STI CLASSIC FUNDS, 497, 1996-05-17

STI CLASSIC FUNDS
497, 1996-05-17

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<PAGE>
STI CLASSIC FUNDS
TRUST SHARES
CAPITAL GROWTH FUND
VALUE INCOME STOCK FUND
AGGRESSIVE GROWTH FUND
BALANCED FUND
SUNBELT EQUITY FUND
INTERNATIONAL EQUITY INDEX FUND

INVESTMENT ADVISORS TO THE FUNDS:
STI CAPITAL MANAGEMENT, N.A.
TRUSCO CAPITAL MANAGEMENT, INC.

The STI Classic Funds (the "Trust") is a mutual fund that offers shares in a
number of separate investment portfolios. This Prospectus sets forth concisely
the information about the Trust Shares of the above-referenced Funds (each a
"Fund" and, collectively, the "Funds"). Investors are advised to read this
Prospectus and retain it for future reference.

A Statement of Additional Information relating to the Funds dated the same date
as this Prospectus has been filed with the Securities and Exchange Commission
and is available without charge through the Distributor, SEI Financial Services
Company, 680 East Swedesford Road, Wayne, PA 19087-1658 or by calling
1-800-428-6970. The Statement of Additional Information is incorporated into
this Prospectus by reference.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

THE TRUST'S SHARES ARE NOT SPONSORED, ENDORSED, OR GUARANTEED BY, AND DO NOT
CONSTITUTE OBLIGATIONS OR DEPOSITS OF, THE ADVISORS OR ANY OF THEIR AFFILIATES
OR CORRESPONDENTS INCLUDING SUNTRUST BANKS, INC., ARE NOT GUARANTEED OR INSURED
BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR ANY
OTHER GOVERNMENTAL AGENCY, AND INVOLVE INVESTMENT RISKS, INCLUDING THE POSSIBLE
LOSS OF THE PRINCIPAL AMOUNT INVESTED.

OCTOBER 1, 1995
<PAGE>
2

No person has been authorized to give any information or to make any
representations not contained in this Prospectus, or in the Trust's Statement of
Additional Information in connection with the offering made by this Prospectus
and, if given or made, such information or representations must not be relied
upon as having been authorized by the Trust or SEI Financial Services Company
(the "Distributor"). This Prospectus does not constitute an offering by the
Trust or by the Distributor in any jurisdiction in which such offering may not
lawfully be made.

The Trust Shares are offered primarily to financial institutions
("Shareholders"), including SunTrust Banks, Inc. and its affiliates and
correspondents, for the investment of funds for which they act in a fiduciary,
agency, investment advisory or custodial capacity. Fund shares may not be
purchased directly by individuals, although institutions may purchase shares for
accounts maintained by individuals.

TABLE OF CONTENTS

<TABLE>
<S> <C>
Expense Summary...................... 3
Financial Highlights................. 4
The Trust............................ 5
Funds and Investment Objectives...... 5
Investment Policies and Strategies... 5
General Investment Policies and
Strategies.......................... 10
Investment Risks..................... 11
Investment Limitations............... 12
Performance Information.............. 13
General Performance Information...... 13
Purchase Of Fund Shares.............. 13
Redemption Of Fund Shares............ 14
Dividends And Distributions.......... 15
Tax Information...................... 15
STI Classic Funds Information........ 17
Board of Trustees.................... 17
Investment Advisors.................. 17
Portfolio Managers................... 18
Banking Laws......................... 19
Distribution......................... 19
Administration....................... 19
Transfer Agent and Dividend
Disbursing Agent.................... 20
Custodian............................ 20
Legal Counsel........................ 20
Independent Public Accountants....... 20
Other Information.................... 20
Voting Rights........................ 20
Reporting............................ 20
Shareholder Inquiries................ 20
Description of Permitted
Investments......................... 21
Appendix............................. A-1
</TABLE>
<PAGE>
3

EXPENSE SUMMARY
TRUST SHARES

Below is a summary of the annual operating expenses for Trust Shares of each
Fund. A hypothetical example based on the summary is also shown. Actual expenses
may vary.

ANNUAL OPERATING EXPENSES
(as a percentage of average net assets)

<TABLE>
<CAPTION>
CAPITAL SUNBELT INTERNATIONAL
GROWTH VALUE INCOME AGGRESSIVE BALANCED EQUITY EQUITY INDEX
FUND STOCK FUND GROWTH FUND FUND FUND FUND
<S> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------
Advisory Fees (After Voluntary
Reductions)(1).................. 1.02% .80% .95% .77% .98% .64%
All Other Expenses............... .13% .15% .20% .18% .17% .41%
- -----------------------------------------------------------------------------------------------------------------
Total Operating Expenses (After
Voluntary Reductions)(1)........ 1.15% .95% 1.15% .95% 1.15% 1.05%
- -----------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
CAPITAL SUNBELT INTERNATIONAL
GROWTH VALUE INCOME AGGRESSIVE BALANCED EQUITY EQUITY INDEX
EXAMPLE FUND STOCK FUND GROWTH FUND FUND FUND FUND
<S> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------
An investor would pay the
following expenses on a $1,000
investment assuming: (1) 5%
annual return and (2) redemption
at the end of each time period:
One year..................... $ 12 $ 10 $ 12 $ 10 $ 12 $ 11
Three Years.................. 37 30 37 30 37 33
Five Years................... 63 53 63 53 65 58
Ten Years.................... 140 117 140 117 140 128
- -----------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------
</TABLE>

FINANCIAL HIGHLIGHTS

The following information has been audited by Arthur Andersen, LLP, the Trust's
independent public accountants, as indicated in their report dated July 20, 1995
on the Trust's financial statements as of May 31, 1995 included in the Trust's
Statement of Additional Information under "Financial Information." This table
should be read in conjunction with the Trust's financial statements and notes
thereto. Additional performance information regarding each Fund is contained in
the Trust's Annual Report to Shareholders and is available without charge by
calling 1-800-428-6970.

For a Trust Share Outstanding Throughout the Period
<TABLE>
<CAPTION>
NET ASSET NET REALIZED
VALUE NET AND UNREALIZED DISTRIBUTIONS FROM DISTRIBUTIONS NET ASSET
BEGINNING OF INVESTMENT GAINS (LOSSES) NET INVESTMENT FROM REALIZED VALUE END OF
PERIOD INCOME (LOSS) ON INVESTMENTS INCOME CAPITAL GAINS PERIOD
------------ ------------- --------------- ------------------ --------------- ------------
<S> <C> <C> <C> <C> <C> <C>
- -------------------
CAPITAL GROWTH FUND
- -------------------
TRUST SHARES
1995........................ $ 11.99 $ 0.16 $ 0.57 $ (0.14 ) $ (0.40 ) $ 12.18
1994........................ 11.95 0.16 0.31 (0.17 ) (0.26 ) 11.99
1993 (1).................... 10.36 0.12 1.57 (0.10 ) -- 11.95
- ------------------------
VALUE INCOME STOCK FUND
- ------------------------
TRUST SHARES
1995........................ $ 10.54 $ 0.32 $ 1.56 $ (0.32 ) $ (0.51 ) $ 11.59
1994........................ 10.23 0.29 0.70 (0.32 ) (0.36 ) 10.54
1993 (2).................... 10.00 0.11 0.16 (0.04 ) -- 10.23
- -----------------------
AGGRESSIVE GROWTH FUND
- -----------------------
TRUST SHARES
1995........................ $ 9.85 $ 0.08 $ 1.15 $ (0.08 ) -- $ 11.00
1994 (3).................... 10.00 0.02 (0.16 ) (0.01 ) -- 9.85
- --------------
BALANCED FUND
- --------------
TRUST SHARES
1995........................ $ 9.76 $ 0.33 $ 0.49 $ (0.32 ) -- $ 10.26
1994 (4).................... 10.00 0.11 (0.29 ) (0.06 ) -- 9.76
- -------------------
SUNBELT EQUITY FUND
- -------------------
TRUST SHARES
1995........................ $ 9.70 $ (0.01 ) $ 0.38 -- $ (0.04 ) $ 10.03
1994 (4).................... 10.00 -- (0.30 ) -- -- 9.70
- -----------------------------
INTERNATIONAL EQUITY INDEX FUND
- -----------------------------
TRUST SHARES
1995 (5).................... $ 10.00 $ 0.08 $ 0.19 $ (0.02 ) $ (0.01 ) $ 10.24

RATIO OF NET
RATIO OF INVESTMENT RATIO OF EXPENSES TO
EXPENSES TO INCOME (LOSS) AVERAGE NET ASSETS
NET ASSETS END AVERAGE NET TO AVERAGE NET (EXCLUDING WAIVERS
TOTAL RETURN OF PERIOD (000) ASSETS ASSETS AND REIMBURSEMENTS)
-------------- --------------- --------------- --------------- ---------------------
<S> <C> <C>
- -------------------
CAPITAL GROWTH FUND
- -------------------
TRUST SHARES
1995........................ 6.63 % $ 984,205 1.15 % 1.38 % 1.28 %
1994........................ 3.87 % 891,870 1.15 % 1.25 % 1.29 %
1993 (1).................... 17.90 %* 507,692 1.15 %* 1.43 %* 1.28 %*
- ------------------------
VALUE INCOME STOCK FUND
- ------------------------
TRUST SHARES
1995........................ 19.06 % $ 991,977 0.95 % 3.16 % 0.95 %
1994........................ 9.95 % 573,082 0.88 % 3.21 % 0.97 %
1993 (2).................... 9.05 %* 137,761 0.80 %* 4.32 %* 0.96 %*
- -----------------------
AGGRESSIVE GROWTH FUND
- -----------------------
TRUST SHARES
1995........................ 12.56 % $ 125,562 1.15 % 0.88 % 1.32 %
1994 (3).................... (1.39 %)+ 57,036 1.15 %* 1.20 %* 1.68 % *
- --------------
BALANCED FUND
- --------------
TRUST SHARES
1995........................ 8.72 % $ 89,051 0.95 % 3.44 % 1.11 %
1994 (4).................... (1.78 %)+ 90,579 0.95 %* 2.76 %* 1.25 % *
- -------------------
SUNBELT EQUITY FUND
- -------------------
TRUST SHARES
1995........................ 3.81 % $ 258,908 1.15 % (0.12 %) 1.30 %
1994 (4).................... (2.99 %)+ 128,280 1.15 %* (0.19 %)* 1.58 %*
- -----------------------------
INTERNATIONAL EQUITY INDEX FUN
- -----------------------------
TRUST SHARES
1995 (5).................... 2.69 %+ $ 89,446 1.05 %* 1.13 %* 1.31 %*

<CAPTION>
RATIO OF NET
INVESTMENT INCOME
(LOSS) TO AVERAGE NET
ASSETS (EXCLUDING
WAIVERS AND PORTFOLIO
REIMBURSEMENTS) TURNOVER RATE
--------------------- -------------
- -------------------
CAPITAL GROWTH FUND
- -------------------
TRUST SHARES
1995........................ 1.25 % 127.79 %
1994........................ 1.11 % 123.87 %
1993 (1).................... 1.30 %* 95.02 %
- ------------------------
VALUE INCOME STOCK FUND
- ------------------------
TRUST SHARES
1995........................ 3.16 % 125.71 %
1994........................ 3.12 % 149.28 %
1993 (2).................... 4.16 %* 34.71 %
- -----------------------
AGGRESSIVE GROWTH FUND
- -----------------------
TRUST SHARES
1995........................ 0.71 % 65.63 %
1994 (3).................... 0.67 %* 7.99 %
- --------------
BALANCED FUND
- --------------
TRUST SHARES
1995........................ 3.28 % 156.61 %
1994 (4).................... 2.46 %* 105.65 %
- -------------------
SUNBELT EQUITY FUND
- -------------------
TRUST SHARES
1995........................ (0.27 %) 80.03 %
1994 (4).................... (0.62 %)* 21.42 %
- -----------------------------
INTERNATIONAL EQUITY INDEX FUN
- -----------------------------
TRUST SHARES
1995 (5).................... 0.87 %* 10.37 %
</TABLE>

* Annualized.
+ Cumulative since inception.

(1) The Capital Growth Fund Trust Shares commenced operations on July 1, 1992.
(2) The Value Income Stock Fund Trust Shares commenced operations on February
12, 1993.

(3) The Aggressive Growth Fund Trust Shares commenced operations on February 2,
1994.

(4) The Sunbelt Equity Fund Trust Shares and the Balanced Fund Trust Shares
commenced operations on January 3, 1994.

(5) The International Equity Index Fund Trust Shares commenced operations on
June 6, 1994.
<PAGE>
5

THE TRUST

STI CLASSIC FUNDS (the "Trust") is a diversified, open-end management investment
company that provides a convenient and economical means of investing in several
professionally managed portfolios of securities. The Trust currently offers
units of beneficial interest ("shares") in a number of separate Funds.
Shareholders may purchase shares in each Fund through three separate classes
(Trust Shares, Investor Shares and Flex Shares), which provide for variations in
distribution and service fees and transfer agent fees, voting rights and
dividends. Except for differences between classes, each share of each Fund
represents an undivided, proportionate interest in that Fund. This Prospectus
relates to the Trust Shares of the Funds described below.

FUNDS AND INVESTMENT OBJECTIVES

THE CAPITAL GROWTH FUND seeks to provide capital appreciation by investing
primarily in a portfolio of common stocks, warrants and securities convertible
into common stock which, in the Advisor's opinion, are undervalued in the
marketplace at the time of purchase.

THE VALUE INCOME STOCK FUND seeks to provide current income with the secondary
goal of achieving capital appreciation by investing primarily in equity
securities.

THE AGGRESSIVE GROWTH FUND seeks to provide capital appreciation by investing
primarily in a diversified portfolio of common stocks, preferred stocks and
securities convertible into common stock of small to mid-sized companies with
above-average growth of earnings. Current income will not be an important
criterion of investment selection and any such income should be considered
incidental.

THE BALANCED FUND seeks to provide capital appreciation and current income by
investing in common and preferred stocks, warrants, securities convertible into
common stock and investment grade fixed income securities.

THE SUNBELT EQUITY FUND seeks to provide capital appreciation by investing
substantially all and under normal market conditions at least 65% of its assets
in common stocks, preferred stocks, warrants and securities convertible into
common stock of U.S. companies headquartered and/or conducting a substantial
portion of their operations in the southern region of the United States. Current
income will not be an important criterion of investment selection and any such
income should be considered incidental.

THE INTERNATIONAL EQUITY INDEX FUND seeks to provide investment results that
correspond to the aggregate price and dividend performance of the securities
included in the Gross Domestic Product Weighted Morgan Stanley Capital
International Europe, Australasia and Far East Index (the "MSCI EAFE-GDP Index"
or "EAFE-GDP Index").11"MSCI EAFE-GDP Index" is a registered service mark of
Morgan Stanley Capital International, which does not sponsor and is in no way
affiliated with the International Equity Index Fund.

There can be no assurance that a Fund will achieve its investment objective.

The investment objectives of each Fund are nonfundamental and may be changed
without shareholder approval.

INVESTMENT POLICIES AND STRATEGIES
*CAPITAL GROWTH FUND

The Capital Growth Fund invests primarily in a diversified portfolio of common
stocks,
<PAGE>
6
warrants, and securities convertible into common stocks which, in the Advisor's
opinion, are undervalued in the marketplace at the time of purchase. In
selecting securities for the Fund, the Advisor will evaluate factors believed to
affect capital appreciation such as the issuer's background, industry position,
historical returns on equity and experience and qualifications of the management
team. Dividend and interest income is incidental to growth of capital. The
Advisor will rotate the Capital Growth Fund's holdings between various market
sectors based on economic analysis of the overall business cycle. Under normal
conditions, at least 65% of the total assets of the Capital Growth Fund will be
invested in common stocks.

All of the common stocks in which the Fund invests are traded on registered
exchanges or on the over-the-counter market in the United States. Assets of the
Capital Growth Fund not invested in the securities described above may be
invested in U.S. dollar denominated equity securities of foreign issuers
(including sponsored American Depositary Receipts ("ADRs") that are traded on
exchanges or listed on NASDAQ); securities issued by money market mutual funds;
pay-in-kind securities; and bonds. The bonds that the Capital Growth Fund may
purchase may be rated in any rating category or may be unrated, provided that no
more than 10% of the Fund's total assets will be invested in bonds rated below
BBB by Standard & Poor's Corporation ("S&P") or below Baa by Moody's Investors
Services, Inc. ("Moody's") or unrated securities of comparable quality. See
"Investment Risks -- High Yield -- Lower Rated Bonds." In addition, the Fund may
invest up to 10% of its assets in restricted securities.

The Fund's turnover rate for the fiscal year ended May 31, 1995 was 127.79%.
This rate of turnover, if continued, will likely result in higher brokerage
commissions and higher levels of realized capital gains than if the turnover
rate was lower.

*VALUE INCOME STOCK FUND

The Value Income Stock Fund seeks to provide current income by structuring its
investments in an attempt to maintain the Fund's yield at a level above the
average dividend yield of the securities comprising the S&P 500 Stock Index.
Achieving such a yield will be the Fund's primary consideration when purchasing
securities. A secondary objective of the Fund will be capital appreciation.

The Fund will invest at least 80% of its total assets in equity securities.
Investments will consist primarily of common stocks, and, under normal market
conditions, at least 65% of the Fund's assets will be invested in common stocks
issued by corporations which have a history of paying regular dividends,
although there can be no assurance that such corporations will continue to pay
dividends. Other equity securities in which the Fund may invest are convertible
debt securities; preferred stocks and warrants which are convertible into or
exchangeable for common stocks; and U.S. dollar denominated equity securities of
foreign issuers (including sponsored ADRs that are traded on exchanges or listed
on NASDAQ). All of the common stocks in which the Fund invests are traded on
registered exchanges such as the New York or American Stock Exchange or on the
over-the-counter market in the United States (i.e., NASDAQ). The Fund may also
purchase debt securities (corporate debt obligations and U.S. Treasury
obligations) which may be rated in any rating category or may be unrated,
provided that no more than 10% of the Fund's total assets will be invested
<PAGE>
7
in bonds rated below BBB by S&P or below Baa by Moody's or unrated securities of
comparable quality.

The Fund will invest primarily in stocks of companies operating in all aspects
of the U.S. and world economies that have a market capitalization of at least
$500 million or more, that the Advisor believes possess fundamentally favorable
long-term characteristics. However, stocks of companies with smaller market
capitalizations and stocks that are out of favor in the financial community and
in which little opportunity for price appreciation is recognized by the
financial community may also be purchased if the Advisor believes they are
undervalued.

The Fund's turnover rate for the fiscal year ended May 31, 1995 was 125.71%.
This rate of turnover, if continued, will likely result in higher brokerage
commissions and higher levels of realized capital gains than if the turnover
rate was lower.

*AGGRESSIVE GROWTH FUND

The Aggressive Growth Fund invests primarily in a diversified portfolio of
common stocks, preferred stocks, and securities convertible into common stocks
of small to midsize companies, (i.e., $50 million to $1 billion and $500 million
to $5 billion, respectively, as measured by their market capitalization), with
above-average growth of earnings. Current income will not be an important
criterion of investment selection and any such income should be considered
incidental. In selecting securities for the Fund, the Advisor will evaluate
factors such as the issuer's background, industry position, historical returns
on equity and experience and qualifications of the management team. Under normal
conditions, at least 80% of the total assets of the Fund will be invested in
equity securities.

Most of the common stocks in which the Fund invests are traded on registered
exchanges or on the over-the-counter market in the United States. Assets of the
Fund not invested in the securities described above may be invested in U.S.
dollar denominated equity securities of foreign issuers (including sponsored
ADRs that are traded on exchanges or listed on NASDAQ); securities issued by
mutual funds; repurchase agreements; and bonds. The bonds that the Fund may
purchase, including any variable or floating rate instruments, must be rated B
or better by S&P or Moody's, provided that this requirement shall not apply to
the Fund's purchase of bonds issued by the government of Canada or by various
supranational entities, and provided further that no more than 10% of the Fund's
total assets will be invested in bonds rated below BBB by S&P or below Baa by
Moody's or unrated securities of comparable quality. The Fund may invest up to
10% of its assets in restricted securities.

*SUNBELT EQUITY FUND

The Sunbelt Equity Fund seeks to provide capital appreciation by investing
substantially all, and under normal market conditions at least 65%, of its
assets in common stocks; preferred stocks; warrants; and securities convertible
into common stock of U.S. companies headquartered and/or conducting a
substantial portion of their operations in (i.e., maintaining at least 50% of
their assets in or deriving at least 50% of their revenues and/or sales from)
the southern region of the United States. Current income will not be an
important criterion of investment selection and any such income should be
considered incidental. The Advisor will seek to identify and purchase securities
of companies that it believes to be undervalued
<PAGE>
8
and that possess a strong balance sheet, a strong earnings record, and adequate
market liquidity.

Most of the common stocks in which the Fund invests are traded on registered
exchanges such as the New York or American Stock Exchange or on the
over-the-counter market in the United States (i.e., NASDAQ). The Fund will
invest no more than 10% of its assets in convertible securities rated lower than
BBB. (See "Investment Risks -- High Yield, Lower Rated Bonds.") The Fund may
invest up to 10% of its total assets in restricted securities. The Fund may also
purchase futures and options for hedging purposes. Obligations relating to
futures contracts will be limited to not more than 20% of the Fund's total
assets.

The Fund will invest primarily in stocks of U.S. companies headquartered and/or
operating in the following U.S. states: Texas, Arkansas, Alabama, Mississippi,
Tennessee, Kentucky, Florida, Virginia, Georgia, North Carolina, South Carolina
and Louisiana. To the extent that the Fund's investments are not as
geographically dispersed across the U.S. as other funds with comparable
objectives, Shareholders will be more subject to the impact of economic forces
on and the relative economic conditions of these states.

*BALANCED FUND

The Balanced Fund seeks to provide capital appreciation and current income
through investments in a diversified portfolio of common and preferred stocks,
warrants, securities convertible into common stocks, and investment grade fixed
income securities. Under normal conditions, no more than 70% of the total assets
of the Fund will be invested in common stocks and other equity securities, and
no more than 60% of the Fund's total assets will be invested in bonds and other
fixed income securities. The Fund will maintain at least 25% of its total assets
in senior fixed income securities.

In selecting equity securities for the Fund, the Advisor will evaluate factors
believed to affect capital appreciation such as the issuer's background,
industry position, historical returns on equity and experience and
qualifications of the management team. The Advisor will rotate the Fund's
holdings between various market sectors based on economic analysis of the
overall business cycle.

All of the common stocks in which the Fund invests are traded on registered
exchanges or on the over-the-counter market in the United States. Assets of the
Fund not invested in the securities described above may be invested in U.S.
dollar denominated equity securities of foreign issuers (including sponsored
ADRs that are traded on exchanges or listed on NASDAQ), securities issued by
investment companies, and bonds.

The Fund will invest in investment grade fixed income securities rated BBB or
better by S&P or Baa or better by Moody's or, if unrated, of comparable quality
at the time of purchase as determined by the Advisor, including corporate debt
obligations; mortgage-backed securities, collateralized mortgage obligations and
asset-backed securities; obligations issued or guaranteed as to principal and
interest by the U.S. Government or its agencies or instrumentalities; custodial
receipts involving U.S. Treasury obligations; securities of the government of
Canada and its provincial and local governments; securities issued or guaranteed
by foreign governments, their political subdivisions, agencies or
instrumentalities; and obligations of supranational entities. No more than 25%
of the Fund's assets will be invested in securities
<PAGE>
9
rated BBB by S&P or Baa by Moody's or, if unrated, of comparable quality at the
time of purchase as determined by the Fund's Advisor.

The Fund may purchase mortgage-backed securities issued or guaranteed as to the
payment of principal and interest by the U.S. Government or its agencies or
instrumentalities or, subject to a limit of 25% of the Fund's assets,
mortgage-backed securities issued by private issuers. These mortgage-backed
securities may be backed or collateralized by fixed, adjustable or floating rate
mortgages. The Fund may also invest in asset backed securities which consist of
securities backed by company receivables, truck and auto loans, leases, credit
card receivables and home equity loans.

In order to reduce interest rate risk, the Fund may purchase floating or
variable rate securities. It may also buy securities on a when-issued basis,
putable securities, pay-in-kind securities, and zero coupon securities. The Fund
may also invest futures and options. Some floating or variable rate securities
will be subject to interest rate "caps" or "floors."

The Balanced Fund's turnover rate for the fiscal year ended May 31, 1995 was
128% for the equity portion of its portfolio and 193% for the fixed income
portion of its portfolio. These rates of turnover, if continued, will likely
result in higher transaction costs and brokerage commissions and higher levels
of realized capital gains than if the turnover rate was lower.

*INTERNATIONAL EQUITY INDEX FUND

The Fund will invest substantially all and, under normal market conditions, at
least 65% of its assets in common and preferred stocks; warrants; options; and
securities convertible into common stock of companies headquartered or based in
the approximately twenty foreign countries included in the Morgan Stanley
Capital International EAFE-GDP Index. The Fund will invest only in the 1088 or
so companies included in the EAFE-GDP Index. Because it is impractical to invest
in every company included in the Index, the Fund will select a representative
sample of securities in each country using a statistical-based optimization
process. Morgan Stanley & Co. Incorporated maintains the optimization computer
programs which will be utilized to select companies within each country.

The Fund will be constructed to have aggregate investment characteristics
similar to those of the EAFE-GDP Index. The Fund will invest in a statistically
selected sample of the securities included in the EAFE-GDP Index, although not
all countries nor all companies within a country will be represented in the
Fund's portfolio of securities at any time. The Fund expects to invest in
approximately 300 stocks so that the results fall within the targeted tracking
error. From time to time, adjustments may be made in the Fund's portfolio
because of changes in the composition of the EAFE-GDP Index. No attempt will be
made to manage the portfolio using traditional economic, financial and market
analyses.

The Fund expects that there will be a close correlation between the Fund's
performance and that of the EAFE-GDP Index. A 1.00 correlation would indicate
perfect correlation, which would be achieved when the net asset value of the
Fund, including the value of its dividend and capital gains distributions,
increases or decreases in exact proportion to changes in the EAFE-GDP Index. The
correlation between the Fund and the EAFE-GDP Index is expected to be over 0.95
on an annual basis. The Fund's ability to track the EAFE-GDP Index, however may
be affected by, among other things, transaction costs, changes in either the
composition of the EAFE-GDP
<PAGE>
10
Index or number of shares outstanding for the component companies of the
EAFE-GDP Index, and the timing and amount of purchases and redemptions.

Securities of foreign issuers purchased by the Fund may be purchased in foreign
markets, on United States registered exchanges, the over-the-counter market or
in the form of sponsored or unsponsored ADRs traded on registered exchanges or
NASDAQ, or sponsored or unsponsored European Depositary Receipts ("EDRs").

The Fund may enter into forward foreign currency contracts as a hedge against
possible variations in foreign exchange rates. A forward foreign currency
contract is a commitment to purchase or sell a specified currency, at a
specified future date, at a specified price. The Fund may enter into forward
foreign currency contracts to hedge a specific security transaction or to hedge
a portfolio position. These contracts may be bought or sold to protect the Fund,
to some degree, against a possible loss resulting from an adverse change in the
relationship between foreign currencies and the U.S. dollar.

The Fund expects to be fully invested in the investments, described above, but
may invest up to 35% of its total assets in U.S. and non-U.S. denominated money
market instruments; repurchase agreements; futures contracts, including stock
index futures contracts; and options on futures contracts. Obligations relating
to futures contracts will be limited to not more than 20% of the Fund's total
assets. The Fund is also permitted to acquire floating and variable rate
securities; purchase securities on a when-issued basis; and purchase illiquid
securities.

GENERAL INVESTMENT POLICIES AND STRATEGIES

For temporary defensive purposes during periods when its Advisor determines that
market conditions warrant, each Fund may invest up to 100% of its assets in
money market instruments consisting of securities issued or guaranteed as to
principal and interest by the U.S. Government, its agencies or
instrumentalities, custodial receipts involving U.S. Treasury obligations,
repurchase agreements, certificates of deposit, bankers' acceptances, and time
deposits issued by banks or savings and loan associations and commercial paper
rated in the highest rating category, and may hold a portion of its assets in
cash. A Fund may not be pursuing its investment objective when it is engaged in
temporary defensive investing. Each Fund may also invest in money market
instruments for liquidity purposes.

Each Fund, except the International Equity Index Fund, may purchase restricted
securities, including Rule 144A securities, that its Advisor determines are
liquid pursuant to guidelines established by the Trust's Board of Trustees.

In the event that a security owned by a Fund is downgraded below the stated
rating categories, the Advisor will review and take appropriate action with
regard to the security.

Each Fund may borrow money for temporary or emergency purposes in an amount not
to exceed one-third of the value of its total assets.
<PAGE>
11
A Fund may not purchase additional securities while its outstanding borrowings
exceed 5% of its assets.

A Fund's purchase of shares of other investment companies is limited by the
Investment Company Act of 1940 and will ordinarily result in an additional layer
of charges and expenses.

Each of the Funds may engage in securities lending and will limit such practice
to 33 1/3% of its total assets.

It is a non-fundamental policy of each Fund to invest no more than 15% of its
net assets in illiquid securities. An illiquid security is a security which
cannot be disposed of in the usual course of business within seven days at a
price approximating its carrying value.

For additional information regarding permitted investments, see "Description of
Permitted Investments" in this Prospectus and in the Statement of Additional
Information.

INVESTMENT RISKS
FOREIGN SECURITIES AND FOREIGN CURRENCY CONTRACTS

Investing in the securities of foreign companies and the utilization of forward
foreign currency contracts involve special risks and considerations not
typically associated with investing in U.S. companies. These risks and
considerations include differences in accounting, auditing and financial
reporting standards, generally higher commission rates on foreign portfolio
transactions, the possibility of expropriation or confiscatory taxation, adverse
changes in investment or exchange control regulations, political instability
which could affect U.S. investment in foreign countries and potential
restrictions of the flow of international capital and currencies. Foreign
companies may also be subject to less government regulation than U.S. companies.
Moreover, the dividends payable on the foreign securities may be subject to
foreign withholding taxes, thus reducing the net amount of income available for
distribution to the Fund's Shareholders. Further, foreign securities often trade
with less frequency and volume than domestic securities and, therefore, may
exhibit greater price volatility. Changes in foreign exchange rates will affect,
favorably or unfavorably, the value of those securities which are denominated or
quoted in currencies other than the U.S. dollar.

By entering into forward foreign currency contracts, the International Equity
Index Fund will seek to protect the value of its investment securities against a
decline in the value of a currency. However, these forward foreign currency
contracts will not eliminate fluctuations in the underlying prices of the
securities. Rather, they simply establish a rate of exchange which one can
obtain at some future point in time. Although such contracts tend to minimize
the risk of loss due to a decline in the value of the hedged currency, also,
they tend to limit any potential gain which might result should the value of
such currency increase.

EQUITY SECURITIES

Investments in equity securities are generally subject to market risks that may
cause their prices to fluctuate over time. The values of convertible equity
securities are also affected by prevailing interest rates, the credit quality of
the issuer and any call provision. Fluctuations in the value of equity
securities in which each Fund invests will cause the net asset value of the Fund
to fluctuate.
<PAGE>
12

MORTGAGE-BACKED SECURITIES

Mortgage-backed securities are subject to the risk of prepayment of the
underlying mortgages. During periods of declining interest rates, prepayment of
mortgages underlying these securities can be expected to accelerate. When the
mortgage-backed securities held by the Balanced Fund are prepaid, the Balanced
Fund must reinvest the proceeds in securities the yield of which reflects
prevailing interest rates, which may be lower than the prepaid security.

FIXED INCOME SECURITIES

The market value of a Fund's fixed income investments will change in response to
interest rate changes and other factors. During periods of falling interest
rates, the values of outstanding fixed income securities generally rise.
Conversely, during periods of rising interest rates, the values of such
securities generally decline. Securities with longer maturities are subject to
greater fluctuations in value than securities with shorter maturities. Changes
by a nationally recognized statistical rating organization ("NRSRO") to the
rating of any fixed income security and in the ability of an issuer to make
payments of interest and principal also affect the value of these investments.
Changes in the value of a Fund's securities will not affect cash income derived
from these securities but will affect the Fund's net asset value.

There is a risk that the current interest rate on floating and variable rate
instruments may not accurately reflect existing market interest rates.

Fixed income securities rated BBB by S&P or Baa by Moody's (investment grade
bonds) are deemed by these rating services to have speculative characteristics.

HIGH YIELD, LOWER RATED BONDS

A Fund's investments in high yield, lower rated bonds ("junk bonds") involve
greater risk of default or price declines than investments in investment grade
securities (securities rated BBB or higher by S&P or Baa or higher by Moody's)
due to changes in the issuer's creditworthiness. The market for high risk, high
yield securities may be thinner and less active, causing market price volatility
and limited liquidity in the secondary market. This may limit the ability of the
Fund to sell such securities at their fair market value either to meet
redemption requests or in response to changes in the economy or the financial
markets. Market prices for high risk, high yield securities may also be affected
by investors' perception of the issuer's credit quality and the outlook for
economic growth. Thus, prices for high risk, high yield securities may move
independently of interest rates and the overall bond market. In addition, the
market for high risk, high yield securities may be adversely affected by
legislative and regulatory developments.

INVESTMENT LIMITATIONS

The following investment limitations constitute fundamental policies of each
Fund. Fundamental policies cannot be changed with respect to a Fund without the
consent of the holders of a majority of the Fund's outstanding shares. The term
"majority of the outstanding shares" means the vote of (i) 67% or more of a
Fund's shares present at a meeting, if more than 50% of the outstanding shares
of the Fund are present or represented by proxy, or (ii) more than 50% of a
Fund's outstanding shares, whichever is less.

Each Fund may not:

1. Purchase securities of any issuer (except securities issued or
guaranteed by the
<PAGE>
13
United States, its agencies or instrumentalities and repurchase agreements
involving such securities) if as a result more than 5% of the total assets of a
Fund would be invested in the securities of such issuer; provided, however, that
a Fund may invest up to 25% of its total assets without regard to this
restriction as permitted by applicable law.

2. Purchase any securities which would cause more than 25% of the total
assets of a Fund to be invested in the securities of one or more issuers
conducting their principal business activities in the same industry, provided
that this limitation does not apply to investments in obligations issued or
guaranteed by the U.S. Government or its agencies and instrumentalities,
repurchase agreements involving such securities or tax-exempt securities issued
by governments or political subdivisions of governments. For purposes of this
limitation, (i) utility companies will be divided according to their services,
for example, gas, gas transmission, electric and telephone will each be
considered a separate industry; (ii) financial service companies will be
classified according to the end users of their services, for example, automobile
finance, bank finance and diversified finance will each be considered a separate
industry; and (iii) supranational entities will be considered to be a separate
industry.

The foregoing percentages will apply at the time of the purchase of a security.
Additional investment limitations are set forth in the Statement of Additional
Information.

PERFORMANCE INFORMATION

From time to time, the Funds may advertise performance (total return and yield).
These figures will be historical and are not intended to indicate future
performance. The yield of a Fund refers to the annualized income generated by an
investment in that Fund over a specified 30-day period. The yield is calculated
by assuming that the income generated by the investment during that period is
generated over one year and is shown as a percentage of the investment.

The total return of a Fund refers to the average compounded rate of return on a
hypothetical investment, including any sales charge imposed, for designated time
periods (including but not limited to, the period from which a Fund commenced
operations through the specified date), assuming that the entire investment is
redeemed at the end of each period and assuming the reinvestment of all dividend
and capital gains distributions.

GENERAL PERFORMANCE INFORMATION

The performance of the Trust's Trust Shares will normally be higher than for
Investor Shares and Flex Shares because Investor Shares and Flex Shares are
subject to distribution, service and certain transfer agent fees not charged to
Trust Shares. The performance of Flex Shares in comparison to Investor Shares
will vary depending upon the investment time horizon.

Each Fund may periodically compare its performance to other mutual funds tracked
by mutual fund rating services, to broad groups of comparable mutual funds or to
unmanaged indices which may assume reinvestment of dividends but generally do
not reflect deductions for administrative and management costs.

PURCHASE OF FUND SHARES

Trust Shares of the Fund are sold primarily to financial institutions, including
subsidiaries of SunTrust Banks, Inc. ("SunTrust"), for the investment of funds
for which they act in a fiduciary, agency, investment advisory or custodial
capacity. Individuals may not
<PAGE>
14
purchase Trust Shares directly, although individuals may be able to purchase
Trust Shares through accounts maintained with financial institutions. Trust
Shares are sold without a sales charge, although financial institutions may
charge their customer accounts for services provided in connection with the
purchase of shares. Financial institutions may impose an earlier cut-off time
for receipt of purchase orders directed through them to allow for processing and
transmittal of these orders to the Transfer Agent for effectiveness the same
day. Information concerning these services and any charges will be provided to
customers by the financial institutions. Trust Shares will be held of record by
the financial institutions, although customers may have or be given the right to
vote the shares depending upon the terms of their relationship with the
financial institution. Confirmations of share purchases and redemptions will be
sent to the financial institution as the shareholder of record.

Shares may be purchased on days on which the New York Stock Exchange is open for
business ("business day").

A purchase order for any of the Funds will be effective as of the business day
received by the Transfer Agent if the Transfer Agent receives the order before
4:00 p.m. Eastern time and payment is received within one day. The purchase
price of shares of a Fund is the net asset value next determined after a
purchase order is effective plus any applicable sales charge (the "offering
price"). The net asset value per share of a Fund is determined by dividing the
total market value of the Fund's investments and other assets, less any
liabilities, by the total outstanding shares of the Fund. Net asset value per
share is determined daily as of the close of business of the New York Stock
Exchange (currently 4:00 p.m. Eastern time) on any business day. Pursuant to
guidelines established by the Trustees, the Trust may use a pricing service to
provide market quotations or valuations for securities owned by each Fund.
Purchases will be made in full and fractional shares of the Trust calculated to
three decimal places.

The Trust reserves the right to reject a purchase order when the Distributor
determines that it is not in the best interest of the Trust and/or
Shareholder(s).

Neither the Trust's Transfer Agent nor the Trust will be responsible for any
loss, liability, cost or expense for acting upon telephone or wire instructions
reasonably believed to be genuine. The Trust maintains procedures, including
identification methods and other means, for ascertaining the identity of callers
and authenticity of instructions.

Shares of the Funds are offered only to residents of states in which the shares
are eligible for purchase. Investors in certain states may be required to
purchase shares through institutions registered as broker-dealers in such
states.

Although the methodology and procedures for calculating the net asset value for
Trust Shares are identical to those of Investor Shares and Flex Shares, the net
asset value per share of the classes of the Funds may differ because of the
distribution, service, and certain transfer agent expenses charged to Investor
Shares and Flex Shares.

REDEMPTION OF FUND SHARES

An order to redeem shares must be transmitted to the Transfer Agent by the
financial institution as the record owner of Trust Shares. Financial
institutions may establish procedures for their customers to request redemption
of Trust Shares held in their account with the financial
<PAGE>
15

institution. Customers should contact their financial institution for
information concerning these procedures.

Redemption orders must be received by the Transfer Agent before 4:00 p.m.
Eastern time on any business day to be effective that day. Redemption proceeds
are normally remitted in federal funds wired to the record owner of the shares
within one business day, but in no event more than seven days following the
effective date of the order. No charge for wiring redemption payments is imposed
by the Trust. Redemption orders are effected at the net asset value per share
next determined after an order is effective.

The Trust intends to pay cash for all shares redeemed, but under abnormal
conditions which make payment in cash unwise, payment may be made wholly or
partly in liquid portfolio securities with a market value equal to the
redemption price. In such circumstances, an investor may incur brokerage costs
in converting such securities to cash.

DIVIDENDS AND DISTRIBUTIONS

Dividends from net investment income (exclusive of capital gains) are declared
and paid quarterly by each of the Funds, except that dividends are declared and
paid annually by the International Equity Index Fund. Each Fund's net realized
capital gains (including net short-term capital gains) are distributed at least
annually. Net income for dividend purposes consists of (i) interest accrued and
original issue discount earned on the Fund's assets, (ii) plus the amortization
of market discount and minus the amortization of market premium on such assets,
(iii) plus dividend or distribution income on such assets, (iv) less accrued
expenses directly attributable to the Fund and the general expenses of the Trust
prorated to the Fund on the basis of its relative net assets. Shareholders of
record on the record date will be entitled to receive dividends.

The net asset value of Trust Shares of the Funds will be reduced by the amount
of any dividend or distribution. Dividends and distributions are paid in the
form of additional Trust Shares of the same Fund unless the customer has elected
prior to the date of distribution to receive payment in cash. Such election, or
any revocation thereof, must be made in writing prior to the date of
distribution to the Trust's Transfer Agent and will become effective with
respect to dividends paid after its receipt. Dividends and distributions are
paid within ten days of the end of the time period to which the dividend
relates. Dividends and distributions payable to a Shareholder are paid in cash
within ten business days after a Shareholder's complete redemption of its Trust
Shares in a Fund.

The amount of dividends payable on Trust Shares will be more than the dividends
payable on Investor Shares and Flex Shares because of the distribution and
certain transfer agent expenses charged to Investor Shares and Flex Shares. The
amount of dividends payable on Flex Shares generally will be less than the
amount of dividends payable on Investor Shares due to the higher distribution
and service expenses of Flex Shares.

TAX INFORMATION

The following summary of federal income tax consequences is based on current tax
laws and regulations, which may be changed by legislative, judicial or
administrative action. No attempt has been made to present a detailed
explanation of the federal, state, or local income tax treatment of each Fund or
its Shareholders. Shareholders are urged to
<PAGE>
16
consult their tax advisors regarding specific questions as to federal, state and
local income taxes.

TAX STATUS OF EACH FUND:

Each Fund is treated as a separate entity for federal tax purposes, and is not
combined with the Trust's other Funds. Each Fund intends to qualify for the
special tax treatment afforded regulated investment companies by the Internal
Revenue Code of 1986, as amended, (the "Code") so that it will be relieved of
federal income tax on that part of its net investment income and net capital
gains (the excess of long-term capital gains over net short-term capital loss)
which is distributed to Shareholders. Each Fund intends to make sufficient
distributions prior to the end of each calendar year to avoid liability for the
federal excise tax applicable to regulated investment companies.

TAX STATUS OF DISTRIBUTIONS:

Each Fund will distribute substantially all of its net investment income
(including, for this purpose, net short-term capital gains) to Shareholders.
Dividends from net investment income paid by the Funds will be taxable to
Shareholders as ordinary income whether received in cash or in additional
shares. Dividends from net investment income will qualify for the dividends
received deduction for corporate Shareholders only to the extent such
distributions are derived from dividends paid by domestic corporations. Any net
capital gains will be distributed annually and will be taxed to Shareholders as
long-term capital gains, regardless of how long the Shareholder has held shares
and regardless of whether distributions are received in cash or in additional
shares. For certain individual Shareholders, net long-term capital gains may be
taxed at a lower rate than ordinary income. The Funds will make annual reports
to Shareholders of the federal income tax status of all distributions. Dividends
declared by a Fund in October, November or December of any year and payable to
Shareholders of record on a date in that month will be deemed to have been paid
by the Fund and received by the Shareholder on December 31 of that year, if paid
by the Fund at any time during the following January.

Income derived by a Fund from obligations of foreign issuers may be subject to
foreign withholding taxes. The International Equity Index Fund expects to elect
to treat Shareholders as having paid their proportionate share of such foreign
taxes. The other Funds will not be able to make this election.

Income received on direct U.S. obligations is exempt from tax at the state level
when received directly by a Fund and may be exempt, depending on the state, when
received by the Shareholder as income dividends from a Fund, provided certain
state-specific conditions are satisfied. Not all states permit such income
dividends to be tax exempt and some require that a certain minimum percentage of
an investment company's income be derived from state tax-exempt interest. The
Funds will inform Shareholders annually of the percentage of income and
distributions derived from direct U.S. obligations. Shareholders should consult
their tax advisors to determine whether any portion of the income dividends
received from a Fund is considered tax-exempt in their particular state.

A sale, exchange or redemption of Fund shares is a taxable event to the
Shareholder.
<PAGE>
17

STI CLASSIC FUNDS INFORMATION
THE TRUST

The Trust was organized as a Massachusetts Business Trust under a Declaration of
Trust dated January 15, 1992. The Declaration of Trust permits the Trust to
offer separate portfolios of shares and different classes of each Fund. All
consideration received by the Trust for shares of any Fund and all assets of
such Fund belong to that Fund and would be subject to liabilities related
thereto.

The Trust pays its expenses, including fees of its service providers, audit and
legal expenses, expenses of preparing prospectuses, proxy solicitation material
and reports to Shareholders, costs of custodial services and registering the
shares under federal and state securities laws, pricing, insurance expenses,
litigation and other extraordinary expenses, brokerage costs, interest charges,
taxes and organization expenses.

BOARD OF TRUSTEES

The management and affairs of the Trust are supervised by the Trustees under the
laws governing business trusts in the Commonwealth of Massachusetts. The
Trustees have approved contracts under which, as described below, certain
companies provide essential management services to the Trust.

INVESTMENT ADVISORS

The Advisors are indirect wholly-owned subsidiaries of SunTrust Banks, Inc.
("SunTrust"), a southeastern regional bank holding company with assets of $44.2
billion as of June 30, 1995. SunTrust ranks among the twenty largest U.S.
banking companies. Its three principal subsidiaries -- SunTrust Banks of
Florida, Inc. SunTrust Banks of Georgia, Inc. and SunTrust Banks of Tennessee,
Inc. -- provide a wide range of personal and corporate banking, trust, and
investment services through more than 600 locations in the three-state area.
Total discretionary assets under management with SunTrust Banks, Inc. equalled
approximately $42 billion as of December 31, 1994.

STI Capital Management, N.A. ("STI Capital") (formerly SunBank Capital
Management, Inc.) serves as the Advisor to the Capital Growth, Value Income
Stock, Aggressive Growth and Balanced Fund and joint advisor to the
International Equity Index Fund. As of June 30, 1995, STI Capital had
discretionary management authority with respect to assets of approximately $11.1
billion. The principal business address of STI Capital is P.O. Box 3808,
Orlando, FL 32802.

Trusco Capital Management, Inc. ("Trusco") serves as the Advisor to the Sunbelt
Equity Fund and as joint advisor to the International Equity Index Fund. As of
June 30, 1995, Trusco had approximately $11.5 billion in assets under
management. The principal business address of Trusco is 50 Hurt Plaza, Suite
1400, Atlanta, GA 30303.

The Trust and the above Investment Advisors have entered into advisory
agreements (the "Advisory Agreements"). Under the Advisory Agreements, the
Advisors make the investment decisions for the assets of the Fund(s) they advise
and continuously review, supervise and administer their respective Fund's
investment program. The Advisors discharge their responsibilities subject to the
supervision of, and policies established by, the Trustees of the Trust. STI
CLASSIC FUNDS ARE NOT DEPOSITS, ARE NOT INSURED OR GUARANTEED BY THE FDIC OR ANY
OTHER GOVERNMENT AGENCY, AND ARE NOT ENDORSED OR GUARANTEED BY AND DO NOT
CONSTITUTE OBLIGATIONS OF SUNTRUST BANKS, INC. OR ANY OF ITS AFFILIATES.
<PAGE>
18
INVESTMENTS IN THE FUNDS INVOLVE RISK, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
RETURNS AND PRINCIPAL VALUES WILL FLUCTUATE AND SHARES AT REDEMPTION MAY BE
WORTH MORE OR LESS THAN THEIR ORIGINAL COST. THERE IS NO GUARANTEE THAT ANY STI
CLASSIC FUND WILL ACHIEVE ITS INVESTMENT OBJECTIVE. With respect to all Funds,
the Advisors may execute brokerage or other agency transactions through
affiliates of the Advisors.

For the services provided and expenses incurred pursuant to the Investment
Advisory Agreements, STI Capital is entitled to receive advisory fees computed
daily and paid monthly at the annual rate of 1.15%, .95%, 1.15% and .80% of the
average daily net assets of the Capital Growth, Balanced, Aggressive Growth and
Value Income Stock Funds, respectively. Trusco is entitled to receive an
advisory fee computed daily and paid monthly at the annual rate of 1.15% of the
average daily net assets of the Sunbelt Equity Fund. Trusco and STI Capital
jointly are entitled to receive an advisory fee computed daily and paid monthly
at the annual rate of .90% of the average daily net assets of the International
Equity Index Fund.

Although the advisory fee for each Fund is higher than advisory fees paid by
other mutual funds, the Trust believes that each such fee is comparable to the
advisory fee paid by many other mutual funds with similar investment objectives
and policies. From time to time, an Advisor may waive (either voluntarily or
pursuant to applicable state limitations) advisory fees payable by a Fund.
Currently, the Advisors have agreed to voluntary reductions in their respective
fees in amounts necessary to maintain the total operating expenses at the
amounts set forth in the Expense Summary. Voluntary reductions of fees may be
terminated at anytime.

For the fiscal year ended May 31, 1995, STI Capital received advisory fees
computed daily and paid monthly at the annual rate of 1.02%, .77%, .95%, and
.80% of the average daily net assets of the Capital Growth, Balanced, Aggressive
Growth and Value Income Stock Funds, respectively. Trusco received an advisory
fee computed daily and paid monthly at the annual rate of .98% of the average
daily net assets of Sunbelt Equity Fund. Trusco and STI Capital jointly received
an advisory fee computed daily and paid monthly at the annual rate of .64% of
the average daily net assets of the International Equity Index Fund.

PORTFOLIO MANAGERS

Mr. Anthony Gray has been responsible for the day-to-day management of the
Capital Growth Fund since its inception. Mr. Gray has served as Chief Executive
Officer and Chief Investment Officer of STI Capital since 1979. Mr. Gray has
also been responsible for the day-to-day management of the equity portion of the
Balanced Fund since its inception.

Mr. Mills Riddick, CFA, has been responsible for the day-to-day management of
the Value Income Stock Fund since April, 1995. Mr. Riddick has been a value
portfolio manager at STI Capital since 1989.

Mr. Thomas Edgar has been responsible for the day-to-day management of the
Aggressive Growth Fund since its inception. Mr. Edgar has served as Senior Vice
President of STI Capital since 1990 and served as Senior Vice President of First
Union Bank from 1988 to 1990.

Mr. L. Earl Denney CFA has been responsible for the day-to-day management of the
fixed income portion of the Balanced Fund since its inception. Mr. Denney has
served as Executive Vice President of STI Capital since 1983.
<PAGE>
19

Mr. James Foster has been responsible for the day-to-day management of the
Sunbelt Equity Fund since its inception. Mr. Foster has served as a Vice
President of Trusco since 1989.

BANKING LAWS

Banking laws and regulations, including the Glass-Steagall Act as presently
interpreted by the Board of Governors of the Federal Reserve System, presently
(a) prohibit a bank holding company registered under the Federal Bank Holding
Company Act of 1956 or its affiliates from sponsoring, organizing, controlling,
or distributing the shares of a registered, open-end investment company
continuously engaged in the issuance of its shares, and generally prohibit banks
from underwriting securities, but (b) do not prohibit such a bank holding
company or affiliate or banks generally from acting as an investment advisor,
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 a customer. The
Advisors believe that each may perform the services for STI Classic Funds
contemplated by their agreements described in this Prospectus without violation
of applicable banking laws or regulations. However, future changes in legal
requirements relating to the permissible activities of banks and their
affiliates, as well as future interpretations of present requirements, could
prevent the Advisors from continuing to perform services for STI Classic Funds.
If the Advisors were prohibited from providing services to STI Classic Funds,
the Board of Trustees would consider selecting other qualified firms. Any new
investment advisory agreements would be subject to Shareholder approval.

If current restrictions preventing a bank or its affiliates from legally
sponsoring, organizing, controlling, or distributing shares of an investment
company were relaxed, the Advisors, or their affiliates, would consider the
possibility of offering to perform additional services for STI Classic Funds. It
is not possible, of course, to predict whether or in what form such legislation
might be enacted or the terms upon which the Advisors, or such affiliates, might
offer to provide such services.

In addition, state securities laws on this issue may differ from the
interpretations of federal law expressed herein and banks and financial
institutions may be required to register as dealers pursuant to state law.

DISTRIBUTION

SEI Financial Services Company (the "Distributor"), a wholly-owned subsidiary of
SEI Corporation ("SEI"), and the Trust are parties to a distribution agreement
("Distribution Agreement"). No compensation is paid to the Distributor for
distribution services for the Trust Shares of each Fund. Trust Shares of the
Fund are offered primarily to institutional investors, including affiliates and
correspondents for the investment of funds in which they act in a fiduciary,
agency or custodial capacity. It is possible that a financial institution may
offer different classes of shares to its customers and thus receive different
compensation with respect to different classes of shares.

Each Fund may execute brokerage or other agency transactions through the
Distributor for which the Distributor receives compensation.

ADMINISTRATION

SEI Financial Management Corporation (the "Administrator"), a wholly-owned
subsidiary of SEI, and the Trust are parties to an Administration Agreement (the
"Administration Agreement"). Under the terms of the Administration Agreement,
the Administrator provides the Trust with certain administrative services, other
than investment advisory
<PAGE>
20
services, including regulatory reporting, all necessary office space, equipment,
personnel, and facilities.

The Administrator is entitled to a fee, which is calculated daily and paid
monthly, at an annual rate as follows:

<TABLE>
<CAPTION>
AVERAGE AGGREGATE DAILY NET ASSETS FEE
- -------------------------------------------- ---------
<S> <C>
$1 - $1 billion .10%
over $1 billion to $5 billion .07%
over $5 billion to $8 billion .05%
over $8 billion to $10 billion .045%
over $10 billion .04%
</TABLE>

From time to time, the Administrator may waive (either voluntarily or pursuant
to applicable state limitations) all or a portion of the administration fee
payable by the Trust.

TRANSFER AGENT AND DIVIDEND
DISBURSING AGENT

Federated Services Company, Pittsburgh, PA is the Transfer Agent for the shares
of the Trust and dividend disbursing agent for the Trust.

