FLEX PARTNERS/, 497, 1997-06-13

FLEX PARTNERS/
497, 1997-06-13

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Rule 497 (c) & (g)
Commission File No. 33-48922
Commission File No. 811-6720

PROSPECTUS June 13, 1997

THE FLEX-PARTNERS
CORE EQUITY FUND
6000 Memorial Drive
Dublin, OH 43017
800-494-FLEX
614-766-7074

THE FLEX-PARTNERS ARE A FAMILY OF MUTUAL FUNDS ORGANIZED AS A BUSINESS
TRUST (THE "TRUST"). THE CORE EQUITY FUND (THE "FUND"), A SERIES OF THE TRUST,
IS A MULTI-MANAGED, DIVERSIFIED OPEN-END INVESTMENT MANAGEMENT COMPANY KNOWN AS
A MUTUAL FUND. THE FUND SEEKS CAPITAL GROWTH BY INVESTING PRIMARILY IN A
DIVERSIFIED PORTFOLIO OF DOMESTIC COMMON STOCKS WITH GREATER THAN AVERAGE GROWTH
CHARACTERISTICS SELECTED PRIMARILY FROM THE STANDARD & POOR'S 500 COMPOSITE
STOCK PRICE INDEX (THE "S&P 500").

THE TRUST SEEKS TO ACHIEVE THE INVESTMENT OBJECTIVE OF THE FUND BY
INVESTING ALL OF THE INVESTABLE ASSETS OF THE FUND IN THE GROWTH STOCK PORTFOLIO
(THE "PORTFOLIO"), A CORRESPONDING OPEN-END MANAGEMENT INVESTMENT COMPANY HAVING
THE SAME INVESTMENT OBJECTIVE AS THE FUND. ACCORDINGLY, INVESTORS SHOULD
CAREFULLY CONSIDER THIS INVESTMENT APPROACH. FOR ADDITIONAL INFORMATION
REGARDING THIS UNIQUE CONCEPT, SEE "INVESTMENT OBJECTIVES AND POLICIES" AND
"OTHER INFORMATION - SHARES OF BENEFICIAL INTEREST AND INVESTMENT STRUCTURE"
ELSEWHERE IN THIS PROSPECTUS.

R. Meeder & Associates, Inc. is the investment adviser of the
Portfolio and Sector Capital Management , L.L.C. (the "Subadviser") is the
investment subadviser of the Portfolio. Sub-subadvisers, selected by the
Subadviser, subject to the review and approval of the Trustees of the
Portfolio, are responsible for the selection of individual portfolio
securities for the assets of the Portfolio assigned to them by the Subadviser.

ADDITIONAL INFORMATION

This Prospectus sets forth basic information about the Trust and the
Fund that a prospective investor should know before investing and it should be
retained for future reference. A STATEMENT OF ADDITIONAL INFORMATION, dated
June 13, 1997, has been filed with the Securities and Exchange Commission and
is incorporated herein by reference. The Statement of Additional Information
is available upon request and without charge by contacting the Fund at the
address given above or by calling: 1-800-494-FLEX, or (614) 766-7074.

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

<PAGE>

TABLE OF CONTENTS

Highlights 2
Synopsis of Financial Information 3
Investment Objectives and Policies 5
Additional Investment Policies 7
The Trust and Its Management 11
Portfolio Transaction Policies 18
Distribution Plans 18
Income Dividends and Taxes 20
How Net Asset Value is Determined 21
Performance Information and Reports 22
Other Information 22
SHAREHOLDER MANUAL

How to Buy Shares 24
How to Make Withdrawals 29
Exchange Privilege 29
Retirement Plans 30
Other Shareholder Services 30
Shareholder Accounts 31

<PAGE>

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HIGHLIGHTS
- ------------------------------------------------------------------------------

INVESTMENT OBJECTIVE: The Core Equity Fund seeks capital growth by investing
primarily in a diversified portfolio of domestic common stocks with greater
than average growth characteristics selected primarily from the S&P 500. The
Trust seeks to achieve the Fund's objective by investing all of the investable
assets of the Fund in the Growth Stock Portfolio, a corresponding open-end
management investment company (the "Portfolio") having the same investment
objective as the Fund. See "Investment Objectives and Policies."

LIQUIDITY: The Fund is an open-end management investment company that
continuously offers and redeems shares of beneficial interest at the next
determined net asset value per share. See "How to Buy Shares" and "How to Make
Withdrawals (Redemptions)."

SALES CHARGES: Investors in the Fund may select Class A or Class C shares,
each with a public offering price that reflects different sales charges and
expense levels. Class A shares are offered at net asset value plus the
applicable sales charge (maximum of 4.00% of public offering price). Class C
shares are sold at net asset value without an initial sales charge but if
redeemed within 18 months of purchase, a contingent deferred sales charge
equal to 1.50% of the lesser of the current market value or the cost of the
shares being redeemed will apply, and if redeemed more than 18 months after
purchase and before 24 months after purchase, a contingent deferred sales
charge equal to .75% of the lesser of the current market value or the cost of
the shares being redeemed will apply. See "How to Buy Shares" and
"Distribution Plans."

RETIREMENT PLANS AND OTHER SHAREHOLDER SERVICES: The Trust offers retirement
plans, which include a prototype Profit Sharing Plan, Money Purchase Pension
Plan, Salary Savings Plan --401(k), Individual Retirement Account (IRA),
Simple IRA, Simplified Employee Pension (SEP) Plan, and a number of other
special shareholder services.

MINIMUM INVESTMENT: A minimum investment of $2,500 is required to open an
account, except an IRA account, for which the minimum is $500. Subsequent
investments must be at least $100. The Fund has the right to redeem the shares
in an account and pay the proceeds to the shareholder if the value of the
account drops below $1,000 ($500 for an IRA) because of shareholder redemptions.
The shareholder will be given 30 days written notice and an opportunity to
restore his account to $1,000 ($500 for an IRA). See "How to Buy Shares",
"Other Shareholder Services" and "Shareholder Accounts."

INVESTMENT ADVISER AND SUBADVISERS: R. Meeder & Associates, Inc. is the
Portfolio's Investment Adviser and Manager (the "Investment Adviser" or the
"Manager"). The Manager has been an investment adviser to individuals,
retirement plans, corporations and foundations since 1974.

<PAGE>

Sector Capital Management, L.L.C. (the "Subadviser") is the Portfolio's
subadviser. The Subadviser has been an investment adviser to individuals,
pension and profit sharing plans, trusts, charitable organizations,
corporations and other institutions since February, 1995.

Sub-subadvisers (the "Sector Advisers") selected by the Subadviser, subject to
the review and approval of the Trustees of the Portfolio, are responsible for
the selection of individual portfolio securities for the assets of the Portfolio
assigned to them by the Subadviser. See "The Trust and Its Management."

DISTRIBUTION PLANS: The Fund has adopted Rule 12b-1 distribution plans for
using as much as 25/100 of 1% and 75/100 of 1% of net assets annually to aid in
the distribution of Class A shares and Class C shares, respectively. The Fund
has adopted a service plan for using as much as 25/100 of 1% of net assets
annually to aid in the distribution of each of Class A shares and Class C
shares. See "Distribution Plans."

HOW TO BUY SHARES: Complete the New Account Application and forward with
payment as directed. Orders accompanied by payment (ordinary check, bank check,
bank wire, and money order) are accepted immediately and priced at the next
determined net asset value per share after receipt of the order. See "How to
Buy Shares" and "How Net Asset Value is Determined."

RISK FACTORS: As in any common stock fund, stock values may fluctuate in
response to the activities of an individual company or in response to general
market and/or economic conditions. Smaller or newer issuers are more likely to
realize more substantial growth as well as suffer more significant losses than
larger, more established issuers. Investments in such companies can be both
more volatile and more speculative. See "Additional Investment Policies - Risk
Factors." The Portfolio may use various investment techniques to hedge the
Portfolio's risks, including futures contracts and options. Special risk
factors may apply to those investments. See "Additional Investment Policies -
Hedging Strategies and Option Strategies."

SHAREHOLDER INQUIRIES: Shareholder inquiries should be directed to the Fund by
writing or telephoning the Fund at the address or telephone number indicated
on the cover page of this Prospectus. To protect the confidentiality of
shareholder accounts, information relating to a specific account will be
disclosed pursuant to a telephone inquiry if the shareholder identifies the
account by account number or by the taxpayer identification number listed on
the account.

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SYNOPSIS OF FINANCIAL INFORMATION6
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SHAREHOLDER TRANSACTION EXPENSES CLASS A CLASS C

Maximum Sales Load Imposed
on Purchases ......................................................... 4.00%1 none
Maximum Deferred Sales Load2 .................................................. none 1.50%
Maximum Sales Load Imposed on
Reinvested Dividends ........................................................ none none
Redemption Fee ................................................................ none none
Exchange Fee .................................................................. none none

ANNUAL FUND OPERATING EXPENSES**
(As a percentage of average net assets)
Management Fees ............................................................. 1.00% 1.00%
Rule 12b-1 Fees3 ............................................................ 0.25% 0.75%
Other Expenses (After Expense
Reimbursements or Fee Waivers*) ........................................ 0.50% 0.25%
Service Fees4 ............................................................... 0.25% 0.25%
------ ------
TOTAL FUND OPERATING EXPENSES** 2.00% 2.25%
(After Expense Reimbursements or Fee Waivers*)

CUMULATIVE EXPENSES
PAID FOR THE PERIOD OF:

EXAMPLE: 1 YEAR 3 YEARS

An investor would pay the following expense on a $1,000 investment, assuming
(1) an operating expense ratio of 2.00% for Class A Shares and 2.25% for Class
C Shares, (2) a 5% annual return throughout the period and (3) redemption at
the end of each time period:

Class A Shares ................................................................ $ 20 $ 63
Class C Shares ................................................................ $ 38 $ 85
An investor would pay the following expenses on the same $1,000 investment
assuming no redemption at the end of the period:

Class A Shares ................................................................ $ 20 $ 63
Class C Shares ................................................................ $ 23 $ 70

<FN>
*The Manager presently intends to reimburse the Fund through an expense
reimbursement to the extent necessary to keep total expenses at 2.00% of
average daily net assets for Class A Shares and 2.25% of average daily net
assets for Class C shares. The Manager may change this policy at any time
without notice to shareholders. This would, in some circumstances, have a
material adverse effect on the net income of the Fund and the return earned
by shareholders. For planning purposes, prospective investors and shareholders
should assume that expense reimbursements will not be made.

Expenses used in the illustration are based on estimated expenses for the Fund
and on the Fund's proportionate share of estimated expenses of the Portfolio,
for the current fiscal year.

1 The sales charge applied to purchases of Class A Shares declines as the amount
invested increases. See "How to Buy Shares."

2 A deferred sales charge on Class C shares applies only if redemption occurs
within twenty-four months from purchase. See "How to Buy Shares."

3 The National Association of Securities Dealers, Inc. ("NASD") limits asset
based sales charges to 6.25% of new sales, plus interest. Long-term
shareholders of Class C Shares may pay more than the economic equivalent
of the maximum front-end sales charges permitted by the NASD. (See "How
to Buy Shares - Purchasing Shares - Purchase Options").

4 The Service Fee pertains to Class A Shares and Class C Shares, 100% of which
is allocated to NASD member firms for continuous personal service by such
members to investors in Class A Shares and Class C Shares of the Fund, such as
responding to shareholder inquiries, quoting net asset values, providing
current marketing material and attending to other shareholder matters.
</FN>
</TABLE>

The expense table is meant to assist an investor in understanding the
various costs and expenses that an investor in the Fund will bear directly or
indirectly. The Fund does not impose an exchange fee or redemption fee. For
more complete descriptions of the various costs and expenses of the Fund see
"The Trust and Its Management" and "Distribution Plans."

The Board of Trustees of the Trust believes that the aggregate per
share expenses of the Fund and the Portfolio will be less than or
approximately equal to the expenses which the Fund would incur if it retained
the services of an investment adviser and the assets of the Fund were invested
directly in the type of securities being held by the Portfolio. For additional
information concerning expenses incurred by the Fund and the Portfolio, see
"The Trust and Its Management" herein, and "Investment Adviser and Manager",
"Investment Subadviser" and "Investment Sub-subadvisers" in the Statement of
Additional Information.

<PAGE>

The table and hypothetical example above are for illustrative
purposes only. The investment rate of return and expenses should not be
considered as representations of past or future performance or past or future
expenses, respectively, as actual rates of return and expenses may be more or
less than the rate and amounts shown.

- ------------------------------------------------------------------------------
INVESTMENT OBJECTIVES AND POLICIES
- ------------------------------------------------------------------------------

The Core Equity Fund and the Growth Stock Portfolio have their own
separate but identical investment objectives and policies, as set forth below.
These investment objectives and policies are not fundamental and may be
changed by the Trustees of the Trust and the Portfolio without approval of the
Fund's shareholders or the Portfolio's investors, except as otherwise provided
herein. No such change would be made without 30 days prior written notice to
shareholders. The Trust seeks to achieve the Fund's investment objective by
investing all of its investable assets in the Portfolio. For more information
concerning the investment structure of the Fund and the Portfolio, see "Other
Information--Investment Structure." Since the investment characteristics of
the Fund will correspond directly to those of the Portfolio, the following is
a discussion of the various investments of and techniques employed by the
Portfolio. Additional information about the investment policies of the
Portfolio appears in the Statement of Additional Information. There can be no
assurance that the investment objectives of the Fund and the Portfolio will be
achieved.

The Portfolio seeks capital growth by investing primarily in a
diversified portfolio of domestic common stocks with greater than average
growth characteristics selected primarily from the Standard & Poor's 500
Composite Stock Price Index (the "S&P 500"). Current income will not be a
primary objective. Under normal circumstances, (i) at least 80% of the
Portfolio's total assets will be invested in domestic common stocks and (ii)
at least 65% of the Portfolio's total assets will be invested in growth
stocks.

<PAGE>

Common stocks are selected for the Portfolio from all domestic
publicly traded common stocks; however, at least 70% of the assets of the
Portfolio invested in common stocks will be invested in common stocks which
are included in the S&P 500.

The Portfolio consists of investment portfolios representing each of
the industry sectors (identified by the Subadviser) comprising the S&P 500.
The assets of the Portfolio will be allocated to each of these industry
sectors in approximately the same proportion as these industry sectors are
represented in the S&P 500 on a market capitalization-weighted basis. The
Subadviser continuously reviews the representation of the industry sectors in
the S&P 500 and continuously categorizes domestic publicly traded common
stocks into a specific industry sector.

The total market value of the common stocks in each industry sector
of the S&P 500 is compared by the Subadviser to the total market value of
all common stocks in the S&P 500 to determine each industry sector's
weighting in the S&P 500. If the weighting of any industry sector in the
Portfolio varies from the weighting on a market-capitalization basis of that
industry sector in the S&P 500 at the end of any month, the amount of assets
in the Portfolio allocated to that industry sector will be reallocated by the
Subadviser. The Subadviser may make a reallocation more frequently than
monthly if it chooses to do so in its sole discretion. Reallocations may
result in additional transaction costs to the extent that sales of securities
as part of such reallocations result in higher portfolio turnover.

Except as otherwise provided below, the assets of the Portfolio
representing each of these industry sectors are managed on a discretionary
basis by one or more separate investment advisers (the "Sector Advisers")
selected by the Subadviser, subject to the review and approval of the Board of
Trustees of the Portfolio.

