STI CLASSIC FUNDS, 497, 1996-11-14

STI CLASSIC FUNDS
497, 1996-11-14

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<PAGE>
THE INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO, AMONG OTHER THINGS, THIS PROSPECTUS HAS BEEN
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. SECURITIES OF THE PORTFOLIOS
REFERENCED IN THIS PROSPECTUS MAY NOT BE SOLD NOR MAY OFFERS TO BUY SUCH
SECURITIES BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF SECURITIES
REFERENCED HEREIN IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD
BE UNLAWFUL PRIOR TO SUCH REGISTRATION OR QUALIFICATION UNDER THE SECURITIES
LAWS OF ANY SUCH STATE.
<PAGE>
NOVEMBER 14, 1996
SUBJECT TO COMPLETION
STI CLASSIC FUNDS
TRUST SHARES
EMERGING MARKETS EQUITY FUND
SMALL CAP EQUITY FUND

INVESTMENT ADVISOR TO THE FUNDS:
STI CAPITAL MANAGEMENT, N.A.
(THE "ADVISOR")

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 Emerging Markets Equity Fund and
Small Cap Equity Fund (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, Pennsylvania 19087-1658 or by calling
1-800-874-4770. 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 ADVISOR OR ANY OF ITS 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.

JANUARY 1, 1997
<PAGE>
2

The Trust Shares are offered primarily to financial institutions and
intermediaries ("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. Individuals may
not purchase Trust Shares directly, although individuals may be able to purchase
Trust Shares through accounts maintained with financial institutions.

TABLE OF CONTENTS

<TABLE>
<S> <C>
Expense Summary........................................................... 3
Performance Information for the Predecessor Collective Funds.............. 4
The Trust................................................................. 4
Funds and Investment Objectives........................................... 4
Investment Policies and Strategies........................................ 5
General Investment Policies and Strategies................................ 6
Investment Risks.......................................................... 7
Investment Limitations.................................................... 9
Performance Information................................................... 10
Purchase of Fund Shares................................................... 10
Redemption of Fund Shares................................................. 11
Dividends and Distributions............................................... 12
Tax Information........................................................... 12
STI Classic Funds Information............................................. 13
The Trust................................................................. 13
Board of Trustees......................................................... 13
Investment Advisor........................................................ 13
Portfolio Managers........................................................ 14
Banking Laws.............................................................. 15
Distribution.............................................................. 15
Administration............................................................ 15
Transfer Agent and Dividend Disbursing Agent.............................. 16
Custodian................................................................. 16
Legal Counsel............................................................. 16
Independent Public Accountants............................................ 16
Other Information......................................................... 16
Voting Rights............................................................. 16
Reporting................................................................. 16
Shareholder Inquiries..................................................... 16
Description of Permitted Investments...................................... 17
Appendix.................................................................. A-1
</TABLE>

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.
<PAGE>
3

EXPENSE SUMMARY
TRUST SHARES

The purpose of the following table is to help you understand the various costs
and expenses that a shareholder will bear, directly or indirectly, in connection
with an investment in the Trust Shares of each Fund.

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

<TABLE>
<CAPTION>
EMERGING
MARKETS EQUITY SMALL CAP
FUND EQUITY FUND
<S> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------
Management Fees (after fee waivers & reimbursements)(1)............................... 1.05% 1.00%
Other Fund Expenses................................................................... .50% .20%
- ------------------------------------------------------------------------------------------------------------------------
Total Fund Operating Expenses (after fee waivers & reimbursements)(2)(3).............. 1.55% 1.20%
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>

(1) The Advisor is waiving, on a voluntary basis, a portion of its fee from the
Fund. The Advisor reserves the right to terminate its waiver at any time in
its sole discretion. Absent such waivers, Management Fees would be 1.30% for
the Emerging Markets Fund and 1.15% for the Small Cap Equity Fund. See
"Investment Advisor."

(2) Other Fund Expenses is based on estimated amounts for the current year.

(3) Absent the voluntary waivers described above, Total Fund Operating Expenses
would be 1.80% for the Emerging Markets Fund and 1.35% for the Small Cap
Equity Fund.

