Funds and agree at the time of sale to repurchase them at a mutually agreed
upon time and price. To the extent that the seller does not repurchase the
securities from the Funds, the Funds could receive less than the repurchase
price on any sale of such securities.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS
The Funds may purchase securities on a when-issued or delayed delivery basis.
These transactions are arrangements in which the Funds purchase securities with
payment and delivery scheduled for a future time. The seller's failure to
complete these transactions may cause the Funds to miss a price or yield
considered to be advantageous. Settlement dates may be a month or more after
entering into these transactions, and the market values of the securities
purchased may vary from the purchase prices. Accordingly, the Funds may pay more
or less than the market value of the securities on the settlement date.
The Funds may dispose of a commitment prior to settlement if the Adviser deems
it appropriate to do so. In addition, the Funds may enter into transactions to
sell their purchase commitments to third parties at current market values and
simultaneously acquire other commitments to purchase similar securities at later
dates. The Funds may realize short-term profits or losses upon the sale of such
commitments.
LENDING OF PORTFOLIO SECURITIES
In order to generate additional income, the Funds may lend portfolio securities
on a short-term or long-term basis, or both, to broker/dealers, banks, or other
institutional borrowers of securities. The Funds will only enter into loan
arrangements with broker/dealers, banks, or other institutions which the Adviser
has determined are creditworthy under guidelines established by the Trustees,
and will receive collateral at all times equal to at least 100% of the value of
the securities loaned.
INVESTMENT LIMITATIONS
- --------------------------------------------------------------------------------
The Funds will not:
- borrow money directly or through reverse repurchase agreements
(arrangements in which a Fund sells a portfolio instrument for a
percentage of its cash value with an agreement to buy it back on a set
date) or pledge securities except, under the following certain
circumstances: the Government Money Market Fund may borrow money and
engage in reverse repurchase agreements in amounts up to one-third of the
value of its total assets and pledge up to 15% of the value of its total
assets to secure such borrowings; and the Prime Money Market Fund may
borrow up to one-third of the value of its total assets and pledge assets
to secure such borrowings.
The above limitation cannot be changed without shareholder approval. The
following limitation, however, may be changed by the Trustees without
shareholder approval. Shareholders will be notified before any material change
in these limitations becomes effective.
The Government Money Market Fund will not:
- invest more than 10% of its respective net assets in illiquid securities,
including repurchase agreements providing for settlement more than seven
days after notice and certain restricted securities not determined by the
Trustees to be liquid.
DG INVESTOR SERIES INFORMATION
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MANAGEMENT OF THE TRUST
BOARD OF TRUSTEES. The Trust is managed by a Board of Trustees. The Trustees are
responsible for managing the Funds' business affairs and for exercising all the
Trust's powers except those reserved for the shareholders. An Executive
Committee of the Board of Trustees handles the Board's responsibilities between
meetings of the Board.
INVESTMENT ADVISER. Pursuant to an investment advisory contract with the Trust,
investment decisions for the Funds are made by ParkSouth Corporation, (the
"Adviser"), subject to direction by the Trustees. The Adviser continually
conducts investment research and supervision for the Funds and is responsible
for the purchase and sale of portfolio instruments.
ADVISORY FEES. The Adviser receives an annual investment advisory fee equal to
.50% of the Funds' average daily net assets. The Adviser may voluntarily choose
to waive a portion of its fee or reimburse the Funds for certain operating
expenses. The Adviser can terminate this voluntary waiver of its advisory fees
at any time at its sole discretion.
ADVISER'S BACKGROUND. ParkSouth Corporation is a registered investment adviser
providing investment management services to individuals and institutional
clients. ParkSouth is a subsidiary of Deposit Guaranty National Bank (the
"Bank"), a national banking association founded in 1925 which, in turn, is a
subsidiary of Deposit Guaranty Corp. ("DGC"). Through its subsidiaries and
affiliates, DGC offers a full range of financial services to the public,
including commercial lending, depository services, cash management, brokerage
services, retail banking, mortgage banking, investment advisory services and
trust services. DGC is listed on the New York Stock Exchange under the symbol
"DEP."
ParkSouth manages, in addition to the Funds in the DG Investor Series, $630
million in common trust fund assets as of December 31, 1996. ParkSouth (which
succeeded to the investment advisory business of the Bank in 1997), or the Bank,
have served as the adviser to the Trust since May 5, 1992.
As part of its regular banking operations, the Bank may make loans to public
companies. Thus, it may be possible, from time to time, for the Funds to hold or
acquire the securities of issuers which are also lending clients of the Bank.
The lending relationships will not be a factor in the selection of securities.
DISTRIBUTION OF FUND SHARES
Federated Securities Corp. is the principal distributor for the Funds. It is a
Pennsylvania corporation organized on November 14, 1969, and is the principal
distributor for a number of investment companies. Federated Securities Corp. is
a subsidiary of Federated Investors.
DISTRIBUTION AND SHAREHOLDER SERVICES PLANS. Under a distribution plan adopted
in accordance with the Investment Company Act Rule 12b-1 (the "Plan"), the Funds
may pay to the distributor an amount computed at an annual rate of 0.25% of the
average daily net asset value of the Funds to finance any activity which is
principally intended to result in the sale of shares subject to the Plan. The
distributor may select financial institutions such as banks, fiduciaries,
custodians for public funds, investment advisers, and broker/dealers ("brokers")
to provide distribution and/or administrative services as agents for their
clients or customers. Government Money Market Fund will not accrue or pay 12b-1
fees until a separate class of shares has been created for certain institutional
investors.
The distributor may from time to time and for such periods as it deems
appropriate, voluntarily reduce its compensation under the Plan to the extent
the expenses attributable to the shares exceed such lower expense limitations as
the distributor may, by notice to the Trust, voluntarily declare to be
effective.
The distributor will pay financial institutions a fee based upon shares subject
to the Plan and owned by their clients or customers. The schedules of such fees
and the basis upon which such fees will be paid will be determined from time to
time by the distributor.
The Funds' Plan is a compensation type plan. As such, the Funds make no payments
to the distributor except as described above. Therefore, the Funds do not pay
for unreimbursed expenses of the distributor, including amounts expended by the
distributor in excess of amounts received by it from the Funds, interest,
carrying or other financing charges in connection with excess amounts expended,
or the distributor's overhead expenses. However, the distributor may be able to
recover such amounts or may earn a profit from future payments made by the Funds
under the Plan.
In addition, the Funds have adopted a Shareholder Services Plan (the "Services
Plan") with respect to its shares. Under the Services Plan, financial
institutions will enter into shareholder service agreements with the Funds to
provide administrative support services to their customers who from time to time
may be owners of record or beneficial owners of the shares. In return for
providing these support services, a financial institution may receive payments
from each Fund at a rate not exceeding 0.15% of the average daily net assets of
the shares beneficially owned by the financial institution's customers for whom
it is holder of record or with whom it has a servicing relationship. These
administrative services may include, but are not limited to, the provision of
personal services and maintenance of shareholder accounts.
The Glass-Steagall Act prohibits a depository institution (such as a commercial
bank or a savings and loan association) from being an underwriter or distributor
of most securities. In the event the Glass-Steagall Act is deemed to prohibit
depository institutions from acting in the administrative capacities described
above or should Congress relax current restrictions on depository institutions,
the Trustees will consider appropriate changes in the services.
SHAREHOLDER SERVICING ARRANGEMENTS. The distributor may pay financial
institutions a fee with respect to the average net asset value of shares held by
their customers for providing administrative services. This fee, if paid, will
be reimbursed by the Adviser and not the Funds.
ADMINISTRATION OF THE FUNDS
ADMINISTRATIVE SERVICES. Federated Administrative Services, a subsidiary of
Federated Investors, provides administrative personnel and services (including
certain legal and financial reporting services) necessary to operate the Funds.
Such services include shareholder servicing and certain legal and accounting
services. Federated Administrative Services provides these at an annual rate as
specified below:
<TABLE>
<CAPTION>
MAXIMUM AVERAGE AGGREGATE
ADMINISTRATIVE FEE DAILY NET ASSETS OF THE TRUST
- ------------------- ------------------------------------
<S> <C>
.15% on the first $250 million
.125% on the next $250 million
.10% on the next $250 million
.075% on assets in excess of $750 million
</TABLE>
The administrative fee received during any fiscal year shall be at least
$100,000 per portfolio. Federated Administrative Services may choose voluntarily
to waive a portion of its fee at any time.
EXPENSES OF THE FUNDS
Each Fund pays all of its own expenses and its allocable share of Trust
expenses.
These expenses include, but are not limited to the cost of: organizing the Trust
and continuing its existence; registering the Fund and its shares; Trustees
fees; meetings of Trustees and shareholders and proxy solicitations therefor;
auditing, accounting, and legal services; investment advisory and administrative
services; custodians, transfer agents, dividend disbursing agents, shareholder
servicing agents, and registrars; issuing, purchasing, repurchasing, and
redeeming shares; reports to government agencies; preparing, printing and
mailing documents to shareholders such as financial statements, prospectuses and
proxies; taxes and commissions; insurance premiums; association membership dues;
and such non-recurring and extraordinary items as may arise.
NET ASSET VALUE
- --------------------------------------------------------------------------------
The Funds attempt to stabilize the net asset value of shares at $1.00 by valuing
their portfolio securities using the amortized cost method. The net asset value
per share is determined by subtracting total liabilities from total assets and
dividing the remainder by the number of shares outstanding. The Funds cannot
guarantee that its net asset value will always remain at $1.00 per share.
The net asset value is determined at 12:00 noon, 3:00 p.m. (Eastern time), and
as of the close of trading (normally 4:00 p.m., Eastern time) on the New York
Stock Exchange, Monday through Friday, except on New Year's Day, Martin Luther
King Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor
Day, Columbus Day, Veterans' Day, Thanksgiving Day and Christmas Day.
INVESTING IN THE FUNDS
- --------------------------------------------------------------------------------
SHARE PURCHASES
Fund shares are sold on days on which the New York Stock Exchange and the
Federal Reserve Wire System are open for business. Fund shares may be ordered by
telephone through procedures established with the Bank in connection with
qualified account relationships. Such procedures may include arrangements under
which certain accounts are swept periodically and amounts exceeding an agreed
upon minimum are invested automatically in Fund shares. The Fund reserves the
right to reject any purchase request.
THROUGH THE BANKS. To place an order to purchase shares of the Funds, open an
account by calling Deposit Guaranty National Bank at (800) 748-8500. Information
needed to establish the account will be taken over the telephone.
Payment may be made by either check, federal funds or by debiting a customer's
account at the Banks.
Purchase orders must be received by 11:00 a.m. (Eastern time). Payment is
required before 3:00 p.m. (Eastern time) on the same business day in order to
earn dividends for that day.
CASH SWEEP PROGRAM. Shareholders of Prime Money Market Fund and Government Money
Market Fund can have cash accumulations in demand deposit accounts with
subsidiaries or affiliates of the Bank automatically invested in Prime Money
Market Fund or Government Money Market Fund on a day selected by the institution
and its customer or when the demand deposit account reaches a predetermined
dollar amount. Participating financial institutions are responsible for prompt
transmission of orders relating to the program, and they may charge for their
services. Investors should read this prospectus along with the financial
institution's agreement or literature describing these services and fees.
MINIMUM INVESTMENT REQUIRED
The minimum initial investment in the Funds is $1,000. Subsequent investments
may be in amounts of $50 or more with regard to the Prime Money Market Fund, and
$100 or more with regard to the Government Money Market Fund. The Funds may
waive the initial minimum investment for employees of Deposit Guaranty Corp. and
its affiliates from time to time.
SYSTEMATIC INVESTMENT PROGRAM
Once an account has been opened, shareholders may add to their investment on a
regular basis in a minimum amount of $50. Under this program, funds may be
automatically withdrawn periodically from the shareholder's checking account and
invested in Fund shares. A shareholder may apply for participation in this
program through the Bank.
EXCHANGE PRIVILEGE
- --------------------------------------------------------------------------------
All shareholders of the Funds are shareholders of DG Investor Series, which, in
addition to the Funds, is composed of the following six portfolios: DG Equity
Fund, DG Opportunity Fund, DG International Equity Fund, DG Limited Term
Government Income Fund, DG Government Income Fund, and DG Municipal Income Fund.
Shareholders in any of the Funds have easy access to all of the other Funds.
EXCHANGING SHARES
Shareholders of any Fund in DG Investor Series may exchange shares for the
shares of any other Fund in DG Investor Series. Prior to any exchange, the
shareholder must receive a copy of the current prospectus of the Fund into which
an exchange is to be effected. Shares may be exchanged at net asset value, plus
the difference between the sales charge (if any) already paid and any sales
charge of the Fund into which shares are to be exchanged, if higher.
When an exchange is made from a Fund with a sales charge to a Fund with no sales
charge, the shares exchanged and additional shares which have been purchased by
reinvesting dividends on such shares retain the character of the exchanged
shares for purposes of exercising further exchange privileges; thus, an exchange
of such shares for shares of a Fund with a sales charge would be at net asset
value.