Assets of the Portfolio representing each of the industry sectors are
managed by one or more Sector Advisers, except (i) the assets of the Portfolio
representing the health sector will be managed and "indexed" by the Subadviser
until it selects one or more Sector Advisers, subject to the review and
approval of the Portfolio Trustees, to manage the assets of the Portfolio
representing the health sector and (ii) in the event a proposed
Sub-subadvisory Agreement is terminated leaving no Sector Adviser to manage
the assets of the Portfolio representing an industry sector, the Subadviser
will, upon termination and until a new Sector Adviser were selected, manage
and "index" the assets of the Portfolio representing the applicable industry
sector by selling any stocks representing the industry sector that are not
included in the S&P 500 and investing the assets comprising the industry
sector in S&P 500 stocks identified by the Subadviser as belonging to that
industry sector in the same proportion as those stocks are represented in the
S&P 500 on a market capitalization-weighted basis.

Each Sector Adviser is limited to the list of companies identified by
the Subadviser which represents the Sector Adviser's specific industry sector.
Each Sector Adviser then selects those common stocks which, in its opinion,
best represent the industry sector the Sector Adviser has been assigned. In
selecting securities for the Portfolio, the Sector Advisers evaluate factors
believed to be favorable to long term growth of capital including specific
financial characteristics of the issuer such as historical earnings growth,
sales growth, profitability and return on equity. The Sector Advisers also

<PAGE>

analyze the issuer's position within its industry sector as well as the
quality and experience of the issuer's management.

Up to 20% of the Portfolio's assets may be invested in temporary
investments such as money market instruments, obligations issued or guaranteed
by the U.S. Government, its agencies and instrumentalities, and repurchase
agreements. See "Additional Investment Policies - Money Market Instruments and
Bonds." The Portfolio may purchase stock index futures contracts and related
options. See "Additional Investment Policies - Hedging Strategies and Option
Strategies." Up to 5% of the total assets of the Portfolio may be invested in
American Depositary Receipts.

As a fundamental policy, the Portfolio may not own more than 10% of
the outstanding voting shares of any issuer and with respect to 75% of the
total assets of the Portfolio, the Portfolio will not purchase a security of
any issuer (other than cash items and U.S. Government Securities, as defined
in the Investment Company Act of 1940) if such purchase would cause the
Portfolio's holdings of that issuer to amount to more than 5% of the
Portfolio's total assets.

See the Fund's Statement of Additional Information for other details.

- ------------------------------------------------------------------------------
ADDITIONAL INVESTMENT POLICIES
- ------------------------------------------------------------------------------

MONEY MARKET INSTRUMENTS AND BONDS

When investing in money market instruments or bonds, the Portfolio
will limit its purchases to the following securities:

o U.S. Government Securities and Securities of its Agencies and
Instrumentalities.

o Bank Obligations and Instruments Secured Thereby.

o High Quality Commercial Paper -- The Portfolio may invest in commercial
paper rated no lower than "A-2" by Standard & Poor's Corporation or "Prime-2"
by Moody's Investors Services, Inc., or, if not rated, issued by a company
having an outstanding debt issue rated at least A by Standard & Poor's or
Moody's.

o Private Placement Commercial Paper -- unregistered securities which are
traded in public markets to qualified institutional investors, such as the
Portfolio.

o High Grade Corporate Obligations -- obligations rated at least A by
Standard & Poor's or Moody's.

o Repurchase Agreements Pertaining to the Above -- The Portfolio may invest in
any of the above securities subject to repurchase agreements with any Federal
Reserve reporting dealer or member bank of the Federal Reserve System.
Repurchase agreements usually are for short periods, such as one week or less,

<PAGE>

but could be longer. The Portfolio will not invest more than 10% of its
assets, at time of purchase, in repurchase agreements which mature in excess
of seven days or in other illiquid or not readily marketable securities.

HEDGING STRATEGIES

The Portfolio may engage in hedging transactions in carrying out its
investment policies. A hedging program may be implemented for the following
reasons: (1) To gain equity market exposure for unallocated and uninvested
cash balances of the Portfolio; (2) To protect the value of specific
securities owned or intended to be purchased while the Investment Adviser,
Subadviser or a Sector Adviser is implementing a change in the Portfolio's
investment position; (3) To protect portfolio values during periods of
extraordinary risk without incurring transaction costs associated with buying
or selling actual securities; and (4) To utilize the "designated hedge"
provisions of Subchapter M of the Internal Revenue Code as a permitted means
of avoiding taxes that would otherwise have to be paid on gains from the sale
of portfolio securities.

A hedging program involves entering into an "option" or "futures"
transaction in lieu of the actual purchase or sale of securities. At present,
many groups of common stocks (stock market indices) may be made the subject of
futures contracts.

Derivatives are financial instruments whose performance is derived,
at least in part, from the performance of an underlying asset, security or
index. Accordingly, these financial futures contracts or related options used
by the Portfolio to implement its hedging strategies are considered
derivatives. The value of derivatives can be affected significantly by even
small market movements, sometimes in unpredictable ways. They do not
necessarily increase risk, and may in fact reduce risk.

The Portfolio will not engage in transactions in financial futures
contracts or related options for speculation but only as a hedge against
changes in the market value of securities held in the Portfolio, securities
which it intends to purchase, or to gain market exposure for unallocated and
uninvested cash balances. The Portfolio will only enter in such transactions
when they are economically appropriate to meeting portfolio investment
objectives and to the reduction of risks inherent in the ongoing management of
the Portfolio.

For certain regulatory purposes, the Commodity Futures Trading
Commission ("CFTC") limits the types of futures positions that can be taken in
conjunction with the management of a securities portfolio for a mutual fund,
such as the Portfolio. All futures transactions for the Portfolio will
consequently be subject to the restrictions on the use of futures contracts
established in CFTC rules, such as observation of the CFTC's definition of
"hedging." In addition, whenever the Portfolio establishes a long futures
position, it will set aside cash or cash equivalents equal to the underlying
commodity value of the long futures contracts held by the Portfolio. Although
all futures contracts involve leverage by virtue of the margin system
applicable to trading on futures exchanges, the Portfolio will not, on a net
basis, have leverage exposure on any long futures contracts that it
establishes because of the cash set aside requirement. All futures
transactions can produce a gain or a loss when they are closed, regardless of

<PAGE>

the purpose for which they have been established. Unlike short futures
contracts positions established to protect against the risk of a decline in
value of existing securities holdings, the long futures positions established
by the Portfolio to protect against reinvestment risk are intended to protect
the Portfolio against the risks of reinvesting portfolio assets that arise
during periods when the assets are not fully invested in securities.

The Portfolio may not purchase or sell financial futures or purchase
related options if immediately thereafter the sum of the amount of margin
deposits on the Portfolio's existing futures positions and premiums paid for
related options would exceed 5% of the market value of the Portfolio's total
assets.

The Portfolio expects that any gain or loss on hedging transactions
will be substantially offset by any gain or loss on the securities underlying
the contracts or being considered for purchase.

There can be no guarantee that the Portfolio will be able to realize
this objective and, as noted below under "Risk Factors", there are some risks
in utilizing a hedging strategy.

OPTION STRATEGIES

The Portfolio may write (sell) covered call options. The purpose of
such transactions is to: (1) hedge against changes in the market value of
specific securities held by the Portfolio; and/or (2) generate incremental
income by capturing the proceeds of options sold.

The Portfolio may write (sell) call options, but only if such options
are covered and remain covered as long as the Portfolio is obligated as a
writer of the option (seller). A call option is "covered" if the Portfolio
owns the underlying security covered by the call. If a "covered" call option
expires un-exercised, the writer realizes a gain in the amount of the premium
received. If the covered call option is exercised, the writer realizes either
a gain or a loss from the sale of the underlying security with the proceeds to
the writer being increased by the amount of the premium. Prior to its
expiration, a call option may be closed out by means of a purchase of an
identical option. Any gain or loss from such transaction will depend on
whether the amount paid is more or less than the premium received for the
option plus related transaction costs.

RISK FACTORS

The Portfolio will be invested in securities which fluctuate in
market value, so net asset value per share will fluctuate as well. When the
Portfolio is invested in smaller capitalization issues, it could be subject to
wider price fluctuations than the stock market as measured by popular market
indices.

There is no guarantee that a shareholder will receive the full amount
of his investment upon the redemption of shares. The Portfolio does, however,
seek to minimize the risk of loss through diversification and, at times, the
use of hedging techniques. Hedging involves risks which are not present in
some other mutual funds with similar objectives (See "Hedging Strategies.")

<PAGE>

Options are subject to certain risks, including the risk of imperfect
correlation between the option and the security underlying the option contract
and the risk that there may not be a liquid secondary market for the option
when the Portfolio seeks to repurchase a call option. Entering into a covered
call writing transaction can also limit the appreciation potential of the
Portfolio.

Futures contracts likewise involve some risk. It is possible that the
contract(s) selected by the Manager or the Subadviser will not follow exactly
the price movement of the securities covered by the contract. If this occurs,
the objective of the hedging strategy may not be successful. There may not be
a liquid market for futures positions when the Portfolio seeks to remove a
hedge transaction. The liquidity of both options and futures contracts may
also be affected if options and futures exchanges impose trading halts,
particularly when markets are volatile.

The Portfolio may invest in repurchase agreements with banks and
securities brokers, and in private placement commercial paper.

All repurchase agreements entered into by the Portfolio will be fully
collateralized. The Portfolio's risk is that the seller may fail to repurchase
the security on the delivery date. If the seller defaults, the underlying
security constitutes collateral for the seller's obligation to pay. It is a
policy of the Portfolio to make settlement on repurchase agreements only upon
proper delivery of the underlying collateral. In the event of a bankruptcy or
other default of a seller of a repurchase agreement to the Portfolio, the
Portfolio could encounter delays and expenses in enforcing its rights and
could experience losses, including a decline in the value of the underlying
securities and loss of income.

Private placement commercial paper ("Rule 144A securities") consists
of unregistered securities which are traded in public markets to qualified
institutional investors, such as the Portfolio. The Portfolio's risk is that
the universe of potential buyers for the securities, should the Portfolio
desire to liquidate a position, is limited to qualified dealers and
institutions, and therefore such securities could have the effect of being
illiquid.

The use of multiple Sector Advisers or the replacement of a Sector
Adviser may increase the Portfolio's portfolio turnover rate, realizations of
gains or losses, and brokerage commissions. High portfolio turnover may
involve correspondingly greater brokerage commissions and transaction costs,
which will be borne by the Portfolio and may result in increased short-term
capital gains which, when distributed to shareholders, are treated as ordinary
income. See "Income Dividends and Taxes."

PORTFOLIO TURNOVER

Although it is not possible to predict future portfolio turnover
rates accurately, and such rates may vary greatly from year to year, the
Subadviser anticipates that the annual portfolio turnover rate for the
Portfolio will not exceed 90%. See "Portfolio Transaction Policies."

<PAGE>

The Portfolio intends to comply with the short-term trading
restrictions of Subchapter M of the Internal Revenue Code of 1986, although
these restrictions could inhibit a rapid change in the Portfolio's
investments.

- ------------------------------------------------------------------------------
THE TRUST AND ITS MANAGEMENT
- ------------------------------------------------------------------------------

The Trust is an open-end management investment company organized as a
Massachusetts business trust on June 22, 1992. The Trust presently has four
series funds, including the Fund. The Trust's offices are at 6000 Memorial
Drive, Dublin, OH 43017. The business and affairs of the Trust are under the
direction of its Board of Trustees.

Neither the Trust nor the Fund has an investment adviser because the
Trust seeks to achieve the investment objective of the Fund by investing its
assets in the Portfolio. The Portfolio has retained the services of
R. Meeder & Associates, Inc. as investment adviser.

MANAGER

R. Meeder & Associates, Inc. (the "Manager") has been an investment
adviser to individuals and retirement plans since 1974. The Manager served as
the investment adviser to the Portfolio and its predecessor from 1985 until
December 31, 1996, at which time the Subadviser and the Sector Advisers
commenced managing the Portfolio. The Manager serves the Portfolio pursuant to
an Investment Advisory Contract under the terms of which it has agreed to
provide an investment program within the limitations of the Portfolio's
investment policies and restrictions, and to furnish all executive,
administrative, and clerical services required for the transaction of
Portfolio business, other than accounting services and services which are
provided by the Portfolio's custodian, transfer agent, independent accountants
and legal counsel. The Manager invests the Portfolio's liquidity reserves and
may invest the Portfolio's financial futures contracts and related options.
See "Additional Investment Policies-Hedging Strategies and Option Strategies."

The Manager was incorporated in Ohio in 1974 and maintains its
principal offices at 6000 Memorial Drive, Dublin, OH 43017. The Manager is a
wholly-owned subsidiary of Muirfield Investors, Inc. ("MII"). MII is
controlled by Robert S. Meeder, Sr. through ownership of voting common stock.
MII conducts business only through its six subsidiaries which are the Manager;
Mutual Funds Service Co., the Trust's transfer agent; Adviser Dealer Services,
Inc., the Fund's distributor (the "Distributor"); Opportunities Management
Co., a venture capital investor; Meeder Advisory Services, Inc., a registered
investment adviser and OMCO, Inc., a registered commodity trading adviser and
commodity pool operator.

Philip A. Voelker is primarily responsible for managing the liquidity
reserve of the Portfolio and managing the futures contracts and related
options of the Portfolio on behalf of the Manager. Mr. Voelker is a Vice
President and Trustee of each of the Trust, the Portfolio and The Flex-funds
and Senior Vice President of the Manager. Mr. Voelker has been associated
with the Manager since 1975.

<PAGE>

All compensation to the Manager will be shared by the Subadviser and
the Manager out of the Manager's fee from the Portfolio in accordance with a
formula such that the Manager will receive 70% and the Subadviser 30% of the
fee payable with respect to the net assets of the Portfolio on December 31,
1996 (the effectiveness of the subadvisory arrangement); then the Manager will
receive 30% and the Subadviser 70% of the fee attributable to any additional
net assets of the Portfolio up to an amount of net assets equal to the net
assets on such date; then the Manager and the Subadviser will share equally
the fee attributable to any additional net assets of the Portfolio up to $50
million of net assets. With respect to net assets of more than $50 million and
less than $100 million, the applicable fee of 0.75% will be shared such that
the Manager will receive 0.35% and the Subadviser 0.40%. For net assets of
$100 million and more, the applicable 0.60% fee would be shared such that the
Manager would receive 0.25% and Subadviser 0.35%.

Accounting, stock transfer, dividend disbursing, and shareholder
services are provided to the Portfolio and the Fund by Mutual Funds Service
Co., 6000 Memorial Drive, Dublin, Ohio 43017, a wholly-owned subsidiary of
MII. The minimum annual fee, payable monthly, for accounting services in the
Portfolio is $7,500. Subject to the applicable minimum fee, the fee is
computed at the rate of 0.15% of the first $10 million, 0.10% of the next $20
million, 0.02% of the next $50 million and 0.01% in excess of $80 million of
the Portfolio's average net assets. In addition, the Fund incurs (subject to a
$4,000 annual minimum fee) an annual fee of the greater of $15 per shareholder
account or 0.10% of the Fund's average net assets, payable monthly, for stock
transfer, dividend disbursing and shareholder support services. Mutual Funds
Service Co. also serves as Administrator to the Fund. Services provided to the
Fund include coordinating and monitoring any third party services to the Fund;
providing the necessary personnel to perform administrative functions for the
Fund; assisting in the preparation, filing and distribution of proxy
materials, periodic reports to Trustees and shareholders, registration
statements and other necessary documents. The Fund incurs an annual fee,
payable monthly, of .05% of the Fund's average net assets. These fees are
reviewed annually by the Trustees of the Trust and the Portfolio. For the year
ended December 31, 1996, total payments to Mutual Funds Service Co. amounted
to $30,867 for the Portfolio.

A broker-dealer may use a portion of the commissions paid by the
Portfolio to reduce the Portfolio or the Fund's expenses. The Manager,
Subadviser and Sector Advisers may take into account sales of shares of the
Fund and other funds advised by them in selecting broker-dealers to effect
portfolio transactions on behalf of the Portfolio.

Information concerning the Trustees and officers of the Trust and the
Portfolio appears in the Statement of Additional Information.

