SOUTHTRUST FUNDS, 485APOS, 1999-05-28

SOUTHTRUST FUNDS
485APOS, 1999-05-28

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1933 Act File No. 33-46190
1940 Act File No. 811-6580

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 X___
---------

Pre-Effective Amendment No. .......................... ______
-------- ------

Post-Effective Amendment No. 10 ........................... X___
------ --------

and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 X___
------

Amendment No. 12 ........................................ X___
-------- ------

SOUTHTRUST FUNDS

(formerly SouthTrust Vulcan Funds)

(Exact Name of Registrant as Specified in Charter)

5800 Corporate Drive
Pittsburgh, Pennsylvania 15237-7010

(Address of Principal Executive Offices)

(412) 288-1900
(Registrant's Telephone Number)

John W. McGonigle, Esquire
Federated Investors Tower,
Pittsburgh, Pennsylvania 15222-3779
(Name and Address of Agent for Service)

It is proposed that this filing will become effective:

immediately upon filing pursuant to paragraph (b)
on _____________ pursuant to paragraph (b)
X 60 days after filing pursuant to paragraph (a) (i) on pursuant to paragraph
(a) (i). 75 days after filing pursuant to paragraph (a)(ii) on
_________________ pursuant to paragraph (a)(ii) of Rule 485.

If appropriate, check the following box:

This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.

THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.

subject to completion

MAY , 1999

Prospectus

SOUTHTRUST FUNDS
SouthTrust Value Fund

Southtrust Growth Fund

SouthTrust Value Fund (formerly, Core Equity Fund) is a mutual fund seeking to
provide long-term capital appreciation, with income a secondary consideration.

SouthTrust Growth Fund is a mutual fund seeking to provide capital appreciation.

As with all mutual funds, the Securities and Exchange Commission has not
approved or disapproved these securities or passed upon the adequacy of this
prospectus, and any representation to the contrary is a criminal offense.

Contents

Fund Goals, Strategies,
Performance and Investment Risks

Risk/Return Summary

What are the Funds' Fees
and Expenses?

What are the Funds'
Investment Strategies?

What are the Principal
Securities in Which the Funds Invest?

What are the Specific Risks
of Investing in the Funds?

What do Shares Cost?

How are the Funds Sold?

How to Purchase Shares

How to Redeem and Exchange Shares

Account and Share Information

Who Manages the Funds?

Financial Information

august , 1999

<PAGE>

FUND GOALS, STRATEGIES, PERFORMANCE AND INVESTMENT RISKS

SouthTrust Funds (Company) currently offer shares in six investment portfolios,
each with its own investment goal and strategies, described in separate
prospectuses. This prospectus pertains only to SouthTrust Value Fund (Value
Fund) and SouthTrust Growth Fund (Growth Fund). The purchase of shares of any
Fund should not be considered a complete investment program, but an important
segment of a well-diversified investment program. For information about other
funds offered by SouthTrust Funds, call 1-800-843-8618.

Following is a discussion of each Fund's goal, investment strategies, and risks.
In addition to the risks set forth below that are specific to an investment in a
particular Fund, there are risks common to all mutual funds. For example, a
Fund's share price may decline and you could lose money. Also, there is no
assurance that a Fund will achieve its investment objective. The shares offered
by this prospectus are not deposits or obligations of any bank, are not endorsed
or guaranteed by any bank, and are not insured or guaranteed by the Federal
Deposit Insurance Corporation, or any other government agency. Finally, all of
the Funds bear the risk of Year 2000 readiness.

Also included on the following pages is performance information for the Funds
over a period of time. In addition, the impact of sales charges on the Funds is
reflected in the performance shown in the Average Annual Total Return tables,
but is not reflected in the bar charts. If the bar charts reflected sales
charges, the returns for the Funds would be less than those shown.

SOUTHTRUST VALUE FUND

WHAT IS THE Value Fund'S goal?

The Fund's goal is to provide long-term capital appreciation, with income a
secondary consideration.

WHAT ARE THE FUND'S MAIN INVESTMENT STRATEGIES?

The Fund's investment approach is focused on owning stocks of well-managed
companies with strong earnings growth that are trading at favorable valuation
levels and provide potential for long-term return. The Adviser first identifies
companies with long-term growth potential based upon the company's strengths,
industry position, strategic plans, and financial condition. After these
companies are identified, the Adviser seeks to uncover those companies selling
at attractive valuations. Investments are held for long-term growth and are
generally sold only when there is a fundamental change or the stock price
reaches its target potential. During normal market conditions, at least 65% of
the Fund's total assets will be invested in equity securities.

What are the Main Risks of Investing in the Fund?

The value of the stocks in the Fund's portfolio will go up and down. These
fluctuations could be a sustained trend or a drastic movement. The Fund's
portfolio will reflect changes in prices of individual portfolio stocks or
general changes in stock valuations. Consequently, the Fund's share price may
decline and you could lose money. Other risks of investing in the Fund include
sector risks and risks related to investing for value.

SOUTHTRUST GROWTH FUND

WHAT IS THE Growth Fund'S goal?

The Fund's goal is capital appreciation.

What are the Fund's Main Investment Strategies?

The Fund's investment approach focuses on owning stocks of well-known companies
which the Adviser believes offer the potential for long-term growth. These
companies will generally be "blue chip" companies, i.e., companies that are
nationally known, have a long record of profit growth and dividend payment, and
a reputation for quality management, products and services. These companies will
have market capitalizations over $10 billion, which is considered to be the
large capitalization sector of the market. While the Fund seeks to buy stocks
when they are attractively valued, quality and growth are considered to be more
important than valuation.

What are the Main Risks of Investing in the Fund?

The value of the stocks in the Fund's portfolio will go up and down. These
fluctuations could be a sustained trend or a drastic movement. The Fund's
portfolio will reflect changes in prices of individual portfolio stocks or
general changes in stock valuations. Growth stocks in particular may experience
a larger decline on a forecast of lower earnings, a negative fundamental
development or an adverse market development. Consequently, the Fund's share
price may decline and you could lose money. Other risks of investing in the Fund
include sector risks and risks related to investing for growth.

What are the Fund's Fees and Expenses?

SOUTHTRUST FUNDS

FEES AND EXPENSES

This table describes the fees and expenses that you may pay if you buy and hold
Shares of the Value Fund or the Growth Fund.

Shareholder Fees Value Growth
Fees Paid Directly From Your Investment Fund
Fund
Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of offering price)........ 4.50%
4.50%
Redemption Fee (as a percentage of amount redeemed, if applicable)*......................... 1.00%
1.00%

Annual Fund Operating Expenses (Before Waivers)1
Expenses That are Deducted From Fund Assets (as percentage of average net assets)

Management Fee ............................................................................. 0.75%
0.75%
Distribution (12b-1) Fee 2.................................................................. None 0.25%

Shareholder Services Fee ................................................................... 0.25% 0.25%

Other Expenses ............................................................................. 0.19%
0.38%
Total Annual Fund Operating Expenses ....................................................... 1.19%
1.63%

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

1 Although not contractually obligated to do so, the Adviser waived certain
amounts. These are shown below along with the net expenses the Funds actually
paid for the fiscal year ended April 30, 1999.

Total Waivers of Fund Expenses ............................................................. 0.00%
0.25%
Total Annual Fund Operating Expenses (after waivers)..................................... 1.19% 1.38%3
</TABLE>

2 Growth Fund has no present intention of paying or accruing the distribution
(12b-1) fee during the year ending April 30, 2000.

3 Total Annual Fund Operating Expenses for the Growth Fund are based on
estimated expenses for the year ending April 30, 2000.

* Applies only to shares of the Value Fund and Growth Fund purchased at net
asset value (investments in excess of $1,000,000) which are redeemed within one
year of purchase. See "How to Redeem and Exchange Shares".

EXAMPLE

This Example is intended to help you compare the cost of investing in the Value
Fund and Growth Fund with the cost of investing in other mutual funds.

The Example assumes that you invest $10,000 in the Value Fund and Growth Fund
for the time periods indicated and then redeem all of your Shares at the end of
those periods. The Example also assumes that your investment has a 5% return
each year and that the Value Fund and Growth Fund operating expenses are before
waivers as shown in the table and remain the same. Although your actual costs
may be higher or lower, based on these assumptions your costs would be:

...................1 Year...........3 Years.. 5 Years 10 Years
- --------------------------------------------------------------------------------
.............................................
- --------------------------------------------------------------------------------

Value
Fund...............$566.............$811..... $1075 $1,828
- --------------------------------------------------------------------------------

Growth
Fund......$608..............$941.............N/A N/A
- ------------------------------------------------------------------------

WHAT IS THE VALUE FUND'S INVESTMENT APPROACH?

The Fund's investment approach focuses on owning stocks of well-managed
companies with strong earnings growth that are trading at valuation levels that
provide the potential for long-term growth. The approach combines sophisticated
quantitative screening to identify the companies with the most attractive
fundamental characteristics with disciplined fundamental analysis. The initial
step in the investment approach is to screen a broad universe of companies to
identify those with long-term growth potential. The emphasis is to find stocks
of companies with above-average long-term earnings growth. The Adviser considers
the attractiveness of the company's industry as well as the core strengths
(quality of management, financial position and competitive posture) are
considered. The Adviser carefully analyzes a company's industry position,
strategic plans and financial statements in an effort to understand the
variables driving its earnings growth. Ideally, the Fund seeks well-managed
companies that provide a unique, value-added product or service and possess a
competitive advantage, such as being the low-cost producer or having a dominant
market share. Typically, companies should generate excess cash flows and
maintain relatively under-leveraged balance sheets. These characteristics
support sustainable, superior earnings growth, which is generally necessary to
drive a stock's price substantially higher over the long term. The earnings
analysis focuses on: superior long-term profits potential; the quarterly
earnings trend; how reported results compare with expectations; and whether
earnings estimates are being raised or lowered. In summary, the search is for
excellent companies with above-average to superior growth prospects. After these
companies are identified, they are screened for valuation. This is the most
important factor in selecting stocks for the Fund. The focus is to uncover
stocks of companies selling at attractive valuations based on: price-to-earnings
(p/e), price-to-sales, price-to-cash flow and p/e-to-earnings growth. The Fund's
strategy is to own stocks with above-average to superior growth, identified when
they are attractively priced. Research is used to project a realistic
fundamental price range for the stock over the next 12 months and beyond. The
projected price range is important because it is used in determining the risk /
reward relationship, which drives the investment decision. Only after gaining an
understanding of what price range is realistic for a stock is the decision made
on whether it is attractive for purchase in the Fund. While a great deal of
analysis and effort is placed into the purchase decision, the sell decision is
equally important. A stock may be sold if the reason for purchasing it is no
longer valid. A stock may also be eliminated when it hits our price target or is
no longer attractive relative to other stocks. In summary, the investment
approach for the Value Fund is a consistent, disciplined search for solid
companies with attractive earnings growth prospects whose share prices are at
levels that offer substantial upside potential and limited downside risk. The
investments are held for prospective long-term appreciation and are sold only
when either the fundamental situation changes or the stock price reaches its
target potential.

WHAT IS THE GROWTH FUND'S INVESTMENT APPROACH?

The Fund's investment approach is focused on owning stocks of large, well-known
companies which are believed to have the potential for superior long-term
growth. The Fund seeks companies with above average financial strength and
predictable stable earnings growth. In selecting stocks, the Adviser considers
sales trends, profit margins and the company's competitive position within its
industry. Investment in research and facilities, and new product development
often plays an important role in the investment decision. But, most important,
the Fund seeks to own stocks in companies with proven management and business
plans that greatly enhance their probability of success in the highly
competitive business environment. Most companies owned will be industry leaders
with low cost operations. A strong balance sheet with cash flow adequate to
support superior growth in a necessity. While we seek to buy the stocks when
they are at the low end of their relative valuation ranges, quality and growth
is generally considered more important than valuation in stocks held in the
portfolio. In summary, management, financial strength, a low cost position,
competitive products, and the probability of predictable superior earnings
growth guide our stock selection.

WHAT ARE THE PRINCIPAL SECURITIES IN WHICH THE FUNDS INVEST?

Equity Securities

Equity securities represent a share of an issuer's earnings and assets, after
the issuer pays its liabilities. The Funds cannot predict the income they will
receive from equity securities because issuers generally have discretion as to
the payment of any dividends or distributions. However, equity securities offer
greater potential for appreciation than many other types of securities, because
their value increases directly with the value of the issuer's business.

Common Stocks
Common stocks are the most prevalent type of equity security. Common stocks
receive the issuer's earnings after the issuer pays its creditors and any
preferred stockholders. As a result, changes in an issuer's earnings
directly influence the value of its common stock.

Depositary Receipts
Depositary receipts represent interest in underlying securities issued by a
foreign company. Depositary receipts are not traded in the same market as
the underlying security. The foreign securities underlying American
Depositary Receipts (ADRs) are traded in the United States. ADRs provide a
way to buy shares of foreign-based companies in the United States rather
than in overseas markets. ADRs are also traded in U.S. dollars, eliminating
the need for foreign exchange transactions. Depositary Receipts involve
many of the same risks of investing directly in foreign securities,
including currency risks and risks of foreign investing.

Convertible Securities

Convertible securities are fixed income securities that have the option to
exchange for equity securities at a specified conversion price. The option
allows a Fund to realize additional returns if the market price of the equity
securities exceeds the conversion price. For example, the Fund may hold fixed
income securities that are convertible into shares of common stock at a
conversion price of $10 per share. If the market value of the shares of common
stock reached $12, the Fund could realize an additional $2 per share by
converting its fixed income securities.

Temporary Defensive Investments
The Funds may temporarily depart from their principal investment strategies by
investing their assets in cash, cash items, and shorter-term, higher quality
debt securities and similar obligations. The Funds may do this to minimize
potential losses and maintain liquidity to meet shareholder redemptions during
adverse market conditions. This may cause a Fund to give up greater investment
returns to maintain the safety of principal, that is, the original amount
invested by shareholders.

WHAT ARE THE MAIN RISKS OF INVESTING IN THE FUNDS?

Stock Market Risks
o The value of equity securities in the Funds' portfolios will rise and fall.
These fluctuations could be a sustained trend or a drastic movement. The
Funds' portfolios will reflect changes in prices of individual portfolio
stocks or general changes in stock valuations. Consequently, a Fund's share
price may decline and you could lose money.

o The Adviser attempts to manage market risk by limiting the amount the Funds
invest in each company's equity securities. However, diversification will not
protect a Fund against widespread or prolonged declines in the stock market.

Sector Risks
o Companies with similar characteristics may be grouped together in broad
categories called sectors. Sector risk is the possibility that a certain
sector may underperform other sectors or the market as a whole. As the
Adviser allocates more of a Fund's portfolio holdings to a particular sector,
the Fund's performance will be more susceptible to any economic, business, or
other developments which generally affect that sector.

Risks Related to Investing for Value
o Due to their relatively low valuations, value stocks are typically less
volatile than growth stocks. For instance, the price of a value stock may
experience a smaller increase on a forecast of higher earnings, a positive
fundamental development, or positive market development. Further, value
stocks tend to have higher dividends than growth stocks. This means they
depend less on price changes for returns and may lag behind growth stocks in
an up market.

Risks related to Investing for Growth
o Due to their relatively high valuations, growth stocks are typically more
volatile than value stocks. For instance, the price of a growth stock may
experience a larger decline on an analyst's downward earnings estimate
revision, a negative fundamental development, or other adverse market
development. Further, growth stocks tend to have lower dividend yields than
value stocks. This means they depend more on price changes for returns and
may be more adversely affected in a down market compared to higher yielding
stocks.

WHAT DO SHARES COST?

You can purchase, redeem, or exchange shares any day the New York Stock Exchange
(NYSE) is open. When the Fund receives your transaction request in proper form,
it is processed at the next calculated net asset value (NAV) plus any applicable
front-end sales charge (public offering price). NAV is determined at the end of
regular trading (normally 4:00 p.m. Eastern time) each day the NYSE is open.
Payment must be received no later than 4:00 p.m. (Eastern time) by the third
business day following receipt of the order. If federal funds are not received
by such date, the order will be canceled and the institution placing the order
will be responsible for any loss to the Funds or their shareholders. Payment for
orders which are not received or accepted will be returned after prompt inquiry
to the sending institution.

The minimum initial investment in each Fund is $1,000. The minimum subsequent
investment is $50. Keep in mind that investment professionals may charge you
fees for their services in connection with your share transactions. With respect
to investments made in the Funds through a sweep program, initial minimum
investments may be modified under the relevant account agreement. SouthTrust
Bank or a SouthTrust Funds Dealer may set different minimums for their
customers.

SALES CHARGE WHEN YOU PURCHASE

<PAGE>

Sales Charge Sales Charge Dealer
Purchase Amount as a as a Allowance
Percentage Percentage as a
of Public of Net Percentage
Offering Amount of Offering
Price Invested Price

- --------------------------------------------------------------------------
Less than $50,000 4.50% 4.71% 4.00%
$50,000 but less than $100,000 4.00% 4.17% 3.50%
$100,000 but less than $250,000 3.25% 3.36% 2.75%
$250,000 but less than $500,000 2.75% 2.83% 2.25%
$500,000 but less than $1,000,000 1.75% 1.78% 1.25%
$1,000,000 or more 0.00%* 0.00% 0.00%
*A redemption fee of 1% may be imposed on certain redemptions made within one
year of purchase. See "How to Redeem and Exchange
Shares."

The sales charge at purchase may be reduced or eliminated by:

o purchases of $1 million or more;

o purchasing shares in greater quantities to reduce the applicable sales
charge;

o combining concurrent purchases of shares by you, your spouse, and your
children under age 21;

o accumulating purchases (in calculating the sales charge on an additional
purchase, include the current value of previous share purchases still
invested in the Fund); or

o signing a letter of intent to purchase a specific dollar amount of shares
within 13 months (call your investment professional or the Fund for more
information).

The sales charge will be eliminated when you purchase shares:

o by reinvesting redemption proceeds within 30 days of redeeming shares;

o by exchanging shares of a Fund for Class A Shares in certain funds which are
distributed by Federated Securities Corp. (Federated Funds). The Federated
Funds offered at net asset value through exchange include: Federated
International Income Fund, Federated International Equity Fund; Federated
Equity Income Fund, Inc., Federated High Income Bond Fund, Inc., Federated
Municipal Securities Fund, Inc., Federated Utility Fund, Inc., and Tax-Free
Instruments Trust;

o as director or employee of the Funds, the Adviser, the Distributor and
their affiliates, and the immediate family members of these individuals;

o as an investor for whom SouthTrust Corporation or one of its affiliates
acts in a fiduciary, advisory, custodial, agency or similar capacity; and

o as an employee who purchases shares through a payroll deduction plan sponsored
by your employer.

From time to time, the Distributor may offer special concessions to enable
investors to purchase shares of the Funds at net asset value. To qualify for a
net asset value purchase, you must pay for such purchases with proceeds from the
redemption of shares of a non-affiliated mutual fund on which a sales charge was
paid. A qualifying purchase of shares must occur within 30 days of the prior
redemption and must be evidenced by a confirmation of the redemption
transaction. Proceeds from the redemption of shares on which no sales charges or
commission were paid do not qualify for a purchase at net asset value.

If your investment qualifies for a reduction or elimination of the sales charge,
you, SouthTrust Funds Shareholder Services or your SouthTrust Funds Dealer
should notify the Funds' Distributor, Federated Securities Corp., at the time of
purchase. If the Distributor is not notified, you will receive the reduced sales
charge only on additional purchases, and not retroactively on previous
purchases.

HOW ARE THE FUNDS SOLD?

The Funds' Distributor markets the shares described in this prospectus to
institutions and individuals, directly or through investment professionals.

When the Distributor receives sales charges and marketing fees, it may pay some
or all of them to investment professionals. The Distributor and its affiliates
may pay out of their assets other amounts (including items of material value) to
investment professionals for marketing and servicing shares. The Distributor is
a subsidiary of Federated Investors, Inc. (Federated).

RULE 12B-1 PLAN - Growth Fund

The Company has adopted a Rule 12b-1 Plan (Plan) on behalf of Growth Fund, which
allows it to pay marketing fees to the Distributor and investment professionals
for the sale, distribution and customer servicing of the Fund's shares. The
Company has no present intention to activate the Plan. Once the Fund begins
accruing the 12b-1 fee, Fund expenses will rise. If the Company were to activate
the Plan, it would be permitted to pay up to 0.25% of the average daily net
assets of the Fund as a distribution fee to the Distributor. Because these
shares could pay marketing fees on an ongoing basis, your investment cost may be
higher over time than other shares with different sales charges and marketing
fees.

HOW TO PURCHASE SHARES

You may purchase shares through SouthTrust Funds Shareholder Services or through
a broker/dealer that has entered into a sales agreement with the Distributor
(SouthTrust Funds Dealer), or through an exchange from another SouthTrust Fund
and certain Federated Funds. Texas residents should purchase shares through
Federated Securities Corp. at 1-800-356-2805. The Funds reserve the right to
reject any request to purchase or exchange shares. Trust customers of SouthTrust
Bank should contact their account officer.

DIRECTLY FROM THE FUND

o Establish your account with the Fund by submitting a completed account
application; and

o Send your payment to the Fund by Federal Reserve wire or check.

An institution may establish an account and place an order by calling SouthTrust
Funds Shareholder Services or a SouthTrust Funds Dealer and the shares will be
priced at the next calculated public offering price after the Fund receives the
order.

By Check

Complete an account application (for new accounts), make your check payable to
the Fund, and mail it to:

SouthTrust Funds

[INSERT ADDRESS]

Payment should be made in U.S. dollars and drawn on a U.S. bank. If you already
have an account, note your account number on your check. The Fund will not
accept third-party checks (checks originally payable to someone other than the
Fund). If your check does not clear, your purchase will be canceled and you
could be responsible for any losses or fees the Fund or its transfer agent
incurs.

By Wire
To purchase shares by Federal Reserve wire, contact SouthTrust Funds Shareholder
Services for wiring instructions. Wire orders will only be accepted on days on
which the Fund, SouthTrust, and the Federal Reserve wire are open.

Send your wire to:

[INSERT ADDRESS]

By Telephone
Once an account has been established, you may purchase additional shares by
calling SouthTrust Funds Shareholder Services directly at 1-800-[INSERT NUMBER]

THROUGH AN INVESTMENT PROFESSIONAL
o Establish an account with the investment professional; and

o Submit your purchase order by 12:00 noon (Eastern time) and payment by 4:00
p.m. (Eastern time) and you will receive that day's dividends. If your order is
received by 4:00 p.m., your order will be processed the next business day.
Investment professionals should send payments according to the instructions in
the sections "By Check" or "By Wire."

THROUGH AN EXCHANGE

You may purchase shares through an exchange from another SouthTrust Fund or one
of the Class A Share Federated Funds. You must meet the minimum initial
investment requirement for purchasing shares and both accounts must have
identical registrations.

You may telephone an exchange request by calling SouthTrust Funds Shareholder
Services or your SouthTrust Funds Dealer. Trust customers should contact their
account officer.

BY automatic INVESTMENT PROGRAM

Once you have opened an account, you may automatically purchase additional
shares in a minimum amount of $50 on a monthly basis by completing an Automatic
Investment Program application or by contacting SouthTrust Funds Shareholder
Services or your SouthTrust Funds Dealer. Once you have opened an account, you
may purchase additional shares through a depository institution that is an
Automated Clearing House (ACH) member. This purchase option can be established
by completing the appropriate sections of the Automatic Investment Application.

HOW TO REDEEM AND EXCHANGE SHARES

You should redeem or exchange shares through SouthTrust Funds Shareholder
Services or your SouthTrust Funds Dealer. Trust customers of SouthTrust Bank
should contact their account officer.

Through a financial institution

Submit your redemption or exchange request to SouthTrust Funds Shareholder
Services or your SouthTrust Funds Dealer by the end of regular trading on the
NYSE (normally 4:00 p.m. Eastern time). The redemption amount you will receive
is based upon the next calculated NAV after the Fund receives the order.
Investment professionals are responsible for promptly submitting redemption
requests and providing proper written redemption instructions as outlined below.
If your redemption order is received by the Distributor before 12:00 noon
(Eastern time), payment in federal funds is normally wired the same day. Payment
for redemption requests received after 12:00 noon (Eastern time) but before 4:00
p.m. (Eastern time) will be wired the next business day.

DIRECTLY FROM THE FUND

By Telephone

You may redeem or exchange shares by calling SouthTrust Funds Shareholder
Services or your SouthTrust Funds Dealer once you have completed the appropriate
authorization form for telephone transactions.

If you call before 12:00 noon (Eastern time), your redemption will be wired to
you the same day. You will not receive that day's dividend.

If you call after 12:00 noon (Eastern time), your redemption will be wired to
you the following business day. You will receive that day's dividend.

The Funds reserve the right to wire redemption proceeds within five business
days after receiving the redemption order if, in the judgment of the Adviser, an
earlier payment could adversely impact a Fund.

By Mail

You may redeem or exchange shares by mailing your request to:

[INSERT ADDRESS]
Your redemption request will be processed on the day the Fund receives your
written request in proper form. Dividends are paid up to and including the day
that a redemption request is processed.

All requests must include:

Fund name, account number and account registration;

o amount to be redeemed or exchanged;

o signatures of all shareholders exactly as registered; and

o if exchanging, the Fund name, account number and account registration into
which you are exchanging.

Call SouthTrust Funds Shareholder Services or your SouthTrust Funds Dealer if
you need special instructions.

Signature Guarantees

Signatures must be guaranteed if:

o your redemption will be sent to an address other than the address of
record;

o your redemption will be sent to an address of record that was changed
within the last 30 days;

o a redemption is payable to someone other than the shareholder(s) of record;
or

o if exchanging (transferring) into another fund with a different shareholder
registration.

A signature guarantee is designed to protect your account from fraud. Obtain a
signature guarantee from a bank or trust company, savings association, credit
union or broker, dealer, or securities exchange member. A notary public cannot
provide a signature guarantee. PAYMENT METHODS FOR REDEMPTIONS

Your redemption proceeds will be mailed by check to your address of record. The
following payment options are available if you complete the appropriate section
of the Account Application Form. These payment options require a signature
guarantee if they were not established when the account was opened:

o an electronic transfer to your account at a financial institution that is
an ACH member; or

o wire payment to your account at a domestic commercial bank that is a Federal
Reserve System member.

Redemption in Kind

Although the Funds intend to pay share redemptions in cash, they reserve the
right to pay the redemption price in whole or in part by a distribution of a
Fund's portfolio securities.

LIMITATIONS ON REDEMPTION PROCEEDS

Redemption proceeds normally are wired or mailed within five business days after
receiving a request in proper form. Payment may be delayed up to seven days:

o to allow your purchase to clear;

o during periods of market volatility; or

o when a shareholder's trade activity or amount adversely impacts a Fund's
ability to manage its assets.

You will not accrue interest or dividends on uncashed checks from the Fund if
those checks are undeliverable and returned to the Fund.

The sales charge when you redeem shares
In order to discourage short-term investments in the Funds, the Company charges
a redemption fee in connection with redemptions of shares held for less than one
year which were purchased at net asset value (investments of $1,000,000 or
more). The charge is 1% of the lesser of the value of the shares redeemed
(exclusive of reinvested dividends and capital gain distributions) or the total
cost of such shares. In determining if a charge applies and the amount of any
such charge, the first shares redeemed are those purchased with reinvested
dividends and capital gain distributions, followed by others held the longest.
The redemption fee is not assessed on ( i ) exchanges (except if shares acquired
by exchange were then redeemed within twelve months of the initial purchase);
(ii) redemptions made in connection with distributions from qualified retirement
plans, 403(b) plans or IRAs due to death, disability or attainment of age 591/2;
(iii) redemptions resulting from the tax-free return of excess contributions to
IRAs or employee benefit plans; and (iv) redemptions through certain automatic
withdrawals. The 1% redemption fee is not a deferred sales charge but is rather
a means to offset the additional costs associated with short-term investments in
the Funds.

EXCHANGE PRIVILEGES

Shareholders who have purchased shares of the Funds (including shares acquired
through a reinvestment of a dividend or distribution on such shares) may
exchange those shares for shares of one of the other SouthTrust Funds or one of
the Class A Share Federated Funds without paying an additional sales charge.
However, this privilege does not apply to exchanges into SouthTrust Value Fund
or SouthTrust Growth Fund until an investor has owned shares in the Funds for 90
days. The 90-day holding period does not apply to exchanges in which the
investor obtained Fund shares through a prior exchange of shares of SouthTrust
Value Fund or SouthTrust Growth Fund. When shares of SouthTrust U.S. Treasury
Money Market Fund are exchanged for shares of a load Fund or a Federated Fund,
the applicable sales charge (if any) will be assessed. However, shareholders
exchanging shares of SouthTrust U.S. Treasury Money Market Fund which were
received in a previous exchange involving shares on which a load was paid will
not be required to pay an additional sales charge upon notification of the
reinvestment of the equivalent investment into a load Fund.

To do this, you must:

o exchange shares having a net asset value of at least $1,000;

o ensure that the account registrations are identical;

o meet any minimum initial investment requirements; and

o receive a prospectus for the fund into which you wish to exchange.

The Funds may modify or terminate the exchange privilege at any time. The Fund's
management or Adviser may determine from the amount, frequency and pattern of
exchanges that a shareholder is engaged in excessive trading that is detrimental
to a Fund and other shareholders. If this occurs, the Fund may terminate the
availability of exchanges to that shareholder and may bar that shareholder from
purchasing other SouthTrust Funds.

Exercise of this privilege is treated as a sale for federal income tax purposes
and, depending on the circumstances, a short or long-term capital gain or loss
may be realized. You can receive further information by contacting SouthTrust
Funds Shareholder Services or a SouthTrust Funds Dealer.

Automatic WITHDRAWAL Plan (awp)

You may automatically redeem shares if the value of your account equals $10,000
or more other than retirement accounts subject to required minimum
distributions. Shareholders who elect to establish an AWP may receive a monthly,
quarterly, semi-annual, or annual payment of a stated amount not less than $50.
Complete the appropriate section of the Account Application or contact
SouthTrust Funds Shareholder Services or your SouthTrust Funds Dealer. This
program may reduce, and eventually deplete, your account. Payments should not be
considered yield or income. Generally, it is not advisable to continue to
purchase shares subject to a sales charge while redeeming shares using this
program.

ADDITIONAL CONDITIONS

Telephone Transactions

The Funds will record your telephone instructions. If the Funds do not follow
reasonable procedures, they may be liable for losses due to unauthorized or
fraudulent telephone instructions.