Upon receipt of proper instructions and all necessary supporting documents,
shares submitted for exchange will be redeemed at the next-determined net asset
value. Written exchange instructions may require a signature guarantee. Exercise
of this privilege is treated as a sale for federal income tax purposes and,
depending on the circumstances, a short or long-term capital gain or loss may be
realized. The exchange privilege may be terminated at any time. Shareholders
will be notified of the termination of the exchange privilege. A shareholder may
obtain further information on the exchange privilege by calling the Banks.
Telephone exchange instructions may be recorded. If reasonable procedures are
not followed by the Funds, they may be liable for losses due to unauthorized or
fraudulent telephone instructions.
REDEEMING SHARES
- --------------------------------------------------------------------------------
Shares are redeemed at their net asset value next determined after the Bank
receives the redemption request. Redemptions will be made on days on which the
Funds computes their net asset value. Redemption requests cannot be executed on
days on which the New York Stock Exchange is closed or on Federal holidays when
wire transfers are restricted. Requests for redemption can be made by telephone
or by mail.
THROUGH THE BANKS
BY TELEPHONE. A shareholder who is a customer of the Bank may redeem shares of
a Fund by calling Deposit Guaranty National Bank at (800) 748-8500.
For orders received before 11:00 a.m. (Eastern time), proceeds will normally be
wired the same day to the shareholder's account at the Bank or a check will be
sent to the address of record. Those shares will not be entitled to the dividend
declared on the day the redemption request was received.
Proceeds from redemption requests received on holidays when wire transfers are
restricted will be wired the following business day. In no event will proceeds
be sent more than seven days after a proper request for redemption has been
received. An authorization form permitting the Funds to accept telephone
requests must first be completed. Authorization forms and information on this
service are available from the Bank. Telephone redemption instructions may be
recorded. If reasonable procedures are not followed by the Funds, they may be
liable for losses due to unauthorized or fraudulent telephone instructions.
In the event of drastic economic or market changes, a shareholder may experience
difficulty in redeeming by telephone. If such a case should occur, another
method of redemption should be utilized, such as a written request to Federated
Shareholder Services Company or the Bank.
If at any time the Funds determine it necessary to terminate or modify this
method of redemption, shareholders would be promptly notified.
BY MAIL. Any shareholder may redeem Fund shares by sending a written request to
the Banks. The written request should include the shareholder's name, the Fund
name, the account number, and the share or dollar amount requested, and should
be signed exactly as the shares are registered. If share certificates have been
issued, they should be sent unendorsed with the written request by registered or
certified mail. Shareholders should call the Banks for assistance in redeeming
by mail.
SIGNATURES. Shareholders requesting a redemption of any amount to be sent to an
address other than on record with the Funds, or a redemption payable other than
to the shareholder of record must have signatures on written redemption requests
guaranteed by:
- a trust company or commercial bank whose deposits are insured by the Bank
Insurance Fund, which is administered by the Federal Deposit Insurance
Corporation ("FDIC");
- a member of the New York, American, Boston, Midwest, or Pacific Stock
Exchange;
- a savings bank or savings association whose deposits are insured by the
Savings Association Insurance Fund, which is administered by the FDIC; or
- any other "eligible guarantor institution," as defined in the Securities
Exchange Act of 1934.
The Funds do not accept signatures guaranteed by a notary public.
The Funds and Federated Shareholder Services Company have adopted standards for
accepting signature guarantees from the above institutions. The Funds may elect
in the future to limit eligible signature guarantors to institutions that are
members of a signature guarantee program. The Funds and Federated Shareholder
Services Company reserve the right to amend these standards at any time without
notice.
Normally, a check for the proceeds is mailed within one business day, but in no
event more than seven days, after receipt of a proper written redemption
request.
SYSTEMATIC WITHDRAWAL PROGRAM
Shareholders who desire to receive payments of a predetermined amount may take
advantage of the Systematic Withdrawal Program. Under this program, Fund shares
are redeemed to provide for periodic withdrawal payments in an amount directed
by the shareholder. Depending upon the amount of the withdrawal payments and the
amount of dividends paid with respect to Fund shares, redemptions may reduce,
and eventually deplete, the shareholder's investment in the Fund. For this
reason, payments under this program should not be considered as yield or income
on the shareholder's investment in the Fund. To be eligible to participate in
this program, a shareholder must have an account value of at least $10,000. A
shareholder may apply for participation in this program through the Bank.
ACCOUNT AND SHARE INFORMATION
- --------------------------------------------------------------------------------
DIVIDENDS. Dividends are declared daily and paid monthly. Dividends are
automatically reinvested on payment dates in additional shares of the Funds
unless cash payments are requested by writing to the Funds or the Banks as
appropriate. Purchase orders must be received by the Bank before 11:00 a.m.
(Eastern time). Payment is required before 3:00 p.m. (Eastern time) on the same
business day in order to earn dividends for that day.
CAPITAL GAINS. The Funds do not expect to realize any capital gains or losses.
If capital gains or losses were to occur, they could result in an increase or
decrease in dividends. The Funds will distribute in cash or additional shares
any realized net long-term capital gains at least once every 12 months.
CERTIFICATES AND CONFIRMATIONS. As transfer agent for the Funds, Federated
Shareholder Services Company maintains a share account for each shareholder.
Share certificates are not issued unless requested by contacting the Funds or
Federated Shareholder Services Company in writing. Monthly confirmations are
sent to report all transactions as well as dividends paid during the month.
ACCOUNTS WITH LOW BALANCES. Due to the high cost of maintaining accounts with
low balances, the Funds may redeem shares in any account, and pay the proceeds
to the shareholder if the account balance falls below a required minimum value
of $1,000 due to shareholder redemptions.
Before shares are redeemed to close an account, the shareholder is notified in
writing and allowed 30 days to purchase additional shares to meet the minimum
requirement.
VOTING RIGHTS. Each share of each Fund gives that shareholder one vote in
Trustee elections and other matters submitted to shareholders for vote. All
shares of each portfolio in the Trust have equal voting rights, except that in
matters affecting only a particular portfolio, only shareholders of that
portfolio are entitled to vote. The Trust is not required to hold annual
shareholder meetings. Shareholder approval will be sought only for certain
changes in the Trust's or the Funds' operation and for election of Trustees
under certain circumstances.
Trustees may be removed by the Trustees or by shareholders at a special meeting.
A special meeting shall be called by the Trustees upon the written request of
shareholders owning at least 10% of the outstanding shares of the Trust entitled
to vote.
As of June 9, 1997, National Financial Services Corp., for the exclusive benefit
of its customers, was the owner of record of 161,600,157 shares (100%)of Prime
Money Market Fund, and therefore, may for certain purposes be deemed to control
the Fund and be able to affect the outcome of certain matters presented for a
vote of shareholders.
As of June 9, 1997, Deposit Guaranty National Bank, acting in various capacities
for numerous accounts, was the owner of record of 170,595,340 shares (72%) of
Government Money Market Fund, and therefore, may for certain purposes be deemed
to control the Fund and be able to affect the outcome of certain matters
presented for a vote of shareholders.
EFFECT OF BANKING LAWS
- --------------------------------------------------------------------------------
The Glass-Steagall Act and other banking laws and regulations presently prohibit
a bank holding company registered under the Bank Holding Company Act of 1956 or
any bank or non-bank affiliate thereof from sponsoring, organizing or
controlling a registered, open-end investment company continuously engaged in
the issuance of its shares, and from issuing, underwriting, selling or
distributing securities in general. Such laws and regulations do not prohibit
such a holding company or bank or non-bank affiliate from acting as investment
adviser, transfer agent or custodian to such an investment company or from
purchasing shares of such a company as agent for and upon the order of their
customer.
Some entities providing services to the Funds are subject to such banking laws
and regulations. They believe, based on the advice of counsel, that they may
perform those services for the Funds contemplated by any agreement entered into
with the Trust without violating the Glass-Steagall Act or other applicable
banking laws or regulations. Changes in either federal or state statutes and
regulations relating to the permissible activities of banks and their
subsidiaries or affiliates, as well as further judicial or administrative
decisions or interpretations of present or future statutes and regulations,
could prevent these entities from continuing to perform all or a part of the
above services. If this happens, the Trustees would consider alternative means
of continuing available investment services. It is not expected that Fund
shareholders would suffer any adverse financial consequences as a result of any
of these occurrences.
TAX INFORMATION
- --------------------------------------------------------------------------------
FEDERAL INCOME TAX
The Funds will pay no federal income tax because it expects to meet requirements
of Subchapter M of the Internal Revenue Code applicable to regulated investment
companies and to receive the special tax treatment afforded to such companies.
The Funds will be treated as single, separate entity for federal income tax
purposes so that income (including capital gains) and losses realized by the
Trust's other portfolios will not be combined for tax purposes with those
realized by the individual Funds.
Unless otherwise exempt, shareholders are required to pay federal income tax on
any dividends and other distributions received. This applies whether dividends
and distributions are received in cash or as additional shares. The Funds will
provide detailed tax information for reporting purposes.
STATE AND LOCAL TAXES
Shareholders are urged to consult their own tax advisers regarding the status of
their accounts under state and local tax laws.
PERFORMANCE INFORMATION
- --------------------------------------------------------------------------------
From time to time, the Funds advertises their yield, effective yield and total
return.
Yield represents the annualized rate of income earned on an investment over a
seven-day period. It is the annualized dividends earned during the period on an
investment shown as a percentage of the investment. The effective yield is
calculated similarly to the yield, but when annualized, the income earned by an
investment is assumed to be reinvested daily. The effective yield will be
slightly higher than the yield because of the compounding effect of this assumed
reinvestment.
Advertisements and sales literature may also refer to total return. Total return
represents the change, over a specified period of time, in the value of an
investment in the shares after reinvesting all income distributions. It is
calculated by dividing that change by the initial investment and is expressed as
a percentage.
From time to time, advertisements for the Funds may refer to ratings, rankings,
and other information in certain financial publications and/or compare the
Funds' performance to certain indices.
ADDRESSES
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
DG Investor Series
DG Prime Money Market Fund Federated Investors Tower
DG U.S. Government Money Market Fund Pittsburgh, PA 15222-3779
- ------------------------------------------------------------------------------------------------
Distributor
Federated Securities Corp. Federated Investors Tower
Pittsburgh, PA 15222-3779
- ------------------------------------------------------------------------------------------------
Investment Adviser
ParkSouth Corporation P.O. Box 1200
Jackson, MS 39215-1200
- ------------------------------------------------------------------------------------------------
Custodian
State Street Bank and Trust Company P.O. Box 1713
Boston, MA 02266-8600
- ------------------------------------------------------------------------------------------------
Transfer Agent and Dividend Disbursing Agent,
and Shareholder Servicing Agent
Federated Shareholder Services Company Federated Investors Tower
Pittsburgh, PA 15222-3779
- ------------------------------------------------------------------------------------------------
Independent Accountants
KPMG Peat Marwick LLP One Mellon Bank Center
Pittsburgh, PA 15219
- ------------------------------------------------------------------------------------------------
Deposit Guaranty National Bank DGB-14
Mutual Funds Services P.O. Box 1200
Jackson, MS 39215-1200
- ------------------------------------------------------------------------------------------------
</TABLE>
DG INVESTOR SERIES
DG PRIME MONEY MARKET FUND
DG U.S. GOVERNMENT MONEY MARKET FUND
[LOGO]
DG INVESTOR SERIES
COMBINED PROSPECTUS
PORTFOLIOS OF DG INVESTOR SERIES,
AN OPEN-END MANAGEMENT
INVESTMENT COMPANY
PARKSOUTH
CORPORATION
JACKSON, MS
INVESTMENT ADVISER
JUNE 30, 1997
[LOGO]
FEDERATED INVESTORS
Federated Securities Corp., Distributor
Cusip 23321N707
Cusip 23321N608
G00499-10 (6/97)
DG PRIME MONEY MARKET FUND
(A PORTFOLIO OF DG INVESTOR SERIES)
Supplement to the Statement of Additional Information dated June 30, 1997
A. Please delete the second paragraph of the section entitled "Trust
Ownership" on page 9 of the Statement of Additional Information and replace
it with the following: "As of August 1, 1997, the following shareholders of
record owned 5% or more of the outstanding shares of the Fund: National
Financial Services Corp., for the exclusive benefit of its customers, was
the owner of record of 148,923,506 shares (100%)."
B. Please add the following as the third sentence of the paragraph of the
section entitled "Investment Advisory Services-Advisory Fees" on page 10 of
the Statement of Additional Information:
"For the period from March 10, 1997 (start of business) to June 30, 1997,
the Adviser earned advisory fees from Prime Money Market Fund of $227,862, of
which $91,145 were voluntarily waived."
C. Please add the following as the last sentence of the first paragraph of
the section entitled "Brokerage Transactions" on page 10 of the Statement
of Additional Information: "During the period from March 10, 1997 (start
of business) to June 30, 1997, Prime Money Market Fund paid no brokerage
commissions on brokerage transactions."
D. Please add the following as the last sentence of the paragraph of the
section entitled "Other Services-Fund Administration" on page 10 of the
Statement of Additional Information: "For the period from March 10, 1997
(start of business) to June 30, 1997, the administrator earned $46,525 on
behalf of Prime Money Market Fund, of which $25,547 was waived."
E. Please add the following as the fifth paragraph of the section entitled
"Purchasing Shares-Distribution and Shareholder Services Plans" on page 11
of the Statement of Additional Information: "For the period from March 10,
1997 (start of business) to June 30, 1997, Prime Money Market Fund made
payments in the amount of $113,931 pursuant to the Distribution Plan, none
of which were waived."