<PAGE>

SUBADVISER

Sector Capital Management, L.L.C. (the "Subadviser"), 5350 Poplar
Avenue, Suite 490, Memphis, Tennessee 38119, serves as the Portfolio's
subadviser under an Investment Subadvisory Agreement among the Portfolio, the
Manager and the Subadviser. The Subadviser furnishes investment advisory
services in connection with the management of the Portfolio.

The Subadviser is a Georgia limited liability company that has been a
registered investment adviser to individuals, pension and profit sharing plans,
trusts, charitable organizations, corporations and other institutions since
January, 1995. As of December 31, 1996, the Subadviser held discretionary
investment authority over approximately $96 million of assets. The Subadviser is
controlled by William L. Gurner and John K. Donaldson. Mr. Gurner is primarily
responsible for the day-to-day management of the Portfolio through interaction
with each of the Sector Advisers. Mr. Gurner is also primarily responsible for
managing the futures contracts and related options of the Portfolio on behalf of
the Subadviser. Mr. Gurner has been associated with the Subadviser since its
inception in January, 1995. Mr. Gurner, President, Administrator, Manager and a
Member of the Subadviser, is a Trustee of the Trust, the Portfolio, The
Flex-funds, mutual funds whose corresponding portfolios are also advised by the
Manager, and such portfolios.

The Subadviser and the Portfolio have entered into a Sub-subadvisory
Agreement with each Sector Adviser selected for the Portfolio. It is the
Subadviser's responsibility to select, subject to the review and approval of
the Portfolio's Board of Trustees, the Sector Advisers who have distinguished
themselves by able performance in respective areas of expertise in sector
management and to review their continued performance. In addition, it is the
Subadviser's responsibility to categorize publicly traded domestic common
stocks into a specific industry sector. The Subadviser may also invest the
Portfolio's financial futures contracts and related options.

Subject to the supervision and direction of the Portfolio's Board of
Trustees, the Subadviser provides to the Portfolio investment management
evaluation services principally by performing initial due diligence on
prospective Sector Advisers for the Portfolio and thereafter monitoring Sector
Adviser performance through quantitative and qualitative analysis as well as
periodic in-person, telephonic and written consultations with Sector Advisers.
In evaluating prospective Sector Advisers, the Subadviser considers, among
other factors, each Sector Adviser's level of expertise; relative performance
and consistency of performance; level of adherence to investment discipline or
philosophy; personnel, facilities and financial strength; and quality of
service and client communications. The Subadviser has responsibility for
communicating performance expectations and evaluations to Sector Advisers and
ultimately recommending to the Board of Trustees of the Portfolio whether
Sector Advisers' contracts should be renewed, modified, or terminated. The
Subadviser provides reports to the Portfolio's Board of Trustees regarding the
results of its evaluation and monitoring functions.

<PAGE>

The Subadviser pays each Sector Adviser a fee for its investment
advisory services that is computed daily and paid monthly based on the value
of the average net assets of the Portfolio assigned by the Subadviser to the
Sector Adviser at an annual rate equal to 0.25%.

Investors should be aware that the Subadviser may be subject to a
conflict of interest when making decisions regarding the retention and
compensation of particular Sector Advisers. However, the Subadviser's
decisions regarding the selection of Sector Advisers and specific amount of
the compensation to be paid to Sector Advisers, are subject to review and
approval by a majority of the Board of Trustees of the Portfolio.

Although the Subadviser and the Sector Advisers' activities are
subject to general oversight by the Board of Trustees and the officers of the
Portfolio, neither the Board nor the officers evaluate the investment merits
of any Sector Adviser's individual security selections. The Board of Trustees
will review regularly the Portfolio's performance compared to the applicable
indices and also will review the Portfolio's compliance with its investment
objectives and policies.

While the investment professionals of the Subadviser have experience
in asset management and the selection of investment advisers, prior to the
Subadviser becoming the subadviser to the Portfolio, on December 31, 1996, it
did not have previous experience in providing investment advisory services to
an investment company.

The Portfolio has filed an exemptive order application (the
"Application") with the Securities and Exchange Commission (the "SEC") seeking
an exemption from Section 15(a)(1) of the Investment Company Act of 1940 to
the extent necessary to permit the Portfolio and the Subadviser to enter into
Investment Sub-subadvisory Agreements with each Sector Adviser without such
agreements being approved by the Portfolio's investors except for Investment
Sub-subadvisory Agreements with an affiliated person of the Portfolio, the
Manager or the Subadviser other than by reason of such affiliated person
serving as an existing Sector Adviser to the Portfolio. Applicable orders
granted by the SEC to other investment companies seeking similar exemptions
have required as a condition to granting the order that the investment company
obtain investor approval for such a policy, and the Portfolio has done so. In
addition, the Portfolio's Application includes the condition that within 90
days of the hiring of any new Sector Advisers and executing a new Investment
Sub-subadvisory Agreement, the Subadviser will furnish shareholders of the
Fund with an information statement about the new Sector Adviser and Investment
Sub-subadvisory Agreement. There is no guarantee that the SEC will grant the
Portfolio's application for exemptive relief. Any changes to the Investment
Advisory Contract between the Portfolio and the Manager or the Investment
Sub-subadvisory Agreement among the Portfolio, Manager and Subadviser still
require shareholder approval. In accordance with the terms of the Application,
a majority of the shareholders of the Fund have approved the operation of the
Trust in accordance with the exemption.

SECTOR ADVISERS: The Sector Advisers have agreed to an investment
advisory fee based on the average net assets of the Portfolio assigned to them
by the Subadviser at an annual rate equal to 0.25%, which is generally lower
than the fees they charge to institutional accounts for which they serve as
investment adviser, and for which they perform all administrative
responsibilities.

<PAGE>

Subject to the supervision and direction of the Subadviser and,
ultimately, the Board of Trustees of the Portfolio, each Sector Adviser's
responsibilities are limited to managing its portion of the securities held by
the Portfolio in accordance with the Portfolio's stated investment objective
and policies, making investment decisions for the Portfolio and placing orders
to purchase and sell securities on behalf of the Portfolio. The following sets
forth certain information about each of the Sector Advisers:

MILLER/HOWARD INVESTMENTS, INC. serves as Sector Adviser to the utilities and
transportation sectors of the Portfolio. Miller/Howard is a registered
investment adviser which has been providing investment services to broker-
dealers, investment advisers, employee benefit plans, endowment portfolios,
foundations and other institutions and individuals since 1984. As of December
31, 1996, Miller/Howard held discretionary investment authority over
approximately $183 million of assets. Lowell G. Miller and Helen Hamada who are,
respectively, Miller/Howard's President, Secretary and a director and its Vice
President, Treasurer and a director, each owns more than 10% of the outstanding
voting securities of Miller/Howard. Mr. Miller controls Miller/Howard through
stock ownership. Miller/Howard is also the subadviser to the Utilities Stock
Portfolio, a corresponding portfolio to The Flex-funds' Total Return Utilities
Fund and The Flex-Partners' Utility Growth Fund. Mr. Miller is the portfolio
manager primarily responsible for the day-to-day management of those assets of
the Portfolio allocated to Miller/Howard. Mr. Miller has been associated with
Miller/Howard since 1984. Mr. Miller is a Trustee of the Trust, the Portfolio,
The Flex-funds, mutual funds whose corresponding portfolios are also advised by
the Manager, and such portfolios. Miller/Howard's principal executive offices
are located at 141 Upper Byrdcliffe Road, Post Office Box 549, Woodstock, New
York, 12498.

HALLMARK CAPITAL MANAGEMENT, INC. serves as Sector Adviser to the capital goods
sector of the Portfolio. Hallmark is a registered investment adviser which has
been providing investment services to individuals; banks; pension, profit
sharing, and other retirement plans; trusts; endowments; foundations; and other
charitable organizations since 1986. As of December 31, 1996, Hallmark held
discretionary investment authority over approximately $120 million of assets.
Peter S. Hagerman owns more than 10% of the outstanding voting securities of
Hallmark. Mr. Hagerman, Chairman of the Board, President, and Chief Executive
Officer, Thomas S. Moore, Senior Vice President and Chief Investment Officer,
and Kathryn A. Skwieralski, Senior Vice President, Treasurer, Chief Financial
and Administrative Officer, are the directors of Hallmark. Mr. Hagerman is the
portfolio manager primarily responsible for the day-to-day management of those
assets of the Portfolio allocated to Hallmark. Mr. Hagerman has been associated
with Hallmark since 1986. Hallmark's principal executive offices are located at
One Greenbrook Corporate Center, 100 Passaic Avenue, Fairfield, New Jersey,
07004.

<PAGE>

M. Hanley, Jr., President and Chief Executive Officer, is the sole director of
Barrow. Michael C. Mewhinney is the portfolio manager primarily responsible
for the day-to-day management of those assets of the Portfolio allocated to
Barrow. Mr. Mewhinney has been associated with Barrow since 1979. Barrow's
principal executive offices are located at 3232 McKinney Avenue, 15th Floor,
Dallas, Texas, 75204-2429.

THE MITCHELL GROUP, INC. serves as Sector Adviser to the energy sector of the
Portfolio. The Mitchell Group is a registered investment adviser which has been
providing investment services to individuals; banks; investment companies;
pension and profit sharing plans; charitable organizations, corporations and
other institutions since 1989. As of December 31, 1996, The Mitchell Group held
discretionary investment authority over approximately $245 million of assets.
Rodney Mitchell, President, Chief Executive Officer, Chief Financial Officer and
sole director, owns more than 10% of the outstanding voting securities of The
Mitchell Group. Mr. Mitchell is the portfolio manager primarily responsible for
the day-to-day management of those assets of the Portfolio allocated to The
Mitchell Group. Mr. Mitchell has been associated with The Mitchell Group since
1989. The Mitchell Group's principal executive offices are located at 1100
Louisiana, #4810, Houston, Texas, 77002.

ASHLAND MANAGEMENT INCORPORATED serves as Sector Adviser to the materials and
services sector of the Portfolio. Ashland is a registered investment adviser
which has been providing investment services to individuals, pension and profit
sharing plans, charitable organizations, corporations and other institutions
since 1975. As of December 31, 1996, Ashland managed accounts having a value of
approximately $1.45 billion. Charles C. Hickox, Chairman of the Board, Chief
Executive Officer and a director, and Perry v.S. Jones, President, Chief
Operating Officer and a director, each owns more than 10% of the outstanding
voting securities of Ashland. Terence J. McLaughlin, Managing Director of
Ashland, and Deborah C. Ohl, a Portfolio Management Associate, are the portfolio
managers primarily responsible for the day-to-day management of those assets of
the Portfolio allocated to Ashland. Mr. McLaughlin has been associated with
Ashland since 1984. Ms. Ohl has been employed by Ashland since August, 1992 and
has served as a Portfolio Management Associate for Ashland since 1993. From May,
1991 until July, 1992, Ms. Ohl was a research and sales assistant with Kidder,
Peabody & Co., Incorporated. Ashland's principal executive offices are located
at 26 Broadway, New York, New York, 10004.

<PAGE>

Neal, President of Kemper Funds Group, a unit of Zurich Kemper, Stephen B.
Timbers, President, Chief Executive Officer and Chief Investment Officer of
Zurich Kemper, and David N. Dreman, Chairman of the Board of Dreman. Jonathan
Kay is the portfolio manager primarily responsible for the day-to-day management
of those assets of the Portfolio allocated to Dreman. Mr. Kay has been
associated with Dreman since 1993. From 1990 to 1993, Mr. Kay was an associate
with J.S. Eliezer, a management consulting firm serving primarily the media
industry. Dreman's principal executive offices are located at 280 Park Avenue,
40th Floor, New York, New York 10017.

RCM CAPITAL MANAGEMENT, L.L.C. serves as Sector Adviser to the technology sector
of the Portfolio. RCM is a registered investment adviser that provides
investment services to institutional and individual clients and registered
investment companies, with approximately $25.6 billion of assets under
management as of December 31, 1996. RCM was established in April 1996, as the
successor to the business and operations of RCM Capital Management, a California
limited partnership, which, with its predecessors, has been in operation since
1970. RCM is a wholly-owned subsidiary of Dresdner Bank AG, an international
banking organization with principal executive offices in Frankfurt, Germany. The
Board of Managers of RCM is comprised of William L. Price, Chairman of the
Board, Chief Investment Officer and Principal of RCM, Michael J. Apatoff,
President, Chief Operating Officer and Principal of RCM, Hans-Dieter
Bauernfeind, General Manager of Dresdner, Gerhard Eberstadt, Senior Chairman of
Dresdner, George N. Fugelsang, Senior General Manager of Dresdner, John D.
Leland, Jr., Principal of RCM, Jeffrey S. Rudsten, Principal of RCM, William S.
Stack, Principal of RCM and Kenneth B. Weeman, Jr., Principal and Head of Equity
Trading of RCM. Walter C. Price and Huachen Chen, each Principals of RCM, are
the portfolio managers primarily responsible for the day-to-day management of
those assets of the Portfolio allocated to RCM. Messrs. Price and Chen have
managed equity portfolios on behalf of RCM since 1985. RCM's principal executive
offices are located at Four Embarcadero Center, San Francisco, California 94111.

Banking laws and regulations, including the Glass-Steagall Act as
presently interpreted by the Board of Governors of the Federal Reserve System,
prohibit certain banking entities, such as Dresdner, from sponsoring,
organizing, controlling or distributing the shares of a registered investment
company continuously engaged in the issuance of its shares, and prohibit banks
generally from underwriting securities. However, banks and their affiliates
generally can act as an adviser (or sub-subadviser) to an investment company
and can purchase shares of an investment company as agent for and upon the
order of customers. RCM believes that it may perform the services contemplated
by the investment management agreement without violating these banking law
regulations. However, future changes in legal requirements relating to the
permissible activities of banks and their affiliates at will as future
interpretations of current requirements, could prevent RCM from continuing to
perform investment management services for the Portfolio.

DISTRIBUTOR

Adviser Dealer Services, Inc. (the "Distributor"), 6000 Memorial Drive,
Dublin, Ohio 43017 serves as the distributor of the shares of the Fund. The
Distributor is an affiliated person of the Manager and a subsidiary of
Muirfield Investors, Inc. The Manager, the Subadviser or the Sector Advisers
may select the Distributor to execute transactions for the Portfolio, provided

<PAGE>

that the commissions, fees or other remuneration received by the Distributor
are reasonable and fair compared to those paid to other brokers in connection
with comparable transactions.

TRANSFER AGENT

Mutual Funds Service Co. ("MFSCO"), 6000 Memorial Drive, Dublin, Ohio 43017,
an affiliated person of the Manager and a wholly-owned subsidiary of Muirfield
Investors, Inc., provides stock transfer, dividend disbursing, and
administrative services to the Fund.

- ------------------------------------------------------------------------------
PORTFOLIO TRANSACTION POLICIES
- ------------------------------------------------------------------------------

Decisions to buy and sell securities are made by the Sector Advisers for
the assets assigned to them, and by the Manager and Subadviser for assets not
assigned to a Sector Adviser. Currently, each portfolio representing an industry
sector has one Sector Adviser. The Manager invests the Portfolio's liquidity
reserves and the Manager or the Subadviser may invest the Portfolio's assets in
financial futures contracts and related options. Each Sector Adviser makes
decisions to buy or sell securities independently from other Sector Advisers. In
addition, when a Sector Adviser's services are terminated and another retained,
the new Sector Adviser may significantly restructure the Portfolio's assets
assigned to it. These practices may increase the Portfolio's portfolio turnover
rates, realization of gains or losses, and brokerage commissions. The portfolio
turnover rates for the Portfolio may vary greatly from year to year as well as
within a year and may be affected by sales of investments necessary to meet cash
requirements for redemptions of shares. A high rate of turnover involves
correspondingly greater expenses, increased brokerage commissions and other
transaction costs, which must be borne by the Portfolio and their shareholders.
See "Portfolio Turnover" elsewhere in this Prospectus and in the Statement of
Additional Information. In addition, high portfolio turnover may result in
increased short-term capital gains, which, when distributed to shareholders, are
treated as ordinary income. See "Income Dividends and Taxes."