Share Certificates

The Funds do not issue share certificates.

ACCOUNT AND SHARE INFORMATION
CONFIRMATIONS AND ACCOUNT STATEMENTS

You will receive confirmation of purchases, redemptions and exchanges (except
for automatic transactions). In addition, you will receive periodic statements
reporting all account activity, including automatic transactions, dividends and
capital gains paid.

DIVIDENDS AND CAPITAL GAINS

The Funds declare and pay any dividends monthly to shareholders. Dividends are
paid to all shareholders invested in the Funds on the record date. The record
date is the date on which a shareholder must officially own shares in order to
earn a dividend.

In addition, the Funds pay any capital gains at least annually. Your dividends
and capital gains distributions will be automatically reinvested in additional
shares without a sales charge, unless you elect cash payments.

If you purchase shares just before a Fund declares a dividend or capital gain
distribution, you will pay the full price for the shares and then receive a
portion of the price back in the form of a taxable distribution, whether or not
you reinvest the distribution in shares. Therefore, you should consider the tax
implications of purchasing shares shortly before a Fund declares a dividend or
capital gain. Contact SouthTrust Funds Shareholder Services or your SouthTrust
Funds Dealer for information concerning when dividends and capital gains will be
paid.

ACCOUNTS WITH LOW BALANCES

Due to the high cost of maintaining accounts with low balances, non-retirement
accounts may be closed if redemptions or exchanges cause the account balance to
fall below the minimum initial investment amount. Before an account is closed,
you will be notified and allowed 30 days to purchase additional shares to meet
the minimum.

TAX INFORMATION

The Funds send an annual statement of your account activity to assist you in
completing your federal, state and local tax returns. Fund distributions of
dividends and capital gains are taxable to you whether paid in cash or
reinvested in the Fund. Dividends are taxable as ordinary income; capital gains
are taxable at different rates depending upon the length of time a Fund holds
its assets.

Fund distributions are expected to be both dividends and capital gains.
Redemptions and exchanges are taxable sales. Please consult your tax adviser
regarding your federal, state, and local tax liability.

WHO MANAGES THE FUNDS?

The Board of Trustees governs the Funds. The Adviser manages the Funds' assets,
including the selection and management of portfolio securities.

SouthTrust Bank of Alabama, N.A., a national banking association, serves as the
investment adviser for each of the Funds. The Adviser, headquartered in
Birmingham, Alabama, is a wholly-owned subsidiary of SouthTrust Corporation, a
publicly-held bank holding company. The Adviser and SouthTrust Corporation have
their principal offices at 420 North 20th Street, Birmingham, Alabama 35203. The
Adviser's experience includes the management of various collective and common
investment funds and the provision of investment management services to banks
and thrift institutions, corporate and profit-sharing trusts, municipal and
state retirement funds, and individual investors. As of July 31, 1999, the
Adviser had approximately $ billion in assets under management. The Adviser has
served as investment adviser since the Company's inception on March 4, 1992.

Subject to the supervision of the Trustees, the Adviser provides overall
investment management for each Fund, provides research and credit analysis, is
responsible for all purchases and sales of portfolio securities, maintains books
and records with respect to each Fund's securities transactions and provides
periodic and special reports to the Trustees as requested.

For the advisory services provided and expenses assumed by it, the Adviser is
entitled to receive a fee from each Fund, computed daily and payable monthly, at
an annual rate of 0.75%. The Adviser may voluntarily waive a portion of its fee
or reimburse the Funds for certain operating expenses.

Investment decisions for Value Fund are made by investment teams with Jon F.
Goebel as the lead portfolio manager. Mr. Goebel has guided the Value Fund since
joining SouthTrust Bank, N.A. in June 1994. Mr. Goebel is the Chief Investment
Officer of SouthTrust Asset Management Company. He is a Chartered Financial
Analyst and has a master's degree from the University of Nebraska. Prior to
joining SouthTrust, Mr. Goebel served in a similar capacity for North Carolina
Trust Company.

Joseph C. Ford has been the portfolio manager for Growth Fund since inception,
July , 1999. Mr. Ford is Director of Portfolio Management for SouthTrust Asset
Management Company where he has been a member of the investment team since 1995.
Prior to joining SouthTrust Asset Management Company, Mr. Ford served as Senior
Vice President and Senior Portfolio Manager at SunBank Capital Management,
SunBank, Inc., in Orlando, Florida, from 1983 to 1995. From 1979 to 1983, he was
an Assistant Vice President and Trust Officer for Virginia National Bankshares,
Inc., Norfolk, Virginia. Mr. Ford has a bachelor of arts degree in Economics
from Belmont Abbey College.

Year 2000 Readiness
The "Year 2000" problem is the potential for computer errors or failures because
certain computer systems may be unable to interpret dates after December 31,
1999 or experience other date-related problems. The Year 2000 problem may cause
systems to process information incorrectly and could disrupt businesses, such as
the Funds, that rely on computers.

While it is impossible to determine in advance all of the risks to a Fund, a
Fund could experience interruptions in basic financial and operational
functions. Fund shareholders could experience errors or disruptions in Fund
share transactions or Fund communications.

The Funds' service providers are making changes to their computer systems to fix
any Year 2000 problems. In addition, they are working to gather information from
third-party providers to determine their Year 2000 readiness.

Year 2000 problems would also increase the risks of a Fund's investments. To
assess the potential effect of the Year 2000 problem, the Adviser is reviewing
information regarding the Year 2000 readiness of issuers of securities a Fund
may purchase. The financial impact of these issues for the Funds is still being
determined. There can be no assurance that potential Year 2000 problems would
not have a material adverse effect on a Fund.

FINANCIAL INFORMATION
FINANCIAL HIGHLIGHTS

The Financial Highlights will help you understand the Value Fund's financial
performance for its past five fiscal years, or since inception, if the life of
the Fund is shorter. Some of the information is presented on a per share basis.
Total returns represent the rate an investor would have earned (or lost) on an
investment in a Fund, assuming reinvestment of any dividends and capital gains.
As this is the Growth Fund's first fiscal year, financial information is not yet
available.

This information has been audited by Arthur Andersen LLP whose report, along
with the Fund's audited financial statements, is included in the Annual Report.

<PAGE>

SOUTHTRUST VALUE FUND
SOUTHTRUST GROWTH FUND
Portfolios of SouthTrust Funds

A Statement of Additional Information (SAI) dated August , 1999, is incorporated
by reference into this prospectus. Additional information about the Funds'
investments is contained in the Funds' Annual and Semi-Annual Reports to
shareholders as they become available. The Annual Report discusses market
conditions and investment strategies that significantly affected the Funds'
performance during the last fiscal year. To obtain the SAI, the Annual Report,
Semi-Annual Report and other information without charge, and make inquiries,
call SouthTrust Funds Shareholder Services at 1-800-843-8618 or your SouthTrust
Funds Dealer.

You can obtain information about the Funds (including the SAI) by visiting or
writing the Public Reference Room of the Securities and Exchange Commission in
Washington, DC 20549-6009 or from the Commission's Internet site at
http://www.sec.gov. You can call 1-800-SEC-0330 for information on the Public
Reference Room's operations and copying charges.

Investment Company Act File No. 811-6580
Cusip 844734103
Cusip

000000-00 (8/99)

THE INFORMATION IN THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT COMPLETE AND
MAY BE CHANGED. WE MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION
STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS
STATEMENT OF ADDITIONSAL INFORMATION IS NOT AN OFFER TO SELL THESE SECURITIES
AND IT IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE
OFFER OR SALE IS NOT PERMITTED.

SUBJECT TO COMPLETION

May , 1999

SOUTHTRUST VALUE FUND

SOUTHTRUST GROWTH FUND

Portfolios of SouthTrust Funds

This Statement of Additional Information (SAI) is not a prospectus. Read this
SAI in conjunction with the prospectus for SouthTrust Value Fund (formerly, Core
Equity Fund) and SouthTrust Growth Fund dated August , 1999. This SAI
incorporates by reference the Funds' Annual Reports. Obtain the prospectus or
Annual Reports without charge by calling 1-800-843-8618.

August , 1999

CONTENTS
How are the Funds Organized?
Securities in Which the Fund Invests
What do Shares Cost?
How are the Funds Sold?
Exchanging Securities for Shares
Subaccounting Services
Redemption in Kind
Massachusetts Partnership Law
Account and Share Information
Tax Information
Who Manages and Provides Services to the Funds?
How Do the Funds Measure Performance?
Financial Information
Addresses
Cusip 844734103

(/99)

<PAGE>

HOW ARE THE FUNDS ORGANIZED?

The Company is an open-end management investment company currently offering
shares in five diversified and one non-diversified investment portfolios. The
Company was organized on March 4, 1992. On June 30, 1998, the name of the
Company changed from "Vulcan Funds" to "SouthTrust Vulcan Funds." Effective July
22, 1998, the name of the Company changed from "SouthTrust Vulcan Funds" to
"SouthTrust Funds."

As stated in the prospectus, the investment adviser of the Funds is SouthTrust
Bank, N.A.

SECURITIES IN WHICH THE FUNDS INVEST

In pursuing their investment strategy, the Funds may invest in the following
securities for any purpose that is consistent with their respective investment
objective.
Following is a table that indicates which types of securities are a: P =
Principal investment of a Fund; or A = Acceptable (but not principal) investment
of a Fund;

Securities Value Growth
Fund Fund

- ----------------------------------------------------------------------------
Equity Securities P P
- ---------------------------------------------------
--------------------------
Common Stocks P P
- ----------------------------------------------------------------------------
Preferred Stocks A A
- ---------------------------------------------------
--------------------------
Warrants A A
- ----------------------------------------------------------------------------
Real Estate Investment Trusts A A
Fixed Income Securities A A
Treasury Securities A A
- ----------------------------------------------------------------------------
Agency Securities A A
- ----------------------------------------------------------------------------
Corporate Debt Securities A A
- ----------------------------------------------------------------------------
Commercial Paper A A
- ----------------------------------------------------------------------------
Demand Instruments A A
- ----------------------------------------------------------------------------
Zero Coupon Securities A A
- ----------------------------------------------------------------------------
Bank Instruments A A
- ----------------------------------------------------------------------------
Convertible Securities A A
- ----------------------------------------------------------------------------
Foreign Securities A A
Depositary Receipts A A
- ----------------------------------------------------------------------------
Brady Bonds A A
Derivative Contracts A A
Futures Contracts A A
- ----------------------------------------------------------------------------
Options A A
- ----------------------------------------------------------------------------
Hybrid Instruments A A
Repurchase Agreements A A
Reverse Repurchase Agreements A A
When Issued Transactions A A
To Be Announced Securities A A
- ----------------------------------------------------------------------------
Securities Lending A A
Asset Coverage A A
Investing in Securities of Other Investment A A
Companies
- ----------------------------------------------------------------------------

SECURITIES DESCRIPTIONS AND TECHNIQUES

Real Estate Investment Trusts (REITs)
REITs are real estate investment trusts that lease, operate and finance
commercial real estate. REITs are exempt from federal corporate income tax
if they limit their operations and distribute most of their income. Such
tax requirements limit a REIT's ability to respond to changes in the
commercial real estate market. Warrants Warrants give a Fund the option to
buy the issuer's equity securities at a specified price (the exercise
price) at a specified future date (the expiration date). A Fund may buy the
designated securities by paying the exercise price before the expiration
date. Warrants may become worthless if the price of the stock does not rise
above the exercise price by the expiration date. This increases the market
risks of warrants as compared to the underlying security. Rights are the
same as warrants, except companies typically issue rights to existing
stockholders.

Fixed Income Securities
Fixed income securities pay interest, dividends or distributions at a specified
rate. The rate may be a fixed percentage of the principal or adjusted
periodically. In addition, the issuer of a fixed income security must repay the
principal amount of the security, normally within a specified time. Fixed income
securities provide more regular income than equity securities. However, the
returns on fixed income securities are limited and normally do not increase with
the issuer's earnings. This limits the potential appreciation of fixed income
securities as compared to equity securities.
A security's yield measures the annual income earned on a security as a
percentage of its price. A security's yield will increase or decrease depending
upon whether it costs less (a discount) or more (a premium) than the principal
amount. If the issuer may redeem the security before its scheduled maturity, the
price and yield on a discount or premium security may change based upon the
probability of an early redemption. Securities with higher risks generally have
higher yields.
The following describes the types of fixed income securities in which the
Funds invest.

Treasury Securities
Treasury securities are direct obligations of the federal government of the
United States. Investors regard treasury securities as having the lowest
credit risks. Agency Securities Agency securities are issued or guaranteed
by a federal agency or other government sponsored entity acting under
federal authority (a GSE). The United States supports some GSEs with its
full faith and credit. Other GSEs receive support through federal
subsidies, loans or other benefits. A few GSEs have no explicit financial
support, but are regarded as having implied support because the federal
government sponsors their activities. Investors regard agency securities as
having low credit risks, but not as low as treasury securities.

Corporate Debt Securities
Corporate debt securities are fixed income securities issued by businesses.
Notes, bonds, debentures and commercial paper are the most prevalent types
of corporate debt securities. The Funds may also purchase interests in bank
loans to companies. The credit risks of corporate debt securities vary
widely among issuers.

In addition, the credit risk of an issuer's debt security may vary based on
its priority for repayment. For example, higher ranking (senior) debt
securities have a higher priority than lower ranking (subordinated)
securities. This means that the issuer might not make payments on
subordinated securities while continuing to make payments on senior
securities. In addition, in the event of bankruptcy, holders of senior
securities may receive amounts otherwise payable to the holders of
subordinated securities. Some subordinated securities, such as trust
preferred and capital securities notes, also permit the issuer to defer
payments under certain circumstances. For example, insurance companies
issue securities known as surplus notes that permit the insurance company
to defer any payment that would reduce its capital below regulatory
requirements.

Commercial Paper

Commercial paper is an issuer's obligation with a maturity of less than
nine months. Companies typically issue commercial paper to pay for
current expenditures. Most issuers constantly reissue their commercial
paper and use the proceeds (or bank loans) to repay maturing paper. If
the issuer cannot continue to obtain liquidity in this fashion, its
commercial paper may default. The short maturity of commercial paper
reduces both the market and credit risks as compared to other debt
securities of the same issuer.

Demand Instruments
Demand instruments are corporate debt securities that the issuer must
repay upon demand. Other demand instruments require a third party, such
as a dealer or bank, to repurchase the security for its face value upon
demand. The Funds treat demand instruments as short-term securities,
even though their stated maturity may extend beyond one year.
Bank Instruments
Bank instruments are unsecured interest bearing deposits with banks. Bank
instruments include bank accounts, time deposits, certificates of deposit
and banker's acceptances. Yankee instruments are denominated in U.S.
dollars and issued by U.S. branches of foreign banks. Eurodollar
instruments are denominated in U.S. dollars and issued by non-U.S. branches
of U.S. or foreign banks.

Zero Coupon Securities
Zero coupon securities do not pay interest or principal until final
maturity unlike debt securities that provide periodic payments of interest
(referred to as a coupon payment). Investors buy zero coupon securities at
a price below the amount payable at maturity. The difference between the
purchase price and the amount paid at maturity represents interest on the
zero coupon security. Investors must wait until maturity to receive
interest and principal, which increases the interest rate and credit risks
of a zero coupon security. There are many forms of zero coupon securities.
Some are issued at a discount and are referred to as zero coupon or capital
appreciation bonds. Others are created from interest bearing bonds by
separating the right to receive the bond's coupon payments from the right
to receive the bond's principal due at maturity, a process known as coupon
stripping. Treasury STRIPs, IOs and POs are the most common forms of
stripped zero coupon securities. In addition, some securities give the
issuer the option to deliver additional securities in place of cash
interest payments, thereby increasing the amount payable at maturity. These
are referred to as pay-in-kind or PIK securities.

Convertible Securities
Convertible securities have lower yields than comparable fixed income
securities. In addition, at the time a convertible security is issued the
conversion price exceeds the market value of the underlying equity securities.
Thus, convertible securities may provide lower returns than non-convertible
fixed income securities or equity securities depending upon changes in the price
of the underlying equity securities. However, convertible securities permit the
Funds to realize some of the potential appreciation of the underlying equity
securities with less risk of losing its initial investment. The Funds treat
convertible securities as both fixed income and equity securities for purposes
of their investment policies and limitatins, because of their unique
characteristics.

Foreign Securities
Foreign securities are securities of issuers based outside the United States.
The Funds consider an issuer to be based outside the United States if: o it is
organized under the laws of, or has a principal office located in, another
country; o the principal trading market for its securities is in another
country; or o it (or its subsidiaries) derived in its most current fiscal year
at least 50% of its total assets, capitalization, gross
revenue or profit from goods produced, services performed, or sales made in
another country.

Foreign securities are primarily denominated in foreign currencies. Along with
the risks normally associated with domestic securities of the same type, foreign
securities are subject to currency risks and risks of foreign investing. Trading
in certain foreign markets is also subject to liquidity risks.

Depositary Receipts
Depositary receipts represent interests in underlying securities issued by
a foreign company. Depositary receipts are not traded in the same market as
the underlying security. The foreign securities underlying American
Depositary Receipts (ADRs) are traded in the United States. ADRs provide a
way to buy shares of foreign-based companies in the United States rather
than in overseas markets. ADRs are also traded in U.S. dollars, eliminating
the need for foreign exchange transactions. The foreign securities
underlying European Depositary Receipts (EDRs), Global Depositary Receipts
(GDRs), and International Depositary Receipts (IDRs), are traded globally
or outside the United States. Depositary receipts involve many of the same
risks of investing directly in foreign securities, including currency risks
and risks of foreign investing.

Brady Bonds
Brady Bonds are U.S. dollar denominated debt obligations that foreign
governments issue in exchange for commercial bank loans. The International
Monetary Fund (IMF) typically negotiates the exchange to cure or avoid a
default by restructuring the terms of the bank loans. The principal amount
of some Brady Bonds is collateralized by zero coupon U.S. Treasury
securities which have the same maturity as the Brady Bonds. However,
neither the U.S. government nor the IMF has guaranteed the repayment of any
Brady Bond.

Derivative Contracts
Derivative contracts are financial instruments that require payments based upon
changes in the values of designated (or underlying) securities, currencies,
commodities, financial indices or other assets. Some derivative contracts (such
as futures and options) require payments relating to a future trade involving
the underlying asset. Other derivative contracts require payments relating to
the income or returns from the underlying asset. The other party to a derivative
contract is referred to as a counterparty.
Many derivative contracts are traded on securities or commodities exchanges.
In this case, the exchange sets all the terms of the contract except for the
price. Investors make payments due under their contracts through the exchange.
Most exchanges require investors to maintain margin accounts through their
brokers to cover their potential obligations to the exchange. Parties to the
contract make (or collect) daily payments to the margin accounts to reflect
losses (or gains) in the value of their contracts. This protects investors
against potential defaults by the counterparty. Trading contracts on an exchange
also allows investors to close out their contracts by entering into offsetting
contracts.
For example, a Fund could close out an open contract to buy an asset at a
future date by entering into an offsetting contract to sell the same asset on
the same date. If the offsetting sale price is more than the original purchase
price, the Fund realizes a gain; if it is less, the Fund realizes a loss.
Exchanges may limit the amount of open contracts permitted at any one time. Such
limits may prevent the Fund from closing out a position. If this happens, the
Fund will be required to keep the contract open (even if it is losing money on
the contract), and to make any payments required under the contract (even if it
has to sell portfolio securities at unfavorable prices to do so). Inability to
close out a contract could also harm the Fund by preventing it from disposing of
or trading any assets it has been using to secure its obligations under the
contract.
A Fund may also trade derivative contracts over-the-counter (OTC) in
transactions negotiated directly between the Fund and the counterparty. OTC
contracts do not necessarily have standard terms, so they cannot be directly
offset with other OTC contracts. In addition, OTC contracts with more
specialized terms may be more difficult to price than exchange traded contracts.
Depending upon how a Fund uses derivative contracts and the relationships
between the market value of a derivative contract and the underlying asset,
derivative contracts may increase or decrease the Fund's exposure to market and
currency risks, and may also expose the Fund to liquidity and leverage risks.
OTC contracts also expose the Fund to credit risks in the event that a
counterparty defaults on the contract.
The Funds may trade in the following types of derivative contracts:
Futures Contracts
Futures contracts provide for the future sale by one party and purchase by
another party of a specified amount of an underlying asset at a specified
price, date, and time. Entering into a contract to buy an underlying asset
is commonly referred to as buying a contract or holding a long position in
the asset. Entering into a contract to sell an underlying asset is commonly
referred to as selling a contract or holding a short position in the asset.
Futures contracts are considered to be commodity contracts.
Futures contracts traded OTC are frequently referred to as forward
contracts.
Options
Options are rights to buy or sell an underlying asset for a specified price
(the exercise price) during, or at the end of, a specified period. A call
option gives the holder (buyer) the right to buy the underlying asset from
the seller (writer) of the option. A put option gives the holder the right
to sell the underlying asset to the writer of the option. The writer of the
option receives a payment, or premium, from the buyer, which the writer
keeps regardless of whether the buyer uses (or exercises) the option. The
Funds may:
o Buy call options on financial futures contracts in anticipation of an increase
in the value of the underlying asset.

o Buy put options on financial futures contracts in anticipation of a decrease
in the value of the underlying asset.

o Write call options on financial futures contracts to generate income from
premiums, and in anticipation of a decrease or only limited increase in the
value of the underlying asset. If a call written by a Fund is exercised,
the Fund foregoes any possible profit from an increase in the market price
of the underlying asset over the exercise price plus the premium received.

o Write put options on financial futures contracts to generate income from
premiums, and in anticipation of an increase or only limited decrease in
the value of the underlying asset. In writing puts, there is a risk that a
Fund may be required to take delivery of the underlying asset when its
current market price is lower than the exercise price.

When a Fund writes options on futures contracts, it will be subject to
margin requirements similar to those applied to futures contracts.
A Fund may also buy or write options to close out existing options
positions.

Hybrid Instruments
Hybrid instruments combine elements of derivative contracts with those of
another security (typically a fixed income security). All or a portion of
the interest or principal payable on a hybrid security is determined by
reference to changes in the price of an underlying asset or by reference to
another benchmark (such as interest rates, currency exchange rates or
indices). Hybrid instruments also include convertible securities with
conversion terms related to an underlying asset or benchmark.

The risks of investing in hybrid instruments reflect a combination of the
risks of investing in securities, options, futures and currencies, and
depend upon the terms of the instrument. Thus, an investment in a hybrid
instrument may entail significant risks in addition to those associated
with traditional fixed income or convertible securities. Hybrid instruments
are also potentially more volatile and carry greater interest rate risks
than traditional instruments. Moreover, depending on the structure of the
particular hybrid, it may expose the Fund to leverage risks or carry
liquidity risks.

Special Transactions
Repurchase Agreements
Repurchase agreements are transactions in which a Fund buys a security from a
dealer or bank and agrees to sell the security back at a mutually agreed upon
time and price. The repurchase price exceeds the sale price, reflecting the
Fund's return on the transaction. This return is unrelated to the interest
rate on the underlying security. The Funds will enter into repurchase
agreements only with banks and other recognized financial institutions, such
as securities dealers, deemed creditworthy by the Adviser. The Funds'
custodian or subcustodian will take possession of the securities subject to
repurchase agreements. The Adviser or subcustodian will monitor the value of
the underlying security each day to ensure that the value of the security
always equals or exceeds the repurchase price. Repurchase agreements are
subject to credit risks. Reverse Repurchase Agreements Reverse repurchase
agreements are repurchase agreements in which a Fund is the seller (rather
than the buyer) of the securities, and agrees to repurchase them at an agreed
upon time and price. A reverse repurchase agreement may be viewed as a type
of borrowing by the Fund. Reverse repurchase agreements are subject to credit
risks. In addition, reverse repurchase agreements create leverage risks
because the Fund must repurchase the underlying security at a higher price,
regardless of the market value of the security at the time of repurchase.
When Issued Transactions When issued transactions are arrangements in which a
Fund buys securities for a set price, with payment and delivery of the
securities scheduled for a future time. During the period between purchase
and settlement, no payment is made by the Fund to the issuer and no interest
accrues to the Fund. The Fund records the transaction when it agrees to buy
the securities and reflects their value in determining the price of its
shares. Settlement dates may be a month or more after entering into these
transactions so that the market values of the securities bought may vary from
the purchase prices. Therefore, when issued transactions create interest rate
risks for a Fund. When issued transactions also involve credit risks in the
event of a counterparty default.

To Be Announced (TBA) Securities
As with other when issued transactions, a seller agrees to issue a TBA
security at a future date. However, the seller does not specify the
particular securities to be delivered. Instead, a Fund agrees to accept any
security that meets specified terms. For example, the Fund and the seller
would agree upon the issuer, interest rate and terms of the underlying
securities. However, the seller would not identify the specific underlying
security until it issues the security.

Securities Lending
The Funds may lend portfolio securities to borrowers that the Adviser deems
creditworthy. In return, a Fund receives cash or liquid securities from the
borrower as collateral. The borrower must furnish additional collateral if
the market value of the loaned securities increases. Also, the borrower must
pay the Fund the equivalent of any dividends or interest received on the
loaned securities. A Fund will reinvest cash collateral in securities that
qualify as an acceptable investment for the Fund. However, the Fund must pay
interest to the borrower for the use of cash collateral. Loans are subject to
termination at the option of the Fund or the borrower. The Fund will not have
the right to vote on securities while they are on loan, but it will terminate
a loan in anticipation of any important vote. The Fund may pay administrative
and custodial fees in connection with a loan and may pay a negotiated portion
of the interest earned on the cash collateral to a securities lending agent
or broker. Securities lending activities are subject to interest rate risks
and credit risks.

Asset Coverage
In order to secure their obligations in connection with derivatives contracts or
special transactions, the Funds will either own the underlying assets, enter
into an offsetting transaction or set aside readily marketable securities with a
value that equals or exceeds a Fund's obligations. Unless a Fund has other
readily marketable assets to set aside, it cannot trade assets used to secure
such obligations entering into an offsetting derivative contract or terminating
a special transaction. This may cause a Fund to miss favorable trading
opportunities or to realize losses on derivative contracts or special
transactions.

Investing in Securities of Other Investment Companies
The Funds may invest their assets in securities of other investment companies,
including the securities of affiliated money market funds, as an efficient means
of carrying out their investment policies and managing their uninvested cash. It
should be noted that investment companies incur certain expenses, such as
management fees, and, therefore, any investment by a Fund in shares of other
investment companies may be subject to such duplicate expenses.

Illiquid Securities
The Funds may invest up to 15% of the total value of their net assets in
securities that are illiquid. An illiquid security is one which may not be sold
or disposed of in the ordinary course of business within seven days at
approximately the value at which the Fund has valued it on its books. Repurchase
agreements with maturities in excess of seven days will be considered by the
Funds to be illiquid.

INVESTMENT RISKS

Stock Market Risks
o The value of equity securities in a Fund's portfolio will rise and fall.
These fluctuations could be a sustained trend or a drastic movement. A Fund's
portfolio will reflect changes in prices of individual portfolio stocks or
general changes in stock valuations. Consequently, a Fund's share price may
decline and you could lose money. The Adviser attempts to manage market risk
by limiting the amount a Fund invests in each company's equity securities.
However, diversification will not protect a Fund against widespread or
prolonged declines in the stock market.

Sector Risks
o Companies with similar characteristics may be grouped together in broad
categories called sectors. Sector risk is the possibility that a certain
sector may underperform other sectors or the market as a whole. As the
Adviser allocates more of a Fund's portfolio holdings to a particular
sector, the Fund's performance will be more susceptible to any economic,
business or other developments which generally affect that sector.

Risks Related To Investing For Growth
o Due to their relatively high valuations, growth stocks are typically more
volatile than value stocks. For instance, the price of a growth stock may
experience a larger decline on an analyst's downward earnings estimate
revision, a negative fundamental development, or other adverse market
development. Further, growth stocks tend to have lower dividend yields than
value stocks. This means they depend more on price changes for returns and
may be more adversely affected in a down market compared to higher yielding
stocks.

Currency Risks
o Exchange rates for currencies fluctuate daily. The combination of currency
risk and market risk tends to make securities traded in foreign markets
more volatile than securities traded exclusively in the United States.

o The Adviser attempts to manage currency risk by limiting the amount a Fund
invests in securities denominated in a particular currency. However,
diversification will not protect a Fund against a general increase in the
value of the U.S. dollar relative to other currencies.

Risks Of Foreign Investing
o Foreign securities pose additional risks because foreign economic or
political conditions may be less favorable than those of the United States.
Foreign financial markets may also have fewer investor protections.
Securities in foreign markets may also be subject to taxation policies that
reduce returns for U.S. investors.

o Due to these risk factors, foreign securities may be more volatile and less
liquid than similar securities traded in the United States.

Liquidity Risks
o Trading opportunities are more limited for equity securities that are not
widely held. This may make it more difficult to sell or buy a security at a
favorable price or time. Consequently, a Fund may have to accept a lower
price to sell a security, sell other securities to raise cash or give up an
investment opportunity, any of which could have a negative effect on a
Fund's performance. Infrequent trading of securities may also lead to an
increase in their price volatility.

o Liquidity risk also refers to the possibility that a Fund may not be able
to sell a security or close out a derivative contract when it wants to. If
this happens, the Fund will be required to continue to hold the security or
keep the position open, and the Fund could incur losses.

o OTC derivative contracts generally carry greater liquidity risk than
exchange-traded contracts.

Leverage Risks
o Leverage risk is created when an investment exposes a Fund to a level of
risk that exceeds the amount invested. Changes in the value of such an
investment magnify a Fund's risk of loss and potential for gain.

o Interest rate changes have a greater effect on the price of fixed income
securities with longer durations. Duration measures the price sensitivity
of a fixed income security to changes in interest rates.

Interest Rate Risks
o Prices of fixed income securities rise and fall in response to changes in
the interest rate paid by similar securities. Generally, when interest
rates rise, prices of fixed income securities fall. However, market
factors, such as the demand for particular fixed income securities, may
cause the price of certain fixed income securities to fall while the prices
of other securities rise or remain unchanged.