F. Please add the following as the third paragraph of the section entitled
"Performance Information-Yield" on page 13 of the Statement of Additional
Information: "Prime Money Market Fund's yield for the seven-day period
ended June 30, 1997 was 5.02%."
G. Please add the following as the third paragraph of the section entitled
"Performance Information-Effective Yield" on page 13 of the Statement of
Additional Information: "Prime Money Market Fund's effective yield for the
seven-day period ended June 30, 1997 was 5.15%."
<PAGE>
H. Please add the following as the third paragraph of the section entitled
"Performance Information-Total Return" on page 13 of the Statement of
Additional Information and replace it with the following: "Prime Money
Market Fund's cumulative total return for the period from March 10, 1997
(date of initial public investment) to June 30, 1997 was 1.51%. Cumulative
total return reflects the Prime Money Market Fund's total performance over
a specific period of time. Prime Money Market Fund's cumulative total
return is representative of approximately 3 months of investment activity
since Prime Money Market Fund's effective date."
August 31, 1997
[GRAPHIC OMITTED]
Cusip 23321N707
G01258-18 (8/97)
[GRAPHIC OMITTED]
DG Investors Series
Money Market Funds
Statement of Additional Information
This Statement of Additional Information relates to the following two
portfolios (individually or collectively referred to as the "Fund" or
"Funds" as the context requires) of DG Investor Series (the "Trust"):
DG Prime Money Market Fund ("Prime Money Market Fund"); and
DG U.S. Government Money Market Fund ("Government Money
Market Fund").
This Statement of Additional Information should be read with the
prospectus of the Funds dated June 30, 1997. This Statement is not a
prospectus. You may request a copy of a prospectus or a paper copy of
this Statement, if you have received it electronically, free of charge
by calling 1-800-530-7377, or you can visit the DG Investors Series'
Internet site on the World Wide Web at (www.dgb.com).
Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
Statement dated June 30, 1997
[GRAPHIC OMITTED]
Cusip 23321N707
Cusip 23321N608
G00499-12 (6/97)
<PAGE>
- --------------------------------------------------------------------------------
Table of Contents
- --------------------------------------------------------------------------------
I
Investment Objectives and Policies 1
Prime Money Market Fund 1
Acceptable Investments 1
U.S. Government Securities 1
Bank Instruments 1
Ratings 1
Government Money Market Fund 1
Types of Investments 1
Investment Policies and Strategies 2
Repurchase Agreements 2
Reverse Repurchase Agreements 2
Credit Enhancement 2
When-Issued and Delayed Delivery Transactions 2
Lending of Portfolio Securities 3
Investment Limitations 3
Regulatory Compliance 4
DG Investor Series Management 5
Trust Ownership 9
Trustees' Compensation 9
Trustee Liability 9
Investment Advisory Services 10
Investment Adviser 10
Advisory Fees 10
Brokerage Transactions 10
Other Services 10
Fund Administration 10
Custodian 10
Transfer Agent, Dividend Disbursing Agent,
and Shareholder Servicing Agent 11
Independent Auditors 11
Purchasing Shares 11
Distribution and Shareholder Services Plans 11
Conversion to Federal Funds 11
Determining Net Asset Value 11
Exchange Privilege 12
Requirements for Exchange 12
Making an Exchange 12
Redeeming Shares 12
Redemption in Kind 12
Massachusetts Partnership Law 12
Tax Status 12
The Funds' Tax Status 12
Shareholders' Tax Status 13
Performance Information 13
Yield 13
Effective Yield 13
Total Return 13
Performance Comparisons 13
Economic and Market Information 14
Financial Statements 14
<PAGE>
Investment Objectives and Policies
The prospectus discusses the objective of each Fund and the policies employed to
achieve those objectives. The following discussion supplements the description
of the Funds' investment policies in the prospectus. The Funds' respective
investment objectives cannot be changed without approval of shareholders. Unless
indicated otherwise, the policies described below may be changed by the Board of
Trustees ("Trustees") without shareholder approval. Shareholders will be
notified before any material change in these policies becomes effective.
Prime Money Market Fund
Acceptable Investments
When determining whether a security presents minimal credit risks, the
investment adviser will consider the creditworthiness of: the issuer of the
security; the issuer of any demand feature applicable to the security; or any
guarantor of either the security or any demand feature.
U.S. Government Securities
The types of U.S. government securities in which the Prime Money Market Fund may
invest generally include direct obligations of the U.S. Treasury (such as U.S.
Treasury bills, notes, and bonds) and obligations issued or guaranteed by U.S.
government agencies or instrumentalities. These securities are backed by:
o the full faith and credit of the U.S. Treasury;
o the issuer's right to borrow from the U.S. Treasury;
o the discretionary authority of the U.S. government to purchase certain
obligations of agencies or instrumentalities; or
o the credit of the agency or instrumentality issuing the obligations.
Bank Instruments
The instruments of banks and savings associations whose deposits are insured by
the Bank Insurance Fund ("BIF") or the Savings Association Insurance Fund
("SAIF"), such as certificates of deposit, demand and time deposits, savings
shares, and bankers' acceptances, are not necessarily guaranteed by those
organizations. In addition to domestic bank instruments, the Prime Money Market
Fund may invest in: Eurodollar Certificates of Deposit issued by foreign
branches of U.S. or foreign banks; Eurodollar Time Deposits, which are U.S.
dollar-denominated deposits in foreign branches of U.S. or foreign banks;
Canadian Time Deposits, which are U.S. dollar-denominated deposits issued by
branches of major Canadian banks located in the United States; and Yankee
Certificates of Deposit, which are U.S. dollar-denominated certificates of
deposit issued by U.S. branches of foreign banks and held in the United States.
Ratings
An NRSRO's highest rating category is determined without regard for
sub-categories and gradations. For example, securities rated A-1 or A-1+ by
Standard & Poor's Ratings Group ("S&P"), Prime-1 by Moody's Investors Service,
Inc. ("Moody's"), or F-1 (+ or -) by Fitch Investors Service, Inc. ("Fitch") are
all considered rated in the highest short-term rating category. The Prime Money
Market Fund will follow applicable regulations in determining whether a security
rated by more than one NRSRO can be treated as being in the highest short-term
rating category; currently, such securities must be rated by two NRSROs in their
highest rating category. See "Regulatory Compliance."
Government Money Market Fund
Types of Investments
Government Money Market Fund invests primarily in short-term U.S. government
securities.
Variable Rate U.S. Government Securities
Some of the short-term U.S. government securities the Government Money
Market Fund may purchase have variable interest rates. These securities
have a rate of interest subject to adjustment at least annually. This
adjusted interest rate is ordinarily tied to some objective standard,
such as the 91-day U.S. Treasury bill rate.
Variable interest rates will reduce the changes in the market value of
such securities from their original purchase prices. Accordingly, the
potential for capital appreciation or capital depreciation should not
be greater than the potential for capital appreciation or capital
depreciation of fixed interest rate U.S. government securities having
maturities equal to the interest rate adjustment dates of the variable
rate U.S. government securities.
The Government Money Market Fund may purchase variable rate U.S. government
securities upon the determination by the Trustees that the interest rate as
adjusted will cause the instrument to have a current market value that
approximates its par value on the adjustment date.
Investment Policies and Strategies
Repurchase Agreements
The Funds or their custodian will take possession of the securities subject to
repurchase agreements and these securities will be marked to market daily. To
the extent that the original seller does not repurchase the securities from the
Funds, the Funds could receive less than the repurchase price on any sale of
such securities. In the event that such a defaulting seller filed for bankruptcy
or became insolvent, disposition of such securities by the Funds might be
delayed pending court action. The Funds believe that under the regular
procedures normally in effect for custody of the Funds' portfolio securities
subject to repurchase agreements, a court of competent jurisdiction would rule
in favor of the Funds and allow retention or disposition of such securities. The
Funds will only enter into repurchase agreements with banks and other recognized
financial institutions, such as broker/dealers, which are found by the Funds'
adviser to be creditworthy pursuant to guidelines established by the Trustees.
Reverse Repurchase Agreements
The Funds may also enter into reverse repurchase agreements. These transactions
are similar to borrowing cash. In reverse repurchase agreements, the Funds
transfer possession of a portfolio instrument to another person, such as a
financial institution, broker, or dealer, in return for a percentage of the
instrument's market value in cash, and agree that on a stipulated date in the
future the Funds will repurchase the portfolio instrument by remitting the
original consideration plus interest at an agreed upon rate.
When effecting reverse repurchase agreements, liquid assets of the Funds, in a
dollar amount sufficient to make payment for the obligations to be purchased,
are segregated at the trade date. These securities are marked to market daily
and are maintained until the transaction is settled.
The use of reverse repurchase agreements may enable the Funds to avoid selling
portfolio instruments at a time when a sale may be deemed to be disadvantageous,
but the ability to enter into reverse repurchase agreements does not ensure that
the Funds will be able to avoid selling portfolio instruments at a
disadvantageous time.
Credit Enhancement
The Prime Money Market Fund typically evaluates the credit quality and ratings
of credit-enhanced securities based upon the financial condition and ratings of
the party providing the credit enhancement (the "credit enhancer"), rather than
the issuer. Generally, the Fund will not treat credit-enhanced securities as
being issued by the credit enhancer for diversification purposes. However, under
certain circumstances applicable regulations may require the Fund to treat
securities as having been issued by both the issuer and the credit enhancer.
When-Issued and Delayed Delivery Transactions
These transactions are made to secure what is considered to be an advantageous
price or yield for the Funds. Settlement dates may be a month or more after
entering into these transactions, and the market values of the securities
purchased may vary from the purchase prices. No fees or other expenses, other
than normal transaction costs, are incurred. However, liquid assets of the Funds
sufficient to make payment for the securities to be purchased are segregated on
the Funds' records at the trade date. These assets are marked to market daily
and are maintained until the transaction has been settled. The Funds do not
intend to engage in when-issued and delayed delivery transactions to an extent
that would cause the segregation of more than 20% of the total value of their
respective assets.
The Government Money Market Fund does not anticipate investing more than 5%of
its respective total assets in when-issued and delayed delivery transactions.
Lending of Portfolio Securities
The collateral received when the Funds lend portfolio securities must be valued
daily and, should the market value of the loaned securities increase, the
borrower must furnish additional collateral to the Funds. During the time
portfolio securities are on loan, the borrower pays the Funds any dividends or
interest paid on such securities. Loans are subject to termination at the option
of the Funds or the borrower. The Funds may pay reasonable administrative and
custodial fees in connection with a loan and may pay a negotiated portion of the
interest earned on the cash or equivalent collateral to the borrower or placing
broker.
Investment Limitations
Selling Short and Buying on Margin
The Funds will not sell any securities short or purchase any securities
on margin, but may obtain such short-term credits as are necessary for clearance
of transactions.
Issuing Senior Securities and Borrowing Money
The Funds will not issue senior securities except that the Funds may
borrow money directly or through reverse repurchase agreements in
amounts up to one-third of the value of their total assets, including
the amounts borrowed.
The Funds will not borrow money or engage in reverse repurchase
agreements for investment leverage, but rather as a temporary,
extraordinary, or emergency measure or to facilitate management of the
portfolio by enabling the Funds to meet redemption requests when the
liquidation of portfolio securities is deemed to be inconvenient or
disadvantageous. The Funds will not purchase any securities while
borrowings in excess of 5% of the value of its total assets are
outstanding.
Pledging Assets
The Funds will not mortgage, pledge, or hypothecate any assets except
as necessary to secure permitted borrowings.
Lending Cash or Securities
The Funds will not lend any assets, except portfolio securities and
except that the Funds may purchase or hold corporate or government
bonds, debentures, notes, certificates of indebtedness or other debt
securities of an issuer, repurchase agreements, or other transactions
permitted by their investment objective, policies, and limitations or
the Trust's Declaration of Trust.
Investing in Commodities
The Funds will not purchase or sell commodities, commodity contracts,
or commodity futures contracts.
Investing in Real Estate
Government Money Market Fund will not purchase or sell real estate,
including limited partnership interests in real estate, although it may invest
in securities secured by real estate or interests in real estate.
Underwriting
The Funds will not underwrite any issue of securities, except as a Fund
may be deemed to be an underwriter under the Securities Act of 1933 in
connection with the sale of securities in accordance with a Fund's
investment objective, policies, and limitations.
Concentration of Investments
Prime Money Market Fund will not invest 25% or more of the value of its
total assets in any one industry except that the Fund will invest 25%
or more of the value of its total assets in commercial paper issued by
finance companies. The Fund may invest 25% or more of the value of its
total assets in cash, cash items, or securities issued or guaranteed by
the government of the United States or its agencies, or
instrumentalities and repurchase agreements collateralized by such U.S.
government securities. The U.S. government is not considered to be an
industry.
<PAGE>
Diversification of Investments
With respect to securities comprising 75% of the value of its total
assets, the Prime Money Market Fund will not purchase securities of any
one issuer (other than cash, cash items, or securities issued or
guaranteed by the government of the United States or its agencies or
instrumentalities and repurchase agreements collateralized by such U.S.
government securities) if as a result more than 5% of the value of its
total assets would be invested in the securities of that issuer, or if
it would own more than 10% of the outstanding voting securities of that
issuer.