The Portfolio may effect portfolio transactions with or through the
Manager, Subadviser or Sector Advisers, or their affiliates, when the Manager,
Subadviser or Sector Advisers, as appropriate, determine that the Portfolio
will receive the best net price and execution. This standard would allow the
Manager, Subadviser or Sector Advisers, or their affiliates, to receive no
more than the remuneration that would be expected to be received by an
unaffiliated broker in a commensurate arm's-length transaction.

- ------------------------------------------------------------------------------
DISTRIBUTION PLANS
- ------------------------------------------------------------------------------

The Fund has adopted two plans of distribution pursuant to Rule 12b-1
(the "Distribution Plans") in accordance with the regulations under the
Investment Company Act of 1940, as amended (the "1940 Act"). Under the
provisions of the Distribution Plans, the Fund makes payments to the
Distributor based on an annual percentage of the average daily value of the
net assets of each class of shares as follows:

<PAGE>

CLASS DISTRIBUTION FEE
----- ----------------
A 0.25%
C 0.75%

The Fund has adopted two service plans (the "Service Plans"). Under
the provisions of the Service Plans, the fund makes payments to the
Distributor based on an annual percentage of the average daily value of the
net assets of each class of shares as follows:

CLASS SERVICE FEE
----- -----------
A 0.25%
C 0.25%

Some or all of the service fees are used to reimburse securities dealers
for personal services and/or the maintenance of shareholder accounts. A portion
of any initial commission paid to dealers for the sale of shares of the Fund
represents payment for personal services and/or the maintenance of shareholder
accounts by such dealers. Dealers who have sold Class A shares are eligible for
further reimbursement commencing as of the time of such sale. Dealers who have
sold Class C shares are eligible for further reimbursement after the first
twelve months during which such shares have been held of record by such dealer
as nominee for its clients (or by such clients directly). Any service fees
received by the Distributor and not allocated to dealers may be applied by the
Distributor in reduction of expenses incurred by it directly for personal
services and the maintenance of shareholder accounts.

The distribution fees are used primarily to offset initial and
ongoing commissions paid to securities dealers for selling such shares. Any
distribution fees received by the Distributor and not allocated to dealers may
be applied by the Distributor in connection with sales or marketing efforts,
including special promotional fees and cash and noncash incentives based upon
sales by securities dealers.

A rule of the National Association of Securities Dealers, Inc.
("NASD") limits the annual expenditures which the Fund may incur under the
Distribution Plans and the Service Plans to a total of 1%, of which 0.75% may
be used to pay distribution expenses and 0.25% may be used to pay shareholder
service fees. The NASD rule also limits the aggregate amount which the Fund
may pay for such distribution costs to 6.25% of gross share sales of a class
since the inception of any asset-based sales charge plus interest at the prime
rate plus 1% on unpaid amounts thereof (less any contingent deferred sales
charge). Such limitation does not apply to shareholder service fees.

The Plans were approved by the Board of Trustees, who made a
determination that there is a reasonable likelihood that the Plans will
benefit the Fund.

The Manager or the Subadviser may use its resources to pay expenses
associated with the sale of the Fund's shares. This may include payments to

<PAGE>

third parties such as banks or broker-dealers, that provide shareholder
support services or engage in the sale of the Fund's shares. However, the Fund
does not pay the Manager or Subadviser any separate fees for this service.

- ------------------------------------------------------------------------------
INCOME DIVIDENDS AND TAXES
- ------------------------------------------------------------------------------

DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS. The Fund's dividends are
declared payable to shareholders on a quarterly basis.

In December, the Fund may distribute an additional ordinary income
dividend (consisting of net short-term capital gains and undistributed income)
in order to preserve its status as a registered investment company (mutual
fund) under the Internal Revenue Code. Net long-term capital gains, if any,
also are declared and distributed in December. Dividends paid by the Fund with
respect to Class A shares and Class C shares, to the extent any dividends are
paid, will be calculated in the same manner at the same time, on the same day
and will be in the same amount except that each class will bear its own
distribution charges, resulting in lower dividends for Class C shares.
Distributions of net capital gains, if any, will be paid in the same amount
for Class A shares and Class C shares.

DISTRIBUTION OPTIONS. You may choose to receive dividends and capital
gain distributions in cash or to reinvest them in additional shares. Please
indicate your choice on your New Account Application or contact your dealer.
If you elect to receive dividends or capital gain distributions in cash and
the U.S. Postal Service returns your checks to us, the checks will be
reinvested in your account at the Fund's then-current net asset value. Until
we receive instructions to the contrary, subsequent distributions will be
reinvested in your account. In addition, we may reinvest, at the Fund's
then-current net asset value, any distribution checks that remain uncashed for
six months.

TAXES. The Fund intends to qualify as a regulated investment company
under Subchapter M of the Internal Revenue Code by distributing all, or
substantially all, of its net investment income and net realized capital gains
to shareholders each year.

The Fund's dividends and capital gain distributions are subject to
federal income tax whether they are received in cash or reinvested in
additional shares. Distributions declared in October, November, December and
paid in January of the following year are taxable as if they were paid on
December 31. The Fund expects to make such a distribution in future years.

Dividends from net investment income (including net short-term
capital gains) are taxable as ordinary income. Distributions from net
long-term capital gains, if any, are taxable as long-term capital gains,
regardless of how long you have held your shares.

A portion of the Fund's dividends may qualify for the
dividends-received deduction available to corporations. The Fund will send you
a tax statement by January 31 showing the tax status of distributions you
received in the previous year and will file a copy with the IRS.

<PAGE>

Form 1099-DIV, Dividends and Distributions will not be provided to
individuals if gross dividends and other distributions are less than $10 or to
corporations, retirement plans (including IRA's), tax-exempt organizations or
to registered securities dealers.

You may realize a capital gain or loss when you redeem (sell) or
exchange shares of the Fund. For most types of accounts, the proceeds from
your redemption transactions will be reported to you and the IRS annually.
However, because the tax treatment depends on your purchase price and personal
tax position, you should keep your regular account statements to use in
determining your taxes.

"BUYING A DIVIDEND." The timing of your investment in the Fund could
have undesirable tax consequences.

If you opened a new account or bought more shares for your current
account just before the day a dividend or capital gain distribution was
reflected in the Fund's share price, you would receive a portion of your
investment back as a taxable distribution. This practice is sometimes referred
to as "buying a dividend."

BACKUP WITHHOLDING. The Fund is required by federal law to withhold
31% of reportable dividends, capital gain distributions, or redemptions
payable to shareholders who have not complied with IRS regulations. To avoid
this withholding requirement, you must certify on your account application (or
on IRS Form W-9) that your social security or taxpayer identification number
(TIN) is correct and that you are not subject to backup withholding for
previous under reporting to the IRS, or that you are exempt from backup
withholding.

The Fund may refuse to sell shares to investors who have not complied
with these requirements, either before or at the time of purchase. Until we
receive your certified TIN, we may redeem your shares in the Fund at any time.

- ------------------------------------------------------------------------------
HOW NET ASSET VALUE IS DETERMINED
- ------------------------------------------------------------------------------

Net asset value per share is determined at each closing of the New
York Stock Exchange each day the Exchange is open for business and each other
day during which there is a sufficient degree of trading that the current net
asset value of the Fund's shares might be materially affected by changes in
the value of the securities held by the Portfolio. Net asset value is obtained
by dividing the value of the Fund's assets (i.e., the value of its investment
in the Portfolio and other assets), less its liabilities, by the total number
of its shares of beneficial interest outstanding at the time. Net asset value
is determined separately for Class A shares and Class C shares. Although the
legal rights of Class A shares and Class C shares are substantially identical,
the different expenses borne by each class will result in different net asset
values and dividends. The net asset value of Class C shares will generally be
lower than the net asset value of Class A shares as a result of the larger
distribution fee accrual with respect to Class C shares.

<PAGE>

- ------------------------------------------------------------------------------
PERFORMANCE INFORMATION AND REPORTS
- ------------------------------------------------------------------------------

The Fund's performance may be used from time to time in
advertisements, shareholder reports or other communications to shareholders or
prospective shareholders. Performance information may include the Fund's
investment results and/or comparisons of its investment results to the
Standard & Poor's 500 Composite Stock Price Index or other various unmanaged
indices or results of other mutual funds. Investment results as used in such
communications will be calculated on a total rate of return basis in the
manner set forth below. From time to time, Fund rankings may be quoted from
various sources, such as Lipper Analytical Services, Inc. and Morningstar
Mutual Fund Report.

The Fund may provide period and average annualized "total return"
quotations. The Fund's "total return" refers to the change in the value of an
investment in the Fund over a stated period based on any change in net asset
value per share and including the value of any shares purchasable with any
dividends or capital gains distributed during such period. Period total return
may be annualized. Period and average annualized total return are calculated
separately for Class A shares and Class C shares. Average annual total return
smoothes out variations in performance and takes into account any applicable
initial or contingent deferred sales charge.

An annualized total return is a compounded total return which assumes
that the period total return is generated over a one-year period, and that all
dividends and capital gain distributions are reinvested. An annualized total
return will be slightly higher than a period total return if the period is
shorter than one year, because of the assumed reinvestment.

Unlike some bank deposits or other investments which pay a fixed
yield for a stated period of time, the total return of the Fund will vary
depending upon interest rates, the current market value of the securities held
by the Portfolio and changes in the Fund's expenses. In addition, during
certain periods for which total return quotations may be provided, the Manager
and/or the Subadviser may have voluntarily agreed to waive portions of their
fees or reimburse Fund expenses on a month-to-month basis. Such waivers and
reimbursements will have the effect of increasing the Fund's net income (and
therefore its total return) during the period such waivers and reimbursements
are in effect.

Shareholders will receive financial reports semi-annually that
include the Fund's financial statements, including listings of investment
securities held by the Portfolio at those dates. Annual reports are audited by
independent accountants.

- ------------------------------------------------------------------------------
OTHER INFORMATION
- ------------------------------------------------------------------------------

SHARES OF BENEFICIAL INTEREST

The Trust's Declaration of Trust permits the Trust to offer and sell
an unlimited number of full and fractional shares of beneficial interest in
each of the Trust's existing funds and to create additional funds. All shares

<PAGE>

have a par value of $.10 per share, are fully paid, non-assessable and fully
transferable when issued. All shares are issued as full or fractional shares.

A fraction of a share has the same rights and privileges as a full
share. Each Fund of the Trust will issue its own series of shares of
beneficial interest. The shares of each Fund represent an interest only in
that Fund's assets (and profits or losses) and in the event of liquidation,
each share of a particular Fund would have the same rights to dividends and
assets as every other share of that Fund.

Each full or fractional share has a proportionate vote. On some
issues, such as the election of Trustees, all shares of the Trust vote
together as one series. On an issue affecting a particular Fund, only its
shares vote as a separate series. An example of such an issue would be a
fundamental investment restriction pertaining to only one Fund. In voting on a
Distribution Plan, approval of the Plan by the shareholders of a particular
Fund would make the Plan effective as to that Fund, whether or not it had been
approved by the shareholders of the other Funds.

The Trust is an entity of the type commonly known as a "Massachusetts
business trust." Under Massachusetts law, shareholders of such a business
trust may, under certain circumstances, be held personally liable as partners
for its obligations. However, the risk of a shareholder incurring financial
loss on account of shareholder liability is limited to circumstances in which
both inadequate insurance existed and the Trust itself was unable to meet its
obligations.

When matters are submitted for shareholder vote, shareholders of each
Fund will have one vote for each full share held and proportionate, fractional
votes for fractional shares held. A separate vote of a Fund is required on any
matter affecting the Fund on which shareholders are entitled to vote.
Shareholders of one Fund are not entitled to vote on a matter that does not
affect that Fund but that does require a separate vote of any other Fund.
There normally will be no meetings of shareholders for the purpose of electing
Trustees unless and until such time as less than a majority of Trustees
holding office have been elected by shareholders, at which time the Trustees
then in office will call a shareholders' meeting for the election of Trustees.
Any Trustee may be removed from office upon the vote of shareholders holding
at least two-thirds of the Trust's outstanding shares at a meeting called for
that purpose. The Trustees are required to call such a meeting upon the
written request of shareholders holding at least 10% of the Trust's
outstanding shares. Shareholders have under certain circumstances (e.g., upon
application and submission of certain specified documents to the Trustees of the
Trust by a specified number of shareholders) the right to communicate with
other shareholders in connection with requesting a meeting of shareholders for
the purpose of removing one or more Trustees.

The Portfolio, in which all the assets of the Fund will be invested,
is organized as a trust under the laws of the State of New York. The
Portfolio's Declaration of Trust provides that the Fund and other entities
investing in the Portfolio (e.g., other investment companies, insurance
company separate accounts, and common and commingled trust funds) will each be
liable for all obligations of that Portfolio. However, the risk of the Fund
incurring financial loss on account of such liability is limited to
circumstances in which both inadequate insurance existed and the Portfolio

<PAGE>

itself was unable to meet its obligations. Accordingly, the Trustees of the
Trust believe that neither the Fund nor its shareholders will be adversely
affected by reason of the Fund's investing in the Portfolio. In addition,
whenever the Trust is requested to vote on matters pertaining to the fundamental
policies of the Portfolio, the Trust will hold a meeting of the Fund's
shareholders and will cast its vote as instructed by the Fund's shareholders.

INVESTMENT STRUCTURE

Unlike other mutual funds which directly acquire and manage their own
portfolio of securities, the Fund seeks to achieve its investment objectives by
investing all of its assets in the Portfolio, a separate registered investment
company with the same investment objectives as the Fund. Therefore, an
investor's interest in the Portfolio's securities is indirect. In addition to
selling a beneficial interest to the Fund, the Portfolio may sell beneficial
interests to other mutual funds or institutional investors. Such investors will
invest in the Portfolio on the same terms and conditions and will pay a
proportionate share of the Portfolio's expenses. However, the other investors
investing in the Portfolio are not required to sell their shares at the same
public offering price as the Fund. Investors in the Fund should be aware that
these differences may result in differences in returns experienced by investors
in the different funds that invest in the Portfolio. Such differences in returns
are also present in other mutual fund structures. Information concerning other
holders of interests in the Portfolio is available by contacting the Trust by
calling: 1-800-494-FLEX, or (614) 766-7074.

Smaller funds investing in the Portfolio may be materially affected by
the actions of larger funds investing in the Portfolio. For example, if a large
fund withdraws from the Portfolio, the remaining funds may experience higher pro
rata operating expenses, thereby producing lower returns. Additionally, the
Portfolio may become less diverse, resulting in increased portfolio risk.
(However, this possibility also exists for traditionally structured funds which
have large or institutional investors.) Also, funds with a greater pro rata
ownership in the Portfolio could have effective voting control of the operations
of the Portfolio. Whenever the Trust is requested to vote on matters pertaining
to the Portfolio, the Trust will hold a meeting of shareholders of the Fund and
will cast all of its votes in the same proportion as do the Fund's shareholders.
Certain changes in the Portfolio's investment objectives, policies or
restrictions could require the Trust to withdraw the Fund's interest in the
Portfolio. Any such withdrawal could result in a distribution in kind of
portfolio securities (as opposed to a cash distribution from the Portfolio). If
such securities are distributed, the Fund could incur brokerage, tax or other
charges in converting the securities to cash. In addition, the distribution in
kind may result in a less diversified portfolio of investments or adversely
affect the liquidity of the Fund.