Credit Risks
o Credit risk is the possibility that an issuer will default on a security by
failing to pay interest or principal when due. If an issuer defaults, a
Fund will lose money.

o Many fixed income securities receive credit ratings from services such as
Standard & Poor's and Moody's Investors Services, Inc. These services
assign ratings to securities by assessing the likelihood of issuer default.
Lower credit ratings correspond to higher credit risk. If a security has
not received a rating, the Funds must rely entirely upon the Adviser's
credit assessment.

o Fixed income securities generally compensate for greater credit risk by
paying interest at a higher rate. The difference between the yield of a
security and the yield of a U.S. Treasury security with a comparable
maturity (the spread) measures the additional interest paid for risk.
Spreads may increase generally in response to adverse economic or market
conditions. A security's spread may also increase if the security's rating
is lowered, or the security is perceived to have an increased credit risk.
An increase in the spread will cause the price of the security to decline.

o Credit risk includes the possibility that a party to a transaction
involving a Fund will fail to meet its obligations. This could cause a Fund
to lose the benefit of the transaction or prevent a Fund from selling or
buying other securities to implement its investment strategy.

INVESTMENT LIMITATIONS
The following limitations pertain to each of the SouthTrust Funds: The Funds may
not:

1. Purchase or sell real estate, except that a Fund may purchase securities of
issuers which deal in real estate and may purchase securities which are secured
by interests in real estate.

2. Acquire any other investment company or investment company security except in
connection with a merger, consolidation, reorganization or acquisition of assets
or where otherwise permitted by the Investment company Act of 1940.

3. Act as an underwriter of securities, except to the extent that it may be
deemed an underwriter within the meaning of the Securities Act of 1933 on
disposition of securities acquired subject to legal or contractual restrictions
on resale.

4. Write or sell put options, call options, straddles, spreads, or any
combination thereof, except for transactions in options on securities,
securities indices, futures contracts, options on futures contracts and
transactions in securities on a when-issued or forward commitment basis, and
except that a non-money market fund may enter into forward foreign currency
contracts and options thereon in accordance with its investment objectives and
policies.

5. Purchase securities of companies for the purpose of exercising control.

6. Purchase securities on margin, make short sales of securities or maintain a
short position, except that (a) this investment limitation shall not apply to a
Fund's transactions in futures contracts and related options, a Fund's sale of
securities short against the box or a Fund's transactions in securities on a
when-issued or forward commitment basis, and (b) a Fund may obtain short-term
credit as may be necessary for the clearance of purchases and sales of portfolio
securities.

7. Purchase or sell commodity contracts, or invest in oil, gas or mineral
exploration or development programs, except that each Fund may, to the extent
appropriate to its investment policies, purchase publicly traded securities of
companies engaging in whole or in part in such activities, may enter into
futures contracts and related options, and may engage in transactions in
securities on a when-issued or forward commitment basis, and except that a
non-money market fund may enter into forward foreign currency contracts and
options thereon in accordance with its investment objectives and policies.

8. Make loans, except that each Fund may purchase and hold debt instruments
(whether such instruments are part of a public offering or privately
negotiated), may lend portfolio securities and enter into repurchase agreements
in accordance with its investment objective and policies.

9. Purchase securities of any one issuer other than securities issued or
guaranteed by the U.S. government, its agencies or instrumentalities or
certificates of deposit for any such securities if more than 5% of the value of
the Fund's total assets, taken at current value, would be invested in the
securities of such issuer, or more than 10% of the issuer's outstanding voting
securities would be owned by the Fund or the Company, except that up to 25% of
the value of the Fund's total assets, taken at current value, may be invested
without regard to these limitations provided, however, that the Treasury Money
Fund may in no event invest more than 5% of its total assets in the securities
of any one issuer. For purposes of this limitation, a security is considered to
be issued by the entity (or entities) whose assets and revenues back the
security. A guarantee of a security is not deemed to be a security issued by the
guarantor when the value of all securities issued and guaranteed by the
guarantor, and owned by the Fund, does not exceed 10% of the value of the Fund's
total assets.

10. Borrow money or issue senior securities except that each Fund may borrow
from banks and enter into reverse repurchase agreements for temporary purposes
in amounts up to one-third of the value of its total assets at the time of such
borrowing; or mortgage, pledge or hypothecate any assets, except in connection
with any such borrowing and then in amounts not in excess of one-third of the
value of the Fund's total assets at the time of such borrowing. No Fund will
purchase securities while its aggregate borrowings including reverse repurchase
agreements and borrowing from banks in excess of 5% of its total assets are
outstanding. Securities held in escrow or separate accounts in connection with a
Fund's investment practices are not deemed to be pledged for purposes of this
limitation.

11. Purchase any securities which would cause 25% or more of the value of the
Fund's total assets at the time of purchase to be invested in the securities of
one or more issuers conducting their principal business activities in the same
industry and, in the case of the Treasury Money Fund, in securities the interest
upon which is paid from revenues of similar types of projects, provided that (a)
there is no limitation with respect to (i) instruments that are issued (as
defined in Investment Limitation No. 1 above) or guaranteed by the United
States, any state, territory or possession of the United States, the District of
Columbia or any of their authorities, agencies, instrumentalities or political
subdivisions and (ii) repurchase agreements secured by the instruments described
in clause (i); (b) wholly-owned finance companies will be considered to be in
the industries of their parents if their activities are primarily related to
financing the activities of the parents; and (c) utilities will be divided
according to their services (for example, gas, gas transmission, electric and
gas, electric and telephone will each be considered a separate industry).

If a percentage limitation is satisfied at the time of investment, a later
increase or decrease in such percentage resulting from a change in the value of
a Fund's investments will not constitute a violation of such limitation, except
that any borrowing by a Fund that exceeds the fundamental investment limitations
stated above must be reduced to meet such limitations within the period required
by the Investment Company Act of 1940 (currently three days). Otherwise, a Fund
may continue to hold a security even though it causes the Fund to exceed a
percentage limitation because of fluctuation in the value of the Fund's assets.

The above limitations cannot be changed unless authorized by the "vote of a
majority of the Funds' outstanding voting securities," as defined by the
Investment Company Act of 1940.

Determining Market Value of Securities
Market values of a Fund's portfolio securities are determined as follows:
o for equity securities, according to the last sale price in the market in
which they are primarily traded (either a national securities exchange or the
over-the-counter market), if available;

o in the absence of recorded sales for equity securities, according to the
mean between the last closing bid and asked prices;

o for bonds and other fixed income securities, at the last sale price on a
national securities exchange, if available, otherwise, as determined by an
independent pricing service;

o for short-term obligations, according to the mean between bid and asked
prices as furnished by an independent pricing service, except that short-term
obligations with remaining maturities of less than 60 days at the time of
purchase may be valued at amortized cost or at fair market value as
determined in good faith by the Board; and

o for all other securities, at fair value as determined in good faith by the
Board.

Prices provided by independent pricing services may be determined without
relying exclusively on quoted prices and may consider: institutional trading in
similar groups of securities, yield, quality, stability, risk, coupon rate,
maturity, type of issue, trading characteristics, and other market data or
factors. From time to time, when prices cannot be obtained from an independent
pricing service, securities may be valued based on quotes from broker-dealers or
other financial institutions that trade the securities. The Funds value futures
contracts and options at their market values established by the exchanges on
which they are traded at the close of trading on such exchanges. Options traded
in the over-the- counter market are valued according to the mean between the
last bid and the last asked price for the option as provided by an investment
dealer or other financial institution that deals in the option. The Board may
determine in good faith that another method of valuing such investments is
necessary to appraise their fair market value.

WHAT DO SHARES COST?

The Funds' net asset value (NAV) per share fluctuates and is based on the market
value of all securities and other assets of each Fund.

Reducing or Eliminating the Front-End Sales Charge
You can reduce or eliminate the applicable front-end sales charge as follows:

Quantity Discounts
Larger purchases can reduce or eliminate the sales charge you pay. You can
combine purchases of shares made on the same day by you, your spouse, and your
children under age 21. In addition, purchases made at one time by a trustee or
fiduciary for a single trust estate or a single fiduciary account can be
combined.

Accumulated Purchases
If you make an additional purchase of shares, you can count previous share
purchases still invested in a Fund in calculating the applicable sales charge on
the additional purchase.

Concurrent Purchases
You can combine concurrent purchases of two or more SouthTrust Funds in
calculating the applicable sales charge.

Letter of Intent
You can sign a Letter of Intent committing to purchase a certain amount of
shares within a 13-month period to combine such purchases in calculating the
sales charge. The Funds' custodian will hold shares in escrow equal to the
maximum applicable sales charge. If you complete the Letter of Intent, the
custodian will release the shares in escrow to your account. If you do not
fulfill the Letter of Intent, the custodian will redeem the appropriate amount
from the shares held in escrow to pay the sales charges that were not applied to
your purchases.

Reinvestment Privilege
You may reinvest, within 30 days, your redemption proceeds at the next
determined NAV, without any sales charge.

Purchases by Affiliates of the Funds
The following individuals and their immediate family members may buy shares at
NAV without any sales charge because there are nominal sales efforts associated
with their purchases: o the Trustees, employees, and sales representatives of
the Funds, the Adviser, the Distributor and their affiliates (and
spouses and children of the foregoing);

o retired employees of the Company, SouthTrust Corporation and it's
affiliates;

o investors for whom SouthTrust Corporation or one of it's affiliates acts in a
fiduciary, advisory, custodial, agency or similar capacity (this does not
include transactions executed by SouthTrust Securities, Inc., including, but
not limited to, self-directed Individual Retirement Accounts); and

o employees who purchase shares through a payroll deduction plan sponsored by
their employers.

HOW ARE THE FUNDS SOLD?

Under the Distributor's Contract with the Company, the Distributor (Federated
Securities Corp.), located at Federated Investors Tower, 1001 Liberty Avenue,
Pittsburgh, PA 15222-3779, offers shares on a continuous, best-efforts basis.

Front-End Sales Charge Reallowances
The Distributor receives a front-end sales charge on certain share sales. The
Distributor generally pays up to 90% (and as much as 100%) of this charge to
investment professionals for sales and/or administrative services. Any payments
to investment professionals in excess of 90% of the front-end sales charge are
considered supplemental payments. The Distributor retains any portion not paid
to an investment professional.

Rule 12b-1 Plan - Growth Fund
As a compensation type plan, the Rule 12b-1 Plan is designed to pay the
Distributor (who may then pay investment professionals such as banks,
broker/dealers, trust departments of bank, and registered investment advisers)
for marketing activities (such as advertising, printing and distributing
prospectuses, and providing incentives to investment professionals) to promote
sales of shares so that overall Fund assets are maintained or increased. This
helps the Fund achieve economies of scale, reduce per share expenses, and
provide cash for orderly portfolio management and share redemptions. Also, the
Fund's service providers that receive asset- based fees also benefit from stable
or increasing Fund assets.
The Fund may compensate the Distributor more or less than its actual marketing
expenses. In no event will the Fund pay for any expenses of the Distributor that
exceed the maximum Rule 12b-1 Plan fee.
The maximum Rule 12b-1 Plan fee that can be paid in any one year may not be
sufficient to cover the marketing related expenses the Distributor has incurred.
Therefore, it may take the Distributor a number of years to recoup these
expenses.

Shareholder Services - Growth Fund
The Fund may pay Federated Shareholder Services Company, a subsidiary of
Federated, for providing shareholder services and maintaining shareholder
accounts. Federated Shareholder Services Company may select others to perform
these services for their customers and pay them fees.

administrative arrangements
Investment professionals may be paid fees out of the assets of the Distributor
and/or Federated Shareholder Services Company (but not out of Fund assets). The
Distributor and/or Federated Shareholder Services Company may be reimbursed by
the Adviser or its affiliates.
Investment professionals receive such fees for providing distribution-related
or shareholder services such as sponsoring sales, providing sales literature,
conducting training seminars for employees, and engineering sales-related
computer software programs and systems. Also, investment professionals may be
paid cash or promotional incentives, such as reimbursement of certain expenses
relating to attendance at informational meetings about the Funds or other
special events at recreational-type facilities, or items of material value.
These payments will be based upon the amount of shares the investment
professional sells or may sell and/or upon the type and nature of sales or
marketing support furnished by the investment professional.

EXCHANGING SECURITIES FOR SHARES

You may contact the Distributor to request a purchase of shares in an exchange
for securities you own. The Funds reserve the right to determine whether to
accept your securities and the minimum market value to accept. The Funds will
value your securities in the same manner as they values their assets. This
exchange is treated as a sale of your securities for federal tax purposes.

SUBACCOUNTING SERVICES

Certain investment professionals may wish to use the transfer agent's
subaccounting system to minimize their internal recordkeeping requirements. The
transfer agent may charge a fee based on the level of subaccounting services
rendered. Investment professionals holding shares in a fiduciary, agency,
custodial, or similar capacity may charge or pass through subaccounting fees as
part of or in addition to normal trust or agency account fees. They may also
charge fees for other services that may be related to the ownership of Shares.
This information should, therefore, be read together with any agreement between
the customer and the investment professional about the services provided, the
fees charged for those services, and any restrictions and limitations imposed.

REDEMPTION IN KIND

Although the Funds intend to pay share redemptions in cash, they reserve the
right, as described below, to pay the redemption price in whole or in part by a
distribution of a Fund's portfolio securities.
Because the Funds have elected to be governed by Rule 18f-1 under the
Investment Company Act of 1940, the Funds are obligated to pay share redemptions
to any one shareholder in cash only up to the lesser of $250,000 or 1% of the
net assets represented by such shares during any 90-day period.
Any share redemption payment greater than this amount will also be in cash
unless a Fund's Board determines that payment should be in kind. In such a case,
the Fund will pay all or a portion of the remainder of the redemption in
portfolio securities, valued in the same way as the Funds determine NAV. The
portfolio securities will be selected in a manner that the Fund's Board deems
fair and equitable and, to the extent available, such securities will be readily
marketable.
Redemption in kind is not as liquid as a cash redemption. If redemption is
made in kind, shareholders receiving the portfolio securities and selling them
before their maturity could receive less than the redemption value of the
securities and could incur certain transaction costs.

MASSACHUSETTS PARTNERSHIP LAW

Under certain circumstances, shareholders may be held personally liable as
partners under Massachusetts law for obligations of the Company. To protect its
shareholders, the Company has filed legal documents with Massachusetts that
expressly disclaim the liability of its shareholders for acts or obligations of
the Company.
In the unlikely event a shareholder is held personally liable for the
Company's obligations, the Company is required by the Declaration of Trust to
use its property to protect or compensate the shareholder. On request, the
Company will defend any claim made and pay any judgment against a shareholder
for any act or obligation of the Company. Therefore, financial loss resulting
from liability as a shareholder will occur only if the Company itself cannot
meet its obligations to indemnify shareholders and to pay judgments against
them.

ACCOUNT AND SHARE INFORMATION

Voting Rights
Each share of a Fund gives the shareholder one vote in Trustee elections and
other matters submitted to shareholders for vote. All shares of the Company have
equal voting rights, except that in matters affecting only a particular Fund,
only shares of that Fund are entitled to vote.
Trustees may be removed by the Trustees or by shareholders at a special
meeting. A special meeting of shareholders will be called by the Trustees upon
the written request of shareholders who own at least 10% of the Company's
outstanding shares of all series entitled to vote.
As of May 7, 1999, the following shareholder, owned of record, beneficially,
or both, 5% or more of the outstanding shares of the Value Fund: Lynspen & Co.,
Birmingham, AL, owned approximately 20,246,621.80 shares (93.38%).
Shareholders owning 25% or more of outstanding shares may be in control and be
able to affect the outcome of certain matters presented for a vote of
shareholders.

TAX INFORMATION

Federal Income Tax
The Funds intend to meet requirements of Subchapter M of the Internal Revenue
Code applicable to regulated investment companies. If these requirements are not
met, a Fund will not receive special tax treatment and will pay federal income
tax.
The Funds will each be treated as a single, separate entity for federal income
tax purposes so that income earned and capital gains and losses realized by the
Company's other portfolios will be separate from those realized by a Fund.

WHO MANAGES AND PROVIDES SERVICES TO THE FUNDS?

BOARD OF TRUSTEES
The Board is responsible for managing the Company's business affairs and for
exercising all the Company's powers except those reserved for the shareholders.
Information about each Board member is provided below and includes each
person's: name, address, birth date, present position(s) held with the Company,
principal occupations for the past five years and positions held prior to the
past five years, total compensation received as a Trustee from the Company for
its most recent fiscal year. The Company is comprised of six funds.

As of May 7, 1999, the Company's Board and Officers as a group owned less than
1% of the Funds' outstanding shares.

An asterisk (*) denotes a Trustee who is deemed to be an interested person as
defined in the Investment Company Act of 1940.

<PAGE>

Name
Birth Date Aggregate
Address Principal Occupations Compensation
Position With Trust for Past Five Years From Trust
William O. Vann* Chairman and Chief Executive Officer, Young & Vann $7750.
Birth Date: January 28, 1942 Supply Co. (since 1987); Partner, B&B Investments;
Box 757 Trustee and Past Chairman, The Childrens' Hospital of
Birmingham, AL Alabama.
CHAIRMAN AND TRUSTEE
Charles G. Brown, III President, Tubular Products Company (since 1985); $7000.
Birth Date: November 27, 1953 Managing Partner, Red Hollow Partnership.
P.O. Box 170100
Birmingham, AL
TRUSTEE
Russell W. Chambliss President (since 1989), Executive Vice President $7750.
Birth Date: December 26, 1951 (1988), and Vice President of Sales and Marketing
Mason Corporation (1984-1988), Mason Corporation.
P.O. Box 59226
Birmingham, AL
TRUSTEE
Thomas M. Grady* Partner of the law firm of Williams, Boger, Grady, $6750.
Birth Date: July 25, 1941 Davis and Tuttle, P.A.; Chairman of the Board of
P.O. Box 2 Pfeiffer University; Member of Cannon Foundation.
Kannapolis, NC
TRUSTEE
Billy L. Harbert, Jr.* President and Chief Operating Officer of Bill Harbert $6250.
Birth Date: May 23, 1965 Construction, Inc. (BHIC) and Vice President of BHIC
Bill Harbert International (until 1998); Director, Harbert International
Construction, Inc. Establishment; Director, Harbert International
P.O. Box 531390 Establishment, S.C.; Director, Bilhar International
Birmingham, AL Establishment; Member/Shareholder, Bonaventure
TRUSTEE Capital, LLC; Member/Shareholder, Bonaventure
Partners, LLC; Board Member/Shareholder, Founders
Trust Company, Inc.; and Member/Shareholder, Treble
Range Partners, LLC.

Edward C. Gonzales Trustee or Director of some of the funds in the $0
Birth Date: October 22, 1930 Federated Complex; President, Executive Vice
Federated Investors Tower President and Treasurer of some of the funds in the
Pittsburgh, PA Federated Fund Complex; Vice Chairman, Federated
PRESIDENT AND TREASURER Investors, Inc.; Vice President, Federated Investment
Management Company and Federated Investment
Counseling, Federated Global Investment
Management Corp., and Passport Research,
Ltd.; Executive Vice President and Director,
Federated Securities Corp.; Trustee,
Federated Shareholder Services Company.

Peter J. Germain Senior Vice President and Director, Mutual Fund $0
Birth Date: September 2, 1959 Services Division, Federated Services Company.
Federated Investors Tower Formerly Senior Corporate Counsel, Federated
Pittsburgh, PA Investors, Inc.
VICE PRESIDENT
Beth Broderick Assistant Vice President, Federated Services Company $0
Birth Date: August 2, 1965 (1997 to present); Client Services Officer, Federated
Federated Investors Tower Services Company (1992-1997).
Pittsburgh, PA
VICE PRESIDENT AND TREASURER
C. Todd Gibson Associate Corporate Counsel, Federated Investors, $0
Birth Date: May 17, 1967 Inc.; Assistant Vice President, Federated
Federated Investors Tower Administrative Services.
Pittsburgh, PA
SECRETARY
</TABLE>

INVESTMENT ADVISER
The Adviser, SouthTrust Bank, N.A. conducts investment research and makes
investment decisions for the Funds.

Under the Investment Advisory Contract, the Adviser is not be liable to the
Company or any Fund shareholder for any losses that may be sustained in the
purchase, holding, or sale of any security or for anything done or omitted by
it, except acts or omissions involving willful misfeasance, bad faith, gross
negligence, or reckless disregard of the duties imposed upon it by its contract
with the Company.

Brokerage Transactions
When selecting brokers and dealers to handle the purchase and sale of portfolio
instruments, the Adviser looks for prompt execution of the order at a favorable
price. The Adviser will generally use those who are recognized dealers in
specific portfolio instruments, except when a better price and execution of the
order can be obtained elsewhere. The Adviser may select brokers and dealers
based on whether they also offer research services (as described below). In
selecting among firms believed to meet these criteria, the Adviser may give
consideration to those firms which have sold or are selling shares of the Funds
and other funds distributed by the Distributor and its affiliates. The Adviser
makes decisions on portfolio transactions and selects brokers and dealers
subject to review by the Company's Board.

Research Services
Research services may include advice as to the advisability of investing in
securities; security analysis and reports; economic studies; industry studies;
receipt of quotations for portfolio evaluations; and similar services. Research
services may be used by the Adviser in advising other accounts. To the extent
that receipt of these services may replace services for which the Adviser or its
affiliates might otherwise have paid, it would tend to reduce their expenses.
The Adviser and its affiliates exercise reasonable business judgment in
selecting those brokers who offer brokerage and research services to execute
securities transactions. They determine in good faith that commissions charged
by such persons are reasonable in relationship to the value of the brokerage and
research services provided.
Investment decisions for the Funds are made independently from those of other
accounts managed by the Adviser. When a Fund and one or more of those accounts
invests in, or disposes of, the same security, available investments or
opportunities for sales will be allocated among the Fund and the account(s) in a
manner believed by the Adviser to be equitable. While the coordination and
ability to participate in volume transactions may benefit a Fund, it is possible
that this procedure could adversely impact the price paid or received and/or the
position obtained or disposed of by a Fund.

Administrator
Federated Services Company, a subsidiary of Federated, provides administrative
personnel and services (including certain legal and financial reporting
services) necessary to operate the Funds.
Federated Services Company also provides certain accounting and recordkeeping
services with respect to a Fund's portfolio investments for a fee based on Fund
assets, plus out-of-pocket expenses.

Custodian
SouthTrust Bank, N.A. is custodian for the securities and cash of the Funds.

Transfer Agent And Dividend Disbursing Agent
Federated Services Company, through its registered transfer agent subsidiary,
Federated Shareholder Services Company, maintains all necessary shareholder
records. The Funds pay the transfer agent a fee based on the size, type, and
number of accounts and transactions made by shareholders.

Independent Auditors
Arthur Andersen LLP are the independent auditors for the Funds.

FEES PAID BY THE VALUE FUND FOR SERVICES
Value Fund
For the Year ended April 30 1998 1997 1996
- --------------------------------------------------------------------------------------------------------------------
Advisory Fee Earned $2,550,383 $1,750,919 $1,1,257,372
Advisory Fee Reduction $10,794 $70,037 $124,311
Brokerage Commissions $$658,372 $292,801 $238,955
Administrative Fee $384,783 $284,437 $222,204
Administrative Fee Reduction $0 $0 $52,868
Growth Fund
For the Year ended April 30 1998 1997 1996
- --------------------------------------------------------------------------------------------------------------------
Advisory Fee Earned $ $ $
Advisory Fee Reduction $ $ $
Brokerage Commissions $ $ $
Administrative Fee $ $ $
Administrative Fee Reduction $ $ $

</TABLE>

HOW DO THE FUNDS MEASURE PERFORMANCE?

The Funds may advertise share performance by using the Securities and Exchange
Commission's (SEC) standard method for calculating performance applicable to all
mutual funds. The SEC also permits this standard performance information to be
accompanied by non-standard performance information.
Share performance reflects the effect of non-recurring charges, such as
maximum sales charges, which, if excluded, would increase the total return and
yield. The performance of shares depends upon such variables as: portfolio
quality; average portfolio maturity; type and value of portfolio securities;
changes in interest rates; changes or differences in a Fund's expenses; and
various other factors.
Share performance fluctuates on a daily basis largely because net earnings and
offering price per Share fluctuate daily. Both net earnings and offering price
per share are factors in the computation of yield and total return.

Average Annual Total Returns and Yield of The Funds
Value Fund

Total returns given for the one-year, five-year and start of performance periods
ended April 30, 1998.

Yield given for the seven-day period ended April 30, 1998.

7-Day Period 1 Year 5 years Start of Performance
Total Return N/A 36.39% 17.47%
Yield 0.43% N/A N/A N/A

Growth Fund

Total returns given for the one-year, five-year and 10-year periods ended April
30, 1998.

Yield given for the seven-day period ended April 30, 1998.

7-Day Period 1 Year 5 years 10 Year
Total Return N/A % % 7%
Yield % N/A N/A N/A

</TABLE>

Total Return
Total return represents the change (expressed as a percentage) in the value of
shares over a specific period of time, and includes the investment of income and
capital gains distributions.
The average annual total return for shares is the average compounded rate of
return for a given period that would equate a $1,000 initial investment to the
ending redeemable value of that investment. The ending redeemable value is
computed by multiplying the number of shares owned at the end of the period by
the NAV per share at the end of the period. The number of shares owned at the
end of the period is based on the number of shares purchased at the beginning of
the period with $1,000, less any applicable sales charge, adjusted over the
period by any additional shares, assuming the annual reinvestment of all
dividends and distributions.
When shares of a Fund are in existence for less than a year, the Fund may
advertise cumulative total return for that specific period of time, rather than
annualizing the total return.

Yield
The yield of shares is calculated by dividing: (i) the net investment income per
share earned by the shares over a thirty-day period; by (ii) the maximum
offering price per share on the last day of the period. This number is then
annualized using semi- annual compounding. This means that the amount of income
generated during the thirty-day period is assumed to be generated each month
over a 12-month period and is reinvested every six months. The yield does not
necessarily reflect income actually earned by shares because of certain
adjustments required by the SEC and, therefore, may not correlate to the
dividends or other distributions paid to shareholders.
To the extent investment professionals and broker/dealers charge fees in
connection with services provided in conjunction with an investment in shares,
the share performance is lower for shareholders paying those fees.

Performance Comparisons
Advertising and sales literature may include:

o references to ratings, rankings, and financial publications and/or
performance comparisons of shares to certain indices;

o charts, graphs, and illustrations using a Fund's returns, or returns in
general, that demonstrate investment concepts such as tax-deferred
compounding, dollar-cost averaging and systematic investment;

o discussions of economic, financial, and political developments and their
impact on the securities market, including the portfolio manager's views on
how such developments could impact the Funds; and

o information about the mutual fund industry from sources such as the Investment
Company Institute.

A Fund may compare its performance, or performance for the types of securities
in which it invests, to a variety of other investments, including federally
insured bank products such as bank savings accounts, certificates of deposit,
and Treasury bills.
A Fund may quote information from reliable sources regarding individual
countries and regions, world stock exchanges, and economic and demographic
statistics.
You may use financial publications and/or indices to obtain a more complete
view of share performance. When comparing performance, you should consider all
relevant factors such as the composition of the index used, prevailing market
conditions, portfolio compositions of other funds, and methods used to value
portfolio securities and compute offering price. The financial publications
and/or indices which a Fund uses in advertising may include:

Dow Jones Industrial Average (DJIA)
Represents share prices of selected blue-chip industrial corporations. The DJIA
indicates daily changes in the average price of stock of these corporations.
Because it represents the top corporations of America, the DJIA index is a
leading economic indicator for the stock market as a whole.

Financial Publications
The Wall Street Journal, Business Week, Changing Times, Financial World, Forbes,
Fortune, and Money magazines, among others-provide performance statistics over
specified time periods.

Lipper Analytical Services, Inc.
Ranks funds in various fund categories by making comparative calculations using
total return. Total return assumes the reinvestment of all capital gains
distributions and income dividends and takes into account any change in net
asset value over a specified period of time.

Moody's Investors Services, Inc., Fitch IBCA, Inc. and Standard & Poor's
Various publications.

Morningstar, Inc.
An independent rating service, is the publisher of the bi-weekly Mutual Fund
Values, which rates more than 1,000 NASDAQ- listed mutual funds of all types,
according to their risk-adjusted returns. The maximum rating is five stars, and
ratings are effective for two weeks.

Standard & Poor's Daily Stock Price Index of 500 Common Stocks (S&P 500)
Composite index of common stocks in industry, transportation, and financial and
public utility companies can be used to compare to the total returns of funds
whose portfolios are invested primarily in common stocks. In addition, the S & P
500 assumes reinvestments of all dividends paid by stocks listed on its index.
Taxes due on any of these distributions are not included, nor are brokerage or
other fees calculated in the S & P figures.
S&P 500 Barra Growth Index is constructed by sorting the S&P 500 based on
their price/book ratios, with the high price/ book companies making up the
index.

FINANCIAL INFORMATION

The Financial Statements for the Value Fund for the fiscal year ended April 30,
1999 are incorporated herein by reference to the Annual Report to Shareholders
of SouthTrust Value Fund dated April 30, 1999.

<PAGE>

ADDRESSES

Southtrust Value Fund
southtrust Growth Fund

Portfolios of SouthTrust Funds

5800 Corporate Drive
Pittsburgh, PA 15237-7010

Distributor
Federated Securities Corp.
Federated Investors Tower
1001 Liberty Avenue,
Pittsburgh, PA 15222-3779

Investment Adviser
SouthTrust Bank, N.A.
420 North 20th Street
Birmingham, AL 35203

Custodian
SouthTrust Bank, N.A.
420 North 20th Street
Birmingham, AL 35203

Transfer Agent and Dividend Disbursing Agent
Federated Shareholder Services Company
P.O. Box 8600
Boston, MA 02266-8600

Independent Public Accountants
Arthur Andersen LLP
225 Franklin Street
Boston, MA 02110-2812

subject to completion

MAY , 1999

Prospectus

SOUTHTRUST FUNDS
SouthTrust bond Fund

Southtrust Income Fund

Southtrust Alabama Tax-Free Income Fund

SouthTrust Bond Fund is a mutual fund seeking to provide a level of total return
consistent with a diversified portfolio of high-quality debt securities.

SouthTrust Income Fund is a mutual fund seeking to provide current income.

SouthTrust Alabama Tax-Free Income Fund is a mutual fund seeking to provide
income exempt from federal income tax and the income tax imposed by the State of
Alabama.

<S> <C>

Contents

Fund Goals, Strategies, Performance and Investment Risks

Risk/Return Summary

What are the Funds' Fees
and Expenses?

What are the Funds'
Investment Strategies?

What are the Principal
Securities in Which the Funds Invest?

What are the Specific Risks
of Investing in the Funds?

What do Shares Cost?

How are the Funds Sold?

How to Purchase Shares

How to Redeem and Exchange Shares

Account and Share Information

Who Manages the Funds?