CUSTODIAN

SunTrust Bank, Atlanta, c/o STI Trust & Investment Operations, Inc., 303
Peacetree Street N.E., 14th Floor, Atlanta, GA 30308, serves as Custodian of the
assets of each Fund of the Trust with the exception of the International Equity
Index Fund. The Bank of California, 475 Sansome Street, Suite 1200, San
Francisco, CA 94111, serves as Custodian for the International Equity Index
Fund. Each Custodian holds cash, securities and other assets of the Trust as
required by the Investment Company Act of 1940.

LEGAL COUNSEL

Morgan, Lewis & Bockius, LLP, Philadelphia, PA, serves as legal counsel to the
Trust.

INDEPENDENT PUBLIC ACCOUNTANTS

The independent public accountants to the Trust are Arthur Andersen, LLP,
Philadelphia, PA.

OTHER INFORMATION
VOTING RIGHTS

Each share held entitles the Shareholder of record to one vote. Each Fund or
class of a Fund will vote separately on matters relating solely to that Fund or
class. As a Massachusetts business trust, the Trust is not required to hold
annual meetings of Shareholders but approval will be sought for certain changes
in the operation of the Trust and for the election of Trustees under certain
circumstances. In addition, a Trustee may be removed by the remaining Trustees
or by Shareholders at a special meeting called upon written request of
Shareholders owning at least 10% of the outstanding shares of the Trust. In the
event that such a meeting is requested the Trust will provide appropriate
assistance and information to the Shareholders requesting the meeting.

REPORTING

The Trust issues unaudited financial information semi-annually and audited
financial statements annually. The Trust furnishes proxy statements and other
reports to Shareholders of record.

SHAREHOLDER INQUIRIES

Shareholders may contact their financial institution's representative in order
to obtain information on account statements, procedures and other related
information.
<PAGE>
21

DESCRIPTION OF PERMITTED INVESTMENTS

The following is a description of the permitted investments for the Funds.
Further discussion is contained in the Statement of Additional Information.

AMERICAN DEPOSITARY RECEIPTS ("ADRs") -- ADRs are securities, typically issued
by a U.S. financial institution (a "depositary"), that evidence ownership
interests in a security or a pool of securities issued by a foreign issuer and
deposited with the depositary. ADRs may be available through "sponsored" or
"unsponsored" facilities. A sponsored facility is established jointly by the
issuer of the security underlying the receipt and a depositary, whereas an
unsponsored facility may be established by a depositary without participation by
the issuer of the underlying security. Holders of unsponsored depositary
receipts generally bear all the costs of the unsponsored facility. The
depositary of an unsponsored facility frequently is under no obligation to
distribute shareholder communications received from the issuer of the deposited
security or to pass through, to the holders of the receipts, voting rights with
respect to the deposited securities.

ASSET-BACKED SECURITIES--Asset-backed securities are securities secured by non-
mortgage assets such as company receivables, truck and auto loans, leases and
credit card receivables. Such securities are generally issued as pass-through
certificates, which represent undivided fractional ownership interests in the
underlying pools of assets. Such securities also may be debt instruments, which
are also known as collateralized obligations and are generally issued as the
debt of a special purpose entity, such as a trust, organized solely for the
purpose of owning such assets and issuing such debt.

Asset-backed securities are not issued or guaranteed by the U.S. Government or
its agencies or instrumentalities; however, the payment of principal and
interest on such obligations may be guaranteed up to certain amounts and for a
certain period by a letter of credit issued by a financial institution (such as
a bank or insurance company) unaffiliated with the issuers of such securities.
The purchase of asset-backed securities raises risk considerations peculiar to
the financing of the instruments underlying such securities. For example, there
is a risk that another party could acquire an interest in the obligations
superior to that of the holders of the asset-backed securities. There also is
the possibility that recoveries on repossessed collateral may not, in some
cases, be available to support payments on those securities. Asset-backed
securities entail prepayment risk, which may vary depending on the type of
asset, but is generally less than the prepayment risk associated with
mortgage-backed securities. In addition, credit card receivables are unsecured
obligations of the card holder.

The market for asset-backed securities is at a relatively early stage of
development. Accordingly, there may be a limited secondary market for such
securities.

BANKERS' ACCEPTANCES -- Bankers' acceptances are bills of exchange or time
drafts drawn on and accepted by a commercial bank. Bankers' acceptances are used
by corporations to finance the shipment and storage of goods. Maturities are
generally six months or less.

CERTIFICATES OF DEPOSIT-- Certificates of deposit are interest bearing
instruments with a specific maturity. They are issued by banks and savings and
loan institutions in exchange for the deposit of funds and normally can be
<PAGE>
22
traded in the secondary market prior to maturity. Certificates of deposit with
penalties for early withdrawal will be considered illiquid.

COMMERCIAL PAPER -- Commercial paper is a term used to describe unsecured
short-term promissory notes issued by banks, municipalities, corporations and
other entities. Maturities on these issues vary from a few to 270 days.

CONVERTIBLE SECURITIES -- Convertible securities are corporate securities that
are exchangeable for a set number of another security at a prestated price.
Convertible securities typically have characteristics similar to both fixed
income and equity securities. Because of the conversion feature, the market
value of a convertible security tends to move with the market value of the
underlying stock. The value of a convertible security is also affected by
prevailing interest rates, the credit quality of the issuer, and any call
provisions.

CORPORATE DEBT OBLIGATIONS -- Debt instruments issued by corporations with
maturities exceeding 270 days. Such instruments may include putable corporate
bonds and zero coupon bonds.

CUSTODIAL RECEIPTS -- Interests in separately traded interest and principal
component parts of U. S. Treasury obligations that are issued by banks or
brokerage firms and are created by depositing U. S. Treasury obligations into a
special account at custodian bank. The custodian holds the interest and
principal payments for the benefit of the registered owners of the certificates
or receipts. The custodian arranges for the issuance of the certificates or
receipts evidencing ownership and maintains the register. Receipts include
"Treasury Receipts" ("TRs"), "Treasury Investment Growth Receipts" ("TIGRs"),
and "Certificates of Accrual on Treasury Securities" ("CATS"). TRs, TIGRs and
CATS are sold as zero coupon securities. See "Zero Coupon Obligations."

DERIVATIVES -- Derivatives are securities whose value is derived from an
underlying contract, index or security, or any combination thereof. This
includes: futures, swap agreements, and some mortgage-back securities (CMOs,
REMICs, IOs and POs). See elsewhere in this "Description of Permitted
Investments" for discussions of these various instruments, and see "Investment
Policies and Strategies" for more information about any investment policies and
limitations applicable to their use.

EUROPEAN DEPOSITARY RECEIPTS ("EDRs") -- EDRs are securities, typically issued
by a non-U.S. financial institution, that evidence ownership interests in a
security or a pool of securities issued by either a U.S. or foreign issuer. EDRs
may be available for investment through "sponsored" or "unsponsored" facilities.
See "ADRs."

FORWARD FOREIGN CURRENCY CONTRACTS -- A forward foreign currency contract
involves an obligation to purchase or sell a specific currency amount at a
future date, agreed upon by the parties, at a price set at the time of the
contract. A Fund may also enter into a contract to sell, for a fixed amount of
U.S. dollars or other appropriate currency, the amount of foreign currency
approximating the value of some or all of the Fund's securities denominated in
such foreign currency.

At the maturity of a forward contract, the Fund may either sell a portfolio
security and make delivery of the foreign currency, or it may retain the
security and terminate its contractual obligation to deliver the foreign
currency by purchasing an "offsetting" contract with the same currency trader,
obligating it to purchase,
<PAGE>
23
on the same maturity date, the same amount of the foreign currency. The Fund may
realize a gain or loss from currency transactions.

FUTURES CONTRACTS AND OPTIONS ON FUTURES CONTRACTS -- Futures contracts provide
for the future sale by one party and purchase by another party of a specified
amount of a specific security at a specified future time and at a specified
price. An option on a futures contract gives the purchaser the right, in
exchange for a premium, to assume a position in a futures contract at a
specified exercise price during the term of the option. A Fund may use futures
contracts and related options for bona fide hedging purposes, to offset changes
in the value of securities held or expected to be acquired, to minimize
fluctuations in foreign currencies, or to gain exposure to a particular market
or instrument. A Fund will minimize the risk that it will be unable to close out
a futures contract by only entering into futures contracts which are traded on
national futures exchanges.

Stock index futures are futures contracts for various stock indices that are
traded on registered securities exchanges. A stock index futures contract
obligates the seller to deliver (and the purchaser to take) an amount of cash
equal to a specific dollar amount times the difference between the value of a
specific stock index at the close of the last trading day of the contract and
the price at which the agreement is made.

There are risks associated with these activities, including the following: (1)
the success of a hedging strategy may depend on an ability to predict movements
in the prices of individual securities, fluctuations in markets and movements in
interest rates, (2) there may be an imperfect or no correlation between the
changes in market value of the securities held by the Fund and the prices of
futures and options on futures, (3) there may not be a liquid secondary market
for a futures contract or option, (4) trading restrictions or limitations may be
imposed by an exchange, and (5) government regulations may restrict trading in
futures contracts and futures options.

ILLIQUID SECURITIES -- Illiquid securities are securities that cannot be
disposed of within seven business days at approximately the price at which they
are being carried on the Fund's books. An illiquid security includes a demand
instrument with a demand notice period exceeding seven days, where there is no
secondary market for such security, and repurchase agreements with durations (or
maturities) over seven days in length.

MEDIUM TERM NOTES -- Medium term notes are periodically or continuously offered
corporate or agency debt that differs from traditionally underwritten corporate
bonds only in the process by which they are issued.

MORTGAGE-BACKED SECURITIES -- Mortgage-backed securities are instruments that
entitle the holder to a share of all interest and principal payments from
mortgages underlying the security. The mortgages backing these securities
include conventional thirty-year fixed rate mortgages, graduated payment
mortgages, and adjustable rate mortgages. During periods of declining interest
rates, prepayment of mortgages underlying mortgage-backed securities can be
expected to accelerate. Prepayment of mortgages which underlie securities
purchased at a premium often results in capital losses, while prepayment of
mortgages purchased at a discount often results in capital gains. Because of
these unpredictable prepayment characteristics, it is often not possible to
predict accurately the average life or realized yield of a particular issue.
<PAGE>
24

GOVERNMENT PASS-THROUGH SECURITIES: These are securities that are issued or
guaranteed by a U.S. Government agency representing an interest in a pool of
mortgage loans. The primary issuers or guarantors of these mortgage-backed
securities are GNMA, FNMA and FHLMC. FNMA and FHLMC obligations are not backed
by the full faith and credit of the U.S. Government as GNMA certificates are,
but FNMA and FHLMC securities are supported by the instrumentalities' right to
borrow from the U.S. Treasury. GNMA, FNMA and FHLMC each guarantees timely
distributions of interest to certificate holders. GNMA and FNMA also each
guarantees timely distributions of scheduled principal. FHLMC has in the past
guaranteed only the ultimate collection of principal of the underlying mortgage
loan; however, FHLMC now issues mortgage-backed securities (FHLMC Gold PCs)
which also guarantee timely payment of monthly principal reductions. Government
and private guarantees do not extend to the securities' value, which is likely
to vary inversely with fluctuations in interest rates.

PRIVATE PASS-THROUGH SECURITIES: These are mortgage-backed securities issued by
a non-governmental entity, such as a trust. These securities include
collateralized mortgage obligations ("CMOs") and real estate mortgage investment
conduits ("REMICs") that are rated in one of the top two rating categories.
While they are generally structured with one or more types of credit
enhancement, private pass-through securities typically lack a guarantee by an
entity having the credit status of a governmental agency or instrumentality.

COLLATERALIZED MORTGAGE OBLIGATIONS ("CMOS"): CMOs are debt obligations or
multiclass pass-through certificates issued by agencies or instrumentalities of
the U.S. Government or by private originators or investors in mortgage loans. In
a CMO, series of bonds or certificates are usually issued in multiple classes.
Principal and interest paid on the underlying mortgage assets may be allocated
among the several classes of a series of a CMO in a variety of ways. Each class
of a CMO, often referred to as a "tranche," is issued with a specific fixed or
floating coupon rate and has a stated maturity or final distribution date.
Principal payments on the underlying mortgage assets may cause CMOs to be
retired substantially earlier then their stated maturities or final distribution
dates, resulting in a loss of all or part of any premium paid.

REMICS: A REMIC is a CMO that qualifies for special tax treatment under the
Internal Revenue Code and invests in certain mortgages principally secured by
interests in real property. Investors may purchase beneficial interests in
REMICs, which are known as "regular" interests, or "residual" interests.
Guaranteed REMIC pass-through certificates ("REMIC Certificates") issued by FNMA
or FHLMC represent beneficial ownership interests in a REMIC trust consisting
principally of mortgage loans or FNMA, FHLMC or GNMA-guaranteed mortgage
pass-through certificates. For FHLMC REMIC Certificates, FHLMC guarantees the
timely payment of interest, and also guarantees the payment of principal as
payments are required to be made on the underlying mortgage participation
certificates. FNMA REMIC Certificates are issued and guaranteed as to timely
distribution of principal and interest by FNMA.

increase as rates rise and decrease as rates fall; the opposite is true of POs.
SMBs are extremely sensitive to changes in interest rates because of the impact
thereon of prepayment of principal on the underlying mortgage securities. The
market for SMBs is not as fully developed as other markets; SMBs therefore may
be illiquid.

OBLIGATIONS OF SUPRANATIONAL ENTITIES -- Supranational entities are entities
established through the joint participation of several governments, and include
the Asian Development Bank, the Inter-American Development Bank, International
Bank for Reconstruction and Development (World Bank), African Development Bank,
European Economic Community, European Investment Bank and the Nordic Investment
Bank.

OPTIONS ON CURRENCIES -- The International Equity Index Fund may purchase and
write put and call options on foreign currencies (traded on U.S. and foreign
exchanges or over-the-counter markets) to manage the portfolio's exposure to
changes in dollar exchange rates. Call options on foreign currency written by
the Fund will be "covered," which means that the Fund will own an equal amount
of the underlying foreign currency. With respect to put options on foreign
currency written by the Fund, the Fund will establish a segregated account with
its custodian bank consisting of cash, U.S. Government securities or other high
grade liquid debt securities in an amount equal to the amount the Fund would be
required to pay upon exercise of the put.

PAY-IN-KIND SECURITIES -- Pay-in-kind securities are bonds or preferred stock
that pay interest or dividends in the form of additional bonds or preferred
stock.

REPURCHASE AGREEMENTS -- Repurchase agreements are agreements by which a Fund
obtains a security and simultaneously commits to return the security to the
seller at an agreed upon price on an agreed upon date within a number of days
from the date of purchase. The custodian will hold the security as collateral
for the repurchase agreement. A Fund bears a risk of loss in the event the other
party defaults on its obligations and the Fund is delayed or prevented from
exercising its right to dispose of the collateral or if the Fund realizes a loss
on the sale of the collateral. A Fund will enter into repurchase agreements only
with financial institutions deemed to present minimal risk of bankruptcy during
the term of the agreement based on established guidelines. Repurchase agreements
are considered loans under the Investment Company Act of 1940.

RESTRICTED SECURITIES -- Restricted securities are securities that may not be
sold freely to the public absent registration under the Securities Act of 1933
or an exemption from registration. Rule 144A securities are securities that have
not been registered under the Securities Act of 1933, but which may be traded
between certain institutional investors, including investment companies. The
Trust's Board of Trustees is responsible for developing guidelines and
procedures for determining the liquidity of restricted securities and monitoring
the Advisors' implementation of the guidelines and procedures.

SECURITIES LENDING -- In order to generate additional income, a Fund may lend
securities which it owns pursuant to agreements requiring that the loan be
continuously secured by collateral consisting of cash, securities of the U.S.
Government or its agencies equal to at least 100% of the market value of the
securities lent. A Fund continues to receive interest on the securities lent
while simultaneously earning interest on the investment of cash collateral.
Collateral is marked to market daily. There may be risks of delay in recovery of
the securities or even loss of rights in the collateral should the borrower of
the securities fail financially or become insolvent.
<PAGE>
26

STANDBY COMMITMENTS AND PUTS -- Standby commitments and puts are securities
subject to standby commitments or puts permit the holder thereof to sell the
securities at a fixed price prior to maturity. Securities subject to a standby
commitment or put may be sold at any time at the current market price. However,
unless the standby commitment or put was an integral part of the security as
originally issued, it may not be marketable or assignable; therefore, the
standby commitment or put would only have value to the Fund owning the security
to which it relates. In certain cases, a premium may be paid for a standby
commitment or put, which premium will have the effect of reducing the yield
otherwise payable on the underlying security. The Fund will limit standby
commitment or put transactions to institutions believed to present minimal
credit risk.

SWAPS, CAPS, FLOORS and COLLARS -- Interest rate swaps, mortgage swaps, currency
swaps and other types of swap agreements such as caps, floors and collars are
designed to permit the purchaser to preserve a return or spread on a particular
investment or portion of its portfolio, and to protect against any increase in
the price of securities the Fund anticipates purchasing at a later date. In a
typical interest rate swap, one party agrees to make regular payments equal to a
floating interest rate times a "notional principal amount," in return for
payments equal to a fixed rate times the same amount, for a specific period of
time. If a swap agreement provides for payment in different currencies, the
parties might agree to exchange the notional principal amount as well. Swaps may
also depend on other prices or rates, such as the value of an index or mortgage
prepayment rates.

In a typical cap or floor agreement, one party agrees to make payments only
under specified circumstances, usually in return for payment of a fee by the
other party. For example, the buyer of an interest rate cap obtains the right to
receive payments to the extent that a specific interest rate exceeds an
agreed-upon level, while the seller of an interest rate floor is obligated to
make payments to the extent that a specified interest rate falls below an
agreed-upon level. An interest rate collar combines elements of buying a cap and
selling a floor.

Swap agreements are sophisticated hedging instruments that typically involve a
small investment of cash relative to the magnitude of risk assumed. As a result,
swaps can be highly volatile and have a considerable impact on the Fund's
performance. Swap agreements are subject to risks related to the counterparty's
ability to perform, and may decline in value if the counterparty's
creditworthiness deteriorates. The Fund may also suffer losses if it is unable
to terminate outstanding swap agreements or reduce its exposure through
offsetting transactions. Any obligation the Fund may have under these types of
arrangements will be covered by setting aside liquid high grade securities in a
segregated account. The Fund will enter into swaps only with counterparties
believed to be creditworthy.

TIME DEPOSITS -- Time deposits are non-negotiable receipts issued by a bank in
exchange for the deposit of funds. Like a certificate of deposit, it earns a
specified rate of interest over a definite period of time; however, it cannot be
traded in the secondary market. Time deposits are considered to be illiquid
securities.

U.S. GOVERNMENT AGENCIES -- Obligations issued or guaranteed by agencies of the
U.S. Government, including, among others, the Federal Farm Credit Bank, the
Federal Housing Administration and the Small Business Administration, and
obligations issued or guaranteed by instrumentalities of the U.S. Government,
including, among others, the Federal Home Loan Mortgage Corporation, the
<PAGE>
27
Federal Land Banks and the U.S. Postal Service. Some of these securities are
supported by the full faith and credit of the U.S. Treasury (e.g., Government
National Mortgage Association), others are supported by the right of the issuer
to borrow from the Treasury (e.g., Federal Farm Credit Bank), while still others
are supported only by the credit of the instrumentality (e.g., Federal National
Mortgage Association). Guarantees of principal by agencies or instrumentalities
of the U.S. Government may be a guarantee of payment at the maturity of the
obligation so that in the event of a default prior to maturity there might not
be a market and thus no means of realizing on the obligation prior to maturity.
Guarantees as to the timely payment of principal and interest do not extend to
the value or yield of these securities nor to the value of the Fund's shares.

U.S. TREASURY OBLIGATIONS -- U.S. Treasury obligations consist of bills, notes
and bonds issued by the U.S. Treasury and separately traded interest and
principal component parts of such obligations that are transferable through the
Federal book-entry system known as Separately Traded Registered Interest and
Principal Securities ("STRIPS").

VARIABLE AND FLOATING RATE INSTRUMENTS -- Certain obligations may carry variable
or floating rates of interest, and may involve a conditional or unconditional
demand feature. Such instruments bear interest at rates which are not fixed, but
which vary with changes in specified market rates or indices. The interest rates
on these securities may be reset daily, weekly, quarterly or some other reset
period, and may have a floor or ceiling on interest rate changes. There is a
risk that the current interest rate on such obligations may not accurately
reflect existing market interest rates. A demand instrument with a demand notice
exceeding seven days may be considered illiquid if there is no secondary market
for such security.

WARRANTS -- Instruments giving holders the right, but not the obligation, to buy
shares of a company at a given price during a specified period.

WHEN-ISSUED AND DELAYED DELIVERY SECURITIES -- When-issued or delayed delivery
basis transactions involve the purchase of an instrument with payment and
delivery taking place in the future. Delivery of and payment for these
securities may occur a month or more after the date of the purchase commitment.
The Fund will segregate liquid high grade debt securities or cash in an amount
at least equal to these commitments. The interest rate realized on these
securities is fixed as of the purchase date and no interest accrues to the Fund
before settlement. These securities are subject to market fluctuation due to
changes in market interest rates and it is possible that the market value at the
time of settlement could be higher or lower than the purchase price if the
general level of interest rates has changed. Although a Fund generally purchases
securities on a when-issued or forward commitment basis with the intention of
actually acquiring securities for its portfolio, a Fund may dispose of a
when-issued security or forward commitment prior to settlement if it deems
appropriate.

ZERO COUPON OBLIGATIONS -- Zero coupon obligations are debt securities that do
not bear any interest, but instead are issued at a deep discount from par. The
value of a zero coupon obligation increases over time to reflect the interest
accreted. Such obligations will not result in the payment of interest until
maturity, and will have greater price volatility than similar securities that
are issued at par and pay interest periodically.
<PAGE>
A-1

APPENDIX
I. BOND RATINGS
*CORPORATE BONDS

The following are descriptions of Standard & Poor's Corporation ("S&P's") and
Moody's Investors Service, Inc. ("Moody's") corporate bond ratings.

Bonds rated AAA have the highest rating S&P assigns to a debt obligation. Such a
rating indicates an extremely strong capacity to pay principal and interest.
Bonds rated AA also qualify as high-quality debt obligations. Capacity to pay
principal and interest is very strong, and in the majority of instances they
differ from AAA issues only in small degree. Debt rated A has a strong capacity
to pay interest and repay principal although it is somewhat more susceptible to
the adverse effects of changes in circumstances and economic conditions than
debt in higher rated categories.

Bonds which are rated BBB are considered to be medium-grade obligations (i.e.,
they are neither highly protected nor poorly secured). Interest payments and
principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.

Debt rated BB, B, CCC, CC and C is regarded as having predominately speculative
characteristics with respect to capacity to pay interest and repay principal. BB
indicates the least degree of speculation and C the highest degree of
speculation. While such debt will likely have some quality and protective
characteristics, these are outweighed by large uncertainties or major risk
exposure to adverse conditions.

Bonds which are rated Aaa by Moody's are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to as
"gilt edge." Interest payments are protected by a large, or an exceptionally
stable, margin and principal is secure. While the various protective elements
are likely to change, such changes as can be visualized are most unlikely to
impair the fundamentally strong position of such issues. Bonds rated Aa by
Moody's are judged by Moody's to be of high quality by all standards. Together
with bonds rated Aaa, they comprise what are generally known as high-grade
bonds. They are rated lower than the best bonds because margins of protection
may not be as large as in Aaa securities or fluctuation of protective elements
may be of greater amplitude or there may be other elements present which make
the long-term risks appear somewhat larger than in Aaa securities.

Bonds which are rated A possess many favorable investment attributes and are to
be considered as upper-medium grade obligations. Factors giving security to
principal and interest are considered adequate, but elements may be present
which suggest a susceptibility to impairment sometime in the future.

Debt rated Baa is regarded as having an adequate capacity to pay interest and
repay principal. Whereas it normally exhibits adequate protection parameters,
adverse economic conditions or changing circumstances are more likely to lead to
a weakened capacity to pay interest and repay principal for debt in this
category than in higher rated categories.

Bonds which are rated Ba are judged to have speculative elements; their future
cannot be considered as well-assured. Often the protection of interest and
principal payments may be very moderate and thereby not well safeguarded during
both good and bad times
<PAGE>
A-2
over the future. Uncertainty of position characterizes bonds in this class.
Bonds which are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small. Bonds
which are rated Caa are of poor standing. Such issues may be in default or there
may be present elements of danger with respect to principal and interest. Bonds
which are rated Ca represent obligations which are speculative in a high degree.
Such issues are often in default or have other marked shortcomings. Bonds which
are rated C are the lowest rated class of bonds and issues so rated can be
regarded as having extremely poor prospects of ever attaining any real
investment standing.

II. COMMERCIAL PAPER AND SHORT-TERM RATINGS

The following descriptions of commercial paper ratings have been published by
S&P, Moody's, Fitch Investors Service, Inc. ("Fitch"), Duff and Phelps ("Duff")
and IBCA Limited ("IBCA"), respectively.

Commercial paper rated A by S&P is regarded by S&P as having the greatest
capacity for timely payment. Issues rated A are further refined by use of the
numbers 1+ and 1. Issues rated A-1+ are those with an "overwhelming degree" of
credit protection. Those rated A-1 reflect a "very strong" degree of safety
regarding timely payment. Those rated A-2 reflect a safety regarding timely
payment but not as high as A-1.

Commercial paper issues rated Prime-1 and Prime-2 by Moody's are judged by
Moody's to have superior ability and strong ability for repayment, respectively.

The rating Fitch-1 (Highest Grade) is the highest commercial rating assigned by
Fitch. Paper rated Fitch-1 is regarded as having the strongest degree of
assurance for timely payment. The rating Fitch-2 (Very Good Grade) is the second
highest commercial paper rating assigned by Fitch which reflects an assurance of
timely payment only slightly less in degree than the strongest issues.

The rating Duff-1 is the highest commercial paper rating assigned by Duff. Paper
rated Duff-1 is regarded as having very high certainty of timely payment with
excellent liquidity factors which are supported by ample asset protection. Risk
factors are minor. Paper rated Duff-2 is regarded as having good certainty of
timely payment, good access to capital markets and sound liquidity factors and
company fundamentals. Risk factors are small.

<TABLE>
<C> <C>
STI CLASSIC FUNDS ORGANIZATIONAL OVERVIEW

* INVESTMENT ADVISORS

Trusco Capital Management, Inc. 50 Hurt Plaza
Suite 1400
Atlanta, GA 30303

STI Capital Management, N.A. P.O. Box 3808
Orlando, FL 32802

* DISTRIBUTOR

SEI Financial Services Company 680 E. Swedesford Road
Wayne, PA 19087

* ADMINISTRATOR

SEI Financial Management Corporation 680 E. Swedesford Road
Wayne, PA 19087

* TRANSFER AGENT

Federated Services Company Federated Investors Tower
Pittsburgh, PA 15222-3779

* CUSTODIAN

SunTrust Bank, Atlanta c/o STI Trust & Investment
Operations, Inc.
303 Peachtree Street N.E.
14th Floor
Atlanta, GA 30308

The Bank of California 475 Sansome Street
(International Equity Index Fund Suite 1200
only) San Francisco, CA 94111

* LEGAL COUNSEL

Morgan, Lewis & Bockius LLP 2000 One Logan Square
Philadelphia, PA 19103

* INDEPENDENT PUBLIC ACCOUNTANTS

Arthur Andersen, LLP 1601 Market Street
Philadelphia, PA 19103
</TABLE>

<PAGE>
100093/10-95

DISTRIBUTOR
SEI Financial Services
Company

/ / / / / / / / / / PROSPECTUS

TRUST SHARES

CAPITAL GROWTH FUND

VALUE INCOME STOCK FUND

AGGRESSIVE GROWTH FUND

BALANCED FUND

SUNBELT EQUITY FUND

INTERNATIONAL EQUITY
INDEX FUND

INVESTMENT ADVISORS
STI CAPITAL MANAGEMENT, N.A.
TRUSCO CAPITAL MANAGEMENT, INC.
OCTOBER 1, 1995
<PAGE>
STI CLASSIC FUNDS
TRUST SHARES
INVESTMENT GRADE BOND FUND
INVESTMENT GRADE TAX-EXEMPT BOND FUND
U.S. GOVERNMENT SECURITIES FUND
LIMITED-TERM FEDERAL MORTGAGE SECURITIES FUND
SHORT-TERM BOND FUND
SHORT-TERM U.S. TREASURY SECURITIES FUND
FLORIDA TAX-EXEMPT BOND FUND
GEORGIA TAX-EXEMPT BOND FUND
TENNESSEE TAX-EXEMPT BOND FUND
PRIME QUALITY MONEY MARKET FUND
U.S. GOVERNMENT SECURITIES MONEY MARKET FUND
TAX-EXEMPT MONEY MARKET FUND

INVESTMENT ADVISORS TO THE FUNDS:
TRUSCO CAPITAL MANAGEMENT, INC.
STI CAPITAL MANAGEMENT, N.A.
SUNTRUST BANK, CHATTANOOGA, N.A.
SUNTRUST BANK, ATLANTA

AN INVESTMENT IN A MONEY MARKET FUND IS NEITHER INSURED NOR GUARANTEED BY THE
U.S. GOVERNMENT. THERE CAN BE NO ASSURANCE THAT A MONEY MARKET FUND WILL BE ABLE
TO MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER SHARE.

OCTOBER 1, 1995
<PAGE>
2

(THIS PAGE INTENTIONALLY LEFT BLANK)
<PAGE>
3

Throughout this Prospectus, the Investment Grade Bond Fund, Investment Grade
Tax-Exempt Bond Fund, Short-Term U.S. Treasury Securities Fund, Short-Term Bond
Fund, U.S. Government Securities Fund and Limited-Term Federal Mortgage
Securities Fund, which invest primarily in bonds and other fixed income
instruments, may be referred to as the "Bond Funds;" and the Florida Tax-Exempt
Bond Fund, Georgia Tax-Exempt Bond Fund and Tennessee Tax-Exempt Bond Fund,
which invest primarily in tax-exempt bonds and other fixed income instruments,
may be referred to as the "State Tax-Exempt Bond Funds" and the Prime Quality
Money Market Fund, U.S. Government Securities Money Market Fund and Tax-Exempt
Money Market Fund may be referred to as the "Money Market Funds."

TABLE OF CONTENTS

<TABLE>
<S> <C>
Expense Summary...................... 4
Financial Highlights................. 6
The Trust............................ 8
Funds and Investment Objectives...... 8
Investment Policies and Strategies... 9
General Investment Policies and
Strategies.......................... 18
Investment Risks..................... 18
Investment Limitations............... 20
Performance Information.............. 21
General Performance Information...... 22
Purchase of Fund Shares.............. 22
Redemption of Fund Shares............ 23
Dividends and Distributions.......... 24
Tax Information...................... 25
STI Classic Funds Information........ 27
Board of Trustees.................... 27
Investment Advisors.................. 27
Portfolio Managers................... 29
Banking Laws......................... 30
Distribution......................... 30
Administration....................... 31
Transfer Agent and Dividend
Disbursing Agent.................... 31
Custodian............................ 31
Legal Counsel........................ 31
Independent Public Accountants....... 31
Other Information.................... 31
Voting Rights........................ 31
Reporting............................ 32
Shareholder Inquiries................ 32
Description of Permitted
Investments......................... 32
Appendix............................. A-1
</TABLE>
<PAGE>
4

EXPENSE SUMMARY
TRUST SHARES

Below is a summary of the annual operating expenses for Trust Shares of each
Fund. A hypothetical example based on the summary is also shown. Actual expenses
may vary.

ANNUAL OPERATING EXPENSES
(as a percentage of average net assets)

<TABLE>
<CAPTION>
LIMITED-TERM
INVESTMENT FEDERAL SHORT-TERM
INVESTMENT GRADE U.S. MORTGAGE SHORT-TERM U.S. TREASURY
GRADE BOND TAX-EXEMPT GOVERNMENT SECURITIES BOND SECURITIES
FUND BOND FUND SECURITIES FUND FUND FUND FUND
<C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------
Advisory
Fees
(After
Voluntary
Reductions)(1)... .62% .61% .00% .33% .42% .19%
All
Other
Expenses
(After
Voluntary
Reductions)(1)... .13% .14% .75% .32% .23% .46%
- -----------------------------------------------------------------------------------------
Total
Operating
Expenses
(After
Voluntary
Reductions)(1)... .75% .75% .75% .65% .65% .65%
- -----------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
LIMITED-TERM
INVESTMENT FEDERAL SHORT-TERM
INVESTMENT GRADE U.S. MORTGAGE SHORT-TERM U.S. TREASURY
GRADE BOND TAX-EXEMPT GOVERNMENT SECURITIES BOND SECURITIES
FUND BOND FUND SECURITIES FUND FUND FUND FUND
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
An investor would pay the following
expenses on a $1,000 investment
assuming: (1) 5% annual return and
(2) redemption at the end of each
time period:
One year........................ $ 8 $ 8 $ 8 $ 7 $ 7 $ 7
Three Years..................... 24 24 24 21 21 21
Five Years...................... 42 42 42 36 36 36
Ten Years....................... 93 93 93 81 81 81
- ---------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>

ANNUAL OPERATING EXPENSES
(as a percentage of average net assets)

<TABLE>
<CAPTION>
U.S.
PRIME GOVERNMENT
FLORIDA GEORGIA TENNESSEE QUALITY SECURITIES TAX-EXEMPT
TAX-EXEMPT TAX-EXEMPT TAX-EXEMPT MONEY MARKET MONEY MARKET MONEY MARKET
BOND FUND BOND FUND BOND FUND FUND FUND FUND
<C> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------
Advisory
Fees
(After
Voluntary
Reductions)(1)... .08% .27% .00% .50% .50% .46%
All
Other
Expenses
(After
Voluntary
Reductions)(1)... .57% .38% .65% .08% .11% .14%
- -------------------------------------------------------------------------------------
Total
Operating
Expenses
(After
Voluntary
Reductions)(1)... .65% .65% .65% .58% .61% .60%
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
U.S.
PRIME GOVERNMENT
FLORIDA GEORGIA TENNESSEE QUALITY SECURITIES TAX-EXEMPT
TAX-EXEMPT TAX-EXEMPT TAX-EXEMPT MONEY MARKET MONEY MARKET MONEY MARKET
EXAMPLE BOND FUND BOND FUND BOND FUND FUND FUND FUND
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
An investor would pay the following
expenses on a $1,000 investment
assuming: (1) 5% annual return and
(2) redemption at the end of each
time period:
One year....................... $ 7 $ 7 $ 7 $ 6 $ 6 $ 6
Three Years.................... 21 21 21 19 20 19
Five Years..................... 36 36 36 32 34 33
Ten Years...................... 81 81 81 73 76 75
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>

FINANCIAL HIGHLIGHTS

For a Trust Share Outstanding Throughout the Period
<TABLE>
<CAPTION>
NET REALIZED
AND
NET ASSET NET UNREALIZED DISTRIBUTIONS
VALUE INVESTMENT GAINS FROM NET DISTRIBUTIONS NET ASSET
BEGINNING INCOME (LOSSES) ON INVESTMENT FROM REALIZED VALUE END TOTAL
OF PERIOD (LOSS) INVESTMENTS INCOME CAPITAL GAINS OF PERIOD RETURN
--------- ---------- ------------ -------------- ------------- --------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
- ----------------------------
INVESTMENT GRADE BOND FUND
- ----------------------------
TRUST SHARES
1995.......................... $ 9.89 $0.61 $ 0.37 $ (0.61) -- $10.26 10.39%
1994.......................... 10.45 0.50 (0.36) (0.50) $ (0.20) 9.89 1.17%
1993 (1)...................... 10.09 0.45 0.36 (0.45) -- 10.45 9.34%*
- ---------------------------------------
INVESTMENT GRADE TAX-EXEMPT BOND FUND
- ---------------------------------------
TRUST SHARES
1995.......................... $10.68 $0.46 $ 0.60 $ (0.46) -- $11.28 10.21%
1994 (2)...................... 11.37 0.22 (0.34) (0.22) $ (0.35) 10.68 (1.10%)+
- --------------------------------
U. S. GOVERNMENT SECURITIES FUND
- --------------------------------
TRUST SHARES
1995 (3)...................... $ 9.98 $0.53 $ 0.29 $ (0.53) -- $10.27 8.64%+
- ---------------------------------------------
LIMITED-TERM FEDERAL MORTGAGE SECURITIES FUND
- ---------------------------------------------
TRUST SHARES
1995 (4)...................... $10.00 $0.58 $ 0.13 $ (0.60) -- $10.11 7.50%+
- ---------------------
SHORT-TERM BOND FUND
- ---------------------
TRUST SHARES
1995.......................... $ 9.79 $0.53 $ 0.19 $ (0.53) -- $ 9.98 7.60%
1994.......................... 10.01 0.42 (0.21) (0.42) $ (0.01) 9.79 2.02%
1993 (5)...................... 10.00 0.08 0.01 (0.08) -- 10.01 4.45%*
- ---------------------------------------
SHORT-TERM U.S. TREASURY SECURITIES FUND
- ---------------------------------------
TRUST SHARES
1995.......................... $ 9.82 $0.47 $ 0.11 $ (0.47) -- $ 9.93 6.11%
1994.......................... 9.98 0.33 (0.11) (0.33) $ (0.05) 9.82 2.17%
1993 (6)...................... 10.00 0.07 (0.02) (0.07) -- 9.98 2.22%*
- -----------------------------
FLORIDA TAX-EXEMPT BOND FUND
- -----------------------------
TRUST SHARES
1995.......................... $ 9.75 $0.44 $ 0.43 $ (0.44) -- $10.18 9.26%
1994 (7)...................... 10.00 0.13 (0.25) (0.13) -- 9.75 (1.19%)+

<CAPTION>
RATIO OF NET
RATIO OF INVESTMENT
EXPENSES TO INCOME (LOSS)
RATIO OF NET AVERAGE NET TO AVERAGE NET
RATIO OF INVESTMENT ASSETS ASSETS
NET ASSETS EXPENSES INCOME (LOSS) (EXCLUDING (EXCLUDING PORTFOLIO

END OF TO AVERAGE TO AVERAGE NET WAIVERS AND WAIVERS AND TURNOVER

PERIOD (000) NET ASSETS ASSETS REIMBURSEMENTS) REIMBURSEMENTS) RATE

------------ ---------- -------------- --------------- --------------- --------

<S> <C> <C> <C> <C> <C> <C>
- ----------------------------
INVESTMENT GRADE BOND FUND
- ----------------------------
TRUST SHARES
1995.......................... $543,308 0.75% 6.22% 0.88% 6.09% 237.66%

1994.......................... 460,538 0.75% 4.77% 0.88% 4.64% 259.19%

1993 (1)...................... 336,132 0.74%* 5.14%* 0.87%* 5.01%* 299.32%

- ------------------------------
INVESTMENT GRADE TAX-EXEMPT BO
- ------------------------------
TRUST SHARES
1995.......................... $ 78,208 0.75% 4.34% 0.91% 4.18% 591.91%

1994 (2)...................... 44,595 0.75%* 3.46%* 0.95%* 3.26%* 432.46%

- ------------------------------
U. S. GOVERNMENT SECURITIES FU
- ------------------------------
TRUST SHARES
1995 (3)...................... $ 3,291 0.75%* 6.67%* 3.33%* 4.09%* 30.39%

- ------------------------------
LIMITED-TERM FEDERAL MORTGAGE
- ------------------------------
TRUST SHARES
1995 (4)...................... $ 41,823 0.65%* 6.43%* 0.93%* 6.15%* 67.63%

- ---------------------
SHORT-TERM BOND FUND
- ---------------------
TRUST SHARES
1995.......................... $ 60,952 0.65% 5.49% 0.85% 5.29% 200.49%

1994.......................... 34,772 0.65% 4.15% 0.85% 3.95% 74.85%

1993 (5)...................... 25,334 0.64%* 3.88%* 1.11%* 3.41%* 63.89%

- ------------------------------
SHORT-TERM U.S. TREASURY SECUR
- ------------------------------
TRUST SHARES
1995.......................... $ 9,599 0.65% 4.91% 1.08% 4.48% 87.98%

1994.......................... 12,723 0.65% 3.23% 0.81% 3.07% 116.57%

1993 (6)...................... 30,336 0.63%* 3.34%* 1.04%* 2.93%* 36.44%

- -----------------------------
FLORIDA TAX-EXEMPT BOND FUND
- -----------------------------
TRUST SHARES
1995.......................... $ 10,118 0.65% 4.63% 1.13% 4.15% 105.01%

1994 (7)...................... 3,192 0.65%* 3.86%* 1.12%* 3.39%* 53.24%

</TABLE>

<PAGE>
7
<TABLE>
<CAPTION>
NET REALIZED
AND
NET ASSET NET UNREALIZED DISTRIBUTIONS
VALUE INVESTMENT GAINS FROM NET DISTRIBUTIONS NET ASSET
BEGINNING INCOME (LOSSES) ON INVESTMENT FROM REALIZED VALUE END TOTAL
OF PERIOD (LOSS) INVESTMENTS INCOME CAPITAL GAINS OF PERIOD RETURN
--------- ---------- ------------ -------------- ------------- --------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
- ------------------------------
GEORGIA TAX-EXEMPT BOND FUND
- ------------------------------
TRUST SHARES
1995.......................... $ 9.42 $0.42 $ 0.21 $ (0.42) -- $ 9.63 6.94%
1994 (8)...................... 10.00 0.14 (0.58) (0.14) -- 9.42 (4.43%)+
- --------------------------------
TENNESSEE TAX-EXEMPT BOND FUND
- --------------------------------
TRUST SHARES
1995.......................... $ 9.22 $0.44 $ 0.28 $ (0.44) -- $ 9.50 8.17%
1994 (9)...................... 10.00 0.12 (0.77) (0.13) -- 9.22 (6.52%)+
- --------------------------------
PRIME QUALITY MONEY MARKET FUND
- --------------------------------
TRUST SHARES
1995.......................... $ 1.00 $0.05 -- $ (0.05) -- $ 1.00 4.79%
1994.......................... 1.00 0.03 -- (0.03) -- 1.00 2.88%
1993 (10)..................... 1.00 0.03 -- (0.03) -- 1.00 2.92%*
- ----------------------------------------------
U.S. GOVERNMENT SECURITIES MONEY MARKET FUND
- ----------------------------------------------
TRUST SHARES
1995.......................... $ 1.00 $0.05 -- $ (0.05) -- $ 1.00 4.67%
1994.......................... 1.00 0.03 -- (0.03) -- 1.00 2.77%
1993 (10)..................... 1.00 0.03 -- (0.03) -- 1.00 2.79%*
- ------------------------------
TAX-EXEMPT MONEY MARKET FUND
- ------------------------------
TRUST SHARES
1995.......................... $ 1.00 $0.03 -- $ (0.03) -- $ 1.00 3.10%
1994.......................... 1.00 0.02 -- (0.02) -- 1.00 2.08%
1993 (10)..................... 1.00 0.02 -- (0.02) -- 1.00 2.12%*

END OF TO AVERAGE TO AVERAGE NET WAIVERS AND WAIVERS AND TURNOVER

PERIOD (000) NET ASSETS ASSETS REIMBURSEMENTS) REIMBURSEMENTS) RATE

------------ ---------- -------------- --------------- --------------- --------

<S> <C> <C> <C> <C> <C> <C>
- ------------------------------
GEORGIA TAX-EXEMPT BOND FUND
- ------------------------------
TRUST SHARES
1995.......................... $ 13,187 0.65% 4.56% 0.98% 4.23% 24.50%

1994 (8)...................... 4,338 0.65%* 4.12%* 1.06%* 3.71%* 25.90%

- ------------------------------
TENNESSEE TAX-EXEMPT BOND FUND
- ------------------------------
TRUST SHARES
1995.......................... $ 1,664 0.65% 4.90% 2.65% 2.90% 27.73%

1994 (9)...................... 594 0.65%* 4.24%* 1.43%* 3.46%* 13.05%

- ------------------------------
PRIME QUALITY MONEY MARKET FUN
- ------------------------------
TRUST SHARES
1995.......................... $799,189 0.58% 4.77% 0.79% 4.56% --

1994.......................... 583,399 0.58% 2.86% 0.79% 2.65% --

1993 (10)..................... 410,991 0.58%* 2.85%* 0.78%* 2.65%* --

- ------------------------------
U.S. GOVERNMENT SECURITIES MON
- ------------------------------
TRUST SHARES
1995.......................... $434,111 0.61% 4.64% 0.80% 4.45% --

1994.......................... 309,228 0.61% 2.69% 0.77% 2.53% --

1993 (10)..................... 453,567 0.61%* 2.71%* 0.78%* 2.54%* --

- ------------------------------
TAX-EXEMPT MONEY MARKET FUND
- ------------------------------
TRUST SHARES
1995.......................... $215,413 0.45% 3.12% 0.70% 2.87% --

1994.......................... 143,982 0.42% 2.05% 0.71% 1.76% --

1993 (10)..................... 78,416 0.41%* 2.07%* 0.70%* 1.78%* --

</TABLE>

* Annualized.
+ Cumulative since inception.
(1) The Investment Grade Bond Fund Trust Shares commenced operations on July
16, 1992.
(2) The Investment Grade Tax-Exempt Bond Fund Trust Shares commenced operations
on October 21, 1993.
(3) The U.S. Government Securities Fund Trust Shares commenced operations on
July 31, 1994.
(4) The Limited Term Federal Mortgage Securities Fund Trust Shares commenced
operations on June 7, 1994.
(5) The Short-Term Bond Fund Trust Shares commenced operations on March 15,
1993.
(6) The Short-Term U.S. Treasury Securities Fund Trust Shares commenced
operations on March 15, 1993.
(7) The Florida Tax-Exempt Bond Fund Trust Shares commenced operations on
January 25, 1994.
(8) The Georgia Tax-Exempt Bond Fund Trust Shares commenced operations on
January 18, 1994.
(9) The Tennessee Tax-Exempt Bond Fund Trust Shares commenced operations on
January 27, 1994.
(10) The Prime Quality Money Market Fund Trust Shares, the U.S. Government
Securities Money Market Fund Trust Shares, and the Tax-Exempt Money Market
Fund Trust Shares commenced operations on June 8, 1992.
<PAGE>
8

THE TRUST

FUNDS AND INVESTMENT OBJECTIVES
BOND FUNDS:

THE INVESTMENT GRADE BOND FUND seeks to provide as high a level of total return
through current income and capital appreciation as is consistent with the
preservation of capital primarily through investment in investment grade fixed
income securities.

THE INVESTMENT GRADE TAX-EXEMPT BOND FUND seeks to provide as high a level of
total return through federally tax-exempt current income and capital
appreciation as is consistent with the preservation of capital primarily through
investment in investment grade tax-exempt obligations.

THE U.S. GOVERNMENT SECURITIES FUND seeks to provide as high a level of current
income as is consistent with the preservation of capital by investing primarily
in obligations issued or guaranteed by the U.S. Government or its agencies or
instrumentalities.

THE LIMITED-TERM FEDERAL MORTGAGE SECURITIES FUND seeks to provide as high a
level of current income as is consistent with the preservation of capital by
investing primarily in mortgage-related securities issued or guaranteed by U.S.
Government agencies and instrumentalities.

THE SHORT-TERM BOND FUND seeks to provide as high a level of current income,
relative to funds with like investment objectives, as is consistent with the
preservation of capital primarily through investment in short- to
intermediate-term investment grade fixed income securities.

THE SHORT-TERM U.S. TREASURY SECURITIES FUND seeks to provide as high a level of
current income, relative to funds with like investment objectives, as is
consistent with the preservation of capital through investment exclusively in
short-term U.S. Treasury securities.

STATE TAX-EXEMPT BOND FUNDS:

THE FLORIDA TAX-EXEMPT BOND FUND seeks to provide current income exempt from
federal income tax for Florida residents without undue investment risk.

THE GEORGIA TAX-EXEMPT BOND FUND seeks to provide current income exempt from
federal and state income tax for Georgia residents without undue investment
risk.

THE TENNESSEE TAX-EXEMPT BOND FUND seeks to provide current income exempt from
federal and state income tax for Tennessee residents without undue investment
risk.

MONEY MARKET FUNDS:

THE PRIME QUALITY MONEY MARKET FUND seeks to provide as high a level of current
<PAGE>
9
income as is consistent with preservation of capital and liquidity by investing
exclusively in high quality money market instruments.

THE U.S. GOVERNMENT SECURITIES MONEY MARKET FUND seeks to provide as high a
level of current income as is consistent with preservation of capital and
liquidity by investing exclusively in bills, notes and bonds issued by the U.S.
Treasury and separately traded interest and principal component parts of such
obligations that are transferable through the Federal Reserve Book-Entry System
("U.S. Treasury obligations"), U.S. Government Subsidiary Corporation securities
that are backed by the full faith and credit of the U.S. Government and
repurchase agreements ("Repos") with approved dealers collateralized by U.S.
Treasury obligations, and U.S. Government Subsidiary Corporation securities.

THE TAX-EXEMPT MONEY MARKET FUND seeks to provide as high a level of current
interest income exempt from federal income tax as is consistent with
preservation of capital and liquidity. The Fund invests primarily in high
quality short-term municipal obligations.

Each Money Market Fund's ability to generate high current income will be limited
by the fact that it is only permitted to invest in high quality securities. It
is a fundamental policy of each Money Market Fund to use its best efforts to
maintain a constant net asset value of $1.00 per share. There can be no
assurance that a Money Market Fund will achieve its investment objective or that
the Money Market Funds will be able to maintain a net asset value of $1.00 per
share on a continuous basis. In addition, each Money Market Fund intends to
comply with federal regulations applicable to money market funds using the
amortized cost method for calculating net asset value which require each Fund to
invest only in U.S. dollar denominated obligations, to maintain an average
maturity on a dollar-weighted basis of 90 days or less and to acquire eligible
securities that present minimal credit risk and have a maturity of 397 days or
less. These requirements will also limit a Money Market Fund's ability to
generate high current income. For a further discussion of these rules, see
"Description of Permitted Investments."

There can be no assurance that a Fund will achieve its investment objective.

The investment objectives of the Investment Grade Bond Fund, U.S. Government
Securities Fund, Limited-Term Federal Mortgage Securities Fund, Short-Term Bond
Fund and Short-Term U.S. Treasury Securities Fund are non-fundamental and may be
changed without a shareholder vote.

INVESTMENT POLICIES AND STRATEGIES
*INVESTMENT GRADE BOND FUND

The Investment Grade Bond Fund will invest exclusively in investment grade
obligations rated BBB or better by Standard & Poor's Corporation ("S&P") or Baa
or better by Moody's Investors Services, Inc. ("Moody's") or, if unrated, of
comparable quality at the time of purchase as determined by the Fund's Advisor,
including corporate debt obligations; mortgage-backed securities, collateralized
mortgage obligations ("CMOs") and asset-backed securities; obligations issued or
guaranteed as to principal and interest by the U.S. Government or its agencies
or instrumentalities; custodial receipts involving U.S. Treasury obligations;
securities of the government of Canada and its provincial and local governments;
securities issued or guaranteed by foreign governments, their political
subdivisions, agencies or instrumentalities; obligations of supranational
entities and sponsored American Depositary
<PAGE>
10
Receipts ("ADRs") that are traded on exchanges or listed on NASDAQ. Under normal
circumstances, at least 65% of the Fund's total assets will be invested in
corporate and government bonds and debentures. No more than 25% of the Fund's
assets will be invested in securities rated BBB by S&P or Baa by Moody's or, if
unrated, of comparable quality at the time of purchase as determined by the
Advisor.

The Fund may purchase mortgage-backed securities issued or guaranteed as to the
payment of principal and interest by the U.S. Government or its agencies or
instrumentalities or, subject to a limit of 25% of the Fund's assets,
mortgage-backed securities issued by private issuers. These mortgage-backed
securities may be backed or collateralized by fixed, adjustable or floating rate
mortgages. The Fund may also invest in asset-backed securities which consist of
securities backed by company receivables, truck and auto loans, leases, credit
card receivables and home equity loans.

In order to reduce interest rate risk, and subject to a general limit of 25% of
the Fund's assets, the Fund may purchase floating or variable rate securities.
It may also buy securities on a when-issued basis, putable securities, medium
term notes, and zero coupon securities. The Fund may also invest up to 10% of
its assets in restricted securities that the Advisor determines are liquid under
guidelines adopted by the Trust's Board of Trustees. The Fund may also engage in
futures and options transactions and may engage in securities lending. Some
floating or variable rate securities will be subject to interest rate "caps" or
"floors."

Under normal market conditions, it is anticipated that the Fund's average
weighted maturity will range from 4 to 10 years. In the case of mortgage related
securities and asset-backed securities, maturity will be determined based on the
expected average life of the security. The Fund may shorten its average weighted
maturity to as little as 90 days if deemed appropriate for temporary defensive
purposes. By so limiting the maturity of its investments, the Fund expects that
its net asset value will experience less price movement in response to changes
in interest rates than the net asset values of mutual funds investing in similar
credit quality securities with longer maturities.

The Fund's portfolio turnover rate was 237.66% for the fiscal year ended May 31,
1995. This rate of turnover, if continued, will likely result in higher
transaction costs and higher levels of realized capital gains than if the
turnover rate was lower.

*INVESTMENT GRADE TAX-EXEMPT BOND FUND

The Investment Grade Tax-Exempt Bond Fund intends to be fully invested in
municipal securities the interest on which is exempt from federal income taxes
in the opinion of bond counsel to the issuer. The issuers of these securities
can be located in all fifty states, the District of Columbia, Puerto Rico and
other U.S. territories and possessions. It is a fundamental policy of the
Investment Grade Tax-Exempt Bond Fund to invest at least 80% of its total assets
in securities the income from which is exempt from federal income tax and
treated as a preference item for purposes of the alternative minimum tax. At
least 65% of the Fund's assets will be invested in municipal bonds and
debentures, and at least 75% of its total assets invested in municipal bonds
will be in securities rated A or better by S&P or Moody's. Municipal securities
must be rated BBB or better by S&P or Baa or better by Moody's in the case of
bonds; SP-1, SP-2 or MIG-1, MIG-2 in the case of notes; A-1, A-2, P-1, P-2 in
the case of tax-exempt commercial
<PAGE>
11
paper; and VMIG-1 or VMIG-2 in the case of variable rate demand obligations. The
Fund will only acquire unrated securities if, at the time of purchase, the
Advisor determines that such unrated obligations are of comparable quality to
rated obligations that may be acquired by the Fund.