The Fund may withdraw its investment from the Portfolio at any time, if
the Board of Trustees of the Trust (who are the same persons who serve as the
Board of Trustees of the Portfolio) determines that it is in the best interests
of the Fund to do so. Upon any such withdrawal, the Board of Trustees would
consider what action might be taken, including the investment of all the assets
of the Fund in another pooled investment entity having the same investment
objectives as the Fund or the retaining of an investment adviser to manage the
Fund's assets directly. The inability to find an adequate investment pool or
investment adviser could have a significant impact on shareholders' investment
in the Fund.

As stated in "Investment Objectives and Policies", except as otherwise
provided herein, the Fund's investment objectives and policies are not
fundamental and may be changed by Trustees without shareholder approval. (No
such change would be made, however, without 30 days' written notice to
shareholders.)

For descriptions of the investment objectives and policies of the
Portfolio, see "Investment Objectives and Policies" and "Additional Investment
Policies." For descriptions of the management and expenses of the Portfolio, see
"The Trust and Its Management" herein, and "Investment Adviser and Manager",
"Investment Subadviser", "Investment Sub-subadvisers" and "Trustees and
Officers" in the Statement of Additional Information.

SHAREHOLDER MANUAL

- ------------------------------------------------------------------------------
HOW TO BUY SHARES
- ------------------------------------------------------------------------------

MINIMUM INVESTMENT -- The minimum investment to open an account is
$2,500, except an Individual Retirement Account (IRA) which has a $500
minimum. Subsequent investments in any account may be made in amounts of at
least $100.

You may open an account and make an investment by purchasing shares
through securities dealers having sales agreements with the Distributor. A
minimum investment of $2,500 ($500 for an IRA) is required to establish an

<PAGE>

account in the Fund. The minimum for subsequent investments in the Fund is
$100.

Direct purchase orders may be made by submitting a check. In the case
of a new account, fill out the New Account Application accompanying this
Prospectus. Be sure to specify the class of shares in which you wish to invest.
A check payable to the Core Equity Fund must accompany the New Account
Application. Payments may be made by check or Federal Reserve Draft payable to
the Core Equity Fund and should be mailed to the following address: THE
FLEX-PARTNERS, C/O MUTUAL FUNDS SERVICE CO., P. O. BOX 7177, DUBLIN, OHIO 43017.

Should an order to purchase shares be canceled because your check
does not clear, you will be responsible for any resulting losses or fees
incurred in the transaction. All orders for the purchase of shares are subject
to acceptance or rejection by the Fund or by the Distributor. Direct purchase
orders received by MFSCO by 4:00 p.m., Eastern time, are confirmed at that
day's public offering price. Direct purchase orders received by MFSCO after
4:00 p.m., Eastern time, are confirmed at the public offering price on the
following business day.

Wire orders for shares of the Fund received by dealers prior to 4:00
p.m., Eastern time, and received by MFSCO before 5:00 p.m., Eastern time, on
the same day are confirmed at that day's public offering price. Orders
received by dealers after 4:00 p.m., Eastern time, are confirmed at the public
offering price on the following business day. It is the dealer's obligation to
place the order with MFSCO before 5:00 p.m., Eastern time, and to forward
payment to Star Bank, N.A., the Custodian for the Fund.

If the wire order is for a new account, you must telephone the Fund
prior to making your initial investment. Call 1-800-494-FLEX, or (614)
766-7074. Be sure to specify the name of the Fund and class of shares in which
you wish to invest. Advise the Fund of the amount you wish to invest and
obtain an account number and instructions. Have your bank wire federal funds
to:

Star Bank, N.A. Cinti/Trust
ABA #: 042-00001-3
Attention: The Flex-Partners Core Equity Fund
Credit Account Number: 486447980
Account Name (your name)
Personal Account No. (Your Flex-Partners account number)

Direct purchase orders received by MFSCO by 4:00 p.m., Eastern time,
are confirmed at that day's net asset value. Direct investments received by
MFSCO after 4:00 p.m. and orders received by dealers after 5:00 p.m. are
confirmed at the net asset value next determined on the following business
day.

No stock certificates will be issued. Instead, an account with MFSCO
is established for each investor and all shares purchased or received,
including those acquired through the reinvestment of dividends and
distributions, are registered on the books of the Fund and credited to such
account.

<PAGE>

The Fund will not permit redemptions until it receives the New
Account Application in good order.

SUBSEQUENT INVESTMENTS -- Subsequent investments in an existing
account in the Fund may be made by mailing a check payable to the Core Equity
Fund. Please include your account number and the class of shares in which you
wish to invest on the check and mail as follows:

THE FLEX-PARTNERS
C/O MUTUAL FUNDS SERVICE CO.
P. O. BOX 7177
DUBLIN, OHIO 43017

Subsequent investments may also be made by bank wire as described
above. It is necessary to notify the Fund prior to each wire purchase. Wires
sent without notifying the Fund will result in a delay of the effective date
of your purchase.

PURCHASING SHARES -- PURCHASE OPTIONS -- You may purchase "Class A"
Shares or "Class C" Shares of the Fund. Class A and Class C Shares bear sales
charges in different forms and amounts. Class A Shares are sold with a sales
charge at the time of purchase, which varies with the amount invested. Class C
Shares have no initial sales charge but are subject to a contingent deferred
sales charge if redeemed within twenty four months from purchase. Under a Rule
12b-1 distribution plan that provides for distribution fees and a service plan
that provides for asset based service fees, Class C Shares have a higher
distribution fee which may cause a long-term shareholder to pay more than the
economic equivalent of the maximum Class A Share initial sales charge. You
should choose the method of purchasing shares (Class A or Class C) that is
most beneficial given the amount of your purchase, the length of time you
expect to hold the shares and other relevant circumstances. Maximum sales
charges and fees are set forth in "Synopsis of Financial Information" above
and quantity discounts for the Class A initial sales charge are set forth
below.

CLASS A SHARES of the Fund are sold at net asset value plus the
applicable sales charge as shown in the table below (the "Offering Price") for
purchases made at one time by a single purchaser, by an individual, his or her
spouse and their children under age 21, or by a single trust account. Class A
Shares also bear a Rule 12b-1 fee of .25% per annum (paid to the Distributor),
of their average net asset value. In addition, Class A shares bear an asset
based service fee of .25% per annum. The sales charge on Class A Shares is
allocated between your investment dealer and the Distributor as shown below:

AS A PERCENTAGE AS A PERCENTAGE
OF OFFERING OF NET ASSET
PRICE OF THE VALUE OF THE DEALER'S
SHARES SHARES SALES
AMOUNT INVESTED PURCHASED PURCHASED CONCESSION
- -------------------------------------------------------------------------------------------

Up to $100,000 4.00% 4.17% 3.50%
$100,001 to $249,999 3.50% 3.63% 3.00%

$250,000 to $499,999 3.00% 3.09% 2.50%
$500,000 to $999,999 2.50% 2.56% 2.00%
$1,000,000 or more None None None

</TABLE>

CUMULATIVE QUANTITY DISCOUNT. The above tables of reduced sales
charges also apply if the dollar amount of a purchase plus the net asset value
of Class A Shares then owned by the purchaser is more than $100,000. The sales
charge on the shares being purchased will then be at the rate applicable to
the aggregate value of such shares then owned plus the amount of the purchase.

To receive the cumulative quantity discount, the investor or
securities dealer must request the discount at the time of placing the
purchase order and give the Transfer Agent sufficient information to determine
and confirm that the purchase will qualify for the discount. The cumulative
quantity discount may be amended or terminated at any time as to all purchases
occurring thereafter.

LETTER OF INTENTION. An investor may also pay reduced sales charges
by signing and fulfilling the Letter of Intention on the New Account
Application which expresses the investor's intention to invest within the
specified 13-month period the amount in Class A Shares indicated. The Letter
of Intention may be back dated to include purchases made within 90 days prior
the signing of the Letter of Intention. The Letter of Intention will not be a
binding obligation on either the purchaser or the Fund.

Purchases made under the Letter of Intention are made at the sales
charge applicable to the aggregate amount to be invested under the Letter of
Intention as if all shares were purchased in a single transaction. During the
period covered by the Letter of Intention, the Transfer Agent will escrow
shares representing 5% of the intended purchase. If the intention is not
completed, a price adjustment is made, based upon the actual amount invested
within the period covered by the Letter of Intention, by redemption of
escrowed shares. A Letter of Intention can be amended: (a) during the 13-month
period if the purchaser files an amended Letter of Intention with the same
expiration date as the original and (b) automatically after the end of the
period, if the total purchases credited to the Letter of Intention qualify for
an additional reduction in sales charge.

CLASS C SHARES are sold at net asset value without an initial sales
charge but if redeemed within eighteen months of purchase (the "CDSC Period")
a contingent deferred sales charge ("CDSC") equal to 1.50% of the lesser of
the current market value or the cost of the shares being redeemed will apply
and if redeemed after eighteen months of purchase and before twenty four
months after purchase, a CDSC equal to .75% of the lesser of the current
market value or the cost of the shares being redeemed will apply. No CDSC will
be imposed on Class C Shares acquired by reinvestment of distributions. In
determining whether a CDSC is applicable, it will be assumed that a redemption
is made first of shares derived from reinvestment of distributions and second
of shares purchased during the CDSC Period. Class C Shares bear an asset based
service fee of 0.25% and a Rule 12b-1 fee that is higher than the Rule 12b-1
fee for Class A Shares. See "Distribution Plans." Class C Shares provide the

<PAGE>

benefit of putting all of an investor's dollars to work from the time the
investment is made, but will have a higher annual expense ratio and pay lower
dividends than Class A Shares due to the higher Rule 12b-1 fee.

All CDSC's imposed on redemptions are paid to the Distributor. The
Distributor intends to pay a commission of 1% of the purchase amount to
participating dealers at the time the investor purchases Class C shares.

SALES CHARGE WAIVERS: Directors, Trustees, officers and full-time
employees of the Portfolio, the Trust, the Manager, the Subadviser or the
Distributor, including members of the immediate families of such individuals
and employee benefit plans established by such entities, may purchase shares
of the Fund at net asset value.

The Fund may also sell Class A shares at net asset value without an
initial sales charge to clients of the Manager or the Subadviser, and to
registered investment advisers and financial planners purchasing for their
clients, by making arrangements to do so with the Trust and the Transfer Agent.

Shares of the Fund may be purchased at net asset value by
broker-dealers who have a sales agreement with the Distributor and by their
registered personnel and employees, including members of the immediate
families of such registered personnel and employees (i.e., spouse and minor
children only).

The Fund may waive the CDSC on redemption following the death of a
shareholder, or if a shareholder becomes unable to engage in any substantial
gainful activity by reason of a medically determinable physical or mental
impairment which can be expected to result in death or be of long-continued
and indefinite duration, and when a total or partial redemption is made in
connection with a distribution from IRAs or other qualified retirement plans
after attaining age 59-1/2. See "Other Shareholder Services - Systematic
Withdrawal Program" and the Statement of Additional Information.

Class A Shares of the Fund may be purchased at net asset value and
the Fund may waive the CDSC on the redemption of Class C Shares owned by
banks, bank trust departments, savings and loan associations, and federal and
state credit unions either in their fiduciary capacities or for their own
accounts. These institutions may charge fees to clients for whose accounts
they purchase shares at net asset value or for which the CDSC has been waived.

Class A Shares may be purchased without an initial sales charge on
accounts that are opened for shareholders by dealers where the amount invested
represents redemption proceeds from other funds, and where the shareholder has
paid a sales charge in connection with the purchase of such other fund's
shares, provided that (i) shares of the Fund are purchased within 60 days
after redemption of such other fund's shares; and (ii) sufficient
documentation of such redemption as the Transfer Agent may require shall be
provided at the time Fund shares are purchased. In addition, shareholders who
have redeemed shares of a mutual fund which is a series of The Flex-Partners
(each a "Flex-Partners Fund") may reinvest the proceeds in any Flex-Partners
Fund at net asset value if such proceeds are reinvested within 60 days after
the date of redemption.

<PAGE>

- ------------------------------------------------------------------------------
HOW TO MAKE WITHDRAWALS (REDEMPTIONS)
- ------------------------------------------------------------------------------

Shares are redeemed and funds withdrawn at net asset value per share
less, in the case of Class C shares, any applicable contingent deferred
sales charge. (See "How Net Asset Value Is Determined.")

BY MAIL -- A shareholder may redeem shares by mailing a written
request in good order to: The Flex-Partners, c/o Mutual Funds Service Co., P.
O. Box 7177, Dublin, OH 43017. Good order means that the request must be
signed by the shareholder(s) and the signature(s) must be guaranteed by an
eligible guarantor institution (a bank, broker-dealer, credit union,
securities exchange, clearing agency or savings association). Further
documentation may be required as to the authority of the person requesting
redemption of shares held of record in the name of corporations or trustees,
and other fiduciaries.

Amounts withdrawn are mailed without charge to the address printed on
your account statement.

BY BANK WIRE -- A shareholder may redeem by telephone by placing a
wire redemption through a securities dealer. Wire redemption requests received
by dealers prior to 4:00 p.m., Eastern time, and received by MFSCO before 5:00
p.m., Eastern time on the same day, are confirmed at that day's net asset
value per share. Direct wire redemption requests must be received by 4:00 p.m.
to be confirmed at that day's net asset value.

WHEN REDEMPTIONS ARE EFFECTIVE -- Redemptions are made at the net
asset value per share next determined after receipt of a redemption request
in good order. (See "How Net Asset Value Is Determined.")

WHEN PAYMENTS ARE MADE -- Shares are redeemed at their net asset
value per share next determined after receipt by MFSCO of the redemption
request in the form described above, less, in the case of Class C shares, any
applicable contingent deferred sales charge. Payment is normally made within
seven days after the redemption request, provided that payment in redemption
of shares purchased by check will be effected only after the check has been
collected, which may take up to fifteen (15) days from the purchase date. To
eliminate this delay it is advisable to purchase shares of the Fund by
certified check or wire.

- ------------------------------------------------------------------------------
EXCHANGE PRIVILEGE
- ------------------------------------------------------------------------------

An exchange represents the sale of shares of one fund and the
purchase of shares of another, which may produce a gain or loss for tax
purposes.

Your exchange will be processed at the net asset value next
determined after the Transfer Agent receives your exchange request. You will

<PAGE>

receive a prospectus along with your confirmation if you exchange into a fund
not offered in this Prospectus. The exchange feature may be modified or
discontinued at any time, upon notice to shareholders in accordance with
applicable rules adopted by the Securities and Exchange Commission.

Your exchange may be processed only if the shares of the fund to be
acquired are eligible for sale in your state and if the amount of your
transaction meets the minimum requirements for that fund. The exchange
privilege is only available in states in which it may be legally offered.

EXCHANGES OF CLASS A SHARES: You may exchange your Class A shares for
Class A shares of any Flex-Partners Fund and for shares of The Flex-funds
Money Market Fund, a single-class money market fund managed by the Manager.

EXCHANGES OF CLASS C SHARES: Class C shares of the Fund are
exchangeable at net asset value only for Class C shares of any other
Flex-Partners Fund. Class C shares of the Fund cannot be exchanged for Class A
shares of any Flex-Partners Fund.

The Fund reserves the right at any time, without prior notice, to
refuse exchange purchases by any person or group if, in the Manager or
Subadviser's judgment, the Fund would be unable to invest effectively in
accordance with its investment objectives and policies, or would otherwise
potentially be adversely affected.

IF YOU HAVE ANY QUESTIONS ON EXCHANGE OR REDEMPTION PROCEDURES, CALL YOUR
DEALER OR THE TRANSFER AGENT.

- ------------------------------------------------------------------------------
RETIREMENT PLANS
- ------------------------------------------------------------------------------

The Trust offers retirement plans which include a prototype Profit
Sharing Plan, a Money Purchase Pension Plan, a Salary Savings Plan--401(k),
Tax-Sheltered Custodial Account - 403(b)(7), an Individual Retirement Account
(IRA), a Simple IRA, and a Simplified Employee Pension (SEP) Plan. Plan Adoption
Agreements and other information required to establish a Flex-Partners
Retirement Plan are available from The Flex-Partners, c/o R. Meeder &
Associates, Inc., P.O. Box 7177, Dublin, Ohio 43017; or call 1-800-494-3539.