<TABLE>
<CAPTION>
ONE THREE
EXAMPLES YEAR YEARS
<S> <C> <C>
- ---------------------------------------------------------------
An investor would pay the following expenses on a
$1,000 investment assuming: (1) a 5% annual
return and (2) redemption at the end of each
time period.
Emerging Markets Equity Fund...................... $16 $ 49
Small Cap Equity Fund............................. $12 $ 37
- ---------------------------------------------------------------
- ---------------------------------------------------------------
</TABLE>

THE EXAMPLES ARE BASED UPON ESTIMATED TOTAL OPERATING EXPENSES OF THE FUND AND
SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE EXPENSES. THESE
FUNDS ARE NEW AND ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
INFORMATION ABOUT THE ACTUAL PERFORMANCE OF THE FUNDS WILL BE CONTAINED IN THE
TRUST'S ANNUAL REPORT TO SHAREHOLDERS, WHICH MAY BE OBTAINED WITHOUT CHARGE WHEN
AVAILABLE.
<PAGE>
4

PERFORMANCE INFORMATION FOR PREDECESSOR COLLECTIVE FUNDS
The Emerging Markets Equity and the Small Cap Equity Funds are each the
successor to collective investment funds previously managed by STI Capital
Management, Inc. A substantial portion of the assets of those collective
investment funds was transferred to the Funds in connection with the Fund's
commencement of operations. Set forth below is certain performance data for the
predecessor collective investment funds, which is deemed relevant because the
collective investment funds were managed using virtually the same investment
objectives, policies and restrictions as those used by each respective Fund. The
performance data, however, is not necessarily indicative of the future
performance of each Fund. Further, the predecessor collective funds were not
subject to certain investment limitations imposed on mutual funds, which, if
they had been imposed, may have adversely affected a collective fund's
performance.

The predecessor collective funds did not incur expenses that correspond to the
advisory, administrative, and other fees to which each Fund is subject.
Accordingly, the following performance information has been adjusted by applying
the total expense ratio for the corresponding Fund, as disclosed in the
Prospectus at the time the Fund commenced operations, which reduced the actual
performance of the collective fund.

The average annual total returns (adjusted to reflect Fund expenses, net of
voluntary waivers and reimbursements) for the following periods:

<TABLE>
<CAPTION>
- -------------------------------------------------------------
SINCE INCEPTION
(3/29/96 - 9/30/96)
- -------------------------------------------------------------
<S> <C>
Emerging Markets Equity Collective Fund 26.01%
- -------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
ONE TWO SINCE
YEAR YEARS INCEPTION
(ENDING (ENDING (9/1/94-
9/30/96) 9/30/96) 9/30/96)
----------- ----------- -----------
<S> <C> <C> <C>
- ---------------------------------------------------------------
Small Cap Equity Fund... 27.96% 25.29% 24.50%
</TABLE>

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 Investment
portfolios (together with the Fund, the "Funds"), Shareholders may purchase
shares in three separate classes (Trust Shares, Investor Shares and Flex Shares)
which provide for variations in distribution and service fees, transfer agent
fees, voting rights and dividends. Except for differences between classes, each
share represents an undivided, proportionate interest in the Fund. This
Prospectus relates to the Trust Shares of the Emerging Markets Equity Fund and
the Small Cap Equity Fund.

FUNDS AND INVESTMENT OBJECTIVES

THE EMERGING MARKETS EQUITY FUND seeks to provide long term capital appreciation
by investing primarily in equity securities of companies located in emerging
markets that appear undervalued relative to their global peers.
<PAGE>
5

THE SMALL CAP EQUITY FUND seeks to provide capital appreciation with a secondary
goal of achieving current income.

The investment objective of each Fund is nonfundamental and may be changed
without shareholder approval. Further, there can be no assurance that a Fund
will achieve its investment objective.

INVESTMENT POLICIES AND STRATEGIES
EMERGING MARKETS EQUITY FUND

The Fund, under normal market conditions will invest at least 65% of its assets
in publicly traded and privately placed equity securities of foreign issuers
located in emerging market countries consisting of: common and preferred stocks,
warrants, options and securities convertible into common stock. As used in this
Prospectus, the term "emerging market country" applies to any country with a
gross domestic product per capita not greater than $10,000.

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.

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. The Fund also 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 portfolios exposure to changes in dollar exchange rates.

The Fund may invest in futures contracts, including options on futures. The Fund
may also purchase shares of closed-end investment companies. The Fund is also
permitted to purchase illiquid securities and may write or purchase put or call
options.