The Fund may invest in floating or variable rate securities and commitments to
purchase the above securities on a when-issued or delayed delivery basis, and
may purchase municipal forwards, medium term notes, putable securities, and zero
coupon securities. The Advisor has discretion to invest up to 20% of the Fund's
total assets in taxable debt securities rated at least BBB or better by S&P or
Baa or better by Moody's or, if unrated, of comparable quality at the time of
purchase as determined by the Advisor, repurchase agreements, and securities
subject to the alternative minimum tax. The Fund may also invest up to 10% of
its assets in restricted securities that the Advisor determines are liquid under
guidelines adopted by the Trust's Board of Trustees and may engage in futures
and options transactions.

Under normal market conditions, it is anticipated that the Fund's average
weighted maturity will range from 4 to 10 years. The Fund may shorten its
average weighted maturity to as little as 90 days if deemed appropriate for
temporary defensive purposes. By so limiting the maturity of its investments,
the Fund's net asset value is expected to experience less price movement in
response to changes in interest rates than the net asset values of mutual funds
investing in similar credit quality securities with longer maturities.

The Fund's portfolio turnover rate was 591.91% for the fiscal year ended May 31,
1995. This rate of turnover, if continued, will likely result in higher
transaction costs and higher levels of realized capital gains than if the
turnover rate was lower.

*U.S. GOVERNMENT SECURITIES FUND

Under normal market conditions, the Fund will invest at least 65% of its assets
in obligations issued or guaranteed by the U.S. Government or its agencies or
instrumentalities, including mortgage-backed securities issued or guaranteed by
U.S. Government agencies such as the Government National Mortgage Association
("GNMA"), the Federal National Mortgage Association ("FNMA") or the Federal Home
Loan Mortgage Corporation ("FHLMC"). Mortgage-backed securities consisting of
CMOs and real estate mortgage investment conduits ("REMICs") purchased by the
Fund will be issued or guaranteed as to payment of principal and interest by the
U.S. Government or its agencies or instrumentalities or, if issued by private
issuers, rated in one of the two highest rating categories by an NRSRO.

The principal governmental issuers or guarantors of mortgage-backed securities
are GNMA, FNMA and FHLMC. Obligations of GNMA are backed by the full faith and
credit of the U.S. Government while obligations of FNMA and FHLMC are supported
by the respective agency only. The Fund may purchase mortgage-backed securities
that are backed or collateralized by fixed, adjustable or floating rate
mortgages.

Mortgage-backed securities that are not issued or guaranteed by the U.S.
Government or its agencies or instrumentalities, including securities nominally
issued by a governmental entity (such as the Resolution Trust Corporation), are
not obligations of a governmental entity and thus may bear a risk of nonpayment.
The timely payment of principal and interest normally is supported, at least
<PAGE>
12
partially, by various forms of insurance or guarantees. There can be no
assurance, however, that such credit enhancement will support full payment of
the principal and interest on such obligations. The average maturity of the
Fund's investment portfolio will typically range from 7 to 14 years.

With respect to the remaining 35% of its assets, the Fund may invest in
corporate or government bonds that carry a rating of Baa or better by Moody's or
BBB or better by S&P, or that are deemed by the Advisor to be of comparable
quality; commercial paper rated at the time of purchase within the two highest
ratings categories of an NRSRO; bankers' acceptances; certificates of deposit
and time deposits; and U.S. Treasury obligations which includes custodial
receipts and repurchase agreements involving securities that constitute
permissible investments for the Fund. The Fund intends to invest in privately
issued, mortgage-backed securities only if they are rated in one of the two
highest rating categories.

*LIMITED-TERM FEDERAL MORTGAGE SECURITIES FUND

Under normal market conditions, the Limited-Term Federal Mortgage Securities
Fund will invest at least 65% of its assets in mortgage-related securities
issued or guaranteed by U.S. Government agencies such as GNMA, FNMA or the
FHLMC. Obligations of GNMA are backed by the full faith and credit of the U.S.
Government while obligations of FNMA and FHLMC are supported by the respective
agency only. The Fund may purchase mortgage-backed securities that are backed or
collateralized by fixed, adjustable or floating rate mortgages. The Fund's
holdings of mortgage-backed securities will typically have an average life of
from one to five years.

Mortgage-backed securities consisting of CMOs and REMICs purchased by the Fund
will be either issued or guaranteed as to payment of principal and interest by
the U.S. Government or its agencies or instrumentalities or, if issued by
private issuers, rated in one of the two highest rating categories by an NRSRO.

Mortgage-backed securities that are not issued or guaranteed by the U.S.
Government or its agencies or instrumentalities, including securities nominally
issued by a governmental entity (such as the Resolution Trust Corporation), are
not obligations of the U.S. Government and thus bear a risk of nonpayment. The
timely payment of principal and interest normally is supported, at least
partially, by various forms of insurance or guarantees. There can be no
assurance, however, that such credit enhancement will support full payment of
the principal and interest on such obligations.

With respect to the remaining 35% of its assets, the Fund may invest in
corporate or government bonds that carry a rating of Baa or better by Moody's or
BBB or better by S&P, or that are deemed by the Advisor to be of comparable
quality; asset backed securities; commercial paper rated at the time of purchase
in the two highest ratings categories of an NRSRO rating bankers' acceptances;
certificates of deposit and time deposits; U.S. Treasury obligations and
custodial receipts; and repurchase agreements involving securities that
constitute permissible investments for the Fund.

The Fund may purchase securities on a forward commitment or when-issued basis,
which
<PAGE>
13
means that delivery and payment for such securities generally takes place after
the customary securities settlement period. The Fund may purchase floating or
variable rate securities and engage in dollar roll transactions. The Fund may
also purchase stripped mortgage-backed securities, but will limit such purchase
to 5% of its net assets.

*SHORT-TERM BOND FUND

Under normal circumstances, the Short-Term Bond Fund will invest solely in
investment grade obligations rated BBB or better by S&P or Baa or better by
Moody's or, if unrated, of comparable quality at the time of purchase as
determined by the Advisor consisting of debt obligations of U.S. and foreign
corporations; mortgage-backed securities; CMOs; asset-backed securities;
obligations (including mortgage-backed securities) issued or guaranteed as to
principal and interest by the U.S. Government or its agencies or
instrumentalities; and custodial receipts involving U.S. Treasury obligations;
(including STRIPS and CUBES). Under normal circumstances, at least 65% of the
Fund's total assets will be invested in corporate and government bonds and
debentures. No more than 25% of the Fund's assets will be invested in securities
rated BBB by S&P or Baa by Moody's or, if unrated, of comparable quality at the
time of purchase by the Advisor.

The Fund may purchase, without limitation, mortgage-backed securities issued or
guaranteed as to the payment of principal and interest by the U.S. Government or
its agencies or instrumentalities and, subject to a limit of 25% of the Fund's
assets, mortgage-backed securities issued by private issuers. These
mortgage-backed securities may be backed or collateralized by fixed, adjustable
or floating rate mortgages. The Fund may also invest in asset-backed securities,
which consist of securities backed by company receivables, truck and auto loans;
leases; credit card receivables; and home equity loans. The Fund will purchase
mortgage-backed and asset-backed securities only if they are rated at least AA
by S&P or Aa by Moody's or, if unrated, determined to be of comparable quality
at the time of purchase by the Advisor.

The Fund may purchase securities on a when-issued basis and may acquire floating
or variable rate securities, medium term notes, putable securities, and zero
coupon securities. The Fund may also purchase securities issued by foreign
governments and supranational agencies. The Fund may also invest in municipal
securities when the Advisor feels it is consistent with the Fund's investment
objective. The Fund will not invest in municipal securities unless the Advisor
believes that the yield will be higher than the yield for comparable taxable
investments in which the Fund is permitted to invest. The following quality
criteria apply to the Fund's investments in municipal securities. The Fund's
investments in municipal notes will be limited to those obligations (i) where
both principal and interest are backed by the full faith and credit of the
United States, (ii) which are rated MIG-2 or V-MIG-2 at the time of investment
by Moody's, (iii) which are rated SP-2 at the time of investment by S&P, or (iv)
which, if not rated, are of equivalent quality to MIG-2, V-MIG-2, or SP-2 in the
Advisor's judgment. The Fund's investment in municipal bonds will be limited to
bonds rated BBB or better by S&P or Baa or better by Moody's, or, if unrated,
deemed by the Advisor to be of comparable quality. For the Fund's investments in
other types of tax-exempt municipal investments, such as participation interests
in municipal lease/purchase agreements, the quality of the underlying credit or
of the bank providing a credit support arrangement must, in
<PAGE>
14
the Advisor's opinion, be equivalent to the municipal note or bond ratings
stated above. The Fund is also authorized to invest up to 10% of its assets in
restricted securities, including Rule 144A securities, that the Advisor
determines are liquid under guidelines adopted by the Trust's Board of Trustees.
The Fund may also enter into bond futures contracts and options on bond futures
contracts and engage in securities lending.

The Fund intends to maintain a dollar-weighted average maturity of 3 years or
less, and the maximum remaining maturity for any security held by the Fund is 7
years. Under normal market conditions it is anticipated that the Fund's
dollar-weighted average maturity will range from 2 to 3 years. In the case of
mortgage related securities and asset-backed securities, maturity will be
determined based on the expected average life of the security. The Fund may
shorten its average weighted maturity to as little as 90 days if deemed
appropriate for temporary defensive purposes. By so limiting the maturity of its
investments, the Fund expects that its net asset value will experience less
price movement in response to changes in interest rates than the net asset
values of mutual funds investing in similar credit quality securities with
longer maturities.

The Fund's turnover rate was 200.49% for the fiscal year ended May 31, 1995.
This rate of turnover, if continued, will likely result in higher transaction
costs and higher levels of realized capital gains than if the turnover rate was
lower.

*SHORT-TERM U.S. TREASURY SECURITIES FUND

The Short-Term U.S. Treasury Securities Fund will invest exclusively in
obligations issued by the U.S. Treasury with maximum remaining maturities of 3
years or less. U.S. Treasury securities are considered to be among the safest
investments available. The Fund will not invest in repurchase agreements. The
Fund may borrow money for temporary or emergency purposes in an amount not
exceeding one-third of its total assets, but has no present intention to do so.

Under normal market conditions, it is anticipated that the Fund's average
maturity will range from one to two years. Furthermore, for temporary defensive
purposes during periods when the Advisor determines that market conditions
warrant, the Short-Term U.S. Treasury Securities Fund may reduce its average
weighted maturity to less than one year.

*FLORIDA TAX-EXEMPT BOND FUND

The Florida Tax-Exempt Bond Fund intends to be fully invested in municipal
securities the interest on which is exempt from federal income taxes based on
opinions from bond counsel to the issuers. The issuers of these securities can
be located in Florida, the District of Columbia, Puerto Rico and other U.S.
territories and possessions. It is a fundamental policy of the Fund to invest at
least 80% of its total assets in securities the income from which is exempt from
federal income tax and not treated as a preference item for purposes of the
alternative minimum tax. At least 65% of the Fund's assets will be invested in
Florida municipal bonds and debentures, and at least 75% of its total assets
invested in municipal bonds will be in securities rated A or better by S&P or
Moody's. Municipal securities must be rated BBB or better by S&P or Baa or
better by Moody's in the case of bonds; SP-1, SP-2 or MIG-1, MIG-2 in the case
of notes; A-1, A-2, or P-1, P-2 in the case of tax-exempt commercial paper; and
VMIG-1 or VMIG-2 in the case of variable rate demand obligations. No more than
25% of the Fund's assets will be invested in bonds rated BBB by S&P or Baa by
Moody's. The Fund will only acquire unrated securities if,
<PAGE>
15
at the time of purchase, the Advisor determines that such unrated obligations
are of comparable quality to rated obligations that may be acquired by the Fund.

The Fund may invest in floating or variable rate securities, commitments to
purchase the above securities on a when-issued or delayed delivery basis, and
may purchase municipal forwards, putable securities, medium term notes, and zero
coupon securities. The Advisor has discretion to invest up to 20% of the Fund's
total assets in taxable debt securities rated at least BBB or better by S&P or
Baa or better by Moody's or, if unrated, of comparable quality at the time of
purchase as determined by the Advisor, repurchase agreements, and securities
subject to the alternative minimum tax. The Fund may also invest in futures and
options, but has no present intention to do so for other than hedging purposes.

Under normal market conditions, it is anticipated that the Fund's average
weighted maturity will range from 6 to 25 years. The Fund may shorten its
average weighted maturity to as little as 90 days if deemed appropriate for
temporary defensive purposes.

The Fund's portfolio turnover rate was 105.01% for the fiscal year ended May 31,
1995. This rate of turnover, if continued, will likely result in higher
transaction costs and higher levels of realized capital gains than if the
turnover rate was lower.

*GEORGIA TAX-EXEMPT BOND FUND

The Georgia Tax-Exempt Bond Fund intends to be fully invested in municipal
securities the interest on which is exempt from federal income taxes and
substantially exempt from State of Georgia income taxes based on opinions from
bond counsel to the issuers. The issuers of these securities can be located in
Georgia, the District of Columbia, Puerto Rico and other U.S. territories and
possessions. It is a fundamental policy of the Fund to invest at least 80% of
its total assets in securities the income from which is exempt from federal
income tax and not treated as a preference item for purposes of the alternative
minimum tax. At least 65% of the Fund's assets will be invested in Georgia
municipal bonds and debentures, and at least 75% of its total assets invested in
municipal bonds will be in securities rated A or better by S&P or Moody's.
Municipal securities must be rated BBB or better by S&P or Baa or better by
Moody's in the case of bonds; SP-1, SP-2 or MIG-1, MIG-2 in the case of notes;
A-1, A-2, or P-1, P-2 in the case of tax-exempt commercial paper; and VMIG-1 or
VMIG-2 in the case of variable rate demand obligations. No more than 25% of the
Fund's assets will be invested in bonds rated BBB by S&P or Baa by Moody's. The
Fund will only acquire unrated securities if, at the time of purchase, the
Advisor determines that such unrated obligations are of comparable quality to
rated obligations that may be acquired by the Fund.

*TENNESSEE TAX-EXEMPT BOND FUND

The Tennessee Tax-Exempt Bond Fund intends to be fully invested in municipal
securities the interest on which is exempt from federal income taxes and
substantially exempt from State of Tennessee income taxes based on opinions from
bond counsel to the issuers. The issuers of these securities can be located in
Tennessee, the District of Columbia, Puerto Rico and other U.S. territories and
possessions. It is a fundamental policy of the Fund to invest at least 80% of
its total assets in securities the income from which is exempt from federal
income tax and not treated as a preference item for purposes of the alternative
minimum tax. At least 65% of the Fund's assets will be invested in Tennessee
municipal bonds and debentures, and at least 75% of its total assets invested in
municipal bonds will be in securities rated A or better by S&P or Moody's.
Municipal securities must be rated BBB or better by S&P or Baa or better by
Moody's in the case of bonds; SP-1, SP-2 or MIG-1, MIG-2 in the case of notes;
A-1, A-2, or P-1, P-2 in the case of tax-exempt commercial paper; and VMIG-1 or
VMIG-2 in the case of variable rate demand obligations. No more than 25% of the
Fund's assets will be invested in bonds rated BBB by S&P or Baa by Moody's. The
Fund will only acquire unrated securities if, at the time of purchase, the
Advisor determines that such unrated obligations are of comparable quality to
rated obligations that may be acquired by the Fund. The Fund may invest in
floating or variable rate securities, commitments to purchase the above
securities on a when-issued or delayed delivery basis, and may purchase
municipal forwards, putable securities, medium term notes, and zero coupon
securities. The Advisor has discretion to invest up to 20% of the Fund's total
assets in taxable debt securities rated at least BBB or better by S&P or Baa or
better by Moody's or, if unrated, of comparable quality at the time of purchase
as determined by Advisor, repurchase agreements, and securities subject to the
alternative minimum tax. The Fund may also invest in futures and options, but
has no present intention to do so for other than hedging purposes.

*PRIME QUALITY MONEY MARKET FUND

The Prime Quality Money Market Fund will invest in money market instruments
denominated in U.S. dollars consisting of (i) U.S. Treasury obligations; (ii)
custodial receipts representing interests in component parts of U.S. Treasury
obligations; (iii) obligations issued or guaranteed as to principal and interest
by agencies and instrumentalities of the U.S. Government; (iv) commercial paper
issued by domestic and foreign issuers rated in the highest short-term rating
category by one or more nationally recognized statistical rating organizations
("NRSROs") as described in the "Appendix" or, if not rated, determined by the
Advisor to be of comparable quality; (v) high quality obligations (including
certificates of deposit, time deposits, bankers' acceptances, Eurodollar and
Yankee bank obligations) of U.S. commercial banks (including foreign branches of
such banks), and
<PAGE>
17
U.S. and London branches of foreign banks or savings and loan and thrift
institutions that are members of the Federal Reserve System, the Federal Deposit
Insurance Corporation, or the Federal Savings and Loan Insurance Corporation;
(vi) high quality short-term corporate obligations issued by companies with
commercial paper meeting the ratings indicated in (iv), above, or, if not rated,
determined by the Advisor to be of comparable quality; (vii) repurchase
agreements involving such obligations; (viii) high quality obligations of
supranational entities satisfying the credit ratings described in (iv), above,
or, if not rated, determined by the Advisor to be of comparable quality; (ix)
medium term notes and (x) investments in guaranteed investment contracts
("GICs") issued by U.S. insurance companies that are determined by the Advisor
to be of comparable quality to the securities with the ratings described above
(subject to a limit of 10% of the Fund's assets). The Fund may not invest more
than 25% of its total assets in obligations issued by foreign branches of U.S.
banks and London branches of foreign banks. The Fund may purchase securities
subject to standby commitments. As a Money Market Fund, the Fund is subject to
limitations on the percentage of its assets that may be invested in any one
issuer and on the percentage that may be invested in securities carrying the
second highest rating assigned by the requisite NRSROs.

*U.S. GOVERNMENT SECURITIES MONEY MARKET FUND

The U.S. Government Securities Money Market Fund will invest exclusively in U.S.
Treasury obligations, U.S. Government Subsidiary Corporation securities which
are backed by the full faith and credit of the U.S. Government (e.g., the
Government National Mortgage Association) and repurchase agreements with dealers
selected pursuant to guidelines adopted by the Trust's Board of Trustees and
collateralized by U.S. Treasury securities and U.S. Government Subsidiary
Corporation securities.

*TAX-EXEMPT MONEY MARKET FUND

The Tax-Exempt Money Market Fund intends to be fully invested in securities the
interest on which is exempt from federal income taxes in the opinion of bond
counsel to the issuer. It is a fundamental policy of the Tax-Exempt Money Market
Fund to invest at least 80% of its total assets in securities the income from
which is exempt from federal income taxes and not treated as a preference item
for purposes of the alternative minimum tax. The Fund may invest in high
quality, U.S. dollar denominated municipal securities of issuers located in all
fifty states, the District of Columbia, Puerto Rico and other U.S. territories
rated in one of the two highest short-term rating categories by S&P or Moody's
or, if not rated, determined by the Advisor to be of comparable quality. The
Fund will primarily purchase municipal bonds with a remaining maturity of 397
days or less, and will also acquire municipal notes and tax-exempt commercial
paper with similar maturities. The Fund may agree to purchase short-term
securities on a when-issued basis and may invest in securities subject to
standby commitments. Securities purchased on a when-issued basis are subject to
settlement within 45 days of the purchase date. The Advisor has discretion to
invest up to 20% of the Fund's assets in U.S. dollar denominated obligations
consisting of taxable money market instruments, obligations issued or guaranteed
by the U.S. Government or its agencies and instrumentalities, repurchase
agreements, and securities subject to the alternative minimum tax.
<PAGE>
18

GENERAL INVESTMENT POLICIES AND STRATEGIES

For temporary defensive purposes during periods when its Advisor determines that
market conditions warrant, each Fund, except the U.S. Government Securities
Money Market Fund and Short-Term U.S. Treasury Securities Fund, may invest up to
100% of its assets in money market instruments consisting of securities issued
or guaranteed as to principal and interest by the U.S. Government, its agencies
or instrumentalities, custodial receipts involving U.S. Treasury obligations,
repurchase agreements, certificates of deposit, bankers' acceptances, and time
deposits issued by banks or savings and loan associations and commercial paper
rated in the highest rating category, and may hold a portion of its assets in
cash. A Fund may not be pursuing its investment objective when it is engaged in
temporary defensive investing.

The municipal bonds that the Investment Grade Tax-Exempt Bond Fund and State
Tax-Exempt Bond Funds may purchase include general obligation bonds, revenue or
special obligation bonds, and private activity and industrial development bonds.
General obligation bonds are backed by the taxing power of the issuing
municipality while revenue or special obligation bonds are backed by a specific
project or facility. The State Tax-Exempt Bond Funds may also purchase
certificates of participation which represent an interest in an underlying
obligation or commitment such as an obligation issued in connection with a
leasing arrangement. The payment of principal and interest on private activity
and industrial development bonds generally is dependent solely on the ability of
the facility's user to meet its obligation and the pledge, if any, of real or
personal property as security for such payment.

The Advisor to a State Tax-Exempt Bond Fund or the Investment Grade Tax-Exempt
Bond Fund may buy or sell portfolio securities with the intention of generating
capital gains. Such gains will increase the Fund's total return and will be
taxable upon distribution to Shareholders. See "Tax Information."

In the event that a security owned by a Fund is downgraded below the stated
rating categories, the Advisor will review and take appropriate action with
regard to the security.

A Fund's purchase of shares of other investment companies is limited by the
Investment Company Act of 1940 and will ordinarily result in an additional layer
of charges and expenses.

Each of the Funds may engage in securities lending and will limit such practice
to 33 1/3% of its total assets. No Fund may purchase additional securities while
its outstanding borrowings exceed 5% of its assets.

It is a non-fundamental policy of each Fund to invest no more than 15% of its
net assets in illiquid securities (10% of the total assets of each Money Market
Fund). An illiquid security is a security which cannot be disposed of in the
usual course of business within seven days at a price approximating its carrying
value.

For additional information regarding permitted investments, see "Description of
Permitted Investments" in this Prospectus and in the Statement of Additional
Information.

INVESTMENT RISKS
ZERO COUPON OBLIGATIONS

Each Fund, except the Tax-Exempt Money Market Fund, may invest, subject to its
investment objective and policies, in zero coupon obligations. Zero coupon
obligations are sold at original issue discount and do not
<PAGE>
19
make periodic payments. Zero coupon obligations may be subject to greater
fluctuations in value due to interest rate changes than interest bearing
obligations. A Fund will be required to include the imputed interest in zero
coupon obligations in its current income. Because each Fund distributes all of
its net investment income to Shareholders, a Fund may have to sell portfolio
securities to distribute the income attributable to these obligations and
securities at a time when the Advisor would not have chosen to sell such
obligations or securities and which may result in a taxable gain or loss.

FOREIGN SECURITIES

Investing in the securities of foreign companies involves special risks and
considerations not typically associated with investing in U.S. companies. These
risks and considerations include differences in accounting, auditing and
financial reporting standards, generally higher commission rates on foreign
portfolio transactions, the possibility of expropriation or confiscatory
taxation, adverse changes in investment or exchange control regulations,
political instability which could affect U.S. investment in foreign countries
and potential restrictions of the flow of international capital and currencies.
Foreign companies may also be subject to less government regulation than U.S.
companies. Moreover, the dividends payable on the foreign securities may be
subject to foreign withholding taxes, thus reducing the net amount of income
available for distribution to the Fund's Shareholders. Further, foreign
securities often trade with less frequency and volume than domestic securities
and, therefore, may exhibit greater price volatility. Changes in foreign
exchange rates will affect, favorably or unfavorably, the value of those
securities which are denominated or quoted in currencies other than the U.S.
dollar.

MORTGAGE-BACKED SECURITIES

Mortgage-backed securities are subject to the risk of prepayment of the
underlying mortgages. During periods of declining interest rates, prepayment of
mortgages underlying these securities can be expected to accelerate. When the
mortgage-backed securities held by a Fund are prepaid, the Fund must reinvest
the proceeds in securities the yield of which reflects prevailing interest
rates, which may be lower than the prepaid security.

FIXED INCOME SECURITIES

The market value of a Fund's fixed income investments will change in response to
interest rate changes and other factors. During periods of falling interest
rates, the values of outstanding fixed income securities generally rise.
Conversely, during periods of rising interest rates, the values of such
securities generally decline. Securities with longer maturities are subject to
greater fluctuations in value than securities with shorter maturities. Changes
by an NRSRO to the rating of any fixed income security and in the ability of an
issuer to make payments of interest and principal also affect the value of these
investments. Changes in the value of a Fund's securities will not affect cash
income derived from these securities but will affect the Fund's net asset value.
<PAGE>
20

Fixed income securities rated BBB by S&P or Baa by Moody's (investment grade
bonds) are deemed by these rating services to have speculative characteristics.

Guarantees of a Fund's securities by the U.S. Government or its agencies or
instrumentalities guarantee only the payment of principal and interest on the
guaranteed securities, and do not guarantee the securities' yield or value or
the yield or value of a Fund's shares.

There is a risk that the current interest rate on floating and variable rate
instruments may not accurately reflect existing market interest rates.

MUNICIPAL SECURITIES

Since each State Tax-Exempt Bond Fund invests in municipal securities issued by
governmental entities of each of their specific states, the performance of each
State Tax-Exempt Bond Fund may be especially affected by factors pertaining to
such state's economy and other factors specifically affecting the ability of
issuers in that state to meet their obligations. As a result, the value of each
State Tax-Exempt Bond Fund's shares may fluctuate more widely than the value of
shares of a portfolio investing in securities relating to a number of different
states. The ability of state, county, or local governments to meet their
obligations will depend primarily on the availability of tax and other revenues
to those governments and on their fiscal conditions generally. Municipal
securities may be affected from time to time by economic, political, geographic
and demographic conditions. In addition, constitutional amendments, legislative
measures, executive orders, administrative regulations and voter initiatives may
limit a government's power to raise revenues or increase taxes and thus could
adversely affect the ability to meet financial obligations.

INVESTMENT LIMITATIONS

Each Fund may not:

1. Purchase securities of any issuer (except securities issued or
guaranteed by the United States, its agencies or instrumentalities and
repurchase agreements involving such securities) if as a result more than 5% of
the total assets of a Fund would be invested in the securities of such issuer;
provided, however, that a Fund may invest up to 25% of its total assets without
regard to this restriction as permitted by applicable law.

2. Purchase any securities which would cause more than 25% of the total
assets of a Fund to be invested in the securities of one or more issuers
conducting their principal business activities in the same industry, provided
that this limitation does not apply to investments in obligations issued or
guaranteed by the U.S. Government or its agencies and instrumentalities,
repurchase agreements involving such securities or tax-exempt securities issued
by governments or political subdivisions of governments and, with respect to
only the Money Market Funds, obligations issued by domestic branches of U.S.
banks or U.S. branches of foreign banks subject to the same regulations as U.S.
banks. For purposes of this limitation, (i) utility companies will be divided
according to their services, for example,
<PAGE>
21
gas, gas transmission, electric and telephone will each be considered a separate
industry; (ii) financial service companies will be classified according to the
end users of their services, for example, automobile finance, bank finance and
diversified finance will each be considered a separate industry; and (iii)
supranational entities will be considered to be a separate industry.

It is a non-fundamental policy of the Tax-Exempt Money Market Fund and
Investment Grade Tax-Exempt Bond Fund that they will not invest more than 25% of
their net assets in securities of one or more issuers conducting their principal
activities in the same state. In addition, the Tax-Exempt Money Market Fund,
Investment Grade Tax-Exempt Bond Fund and State Tax-Exempt Bond Funds will not
invest more than 25% of their total assets in securities the interest on which
is derived from revenues of similar type projects.

The foregoing percentages will apply at the time of the purchase of a security.

Additional investment limitations are set forth in the Statement of Additional
Information.

PERFORMANCE INFORMATION
*MONEY MARKET FUNDS

From time to time each Money Market Fund may advertise its "current yield" and
"effective compound yield." Both yield figures are based on historical earnings
and are not intended to indicate future performance. The "current yield" of each
Fund refers to the income generated by an investment in a Fund over a seven-day
period (which period will be stated in the advertisement). This income is then
"annualized." That is, the amount of income generated by the investment during
that week is assumed to be generated each week over a 52-week period and is
shown as a percentage of the investment. The "effective yield" is calculated
similarly but, when annualized, the income earned by an investment in a Fund is
assumed to be reinvested. The "effective yield" will be slightly higher than the
"current yield" because of the compounding effect of this assumed reinvestment.

The Tax-Exempt Money Market Fund may also advertise a "tax-equivalent yield,"
which is calculated by determining the rate of return that would have been
achieved on a fully taxable investment to produce the after tax equivalent of
the Fund's yield, assuming certain tax brackets for the Shareholder.

*BOND AND STATE TAX-EXEMPT BOND FUNDS

From time to time, the Bond and State Tax-Exempt Bond Funds may advertise yield
and total return. These figures will be based on historical earnings and are not
intended to indicate future performance. The yield of a Fund refers to the
annualized income generated by an investment in that Fund over a specified
30-day period. The yield is calculated by assuming that the income generated by
the investment during that period is generated over one year and is shown as a
percentage of the investment.

The Investment Grade Tax-Exempt and State Tax-Exempt Bond Funds may also
advertise a "tax-equivalent yield," which is calculated by determining the rate
of return that would have been achieved on a fully taxable investment to produce
the after tax equivalent of the Fund's yield, assuming certain tax brackets for
the Shareholder.

The total return of a Fund refers to the average compounded rate of return to a
hypothetical investment, including any sales charge imposed, for designated time
periods (including but not limited to, the period from which a Fund commenced
operations through the specified
<PAGE>
22
date), assuming that the entire investment is redeemed at the end of each period
and assuming the reinvestment of all dividend and capital gains distributions.

GENERAL PERFORMANCE INFORMATION

The performance of the Trust's Trust Shares will normally be higher than for
Investor Shares and Flex Shares because Investor Shares and Flex Shares are
subject to distribution, service, and certain transfer agent fees not charged to
Trust Shares. The performance of Flex Shares in comparison to Investor Shares
will vary depending upon the investment time horizon.

PURCHASE OF FUND SHARES

Trust Shares of the Fund are sold primarily to financial institutions, including
subsidiaries of SunTrust Banks, Inc. ("SunTrust"), for the investment of funds
for which they act in a fiduciary, agency, investment advisory or custodial
capacity. Individuals may not purchase Trust Shares directly, although
individuals may be able to purchase Trust Shares through accounts maintained
with financial institutions. Trust Shares are sold without a sales charge,
although financial institutions may charge their customer accounts for services
provided in connection with the purchase of shares. Financial institutions may
impose an earlier cut-off time for receipt of purchase orders directed through
them to allow for processing and transmittal of the reorders to the Transfer
Agent for effectiveness the same day. Information concerning these services and
any charges will be provided to customers by the financial institutions. Trust
Shares will be held of record by the financial institutions, although customers
may have or be given the right to vote the shares depending upon the terms of
their relationship with the financial institution. Confirmations of share
purchases and redemptions will be sent to the financial institution as the
shareholder of record.

Shares may be purchased on days on which the New York Stock Exchange is open for
business ("business day"). However, money market mutual fund shares cannot be
purchased or redeemed for same day settlement on days the Federal Reserve is
closed.

Purchase orders for Money Market Funds will be effective as of the business day
received by the Transfer Agent and eligible to receive dividends declared the
same day if the Transfer Agent receives the order before 11:00 a.m. Eastern time
for the Tax-Exempt Money Market Fund or before 1:00 p.m. Eastern time for the
Prime Quality Money Market Fund and U.S. Government Securities Money Market Fund
and the Custodian receives federal funds before 4:00 p.m. Eastern time on such
day. Otherwise, purchase orders for the Money Market Funds will be effective the
next business day provided the Custodian receives readily available funds before
4:00 p.m. Eastern time on the next such business day. The purchase price is the
net asset value per share next computed after the order is received and accepted
by the Trust. The net asset value per share of each Fund is determined by
dividing the total value of its investments and other assets, less any
liabilities, by its total outstanding shares. The net asset value per share is
calculated as of the close of business of the New York Stock Exchange (currently
4:00 p.m. Eastern time)
<PAGE>
23
each business day based on the amortized cost method described in the Statement
of Additional Information and is expected to remain constant at $1.00 per share.

A purchase order for any of the Bond and State Tax-Exempt Bond Funds will be
effective as of the business day it is received by the Transfer Agent if the
Transfer Agent receives the order before 4:00 p.m. Eastern time and payment is
received within one day. The purchase price of shares of a Fund is the net asset
value next determined after a purchase order is effective plus any applicable
sales charge (the "offering price"). The net asset value per share of a Fund is
determined by dividing the total market value of the Fund's investments and
other assets, less any liabilities, by the total outstanding shares of the Fund.
Net asset value per share is determined daily as of 4:00 p.m. Eastern time on
any business day. Pursuant to guidelines established by the Trustees, the Trust
may use a pricing service to provide market quotations or valuations for
securities owned by each Fund. Purchases will be made in full and fractional
shares of the Trust calculated to three decimal places.

The Trust reserves the right to reject a purchase order when the Distributor
determines that it is not in the best interest of the Trust and/or
Shareholder(s).

Although the methodology and procedures for calculating the net asset value of
the Trust Shares are identical to those of the Investor Shares and Flex Shares,
the net asset value per share of the classes may differ because of the
distribution, service, and certain transfer agent expenses charged to Investor
Shares and Flex Shares.

REDEMPTION OF FUND SHARES

With respect to the Money Market Funds, redemption orders must be received by
the Transfer Agent on a business day before 1:00 p.m. Eastern time for the Prime
Quality and U.S. Government Securities Money Market Funds and before 11:00 a.m.
Eastern time for the Tax-Exempt Money Market Fund. Redemption orders received
after the times noted above will normally be executed the following day. STI
Classic Funds reserves the right to wire redemption proceeds within five
business days after receiving the redemption orders if, in the judgment of the
Advisor, an earlier payment could adversely impact a Fund.

With respect to the Bond and State Tax-Exempt Bond Funds, redemption orders must
be received by the Transfer Agent before 4:00 p.m.
<PAGE>
24
Eastern time on any business day. Redemption proceeds are normally remitted
within five business days following receipt of the order.

DIVIDENDS AND DISTRIBUTIONS
MONEY MARKET FUNDS

Dividends from net investment income (exclusive of capital gains) of each of the
Money Market Funds are declared on each business day to Shareholders at the
close of business on the day of declaration. Net income for dividend purposes
consists of (i) interest accrued and original issue discount earned on the
Fund's assets, (ii) plus the amortization of market discount (except in the case
of the Tax-Exempt Money Market Fund) and minus the amortization of market
premium on such assets, (iii) less accrued expenses directly attributable to the
Fund and the general expenses of the Trust prorated to the Fund on the basis of
its relative net assets. Trust Shares begin earning dividends on the business
day the purchase order is effective and continue earning dividends through and
including the business day before the redemption order is effective. Dividends
are paid within ten business days after the end of each month in the form of
additional Trust Shares of the same Fund unless the Shareholder has elected
prior to the date of distribution to receive payment in cash. Such election, or
any revocation thereof, must be made in writing at least 15 days prior to the
date of distribution to the Trust's transfer agent and will become effective
with respect to dividends paid after its receipt. Dividends are paid within ten
business days after a Shareholder's complete redemption of its Trust Shares in a
Fund.

BOND AND STATE TAX-EXEMPT BOND FUNDS

Dividends from net investment income (exclusive of capital gains) are declared
on each business day and paid monthly by each of the Bond and State Tax-Exempt
Bond Funds. Each Fund's net realized capital gains (including net short-term
capital gains) are distributed at least annually. Net income for dividend
purposes consists of (i) interest accrued and original issue discount earned on
the Fund's assets, (ii) plus the amortization of market discount (except in the
case of the Investment Grade Tax-Exempt Bond and State Tax-Exempt Bond Funds)
and minus the amortization of market premium on such assets, (iii) plus dividend
or distribution income on such assets, (iv) less accrued expenses directly
attributable to the Fund and the general expenses of the Trust prorated to the
Fund on the basis of its relative net assets. Investor Shares and Flex Shares
invested in the Bond and State Tax-Exempt Bond Funds are eligible to begin
earning dividends that are declared on the business day after the purchase order
is effective and continue to be eligible for dividends through and including the
day the redemption order is effective.

The net asset value of Trust Shares of the Funds will be reduced by the amount
of any dividend or distribution. Dividends and distributions are paid in the
form of additional Trust Shares of the same Fund unless the customer has elected
prior to the date of distribution to receive payment in cash. Such election, or
any revocation thereof, must be made in writing prior to the date of
distribution to the Trust's transfer agent and will become
<PAGE>
25
effective with respect to dividends paid after its receipt. Dividends and
distributions are paid within ten days of the end of the time period to which
the dividend relates. Dividends and distributions payable to a Shareholder are
paid in cash within ten business days after a Shareholder's complete redemption
of its Trust Shares in a Fund.

TAX INFORMATION

The following summary of federal income tax consequences is based on current tax
laws and regulations, which may be changed by legislative, judicial or
administrative action. No attempt has been made to present a detailed
explanation of the federal, state, or local income tax treatment of each Fund or
its Shareholders. In particular, no attempt has been made herein to provide
information on the tax laws of Florida, Georgia or Tennessee. Accordingly,
Shareholders are urged to consult their tax advisors regarding specific
questions as to federal, state and local income taxes.

TAX STATUS OF EACH FUND

Each Fund is treated as a separate entity for federal tax purposes, and is not
combined with the Trust's other Funds. Each Fund intends to qualify for the
special tax treatment afforded regulated investment companies by the Internal
Revenue Code of 1986, as amended (the "Code"), so that it will be relieved of
federal income tax on that part of its net investment income and net capital
gains (the excess of long-term capital gains over net short-term capital loss)
which is distributed to Shareholders. Each Fund intends to make sufficient
distributions prior to the end of each calendar year to avoid liability for the
federal excise tax applicable to regulated investment companies.

TAX STATUS OF DISTRIBUTIONS:
MONEY MARKET FUNDS

The Prime Quality Money Market Fund and the U.S. Government Securities Money
Market Fund will each distribute all of their net investment income (including,
for this purpose, net short-term capital gains) to Shareholders. Dividends from
net investment income will be taxable to Shareholders as ordinary income whether
received in cash or in additional shares.

The Tax-Exempt Money Market Fund will distribute all of its net investment
income (including net short-term capital gains) to Shareholders. If, at the
close of each quarter of its taxable year, at least 50% of the value of the
Fund's assets consists of obligations the interest on which is excludable from
gross income, the Fund may pay exempt-interest dividends to its Shareholders.
Those dividends constitute the portion of the aggregate dividends as designated
by the Fund, equal to the excess of the excludable interest over certain amounts
disallowed as deductions. Exempt-interest dividends are excludable from a
Shareholder's gross income for regular federal income tax purposes, but may have
alternative minimum tax consequences. See the Statement of Additional
Information.

Current federal tax law limits the types and volume of bonds qualifying for the
federal income tax exemption of interest, which may
<PAGE>
26
have an effect on the ability of the Tax-Exempt Money Market Fund to purchase
sufficient amounts of tax-exempt securities to satisfy the Code's requirements
for the payment of exempt-interest dividends.

TAX STATUS OF DISTRIBUTIONS:
BOND AND STATE TAX-EXEMPT BOND FUNDS

Each of the Investment Grade Tax-Exempt Bond and State Tax-Exempt Bond Funds
will distribute all of its net investment income (including net short-term
capital gains) to Shareholders. If, at the close of each quarter of its taxable
year, at least 50% of the value of each of the Fund's assets consist of
obligations the interest on which is excludable from gross income, the Fund may
pay exempt-interest dividends to its Shareholders. Those dividends constitute
the portion of the aggregate dividends as designated by the Fund, equal to the
excess of the excludable interest over certain amounts disallowed as deductions.
Exempt-interest dividends are excludable from a Shareholder's gross income for
regular federal income tax purposes, but may have alternative minimum tax
consequences. See the Statement of Additional Information.

Current federal tax law limits the types and volume of bonds qualifying for the
federal income tax exemption of interest, which may have an effect on the
ability of the Investment Grade Tax-Exempt Bond and State Tax-Exempt Bond Funds
to purchase sufficient amounts of tax-exempt securities to satisfy the Code's
requirements for the payment of exempt-interest dividends.

TAX STATUS OF DISTRIBUTIONS:
ALL FUNDS

Dividends from net investment income will qualify for the dividends received
deduction for corporate Shareholders only to the extent such distributions are
derived from dividends paid by domestic corporations. Dividends from net capital
gains (the excess of net long-term capital gains over net short-term capital
loss) will be treated as long-term capital gains, regardless of how long the
Shareholder has held shares and regardless of whether distributions are received
in cash or in additional shares. For certain individual Shareholders net
long-term capital gains may be taxed at a lower rate than ordinary income. Each
Fund will make annual reports to Shareholders of the federal income tax status
of all distributions. Dividends declared by a Fund in October, November or
December of any year and payable to Shareholders of record on a date in that
month will be deemed to have been paid by the Fund and received by the
Shareholders on December 31, of that year, if paid by the Fund any time during
the following January.

Income received on direct U.S. obligations is exempt from tax at the state level
when received directly by a Fund and may be exempt, depending on the state, when
received by a Shareholder from a Fund provided certain state specific conditions
are satisfied. Not all states permit such income dividends to be tax-exempt and
some require that a certain minimum percentage of an investment company's income
be derived from state tax-exempt interest. Each Fund will inform Shareholders
annually of the percentage of
<PAGE>
27
income and distributions derived from direct U.S. obligations. Shareholders
should consult their tax advisors to determine whether any portion of the income
dividends received from a Fund is considered tax exempt in their particular
states.

Income derived by a Fund from obligations of foreign issuers may be subject to
foreign withholding taxes. No Fund will be able to treat Shareholders as having
paid their proportionate share of such foreign taxes.

Interest on indebtedness incurred or continued by a Shareholder in order to
purchase shares of a "tax-exempt" Fund is not deductible. Furthermore, entities
or persons who are "substantial users" (or persons related to "substantial
users") of facilities financed by "private activity bonds" or certain industrial
development bonds should consult their tax advisors before purchasing shares.
For these purposes, the term "substantial user" is defined generally to include
a "non-exempt person" who regularly uses in trade or business a part of a
facility financed from the proceeds of such bonds. See the Statement of
Additional Information.

A sale, exchange or redemption of Fund shares is a taxable event to the
Shareholder.

STI CLASSIC FUNDS INFORMATION
THE TRUST

The Trust pays its expenses, including fees of its service providers, audit and
legal expenses, expenses of preparing prospectuses, proxy solicitation material
and reports to Share-
holders, costs of custodial services and registering the shares under federal
and state securities laws, pricing, insurance expenses, litigation and other
extraordinary expenses, brokerage costs, interest charges, taxes and
organization expenses.

BOARD OF TRUSTEES

INVESTMENT ADVISORS

The Advisors are indirect wholly-owned subsidiaries of SunTrust Banks, Inc.
("SunTrust"), a southeastern regional bank holding company with assets of $44.2
billion as of June 30, 1995. SunTrust ranks among the twenty largest U.S.
banking companies. Its three principal subsidiaries-- SunTrust Banks of Florida,
Inc., SunTrust Banks of Georgia, Inc. and SunTrust Banks of Tennessee, Inc.--
provide a wide range of personal and corporate banking, trust, and investment
services through more than 600 locations in the three-state area. Total
discretionary assets under management with SunTrust Banks, Inc. equalled
approximately $42 billion as of December 31, 1994.

Trusco Capital Management, Inc. ("Trusco") serves as the Advisor to the Money
Market, Short-Term U.S. Treasury Securities, Short-Term Bond and U.S. Government
Securities Funds.
<PAGE>
28
As of June 30, 1995, Trusco had approximately $11.5 billion in assets under
management. The principal business address of Trusco is 50 Hurt Plaza, Suite
1400, Atlanta, GA 30303.

STI Capital Management, N.A. ("STI Capital") (formerly SunBank Capital
Management, N.A.) serves as the Advisor to the Limited-Term Federal Mortgage
Securities, Investment Grade Bond, Investment Grade Tax-Exempt Bond and Florida
Tax-Exempt Bond Funds. As of June 30, 1995, STI Capital had discretionary
management authority with respect to assets of approximately $11.1 billion. The
principal business address of STI Capital is P.O. Box 3808, Orlando, FL 32802.

SunTrust Bank, Chattanooga, N.A. ("SunTrust Bank, Chattanooga") (formerly
American National Bank & Trust Company) serves as the Advisor to the Tennessee
Tax-Exempt Bond Fund. SunTrust Bank, Chattanooga had approximately $1.5 billion
in assets under management as of June 30, 1995. The principal business address
of SunTrust Bank, Chattanooga is 736 Market Street, Chattanooga, TN 37402.

SunTrust Bank, Atlanta (formerly Trust Company Bank) serves as the Advisor to
the Georgia Tax-Exempt Bond Fund. As of December 31, 1994, SunTrust Bank,
Atlanta had approximately $17.4 billion in assets under management. The
principal address for SunTrust Bank, Atlanta is 25 Park Place, Atlanta, GA
30303.

The Trust and the above Advisors have entered into advisory agreements (the
"Advisory Agreements"). Under the Advisory Agreements, the Advisors make the
investment decisions for the assets of the Fund(s) they advise and continuously
review, supervise and administer their respective Fund's investment program. The
Advisors discharge their responsibilities subject to the supervision of, and
policies established by, the Trustees of the Trust.
STI CLASSIC FUNDS ARE NOT DEPOSITS, ARE NOT INSURED OR GUARANTEED BY THE FDIC OR
ANY OTHER GOVERNMENT AGENCY, AND ARE NOT ENDORSED OR GUARANTEED BY AND DO NOT
CONSTITUTE OBLIGATIONS OF SUNTRUST BANKS, INC. OR ANY OF ITS AFFILIATES.
INVESTMENTS IN THE FUNDS INVOLVE RISK, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
RETURNS AND PRINCIPAL VALUES WILL FLUCTUATE AND SHARES AT REDEMPTION MAY BE
WORTH MORE OR LESS THAN THEIR ORIGINAL COST. THERE IS NO GUARANTEE THAT ANY STI
CLASSIC FUND WILL ACHIEVE ITS INVESTMENT OBJECTIVE. With respect to all Funds,
the Advisors may execute brokerage or other agency transactions through
affiliates of the Advisors.

For the services provided and expenses incurred pursuant to the Investment
Advisory Agreements: Trusco is entitled to receive advisory fees computed daily
and paid monthly at the annual rate of .74%, .65%, .65%, .55%, .65% and .65% of
the average daily net assets of the U.S. Government Securities Fund, Prime
Quality Money Market Fund, U.S. Government Securities Money Market Fund,
Tax-Exempt Money Market Fund, Short-Term U.S. Treasury Securities Fund and
Short-Term Bond Fund, respectively; STI Capital is entitled to receive advisory
fees computed daily and paid monthly at the annual rate of .65%, .74%, .74% and
.65% of the average daily net assets of the Florida Tax-Exempt Bond Fund,
Investment Grade Bond Fund, Investment Grade Tax-Exempt Bond Fund and
Limited-Term Federal Mortgage Securities Fund, respectively; SunTrust Bank,
Chattanooga, N.A. is entitled to receive advisory fees computed daily and paid
monthly at the annual rates of .65% of the average daily net assets of the
Tennessee Tax-Exempt Bond Fund and SunTrust Bank, Atlanta is entitled to receive
advisory fees computed
<PAGE>
29
daily and paid monthly at the annual rate of .65% of the average daily net
assets of the Georgia Tax-Exempt Bond Fund.

From time to time, an Advisor may waive (either voluntarily or pursuant to
applicable state limitations) advisory fees payable by a Fund. Currently, the
Advisors have agreed to voluntary reductions in their respective fees in amounts
necessary to maintain the total operating expenses at the amounts set forth in
the Expense Summary. Voluntary reductions of fees may be terminated at anytime.

For the fiscal year ended May 31, 1995: Trusco received advisory fees computed
daily and paid monthly at the annual rate of .50%, .50%, .46%, .19%, .42%, and
.0% of the average daily net assets of the Prime Quality Money Market Fund, U.S.
Government Securities Money Market Fund, Tax-Exempt Money Market Fund,
Short-Term U.S. Treasury Securities Fund, Short-Term Bond Fund, and U.S.
Government Securities Fund, respectively; STI Capital received advisory fees
computed daily and paid monthly at the annual rate of .12%, .62%, .61%, and .33%
of the average daily net assets of the Florida Tax-Exempt Bond Fund, Investment
Grade Bond Fund, Investment Grade Tax-Exempt Bond Fund, and Limited-Term
Mortgage Federal Securities Fund, respectively; SunTrust Bank, Chattanooga
received advisory fees computed daily and paid monthly at the annual rates of
.0% of the average daily net assets of the Tennessee Tax-Exempt Bond Fund and
SunTrust Bank, Atlanta received advisory fees computed daily and paid monthly at
the annual rate of .27% of the average daily net assets of the Georgia Tax-
Exempt Bond Fund.

PORTFOLIO MANAGERS

Mr. Charles B. Leonard, CFA, First Vice President of Trusco, and Michael L.
Ford, an Associate of Trusco have been responsible for the day-to-day management
of the U.S. Government Securities Fund since its inception. Mr. Leonard has been
with Trusco since 1986 as the senior fixed income manager. Mr. Ford has been
with Trusco since April, 1994. Prior to joining Trusco, Mr. Ford served as a
senior securities analyst with Liberty Capital Advisors from January, 1992 to
April, 1994 and served as a securities analyst at Southern Farm Bureau Life
Insurance Company from 1990 to 1992. Mr. Ford was a graduate student at Milsaps
College from 1989 to 1991.

Mr. L. Earl Denney CFA and Mr. Dave E. West CFA have been responsible for the
day-to-day management of the Limited-Term Federal Mortgage Securities Fund since
its inception. Mr. Denney has served as Executive Vice President of STI Capital
since 1983. Mr. West has served as a fixed income portfolio manager with STI
Capital since 1989. Mr. Denney has also been responsible for the day-to-day
management of the Investment Grade Bond Fund since its inception.

Ms. Gay Cash has been responsible for the day-to-day management of the Georgia
Tax-Exempt Bond Fund since its inception. Ms. Cash has served as a Vice
President of SunTrust Bank, Atlanta since January 1, 1987.

Mr. Ronald Schwartz has been responsible for the day-to-day management of the
Florida Tax-Exempt Bond and Investment Grade Tax-Exempt Bond Funds since their
inception. Mr. Schwartz joined STI Capital in 1988 and currently serves as a
Senior Vice President. Mr. Schwartz, has also been responsible for the
day-to-day management of the Tennessee Tax-Exempt Bond Fund since July, 1995.
Mr. Schwartz serves as Vice President and Trust Investment Officer of SunTrust
Bank, Chattanooga.
<PAGE>
30

Starting September, 1995, Patricia Love became co-portfolio manager of the
Tennessee Tax-Exempt Bond Fund. Ms. Love serves as Vice President and Trust
Investment Officer of SunTrust Bank, Chattanooga. Ms. Love also is a portfolio
manager at STI Capital. Ms. Love has been with SunTrust Bank, Chattanooga since
1993 and prior to that served as a portfolio analyst with First City Texas from
1986 to 1993.

Ms. Agnes Pampush has been responsible for the day-to-day management of the
Short-Term Bond and Short-Term U.S. Treasury Securities Funds since their
inception. Ms. Pampush has served as Vice President and Fixed Income Portfolio
Manager of Trusco since 1988.

BANKING LAWS

DISTRIBUTION

Each Fund may execute brokerage or other agency transactions through the
Distributor for which the Distributor receives compensation.

ADMINISTRATION

SEI Financial Management Corporation (the "Administrator"), a wholly-owned
subsidiary of SEI, and the Trust are parties to an Administration Agreement (the
"Administration Agreement"). Under the terms of the Administration Agreement,
the Administrator provides the Trust with certain administrative services, other
than investment advisory services, including regulatory reporting, all necessary
office space, equipment, personnel, and facilities.

The Administrator is entitled to a fee, which is calculated daily and paid
monthly, at an annual rate as follows:

<TABLE>
<CAPTION>
AVERAGE AGGREGATE DAILY NET ASSETS FEE
- --------------------------------------------- ---------
<S> <C>
$1 - $1 billion .10%
over $1 billion to $5 billion .07%
over $5 billion to $8 billion .05%
over $8 billion to $10 billion .045%
over $10 billion .04%
</TABLE>

From time to time, the Administrator may waive (either voluntarily or pursuant
to applicable state limitations) all or a portion of the administration fee
payable with respect to the Trust.

TRANSFER AGENT AND DIVIDEND DISBURSING AGENT

Federated Services Company, Pittsburgh, PA is the Transfer Agent for the shares
of the Trust and dividend disbursing agent for the Trust.

CUSTODIAN

SunTrust Bank, Atlanta, c/o STI Trust & Investment Operations, Inc., 303
Peachtree Street N.E., 14th Floor, Atlanta, GA 30308 serves as Custodian of the
assets of each Fund of the Trust except the International Equity Index Fund. The
Bank of California, 475 Sansome Street, Suite 1200, San Francisco, CA 94111,
serves as Custodian for the International Equity Index Fund. The Custodians hold
cash, securities and other assets of the Trust as required by the Investment
Company Act of 1940.

LEGAL COUNSEL

Morgan, Lewis & Bockius, LLP, Philadelphia, PA, serves as legal counsel to the
Trust.

INDEPENDENT PUBLIC ACCOUNTANTS

The independent public accountants to the Trust are Arthur Andersen, LLP,
Philadelphia, PA.