Financial Information

</TABLE>

august , 1999

<PAGE>

FUND GOALS, STRATEGIES, PERFORMANCE AND INVESTMENT RISKS

SouthTrust Funds (Company) currently offer shares in six investment portfolios,
each with its own investment goal and strategies, described in separate
prospectuses. This prospectus pertains only to SouthTrust Bond Fund (Bond Fund),
SouthTrust Income Fund (Income Fund), and SouthTrust Alabama Tax-Free Income
Fund (Alabama Tax-Free Income Fund). The purchase of shares of any Fund should
not be considered a complete investment program, but an important segment of a
well-diversified investment program. For information about other funds offered
by SouthTrust Funds, call 1-800-843-8618.

Also included on the following pages is performance information for each Fund
over a period of time. Since the Alabama Tax-Free Fund was effective on
________, 1999 and does not have a performance record for a full calendar year,
the SEC does not permit the Fund to show performance in a bar chart or table. In
addition, the impact of sales charges on each Fund is reflected in the
performance shown in the Average Annual Total Return tables, but is not
reflected in the bar charts. If the bar charts reflected sales charges, the
returns for the Funds would be less than those shown. SOUTHTRUST BOND FUND WHAT
IS THE bond FUND'S goal?

The Fund's goal is to provide a level of total return consistent with a
portfolio of high-quality debt securities.

WHAT ARE THE FUND'S MAIN INVESTMENT STRATEGIES?

The Fund seeks to achieve its goal by investing in high quality, investment
grade corporate debt obligations and U.S. government securities, including
obligations issued or guaranteed by agencies or instrumentalities of the U.S.
government. The key elements in selecting the Fund's securities are quality,
marketability, and maturity. Investment decisions are based upon the Adviser's
assessment of the overall economy, the Treasury yield curve, and interest rate
spreads. First, the Fund's targeted duration is determined based upon
macroeconomic factors. Then, the Adviser's analysis of the yield curve
determines which maturities (intermediate to long term) offer the most
attractive potential returns. The Adviser then considers spreads between various
sectors (such as U.S. Treasuries, agency securities, and corporate bonds) to
select the quality and types of bonds that offer the most attractive investment
opportunity. It is expected that the Fund's average maturity will generally
range up to 15 years. During normal market conditions, at least 65% of the
Fund's total assets will be invested in investment grade bonds.

SOUTHTRUST INCOME FUND

WHAT IS THE Income FUND'S goal? The Fund's goal is to provide current income.

WHAT ARE THE FUND'S MAIN INVESTMENT STRATEGIES?

The Fund seeks to achieve its goal by investing in a diversified portfolio
comprised primarily of income-producing securities. The key elements in
selecting the Fund's investment-grade securities are quality, marketability, and
maturity. Investment decisions are based upon the Adviser's assessment of the
overall economy, the Treasury yield curve, and interest rate spreads. First, the
Fund's targeted duration is determined based upon macroeconomic factors. Then,
the Adviser's analysis of the yield curve determines which maturities (short to
intermediate term) offer the most attractive potential returns. The Adviser then
considers spreads between various sectors (such as U.S. Treasuries, agency
securities, and corporate bonds) to select the quality and types of bonds that
offer the most attractive investment opportunity. It is expected that the Fund's
average maturity will generally range up to five years. During normal market
conditions, at least 65% of the Fund's total assets will be invested in
investment grade, income-producing securities.

SOUTHTRUST ALABAMA TAX-FREE INCOME FUND

WHAT IS THE Alabama Tax-Free Income Fund'S goal?

The Fund's goal is to provide current income exempt from federal income tax and
the income tax imposed by the State of Alabama.

WHAT ARE THE FUND'S MAIN INVESTMENT STRATEGIES?

The Fund seeks to achieve its goal by investing at least 80% of its total assets
in tax-exempt fixed income securities so that the Fund's annual interest income
is exempt from federal income tax and Alabama state income tax. The Adviser
selects investments after assessing factors such as trends in interest rates,
creditworthiness, the supply of appropriate municipal bonds, and portfolio
diversification. In order to reduce interest rate risks but still produce
competitive return, the Fund will maintain a weighted average maturity of four
to eight years.

At least 65% of the Fund's total assets will be invested in obligations issued
by or on behalf of the State of Alabama, its political subdivisions, or
agencies. Some of the interest from the Fund's investments may be subject to the
federal alternative minimum tax for individuals and corporations.

WHAT ARE THE main RISKS OF INVESTING IN THE FUND?
The prices of fixed-rate debt securities change in the opposite direction of
interest rates. As a result, if interest rates increase, the value of the Fund's
portfolio securities (and therefore the value of your Fund shares) could go
down. Other factors that may affect the Fund's returns include bond defaults or
increase in the risk of defaults, or early redemptions of portfolio securities.
Since the Fund is non-diversified and invests primarily in issuers from a single
state, the Fund may be subject to additional risks compared to funds that are
fully diversified and/or invest in multiple states. Alabama's economy is
dependent on certain industries, such as manufacturing and natural
resource-based industries (e.g., textiles, coal mining, and timber) - any
downturn in these and other industries may adversely impact the economy of
Alabama.

What are the Fund's Fees and Expenses?

FEES AND EXPENSES .................

This table describes the fees and expenses that you may pay if you buy and hold
shares of the Bond Fund, Income Fund or Alabama Tax-Free Fund.

Shareholder Fees ................. Bond Income Alabama-Tax
Fees Paid Directly From Your Investment.............. Fund Fund Free
Fund
Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of offering price)........ 3.50% 3.50%
3.50%
Redemption Fee (as a percentage of amount redeemed, if applicable)*......................... 1.00% 1.00%
1.00%

Annual Fund Operating Expenses (Before Waivers)1
Expenses That are Deducted From Fund Assets (as percentage of average net assets)

Management Fee 2............................................................................ 0.60% 0.60%
0.60%
Distribution (12b-1) Fee 3.................................................................. None 0.25% 0.25%
Shareholder Services Fee ................................................................... 0.25% 0.25% 0.25%
Other Expenses 4............................................................................ 0.25% 0.59%
0.42%
Total Annual Fund Operating Expenses ....................................................... 1.10% 1.69%
1.52%

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

1 Although not contractually obligated to do so, the Adviser and administrator
waived certain amounts. These are shown below along with the net expenses the
Fund actually paid for the fiscal year ended April 30, 1999.

Total Waivers of Fund Expenses ................................................... 0.01%
0.69% 0.25%
Total Annual Fund Operating Expenses (after waivers)................................. 1.09% 1.00% 1.27%5
</TABLE>

2 The Adviser voluntarily waived a portion of the management fee. The Adviser
can terminate this voluntary waiver at any time. The management fees paid by the
Bond Fund and Income Fund (after the voluntary waivers) were 0.59% and 0.30%
respectively for the year ended April 30, 1999.

3 The Income Fund did not pay or accrue the distribution (12b-1) fee during the
year ended April 30, 1999. Income Fund and Alabama Tax Free Fund have no present
intention of paying or accruing the distribution (12b-1) fee during the year
ending April 30, 2000.

4 The administrator voluntarily waived a portion of the administrative fee of
the Income Fund. The administrator can terminate this voluntary waiver at any
time. Total other expenses paid by the Income Fund (after the voluntary waiver)
was 0.45% for the year ended April 30, 1999.

5 Total Annual Fund Operating Expenses for the Alabama-Tax Free Fund are based
on estimated expenses for the year ending April 30, 2000.

* Applies only to shares of the Bond Fund, Income Fund and the Alabama Tax-Free
Fund purchased at net asset value (investments in excess of $1,000,000) which
are redeemed within one year of purchase. See "How to Redeem and Exchange
Shares".

EXAMPLE

This Example is intended to help you compare the cost of investing in the Bond
Fund, Income Fund and Alabama Tax-Free Fund with the cost of investing in other
mutual funds.

The Example assumes that you invest $10,000 in the Bond Fund, Income Fund and
Alabama Tax-Free Fund for the time periods indicated and then redeem all of your
shares at the end of those periods. The Example also assumes that your
investment has a 5% return each year and that the Bond Fund, Income Fund and
Alabama Tax-Free Fund operating expenses are before waivers as shown in the
table and remain the same. Although your actual costs may be higher or lower,
based on these assumptions your costs would be:

.................1 Year...........3 Years.. 5 Years 10 Years
- ------------------------------------------------------------------------------
...........................................
- ------------------------------------------------------------------------------

Bond
Fund.............$458.............$687..... $935 $1,643
- ------------------------------------------------------------------------------

Income
Fund.............$516.............$864..... $1,236 $2,278
- ------------------------------------------------------------------------------

Alabama Tax-
Free Fund........$499.............$813..... N/A N/A
- ------------------------------------------------------------------------------

WHAT ARE THE PRINCIPAL SECURITIES IN WHICH THE FUNDS INVEST?

Investment Ratings for Investment Grade Securities

The Adviser will determine whether a security is investment grade based upon the
credit ratings given by an NRSRO. For example, Standard and Poor's, a rating
service, assigns ratings to investment grade securities (AAA, AA, A, and BBB)
based on their assessment of the likelihood of the issuer's inability to pay
interest or principal (default) when due on each security. The Funds will
purchase only those securities that are rated within the four highest rating
categories or, if unrated, are determined by the Adviser to be of comparable
quality, which may include securities having speculative characteristics. The
Funds may purchase securities rated within the lowest category of investment
grade (i.e., Baa by Moody's Investors Services, Inc. or BBB by Standard and
Poor's). Lower credit ratings correspond to higher credit risk. If a security
has not received a rating, the Fund must rely entirely upon the Adviser's credit
assessment that the security is comparable to investment grade.

A security's yield measures the annual income earned on a security as a
percentage of its price. A security's yield will increase or decrease depending
upon whether it costs less (a discount) or more (a premium) than the principal
amount. If the issuer may redeem the security before its scheduled maturity, the
price and yield on a discount or premium security may change based upon the
probability of an early redemption. Securities with higher risks generally have
higher yields.

The following describes the types of fixed income securities in which the Funds
invest.

Treasury Securities
Treasury securities in which Bond Fund and Income Fund invest are direct
obligations of the federal government of the United States. Treasury
securities are generally regarded as having the lowest credit risks.

Agency Securities
Agency securities in which Bond Fund and Income Fund invest are issued or
guaranteed by a federal agency or other government sponsored entity acting
under federal authority (a GSE). The United States supports some GSEs with
its full faith and credit. Other GSEs receive support through federal
subsidies, loans or other benefits. A few GSEs have no explicit financial
support, but are regarded as having implied support because the federal
government sponsors their activities. Agency securities are generally
regarded as having low credit risks, but not as low as treasury securities.

The Funds treat mortgage backed securities guaranteed by GSEs as agency
securities. Although a GSE guarantee protects against credit risks, it does
not reduce the interest rate and prepayment risks of these mortgage backed
securities.

Corporate Debt Securities
Corporate debt securities in which Bond Fund and Income Fund invest are
fixed income securities issued by businesses. Notes, bonds, debentures and
commercial paper are the most prevalent types of corporate debt securities.
The Funds may also purchase interests in bank loans to companies. The
credit risks of corporate debt securities vary widely among issuers.

Commercial Paper
Commercial paper is an issuer's obligation with a maturity of less than
nine months. Companies typically issue commercial paper to pay for
current expenditures. Most issuers constantly reissue their commercial
paper and use the proceeds (or bank loans) to repay maturing paper. If
the issuer cannot continue to obtain liquidity in this fashion, its
commercial paper may default. The short maturity of commercial paper
reduces both the interest rate and credit risks as compared to other
debt securities of the same issuer.

Mortgage Backed Securities
Mortgage backed securities in which Bond Fund and Income Fund invest
represent interests in pools of mortgages. The mortgages that comprise a
pool normally have similar interest rates, maturities and other terms.
Mortgages may have fixed or adjustable interest rates. Interests in pools
of adjustable rate mortgages are known as ARMs.

Mortgage backed securities come in a variety of forms. Many have extremely
complicated terms. The simplest form of mortgage backed securities are
pass-through certificates. An issuer of pass-through certificates gathers
monthly payments from an underlying pool of mortgages. Then, the issuer
deducts its fees and expenses and passes the balance of the payments onto
the certificate holders once a month. Holders of pass-through certificates
receive a pro rata share of all payments and pre-payments from the
underlying mortgages. As a result, the holders assume all the prepayment
risks of the underlying mortgages.

Collateralized Mortgage Obligations (CMOs)
CMOs, including interests in real estate mortgage investment conduits
(REMICs), allocate payments and prepayments from an underlying
pass-through certificate among holders of different classes of mortgage
backed securities. This creates different prepayment and interest rate
risks for each CMO class.

The degree of increased or decreased prepayment risks depends upon the
structure of the CMOs. However, the actual returns on any type of
mortgage backed security depend upon the performance of the underlying
pool of mortgages, which no one can predict and will vary among pools.

Asset Backed Securities

Asset backed securities in which Bond Fund and Income Fund invest are
payable from pools of obligations other than mortgages such as auto loans
or credit card receivables. Most asset backed securities involve consumer
or commercial debts with maturities of less than ten years. However, almost
any type of fixed income assets (including other fixed income securities)
may be used to create an asset backed security. Asset backed securities may
take the form of commercial paper, notes, or pass through certificates.
Asset backed securities have prepayment risks. Like CMOs, asset backed
securities may be structured like Floaters, Inverse Floaters, IOs and POs.

Zero Coupon Securities
Zero coupon securities in which Bond Fund and Income Fund invest do not pay
interest or principal until final maturity unlike debt securities that
provide periodic payments of interest (referred to as a coupon payment).
Investors buy zero coupon securities at a price below the amount payable at
maturity. The difference between the purchase price and the amount paid at
maturity represents interest on the zero coupon security. Investors must
wait until maturity to receive interest and principal, which increases the
interest rate and credit risks of a zero coupon security.

Credit Enhancement

All of the Funds may purchase securities backed by credit enhancement. Credit
enhancement consists of an arrangement in which a company agrees to pay amounts
due on a fixed income security if the issuer defaults. In some cases the company
providing credit enhancement makes all payments directly to the security holders
and receives reimbursement from the issuer. Normally, the credit enhancer has
greater financial resources and liquidity than the issuer. For this reason, the
Adviser often evaluates the credit risk of a fixed income security based solely
upon its credit enhancement.

Common types of credit enhancement include guarantees, letters of credit, bond
insurance and surety bonds. Credit enhancement also includes arrangements where
securities or other liquid assets secure payment of a fixed income security. If
a default occurs, these assets may be sold and the proceeds paid to security's
holders. Either form of credit enhancement reduces credit risks by providing
another source of payment for a fixed income security.

Convertible Securities
Convertible securities are fixed income securities that the Bond Fund and Income
Fund have the option to exchange for equity securities at a specified conversion
price. The option allows the Fund to realize additional returns if the market
price of the equity securities exceeds the conversion price. For example, the
Fund may hold fixed income securities that are convertible into shares of common
stock at a conversion price of $10 per share. If the market value of the shares
of common stock reached $12, the Fund could realize an additional $2 per share
by converting its fixed income securities.

Convertible securities have lower yields than comparable fixed income
securities. In addition, at the time a convertible security is issued the
conversion price exceeds the market value of the underlying equity securities.
Thus, convertible securities may provide lower returns than non-convertible
fixed income securities or equity securities depending upon changes in the price
of the underlying equity securities. However, convertible securities permit the
Fund to realize some of the potential appreciation of the underlying equity
securities with less risk of losing its initial investment.

The Funds treat convertible securities as both fixed income and equity
securities for purposes of their investment policies and limitations, because of
their unique characteristics.

Variable Rate and Floating Rate Demand Instruments

Variable rate demand instruments in which all the Funds invest are securities
that require the issuer or a third party, such as a dealer or bank, to
repurchase the security for its face value upon demand. The securities also pay
interest at a variable rate intended to cause the securities to trade at their
face value. The Funds treat demand instruments as short-term securities, because
their variable interest rate adjusts in response to changes in market rates,
even though their stated maturity may extend beyond thirteen months.

Tax Exempt Securities

Tax exempt securities in which Alabama Tax-Free Income Fund invests are fixed
income securities that pay interest that is not subject to federal income taxes
or Alabama state income taxes. Typically, states, counties, cities and other
political subdivisions and authorities issue tax exempt securities. The market
categorizes tax exempt securities by their source of repayment.

General Obligation Bonds

General obligation bonds are supported by the issuer's power to impose
property or other taxes. The issuer must impose and collect taxes
sufficient to pay principal and interest on the bonds. However, the
issuer's authority to impose additional taxes may be limited by its charter
or state law.

Special Revenue Bonds

Special revenue bonds are payable solely from specific revenues received by
the issuer such as specific taxes, assessments, tolls, or fees. Bondholders
may not collect from the municipality's general taxes or revenues. For
example, a municipality may issue bonds to build a toll road, and pledge
the tolls to repay the bonds. Therefore, a shortfall in the tolls could
result in a default on the bonds.

Private Activity Bonds

Private activity bonds are special revenue bonds used to finance
private entities. For example, a municipality may issue bonds to
finance a new factory to improve its local economy. The municipality
would lend the proceeds from its bonds to the company using the
factory, and the company would agree to make loan payments sufficient
to repay the bonds. The bonds would be payable solely from the
company's loan payments, not from any other revenues of the
municipality. Therefore, any default on the loan normally would result
in a default on the bonds.

The interest on many types of private activity bonds is subject to the
federal alternative minimum tax (AMT). The Fund may invest in bonds
subject to AMT.

Tax Increment Financing Bonds

Tax increment financing (TIF) bonds are payable from increases in taxes or
other revenues attributable to projects financed by the bonds. For example,
a municipality may issue TIF bonds to redevelop a commercial area. The TIF
bonds would be payable solely from any increase in sales taxes collected
from merchants in the area. The bonds could default if merchants' sales,
and related tax collections, failed to increase as anticipated.

Municipal Notes

Municipal notes are short-term tax exempt securities. Many municipalities
issue such notes to fund their current operations before collecting taxes
or other municipal revenues. Municipalities may also issue notes to fund
capital projects prior to issuing long-term bonds. The issuers typically
repay the notes at the end of their fiscal year, either with taxes, other
revenues or proceeds from newly issued notes or bonds.

Special Transactions

Repurchase Agreements

Repurchase agreements are transactions in which a Fund buys a security from
a dealer or bank and agrees to sell the security back at a mutually agreed
upon time and price. The repurchase price exceeds the sale price,
reflecting the Fund's return on the transaction. This return is unrelated
to the interest rate on the underlying security. A Fund will enter into
repurchase agreements only with banks and other recognized financial
institutions, such as securities dealers, deemed creditworthy by the
Adviser.

A Fund's custodian or subcustodian will take possession of the securities
subject to repurchase agreements. The Adviser or subcustodian will monitor
the value of the underlying security each day to ensure that the value of
the security always equals or exceeds the repurchase price.

Repurchase agreements are subject to credit risks.

Delayed Delivery Transactions

Delayed delivery transactions, including when issued transactions, are
arrangements in which a Fund buys securities for a set price, with payment
and delivery of the securities scheduled for a future time. During the
period between purchase and settlement, no payment is made by the Fund to
the issuer and no interest accrues to the Fund. A Fund records the
transaction when it agrees to buy the securities and reflects their value
in determining the price of its shares. Settlement dates may be a month or
more after entering into these transactions so that the market values of
the securities bought may vary from the purchase prices. Therefore, delayed
delivery transactions create interest rate risks for a Fund. Delayed
delivery transactions also involve credit risks in the event of a
counterparty default.

Asset Coverage
In order to secure its obligations in connection with special transactions,
a Fund will either own the underlying assets, enter into an offsetting
transaction or set aside readily marketable securities with a value that
equals or exceeds the Fund's obligations. Unless a Fund has other readily
marketable assets to set aside, it cannot trade assets used to secure such
obligations without entering into an offsetting derivative contract or
terminating a special transaction. This may cause a Fund to miss favorable
trading opportunities or to realize losses on derivative contracts or
special transactions.

Investing in Securities of Other Investment Companies

The Funds may invest their assets in securities of other investment companies,
including the securities of affiliated money market funds, as an efficient means
of carrying out their investment policies and managing their uninvested cash.

Temporary Defensive Investments

The Funds may temporarily depart from their principal investment strategies by
investing their assets in cash, cash items, and shorter-term, higher-quality
debt seecurities and similar obligations. A Fund may do this to minimize
potential losses and maintain liquidity to meet shareholder redemptions during
adverse market conditions. This may cause a Fund to give up greater investment
returns to maintain the safety of principal, that is, the original amount
invested by shareholders.

Portfolio Turnover

The Funds actively trade their portfolio securities in an attempt to achieve
their individual investment objective. Active trading will cause a Fund to have
an increased portfolio turnover rate, which is likely to generate shorter-term
gains (losses) for its shareholders, which are taxed at a higher rate than
longer-term gains (losses). Actively trading portfolio securities increases the
Funds' trading costs and may have an adverse impact on a Fund's performance.

WHAT ARE THE MAIN RISKS OF INVESTING IN THE FUNDS?

Interest Rate Risks
o Prices of fixed income securities rise and fall in response to changes in the
interest rate paid by similar securities. Generally, when interest rates
rise, prices of fixed income securities fall. However, market factors, such
as the demand for particular fixed income securities, may cause the price of
certain fixed income securities to fall while the prices of other securities
rise or remain unchanged.

o Interest rate changes have a greater effect on the price of fixed income
securities with longer durations. Duration measures the price sensitivity of
a fixed income security to changes in interest rates.

Credit Risks
o Credit risk is the possibility that an issuer will default on a security by
failing to pay interest or principal when due. If an issuer defaults, the
Fund will lose money.

o Many fixed income securities receive credit ratings from services such as
Standard & Poor's and Moody's Investors Services, Inc. These services assign
ratings to securities by assessing the likelihood of issuer default. Lower
credit ratings correspond to higher credit risk. If a security has not
received a rating, a Fund must rely entirely upon the Adviser's credit
assessment.

o Fixed income securities generally compensate for greater credit risk by
paying interest at a higher rate. The difference between the yield of a
security and the yield of a U.S. Treasury security with a comparable maturity
(the spread) measures the additional interest paid for risk. Spreads may
increase generally in response to adverse economic or market conditions. A
security's spread may also increase if the security's rating is lowered, or
the security is perceived to have an increased credit risk. An increase in
the spread will cause the price of the security to decline.

o Credit risk includes the possibility that a party to a transaction involving
a Fund will fail to meet its obligations. This could cause a Fund to lose the
benefit of the transaction or prevent a Fund from selling or buying other
securities to implement its investment strategy.

Call Risks
o Call risk is the possibility that an issuer may redeem a fixed income
security before maturity (a call) at a price below its current market price.
An increase in the likelihood of a call may reduce the security's price.

o If a fixed income security is called, the Fund may have to reinvest the
proceeds in other fixed income securities with lower interest rates, higher
credit risks, or other less favorable characteristics.

Prepayment Risks

o Generally, homeowners have the option to prepay their mortgages at any time
without penalty. Homeowners frequently refinance high interest rate
mortgages when mortgage rates fall. This results in the prepayment of
mortgage backed securities with higher interest rates. Conversely,
prepayments due to refinancings decrease when mortgage rates increase. This
extends the life of mortgage backed securities with lower interest rates.
Other economic factors can also lead to increases or decreases in
prepayments. Increases in prepayments of high interest rate mortgage backed
securities, or decreases in prepayments of lower interest rate mortgage
backed securities, may reduce their yield and price. These factors,
particularly the relationship between interest rates and mortgage
prepayments makes the price of mortgage backed securities more volatile
than many other types of fixed income securities with comparable credit
risks.

o Mortgage backed securities generally compensate for greater prepayment risk
by paying a higher yield. The difference between the yield of a mortgage
backed security and the yield of a U.S. Treasury security with a comparable
maturity (the spread) measures the additional interest paid for risk. Spreads
may increase generally in response to adverse economic or market conditions.
A security's spread may also increase if the security is perceived to have an
increased prepayment risk or perceived to have less market demand. An
increase in the spread will cause the price of the security to decline.

o The Fund may have to reinvest the proceeds of mortgage prepayments in other
fixed income securities with lower interest rates, higher prepayment risks,
or other less favorable characteristics.

Municipal Securities Risks

o Local political and economic factors may adversely affect the value and
liquidity of municipal securities held by Alabama Tax-Free Income Fund. The
value of municipal securities can be affected more by supply and demand
factors or the creditworthiness of the issuer than market interest rates.
Repayment of municipal securities depends on the ability of the issuer or
project backing such securities to generate taxes or revenues. Because the
Fund invests primarily in Alabama, it may be adversely affected by the
factors or events particular to the state.

Issuer Diversification
o The Alabama Tax-Free Income Fund is not diversified. Compared to diversified
funds, it may invest a higher percentage of its assets among fewer issuers of
portfolio securities. This increases the Fund's risk by magnifying the impact
(positively or negatively) that any one issuer has on the Fund's share price
and performance.

Tax Risks
o In order to be tax-exempt, municipal securities must meet certain legal
requirements. Failure to meet such requirements may cause the interest
received and distributed by the Alabama Tax-Free Income Fund to shareholders
to be taxable.

o Changes or proposed changes in federal tax laws may cause the prices of
municipal securities to fall.

WHAT DO SHARES COST?

You can purchase, redeem, or exchange shares any day the New York Stock Exchange
(NYSE) is open. When the Fund receives your transaction request in proper form,
it is processed at the next calculated net asset value (NAV) plus any applicable
front-end sales charge (public offering price). NAV is determined at the end of
regular trading (normally 4:00 p.m. Eastern time) each day the NYSE is open.
Payment must be received by the Funds' custodian no later than 4:00 p.m.
(Eastern time) by the third business day following receipt of the order. If
federal funds are not received by such date, the order will be canceled and the
institution placing the order will be responsible for any loss to the Funds or
their shareholders. Payment for orders which are not received or accepted will
be returned after prompt inquiry to the sending institution.

The minimum initial investment in each Fund is $1000. The minimum subsequent
investment is $50. Keep in mind that investment professionals may charge you
fees for their services in connection with your share transactions. With respect
to investments made in the Funds through a sweep program, initial minimum
investments may be modified under the relevant account agreement. SouthTrust
Bank or a SouthTrust Funds Dealer may set different minimums for their
customers.

SALES CHARGE WHEN YOU PURCHASE

<PAGE>

Sales Charge Sales Dealer
Purchase Amount as a Charge as a Allowance
Percentage of Percentage as a
Public of Net Percentage
Offering PriceAmount of
Invested Offering
Price

- -----------------------------------------------------------------------------
Less than $100,000 3.50% 3.63% 3.00%
$100,000 but less than $250,000 3.00% 3.09% 2.50%
$250,000 but less than $500,000 2.50% 2.56% 2.00%
$500,000 but less than $1 million 2.00% 2.04% 1.50%
$1 million or greater 0.00%* 0.00% 0.00%

*A redemption fee of 1% may be imposed on certain redemptions made within one
year of purchase. See "How to Redeem and Exchange Shares."

The sales charge at purchase may be reduced or eliminated by:

o purchases $1 million or more;

combining concurrent purchases of shares by you, your spouse, and your children
under age 21;

o accumulating purchases (in calculating the sales charge on an additional
purchase, include the current value of previous share purchases still
invested in the Fund); or

o signing a letter of intent to purchase a specific dollar amount of shares
within 13 months (call your investment professional or the Fund for more
information).

The sales charge will be eliminated when you purchase shares:

o by reinvesting redemption proceeds within 30 days of redeeming shares;

o as director or employee of the Funds, the Adviser, the Distributor and
their affiliates, and the immediate family members of these individuals;

o as an investor for whom SouthTrust Corporation or one of its affiliates
acts in a fiduciary, advisory, custodial, agency or similar capacity; and

o as an employee who purchases shares through a payroll deduction plan sponsored
by your employer.

HOW ARE THE FUNDS SOLD?

The Fund's Distributor markets the shares described in this prospectus to
institutions and individuals, directly or through investment professionals. The
Alabama Tax-Free Income Fund may not be a suitable investment for retirement
plans or for non-Alabama taxpayers because it invests in Alabama municipal
securities.

RULE 12B-1 PLAN

The Company has adopted a Rule 12b-1 Plan (Plan) on behalf of Income Fund and
Alabama Tax-Free Income Fund, which allows it to pay marketing fees to the
Distributor and investment professionals for the sale, distribution and customer
servicing of the Funds' shares. The Company has no present intention to activate
the Plan. Once the Funds begin accruing the 12b-1 fee, Fund expenses will rise.
If the Company were to activate the Plan, it would be permitted to pay up to
0.25% of the average daily net assets of each Fund as a distribution fee to the
Distributor. Because these shares could pay marketing fees on an ongoing basis,
your investment cost may be higher over time than other shares with different
sales charges and marketing fees.

HOW TO PURCHASE SHARES

You may purchase shares through SouthTrust Funds Shareholder Services or through
a broker/dealer that has entered into a sales agreement with the Distributor (a
SouthTrust Funds Dealer), or through an exchange from another SouthTrust Fund
and certain Federated Funds. The Funds reserve the right to reject any request
to purchase or exchange shares. Trust customers of SouthTrust Bank should
contact their account officer.

DIRECTLY FROM THE FUND

o Establish your account with the Fund by submitting a completed account
application; and

o Send your payment to the Fund by Federal Reserve wire or check.

By Check

Complete an account application (for new accounts), make your check payable to
the Fund, and mail it to:

SouthTrust Funds

[INSERT ADDRESS]

Send your wire to:

[INSERT ADDRESS]

By Telephone
Once an account has been established, you may purchase additional shares by
calling SouthTrust Funds Shareholder Services directly at 1-800-[INSERT NUMBER]

THROUGH AN INVESTMENT PROFESSIONAL
o Establish an account with the investment professional; and

THROUGH AN EXCHANGE

You may telephone an exchange request by calling SouthTrust Shareholder Services
or your SouthTrust Funds Dealer. Trust customers of SouthTrust Bank should
contact their account officer.

BY automatic INVESTMENT PROGRAM
Once you have opened an account, you may automatically purchase additional
shares in a minimum amount of $50 on a monthly basis by completing an Automatic
Investment Program application or by contacting SouthTrust Funds Shareholder
Services or your SouthTrust Funds Dealer. Once you have opened an account, you
may purchase additional shares through a depository institution that is an
Automated Clearing House (ACH) member. This purchase option can be established
by completing the appropriate sections of the Automatic Investment Application.

HOW TO REDEEM AND EXCHANGE SHARES

You should redeem or exchange shares through SouthTrust Funds Shareholder
Services or your SouthTrust Funds Dealer. Trust customers of SouthTrust Bank
should contact their account officer.