The Fund expects to be fully invested in the investments described above, but
may invest up to 35% of its total assets in bonds and debentures issued by
non-U.S. or U.S. companies, securities issued or guaranteed by foreign or U.S.
governments, including U.S. Treasury obligations, U.S. Treasury STRIPs and
Canadian government obligations, and foreign and U.S. Commercial paper. The
bonds that the Fund may purchase may be rated in any rating category or may be
unrated provided that no more than 20% of the Fund's total assets will be rated
below BBB by S&P or below Baa by Moody's, Inc. or securities not rated by S&P or
Moody's and of comparable quality (see "Investment Risks -- High Yield, Lower
Rated Bonds"). When investing in bonds, the Fund may seek capital gains by
taking advantage of price appreciation caused by interest rate and credit
quality changes. The Fund is also permitted to acquire floating and variable
rate securities. The Fund may invest in mortgage-backed securities and
collateralized mortgage obligations ("CMOs") with a rating no lower than "O" and
asset-backed securities with a rating no lower than "P". The Fund is also
permitted to invest in the short-term obligations of U.S. and foreign banks,
such as commercial banks and savings and loan institutions, with assets of at
least $500 million.

For temporary defensive purposes, during periods when the Advisor determines
that market conditions warrant, the Fund may hold a
<PAGE>
6
portion of its assets in cash and 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; repurchase agreements; certificates of deposit; bankers'
acceptances; time deposits issued by banks or savings and loan associations; and
commercial paper rated in the highest rating category. The Fund may not be
pursuing its investment objective when it is engaged in temporary defensive
investing.

The Emerging Markets Equity Fund may purchase restricted securities, including
Rule 144A securities, that the Advisor determines are liquid pursuant to
guidelines established by the Trust's Board of Trustees.

The Fund's turnover rate may exceed 100%. This rate of turnover, if continued,
will likely result in higher brokerage commissions, higher levels of realized
capital gains and additional taxes than if the turnover rate was lower. See
"Taxes."

SMALL CAP EQUITY FUND

The Small Cap Equity Fund invests substantially all, and under normal market
conditions at least 65%, of its assets in the equity securities of smaller
companies (I.E., companies with market capitalizations of less than $1 billion)
which, in the Advisor's opinion, are undervalued for above-average capital
growth. Any remaining assets may be invested in the equity securities of
companies with larger market capitalizations which the Advisor believes are also
undervalued. The Fund may also invest U.S. dollar denominated equity securities
of foreign issuers (including American Depositary Receipts). Equity securities
include common stock, preferred stock, warrants and rights to subscribe to
common stock and, in general, any security that is convertible into or
exchangeable for common stock.

In order to meet liquidity needs, or for temporary defensive purposes, the Fund
may invest all or a portion of its assets in common stocks of larger, more
established companies, fixed income securities, repurchase agreements, cash or
money market securities. Fixed income securities will only be purchased if they
are rated investment grade or better by one or more nationally recognized
statistical ratings organizations ("NRSROs"). Investment grade bonds include
securities rated at least BBB by Standard & Poor's Corporation ("S&P") or Baa by
Moody's Investor's Services, Inc. ("Moodys"). Money market securities will only
be purchased if they have been given one of the two top ratings by two or more
NRSROs, or if not rated, determined to be of comparable quality by the Fund's
Advisor. To the extent the Fund is engaged in temporary defensive investing, the
Fund will not be pursuing its investment objective.

The Small Cap Equity Fund may engage in options transactions for hedging
purposes only. The Small Cap Equity Fund will not invest more than 20% of its
total assets in unsponsored ADR facilities.

The Fund's annual turnover rate may exceed 100%. Such a turnover rate may result
in higher transactions costs and may result in additional taxes for
shareholders. See "Taxes."

GENERAL INVESTMENT POLICIES AND STRATEGIES

In the event that a security owned by the Fund is downgraded below the stated
rating categories, the Advisor will review and take appropriate action with
regard to the security.
<PAGE>
7

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.

Each Fund may purchase securities issued by money market mutual funds. 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 Fund 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
AMERICAN DEPOSITARY RECEIPTS

American Depositary Receipts ("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.

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 a Fund invests will cause the net asset value of a Fund to
fluctuate.

Investments in small capitalization companies involve greater risk than is
customarily associated with larger, more established companies due to the
greater business risks of small size, limited markets and financial resources,
narrow product lines and the frequent lack of depth of management. The
securities of small companies are often traded over-the-counter and may not be
traded in volumes typical on a national securities exchange. Consequently, the
securities of smaller companies may have limited market stability and may be
subject to more abrupt or erratic market movements than securities of larger,
more established growth companies or the market averages in general.