OTHER INFORMATION
VOTING RIGHTS

REPORTING

The Trust issues unaudited financial information semi-annually and audited
financial statements annually. The Trust furnishes proxy statements and other
reports to Shareholders of record.

SHAREHOLDER INQUIRIES

Shareholders may contact their financial institution's representative in order
to obtain information on account statements, procedures and other related
information.

DESCRIPTION OF PERMITTED INVESTMENTS

The following is a description of the permitted investments for the Funds.
Further discussion is contained in the Statement of Additional Information.

ASSET-BACKED SECURITIES -- Asset-backed securities are securities secured by
non-mortgage assets such as company receivables, truck and auto loans, leases
and credit card receivables. Such securities are generally issued as
pass-through certificates, which represent undivided fractional ownership
interests in the underlying pools of assets. Such securities also may be debt
instruments, which are also known as collateralized obligations and are
generally issued as the debt of a special purpose entity, such as a trust,
organized solely for the purpose of owning such assets and issuing such debt.

The market for asset-backed securities is at a relatively early stage of
development. Accordingly, there may be a limited secondary market for such
securities.
<PAGE>
33

CERTIFICATES OF DEPOSIT -- Certificates of deposit are interest bearing
instruments with a specific maturity. They are issued by banks and savings and
loan institutions in exchange for the deposit of funds and normally can be
traded in the secondary market prior to maturity. Certificates of deposit with
penalties for early withdrawal will be considered illiquid.

COMMERCIAL PAPER -- Commercial paper is a term used to describe unsecured
short-term

promissory notes issued by banks, municipalities, corporations and other
entities. Maturities on these issues vary from a few to 270 days.

CORPORATE DEBT OBLIGATIONS -- Corporate debt obligations are debt instruments
issued by corporations with maturities exceeding 270 days. Such instruments may
include putable corporate bonds and zero coupon bonds.

CUSTODIAL RECEIPTS -- Custodial receipts are interests in separately traded
interest and principal component parts of U.S. Treasury obligations that are
issued by banks or brokerage firms and are created by depositing U.S. Treasury
obligations into a special account at a custodian bank. The custodian holds the
interest and principal payments for the benefit of the registered owners of the
certificates or receipts. The custodian arranges for the issuance of the
certificates or receipts evidencing ownership and maintains the register.
Receipts include Treasury Receipts ("TRs"), Treasury Investment Growth Receipts
("TIGRs"), and Certificates of Accrual on Treasury Securities ("CATS").

Receipts are sold as zero coupon securities which means that they are sold at a
substantial discount and redeemed at face value at their maturity date without
interim cash payments of interest or principal. This discount is accreted over
the life of the security, and such accretion will constitute the income earned
on the security for both accounting and tax purposes. Because of these features,
such securities may be subject to greater interest rate volatility than interest
paying investments. See "Zero Coupon Obligations."

DOLLAR ROLLS -- Dollar rolls are transactions in which securities are sold for
delivery in the current month and the seller simultaneously contracts to
repurchase substantially similar securities on a specified future date. Any
difference between the sale price and the purchase price is netted against the
interest income foregone on the securities sold to arrive at an implied
borrowing rate. Alternatively, the sale and purchase transactions can be
executed at the same price, with the Fund being paid a fee as consideration for
entering into the commitment to purchase. Dollar rolls may be renewed prior to
cash settlement and initially may involve only a firm commitment
<PAGE>
34
agreement by the Fund to buy a security. If the broker-dealer to whom the Fund
sells the security becomes insolvent, the Fund's right to repurchase the
security may be restricted. Other risks involved in entering into dollar rolls
include the risk that the value of the security may change adversely over the
term of the dollar roll and that the security the Fund is required to repurchase
may be worth less than the security that the Fund originally held.

To avoid any leveraging concerns, the Fund will place U.S. Government or other
liquid, high grade assets in a segregated account in an amount sufficient to
cover its repurchase obligation.

EURODOLLAR AND YANKEE BANK OBLIGATIONS -- Eurodollar bank obligations are U.S.
dollar-denominated certificates of deposit or time deposits issued outside the
United States by foreign branches of U.S. banks or by foreign banks. Yankee bank
obligations are U.S. dollar denominated obligations issued in the United States
by foreign banks.

FUTURES CONTRACTS AND OPTIONS ON FUTURES CONTRACTS -- Futures contracts provide
for the future sale by one party and purchase by another party of a specified
amount of a specific security at a specified future time and at a specified
price. An option on a futures contract gives the purchaser the right, in
exchange for a premium, to assume a position in a futures contract at a
specified exercise price during the term of the option. A Fund may use futures
contracts and related options for BONA FIDE hedging purposes, to offset changes
in the value of securities held or expected to be acquired, to minimize
fluctuations in foreign currencies, or to gain exposure to a particular market
or instrument. A Fund will minimize the risk that it will be unable to close out
a futures contract by only entering into futures contracts which are traded on
national futures exchanges.

GUARANTEED INVESTMENT CONTRACTS ("GICs") -- GICs are contracts issued by U.S.
insurance companies. Pursuant to such contracts, the Fund makes cash
contributions to a deposit fund of the insurance company's general account. The
insurance company then credits to the Fund on a monthly basis guaranteed
interest at either a fixed, variable or floating rate. A GIC provides that this
guaranteed interest will not be less than a certain minimum rate. A GIC is a
general obligation of the issuing insurance company and not a separate account.
The purchase price paid for a GIC becomes part of the
<PAGE>
35
general assets of the issuer, and the contract is paid at maturity from the
general assets of the issuer.

Generally, GICs are not assignable or transferable without the permission of the
issuing insurance company. For this reason, an active secondary market in GICs
does not currently exist and GICs are considered to be illiquid investments.

LOAN PARTICIPATIONS -- Loan participations are interests in loans to U.S.
corporations which are administered by the lending bank or agent for a syndicate
of lending banks, and sold by the lending bank or syndicate member
("intermediary bank"). In a loan participation, the borrower corporation will be
deemed to be the issuer of the participation interest except to the extent the
Fund derives its rights from the intermediary bank. Because the intermediary
bank does not guarantee a loan participation, a loan participation is subject to
the credit risks associated with the underlying corporate borrower. In the event
of bankruptcy or insolvency of the corporate borrower, a loan participation may
be subject to certain defenses that can be asserted by such borrower as a result
of improper conduct by the intermediary bank. In addition, in the event the
underlying corporate borrower fails to pay principal and interest when due, the
Fund may be subject to delays, expenses and risks that are greater than those
that would have been involved if the Fund had purchased a direct obligation of
such borrower. Under the terms of a Loan Participation, the Fund may be regarded
as a creditor of the intermediary bank (rather than of the underlying corporate
borrower), so that the Fund may also be subject to the risk that the
intermediary bank may become insolvent.

The secondary market for loan participations is limited and any such
participation purchased by the Fund may be regarded as illiquid.

GOVERNMENT PASS-THROUGH SECURITIES: These are securities that are issued or
guaranteed by a U.S. Government agency representing an interest in a pool of
mortgage loans. The primary issuers or guarantors of these mortgage-backed
securities are GNMA, FNMA
<PAGE>
36
and FHLMC. FNMA and FHLMC obligations are not backed by the full faith and
credit of the U.S. Government as GNMA certificates are, but FNMA and FHLMC
securities are supported by the instrumentalities' right to borrow from the U.S.
Treasury. GNMA, FNMA and FHLMC each guarantees timely distributions of interest
to certificate holders. GNMA and FNMA also each guarantees timely distributions
of scheduled principal. FHLMC has in the past guaranteed only the ultimate
collection of principal of the underlying mortgage loan; however, FHLMC now
issues mortgage-backed securities (FHLMC Gold PCs) which also guarantee timely
payment of monthly principal reductions. Government and private guarantees do
not extend to the securities' value, which is likely to vary inversely with
fluctuations in interest rates.

STRIPPED MORTGAGE-BACKED SECURITIES ("SMBS"): SMBs are usually structured with
two classes that receive specified proportions of the monthly interest and
principal payments from a pool of mortgage securities. One class may receive all
of the interest payments and thus is termed an interest-only class ("IO"), while
the other class may receive all of the principal payments and thus is termed the
principal-only class ("PO"). The value of IOs tends to increase as rates rise
and decrease as rates fall; the opposite is true of POs. SMBs are extremely
sensitive to changes in interest rates because of the impact thereon of
prepayment of principal on the underlying mortgage
<PAGE>
37
securities. The market for SMBs is not as fully developed as other markets; SMBs
therefore may be illiquid.

RISK FACTORS: Due to the possibility of prepayments of the underlying mortgage
instruments, mortgage-backed securities generally do not have a known maturity.
In the absence of a known maturity, market participants generally refer to an
estimated average life. An average life estimate is a function of an assumption
regarding anticipated prepayment patterns, based upon current interest rates,
current conditions in the relevant housing markets and other factors. The
assumption is necessarily subjective, and thus different market participants can
produce different average life estimates with regard to the same security. There
can be no assurance that estimated average life will be a security's actual
average life.

MUNICIPAL FORWARDS -- Municipal forwards are forward commitments for the
purchase of tax-exempt bonds with a specified coupon to be delivered by an
issuer at a future date, typically exceeding 45 days but normally less than one
year after the commitment date. Municipal forwards are normally used as a
refunding mechanism for bonds that may only be redeemed on a designated future
date. A Fund will enter into municipal forwards when the price and yield of the
underlying bonds are believed to be favorable when compared to current prices
and yields. As with forward commitments, municipal forwards are subject to
market fluctuations due to changes in market interest rates between the
commitment date and the settlement date. municipal forwards may be considered to
be illiquid investments.

To avoid any leveraging concerns, a Fund will maintain liquid, high grade
securities in a segregated account at least equal to the purchase price of the
municipal forward.

MUNICIPAL LEASE OBLIGATIONS -- Municipal lease obligations are securities issued
by state and local governments and authorities to finance the acquisition of
equipment and facilities. They may take the form of a lease, an installment
purchase contract, a conditional sales contract, or a participation interest in
any of the above. Depending upon the market for such securities, municipal lease
obligations may be illiquid.

MUNICIPAL SECURITIES -- Municipal securities consist of (i) debt obligations
issued by or on behalf of public authorities to obtain funds to be used for
various public facilities, for refunding outstanding obligations, for general
operating expenses, and for lending such funds to other public institutions and
facilities, and (ii) certain private activity and industrial development bonds
issued by or on behalf of public authorities to obtain funds to provide for the
construction, equipment, repair or improvement of privately operated facilities.

General obligation bonds are backed by the taxing power of the issuing
municipality. Revenue bonds are backed by the revenues of a project or facility
(tolls from a bridge, for example). Certificates of participation represent an
interest in an underlying obligation or commitment, such as an obligation issued
in connection with a leasing arrangement. The payment of principal and interest
on private activity and industrial development bonds generally is dependent
solely on the ability of a facility's user to meet its financial obligations and
the pledge, if any, of real and personal property as security for such payment.

Municipal securities include both municipal notes and municipal bonds. Municipal
notes include general obligation notes, tax anticipation notes, revenue
anticipation notes, bond anticipation notes, certificates of indebtedness,
demand notes and construction
<PAGE>
38
loan notes and participation interests in municipal notes. Municipal bonds
include general obligation bonds, revenue or special obligation bonds, private
activity and industrial development bonds and participation interests in
municipal bonds.

OBLIGATIONS OF SUPRANATIONAL ENTITIES -- Supranational entities are entities
established through the joint participation of several governments, and include
the Asian Development Bank, Inter-American Development Bank, International Bank
for Reconstruction and Development (World Bank), African Development Bank,
European Economic Community, European Investment Bank and Nordic Investment
Bank.

RESTRAINTS ON INVESTMENTS BY MONEY MARKET FUNDS -- Investments by a money market
fund are subject to limitations imposed under regulations adopted by the
Securities and Exchange Commission. Under these regulations, money market funds
may only acquire obligations that present minimal credit risk and that are
"eligible securities," which means they are (i) rated, at the time of
investment, by at least two nationally recognized security rating organizations
(one if it is the only organization rating such obligation) in the highest
rating category or, if unrated, determined to be of comparable quality (a "first
tier security"), or (ii) rated according to the foregoing criteria in the second
highest rating category or, if unrated, determined to be of comparable quality
("second tier security"). A security is not considered to be unrated if its
issuer has outstanding obligations of comparable priority and security that have
a short-term rating. In the case of taxable money market funds, investments in
second tier securities are subject to the further constraints in that (i) no
more than 5% of a Fund's assets may be invested in second tier securities and
(ii) any investment in securities of any one such issuer is limited to the
greater of 1% of the Fund's total assets or $1 million. A taxable money market
fund may also hold more than 5% of its assets in first tier securities of a
single issuer for three "business days" (that is, any day other than a Saturday,
Sunday or customary business holiday).

RESTRICTED SECURITIES -- Restricted securities are securities that may not be
sold freely to the public absent registration under the Securities Act of 1933
or an exemption from registration. Rule 144A securities are securities that have
not been registered under the Securities Act of 1933 but which may be traded
between certain institutional investors including investment companies. The
Trust's Board of Trustees is responsible for developing guidelines and
procedures for determining the liquidity of restricted securities, and for
monitoring the Advisor's implementation of the guidelines and procedures.

SECURITIES LENDING -- In order to generate additional income, a Fund may lend
securities
<PAGE>
39
which it owns pursuant to agreements requiring that the loan be continuously
secured by collateral consisting of cash, securities of the U.S. Government or
its agencies equal to at least 100% of the market value of the securities lent.
A Fund continues to receive interest on the securities lent while simultaneously
earning interest on the investment of cash collateral. Collateral is marked to
market daily. There may be risks of delay in recovery of the securities or even
loss of rights in the collateral should the borrower of the securities fail
financially or become insolvent.

SECURITIES OF FOREIGN ISSUERS -- There are certain risks connected with
investing in foreign securities. These include risks of adverse political and
economic developments (including possible governmental seizure or
nationalization of assets), the possible imposition of exchange controls or
other governmental restrictions, less uniformity in accounting and reporting
requirements, the possibility that there will be less information on such
securities and their issuers available to the public, the difficulty of
obtaining or enforcing court judgments abroad, restrictions on foreign
investments in other jurisdictions, difficulties in effecting repatriation of
capital invested abroad, and difficulties in transaction settlements and the
effect of delay on shareholder equity. Foreign securities may be subject to
foreign taxes, and may be less marketable than comparable U.S. securities. The
value of a Fund's investments denominated in foreign currencies will depend on
the relative strengths of those currencies and the U.S. dollar, and a Fund may
be affected favorably or unfavorably by changes in the exchange rates or
exchange control regulations between foreign currencies and the U.S. dollar.
Changes in foreign currency exchange rates also may affect the value of
dividends and interest earned, gains and losses realized on the sale of
securities and net investment income and gains, if any, to be distributed to
shareholders by a Fund.

STANDBY COMMITMENTS AND PUTS -- Securities subject to standby commitments or
puts permit the holder thereof to sell the securities at a fixed price prior to
maturity. Securities subject to a standby commitment or put may be sold at any
time at the current market price. However, unless the standby commitment or put
was an integral part of the security as originally issued, it may not be
marketable or assignable; therefore, the standby commitment or put would only
have value to the Fund owning the security to which it relates. In certain
cases, a premium may be paid for a standby commitment or put, which premium will
have the effect of reducing the yield otherwise payable on the underlying
security. The Fund will limit standby commitment or put transactions to
institutions believed to present minimal credit risk.

U.S. GOVERNMENT AGENCIES -- Obligations issued or guaranteed by agencies of the
U.S. Government, including, among others, the Federal Farm Credit Bank, the
Federal Housing Administration and the Small Business Administration, and
obligations issued or guaranteed by instrumentalities of the U.S. Government,
including, among others, the Federal Home Loan Mortgage Corporation, the Federal
Land Banks and the U.S. Postal Service. Some of these securities are supported
by the full faith and credit of the U.S. Treasury (e.g.,
<PAGE>
40
Government National Mortgage Association), others are supported by the right of
the issuer to borrow from the Treasury (e.g., Federal Farm Credit Bank), while
still others are supported only by the credit of the instrumentality (e.g.,
Federal National Mortgage Association). Guarantees of principal by agencies or
instrumentalities of the U.S. Government may be a guarantee of payment at the
maturity of the obligation so that in the event of a default prior to maturity
there might not be a market and thus no means of realizing on the obligation
prior to maturity. Guarantees as to the timely payment of principal and interest
do not extend to the value or yield of these securities nor to the value of the
Fund's shares.

U.S. GOVERNMENT SUBSIDIARY CORPORATIONS -- Securities of wholly-owned
corporations of the U.S. Government (within the Department of Housing and Urban
Development) which are secured by the full faith and credit of the U.S.
Government (e.g., GNMA).

APPENDIX
I. BOND RATINGS
*CORPORATE AND MUNICIPAL BONDS

The following are descriptions of Standard & Poor's Corporation ("S&P") and
Moody's Investors Service, Inc. ("Moody's") corporate and municipal bond
ratings.

*MUNICIPAL NOTE RATINGS

Moody's highest rating for state and municipal and other short-term notes is
MIG-1 and VMIG-1. Short-term municipal securities rated MIG-1 or VMIG-1 are of
the best quality. They have strong protection from established cash flows of
funds for their servicing or from established and broad-based access to the
market for refinancing or both. Short-term municipal securities rated MIG-2 and
VMIG-2 are of high quality. Margins of protection are ample although not so
large as in the preceding group.
<PAGE>
A-2

An S&P note rating reflects the liquidity concerns and market access risks
unique to notes. Notes due in 3 years or less will likely receive a note rating.
Notes maturing beyond 3 years will most likely receive a long-term debt rating.
The following criteria will be used in making that assessment.

- Amortization schedule (the larger the final maturity relative to other
maturities the more likely it will be treated as a note).

- Source of Payment (the more dependent the issue is on the market for its
refinancing, the more likely it will be treated as a note)

Note rating symbols are as follows:

SP-1. Very strong or strong capacity to pay principal and interest. Those issues
determined to possess overwhelming safety characteristics will be given a plus
(+) designation.

SP-2. Satisfactory capacity to pay principal and interest.

II. COMMERCIAL PAPER AND SHORT-TERM RATINGS

The following descriptions of commercial paper ratings have been published by
S&P, Moody's, Fitch Investors Service, Inc. ("Fitch"), Duff and Phelps ("Duff")
and IBCA Limited ("IBCA"), respectively.

Commercial paper issues rated Prime-1 and Prime-2 by Moody's are judged by
Moody's to have superior ability and strong ability for repayment, respectively.

<TABLE>
<C> <C>
STI CLASSIC FUNDS ORGANIZATIONAL OVERVIEW

* INVESTMENT ADVISORS

Trusco Capital Management, Inc. 50 Hurt Plaza
Suite 1400
Atlanta, GA 30303

STI Capital Management, N.A. P.O. Box 3808
Orlando, FL 32802

SunTrust Bank, Chattanooga, N.A. 736 Market Street
Chattanooga, TN 37402

SunTrust Bank, Atlanta 25 Park Place
Atlanta, GA 30303

* DISTRIBUTOR

SEI Financial Services Company 680 E. Swedesford Road
Wayne, PA 19087

* ADMINISTRATOR

SEI Financial Management Corporation 680 E. Swedesford Road
Wayne, PA 19087

* TRANSFER AGENT

Federated Services Company Federated Investors Tower
Pittsburgh, PA 15222-3779

* CUSTODIAN

SunTrust Bank, Atlanta c/o STI Trust & Investment
Operations, Inc.
303 Peachtree Street N.E.
14th Floor
Atlanta, GA 30308

* LEGAL COUNSEL

Morgan, Lewis & Bockius LLP 2000 One Logan Square
Philadelphia, PA 19103

* INDEPENDENT PUBLIC ACCOUNTANTS

Arthur Andersen, LLP 1601 Market Street
Philadelphia, PA 19103
</TABLE>

<PAGE>
100486 / 10-95

DISTRIBUTOR
SEI Financial Services
Company

/ / / / / / / / / /

PROSPECTUS

TRUST SHARES

INVESTMENT GRADE BOND FUND
INVESTMENT GRADE TAX-EXEMPT BOND FUND
U.S. GOVERNMENT SECURITIES FUND
LIMITED-TERM FEDERAL MORTGAGE SECURITIES FUND
SHORT-TERM BOND FUND
SHORT-TERM U.S. TREASURY SECURITIES FUND
FLORIDA TAX-EXEMPT BOND FUND
GEORGIA TAX-EXEMPT
BOND FUND
TENNESSEE TAX-EXEMPT
BOND FUND
PRIME QUALITY MONEY
MARKET FUND
U.S. GOVERNMENT SECURITIES MONEY MARKET FUND
TAX-EXEMPT MONEY
MARKET FUND

INVESTMENT ADVISORS
TRUSCO CAPITAL MANAGEMENT, INC.
STI CAPITAL MANAGEMENT, N.A.
SUNTRUST BANK, CHATTANOOGA, N.A.
SUNTRUST BANK, ATLANTA
OCTOBER 1, 1995
<PAGE>
STI CLASSIC FUNDS
INVESTOR SHARES
CAPITAL GROWTH FUND
VALUE INCOME STOCK FUND
AGGRESSIVE GROWTH FUND
BALANCED FUND
SUNBELT EQUITY FUND
INTERNATIONAL EQUITY INDEX FUND

INVESTMENT ADVISORS TO THE FUNDS:
STI CAPITAL MANAGEMENT, N.A.
TRUSCO CAPITAL MANAGEMENT, INC.

The STI Classic Funds (the "Trust") is a mutual fund that offers shares in a
number of separate investment portfolios. This Prospectus sets forth concisely
the information about the Investor Shares of the above-referenced Funds (each a
"Fund" and, collectively, the "Funds"). Investors are advised to read this
Prospectus and retain it for future reference.

OCTOBER 1, 1995
<PAGE>
2

TABLE OF CONTENTS

<TABLE>
<S> <C>
Expense Summary...................... 3
Financial Highlights................. 4
The Trust............................ 5
Funds and Investment Objectives...... 5
Investment Policies and Strategies... 5
General Investment Policies and
Strategies.......................... 10
Investment Risks..................... 11
Investment Limitations............... 12
Performance Information.............. 13
General Performance Information...... 13
Fundlink............................. 13
Purchase of Fund Shares.............. 14
Redemption of Fund Shares............ 17
Exchanges............................ 17
Dividends and Distributions.......... 18
Tax Information...................... 18
STI Classic Funds Information........ 20
Board of Trustees.................... 20
Investment Advisors.................. 20
Portfolio Managers................... 21
Banking Laws......................... 22
Distribution......................... 22
Administration....................... 23
Transfer Agent and Dividend
Disbursing Agent.................... 23
Custodian............................ 23
Legal Counsel........................ 24
Independent Public Accountants....... 24
Other Information.................... 24
Voting Rights........................ 24
Reporting............................ 24
Shareholder Inquiries................ 24
Description of Permitted
Investments......................... 24
Appendix............................. A-1
</TABLE>
<PAGE>
3

EXPENSE SUMMARY
INVESTOR SHARES

<TABLE>
<S> <C>
SHAREHOLDER TRANSACTION EXPENSES
ALL FUNDS
- ------------------------------------------------------------------------------------------------
Maximum Sales Charge Imposed on Purchases (as a percentage of offering price)........ 3.75%
Maximum Sales Charge Imposed on Reinvested Dividends................................. None
Deferred Sales Charge................................................................ None
Redemption Fees(1)................................................................... None
Exchange Fee......................................................................... None
- ------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------
</TABLE>

(1) There is a $7.00 wire charge for redemptions for all funds processed from
retail accounts which require wires to particular banks.

ANNUAL OPERATING EXPENSES
(as a percentage of average net assets)
<TABLE>
<CAPTION>
CAPITAL AGGRESSIVE SUNBELT
GROWTH VALUE INCOME GROWTH BALANCED EQUITY
FUND STOCK FUND FUND FUND FUND
<S> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------------------------
Advisory Fees (After Voluntary Reductions)(1)... 1.02% .80% .95% .77% .98%
All Other Expenses (After Voluntary
Reductions)(1)................................. .28% .20% .49% .39% .37%
12b-1 Service & Distribution Expenses (After
Voluntary Reductions)(1)....................... .50% .30% .16% .09% .25%
- -------------------------------------------------------------------------------------------------------------------------------
Total Operating Expenses (After Voluntary
Reductions)(1)................................. 1.80% 1.30% 1.60% 1.25% 1.60%
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------

<CAPTION>
INTERNATIONAL
EQUITY INDEX
FUND
<S> <C>
- ------------------------------------------------
Advisory Fees (After Voluntary Reductions)(1)... .64%
All Other Expenses (After Voluntary
Reductions)(1)................................. .81%
12b-1 Service & Distribution Expenses (After
Voluntary Reductions)(1)....................... 0%
- ------------------------------------------------
Total Operating Expenses (After Voluntary
Reductions)(1)................................. 1.45%
- ------------------------------------------------
- ------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
CAPITAL AGGRESSIVE SUNBELT INTERNATIONAL
GROWTH VALUE INCOME GROWTH BALANCED EQUITY EQUITY INDEX
EXAMPLE FUND STOCK FUND FUND FUND FUND FUND
<S> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------
An investor would pay the following expenses
on a $1,000 investment assuming: (1) 5%
annual return and (2) redemption at the end
of each time period:
One year.................................. $ 55 $ 50 $ 53 $ 50 $ 53 $ 52
Three Years............................... 92 77 86 76 86 82
Five Years................................ 131 106 121 104 121 114
Ten Years................................. 241 188 220 183 220 205
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>

THE EXAMPLE IS BASED UPON THE TOTAL OPERATING EXPENSES OF A FUND AND SHOULD NOT
BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE EXPENSES. ACTUAL EXPENSES MAY
BE GREATER OR LESS THAN THOSE SHOWN. The purpose of this table is to assist the
investor in understanding the various costs and expenses that may be directly or
indirectly borne by investors in the Trust. The information set forth in the
foregoing table and example relates only to Investor Shares. The Trust also
offers Trust Shares of each Fund which are subject to the same expenses except
there are no distribution fees, different transfer agent fees or sales charges
and Flex Shares of each Fund which are subject to the same expenses except for
different distribution, sales charges, service and transfer agent fees. The
rules of the Securities and Exchange Commission require that the maximum sales
charge be reflected in the above table. However, certain investors may qualify
for reduced sales charges. See "Purchase of Fund Shares." Long-term Investor
Class Shareholders may eventually pay more than the economic equivalent of the
maximum front-end sales charges otherwise permitted by the National Association
of Securities Dealers, Inc.'s Rules of Fair Practice.
<PAGE>
4

FINANCIAL HIGHLIGHTS

For an Investor Share Outstanding Throughout the Period
<TABLE>
<CAPTION>
NET ASSET NET REALIZED
VALUE NET AND UNREALIZED DISTRIBUTIONS FROM DISTRIBUTIONS NET ASSET
BEGINNING OF INVESTMENT GAINS (LOSSES) NET INVESTMENT FROM REALIZED VALUE END OF
PERIOD INCOME (LOSS) ON INVESTMENTS INCOME CAPITAL GAINS PERIOD
------------ ------------- --------------- ------------------ --------------- ------------
<S> <C> <C> <C> <C> <C> <C>
- -------------------
CAPITAL GROWTH FUND
- -------------------
INVESTOR SHARES
1995........................ $ 11.98 $ 0.09 $ 0.57 $ (0.07 ) $ (0.40 ) $ 12.17
1994........................ 11.93 0.09 0.31 (0.09 ) (0.26 ) 11.98
1993 (1).................... 10.00 0.06 1.93 (0.06 ) -- 11.93
- ------------------------
VALUE INCOME STOCK FUND
- ------------------------
INVESTOR SHARES
1995........................ $ 10.52 $ 0.28 $ 1.56 $ (0.27 ) $ (0.51 ) $ 11.58
1994........................ 10.23 0.26 0.67 (0.27 ) (0.37 ) 10.52
1993 (2).................... 9.73 0.09 0.44 (0.03 ) -- 10.23
- -----------------------
AGGRESSIVE GROWTH FUND
- -----------------------
INVESTOR SHARES
1995........................ $ 9.84 $ 0.03 $ 1.15 $ (0.03 ) -- $ 10.99
1994 (3).................... 10.00 0.01 (0.17 ) -- -- 9.84
- --------------
BALANCED FUND
- --------------
INVESTOR SHARES
1995........................ $ 9.79 $ 0.28 $ 0.51 $ (0.28 ) -- $ 10.30
1994 (4).................... 10.00 0.03 (0.24 ) -- -- 9.79
- -------------------
SUNBELT EQUITY FUND
- -------------------
INVESTOR SHARES
1995........................ $ 9.69 $ (0.05 ) $ 0.36 -- $ (0.04 ) $ 9.96
1994 (4).................... 10.00 (0.02 ) (0.29 ) -- -- 9.69
- -----------------------------
INTERNATIONAL EQUITY INDEX FUND
- -----------------------------
INVESTOR SHARES
1995 (5).................... $ 10.00 $ 0.05 $ 0.17 $ (0.01 ) $ (0.01 ) $ 10.20

RATIO OF NET
RATIO OF INVESTMENT RATIO OF EXPENSES TO
EXPENSES TO INCOME (LOSS) AVERAGE NET ASSETS
NET ASSETS END AVERAGE NET TO AVERAGE NET (EXCLUDING WAIVERS AND
TOTAL RETURN OF PERIOD (000) ASSETS ASSETS REIMBURSEMENTS)
------------- --------------- --------------- --------------- -----------------------
<S> <C> <C>
- -------------------
CAPITAL GROWTH FUND
- -------------------
INVESTOR SHARES
1995........................ 5.93 % $ 160,875 1.80 % 0.73 % 2.10 %
1994........................ 3.26 % 170,795 1.80 % 0.64 % 2.11 %
1993 (1).................... 20.49 %* 131,858 1.80 %* 0.81 %* 2.06 %*
- ------------------------
VALUE INCOME STOCK FUND
- ------------------------
INVESTOR SHARES
1995........................ 18.71 % $ 92,256 1.30 % 2.80 % 1.41 %
1994........................ 9.27 % 60,589 1.25 % 2.80 % 1.44 %
1993 (2).................... 19.42 %* 24,779 1.15 %* 4.51 %* 1.63 %*
- -----------------------
AGGRESSIVE GROWTH FUND
- -----------------------
INVESTOR SHARES
1995........................ 11.96 % $ 7,345 1.60 % 0.43 % 2.27 %
1994 (3).................... (1.60 %)+ 3,004 1.60 %* 0.74 %* 4.60 %*
- --------------
BALANCED FUND
- --------------
INVESTOR SHARES
1995........................ 8.29 % $ 3,765 1.25 % 3.17 % 1.80 %
1994 (4).................... (2.10 %)+ 2,311 1.25 %* 2.46 %* 4.91 %*
- -------------------
SUNBELT EQUITY FUND
- -------------------
INVESTOR SHARES
1995........................ 3.20 % $ 22,180 1.60 % (0.57 %) 1.98 %
1994 (4).................... (3.10 %)+ 16,077 1.60 %* (0.63 %)* 2.04 %*
- -----------------------------
INTERNATIONAL EQUITY INDEX FUN
- -----------------------------
INVESTOR SHARES
1995 (5).................... 2.18 %+ $ 3,960 1.45 %* 0.67 %* 2.44 %*

<CAPTION>
RATIO OF NET
INVESTMENT INCOME
(LOSS) TO AVERAGE NET
ASSETS (EXCLUDING
WAIVERS AND PORTFOLIO
REIMBURSEMENTS) TURNOVER RATE
--------------------- -------------
- -------------------
CAPITAL GROWTH FUND
- -------------------
INVESTOR SHARES
1995........................ 0.43 % 127.79 %
1994........................ 0.33 % 123.87 %
1993 (1).................... 0.55 %* 95.02 %
- ------------------------
VALUE INCOME STOCK FUND
- ------------------------
INVESTOR SHARES
1995........................ 2.69 % 125.71 %
1994........................ 2.61 % 149.28 %
1993 (2).................... 4.04 %* 34.71 %
- -----------------------
AGGRESSIVE GROWTH FUND
- -----------------------
INVESTOR SHARES
1995........................ (0.24 %) 65.63 %
1994 (3).................... (2.26 %)* 7.99 %
- --------------
BALANCED FUND
- --------------
INVESTOR SHARES
1995........................ 2.62 % 156.61 %
1994 (4).................... (1.20 %)* 105.65 %
- -------------------
SUNBELT EQUITY FUND
- -------------------
INVESTOR SHARES
1995........................ (0.95 %) 80.03 %
1994 (4).................... (1.07 %)* 21.42 %
- -----------------------------
INTERNATIONAL EQUITY INDEX FUN
- -----------------------------
INVESTOR SHARES
1995 (5).................... (0.32 %)* 10.37 %
</TABLE>

* Annualized.
+ Cumulative since inception.

(1) The Capital Growth Fund Investor Shares Investor Shares commenced
operations on June 9, 1992.
(2) The Value Income Stock Fund Investor Shares commenced operation on February
17, 1993.

(3) The Aggressive Growth Fund Investor Shares commenced operations on February
1, 1994.

(4) The Sunbelt Equity Fund Investor Shares and the Balanced Fund Investor
Shares commenced operations on January 4, 1994.

(5) The International Equity Index Fund Investor Shares commenced operations on
June 6, 1994.
<PAGE>
5

THE TRUST

STI CLASSIC FUNDS (the "Trust") is a diversified, open-end management investment
company that provides a convenient and economical means of investing in several
professionally managed portfolios of securities. The Trust currently offers
units of beneficial interest ("shares") in a number of separate Funds.
Shareholders may purchase shares in each Fund through three separate classes
(Trust Shares, Investor Shares and Flex Shares) which provide for variations in
distribution and service fees and transfer agent fees, voting rights and
dividends. Except for differences between classes, each share of each Fund
represents an undivided, proportionate interest in that Fund. This Prospectus
relates to the Investor Shares of the Funds described below.

FUNDS AND INVESTMENT OBJECTIVES

THE CAPITAL GROWTH FUND seeks to provide capital appreciation by investing
primarily in a portfolio of common stocks, warrants and securities convertible
into common stock which in the Advisor's opinion are undervalued in the
marketplace at the time of purchase.

THE VALUE INCOME STOCK FUND seeks to provide current income with the secondary
goal of achieving capital appreciation by investing primarily in equity
securities.

THE INTERNATIONAL EQUITY INDEX FUND seeks to provide investment results that
correspond to the aggregate price and dividend performance of the securities
included in the Gross Domestic Product Weighted Morgan Stanley Capital
International Europe, Australasia and Far East Index (the "MSCI EAFE-GDP Index"
or "EAFE-GDP Index").11"MSCI EAFE-GDP Index" is a registered service mark of
Morgan Stanley Capital International which does not sponsor and is in no way
affiliated with the International Equity Index Fund.

There can be no assurance that a Fund will achieve its investment objective.

The investment objectives of each Fund are nonfundamental and may be changed
without shareholder approval.

INVESTMENT POLICIES AND STRATEGIES
*CAPITAL GROWTH FUND

All of the common stocks in which the Fund invests are traded on registered
exchanges or on the over-the-counter market in the United States. Assets of the
Capital Growth Fund not invested in the securities described above may be
invested in U.S. dollar denominated equity securities of foreign issuers
(including sponsored American Depositary Receipts ("ADRs") that are traded on
exchanges or listed on NASDAQ); securities issued by money market mutual funds;
pay-in-kind securities; and bonds. The bonds that the Capital Growth Fund may
purchase may be rated in any rating category or may be unrated, provided that no
more than 10% of the Fund's total assets will be invested in bonds rated below
BBB by Standard & Poor's Corporation ("S&P") or below Baa by Moody's Investors
Service, Inc. ("Moody's") or unrated securities of comparable quality (see
"Investment Risks -- High Yield -- Lower Rated Bonds"). In addition, the Fund
may invest up to 10% of its assets in restricted securities.

*VALUE INCOME STOCK FUND

*AGGRESSIVE GROWTH FUND

*SUNBELT EQUITY FUND

The Sunbelt Equity Fund seeks to provide capital appreciation by investing
substantially all, and under normal market conditions at least 65%, of its
assets in common stocks; preferred stocks; warrants; and securities convertible
into common stock of U.S. companies headquartered and/or conducting a
substantial portion of their operations in (i.e., maintaining at least 50% of
their assets in or deriving at least 50% of their revenues and/or sales from)
the southern region of the United States. Current income will not be an
important criterion of investment selection and any such income should be
considered incidental. The Advisor will seek to identify and purchase securities
of companies that it believes to be undervalued and that possess a strong
balance sheet, a strong earnings record, and adequate market liquidity.
<PAGE>
8

*BALANCED FUND

The Fund will invest in investment grade fixed income securities rated BBB or
better by S&P or Baa or better by Moody's or, if unrated, of comparable quality
at the time of purchase as determined by the Advisor, including corporate debt
obligations; mortgage-backed securities, collateralized mortgage obligations and
asset-backed securities; obligations issued or guaranteed as to principal and
interest by the U.S. Government or its agencies or instrumentalities; custodial
receipts involving U.S. Treasury obligations; securities of the government of
Canada and its provincial and local governments; securities issued or guaranteed
by foreign governments, their political subdivisions, agencies or
instrumentalities; and obligations of supranational entities. No more than 25%
of the Fund's assets will be invested in securities rated BBB by S&P or Baa by
Moody's or, if unrated, of comparable quality at the time of purchase as
determined by the Fund's Advisor.
<PAGE>
9

The Balanced Fund's turnover rate for the fiscal year ended May 31, 1995 was
128% for the equity portion of its portfolio and 193% for the fixed income
portion of its portfolio. These rates of turnover if continued will likely
result in higher transaction costs and brokerage commissions and higher levels
of realized capital gains than if the turnover rate was lower.

*INTERNATIONAL EQUITY INDEX FUND

The Fund expects that there will be a close correlation between the Fund's
performance and that of the EAFE-GDP Index. A 1.00 correlation would indicate
perfect correlation, which would be achieved when the net asset value of the
Fund, including the value of its dividend and capital gains distributions,
increases or decreases in exact proportion to changes in the EAFE-GDP Index. The
correlation between the Fund and the EAFE-GDP Index is expected to be over 0.95
on an annual basis. The Fund's ability to track the EAFE-GDP Index, however may
be affected by, among other things, transaction costs, changes in either the
composition of the EAFE-GDP Index or number of shares outstanding for the
component companies of the EAFE-GDP Index, and the timing and amount of
purchases and redemptions.
<PAGE>
10

GENERAL INVESTMENT POLICIES AND STRATEGIES

In the event that a security owned by a Fund is downgraded below the stated
rating categories, the Advisor will review and take appropriate action with
regard to the security.

Each Fund may borrow money for temporary or emergency purposes in an amount not
to exceed one-third of the value of its total assets. A Fund may not purchase
additional securities while its outstanding borrowings exceed 5% of its assets.

A Fund's purchase of shares of other investment companies is limited by the
<PAGE>
11
Investment Company Act of 1940 and will ordinarily result in an additional layer
of charges and expenses.

Each of the Funds may engage in securities lending and will limit such practice
to 33 1/3% of its total assets.

For additional information regarding permitted investments, see "Description of
Permitted Investments" in this Prospectus and in the Statement of Additional
Information.

INVESTMENT RISKS
FOREIGN SECURITIES AND FOREIGN CURRENCY CONTRACTS

EQUITY SECURITIES

MORTGAGE-BACKED SECURITIES

Mortgage-backed securities are subject to the risk of prepayment of the
underlying mortgages. During periods of declining interest rates, prepayment of
mortgages underlying these securities can be expected to accelerate. When the
mortgage-backed securities held by
<PAGE>
12
the Balanced Fund are prepaid, the Balanced Fund must reinvest the proceeds in
securities the yield of which reflects prevailing interest rates, which may be
lower than the prepaid security.

FIXED INCOME SECURITIES

There is a risk that the current interest rate on floating and variable rate
instruments may not accurately reflect existing market interest rates.

Fixed income securities rated BBB by S&P or Baa by Moody's (investment grade
bonds) are deemed by these rating services to have speculative characteristics.

HIGH YIELD, LOWER RATED BONDS

INVESTMENT LIMITATIONS

Each Fund may not:

The foregoing percentages will apply at the time of the purchase of a security.
Additional investment limitations are set forth in the Statement of Additional
Information.

PERFORMANCE INFORMATION

GENERAL PERFORMANCE INFORMATION

The performance of the Trust's Investor Shares and Flex Shares will normally be
lower than for Trust Shares because Investor Shares and Flex Shares are subject
to distribution, service, and certain transfer agent fees not charged to Trust
Shares. The performance of Flex Shares in comparison to Investor Shares will
vary depending upon investment time horizon.

FUNDLINK

All purchases and redemptions of STI Classic Fund Investor Shares may be
completed via FUNDLINK, a telephone activated service that allows Shareholders
to transfer money between the STI Classic Funds and a Shareholder's SunTrust
bank account(s). To initiate a FUNDLINK transaction, Shareholders are provided a
toll-free telephone number (1-800-428-6970) to call the Trust's Transfer Agent.
To utilize this service, a Shareholder must contact an Investment Services
Representative of a SunTrust Banks, Inc. affiliate bank and complete the
appropriate application and authorization agreements.
<PAGE>
14

PURCHASE OF FUND SHARES

Investor Shares are sold on a continuous basis and may be purchased by
contacting the Trust's Transfer Agent, Federated Services Company (the "Transfer
Agent,") either by mail, by telephone or by wire. Investor Shares may also be
purchased through Investment Services Representatives of SunTrust Banks, Inc.
affiliate banks which serve as Shareholder Servicing Agents to the Trust.
Furthermore, Investor Shares may be purchased through SunTrust Securities, Inc.,
as well as, certain correspondent banks of SunTrust Banks, Inc.

Shares may be purchased on days on which the New York Stock Exchange is open for
business ("business day").

A purchase order for any of the Funds will be effective as of the business day
it is received by the Transfer Agent if the Transfer Agent receives the order
before 4:00 p.m. Eastern time. The purchase price of shares of a Fund is the net
asset value next determined after a purchase order is effective plus any
applicable sales charge (the "offering price"). The net asset value per share of
a Fund is determined by dividing the total market value of the Fund's
investments and other assets, less any liabilities, by the total outstanding
shares of the Fund. Net asset value per share is determined daily as of close of
business of the New York Stock Exchange (currently 4:00 p.m. Eastern time) on
any business day. Pursuant to guidelines established by the Trustees, the Trust
may use a pricing service to provide market quotations or valuations for
securities owned by each Fund. Purchases will be made in full and fractional
shares of the Trust calculated to three decimal places. Purchases by mail are
considered received after payment by check is converted into federal funds.

Minimum initial and subsequent purchase amounts, respectively, for each Fund are
$2,000 and $1,000 ($100 via statement coupon). Employees and their immediate
family members (spouses and children under age 21) of SunTrust Banks, Inc. and
its affiliates may establish accounts with a minimum initial purchase amount of
$1,000. The minimum initial purchase amount for retirement plans is $2,000.
These minimums may be waived at the Distributor's discretion.

Financial institutions may impose an earlier cut-off time for receipt of
purchase orders directed through them to allow for processing and transmittal of
these orders to the Transfer Agent for effectiveness the same day.

The Trust reserves the right to reject a purchase order when the Distributor
determines that it is not in the best interest of the Trust and/or
Shareholder(s).

Shares of the Funds are offered only to residents of states in which the shares
are eligible for purchase.

Although the methodology and procedures for calculating the net asset value of
Investor Shares are identical to those for Trust Shares and Flex Shares, the net
asset value per share of the classes may differ because of the distribution,
service, and certain transfer agent expenses charged to Investor Shares and Flex
Shares. Investors in certain states may be required to purchase shares through
institutions registered as brokers/dealers in such states.
<PAGE>
15

*SYSTEMATIC INVESTMENT PLAN

Shares of each Fund may be purchased systematically through deductions from
checking or savings accounts maintained through SunTrust Banks, Inc. affiliate
banks. Investors may purchase shares on a fixed schedule (semi-monthly or
monthly) with amounts from $100 up to $100,000. The Systematic Investment Plan
is subject to account minimum initial purchase and subsequent amounts of $500
and $50 ($5,000 for non-SunTrust employees, $1,000 for employees of SunTrust and
their immediate family members) and minimum maintained balance requirements. The
purchases will be effective on the business day that the transfer agent receives
the transmission.

*SALES CHARGE INFORMATION

The following schedule applies to the purchase of Investor Shares of a Fund:

<TABLE>
<CAPTION>
SALES CHARGE AS A SALES CHARGE AS A
PERCENTAGE OF PERCENTAGE OF NET
OFFERING PRICE AMOUNT INVESTED
----------------- ------------------
<S> <C> <C>
Less than $100,000... 3.75% 3.90%
$100,000 but less
than $250,000....... 3.25% 3.36%
$250,000 but less
than $1,000,000..... 2.50% 2.56%
$1,000,000 and
higher.............. 1.50% 1.52%
</TABLE>

Employees and their immediate family members (spouses and children under age 21)
of SunTrust Banks, Inc. and its affiliates, as well as persons investing
distributions from qualified employee benefit retirement plans or rollovers from
Individual Retirement Accounts ("IRAs") previously established with a SunTrust
Banks, Inc. affiliate bank trust department, will be exempt from sales charges
in purchasing Investor Shares. In addition, certain trust accounts for which a
subsidiary bank of SunTrust Banks, Inc. acts in an administrative, fiduciary,
investment advisory, or custodial capacity, will be exempt from sales charges
and be placed in Trust Shares.

When accounts for which a subsidiary bank of SunTrust Banks, Inc. has acted in a
fiduciary, administrative, custodial or investment advisory capacity are closed
and Investor Shares purchased, the Investor Shares that are purchased in an
amount equal to or lesser than the value of the account distribution will be
exempt from sales charges. Any subsequent purchases will be subject to the
applicable sales charge.

Purchases of STI Classic Funds Investor Shares through a SunTrust Banks, Inc.
affiliate bank's asset allocation account will be exempt from sales charges.

Dealers will be reallowed the entire sales charge imposed on purchases of
Investor Shares and may, therefore, be deemed "underwriters" for purposes of the
Securities Act of 1933.

*RIGHTS OF ACCUMULATION

In calculating the sales charge rates applicable to current purchases of a
Fund's Investor Shares by a "single purchaser," the Trust will cumulate current
purchases at the offering price with the current market value of previously
purchased Investor Shares of any Trust's non-Money Market Funds ("Eligible
Funds") which are sold subject to a sales charge.

The term "single purchaser" refers to (i) an individual, (ii) an individual and
spouse purchasing shares of an Eligible Fund for their own account or for trust
or custodial accounts for their minor children, or (iii) a fiduciary purchasing
for any one trust, estate or fiduciary account, including employee benefit plans
created under Sections 401 or 457 of the Internal Revenue Code, including
related plans
<PAGE>
16
of the same employer. Furthermore, under this provision, purchases by a "single
purchaser" shall include purchases by an individual for his/ her own account in
combination with (i) purchases of that individual and spouse for their joint
account or for trust and custodial accounts for their minor children and (ii)
purchases of that individual's spouse for his/ her own account. To be entitled
to a reduced sales charge based upon shares already owned, the investor must ask
the Distributor for such reduction at the time of purchase and provide the
account number(s) of the investor, the investor and spouse, and their children
(under age 21), and give the ages of such children. The Funds may amend or
terminate this right of accumulation at any time as to subsequent purchases.

*LETTER OF INTENT

By submitting a Letter of Intent to the Transfer Agent, a "single purchaser" may
purchase shares of a non-Money Market Fund during a 13-month period at the
reduced sales charge rates applicable to the aggregate amount of the intended
purchases stated in the Letter. The Letter may apply to purchases made up to 90
days before the date of the Letter. The purchase price for these prior trades
will not be adjusted.

A written Letter of Intent provided to the Transfer Agent, is not legally
binding on the signer or a Fund, and provides for the holding in escrow by the
transfer agent of 3.75% of the total amount intended to be purchased until such
purchase is completed within the 13-month period. A Letter of Intent may be
dated to include shares purchased up to 90 days prior to the date the Letter is
signed. The 13-month period begins on the date of the earliest purchase. If the
intended investment is not completed, the Transfer Agent will surrender an
appropriate number of the escrowed shares for redemption in order to realize the
difference between the sales charge on the shares purchased at the reduced rate
and the sales charge otherwise applicable to the total shares purchased.

*COMBINED PURCHASE/QUANTITY DISCOUNT PRIVILEGE

The Trust will combine purchases of Investor Shares of Eligible Funds made on
the same day by the investor, his/her spouse, and his/her children under age 21
when calculating the sales charge. This combination may also apply to purchases
made pursuant to a Letter of Intent. Purchases made by such persons over a 13
month period could thus qualify the entire purchase for a reduced sales charge.

*SPECIAL DIVIDEND SERVICES

Dividend distributions made by a Fund can be automatically reinvested in any one
Fund of the Trust without a sales charge, subject to account minimum initial
purchase amounts and minimum maintained balance requirements.

*REPURCHASE OF FUND SHARES

Investor Shares of a Fund may be purchased at their net asset value if such
shares were redeemed from a Fund with a sales charge within the past 60 days.
The amount which may be reinvested is limited to an amount up to but not
exceeding the redemption proceeds. In order to exercise this privilege a written
order for the purchases must be received by the Transfer Agent within 60 days
after the redemption. It is the responsibility of the Investor to notify the
Transfer Agent at the time of repurchase.
<PAGE>
17

REDEMPTION OF FUND SHARES

Shareholders may redeem their Investor Shares without charge on any day that net
asset value is calculated. Investor Shares may ordinarily be redeemed by mail or
telephone request to the Transfer Agent.

However, all or part of a shareholder's holdings of Investor Shares may be
redeemed in accordance with instructions and limitations pertaining to his or
her account. Redemption orders must be received by the Transfer Agent before
4:00 p.m. Eastern time on any business day. Redemption proceeds are remitted
within five days following receipt of the order.

Requests for redemptions from the Funds may be placed in writing or by telephone
directly to an Investment Services Representative of a SunTrust Banks, Inc.
affiliate bank, through SunTrust Securities, Inc., and through certain
correspondent banks of SunTrust Banks, Inc. (or via FUNDLINK to the Transfer
Agent).Redemptions placed via telephone or FUNDLINK (1-800-428-6970) can only be
placed for a minimum of $1,000.

Redemption proceeds can be wired, distributed by check, or transferred to a
Shareholder's account via FUNDLINK. There will be a $7.00 wire charge for
redemptions processed from accounts which require wires to particular banks.

When Investor Shares are purchased by check or through ACH the proceeds from the
redemption of those Shares are not available, and the Shares may not be
exchanged, until the Trust or its agents are reasonably certain that the
purchase check has cleared, which could take up to 7 business days.

A Shareholder may be required to redeem Investor Shares if the balance in a
Shareholder's Fund account drops below $2,000 as a result of redemptions and the
Shareholder does not increase its balance to at least $2,000 on 60 days' written
notice. The minimum account balance for employees of SunTrust Banks, Inc. and
its affiliates is $1,000. The Trust intends to pay cash for all shares redeemed,
but under abnormal conditions which make payment in cash unwise, payment may be
made wholly or partly in liquid portfolio securities with a market value equal
to the redemption price. In such cases, an investor may incur brokerage costs in
converting such securities to cash.

Redemptions of $25,000 or greater must be in writing and a signature guarantee
must accompany the written request.

*SYSTEMATIC WITHDRAWAL PLAN

A systematic withdrawal plan can be established for any Fund account with a
$10,000 minimum balance. Under the plan, redemptions can be automatically
processed (monthly, quarterly, semi-annually or annually) by check or through an
electronic transfer to a Shareholder's SunTrust Banks, Inc. affiliate bank
account with a minimum redemption amount of $50.

EXCHANGES

charge will be subject to an incremental sales charge. Exchanges made from a
Fund with a higher sales charge to a Fund with a lower sales charge or a Money
Market Fund are made without a charge. Four exchanges may be made per calendar
year. More than four exchanges in a year may be considered an abuse of the
exchange privilege. The Fund reserves the right to charge a $10.00 fee for each
exchange. A Shareholder with more than four exchanges per year will be notified
prior to the imposition of any such fee. Exchanges may be requested through an
Investment Services Representative of a SunTrust Banks, Inc. affiliate bank,
SunTrust Securities, Inc. and certain correspondent banks of SunTrust Banks,
Inc., either by telephone or in writing, (or via FUNDLINK through the Fund's
Transfer Agent). The minimum exchange amount is $1,000 subject to account
minimum initial purchase amounts and minimum maintained balance requirements.
This exchange offer is subject to change or termination by the Trust upon sixty
days' notice.

DIVIDENDS AND DISTRIBUTIONS

Dividends from net investment income (exclusive of capital gains) are declared
and paid quarterly by each of the Funds except that dividends are declared and
paid annually by the International Equity Index Fund. Each Fund's net realized
capital gains (including net short-term capital gains) are distributed at least
annually. Net income for dividend purposes consists of (i) interest accrued and
original issue discount earned on the Fund's assets, (ii) plus the amortization
of market discount and minus the amortization of market premium on such assets,
(iii) plus dividend or distribution income on such assets, (iv) less accrued
expenses directly attributable to the Fund and the general expenses of the Trust
prorated to the Fund on the basis of its relative net assets. Shareholders of
record on the record date will be entitled to receive dividends.

The net asset value of Investor Shares of the Funds will be reduced by the
amount of any dividend or distribution. Dividends and distributions are paid in
the form of additional Investor Shares of the same Fund unless the customer has
elected prior to the date of distribution to receive payment in cash. Such
election, or any revocation thereof, must be made in writing prior to the date
of distribution to the Trust's transfer agent and will become effective with
respect to dividends paid after its receipt. Dividends and distributions are
paid within ten days of the end of the time period to which the dividend
relates. Dividends and distributions payable to a Shareholder are paid in cash
within ten business days after a Shareholder's complete redemption of its
Investor Shares in a Fund.