Minimum purchase requirements for retirement plan accounts are subject
to the same requirements as regular accounts, except for an IRA, which has a
reduced minimum purchase requirement. (See "How to Buy Shares.")

- ------------------------------------------------------------------------------
OTHER SHAREHOLDER SERVICES
- ------------------------------------------------------------------------------

AUTOMATIC ACCOUNT BUILDER: Regular investments in the Fund of $100 or
more will be deducted from a shareholder's checking or savings account and
invested in shares of the Fund. A shareholder's bank must be a member of the
Automated Clearing House (ACH). Shareholders wishing to add to their

<PAGE>

investment account must complete the Automatic Account Builder section of the
New Account Application. There is no additional charge for this service.

SYSTEMATIC WITHDRAWAL PROGRAM: A Systematic Withdrawal Program is
offered for any investor who wishes to receive regular distributions of $100
or more from his account. The investor must either own or purchase shares
having a value of at least $10,000 and advise the Trust in writing of the
amount to be distributed and the desired frequency, i.e., monthly, quarterly
or annually. This option may be exercised by completing the appropriate
section of the New Account Application. The investor should realize that if
withdrawals exceed income dividends, the invested principal may be depleted.

Systematic withdrawals from investor accounts owning Class C Shares
will be subject to the contingent deferred sales charge with the following
exceptions. No CDSC will be imposed on withdrawals: (1) that are made in
connection with a distribution from an IRA or other qualified retirement plan
after attaining age 59-1/2; or (2) on an amount which will not exceed 10%
annually of the "initial account value" -- i.e., the value of the Fund account
at the time the shareholder elects to participate in the systematic withdrawal
program and thereafter, the value of the account as of the first day of any
calendar year. The investor may make additional investments and may change or
stop the program at any time. There is no charge for this program.

- ------------------------------------------------------------------------------
SHAREHOLDER ACCOUNTS
- ------------------------------------------------------------------------------

The Trust maintains an account for each shareholder in full and
fractional shares. The Fund reserves the right to reject any purchase order,
and to waive minimum purchase requirements.

CONFIRMATION STATEMENT -- All purchase and sale transactions, and
dividend reinvestments, are confirmed promptly after they become effective.

ACCOUNTS BELOW MINIMUM -- The Trust reserves the right to redeem
shares in any account for their then current net asset value and pay the
proceeds to the shareholder if at any time the account has shares valued at
less than $1,000 ($500 for an IRA) as a result of redemptions by the
shareholder. The Trust also reserves the right to redeem the shares in any
account which may have been opened under a waiver of minimum purchase
requirements if sufficient additional shares were not subsequently purchased
to meet these requirements. Before a redemption is processed, the shareholder
will be allowed 30 days after written notice from the Trust to make an
additional investment sufficient to bring the value of shares in the account
to $1,000 ($500 for an IRA).

<PAGE>

INVESTMENT ADVISER
R. Meeder & Associates, Inc.

ADDRESS OF FUND & ADVISER
6000 Memorial Drive
Dublin, OH 43017
800-494-FLEX (3539)
614-766-7074 (in Central Ohio)

INVESTMENT SUBADVISER
Sector Capital Management, L.L.C.
5350 Poplar Avenue, Suite 490
Memphis, Tennessee 38119

DISTRIBUTOR
Adviser Dealer Services, Inc.
6000 Memorial Drive
Dublin, OH 43017
800-494-FLEX (3539)
614-766-7074 (in Central Ohio)

CUSTODIAN
Star Bank, N.A.
Star Bank Center
425 Walnut Street
Cincinnati, OH 45202

TRANSFER AGENT & DIVIDEND
DISBURSING AGENT
Mutual Funds Service Co.
6000 Memorial Drive
Dublin, OH 43017
800-494-FLEX
614-766-7074 (in Central Ohio)

AUDITORS
KPMG Peat Marwick LLP
Two Nationwide Plaza
Columbus, OH 43215

<PAGE>

THE CORE EQUITY FUND
A FUND OF THE FLEX-PARTNERS TRUST
STATEMENT OF ADDITIONAL INFORMATION

June 13, 1997

This Statement is not a prospectus but should be read in conjunction with the
Fund's current Prospectus (dated June 13, 1997). Please retain this document for
future reference. To obtain an additional copy of the Prospectus, please call
Mutual Funds Service Co. at 1-800-494-3539. Capitalized terms used and not
otherwise defined herein have the same meanings as defined in the Prospectus.

The Fund offers two classes of shares which may be purchased at the next
determined net asset value per share plus a sales charge which at the election
of the investor may be imposed (i) at the time of purchase (Class A shares) or
(ii) on a deferred basis (Class C shares). These alternatives permit an
investor to choose the method of purchasing shares that is most beneficial
given the amount of the purchase, the length of time the investor expects to
hold the shares and other circumstances.

Each Class A and Class C share represents an identical legal interest in the
investment portfolio of the Fund and has the same rights except that the Class
C shares bear the higher expenses of a distribution plan for such class which
will cause the Class C shares to have a higher expense ratio and to pay lower
dividends than the Class A shares. Each class will have exclusive voting
rights with respect to its distribution plan. Although the legal rights of
holders of Class A and Class C shares are identical the different expenses
borne by each class will result in different net asset values and dividends.
The two classes also have different exchange privileges.

TABLE OF CONTENTS PAGE

Investment Policies and Limitations 2
Portfolio Transactions 12
Valuation of Portfolio Securities 14
Performance 15
Additional Purchase and Redemption Information 17
Distributions and Taxes 21
Investment Adviser and Manager 22
Investment Subadviser 24
Investment Sub-subadvisers 25
The Distributor 30
Trustees and Officers 31
Flex-Partners Retirement Plans 35
Contracts With Companies Affiliated With Manager 37
Description of the Trust 37

INVESTMENT ADVISER INVESTMENT SUBADVISER
R. Meeder & Associates, Inc. Sector Capital Management, L.L.C.

DISTRIBUTOR TRANSFER AGENT
Adviser Dealer Services, Inc. Mutual Funds Service Co.

<PAGE>

INVESTMENT POLICIES AND LIMITATIONS

The following policies and limitations supplement those set forth in
the Prospectus. Unless otherwise noted, whenever an investment policy or
limitation states a maximum percentage of the Portfolio's assets that may be
invested in any security or other asset, or sets forth a policy regarding
quality standards, such standard or percentage limitation will be determined
immediately after and as a result of the Portfolio's acquisition of such
security or other asset. Accordingly, any subsequent change in values, net
assets, or other circumstances will not be considered when determining whether
the investment complies with the Fund's investment policies and limitations.

The Fund's fundamental investment limitations cannot be changed
without approval by a "majority of the outstanding voting securities" (as
defined in the Investment Company Act of 1940) of the Fund. However, except
for the fundamental investment limitations set forth below, the investment
policies and limitations described in this Statement of Additional Information
are not fundamental and may be changed by the Trustees without shareholder
approval. THE FOLLOWING ARE THE PORTFOLIO'S FUNDAMENTAL INVESTMENT LIMITATIONS
SET FORTH IN THEIR ENTIRETY; PROVIDED THAT NOTHING IN THE FOLLOWING INVESTMENT
RESTRICTIONS WILL PREVENT THE FUND FROM INVESTING ALL OR PART OF THE FUND'S
ASSETS IN AN OPEN-END MANAGEMENT INVESTMENT COMPANY WITH THE SAME INVESTMENT
OBJECTIVE AS THE FUND. THE FUND OR THE PORTFOLIO MAY NOT:

(1) with respect to 75% of the Portfolio's total assets, purchase the
securities of any issuer (other than obligations issued or guaranteed by the
government of the United States, or any of its agencies or instrumentalities)
if, as a result thereof, (a) more than 5% of the Portfolio's total assets
would be invested in the securities of such issuer, or (b) the Fund would hold
more than 10% of the voting securities of such issuer;

(2) issue senior securities, except as permitted under the Investment
Company Act of 1940;

(3) borrow money, except that the Portfolio may borrow money for
temporary or emergency purposes (not for leveraging or investment) in an
amount not exceeding 33-1/3% of its total assets including the amount
borrowed less liabilities (other than borrowings). Any borrowings that come
to exceed this amount will be reduced within three days (not including Sundays
and holidays) to the extent necessary to comply with the 33-1/3% limitation;

(4) underwrite securities issued by others (except to the extent that
the Portfolio may be deemed to be an underwriter within the meaning of the
Securities Act of 1933 in the disposition of restricted securities);

(5) purchase the securities of any issuer (other than securities
issued or guaranteed by the U.S. government or any of its agencies or

<PAGE>

instrumentalities) if, as a result, more than 25% of the Portfolio's total
assets would be invested in the securities of companies whose principal
business activities are in the same industry;

(6) purchase or sell real estate unless acquired as a result of
ownership of securities or other instruments (but this shall not prevent the
Portfolio from investing in securities or other instruments backed by real
estate or securities of companies engaged in the real estate business); or

(7) purchase or sell physical commodities unless acquired as a result
of ownership of securities or other instruments (but this shall not prevent
the Portfolio from purchasing or selling options and futures contracts or from
investing in securities or other instruments backed by physical commodities).

THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL, AND MAY BE CHANGED
WITHOUT SHAREHOLDER APPROVAL.

(i) The Portfolio does not currently intend to engage in short sales,
but may engage in short sales "against the box" to the extent that the
Portfolio contemporaneously owns or has the right to obtain at no added cost
securities identical to those sold short, and provided that transactions in
futures contracts and options are not deemed to constitute selling securities
short.

(ii) The Portfolio does not currently intend to purchase securities
on margin, except that the Fund may obtain such short-term credits as are
necessary for the clearance of transactions, and provided that margin payments
in connection with futures contracts and options on futures contracts shall
not constitute purchasing securities on margin.

(iii) The Portfolio may borrow money only from a bank. The Portfolio
will not purchase any security while borrowings representing more than 5% of
its total assets are outstanding.

(iv) The Portfolio does not currently intend to purchase any security
if, as a result, more than 10% of its net assets would be invested in
securities that are deemed to be illiquid because they are subject to legal or
contractual restrictions on resale or because they cannot be sold or disposed
of in the ordinary course of business at approximately the prices at which
they are valued, including repurchase agreements with remaining maturities in
excess of seven days or securities without readily available market quotes.

(v) The Portfolio does not currently intend to invest in securities
of real estate investment trusts that are not readily marketable, or to invest
in securities of real estate limited partnerships that are not listed on the
New York Stock Exchange or the American Stock Exchange or traded on the NASDAQ
National Market System.

<PAGE>

(vi) The Portfolio does not currently intend to purchase securities
of other investment companies. This limitation does not apply to securities
received as dividends, through offers of exchange, or as a result of
reorganization, consolidation, or merger.

(vii) The Portfolio does not currently intend to purchase the
securities of any issuer (other than securities issued or guaranteed by the
U.S. Government or political subdivisions thereof) if, as a result, more than
5% of its total assets would be invested in the securities of business
enterprises that, including predecessors, have a record of less than three
years of continuous operation.

(viii) The Portfolio does not currently intend to purchase warrants,
valued at the lower of cost or market, in excess of 5% of the Portfolio's net
assets. Included in that amount, but not to exceed 2% of the Portfolio's net
assets, may be warrants that are not listed on the New York Stock Exchange or
the American Stock Exchange. Warrants acquired by the Portfolio in units or
attached to securities are not subject to these restrictions.

(ix) The Portfolio does not currently intend to invest in oil, gas,
or other mineral exploration or development programs or leases.

(x) The Portfolio does not currently intend to purchase the
securities of any issuer if those officers and Trustees of the Trust and those
officers and directors of the Manager, the Subadviser, or the Sector Advisers
who individually own more than 1/2 of 1% of the securities of such issuer,
together own more than 5% of such issuer's securities.

For the Portfolio's limitations on futures and options transactions, see
the section entitled "Limitations on Futures and Options Transactions." For the
Portfolio's limitations on short sales, see the section entitled "Short Sales."

MONEY MARKET INSTRUMENTS When investing in money market instruments, the
Portfolio will limit its purchases, denominated in U.S. dollars, to the
following securities.

U.S. Government Securities and Securities of its Agencies and
Instrumentalities - obligations issued or guaranteed as to principal or
interest by the United States or its agencies (such as the Export Import Bank
of the United States, Federal Housing Administration, and Government National
Mortgage Association) or its instrumentalities (such as the Federal Home Loan
Bank, Federal Intermediate Credit Banks and Federal Land Bank), including
Treasury bills, notes and bonds.

Bank Obligations and Instruments Secured Thereby - obligations
(including certificates of deposit, time deposits and bankers' acceptances) of
domestic banks having total assets of $1,000,000,000 or more, instruments
secured by such obligations and obligations of foreign branches of such banks,
if the domestic parent bank is unconditionally liable to make payment on the
instrument if the foreign branch fails to make payment for any reason. The

<PAGE>

Portfolio may also invest in obligations (including certificates of deposit
and bankers' acceptances) of domestic branches of foreign banks having assets
of $1,000,000,000 or more, if the domestic branch is subject to the same
regulation as United States banks. The Portfolio will not invest at time of
purchase more than 25% of its assets in obligations of banks, nor will the
Portfolio invest more than 10% of its assets in time deposits.

High Quality Commercial Paper - The Portfolio may invest in
commercial paper rated no lower than "A-2" by Standard & Poor's Corporation or
"Prime-2" by Moody's Investors Services, Inc., or, if not rated, issued by a
company having an outstanding debt issue rated at least A by Standard & Poor's
or Moody's.

Private Placement Commercial Paper - Private placement commercial
paper consists of unregistered securities which are traded in public markets
to qualified institutional investors, such as the Portfolio. The Portfolio's
risk is that the universe of potential buyers for the securities, should the
Portfolio desire to liquidate a position, is limited to qualified dealers and
institutions, and therefore such securities could have the effect of being
illiquid.

High Grade Corporate Obligations - obligations rated at least A by
Standard & Poor's or Moody's. See rating information below.

Repurchase Agreements - See "Repurchase Agreements" below.

The Manager exercises due care in the selection of money market
instruments. However, there is a risk that the issuers of the securities may
not be able to meet their obligations to pay interest or principal when due.
There is also a risk that some of the Portfolio's securities might have to be
liquidated prior to maturity at a price less than original amortized cost or
value, face amount or maturity value to meet larger than expected redemptions.
Any of these risks, if encountered, could cause a reduction in net income or
in the net asset value of the Portfolio.

RATINGS

1. Moody's Investors Services, Inc.'s Corporate Bond Rating:

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 edge." 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 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
or protection may not be as large as in Aaa securities or fluctuation of

<PAGE>

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 or time. Such bonds lack outstanding
investment characteristics and in fact have speculative characteristics as
well.

2. Standard and Poor's Corporation's Corporate Bond Rating:

AAA - Bonds rated AAA are highest grade obligations. They possess the
ultimate degree of protection as to principal and interest. Marketwise they
move with interest rates, and hence provide the maximum safety on all counts.

AA - Bonds rated AA also qualify as high grade obligations, and in
the majority of instances differ from AAA issues only in small degree. Here,
too, prices move with the long-term money market.

A - Bonds rated A are regarded as upper medium grade. They have
considerable investment strength but are not entirely free from the adverse
effect of changes in economic and trade conditions. Interest and principal are
regarded as safe. They predominantly reflect money rates in their market
behavior but, to some extent, also economic conditions.

BBB - Bonds rated BBB are regarded as having an adequate capacity to
pay principal and interest. Whereas they normally exhibit protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay principal and interest for bonds
in this category than for bonds in the A category.