The above limitations cannot be changed without shareholder approval. The
following limitations, however, may be changed by the Trustees without
shareholder approval. Shareholders will be notified before any material change
in these limitations becomes effective.
Investing in Illiquid Securities
The Funds will not invest more than 10% of the value of their net
assets in illiquid securities, including securities not determined by
the Trustee to be liquid and repurchase agreementsproviding for
settlement in more than seven days after notice, and with respect to
the Prime Money Market Fund, non-negotiable time deposits.
Investing in Securities of Other Investment Companies
Government Money Market Fund and Prime Money Market Fund will limit
their investments in other investment companies to no more than 3% of
the total outstanding voting stock of any investment company, will not
invest more than 5% of their respective total assets in any one
investment company, or invest more than 10% of their respective total
assets in investment companies in general. The Funds will purchase
securities of investment companies only in open-market transactions
involving only customary broker's commissions. However, these
limitations are not applicable if the securities are acquired in a
merger, consolidation, or acquisition of assets. It should be noted
that investment companies incur certain expenses, such as management
fees, and, therefore, any investment by the Funds in shares of another
investment company would be subject to such duplicate expenses. The
Funds' adviser will waive its investment advisory fee on assets
invested in securities of open-end investment companies.
Investing for Control
Prime Money Market Fund will not invest in securities of a company for
the purpose of exercising control or management.
Investing in Options
The Funds will not invest in puts, calls, straddles, spreads, or any
combination of them.
For purposes of the above limitations, the Funds consider certificates of
deposit and demand and time deposits issued by a U.S. branch of a domestic bank
or savings association having capital, surplus, and undivided profits in excess
of $100,000,000 at the time of investment to be "cash items." Except with
respect to borrowing money, if a percentage limitation is adhered to at the time
of investment, a later increase or decrease in percentage resulting from any
change in value or net assets will not result in a violation of such limitation.
Prime Money Market Fund has no present intent to borrow money or pledge
securities in excess of 5% of the value of its net assets during the coming
fiscal year.
Regulatory Compliance
The Funds may follow non-fundamental operational policies that are more
restrictive than their fundamental investment limitations, as set forth in the
prospectus and this Statement of Additional Information, in order to comply with
applicable laws and regulations, including the provisions of and regulations
under the Investment Company Act of 1940. In particular, the Funds will comply
with the various requirements of Rule 2a-7, which regulates money market mutual
funds. For example, with limited exceptions, Rule 2a-7 prohibits the investment
of more than 5% of its assets in the securities of any one issuer, although
Government Money Market Fund's investment limitation only requires such 5%
diversification with respect to 75% of its assets. Government Money Market Fund
will invest more than 5% of its assets in any one issuer only under the
circumstances permitted by Rule 2a-7. The Funds will also determine the
effective maturity of their investments , as well as their ability to consider a
security as having received the requisite short-term ratings by NRSROs,
according to Rule 2a-7. The Funds may change these operational policies to
reflect changes in the laws and regulations without the approval of their
shareholders.
<PAGE>
DG Investor Series Management
Officers and Trustees are listed with their addresses, birthdates, present
positions with Dg Investor Series, and principal occupations.
John F. Donahue@*
Federated Investors Tower
Pittsburgh, PA
Birthdate: July 28, 1924
Chairman and Trustee
Chairman and Trustee, Federated Investors, Federated Advisers, Federated
Management, and Federated Research; Chairman and Director, Federated Research
Corp. and Federated Global Research Corp.; Chairman, Passport Research, Ltd.;
Chief Executive Officer and Director or Trustee of the Funds.Mr. Donahue is the
father of J. Christopher Donahue, Executive Vice President of the Company.
Thomas G. Bigley
15 Old Timber Trail
Pittsburgh, PA
Birthdate: February 3, 1934
Trustee
Chairman of the Board, Children's Hospital of Pittsburgh; formerly, Senior
Partner, Ernst & Young LLP; Director, MED 3000 Group, Inc.; Director, Member of
Executive Committee, University of Pittsburgh; Director or Trustee of the Funds.
John T. Conroy, Jr.
Wood/IPC Commercial Department
John R. Wood and Associates, Inc., Realtors
3255 Tamiami Trail North
Naples, FL
Birthdate: June 23, 1937
Trustee
President, Investment Properties Corporation; Senior Vice-President, John R.
Wood and Associates, Inc., Realtors; Partner or Trustee in private real estate
ventures in Southwest Florida; formerly, President, Naples Property Management,
Inc. and Northgate Village Development Corporation; Director or Trustee of the
Funds.
William J. Copeland
One PNC Plaza - 23rd Floor
Pittsburgh, PA
Birthdate: July 4, 1918
Trustee
Director and Member of the Executive Committee, Michael Baker, Inc.; formerly,
Vice Chairman and Director, PNC Bank, N.A., and PNC Bank Corp.; Director, Ryan
Homes, Inc.; Director or Trustee of the Funds.
<PAGE>
James E. Dowd
571 Hayward Mill Road
Concord, MA
Birthdate: May 18, 1922
Trustee
Attorney-at-law; Director, The Emerging Germany Fund, Inc.; Director or Trustee
of the Funds.
Lawrence D. Ellis, M.D.*
3471 Fifth Avenue, Suite 1111
Pittsburgh, PA
Birthdate: October 11, 1932
Trustee
Professor of Medicine, University of Pittsburgh; Medical Director, University of
Pittsburgh Medical Center - Downtown; Member, Board of Directors, University of
Pittsburgh Medical Center; formerly, Hematologist, Oncologist, and Internist,
Presbyterian and Montefiore Hospitals; Director or Trustee of the Funds.
Edward L. Flaherty, Jr.@
Miller, Ament, Henny & Kochuba
205 Ross Street
Pittsburgh, PA
Birthdate: June 18, 1924
Trustee
Attorney of Counsel, Miller, Ament, Henny & Kochuba; Director, Eat'N Park
Restaurants, Inc.; formerly, Counsel, Horizon Financial, F.A., Western Region;
Director or Trustee of the Funds.
Edward C. Gonzales *
Federated Investors Tower
Pittsburgh, PA
Birthdate: October 22, 1930
President, Treasurer and Trustee
Vice Chairman, Treasurer, and Trustee, Federated Investors; Vice President,
Federated Advisers, Federated Management, Federated Research, Federated Research
Corp., Federated Global Research Corp. and Passport Research, Ltd.; Executive
Vice President and Director, Federated Securities Corp.; Trustee, Federated
Shareholder Services Company; Trustee or Director of some of the Funds;
President, Executive Vice President and Treasurer of some of the Funds.
Peter E. Madden
One Royal Palm Way
100 Royal Palm Way
Palm Beach, FL
Birthdate: March 16, 1942
Trustee
Consultant; Former State Representative, Commonwealth of Massachusetts;
formerly, President, State Street Bank and Trust Company and State Street Boston
Corporation; Director or Trustee of the Funds.
<PAGE>
Gregor F. Meyer
203 Kensington Ct.
Pittsburgh, PA
Birthdate: October 6, 1926
Trustee
Former Attorney, Member of Miller, Ament, Henny & Kochuba; Chairman, Meritcare,
Inc.; Director, Eat'N Park Restaurants, Inc.; Director or Trustee of the Funds.
John E. Murray, Jr., J.D., S.J.D.
President, Duquesne University
Pittsburgh, PA
Birthdate: December 20, 1932
Trustee
President, Law Professor, Duquesne University; Consulting Partner, Mollica &
Murray; Director or Trustee of the Funds.
Wesley W. Posvar
1202 Cathedral of Learning
University of Pittsburgh
Pittsburgh, PA
Birthdate: September 14, 1925
Trustee
Professor, International Politics; Management Consultant; Trustee, Carnegie
Endowment for International Peace, RAND Corporation, Online Computer Library
Center, Inc., National Defense University and U.S. Space Foundation; President
Emeritus, University of Pittsburgh; Founding Chairman, National Advisory Council
for Environmental Policy and Technology, Federal Emergency Management Advisory
Board and Czech Management Center, Prague; Director or Trustee of the Funds.
Marjorie P. Smuts
4905 Bayard Street
Pittsburgh, PA
Birthdate: June 21, 1935
Trustee
Public relations/Marketing/Conference Planning; Director or Trustee of the
Funds.
J. Christopher Donahue
Federated Investors Tower
Pittsburgh, PA
Birthdate: April 11, 1949
Executive Vice President
President and Trustee, Federated Investors, Federated Advisers, Federated
Management, and Federated Research; President and Director, Federated Research
Corp. and Federated Global Research Corp.; President, Passport Research, Ltd.;
Trustee, Federated Shareholder Services Company, and Federated Shareholder
Services; Director, Federated Services Company; President or Executive Vice
President of the Funds; Director or Trustee of some of the Funds. Mr. Donahue is
the son of John F. Donahue, Chairman and Trustee of the Company.
<PAGE>
John W. McGonigle
Federated Investors Tower
Pittsburgh, PA
Birthdate: October 26, 1938
Executive Vice President and Secretary
Executive Vice President, Secretary, and Trustee, Federated Investors; Trustee,
Federated Advisers, Federated Management, and Federated Research; Director,
Federated Research Corp. and Federated Global Research Corp.; Trustee, Federated
Shareholder Services Company; Director, Federated Services Company; President
and Trustee, Federated Shareholder Services; Director, Federated Securities
Corp.; Executive Vice President and Secretary of the Funds; Treasurer of some of
the Funds.
Richard B. Fisher
Federated Investors Tower
Pittsburgh, PA
Birthdate: May 17, 1923
Vice President
Executive Vice President and Trustee, Federated Investors; Chairman and
Director, Federated Securities Corp.; President or Vice President of some of the
Funds; Director or Trustee of some of the Funds.
Charles L. Davis, Jr.
Federated Investors Tower
Pittsburgh, PA
Birthdate: March 23, 1960
Vice President and Assistant Treasurer
Vice President and Assistant Treasurer of some of the Funds.
* This Trustee is deemed to be an "interested person" as defined in the
Investment Company Act of 1940.
@ Member of the Executive Committee. The Executive Committee of the
Board of Trustees handles the responsibilities of the Board between meetings of
the Board.
As referred to in the list of Trustees and Officers, "Funds" includes the
following investment companies:111 Corcoran Funds; Arrow Funds; Automated
Government Money Trust; Blanchard Funds; Blanchard Precious Metals Fund, Inc.;
Cash Trust Series II; Cash Trust Series, Inc. ; DG Investor Series; Edward D.
Jones & Co. Daily Passport Cash Trust; Federated Adjustable Rate U.S. Government
Fund, Inc.; Federated American Leaders Fund, Inc.; Federated ARMs Fund;
Federated Equity Funds; Federated Equity Income Fund, Inc.; Federated Fund for
U.S. Government Securities, Inc.; Federated GNMA Trust; Federated Government
Income Securities, Inc.; Federated Government Trust; Federated High Income Bond
Fund, Inc.; Federated High Yield Trust; Federated Income Securities Trust;
Federated Income Trust; Federated Index Trust; Federated Institutional Trust;
Federated Insurance Series; Federated Investment Portfolios; Federated
Investment Trust; Federated Master Trust; Federated Municipal Opportunities
Fund, Inc.; Federated Municipal Securities Fund, Inc.; Federated Municipal
Trust; Federated Short-Term Municipal Trust; Federated Short-Term U.S.
Government Trust; Federated Stock and Bond Fund, Inc.; Federated Stock Trust;
Federated Tax-Free Trust; Federated Total Return Series, Inc.; Federated U.S.
Government Bond Fund; Federated U.S. Government Securities Fund: 1-3 Years;
Federated U.S. Government Securities Fund: 2-5 Years; Federated U.S. Government
Securities Fund: 5-10 Years; Federated Utility Fund, Inc.; First Priority Funds;
Fixed Income Securities, Inc.; High Yield Cash Trust; Intermediate Municipal
Trust; International Series, Inc.; Investment Series Funds, Inc.; Investment
Series Trust; Liberty Term Trust, Inc. - 1999; Liberty U.S. Government Money
Market Trust; Liquid Cash Trust; Managed Series Trust; Money Market Management,
Inc.; Money Market Obligations Trust; Money Market Trust; Municipal Securities
Income Trust; Newpoint Funds; Peachtree Funds; RIMCO Monument Funds; Targeted
Duration Trust; Tax-Free Instruments Trust; The Planters Funds; The Starburst
Funds; The Starburst Funds II; The Virtus Funds; Trust for Financial
Institutions; Trust for Government Cash Reserves; Trust for Short-Term U.S.
Government Securities; Trust for U.S. Treasury Obligations; Wesmark Funds; and
World Investment Series, Inc.
<PAGE>
Trust Ownership
Officers and Trustees as a group own less than 1% of the Fund`s outstanding
shares.
As of June 9, 1997, the following shareholder of record owned 5% or more of the
outstanding shares of Prime Money Market Fund: National Financial Services
Corp., for the exclusive benefit of its customers, was the owner of record of
approximately 161,600,157 shares (100%).