Through An Investment Professional
Submit your redemption or exchange request to SouthTrust Funds Shareholder
Services or your SouthTrust Funds Dealer by the end of regular trading on the
NYSE (normally 4:00 p.m. Eastern time). The redemption amount you will receive
is based upon the next calculated NAV after the Fund receives the order.
Investment professionals are responsible for promptly submitting redemption
requests and providing proper written redemption instructions as described
below. If your redemption order is received by the Distributor before 12:00 noon
(Eastern time), payment in federal funds is normally wired the same day. Payment
for redemption requests received after 12:00 noon (Eastern time) but before 4:00
p.m. (Eastern time) will be wired the next business day.

Directly From The Fund

By Telephone

If you call before 12:00 noon (Eastern time), your redemption will be wired to
you the same day. You will not receive that day's dividend.

If you call after 12:00 noon (Eastern time), your redemption will be wired to
you the following business day. You will receive that day's dividend.

By Mail
You may redeem or exchange shares by mailing your request to:
[INSERT ADDRESS]
Your redemption will be processed after the Fund receives your written request
in proper form. All requests must include:

Fund name, account number and account registration;

o amount to be redeemed or exchanged;

o signatures of all shareholders exactly as registered; and

o if exchanging, the Fund name, account number and account registration into
which you are exchanging.

Call SouthTrust Funds Shareholder Services or your SouthTrust Funds Dealer if
you need special instructions.

Signature Guarantees Signatures must be guaranteed if:

o your redemption will be sent to an address other than the address of
record;

o your redemption will be sent to an address of record that was changed
within the last 30 days;

o a redemption is payable to someone other than the shareholder(s) of record;
or

o if exchanging (transferring) into another fund with a different shareholder
registration.

PAYMENT METHODS FOR REDEMPTIONS

o an electronic transfer to your account at a financial institution that is
an ACH member; or

o wire payment to your account at a domestic commercial bank that is a Federal
Reserve System member.

Redemption in Kind

Although the Funds intend to pay share redemptions in cash, they reserve the
right to pay the redemption price in whole or in part by a distribution of a
Fund's portfolio securities.

LIMITATIONS ON REDEMPTION PROCEEDS

Redemption proceeds normally are wired or mailed within five business days after
receiving a request in proper form. Payment may be delayed up to seven days:

o to allow your purchase to clear;

o during periods of market volatility; or

o when a shareholder's trade activity or amount adversely impacts a Fund's
ability to manage its assets.

You will not accrue interest or dividends on uncashed checks from the Fund if
those checks are undeliverable and returned to the Fund.

The sales charge when you redeem shares
In order to discourage short-term investments in the Funds, the Company charges
a redemption fee in connection with redemptions of shares held for less than one
year which were purchased at net asset value (investments of $1,000,000 or
more). The charge is 1% of the lesser of the value of the shares redeemed
(exclusive of reinvested dividends and capital gain distributions) or the total
cost of such shares. In determining if a charge applies and the amount of any
such charge, the first shares redeemed are those purchased with reinvested
dividends and capital gain distributions, followed by others held the longest.
The redemption fee is not assessed on ( i ) exchanges (except is shares acquired
by exchange were then redeemed within twelve months of the initial purchase);
(ii) redemptions made in connection with distributions from qualified retirement
plans, 403(b) plans or IRAs due to death, disability or attainment of age 591/2;
(iii) redemptions resulting from the tax-free return of excess contributions to
IRAs or employee benefit plans; and (iv) redemptions through certain automatic
withdrawals. The 1% redemption fee is not a deferred sales charge but is rather
a means to offset the additional costs associated with short-term investments in
the Funds.

EXCHANGE PRIVILEGES

Shareholders who have purchased shares of the Funds (including shares acquired
through a reinvestment of a dividend or distribution on such shares) may
exchange those shares for shares of one of the other SouthTrust Funds or one of
the Federated Funds without paying an additional sales charge. However, this
privilege does not apply to exchanges into SouthTrust Value Fund or SouthTrust
Growth Fund until an investor has owned shares in the one of the Funds for 90
days. The 90-day holding period does not apply to exchanges in which the
investor obtained Fund shares through a prior exchange of shares of SouthTrust
Value Fund or SouthTrust Growth Fund. When shares of SouthTrust U.S. Treasury
Money Market Fund are exchanged for shares of a load Fund or a Federated Fund,
the applicable sales charge (if any) will be assessed. However, shareholders
exchanging shares of SouthTrust U.S. Treasury Money Market Fund which were
received in a previous exchange involving shares on which a load was paid will
not be required to pay an additional sales charge upon notification of the
reinvestment of the equivalent investment into a load Fund.

To exchange, you must:

o exchange shares having a net asset value of at least $1,000;

o ensure that the account registrations are identical;

o meet any minimum initial investment requirements; and

o receive a prospectus for the fund into which you wish to exchange.

Automatic WITHDRAWAL Plan (awp)

You may automatically redeem shares if the value of your account equals $10,000
or more (other than retirement accounts subject to required minimum
distributions). Shareholders who elect to establish an AWP may receive a
monthly, quarterly, semi-annual, or annual payment of a stated amount not less
than $50. Complete the appropriate section of the Account Application or contact
SouthTrust Funds Shareholder Services or your SouthTrust Funds Dealer. This
program may reduce, and eventually deplete, your account. Payments should not be
considered yield or income. Generally, it is not advisable to continue to
purchase shares subject to a sales charge while redeeming shares using this
program.

ADDITIONAL CONDITIONS

Telephone Transactions

The Funds will record your telephone instructions. If the Funds do not follow
reasonable procedures, they may be liable for losses due to unauthorized or
fraudulent telephone instructions.

Share Certificates

The Funds do not issue share certificates.

ACCOUNT AND SHARE INFORMATION
CONFIRMATIONS AND ACCOUNT STATEMENTS

DIVIDENDS AND CAPITAL GAINS

ACCOUNTS WITH LOW BALANCES

TAX INFORMATION

Fund distributions are expected to be primarily dividends. Redemptions and
exchanges are taxable sales. Please consult your tax adviser regarding your
federal, state, and local tax liability.

It is anticipated that Alabama Tax-Free Income Fund distributions will be
primarily dividends that are exempt from federal income tax, although a portion
of the Fund's dividends may not be exempt. Dividends may be subject to state and
local taxes, although the Alabama Tax-Free Income Fund's dividends will be
exempt from Alabama state personal income tax to the extent they are derived
from interest on obligations exempt from Alabama personal income taxes. Capital
gains and non-exempt dividends are taxable whether paid in cash or reinvested in
the Fund.

WHO MANAGES THE FUND?

The Board of Trustees governs the Funds. The Adviser manages the Funds' assets,
including the selection and management of portfolio securities.

For the advisory services provided and expenses assumed by it, the Adviser is
entitled to receive a fee from each Fund, computed daily and payable monthly, at
an annual rate of 0.60%. The Adviser may voluntarily waive a portion of its fee
or reimburse the Funds for certain operating expenses.

Investment decisions for Bond Fund and Income Fund are made by investment teams
with David J. Howell as the lead portfolio manager. Mr. Howell has lead the Bond
and Income Fund's management since their inceptions in May 1992 and January
1996, respectively. Mr. Howell is a Senior Fixed-Income Portfolio Manager for
SouthTrust Asset Management Company where he has been a member of the investment
team since 1987. Mr. Howell has a bachelor's degree from the University of North
Alabama.

Charles P. Matthews has been the portfolio manager for Alabama Tax-Free Income
Fund since inception, July , 1999. Mr. Matthews is a Vice President and Senior
Portfolio Manager for SouthTrust Asset Management Company, Inc. where he has
been a member of the investment team since 1997. Prior to joining SouthTrust
Asset Management Company, Inc., Mr. Matthews served as Assistant Vice President
and Portfolio Manager at Bay Banks Investment Management in Boston,
Massachusetts from 1992 to 1997. Mr. Matthews has a bachelor of arts degree from
Clark University and an MBA in Finance from Suffolk University

As part of its regular banking operations, SouthTrust Bank of Alabama, N.A. may
make loans to public companies. Thus, it may be possible, from time to time, for
the Funds to hold or acquire the securities of issuers which are also lending
clients of SouthTrust Bank of Alabama, N.A. The lending relationship will not be
a factor in the selection of securities.

Year 2000 Readiness

The "Year 2000" problem is the potential for computer errors or failures because
certain computer systems may be unable to interpret dates after December 31,
1999 or experience other date-related problems. The Year 2000 problem may cause
systems to process information incorrectly and could disrupt businesses, such as
the Funds, that rely on computers.

FINANCIAL INFORMATION
FINANCIAL HIGHLIGHTS

The Financial Highlights will help you understand the Bond Fund's and Income
Fund's financial performance for its past five fiscal years, or since inception,
if the life of the Fund is shorter. Some of the information is presented on a
per share basis. Total returns represent the rate an investor would have earned
(or lost) on an investment in a Fund, assuming reinvestment of any dividends and
capital gains. As this is the Alabama Tax-Free Income Fund's first fiscal year,
financial information is not yet available.

This information has been audited by Arthur Andersen LLP whose report, along
with the Fund's audited financial statements, is included in the Annual Report.

<PAGE>

SOUTHTRUST BOND FUND
SOUTHTRUST INCOME FUND
SOUTHTRUST ALABAMA TAX-FREE INCOME FUND
Portfolios of SouthTrust Funds

You can obtain information about the Fund (including the SAI) by visiting or
writing the Public Reference Room of the Securities and Exchange Commission in
Washington, DC 20549-6009 or from the Commission's Internet site at
http://www.sec.gov. You can call 1-800-SEC-0330 for information on the Public
Reference Room's operations and copying charges.

Investment Company Act File No. 811-6580
Cusip 844734301
Cusip 844734400

000000-00 (8/99)

SUBJECT TO COMPLETION

MAY , 1999

SOUTHTRUST BOND FUND

SOUTHTRUST INCOME FUND

SOUTHTRUST ALABAMA TAX-FREE INCOME FUND

Portfolios of SouthTrust Funds

This Statement of Additional Information (SAI) is not a prospectus. Read this
SAI in conjunction with the prospectus for SouthTrust Bond Fund, SouthTrust
Income Fund, and SouthTrust Alabama Tax Free Income Fund dated August , 1999.
This SAI incorporates by reference the Funds' Annual Reports. Obtain the
prospectus or Annual Reports without charge by calling 1-800-843-8618.

August , 1999

CONTENTS
How are the Funds Organized?
Securities in Which the Funds Invest
What do Shares Cost?
How are the Funds Sold?
Exchanging Securities for Shares
Subaccounting Services
Redemption in Kind
Massachusetts Partnership Law
Account and Share Information
Tax Information
Who Manages and Provides Services to the Funds?
How Do the Funds Measure Performance?
Investment Ratings
Financial Information
Addresses
Cusip 844734301
Cusip 844734400
(/99)

<PAGE>

HOW ARE THE FUNDS ORGANIZED?

As stated in the prospectus, the investment adviser of the Funds is SouthTrust
Bank, N.A.

SECURITIES IN WHICH THE FUNDS INVEST

In pursuing their investment strategy, the Funds may invest in the following
securities for any purpose that is consistent with their respective investment
objective.
Following is a table that indicates which types of securities are a: P =
Principal investment of the Funds; A = Acceptable (but not principal) investment
of the Funds; or N = Not an acceptable investment of the Funds.

Securities Bond Fund Income Fund Alabama Tax
Free Income
Fund

Equity Securities N A N
- --------------------------------------------------- -----
--------------------------
Common Stocks N A N
--- -----------------
- --------------------------------------------------- ------------
Preferred Stocks N A N
-----
- ----------------------------------------------------------------------------
Warrants N A N
-----------------
- ----------------------------------------------------------------
Fixed Income Securities P P P
- --------------------------------------------------------------------------------
Treasury Securities P P A
------------
- ----------------------------------------------------- -----------------
Agency Securities P P A
------------
- ----------------------------------------------------- -----------------
Bank Instruments A A A
- --------------------------------------------------------------------------------
Corporate Debt Obligations P P N
- --------------------------------------------------------------------------------
Commercial Paper A A N
- --------------------------------------------------------------------------------
Demand Instruments A A N
Convertible Securities A A N
Asset Backed Securities P P N
Zero Coupon Securities A A N
Derivative Contracts A A A
Mortgage-Backed Securities P P N
Collateralized Mortgage Obligations P A N
Taxable Municipal Bonds A A N
Tax Exempt Securities N N P
General Obligation Bonds N N P
Special Revenue Bonds N N P
Private Activity Bonds N N A
Tax Increment Financing Bonds N N A
Municipal Notes N N A
Variable Rate Demand Instruments N N A
Foreign Government Securities A A N
Depositary Receipts A A N
Repurchase Agreements A A N
Reverse Repurchase Agreements A A N
When Issued Transactions A A N
To Be Announced Securities A A N
- --------------------------------------------------------------------------------
Securities Lending A A A
Asset Coverage A A A
Investing in Securities of Other Investment A A A
Companies
- --------------------------------------------------------------------------------

SECURITIES DESCRIPTIONS AND TECHNIQUES

Equity Securities
Equity securities represent a share of an issuer's earnings and assets, after
the issuer pays its liabilities. A Fund cannot predict the income it will
receive from equity securities because issuers generally have discretion as to
the payment of any dividends or distributions. However, equity securities offer
greater potential for appreciation than many other types of securities, because
their value increases directly with the value of the issuer's business. The
following describes the types of equity securities in which the Income Fund
invest.
Common Stocks
Common stocks are the most prevalent type of equity security. Common stocks
receive the issuer's earnings after the issuer pays its creditors and any
preferred stockholders. As a result, changes in an issuer's earnings
directly influence the value of its common stock. Preferred Stocks
Preferred stocks have the right to receive specified dividends or
distributions before the issuer makes payments on its common stock. Some
preferred stocks also participate in dividends and distributions paid on
common stock. Preferred stocks may also permit the issuer to redeem the
stock. Warrants Warrants give the Fund the option to buy the issuer's
equity securities at a specified price (the exercise price) at a specified
future date (the expiration date). The Fund may buy the designated
securities by paying the exercise price before the expiration date.
Warrants may become worthless if the price of the stock does not rise above
the exercise price by the expiration date. This increases the market risks
of warrants as compared to the underlying security. Rights are the same as
warrants, except companies typically issue rights to existing stockholders.

Treasury Securities
Treasury securities are direct obligations of the federal government of the
United States. Treasury securities are generally regarded as having the
lowest credit risks.

Agency Securities
Agency securities are issued or guaranteed by a federal agency or other
government sponsored entity acting under federal authority (a GSE). The
United States supports some GSEs with its full faith and credit. Other GSEs
receive support through federal subsidies, loans or other benefits. A few
GSEs have no explicit financial support, but are regarded as having implied
support because the federal government sponsors their activities. Agency
securities are generally regarded as having low credit risks, but not as
low as treasury securities.

Commercial Paper
Commercial paper is an issuer's obligation with a maturity of less than
nine months. Companies typically issue commercial paper to pay for
current expenditures. Most issuers constantly reissue their commercial
paper and use the proceeds (or bank loans) to repay maturing paper. If
the issuer cannot continue to obtain liquidity in this fashion, its
commercial paper may default. The short maturity of commercial paper
reduces both the market and credit risks as compared to other debt
securities of the same issuer.

Taxable Municipal Securities
Municipal securities are issued by states, counties, cities and other
political subdivisions and authorities. Although many municipal securities
are exempt from federal income tax, the Funds may invest in taxable
municipal securities.

Mortgage Backed Securities
Mortgage backed securities represent interests in pools of mortgages. The
mortgages that comprise a pool normally have similar interest rates,
maturities and other terms. Mortgages may have fixed or adjustable interest
rates. Interests in pools of adjustable rate mortgages are known as ARMs.

Sequential CMOs
In a sequential pay CMO, one class of CMOs receives all principal
payments and prepayments. The next class of CMOs receives all
principal payments after the first class is paid off. This process
repeats for each sequential class of CMO. As a result, each class
of sequential pay CMOs reduces the prepayment risks of subsequent
classes.

PACs, TACs and Companion Classes
More sophisticated CMOs include planned amortization classes
(PACs) and targeted amortization classes (TACs). PACs and TACs are
issued with companion classes. PACs and TACs receive principal
payments and prepayments at a specified rate. The companion
classes receive principal payments and prepayments in excess of
the specified rate. In addition, PACs will receive the companion
classes' share of principal payments, if necessary, to cover a
shortfall in the prepayment rate. This helps PACs and TACs to
control prepayment risks by increasing the risks to their
companion classes.

IOs and POs
CMOs may allocate interest payments to one class (Interest Only or
IOs) and principal payments to another class (Principal Only or
POs). POs increase in value when prepayment rates increase. In
contrast, IOs decrease in value when prepayments increase, because
the underlying mortgages generate less interest payments. However,
IOs tend to increase in value when interest rates rise (and
prepayments decrease), making IOs a useful hedge against interest
rate risks.

Floaters and Inverse Floaters
Another variant allocates interest payments between two classes of
CMOs. One class (Floaters) receives a share of interest payments
based upon a market index such as LIBOR. The other class (Inverse
Floaters) receives any remaining interest payments from the
underlying mortgages. Floater classes receive more interest (and
Inverse Floater classes receive correspondingly less interest) as
interest rates rise. This shifts prepayment and interest rate
risks from the Floater to the Inverse Floater class, reducing the
price volatility of the Floater class and increasing the price
volatility of the Inverse Floater class.

Z Classes and Residual Classes
CMOs must allocate all payments received from the underlying
mortgages to some class. To capture any unallocated payments, CMOs
generally have an accrual (Z) class. Z classes do not receive any
payments from the underlying mortgages until all other CMO classes
have been paid off. Once this happens, holders of Z class CMOs
receive all payments and prepayments. Similarly, REMICs have
residual interests that receive any mortgage payments not
allocated to another REMIC class. The degree of increased or
decreased prepayment risks depends upon the structure of the CMOs.
However, the actual returns on any type of mortgage backed
security depend upon the performance of the underlying pool of
mortgages, which no one can predict and will vary among pools.

Asset Backed Securities
Asset backed securities are payable from pools of obligations other than
mortgages. Most asset backed securities involve consumer or commercial
debts with maturities of less than ten years. However, almost any type of
fixed income assets (including other fixed income securities) may be used
to create an asset backed security. Asset backed securities may take the
form of commercial paper, notes, or pass through certificates. Asset backed
securities have prepayment risks. Like CMOs, asset backed securities may be
structured like Floaters, Inverse Floaters, IOs and POs.

Bank Instruments

Bank instruments are unsecured interest bearing deposits with banks. Bank
instruments include bank accounts, time deposits, certificates of deposit
and banker's acceptances. Yankee instruments are denominated in U.S.
dollars and issued by U.S. branches of foreign banks. Eurodollar
instruments are denominated in U.S. dollars and issued by non-U.S. branches
of U.S. or foreign banks.

Zero Coupon Securities
There are many forms of zero coupon securities. Some are issued at a
discount and are referred to as zero coupon or capital appreciation bonds.
Others are created from interest bearing bonds by separating the right to
receive the bond's coupon payments from the right to receive the bond's
principal due at maturity, a process known as coupon stripping. Treasury
STRIPs, IOs and POs are the most common forms of stripped zero coupon
securities. In addition, some securities give the issuer the option to
deliver additional securities in place of cash interest payments, thereby
increasing the amount payable at maturity. These are referred to as
pay-in-kind or PIK securities.

Credit Enhancement
Credit enhancement consists of an arrangement in which a company agrees to
pay amounts due on a fixed income security if the issuer defaults. In some
cases the company providing credit enhancement makes all payments directly
to the security holders and receives reimbursement from the issuer.
Normally, the credit enhancer has greater financial resources and liquidity
than the issuer. For this reason, the Adviser usually evaluates the credit
risk of a fixed income security based solely upon its credit enhancement.

Common types of credit enhancement include guarantees, letters of credit,
bond insurance and surety bonds. Credit enhancement also includes
arrangements where securities or other liquid assets secure payment of a
fixed income security. If a default occurs, these assets may be sold and
the proceeds paid to security's holders. Either form of credit enhancement
reduces credit risks by providing another source of payment for a fixed
income security.

Convertible Securities
Convertible securities are fixed income securities that the Funds have the
option to exchange for equity securities at a specified conversion price. The
option allows a Fund to realize additional returns if the market price of the
equity securities exceeds the conversion price. For example, a Fund may hold
fixed income securities that are convertible into shares of common stock at a
conversion price of $10 per share. If the market value of the shares of common
stock reached $12, the Fund could realize an additional $2 per share by
converting its fixed income securities.

Convertible securities have lower yields than comparable fixed income
securities. In addition, at the time a convertible security is issued the
conversion price exceeds the market value of the underlying equity securities.
Thus, convertible securities may provide lower returns than non-convertible
fixed income securities or equity securities depending upon changes in the price
of the underlying equity securities. However, convertible securities permit a
Fund to realize some of the potential appreciation of the underlying equity
securities with less risk of losing its initial investment.

The Funds treat convertible securities as both fixed income and equity
securities for purposes of their investment policies and limitations, because of
their unique characteristics.

Tax Exempt Securities
Tax exempt securities are fixed income securities that pay interest that is not
subject to regular federal income taxes. Typically, states, counties, cities and
other political subdivisions and authorities issue tax exempt securities. The
market categorizes tax exempt securities by their source of repayment.

General Obligation Bonds
General obligation bonds are supported by the issuer's power to exact
property or other taxes. The issuer must impose and collect taxes
sufficient to pay principal and interest on the bonds. However, the
issuer's authority to impose additional taxes may be limited by its charter
or state law.

Special Revenue Bonds
Special revenue bonds are payable solely from specific revenues received by
the issuer such as specific taxes, assessments, tolls, or fees. Bondholders
may not collect from the municipality's general taxes or revenues. For
example, a municipality may issue bonds to build a toll road, and pledge
the tolls to repay the bonds. Therefore, a shortfall in the tolls normally
would result in a default on the bonds.

Private Activity Bonds
Private activity bonds are special revenue bonds used to finance
private entities. For example, a municipality may issue bonds to
finance a new factory to improve its local economy. The municipality
would lend the proceeds from its bonds to the company using the
factory, and the company would agree to make loan payments sufficient
to repay the bonds. The bonds would be payable solely from the
company's loan payments, not from any other revenues of the
municipality. Therefore, any default on the loan normally would result
in a default on the bonds.

The interest on many types of private activity bonds is subject to the
federal alternative minimum tax (AMT). The Alabama Tax-Free Fund may
invest in bonds subject to AMT.

Tax Increment Financing Bonds
Tax increment financing (TIF) bonds are payable from increases in taxes or
other revenues attributable to projects financed by the bonds. For example,
a municipality may issue TIF bonds to redevelop a commercial area. The TIF
bonds would be payable solely from any increase in sales taxes collected
from merchants in the area. The bonds could default if merchants' sales,
and related tax collections, failed to increase as anticipated.

Municipal Notes
Municipal notes are short-term tax exempt securities. Many municipalities
issue such notes to fund their current operations before collecting taxes
or other municipal revenues. Municipalities may also issue notes to fund
capital projects prior to issuing long-term bonds. The issuers typically
repay the notes at the end of their fiscal year, either with taxes, other
revenues or proceeds from newly issued notes or bonds.

Municipal Bond Insurance

The Alabama Tax-Free Fund may purchase municipal securities covered by insurance
which guarantees the timely payment of principal at maturity and interest on
such securities ("Policy" or "Policies"). These insured municipal securities are
either (1) covered by an insurance policy applicable to a particular security,
whether obtained by the issuer of the security or by a third party
("Issuer-Obtained Insurance") or (2) insured under master insurance policies
issued by municipal bond insurers, which may by purchased by the Fund. The
premiums for the Policies may be paid by the Fund and the yield on the Fund's
portfolio may be reduced thereby.
The Fund may require or obtain municipal bond insurance when purchasing
municipal securities which would not otherwise meet the Fund's quality
standards. The Fund may also require or obtain municipal bond insurance when
purchasing or holding specific municipal securities, when, in the opinion of the
Fund's Adviser, such insurance would benefit the Fund (for example, through
improvement of portfolio quality or increased liquidity of certain securities).
The Fund's Adviser anticipates that between [ ]% and [ ]% of the Fund's net
assets will be invested in municipal securities which are insured.
Issuer-Obtained Insurance policies are non-cancelable and continue in force
as long as the municipal securities are outstanding and their respective
insurers remain in business. If a municipal security is covered by
Issuer-Obtained Insurance, then such security need not be insured by the
Policies purchased by the Fund.
The Fund may purchase two types of Policies issued by municipal bond
insurers. One type of Policy covers certain municipal securities only during the
period in which they are in the Fund's portfolio. In the event that a municipal
security covered by such a Policy is sold from the Fund, the insurer of the
relevant Policy will be liable for those payments of interest and principal
which are due and owing at the time of the sale.
The other type of Policy covers municipal securities not only while they
remain in the Fund's portfolio but also until their final maturity even if they
are sold out of the Fund's portfolio, so that the coverage may benefit all
subsequent holders of those municipal securities. The Fund will obtain insurance
which covers municipal securities until final maturity even after they are sold
out of the Fund's portfolio only if, in the judgment of the Fund's Adviser, the
Fund would receive net proceeds from the sale of those securities, after
deducting the cost of such permanent insurance and related fees, significantly
in excess of the proceeds it would receive if such municipal securities were
sold without insurance. Payments received from municipal bond issuers may not be
tax-exempt income to shareholders of the Fund.
The Fund may purchase Policies from MBIA Corp. (MBIA), AMBAC Indemnity
Corporation (AMBAC), Financial Guaranty Insurance Company (FGIC), or any other
municipal bond insurer which is rated AAA by Standard & Poor's (S&P) or Aaa by
Moody's Investors Services, Inc. (Moody's). Each Policy guarantees the payment
of principal and interest on those municipal securities it insures. The Policies
will have the same general characteristics and features. A municipal security
will be eligible for coverage if it meets certain requirements set forth in the
Policy. In the event interest or principal on an insured municipal security is
not paid when due, the insurer covering the security will be obligated under its
Policy to make such payment not later than 30 days after it has been notified by
the Fund that such non-payment has occurred. MBIA, AMBAC, and FGIC will not have
the right to withdraw coverage on securities insured by their Policies so long
as such securities remain in the Fund's portfolio, nor may MBIA, AMBAC, or FGIC
cancel their Policies for any reason except failure to pay premiums when due.
MBIA, AMBAC, and FGIC will reserve the right at any time upon 90 days'
written notice to the Fund to refuse to insure any additional municipal
securities purchased by the Fund after the effective date of such notice. The
Fund reserves the right to terminate any of the Policies if it determines that
the benefits to the Fund of having its portfolio insured under such Policy are
not justified by the expense involved.
Additionally, the Fund reserves the right to enter into contracts with
insurance carriers other than MBIA, AMBAC, or FGIC if such carriers are rated
AAA by S&P or Aaa by Moody's.

Reverse Repurchase Agreements
Reverse repurchase agreements are repurchase agreements in which a Fund is
the seller (rather than the buyer) of the securities, and agrees to
repurchase them at an agreed upon time and price. A reverse repurchase
agreement may be viewed as a type of borrowing by the Fund. Reverse
repurchase agreements are subject to credit risks. In addition, reverse
repurchase agreements create leverage risks because the Fund must repurchase
the underlying security at a higher price, regardless of the market value of
the security at the time of repurchase.

When Issued Transactions
When issued transactions are arrangements in which a Fund buys securities
for a set price, with payment and delivery of the securities scheduled for a
future time. During the period between purchase and settlement, no payment
is made by the Fund to the issuer and no interest accrues to the Fund. The
Fund records the transaction when it agrees to buy the securities and
reflects their value in determining the price of its shares. Settlement
dates may be a month or more after entering into these transactions so that
the market values of the securities bought may vary from the purchase
prices. Therefore, when issued transactions create interest rate risks for a
Fund. When issued transactions also involve credit risks in the event of a
counterparty default.

To Be Announced (TBA) Securities
As with other when issued transactions, a seller agrees to issue a TBA
security at a future date. However, the seller does not specify the
particular securities to be delivered. Instead, a Fund agrees to accept any
security that meets specified terms. For example, in a TBA mortgage backed
transaction, the Fund and the seller would agree upon the issuer, interest
rate and terms of the underlying mortgages. However, the seller would not
identify the specific underlying mortgages until it issues the security. TBA
mortgage backed securities increase interest rate risks because the
underlying mortgages may be less favorable than anticipated by the Fund.

Securities Lending
The Funds may lend portfolio securities to borrowers that the Adviser deems
creditworthy. In return, a Fund receives cash or liquid securities from the
borrower as collateral. The borrower must furnish additional collateral if
the market value of the loaned securities increases. Also, the borrower must
pay the Fund the equivalent of any dividends or interest received on the
loaned securities.
A Fund will reinvest cash collateral in securities that qualify as an
acceptable investment for the Fund. However, the Fund must pay interest to
the borrower for the use of cash collateral.
Loans are subject to termination at the option of the Fund or the
borrower. The Fund will not have the right to vote on securities while they
are on loan, but it will terminate a loan in anticipation of any important
vote. The Fund may pay administrative and custodial fees in connection with
a loan and may pay a negotiated portion of the interest earned on the cash
collateral to a securities lending agent or broker.
Securities lending activities are subject to interest rate risks and
credit risks.

Asset Coverage
In order to secure its obligations in connection with derivatives contracts
or special transactions, the Funds will either own the underlying assets,
enter into an offsetting transaction or set aside readily marketable
securities with a value that equals or exceeds a Fund's obligations. Unless
a Fund has other readily marketable assets to set aside, it cannot trade
assets used to secure such obligations entering into an offsetting
derivative contract or terminating a special transaction. This may cause a
Fund to miss favorable trading opportunities or to realize losses on
derivative contracts or special transactions.

Foreign Government Securities
Foreign government securities generally consist of fixed income securities
supported by national, state or provincial governments or similar political
subdivisions. Foreign government securities also include debt obligations
of supranational entities, such as international organizations designed or
supported by governmental entities to promote economic reconstruction or
development, international banking institutions and related government
agencies. Examples of these include, but are not limited to, the
International Bank for Reconstruction and Development (the World Bank), the
Asian Development Bank, the European Investment Bank and the Inter-American
Development Bank.

Foreign government securities also include fixed income securities of
quasi-governmental agencies that are either issued by entities owned by a
national, state or equivalent government or are obligations of a political
unit that are not backed by the national government's full faith and
credit. Further, foreign government securities include mortgage-related
securities issued or guaranteed by national, state or provincial
governmental instrumentalities, including quasi-governmental agencies.