3. Commercial Paper Ratings:

Commercial paper rated A-1 by Standard & Poor's Corporation ("S&P")
has the following characteristics: Liquidity ratios are adequate to meet cash
requirements. Long term senior debt is rated "A" or better. The issuer has
access to at least two additional channels of borrowing. Basic earnings and
cash flow have an upward trend. Typically, the issuer's industry is well
established and the issuer has a strong position within the industry. The

<PAGE>

reliability and quality of management are unquestioned. Relative strength or
weakness of the above factors determines whether the issuer's commercial paper
is A-1, A-2, or A-3.

The rating P-1 is the highest commercial paper rating assigned by
Moody's Investors Service, Inc. ("Moody's"). Among the factors considered by
Moody's in assigning ratings are the following: (1) evaluation of the
management of the issuer; (2) economic evaluation of the issuer's industry or
industries and an appraisal of speculative-type risks which may be inherent in
certain areas; (3) evaluation of the issuer's products in relation to
competition and customer acceptance; (4) liquidity; (5) amount and quality of
long-term debt; (6) trend of earnings over a period of ten years; (7)
financial strength of a parent company and the relationships which exist with
the issuer; and (8) recognition by the management of obligations which may be
present or may arise as a result of public interest questions and preparations
to meet such obligations.

4. Description of Permitted Money Market Investments:

Commercial Paper - refers to promissory notes issued by corporations
in order to finance their short term credit needs.

U.S. Government Obligations - are bills, certificates of indebtedness
notes and bonds issued by the U.S. Treasury and agencies, authorities and
instrumentalities of the U.S. Government established under the authority of an
act of Congress. Some obligations of U.S. Government agencies, authorities and
instrumentalities are supported by the full faith and credit of the U.S.
Treasury, as for example, the Government National Mortgage Association; others
by the right of the issuer to borrow from the Treasury, as in the case of
Federal Farm Credit Banks and Federal National Mortgage Association; and
others only by the credit of the agency, authority or instrumentality; as for
example, Federal Home Loan Mortgage and Federal Home Loan Bank.

Repurchase Agreements - See "Repurchase Agreements" below.

Certificates of Deposit - are certificates issued against funds
deposited in a bank, are for a definite period of time, earn a specified or
variable rate of return and are normally negotiable.

Banker's Acceptances - are short-term credit instruments used to
finance the import, export, transfer or storage of goods. They are termed
"accepted" when a bank guarantees their payment at maturity.

Corporate Obligations - include bonds and notes issued by
corporations in order to finance longer term credit needs.

ILLIQUID INVESTMENTS are investments that cannot be sold or disposed
of in the ordinary course of business at approximately the prices at which
they are valued. Under the supervision of the Board of Trustees, the Manager,
Subadviser and/or Sector Advisers determine the liquidity of the Portfolio's
investments and, through reports from the Manager, Subadviser and/or Sector

<PAGE>

Advisers, the Board monitors investments in illiquid instruments. In
determining the liquidity of the Portfolio's investments, the Manager,
Subadviser and Sector Advisers may consider various factors, including (1) the
frequency of trades and quotations, (2) the number of dealers and prospective
purchasers in the marketplace, (3) dealer undertakings to make a market, (4)
the nature of the security (including any demand or tender features), and (5)
the nature of the marketplace for trades (including the ability to assign or
offset the Portfolio's rights and obligations relating to the investment).
Investments currently considered by the Portfolio to be illiquid include
repurchase agreements not entitling the holder to payment of principal and
interest within seven days, over-the-counter options, and non-government
stripped fixed-rate mortgage-backed securities. Also, the Manager, Subadviser
and/or Sector Advisers may determine some restricted securities to be
illiquid. However, with respect to over-the-counter options the Portfolio
writes, all or a portion of the value of the underlying instrument may be
illiquid depending on the assets held to cover the option and the nature and
terms of any agreement the Portfolio may have to close out the option before
expiration. In the absence of market quotations, illiquid investments are
priced at fair value as determined in good faith by the Board of Trustees. If
through a change in values, net assets, or other circumstances, the Portfolio
were in a position where more than 10% of its net assets were invested in
illiquid securities, it would seek to take appropriate steps to protect
liquidity.

RESTRICTED SECURITIES generally can be sold in privately negotiated
transactions, pursuant to an exemption from registration under the Securities
Act of 1933, or in a registered public offering. Where registration is
required, the Portfolio may be obligated to pay all or part of the
registration expense and a considerable period may elapse between the time it
decides to seek registration and the time the Portfolio may be permitted to
sell a security under an effective registration statement. If, during such a
period, adverse market conditions were to develop, the Portfolio might obtain
a less favorable price than prevailed when it decided to seek registration of
the security.

REPURCHASE AGREEMENTS. In a repurchase agreement, the Portfolio
purchases a security and simultaneously commits to resell that security to the
seller at an agreed upon price on an agreed upon date within a number of days
from the date of purchase. The resale price reflects the purchase price plus
an agreed upon incremental amount which is unrelated to the coupon rate or
maturity of the purchased security. A repurchase agreement involves the
obligation of the seller to pay the agreed upon price, which obligation is in
effect secured by the value (at least equal to the amount of the agreed upon
resale price and marked to market daily) of the underlying security. The
Portfolio may engage in repurchase agreements with respect to any security in
which it is authorized to invest.

While it does not presently appear possible to eliminate all risks
from these transactions (particularly the possibility of a decline in the
market value of the underlying securities, as well as delays and costs to the
Portfolio in connection with bankruptcy proceedings), it is the Portfolio's

<PAGE>

current policy to limit repurchase agreement transactions to parties whose
creditworthiness has been reviewed and found satisfactory by the Manager.

LIMITATIONS ON FUTURES AND OPTIONS TRANSACTIONS. The Portfolio will
not: (a) write call options if, as a result, more than 25% of the Portfolio's
total assets would be hedged with options under normal conditions; or (b)
purchase futures contracts if, as a result, the Portfolio's total obligations
upon settlement or exercise of purchased futures contracts would exceed 25% of
its total assets. These limitations do not apply to options attached to or
acquired or traded together with their underlying securities, and do not apply
to securities that incorporate features similar to options. The above
limitations on the Portfolio's investments in futures contracts and options,
and the Portfolio's policies regarding futures contracts and options discussed
elsewhere in this Statement of Additional Information, may be changed as
regulatory agencies permit.

FUTURES CONTRACTS. When the Portfolio purchases a futures contract,
it agrees to purchase a specified underlying instrument at a specified future
date. When the Portfolio sells a futures contract, it agrees to sell the
underlying instrument at a specified future date. The price at which the
purchase and sale will take place is fixed when the Portfolio enters into the
contract.

Some currently available futures contracts are based on indices of
securities-prices, such as the Standard & Poor's 500 Composite Stock Price
Index (S&P 500). Futures can be held until their delivery dates, or can be
closed out before then if a liquid secondary market is available.

The value of a futures contract tends to increase and decrease in
tandem with the value of its underlying instrument. Therefore, purchasing
futures contracts will tend to increase the Portfolio's exposure to positive
and negative price fluctuations in the underlying instrument, much as if it
had purchased the underlying instrument directly. When the Portfolio sells a
futures contract, by contrast, the value of its futures position will tend to
move in a direction contrary to the market. Selling futures contracts,
therefore, will tend to offset both positive and negative market price
changes, much as if the underlying instrument had been sold.

FUTURES MARGIN PAYMENTS. The purchaser or seller of a futures
contract is not required to deliver or pay for the underlying instrument
unless the contract is held until the delivery date. However, both the
purchaser and seller are required to deposit "initial margin" with a futures
broker, known as a futures commission merchant (FCM), when the contract is
entered into. Initial margin deposits are typically equal to a percentage of
the contract's value.

If the value of either party's position declines, that party will be
required to make additional "variation margin" payments to settle the change
in value on a daily basis. The party that has a gain may be entitled to
receive all or a portion of this amount. Initial and variation margin payments

<PAGE>

do not constitute purchasing securities on margin for purposes of the
Portfolio's investment limitations. In the event of the bankruptcy of an FCM
that holds margin on behalf of the Portfolio, the Portfolio may be entitled to
return of margin owed to it only in proportion to the amount received by the
FCM's other customers, potentially resulting in losses to the Portfolio.

WRITING CALL OPTIONS. Writing a call option obligates the Portfolio
to sell or deliver the option's underlying instrument, in return for the
strike price, upon exercise of the option. The characteristics of writing call
options are similar to those of writing put options, except that writing calls
generally is a profitable strategy if prices remain the same or fall. Through
receipt of the option premium, a call writer mitigates the effects of a price
decline. At the same time, because a call writer must be prepared to deliver
the underlying instrument in return for the strike price, even if its current
value is greater, a call writer gives up some ability to participate in
security price increases.

CORRELATION OF PRICE CHANGES. Because there are a limited number of
types of exchange traded options and futures contracts, it is likely that the
standardized contracts available will not match the Portfolio's current or
anticipated investments exactly. The Portfolio may invest in options and
futures contracts based on securities with different issuers, maturities, or
other characteristics from the securities in which it typically invests, which
involves a risk that the options or futures position will not track the
performance of the Portfolio's other investments.

Options and futures prices can also diverge from the prices of their
underlying instruments, even if the underlying instruments match the
Portfolio's investments well. Options and futures prices are affected by such
factors as current and anticipated short-term interest rates, changes in
volatility of the underlying instrument, and the time remaining until
expiration of the contract, which may not affect security prices the same way.
Imperfect correlation may also result from differing levels of demand in the
options and futures markets and the securities markets, from structural
differences in how options and futures and securities are traded, or from
imposition of daily price fluctuation limits or trading halts.

The Portfolio may purchase or sell options and futures contracts with
a greater or lesser value than the securities it wishes to hedge or intends to
purchase in order to attempt to compensate for differences in volatility
between the contract and the securities, although this may not be successful
in all cases. If price changes in the Portfolio's options or futures positions
are poorly correlated with its other investments, the positions may fail to
produce anticipated gains or result in losses that are not offset by gains in
other investments.

LIQUIDITY OF OPTIONS AND FUTURES CONTRACTS. There is no assurance a
liquid secondary market will exist for any particular options or futures
contract at any particular time. Options may have relatively low trading
volume and liquidity if their strike prices are not close to the underlying
instrument's current price. In addition, exchanges may establish daily price

<PAGE>

fluctuation limits for options and futures contracts, and may halt trading if
a contract's price moves upward or downward more than the limit in a given
day. On volatile trading days when the price fluctuation limit is reached or a
trading halt is imposed, it may be impossible for the Portfolio to enter into
new positions or close out existing positions. If the secondary market for a
contract is not liquid because of price fluctuation limits or otherwise, it
could prevent prompt liquidation of unfavorable positions, and potentially
could require the Portfolio to continue to hold a position until delivery or
expiration regardless of changes in its value. As a result, the Portfolio's
access to other assets held to cover its options or futures positions could
also be impaired.

ASSET COVERAGE FOR FUTURES AND OPTIONS POSITIONS. The Portfolio will
comply with guidelines established by the SEC with respect to coverage of
options and futures strategies by mutual funds, and if the guidelines so
require, will set aside appropriate liquid assets in a segregated custodial
account in the amount prescribed. Securities held in a segregated account
cannot be sold while the futures or option strategy is outstanding, unless
they are replaced with other suitable assets. As a result, there is a
possibility that segregation of a large percentage of the Portfolio's assets
could impede portfolio management or the Fund's ability to meet redemption
requests or other current obligations.

SHORT SALES. The Portfolio may enter into short sales "against the
box" with respect to equity securities it holds. For example, if a Sector
Adviser anticipates a decline in the price of a stock the Portfolio holds, it
may sell the stock short "against the box." If the stock price subsequently
declines, the proceeds of the short sale could be expected to offset all or a
portion of the stock's decline. The Portfolio currently intends to hedge no
more than 15% of its total assets with short sales "against the box" on equity
securities under normal circumstances.

When the Portfolio enters into a short sale "against the box", it
will be required to own or have the right to obtain at no added cost
securities identical to those sold short "against the box" and will be
required to continue to hold them while the short sale "against the box" is
outstanding. The Portfolio will incur transaction costs, including interest
expense, in connection with opening, maintaining, and closing short sales.

PORTFOLIO TURNOVER.

The Portfolio's portfolio turnover rate for the fiscal year ended
December 31, 1996 was 82% (1995 - 338%). The Portfolio began the year fully
invested in the stock market. For approximately two months (early March
through early May) 50% of the Portfolio's assets were invested defensively in
money market securities. Also, in the period from mid-July through October,
various portions of the Portfolio were invested defensively in cash
equivalents and/or Treasury Bonds. The periods of defensive positions in
March-May and July-October were in response to technical weakness and negative
trends in the equity markets.

<PAGE>

Major changes in the Portfolio has resulted in portfolio turnover rates
of as much as 338%, which is greater than most other investment companies,
including many which emphasize capital appreciation as a basic policy. The
policies of the Growth Stock Portfolio may be expected to result in
correspondingly heavier brokerage commissions and taxes, which ultimately must
be borne by the Trust's shareholders.

Management is presently unable to predict the portfolio turnover rate
for the current year. It is conceivable that the turnover rate for the Portfolio
will exceed 300% in the first year.

PORTFOLIO TRANSACTIONS

All orders for the purchase or sale of portfolio securities are
placed on behalf of the Portfolio by the Manager, Subadviser or Sector
Advisers pursuant to authority contained in the investment advisory agreement,
investment subadvisory agreement and investment sub-subadvisory agreements.
The Manager, Subadviser and Sector Advisers are also responsible for the
placement of transaction orders for accounts for which they or their
affiliates act as investment adviser. In selecting broker-dealers, subject to
applicable limitations of the federal securities laws, the Manager, Subadviser
and Sector Advisers consider various relevant factors, including, but not
limited to, the size and type of the transaction; the nature and character of
the markets for the security to be purchased or sold; the execution
efficiency, settlement capability, and financial condition of the
broker-dealer firm; the broker-dealer's execution services rendered on a
continuing basis; the reasonableness of any commissions, and arrangements for
payment of Portfolio expenses.

The Portfolio may execute portfolio transactions with broker-dealers
who provide research and execution services to the Portfolio or other accounts
over which the Manager, Subadviser or Sector Advisers or their affiliates
exercise investment discretion. Such services may include advice concerning
the value of securities; the advisability of investing in, purchasing or
selling securities; the availability of securities or the purchasers or
sellers of securities; furnishing analyses and reports concerning issuers
industries, securities, economic factors and trends, portfolio strategy, and
performance of accounts; and effecting securities transactions and performing
functions incidental thereto (such as clearance and settlement). The selection
of such broker-dealers generally is made by the Manager, Subadviser and Sector
Advisers (to the extent possible consistent with execution considerations) in
accordance with a ranking of broker-dealers determined periodically by the
Manager, Subadviser and Sector Advisers' investment staffs based upon the
quality of research and execution services provided.

The receipt of research from broker-dealers that execute transactions
on behalf of the Portfolio may be useful to the Manager, Subadviser and Sector
Advisers in rendering investment management services to the Portfolio or their
other clients, and conversely, such research provided by broker-dealers who
have executed transaction orders on behalf of other Manager, Subadviser and
Sector Advisers' clients may be useful to the Manger, Subadviser and Sector
Advisers in carrying out their obligations to the Portfolio. The receipt of
such research is not expected to reduce the Manager, Subadviser and Sector
Advisers' normal independent research activities; however, it enables the
Manager, Subadviser and Sector Advisers to avoid the additional expenses that
could be incurred if the Manager, Subadviser and Sector Advisers tried to
develop comparable information through their own efforts.