The amount of dividends payable on Investor Shares and Flex Shares will be less
than the dividends payable on Trust Shares because of the distribution and
certain transfer agent expenses charged to Investor Shares and Flex Shares. The
amount of dividends payable on Flex Shares generally will be less than the
amount of dividends payable on Investor Shares due to the higher distribution
and service expenses of Flex Shares.

TAX INFORMATION

The following summary of federal income tax consequences is based on current tax
laws and regulations, which may be changed by legislative, judicial or
administrative action. No attempt has been made to present a detailed
explanation of the federal, state, or local income tax treatment of each Fund or
its Shareholders. Shareholders are urged to
<PAGE>
19
consult their tax advisors regarding specific questions as to federal, state and
local income taxes.

TAX STATUS OF EACH FUND:

TAX STATUS OF DISTRIBUTIONS:

Income received on direct U.S. obligations is exempt from tax at the state level
when received directly by a Fund and may be exempt, depending on the state, when
received by the Shareholder as income dividends from a fund, provided certain
state-specific conditions are satisfied. Not all states permit such income
dividends to be tax exempt and some require that a certain minimum percentage of
an investment company's income be derived from state tax-exempt interest. The
Funds will inform Shareholders annually of the percentage of income and
distributions derived from direct U.S. obligations. Shareholders should consult
their tax advisors to determine whether any portion of the income dividends
received from a Fund is considered tax-exempt in their particular state.

A sale, exchange or redemption of Fund shares is a taxable event to the
Shareholder.
<PAGE>
20

STI CLASSIC FUNDS INFORMATION
THE TRUST

BOARD OF TRUSTEES

INVESTMENT ADVISORS

The Advisors are indirect wholly-owned subsidiaries of SunTrust Banks, Inc.
("SunTrust"), a southeastern regional bank holding company with assets of $44.2
billion as of June 30, 1995. SunTrust ranks among the twenty largest U.S.
banking companies. Its three principal subsidiaries--SunTrust Banks of Florida,
Inc., SunTrust Banks of Georgia, Inc. and SunTrust Banks of Tennessee, Inc.--
provide a wide range of personal and corporate banking, trust, and investment
services through more than 600 locations in the three-state area. Total
discretionary assets under management with SunTrust Banks, Inc. equalled
approximately $42 billion as of December 31, 1994.

STI Capital Management, N.A. ("STI Capital") (formerly SunBank Capital
Management, N.A.) serves as the Advisor to the Capital Growth, Value Income,
Aggressive Growth and Balanced Funds and joint advisor to the International
Equity Index Fund. As of June 30, 1995, STI Capital had discretionary management
authority with respect to assets of approximately $11.1 billion. The principal
business address of STI Capital is P.O. Box 3808, Orlando, FL 32802.

The Trust and the above Advisors have entered into advisory agreements (the
"Advisory Agreements"). Under the Advisory Agreements, the Advisors make the
investment decisions for the assets of the Fund(s) they advise and continuously
review, supervise and administer their respective Fund's investment program. The
Advisors discharge their responsibilities subject to the supervision of, and
policies established by, the Trustees of the Trust. STI CLASSIC FUNDS ARE NOT
DEPOSITS, ARE NOT INSURED OR GUARANTEED BY THE FDIC OR ANY OTHER GOVERNMENT
AGENCY, AND ARE NOT ENDORSED OR GUARANTEED BY AND DO NOT CONSTITUTE OBLIGATIONS
OF SUNTRUST BANKS,
<PAGE>
21
INC. OR ANY OF ITS AFFILIATES. INVESTMENTS IN THE FUNDS INVOLVE RISK, INCLUDING
THE POSSIBLE LOSS OF PRINCIPAL. RETURNS AND PRINCIPAL VALUES WILL FLUCTUATE AND
SHARES AT REDEMPTION MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. THERE
IS NO GUARANTEE THAT ANY STI CLASSIC FUND WILL ACHIEVE ITS INVESTMENT OBJECTIVE.
With respect to all Funds, the Advisors may execute brokerage or other agency
transactions through affiliates of the Advisors.

For the services provided and expenses incurred pursuant to the Advisory
Agreements, STI Capital is entitled to receive advisory fees computed daily and
paid monthly at the annual rate of 1.15%, .95%, 1.15% and .80% of the average
daily net assets of the Capital Growth, Balanced, Aggressive Growth and Value
Income Stock Funds, respectively. Trusco is entitled to receive an advisory fee
computed daily and paid monthly at the annual rate of 1.15% of the average daily
net assets of the Sunbelt Equity Fund. Trusco and STI Capital jointly are
entitled to receive an advisory fee computed daily and paid monthly at the
annual rate of .90% of the average daily net assets of the International Equity
Index Fund.

Although the advisory fee for each Fund is higher than advisory fees paid by
other mutual funds, the Trust believes that the fee is comparable to the
advisory fee paid by many other mutual funds with similar investment objectives
and policies. From time to time, an Advisor may waive (either voluntarily or
pursuant to applicable state limitations) advisory fees payable by a Fund.
Currently, the Advisors and the Distributor have agreed to voluntary reductions
in their respective fees as well as reductions in service and distribution fees
in amounts necessary to maintain the total operating expenses at the amounts set
forth in the Expense Summary. Voluntary reductions of fees may be terminated at
anytime.

For the fiscal year ended May 31, 1995, STI Capital received advisory fees
computed daily and paid monthly at the annual rate of 1.02%, .77%, .95%, and
.80% of the average daily net assets of the Capital Growth, Balanced, Aggressive
Growth and Value Income Stock, respectively. Trusco received an advisory fee
computed daily and paid monthly at the annual rate of .98% of the average daily
net assets of Sunbelt Equity Fund. Trusco and STI Capital jointly received an
advisory fee computed daily and paid monthly at the annual rate of .64% of the
average daily net assets of the International Equity Index Fund.

PORTFOLIO MANAGERS

Mr. Mills Riddick, CFA, has been responsible for the day-to-day management of
the Value Income Stock Fund since April, 1995. Mr. Riddick has been a value
portfolio manager at STI Capital Management since 1989.

Mr. L. Earl Denney, CFA, has been responsible for the day-to-day management of
the fixed income portion of the Balanced Fund since its inception. Mr. Denney
has served as Executive Vice President of STI Capital since 1983.
<PAGE>
22

Mr. James Foster has been responsible for the day-to-day management of the
Sunbelt Equity Fund since its inception. Mr. Foster has served as a Vice
President of Trusco since 1989.

BANKING LAWS

DISTRIBUTION

SEI Financial Services Company (the "Distributor"), a wholly-owned subsidiary of
SEI Corporation ("SEI"), and the Trust, are parties to a Distribution Agreement
("Distribution Agreement") dated May 29, 1992. The Investor Shares of each Fund
have a distribution plan ("Investor Plan"). The Distribution Agreement and the
Investor Plan provide that the Investor Shares of the Funds may pay a
distribution services fee to the Distributor of up to .68% of the daily net
assets of the Capital Growth Fund, .33% of the average daily net assets of the
Value Income Stock Fund, .43% of the average daily net assets of the Aggressive
Growth and Sunbelt Equity Funds, .28% of the average daily net assets of the
Balanced Fund and .38% of the average daily net assets of the International
Equity Index Fund. The Distributor will waive all or a portion of the
distribution fee in order to limit the net expenses of the Investor Shares to
the amounts set forth under "Expense Summary." The Distributor may apply this
fee toward: (a) compensation for its services in connection with distribution
assistance or provision of shareholder services; or (b) payments to financial
institutions and intermediaries such as banks (including
<PAGE>
23
SunTrust Banks, Inc.'s affiliate banks), savings and loan associations,
insurance companies, and investment counselors, broker-dealers, and the
Distributor's affiliates and subsidiaries as compensation for services,
reimbursement of expenses incurred in connection with distribution assistance,
or provision of Shareholder services. The Investor Plan is characterized as a
compensation plan since the distribution fee will be paid to the Distributor
without regard to the distribution or shareholder service expenses incurred by
the Distributor or the amount of payments made to financial institutions and
intermediaries. SunTrust Banks, Inc.'s affiliate banks and certain correspondent
banks may serve as shareholder servicing agents to the Trust. A prospective
investor may visit any one of the Investment Services offices of the SunTrust
Banks, Inc.'s affiliate banks, as listed on the last pages of the Prospectus,
SunTrust Securities, Inc. or certain correspondent banks of SunTrust Banks, Inc.
to receive copies of the Prospectuses for the Investor Shares of the Trust and
application forms. Trust Shares of each Fund are offered without a sales charge
or a distribution fee primarily to institutional investors, including affiliates
and correspondents for the investment of funds in which they act in a fiduciary,
agency, investment advisory or custodial capacity. It is possible that a
financial institution may offer different classes of shares to its customers and
thus receive different compensation with respect to different classes of shares.

Each Fund may execute brokerage or other agency transactions through the
Distributor, for which the Distributor receives compensation.

ADMINISTRATION

SEI Financial Management Corporation (the "Administrator"), a wholly-owned
subsidiary of SEI, and the Trust are parties to an Administration Agreement (the
"Administration Agreement"). Under the terms of the Administration Agreement,
the Administrator provides the Trust with certain administrative services, other
than investment advisory services, including regulatory reporting, all necessary
office space, equipment, personnel, and facilities.

The Administrator is entitled to a fee, which is calculated daily and paid
monthly, at an annual rate as follows:

<TABLE>
<CAPTION>
AVERAGE AGGREGATE NET ASSETS FEE
- -------------------------------------------- ---------
<S> <C>
$1 - $1 billion .10%
over $1 billion to $5 billion .07%
over $5 billion to $8 billion .05%
over $8 billion to $10 billion .045%
over $10 billion .04%
</TABLE>

From time to time, the Administrator may waive (either voluntarily or pursuant
to applicable state limitations) all or a portion of the administration fee
payable with respect to the Trust.

TRANSFER AGENT AND DIVIDEND DISBURSING AGENT

Federated Services Company, Pittsburgh, PA is the Transfer Agent for the shares
of the Trust and dividend disbursing agent for the Trust.

CUSTODIAN

SunTrust Bank, Atlanta, c/o STI Trust & Investment Operations, Inc., 303
Peachtree Street N.E., 14th Floor, Atlanta, GA 30308 serves as Custodian of the
assets of each Fund of the Trust with the exception of the International Equity
Index Fund. The Bank of California, 475 Sansome Street, Suite 1200, San
Francisco, CA 94111, serves as Custodian for
<PAGE>
24
the International Equity Index Fund. The Custodians hold cash, securities and
other assets of the Trust as required by the Investment Company Act of 1940.

LEGAL COUNSEL

Morgan, Lewis & Bockius LLP, Philadelphia, PA, serves as legal counsel to the
Trust.

INDEPENDENT PUBLIC ACCOUNTANTS

The independent public accountants to the Trust are Arthur Andersen, LLP,
Philadelphia, PA.

OTHER INFORMATION
VOTING RIGHTS

REPORTING

The Trust issues unaudited financial information semi-annually and audited
financial statements annually. The Trust furnishes proxy statements and other
reports to Shareholders of record.

SHAREHOLDER INQUIRIES

Shareholders may contact the Transfer Agent in order to obtain information on
account statements, procedures and other related information by calling
1-800-428-6970.

DESCRIPTION OF PERMITTED INVESTMENTS

The following is a description of the permitted investments for the Funds.
Further discussion is contained in the Statement of Additional Information.

ASSET-BACKED SECURITIES -- Asset-backed securities are securities secured by
non-mortgage assets such as company receivables, truck and auto loans, leases
and credit card receivables. Such securities are generally issued as
pass-through certificates, which represent undivided fractional ownership
interests in
<PAGE>
25
the underlying pools of assets. Such securities also may be debt instruments,
which are also known as collateralized obligations and are generally issued as
the debt of a special purpose entity, such as a trust, organized solely for the
purpose of owning such assets and issuing such debt.

The market for asset-backed securities is at a relatively early stage of
development. Accordingly, there may be a limited secondary market for such
securities.

CERTIFICATES OF DEPOSIT -- Certificates of deposit are interest bearing
instruments with a specific maturity. They are issued by banks and savings and
loan institutions in exchange for the deposit of funds and normally can be
traded in the secondary market prior to maturity. Certificates of deposit with
penalties for early withdrawal will be considered illiquid.

CUSTODIAL RECEIPTS -- Custodial receipts are interests in separately traded
interest and principal component parts of U. S. Treasury obligations that are
issued by banks or brokerage firms and are created by depositing U. S. Treasury
obligations into a special account at custodian bank. The custodian holds the
interest and principal payments for the benefit of the registered owners of the
certificates or receipts. The custodian arranges for the issuance of the
certificates or receipts evidencing
<PAGE>
26
ownership and maintains the register. Receipts include "Treasury Receipts"
("TRs"), "Treasury Investment Growth Receipts" ("TIGRs"), and "Certificates of
Accrual on Treasury Securities" ("CATS"). TRs, TIGRs and CATS are sold as zero
coupon securities. See "Zero Coupon Obligations."

At the maturity of a forward contract, the Fund may either sell a portfolio
security and make delivery of the foreign currency, or it may retain the
security and terminate its contractual obligation to deliver the foreign
currency by purchasing an "offsetting" contract with the same currency trader,
obligating it to purchase, on the same maturity date, the same amount of the
foreign currency. The Fund may realize a gain or loss from currency
transactions.

There are risks associated with these activities, including the following: (1)
the success of a hedging strategy may depend on an ability to predict movements
in the prices of individual securities, fluctuations in markets and movements in
interest rates, (2) there may be an imperfect or no correlation between the
<PAGE>
27
changes in market value of the securities held by the Fund and the prices of
futures and options on futures, (3) there may not be a liquid secondary market
for a futures contract or option, (4) trading restrictions or limitations may be
imposed by an exchange, and (5) government regulations may restrict trading in
futures contracts and futures options.

COLLATERALIZED MORTGAGE OBLIGATIONS ("CMOS"): CMOs are debt obligations or
multiclass pass-through certificates issued by agencies or instrumentalities of
the U.S. Government or by private originators or investors in mortgage loans. In
a CMO, series of bonds or certificates are usually issued in multiple classes.
Principal
<PAGE>
28
and interest paid on the underlying mortgage assets may be allocated among the
several classes of a series of a CMO in a variety of ways. Each class of a CMO,
often referred to as a "tranche," is issued with a specific fixed or floating
coupon rate and has a stated maturity or final distribution date. Principal
payments on the underlying mortgage assets may cause CMOs to be retired
substantially earlier then their stated maturities or final distribution dates,
resulting in a loss of all or part of any premium paid.

STRIPPED MORTGAGE-BACKED SECURITIES ("SMBS"): SMBs are usually structured with
two classes that receive specified proportions of the monthly interest and
principal payments from a pool of mortgage securities. One class may receive all
of the interest payments and is thus termed an interest-only class ("IO"), while
the other class may receive all of the principal payments and is thus termed the
principal-only class ("PO"). The value of IOs tends to increase as rates rise
and decrease as rates fall; the opposite is true of POs. SMBs are extremely
sensitive to changes in interest rates because of the impact thereon of
prepayment of principal on the underlying mortgage securities. The market for
SMBs is not as fully developed as other markets; SMBs therefore may be illiquid.

PAY-IN-KIND SECURITIES -- Pay-in-kind securities are bonds or preferred stock
that pay interest or dividends in the form of additional bonds or preferred
stock.

REPURCHASE AGREEMENTS -- Repurchase agreements are agreements by which a Fund
obtains a security and simultaneously commits to return the security to the
seller at an agreed
<PAGE>
29
upon price on an agreed upon date within a number of days from the date of
purchase. The custodian will hold the security as collateral for the repurchase
agreement. A Fund bears a risk of loss in the event the other party defaults on
its obligations and the Fund is delayed or prevented from exercising its right
to dispose of the collateral or if the Fund realizes a loss on the sale of the
collateral. A Fund will enter into repurchase agreements only with financial
institutions deemed to present minimal risk of bankruptcy during the term of the
agreement based on established guidelines. Repurchase agreements are considered
loans under the Investment Company Act of 1940.

U.S. GOVERNMENT AGENCIES -- Obligations issued or guaranteed by agencies of the
U.S. Government, including, among others, the Federal Farm Credit Bank, the
Federal Housing Administration and the Small Business Administration, and
obligations issued or guaranteed by instrumentalities of the U.S. Government,
including, among others, the Federal Home Loan Mortgage Corporation, the Federal
Land Banks and the U.S. Postal Service. Some of these securities are supported
by the full faith and credit of the U.S. Treasury (e.g., Government National
Mortgage Association), others are supported by the right of the issuer to borrow
from the Treasury (e.g., Federal Farm Credit Bank), while still others are
supported only by the credit of the instrumentality (e.g., Federal National
Mortgage Association). Guarantees of principal by agencies or instrumentalities
of the U.S. Government may be a guarantee of payment at the maturity of the
obligation so that in the event of a default prior to maturity there might not
be a market and thus no means of realizing on the obligation prior to maturity.
Guarantees as to the timely payment of principal and interest do not extend to
the value or yield of these securities nor to the value of the Fund's shares.

VARIABLE AND FLOATING RATE INSTRUMENTS -- Certain obligations may carry variable
or floating rates of interest, and may involve a conditional or unconditional
demand feature. Such instruments bear interest at rates which are not fixed, but
which vary with changes in specified market rates or indices. The interest rates
on these securities may be reset daily, weekly, quarterly or some other reset
period, and may have a floor or ceiling on interest rate changes. There is a
risk that the current interest
<PAGE>
31
rate on such obligations may not accurately reflect existing market interest
rates. A demand instrument with a demand notice exceeding seven days may be
considered illiquid if there is no secondary market for such security.

WARRANTS -- Warrants are instruments giving holders the right, but not the
obligation, to buy shares of a company at a given price during a specified
period.

WHEN-ISSUED AND DELAYED DELIVERY SECURITIES -- When-issued or delayed delivery
basis transactions involve the purchase of an instrument with payment and
delivery taking place in the future. Delivery of and payment for these
securities may occur a month or more after the date of the purchase commitment.
The Fund will segregate liquid high grade debt securities or cash in an amount
at least equal to these commitments. The interest rate realized on these
securities is fixed as of the purchase date and no interest accrues to the Fund
before settlement. These securities are subject to market fluctuation due to
changes in market interest rates and it is possible that the market value at the
time of settlement could be higher or lower than the purchase price if the
general level of interest rates has changed. Although a Fund generally purchases
securities on a when-issued or forward commitment basis with the intention of
actually acquiring securities for its portfolio, a Fund may dispose of a when-
issued security or forward commitment prior to settlement if it deems
appropriate.

APPENDIX
I. BOND RATINGS
*CORPORATE BONDS

The following are descriptions of Standard & Poor's Corporation ("S&P")and
Moody's Investors Service, Inc. ("Moody's") corporate bond ratings.

II. COMMERCIAL PAPER AND SHORT-TERM RATINGS

The following descriptions of commercial paper ratings have been published by
S&P, Moody's, Fitch Investors Service, Inc. ("Fitch"), Duff and Phelps ("Duff")
and IBCA Limited ("IBCA"), respectively.

Commercial paper issues rated Prime-1 and Prime-2 by Moody's are judged by
Moody's to have superior ability and strong ability for repayment, respectively.

The designation A1 by IBCA indicates that the obligation is supported by a very
strong capacity for timely repayment. Those obligations rated A1+ are supported
by the highest capacity for timely repayment. Obligations rated A2 are supported
by a strong capacity for timely repayment, although such capacity may be
susceptible to adverse changes in business, economic or financial conditions.
<PAGE>
(THIS PAGE INTENTIONALLY LEFT BLANK)
<PAGE>
(THIS PAGE INTENTIONALLY LEFT BLANK)
<PAGE>
TRUST AND INVESTMENT SERVICES OFFICES OF SUNTRUST BANKS, INC. AFFILIATE BANKS:

FLORIDA: (STATEWIDE TOLL FREE) 1-800-526-1177

SUNTRUST BANK, CENTRAL FLORIDA, N.A.
200 S. Orange Avenue
Tower 10
Orlando, FL 32801
(407) 237-4380
1-800-432-4760, ext. 4380

SUNTRUST BANK, SOUTH FLORIDA, N.A.
501 E. Las Olas Boulevard
Ft. Lauderdale, FL 33301
(305) 765-7422

Boca Raton Office
800 S. Federal Highway
Boca Raton, FL 33435
(407) 243-6707

Coral Ridge Office
2626 E. Oakland Park Blvd.
Ft. Lauderdale, FL 33306
(305) 765-2155

Delray Beach Office
302 E. Atlantic Avenue
Delray Beach, FL 33483
(407) 243-6750

Hollywood Office
2001 Hollywood Blvd.
Hollywood, FL 33021
(305) 765-7062

Palm Beach Office
303 Royal Poinciana Plaza
Palm Beach, FL 33480
(407) 835-2855

PGA Office
2570 PGA Blvd.
Palm Beach Gardens, FL 33410
(407) 835-2802

SUNTRUST BANK, MIAMI, N.A.
777 Brickell Avenue
Miami, FL 33131
(305) 579-7450

SUNTRUST BANK, TAMPA BAY
315 E. Madison Street
Tampa, FL 33602
(813) 224-2517

SUNTRUST BANK, TREASURE COAST, N.A.
700 Virginia Avenue
Ft. Pierce, FL 34982
(407) 467-6459

Osceola Office
111 E. Osceola Street
Stuart, FL 34994
(407) 223-6012

SUNTRUST BANK, EAST CENTRAL FLORIDA
Belnova Office
1590 S. Nova Road
Daytona Beach, FL 32114
(904) 258-2660

Bill France Office
299 Bill France Blvd.
Daytona Beach, FL 32114
(904) 258-2654

Deland Office
302 E. New York Avenue
Deland, FL 32724
(904) 822-5891

SUNTRUST BANK, NORTH FLORIDA, N.A.
200 W. Forsyth Street
Jacksonville, FL 32202
(904) 632-2534

SUNTRUST BANK, SOUTHWEST FLORIDA
12730 New Brittany Blvd.
Ft. Myers, FL 33907
(813) 277-2531

Pelican Bay Office
801 Laurel Oak Drive
Naples, FL 33963
(813) 598-0515

SUNTRUST BANK, GULF COAST
South Gate Office
3400 S. Tamiami Trail
Sarasota, FL 34230
(813) 951-3218

Port Charlotte Office
18501 Murdock Circle
Port Charlotte, FL 33949
(813) 625-9286
<PAGE>
North Beneva Office
3577 Fruitville Road
Sarasota, FL 34237
(813) 951-3040

South Beneva Office
8181 S. Tamiami Trail
Sarasota, FL 34231
(813) 951-3053

Venice Office
200 Nokomis Avenue South
Venice, FL 34285
(813) 486-4417

SUNTRUST BANK, MID-FLORIDA, N.A.
210 Security Square
Winter Haven, FL 33880
(813) 297-6855

Okeechobee Office
815 S. Parrott Avenue
Okeechobee, FL 34974
(813) 763-6417

SUNTRUST BANK, NATURE COAST
One East Jefferson Street
Brooksville, FL 34601
(904) 754-5799

Crystal River Office
1502 SE Highway 19
Crystal River, FL 32629
(904) 795-8214

Seven Hills Office
1170 Mariner
Spring Hill, FL 34609
(904) 754-5779

SUNTRUST BANK, NORTH CENTRAL FLORIDA
203 E. Silver Springs Blvd.
Ocala, FL 34470
(904) 368-6477

SUNTRUST BANK, TALLAHASSEE, N.A.
3522 Thomasville Road
Tallahassee, FL 32312
(904) 298-5030

SUNTRUST BANK, WEST FLORIDA
511 W. 23rd Street
Panama City, FL 32405
(904) 872-6087

GEORGIA:

SUNTRUST BANK, ATLANTA
55 Park Place
First Floor
Atlanta, GA 30303
(404) 588-7315
1-800-241-0901 Ext. 7315

SUNTRUST BANK, NORTHEAST GEORGIA, N.A.
101 N. Lumpkin Street
Athens, GA 30601
(706) 354-5346

Gainesville Branch
104 Green Street
Gainesville, GA 30503
(770) 503-8674

SUNTRUST BANK, NORTHWEST GEORGIA, N.A.
100 East Second Avenue
Rome, GA 30161
(706) 236-4325

SUNTRUST BANK, AUGUSTA, N.A.
2815 Wrightsboro Road
Augusta, GA 30909
(706) 821-2015

SUNTRUST BANK, MIDDLE GEORGIA, N.A.
606 Cherry Street
Macon, GA 31208
(912) 755-5175

SUNTRUST BANK, WEST GEORGIA, N.A.
1246 First Avenue
Columbus, GA 31901
(706) 649-3631

SUNTRUST BANK, SAVANNAH, N.A.
33 Ball Street
Savannah, GA 31401
(912) 944-1165

SUNTRUST BANK, SOUTH GEORGIA, N.A.
410 W. Broad Avenue
Albany, GA 31701
(912) 430-5468
<PAGE>
Coffee County Branch
201 S. Peterson Avenue
Douglas, GA 31533
(912) 384-1820

SUNTRUST BANK, SOUTHEAST GEORGIA, N.A.
510 Gloucester Street
Brunswick, GA 31520
(912) 262-5322

Sea Island Road Branch
701 Sea Island Road
St. Simons Island, GA 31522
(912) 638-3620
(912) 262-2227

TENNESSEE:

SUNTRUST BANK, NASHVILLE, N.A.
424 Church Street
4th Floor
Nashville, TN 37230
(615) 748-4477
1-800-932-2652

SUNTRUST BANK, CHATTANOOGA, N.A.
736 Market Street
Chattanooga, TN 37402
(615) 757-3085
TN WATS 1-800-572-7306, Ext. 3085
Bordering States WATS
1-800-874-1083, Ext. 3085

SUNTRUST BANK, EAST TENNESSEE, N.A.
700 East Hill Avenue
Knoxville, TN 37997
(615) 544-2181
1-800-225-0913, Ext. 2181

SUNTRUST BANK, NORTHEAST TENNESSEE
207 Mockingbird Lane
Johnson City, TN 37604
(615) 461-1005

SUNTRUST BANK, SOUTH CENTRAL TENNESSEE, N.A.
25 Public Square
Lawrenceburg, TN 38464
(615) 762-3511

ALABAMA:

SUNTRUST BANK, ALABAMA, N.A.
201 South Court Street
Florence, AL 35630
(205) 767-8463
<PAGE>

<TABLE>
<S> <C> <C>
STI CLASSIC FUNDS ORGANIZATIONAL OVERVIEW

* INVESTMENT ADVISORS
Trusco Capital Management, Inc. 50 Hurt Plaza
Suite 1400
Atlanta, GA 30303
STI Capital Management, N.A. P.O. Box 3808
Orlando, FL 32802
* DISTRIBUTOR
SEI Financial Services Company 680 E. Swedesford Road
Wayne, PA 19087
* ADMINISTRATOR
SEI Financial Management 680 E. Swedesford Road
Corporation Wayne, PA 19087
* TRANSFER AGENT
Federated Services Company Federated Investors Tower
Pittsburgh, PA 15222-3779
* CUSTODIAN
SunTrust Bank, Atlanta c/o STI Trust & Investment
Operations, Inc.
303 Peachtree Street N.E.
14th Floor
Atlanta, GA 30308
The Bank of California 475 Sansome Street
(International Equity Index Fund Suite 1200
only) San Francisco, CA 94111
* LEGAL COUNSEL
Morgan, Lewis & Bockius LLP 2000 One Logan Square
Philadelphia, PA 19103
* INDEPENDENT PUBLIC ACCOUNTANTS
Arthur Andersen, LLP 1601 Market Street
Philadelphia, PA 19103
</TABLE>

<PAGE>
100092/10-95

DISTRIBUTOR
SEI Financial Services
Company

...............................................................................

PROSPECTUS

INVESTOR SHARES

CAPITAL GROWTH FUND

VALUE INCOME STOCK FUND

AGGRESSIVE GROWTH FUND

BALANCED FUND

SUNBELT EQUITY FUND

INTERNATIONAL EQUITY
INDEX FUND

INVESTMENT ADVISORS
STI CAPITAL MANAGEMENT, N.A.
TRUSCO CAPITAL MANAGEMENT, INC.
OCTOBER 1, 1995

ABCD
<PAGE>
STI CLASSIC FUNDS
INVESTOR SHARES
INVESTMENT GRADE BOND FUND
INVESTMENT GRADE TAX-EXEMPT BOND FUND
U.S. GOVERNMENT SECURITIES FUND
LIMITED-TERM FEDERAL MORTGAGE SECURITIES FUND
SHORT-TERM BOND FUND
SHORT-TERM U.S. TREASURY SECURITIES FUND
FLORIDA TAX-EXEMPT BOND FUND
GEORGIA TAX-EXEMPT BOND FUND
TENNESSEE TAX-EXEMPT BOND FUND
PRIME QUALITY MONEY MARKET FUND
U.S. GOVERNMENT SECURITIES MONEY MARKET FUND
TAX-EXEMPT MONEY MARKET FUND

INVESTMENT ADVISORS TO THE FUNDS:
TRUSCO CAPITAL MANAGEMENT, INC.
STI CAPITAL MANAGEMENT, N.A.
SUNTRUST BANK, CHATTANOOGA, N.A.
SUNTRUST BANK, ATLANTA

The STI Classic Funds (the "Trust") is a mutual fund that offers shares in a
number of separate investment portfolios. This Prospectus sets forth concisely
the information about the Investor Shares of the above-referenced Funds (each a
"Fund" and, collectively, the "Funds"). Investors are advised to read this
Prospectus and retain it for future reference.

OCTOBER 1, 1995
<PAGE>
2

TABLE OF CONTENTS

<TABLE>
<S> <C>
Expense Summary...................... 3
Financial Highlights................. 6
The Trust............................ 8
Funds and Investment Objectives...... 8
Investment Policies and Strategies... 9
General Investment Policies and
Strategies......................... 18
Investment Risks..................... 18
Investment Limitations............... 20
Performance Information.............. 21
General Performance Information...... 22
Fundlink............................. 22
Purchase of Fund Shares.............. 22
Redemption of Fund Shares............ 26
Exchanges............................ 27
Dividends and Distributions.......... 28
Tax Information...................... 29
STI Classic Funds Information........ 31
Board of Trustees.................... 31
Investment Advisors.................. 31
Portfolio Managers................... 33
Banking Laws......................... 34
Distribution......................... 34
Administration....................... 35
Transfer Agent and Dividend
Disbursing Agent................... 35
Custodian............................ 36
Legal Counsel........................ 36
Independent Public Accountants....... 36
Other Information.................... 36
Voting Rights........................ 36
Reporting............................ 36
Shareholder Inquiries................ 36
Description of Permitted
Investments........................ 36
Appendix............................. A-1
</TABLE>
<PAGE>
3

EXPENSE SUMMARY
INVESTOR SHARES

Below is a summary of the transaction expenses and annual operating expenses for
Investor Shares of each Fund described in this Prospectus. A hypothetical
example based on the estimated expenses is also shown. Actual expenses may vary.
<TABLE>
<S> <C> <C> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES
- ---------------------------------------------------------------------------------------------

<CAPTION>
U.S. GOVERNMENT
SECURITIES,
INVESTMENT GRADE
BOND,
INVESTMENT GRADE LIMITED-TERM SHORT-TERM
TAX-EXEMPT BOND FEDERAL U.S.
AND STATE MORTGAGE TREASURY
TAX-EXEMPT BOND SECURITIES SHORT-TERM SECURITIES
FUNDS FUND BOND FUND FUND
<S> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------
Maximum Sales Charge Imposed on
Purchases (as a percentage of
offering price).................. 3.75% 2.50% 2.00% 1.00%
Maximum Sales Charge Imposed on
Reinvested Dividends............. None None None None
Deferred Sales Charge............. None None None None
Redemption Fees(1)................ None None None None
Exchange Fee...................... None None None None
- ---------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------
</TABLE>

(1) There is a $7.00 wire charge for redemptions for all funds processed from
retail accounts which require wires to particular banks.
<PAGE>
4

ANNUAL OPERATING EXPENSES
(as a percentage of average net assets)
<TABLE>
<CAPTION>
INVESTMENT GRADE LIMITED-TERM
INVESTMENT GRADE TAX- EXEMPT BOND U.S. GOVERNMENT FEDERAL MORTGAGE SHORT-TERM BOND
BOND FUND FUND SECURITIES FUND SECURITIES FUND FUND
<S> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------------------------
Advisory Fees (After Voluntary
Reductions)(1).............. .62 % .61 % 0 % .33 % .42 %
All Other Expenses (After
Voluntary Reductions)(1).... .37 % .29 % 1.15 % .57 % .36 %
12b-1 Service & Distribution
Expenses (After Voluntary
Reductions)(1).............. .16 % .25 % 0 % 0 % .07 %
- -------------------------------------------------------------------------------------------------------------------------------
Total Operating Expenses
(After Voluntary
Reductions)(1).............. 1.15 % 1.15 % 1.15 % .90 % .85 %
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------

<CAPTION>
SHORT-TERM U.S.
TREASURY
SECURITIES FUND
<S> <C>
- ------------------------------
Advisory Fees (After Voluntary
Reductions)(1).............. .19 %
All Other Expenses (After
Voluntary Reductions)(1).... .52 %
12b-1 Service & Distribution
Expenses (After Voluntary
Reductions)(1).............. .09 %
- ------------------------------
Total Operating Expenses
(After Voluntary
Reductions)(1).............. .80 %
- ------------------------------
- ------------------------------
</TABLE>

(1) Absent voluntary reductions and reimbursements by the Advisor and
Administrator, advisory fees, other expenses, service and distribution
expenses, and total operating expenses expressed as a percentage of average
net assets, respectively, for the Investor Shares of each Fund would be:
Investment Grade Bond Fund -- .74%, .37%, .43% and 1.54%; Investment Grade
Tax Exempt Bond Fund -- .74%, .29%, .43% and 1.46%; US Government Securities
Fund -- .74%, 5.72%, .38% and 6.84%; Limited-Term Federal Mortgage
Securities Fund -- .65%, 6.86%, .23% and 7.74%; Short-Term Bond Fund --
.65%, .68%, .23% and 1.56%; and Short-Term US Treasury Securities Fund --
.65%, .52%, .18% and 1.35%. Fee reductions are voluntary and may be
terminated at any time. Additional information may be found under
"Investment Advisors," "Administration" and "Distribution." A person that
purchases shares through an account with a financial institution may be
charged separate fees by the financial institution.
<TABLE>
<CAPTION>
LIMITED-TERM
INVESTMENT INVESTMENT GRADE FEDERAL
GRADE BOND TAX- EXEMPT BOND U.S. GOVERNMENT MORTGAGE SHORT-TERM BOND
EXAMPLE FUND FUND SECURITIES FUND SECURITIES FUND FUND
<S> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------------------
An investor would pay the
following expenses on a
$1,000 investment assuming:
(1) 5% annual return and (2)
redemption at the end of
each time period:
One year.................. $ 49 $ 49 $ 49 $ 34 $ 29
Three Years............... 73 73 73 53 47
Five Years................ 98 98 98 74 66
Ten Years................. 172 172 172 133 123
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------

ANNUAL OPERATING EXPENSES
(as a percentage of average net assets)
<TABLE>
<CAPTION>
TENNESSEE PRIME QUALITY U.S. GOVERNMENT
FLORIDA TAX- EXEMPT GEORGIA TAX- EXEMPT TAX-EXEMPT BOND MONEY MARKET SECURITIES MONEY
BOND FUND BOND FUND FUND FUND MARKET FUND
<S> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------------------------
Advisory Fees (After
Voluntary
Reductions)(1).......... .08 % .27 % 0 % .50 % .50 %
All Other Expenses (After
Voluntary
Reductions)(1).......... .74 % .53 % .70 % .12 % .21 %
12b-1 Service &
Distribution Expenses
(After Voluntary
Reductions)(1).......... .03 % .05 % .15 % .13 % .04 %
- --------------------------------------------------------------------------------------------------------------------------------
Total Operating Expenses
(After Voluntary
Reductions)(1).......... .85 % .85 % .85 % .75 % .75 %
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------

<CAPTION>
TAX-EXEMPT MONEY
MARKET FUND
<S> <C>
- --------------------------
Advisory Fees (After
Voluntary
Reductions)(1).......... .46 %
All Other Expenses (After
Voluntary
Reductions)(1).......... .20 %
12b-1 Service &
Distribution Expenses
(After Voluntary
Reductions)(1).......... .06 %
- --------------------------
Total Operating Expenses
(After Voluntary
Reductions)(1).......... .72 %
- --------------------------
- --------------------------
</TABLE>

(1) Absent voluntary reductions and reimbursements by the Advisor and
Administrator, advisory fees, other expenses, and total operating expenses
expressed as a percentage of average net assets, respectively, for the Trust
Shares of each Fund would be: Florida Tax-Exempt Bond Fund -- .65%, .70%,
.18% and 1.53%; Georgia Tax Exempt Bond Fund -- .65%, .60%, .18% and 1.43%;
Tennessee Tax-Exempt Bond Fund --.65%, 1.27%, .18% and 2.10%; Prime Qualifty
Money Market Fund -- .65%, .40%, .20% and 1.01%; US Government Securities
Money Market Fund -- .65%, .21%, .17% and 1.03%, and Tax-Exempt Money Market
Fund -- .55%, .20%, .15% and .90%. Total operating expenses for the
Tax-Exempt Money Market Fund have been restated to reflect current expenses.
Fee reductions are voluntary and may be terminated at anytime. Additional
information may be found under "Investment Advisors," "Administration," and
"Distribution." A person that purchases shares through an account with a
financial institution may be charged separate fees by the financial
institution.
<TABLE>
<CAPTION>
U.S. GOVERNMENT
TENNESSEE PRIME QUALITY SECURITIES
FLORIDA TAX- GEORGIA TAX- TAX-EXEMPT BOND MONEY MARKET MONEY MARKET
EXAMPLE EXEMPT BOND FUND EXEMPT BOND FUND FUND FUND FUND
<S> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------
An investor would pay the
following expenses on a
$1,000 investment
assuming: (1) 5% annual
return and (2)
redemption at the end of
each time period:
One year.............. $ 46 $ 46 $ 46 $ 8 $ 8
Three Years........... 64 64 64 24 24
Five Years............ 83 83 83 42 42
Ten Years............. 138 138 138 93 93
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------

<CAPTION>
TAX-EXEMPT
MONEY MARKET
EXAMPLE FUND
<S> <C>
- --------------------------
An investor would pay the
following expenses on a
$1,000 investment
assuming: (1) 5% annual
return and (2)
redemption at the end of
each time period:
One year.............. $ 7
Three Years........... 23
Five Years............ 40
Ten Years............. 89
- --------------------------
- --------------------------
</TABLE>

THE EXAMPLE IS BASED UPON THE TOTAL OPERATING EXPENSES OF A FUND AND SHOULD NOT
BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE EXPENSES. ACTUAL EXPENSES MAY
BE GREATER OR LESS THAN THOSE SHOWN. The purpose of this table is to assist the
investor in understanding the various costs and expenses that may be directly or
indirectly borne by investors in the Trust. The information set forth in the
foregoing table and example relates only to Investor Shares. The Trust also
offers Trust Shares of each Fund of the non-money market funds which are subject
to the same expenses except there are no distribution fees, different transfer
agent fees or sales charges and Flex Shares of each Fund which are subject to
the same expenses except for different distribution, sales charge, service and
transfer agent fees. The rules of the Securities and Exchange Commission require
that the maximum sales charge be reflected in the above table. However, certain
investors may qualify for reduced sales charges. See "Purchase of Fund Shares."
Long-term Investor Class Shareholders may eventually pay more than the economic
equivalent of the maximum front-end sales charges otherwise permitted by the
National Association of Securities Dealers, Inc.'s Rules of Fair Practice.
<PAGE>
6

FINANCIAL HIGHLIGHTS

For an Investor Share Outstanding Throughout the Period
<TABLE>
<CAPTION>
NET REALIZED
AND
NET ASSET UNREALIZED DISTRIBUTIONS
VALUE NET GAINS FROM NET DISTRIBUTIONS
BEGINNING INVESTMENT (LOSSES) ON INVESTMENT FROM REALIZED
OF PERIOD INCOME INVESTMENTS INCOME CAPITAL GAINS
--------- ---------- ------------ -------------- -------------
- -----------------------------
INVESTMENT GRADE BOND FUND
- -----------------------------
INVESTOR SHARES
<S> <C> <C> <C> <C> <C>
1995........................ $ 9.89 $0.57 $ 0.38 $ (0.58) --
1994........................ 10.44 0.46 (0.35) (0.46) $ (0.20)
1993 (1).................... 10.00 0.44 0.44 (0.44) --
- ------------------------------------------
INVESTMENT GRADE TAX-EXEMPT BOND FUND
- ------------------------------------------
INVESTOR SHARES
1995........................ $10.69 $0.42 $ 0.61 $ (0.42) --
1994........................ 10.79 0.33 0.25 (0.33) $ (0.35)
1993 (2).................... 10.00 0.35 0.82 (0.35) (0.03)
- ---------------------------------
U.S. GOVERNMENT SECURITIES FUND
- ---------------------------------
INVESTOR SHARES
1995 (3).................... $10.00 $0.56 $ 0.26 $ (0.56) --
- ------------------------------------------------
LIMITED-TERM FEDERAL MORTGAGE SECURITIES FUND
- ------------------------------------------------
INVESTOR SHARES
1995 (4).................... $ 9.98 $0.58 $ 0.13 $ (0.58) --
- ----------------------
SHORT-TERM BOND FUND
- ----------------------
INVESTOR SHARES
1995........................ $ 9.81 $0.51 $ 0.19 $ (0.50) --
1994........................ 10.03 0.40 (0.21) (0.40) $ (0.01)
1993 (5).................... 10.06 0.06 (0.03) (0.06) --
- -----------------------------------------
SHORT-TERM U.S. TREASURY SECURITIES FUND
- -----------------------------------------
INVESTOR SHARES
1995........................ $ 9.83 $0.46 $ 0.11 $ (0.46) --
1994........................ 9.99 0.32 (0.12) (0.31) $ (0.05)
1993 (6).................... 10.01 0.06 (0.02) (0.06) --
- -------------------------------
FLORIDA TAX-EXEMPT BOND FUND
- -------------------------------
INVESTOR SHARES
1995........................ $ 9.75 $0.42 $ 0.43 $ (0.42) --
1994 (7).................... 10.00 0.13 (0.25) (0.13) --

<CAPTION>
RATIO OF NET
RATIO OF INVESTMENT
EXPENSES TO INCOME (LOSS)
RATIO OF NET AVERAGE NET TO AVERAGE NET
RATIO OF INVESTMENT ASSETS ASSETS
NET ASSET NET ASSETS EXPENSES INCOME TO (EXCLUDING (EXCLUDING
VALUE END TOTAL END OF TO AVERAGE AVERAGE NET WAIVERS AND WAIVERS AND
OF PERIOD RETURN PERIOD (000) NET ASSETS ASSETS REIMBURSEMENTS) REIMBURSEMENTS)
--------- -------- ------------ ---------- ------------ --------------- ---------------
- -----------------------------
INVESTMENT GRADE BOND FUND
- -----------------------------
INVESTOR SHARES
<S> <C>
1995........................ $ 10.26 10.04% $ 33,772 1.15% 5.79% 1.49% 5.45%

1994........................ 9.89 0.86% 35,775 1.14% 4.39% 1.41% 4.12%

1993 (1).................... 10.44 9.21%* 24,375 1.14%* 4.75%* 1.46%* 4.43%*

- ------------------------------
INVESTMENT GRADE TAX-EXEMPT BO
- ------------------------------
INVESTOR SHARES
1995........................ $ 11.30 9.91% $ 41,693 1.15% 3.88% 1.43% 3.60%

1994........................ 10.69 5.37% 46,182 1.14% 2.96% 1.51% 2.59%

1993 (2).................... 10.79 11.88%* 15,844 1.12%* 3.61%* 1.83%* 2.90%*

- ------------------------------
U.S. GOVERNMENT SECURITIES FUN
- ------------------------------
INVESTOR SHARES
1995 (3).................... $ 10.26 $ 8.61+ $ 589 $ 1.15%* 6.08%* 6.84%* 0.39%*

- ------------------------------
LIMITED-TERM FEDERAL MORTGAGE
- ------------------------------
INVESTOR SHARES
1995 (4).................... $ 10.11 7.45%+ $ 623 0.90%* 6.27%* 7.74%* (0.57%)*

- ----------------------
SHORT-TERM BOND FUND
- ----------------------
INVESTOR SHARES
1995........................ $ 10.01 7.44% $ 2,609 0.85% 5.24% 1.56% 4.53%

1994........................ 9.81 1.81% 2,381 0.85% 3.94% 2.52% 2.27%

1993 (5).................... 10.03 1.65%* 716 0.85%* 3.85%* 7.22%* (2.52%)*

- ------------------------------
SHORT-TERM U.S. TREASURY SECUR
- ------------------------------
INVESTOR SHARES
1995........................ $ 9.94 6.03% $ 7,144 0.80% 4.74% 1.33% 4.21%

1994........................ 9.83 2.01% 4,841 0.78% 3.11% 1.41% 2.48%

1993 (6).................... 9.99 1.84%* 2,423 0.80%* 3.16%* 3.42%* 0.54%*

- ------------------------------
FLORIDA TAX-EXEMPT BOND FUND
- ------------------------------
INVESTOR SHARES
1995........................ $ 10.18 9.04% $ 3,320 0.85% 4.36% 1.50% 3.71%

1994 (7).................... 9.75 (1.22%)+ 2,280 0.85%* 3.67%* 3.20%* 1.32%*

PORTFOLIO
TURNOVER
RATE
--------
- -----------------------------
INVESTMENT GRADE BOND FUND
- -----------------------------
INVESTOR SHARES
1995........................ 237.66%
1994........................ 259.19%
1993 (1).................... 299.32%
- ------------------------------
INVESTMENT GRADE TAX-EXEMPT BO
- ------------------------------
INVESTOR SHARES
1995........................ 591.91%
1994........................ 432.46%
1993 (2).................... 344.87%
- ------------------------------
U.S. GOVERNMENT SECURITIES FUN
- ------------------------------
INVESTOR SHARES
1995 (3).................... 30.39%
- ------------------------------
LIMITED-TERM FEDERAL MORTGAGE
- ------------------------------
INVESTOR SHARES
1995 (4).................... 67.63%
- ----------------------
SHORT-TERM BOND FUND
- ----------------------
INVESTOR SHARES
1995........................ 200.49%
1994........................ 74.85%
1993 (5).................... 63.89%
- ------------------------------
SHORT-TERM U.S. TREASURY SECUR
- ------------------------------
INVESTOR SHARES
1995........................ 87.98%
1994........................ 116.57%
1993 (6).................... 36.44%
- ------------------------------
FLORIDA TAX-EXEMPT BOND FUND
- ------------------------------
INVESTOR SHARES
1995........................ 105.01%
1994 (7).................... 53.24%
</TABLE>

<PAGE>
7
<TABLE>
<CAPTION>
NET REALIZED
AND
NET ASSET UNREALIZED DISTRIBUTIONS
VALUE NET GAINS FROM NET DISTRIBUTIONS
BEGINNING INVESTMENT (LOSSES) ON INVESTMENT FROM REALIZED
OF PERIOD INCOME INVESTMENTS INCOME CAPITAL GAINS
--------- ---------- ------------ -------------- -------------
- --------------------------------
GEORGIA TAX-EXEMPT BOND FUND
- --------------------------------
INVESTOR SHARES
<S> <C> <C> <C> <C> <C>
1995......... $ 9.44 $0.40 $ 0.21 $ (0.40) --
1994 (8)..... 10.00 0.13 (0.56) (0.13) --
- ----------------------------------
TENNESSEE TAX-EXEMPT BOND FUND
- ----------------------------------
INVESTOR SHARES
1995......... $ 9.23 $0.44 $ 0.29 $ (0.43) --
1994 (8)..... 10.00 0.13 (0.77) (0.13) --
- ----------------------------------
PRIME QUALITY MONEY MARKET FUND
- ----------------------------------
INVESTOR SHARES
1995......... $ 1.00 $0.05 -- $ (0.05) --
1994......... 1.00 0.03 -- (0.03) --
1993 (9)..... 1.00 0.03 -- (0.03) --
- -------------------------------------------------
U.S. GOVERNMENT SECURITIES MONEY MARKET FUND
- -------------------------------------------------
INVESTOR SHARES
1995......... $ 1.00 $0.04 -- $ (0.04) --
1994......... 1.00 0.03 -- (0.03) --
1993 (9)..... 1.00 0.03 -- (0.03) --
- --------------------------------
TAX-EXEMPT MONEY MARKET FUND
- --------------------------------
INVESTOR SHARES
1995......... $ 1.00 $0.03 -- $ (0.03) --
1994......... 1.00 0.02 -- (0.02) --
1993 (9)..... 1.00 0.02 -- (0.02) --

VALUE END TOTAL END OF TO AVERAGE AVERAGE NET WAIVERS AND WAIVERS AND TURNOVER

OF PERIOD RETURN PERIOD (000) NET ASSETS ASSETS REIMBURSEMENTS) REIMBURSEMENTS) RATE

--------- -------- ------------ ---------- ------------ --------------- --------------- --------

- ---------------
GEORGIA TAX-EXE
- ---------------
INVESTOR SHARE
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1995......... $ 9.65 6.70% $ 3,268 0.85% 4.31% 1.43% 3.73% 24.50%

1994 (8)..... 9.44 (4.29%)+ 3,300 0.85%* 3.93%* 2.36%* 2.42%* 25.90%

- ---------------
TENNESSEE TAX-E
- ---------------
INVESTOR SHARE
1995......... $ 9.53 8.24% $ 1,170 0.85% 4.70%* 2.10% 3.45% 27.73%

1994 (8)..... 9.23 (6.39%)+ 1,127 0.85%* 3.74%* 6.60%* (2.01%)* 13.05%

- ---------------
PRIME QUALITY M
- ---------------
INVESTOR SHARE
1995......... $ 1.00 4.62% $157,616 0.75% 4.55% 1.01% 4.29% --

1994......... 1.00 2.71% 129,415 0.75% 2.67% 0.99% 2.43% --

1993 (9)..... 1.00 2.75%* 61,378 0.75%* 2.68%* 1.02%* 2.41%* --

- ---------------
U.S. GOVERNMENT
- ---------------
INVESTOR SHARE
1995......... $ 1.00 4.51% $ 46,639 0.75% 4.51% 1.00% 4.24% --

1994......... 1.00 2.63% 32,395 0.75% 2.54% 0.97% 2.32% --

1993 (9)..... 1.00 2.65%* 16,688 0.75%* 2.57%* 1.11%* 2.21%* --

- ---------------
TAX-EXEMPT MONE
- ---------------
INVESTOR SHARE
1995......... $ 1.00 3.00% $ 87,647 0.55% 3.00% 0.87% 2.68% --

1994......... 1.00 1.96% 61,675 0.54% 1.93% 0.88% 1.59% --

1993 (9)..... 1.00 2.00%* 35,209 0.53%* 1.95%* 0.95%* 1.53%* --

</TABLE>

* Annualized.
+ Cumulative since inception.

(1) The Investment Grade Bond Fund Investor Shares commenced operations on June
11, 1992.
(2) The Investment Grade Tax-Exempt Bond Fund Investor Shares commenced
operations on June 9, 1992.

(3) The U.S. Government Securities Fund Investor Shares commenced operations on
June 9, 1994.

(4) The Limited-Term Federal Mortgage Securities Fund Investor Shares commenced
operations on July 17, 1994.

(5) The Short-Term Bond Fund Investor Shares commenced operations on March 22,
1993.

(6) The Short-Term U.S. Treasury Securities Fund Investor Shares commenced
operations on March 18, 1993.

(7) The Florida Tax-Exempt Bond Fund Investor Shares commenced operations on
January 18, 1994.

(8) The Georgia Tax-Exempt Bond Fund Investor Shares and the Tennessee
Tax-Exempt Bond Fund Investor Shares commenced operations on January 19,
1994.

(9) The Prime Quality Money Market Fund Trust Shares and Investor Shares, U.S.
Government Securities Money Market Fund Trust Shares and Investor Shares,
and Tax-Exempt Money Market Fund Trust Shares and Investor Shares commenced
opertions on June 8, 1992.
<PAGE>
8

THE TRUST

FUNDS AND INVESTMENT OBJECTIVES

BOND FUNDS:

STATE TAX-EXEMPT BOND FUNDS:

THE FLORIDA TAX-EXEMPT BOND FUND seeks to provide current income exempt from
federal income tax for Florida residents without undue investment risk.

THE GEORGIA TAX-EXEMPT BOND FUND seeks to provide current income exempt from
federal and state income tax for Georgia residents without undue investment
risk.

THE TENNESSEE TAX-EXEMPT BOND FUND seeks to provide current income exempt from
federal and state income tax for Tennessee residents without undue investment
risk.

MONEY MARKET FUNDS:

THE PRIME QUALITY MONEY MARKET FUND seeks to provide as high a level of current
income as is consistent with preservation of
<PAGE>
9
capital and liquidity by investing exclusively in high quality money market
instruments.

There can be no assurance that a Fund will achieve its investment objective.

The investment objectives of the Investment Grade Bond Fund, U.S. Government
Securities Fund, Limited-Term Federal Mortgage Securities Fund, Short-Term Bond
Fund and Short-Term U.S. Treasury Securities Fund are nonfundamental and may be
changed without a shareholder vote.

INVESTMENT POLICIES AND STRATEGIES

*INVESTMENT GRADE BOND FUND

The Investment Grade Bond Fund will invest exclusively in investment grade
obligations rated BBB or better by Standard & Poor's Corporation ("S&P") or Baa
or better by Moody's Investors Service, Inc. ("Moody's") or, if unrated, of
comparable quality at the time of purchase as determined by the Advisor,
including corporate debt obligations; mortgage-backed securities, collateralized
mortgage obligations ("CMOs") and asset-backed securities; obligations issued or
guaranteed as to principal and interest by the U.S. Government or its agencies
or instrumentalities; custodial receipts involving U.S. Treasury obligations;
securities of the government of Canada and its provincial and local governments;
securities issued or guaranteed by foreign governments, their political
subdivisions, agencies or instrumentalities; obligations of supranational
entities and sponsored American Depositary Receipts ("ADRs") that are traded on
exchanges or
<PAGE>
10
listed on NASDAQ. Under normal circumstances, at least 65% of the Fund's total
assets will be invested in corporate and government bonds and debentures. No
more than 25% of the Fund's assets will be invested in securities rated BBB by
S&P or Baa by Moody's or, if unrated, of comparable quality at the time of
purchase as determined by the Advisor.