Temporary Defensive Investments

The Funds may temporarily depart from their principal investment strategies by
investing their assets in U.S. government obligations, notes, zero coupon
securities (in the case of the Bond Fund and Income Fund), and repurchase
agreements collateralized by U.S. government obligations. In the case of Alabama
Tax-Free Fund, temporary defensive investments may include taxable securities.
The Funds may do this to minimize potential losses and maintain liquidity to
meet shareholder redemptions during adverse market conditions. This may cause a
Fund to give up greater investment returns to maintain the safety of principal,
that is, the original amount invested by shareholders.

INVESTMENT RISKS

Interest Rate Risks
o Prices of fixed income securities rise and fall in response to interest
rate changes for similar securities. Generally, when interest rates rise,
prices of fixed income securities fall.

Sector Risks
o Companies with similar characteristics may be grouped together in broad
categories called sectors. Sector risk is the possibility that a certain
sector may underperform other sectors or the market as a whole. As the
Adviser allocates more of a Fund's portfolio holdings to a particular
sector, the Fund's performance will be more susceptible to any economic,
business or other developments which generally affect that sector.

o OTC derivative contracts generally carry greater liquidity risk than
exchange-traded contracts.

Credit Risks
o Credit risk is the possibility that an issuer will default on a security by
failing to pay interest or principal when due. If an issuer defaults, a
Fund will lose money.

o Many fixed income securities receive credit ratings from services such as
S&P and Moody's. These services assign ratings to securities by assessing
the likelihood of issuer default. Lower credit ratings correspond to higher
credit risk. If a security has not received a rating, the Funds must rely
entirely upon the Adviser's credit assessment.

Prepayment Risks
o Generally, homeowners have the option to prepay their mortgages at any time
without penalty. Homeowners frequently refinance high interest rate
mortgages when mortgage rates fall. This results in the prepayment of
mortgage backed securities with higher interest rates. Conversely,
prepayments due to refinancings decrease when mortgage rates increase. This
extends the life of mortgage backed securities with lower interest rates.
As a result, increases in prepayments of high interest rate mortgage backed
securities, or decreases in prepayments of lower interest rate mortgage
backed securities, may reduce their yield and price. This relationship
between interest rates and mortgage prepayments makes the price of mortgage
backed securities more volatile than most other types of fixed income
securities with comparable credit risks.

Call Risks
o Call risk is the possibility that an issuer may redeem a fixed income
security before maturity (a call) at a price below its current market
price. An increase in the likelihood of a call may reduce the security's
price.

o If a fixed income security is called, a Fund may have to reinvest the
proceeds in other fixed income securities with lower interest rates, higher
credit risks, or other less favorable characteristics.

Stock Market Risks
o The value of equity securities in Income Fund's portfolio will rise and
fall. These fluctuations could be a sustained trend or a drastic movement.
The Fund's portfolio will reflect changes in prices of individual portfolio
stocks or general changes in stock valuations. Consequently, the Fund's
share price may decline and you could lose money. The Adviser attempts to
manage market risk by limiting the amount the Fund invests in each
company's equity securities. However, diversification will not protect the
Fund against widespread or prolonged declines in the stock market.

o Changes or proposed changes in federal tax laws may cause the prices of
municipal securities to fall.

Currency Risks

o Exchange rates for currencies fluctuate daily. The combination of currency
risk and interest rate risk tends to make securities traded in foreign
markets more volatile than securities traded exclusively in the U.S.
o The Adviser attempts to manage currency risk by limiting the amount a Fund
invests in securities denominated in a particular currency. However,
diversification will not protect a Fund against a general increase in the
value of the U.S. dollar relative to other currencies.

Risks of Foreign Investing
o Foreign securities pose additional risks because foreign economic or
political conditions may be less favorable than those of the United States.
Securities in foreign markets may also be subject to taxation policies that
reduce returns for U.S.
investors.
o Foreign companies may not provide information (including financial
statements) as frequently or to as great an extent as companies in the
United States. Foreign companies may also receive less coverage than United
States companies by market analysts and the financial press. In addition,
foreign countries may lack uniform accounting, auditing and financial
reporting standards or regulatory requirements comparable to those
applicable to U.S. companies. These factors may prevent the Funds and their
Adviser from obtaining information concerning foreign companies that is as
frequent, extensive and reliable as the information available concerning
companies in the United States.
o Foreign countries may have restrictions on foreign ownership of securities
or may impose exchange controls, capital flow restrictions or repatriation
restrictions which could adversely affect the liquidity of the Funds'
investments.

Risks of Investing in Alabama

The economy of Alabama historically has relied on manufacturing and natural
resource-based industries which included textiles, apparel, food processing,
coal mining and timber. Throughout the 1990's, many of these industries have
faced intense competition from overseas and have been forced to downsize or
dramatically alter the way they do business in response to these threats. As a
result, the Alabama economy has undergone much diversification and transition in
the past decade. Since the 1991 recession, the State's proactive business
development policies have yielded big results with growth in high technology,
health care, banking and business services, particularly in the Birmingham,
Huntsville, and Mobile metropolitan areas. Once heavily reliant on the steel
industry, the Greater Birmingham area has much experience in transformation, and
has exhibited its resiliency by attracting several major companies to the region
in recent years. This has fueled a dramatic suburban expansion that has greatly
benefited the real estate development and construction trades.

The outlook for the future is that modest economic growth will continue with
growth in some industries more than offsetting downsizing in the textile and
apparel sectors. Particularly noteworthy is growth associated with automobile
manufacturing as Mercedes-Benz (a subsidiary of Daimler-Chrysler) has operated
an assembly plant in Vance, Alabama since 1998 and Honda has recently announced
that it will build a plant in Lincoln, Alabama which will come online in 2001 to
meet increased demand for sport-utility vehicles. This should allow solid
employment growth to continue with unemployment expected to keep pace with the
national average as it has substantially closed the gap. These trends indicate
stable to modestly improving demographic and credit fundamentals for issuers of
municipal debt within the State.

The State has been characterized by conservative financial management and fiscal
practices as is evidenced by its fairly low general obligation debt burden and
its ability to consistently maintain a AA credit rating from both S&P and
Moody's. The state constitution does not allow for deficit spending so should a
revenue shortfall occur, the governor is required to cutback spending across the
board. This has not occurred since 1993 and is not expected in the current year.
Governor Don Siegelman's proposal to establish a state lottery would provide an
additional revenue source and would be viewed as a positive development from a
credit analysis standpoint. This proposal is currently pending in the state
legislature. A diversifying economic base coupled with sound fiscal management
leaves Alabama well-positioned for consistent growth looking ahead.

INVESTMENT LIMITATIONS
The following limitations pertain to each of the SouthTrust Funds: The Funds may
not:

1. Purchase or sell real estate, except that a Fund may purchase securities of
issuers which deal in real estate and may purchase securities which are secured
by interests in real estate.

5. Purchase securities of companies for the purpose of exercising control.

If a percentage limitation is satisfied at the time of investment, a later
increase or decrease in such percentage resulting from a change in the value of
a Fund's investments will not constitute a violation of such limitation, except
that any borrowing by a Fund that exceeds the fundamental investment limitations
stated above must be reduced to meet such limitations within the period required
by the .Investment Company Act of 1940 (currently three days). Otherwise, a Fund
may continue to hold a security even though it causes the Fund to exceed a
percentage limitation because of fluctuation in the value of the Fund's assets.

The above limitations cannot be changed unless authorized by the "vote of a
majority of the Funds' outstanding voting securities," as defined by the
Investment Company Act of 1940.

o in the absence of recorded sales for equity securities, according
to the mean between the last closing bid and asked prices;

o for bonds and other fixed income securities, at the last sale price on a
national securities exchange, if available, otherwise, as determined by an
independent pricing service;

o for short-term obligations, according to the mean between bid and asked
prices as furnished by an independent pricing service, except that
short-term obligations with remaining maturities of less than 60 days at
the time of purchase may be valued at amortized cost or at fair market
value as determined in good faith by the Board; and

o for all other securities, at fair value as determined in good
faith by the Board.

WHAT DO SHARES COST?

The Funds' net asset value (NAV) per share fluctuates and is based on the market
value of all securities and other assets of each Fund.

Reducing or Eliminating the Front-End Sales Charge
You can reduce or eliminate the applicable front-end sales charge as follows:

Concurrent Purchases
You can combine concurrent purchases of two or more SouthTrust Funds in
calculating the applicable sales charge.

Reinvestment Privilege
You may reinvest, within 30 days, your redemption proceeds at the next
determined NAV, without any sales charge.

o retired employees of the Company, SouthTrust Corporation and it's
affiliates;

o investors for whom SouthTrust Corporation or one of it's affiliates acts in
a fiduciary, advisory, custodial, agency or similar capacity (this does not
include transactions executed by SouthTrust Securities, Inc., including,
but not limited to, self-directed Individual Retirement Accounts); and

o employees who purchase shares through a payroll deduction plan sponsored by
their employers.

HOW ARE THE FUNDS SOLD?

Rule 12b-1 Plan - Income fund and Alabama Tax Free Income Fund
As a compensation type plan, the Rule 12b-1 Plan is designed to pay the
Distributor (who may then pay investment professionals such as banks,
broker/dealers, trust departments of bank, and registered investment advisers)
for marketing activities (such as advertising, printing and distributing
prospectuses, and providing incentives to investment professionals) to promote
sales of shares so that overall Fund assets are maintained or increased. This
helps the Funds achieve economies of scale, reduce per share expenses, and
provide cash for orderly portfolio management and share redemptions. Also, the
Funds' service providers that receive asset- based fees also benefit from stable
or increasing Fund assets.
The Funds may compensate the Distributor more or less than its actual
marketing expenses. In no event will the Funds pay for any expenses of the
Distributor that exceed the maximum Rule 12b-1 Plan fee.
The maximum Rule 12b-1 Plan fee that can be paid in any one year may not be
sufficient to cover the marketing related expenses the Distributor has incurred.
Therefore, it may take the Distributor a number of years to recoup these
expenses.

Shareholder Services - Alabama Tax Free Income Fund
The Fund may pay Federated Shareholder Services Company, a subsidiary of
Federated, for providing shareholder services and maintaining shareholder
accounts. Federated Shareholder Services Company may select others to perform
these services for their customers and pay them fees.

EXCHANGING SECURITIES FOR SHARES

SUBACCOUNTING SERVICES

Certain investment professionals may wish to use the transfer agent's
subaccounting system to minimize their internal recordkeeping requirements. The
transfer agent may charge a fee based on the level of subaccounting services
rendered. Investment professionals holding shares in a fiduciary, agency,
custodial, or similar capacity may charge or pass through subaccounting fees as
part of or in addition to normal trust or agency account fees. They may also
charge fees for other services that may be related to the ownership of shares.
This information should, therefore, be read together with any agreement between
the customer and the investment professional about the services provided, the
fees charged for those services, and any restrictions and limitations imposed.

REDEMPTION IN KIND

MASSACHUSETTS PARTNERSHIP LAW

ACCOUNT AND SHARE INFORMATION

Voting Rights
Each share of a Fund gives the shareholder one vote in Trustee elections and
other matters submitted to shareholders for vote. All shares of the Company have
equal voting rights, except that in matters affecting only a particular Fund,
only shares of that Fund are entitled to vote.
Trustees may be removed by the Trustees or by shareholders at a special
meeting. A special meeting of shareholders will be called by the Trustees upon
the written request of shareholders who own at least 10% of the Company's
outstanding shares of all series entitled to vote.
As of May 7, 1999, the following shareholder, owned of record, beneficially,
or both, 5% or more of the outstanding shares of the Bond Fund: Lynspen & Co.,
Birmingham, AL, owned approximately 11,633,945.55 shares (91.11%).
As of May 7, 1999, the following shareholder, owned of record, beneficially,
or both, 5% or more of the outstanding shares of the Income Fund: Lynspen & Co.,
Birmingham, AL, owned approximately 4,933,416.38 shares (91.45%).
Shareholders owning 25% or more of outstanding shares may be in control and be
able to affect the outcome of certain matters presented for a vote of
shareholders.

TAX INFORMATION

WHO MANAGES AND PROVIDES SERVICES TO THE FUND?

As of May 7, 1999, the Company's Board and Officers as a group owned less than
1% of the Funds' outstanding shares.

An asterisk (*) denotes a Trustee who is deemed to be an interested person as
defined in the Investment Company Act of 1940.

<PAGE>

INVESTMENT ADVISER

The Adviser, SouthTrust Bank, N.A. conducts investment research and makes
investment decisions for the Funds.

Under the Advisory Contract, the Adviser is not be liable to the Company or any
Fund shareholder for any losses that may be sustained in the purchase, holding,
or sale of any security or for anything done or omitted by it, except acts or
omissions involving willful misfeasance, bad faith, gross negligence, or
reckless disregard of the duties imposed upon it by its contract with the
Company.

Custodian
SouthTrust Bank, N.A. is custodian for the securities and cash of the Funds.

Independent Auditors
Arthur Andersen LLP are the independent auditors for the Funds.

FEES PAID BY THE FUNDS FOR SERVICES
Bond Fund
For the Year ended April 30 1998 1997 1996
- --------------------------------------------------------------------------------------------------------------------
Advisory Fee Earned $604,746 $528,799 $491,657
Advisory Fee Reduction $5,747 $44,067 $40,971
Brokerage Commissions $0 $0 $0
Administrative Fee $114,117 $107,564 $108,910
Administrative Fee Reduction $0 $0 $27,289

Income Fund
For the Year ended April 30 1998 1997 1996
- --------------------------------------------------------------------------------------------------------------------
Advisory Fee Earned $233,648 $248,407 $122,936
Advisory Fee Reduction $116,824 $113,723 $10,245
Brokerage Commissions $0 $0 $0
Administrative Fee $99,999 $100,160 $30,501
Administrative Fee Reduction $55,841 $21,981 $0
</TABLE>

Alabam Tax-Free Income Fund has not completed a full fiscal year and, therefore,
has no fees to report as of the date of this Statement.

HOW DO THE FUNDS MEASURE PERFORMANCE?

The Funds may advertise share performance by using the Securities and Exchange
Commission's (SEC) standard method for calculating performance applicable to all
mutual funds. The SEC also permits this standard performance information to be
accompanied by non-standard performance information.
Share performance reflects the effect of non-recurring charges, such as
maximum sales charges, which, if excluded, would increase the total return and
yield. The performance of shares depends upon such variables as: portfolio
quality; average portfolio maturity; type and value of portfolio securities;
changes in interest rates; changes or differences in a Fund's expenses; and
various other factors.
Share performance fluctuates on a daily basis largely because net earnings and
offering price per share fluctuate daily. Both net earnings and offering price
per share are factors in the computation of yield and total return.

Average Annual Total Returns and Yields
Bond Fund total returns given for the one-year, five-year, and start of
performance periods ended April 30, 1998.

Bond Fund yield given for the seven-day period ended April 30, 1998.

7-Day Period 1 Year 5 Years Start of Performance
Total Return N/A 6.93% 6.44%
Yield 5.37% N/A N/A N/A
Income Fund total returns given for the one-, and start of performance periods ended April 30, 1998.

Income Fund yield given for the seven-day period ended April 30, 1998.

7-Day Period 1 Year Start of Performance
Total Return N/A 3.71% 7.80%
Yield 5.23% N/A N/A
</TABLE>

Alabam Tax-Free Income Fund has not completed a full fiscal year and, therefore,
has no performance to report as of the date of this Statement.

TAX EQUIVALENCY TABLE
Set forth below is a sample of a tax-equivalency table that may be used in
advertising and sales literature. This table is for illustrative purposes only
and is not representative of future performance of the Alabama Tax-Free Income
Fund. The interest earned by the municipal securities owned by the Fund
generally remains free from federal regular income tax and is often free from
state and local taxes as well. However, some of the Fund's income may be subject
to the federal alternative minimum tax and state and/or local taxes.

Taxable Yield Equivalent for 1999 - STATE OF ALABAMA

Combined Federal and State
Income Tax Bracket: 20.00% 33.00% 36.00% 41.00% 44.60%
- ----------------------------------------------------------------------------------------------------------------------
Joint Return $1-43,050 $43,051-104,050 $104,051-158,550 $158,551-283,150 Over 283,150
Single Return $1-25,750 $25,751-62,450 $62,451-130,250 $130,251-283,150 Over 283,150
Tax Exempt Yield: Taxable Yield Equivalent:
2.50% 3.13% 3.73% 3.91% 4.24% 4.51%
3.00% 3.75% 4.48% 4.69% 5.08% 5.42%
3.50% 4.38% 5.22% 5.47% 5.93% 6.32%
4.00% 5.00% 5.97% 6.25% 6.78% 7.22%
4.50% 5.63% 6.72% 7.03% 7.63% 8.12%
5.00% 6.25% 7.46% 7.81% 8.47% 9.03%
5.50% 6.88% 8.21% 8.59% 9.32% 9.93%
6.00% 7.50% 8.96% 9.38% 10.17% 10.83%
6.50% 8.13% 9.70% 10.16% 11.02% 11.73%
7.00% 8.75% 10.45% 10.94% 11.86% 12.64%
</TABLE>

Note: The maximum marginal tax rate for each bracket was used in calculating the
taxable yield equivalent. Furthermore, additional state and local taxes paid on
comparable taxable investments were not used to increase federal deductions.

Performance Comparisons
Advertising and sales literature may include:

o references to ratings, rankings, and financial publications and/or
performance comparisons of shares to certain indices;

o information about the mutual fund industry from sources such as the
Investment Company Institute.

INVESTMENT RATINGS

Standard and Poor's Long-Term Debt Rating Definitions
AAA--Debt rated AAA has the highest rating assigned by Standard & Poor's.
Capacity to pay interest and repay principal is extremely strong. AA--Debt rated
AA has a very strong capacity to pay interest and repay principal and differs
from the higher rated issues only in small degree. A--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. BBB--Debt rated BBB 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. BB--Debt rated BB has less near-term vulnerability to default than
other speculative issues. However, it faces major ongoing uncertainties or
exposure to adverse business, financial, or economic conditions which could lead
to inadequate capacity to meet timely interest and principal payments. The BB
rating category is also used for debt subordinated to senior debt that is
assigned an actual or implied BBB- rating. B--Debt rated B has a greater
vulnerability to default but currently has the capacity to meet interest
payments and principal repayments. Adverse business, financial, or economic
conditions will likely impair capacity or willingness to pay interest and repay
principal. The B rating category is also used for debt subordinated to senior
debt that is assigned an actual or implied BB or BB- rating. CCC--Debt rated CCC
has a currently identifiable vulnerability to default, and is dependent upon
favorable business, financial, and economic conditions to meet timely payment of
interest and repayment of principal. In the event of adverse business,
financial, or economic conditions, it is not likely to have the capacity to pay
interest and repay principal. The CCC rating category is also used for debt
subordinated to senior debt that is assigned an actual or implied B or B-
rating. CC--The rating CC typically is applied to debt subordinated to senior
debt that is assigned an actual or implied CCC debt rating. C--The rating C
typically is applied to debt subordinated to senior debt which is assigned an
actual or implied CCC- debt rating. The C rating may be used to cover a
situation where a bankruptcy petition has been filed, but debt service payments
are continued.

Moody's Investors Service, Inc. Long-Term Bond Rating Definitions
AAA--Bonds which are rated AAA are judged to be of the best quality. They carry
the smallest degree of investment risk and are generally referred to as gilt
edged. Interest payments are protected by a large or by 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. AA--Bonds which are rated AA are
judged to be of high quality by all standards. Together with the AAA group, 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. A--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. BAA--Bonds which are rated BAA are considered
as 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. BA--Bonds which are 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 over the future. Uncertainty
of position characterizes bonds in this class. B--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. CAA--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 or interest. CA--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. C--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.

Fitch IBCA, Inc. Long-Term Debt Rating Definitions
AAA--Bonds considered to be investment grade and of the highest credit quality.
The obligor has an exceptionally strong ability to pay interest and repay
principal, which is unlikely to be affected by reasonably foreseeable events.
AA--Bonds considered to be investment grade and of very high credit quality. The
obligor's ability to pay interest and repay principal is very strong, although
not quite as strong as bonds rated AAA. Because bonds rated in the AAA and AA
categories are not significantly vulnerable to foreseeable future developments,
short- term debt of these issuers is generally rated F-1+. A--Bonds considered
to be investment grade and of high credit quality. The obligor's ability to pay
interest and repay principal is considered to be strong, but may be more
vulnerable to adverse changes in economic conditions and circumstances than
bonds with higher ratings. BBB--Bonds considered to be investment grade and of
satisfactory credit quality. The obligor's ability to pay interest and repay
principal is considered to be adequate. Adverse changes in economic conditions
and circumstances, however, are more likely to have adverse impact on these
bonds, and therefore impair timely payment. The likelihood that the ratings of
these bonds will fall below investment grade is higher than for bonds with
higher ratings. BB--Bonds are considered speculative. The obligor's ability to
pay interest and repay principal may be affected over time by adverse economic
changes. However, business and financial alternatives can be identified which
could assist the obligor in satisfying its debt service requirements. B--Bonds
are considered highly speculative. While bonds in this class are currently
meeting debt service requirements, the probability of continued timely payment
of principal and interest reflects the obligor's limited margin of safety and
the need for reasonable business and economic activity throughout the life of
the issue. CCC--Bonds have certain identifiable characteristics which, if not
remedied, may lead to default. The ability to meet obligations requires an
advantageous business and economic environment. CC--Bonds are minimally
protected. Default in payment of interest and/or principal seems probable over
time. C--Bonds are in imminent default in payment of interest or principal.

Moody's Investors Services, Inc. Commercial Paper Ratings
Prime-1--Issuers rated Prime-1 (or related supporting institutions) have a
superior capacity for repayment of short-term promissory obligations. Prime-1
repayment capacity will normally be evidenced by the following characteristics:
o Leading market positions in well established industries.

o High rates of return on funds employed.

o Conservative capitalization structure with moderate reliance on debt and ample
asset protection.

o Broad margins in earning coverage of fixed financial charges and high internal
cash generation.

o Well established access to a range of financial markets and assured sources of
alternate liquidity.

Prime-2--Issuers rated Prime-2 (or related supporting institutions) have a
strong capacity for repayment of short-term promissory obligations. This will
normally be evidenced by many of the characteristics cited above but to a lesser
degree. Earnings trends and coverage ratios, while sound, will be more subject
to variation. Capitalization characteristics, while still appropriate, may be
more affected by external conditions. Ample alternate liquidity is maintained.

Standard and Poor's Commercial Paper Ratings
A-1--This designation indicates that the degree of safety regarding timely
payment is strong. Those issues determined to possess extremely strong safety
characteristics are denoted with a plus sign (+) designation. A-2--Capacity for
timely payment on issues with this designation is satisfactory. However, the
relative degree of safety is not as high as for issues designated A-1.

Fitch IBCA, Inc. Commercial Paper Rating Definitions
FITCH-1--(Highest Grade) Commercial paper assigned this rating is regarded as
having the strongest degree of assurance for timely payment. FITCH-2--(Very Good
Grade) Issues assigned this rating reflect an assurance of timely payment only
slightly less in degree than the strongest issues.

FINANCIAL INFORMATION

The Financial Statements for the Funds for the fiscal year ended April 30, 1999
are incorporated herein by reference to the Annual Report to Shareholders of
SouthTrust Bond Fund and SouthTrust Income Fund dated April 30, 1999.

<PAGE>

ADDRESSES

Southtrust Bond fund
southtrust Income fund
SouthTrust Alabama Tax Free Income Fund

Portfolios of SouthTrust Funds

5800 Corporate Drive
Pittsburgh, PA 15237-7010

Distributor
Federated Securities Corp.
Federated Investors Tower
1001 Liberty Avenue,
Pittsburgh, PA 15222-3779

Investment Adviser
SouthTrust Bank, N.A.
420 North 20th Street
Birmingham, AL 35203

Custodian
SouthTrust Bank, N.A.
420 North 20th Street
Birmingham, AL 35203

Transfer Agent and Dividend Disbursing Agent
Federated Shareholder Services Company
P.O. Box 8600
Boston, MA 02266-8600

Independent Public Accountants
Arthur Andersen LLP
225 Franklin Street
Boston, MA 02110-2812

subject to completion

MAY , 1999

Prospectus

SOUTHTRUST FUNDS
SouthTrust U.S. Treasury Money Market Fund

SouthTrust U.S. Treasury Money Market Fund is a mutual fund seeking to provide
as high a level of current income as is consistent with maintaining liquidity
and stability of principal.

<S> <C>

Contents

Fund Goals, Strategies, Performance and Investment Risks

Risk/Return Summary

What are the Fund's Fees
and Expenses?

What are the Principal
Securities in Which the Fund Invests?

What are the Specific Risks
of Investing in the Fund?

What do Shares Cost?

How is the Fund Sold?

How to Purchase Shares

How to Redeem and Exchange Shares

Account and Share Information

Who Manages the Fund?

Financial Information

</TABLE>

august , 1999

<PAGE>

FUND GOALS, STRATEGIES, PERFORMANCE AND INVESTMENT RISKS

SouthTrust Funds (Company) currently offer shares in six investment portfolios,
each with its own investment goal and strategies, described in separate
prospectuses. This prospectus pertains only to SouthTrust U.S. Treasury Money
Market Fund (Treasury Money Fund) The purchase of shares of any Fund should not
be considered a complete investment program, but an important segment of a
well-diversified investment program. For information about other funds offered
by SouthTrust Funds, call 1-800-843-8618.

WHAT IS THE Treasury Money FUND'S goal?
The Fund's goal is to provide as high a level of current income as is consistent
with maintaining liquidity and stability of principal.

WHAT ARE THE FUND'S MAIN INVESTMENT STRATEGIES?

The Fund pursues its goal by investing in short-term direct obligations of the
U.S. Treasury or in repurchase agreements collateralized by such obligations.
The strategy undertaken to accomplish the Fund's goal requires maintaining a
weighted average maturity of 60 days or less. The relatively short average
portfolio maturity provides necessary cash flow to meet redemption needs. Fund
liquidity needs and interest rate trends weigh heavily on the Adviser's maturity
and sector decisions.

A "barbell" or "ladder" strategy is used with a blend of Treasuries and
repurchase agreements. In using a barbell structure, the Fund combines
investments in longer maturity Treasury bills with overnight repurchase
agreements. This structure offers a competitive yield when Treasuries and
repurchase agreements offer relative value. In using a ladder structure, the
Fund invests in each maturity range of the Treasury bill yield curve. The Fund
atttempts to maximize its yield through ongoing relative value analysis.
Changing economic and market events drive the Fund's strategy and are
continuously monitored.

What are the Main Risks of Investing in the Fund?

Although the Fund seeks to maintain a stable net asset value of $1, it is
possible to lose money by investing in the Fund. Although the Fund invests in
U.S. Treasury securities that are backed by the full faith and credit of the
United States, Fund shares themselves are not guaranteed or supported by the
U.S. government.

The shares offered by this prospectus are not deposits or obligations of any
bank, are not endorsed or guaranteed by any bank and are not insured or
guaranteed by the U.S. government, the Federal Deposit Insurance Corporation,
the Federal Reserve Board, or any other government agency.

What are the Fund's Fees and Expenses?

FEES AND EXPENSES .................

This table describes the fees and expenses that you may pay if you buy and hold
shares of the Treasury Money Fund.

Shareholder Fees .................
Fees Paid Directly From Your Investment.................................... None

Annual Fund Operating Expenses (Before Waivers)1
Expenses That are Deducted From Fund Assets (as percentage of average net
assets)

Management Fee 2....................................................... 0.50%
Distribution (12b-1) Fee .............................................. None

Shareholder Services Fee .............................................. 0.25%

Other Expenses ........................................................ 0.17%
Total Annual Fund Operating Expenses .................................. 0.92%

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

1 Although not contractually obligated to do so, the Adviser waived certain
amounts. These are shown below along with the net expenses the Fund actually
paid for the fiscal year ended April 30, 1999.

Total Waiver of Fund Expenses ..................................
0.19%
Total Annual Fund Operating Expenses (after waiver)...................0.73%

2 The Adviser voluntarily waived a portion of the management fee. The Adviser
can terminate this voluntary waiver at any time. The management fee paid by the
Treasury Money Fund (after the voluntary waiver) was 0.31% for the year ended
April 30, 1999.

EXAMPLE

This Example is intended to help you compare the cost of investing in the
Treasury Money Fund with the cost of investing in other mutual funds.

The Example assumes that you invest $10,000 in the Treasury Money Fund for
the time periods indicated and then redeem all of your shares at the end of
those periods. The Example also assumes that your investment has a 5% return
each year and that the Treasury Money Fund operating expenses are before waivers
as shown in the table and remain the same. Although your actual costs may be
higher or lower, based on these assumptions your costs would be:

..........................1 Year... 3 Years 5 Years 10 Years
- -------------------------------------------------------------------------------
...................................
- --------------------------------------------------------------------------------

Treasury
Money Fund........$94..............$293 $509 $1131
- -------------------------------------------------------------------------------

WHAT ARE THE PRINCIPAL SECURITIES IN WHICH THE FUND INVESTS?

U.S. Treasury Securities

U.S. Treasury securities are direct obligations of the federal government
of the United States. U.S. Treasury securities generally pay interest, dividends
or distributions at a specified rate. The rate may be fixed or adjusted
periodically. The U.S. Treasury must also repay the principal amount of the
security, normally within a specified time.

The Fund may also purchase participation interests in trusts that are issued
directly by the U.S. Treasury and are related to direct U.S. Treasury
obligations such as Treasury Investors Growth Receipts (TIGRs) and Certificates
of Accrual on Treasury Securities (CATs).

Repurchase Agreements

Repurchase Agreements are transactions in which the Fund buys a security from a
dealer or bank and agrees to sell the security back at a mutually agreed upon
time and price. The repurchase price exceeds the sale price, reflecting the
Fund's return for the transaction. This return is unrelated to the interest rate
on the underlying security. The Fund will enter into repurchase agreements only
with banks and other recognized financial institutions, such as securities
dealers deemed creditworthy by the Adviser.

The Fund's custodian or subcustodian will take possession of the securities
subject to repurchase agreements. The Adviser or subcustodian will monitor the
value of the underlying securities each day to ensure that the value of the
security always equals or exceeds the repurchase price.

Repurchase agreements are subject to credit risks.

Temporary Defensive Investments
Any strategy to manage the liquidity of the Fund is subject to the Fund's policy
of limiting investments to direct obligations of the U.S. Treasury and
repurchase agreements collateralized by such obligations.