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
<PAGE>
8
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 a 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 (the lowest ratings
of investment grade bonds) are deemed by these rating services to have
speculative characteristics.

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, limited publicly
available information regarding foreign issuers, less liquidity of securities,
possible seizure, nationalization and expropriation of the foreign issuer or
foreign deposits, 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 Emerging Markets Equity
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 Emerging Markets Equity
Fund will seek to protect the value of its respective 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, they tend
to limit any potential gain which might result should the value of such currency
increase.

HIGH YIELD, LOWER RATED BONDS

The Emerging Markets Equity 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 (E.G., 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
<PAGE>
9
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.

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 Emerging Markets Equity Fund are prepaid,
the Fund generally will reinvest the proceeds in securities with a yield that
reflects prevailing interest rates, which may be lower than the prepaid
security.

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 great fluctuations
in value due to interest rate changes.

The Emerging Markets Equity Fund will be required to include the imputed
interest in zero coupon obligations in its current income. Because the Fund
distributes all of its net investment income to investors, the 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.

INVESTMENT LIMITATIONS

The following investment limitations constitute fundamental policies of the
Funds. 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 the
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 the
Fund's outstanding shares, whichever is less.

The 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
the Fund would be invested in the securities of such issuer; provided, however,
that the Fund may invest up to 25% of its total assets without regard to this
restriction.

2. Purchase any securities which would cause more than 25% of the total assets
of the 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.
<PAGE>
10

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 the 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 the 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.

The performance of the Trust Shares of the Trust 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.

The Funds 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 Trust are sold primarily to financial institutions or
intermediaries, 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 generally may not purchase Trust
Shares directly, although individuals may be able to purchase Trust Shares
through accounts maintained with financial institutions and potentially through
the Preferred Portfolio Account (an asset allocation account available through
SunTrust Securities, Inc.) 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 Trust's
transfer agent, Federated Services Company (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 (a "Business Day").
<PAGE>
11

A purchase order for a Fund 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. Purchases will be made in
full and fractional shares of the Trust calculated to three decimal places. 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 the Fund.

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).

The Trust maintains procedures, including identification methods and other
means, for ascertaining the identity of callers and authenticity of
instructions. If reasonable procedures are not employed, the Trust and/or the
Transfer Agent may be liable for any losses due to unauthorized or fraudulent
telephone transactions. Neither the 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.

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 Trust shares must be transmitted to the Transfer Agent by the
financial institution as the record owner. Financial institutions may establish
procedures for their customers to request redemption of Trust Shares held in
their account with the financial 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.
<PAGE>
12

DIVIDENDS AND DISTRIBUTIONS

Dividends from net investment income (exclusive of capital gains) are declared
and paid annually by the Emerging Markets Equity Fund and quarterly by the Small
Cap Equity 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 a 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 a 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 Funds 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 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 the 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 a Fund or its
Shareholders. Shareholders are urged to consult their tax advisors regarding
specific questions as to federal, state and local income taxes.

TAX STATUS OF EACH FUND:

The Funds intend 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.
The Funds intend 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
<PAGE>
13
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 the 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 the Fund from obligations of foreign issuers may be subject to
foreign withholding taxes. The Funds expect to elect to treat Shareholders as
having paid their proportionate share of such foreign taxes.

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 the 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.

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, state filing fees and
registering the shares under federal 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 ADVISOR

The Advisor is an indirect wholly-owned subsidiary of SunTrust Banks, Inc.
("SunTrust"), a southeastern regional bank holding company with assets of $66
billion as of December 31, 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
<PAGE>
14
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 $ billion as of .

STI Capital Management, N.A. ("STI Capital") serves as the Advisor to the
Emerging Markets Equity Fund. As of , 199 , STI Capital had
discretionary management authority with respect to assets of approximately $
billion. The principal business address of STI Capital is P.O. Box 3808,
Orlando, Florida 32802.

The Trust and the Investment Advisor have entered into an advisory agreement
(the "Advisory Agreement"). Under the Advisory Agreement, the Advisor makes the
investment decisions for the assets of the Fund it advises and continuously
reviews, supervises and administers the Fund's investment programs. The Advisor
discharges the 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 FUND 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 the Fund, the Advisor may execute
brokerage or other agency transactions through affiliates of the Advisor.

For the services provided and expenses incurred pursuant to the Advisory
Agreement, STI Capital is entitled to receive advisory fees computed daily and
paid monthly at the annual rate of 1.30% of the average daily net assets of the
Emerging Markets Equity Fund and 1.15% of the average daily net assets of the
Small Cap Equity Fund.