The Fund may purchase mortgage-backed securities issued or guaranteed as to the
payment of principal and interest by the U.S. Government or its agencies or
instrumentalities or, subject to a limit of 25% of the Fund's assets,
mortgage-backed securities issued by private issuers. These mortgage-backed
securities may be backed or collateralized by fixed, adjustable or floating rate
mortgages. The Fund may also invest in asset-backed securities which consist of
securities backed by company receivables, truck and auto loans, leases, credit
card receivables and home equity loans.

In order to reduce interest rate risk, and subject to a general limit of 25% of
the Fund's assets, the Fund may purchase floating or variable rate securities.
It may also buy securities on a when-issued basis, medium term notes, putable
securities and zero coupon securities. The Fund may also invest up to 10% of its
assets in restricted securities that the Advisor determines are liquid under
guidelines adopted by the Trust's Board of Trustees. The Fund may also engage in
futures and options transactions and may engage in securities lending. Some
floating or variable rate securities will be subject to interest rate "caps" or
"floors."

*INVESTMENT GRADE TAX-EXEMPT BOND FUND

The Investment Grade Tax-Exempt Bond Fund intends to be fully invested in
municipal securities the interest on which is exempt from federal income taxes
in the opinion of bond counsel to the issuer. The issuers of these securities
can be located in all fifty states, the District of Columbia, Puerto Rico and
other U.S. territories and possessions. It is a fundamental policy of the
Investment Grade Tax-Exempt Bond Fund to invest at least 80% of its total assets
in securities the income from which is exempt from federal income tax and not
treated as a preference item for purposes of the alternative minimum tax. At
least 65% of the Fund's assets will be invested in municipal bonds and
debentures, and at least 75% of its total assets invested in municipal bonds
will be in securities rated A or better by S&P or Moody's. Municipal securities
must be rated BBB or better by S&P or Baa or better by Moody's in the case of
bonds; SP-1, SP-2 or MIG-1, MIG-2 in the case of notes; A-1, A-2, P-1, P-2 in
the case of tax-exempt commercial paper; and VMIG-1 or VMIG-2 in the case of
<PAGE>
11
variable rate demand obligations. The Fund will only acquire unrated securities
if, at the time of purchase, the Advisor determines that such unrated
obligations are of comparable quality to rated obligations that may be acquired
by the Fund.

*U.S. GOVERNMENT SECURITIES FUND

Mortgage-backed securities that are not issued or guaranteed by the U.S.
Government or its agencies or instrumentalities, including securities nominally
issued by a governmental entity (such as the Resolution Trust Corporation), are
not obligations of a governmental entity and thus may bear a risk of nonpayment.
The timely payment of principal and interest normally is supported, at least
partially, by various forms of insurance or
<PAGE>
12
guarantees. There can be no assurance, however, that such credit enhancement
will support full payment of the principal and interest on such obligations. The
average maturity of the Fund's investment portfolio will typically range from 7
to 14 years.

With respect to the remaining 35% of its assets, the Fund may invest in
corporate or government bonds that carry a rating of Baa or better by Moody's or
BBB or better by S&P or better, or that are deemed by the Advisor to be of
comparable quality; commercial paper rated at the time of purchase within the
two highest ratings categories of an NRSRO; bankers' acceptances; certificates
of deposit and time deposits; and U.S. Treasury obligations which includes
custodial receipts and repurchase agreements involving securities that
constitute permissible investments for the Fund. The Fund intends to invest in
privately issued, mortgage-backed securities only if they are rated in one of
the two highest rating categories.

The Fund may purchase securities on a forward commitment or when-issued basis,
which means that delivery and payment for such securities generally takes place
after the customary securities settlement period. The Fund may purchase floating
or variable rate securities, and may engage in dollar roll transactions.

*LIMITED-TERM FEDERAL MORTGAGE SECURITIES FUND

Mortgage-backed securities that are not issued or guaranteed by the U.S.
Government or its agencies or instrumentalities, including securities nominally
issued by a governmental entity (such as the Resolution Trust Corporation), are
not obligations of the U.S. Government and thus bear a risk of nonpayment. The
timely payment of principal and interest normally is supported, at least
partially, by various forms of insurance or guarantees. There can be no
assurance, however, that such credit enhancement will support full payment of
the principal and interest on such obligations.

With respect to the remaining 35% of its assets, the Fund may invest in
corporate or government bonds that carry a rating of Baa or better by Moody's or
BBB or better by S&P, or that are deemed by the Advisor to be of comparable
quality; asset backed securities; commercial paper rated at the time of purchase
in the two highest ratings categories of an NRSRO rating bankers' acceptances;
certificates of deposit and time deposits; U.S. Treasury obligations and
custodial receipts; and repurchase agreements involving securities that
constitute permissible investments for the Fund.

The Fund may purchase securities on a forward commitment or when-issued basis,
which
<PAGE>
13
means that delivery and payment for such securities generally takes place after
the customary securities settlement period. The Fund may purchase floating or
variable rate securities, and may engage in dollar roll transactions. The Fund
may also purchase stripped mortgage-backed securities, but will limit such
purchase to 5% of its net assets.

*SHORT-TERM BOND FUND

Under normal circumstances, the Short-Term Bond Fund will invest solely in
investment grade obligations rated BBB or better by S&P or Baa or better by
Moody's or, if unrated, of comparable quality at the time of purchase as
determined by the Advisor consisting of debt obligations of U.S. and foreign
corporations, mortgage-backed securities; CMOs; asset-backed securities;
obligations (including mortgage-backed securities) issued or guaranteed as to
principal and interest by the U.S. Government or its agencies or
instrumentalities; and custodial receipts involving U.S. Treasury obligations
(including STRIPS and CUBES). Under normal circumstances, at least 65% of the
Fund's total assets will be invested in corporate and government bonds and
debentures. No more than 25% of the Fund's assets will be invested in securities
rated BBB by S&P or Baa by Moody's or, if unrated, of comparable quality at the
time of purchase by the Advisor.

The Fund may purchase, without limitation, mortgage-backed securities issued or
guaranteed as to the payment of principal and interest by the U.S. Government or
its agencies or instrumentalities and, subject to a limit of 25% of the Fund's
assets, mortgage-backed securities issued by private issuers. These
mortgage-backed securities may be backed or collateralized by fixed, adjustable
or floating rate mortgages. The Fund may also invest in asset-backed securities,
which consist of securities backed by company receivables; truck and auto loans;
leases; credit card receivables; and home equity loans. The Fund will purchase
mortgage-backed and asset-backed securities only if they are rated at least AA
by S&P or Aa by Moody's or, if unrated, determined to be of comparable quality
at the time of purchase by the Advisor.

*SHORT-TERM U.S. TREASURY SECURITIES FUND

*FLORIDA TAX-EXEMPT BOND FUND

*GEORGIA TAX-EXEMPT BOND FUND

The Georgia Tax-Exempt Bond Fund intends to be fully invested in municipal
securities the interest on which is exempt from federal income taxes and
substantially exempt from State of Georgia income taxes based on opinions from
bond counsel to the issuers. The issuers of these securities can be located in
Georgia, the District of Columbia, Puerto Rico and other U.S. territories and
possessions. It is a fundamental policy of the Fund to invest at least 80% of
its total assets in securities the income from which is exempt from federal
income tax and not treated as a preference item for purposes of alternative
minimum tax. At least 65% of the Fund's assets will be invested in Georgia
municipal bonds and debentures, and at least 75% of its total assets invested in
municipal bonds will be in securities rated A or better by S&P or Moody's.
Municipal securities must be rated BBB or better by S&P or Baa or better by
Moody's in the case of bonds; SP-1, SP-2 or MIG-1, MIG-2 in the case of notes;
A-1, A-2, or P-1, P-2 in the case of tax-exempt commercial paper; and VMIG-1 or
VMIG-2 in the case of variable rate demand obligations. No more than 25% of the
Fund's assets will be invested in bonds rated BBB by S&P or Baa by Moody's. The
Fund will only acquire unrated securities if, at the time of purchase, the
Advisor determines that such unrated obligations are of comparable quality to
rated obligations that may be acquired by the Fund.

The Fund may invest in floating or variable rate securities, commitments to
purchase the above securities on a when-issued or delayed delivery basis, and
may purchase municipal forwards, putable securities, medium term notes and zero
coupon securities. The Advisor has discretion to invest up to 20% of the Fund's
total assets in taxable debt securities rated at least BBB or better by S&P or
Baa or better by Moody's or, if unrated, of comparable quality at the time of
purchase as determined by the Advisor, repurchase agreements, and securities
subject to the alternative minimum tax. The Fund may also invest in futures and
options, but has no present intention to do so for other than hedging purposes.

Under normal market conditions, it is anticipated that the Fund's average
weighted
<PAGE>
16
maturity will range from 6 to 25 years. The Fund may shorten its average
weighted maturity to as little as 90 days if deemed appropriate for temporary
defensive purposes.

*TENNESSEE TAX-EXEMPT BOND FUND

The Tennessee Tax-Exempt Bond Fund intends to be fully invested in municipal
securities the interest on which is exempt from federal income taxes and
substantially exempt from State of Tennessee income taxes based on opinions from
bond counsel to the issuers. The issuers of these securities can be located in
Tennessee, the District of Columbia, Puerto Rico and other U.S. territories and
possessions. It is a fundamental policy of the Fund to invest at least 80% of
its total assets in securities the income from which is exempt from federal
income tax and not treated as a preference item for purposes of the alternative
minimum tax. At least 65% of the Fund's assets will be invested in Tennessee
municipal bonds and debentures, and at least 75% of its total assets invested in
municipal bonds will be in securities rated A or better by S&P or Moody's.
Municipal securities must be rated BBB or better by S&P or Baa or better by
Moody's in the case of bonds; SP-1, SP-2 or MIG-1, MIG-2 in the case of notes;
A-1, A-2, or P-1, P-2 in the case of tax-exempt commercial paper; and VMIG-1 or
VMIG-2 in the case of variable rate demand obligations. No more than 25% of the
Fund's assets will be invested in bonds rated BBB by S&P or Baa by Moody's. The
Fund will only acquire unrated securities if, at the time of purchase, the
Advisor determines that such unrated obligations are of comparable quality to
rated obligations that may be acquired by the Fund. The Fund may invest in
floating or variable rate securities, commitments to purchase the above
securities on a when-issued or delayed delivery basis, and may purchase
municipal forwards, putable securities, medium term notes and zero coupon
securities. The Advisor has discretion to invest up to 20% of the Fund's total
assets in taxable debt securities rated at least BBB or better by S&P or Baa or
better by Moody's or, if unrated, of comparable quality at the time of purchase
as determined by the Advisor, repurchase agreements, and securities subject to
the alternative minimum tax. The Fund may also invest in futures and options,
but has no present intention to do so for other than hedging purposes.

*PRIME QUALITY MONEY MARKET FUND

The Prime Quality Money Market Fund will invest in money market instruments
denominated in U.S. dollars consisting of (i) U.S. Treasury obligations; (ii)
custodial receipts representing interests in component parts of U.S. Treasury
obligations; (iii) obligations issued or guaranteed as to principal and interest
by agencies and instrumentalities of the U.S. Government; (iv) commercial paper
issued by domestic and foreign issuers rated in the highest short-term rating
category by one or more nationally recognized statistical rating organizations
("NRSROs") as described in the "Appendix" or, if not rated, determined by the
Advisor to be of comparable quality; (v) high quality obligations (including
certificates of deposit, time deposits, bankers' acceptances, Eurodollar and
Yankee bank obligations) of U.S. commercial banks (including foreign branches of
such banks), and U.S. and London branches of foreign banks or savings and loan
and thrift institutions that are
<PAGE>
17
members of the Federal Reserve System, the Federal Deposit Insurance
Corporation, or the Federal Savings and Loan Insurance Corporation; (vi) high
quality short-term corporate obligations issued by companies with commercial
paper meeting the ratings indicated in (iv), above, or, if not rated, determined
by the Advisor to be of comparable quality; (vii) repurchase agreements
involving such obligations; (viii) high quality obligations of supranational
entities satisfying the credit ratings described in (iv), above, or, if not
rated, determined by the Advisor to be of comparable quality; (ix) medium term
notes and (x) investments in guaranteed investment contracts ("GICs") issued by
U.S. insurance companies that are determined by the Advisor to be of comparable
quality to the securities with the ratings described above (subject to a limit
of 10% of the Fund's assets). The Fund may not invest more than 25% of its total
assets in obligations issued by foreign branches of U.S. banks and London
branches of foreign banks. The Fund may purchase securities subject to standby
commitments. As a Money Market Fund, the Fund is subject to limitations on the
percentage of its assets that may be invested in any one issuer and on the
percentage that may be invested in securities carrying the second highest rating
assigned by the requisite NRSROs.

*U.S. GOVERNMENT SECURITIES MONEY MARKET FUND

*TAX-EXEMPT MONEY MARKET FUND

The Tax-Exempt Money Market Fund intends to be fully invested in securities the
interest on which is exempt from federal income taxes in the opinion of bond
counsel to the issuer. It is a fundamental policy of the Tax-Exempt Money Market
Fund to invest at least 80% of its total assets in securities the income from
which is exempt from federal income taxes and not treated as a preference item
for purposes of the alternative minimum tax. The Fund may invest in high quality
U.S. dollar denominated municipal securities of issuers located in all fifty
states, the District of Columbia, Puerto Rico and other U.S. territories rated
in one of the two highest short-term rating categories by S&P or Moody's or, if
not rated, determined by the Advisor to be of comparable quality. The Fund will
primarily purchase municipal bonds with a remaining maturity of 397 days or
less, and will also acquire municipal notes and tax-exempt commercial paper with
similar maturities. The Fund may agree to purchase short-term securities on a
when-issued basis and may invest in securities subject to standby commitments.
Securities purchased on a when-issued basis are subject to settlement within 45
days of the purchase date.

The Advisor has discretion to invest up to 20% of the Fund's assets in U.S.
dollar denominated obligations consisting of taxable money market instruments,
obligations issued or guaranteed by the U.S. Government or its agencies and
instrumentalities, repurchase agreements, and securities subject to the
alternative minimum tax.
<PAGE>
18

GENERAL INVESTMENT POLICIES AND STRATEGIES

In the event that a security owned by a Fund is downgraded below the stated
rating categories, the Advisor will review and take appropriate action with
regard to the security.

A Fund's purchase of shares of other investment companies is limited by the
Investment Company Act of 1940 and will ordinarily result in an additional layer
of charges and expenses.

It is a non-fundamental policy of each Fund to invest no more than 15% of its
net assets in illiquid securities (10% of the net assets of each Money Market
Fund). An illiquid security is a security which cannot be disposed of in the
usual course of business within seven days at a price approximating its carrying
value.

For additional information regarding permitted investments, see "Description of
Permitted Investments" in this Prospectus and in the Statement of Additional
Information.

INVESTMENT RISKS
ZERO COUPON OBLIGATIONS

FOREIGN SECURITIES

MORTGAGE-BACKED SECURITIES

Mortgage-backed securities are subject to the risk of prepayment of the
underlying mortgages. During periods of declining interest rates, prepayment of
mortgages underlying these securities can be expected to accelerate. When the
mortgage-backed securities held by a Fund are prepaid, the Fund must reinvest
the proceeds in securities the yield of which reflects prevailing interest
rates, which may be lower than the prepaid security.

FIXED INCOME SECURITIES

The market value of a Fund's fixed income investments will change in response to
interest rate changes and other factors. During periods of falling interest
rates, the values of outstanding fixed income securities generally rise.
Conversely, during periods of rising interest rates, the values of such
securities generally decline. Securities with longer maturities are subject to
greater fluctuations in value than securities with shorter maturities. Changes
by an NRSRO to the rating of any fixed income security and in the ability of an
issuer to make payments of interest and principal also affect the value of these
investments. Changes in the value of a Fund's securities will not affect cash
income derived from these securities but will affect the Fund's net asset value.

Fixed income securities rated BBB by S&P or Baa by Moody's (investment grade
bonds) are deemed by these rating services to have speculative characteristics.

There is a risk that the current interest rate on floating and variable rate
instruments may not accurately reflect existing market interest rates.

MUNICIPAL SECURITIES

INVESTMENT LIMITATIONS

Each Fund may not:

divided according to their services, for example, gas, gas transmission,
electric and telephone will each be considered a separate industry; (ii)
financial service companies will be classified according to the end users of
their services, for example, automobile finance, bank finance and diversified
finance will each be considered a separate industry; and (iii) supranational
entities will be considered to be a separate industry.

The foregoing percentages will apply at the time of the purchase of a security.
Additional investment limitations are set forth in the Statement of Additional
Information.

PERFORMANCE INFORMATION
*MONEY MARKET FUNDS

*BOND AND STATE TAX-EXEMPT BOND FUNDS

The total return of a Fund refers to the average compounded rate of return to a
hypothetical investment, including any sales charge imposed, for designated time
periods (including but not limited to, the period from which a Fund
<PAGE>
22
commenced operations through the specified date), assuming that the entire
investment is redeemed at the end of each period and assuming the reinvestment
of all dividend and capital gains distributions.

GENERAL PERFORMANCE INFORMATION

The performance of the Trust's Investor Shares and Flex Shares will normally be
lower than for Trust Shares of the Trust because Investor Shares and Flex Shares
are subject to distribution, service, and certain transfer agent fees not
charged to Trust Shares. The performance of Flex Shares in comparison to
Investor Shares will vary depending upon the investment time horizon.

FUNDLINK

PURCHASE OF FUND SHARES

Investor Shares are sold on a continuous basis and may be purchased by
contacting the Trust's Transfer Agent, Federated Services Company (the "Transfer
Agent"), either by mail, by telephone or by wire. Investor Shares may also be
purchased through Investment Services Representatives of SunTrust Banks, Inc.,
affiliate banks which serve as Shareholder Servicing Agents to the Trust.
Furthermore, Investor Shares may be purchased through SunTrust Securities, Inc.,
as well as, certain correspondent banks of SunTrust Banks, Inc.

MONEY MARKET FUNDS

Purchase orders for Money Market Funds will be effective as of the business day
received by the Transfer Agent and eligible to receive dividends declared the
same day if the Transfer Agent receives the order before 11:00 a.m. Eastern time
for the Tax-Exempt Money Market Fund or before 1:00 p.m. Eastern time for the
Prime Quality Money Market Fund and U.S. Government Securities Money Market Fund
and the Custodian receives federal funds before 4:00 p.m. Eastern time on such
day. Otherwise, purchase orders for the Money Market Funds will be effective the
next business day provided the Custodian receives readily available funds before
4:00 p.m. Eastern time on the next such business day. The purchase price is the
net asset value per share next computed after the order is received and accepted
by the Trust. The net asset value per share of each Fund is determined by
dividing the total value of its
<PAGE>
23
investments and other assets, less any liabilities, by its total outstanding
shares. The net asset value per share is calculated as of close of business of
the New York Stock Exchange (currently 4:00 p.m. Eastern time) each business day
based on the amortized cost method described in the Statement of Additional
Information and is expected to remain constant at $1.00 per share.

Minimum initial and subsequent purchase amounts for all Investor Shares of Money
Market Funds are $5,000 and $1,000, respectively. Subsequent purchases via
statement coupon are permitted in amounts of $100 or more. These minimums may be
waived at the Distributor's discretion.

BOND AND STATE TAX-EXEMPT BOND FUNDS

A purchase order for any of the Bond or State Tax-Exempt Bond Funds will be
effective as of the business day it is received by the Transfer Agent if the
Transfer Agent receives the order before 4:00 p.m. Eastern time. The purchase
price of shares of a Fund is the net asset value next determined after a
purchase order is effective plus any applicable sales charge (the "offering
price"). The net asset value per share of a Fund is determined by dividing the
total market value of the Fund's investments and other assets, less any
liabilities, by the total outstanding shares of the Fund. Net asset value per
share is determined daily as of 4:00 p.m. Eastern time on any business day.
Pursuant to guidelines established by the Trustees, the Trust may use a pricing
service to provide market quotations or valuations for securities owned by each
Fund. Purchases will be made in full and fractional shares of a Fund calculated
to three decimal places. Purchases by mail are considered received after payment
by check is converted into federal funds.

Minimum initial and subsequent purchase amounts, respectively, for each Bond and
State Tax-Exempt Bond Fund are $2,000 and $1,000 ($100 via statement coupon).
Employees and their immediate family members (spouses and children under age 21)
of SunTrust Banks, Inc. and its affiliates may establish accounts with a minimum
initial purchase amount of $1,000. The minimum initial purchase amount for
retirement plans is $2,000. These minimums may be waived at the Distributor's
discretion.

The Trust reserves the right to reject a purchase order when the Distributor
determines that it is not in the best interest of the Trust and/or
Shareholder(s).

Neither the Trust's Transfer Agent nor the Trust will be responsible for any
loss, liability, cost or expense for acting upon telephone or wire instructions
reasonably believed to be geniune. The Trust maintains procedures, including
identification methods and other means, for ascertaining the identity of callers
and authenticity of instructions.

Although the methodology and procedures for calculating the net asset value of
Investor Shares and Flex Shares are identical to those for Trust Shares, the net
asset value per share of the classes may differ because of the distribution,
service, and certain transfer agent expenses charged to Investor Shares and Flex
Shares.
<PAGE>
24

*SYSTEMATIC INVESTMENT PLAN

Shares of each Fund may be purchased systematically through deductions from
checking or savings accounts maintained through SunTrust Banks, Inc. affiliate
banks. Investors may purchase shares on a fixed schedule (semi-monthly or
monthly) with amounts from $100 up to $100,000. The Systematic Investment Plan
is subject to account minimum initial purchase and subsequent purchase amounts
of $500 and $50 and minimum maintained balance requirements. The purchases will
be effective on the business day that the transfer agent receives the
transmission.

*SALES CHARGE INFORMATION

The following schedules apply to the purchase of Investor Shares of a Fund:

<TABLE>
<CAPTION>
SALES CHARGE AS A SALES CHARGE AS A
PERCENTAGE OF PERCENTAGE OF NET
OFFERING PRICE AMOUNT INVESTED
----------------- -----------------
<S> <C> <C>
U.S. GOVERNMENT SECURITIES,
INVESTMENT GRADE TAX-EXEMPT BOND,
INVESTMENT GRADE BOND, and STATE TAX-EXEMPT
BOND FUNDS
Less than $100,000....................................................... 3.75% 3.90%
$100,000 but less than $250,000.......................................... 3.25% 3.36%
$250,000 but less than $1,000,000........................................ 2.50% 2.56%
$1,000,000 and higher.................................................... 1.00% 1.01%
LIMITED-TERM FEDERAL MORTGAGE SECURITIES FUND
Less than $100,000....................................................... 2.50% 2.56%
$100,000 but less than $250,000.......................................... 1.75% 1.78%
$250,000 but less than $1,000,000........................................ 1.25% 1.27%
$1,000,000 and higher.................................................... None None
SHORT-TERM BOND FUND
Less than $100,000....................................................... 2.00 % 2.04 %
$100,000 but less than $250,000.......................................... 1.50 % 1.52 %
$250,000 but less than $1,000,000........................................ 1.00 % 1.01 %
$1,000,000 and higher.................................................... None None
SHORT-TERM U.S. TREASURY SECURITIES FUND
Less than $100,000....................................................... 1.00 % 1.01 %
$100,000 but less than $250,000.......................................... 0.75 % 0.76 %
$250,000 but less than $500,000.......................................... 0.50 % 0.50 %
$500,000 and higher...................................................... None None
</TABLE>

<PAGE>
25

Purchases of STI Classic Fund Investor Shares through a SunTrust Banks, Inc.
affiliate bank asset allocation account will be exempt from sales charges.

Dealers will be reallowed the entire sales charge imposed on purchases of
Investor Shares and may, therefore, be deemed "underwriters" for purposes of the
Securities Act of 1933.

*RIGHTS OF ACCUMULATION

The term "single purchaser" refers to (i) an individual, (ii) an individual and
spouse purchasing shares of an Eligible Fund for their own account or for trust
or custodial accounts for their minor children, or (iii) a fiduciary purchasing
for any one trust, estate or fiduciary account, including employee benefit plans
created under Sections 401 or 457 of the Internal Revenue Code, including
related plans of the same employer. Furthermore, under this provision, purchases
by a "single purchaser" shall include purchases by an individual for his/her own
account in combination with (i) purchases of that individual and spouse for
their joint account or for trust and custodial accounts for their minor children
and (ii) purchases of that individual's spouse for his/her own account. To be
entitled to a reduced sales charge based upon shares already owned, the investor
must ask the Distributor for such reduction at the time of purchase and provide
the account number(s) of the investor, the investor and spouse, and their
children (under age 21), and give the ages of such children. The Funds may amend
or terminate this right of accumulation at any time as to subsequent purchases.

*LETTER OF INTENT

A written Letter of Intent provided to the Transfer Agent, is not legally
binding on the
<PAGE>
26
signer or a Fund, and provides for the holding in escrow by the Transfer Agent
of 3.75% of the total amount intended to be purchased until such purchase is
completed within the 13-month period. A Letter of Intent may be dated to include
shares purchased up to 90 days prior to the date the Letter is signed. The
13-month period begins on the date of the earliest purchase. If the intended
investment is not completed, the Transfer Agent will surrender an appropriate
number of the escrowed shares for redemption in order to realize the difference
between the sales charge on the shares purchased at the reduced rate and the
sales charge otherwise applicable to the total shares purchased.

*COMBINED PURCHASE/QUANTITY DISCOUNT PRIVILEGE

*SPECIAL DIVIDEND SERVICES

Dividend distributions made by a Fund can be automatically reinvested in any one
Fund without a sales charge, subject to account minimum initial purchase amounts
and minimum maintained balance requirements.

*REPURCHASE OF FUND SHARES

REDEMPTION OF FUND SHARES

With respect to the Money Market Funds, redemption orders must be received by
the Transfer Agent on a business day before 1:00 p.m. Eastern time for the Prime
Quality and U.S. Government Securities Money Market Funds and before 11:00 a.m.
Eastern time for the Tax-Exempt Money Market Fund. Redemption orders received
after the times noted above will normally be executed the following day. The
Trust reserves the right to wire redemption proceeds within five business days
after receiving the redemption orders if, in the judgment of the Advisor, an
earlier payment could adversely impact a Fund.

With respect to the Bond and State Tax-Exempt Bond Funds, redemption orders must
be received by the Transfer Agent before 4:00 p.m. Eastern time on any business
day. Redemption proceeds are normally remitted within five business days
following receipt of the order.

Requests for redemptions from the Funds may be placed in writing or by telephone
directly to an Investment Services Representative of a SunTrust Banks, Inc.
affiliate bank, through SunTrust Securities, Inc. and through certain
correspondent banks of SunTrust Banks, Inc.
<PAGE>
27
(or via FUNDLINK to the Transfer Agent). Redemptions placed via telephone or
FUNDLINK (1-800-428-6970) can only be placed for a minimum of $1,000.

A Shareholder may be required to redeem Investor Shares if the balance in a
Shareholder's Fund account drops below $2,000 for the Bond and State Tax-Exempt
Bond Funds ($5,000 for the Money Market Funds) as a result of redemptions, and,
the Shareholder does not increase its balance to at least $2,000 for the Bond
and State Tax-Exempt Bond Funds ($5,000 for the Money Market Funds) on 60 days'
written notice. The minimum account balance for employees of SunTrust is $1,000
for the Bond and State Tax-Exempt Bond Funds. The Trust intends to pay cash for
all shares redeemed, but under abnormal conditions which make payment in cash
unwise, payment may be made wholly or partly in liquid portfolio securities with
a market value equal to the redemption price. In such cases, an investor may
incur brokerage costs in converting such securities to cash.

Redemptions of $25,000 or greater for Bond and State Tax-Exempt Bond Funds must
be in writing and a signature guarantee must accompany the written request.

*SYSTEMATIC WITHDRAWAL PLAN

EXCHANGES

Some or all of the Investor Shares of the Funds for which payment has been
received (i.e., an established account) may be exchanged for Investor Shares of
other Funds within the Trust. Shares being exchanged for the first time from a
Money Market Fund into a Fund with a sales charge will be subject to the sales
charge of that Fund. Likewise, Shares being exchanged for the first time into a
Fund with a higher sales charge will be subject to an incremental sales charge.
Exchanges made from a Fund with a higher sales charge to a Fund with a lower
sales charge or a Money Market Fund are made without a charge. Four exchanges
may be made per calendar year. More than four exchanges in a year may be
considered an abuse of the exchange privilege. The Fund reserves the right to
charge a $10.00 fee for each exchange. A Shareholder with more than four
exchanges per year will be notified prior to the imposition of any such fee.
Exchanges may be requested through an Investment Services Representative of a
SunTrust Banks, Inc. affiliate bank, SunTrust Securities, Inc. and certain
correspondent banks of SunTrust Banks, Inc. either by telephone or in writing
(or via FUNDLINK through the Fund's Transfer Agent). The minimum exchange amount
is $1,000 subject to account minimum initial purchase amounts and minimum
maintained balance requirements. This exchange offer is subject to
<PAGE>
28
change or termination by the Trust at any time upon sixty days' notice.

DIVIDENDS AND DISTRIBUTIONS
MONEY MARKET FUNDS

Dividends from net investment income (exclusive of capital gains) of each of the
Money Market Funds are declared on each business day to Shareholders at the
close of business on the day of declaration. Net income for dividend purposes
consists of (i) interest accrued and original issue discount earned on the
Fund's assets, (ii) plus the amortization of market discount (except in the case
of the Tax-Exempt Money Market Fund) and minus the amortization of market
premium on such assets, (iii) less accrued expenses directly attributable to the
Fund and the general expenses of the Trust prorated to the Fund on the basis of
its relative net assets. Investor Shares begin earning dividends on the business
day the purchase order is effective and continue earning dividends through and
including the business day before the redemption order is effective. Dividends
are paid within ten business days after the end of each month in the form of
additional Investor Shares of the same Fund unless the Shareholder has elected
prior to the date of distribution to receive payment in cash. Such election, or
any revocation thereof, must be made in writing at least 15 days prior to the
date of distribution to the Fund's transfer agent and will become effective with
respect to dividends paid after its receipt. Dividends are paid within ten
business days after a Shareholder's complete redemption of his Investor Shares
in a Fund.

BOND AND STATE TAX-EXEMPT BOND FUNDS

Dividends from net investment income (exclusive of capital gains) are declared
on each business day and paid monthly by each of the Bond and State Tax-Exempt
Bond Funds. Each Fund's net realized capital gains (including net short-term
capital gains) are distributed at least annually. Net income for dividend
purposes consists of (i) interest accrued and original issue discount earned on
the Fund's assets, (ii) plus the amortization of market discount (except in the
case of the Investment Grade Tax-Exempt Bond and State Tax-Exempt Bond Funds)
and minus the amortization of market premium on such assets, (iii) plus dividend
or distribution income on such assets, (iv) less accrued expenses directly
attributable to the Fund and the general expenses of the Trust prorated to the
Fund on the basis of its relative net assets. Investor Shares invested in the
Bond and State Tax-Exempt Bond Funds are eligible to begin earning dividends
that are declared on the business day after the purchase order is effective and
continue to be eligible for dividends through and including the day the
redemption order is effective.

The amount of dividends payable on Investor Shares and Flex Shares will be less
than the
<PAGE>
29
dividends payable on Trust Shares because of the distribution and certain
transfer agent expenses charged to Investor Shares and Flex Shares. The amount
of dividends payable on Flex Shares generally will be less than the amount of
dividends payable on Investor Shares due to the higher distribution and service
expenses of Flex Shares.

TAX INFORMATION

The following summary of federal income tax consequences is based on current tax
laws and regulations, which may be changed by legislative, judicial or
administrative action. No attempt has been made to present a detailed
explanation of the federal, state, or local income tax treatment of each Fund or
its Shareholders. In particular, no attempt has been made herein to provide
information on the tax laws of Florida, Georgia or Tennessee. Accordingly,
Shareholders are urged to consult their tax advisors regarding specific
questions as to federal, state and local income taxes.

TAX STATUS OF EACH FUND

TAX STATUS OF DISTRIBUTIONS: MONEY MARKET FUNDS

The Tax-Exempt Money Market Fund will distribute all of its net investment
income (including net short-term capital gains) to Share-
holders. If, at the close of each quarter of its taxable year, at least 50% of
the value of the Fund's assets consists of obligations the interest on which is
excludable from gross income, the Fund may pay exempt-interest dividends to its
Shareholders. Those dividends constitute the portion of the aggregate dividends
as designated by the Fund, equal to the excess of the excludable interest over
certain amounts disallowed as deductions. Exempt-interest dividends are
excludable from a Shareholder's gross income for regular federal income tax
purposes, but may have alternative minimum tax consequences. See the Statement
of Additional Information.

Current federal tax law limits the types and volume of bonds qualifying for the
federal income tax exemption of interest, which may have an effect on the
ability of the Tax-Exempt Money Market Fund to purchase sufficient amounts of
tax-exempt securities to satisfy the Code's requirements for the payment of
exempt-interest dividends.
<PAGE>
30

TAX STATUS OF DISTRIBUTIONS: BOND AND STATE TAX-EXEMPT BOND FUNDS

Each of the Investment Grade Tax-Exempt Bond and State Tax-Exempt Bond Funds
will distribute all of its net investment income (including net short-term
capital gains) to Shareholders. If, at the close of each quarter of its taxable
year, at least 50% of the value of a Fund's assets consist of obligations the
interest on which is excludable from gross income, the Fund may pay
"exempt-interest dividends" to its Shareholders. Those dividends constitute the
portion of the aggregate dividends as designated by the Fund, equal to the
excess of the excludable interest over certain amounts disallowed as deductions.
Exempt-interest dividends are excludable from a Shareholder's gross income for
regular federal income tax purposes, but may have alternative minimum tax
consequences. See the Statement of Additional Information.

TAX STATUS OF DISTRIBUTIONS: ALL FUNDS

Dividends from net investment income will qualify for the dividends received
deduction for corporate Shareholders only to the extent such distributions are
derived from dividends paid by domestic corporations. Dividends from net capital
gains (the excess of net long-term capital gains over net short-term capital
loss) will be treated as long-term capital gains, regardless of how long the
Shareholder has held shares and regardless of whether distributions are received
in cash or in additional shares. For certain individual Shareholders, net
long-term capital gains may be taxed at a lower rate than ordinary income. Each
Fund will make annual reports to Shareholders of the federal income tax status
of all distributions. Dividends declared by a Fund in October, November or
December of any year and payable to Shareholders of record on a date in that
month will be deemed to have been paid by the Fund and received by the
Shareholders on December 31, of that year, if paid by the Fund any time during
the following January.

Income received on direct U.S. obligations is exempt from tax at the state level
when received directly by a Fund and may be exempt, depending on the state, when
received by a Shareholder from a Fund provided certain state-specific conditions
are satisfied. Not all states permit such income dividends to be tax-exempt and
some require that a certain minimum percentage of an investment company's income
be derived from state tax-exempt interest. Each Fund will inform Shareholders
annually of the percentage of income and distributions derived from direct U.S.
obligations. Shareholders should consult their tax advisors to determine whether
any portion of the income dividends received from a Fund is considered tax
exempt in their particular states.

Income derived by a Fund from obligations of foreign issuers may be subject to
foreign withholding taxes. No Fund will be able to elect to treat Shareholders
as having paid their proportionate share of such foreign taxes.
<PAGE>
31

A sale, exchange or redemption of Fund shares is a taxable event to the
Shareholder.

STI CLASSIC FUNDS INFORMATION
THE TRUST

BOARD OF TRUSTEES

INVESTMENT ADVISORS

The Advisors are indirect wholly-owned subsidiaries of SunTrust Banks, Inc.
("SunTrust"), a southeastern regional bank holding company with assets of $44.2
billion as of June 30, 1995. SunTrust ranks among the twenty largest U.S.
banking companies. Its three principal subsidiaries--SunTrust Banks of Florida,
Inc., SunTrust Banks of Georgia, Inc. and SunTrust Banks of Tennessee,
Inc.--provide a wide range of personal and corporate banking, trust, and
investment services through more than 600 locations in the three-state area.
Total discretionary assets under management with SunTrust Banks, Inc. equalled
approximately $42 billion as of December 31, 1994.

Trusco Capital Management, Inc. ("Trusco") serves as the Advisor to the Money
Market, Short-Term U.S. Treasury Securities, Short-Term Bond and U.S. Government
Securities Funds. As of June 30, 1995, Trusco had approximately $11.5 billion in
assets under management. The principal business address of Trusco is 50 Hurt
Plaza, Suite 1400, Atlanta, GA 30303.

STI Capital Management, N.A. ("STI Capital") (formerly SunBank Capital
Management, N.A.) serves as the Advisor to the Limited-Term Federal Mortgage
Securities, Investment Grade Bond, Investment Grade Tax-Exempt Bond and Florida
Tax-Exempt Bond Funds. As of June 30,
<PAGE>
32
1995, STI Capital had discretionary management authority with respect to assets
of approximately $11.1 billion. The principal business address of STI Capital is
P.O. Box 3808, Orlando, FL 32802.

SunTrust Bank, Chattanooga, N.A. ("SunTrust Bank, Chattanooga") (formerly
American National Bank & Trust Company) serves as the Advisor to the Tennessee
Tax-Exempt Bond Fund. SunTrust Bank, Chattanooga, N.A. had approximately $1.5
billion in assets under management as of June 30, 1995. The principal business
address of SunTrust Bank, Chattanooga, N.A. is 736 Market Street, Chattanooga,
TN 37402.

The Trust and the above Advisors have entered into advisory agreements (the
"Advisory Agreements"). Under the Advisory Agreements, the Advisors make the
investment decisions for the assets of the Fund(s) they advise and continuously
review, supervise and administer their respective Fund's investment program. The
Advisors discharge their responsibilities subject to the supervision of, and
policies established by, the Trustees of the Trust. STI CLASSIC FUNDS ARE NOT
DEPOSITS, ARE NOT INSURED OR GUARANTEED BY THE FDIC OR ANY OTHER GOVERNMENT
AGENCY, AND ARE NOT ENDORSED OR GUARANTEED BY AND DO NOT CONSTITUTE OBLIGATIONS
OF SUNTRUST BANKS, INC. OR ANY OF ITS AFFILIATES. INVESTMENTS IN THE FUNDS
INVOLVE RISK, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL. RETURNS AND PRINCIPAL
VALUES WILL FLUCTUATE AND SHARES AT REDEMPTION MAY BE WORTH MORE OR LESS THAN
THEIR ORIGINAL COST. THERE IS NO GUARANTEE THAT ANY STI CLASSIC FUND WILL
ACHIEVE ITS INVESTMENT OBJECTIVE. With respect to all Funds, the Advisors may
execute brokerage or other agency transactions through affiliates of the
Advisors.

For the services provided and expenses incurred pursuant to the Advisory
Agreements: Trusco is entitled to receive advisory fees computed daily and paid
monthly at the annual rate of .74%, .65%, .65%, .55%, .65% and .65% of the
average daily net assets of the U.S. Government Securities Fund, Prime Quality
Money Market Fund, U.S. Government Securities Money Market Fund, Tax-Exempt
Money Market Fund, Short-Term U.S. Treasury Securities Fund and Short-Term Bond
Fund, respectively; STI Capital is entitled to receive advisory fees computed
daily and paid monthly at the annual rate of .65%, .74%, .74% and .65% of the
average daily net assets of the Florida Tax-Exempt Bond Fund, Investment Grade
Bond Fund, Investment Grade Tax-Exempt Bond Fund and Limited-Term Federal
Mortgage Securities Fund, respectively; SunTrust Bank, Chattanooga is entitled
to receive advisory fees computed daily and paid monthly at the annual rates of
.65% of the average daily net assets of the Tennessee Tax-Exempt Bond Fund; and
SunTrust Bank, Atlanta is entitled to receive advisory fees computed daily and
paid monthly at the annual rate of .65% of the average daily net assets of the
Georgia Tax-Exempt Bond Fund.

From time to time, an Advisor may waive (either voluntarily or pursuant to
applicable state limitations) advisory fees payable by a Fund. Currently, the
Advisors and the Distributor have agreed to voluntary reductions in their
respective fees as well as reductions in service and distribution fees in
amounts necessary to maintain the total operating expenses at the amounts set
forth in the Expense Summary. Voluntary reductions of fees may be terminated at
anytime.
<PAGE>
33

For the fiscal year ended May 31, 1995: Trusco received advisory fees computed
daily and paid monthly at the annual rate of .50%, .50%, .46%, .19%, .42% and
.0% of the average daily net assets of the Prime Quality Money Market Fund, U.S.
Government Securities Money Market Fund, Tax-Exempt Money Market Fund,
Short-Term U.S. Treasury Securities Fund, Short-Term Bond Fund and U.S.
Government Securities Fund, respectively; STI Capital received advisory fees
computed daily and paid monthly at the annual rate of .12%, .62%, .61%, and .33%
of the average daily net assets of the Florida Tax-Exempt Bond Fund, Investment
Grade Bond Fund, Investment Grade Tax-Exempt Bond Fund and Limited-Term Federal
Mortgage Securities Fund, respectively; SunTrust Bank, Chattanooga received
advisory fees computed daily and paid monthly at the annual rates of .0% of the
average daily net assets of the Tennessee Tax-Exempt Bond Fund and SunTrust
Bank, Atlanta received advisory fees computed daily and paid monthly at the
annual rate of .27% of the average daily net assets of the Georgia Tax-Exempt
Bond Fund.

PORTFOLIO MANAGERS

Mr. Charles B. Leonard, CFA, First Vice President of Trusco, and Michael L.
Ford, an Associate of Trusco, have been responsible for the day-to-day
management of the U.S. Government Securities Fund since its inception. Mr.
Leonard has been with Trusco since 1986 as the senior fixed income manager. Mr.
Ford has been with Trusco since April 1994. Prior to joining Trusco, Mr. Ford
served as a senior securities analyst with Liberty Capital Advisors from
January, 1992 to April, 1994 and has served as a securities analyst at Southern
Farm Bureau Life Insurance Company from 1990 to 1992. Mr. Ford was a graduate
student at Millsaps College from 1989 to 1991.

Mr. L. Earl Denney, CFA, and Mr. Dave E. West, CFA, have been responsible for
the day-to-day management of the Limited-Term Federal Mortgage Securities Fund
since its inception. Mr. Denney has served as Executive Vice President of STI
Capital since 1983. Mr. West has served as a fixed income portfolio manager with
STI Capital since 1989. Mr. Denney has also been responsible for the day-to-day
management of the Investment Grade Bond Fund since its inception.

Ms. Gay Cash has been responsible for the day-to-day management of the Georgia
Tax-Exempt Bond Fund since its inception. Ms. Cash has served as a Vice
President of SunTrust, Atlanta since January 1, 1987.

Mr. Ronald Schwartz, CFA, has been responsible for the day-to-day management of
the Florida Tax-Exempt Bond and Investment Grade Tax-Exempt Bond Funds since
their inception. Mr. Schwartz joined STI Capital in 1988 and currently serves as
a Senior Vice President. Mr. Schwartz, has also been responsible for the
day-to-day management of the Tennessee Tax-Exempt Bond Fund since July, 1995.
Mr. Schwartz serves as Vice President and Trust Investment Officer of SunTrust
Bank, Chattanooga.

Starting September, 1995, Patricia Love became co-portfolio manager of the
Tennessee Tax-Exempt Bond Fund. Ms. Love serves as Vice President and Trust
Investment Officer of SunTrust Bank, Chattanooga. Ms. Love is also a portfolio
manager at STI Capital. Ms. Love has been with SunTrust Bank, Chattanooga since
1993 and prior to that served as a portfolio analyst with First City Texas from
1986 to 1993.

Ms. Agnes Pampush has been responsible for the day-to-day management of the
Short-Term Bond and Short-Term U.S. Treasury Securities Funds since their
inception. Ms. Pampush has
<PAGE>
34
served as Vice President and Fixed Income Portfolio Manager of Trusco since
1988.

BANKING LAWS

DISTRIBUTION

the U.S. Government Securities Fund and .23% of the average daily net assets of
the Limited-Term Federal Mortgage Securities Fund. The Distributor will waive
all or a portion of the distribution fee in order to limit the net expenses of
the Investor Shares to the amounts set forth under "Expense Summary." The
Distributor may apply this fee toward: (a) compensation for its services in
connection with distribution assistance or provision of shareholder services; or
(b) payments to financial institutions and intermediaries such as banks
(including SunTrust Banks, Inc.'s affiliate banks), savings and loan
associations, insurance companies, and investment counselors, broker-dealers,
and the Distributor's affiliates and subsidiaries as compensation for services,
reimbursement of expenses incurred in connection with distribution assistance,
or provision of Shareholder services. The Investor Plan is characterized as a
compensation plan since the distribution fee will be paid to the Distributor
without regard to the distribution or shareholder service expenses incurred by
the Distributor or the amount of payments made to financial institutions and
intermediaries. SunTrust Banks, Inc.'s affiliate banks and certain correspondent
banks may serve as shareholder servicing agents to the Trust. A prospective
investor may visit any one of the Investment Services offices of the SunTrust
Banks, Inc.'s affiliate banks, as listed on the last pages of the Prospectus,
SunTrust Securities, Inc. or certain correspondent banks of SunTrust Banks, Inc.
to receive copies of the Prospectuses for the Investor Shares of the Trust and
application forms. Trust Shares of each Fund are offered without a sales charge
or a distribution fee primarily to institutional investors, including affiliates
and correspondents for the investment of funds in which they act in a fiduciary,
agency, investment advisory or custodial capacity. It is possible that a
financial institution may offer different classes of shares to its customers and
thus receive different compensation with respect to different classes of shares.

Each Fund may execute brokerage or other agency transactions through the
Distributor, for which the Distributor receives compensation.

ADMINISTRATION

SEI Financial Management Corporation (the "Administrator"), a wholly-owned
subsidiary of SEI, and the Trust are parties to an Administration Agreement (the
"Administration Agreement"). Under the terms of the Administration Agreement,
the Administrator provides the Trust with certain administrative services, other
than investment advisory services, including regulatory reporting, all necessary
office space, equipment, personnel, and facilities.

The Administrator is entitled to a fee, which is calculated daily and paid
monthly, at an annual rate as follows:

From time to time, the Administrator may waive (either voluntarily or pursuant
to applicable state limitations) all or a portion of the administration fee
payable with respect to the Trust.

TRANSFER AGENT AND DIVIDEND DISBURSING AGENT

Federated Services Company, Pittsburgh, PA is the Transfer Agent for the shares
of the Trust and dividend disbursing agent for the Trust.
<PAGE>
36

CUSTODIAN

SunTrust Bank, Atlanta, c/o STI Trust and Investment Operations, Inc., 303
Peachtree Street N.E., 14th Floor, Atlanta, GA 30308, serves as Custodian of the
assets of each Fund of the Trust except the International Equity Index Fund. The
Bank of California, 475 Sansome Street, Suite 1200, San Francisco, CA 94111,
serves as Custodian for the International Equity Index Fund. The Custodians hold
cash, securities and other assets of the Trust as required by the Investment
Company Act of 1940.

LEGAL COUNSEL

Morgan, Lewis & Bockius, LLP, Philadelphia, PA, serves as legal counsel to the
Trust.

INDEPENDENT PUBLIC ACCOUNTANTS

The independent public accountants to the Trust are Arthur Andersen, LLP,
Philadelphia, PA.

OTHER INFORMATION
VOTING RIGHTS

REPORTING

The Trust issues unaudited financial information semi-annually and audited
financial statements annually. The Trust furnishes proxy statements and other
reports to Shareholders of record.

SHAREHOLDER INQUIRIES

Shareholders may contact the Transfer Agent in order to obtain information on
account statements, procedures and other related information by calling
1-800-428-6970.

DESCRIPTION OF PERMITTED INVESTMENTS

The following is a description of the permitted investments for the Funds.
Further discussion is contained in the Statement of Additional Information.

AMERICAN DEPOSITARY RECEIPTS ("ADRs") -- ADRs are securities, typically issued
by a U.S. financial institution (a "depositary"), that evidence ownership
interests in a security or a pool of securities issued by a foreign issuer and
deposited with the depositary. ADRs may be available through "sponsored" or
"unsponsored" facilities. A sponsored facility is established jointly by the
issuer of the security underlying the receipt and a depositary, whereas an
unsponsored facility may be established by a depositary without participation by
the issuer of the underlying security. Holders of unsponsored depositary
receipts generally bear all the costs of the unsponsored facility. The
depositary of an unsponsored facility frequently is under no obligation to
distribute shareholder communications received from the issuer of the deposited
<PAGE>
37
security or to pass through, to the holders of the receipts, voting rights with
respect to the deposited securities.

ASSET-BACKED SECURITIES -- Asset-backed securities are securities secured by
non-mortgage assets such as company receivables, truck and auto loans, leases
and credit card receivables. Such securities are generally issued as
pass-through certificates, which represent undivided fractional ownership
interests in the underlying pools of assets. Such securities also may be debt
instruments, which are also known as collateralized obligations and are
generally issued as the debt of a special purpose entity, such as a trust,
organized solely for the purpose of owning such assets and issuing such debt.

The market for asset-backed securities is at a relatively early stage of
development. Accordingly, there may be a limited secondary market for such
securities.

CERTIFICATES OF DEPOSIT -- Certificates of deposit are interest bearing
instruments with a specific maturity. They are issued by banks and savings and
loan institutions in exchange for the deposit of funds and normally can be
traded in the secondary market prior to maturity. Certificates of deposit with
penalties for early withdrawal will be considered illiquid.

CUSTODIAL RECEIPTS -- Custodial receipts are interests in separately traded
interest and principal component parts of U.S. Treasury obligations that are
issued by banks or brokerage firms and are created by depositing U.S. Treasury
obligations into a special account at a custodian bank. The custodian holds the
interest and principal payments for the benefit of the registered owners of the
certificates or
<PAGE>
38
receipts. The custodian arranges for the issuance of the certificates or
receipts evidencing ownership and maintains the register. Receipts include
Treasury Receipts ("TRs"), Treasury Investment Growth Receipts ("TIGRs"), and
Certificates of Accrual on Treasury Securities ("CATS").

DOLLAR ROLLS -- Dollar rolls are transactions in which securities are sold for
delivery in the current month and the seller simultaneously contracts to
repurchase substantially similar securities on a specified future date. Any
difference between the sale price and the purchase price is netted against the
interest income foregone on the securities sold to arrive at an implied
borrowing rate. Alternatively, the sale and purchase transactions can be
executed at the same price, with the Fund being paid a fee as consideration for
entering into the commitment to purchase. Dollar rolls may be renewed prior to
cash settlement and initially may involve only a firm commitment agreement by
the Fund to buy a security. If the broker-dealer to whom the Fund sells the
security becomes insolvent, the Fund's right to repurchase the security may be
restricted. Other risks involved in entering into dollar rolls include the risk
that the value of the security may change adversely over the term of the dollar
roll and that the security the Fund is required to repurchase may be worth less
than the security that the Fund originally held.

To avoid any leveraging concerns, the Fund will place U.S. Government or other
liquid, high grade assets in a segregated account in an amount sufficient to
cover its repurchase obligation.

FUTURES CONTRACTS AND OPTIONS ON FUTURES CONTRACTS -- Futures contracts provide
for the future sale by one party and purchase by another party of a specified
amount of a specific security at a specified future time and at a specified
price. An option on a futures contract gives the purchaser the right, in
exchange for a premium, to assume a position in a futures contract at a
specified exercise price during the term of the option. A Fund may use futures
contracts and related options for bona fide hedging purposes, to offset changes
in the value of securities held or
<PAGE>
39
expected to be acquired, to minimize fluctuations in foreign currencies, or to
gain exposure to a particular market or instrument. A Fund will minimize the
risk that it will be unable to close out a futures contract by only entering
into futures contracts which are traded on national futures exchanges.

GUARANTEED INVESTMENT CONTRACTS ("GICs") -- GICs are contracts issued by U.S.
insurance companies. Pursuant to such contracts, the Fund makes cash
contributions to a deposit fund of the insurance company's general account. The
insurance company then credits to the Fund on a monthly basis guaranteed
interest at either a fixed, variable or floating rate. A GIC provides that this
guaranteed interest will not be less than a certain minimum rate. A GIC is a
general obligation of the issuing insurance company and not a separate account.
The purchase price paid for a GIC becomes part of the general assets of the
issuer, and the contract is paid at maturity from the general assets of the
issuer.

LOAN PARTICIPATIONS -- Loan participations are interests in loans to U.S.
corporations which are administered by the lending bank or agent for a syndicate
of lending banks, and sold by the lending bank or syndicate member
("intermediary bank"). In a loan participation, the borrower corporation will be
deemed to be the issuer of the participation interest except to the extent the
Fund derives its rights from the intermediary bank. Because the intermediary
bank does not guarantee a loan participation, a loan participation is subject to
the credit risks associated with the underlying corporate borrower. In the event
of bankruptcy or insolvency of the corporate borrower, a loan participation may
be subject to certain defenses that can be asserted by such borrower as a result
of improper conduct by the intermediary bank. In addition, in the event the
underlying corporate
<PAGE>
40
borrower fails to pay principal and interest when due, the Fund may be subject
to delays, expenses and risks that are greater than those that would have been
involved if the Fund had purchased a direct obligation of such borrower. Under
the terms of a Loan Participation, the Fund may be regarded as a creditor of the
intermediary bank (rather than of the underlying corporate borrower), so that
the Fund may also be subject to the risk that the intermediary bank may become
insolvent.

The secondary market for loan participations is limited and any such
participation purchased by the Fund may be regarded as illiquid.