WHAT ARE THE SPECIFIC RISKS OF INVESTING IN THE FUND?

Although there are many factors which may affect an investment in the Fund, the
principal risks of investing in a U.S. Treasury money market fund are described
below.

Interest Rate Risk
Prices of fixed income securities rise and fall in response to changes in the
interest rate paid by similar securities. Generally, when interest rates rise,
prices of fixed income securities fall. However, market factors, such as the
demand for particular fixed income securities, may cause the price of certain
fixed income securities to fall while the prices of other securities rise or
remain unchanged.

Interest rate changes have a greater effect on the price of fixed income
securities with longer durations. Duration measures the price sensitivity of a
fixed income security to changes in interest rates.

Credit Risk
Credit risk includes the possibility that a party to a transaction involving the
Fund will fail to meet its obligations. This could cause the Fund to lose the
benefit of the transaction or prevent the Fund from selling or buying other
securities to implement its investment strategy.

WHAT DO SHARES COST?

Shares of the Treasury Money Fund are sold without a sales charge or a
redemption fee. You can purchase, redeem, or exchange shares any day the New
York Stock Exchange (NYSE) is open. Purchase orders must be received by the
Distributor no later than 12:00 noon (Eastern time) on any business day. Orders
received before 12:00 noon (Eastern time) will be executed at 12:00 noon
(Eastern time); however, if federal funds for such orders are not received by
4:00 p.m. (Eastern time), the order will be canceled with notice to the investor
placing the order. Orders received in proper form after 12:00 noon (Eastern
time) will be executed on the next business day. The Fund attempts to stabilize
the net asset value of its shares at $1.00 by valuing the portfolio securities
using the amortized cost method. The Fund cannot guarantee that its NAV will
always remain at $1.00 per share. NAV is determined twice, at 12:00 noon
(Eastern time) and at the end of regular trading (normally 4:00 p.m. Eastern
time) each day the NYSE is open.

The minimum initial investment in the Fund is $1,000. The minimum subsequent
investment is $50. Keep in mind that investment professionals may charge you
fees for their services in connection with your share transactions. With respect
to investments made in the Fund through a sweep program, initial minimum
investments may be modified under the relevant account agreement. SouthTrust
Bank or a SouthTrust Funds Dealer may set different minimums for their
customers.

HOW IS THE FUND SOLD?

Federated Securities Corp., the Fund's Distributor markets the shares described
in this prospectus to institutions and individuals, directly or through
investment professionals.

The Distributor and its affiliates may pay out of their assets other
amounts (including items of material value) to investment professionals for
marketing and servicing shares. The Distributor is a subsidiary of Federated
Investors, Inc. (Federated).

HOW TO PURCHASE SHARES

You may purchase shares through SouthTrust Funds Shareholder Services or through
a broker/dealer that has entered into a sales agreement with the Distributor (a
"SouthTrust Funds Dealer"), or through an exchange from another SouthTrust Fund
and certain Federated Funds. Texas residents should purchase shares through
Federated Securities Corp. at 1-800-356-2805. The Fund reserves the right to
reject any request to purchase or exchange shares. Trust customers of SouthTrust
Bank should contact their account officer.

DIRECTLY FROM THE FUND

o........Establish your account with the Fund by submitting a completed account
application; and

o Send your payment to the Fund by Federal Reserve wire or check.

You will become the owner of shares after the Fund receives your wire or your
check. If your check does not clear, your purchase will be canceled and you
could be liable for any losses or fees the Fund or its transfer agent incurs.

An institution may establish an account and place an order by calling SouthTrust
Funds Shareholder Services or a SouthTrust Funds Dealer and will become a
shareholder after the Fund receives the order.

By Check

Complete an account application (for new accounts), make your check payable to
the Fund, and mail it to:

SouthTrust Funds

[INSERT ADDRESS]

Send your wire to:

[INSERT ADDRESS}

By Telephone
Once an account has been established, you may purchase additional shares by
calling SouthTrust Funds Shareholder Services directly at 1-800-[INSERT NUMBER]

THROUGH AN INVESTMENT PROFESSIONAL
o Establish an account with the investment professional; and

o Submit your purchase order to the investment professional before 12:00 noon
(Eastern time). You will receive that day's dividends if the investment
professional forwards the order to the Fund and the Fund receives payment by
4:00 p.m.(Eastern time). You will become the owner of shares and receive
dividends when the Fund receives your payment. Investment professionals should
send payments according to the instructions in the sections "By Check" or "By
Wire."

THROUGH AN EXCHANGE

You may purchase shares through an exchange from another SouthTrust Fund. You
must meet the minimum initial investment requirement for purchasing shares and
both accounts must have identical registrations.

You may telephone an exchange request by calling SouthTrust Funds Shareholder
Services or a SouthTrust Funds Dealer. Trust customers of SouthTrust Bank should
contact their account officer.

You may exchange shares of the Fund for Class A Shares in certain funds which
are distributed by Federated Securities Corp. (the "Federated Funds"). The
Federated Funds with exchange privileges with the Company are: Federated
International Income Fund, Federated International Equity Fund; Federated Equity
Income Fund, Inc., Federated High Income Bond Fund, Inc., Federated Municipal
Securities Fund, Inc., Federated Utility Fund, Inc., and Tax-Free Instruments
Trust. When shares of the Fund are exchanged for shares of a load Fund or a
Federated Fund, the applicable sales charge will be assessed. However,
shareholders exchanging shares of the Fund which were received in a previous
exchange involving shares on which a load was paid will not be required to pay
an additional sales charge upon notification of the reinvestment of the
equivalent investment into a load Fund.

BY AUTOMATIC INVESTMENT PROGRAM
Once you have opened an account, you may automatically purchase additional
shares in a minimum amount of $50 on a monthly basis by completing an Automatic
Investment Program application or by contacting SouthTrust Funds Shareholder
Services or your SouthTrust Funds Dealer. Once you have opened an account, you
may purchase additional shares through a depository institution that is an
Automated Clearing House (ACH) member. This purchase option can be established
by completing the appropriate sections of the Automatic Investment Application.

HOW TO REDEEM AND EXCHANGE SHARES

You should redeem or exchange shares through SouthTrust Funds Shareholder
Services or your SouthTrust Funds Dealer. Trust customers of SouthTrust Bank
should contact their account officer.

THROUGH AN INVESTMENT PROFESSIONAL
Submit your redemption or exchange request by the end of regular trading on the
NYSE (normally 4:00 p.m. Eastern time). Investment professionals are responsible
for promptly submitting redemption requests and providing proper written
redemption instructions as outlined below. If your redemption order is received
before 12:00 noon (Eastern time), payment in federal funds is normally wired the
same day. Payment for redemption requests received after 12:00 noon (Eastern
time) but before 4:00 p.m. (Eastern time) will be wired the next business day.

DIRECTLY FROM THE FUND

By Telephone

If you call before 12:00 noon (Eastern time), your redemption will be wired to
you the same day. You will not receive that day's dividend.

If you call after 12:00 noon (Eastern time), your redemption will be wired to
you the following business day. You will receive that day's dividend.

The Fund reserves the right to wire redemption proceeds within five business
days after receiving the redemption order if, in the judgment of the Adviser, an
earlier payment could adversely impact the Fund.

By Mail
You may redeem shares by mailing your request to:
[INSERT ADDRESS]
Your redemption request will be processed on the day the Fund receives your
written request in proper form. Dividends are paid up to and including the day
that a redemption request is processed.

All requests must include:

o Fund name, account number and account registration;

o amount to be redeemed or exchanged;

o signatures of all shareholders exactly as registered; and

o if exchanging, the Fund name, account number and account registration into
which you are exchanging.

Call SouthTrust Funds Shareholder Services or your SouthTrust Funds Dealer if
you need special instructions.

Signature Guarantees

Signatures must be guaranteed if:

o your redemption will be sent to an address other than the address of
record;

o your redemption will be sent to an address of record that was changed
within the last 30 days;

o a redemption is payable to someone other than the shareholder(s) of record;
or

o if exchanging (transferring) into another fund with a different shareholder
registration.

PAYMENT METHODS FOR REDEMPTIONS
Your redemption proceeds will be mailed by check to your address of record. The
following payment options are available if you complete the appropriate section
of the Account Application Form. These payment options require a signature
guarantee if they were not established when the account was opened:

o an electronic transfer to your account at a financial institution that is
an ACH member; or

o wire payment to your account at a domestic commercial bank that is a Federal
Reserve System member.

Redemption in Kind

Although the Fund intends to pay share redemptions in cash, it reserves the
right to pay the redemption price in whole or in part by a distribution of the
Fund's portfolio securities.

LIMITATIONS ON REDEMPTION PROCEEDS
Redemption proceeds normally are wired or mailed within one business day after
receiving a request in proper form. Payment may be delayed up to seven days:

o to allow your purchase to clear;

o during periods of market volatility; or

o when a shareholder's trade activity or amount adversely impacts the Fund's
ability to manage its assets.

You will not accrue interest or dividends on uncashed checks from the Fund if
those checks are undeliverable and returned to the Fund.

EXCHANGE PRIVILEGES

Shareholders who have purchased shares of the Fund (including shares acquired
through a reinvestment of a dividend or distribution on such shares) may
exchange those shares for shares of one of the other SouthTrust Funds or one of
the Federated Funds without paying an additional sales charge. However, this
privilege does not apply to exchanges into SouthTrust Value Fund or SouthTrust
Growth Fund until an investor has owned shares in the one of the Funds for 90
days. The 90-day holding period does not apply to exchanges in which the
investor obtained Fund shares through a prior exchange of shares of SouthTrust
Value Fund or SouthTrust Growth Fund. When shares of Treasury Money Fund are
exchanged for shares of a load Fund or a Federated Fund, the applicable sales
charge (if any) will be assessed. However, shareholders exchanging shares of
Treasury Money Fund which were received in a previous exchange involving shares
on which a load was paid will not be required to pay an additional sales charge
upon notification of the reinvestment of the equivalent investment into a load
Fund.

To exchange, you must:

o exchange shares having a net asset value of at least $1,000;

o ensure that the account registrations are identical;

o meet any minimum initial investment requirements; and

o receive a prospectus for the fund into which you wish to exchange.

The Fund may modify or terminate the exchange privilege at any time. The Fund's
management or Adviser may determine from the amount, frequency and pattern of
exchanges that a shareholder is engaged in excessive trading that is detrimental
to the Fund and other shareholders. If this occurs, the Fund may terminate the
availability of exchanges to that shareholder and may bar that shareholder from
purchasing other SouthTrust Funds.

Automatic WITHDRAWAL Plan ("awp")

ADDITIONAL CONDITIONS

Telephone Transactions

The Fund will record your telephone instructions. If the Fund does not follow
reasonable procedures, it may be liable for losses due to unauthorized or
fraudulent telephone instructions.

Share Certificates

The Fund does not issue share certificates.

ACCOUNT AND SHARE INFORMATION
Account Activity

You will receive periodic statements reporting all account activity, including
automatic transactions, dividends and capital gains paid.

DIVIDENDS AND CAPITAL GAINS

The Fund declares daily and pays any dividends monthly to shareholders. If you
purchase shares by wire, you begin earning dividends on the day your wire is
received. If you purchase shares by check, you begin earning dividends on the
business day after the Fund receives your check. In either case, you earn
dividends through the day your redemption request is received.

The Fund does not expect to realize any capital gains or losses. If capital
gains or losses were to occur, they could result in an increase or decrease in
dividends. The Fund pays any capital gains at least annually. Your dividends and
capital gains distributions will be automatically invested in additional shares,
unless you elect cash payments.

ACCOUNTS WITH LOW BALANCES

TAX INFORMATION

The Fund sends an annual statement of your account activity to assist you in
completing your federal, state and local tax returns. Although the Fund is
structured to provide income exempt from state and local taxes, dividends may be
subject to income and local taxes in some states. Fund distributions of
dividends and capital gains are taxable to you whether paid in cash or
reinvested in the Fund. Non-exempt dividends and capital gains are taxable
whether paid in cash or reinvested in the Fund. Redemptions and exchanges are
taxable sales. Please consult your tax adviser regarding your federal, state,
and local tax liability.

WHO MANAGES THE FUND?

The Board of Trustees governs the Fund. The Adviser manages the Fund's assets,
including the selection and management of portfolio securities.

For the advisory services provided and expenses assumed by it, the Adviser is
entitled to receive a fee from the Fund, computed daily and payable monthly, at
an annual rate of 0.50%. The Adviser may voluntarily waive a portion of its fee
or reimburse the Fund for certain operating expenses.

While it is impossible to determine in advance all of the risks to the Fund, the
Fund could experience interruptions in basic financial and operational
functions. Fund shareholders could experience errors or disruptions in Fund
share transactions or Fund communications.

The Fund's service providers are making changes to their computer systems to fix
any Year 2000 problems. In addition, they are working to gather information from
third-party providers to determine their Year 2000 readiness.

Year 2000 problems would also increase the risks of the Fund's investments. To
assess the potential effect of the Year 2000 problem, the Adviser is reviewing
information regarding the Year 2000 readiness of issuers of securities the Fund
may purchase. The financial impact of these issues for the Fund is still being
determined. There can be no assurance that potential Year 2000 problems would
not have a material adverse effect on the Fund.

FINANCIAL INFORMATION
FINANCIAL HIGHLIGHTS

The Financial Highlights will help you understand the Treasury Money Fund's
financial performance for its past five fiscal years, or since inception, if the
life of the Fund is shorter. Some of the information is presented on a per share
basis. Total returns represent the rate an investor would have earned (or lost)
on an investment in the Fund, assuming reinvestment of any dividends and capital
gains.

This information has been audited by Arthur Andersen LLP whose report, along
with the Fund's audited financial statements, is included in the Annual Report.

<PAGE>

SOUTHTRUST U.S. TREASURY MONEY MARKET FUND
A Portfolio of SouthTrust Funds

A Statement of Additional Information (SAI) dated August , 1999, is incorporated
by reference into this prospectus. Additional information about the Fund's
investments is contained in the Fund's Annual and Semi-Annual Reports to
shareholders as they become available. The Annual Report discusses market
conditions and investment strategies that significantly affected the Fund's
performance during the last fiscal year. To obtain the SAI, the Annual Report,
Semi-Annual Report and other information without charge, and make inquiries,
call SouthTrust Funds Shareholder Services at 1-800-843-8618 or your SouthTrust
Funds Dealer.

Investment Company Act File No. 811-6580
Cusip 844734202

000000-00 (8/99)

SUBJECT TO COMPLETION

May , 1999

Statement of Additional Information

SOUTHTRUST U.S. TREASURY MONEY MARKET FUND

A Portfolio of SouthTrust Funds

This Statement of Additional Information (SAI) is not a prospectus. Read this
SAI in conjunction with the prospectus for SouthTrust U.S. Treasury Money Market
Fund dated August , 1999. This SAI incorporates by reference the Fund's Annual
Report. Obtain the prospectus or the Annual Report without charge by calling
1-800-843-8618.

August , 1999

Contents
How is the Fund Organized?
Securities in Which the Fund Invests
How is the Fund Sold?
Subaccounting Services
Redemption in Kind
Massachusetts Partnership Law
Account and Share Information
Tax Information
Who Manages and Provides Services to the Fund?
How Does the Fund Measure Performance?
Financial Information
Addresses

Cusip 844734202

/99)

<PAGE>

HOW IS THE FUND ORGANIZED?

As stated in the prospectus, the investment adviser of the Fund is SouthTrust
Bank, N.A.

SECURITIES IN WHICH THE FUND INVESTS

In pursuing its investment strategy, the Fund may invest in the following
securities for any purpose that is consistent with its investment objective.

Following is a table that indicates which types of securities are a: P =
Principal investment of the Fund; or A = Acceptable (but not principal)
investment of the Fund;

- -----------------------------------------------------------------
Fixed Income Securities A
Treasury Securities P
- -----------------------------------------------------------------
Zero Coupon Securities A
Special Transactions A
Repurchase Agreements P
Reverse Repurchase Agreements A
When Issued Transactions A
To Be Announced Securities A
- -----------------------------------------------------------------
Securities Lending A
Asset Coverage A
Variable Rate Demand Instruments A
Investing in Securities of Other Investment A
Companies
- -----------------------------------------------------------------
SECURITIES DESCRIPTIONS AND TECHNIQUES

Treasury securities are direct obligations of the federal government of the
United States. Treasury securities are generally regarded as having the
lowest credit risks.

Variable Rate Demand Instruments
Variable rate demand instruments are tax exempt securities that require the
issuer or a third party, such as a dealer or bank, to repurchase the security
for its face value upon demand. The securities also pay interest at a variable
rate intended to cause the securities to trade at their face value. The Fund
treats demand instruments as short-term securities, because their variable
interest rate adjusts in response to changes in market rates, even though their
stated maturity may extend beyond thirteen months. The Fund will invest in
variable and floating rate instruments only when the Adviser deems the
investment to involve minimal credit risk. Variable and floating rate
instruments held by the Fund may be subject to the Fund's 10% limitation on
illiquid investments when the Fund cannot demand payment of the principal amount
within seven days absent a reliable trading market.

Special Transactions
Repurchase Agreements
Repurchase agreements are transactions in which the Fund buys a security
from a dealer or bank and agrees to sell the security back at a mutually
agreed upon time and price. The repurchase price exceeds the sale price,
reflecting the Fund's return on the transaction. This return is unrelated to
the interest rate on the underlying security. The Fund will enter into
repurchase agreements only with banks and other recognized financial
institutions, such as securities dealers, deemed creditworthy by the
Adviser.
The Fund's custodian or subcustodian will take possession of the
securities subject to repurchase agreements. The Adviser or subcustodian
will monitor the value of the underlying security each day to ensure that
the value of the security always equals or exceeds the repurchase price.
Repurchase agreements are subject to credit risks.
Reverse Repurchase Agreements
Reverse repurchase agreements are repurchase agreements in which the Fund is
the seller (rather than the buyer) of the securities, and agrees to
repurchase them at an agreed upon time and price. A reverse repurchase
agreement may be viewed as a type of borrowing by the Fund. Reverse
repurchase agreements are subject to credit risks. In addition, reverse
repurchase agreements create leverage risks because the Fund must repurchase
the underlying security at a higher price, regardless of the market value of
the security at the time of repurchase. When Issued Transactions When issued
transactions are arrangements in which the Fund buys securities for a set
price, with payment and delivery of the securities scheduled for a future
time. During the period between purchase and settlement, no payment is made
by the Fund to the issuer and no interest accrues to the Fund. The Fund
records the transaction when it agrees to buy the securities and reflects
their value in determining the price of its shares. Settlement dates may be
a month or more after entering into these transactions so that the market
values of the securities bought may vary from the purchase prices.
Therefore, when issued transactions create interest rate risks for the Fund.
When issued transactions also involve credit risks in the event of a
counterparty default. To Be Announced (TBA) Securities As with other when
issued transactions, a seller agrees to issue a TBA security at a future
date. However, the seller does not specify the particular securities to be
delivered. Instead, the Fund agrees to accept any security that meets
specified terms. Securities Lending The Fund may lend portfolio securities
to borrowers that the Adviser deems creditworthy. In return, the Fund
receives cash or liquid securities from the borrower as collateral. The
borrower must furnish additional collateral if the market value of the
loaned securities increases. Also, the borrower must pay the Fund the
equivalent of any dividends or interest received on the loaned securities.
The Fund will reinvest cash collateral in securities that qualify as an
acceptable investment for the Fund. However, the Fund must pay interest to
the borrower for the use of cash collateral.
Loans are subject to termination at the option of the Fund or the
borrower. The Fund will not have the right to vote on securities while they
are on loan, but it will terminate a loan in anticipation of any important
vote. The Fund may pay administrative and custodial fees in connection with
a loan and may pay a negotiated portion of the interest earned on the cash
collateral to a securities lending agent or broker.
Securities lending activities are subject to interest rate risks and
credit risks.

Asset Coverage
In order to secure its obligations in connection with special transactions,
the Fund will either own the underlying assets, enter into an offsetting
transaction or set aside readily marketable securities with a value that
equals or exceeds the Fund's obligations. Unless the Fund has other readily
marketable assets to set aside, it cannot trade assets used to secure such
obligations entering into an offsetting contract or terminating a special
transaction. This may cause the Fund to miss favorable trading opportunities
or to realize losses on special transactions.

Investing in Securities of Other Investment Companies
The Fund may invest its assets in securities of other investment companies as an
efficient means of carrying out its investment policies and managing its
uninvested cash. The Fund will only invest in money market funds that seek to
maintain a $1.00 net asset value and that invest in securities eligible for
direct purchase by the Fund. It should be noted that investment companies incur
certain expenses, such as management fees, and, therefore, any investment by the
Fund in shares of other investment companies may be subject to such duplicate
expenses.

Illiquid Securities
The Fund may invest up to 10% of the total value of its net assets in securities
that are illiquid. An illiquid security is one which may not be sold or disposed
of in the ordinary course of business within seven days at approximately the
value at which the Fund has valued it on its books. Repurchase agreements with
maturities in excess of seven days will be considered by the Fund to be
illiquid.

INVESTMENT RISKS
Although there are many factors which may effect an investment in the Fund, the
principal risks of investing in a U.S. Treasury money market fund are described
below.

Interest Rate Risks
o Prices of fixed income securities rise and fall in response to interest rate
changes for similar securities. Generally, when interest rates rise, prices
of fixed income securities fall.

o Interest rate changes have a greater effect on the price of fixed income
securities with longer durations. Duration measures the price sensitivity of
a fixed income security to changes in interest rates.

Credit Risk
o Credit risk includes the possibility that a party to a transaction involving
the Fund will fail to meet its obligations. This could cause the Fund to
lose the benefit of the transaction or prevent the Fund from selling or
buying other securities to implement its investment strategy.

INVESTMENT LIMITATIONS
The following limitations pertain to each of the SouthTrust Funds: The Funds may
not:

1. Purchase or sell real estate, except that a Fund may purchase securities of
issuers which deal in real estate and may purchase securities which are secured
by interests in real estate.

5. Purchase securities of companies for the purpose of exercising control.

The above limitations cannot be changed unless authorized by the "vote of a
majority of its outstanding voting securities," as defined by the Investment
Company Act of 1940.

Regulatory Compliance
The Fund may follow non-fundamental operational policies that are more
restrictive than its fundamental investment limitations, as set forth in the
prospectus and this Statement of Additional Information, in order to comply with
applicable laws and regulations, including the provisions of and regulations
under the Investment Company Act of 1940. In particular, the Fund will comply
with the various requirements of Rule 2a-7 (Rule), which regulates money market
mutual funds. The Fund will determine the effective maturity of its investments
according to the Rule. The Fund may change these operational policies to reflect
changes in the laws and regulations without the approval of its shareholders.

DETERMINING MARKET VALUE OF SECURITIES
The Board has decided that the best method for determining the value of
portfolio instruments is amortized cost. Under this method, portfolio
instruments are valued at the acquisition cost as adjusted for amortization of
premium or accumulation of discount rather than at current market value.
Accordingly, neither the amount of daily income nor the net asset value (NAV) is
affected by any unrealized appreciation or depreciation of the portfolio. In
periods of declining interest rates, the indicated daily yield on shares of the
Fund computed by dividing the annualized daily income on the Fund's portfolio by
the NAV computed as above may tend to be higher than a similar computation made
by using a method of valuation based upon market prices and estimates. In
periods of rising interest rates, the opposite may be true.

The Fund's use of the amortized cost method of valuing portfolio instruments
depends on its compliance with certain conditions in the Rule. Under the Rule,
the Fund must establish procedures reasonably designed to stabilize the NAV per
share, as computed for purposes of distribution and redemption, at $1.00 per
share, taking into account current market conditions and the Fund's investment
objective. The procedures include monitoring the relationship between the
amortized cost value per share and the NAV per share based upon available
indications of market value. The Board will decide what, if any, steps should be
taken if there is a difference of more than 0.5 of 1% between the two values.
The Board will take any steps they consider appropriate (such as redemption in
kind or shortening the average portfolio maturity) to minimize any material
dilution or other unfair results arising from differences between the two
methods of determining NAV.

HOW IS THE FUND SOLD?

Under the Distributor's Contract with the Company, the Distributor (Federated
Securities Corp.) offers shares on a continuous, best-efforts basis.

EXCHANGING SECURITIES FOR SHARES

You may contact the Distributor to request a purchase of shares in an exchange
for securities you own. The Fund reserves the right to determine whether to
accept your securities and the minimum market value to accept. The Fund will
value your securities in a fair and equitable manner. This exchange is treated
as a sale of your securities for federal tax purposes.

SUBACCOUNTING SERVICES

Certain investment professionals may wish to use the transfer agent's
subaccounting system to minimize their internal recordkeeping requirements. The
transfer agent may charge a fee based on the level of subaccounting services
rendered. Investment professionals holding shares in a fiduciary, agency,
custodial, or similar capacity may charge or pass through subaccounting fees as
part of or in addition to normal trust or agency account fees. They may also
charge fees for other services that may be related to the ownership of shares.
This information should, therefore, be read together with any agreement between
the customer and the investment professional about the services provided, the
fees charged for those services, and any restrictions and limitations imposed.

REDEMPTION IN KIND

Although the Fund intends to pay share redemptions in cash, it reserves the
right, as described below, to pay the redemption price in whole or in part by a
distribution of the Fund's portfolio securities.

Because the Fund has elected to be governed by Rule 18f-1 under the Investment
Company Act of 1940, the Fund is obligated to pay share redemptions to any one
shareholder in cash only up to the lesser of $250,000 or 1% of the net assets
represented by such share class during any 90-day period.

Any share redemption payment greater than this amount will also be in cash
unless the Fund's Board determines that payment should be in kind. In such a
case, the Fund will pay all or a portion of the remainder of the redemption in
portfolio securities, valued in the same way as the Fund determines its NAV. The
portfolio securities will be selected in a manner that the Fund's Board deems
fair and equitable and, to the extent available, such securities will be readily
marketable.

Redemption in kind is not as liquid as a cash redemption. If redemption is made
in kind, shareholders receiving the portfolio securities and selling them before
their maturity could receive less than the redemption value of the securities
and could incur certain transaction costs.

MASSACHUSETTS PARTNERSHIP LAW

In the unlikely event a shareholder is held personally liable for the Company's
obligations, the Company is required by the Declaration of Trust to use its
property to protect or compensate the shareholder. On request, the Company will
defend any claim made and pay any judgment against a shareholder for any act or
obligation of the Company. Therefore, financial loss resulting from liability as
a shareholder will occur only if the Company itself cannot meet its obligations
to indemnify shareholders and to pay judgments against them.

ACCOUNT AND SHARE INFORMATION

VOTING RIGHTS
Each share of the Fund gives the shareholder one vote in Trustee elections and
other matters submitted to shareholders for vote. All shares of the Company have
equal voting rights, except that in matters affecting only a particular Fund,
only shares of that Fund are entitled to vote.

Trustees may be removed by the Board or by shareholders at a special
meeting. A special meeting of shareholders will be called by the Board upon the
written request of shareholders who own at least 10% of the Company's
outstanding shares of all series entitled to vote.

As of May 7, 1999, the following shareholders, owned of record, beneficially,
or both, 5% or more of the outstanding shares of the U.S. Treasury Money Market
Fund: Lynspen & Co., Birmingham, AL, owned approximately 502,404,573.13 shares
(84.50%%) and BHC Securities, Inc., Philadelphia, PA, owned approximately
65,223,347.79 shares (9.93%).
Shareholders owning 25% or more of outstanding shares may be in control and be
able to affect the outcome of certain matters presented for a vote of
shareholders.

TAX INFORMATION

FEDERAL INCOME TAX
The Fund intends to meet requirements of Subchapter M of the Internal Revenue
Code applicable to regulated investment companies. If these requirements are not
met, it will not receive special tax treatment and will pay federal income tax.
The Fund will be treated as a single, separate entity for federal income tax
purposes so that income earned and capital gains and losses realized by the
Company's other portfolios will be separate from those realized by the Fund.

WHO MANAGES AND PROVIDES SERVICES TO THE FUND?

As of May 7, 1999, the Company's Board and Officers as a group owned less than
1% of the Fund's outstanding shares.

An asterisk (*) denotes a Trustee who is deemed to be an interested person as
defined in the Investment Company Act of 1940.

<PAGE>

</TABLE>

INVESTMENT ADVISER The Adviser, SouthTrust Bank, N.A. conducts investment
research and makes investment decisions for the Fund.

Under the Investment Advisory Contract, the Adviser shall not be liable to the
Company or any Fund shareholder for any losses that may be sustained in the
purchase, holding, or sale of any security or for anything done or omitted by
it, except acts or omissions involving willful misfeasance, bad faith, gross
negligence, or reckless disregard of the duties imposed upon it by its contract
with the Company.

BROKERAGE TRANSACTIONS When selecting brokers and dealers to handle the purchase
and sale of portfolio instruments, the Adviser looks for prompt execution of the
order at a favorable price. The Adviser will generally use those who are
recognized dealers in specific portfolio instruments, except when a better price
and execution of the order can be obtained elsewhere. In selecting among firms
believed to meet these criteria, the Adviser may give consideration to those
firms which have sold or are selling shares of the Fund and other funds
distributed by the Distributor and its affiliates. The Adviser makes decisions
on portfolio transactions and selects brokers and dealers subject to review by
the Company's Board.

Research Services Investment decisions for the Fund are made independently from
those of other accounts managed by the Adviser. When the Fund and one or more of
those accounts invests in, or disposes of, the same security, available
investments or opportunities for sales will be allocated among the Fund and the
account(s) in a manner believed by the Adviser to be equitable. While the
coordination and ability to participate in volume transactions may benefit the
Fund, it is possible that this procedure could adversely impact the price paid
or received and/or the position obtained or disposed of by the Fund.

ADMINISTRATOR Federated Services Company, a subsidiary of Federated, provides
administrative personnel and services (including certain legal and financial
reporting services) necessary to operate the Fund. Federated Services Company
also provides certain accounting and recordkeeping services with respect to the
Fund's portfolio investments for a fee based on Fund assets, plus out-of-pocket
expenses.

CUSTODIAN
SouthTrust Bank, N.A. is
custodian for the securities
and cash of the Fund.

TRANSFER AGENT AND DIVIDEND DISBURSING AGENT Federated Services Company, through
its registered transfer agent subsidiary, Federated Shareholder Services
Company, maintains all necessary shareholder records. The Fund pays the transfer
agent a fee based on the size, type, and number of accounts and transactions
made by shareholders.

INDEPENDENT PUBLIC ACCOUNTANTs
Arthur Andersen LLP is the
independent public accountant
for the Fund.