Although the advisory fees for the Funds are 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, the Advisor may waive (either voluntarily or
pursuant to applicable regulatory limitations) advisory fees payable by a Fund.
Currently, the Advisor has agreed to voluntary reductions in its 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 any time.

PORTFOLIO MANAGERS

Mr. Pablo Salas has been responsible for the day-to-day management of the
Emerging Markets Equity Fund since its inception. Mr. Salas joined STI Capital
in 1996. Prior to joining STI Capital, Mr. Salas managed an emerging markets
portfolio at Lazard Freres Asset Management from 1994 to 1996 and was a
securities analyst at The Principal Group/ Invista Capital Management from 1992
to 1994.

Mr. Brett Barner, CFA, has been responsible for the day-to-day management of the
Small Cap Equity Fund since commencement of operations. Mr. Barner has been a
portfolio manager with STI Capital since 1990.
<PAGE>
15

BANKING LAWS

Banking laws and regulations, including the Glass-Steagall Act as presently
interpreted by the Board of Governors of the Federal Reserve System, currently
(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
Advisor believes that it may perform the services for STI Classic Funds
contemplated by its Advisory Agreement 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 Advisor from continuing to perform services for STI Classic Funds.
If the Advisor was prohibited from providing services to STI Classic Funds, the
Board of Trustees would consider selecting other qualified firms. Any new
investment advisory agreement 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 Advisor, or its 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 Advisor, 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
(the "Distribution Agreement"). No compensation is paid to the Distributor for
distribution services for the Trust Shares of the Fund. Trust Shares of the
Funds 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. An investor may call 1-800-874-4770 to receive
more information regarding Investor Shares or Flex Shares. 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.

The Funds may execute brokerage or other agency transactions through the
Distributor for which the Distributor receives compensation.

ADMINISTRATION

SEI Fund Resources (the "Administrator") serves as the Administrator of the
Trust. 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.
<PAGE>
16

The Administrator is entitled to a fee from the Trust, 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 0.10 %
over $1 billion to $5 billion 0.07 %
over $5 billion to $8 billion 0.05 %
over $8 billion to $10 billion 0.045%
over $10 billion 0.04 %
</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, Federated Investors Tower, Pittsburgh, Pennsylvania
15222-3779 is the Transfer Agent for the shares of the Trust and dividend
disbursing agent for the Trust.

CUSTODIAN

The Bank of New York, One Wall Street, New York, New York 10286, serves as
custodian for the Emerging Markets Equity Fund. SunTrust Bank, Atlanta, c/o STI
Trust & Investment Operations, Inc., 303 Peachtree Street N.E., 14th Floor,
Atlanta, Georgia 30308, serves as custodian of the assets of the Small Cap
Equity Fund. The custodians hold cash, securities and other assets of the Trust
as required by the 1940 Act.

LEGAL COUNSEL

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

INDEPENDENT PUBLIC ACCOUNTANTS

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

OTHER INFORMATION
VOTING RIGHTS

Each share held entitles the Shareholder of record to one vote. Each of the
Funds 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 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>
17

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, 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>
18
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.

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 and SMBs). 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.

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. The 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, 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. The 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. The 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
<PAGE>
19
(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.

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 the Government National Mortgage Association ("GNMA"), the
Federal National Mortgage Association ("FNMA") and the Federal Home Loan
Mortgage Corporation ("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.
<PAGE>
20

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 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.

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.

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. The 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
<PAGE>
21
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, the 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. The 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.

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.
<PAGE>
22

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, FHLMC, 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., GNMA securities), others are supported by the right of
the issuer to borrow from the Treasury (e.g., Federal Farm Credit Bank
securities), while still others are supported only by the credit of the
instrumentality (e.g., FNMA securities). 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.

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 or 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. 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. Together with
bonds rated Aaa, they comprise what are generally known as high-grade bonds.

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 a 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.

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>

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

* INVESTMENT ADVISOR

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 Fund Resources 680 E. Swedesford Road
Wayne, PA 19087

* TRANSFER AGENT

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

* CUSTODIAN

The Bank of New York One Wall Street
New York, NY 10286

* 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

EMERGING MARKETS
EQUITY FUND

SMALL CAP
EQUITY FUND

INVESTMENT ADVISOR
STI CAPITAL MANAGEMENT, N.A.

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