As of June 9, 1997, the following shareholders of record owned 5% or more of the
outstanding shares of U.S. Government Money Market Fund: Deposit Guaranty
National Bank, acting in various capacities for numerous accounts was the owner
of record of approximately 170,595,340 shares (72%) and Commercial National
Bank, acting in various capacities for numerous accounts, was the owner of
record of approximately 51,813,418 shares (21.87%).
Trustees' Compensation
Name , Aggregate
Position With Compensation From
Trust Trust+
John F. Donahue, $0
Chairman and Trustee
Thomas G. Bigley, $1,958
Trustee
John T. Conroy, Jr., $2,155
Trustee
William J. Copeland, $2,155
Trustee
James E. Dowd, $2,155
Trustee
Lawrence D. Ellis, M.D., $1,958
Trustee
Edward L. Flaherty, Jr., $2,155
Trustee
Edward C. Gonzales, $0
President, Treasurer and Trustee
Peter E. Madden, $1,958
Trustee
Gregor F. Meyer, $1,958
Trustee
John E. Murray, Jr., $1,958
Trustee
Wesley W. Posvar, $1,958
Trustee
Marjorie P. Smuts, $1,958
Trustee
+The aggregate compensation is provided for the Trust which is currently
comprised of eight portfolios. Information is furnished for the fiscal year
ended February 28, 1997, and the seven portfolios that were effective as of that
date.
Trustee Liability
The Trust's Declaration of Trust provides that the Trustees will only be liable
for their own willful defaults. If reasonable care has been exercised in the
selection of officers, agents, employees, or investment advisers, a Trustee
shall not be liable for any neglect or wrong doing of any such person. However,
they are not protected against any liability to which they would otherwise be
subject by reason of willful misfeasance, bad faith, gross negligence, or
reckless disregard of the duties involved in the conduct of their office.
Investment Advisory Services
Investment Adviser
The Funds' investment adviser is ParkSouth Corporation (the "Adviser"), a
subsidiary of Deposit Guaranty National Bank, a national banking association
founded in 1925 which, in turn, is a subsidiary of Deposit Guaranty Corp. The
Adviser shall not be liable to the Trust, the Funds or any shareholder of the
Funds for any losses that may be sustained in the purchase, holding, or sale of
any security, or for anything done or omitted by it, except acts or omissions
involving willful misfeasance, bad faith, gross negligence, or reckless
disregard of the duties imposed upon it by its contract with the Trust.
Because of the internal controls maintained by Deposit Guaranty National Bank to
restrict the flow of non-public information, Fund investments are typically made
without any knowledge of Deposit Guaranty National Bank's or its affiliates'
lending relationships with an issuer. Advisory Fees
For its advisory services, the Adviser receives an annual investment advisory
fee as described in the prospectus. For the fiscal years ended February 28,
1997, February 29, 1996, and February 28, 1995, the Adviser earned fees from
Government Money Market Fund of $1,138,567, $1,044,577 and $837,617,
respectively, of which $455,427, $417,831 and $335,047, respectively, were
voluntarily waived.
Brokerage Transactions
When selecting brokers and dealers to handle the purchase and sale of portfolio
instruments, the Adviser looks for prompt execution of the order at a favorable
price. In working with dealers, the Adviser will generally use those who are
recognized dealers in specific portfolio instruments, except when a better price
and execution of the order can be obtained elsewhere. The Adviser makes
decisions on portfolio transactions and selects brokers and dealers subject to
guidelines established by the Trustees. The Adviser may select brokers and
dealers who offer brokerage and research services. These services may be
furnished directly to the Fund or to the Adviser and may include: advice as to
the advisability of investing in securities; security analysis and reports;
economic studies; industry studies; receipt of quotations for portfolio
evaluations; and similar services. Research services provided by brokers and
dealers may be used by the Adviser or its affiliates in advising the Fund and
other accounts. To the extent that receipt of these services may supplant
services for which the Adviser or its affiliates might otherwise have paid, it
would tend to reduce their expenses. The Adviser and its affiliates exercise
reasonable business judgment in selecting brokers who offer brokerage and
research services to execute securities transactions. They determine in good
faith that commissions charged by such persons are reasonable in relationship to
the value of the brokerage and research services provided. For the fiscal years
ended February 28, 1997, February 29, 1996, and February 28, 1995, Government
Money Market Fund paid no brokerage commissions on brokerage transactions.
Although investment decisions for the Fund are made independently from those of
the other accounts managed by the Adviser, investments of the type the Fund may
make may also be made by those other accounts. When the Fund and one or more
other accounts managed by the Adviser are prepared to invest in, or desire to
dispose of, the same security, available investments or opportunities for sales
will be allocated in a manner believed by the Adviser to be equitable to each.
In some cases, this procedure may adversely affect the price paid or received by
the Fund or the size of the position obtained or disposed of by the Fund. In
other cases, however, it is believed that coordination and the ability to
participate in volume transactions will be to the benefit of the Fund.
Other Services
Fund Administration
Federated Administrative Services, a subsidiary of Federated Investors, provides
administrative personnel and services to the Fund for a fee as described in the
prospectus. For the fiscal years ended February 28, 1997, February 29, 1996, and
February 28, 1995, the administrator earned $248,304, $244,926 and $210,182,
respectively, on behalf of the Government Money Market Fund, none of which was
waived.
Custodian
State Street Bank and Trust Company, Boston, Massachusetts, is custodian for the
securities and cash of the Funds.
Transfer Agent, Dividend Disbursing Agent, and Shareholder Servicing Agent
Federated Shareholder Services Company, Pittsburgh, Pennsylvania, a subsidiary
of Federated Investors, serves as transfer agent for the shares of the Funds,
dividend disbursing agent for the Funds, and shareholder servicing agent for the
Funds.
Independent Auditors
The independent auditors for the Fund are KPMG Peat Marwick LLP, Pittsburgh,
Pennsylvania.
Purchasing Shares
Shares of the Funds are sold at their net asset value next determined after an
order is received on days the New York Stock Exchange and Federal Reserve Wire
System are open for business. The procedure for purchasing shares is explained
in the prospectus under "Investing in the Fund."
Distribution and Shareholder Services Plans
These arrangements permit the payment of fees to financial institutions to
stimulate distribution activities and services to shareholders provided by a
representative who has knowledge of the shareholder's particular circumstances
and goals. These activities and services may include, but are not limited to,
marketing efforts; providing office space, equipment, telephone facilities, and
various clerical, supervisory, computer, and other personnel as necessary or
beneficial to establish and maintain shareholder accounts and records;
processing purchase and redemption transactions and automatic investments of
client account cash balances; answering routine client inquiries; and assisting
clients in changing dividend options, account designations, and addresses.
By adopting the Distribution Plan, the Trustees expect that the Funds will be
able to achieve a more predictable flow of cash for investment purposes and to
meet redemptions. This will facilitate more efficient portfolio management and
assist the Funds in pursuing their investment objectives. By identifying
potential investors whose needs are served by the Funds' objectives, and
properly servicing these accounts, it may be possible to curb sharp fluctuations
in rates of redemptions and sales.
Other benefits, which may be realized under either arrangement, may include: (1)
providing personal services to shareholders; (2) investing shareholder assets
with a minimum of delay and administrative detail; and (3) enhancing shareholder
recordkeeping systems; and (4) responding promptly to shareholders' requests and
inquiries concerning their accounts.
For the fiscal year ended February 28, 1997, Government Money Market Fund made
no payments pursuant to the Distribution Plan.
Conversion to Federal Funds
It is the Funds' policy to be as fully invested as possible so that maximum
interest may be earned. To this end, all payments from shareholders must be in
federal funds or be converted into federal funds. Deposit Guaranty National Bank
(the "Bank"), as well as Federated Shareholder Services Company, act as the
shareholder's agent in depositing checks and converting them to federal funds.
Determining Net Asset Value
The Trustees have decided that the best method for determining the value of
portfolio instruments is amortized cost. Under this method, portfolio
instruments are valued at the acquisition cost as adjusted for amortization of
premium or accumulation of discount rather than at current market value.
Accordingly, neither the amount of daily income nor the net asset value is
affected by any unrealized appreciation or depreciation of the portfolio. In
periods of declining interest rates, the indicated daily yield on shares of the
Funds computed by dividing the annualized daily income on the Funds' portfolio
by the net asset value computed as above may tend to be higher than a similar
computation made by using a method of valuation based upon market prices and
estimates. In periods of rising interest rates, the opposite may be true.
The Funds' use of the amortized cost method of valuing portfolio instruments
depends on its compliance with certain conditions in Rule 2a-7 (the "Rule")
promulgated by the Securities and Exchange Commission under the Investment
Company Act of 1940. Under the Rule, the Trustees must establish procedures
reasonably designed to stabilize the net asset value per share, as computed for
purposes of distribution and redemption, at $1.00 per share, taking into account
current market conditions and the Funds' investment objective. The procedures
include monitoring the relationship between the amortized cost value per share
and the net asset value per share based upon available indications of market
value. The Trustees will decide what, if any, steps should be taken if there is
a difference of more than 0.5% between the two values. The Trustees will take
any steps they consider appropriate (such as redemption in kind or shortening
the average portfolio maturity) to minimize any material dilution or other
unfair results arising from differences between the two methods of determining
net asset value.
Exchange Privilege
Requirements for Exchange
Before the exchange, the shareholder must receive a prospectus of the fund for
which the exchange is being made. Upon receipt of proper instructions and
required supporting documents, shares submitted for exchange are redeemed and
the proceeds invested in shares of the other fund.
Further information on the exchange privilege may be obtained by calling the
Funds.
Making an Exchange
Instructions for exchanges may be given in writing. Written instructions may
require a signature guarantee.
Redeeming Shares
Shares of the Funds are redeemed at the next computed net asset value after the
Bank receives the redemption request. Redemption procedures are explained in the
prospectus under "Redeeming Shares." Redemption requests cannot be executed on
days on which the New York Stock Exchange is closed or on federal holidays when
wire transfers are restricted.
Although State Street Bank does not charge for telephone redemptions, it
reserves the right to charge a fee for the cost of wire-transferred redemptions
of less than $5,000.
Redemption in Kind
Although the Funds intend to redeem shares in cash, they reserve the right under
certain circumstances to pay the redemption price in whole or in part by a
distribution of securities from the Funds' portfolio.
Redemption in kind will be made in conformity with applicable Securities and
Exchange Commission rules, taking such securities at the same value employed in
determining net asset value and selecting the securities in a manner the
Trustees determine to be fair and equitable.
The Funds have elected to be governed by Rule 18f-1 of the Investment Company
Act of 1940 under which each Fund is obligated to redeem shares for any one
shareholder in cash only up to the lesser of $250,000 or 1% of each Fund's net
asset value during any 90-day period.
Massachusetts Partnership Law
Under certain circumstances, shareholders may be held personally liable as
partners under Massachusetts law for obligations of the Trust. To protect its
shareholders, the Trust has filed legal documents with Massachusetts that
expressly disclaim the liability of its shareholders for acts or obligations of
the Trust. These documents require notice of this disclaimer to be given in each
agreement, obligation, or instrument the Trust or its Trustees enter into or
sign.
In the unlikely event a shareholder is held personally liable for the Trust's
obligations, the Trust is required by the Declaration of Trust to use its
property to protect or compensate the shareholder. On request, the Trust will
defend any claim made and pay any judgment against a shareholder for any act or
obligation of the Trust. Therefore, financial loss resulting from liability as a
shareholder will occur only if the Trust itself cannot meet its obligations to
indemnify shareholders and pay judgments against them. Tax Status
The Funds' Tax Status
The Funds will pay no federal income tax because they expect to meet the
requirements of Subchapter M of the Internal Revenue Code applicable to
regulated investment companies and to receive the special tax treatment afforded
to such companies. To qualify for this treatment, each Fund must, among other
requirements:
o derive at least 90% of its gross income from dividends, interest, and
gains from the sale of securities; o derive less than 30% of its gross
income from the sale of securities held less than three months; o invest
in securities within certain statutory limits; and o distribute to its
shareholders at least 90% of its net income earned during the year.
Shareholders' Tax Status
Shareholders of the Funds are subject to federal income tax on dividends
received as cash or additional shares. These dividends, and any short-term
capital gains, are taxable as ordinary income. No portion of any income dividend
paid by the Funds is eligible for the dividends received deduction available to
corporations.
Performance Information
Performance depends upon such variables as: portfolio quality; average portfolio
maturity; type of instruments in which the portfolio is invested; changes in
interest rates; changes in expenses; and the relative amount of cash flow. To
the extent that financial institutions and broker/dealers charge fees in
connection with services provided in conjunction with an investment in shares of
the Funds, the performance will be reduced for those shareholders paying those
fees.
Yield
The yield is calculated based upon the seven days ending on the day of the
calculation, called the "base period." This yield is computed by: determining
the net change in the value of a hypothetical account with a balance of one
share at the beginning of the base period, with the net change excluding capital
changes but including the value of any additional shares purchased with
dividends earned from the original one share and all dividends declared on the
original and any purchased shares; dividing the net change in the account's
value by the value of the account at the beginning of the base period to
determine the base period return; and multiplying the base period return by
365/7.
The Government Money Market Fund's yield for the seven-day period ended February
28, 1997 was 4.72%.
Effective Yield
The effective yield is calculated by compounding the unannualized base period
return by: adding 1 to the base period return; raising the sum to the 365/7th
power; and subtracting 1 from the result.