FEES PAID BY THE FUND FOR
SERVICES

For the Year ended April 30 1998 1997 1996
Advisory Fee Earned $2,507,721 $2,163,019 $1,546,225
Advisory Fee Reduction $959,228 $865,208 $618,490
Brokerage Commissions $0 $0 $0
Administrative Fee $567,937 $526,824 $408,456
Administrative Fee Reduction $0 $0 $57,426

HOW DOES THE FUND MEASURE PERFORMANCE?

The Fund may advertise share performance by using the Securities and Exchange
Commission's (SEC) standard method for calculating performance applicable to all
mutual funds. The SEC also permits this standard performance information to be
accompanied by non-standard performance information.

The performance of shares depends upon such variables as: portfolio quality;
average portfolio maturity; type and value of portfolio securities; changes in
interest rates; changes or differences in the Fund's expenses; and various other
factors.

Share performance fluctuates on a daily basis largely because net earnings
fluctuate daily. Both net earnings and offering price per share are factors in
the computation of yield and total return.

Average Annual Total Returns and Yield
Total returns given for the one-year, five-year and start of performance periods
ended April 30, 1998.

Yield and Effective Yield given for the seven-day period ended April 30, 1998.

7 Day Period 1 Year 5-Year Start of Performance
Total Return N/A 5.14% 4.29%
Yield 4.91% N/A N/A N/A
Effective Yield 5.03% N/A N/A N/A

TOTAL RETURN
Total return represents the change (expressed as a percentage) in the value of
shares over a specific period of time, and includes the investment of income and
capital gains distributions.

The average annual total return for shares is the average compounded rate of
return for a given period that would equate a $1,000 initial investment to the
ending redeemable value of that investment. The ending redeemable value is
computed by multiplying the number of shares owned at the end of the period by
the NAV per share at the end of the period. The number of shares owned at the
end of the period is based on the number of shares purchased at the beginning of
the period with $1,000, less any applicable sales charge, adjusted over the
period by any additional shares, assuming the annual reinvestment of all
dividends and distributions.

YIELD
The yield of shares is based upon the seven days ending on the day of the
calculation, called the "base period." This yield is calculated by: determining
the net change in the value of a hypothetical account with a balance of one
share at the beginning of the base period, with the net change excluding capital
changes but including the value of any additional shares purchased with
dividends earned from the original one share and all dividends declared on the
original and any purchased shares; dividing the net change in the account's
value by the value of the account at the beginning of the base period to
determine the base period return; and multiplying the base period return by
365/7. The effective yield is calculated by compounding the unannualized
base-period return by: adding 1 to the base-period return, raising the sum to
the 365/7th power; and subtracting 1 from the result. The tax- equivalent yield
of shares is calculated similarly to the yield, but is adjusted to reflect the
taxable yield that shares would have had to earn to equal the actual yield,
assuming a specific tax rate.

To the extent investment professionals and broker/dealers charge fees in
connection with services provided in conjunction with an investment in shares,
the share performance is lower for shareholders paying those fees.

PERFORMANCE COMPARISONS
Advertising and sales literature may include:

o references to ratings, rankings, and financial publications and/or
performance comparisons of shares to certain indices;

o charts, graphs and illustrations using the Fund's returns, or returns in
general, that demonstrate investment concepts such as tax-deferred
compounding, dollar-cost averaging and systematic investment;

o discussions of economic, financial and political developments and their
impact on the securities market, including the portfolio manager's views on
how such developments could impact the Fund; and

o information about the mutual fund industry from sources such as the Investment
Company Institute.

The Fund may compare its performance, or performance for the types of securities
in which it invests, to a variety of other investments, including federally
insured bank products such as bank savings accounts, certificates of deposit,
and Treasury bills.

The Fund may quote information from reliable sources regarding individual
countries and regions, world stock exchanges, and economic and demographic
statistics.

You may use financial publications and/or indices to obtain a more complete view
of share performance. When comparing performance, you should consider all
relevant factors such as the composition of the index used, prevailing market
conditions, portfolio compositions of other funds, and methods used to value
portfolio securities and compute offering price.

FINANCIAL INFORMATION

The Financial Statements for the Fund for the fiscal year ended April 30, 1999
are incorporated herein by reference to the Annual Report to Shareholders of
SouthTrust U.S. Treasury Money Market Fund dated April 30, 1999.

<PAGE>

ADDRESSES

SouthTrust U.S. Treasury Money Market Fund

A Portfolio of SouthTrust Funds

5800 Corporate Drive
Pittsburgh, PA 15237-7010

Distributor
Federated Securities Corp.
Federated Investors Tower
1001 Liberty Avenue,
Pittsburgh, PA 15222-3779

Investment Adviser
SouthTrust Bank, N.A.
420 North 20th Street
Birmingham, AL 35203

Custodian
SouthTrust Bank, N.A.
420 North 20th Street
Birmingham, AL 35203

Transfer Agent and Dividend Disbursing Agent
Federated Shareholder Services Company
P.O. Box 8600
Boston, MA 02266-8600

Independent Public Accountants
Arthur Andersen LLP
225 Franklin Street
Boston, MA 02110-2812

Risk/Return Bar Chart and Table Appendix
The graphic presentation displayed here consists of a bar chart representing the
annual total returns of SouthTrust Value Fund as of the calendar year-end for
each of six years.

The `y' axis reflects the "% Total Return" beginning with "-5%" and increasing
in increments of 5% up to 40%

The `x' axis represents calculation periods from the earliest calendar year end
of the Fund's start of business through the calendar year ended December 31,
1998. The light gray shaded chart features six distinct vertical bars, each
shaded in charcoal, and each visually representing by height the total return
percentages for the calendar year stated directly at its base. The calculated
total return percentage for the Fund for each calendar year is stated directly
at the top of each respective bar, for the calendar years1993 through 1998, The
percentages noted are: 2.86%/1993, -1.71%/1994, 36.54%/1995. 23.17%/1996,
27.45%/1997, and 12.61%/1998.

The bar chart shows the variability of the Fund's total returns on a calendar
year-end basis.

The total returns displayed for the Fund do not reflect the payment of any sales
charges or recurring shareholder account fees. If these charges or fees had been
included, the returns shown would have been lower.]

The Fund's total return from January 1, 1999 to March 31, 1999 was -0.32%.

Within the period shown in the Chart, the Fund's highest quarterly return was
23.89% (quarter ended December 31, 1998). Its lowest quarterly return was
- -16.95% (quarter ended September 30, 1998).

Average Annual Total Return Table
The following table represents the Fund's Average Annual Total Returns, reduced
to reflect applicable sales charges, for the calendar periods ending December
31, 1998.

The table shows the Fund's total returns averaged over a period of years
relative to Standard and Poor's 500 Composite Index (S&P500), a broad-based
market index, for the calendar periods ended December 31, 1998. Total returns
for the index shown do not reflect sales charges, expenses or other fees that
the SEC requires to be reflected in the Fund's performance. Indexes are
unmanaged, and it is not possible to invest directly in an index.

Calendar Period Value Fund S&P 500 Index
1 Year % 28.61%
5 Years % 24.07%
Start of Performance1 % 0.00%

1 The Fund's start of performance date was May 8, 1992.
Past performance does not necessarily predict future performance. This
information provides you with historical performance so that you can analyze
whether the Fund's investment risks are balanced by its potential rewards.

The graphic presentation displayed here consists of a bar chart representing the
annual total returns of SouthTrust Growth Fund1 as of the calendar year-end for
each of six years.

The `y' axis reflects the "% Total Return" beginning with "-5%" and increasing
in increments of 5% up to 40%

The `x' axis represents calculation periods for the last ten calendar years of
the Fund beginning with the earliest year through the calendar year ended
December 31, 1998. The light gray shaded chart features ten distinct vertical
bars, each shaded in charcoal, and each visually representing by height the
total return percentages for the calendar year stated directly at its base. The
calculated total return percentage for the Fund for each calendar year is stated
directly at the top of each respective bar, for the calendar years1989 through
1998, The percentages noted are: 29.58%/1989, 0.91%/1990, 30.29%/1991,
3.93%/1992. 1.80%/1993, -2.30%/1994, 36.25%/1995. 24.29%/1996, 27.23%/1997, and
29.84%/1998.

The bar chart shows the variability of the Predecessor Collective Trust Fund's
total returns on a calendar year-end basis.

The total returns displayed for the Predecessor Collective Trust Fund do not
reflect the payment of any sales charges or recurring shareholder account fees.
If these charges or fees had been included, the returns shown would have been
lower.]

The Predecessor Collective Trust Fund's total return from January 1, 1999 to
March 31, 1999 was 3.20 %.

Within the period shown in the Chart, the Predecessor Collective Trust Fund's
highest quarterly return was 24.9 % (quarter ended December 311998). Its lowest
quarterly return was -11.34% (quarter ended September 30, 1990).

Average Annual Total Return Table
The following table represents the Predecessor Collective Trust Fund's Average
Annual Total Returns, reduced to reflect applicable sales charges, for the
calendar periods ending December 31, 1998.

The table shows the Predecessor Collective Trust Fund's total returns averaged
over a period of years relative to Standard and Poor's 500 Composite Index
(S&P500), a broad-based market index, for the calendar periods ended December
31, 1998. Total returns for the index shown do not reflect sales charges,
expenses or other fees that the SEC requires to be reflected in the Fund's
performance.
Indexes are unmanaged, and it is not possible to invest directly in an index.

Calendar Period Growth Fund S&P 500 Index
1 Year 23.99% 28.61%
5 Years 21.68% 24.07%
10 Years 16.68% 19.19%

Past performance does not necessarily predict future performance. This
information provides you with historical performance so that you can analyze
whether the Fund's investment risks are balanced by its potential rewards.

1 The Growth Fund is the successor to the portfolio of a collective trust fund
managed by the Adviser. At the Fund's commencement of operations, the assets
from the collective trust fund were transferred to the Fund in exchange for Fund
shares. The Fund's average annual total return since inception ( ) is xx.xx%
through December 31, 1998. The quoted performance data includes the performance
of the collective trust fund for periods before Growth Fund's registration
statement became effective on July , 1999, as adjusted to reflect the Growth
Fund's expenses. The collective trust fund was not registered under the
Investment Company Act of 1940 ("1940 Act") and therefore was not subject to
certain investment restrictions that are imposed by the 1940 Act. If the
collective trust fund had been registered under the 1940 Act, the performance
may have been adversely affected. The graphic presentation displayed here
consists of a bar chart representing the annual total returns of SouthTrust Bond
Fund as of the calendar year-end for each of six years.

The `y' axis reflects the "% Total Return" beginning with "-5%" and increasing
in increments of 5% up to 20%

The `x' axis represents calculation periods from the earliest calendar year end
of the Fund's start of business through the calendar year ended December 31,
1998. The light gray shaded chart features six distinct vertical bars, each
shaded in charcoal, and each visually representing by height the total return
percentages for the calendar year stated directly at its base. The calculated
total return percentage for the Fund for each calendar year is stated directly
at the top of each respective bar, for the calendar years1993 through 1998, The
percentages noted are: 10.42%/1993, -4.62%/1994, 15.95%/1995. 2.89%/1996,
9.51%/1997, and 9.26%/1998.

The bar chart shows the variability of the Fund's total returns on a calendar
year-end basis.

The Fund's total return from January 1, 1999 to March 31, 1999 was -1.94%.

Within the period shown in the Chart, the Fund's highest quarterly return was
5.77% (quarter ended September 30, 1998). Its lowest quarterly return was -3.39%
(quarter ended March 31, 1994).

The table shows the Fund's total returns averaged over a period of years
relative to Lehman Brothers Intermediate Government/Corporate Index (LBIG/C), a
broad-based market index, for the calendar periods ended December 31, 1998.
Total returns for the index shown do not reflect sales charges, expenses or
other fees that the SEC requires to be reflected in the Fund's performance.
Indexes are unmanaged, and it is not possible to invest directly in an index.

Calendar Period Bond Fund LBIG/C Index
1 Year 5.42% 0.00%
5 Years 5.60% 0.00%
Start of Performance1 6.94% 0.00%

The graphic presentation displayed here consists of a bar chart representing the
annual total returns of SouthTrust Income Fund as of the calendar year-end for
each of six years.

The `y' axis reflects the "% Total Return" beginning with "6.60%" and increasing
in increments of 5% up to 7%

The `x' axis represents calculation periods from the earliest calendar year end
of the Fund's start of business through the calendar year ended December 31,
1998. The light gray shaded chart features two distinct vertical bars, each
shaded in charcoal, and each visually representing by height the total return
percentages for the calendar year stated directly at its base. The calculated
total return percentage for the Fund for each calendar year is stated directly
at the top of each respective bar, for the calendar years1997 and 1998, The
percentages noted are: 6.76%/1997, and 7.00%/1998.

The bar chart shows the variability of the Fund's total returns on a calendar
year-end basis.

The Fund's total return from January 1, 1999 to March 31, 1999 was 0.25%.

Within the period shown in the Chart, the Fund's highest quarterly return was
3.73% (quarter ended September 30, 1998). Its lowest quarterly return was 0.05%
(quarter ended December 31, 1994).

The table shows the Fund's total returns averaged over a period of years
relative to Merrill Lynch Government 1-5 Index (MLC/G 1-5), a broad-based market
index, for the calendar periods ended December 31, 1998. Total returns for the
index shown do not reflect sales charges, expenses or other fees that the SEC
requires to be reflected in the Fund's performance. Indexes are unmanaged, and
it is not possible to invest directly in an index.

Calendar Period Income Fund MLC/G Index
1 Year 53.22% 0.00%
Start of Performance1 4.29% 0.00%

The graphic presentation displayed here consists of a bar chart representing the
annual total returns of SouthTrust U.S. Treasury Money Market Fund as of the
calendar year-end for each of six years.

The `y' axis reflects the "% Total Return" beginning with "%" and increasing in
increments of 1% up to 6%

The `x' axis represents calculation periods from the earliest calendar year end
of the Fund's start of business through the calendar year ended December 31,
1998. The light gray shaded chart features six distinct vertical bars, each
shaded in charcoal, and each visually representing by height the total return
percentages for the calendar year stated directly at its base. The calculated
total return percentage for the Fund for each calendar year is stated directly
at the top of each respective bar, for the calendar years1993 through 1998, The
percentages noted are: 2.78%/1993, 3.77%/1994, 5.48%/1995. 4.87%/1996,
5.07%/1997, and 5.00%/1998.

Historically, the Fund has maintained a constant $1.00 net asset value per
share. The bar chart shows the variability of the Fund's total returns on a
calendar year-end basis.

The Fund shares are not sold subject to a sales charge (load). The total returns
shown are based on the net asset value.

The Fund's total return from January 1, 1999 to March 31, 1999 was 1.07%.

Within the period shown in the Chart, the Fund's highest quarterly return was
1.38% (quarter ended June 30, 1995). Its lowest quarterly return was 0.68%
(quarter ended June 30, 1993). The Fund's 7-Day Net Yield as of December 31,
1998 was 4.43%.

The table shows the Fund's total returns for the calendar periods ending
December 31, 1998.

U.S. Treasury
Money Market
Calendar Period Fund
1 Year 5.00%
5 Years 4.84%
Start of Performance1 4.35%

1 The Fund's start of performance date was May 8, 1992.
The Fund's 7-Day Net Yield as of December 31, 1998 was 4.43%. Investors may
call the Fund to acquire the 7-Day Net Yield by calling
1-800-834-8618.

PART C. OTHER INFORMATION.

Item 23. Exhibits:

(a) (i) Conformed copy of Master Trust Agreement
of the Registrant; (1) (ii) Conformed copy
of Amendment No. 1 to Master Trust
Agreement; (2) (iii) Conformed copy of
Amendment No. 4 to Master Trust Agreement;
(7) (iv) Conformed copy of Amendment No. 2
to the Master Trust Agreement; (9) (v)
Conformed copy of Amendment No. 3 to the
Master Trust Agreement; (9) (vi) Conformed
copy of Amendment No. 6 to the Master Trust
Agreement; (9)
(b) Copy of By-Laws of the Registrant; (1)
(c) Not applicable;
(d) (i) Conformed copy of copy of Investment
Advisory Contract of the Registrant; (3)
(ii) Conformed copy of Amendment to
Investment Advisory Contract dated September
1, 1995;
(8)
(e) (i) Conformed copy of Distributor's Contract of the Registrant; (5)
(ii) Conformed copy of Exhibit D to Distributor's Contract; (9)
(f) Not applicable;
(g) (i) Conformed copy of Custodian Contract of the Registrant; (11)
(ii) Conformed copy of Custodian Fee Schedule;(11)
(h) (i) Conformed copy of Administrative Services Agreement of
Registrant; (5)
+ Exhibits are filed electronically.

1. Response is incorporated by reference to Registrant's Initial Registration
Statement on Form N-1A filed on March 5, 1992. (File Nos. 33-46190 and
811-6580)

2. Response is incorporated by reference to Registrant's Pre-Effective
Amendment No. 1 on Form N-1A filed on May 1, 1992. (File Nos. 33-46190 and
811-6580)

3. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 1 filed on November 27, 1992. (File Nos. 33-46190 and
811-6580)

5. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 3 filed on June 24, 1994. (File Nos. 33-46190 and 811-6580)

7. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 5 on Form N-1A filed on September 29, 1995. (File Nos.
33-46190 and 811-6580)

8. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 6 filed on October 13, 1995. (File Nos. 33-46190 and
811-6580)

9. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 7 filed on June 27, 1996. (File Nos. 33-46190 and 811-6580)

11. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 9 filed on July 20, 1998. (File Nos. 33-46190 and 811-6580)

<PAGE>

(ii) Conformed copy of Amendment No. 1 to Administrative Services
Agreement of Registrant; (6)
(iii) Conformed copy of Amendment No. 2 to Administrative Services
Agreement of Registant; +
(iv) Conformed copy of Fund Accounting and Shareholder
Recordkeeping Agreement of Registrant;
(5)
(v) Conformed copy of Electronic Communications and Recordkeeping
Agreement; (6)
(vi) Conformed copy of Amendment No. 1 to Schedule A, Fund
Accounting and Shareholder
Recordkeeping Agreement; (10)
(vii) Conformed copy of Amendment No. 1 to Schedule C, Fund
Accounting and Shareholder
Recordkeeping Agreement; (10)
(i) Conformed copy of Opinion and Consent of Counsel
as to legality of shares being registered; (2) (k)
Conformed copy of Consent of Independent Public
Auditors; (to be filed by amendment); (l) Conformed
copy of Purchase Agreement of the Registrant; (3) (m)
(i) Copy of 12b-1 Agreement and copy of Exhibit A to
the Agreement dated September 1, 1995;
(8)
(ii) Copy of Rule 12b-1 Plan; (8)
(iii) Conformed copy of Exhibit A to the
12b-1 Plan dated September 1, 1995; (9)
(n) Not included per Footnote 60 of Release No.33- 7684;
(o) Not applicable;
(p) Conformed copy of Power of Attorney; (10).

+ Exhibits are filed electronically.

2. Response is incorporated by reference to Registrant's Pre-Effective
Amendment No. 1 on Form N-1A filed on May 1, 1992. (File Nos. 33-46190 and
811-6580)

3. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 1 filed on November 27, 1992. (File Nos. 33-46190 and
811-6580)

5. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 3 filed on June 24, 1994. (File Nos. 33-46190 and 811-6580)

6. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 4 filed on June 23, 1995. (File Nos. 33-46190 and 811-6580)

8. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 6 filed on October 13, 1995. (File Nos. 33-46190 and
811-6580)

9. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 7 filed on June 27, 1996. (File Nos. 33-46190 and 811-6580)

10. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 8 filed on June 24, 1997. (File Nos. 33-46190 and 811-6580)

<PAGE>

Item 24. Persons Controlled by or Under Common Control with Registrant:

None

Item 25. Indemnification: (3)

Item 26. Business and Other Connections of Investment Adviser:

For a description of the other business of the Investment
Adviser, see the section entitled "Management of the Funds" in
Part A.

To reach any of the following Officers and Directors of the
Investment Adviser, call SouthTrust Bank, N.A.

(1) (2) (3)
Principal Occupation
or Other Employment
of a Substantial
Position with Nature During
Name the Adviser the Past Two Years

Julian W. Banton Director, Chairman, Banking.
President, and Chief
Executive Officer

Gene Bartow Director Athletic Director,
University of
Alabama at Birmingham.

Thomas E. Bradford, Jr. Director Chairman and Chief Executive Officer,
Bradford & Company.

Ronald G. Bruno Director Chairman, President and Chief Executive
Officer, Bruno's Inc.

-------------------------------- 3. Response is incorporated by reference
to Registrant's Post-Effective Amendment No. 1 filed on November 27, 1992. (File
Nos. 33-46190 and 811-6580)

<PAGE>

(1) (2) (3)
Principal Occupation
or Other Employment
of a Substantial
Position with Nature During
Name the Adviser the Past Two Years

H.M. Burt, Jr. Director Chairman and Chief Executive Officer
Southern Tool Inc.

David J. Cooper Director President, Cooper/T.
Smith Corporation

Sallie C. Creel Director Owner/Operator Alabama Car Rental.

James C. Harrison Director President and Chief Executive Officer,
Protective and Industrial
Insurance Company

Chris H. Horgen Director Chairman and Chief Executive Officer,
Nichols Research Corporation

Dr. Judy M. Merritt Director President, Jefferson
State College

William E. Smith, Jr. Director Chairman and Chief Executive Officer,
Royal Cup, Inc.

R. Neal Travis Director President, South Central Bell
Telephone Company

Tom Coley Executive Vice Banking
President
Retail Division

Fred C. Crum, Jr. Executive Vice Banking
President
Corporate Division

E. Frank Schmidt Executive Vice Banking
President Alabama Markets

Charles M. Murrell Executive Vice
President SouthTrust Banking
Data Services

R. Glenn Eubanks Executive Vice Banking
President
Commercial Division

William C. Patterson Executive Vice Banking
President
Credit Division

<PAGE>

(1) (2) (3)

Principal Occupation
or Other Employment
of a Substantial
Position with Nature During
Name the Adviser the Past Two Years

William E. Pearson, Jr. Executive Vice Banking
President
Administration/
Finance Division

Dick White Executive Vice Banking
President
Asset Management
</TABLE>

Item 27. Principal Underwriters:

(a) Federated Securities Corp., the Distributor for shares of the Registrant,
also acts as principal underwriter for the following open-end investment
companies: 111 Corcoran Funds; Automated Government Money Trust; Blanchard
Funds; Blanchard Precious Metals Fund, Inc.; Cash Trust Series II; Cash Trust
Series, Inc.; DG Investor Series; Edward D. Jones & Co. Daily Passport Cash
Trust; Federated Adjustable Rate U.S. Government Fund, Inc.; Federated American
Leaders Fund, Inc.; Federated ARMs Fund; Federated Core Trust; Federated Equity
Funds; Federated Equity Income Fund, Inc.; Federated Fund for U.S. Government
Securities, Inc.; Federated GNMA Trust; Federated Government Income Securities,
Inc.; Federated Government Trust; Federated High Income Bond Fund, Inc.;
Federated High Yield Trust; Federated Income Securities Trust; Federated Income
Trust; Federated Index Trust; Federated Institutional Trust; Federated Insurance
Series; Federated Master Trust; Federated Municipal Opportunities Fund, Inc.;
Federated Municipal Securities Fund, Inc.; Federated Municipal Trust; Federated
Short-Term Municipal Trust; Federated Short-Term U.S. Government Trust;
Federated Stock and Bond Fund, Inc.; Federated Stock Trust; Federated Tax-Free
Trust; Federated Total Return Series, Inc.; Federated U.S. Government Bond Fund;
Federated U.S. Government Securities Fund: 1-3 Years; Federated U.S. Government
Securities Fund: 2-5 Years; Federated U.S. Government Securities Fund: 5-10
Years; Federated Utility Fund, Inc.; Fixed Income Securities, Inc.; High Yield
Cash Trust; Independence One Mutual Funds; Intermediate Municipal Trust;
International Series, Inc.; Investment Series Funds, Inc.; Investment Series
Trust; Liberty U.S. Government Money Market Trust; Liquid Cash Trust; Managed
Series Trust; Marshall Funds, Inc.; Money Market Management, Inc.; Money Market
Obligations Trust; Money Market Obligations Trust II; Money Market Trust;
Municipal Securities Income Trust; Newpoint Funds; Peachtree Funds; Regions
Funds; RIGGS Funds; SouthTrust Funds; Star Funds; Targeted Duration Trust;
Tax-Free Instruments Trust; The Planters Funds; The Virtus Funds; The Wachovia
Funds; The Wachovia Municipal Funds; Tower Mutual Funds; Trust for Financial
Institutions; Trust for Government Cash Reserves; Trust for Short-Term U.S.
Government Securities; Trust for U.S. Treasury Obligations; Vision Group of
Funds, Inc.; and World Investment Series, Inc.

Federated Securities Corp. also acts as principal underwriter for the
following closed-end investment company: Liberty Term Trust, Inc.- 1999.

<PAGE>

(b)

(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address With Distributor With Registrant

Richard B. Fisher Director, Chairman, Chief
Federated Investors Tower Executive Officer, Chief
Pittsburgh, PA 15222-3779 Operating Officer, Asst.
Secretary and Asst.
Treasurer, Federated
Securities Corp.

Edward C. Gonzales Director, Executive Vice President,
Federated Investors Tower President, Federated, Treasurer
Pittsburgh, PA 15222-3779 Securities Corp.

Thomas R. Donahue Director, Assistant Secretary
Federated Investors Tower and Assistant Treasurer
Pittsburgh, PA 15222-3779 Federated Securities Corp

James F. Getz President-Broker/Dealer, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

John B. Fisher President-Institutional Sales, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

David M. Taylor Executive Vice President --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Mark W. Bloss Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Richard W. Boyd Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Laura M. Deger Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Theodore Fadool, Jr. Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Bryant R. Fisher Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Christopher T. Fives Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

James S. Hamilton Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

James M. Heaton Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

<PAGE>

(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address With Distributor With Registrant

Keith Nixon Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Solon A. Person, IV Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Timothy C. Pillion Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Thomas E. Territ Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Ernest G. Anderson Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Teresa M. Antoszyk Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

John B. Bohnet Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Byron F. Bowman Vice President, Secretary, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Jane E. Broeren-Lambesis Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

David J. Callahan Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Mary J. Combs Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

R. Edmond Connell, Jr. Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

R. Leonard Corton, Jr. Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Kevin J. Crenny Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Daniel T. Culbertson Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

<PAGE>

(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address With Distributor With Registrant

G. Michael Cullen Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Marc C. Danile Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

William C. Doyle Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Jill Ehrenfeld Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Mark D. Fisher Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Joseph D. Gibbons Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

John K. Goettlicher Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Craig S. Gonzales Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Richard C. Gonzales Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Raymond Hanley Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Bruce E. Hastings Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Beth A. Hetzel Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

James E. Hickey Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Charlene H. Jennings Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Brian G. Kelly Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

<PAGE>

(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address With Distributor With Registrant

H. Joseph Kennedy Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Michael W. Koenig Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Michael R. Manning Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Mark J. Miehl Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Richard C. Mihm Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

J. Michael Miller Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Alec H. Neilly Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Thomas A. Peters III Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Robert F. Phillips Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Richard A. Recker Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Eugene B. Reed Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Paul V. Riordan Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

John Rogers Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Brian S. Ronayne Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Thomas S. Schinabeck Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

<PAGE>

(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address With Distributor With Registrant

Edward L. Smith Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

David W. Spears Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

John A. Staley Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Colin B. Starks Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Jeffrey A. Stewart Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

William C. Tustin Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Paul A. Uhlman Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Miles J. Wallace Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

John F. Wallin Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Richard B. Watts Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Edward J. Wojnarowski Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Michael P. Wolff Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Edward R. Bozek Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Terri E. Bush Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Beth C. Dell Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

<PAGE>

(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address With Distributor With Registrant

David L. Immonen Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Renee L. Martin Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Robert M. Rossi Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Denis McAuley Treasurer, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Leslie K. Platt Assistant Secretary, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
</TABLE>

(c)

Item 28. Location of Accounts and Records:

All accounts and records required to be maintained by Section 31(a) of the
Investment Company Act of 1940 and Rules 31a-1 through 31a-3 promulgated
thereunder are maintained at one of the following locations:

Registrant 5800 Corporate Drive
Pittsburgh, PA 15237-7010

Federated Shareholder Services Company Federated Investors Tower
("Transfer Agent and Dividend Disbursing 1001 Liberty Avenue
Agent and Portfolio Recordkeeper") Pittsburgh, PA 15222-3779

Federated Administrative Services Federated Investors Tower
("Administrator") 1001 Liberty Avenue
Pittsburgh, PA 15222-3779

SouthTrust Bank, N.A. 420 North 20th Street
("Adviser") Birmingham, AL 35203

SouthTrust Bank, N.A. 420 North 20th Street
("Custodian") Birmingham, AL 35203

Item 29. Management Services: Not applicable.

Item 30. Undertakings:

Registrant hereby undertakes to comply with the provisions of
Section 16(c) of the 1940 Act with respect to the removal of
Trustees and the calling of special shareholder meetings by
shareholders.

Registrant hereby undertakes to furnish each person to whom a
prospectus is delivered with a copy of the Registrant's latest
Annual Report to shareholders, upon request and without
charge.
SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant, SOUTHTRUST FUNDS (formerly,
SouthTrust Vulcan Funds), certifies that it meets all of the requirements for
effectiveness of this Amendment to its Registration Statement pursuant to Rule
485(a) under the Securities Act of 1933 and has duly caused this Amendment to
its Registration Statement to be signed on its behalf by the undersigned,
hereunto duly authorized, in the City of Pittsburgh and Commonwealth of
Pennsylvania, on the 28th day of May, 1999.

SOUTHTRUST FUNDS
(formerly, SouthTrust Vulcan Funds)

BY: /s/C. Todd Gibson
C. Todd Gibson, Secretary
Attorney in Fact for William O. Vann
May 28, 1999

Pursuant to the requirements of the Securities Act of 1933, this Amendment
to its Registration Statement has been signed below by the following person in
the capacity and on the date indicated:

NAME TITLE DATE

By: /s/C. Todd Gibson Attorney In Fact May 28, 1999
C. Todd Gibson For the Persons
SECRETARY Listed Below

NAME TITLE

William O. Vann* Trustee and Chairman
of the Board

Charles G. Brown, III * Trustee

Russell W. Chambliss * Trustee

Edward C. Gonzales* President (Principal Executive
Officer) and
Treasurer
(Principal Financial and
Accounting Officer)

Thomas M. Grady * Trustee

Billy L. Harbert, Jr. Trustee

* By Power of Attorney