COLLATERALIZED MORTGAGE OBLIGATIONS ("CMOS"): CMOs are debt obligations or
multiclass pass-through certificates issued by agencies or instrumentalities of
the U.S. Government or by private originators or investors in mortgage loans. In
a CMO, series of bonds or certificates are usually issued in multiple classes.
Principal and interest paid on the underlying mortgage assets may be allocated
among the several
<PAGE>
41
classes of a series of a CMO in a variety of ways. Each class of a CMO, often
referred to as a "tranche," is issued with a specific fixed or floating coupon
rate and has a stated maturity or final distribution date. Principal payments on
the underlying mortgage assets may cause CMOs to be retired substantially
earlier then their stated maturities or final distribution dates, resulting in a
loss of all or part of any premium paid.

STRIPPED MORTGAGE-BACKED SECURITIES ("SMBS"): SMBs are usually structured with
two classes that receive specified proportions of the monthly interest and
principal payments from a pool of mortgage securities. One class may receive all
of the interest payments and is thus termed an interest-only class ("IO"), while
the other class may receive all of the principal payments and thus is termed the
principal-only class ("PO"). The value of IOs tends to increase as rates rise
and decrease as rates fall; the opposite is true of POs. SMBs are extremely
sensitive to changes in interest rates because of the impact thereon of
prepayment of principal on the underlying mortgage securities. The market for
SMBs is not as fully developed as other markets; SMBs therefore may be illiquid.

To avoid any leveraging concerns, a Fund will maintain liquid, high grade
securities in a
<PAGE>
42
segregated account at least equal to the purchase price of the municipal
forward.

Municipal securities include both municipal notes and municipal bonds. Municipal
notes include general obligation notes, tax anticipation notes, revenue
anticipation notes, bond anticipation notes, certificates of indebtedness,
demand notes and construction loan notes and participation interests in
municipal notes. Municipal bonds include general obligation bonds, revenue or
special obligation bonds, private activity and industrial development bonds and
participation interests in municipal bonds.

RESTRAINTS ON INVESTMENTS BY MONEY MARKET FUNDS -- Investments by a money market
fund are subject to limitations imposed
<PAGE>
43
under regulations adopted by the Securities and Exchange Commission. Under these
regulations, money market funds may only acquire obligations that present
minimal credit risk and that are "eligible securities," which means they are (i)
rated, at the time of investment, by at least two nationally recognized security
rating organizations (one if it is the only organization rating such obligation)
in the highest rating category or, if unrated, determined to be of comparable
quality (a "first tier security"), or (ii) rated according to the foregoing
criteria in the second highest rating category or, if unrated, determined to be
of comparable quality ("second tier security"). A security is not considered to
be unrated if its issuer has outstanding obligations of comparable priority and
security that have a short-term rating. In the case of taxable money market
funds, investments in second tier securities are subject to the further
constraints in that (i) no more than 5% of a Fund's assets may be invested in
second tier securities and (ii) any investment in securities of any one such
issuer is limited to the greater of 1% of the Fund's total assets or $1 million.
A taxable money market fund may also hold more than 5% of its assets in first
tier securities of a single issuer for three "business days" (that is, any day
other than a Saturday, Sunday or customary business holiday).

RESTRICTED SECURITIES -- Restricted securities are securities that may not be
sold freely to the public absent registration under the Securities Act of 1933
or an exemption from registration. Rule 144A securities are securities that have
not been registered under the Securities Act of 1933 but which may be traded
between certain institutional investors including investment companies. The
Trust's Board of Trustees is responsible for developing guidelines and
procedures for determining the liquidity of restricted securities, and for
monitoring the Advisor's implementation of the guidelines and procedures.

SECURITIES OF FOREIGN ISSUERS -- There are certain risks connected with
investing in foreign securities. These include risks of adverse political and
economic developments (including possible governmental seizure or
nationalization of assets), the possible imposition of exchange controls or
other governmental restrictions, less uniformity in accounting and reporting
requirements, the possibility that there will be less information on such
securities and their issuers available to the public, the difficulty of
obtaining or enforcing court judgments abroad, restrictions on foreign
investments in other jurisdictions, difficulties in effecting repatriation of
capital invested abroad, and difficulties in transaction settlements and the
effect of delay on shareholder equity. Foreign securities may be subject to
foreign taxes, and may be less marketable than comparable U.S. securities. The
value of a Fund's investments denominated in foreign currencies will depend on
the relative strengths of those currencies and the U.S. dollar, and a Fund may
be affected
<PAGE>
44
favorably or unfavorably by changes in the exchange rates or exchange control
regulations between foreign currencies and the U.S. dollar. Changes in foreign
currency exchange rates also may affect the value of dividends and
interest earned, gains and losses realized on the sale of securities and net
investment income and gains, if any, to be distributed to shareholders by a
Fund.

U.S. GOVERNMENT AGENCIES -- Obligations issued or guaranteed by agencies of the
U.S. Government, including, among others, the Federal Farm Credit Bank, the
Federal Housing Administration and the Small Business Administration, and
obligations issued or guaranteed by instrumentalities of the U.S. Government,
including, among others, the Federal Home Loan Mortgage Corporation, the Federal
Land Banks and the U.S. Postal Service. Some of these securities are supported
by the full faith and credit of the U.S. Treasury (e.g., Government National
Mortgage Association), others are supported by the right of the issuer to borrow
from the Treasury (e.g., Federal Farm Credit Bank), while still others are
supported only by the credit of the instrumentality (e.g., Federal National
Mortgage Association). Guarantees of principal by agencies or instrumentalities
of the U.S. Government may be a guarantee of payment at the maturity of the
obligation so that in the event of a default prior to maturity there might not
be a market and thus no means of realizing on the obligation prior to maturity.
Guarantees as to the timely payment of principal and interest do not extend to
the value or yield of these securities nor to the value of the Fund's shares.

VARIABLE AND FLOATING RATE INSTRUMENTS -- Certain obligations may carry variable
or floating rates of interest, and may involve a conditional or unconditional
demand feature.
<PAGE>
45
Such instruments bear interest at rates which are not fixed, but which vary with
changes in specified market rates or indices. The interest rates on these
securities may be reset daily, weekly, quarterly or some other reset period, and
may have a floor or ceiling on interest rate changes. There is a risk that the
current interest rate on such obligations may not accurately reflect existing
market interest rates. A demand instrument with a demand notice exceeding seven
days may be considered illiquid if there is no secondary market for such
security.

WHEN-ISSUED AND DELAYED DELIVERY SECURITIES -- When-issued or delayed delivery
basis transactions involve the purchase of an instrument with payment and
delivery taking place in the future. Delivery of and payment for these
securities may occur a month or more after the date of the purchase commitment.
The Fund will segregate liquid high grade debt securities or cash in an amount
at least equal to these commitments. The interest rate realized on these
securities is fixed as of the purchase date and no interest accrues to the Fund
before settlement. These securities are subject to market fluctuation due to
changes in market interest rates and it is possible that the market value at the
time of settlement could be higher or lower than the purchase price if the
general level of interest rates has changed. Although a Fund generally purchases
securities on a when-issued or forward commitment basis with the intention of
actually acquiring securities for its portfolio, a Fund may dispose of a when-
issued security or forward commitment prior to settlement if it deems
appropriate.

APPENDIX
I. BOND RATINGS
*CORPORATE AND MUNICIPAL BONDS

The following are descriptions of Standard & Poor's Corporation ("S&P") and
Moody's Investors Service, Inc. ("Moody's") corporate and municipal bond
ratings.

*MUNICIPAL NOTE RATINGS

- - Amortization schedule (the larger the final
maturity relative to other maturities the more likely it will be treated as a
note).

- - Source of Payment (the more dependent the
issue is on the market for its refinancing, the more likely it will be treated
as a note).

Note rating symbols are as follows:

SP-1. Very strong or strong capacity to pay principal and interest. Those issues
determined to possess overwhelming safety characteristics will be given a plus
(+) designation.

SP-2. Satisfactory capacity to pay principal and interest.

II. COMMERCIAL PAPER AND SHORT-TERM RATINGS

The following descriptions of commercial paper ratings have been published by
S&P, Moody's, Fitch Investors Service, Inc. ("Fitch"), Duff and Phelps ("Duff")
and IBCA Limited ("IBCA"), respectively.

Commercial paper issues rated Prime-1 and Prime-2 by Moody's are judged by
Moody's to have superior ability and strong ability for repayment, respectively.

The rating Duff-1 is the highest commercial paper rating assigned by Duff. Paper
rated Duff-1 is regarded as having very high certainty of timely payment with
excellent liquidity factors which are supported by ample asset protection. Risk
factors are minor. Paper rated Duff-2 is regarded as having good certainty of
timely payment, good access to capital markets and sound liquidit y factors and
company fundamentals. Risk factors are small.

The designation A1 by IBCA indicates that the obligation is supported by a very
strong capacity for timely repayment. Those obligations rated A1+ are supported
by the highest capacity for timely repayment. Obligations rated A2 are supported
by a strong capacity for timely repayment, although such capacity may be
susceptible to adverse changes in business, economic or financial conditions.
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TRUST AND INVESTMENT SERVICES OFFICES OF SUNTRUST BANKS, INC.
AFFILIATE BANKS:

FLORIDA: (STATEWIDE TOLL FREE) 1-800-526-1177

SUNTRUST BANK, CENTRAL FLORIDA, N.A.
200 S. Orange Avenue
Tower 10
Orlando, FL 32801
(407) 237-4380
1-800-432-4760, ext. 4380

SUNTRUST BANK, SOUTH FLORIDA, N.A.
501 E. Las Olas Boulevard
Ft. Lauderdale, FL 33301
(305) 765-7422
Boca Raton Office
800 S. Federal Highway
Boca Raton, FL 33435
(407) 243-6707
Coral Ridge Office
2626 E. Oakland Park Blvd.
Ft. Lauderdale, FL 33306
(305) 765-2155
Delray Beach Office
302 E. Atlantic Avenue
Delray Beach, FL 33483
(407) 243-6750
Hollywood Office
2001 Hollywood Blvd.
Hollywood, FL 33021
(305) 765-7062
Palm Beach Office
303 Royal Poinciana Plaza
Palm Beach, FL 33480
(407) 838-2855
PGA Office
2570 PGA Blvd.
Palm Beach Gardens, FL 33410
(407) 835-2802

SUNTRUST BANK, MIAMI, N.A.
777 Brickell Avenue
Miami, FL 33131
(305) 579-7450

SUNTRUST BANK, TAMPA BAY
315 E. Madison Street
Tampa, FL 33602
(813) 224-2517

SUNTRUST BANK, TREASURE COAST, N.A.
700 Virginia Avenue
Ft. Pierce, FL 34982
(407) 467-6459
Osceola Office
111 East Osceola Street
Stuart, FL 34994
(407) 223-6012

SUNTRUST BANK, EAST CENTRAL FLORIDA
Belnova Office
1590 S. Nova Road
Daytona Beach, FL 32114
(904) 258-2660
Bill France Office
299 Bill France Blvd.
Daytona Beach, FL 32114
(904) 258-2654
Deland Office
302 E. New York Avenue
Deland, FL 32724
(904) 822-5891

SUNTRUST BANK, NORTH FLORIDA, N.A.
200 W. Forsyth Street
Jacksonville, FL 32202
(904) 632-2534

SUNTRUST BANK, SOUTHWEST FLORIDA
12730 New Brittany Blvd.
Ft. Myers, FL 33907
(813) 277-2531
Pelican Bay Office
801 Laurel Oak Drive
Naples, FL 33963
(813) 598-0515
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SUNTRUST BANK, GOLF COAST
South Gate Office
3400 S. Tamiami Trail
Sarasota, FL 34230
(813) 951-3218
Port Charlotte Office
18501 Murdock Circle
Port Charlotte, FL 33949
(813) 625-9286
North Beneva Office
3577 Fruitville Road
Sarasota, FL 34237
(813) 951-3040
South Beneva Office
8181 S. Tamiami Trail
Sarasota, FL 34231
(813) 951-3053
Venice Office
200 Nokomis Avenue South
Venice, FL 34285
(813) 951-3053

SUNTRUST BANK, MID-FLORIDA, N.A.
210 Security Square
Winter Haven, FL 33880
(813) 297-6855
Okeechobee Office
815 S. Parrott Avenue
Okeechobee, FL 34974
(813) 763-6417

SUNTRUST BANK, NATURE COAST
One East Jefferson Street
Brooksville, FL 34601
(904) 754-5799
Crystal River Office
1502 SE Highway 19
Crystal River, FL 32629
(904) 795-8214
Seven Hills Office
1170 Mariner Blvd.
Spring Hill, FL 34609
(904) 754-5779

SUNTRUST BANK, NORTH CENTRAL FLORIDA
203 E. Silver Springs Blvd.
Ocala, FL 34470
(904) 368-6477

SUNTRUST BANK, TALLAHASSEE, N.A.
3522 Thomasville Road
Tallahassee, FL 32312
(904) 298-5030

SUNTRUST BANK, WEST FLORIDA
511 W. 23rd Street
Panama City, FL 32405
(904) 872-6087

GEORGIA:

SUNTRUST BANK, ATLANTA
55 Park Place
First Floor
Adams, GA 30303
(404) 588-7315
1-800-241-0901 Ext. 7315

SUNTRUST BANK, NORTHEAST GEORGIA, N.A.
101 N. Lumpkin Street
Athens, GA 30601
(706) 354-5346

GAINSVILLE BRANCH
104 Green Street
Gainsville, GA 30503
(770) 503-8674

SUNTRUST BANK, NORTHEAST GEORGIA, N.A.
100 East Second Avenue
Rome, GA 30161
(706) 236-4325

SUNTRUST BANK, AUGUSTA, N.A.
2815 Wrightsboro Road
Augusta, GA 30909
(706) 821-2015

SUNTRUST BANK, MIDDLE GEORGIA, N.A.
606 Cherry Street
Macon, GA 31208
(912) 755-5175

SUNTRUST BANK, WEST GEORGIA, N.A.
1246 First Avenue
Columbus, GA 31901
(706) 649-3631

SUNTRUST BANK, SAVANNAH, N.A.
33 Bull Street
Savannah, GA 31401
(912) 944-1165
<PAGE>
SUNTRUST BANK, SOUTH GEORGIA, N.A.
410 W. Broad Avenue
Albany, GA 31701
(912) 430-5468
Coffee County Branch
201 S. Peterson Avenue
Douglas, GA 31533
(912) 384-1820

SUNTRUST BANK, SOUTHEAST GEORGIA, N.A.
510 Gloucester Street
Brunswick, GA 31520
(912) 262-5322

SEA ISLAND ROAD BRANCH
701 Sea Island Road
St. Simons Island, GA 31522
(912) 638-3620
(912) 262-2227

TENNESSEE:

SUNTRUST BANK, NASHVILLE, N.A.
424 Church Street
4th Floor
Nashville, TN 37230
(615) 748-4477
1-800-932-2652

SUNTRUST BANK, CHATTANOOGA, N.A.
736 Market Street
Chattanooga, TN 37402
(615) 757-3085
TN WATS 1-800-572-7306, Ext. 3085
Bordering States WATS
1-800-874-1083, Ext. 3085

SUNTRUST BANK, EAST TENNESSEE, N.A.
700 East Hill Avenue
Knoxville, TN 37997
(615) 544-2181
1-800-225-0913, Ext. 2181

SUNTRUST BANK, NORTHEAST TENNESSEE
207 Mockingbird Lane
Johnson City, TN 37604
(615) 461-1005

SUNTRUST BANK, SOUTH CENTRAL TENNESSEE, N.A.
25 Public Square
Lawrenceburg, TN 38464
(615) 762-3511

ALABAMA:

SUNTRUST BANK, ALABAMA, N.A.
201 South Court Street
Florence, AL 35630
(205) 767-8463
<PAGE>

<TABLE>
<S> <C> <C>
STI CLASSIC FUNDS ORGANIZATIONAL OVERVIEW

* INVESTMENT ADVISORS
Trusco Capital Management, Inc. 50 Hurt Plaza
Suite 1400
Atlanta, GA 30303
STI Capital Management, N.A. P.O. Box 3808
Orlando, FL 32802
SunTrust Bank, Chattanooga, N.A. 736 Market Street
Chattanooga, TN 37402
SunTrust Bank, Atlanta 25 Park Place
Atlanta, GA 30303
* DISTRIBUTOR
SEI Financial Services Company 680 E. Swedesford Road
Wayne, PA 19087
* ADMINISTRATOR
SEI Financial Management Corporation 680 E. Swedesford Road
Wayne, PA 19087
* TRANSFER AGENT
Federated Services Company Federated Investors Tower
Pittsburgh, PA 15222-3779
* CUSTODIAN
SunTrust Bank, Atlanta c/o STI Trust & Investment
Operations, Inc.
303 Peachtree Street N.E.
14th Floor
Atlanta, GA 30308
* LEGAL COUNSEL
Morgan, Lewis & Bockius LLP 2000 One Logan Square
Philadelphia, PA 19103
* INDEPENDENT PUBLIC ACCOUNTANTS
Arthur Andersen, LLP 1601 Market Street
Philadelphia, PA 19103
</TABLE>

<PAGE>
100487/10-95

DISTRIBUTOR
SEI Financial Services
Company

...............................................................................

PROSPECTUS

INVESTOR SHARES

INVESTMENT GRADE BOND FUND
INVESTMENT GRADE TAX-EXEMPT
BOND FUND
U.S. GOVERNMENT
SECURITIES FUND
LIMITED-TERM FEDERAL MORTGAGE
SECURITIES FUND
SHORT-TERM BOND FUND
SHORT-TERM U.S. TREASURY
SECURITIES FUND
FLORIDA TAX-EXEMPT BOND FUND
GEORGIA TAX-EXEMPT
BOND FUND
TENNESSEE TAX-EXEMPT
BOND FUND
PRIME QUALITY MONEY
MARKET FUND
U.S. GOVERNMENT SECURITIES
MONEY MARKET FUND
TAX-EXEMPT MONEY
MARKET FUND

INVESTMENT ADVISORS
TRUSCO CAPITAL MANAGEMENT, INC.
STI CAPITAL MANAGEMENT, N.A.
SUNTRUST BANK, CHATTANOOGA, N.A.
SUNTRUST BANK, ATLANTA
OCTOBER 1, 1995

ABCD
<PAGE>
STI CLASSIC FUNDS
FLEX SHARES
INVESTMENT GRADE BOND FUND
INVESTMENT GRADE TAX-EXEMPT BOND FUND
U.S. GOVERNMENT SECURITIES FUND
LIMITED-TERM FEDERAL MORTGAGE SECURITIES FUND
SHORT-TERM BOND FUND
SHORT-TERM U.S. TREASURY SECURITIES FUND
FLORIDA TAX-EXEMPT BOND FUND
GEORGIA TAX-EXEMPT BOND FUND
TENNESSEE TAX-EXEMPT BOND FUND
CAPITAL GROWTH FUND
VALUE INCOME STOCK FUND
AGGRESSIVE GROWTH FUND
BALANCED FUND
SUNBELT EQUITY FUND
INTERNATIONAL EQUITY INDEX FUND

INVESTMENT ADVISORS TO THE FUNDS:
TRUSCO CAPITAL MANAGEMENT, INC.
STI CAPITAL MANAGEMENT, N.A.
SUNTRUST BANK, CHATTANOOGA
SUNTRUST BANK, ATLANTA

The STI Classic Funds (the "Trust") is a mutual fund that offers shares in a
number of separate investment portfolios. This Prospectus sets forth concisely
the information about the Flex Shares of the above-referenced Funds (each a
"Fund" and, collectively, the "Funds"). Investors are advised to read this
Prospectus and retain it for future reference.

OCTOBER 1, 1995
<PAGE>
2

Throughout this Prospectus, the Investment Grade Bond Fund, Investment Grade
Tax-Exempt Bond Fund, Short-Term U.S. Treasury Securities Fund, Short-Term Bond
Fund, U.S. Government Securities Fund and Limited-Term Federal Mortgage
Securities Fund, which invest primarily in bonds and other fixed income
instruments, may be referred to as the "Bond Funds;" and the Florida Tax-Exempt
Bond Fund, Georgia Tax-Exempt Bond Fund and Tennessee Tax-Exempt Bond Fund,
which invest primarily in tax-exempt bonds and other fixed income instruments,
may be referred to as the "State Tax-Exempt Bond Funds" and the Capital Growth
Fund, Value Income Stock Fund, Aggressive Growth Fund, Sunbelt Equity Fund and
International Equity Index Fund, which invest primarily in equity securities,
may be referred to as the "Equity Funds."

TABLE OF CONTENTS

<TABLE>
<S> <C>
Expense Summary...................... 3
The Trust............................ 7
Funds and Investment Objectives...... 7
Investment Policies and Strategies... 8
General Investment Policies and
Strategies......................... 20
Investment Risks..................... 21
Investment Limitations............... 23
Performance Information.............. 24
General Performance Information...... 24
Fundlink............................. 24
Purchase of Fund Shares.............. 24
Redemption of Fund Shares............ 27
Exchanges............................ 28
Dividends and Distributions.......... 28
Tax Information...................... 29
STI Classic Funds Information........ 30
Board of Trustees.................... 31
Investment Advisors.................. 31
Portfolio Managers................... 33
Banking Laws......................... 34
Distribution......................... 34
Administration....................... 35
Transfer Agent and Dividend
Disbursing Agent................... 36
Custodian............................ 36
Legal Counsel........................ 36
Independent Public Accountants....... 36
Other Information.................... 36
Voting Rights........................ 36
Reporting............................ 36
Shareholder Inquiries................ 36
Description of Permitted
Investments........................ 36
Appendix............................. A-1
</TABLE>
<PAGE>
3

EXPENSE SUMMARY
FLEX SHARES

Below is a summary of the transaction expenses and annual operating expenses for
the Flex Shares of each Fund described in this Prospectus. A hypothetical
example based on the estimated expenses is also shown. Actual expenses may vary.
<TABLE>
<S> <C>
SHAREHOLDER TRANSACTION EXPENSES
- ----------------------------------------------------------------------------------------------

<CAPTION>
ALL FUNDS
<S> <C>
- ----------------------------------------------------------------------------------------------
Maximum Sales Charge Imposed
on Purchases (as a percentage of
offering price)................................................................... None
Maximum Sales Charge Imposed
on Reinvested Dividends........................................................... None
Maximum Contingent Deferred
Sales Charge...................................................................... 2.00%
Redemption Fees(1)................................................................. None
Exchange Fee....................................................................... None
- ----------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------
</TABLE>

(1) There is a $7.00 wire charge for redemptions for all funds processed from
retail accounts which require wires to particular banks.
<PAGE>
4

ANNUAL OPERATING EXPENSES
(as a percentage of average net assets)
<TABLE>
<CAPTION>
INVESTMENT GRADE LIMITED-TERM
INVESTMENT GRADE TAX- EXEMPT BOND U.S. GOVERNMENT FEDERAL MORTGAGE SHORT-TERM BOND
BOND FUND FUND SECURITIES FUND SECURITIES FUND FUND
<S> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------
Advisory Fees (After Voluntary
Reductions)(1).............. .62 % .61 % .00 % .33 % .42 %
All Other Expenses (After
Voluntary Reductions)(1).... .37 % .29 % 1.15 % .57 % .36 %
12b-1 Distribution & Service
Expenses (After Voluntary
Reductions)(1).............. .65 % .73 % .50 % .35 % .42 %
- ------------------------------------------------------------------------------------------------------------------------------
Total Operating Expenses
(After Voluntary
Reductions)(1).............. 1.64 % 1.63 % 1.65 % 1.25 % 1.20 %
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------

<CAPTION>
SHORT-TERM U.S.
TREASURY
SECURITIES FUND
<S> <C>
- ------------------------------
Advisory Fees (After Voluntary
Reductions)(1).............. .19 %
All Other Expenses (After
Voluntary Reductions)(1).... .52 %
12b-1 Distribution & Service
Expenses (After Voluntary
Reductions)(1).............. .34 %
- ------------------------------
Total Operating Expenses
(After Voluntary
Reductions)(1).............. 1.05 %
- ------------------------------
- ------------------------------
</TABLE>

(1) Absent voluntary reductions and reimbursements by the Advisor and
Administrator, advisory fees, other expenses, service and distribution
expenses, and total operating expenses expressed as a percentage of average
net assets, respectively, for the Flex Shares of each Fund would be:
Investment Grade Bond Fund -- .74%, .37%, 1.00% and 2.11%; Investment Grade
Tax Exempt Bond Fund -- .74%, .29%, 1.00% and 2.03%; US Government
Securities Fund -- .74%, 5.72%, 1.00% and 7.46%; Limited-Term Federal
Mortgage Securities Fund -- .65%, 6.86%, 1.00% and 8.51%; Short-Term Bond
Fund -- .65%, .68%, 1.00% and 2.33%; and Short-Term US Treasury Securities
Fund -- .65%, .52%, 1.00% and 2.17%. Fee reductions are voluntary and may be
terminated at any time. Additional information may be found under
"Investment Advisors," "Administration" and "Distribution." A person that
purchases shares through an account with a financial institution may be
charged separate fees by the financial institution.
<TABLE>
<CAPTION>
LIMITED-TERM
INVESTMENT INVESTMENT GRADE FEDERAL
GRADE BOND TAX- EXEMPT BOND U.S. GOVERNMENT MORTGAGE SHORT-TERM BOND
EXAMPLE FUND FUND SECURITIES FUND SECURITIES FUND FUND
<S> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------------------
An investor would pay the
following expenses on a
$1,000 investment assuming:
(1) 5% annual return and (2)
redemption at the end of
each time period:
ONE YEAR
Assuming a complete
redemption at end of
period................... $ 37 $ 37 $ 37 $ 33 $ 32
Assuming no redemptions... 17 17 17 13 12
THREE YEARS
Assuming a complete
redemption at end of
period................... 52 51 52 40 38
Assuming no redemptions... 52 51 52 40 38
FIVE YEARS
Assuming a complete
redemption at end of
period................... 89 89 90 69 66
Assuming no redemptions... 89 89 90 69 66
TEN YEARS
Assuming a complete
redemption at end of
period................... 194 193 195 151 145
Assuming no redemptions... 194 193 195 151 145
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------

<CAPTION>
SHORT-TERM
U.S. TREASURY
SECURITIES
EXAMPLE FUND
<S> <C>
- ------------------------------
An investor would pay the
following expenses on a
$1,000 investment assuming:
(1) 5% annual return and (2)
redemption at the end of
each time period:
ONE YEAR
Assuming a complete
redemption at end of
period................... $ 31
Assuming no redemptions... 11
THREE YEARS
Assuming a complete
redemption at end of
period................... 33
Assuming no redemptions... 33
FIVE YEARS
Assuming a complete
redemption at end of
period................... 58
Assuming no redemptions... 58
TEN YEARS
Assuming a complete
redemption at end of
period................... 128
Assuming no redemptions... 128
- ------------------------------
- ------------------------------
</TABLE>

THE EXAMPLE IS BASED UPON THE TOTAL OPERATING EXPENSES OF A FUND AND SHOULD NOT
BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE EXPENSES. ACTUAL EXPENSES MAY
BE GREATER OR LESS THAN THOSE SHOWN. The purpose of this table is to assist the
investor in understanding the various costs and expenses that may be directly or
indirectly borne by investors in the Trust. The information set forth in the
foregoing table and example relates only to Flex Shares. The Trust also offers
Trust Shares and Investor Shares of each Fund which are subject to the same
expenses except for variations in distribution and service fees, transfer agent
fees and sales charges. The rules of the Securities and Exchange Commission
require that the maximum sales charge be reflected in the above table. However,
certain investors may qualify for reduced sales charges. See "Purchase of Fund
Shares." Long-term Flex Shareholders may eventually pay more than the economic
equivalent of the maximum front-end sales charges otherwise permitted by the
National Association of Securities Dealers, Inc.'s Rules of Fair Practice.
<PAGE>
5

ANNUAL OPERATING EXPENSES
(as a percentage of average net assets)

<TABLE>
<CAPTION>
TENNESSEE
FLORIDA TAX- GEORGIA TAX- TAX-EXEMPT BOND
EXEMPT BOND FUND EXEMPT BOND FUND FUND
<S> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------------------
Advisory Fees (After Voluntary Reductions)(1)............................. .08 % .27 % .00 %
All Other Expenses (After Voluntary Reductions)(1)........................ .74 % .53 % .70 %
12b-1 Distribution & Service Expenses (After Voluntary Reductions)(1)..... .53 % .55 % .65 %
- ---------------------------------------------------------------------------------------------------------------------------------
Total Operating Expenses (After Voluntary Reductions)(1).................. 1.35 % 1.35 % 1.35 %
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
TENNESSEE
FLORIDA TAX- GEORGIA TAX- TAX-EXEMPT BOND
EXAMPLE EXEMPT BOND FUND EXEMPT BOND FUND FUND
<S> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------------------
An investor would pay the following expenses on a $1,000 investment
assuming: (1) 5% annual return and (2) redemption at the end of each
time period:
ONE YEAR
Assuming a complete redemption at end of period....................... $ 34 $ 34 $ 34
Assuming no redemptions............................................... 14 14 14
THREE YEARS
Assuming a complete redemption at end of period....................... 43 43 43
Assuming no redemptions............................................... 43 43 43
FIVE YEARS
Assuming a complete redemption at end of period....................... 74 74 74
Assuming no redemptions............................................... 74 74 74
TEN YEARS
Assuming a complete redemption at end of period....................... 162 162 162
Assuming no redemptions............................................... 162 162 162
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>

THE EXAMPLE IS BASED UPON THE TOTAL OPERATING EXPENSES OF A FUND AND SHOULD NOT
BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE EXPENSES. ACTUAL EXPENSES MAY
BE GREATER OR LESS THAN THOSE SHOWN. The purpose of this table is to assist the
investor in understanding the various costs and expenses that may be directly or
indirectly borne by investors in the Trust. The information set forth in the
foregoing table and example relates only to Flex Shares. The Trust also offers
Trust Shares and Investor Shares of each Fund which are subject to the same
expenses except for variations in distribution and service fees, transfer agent
fees and sales charges. The rules of the Securities and Exchange Commission
require that the maximum sales charge be reflected in the above table. However,
certain investors may qualify for reduced sales charges. See "Purchase of Fund
Shares." Long-term Flex Shareholders may eventually pay more than the economic
equivalent of the maximum front-end sales charges otherwise permitted by the
National Association of Securities Dealers, Inc.'s Rules of Fair Practice.
<PAGE>
6

ANNUAL OPERATING EXPENSES
(as a percentage of average net assets)
<TABLE>
<CAPTION>
CAPITAL VALUE AGGRESSIVE SUNBELT
GROWTH INCOME STOCK GROWTH BALANCED EQUITY
FUND FUND FUND FUND FUND
<S> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------
Advisory Fees (After Voluntary
Reductions)(1)............................... 1.02% .80% .95% .77% .98%
All Other Expenses (After Voluntary
Reductions)(1)............................... .28% .20% .49% .39% .37%
12b-1 Distribution & Service Expenses (After
Voluntary Reductions)(1)..................... .97% 1.00% .76% .84% .85%
- -----------------------------------------------------------------------------------------------------------------------------
Total Operating Expenses (After Voluntary
Reductions)(1)............................... 2.27% 2.00% 2.20% 2.00% 2.20%
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------

<CAPTION>
INTERNATIONAL
EQUITY INDEX
FUND
<S> <C>
- -----------------------------------------------
Advisory Fees (After Voluntary
Reductions)(1)............................... .64%
All Other Expenses (After Voluntary
Reductions)(1)............................... .81%
12b-1 Distribution & Service Expenses (After
Voluntary Reductions)(1)..................... .65%
- -----------------------------------------------
Total Operating Expenses (After Voluntary
Reductions)(1)............................... 2.10%
- -----------------------------------------------
- -----------------------------------------------
</TABLE>

(1) Absent voluntary reductions and reimbursements by the Advisor and
Administrator, advisory fees, other expenses, service and distribution
expenses, and total operating expenses expressed as a percentage of average
net assets, respectively, for the Investor Shares of each Fund would be:
Capital Growth Fund -- 1.15%, .28%, 1.00% and 2.43%; Value Income Stock Fund
-- .80%, .28%, 1.00% and 2.08%; Aggressive Growth Fund -- 1.15%, .69%,
1.00%, and 2.84%; Balanced Fund -- .95%, .57%, 1.00%, and 2.52%; Sunbelt
Equity Fund -- 1.15%, .40%, 1.00%, and 2.55%; and International Equity Index
Fund -- .90%, 1.16%, 1.00% and 3.06%. Fee reductions are voluntary and may
be terminated at any time. Additional information may be found under
"Investment Advisors," "Administration," and "Distribution." A person that
purchases shares through an account with a financial institution may be
charged separate fees by the financial institution.
<TABLE>
<CAPTION>
CAPITAL VALUE AGGRESSIVE SUNBELT
GROWTH INCOME STOCK GROWTH BALANCED EQUITY
EXAMPLE FUND FUND FUND FUND FUND
<S> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------------------
An investor would pay the following expenses on
a $1,000 investment assuming: (1) 5% annual
return and (2) redemption at the end of each
time period:
ONE YEAR
Assuming a complete redemption at end of
period.................................... $ 44 $ 41 $ 43 $ 41 $ 43
Assuming no redemptions.................... 23 20 22 20 22
THREE YEARS
Assuming a complete redemption at end of
period.................................... 71 63 69 63 69
Assuming no redemptions.................... 71 63 69 63 69
FIVE YEARS
Assuming a complete redemption at end of
period.................................... 122 108 118 108 118
Assuming no redemptions.................... 122 108 118 108 118
TEN YEARS
Assuming a complete redemption at end of
period.................................... 261 233 253 233 253
Assuming no redemptions.................... 261 233 253 233 253
- --------------------------------------------------------------------------------------------------------------------------

<CAPTION>
INTERNATIONAL
EQUITY INDEX
EXAMPLE FUND
<S> <C>
- -----------------------------------------------
An investor would pay the following expenses on
a $1,000 investment assuming: (1) 5% annual
return and (2) redemption at the end of each
time period:
ONE YEAR
Assuming a complete redemption at end of
period.................................... $ 42
Assuming no redemptions.................... 21
THREE YEARS
Assuming a complete redemption at end of
period.................................... 66
Assuming no redemptions.................... 66
FIVE YEARS
Assuming a complete redemption at end of
period.................................... 113
Assuming no redemptions.................... 113
TEN YEARS
Assuming a complete redemption at end of
period.................................... 243
Assuming no redemptions.................... 243
- -----------------------------------------------
</TABLE>

THE EXAMPLE IS BASED UPON THE TOTAL OPERATING EXPENSES OF A FUND AND SHOULD NOT
BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE EXPENSES. ACTUAL EXPENSES MAY
BE GREATER OR LESS THAN THOSE SHOWN. The purpose of this table is to assist the
investor in understanding the various costs and expenses that may be directly or
indirectly borne by investors in the Trust. The information set forth in the
foregoing table and example relates only to Flex Shares. The Trust also offers
Trust Shares and Investor Shares of each Fund which are subject to the same
expenses except for variations in distribution and service fees, transfer agent
fees and sales charges. The rules of the Securities and Exchange Commission
require that the maximum sales charge be reflected in the above table. However,
certain investors may qualify for reduced sales charges. See "Purchase of Fund
Shares." Long-term Flex Shareholders may eventually pay more than the economic
equivalent of the maximum front-end sales charges otherwise permitted by the
National Association of Securities Dealers, Inc.'s Rules of Fair Practice.
<PAGE>
7

THE TRUST

STI CLASSIC FUNDS (the "Trust") is a diversified, open-end management investment
company that provides a convenient and economical means of investing in several
professionally managed portfolios of securities. The Trust currently offers
units of beneficial interest ("shares") in a number of separate Funds.
Shareholders may purchase shares in each Fund through three separate classes
(Trust Shares, Investor Shares and Flex Shares), which provide for variations in
distribution and service fees, transfer agent fees, sales charges, voting rights
and dividends. Except for differences between classes, each share of each Fund
represents an undivided, proportionate interest in that Fund. This Prospectus
relates to the Flex Shares of the Funds described below.

FUNDS AND INVESTMENT OBJECTIVES

BOND FUNDS:

STATE TAX-EXEMPT BOND FUNDS:

THE FLORIDA TAX-EXEMPT BOND FUND seeks to provide current income exempt from
federal income tax for Florida residents without undue investment risk.

THE GEORGIA TAX-EXEMPT BOND FUND seeks to provide current income exempt from
federal and state income tax for Georgia residents without undue investment
risk.

THE TENNESSEE TAX-EXEMPT BOND FUND seeks to provide current income exempt from
federal and state income tax for Tennessee residents without undue investment
risk.
<PAGE>
8

EQUITY FUNDS:

THE CAPITAL GROWTH FUND seeks to provide capital appreciation by investing
primarily in a portfolio of common stocks, warrants and securities convertible
into common stock which in the Advisor's opinion are undervalued in the
marketplace at the time of purchase.

THE VALUE INCOME STOCK FUND seeks to provide current income with the secondary
goal of achieving capital appreciation by investing primarily in equity
securities.

THE INTERNATIONAL EQUITY INDEX FUND seeks to provide investment results that
correspond to the aggregate price and dividend performance of the securities
included in the Gross Domestic Product Weighted Morgan Stanley Capital
International Europe, Australasia and Far East Index (the "MSCI EAFE-GDP Index"
or "EAFE-GDP Index"). 11"MSCI EAFE-GDP Index" is a registered service mark of
Morgan Stanley Capital International which does not sponsor and is in no way
affiliated with the International Equity Index Fund.

There can be no assurance that a Fund will achieve its investment objective.

The investment objectives of the Investment Grade Bond Fund, U.S. Government
Securities Fund, Limited-Term Federal Mortgage Securities Fund, Short-Term Bond
Fund, Short-Term U.S. Treasury Securities Fund, Capital Growth Fund, Value
Income Stock Fund, Aggressive Growth Fund, Balanced Fund, Sunbelt Equity Fund
and International Equity Index Fund are nonfundamental and may be changed
without a shareholder vote.

INVESTMENT POLICIES AND STRATEGIES
*INVESTMENT GRADE BOND FUND

The Investment Grade Bond Fund will invest exclusively in investment grade
obligations rated BBB or better by Standard & Poor's Corporation ("S&P") or Baa
or better by Moody's Investors Services, Inc. ("Moody's") or, if unrated, of
comparable quality at the time of purchase as determined by the Advisor,
including corporate debt obligations; mortgage-backed securities, collateralized
mortgage obligations ("CMOs") and asset-backed securities; obligations issued or
guaranteed as to principal and interest by the U.S. Government or its agencies
or instrumentalities; custodial receipts involving U.S. Treasury obligations;
securities of the government of Canada and its provincial and local
<PAGE>
9
governments; securities issued or guaranteed by foreign governments, their
political subdivisions, agencies or instrumentalities; obligations of
supranational entities and sponsored American Depositary Receipts ("ADRs") that
are traded on exchanges or listed on NASDAQ. Under normal circumstances, at
least 65% of the Fund's total assets will be invested in corporate and
government bonds and debentures. No more than 25% of the Fund's assets will be
invested in securities rated BBB by S&P or Baa by Moody's or, if unrated, of
comparable quality at the time of purchase as determined by the Advisor.

The Fund may purchase mortgage-backed securities issued or guaranteed as to the
payment of principal and interest by the U.S. Government or its agencies or
instrumentalities or, subject to a limit of 25% of the Fund's assets,
mortgage-backed securities issued by private issuers. These mortgage-backed
securities may be backed or collateralized by fixed, adjustable or floating rate
mortgages. The Fund may also invest in asset-backed securities which consist of
securities backed by company receivables, truck and auto loans, leases, credit
card receivables and home equity loans.

In order to reduce interest rate risk, and subject to a general limit of 25% of
the Fund's assets, the Fund may purchase floating or variable rate securities.
It may also buy securities on a when-issued basis, medium term notes, putable
securities and zero coupon securities. The Fund may also invest up to 10% of its
assets in restricted securities that the Advisor determines are liquid under
guidelines adopted by the Trust's Board of Trustees. The Fund may also engage in
futures and options transactions and may engage in securities lending. Some
floating or variable rate securities will be subject to interest rate "caps" or
"floors."

The Fund's portfolio turnover rate was 237.66% for the fiscal year ended May 31,
1995. This rate of turnover will likely result in higher transaction costs and
higher levels of realized capital gains than if the turnover rate was lower.

*INVESTMENT GRADE TAX-EXEMPT BOND FUND

The Investment Grade Tax-Exempt Bond Fund intends to be fully invested in
municipal securities the interest on which is exempt from federal income taxes
in the opinion of bond counsel to the issuer. The issuers of these securities
can be located in all fifty states, the District of Columbia, Puerto Rico and
other U.S. territories and possessions. It is a fundamental policy of the
Investment Grade Tax-Exempt Bond Fund to invest at least 80% of its total assets
in securities the income from which is exempt from federal income tax and not
treated as a preference item for purposes of the alternative minimum tax. At
least 65% of the Fund's assets will be invested in municipal bonds and
debentures, and at least 75% of its total assets invested in municipal bonds
will be in securities rated A or better by S&P or Moody's. Municipal securities
must be rated BBB or better by S&P or Baa or better by
<PAGE>
10
Moody's in the case of bonds; SP-1, SP-2 or MIG-1, MIG-2 in the case of notes;
A-1, A-2, P-1, P-2 in the case of tax-exempt commercial paper; and VMIG-1 or
VMIG-2 in the case of variable rate demand obligations. The Fund will only
acquire unrated securities if, at the time of purchase, the Advisor determines
that such unrated obligations are of comparable quality to rated obligations
that may be acquired by the Fund.

*U.S. GOVERNMENT SECURITIES FUND

Mortgage-backed securities that are not issued or guaranteed by the U.S.
Government or its agencies or instrumentalities, including securities nominally
issued by a governmental entity (such as the Resolution Trust Corporation), are
not obligations of a governmental entity and thus may bear a risk of nonpayment.
The timely payment of principal
<PAGE>
11
and interest normally is supported, at least partially, by various forms of
insurance or guarantees. There can be no assurance, however, that such credit
enhancement will support full payment of the principal and interest on such
obligations. The average maturity of the Fund's investment portfolio will
typically range from 7 to 14 years.

*LIMITED-TERM FEDERAL MORTGAGE SECURITIES FUND

Mortgage-backed securities that are not issued or guaranteed by the U.S.
Government or its agencies or instrumentalities, including securities nominally
issued by a governmental entity (such as the Resolution Trust Corporation), are
not obligations of the U.S. Government and thus bear a risk of nonpayment. The
timely payment of principal and interest normally is supported, at least
partially, by various forms of insurance or guarantees. There can be no
assurance, however, that such credit enhancement will support full payment of
the principal and interest on such obligations.

With respect to the remaining 35% of its assets, the Fund may invest in
corporate or government bonds that carry a rating of Baa or better by Moody's or
BBB or better by S&P, or that are deemed by the Advisor to be of comparable
quality; asset backed securities; commercial paper rated at the time of purchase
in the two highest ratings categories of an NRSRO rating bankers' acceptances;
certificates of deposit and time deposits; U.S. Treasury obligations and
custodial receipts; and repurchase agreements involving securities that
constitute permissible investments for the Fund.
<PAGE>
12

*SHORT-TERM BOND FUND

Under normal circumstances, the Short-Term Bond Fund will invest solely in
investment grade obligations rated BBB or better by S&P or Baa or better by
Moody's or, if unrated, of comparable quality at the time of purchase as
determined by the Advisor consisting of debt obligations of U.S. and foreign
corporations, mortgage-backed securities; CMOs; asset-backed securities;
obligations (including mortgage-backed securities) issued or guaranteed as to
principal and interest by the U.S. Government or its agencies or
instrumentalities; and custodial receipts involving U.S. Treasury obligations
(including STRIPS and CUBES). Under normal circumstances, at least 65% of the
Fund's total assets will be invested in corporate and government bonds and
debentures. No more than 25% of the Fund's assets will be invested in securities
rated BBB by S&P or Baa by Moody's or, if unrated, of comparable quality at the
time of purchase by the Advisor.

The Fund may purchase securities on a when-issued basis and may acquire floating
or variable rate securities, medium term notes, putable securities, and zero
coupon securities. The Fund may also purchase securities issued by foreign
governments and supranational agencies. The Fund may also invest in municipal
securities when the Advisor feels it is consistent with the Fund's investment
objective. The Fund will not invest in municipal securities unless the Advisor
believes that the yield will be higher than the yield for comparable taxable
investments in which the Fund is permitted to invest. The following quality
criteria apply to the Fund's investments in municipal securities. The Fund's
investments in municipal notes will be limited to those obligations (i) where
both principal and interest are backed by the full faith and credit of the
United States, (ii) which are rated MIG-2 or V-MIG-2 at the time of investment
by Moody's, (iii) which are rated SP-2 at the time of investment by S&P, or (iv)
which, if not rated, are of equivalent quality to MIG-2, V-MIG-2, or SP-2 in the
Advisor's judgment. The Fund's investment in municipal bonds will be limited to
bonds rated BBB or better by S&P or Baa or better by Moody's, or, if unrated,
deemed by the Advisor to be of comparable quality. For the Fund's investments in
other types of tax-exempt municipal investments, such as participation interests
in municipal lease/purchase agreements, the quality of the underlying credit or
of the bank
<PAGE>
13
providing a credit support arrangement must, in the Advisor's opinion, be
equivalent to the municipal note or bond ratings stated above. The Fund is also
authorized to invest up to 10% of its assets in restricted securities, including
Rule 144A securities, that the Advisor determines are liquid under guidelines
adopted by the Trust's Board of Trustees. The Fund may also enter into bond
futures contracts and options on bond futures contracts and engage in securities
lending.

*SHORT-TERM U.S. TREASURY SECURITIES FUND

*FLORIDA TAX-EXEMPT BOND FUND

The Florida Tax-Exempt Bond Fund intends to be fully invested in municipal
securities the interest on which is exempt from federal income taxes based on
opinions from bond counsel to the issuers. The issuers of these securities can
be located in Florida, the District of Columbia, Puerto Rico and other U.S.
territories and possessions. It is a fundamental policy of the Fund to invest at
least 80% of its total assets in securities the income from which is exempt from
federal income tax and not treated as a preference item for purposes of the
alternative minimum tax. At least 65% of the Fund's assets will be invested in
Florida municipal bonds and debentures, and at least 75% of its total assets
invested in municipal bonds will be in securities rated A or better by S&P or
Moody's. Municipal securities must be rated BBB or better by S&P or Baa or
better by Moody's in the case of bonds; SP-1, SP-2 or MIG-1, MIG-2 in the case
of notes; A-1, A-2, or P-1, P-2 in the case of tax-exempt commercial paper; and
VMIG-1 or VMIG-2 in the case of variable rate demand obligations. No more than
25% of the Fund's assets will be invested in bonds rated BBB by S&P or Baa by
Moody's. The Fund will only acquire unrated securities if,
<PAGE>
14
at the time of purchase, the Advisor determines that such unrated obligations
are of comparable quality to rated obligations that may be acquired by the Fund.

*GEORGIA TAX-EXEMPT BOND FUND

The Georgia Tax-Exempt Bond Fund intends to be fully invested in municipal
securities the interest on which is exempt from federal income taxes and
substantially exempt from State of Georgia income taxes based on opinions from
bond counsel to the issuers. The issuers of these securities can be located in
Georgia, the District of Columbia, Puerto Rico and other U.S. territories and
possessions. It is a fundamental policy of the Fund to invest at least 80% of
its total assets in securities the income from which is exempt from federal
income tax and not treated as a preference item for purposes of alternative
minimum tax. At least 65% of the Fund's assets will be invested in Georgia
municipal bonds and debentures, and at least 75% of its total assets invested in
municipal bonds will be in securities rated A or better by S&P or Moody's.
Municipal securities must be rated BBB or better by S&P or Baa or better by
Moody's in the case of bonds; SP-1, SP-2 or MIG-1, MIG-2 in the case of notes;
A-1, A-2, or P-1, P-2 in the case of tax-exempt commercial paper; and VMIG-1 or
VMIG-2 in the case of variable rate demand obligations. No more than 25% of the
Fund's assets will be invested in bonds rated BBB by S&P or Baa by Moody's. The
Fund will only acquire unrated securities if, at the time of purchase, the
Advisor determines that such unrated obligations are of comparable quality to
rated obligations that may be acquired by the Fund.

The Fund may invest in floating or variable rate securities, commitments to
purchase the above securities on a when-issued or delayed delivery basis, and
may purchase municipal forwards, putable securities, medium term notes and zero
coupon securities. The Advisor has discretion to invest up to 20% of the Fund's
total assets in taxable debt securities rated at least BBB or better by S&P or
Baa or better by Moody's or, if unrated, of comparable quality at the time of
purchase as determined by the Advisor, repurchase agreements, and securities
subject to the alternative minimum tax. The Fund may also invest in futures and
options, but has no present intention to do so for other than hedging purposes.

Under normal market conditions, it is anticipated that the Fund's average
weighted maturity will range from 6 to 25 years. The
<PAGE>
15
Fund may shorten its average weighted maturity to as little as 90 days if deemed
appropriate for temporary defensive purposes.

*TENNESSEE TAX-EXEMPT BOND FUND

The Tennessee Tax-Exempt Bond Fund intends to be fully invested in municipal
securities the interest on which is exempt from federal income taxes and
substantially exempt from State of Tennessee income taxes based on opinions from
bond counsel to the issuers. The issuers of these securities can be located in
Tennessee, the District of Columbia, Puerto Rico and other U.S. territories and
possessions. It is a fundamental policy of the Fund to invest at least 80% of
its total assets in securities the income from which is exempt from federal
income tax and not treated as a preference item for purposes of the alternative
minimum tax. At least 65% of the Fund's assets will be invested in Tennessee
municipal bonds and debentures, and at least 75% of its total assets invested in
municipal bonds will be in securities rated A or better by S&P or Moody's.
Municipal securities must be rated BBB or better by S&P or Baa or better by
Moody's in the case of bonds; SP-1, SP-2 or MIG-1, MIG-2 in the case of notes;
A-1, A-2, or P-1, P-2 in the case of tax-exempt commercial paper; and VMIG-1 or
VMIG-2 in the case of variable rate demand obligations. No more than 25% of the
Fund's assets will be invested in bonds rated BBB by S&P or Baa by Moody's. The
Fund will only acquire unrated securities if, at the time of purchase, the
Advisor determines that such unrated obligations are of comparable quality to
rated obligations that may be acquired by the Fund. The Fund may invest in
floating or variable rate securities, commitments to purchase the above
securities on a when-issued or delayed delivery basis, and may purchase
municipal forwards, putable securities, medium term notes and zero coupon
securities. The Advisor has discretion to invest up to 20% of the Fund's total
assets in taxable debt securities rated at least BBB or better by S&P or Baa or
better by Moody's or, if unrated, of comparable quality at the time of purchase
as determined by the Advisor, repurchase agreements, and securities subject to
the alternative minimum tax. The Fund may also invest in futures and options,
but has no present intention to do so for other than hedging purposes.

*CAPITAL GROWTH FUND

The Capital Growth Fund invests primarily in a diversified portfolio of common
stocks, warrants, and securities convertible into common stocks which, in the
Advisor's opinion, are undervalued in the marketplace at the time of purchase.
In selecting securities for the Fund, the Advisor will evaluate factors believed
to affect capital appreciation such as the issuer's background, industry
position, historical returns on equity and experience and qualifications of the
management team. Dividend and interest income is incidental to growth of
capital. The Advisor will rotate the Capital Growth Fund's holdings between
various market sectors based on economic analysis of the overall business cycle.
Under normal conditions, at least 65% of the total assets of the Capital Growth
Fund will be invested in common stocks.

All of the common stocks in which the Fund invests are traded on registered
exchanges or on the over-the-counter market in the United States. Assets of the
Capital Growth Fund not
<PAGE>
16
invested in the securities described above may be invested in U.S. dollar
denominated equity securities of foreign issuers (including sponsored American
Depositary Receipts ("ADRs") that are traded on exchanges or listed on NASDAQ);
securities issued by money market mutual funds; pay-in-kind securities; and
bonds. The bonds that the Capital Growth Fund may purchase may be rated in any
rating category or may be unrated, provided that no more than 10% of the Fund's
total assets will be invested in bonds rated below BBB by Standard & Poor's
Corporation ("S&P") or below Baa by Moody's Investors Service, Inc. ("Moody's")
or unrated securities of comparable quality (see "Investment Risks -- High Yield
- -- Lower Rated Bonds"). In addition, the Fund may invest up to 10% of its assets
in restricted securities.

*VALUE INCOME STOCK FUND

The Fund will invest at least 80% of its total assets in equity securities.
Investments will consist primarily of common stocks, and, under normal market
conditions, at least 65% of the Fund's assets will be invested in common stocks
issued by corporations which have a history of paying regular dividends,
although there can be no assurance that such corporations will continue to pay
dividends. Other equity securities in which the Fund may invest are convertible
debt securities, preferred stocks and warrants which are convertible into or
exchangeable for common stocks; and U.S. dollar denominated equity securities of
foreign issuers (including sponsored ADRs that are traded on exchanges or listed
on NASDAQ). All of the common stocks in which the Fund invests are traded on
registered exchanges such as the New York or American Stock Exchange or on the
over-the-counter market in the United States (i.e., NASDAQ). The Fund may also
purchase debt securities (corporate debt obligations and U.S. Treasury
obligations) which may be rated in any rating category or may be unrated,
provided that no more than 10% of the Fund's total assets will be invested in
bonds rated below BBB by S&P or below Baa by Moody's or unrated securities of
comparable quality.

*AGGRESSIVE GROWTH FUND

*SUNBELT EQUITY FUND

The Sunbelt Equity Fund seeks to provide capital appreciation by investing
substantially all, and under normal market conditions at least 65%; of its
assets in common stocks; preferred stocks; warrants; and securities convertible
into common stock of U.S. companies headquartered and/or conducting a
substantial portion of their operations in (i.e., maintaining at least 50% of
their assets in or deriving at least 50% of their revenues and/or sales from)
the southern region of the United States. Current income will not be an
important criterion of investment selection and any such income should be
considered incidental. The Advisor will seek to identify and purchase securities
of companies that it believes to be undervalued and that possess a strong
balance sheet, a strong earnings record, and adequate market liquidity.