The Government Money Market Fund's effective yield for the seven-day period
ended February 28, 1997 was 4.83%.
Total Return
Average annual total return is the average compounded rate of return for a given
period that would equate a $1,000 initial investment to the ending redeemable
value of that investment. The ending redeemable value is computed by multiplying
the number of shares owned at the end of the period by the net asset value per
share at the end of the period. The number of shares owned at the end of the
period is based on the number of shares purchased at the beginning of the period
with $1,000, adjusted over the period by any additional shares, assuming the
monthly reinvestment of all dividends and distributions.
The Government Money Market Fund's average annual total returns for the fiscal
year ended February 28, 1997, and for the period from March 31, 1992 (date of
initial public investment) to February 28, 1997, were 4.83% and 4.08%
respectively.
Performance Comparisons
Investors may use financial publications and/or indices to obtain a more
complete view of the Funds' performance. When comparing performance, investors
should consider all relevant factors such as the composition of any index used,
prevailing market conditions, portfolio compositions of other funds, and methods
used to value portfolio securities and compute offering price. The financial
publications and/or indices which the Funds use in advertising may include:
o Lipper Analytical Services, Inc. (Prime Money Market Fund Government
Money Market Fund), ranks funds in various fund categories based on
total return, which assumes the reinvestment of all income dividends
and capital gains distributions, if any.
o Donoghue's Money Fund Report (Prime Money Market Fund Government
Money Market Fund) publishes annualized yields of money market funds
weekly. Donoghue's Money Market Insight publication reports monthly
and 12-month-to-date investment results for the same money funds.
o Money (Prime Money Market Fund Government Money Market Fund), a
monthly magazine, regularly ranks money market funds in various
categories based on the latest available seven-day effective yield.
o Bank Rate Monitor(C) National Index (Prime Money Market Fund
Government Money Market Fund), Miami Beach, Florida, published
weekly, is an average of the interest rates of personal money market
deposit accounts at ten of the largest banks and thrifts in each of
the five largest Standard Metropolitan Statistical Areas. If more
than one rate is offered, the lowest rate is used. Account minimums
and compounding methods may vary.
o Discount Corporation of New York 30-Day Federal Agencies (Government
Money Market Fund), for example, is a weekly quote of the average
daily offering price for selected federal agency issues maturing in 30
days.
o Salomon 30-Day Treasury Bill Index (Government Money Market Fund) is a
weekly quote of the most representative yields for selected securities
issued by the U.S. Treasury, maturing in 30 days.
Advertisements and other sales literature for the Funds may quote total returns
which are calculated on non-standardized base periods. These total returns
represent the historic change in the value of an investment in the Funds based
on monthly reinvestment of dividends over a specified period of time.
Advertising and other promotional literature may include charts, graphs and
other illustrations using the Funds' returns in general, that demonstrate basic
investment concepts such as tax-deferred compounding, dollar-cost averaging and
systematic investment. In addition, the Funds can compare its performance, or
performance for the types of securities in which it invests, to a variety of
other investments, such as bank savings accounts, certificates of deposit, and
Treasury bills.
Economic and Market Information
Advertising and sales literature for the Funds may include discussions of
economic, financial and political developments and their effect on the
securities market. Such discussions may take the form of commentary on these
developments by Fund portfolio managers and their views and analysis on how such
developments could affect the Funds. In addition, advertising and sales
literature may quote statistics and give general information about the mutual
fund industry, including the growth of the industry, from sources such as the
Investment Company Institute ("ICI"). For example, according to the ICI,
thirty-seven percent of American households are pursuing their financial goals
through mutual funds. These investors, as well as businesses and institutions,
have entrusted over $3.5 trillion to the more than 6,000 funds available.
Financial Statements
The financial statements for the fiscal year ended February 28, 1997, for
Government Money Market Fund are incorporated herein by reference to the Annual
Report of the Fund dated February 28, 1997 (File Nos. 33-46431 and 811-6607). A
copy of Government Money Market Fund's Annual Report may be obtained without
charge by contacting the Trust.
PART C. OTHER INFORMATION.
Item 24. Financial Statements and Exhibits:
(a) Financial Statements: (1-6) Incorporated herein by reference to the Trust's
Annual Report dated February 28, 1997 (File Nos. 33-46431 and 811-6607); (7)
Filed in supplement to Part A; (8,9) To be filed by amendment.
(b) Exhibits:
(1) Conformed copy of Declaration of Trust of the Registrant (1.);
(i) Conformed copy of Amendment No. 1 of Declaration of
Trust of the Registrant (2.);
(ii) Conformed copy of Amendment No. 3 of Declaration of
Trust of the Registrant (4.);
(iii) Conformed copy of Amendment to the Declaration of
Trust of the Registrant dated May 17, 1994 (8.);
(2) Copy of By-Laws of the Registrant (1.);
(3) Not applicable;
(4) (i) Copy of Specimen Certificate for Shares of Beneficial
Interest of DG U.S. Government Money Market Fund(3.);
(ii) Copy of Specimen Certificate for
Shares of Beneficial Interest of DG Limited
Term Government Income Fund (3.); (iii) Copy
of Specimen Certificate for Shares of
Beneficial Interest of DG Government Income
Fund (3.);
(iv) Copy of Specimen Certificate for Shares of Beneficial
Interest of DG Equity Fund (3.);
(v) Copy of Specimen Certificate for Shares of Beneficial
Interest of DG Municipal Income (6.);
(vi) Copy of Specimen Certificate for Shares of Beneficial
Interest of DG Opportunity Fund (8.);
(vii) Copy of Specimen Certificate for Shares of Beneficial
Interest of DG Prime Money Market Fund (12.);
+ All exhibits have been filed electronically.
1. Response is incorporated by reference to Registrant's Initial Registration
Statement on Form N-1A filed March 18, 1992. (File Nos. 33-46431 and
811-6607)
2. Response is incorporated by reference to Registrant's Pre-Effective
Amendment No. 1 on Form N-1A filed April 29, 1992. (File Nos. 33-46431
and 811-6607)
3. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 1 on Form N-1A filed May 22, 1992. (File Nos. 33-46431
and 811-6607)
4. Response is incorporated by reference to Registrant's Post-Effective
Amendment No.2 on Form N-1A filed October 14, 1992. (File Nos. 33-46431
and 811-6607)
6. Response is incorporated by Reference to Registrant's Post-Effective
Amendment No. 4 on Form N-1A filed April 23, 1993. (File Nos. 33-46431
and 811-6607)
8. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 6 on Form N-1A filed May 26, 1994. (File Nos. 33-46431 and
811-6607)
12. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 11 on Form N-1A filed November 15, 1996. (File Nos. 33-46431
and 811-6607)
<PAGE>
(viii) Copy of Specimen Certificate for Shares of Beneficial Interest
of DG Mid Cap Fund (13.);
(ix) Copy of Specimen Certificate for Shares of Beneficial Interest
of DG International Equity Fund (13.);
(5) Conformed copy of Investment Advisory Contract of Registrant (13.);
(i) Conformed copy of Exhibit I to the
Investment Advisory Contract of Registrant
to add DG Mid Cap Fund (15); (ii) Conformed
copy of Sub-Advisory Agreement between
Deposit Guaranty National Bank and
Commercial National Bank (6.);
(a) Conformed copy of Exhibit A for
DG Equity Fund (8.); (b) Conformed
copy of Exhibit B for DG Government
Income Fund (8.); (c) Conformed
copy of Exhibit C for DG Limited
Term Government Income Fund (8.);
(d) Conformed copy of Exhibit D for
DG Municipal Income Fund (8.); (e)
Conformed copy of Exhibit E for DG
Opportunity Fund; (9.)
(iii) Conformed copy of Sub-Advisory Agreement between ParkSouth
Corporation and Lazard Frere Asset Management (13.);
(iv) Form of Sub-Advisory Agreement between ParkSouth Corporation
and Bennett Lawrence Management, Inc. (13.);
(6) Conformed copy of Distributor's Contract of the Registrant (3.);
(i) Conformed copy of Exhibit A for DG vs
Government Money Market Fund (8.); (ii)
Copy of Exhibit B for DG Limited Term
Government Income Fund (8.);
(iii) Conformed copy of Exhibit C for DG
Government Income Fund (8.); (iv) Conformed
copy of Exhibit D for DG Equity Income Fund
(8.);
(v) Conformed copy of Exhibit E for DG
Municipal Income Fund (8.); (vi) Conformed
copy of Exhibit F for DG Opportunity Fund
(9.);
+ All exhibits have been filed electronically.
3. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 1 on Form N-1A filed May 22, 1992. (File Nos. 33-46431
and 811-6607)
6. Response is incorporated by Reference to Registrant's Post-Effective
Amendment No. 4 on Form N-1A filed April 23, 1993. (File Nos.
33-46431 and 811-6607)
8. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 6 on Form N-1A filed May 26, 1994. (File Nos. 33-46431
and 811-6607)
9. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 8 on Form N-1A filed February 10, 1995. (File Nos.
33-46431 and 811-6607)
13. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 13 on Form N-1A filed June 20, 1997. (File Nos.
33-46431 and 811-6607)
15. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 15 on Form N-1A filed August 22, 1997. (File Nos.
33-46431 and 811-6607)
(vii) Conformed copy of Exhibit G for DG
Prime Money Market Fund (13.); (viii)
Conformed copy of Exhibit H for DG
International Equity Fund (13.); (ix)
Conformed copy of Exhibit I for DG Mid Cap
Fund (14);
(7) Not applicable
(8) Conformed copy of Custodian Agreement of the Registrant (6.);
(9) (i) Conformed copy of Transfer Agency and Service Agreement of
Registrant (6.);
(ii)...Conformed copy of Administrative Services Agreement (7.);
(iii) Conformed copy of Shareholder Services
Agreement (13.); (iv) Conformed copy of
Shareholder Services Plan (9.);
(v) Conformed copy of Exhibit A to Shareholder Services Plan (9.);
(vi) Conformed copy of Exhibits B, C, D, E, F, G, H, and I to
Shareholder Services Plan (13.);
(10) Conformed copy of Opinion and Consent of Counsel as to legality of
shares being registered (11.);
(11) Not applicable;
(12) Not applicable;
(13) Conformed copy of Initial Capital Understanding (2.);.
(14) Not applicable;
(15) (i) Copy of Distribution Plan of the Registrant (2.);
(a) Conformed copy of Exhibit A for
D.G. U.S. Government Money Market
Fund (8.); (b) Conformed copy of
Exhibit B for DG Limited Term
Government Income Fund (8.); (c)
Conformed copy of Exhibit C for DG
Government Income Fund (8.); (d)
Conformed copy of Exhibit D for DG
Equity Fund (8.);
+ All exhibits have been filed electronically.
2. Response is incorporated by reference to Registrant's Pre-Effective
Amendment No. 1 on Form N-1A filed April 29, 1992. (File Nos.
33-46431 and 811-6607)
6. Response is incorporated by Reference to Registrant's Post-Effective
Amendment No. 4 on Form N-1A filed April 23, 1993. (File Nos.
33-46431 and 811-6607)
7. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 5 on Form N-1A filed April 27, 1994. (File Nos.
33-46431 and 811-6607)
8. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 6 on Form N-1A filed May 26, 1994. (File Nos. 33-46431
and 811-6607)
9. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 8 on Form N-1A filed February 10, 1995. (File Nos.
33-46431 and 811-6607);
11. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 10 on Form N-1A filed June 24, 1996. (File Nos. 33-46431
and 811-6607)
13. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 13 on Form N-1A filed June 20, 1997. (File Nos.
33-46431 and 811-6607)
14. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 14 on Form N-1A filed June 26, 1997. (File Nos.
33-46431 and 811-6607)
(e) Conformed copy of Exhibit E for
DG Municipal Income Fund (8.); (f)
Conformed copy of Exhibit F for DG
Opportunity Fund (9.); (g)
Conformed copy of Exhibit G for DG
Prime Money Market Fund (13.); (h)
Conformed copy of Exhibit H for DG
International Equity Fund (13.);
(i) Conformed copy of Exhibit I for
DG Mid Cap Fund (13.);
(ii) Copy of Rule 12b-1 Agreement of the Registrant (8.);
(16) Schedule for Computation of Fund Performance Data;
(i) DG Equity Fund (5.);
(ii) DG Government Income Fund (5.);
(iii) DG Limited Term Government Income Fund (5.);
(iv) DG U.S. Government Money Market Fund (5.);
(v) DG Municipal Income Fund (6.);
(vi) DG Opportunity Fund (9.);
(vii) DG Prime Money Market Fund; + (17)
Copy of Financial Data Schedules; + (18) Conformed
copy of Power of Attorney (10.).
Item 25. Persons Controlled by or Under Common Control with Registrant:
None
+ All exhibits have been filed electronically.
5. Response is incorporated by reference to Registrant's Post-Effective
Amendment No.3 on Form N-1A filed October 28, 1992. (File Nos.
33-46431 and 811-6607)
6. Response is incorporated by Reference to Registrant's Post-Effective
Amendment No. 4 on Form N-1A filed April 23, 1993. (File Nos.
33-46431 and 811-6607)
8. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 6 on Form N-1A filed May 26, 1994. (File Nos. 33-46431
and 811-6607)
9. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 8 on Form N-1A filed February 10, 1995. (File Nos.
33-46431 and 811-6607);
10. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 9 on Form N-1A filed April 25, 1995. (File Nos. 33-46431
and 811-6607)
13. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 13 on Form N-1A filed June 20, 1997. (File Nos.
33-46431 and 811-6607)
<PAGE>
Item 26. Number of Holders of Securities:
Number of Record Holders
Title of Class as of August 1, 1997
Shares of beneficial interest
(no par value)
DG U.S. Government Money
Market Fund 97
DG Limited Term Government
Income Fund 169
DG Government Income Fund 190
DG Equity Fund 1,679
DG Municipal Income Fund 97
DG Opportunity Fund 711
DG Prime Money Market Fund 9
DG International Equity Fund 6
DG Mid Cap Fund.................... Not currently effective
Item 27. Indemnification: (4)
Item 28. Business and Other Connections of Investment Adviser:
(a) ParkSouth Corporation is a registered investment
adviser providing investment management services to
individuals and institutional clients. ParkSouth
Corporation is a subsidiary of Deposit Guaranty
National Bank, a national banking association formed in
1925, which, in turn, is a subsidiary of Deposit
Guaranty Corp ("DGC"). Through its subsidiaries and
affiliates, DGC offers a full range of financial
services to the public, including commercial lending,
depository services, cash management, brokerage
services, retail banking, mortgage banking, investment
advisory services and trust services.
ParkSouth Corporation manages, in addition to the Funds
in the DG Investor Series, $630 million in common trust
fund assets as of December 31, 1996. ParkSouth
Corporation (which suceeded to the investment advisory
business of Deposit Guaranty National Bank in 1997) or
Deposit Guaranty National Bank have served as the
Trust's investment adviser since May 5, 1992.
<PAGE>
The principal executive officers of the Fund's
Investment Adviser, and the Directors of the Fund's
Adviser, are set forth in the following tables. Unless
otherwise noted, the position listed under Other
Substantial Business, Profession, Vocation or
Employment is with Deposit Guaranty National Bank.
<TABLE>
<CAPTION>
<S> <C> <C>
Other Substantial
Position With Business,Profession,
Name the Adviser Vocation or Employment
E.B. Robinson, Jr. Chairman of the Board
and Chief Executive
Howard L. McMillan, Jr. President and Chief
Operating Officer
William R. Boone Executive Vice President
Thomas M. Hontzas Executive Vice President
W. Parks Johnson Executive Vice President
James S. Lenoir Executive Vice President
W. Stanley Pratt Executive Vice President
Arlen L. McDonald Executive Vice President
and Chief Financial Officer
</TABLE>
<TABLE>
<CAPTION>
DIRECTORS
<S> <C> <C>
Haley R. Barbour Warren A. Hood, Jr. W.R. Newman, III
Michael B. Bemis Charles L. Irby John N. Palmer
W. Randolph James E.B. Robinson, Jr. Sharon S. Greener
Booker T. Jones Robert D. Robinson Robert L.T. Smith, Jr.
Howard L. McMillan, Jr. Douglas A. Herring Richard McRae,Jr.
J. Kelley Williams
</TABLE>
(b) Lazard Freres Asset Management, a division of Lazard
Freres & Co. LLC, a New York limited liability company,
which is registered as an investment adviser with the
Securities and Exchange Commission and is a member of the
New York, American and Midwest Stock Exchanges. Lazard
Freres Asset Management provides investment management
services to client discretionary accounts with assets
totalling approximately $38.1 billion as of December 31,
1996. Lazard Freres Asset Management serves as Sub-Adviser
to DG International Equity Fund.
Lazard Freres Asset Management is managed by members who are
referred to as Managing Directors and are as follows: Norman
Eig; Herbert W. Gullquist; Thomas F. Dunn; Robert P.
Morgenthau; John R. Reese; John R. Reinsberg; Michael S.
Rome; Alexander E. Zagoreos; Larry Kohn; and Eileen
Alexanderson.
<PAGE>
(c) Bennett Lawrence Management, LLC, a New York limited
liability company, which is registered as an investment
adviser with the Securities and Exchange Commission.
Bennett Lawrence Management, LLC provides investment
management services to client discretionary accounts with
assets totalling approximately $634 million as of December
31, 1996. Bennett Lawrence Management, LLC serves as
Sub-Adviser to DG Mid Cap Fund.
Bennett Lawrence Management, LLC is managed by S. Van Zandt
Schreiber, Managing Member and Chief Portfolio Manager,
Robert W. Deaton, Member and Associate Portfolio Manager,
Brendan J. Contant, Member and Marketing Director and Jane
H. Fisher, Member and Operations Director.
Item 29. Principal Underwriters:
(a) 111 Corcoran Funds; Arrow Funds; Automated Government Money
Trust; BayFunds; Blanchard Funds; Blanchard Precious Metals Fund,
Inc.; Cash Trust Series II; Cash Trust Series, Inc.; DG Investor
Series; Edward D. Jones & Co. Daily Passport Cash Trust;
Federated Adjustable Rate U.S. Government Fund, Inc.; Federated
American Leaders Fund, Inc.; Federated ARMs Fund; Federated
Equity Funds; Federated Equity Income Fund, Inc.; Federated Fund
for U.S. Government Securities, Inc.; Federated GNMA Trust;
Federated Government Income Securities, Inc.; Federated
Government Trust; Federated High Income Bond Fund, Inc.;
Federated High Yield Trust; Federated Income Securities Trust;
Federated Income Trust; Federated Index Trust; Federated
Institutional Trust; Federated Insurance Series; Federated
Investment Portfolios; Federated Investment Trust; Federated
Master Trust; Federated Municipal Opportunities Fund, Inc.;
Federated Municipal Securities Fund, Inc.; Federated Municipal
Trust; Federated Short-Term Municipal Trust; Federated Short-Term
U.S. Government Trust; Federated Stock and Bond Fund, Inc.;
Federated Stock Trust; Federated Tax-Free Trust; Federated Total
Return Series, Inc.; Federated U.S. Government Bond Fund;
Federated U.S. Government Securities Fund: 1-3 Years; Federated
U.S. Government Securities Fund: 2-5 Years; Federated U.S.
Government Securities Fund: 5-10 Years; Federated Utility Fund,
Inc.; First Priority Funds; Fixed Income Securities, Inc.; High
Yield Cash Trust; Independence One Mutual Funds; Intermediate
Municipal Trust; International Series, Inc.; Investment Series
Funds, Inc.; Investment Series Trust; Liberty U.S. Government
Money Market Trust; Liquid Cash Trust; Managed Series Trust;
Marshall Funds, Inc.; Money Market Management, Inc.; Money Market
Obligations Trust; Money Market Obligations Trust II; Money
Market Trust; Municipal Securities Income Trust; Newpoint Funds;
Peachtree Funds; RIMCO Monument Funds; SouthTrust Vulcan Funds;
Star Funds; Targeted Duration Trust; Tax-Free Instruments Trust;
The Biltmore Funds; The Biltmore Municipal Funds; The Monitor
Funds; The Planters Funds; The Starburst Funds; The Starburst
Funds II; The Virtus Funds; Tower Mutual Funds; Trust for
Financial Institutions; Trust for Government Cash Reserves; Trust
for Short-Term U.S. Government Securities; Trust for U.S.
Treasury Obligations; Vision Group of Funds, Inc.; Wesmark Funds;
and World Investment Series, Inc.
Federated Securities Corp. also acts as principal underwriter for the
following closed-end investment company: Liberty Term Trust, Inc.- 1999.
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
(b)
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address With Underwriter With Registrant
Richard B. Fisher Director, Chairman, Chief Vice President
Federated Investors Tower Executive Officer, Chief
Pittsburgh, PA 15222-3779 Operating Officer, Asst.
Secretary, and Asst.
Treasurer, Federated
Securities Corp.
Edward C. Gonzales Director, Executive Vice President, Treasurer
Federated Investors Tower President, Federated, and Trustee
Pittsburgh, PA 15222-3779 Securities Corp.
Thomas R. Donahue Director, Assistant Secretary,
Federated Investors Tower Assistant Treasurer
Pittsburgh, PA 15222-3779 Federated Securities Corp
John B. Fisher President-Institutional Sales, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
James F. Getz President-Broker/Dealer, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Mark R. Gensheimer Executive Vice President of --
Federated Investors Tower Bank/Trust, Federated
Pittsburgh, PA 15222-3779 Securities Corp.
David M. Taylor Executive Vice President --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Mark W. Bloss Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Richard W. Boyd Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Laura M. Deger Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Theodore Fadool, Jr. Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Bryant R. Fisher Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Christopher T. Fives Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
James S. Hamilton Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address With Underwriter With Registrant
James M. Heaton Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Keith Nixon Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Solon A. Person, IV Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Timothy C. Pillion Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Thomas E. Territ Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Teresa M. Antoszyk Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
John B. Bohnet Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Byron F. Bowman Vice President, Secretary, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Jane E. Broeren-Lambesis Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Dale R. Browne Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Mary J. Combs Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
R. Edmond Connell, Jr. Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
R. Leonard Corton, Jr. Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Kevin J. Crenny Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Daniel T. Culbertson Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
<PAGE>
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address With Underwriter With Registrant
G. Michael Cullen Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
William C. Doyle Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Jill Ehrenfeld Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Mark D. Fisher Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Joseph D. Gibbons Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
John K. Goettlicher Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Craig S. Gonzales Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Richard C. Gonzales Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Bruce E. Hastings Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Beth A. Hetzel Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
James E. Hickey Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Brian G. Kelly Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
H. Joseph Kennedy Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Mark J. Miehl Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Richard C. Mihm Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
<PAGE>
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address With Underwriter With Registrant
J. Michael Miller Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Robert D. Oehlschlager Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Thomas A. Peters III Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Robert F. Phillips Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Richard A. Recker Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Eugene B. Reed Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
George D. Riedel Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Paul V. Riordan Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
John Rogers Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Brian S. Ronayne Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Thomas S. Schinabeck Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Edward L. Smith Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
David W. Spears Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
John A. Staley Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Jeffrey A. Stewart Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
<PAGE>
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address With Underwriter With Registrant
Richard Suder Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
William C. Tustin Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Paul A. Uhlman Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Miles J. Wallace Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
John F. Wallin Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Richard B. Watts Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Edward J. Wojnarowski Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Michael P. Wolff Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Edward R. Bozek Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Terri E. Bush Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Charlene H. Jennings Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Matthew S. Propelka Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Denis McAuley Treasurer, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Leslie K. Platt Assistant Secretary, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
</TABLE>
(c) Not applicable.
<PAGE>
Item 30. Location of Accounts and Records:
All accounts and records required to be maintained by Section 31(a) of the
Investment Company Act of 1940 and Rules 31a-1 through 31a-3 promulgated
thereunder are maintained at one of the following locations:
<TABLE>
<CAPTION>
<S> <C>
DG Investor Series Federated Investors Tower
Pittsburgh, PA 15222-3779
Federated Shareholder Services Company P.O. Box 8600
Transfer Agent, Dividend Boston, MA 02266-8600
Disbursing Agent and
Shareholder Servicing Agent
Federated Administrative Services Federated Investors Tower
Administrator Pittsburgh, PA 15222-3779
ParkSouth Corporation P.O. Box 1200
Adviser Jackson,MS 39215-1200
Lazard Freres Asset Management 30 Rockefeller Plaza
Sub-Adviser to DG International New York, NY 10020
Equity Fund only
Bennett Lawrence Management, LLC 757 Third Avenue, 19th Floor
Sub-Adviser to DG Mid Cap New York, NY 10017
Fund only
State Street Bank and Trust Company P.O. Box 8600
Custodian Boston, MA 02266-8600
</TABLE>
Item 31. Management Services: Not applicable.
Item 32. Undertakings:
Registrant hereby undertakes to comply with the provisions of
Section 16(c) of the 1940 Act with respect to the removal of Trustees and the
calling of special shareholder meetings by shareholders.
Registrant hereby undertakes to furnish each person to whom a
prospectus is delivered with a copy of the Registrant's latest annual report to
shareholders, upon request and without charge.
Registrant hereby undertakes to file a post-effective
amendment on behalf of DG International Equity Fund, using
financial statments for DG International Equity Fund, which
need not be certified, within four to six months from the
effective date of Post-Effective Amendment No. 12.
Registrant hereby undertakes to file a post-effective
amendment on behalf of DG Mid Cap Fund, using financial
statments for DG Mid Cap Fund, which need not be certified,
within four to six months from the effective date of
Post-Effective Amendment No. 13.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant, DG INVESTOR SERIES, certifies
that it meets all of the requirements for effectiveness of this Amendment to its
Registration Statement pursuant to Rule 485 (b) under the Securities Act of 1933
and has duly caused this Amendment to its Registration Statement to be signed on
its behalf by the undersigned, thereto duly authorized, in the City of
Pittsburgh and Commonwealth of Pennsylvania, on the 25th day of August, 1997.