The Fund will invest primarily in stocks of U.S. companies headquartered and/or
operating in the following U.S. states: Texas, Arkansas, Alabama, Mississippi,
Tennessee, Kentucky, Florida, Virginia, Georgia, North Carolina, South Carolina
and Louisiana. To the extent that the Fund's investments are not as
geographically dispersed across the U.S. as other funds with
<PAGE>
18
comparable objectives, Shareholders will be more subject to the impact of
economic forces on and the relative economic conditions of these states.

*BALANCED FUND

The Fund will invest in investment grade fixed income securities rated BBB or
better by S&P or Baa or better by Moody's or, if unrated, of comparable quality
at the time of purchase as determined by the Advisor, including corporate debt
obligations; mortgage-backed securities, collateralized mortgage obligations and
asset-backed securities; obligations issued or guaranteed as to principal and
interest by the U.S. Government or its agencies or instrumentalities; custodial
receipts involving U.S. Treasury obligations; securities of the government of
Canada and its provincial and local governments; securities issued or guaranteed
by foreign governments, their political subdivisions, agencies or
instrumentalities; and obligations of supranational entities. No more than 25%
of the Fund's assets will be invested in securities rated BBB by S&P or Baa by
Moody's or, if unrated, of comparable quality at the time of purchase as
determined by the Fund's Advisor.

The Balanced Fund's turnover rate for the fiscal year ended May 31, 1995 was
128% for the
<PAGE>
19
equity portion of its portfolio and 193% for the fixed income portion of its
portfolio. These rates of turnover, if continued will likely result in higher
transaction costs and brokerage commissions and higher levels of realized
capital gains than if the turnover rate was lower.

*INTERNATIONAL EQUITY INDEX FUND

The Fund expects that there will be a close correlation between the Fund's
performance and that of the EAFE-GDP Index. A 1.00 correlation would indicate
perfect correlation, which would be achieved when the net asset value of the
Fund, including the value of its dividend and capital gains distributions,
increases or decreases in exact proportion to changes in the EAFE-GDP Index. The
correlation between the Fund and the EAFE-GDP Index is expected to be over 0.95
on an annual basis. The Fund's ability to track the EAFE-GDP Index, however may
be affected by, among other things, transaction costs, changes in either the
composition of the EAFE-GDP Index or number of shares outstanding for the
component companies of the EAFE-GDP Index, and the timing and amount of
purchases and redemptions.

The Fund expects to be fully invested in the investments, described above, but
may invest
<PAGE>
20
up to 35% of its total assets in U.S. and non-U.S. denominated money market
instruments; repurchase agreements; futures contracts, including stock index
futures contracts; and options on futures contracts. Obligations relating to
futures contracts will be limited to not more than 20% of the Fund's total
assets. The Fund is also permitted to acquire floating and variable rate
securities; purchase securities on a when-issued basis; and purchase illiquid
securities.

GENERAL INVESTMENT POLICIES AND STRATEGIES

For temporary defensive purposes during periods when its Advisor determines that
market conditions warrant, each Fund, except the Short-Term U.S. Treasury
Securities Fund, may invest up to 100% of its assets in money market instruments
consisting of securities issued or guaranteed as to principal and interest by
the U.S. Government, its agencies or instrumentalities, custodial receipts
involving U.S. Treasury obligations, repurchase agreements, certificates of
deposit, bankers' acceptances, and time deposits issued by banks or savings and
loan associations and commercial paper rated in the highest rating category, and
may hold a portion of its assets in cash. A Fund may not be pursuing its
investment objective when it is engaged in temporary defensive investing. The
Equity Funds and the Balanced Fund may invest in money market instruments for
liquidity purposes.

In the event that a security owned by a Fund is downgraded below the stated
rating categories, the Advisor will review and take appropriate action with
regard to the security.

A Fund's purchase of shares of other investment companies is limited by the
Investment Company Act of 1940 (the "1940 Act") and will ordinarily result in an
additional layer of charges and expenses.

Each of the Funds may engage in securities lending and will limit such practice
to 33 1/3% of
<PAGE>
21

its total assets. No Fund may purchase additional securities while its
outstanding borrowings exceed 5% of its assets.

The Capital Growth Fund, Value Income Stock Fund, Aggressive Growth Fund,
Balanced Fund and Sunbelt Equity Fund may purchase restricted securities,
including Rule 144A securities, that its Advisor determines are liquid pursuant
to the guidelines established by the Trust's Board of Trustees.

For additional information regarding permitted investments, see "Description of
Permitted Investments" in this Prospectus and in the Statement of Additional
Information.

INVESTMENT RISKS
ZERO COUPON OBLIGATIONS

Each Fund may invest, subject to its investment objective and policies, in zero
coupon obligations. Zero coupon obligations are sold at original issue discount
and do not make periodic payments. Zero coupon obligations may be subject to
greater fluctuations in value due to interest rate changes than interest bearing
obligations. A Fund will be required to include the imputed interest in zero
coupon obligations in its current income. Because each Fund distributes all of
its net investment income to Shareholders, a Fund may have to sell portfolio
securities to distribute the income attributable to these obligations and
securities at a time when the Advisor would not have chosen to sell such
obligations or securities and which may result in a taxable gain or loss.

FOREIGN SECURITIES AND FOREIGN CURRENCY CONTRACTS

EQUITY SECURITIES

Investment in equity securities are generally subject to market risks that may
cause their prices to fluctuate over time. The values of convertible equity
securities are also affected by prevailing interest rates, the credit quality of
the issuer and any call provision. Fluctuations in the value of equity
securities in which a Fund invests will cause the net asset value of the Fund to
fluctuate.

MORTGAGE-BACKED SECURITIES

Mortgage-backed securities are subject to the risk of prepayment of the
underlying mortgages. During periods of declining interest rates, prepayment of
mortgages underlying these securities can be expected to accelerate. When the
mortgage-backed securities held by a Fund are prepaid, the Fund must reinvest
the proceeds in securities the yield of which reflects prevailing interest
rates, which may be lower than the prepaid security.

FIXED INCOME SECURITIES

The market value of a Fund's fixed income investments will change in response to
interest rate changes and other factors. During periods of falling interest
rates, the values of outstanding fixed income securities generally rise.
Conversely, during periods of rising interest rates, the values of such
securities generally decline. Securities with longer maturities are subject to
greater fluctuations in value than securities with shorter maturities. Changes
by an NRSRO to the rating of any fixed income security and in the ability of an
issuer to make payments of interest and principal also affect the value of these
investments. Changes in the value of a Fund's securities will not affect cash
income derived from these securities but will affect the Fund's net asset value.

Fixed income securities rated BBB by S&P or Baa by Moody's (investment grade
bonds) are deemed by these rating services to have speculative characteristics.

There is a risk that the current interest rate on floating and variable rate
instruments may not accurately reflect existing market interest rates.

MUNICIPAL SECURITIES

HIGH YIELD, LOWER RATED BONDS

INVESTMENT LIMITATIONS

Each Fund may not:

It is a non-fundamental policy of the Investment Grade Tax-Exempt Bond Fund that
it will not invest more than 25% of its net assets in securities of one or more
issuers conducting their principal activities in the same state. In addition,
the Investment Grade Tax-Exempt Bond Fund and State Tax-Exempt Bond Funds will
not invest more than 25% of their total assets in securities the interest on
which is derived from revenues of similar type projects.

The foregoing percentages will apply at the time of the purchase of a security.
Additional investment limitations are set forth in the Statement of Additional
Information.
<PAGE>
24

PERFORMANCE INFORMATION

From time to time, the Funds may advertise yield and total return. These figures
will be based on historical earnings and are not intended to indicate future
performance. The yield of a Fund refers to the annualized income generated by an
investment in that Fund over a specified 30-day period. The yield is calculated
by assuming that the income generated by the investment during that period is
generated over one year and is shown as a percentage of the investment.

The total return of a Fund refers to the average compounded rate of return to a
hypothetical investment, including any sales charge imposed, for designated time
periods (including but not limited to, the period from which a Fund commenced
operations through the specified date), assuming that the entire investment is
redeemed at the end of each period and assuming the reinvestment of all dividend
and capital gains distributions.

GENERAL PERFORMANCE INFORMATION

The performance of the Trust's Investor Shares and Flex Shares will normally be
lower than for Trust Shares because Investor Shares and Flex Shares are subject
to distribution, services, and certain transfer agent fees not charged to Trust
Shares. The performance of Flex Shares in comparison to Investor Shares will
vary depending upon the investment time horizon.

FUNDLINK

All purchases and redemptions of STI Classic Fund Flex Shares may be completed
via FUNDLINK, a telephone activated service that allows Shareholders to transfer
money between the STI Classic Funds and a Shareholder's SunTrust bank
account(s). To initiate a FUNDLINK transaction, Shareholders are provided a
toll-free telephone number (1-800-428-6970) to call the Trust's Transfer Agent.
To utilize this service, a Shareholder must contact an Investment Services
Representative of a SunTrust Banks, Inc. affiliate bank and complete the
appropriate application and authorization agreements.

PURCHASE OF FUND SHARES

Flex Shares are sold at net asset value (without an initial sales charge) and
are subject to a deferred sales charge if redeemed within one year of purchase.
Flex Shares provide the benefit of permitting all investor dollars to be
invested from the initial time of purchase.

Flex Shares are sold on a continuous basis and may be purchased by contacting
the Trust's Transfer Agent, Federated Services Company (the "Transfer Agent"),
either by mail, by telephone or by wire. Flex Shares may also be purchased
through Investment Services Representatives of SunTrust Banks, Inc., affiliate
banks which serve as Shareholder Servicing Agents to the Trust. Furthermore,
Flex Shares
<PAGE>
25
may be purchased through SunTrust Securities, Inc., as well as, certain
correspondent banks of SunTrust Banks, Inc.

Shares may be purchased on days on which the New York Stock Exchange is open for
business ("business day").

A purchase order for any of the Funds will be effective as of the business day
it is received by the Transfer Agent if the Transfer Agent receives the order
before 4:00 p.m. Eastern time. The purchase price of Flex Shares of a Fund is
the net asset value next determined after a purchase order is effective. The net
asset value per share of a Fund is determined by dividing the total market value
of the Fund's investments and other assets, less any liabilities, by the total
outstanding shares of the Fund. Net asset value per share is determined daily as
of the close of business of the New York Stock Exchange (currently 4:00 p.m.
Eastern time) on any business day. Pursuant to guidelines established by the
Trustees, the Trust may use a pricing service to provide market quotations or
valuations for securities owned by each Fund. Purchases will be made in full and
fractional shares of a Fund calculated to three decimal places. Purchases by
mail are considered received after payment by check is converted into federal
funds.

Minimum initial and subsequent purchase amounts, respectively, for each Fund are
$10,000 and $1,000 ($100 via statement coupon). The minimum initial purchase
amount for retirement plans is $2,000. These minimums may be waived at the
Distributor's discretion such as for any one trust or fiduciary account
including employee benefit plans created under sections 401 or 457 of the
Internal Revenue Code including related plans of the same employer.

The Trust reserves the right to reject a purchase order when the Distributor
determines that it is not in the best interest of the Trust and/or
Shareholder(s).

Neither the Trust's Transfer Agent nor the Trust will be responsible for any
loss, liability, cost or expense for acting upon telephone or wire instructions
reasonably believed to be genuine. The Trust and the Transfer Agent maintain
procedures, including identification methods and other means, for ascertaining
the identity of callers and authenticity of instructions.

Although the methodology and procedures for calculating the net asset value of
Flex Shares are identical to those for Trust and Investor Shares, the net asset
value per share of the classes may differ because of the distribution, service,
and certain transfer agent expenses charged to Flex Shares and Investor Shares.

In deciding whether to purchase Investor Shares or Flex Shares, investors should
take into consideration their present and anticipated purchase amounts, and time
horizons. Investors should consider, based on the anticipated life of their
Funds(s) investment, whether the accumulated distribution fees and contingent
deferred sales charge on Flex Shares would be less than the initial sales charge
on the Investor Shares or Trust Shares purchased at the same time. And,
simultaneously and to what extent such differential would be offset by the
higher dividend distributions per share on the Investor
<PAGE>
26
Shares or Trust Shares. To assist investors in making this decision, an analysis
program is available through a local SunTrust Trust and Investment Service
representative upon request.

*SYSTEMATIC INVESTMENT PLAN

Shares of each Fund may be purchased systematically through deductions from
checking or savings accounts maintained through SunTrust Banks, Inc. affiliate
banks. The Systematic Investment Plan is subject to subsequent minimum
maintained balance requirements. The minimum initial purchase amount for the
Systematic Investment Plan is $500. Since the minimum normal initial investment
amount for Flex Shares is $10,000 per Fund, it is expected that Systematic
Investment Plan purchases will total $10,000 per Fund within a two-year period.
The distributor maintains the right to terminate a Systematic Investment Plan
account if the account fails to reach this $10,000 total cumulative purchase
amount within the two-year period. Investors may purchase shares on a fixed
schedule (semi-monthly or monthly) with amounts from $50 up to $100,000. The
purchases will be effective on the business day that the Transfer Agent receives
the transmission.

*CONTINGENT DEFERRED SALES CHARGE INFORMATION

Flex Shares of the Funds may be purchased at their net asset value. Shares
redeemed within the first year after purchase will be subject to a contingent
deferred sales charge ("CDSC") equal to 2.00% of the lesser of the net asset
value of the shares at the time of purchase or the net asset value of the shares
at the time of redemption, in accordance with the following schedule:

<TABLE>
<CAPTION>
CONTINGENT DEFERRED SALES
CHARGE AS A PERCENTAGE OF
YEAR SINCE DOLLAR AMOUNT SUBJECT TO
PURCHASE CHARGE
----------- ---------------------------
<S> <C> <C>
First 2.00%
Second None
</TABLE>

The CDSC will not apply to shares purchased through reinvestment of dividends or
capital gain distributions, accordingly, no sales charge is imposed on increases
in net asset value above the initial purchase price. In determining whether a
particular redemption is subject to a CDSC, it is assumed that the redemption is
first of shares held for over one year or shares acquired through reinvestment
of dividends or other distributions. No CDSC will be charged on exchanges of
Flex Shares of any Fund for Flex Shares of any other Fund. See "Exchanges." In
determining the amount of the Flex Shares CDSC that applies, all purchases shall
be considered as having been made on the trade date.

The contingent deferred sales charge will not be imposed when a redemption
results from a tax-free return under the following circumstances: (i) a total or
partial distribution from a qualified plan, other than an IRA, Keogh Plan, or a
custodial account following retirement; (ii) a total or partial distribution
from an IRA, Keogh Plan, or a custodial account after the beneficial owner or
participant attains age 59 1/2 or (iii) from the death or complete disability
(as defined in the Internal Revenue Code or evidenced by a certificate from the
U.S. Social Security Administration) of the beneficial owner or participant. The
exemption from the contigent deferred sales charge for qualified plans, an IRA,
Keogh Plan, or a custodial account does not extend to account transfers,
rollovers, and other redemptions made for purposes of reinvestment. Contingent
deferred sales
<PAGE>
27
charges are not charged in connection with exchanges of shares for shares in
other STI Classic Fund Flex Shares or in connection with redemptions by the Fund
of accounts with low balances.

REDEMPTION OF FUND SHARES

Shareholders may redeem their Flex Shares on any day that net asset value is
calculated. Flex Shares may ordinarily be redeemed by mail or telephone request
to the Transfer Agent. All redemption orders are effected at the net asset value
per share next determined after receipt of a valid redemption request, reduced
by any applicable CDSC. See "Sales Charge Information."

However, all or part of a shareholder's holdings of Flex Shares may be redeemed
in accordance with instructions and limitations pertaining to his or her
account. Redemption orders must be received by the Transfer Agent before 4:00
p.m. Eastern time on any business day. Redemption proceeds are normally remitted
within five business days following receipt of the order.

Requests for redemptions from the Funds may be placed in writing or by telephone
directly to an Investment Services Representative of a SunTrust Banks, Inc.
affiliate bank, through SunTrust Securities, Inc. and through certain
correspondent banks of SunTrust Banks, Inc. (or via FUNDLINK to the Transfer
Agent). Redemptions placed via telephone or FUNDLINK (1-800-428-6970) can only
be placed for a minimum of $1,000.

When Flex Shares are purchased by check the proceeds from the redemption of
those Shares are not available, and the Shares may not be exchanged, until the
Trust or its agents are reasonably certain that the purchase check has cleared,
which could take up to 7 business days.

A Shareholder may be required to redeem Flex Shares if the balance in a
Shareholder's Fund account drops below $10,000 as a result of redemptions, and,
the Shareholder does not increase its balance to at least $10,000 on 60 days'
written notice. The Trust intends to pay cash for all shares redeemed, but under
abnormal conditions which make payment in cash unwise, payment may be made
wholly or partly in liquid portfolio securities with a market value equal to the
redemption price. In such cases, an investor may incur brokerage costs in
converting such securities to cash.

Redemptions of $25,000 or greater for a Fund must be in writing and a signature
guarantee must accompany the written request.

*SYSTEMATIC WITHDRAWAL PLAN

Because regular, systematic withdrawals of Flex Shares made within one year of
purchase will be subject to the CDSC, it may not be in the best interest of Flex
shareholders to participate in the Systematic Withdrawal Plan. Exceptions
relating to systematic withdrawals from qualified retirement plans were
previously referenced.
<PAGE>
28

EXCHANGES

Flex Shares of the Funds may be exchanged at net asset value only for Flex
Shares of the other Funds of the Trust or for Investor Shares of the Money
Market Funds of the Trust. No CDSC will be imposed on redemptions of Money
Market Fund Shares acquired in an exchange, provided they are held for at least
one year from the initial purchase date of the Flex Shares or are exchanged back
into Flex Shares. Subsequent exchanges of Investor Shares of the Money Market
Funds (which were acquired in an exchange of Flex Shares) may be only for Flex
Shares of the Equity or Fixed Income Funds.

Flex Shares may be exchanged for Trust Shares (Shares for which SunTrust Banks,
Inc. or one of its affiliates acts in a fiduciary, agency, investment advisory
or custodial capacity) at net asset value. Trust Shares acquired in an exchange
of Flex Shares will not be subject to a CDSC upon redemption.

Four exchanges may be made per calendar year. More than four exchanges in a year
may be considered an abuse of the exchange privilege. The Fund reserves the
right to charge a $10.00 fee for each exchange. A Shareholder with more than
four exchanges per year will be notified prior to the imposition of any such
fee. Exchanges may be requested through an Investment Services Representative of
a SunTrust Banks, Inc. affiliate bank, SunTrust Securities, Inc. and certain
correspondent banks of SunTrust Banks, Inc. either by telephone or in writing
(or via FUNDLINK through the Fund's Transfer Agent). The minimum exchange amount
is $1,000 subject to account minimum initial purchase amounts and minimum
maintained balance requirements. This exchange offer is subject to change or
termination by the Trust at any time upon sixty days' notice.

DIVIDENDS AND DISTRIBUTIONS

Dividends from net investment income (exclusive of capital gains) are declared
on each business day and paid monthly by each of the Bond and State Tax-Exempt
Bond Funds. Dividends from net investment income (exclusive of capital gains)
are declared and paid quarterly by the Equity Funds and Balanced Fund, except
that dividends are declared and paid annually by the International Equity Index
Fund. Each Fund's net realized capital gains (including net short-term capital
gains) are distributed at least annually. Net income for dividend purposes
consists of (i) interest accrued and original issue discount earned on the
Fund's assets, (ii) plus the amortization of market discount (except in the case
of the Investment Grade Tax-Exempt Bond and State Tax-Exempt Bond Funds) and
minus the amortization of market premium on such assets, (iii) plus dividend or
distribution income on such assets, (iv) less accrued expenses directly
attributable to the Fund and the general expenses of the Trust prorated to the
Fund on the basis of its relative net assets. Flex Shares invested in the Bond
and State Tax-Exempt Bond Funds are eligible to begin earning dividends that are
declared on the business day after the purchase order is effective and continue
to be eligible for dividends through and including the day the redemption order
is effective.

The net asset value of Flex Shares of the Funds will be reduced by the amount of
any dividend or distribution. Dividends and distributions are paid in the form
of additional Flex Shares of the same Fund unless the customer has elected prior
to the date of distribution to receive payment in cash. Such election, or any
revocation thereof, must be made in writing prior to the date of distribution to
the Trust's transfer agent and will become effective with respect to dividends
paid after its receipt. Dividends and distributions are paid within ten days of
the end
<PAGE>
29
of the time period to which the dividend relates. Dividends and distributions
payable to a Shareholder are paid in cash within ten business days after a
Shareholder's complete redemption of its Flex Shares in a Fund.

TAX INFORMATION

The following summary of federal income tax consequences is based on current tax
laws and regulations, which may be changed by legislative, judicial or
administrative action. No attempt has been made to present a detailed
explanation of the federal, state, or local income tax treatment of each Fund or
its Shareholders. In particular, no attempt has been made herein to provide
information on the tax laws of Florida, Georgia or Tennessee. Accordingly,
Shareholders are urged to consult their tax advisors regarding specific
questions as to federal, state and local income taxes.

TAX STATUS OF EACH FUND

TAX STATUS OF DISTRIBUTIONS: BOND AND STATE TAX-EXEMPT BOND FUNDS

Each of the Investment Grade Tax-Exempt Bond and State Tax-Exempt Bond Funds
will distribute all of its net investment income (including net short-term
capital gains) to Shareholders. If, at the close of each quarter of its taxable
year, at least 50% of the value of a Fund's assets consist of obligations the
interest on which is excludable from gross income, the Fund may pay
exempt-interest dividends to its Shareholders. Those dividends constitute the
portion of the aggregate dividends as designated by the Fund, equal to the
excess of the excludable interest over certain amounts disallowed as deductions.
Exempt-interest dividends are excludable from a Shareholder's gross income for
regular federal income tax purposes, but may have alternative minimum tax
consequences. See the Statement of Additional Information.

Current federal tax law limits the types and volume of bonds qualifying for the
federal income tax exemption of interest, which may have an effect on the
ability of the Investment Grade Tax-Exempt Bond and State Tax-Exempt Bond Funds
to purchase sufficient amounts of tax-exempt securities to satisfy the Code's
<PAGE>
30
requirements for the payment of exempt-interest dividends.

TAX STATUS OF DISTRIBUTIONS: ALL FUNDS

Dividends from net investment income will qualify for the dividends received
deduction for corporate Shareholders only to the extent such distributions are
derived from dividends paid by domestic corporations. Dividends from net capital
gains (the excess of net long-term capital gains over net short-term capital
loss) will be treated as long-term capital gains, regardless of how long the
Shareholder has held shares and regardless of whether distributions are received
in cash or in additional shares. For certain individual Shareholders, net
long-term capital gains may be taxed at a lower rate than ordinary income. Each
Fund will make annual reports to Shareholders of the federal income tax status
of all distributions. Dividends declared by a Fund in October, November or
December of any year and payable to Shareholders of record on a date in that
month will be deemed to have been paid by the Fund and received by the
Shareholders on December 31, of that year, if paid by the Fund any time during
the following January.

Income received on direct U.S. obligations is exempt from tax at the state level
when received directly by a Fund and may be exempt, depending on the state, when
received by a Shareholder from a Fund provided certain state-specific conditions
are satisfied. Not all states permit such income dividends to be tax-exempt and
some require that a certain minimum percentage of an investment company's income
be derived from state tax-exempt interest. Each Fund will inform Shareholders
annually of the percentage of income and distributions derived from direct U.S.
obligations. Shareholders should consult their tax advisors to determine whether
any portion of the income dividends received from a Fund is considered tax
exempt in their particular states.

A sale, exchange or redemption of Fund shares is a taxable event to the
Shareholder.

STI CLASSIC FUNDS INFORMATION
THE TRUST

The Trust pays its expenses, including fees of its service providers, audit and
legal expenses, expenses of preparing prospectuses, proxy
<PAGE>
31
solicitation material and reports to Shareholders, costs of custodial services
and registering the shares under federal and state securities laws, pricing,
insurance expenses, litigation and other extraordinary expenses, brokerage
costs, interest charges, taxes and organization expenses.

BOARD OF TRUSTEES

INVESTMENT ADVISORS

The Advisors are indirect wholly-owned subsidiaries of SunTrust Banks, Inc.
("SunTrust"), a southeastern regional bank holding company with assets of $44.2
billion as of June 30, 1995. SunTrust ranks among the twenty largest U.S.
banking companies. Its three principal subsidiaries--SunTrust Bank of Florida,
Inc., SunTrust Banks of Georgia, Inc. and SunTrust Banks of Tennessee,
Inc.--provide a wide range of personal and corporate banking, trust, and
investment services through more than 600 locations in the three-state area.
Total discretionary assets under management with SunTrust Banks, Inc. equalled
approximately $42 billion as of December 31, 1994.

Trusco Capital Management, Inc. ("Trusco") serves as the Advisor to the
Short-Term U.S. Treasury Securities, Short-Term Bond, U.S. Government Securities
and Sunbelt Equity Funds and joint advisor to the International Equity Index
Fund. As of June 30, 1995, Trusco had approximately $11.5 billion in assets
under management. The principal business address of Trusco is 50 Hurt Plaza,
Suite 1400, Atlanta, GA 30303.

STI Capital Management, N.A. ("STI Capital") (formerly SunBank Capital
Management, N.A.) serves as the Advisor to the Limited-Term Federal Mortgage
Securities, Investment Grade Bond, Investment Grade Tax-Exempt Bond, Florida
Tax-Exempt Bond Capital Growth, Value Income Stock, Aggressive Growth and
Balanced Funds and joint advisor to the International Equity Index Fund. As of
June 30, 1995, STI Capital had discretionary management authority with respect
to assets of approximately $11.1 billion. The principal business address of STI
Capital is P.O. Box 3808, Orlando, FL 32802.

The Trust and the above Advisors have entered into advisory agreements (the
"Advisory Agreements"). Under the Advisory Agreements, the Advisors make the
investment decisions for the assets of the Fund(s) they advise and continuously
review, supervise and administer their respective Fund's investment program. The
Advisors discharge their responsibilities subject to the supervision of, and
policies established by, the Trustees of the Trust. STI CLASSIC
<PAGE>
32
FUNDS ARE NOT DEPOSITS, ARE NOT INSURED OR GUARANTEED BY THE FDIC OR ANY OTHER
GOVERNMENT AGENCY, AND ARE NOT ENDORSED OR GUARANTEED BY AND DO NOT CONSTITUTE
OBLIGATIONS OF SUNTRUST BANKS, INC. OR ANY OF ITS AFFILIATES. INVESTMENTS IN THE
FUNDS INVOLVE RISK, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL. RETURNS AND
PRINCIPAL VALUES WILL FLUCTUATE AND SHARES AT REDEMPTION MAY BE WORTH MORE OR
LESS THAN THEIR ORIGINAL COST. THERE IS NO GUARANTEE THAT ANY STI CLASSIC FUND
WILL ACHIEVE ITS INVESTMENT OBJECTIVE. With respect to all Funds, the Advisors
may execute brokerage or other agency transactions through affiliates of the
Advisors.

For the services provided and expenses incurred pursuant to the Advisory
Agreements: Trusco is entitled to receive advisory fees computed daily and paid
monthly at the annual rate of .74%, .65%, .65% and 1.15% of the average daily
net assets of the U.S. Government Securities Fund, Short-Term U.S. Treasury
Securities Fund, Short-Term Bond Fund and Sunbelt Equity Fund, respectively; STI
Capital is entitled to receive advisory fees computed daily and paid monthly at
the annual rate of .65%, .74%, .74%, .65%, 1.15%, .95%, 1.15% and .80% of the
average daily net assets of the Florida Tax-Exempt Bond Fund, Investment Grade
Bond Fund, Investment Grade Tax-Exempt Bond Fund, Limited-Term Federal Mortgage
Securities Fund, Capital Growth Fund, Balanced Fund, Aggressive Growth Fund and
Value Income Stock Fund, respectively. Trusco and STI Capital jointly are
entitled to receive an advisory fee computed daily and paid monthly at the
annual rate of .90% of the average daily net assets of the International Equity
Index Fund; SunTrust Bank, Chattanooga is entitled to receive advisory fees
computed daily and paid monthly at the annual rates of .65% of the average daily
net assets of the Tennessee Tax-Exempt Bond Fund; and SunTrust Bank, Atlanta is
entitled to receive advisory fees computed daily and paid monthly at the annual
rate of .65% of the average daily net assets of the Georgia Tax-Exempt Bond
Fund.

Although the advisory fees for the Sunbelt Equity Fund, Capital Growth Fund,
Balanced Fund, Aggressive Growth Fund, Value Income Stock Fund and International
Equity Index Fund are higher than advisory fees paid by other mutual funds, the
Trust believes that the fees are comparable to the advisory fees paid by many
other mutual funds with similar investment objectives and policies. From time to
time, an Advisor may waive (either voluntarily or pursuant to applicable state
limitations) advisory fees payable by a Fund. Currently, the Advisors and the
Distributor have agreed to voluntary reductions in their respective fees as well
as reductions in service and distribution fees in amounts necessary to maintain
the total operating expenses at the amounts set forth in the Expense Summary.
Voluntary reductions of fees may be terminated at anytime.

For the fiscal year ended May 31, 1995: Trusco received advisory fees computed
daily and paid monthly at the annual rate of .18%, .41%, .98%, and .0% of the
average daily net assets of the Short-Term U.S. Treasury Securities Fund,
Short-Term Bond Fund, Sunbelt Equity Fund, and U.S. Government Securities Fund,
respectively; STI Capital received advisory fees computed daily and paid monthly
at the annual rate of .12%, .62%, .61%, 1.02%, .77%, .95%, .80% and .33%, of the
average daily net assets of the Florida Tax-Exempt Bond Fund, Investment Grade
Bond Fund, Investment Grade Tax-Exempt Bond Fund, Capital Growth Fund, Balanced
Fund, Aggressive Growth Fund, Value Income Stock Fund and Limited-Term Federal
Mortgage Securities Fund, respectively; SunTrust Bank, Chattanooga received
advisory fees computed daily
<PAGE>
33

and paid monthly at the annual rates of .0% of the average daily net assets of
the Tennessee Tax-Exempt Bond Fund and SunTrust Bank, Atlanta received advisory
fees computed daily and paid monthly at the annual rate of .27% of the average
daily net assets of the Georgia Tax-Exempt Bond Fund. Trusco and STI Capital
jointly received an advisory fee computed daily and paid monthly at the annual
rate of .64% of the average daily net assets of the International Equity Index
Fund.

PORTFOLIO MANAGERS

Mr. Mills Riddick, CFA, has been responsible for the day-to-day management of
the Value Income Stock Fund since April, 1995. Mr. Riddick has been a value
portfolio manager at STI Capital since 1989.

Starting September, 1995, Patricia Love became co-portfolio manager of the
Tennesse Tax-Exempt Bond Fund. Ms. Love serves as Vice President and Trust
Investment Officer of SunTrust Bank, Chattanooga. Ms. Love is also a portfolio
manager at STI Capital. Ms. Love has been with SunTrust Bank, Chattanooga since
1993 and prior to that served as a portfolio analyst with First City Texas from
1986 to 1993.

Mr. Anthony Gray has been responsible for the day-to-day management of the
Capital Growth Fund since its inception. Mr. Gray has served
<PAGE>
34
as Chief Executive Officer and Chief Investment Officer of STI Capital since
1979. Mr. Gray has also been responsible for the day-to-day management of the
equity portion of the Balanced Fund since its inception.

Mr. James Foster has been responsible for the day-to-day management of the
Sunbelt Equity Fund since its inception. Mr. Foster has served as a Vice
President of Trusco since 1989.

BANKING LAWS

DISTRIBUTION

The Flex Plan is characterized as a compensation plan since the distribution fee
will be paid to the Distributor without regard to the distribution or
shareholder service expenses incurred by the Distributor or the amount of
payments made to financial institutions and intermediaries. SunTrust Banks,
Inc.'s affiliate banks and certain correspondent banks may serve as shareholder
servicing agents to the Trust. A prospective investor may visit any one of the
Investment Services offices of the SunTrust Banks, Inc.'s affiliate banks, as
listed on the last pages of the Prospectus, SunTrust Securities, Inc. or certain
correspondent banks of SunTrust Banks, Inc. to receive copies of the
Prospectuses for the Flex Shares of the Trust and application forms. Trust
Shares of each Fund are offered without a sales charge or a distribution or
service fee primarily to institutional investors, including affiliates and
correspondents for the investment of funds in which they act in a fiduciary,
agency, investment advisory or custodial capacity. Investor Shares of each Fund
are offered subject to a sales load on purchases and a distribution fee. The
different sales charge option of the Investor Shares provides investors with an
alternative purchase arrangement to the Flex Shares. It is possible that
financial institutions and intermediaries may offer different classes of shares
to their customers and thus receive different compensation with respect to
different classes of shares.

Each Fund may execute brokerage or other agency transactions through the
Distributor, for which the Distributor receives compensation.

ADMINISTRATION

SEI Financial Management Corporation (the "Administrator"), a wholly-owned
subsidiary of SEI, and the Trust are parties to an Administration Agreement (the
"Administration Agreement"). Under the terms of the Administration Agreement,
the Administrator provides the Trust with certain administrative services, other
than investment advisory services, including regulatory reporting, all necessary
office space, equipment, personnel, and facilities.

The Administrator is entitled to a fee which is calculated daily and paid
monthly at an annual rate as follows:

<TABLE>
<CAPTION>
AVERAGE AGGREGATE DAILY NET ASSETS FEE
- -------------------------------------------- ---------
<S> <C>
$1 - $1 billion............................. .10%
over $1 billion to $5 billion............... .07%
over $5 billion to $8 billion............... .05%
over $8 billion to $10 billion.............. .045%
over $10 billion............................ .04%
</TABLE>

From time to time, the Administrator may waive (either voluntarily or pursuant
to applicable state limitations) all or a portion of the administration fee
payable with respect to the Trust.
<PAGE>
36

TRANSFER AGENT AND DIVIDEND DISBURSING AGENT

Federated Services Company, Pittsburgh, PA is the Transfer Agent for the shares
of the Trust and dividend disbursing agent for the Trust.

CUSTODIAN

SunTrust Bank, Atlanta, c/o STI Trust & Investment Operations, Inc., 303
Peachtree Street, N.E., 14th floor, Atlanta, GA 30308, serves as Custodian of
the assets of each Fund of the Trust except the International Equity Index Fund.
The Bank of California, 475 Sansome Street, Suite 1200, San Francisco, CA 94111,
serves as Custodian for the International Equity Index Fund. The Custodians hold
cash, securities and other assets of the Trust as required by the Investment
Company Act of 1940.

LEGAL COUNSEL

Morgan, Lewis & Bockius, LLP, Philadelphia, PA, serves as legal counsel to the
Trust.

INDEPENDENT PUBLIC ACCOUNTANTS

The independent public accountants to the Trust are Arthur Andersen, LLP,
Philadelphia, PA.

OTHER INFORMATION
VOTING RIGHTS

REPORTING

The Trust issues unaudited financial information semi-annually and audited
financial statements annually. The Trust furnishes proxy statements and other
reports to Shareholders of record.

SHAREHOLDER INQUIRIES

Shareholders may contact the Transfer Agent in order to obtain information on
account statements, procedures and other related information by calling
1-800-428-6970.

DESCRIPTION OF PERMITTED INVESTMENTS

The following is a description of the permitted investments for the Funds.
Further discussion is contained in the Statement of Additional Information.

AMERICAN DEPOSITARY RECEIPTS ("ADRs") -- ADRs are securities, typically issued
by a U.S. financial institution (a "depositary"), that evidence ownership
interests in a security or a pool of securities issued by a foreign issuer and
deposited with the depositary. ADRs may be available through "sponsored" or
"unsponsored" facilities. A sponsored facility is established jointly by the
issuer of the security underlying the receipt and a depositary, whereas an
unsponsored facility may be established by a depositary without
<PAGE>
37
participation by the issuer of the underlying security. Holders of unsponsored
depositary receipts generally bear all the costs of the unsponsored facility.
The depositary of an unsponsored facility frequently is under no obligation to
distribute shareholder communications received from the issuer of the deposited
security or to pass through, to the holders of the receipts, voting rights with
respect to the deposited securities.

ASSET-BACKED SECURITIES -- Asset-backed securities are securities secured by
non-mortgage assets such as company receivables, truck and auto loans, leases
and credit card receivables. Such securities are generally issued as
pass-through certificates, which represent undivided fractional ownership
interests in the underlying pools of assets. Such securities also may be debt
instruments, which are also known as collateralized obligations and are
generally issued as the debt of a special purpose entity, such as a trust,
organized solely for the purpose of owning such assets and issuing such debt.

The market for asset-backed securities is at a relatively early stage of
development. Accordingly, there may be a limited secondary market for such
securities.

CERTIFICATES OF DEPOSIT -- Certificates of deposit are interest bearing
instruments with a specific maturity. They are issued by banks and savings and
loan institutions in exchange for the deposit of funds and normally can be
traded in the secondary market prior to maturity. Certificates of deposit with
penalties for early withdrawal will be considered illiquid.

DOLLAR ROLLS -- Dollar rolls are transactions in which securities are sold for
delivery in the current month and the seller simultaneously contracts to
repurchase substantially similar securities on a specified future date. Any
difference between the sale price and the purchase price is netted against the
interest income foregone on the securities sold to arrive at an implied
borrowing rate. Alternatively, the sale and purchase transactions can be
executed at the same price, with the Fund being paid a fee as consideration for
entering into the commitment to purchase. Dollar rolls may be renewed prior to
cash settlement and initially may involve only a firm commitment agreement by
the Fund to buy a security. If the broker-dealer to whom the Fund sells the
security becomes insolvent, the Fund's right to repurchase the security may be
restricted. Other risks involved in entering into dollar rolls include the risk
that the value of the security may change adversely over the term of the dollar
roll and that the security the Fund is required to repurchase may be worth less
than the security that the Fund originally held.

To avoid any leveraging concerns, the Fund will place U.S. Government or other
liquid, high grade assets in a segregated account in an amount sufficient to
cover its repurchase obligation.

At the maturity of a forward contract, the Fund may either sell a portfolio
security and make delivery of the foreign currency, or it may retain the
security and terminate its contractual obligation to deliver the foreign
currency by purchasing an "offsetting" contract with the same currency trader,
obligating it to purchase, on the same maturity date, the same amount of the
foreign currency. The Fund may realize a gain or loss from currency
transactions.

GUARANTEED INVESTMENT CONTRACTS ("GICs") -- GICs are contracts issued by U.S.
insurance companies. Pursuant to such contracts, the Fund makes cash
contributions to a deposit fund of the insurance company's general account. The
insurance company then credits to the Fund on a monthly basis guaranteed
interest at either a fixed, variable or floating rate. A GIC provides that this
guaranteed interest will not be less than a certain
<PAGE>
40
minimum rate. A GIC is a general obligation of the issuing insurance company and
not a separate account. The purchase price paid for a GIC becomes part of the
general assets of the issuer, and the contract is paid at maturity from the
general assets of the issuer.

The secondary market for loan participations is limited and any such
participation purchased by the Fund may be regarded as illiquid.

GOVERNMENT PASS-THROUGH SECURITIES: These are securities that are issued or
guaranteed by a U.S. Government agency representing an interest in a pool of
mortgage loans. The primary issuers or guarantors of these mortgage-
<PAGE>
41
backed securities are GNMA, FNMA and FHLMC. FNMA and FHLMC obligations are not
backed by the full faith and credit of the U.S. Government as GNMA certificates
are, but FNMA and FHLMC securities are supported by the instrumentalities' right
to borrow from the U.S. Treasury. GNMA, FNMA and FHLMC each guarantees timely
distributions of interest to certificate holders. GNMA and FNMA also each
guarantees timely distributions of scheduled principal. FHLMC has in the past
guaranteed only the ultimate collection of principal of the underlying mortgage
loan; however, FHLMC now issues mortgage-backed securities (FHLMC Gold PCs)
which also guarantee timely payment of monthly principal reductions. Government
and private guarantees do not extend to the securities' value, which is likely
to vary inversely with fluctuations in interest rates.

STRIPPED MORTGAGE-BACKED SECURITIES ("SMBS"): SMBs are usually structured with
two classes that receive specified proportions of the monthly interest and
principal payments from a pool of mortgage securities. One class may receive all
of the interest payments and is thus termed an interest-only class ("IO"), while
the other class may receive all of the principal payments and thus is termed the
principal-only class ("PO"). The value of IOs tends to increase as rates rise
and decrease as rates fall; the opposite is true of POs. SMBs are extremely
sensitive to changes in interest rates because of the impact thereon of
prepayment of principal on the underlying mortgage securities. The market for
SMBs is not as fully
<PAGE>
42
developed as other markets; SMBs therefore may be illiquid.

To avoid any leveraging concerns, a Fund will maintain liquid, high grade
securities in a segregated account at least equal to the purchase price of the
municipal forward.

Municipal securities include both municipal notes and municipal bonds. Municipal
notes include general obligation notes, tax anticipation notes, revenue
anticipation notes, bond anticipation notes, certificates of indebtedness,
demand notes and construction loan notes and participation interests in
municipal notes. Municipal bonds include general obligation bonds,
<PAGE>
43
revenue or special obligation bonds, private activity and industrial development
bonds and participation interests in municipal bonds.

PAY-IN-KIND SECURITIES -- Pay-in-Kind securities are bonds or preferred stock
that pay interest or dividends in the form of additional bonds or preferred
stock.

RESTRAINTS ON INVESTMENTS BY MONEY MARKET FUNDS -- Investments by a money market
fund are subject to limitations imposed under regulations adopted by the
Securities and Exchange Commission. Under these regulations, money market funds
may only acquire obligations that present minimal credit risk and that are
"eligible securities," which means they are (i) rated, at the time of
investment, by at least two nationally recognized security rating organizations
(one if it is the only organization rating such obligation) in the highest
rating category or, if unrated, determined to be of comparable quality (a "first
tier security"), or (ii) rated according to the foregoing criteria in the second
highest rating category or, if unrated, determined to be of comparable quality
("second tier security"). A security is not considered to be unrated if its
issuer has outstanding obligations of comparable priority and security that have
a short-term rating. In the case of taxable money market funds, investments in
second tier securities are subject to the further constraints in that (i) no
more than 5% of a Fund's assets may be invested in second tier securities and
(ii) any investment in securities of any one such issuer is limited to the
greater of 1% of the Fund's total assets or $1 million. A taxable money market
fund may also hold more than 5% of its assets in first tier securities of a
single issuer for three "business
<PAGE>
44
days" (that is, any day other than a Saturday, Sunday or customary business
holiday).

RESTRICTED SECURITIES -- Restricted securities are securities that may not be
sold freely to the public absent registration under the Securities Act of 1933
or an exemption from registration. Rule 144A securities are securities that have
not been registered under the Securities Act of 1933 but which may be traded
between certain institutional investors including investment companies. The
Trust's Board of Trustees is responsible for developing guidelines and
procedures for determining the liquidity of restricted securities, and for
monitoring the Advisor's implementation of the guidelines and procedures.

SWAPS, CAPS, FLOORS and COLLARS -- Interest rate swaps, mortgage swaps, currency
swaps and other types of swap agreements such as caps, floors and collars are
designed
<PAGE>
45
to permit the purchaser to preserve a return or spread on a particular
investment or portion of its portfolio, and to protect against any increase in
the price of securities the Fund anticipates purchasing at a later date. In a
typical interest rate swap, one party agrees to make regular payments equal to a
floating interest rate times a "notional principal amount," in return for
payments equal to a fixed rate times the same amount, for a specific period of
time. If a swap agreement provides for payment in different currencies, the
parties might agree to exchange the notional principal amount as well. Swaps may
also depend on other prices or rates, such as the value of an index or mortgage
prepayment rates.

U.S. GOVERNMENT AGENCIES -- Obligations issued or guaranteed by agencies of the
U.S. Government, including, among others, the Federal Farm Credit Bank, the
Federal Housing Administration and the Small Business Administration, and
obligations issued or guaranteed by instrumentalities of the U.S. Government,
including, among others, the Federal Home Loan Mortgage Corporation, the Federal
Land Banks and the U.S. Postal Service. Some of these securities are supported
by the full faith and credit of the U.S. Treasury (e.g., Government National
Mortgage Association), others are supported by the right of the issuer to borrow
from the Treasury (e.g., Federal Farm Credit Bank), while still others are
supported only by the credit of the instrumentality (e.g., Federal National
Mortgage Association). Guarantees of principal by agencies or instrumentalities
of the U.S. Government may be a guarantee of payment at the maturity of the
obligation so that in the event of a default prior to maturity there might not
be a market and thus no means of realizing on the obligation prior to maturity.
Guarantees as to the timely payment of principal and interest do not extend to
the value or yield of these securities nor to the value of the Fund's shares.

U.S. GOVERNMENT SUBSIDIARY CORPORATIONS -- Securities of wholly-owned
corporations of the U.S. Government (within the
<PAGE>
46
Department of Housing and Urban Development) which are secured by the full faith
and credit of the U.S. Government (e.g., GNMA).

WHEN-ISSUED AND DELAYED DELIVERY SECURITIES -- When-issued or delayed delivery
basis transactions involve the purchase of an instrument with payment and
delivery taking place in the future. Delivery of and payment for these
securities may occur a month or more after the date of the purchase commitment.
The Fund will segregate with liquid high grade debt securities or cash in an
amount at least equal to these commitments. The interest rate realized on these
securities is fixed as of the purchase date and no interest accrues to the Fund
before settlement. These securities are subject to market fluctuation due to
changes in market interest rates and it is possible that the market value at the
time of settlement could be higher or lower than the purchase price if the
general level of interest rates has changed. Although a Fund generally purchases
securities on a when-issued or forward commitment basis with the intention of
actually acquiring securities for its portfolio, a Fund may dispose of a when-
issued security or forward commitment prior to settlement if it deems
appropriate.

APPENDIX
I. BOND RATINGS
*CORPORATE AND MUNICIPAL BONDS

The following are descriptions of Standard & Poor's Corporation ("S&P") and
Moody's Investors Service, Inc. ("Moody's") corporate and municipal bond
ratings.

*MUNICIPAL NOTE RATINGS

- - Amortization schedule (the larger the final
maturity relative to other maturities the more likely it will be treated as a
note).

- - Source of Payment (the more dependent the
issue is on the market for its refinancing, the more likely it will be treated
as a note).

Note rating symbols are as follows:

SP-1. Very strong or strong capacity to pay principal and interest. Those issues
determined to possess overwhelming safety characteristics will be given a plus
(+) designation.

SP-2. Satisfactory capacity to pay principal and interest.

II. COMMERCIAL PAPER AND SHORT-TERM RATINGS

The following descriptions of commercial paper ratings have been published by
S&P, Moody's, Fitch Investors Service, Inc. ("Fitch"), Duff and Phelps ("Duff")
and IBCA Limited ("IBCA"), respectively.

Commercial paper issues rated Prime-1 and Prime-2 by Moody's are judged by
Moody's to have superior ability and strong ability for repayment, respectively.

The rating Fitch-1+ (Exceptionally Strong Credit Quality) is the highest
commercial rating assigned by Fitch. Paper rated Fitch-1+ is regarded as having
the strongest degree of assurance for timely payment. The rating Fitch-1 (Strong
Credit Quality) is the second highest commercial paper rating assigned by Fitch
which reflects an assurance of timely
<PAGE>
A-3
payment only slightly less in degree than issues rated F-1+.

The designation A1 by IBCA indicates that the obligation is supported by a very
strong capacity for timely repayment. Those obligations rated A1+ are supported
by the highest capacity for timely repayment. Obligations rated A2 are supported
by a strong capacity for timely repayment, although such capacity may be
susceptible to adverse changes in business, economic or financial conditions.
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INVESTMENT SERVICES OFFICES OF SUNTRUST BANKS, INC. AFFILIATE BANKS:

FLORIDA: (STATEWIDE TOLL FREE) 1-800-526-1177

SUNTRUST BANK, CENTRAL FLORIDA, N.A.
200 S. Orange Avenue
Tower 10
Orlando, FL 32801
(407) 237-4380
1-800-432-4760, ext.4380

SUNTRUST BANK, SOUTH FLORIDA, N.A.
501 E. Las Olas Boulevard
Ft. Lauderdale, FL 33301
(305) 765-7422
Boca Raton Office
800 S. Federal Highway
Boca Raton, FL 33435
(407) 243-6707
Coral Ridge Office
2626 E. Oakland Park Blvd.
Ft. Lauderdale, FL 33306
(305) 765-2155
Delray Beach Office
302 E. Atlantic Avenue
Delray Beach, FL 33483
(407) 243-6750
Hollywood Office
2001 Hollywood Blvd.
Hollywood, FL 33021
(305) 765-7062
Palm Beach Office
303 Royal Poinciana Plaza
Palm Beach, FL 33480
(407) 835-2855
PGA Office
2570 PGA Blvd.
Palm Beach Gardens, FL 33410
(407) 835-2802

SUNTRUST BANK, MIAMI, N.A.
777 Brickall Avenue
Miami, FL 33131
(305) 579-7450

SUNTRUST BANK, TAMPA BAY
315 E. Madison Street
Tampa, FL 33602
(813) 224-2517

SUNTRUST BANK, TREASURE COAST, N.A.
700 Virginia Avenue
Ft. Pierce, FL 34982
(407) 467-6459
Osceola Office
111 East Osceola Street
Stuart, FL 34994
(407) 223-6012

SUNTRUST BANK, NORTH FLORIDA, N.A.
200 W. Forsyth Street
Jacksonville, FL 32202
(904) 632-2534

SUNTRUST BANK, SOUTHWEST FLORIDA
12730 New Brittany Blvd.
Ft. Meyers, FL 33907
(813) 277-2531

Pelican Bay Office
801 Laurel Oak Drive
Naples, FL 33963
(813) 598-0515
<PAGE>
SUNTRUST BANK, GULF COAST
South Gate Office
3400 S. Tamiami Trail
Sarasota, FL 34230
(813) 951-3218
Port Charlotte Office
18501 Murdock Circle
Port Charlotte, FL 33949
(813) 625-9286
North Beneva Office
3577 Fruitville Road
Sarasota, FL 34237
(813) 951-3040

South Beneva Office
8181 S. Tamiami Trail
Sarasota, FL 34231
(813) 951-3053

Venice Office
200 Nokomis Ave South
Venice, FL 34285
(813) 486-4417

SUNTRUST BANK, MID-FLORIDA, N.A.
210 Security Square
Winter Haven, FL 33880
(813) 297-6855
Okeechobee Office
815 S. Parrott Avenue
Okeechobee, FL 34974
(813) 763-6417

SUNTRUST BANK, NORTH CENTRAL FLORIDA
203 E. Silver Springs Blvd.
Ocala, FL 34470
(904) 368-6477

SUNTRUST BANK, TALLAHASSEE, N.A.
3522 Thomasville Road
Tallahassee, FL 32312
(904) 298-5030

SUNTRUST BANK, WEST FLORIDA
511 W. 23rd Street
Panama City, FL 32405
(904) 872-6087

GEORGIA:

SUNTRUST BANK, ATLANTA
55 Park Place
First Floor
Atlanta, GA 30303
(404) 588-7315
1-800-241-0901 Ext. 7315

SUNTRUST BANK, NORTHEAST GEORGIA, N.A.
101 N. Lumpkin Street
Athens, GA 30601
(704) 354-5346
Gainesville Branch
104 Green Street
Gainesville, GA 30503
(770) 503-8674

SUNTRUST BANK, NORTHWEST GEORGIA, N.A.
100 East Second Avenue
Rome, GA 30161
(706) 236-4325

SUNTRUST BANK, AUGUSTA, N.A.
2815 Wrightsboro Road
Augusta, GA 30909
(706) 821-2015

SUNTRUST BANK, MIDDLE GEORGIA, N.A.
606 Cherry Street
Macon, GA 31208
(912) 755-5175

SUNTRUST BANK, WEST GEORGIA, N.A.
1246 First Avenue
Columbus, GA 31901
(706) 649-3631

SUNTRUST BANK, SOUTHEAST GEORGIA, N.A.
510 Gloucester Street
Brunswick, GA 31520
(912) 262-5322

SEA ISLAND ROAD BRANCH
701 Sea Island Road
St. Simons Island, GA 31522
(912) 638-3620
(912) 262-2227

TENNESSEE:

SUNTRUST BANK, NASHVILLE, N.A.
424 Church Street
4th Floor
Nashville, TN 37230
(615) 748-4477
1-800-932-2652

SUNTRUST BANK, CHATTANOOGA, N.A.
736 Market Street
Chattanooga, TN 37402
(615) 737-3085
TN WATS 1-800-572-7306, Ext. 3085
Bordering States WATS
1-800-874-1083, Ext. 3085

SUNTRUST BANK, EAST TENNESSEE, N.A.
700 East Hill Avenue
Knoxville, TN 37997
(615) 544-2181
1-800-225-0913, Ext. 2181

SUNTRUST BANK, NORTHEAST TENNESSEE
207 Mockingbird Lane
Johnson City, TN 37604
(615) 461-1005

SUNTRUST BANK, SOUTH CENTRAL TENNESSEE, N.A.
25 Public Square
Lawrenceburg, TN 38464
615-762-3511

ALABAMA:

SUNTRUST BANK, ALABAMA, N.A.
201 South Court Street
Florence, AL 35630
(205) 767-8463
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DISTRIBUTOR
SEI Financial Services
Company

...............................................................................

100159/10-95

PROSPECTUS

STI CLASSIC FUNDS
FLEX SHARES
A CLASS OF NO INITIAL SALES CHARGE FUNDS

INVESTMENT ADVISORS
STI CAPITAL MANAGEMENT, N.A.
TRUSCO CAPITAL MANAGEMENT, INC.
SUNTRUST BANK, CHATTANOOGA, N.A.,
SUNTRUST BANK, ATLANTA
OCTOBER 1, 1995