DG INVESTOR SERIES
BY: /s/C. Grant Anderson
C. Grant Anderson, Assistant Secretary
Attorney in Fact for John F. Donahue
August 25, 1997
Pursuant to the requirements of the Securities Act of 1933, this Amendment
to its Registration Statement has been signed below by the following person in
the capacity and on the date indicated:
<TABLE>
<CAPTION>
<S> <C> <C>
NAME TITLE DATE
By: /s/C. Grant Anderson
C. Grant Anderson Attorney In Fact August 25, 1997
ASSISTANT SECRETARY For the Persons
Listed Below
NAME TITLE
John F. Donahue* Chairman and Trustee
(Chief Executive Officer)
Edward C. Gonzales* President, Treasurer and Trustee
(Principal Financial and
Accounting Officer)
Thomas G. Bigley* Trustee
John T. Conroy, Jr.* Trustee
William J. Copeland* Trustee
James E. Dowd* Trustee
Lawrence D. Ellis, M.D.* Trustee
Edward L. Flaherty, Jr.* Trustee
Peter E. Madden* Trustee
Gregor F. Meyer* Trustee
John E. Murray, Jr.* Trustee
Wesley W. Posvar* Trustee
Marjorie P. Smuts* Trustee
* By Power of Attorney
</TABLE>
Exhibit 16(vii) under Form N-1A
Exhibit 99 under Item 601/Reg. S-K
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Schedule for Computation Initial
of Fund Performance Data Invest of: $1,000
Offering
DG PRIME MONEY MARKET Price/
Share= $1.00
Return Since Inception
ending 6/30/97 NAV= $1.00
FYE: February 28
Begin Capital Reinvest Ending Total
DECLARED:DAILY Reinvest Period Dividend Gain Price Period Ending Invest
PAID: QUARTERLY Dates Shares /Share /Share /Share Shares Price Value
3/31/97 1000.000 0.002806884 0.00000 $1.00 1002.807 $1.00 $1,002.81
4/30/97 1002.807 0.003968879 0.00000 $1.00 1006.787 $1.00 $1,006.79
5/31/97 1006.787 0.004147879 0.00000 $1.00 1010.963 $1.00 $1,010.96
6/30/97 1010.963 0.004091575 0.00000 $1.00 1015.099 $1.00 $1,015.10
$1,000 (1+T) = End Value
T = 1.51%
</TABLE>
<TABLE>
<CAPTION>
DG PRIME MONEY MARKET FUND
<S> <C> <C> <C> <C>
Yield = 2{( $0.00 - $0.00 )+1)^6-1}=
-------------------------------------------
Computation of SEC Yield 0 *( $0.00 - 0.00000)
As of: June 30, 1997
SEC Yield = MONEY MARKET FUNDS DO NOT
CALCULATE SEC YIELDS
</TABLE>
Dividend and/or Interest
Inc for the 30 days ended $0.00
Net Expenses for $0.00
the Period
Avg Daily Shares
Outstanding and entitled
to receive dividends 0
Maxium offering price
per share as of 6/30/97 0
Undistributed net income 0.00000
Tax Equivalent Yield
(assumes individual
does not itemize
on Federal Return)
100 % minus the Federal
taxable % (100%-28%=72%)
30 SEC yield / by the tax
equiv % (0.00% / 72.0%)= 0.00%
<TABLE> <S> <C>
<S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 05
<NAME> DG Investor Series
DG U.S. Government Money Market Fund
<PERIOD-TYPE> 12-mos
<FISCAL-YEAR-END> Feb-28-1997
<PERIOD-END> Feb-28-1997
<INVESTMENTS-AT-COST> 273,622,132
<INVESTMENTS-AT-VALUE> 273,622,132
<RECEIVABLES> 765,275
<ASSETS-OTHER> 2,418
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 274,389,825
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 936,899
<TOTAL-LIABILITIES> 936,899
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 273,452,926
<SHARES-COMMON-STOCK> 273,452,926
<SHARES-COMMON-PRIOR> 245,647,230
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 273,452,926
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 11,924,422
<OTHER-INCOME> 0
<EXPENSES-NET> 1,141,023
<NET-INVESTMENT-INCOME> 10,783,399
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 10,783,399
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 10,783,399
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 550,619,637
<NUMBER-OF-SHARES-REDEEMED> 522,981,171
<SHARES-REINVESTED> 167,230
<NET-CHANGE-IN-ASSETS> 27,805,696
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1,138,567
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,596,450
<AVERAGE-NET-ASSETS> 227,713,430
<PER-SHARE-NAV-BEGIN> 1.000
<PER-SHARE-NII> 0.050
<PER-SHARE-GAIN-APPREC> 0.000
<PER-SHARE-DIVIDEND> 0.050
<PER-SHARE-DISTRIBUTIONS> 0.000
<RETURNS-OF-CAPITAL> 0.000
<PER-SHARE-NAV-END> 1.000
<EXPENSE-RATIO> 0.50
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.000
</TABLE>
<TABLE> <S> <C>
<S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 03
<NAME> DG Investor Series
DG Limited Term Government Income Fund
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> Feb-28-1997
<PERIOD-END> Feb-28-1997
<INVESTMENTS-AT-COST> 83,281,477
<INVESTMENTS-AT-VALUE> 83,351,823
<RECEIVABLES> 1,070,531
<ASSETS-OTHER> 473
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 84,422,827
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 37,400
<TOTAL-LIABILITIES> 37,400
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 87,809,218
<SHARES-COMMON-STOCK> 8,689,448
<SHARES-COMMON-PRIOR> 9,513,347
<ACCUMULATED-NII-CURRENT> 35,553
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (3,529,690)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 70,346
<NET-ASSETS> 84,385,427
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 5,339,716
<OTHER-INCOME> 0
<EXPENSES-NET> 597,447
<NET-INVESTMENT-INCOME> 4,742,269
<REALIZED-GAINS-CURRENT> (1,008,150)
<APPREC-INCREASE-CURRENT> 293,452
<NET-CHANGE-FROM-OPS> 4,027,571
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 4,818,533
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 2,953,124
<NUMBER-OF-SHARES-REDEEMED> 3,986,837
<SHARES-REINVESTED> 209,814
<NET-CHANGE-IN-ASSETS> (8,890,184)
<ACCUMULATED-NII-PRIOR> 56,525
<ACCUMULATED-GAINS-PRIOR> (2,466,248)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 527,974
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 773,439
<AVERAGE-NET-ASSETS> 87,995,684
<PER-SHARE-NAV-BEGIN> 9.800
<PER-SHARE-NII> 0.520
<PER-SHARE-GAIN-APPREC> (0.080)
<PER-SHARE-DIVIDEND> 0.530
<PER-SHARE-DISTRIBUTIONS> 0.000
<RETURNS-OF-CAPITAL> 0.000
<PER-SHARE-NAV-END> 9.710
<EXPENSE-RATIO> 0.68
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.000
</TABLE>
<TABLE> <S> <C>
<S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 02
<NAME> DG Investor Series
DG Government Income Fund
<PERIOD-TYPE> 12-mos
<FISCAL-YEAR-END> Feb-28-1997
<PERIOD-END> Feb-28-1997
<INVESTMENTS-AT-COST> 248,234,740
<INVESTMENTS-AT-VALUE> 246,891,671
<RECEIVABLES> 2,806,284
<ASSETS-OTHER> 3,766
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 249,701,721
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 83,279
<TOTAL-LIABILITIES> 83,279
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 252,978,362
<SHARES-COMMON-STOCK> 25,761,234
<SHARES-COMMON-PRIOR> 18,659,694
<ACCUMULATED-NII-CURRENT> 45,794
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (2,062,645)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (1,343,069)
<NET-ASSETS> 249,618,442
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 14,877,668
<OTHER-INCOME> 0
<EXPENSES-NET> 1,606,237
<NET-INVESTMENT-INCOME> 13,271,431
<REALIZED-GAINS-CURRENT> (1,412,964)
<APPREC-INCREASE-CURRENT> (2,801,515)
<NET-CHANGE-FROM-OPS> 9,056,952
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 13,349,136
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 11,623,519
<NUMBER-OF-SHARES-REDEEMED> 5,043,232
<SHARES-REINVESTED> 521,253
<NET-CHANGE-IN-ASSETS> 65,392,336
<ACCUMULATED-NII-PRIOR> 62,896
<ACCUMULATED-GAINS-PRIOR> (589,078)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1,369,096
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,834,420
<AVERAGE-NET-ASSETS> 226,453,311
<PER-SHARE-NAV-BEGIN> 9.870
<PER-SHARE-NII> 0.570
<PER-SHARE-GAIN-APPREC> (0.180)
<PER-SHARE-DIVIDEND> 0.570
<PER-SHARE-DISTRIBUTIONS> 0.000
<RETURNS-OF-CAPITAL> 0.000
<PER-SHARE-NAV-END> 9.690
<EXPENSE-RATIO> 0.70
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.000
</TABLE>
<TABLE> <S> <C>
<S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 01
<NAME> DG Investor Series
DG Equity Fund
<PERIOD-TYPE> 12-Mos
<FISCAL-YEAR-END> Feb-28-1997
<PERIOD-END> Feb-28-1997
<INVESTMENTS-AT-COST> 318,427,891
<INVESTMENTS-AT-VALUE> 489,693,047
<RECEIVABLES> 838,410
<ASSETS-OTHER> 5,706
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 490,537,163
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 145,262
<TOTAL-LIABILITIES> 145,262
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 318,556,876
<SHARES-COMMON-STOCK> 29,394,313
<SHARES-COMMON-PRIOR> 26,583,091
<ACCUMULATED-NII-CURRENT> 553,985
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 15,884
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 171,265,156
<NET-ASSETS> 490,391,901
<DIVIDEND-INCOME> 6,283,804
<INTEREST-INCOME> 1,755,374
<OTHER-INCOME> 0
<EXPENSES-NET> 3,956,052
<NET-INVESTMENT-INCOME> 4,083,126
<REALIZED-GAINS-CURRENT> 10,108,185
<APPREC-INCREASE-CURRENT> 63,747,215
<NET-CHANGE-FROM-OPS> 77,938,526
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 3,964,723
<DISTRIBUTIONS-OF-GAINS> 10,093,485
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 6,852,631
<NUMBER-OF-SHARES-REDEEMED> 4,578,933
<SHARES-REINVESTED> 537,524
<NET-CHANGE-IN-ASSETS> 105,246,864
<ACCUMULATED-NII-PRIOR> 435,582
<ACCUMULATED-GAINS-PRIOR> 1,184
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 3,213,522
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 3,956,052
<AVERAGE-NET-ASSETS> 428,699,511
<PER-SHARE-NAV-BEGIN> 14.490
<PER-SHARE-NII> 0.140
<PER-SHARE-GAIN-APPREC> 2.540
<PER-SHARE-DIVIDEND> 0.140
<PER-SHARE-DISTRIBUTIONS> 0.350
<RETURNS-OF-CAPITAL> 0.000
<PER-SHARE-NAV-END> 16.680
<EXPENSE-RATIO> 0.92
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.000
</TABLE>
<TABLE> <S> <C>
<S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 04
<NAME> DG Investor Series
DG Municipal Income Fund
<PERIOD-TYPE> 12-Mos
<FISCAL-YEAR-END> Feb-28-1997
<PERIOD-END> Feb-28-1997
<INVESTMENTS-AT-COST> 44,233,362
<INVESTMENTS-AT-VALUE> 45,420,088
<RECEIVABLES> 1,653,371
<ASSETS-OTHER> 435
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 47,073,894
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 145,968
<TOTAL-LIABILITIES> 145,968
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 45,525,103
<SHARES-COMMON-STOCK> 4,433,345
<SHARES-COMMON-PRIOR> 4,182,389
<ACCUMULATED-NII-CURRENT> 111,120
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 104,977
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 1,186,726
<NET-ASSETS> 46,927,926
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 2,508,540
<OTHER-INCOME> 0
<EXPENSES-NET> 325,414
<NET-INVESTMENT-INCOME> 2,183,126
<REALIZED-GAINS-CURRENT> 116,120
<APPREC-INCREASE-CURRENT> (430,640)
<NET-CHANGE-FROM-OPS> 1,868,597
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 2,140,424
<DISTRIBUTIONS-OF-GAINS> 47,122
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,331,086
<NUMBER-OF-SHARES-REDEEMED> 1,083,418
<SHARES-REINVESTED> 3,288
<NET-CHANGE-IN-ASSETS> 2,349,602
<ACCUMULATED-NII-PRIOR> 68,418
<ACCUMULATED-GAINS-PRIOR> 35,979
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 279,232
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 537,479
<AVERAGE-NET-ASSETS> 46,538,898
<PER-SHARE-NAV-BEGIN> 10.660
<PER-SHARE-NII> 0.490
<PER-SHARE-GAIN-APPREC> (0.070)
<PER-SHARE-DIVIDEND> 0.480
<PER-SHARE-DISTRIBUTIONS> 0.010
<RETURNS-OF-CAPITAL> 0.000
<PER-SHARE-NAV-END> 10.590
<EXPENSE-RATIO> 0.70
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.000
</TABLE>
<TABLE> <S> <C>
<S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 06
<NAME> DG Investor Series
DG Opportunity Fund
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> Feb-28-1997
<PERIOD-END> Feb-28-1997
<INVESTMENTS-AT-COST> 70,805,933
<INVESTMENTS-AT-VALUE> 80,520,538
<RECEIVABLES> 42,145
<ASSETS-OTHER> 1,271
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</TABLE>
<TABLE> <S> <C>
<S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 01
<NAME> DG Investors Series
DG Prime Money Market Fund
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<FISCAL-YEAR-END> Dec-31-1997
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</TABLE>