<PAGE>

Subject to applicable limitations of the federal securities laws,
broker-dealers may receive commissions for agency transactions that are in
excess of the amount of commissions charged by other broker-dealers in
recognition of their research and execution services. In order to cause the
Portfolio to pay such higher commissions, the Manager, Subadviser and/or
Sector Advisers must determine in good faith that such commissions are
reasonable in relation to the value of the brokerage and research services
provided by such executing broker-dealers viewed in terms of a particular
transaction or the Manager, Subadviser and/or Sector Advisers' overall
responsibilities to the Portfolio and their other clients. In reaching this
determination, the Manager, Subadviser and/or Sector Advisers will not attempt
to place a specific dollar value on the brokerage and research services
provided or to determine what portion of the compensation should be related to
those services.

The Manager, Subadviser and Sector Advisers are authorized to use
research services provided by and to place portfolio transactions with
brokerage firms that have provided assistance in the distribution of shares of
the Fund or shares of other Flex-funds funds or Flex-Partners funds to the
extent permitted by law.

The Manager, Subadviser and Sector Advisers may allocate brokerage
transactions to broker-dealers who have entered into arrangements with the
Manager, Subadviser and Sector Advisers under which the broker-dealer
allocates a portion of the commissions paid by the Portfolio toward payment of
the Portfolio or the Fund's expenses, such as transfer agent fees of Mutual
Funds Service Co. or custodian fees. The transaction quality must, however, be
comparable to those of other qualified broker-dealers.

The Trustees of the Portfolio periodically review the Manager,
Subadviser and Sector Advisers' performance of their responsibilities in
connection with the placement of portfolio transactions on behalf of the
Portfolio and review the commissions paid by the Portfolio over representative
periods of time to determine if they are reasonable in relation to the
benefits to the Portfolio.

From time to time, the Trustees of the Portfolio will review whether
the recapture for the benefit of the Portfolio of some portion of the
brokerage commissions or similar fees paid by the Portfolio on portfolio
transactions is legally permissible and advisable.

The Portfolio seeks to recapture soliciting broker-dealer fees on the
tender of portfolio securities, but at present no other recapture arrangements
are in effect. The Trustees of the Portfolio intend to continue to review
whether recapture opportunities are available and are legally permissible and,
if so, to determine in the exercise of their business judgment, whether it
would be advisable for the Portfolio to seek such recapture.

Although the Trustees and officers of the Portfolio are substantially
the same as those of other portfolios managed by the Manager, investment
decisions for the Portfolio are made independently from those of other

<PAGE>

portfolios managed by the Manager or accounts managed by affiliates of the
Manager. It sometimes happens that the same security is held in the portfolio
of more than one of these funds or accounts. Simultaneous transactions are
inevitable when several portfolios are managed by the same investment adviser,
particularly when the same security is suitable for the investment objective
of more than one portfolio.

When two or more portfolios are simultaneously engaged in the
purchase or sale of the same security, the prices and amounts are allocated in
accordance with a policy considered by the Portfolio Trustees to be equitable
to each portfolio. In some cases this system could have a detrimental effect
on the price or value of the security as far as the Portfolio is concerned. In
other cases, however, the ability of the Portfolio to participate in volume
transactions will produce better executions and prices for the Portfolio. It
is the current opinion of the Trustees of the Portfolio that the desirability
of retaining the Manager as investment adviser to the Portfolio outweighs any
disadvantages that may be said to exist from exposure to simultaneous
transactions. During the period from January 1, 1996 to December 31, 1996, the
Portfolio paid total commissions of $5,137 ($44,665 in 1995; $135,422 in 1994)
on the purchase and sale of common stocks. Brokerage commissions paid on the
purchases and sales by the Portfolio of futures and option contracts for the
year ended December 31, 1996 were $17,339 ($22,399 in 1995).

VALUATION OF PORTFOLIO SECURITIES

Portfolio securities are valued by various methods depending on the
primary market or exchange on which they trade. Equity securities for which
the primary market is the U.S. are valued at last sale price or, if no sale
has occurred, at the closing bid price. Short-term securities less than 60
days to maturity are valued either at amortized cost or at original cost plus
accrued interest, both of which approximate current value. Fixed-income
securities are valued primarily by a pricing service that uses a vendor
security valuation matrix which incorporates both dealer-supplied valuations
and electronic data processing techniques.

This twofold approach is believed to more accurately reflect fair
value because it takes into account appropriate factors such as institutional
trading in similar groups of securities, yield, quality, coupon rate,
maturity, type of issue, trading characteristics, and other market data
without exclusive reliance upon quoted, exchange, or over-the-counter prices.

Securities and other assets for which there is no readily available
market are valued in good faith by the Board of Trustees. The procedures set
forth above need not be used to determine the value of the securities owned by
the Portfolio if, in the opinion of the Board of Trustees, some other method
(e.g., closing over-the-counter bid prices in the case of debt instruments
traded on an exchange) would more accurately reflect the fair market value of
such securities.

<PAGE>

Generally, the valuation of equity securities, as well as corporate
bonds, U.S. government securities, money market instruments, and repurchase
agreements, is substantially completed each day at the close of the New York
Stock Exchange (NYSE).

The values of any such securities held by the Portfolio are
determined as of such time for the purpose of computing the Portfolio's net
asset value. If an extraordinary event that is expected to materially affect
the value of a portfolio security occurs after the close of an exchange on
which that security is traded, then the security will be valued as determined
in good faith by the Board of Trustees.

PERFORMANCE

The Fund may quote its performance in various ways. All performance
information supplied by the Fund in advertising is historical and is not
intended to indicate future returns. The Fund's share price and total returns
fluctuate in response to market conditions and other factors, and the value of
Fund shares when redeemed may be more or less than their original cost.

TOTAL RETURN CALCULATIONS. Total returns quoted in advertising
reflect all aspects of the Fund's return, including the effect of reinvesting
dividends and capital gain distributions, and any change in the Fund's net
asset value over the period. Average annual total return is determined
separately for Class A and Class C shares. Average annual returns will be
calculated by determining the growth or decline in value of a hypothetical
historical investment in the Fund over a stated period, and then calculating
the annually compounded percentage rate that would have produced the same
result if the rate of growth or decline in value had been constant over the
period. While average annual returns are a convenient means of comparing
investment alternatives, investors should realize that the Fund's performance
is not constant over time, but changes from year to year, and that average
annual returns represent averaged figures as opposed to the actual
year-to-year performance of the Fund.

In addition to average annual returns, the Fund may quote unaveraged
or cumulative total returns reflecting the simple change in value of an
investment over a stated period. Average annual and cumulative total returns
may be quoted as a percentage or as a dollar amount, and may be calculated for
a single investment, a series of investments, or series of redemptions over
any time period. Total returns may be broken down into their components of
income and capital (including capital gains and changes in share price) in
order to illustrate the relationship of these factors and their contributions
to total return. Total returns may be quoted on a before-tax or after-tax
basis. Total returns, yields, and other performance information may be quoted
numerically, or in a table, graph, or similar illustration.

Total return is computed by finding the average annual compounded
rates of return over the length of the base periods that would equate the
initial amount invested to the ending redeemable value, according to the
following formula:

<PAGE>

P (1+T)n = ERV
P = initial investment of $1,000
T = average annual total return
n = Number of years
ERV = ending redeemable value at the end of the base period

NET ASSET VALUE. Charts and graphs using the Fund's net asset values,
adjusted net asset values, and benchmark indices may be used to exhibit
performance. An adjusted net asset value includes any distributions paid by
the Fund and reflects all elements of its return. Unless otherwise indicated,
the Fund's adjusted net asset values are not adjusted for sales charges, if
any.

MOVING AVERAGES. The Fund may illustrate performance using moving
averages. A long-term moving average is the average of each week's adjusted
closing net asset value for a specified period. A short-term moving average is
the average of each day's adjusted closing net asset value for a specified
period. Moving Average Activity Indicators combine adjusted closing net asset
values from the last business day of each week with moving averages for a
specified period to produce indicators showing when a net asset value has
crossed, stayed above, or stayed below its moving average.

HISTORICAL FUND RESULTS. The Fund's performance may be compared to
the performance of other mutual funds in general, or to the performance of
particular types of mutual funds. These comparisons may be expressed as mutual
fund rankings prepared by Lipper Analytical Services, Inc. (Lipper), an
independent service located in Summit, New Jersey that monitors the
performance of mutual funds. Lipper generally ranks funds on the basis of
total return, assuming reinvestment of distributions, but does not take sales
charges or redemption fees into consideration, and total return is prepared
without regard to tax consequences. In addition to the mutual fund rankings,
the Fund's performance may be compared to mutual fund performance indices
prepared by Lipper.

From time to time, the Fund's performance may also be compared to
other mutual funds tracked by financial or business publications and
periodicals. For example, the Fund may quote Morningstar, Inc. in its
advertising materials. Morningstar, Inc. is a mutual fund rating service that
rates mutual funds on the basis of risk-adjusted performance. Rankings that
compare the performance of Flex-Partners or Flex-funds funds to one another in
appropriate categories over specific periods of time may also be quoted in
advertising.

In advertising materials, the Trust may reference or discuss its
products and services, which may include: other Flex-Partners or Flex-funds
funds; retirement investing; the effects of periodic investment plans and
dollar; cost averaging; saving for college; and charitable giving. In
addition, the Fund may quote financial or business publications and
periodicals, including model portfolios or allocations, as they relate to Fund
management, investment philosophy, and investment techniques. The Fund may

<PAGE>

also reprint, and use as advertising and sales literature, articles from
Reflexions, a quarterly magazine provided free of charge to Flex-Partners and
Flex-funds shareholders.

VOLATILITY. The Fund may quote various measures of volatility and
benchmark correlation in advertising. In addition, the Fund may compare these
measures to those of other funds. Measures of volatility seek to compare the
Fund's historical share price fluctuations or total returns to those of a
benchmark. Measures of benchmark correlation indicate how valid a comparative
benchmark may be. All measures of volatility and correlation are calculated
using averages of historical data.

MOMENTUM INDICATORS indicate the Fund's price movements over specific
periods of time. Each point on the momentum indicator represents the Fund's
percentage change in price movements over that period.

The Fund may advertise examples of the effects of periodic investment
plans, including the principle of dollar cost averaging. In such a program, an
investor invests a fixed dollar amount in a Fund at periodic intervals,
thereby purchasing fewer shares when prices are high and more shares when
prices are low. While such a strategy does not assure a profit or guard
against loss in a declining market, the investor's average cost per share can
be lower than if fixed numbers of shares are purchased at the same intervals.
In evaluating such a plan, investors should consider their ability to continue
purchasing shares during periods of low price levels.

The Fund may be available for purchase through retirement plans or
other programs offering deferral of, or exemption from, income taxes, which
may produce superior after-tax returns over time. For example, a $1,000
investment earning a taxable return of 10% annually would have an after-tax
value of $1,949 after ten years, assuming tax was deducted from the return
each year at a 31% rate. An equivalent tax deferred investment would have an
after tax value of $2,100 after ten years, assuming tax was deducted at a 31%
rate from the tax-deferred earnings at the end of the ten-year period.

ADDITIONAL PURCHASE AND REDEMPTION INFORMATION

The Fund is open for business and its net asset value per share (NAV)
is calculated each day the NYSE is open for trading. The NYSE has designated
the following holiday closings: New Year's Day, Washington's Birthday
(observed), Good Friday, Memorial Day (observed), Independence Day (observed),
Labor Day, Thanksgiving Day, and Christmas Day (observed). The NYSE may modify
its holiday schedule at any time.

The Fund's net asset value is determined as of the close of the NYSE
(normally 4:00 p.m. Eastern time). However, NAV may be calculated earlier if
trading on the NYSE is restricted or as permitted by the SEC. To the extent
that portfolio securities are traded in other markets on days when the NYSE is
closed, the Fund's NAV may be affected on days when investors do not have
access to the Fund to purchase or redeem shares.

<PAGE>

Shareholders of the Fund will be able to exchange their Class A
shares for Class A shares of any mutual fund that is a series of The
Flex-Partners (each a "Flex-Partners Fund"), and shares of The Flex-funds
Money Market Fund. No fee or sales load will be imposed upon the exchange.
Shareholders of The Flex-funds Money Market Fund who acquired such shares upon
exchange of Class A shares of the Fund may use the exchange privilege only to
acquire Class A shares of a Flex-Partners Fund.

Shareholders of the Fund may exchange their Class C shares for Class
C shares of other Flex-Partners Funds. If Class C shares of the Fund are
exchanged for Class C shares of other Flex-Partners Funds, no contingent
deferred sales charge will be payable upon such exchange of Class C shares,
but a contingent deferred sales charge will be payable upon the redemption
of Class C shares acquired as a result of the exchange. The applicable sales
charge will be that imposed by the Fund in which shares were initially
purchased and the purchase date will be deemed to be the date of the
initial purchase rather than the date of the exchange.

At any time after acquiring shares of other funds participating in
the Class C exchange privilege, the shareholder may again exchange those
shares (and any reinvested dividends and distributions) for Class C shares of
the Fund without subjecting such shares to any contingent deferred sales
charge. Shares of any fund participating in the Class C exchange privilege
that were acquired through reinvestment of dividends or distributions may be
exchanged for Class C shares of other funds without being subject to any
contingent deferred sales charge

Additional details about the exchange privilege and prospectuses for
each of The Flex-Partners funds and The Flex-funds Money Market Fund are
available from the Fund's Transfer Agent. The exchange privilege may be
modified, terminated or suspended on 60 days' notice and any fund, including
the Fund, or the Distributor has the right to reject any exchange application
relating to such Fund's shares. The 60 day notification requirement may be
waived if (i) the only effect of a modification would be to reduce or
eliminate an administrative fee redemption fee, or deferred sales charge
ordinarily payable at the time of an exchange, or (ii) the Fund suspends the
redemption of the shares to be exchanged as permitted under the 1940 Act or
the rules and regulations thereunder, or the Fund to be acquired suspends the
sale of its shares because it is unable to invest amounts effectively in
accordance with its investment objective and policies.

In the Prospectus, the Fund has notified shareholders that it
reserves the right at any time, without prior notice, to refuse exchange
purchases by any person or group if, in the Subadviser's judgment, the Fund
would be unable to invest effectively in accordance with its investment
objective and policies, or would otherwise potentially be adversely affected.

COMBINED PURCHASE AND CUMULATIVE PURCHASE PRIVILEGE. If an investor
or eligible group of related investors purchases Class A shares of the Fund

<PAGE>

concurrently with Class A shares of another series of the Trust, the purchases
may be combined to take advantage of the reduced sales charges applicable to
larger purchases. See the table of breakpoints under "How to Buy Shares -
Cumulative Quantity Discount" in the Prospectus.

An eligible group of related Fund investors includes any combination
of the following:

(a) an individual;

(b) the individual's spouse, their children and their
parents;

(d) any company controlled by the individual (a person,
entity or group that holds 25% or more of the outstanding voting securities
of a corporation will be deemed to control the corporation, and a partnership
will be deemed to be controlled by each of its general partners);

(e) a trust created by the individual, the beneficiaries of
which are the individual, his or her spouse, parents or children;

(f) a Uniform Gifts to Minors Act/Uniform Transfers to
Minors Act account created by the individual or the individual's spouse; and

(g) one or more employee benefit plans of a company
controlled by an individual.

The Combined Purchase and Cumulative Purchase Privilege does not apply to
individual participants in retirement and group plans described below
under "Flex-Partners Retirement Plans."

RIGHTS OF ACCUMULATION. Reduced sales charges are also available through
Rights of Accumulation, under which an investor or an eligible group of
related investors, as described above under "Combined Purchase and Cumulative
Purchase Privilege," may aggregate the value of their existing holdings of the
Class A shares of the Fund and Class A shares of other Flex-Partners
Funds to determine the reduced sales charge. The value of existing holdings
for purposes of determining the reduced sales charge is calculated using the
maximum offering price (net asset value plus maximum sales charge) as of the
previous business day. See "How Net Asset Value is Determined" in the
Prospectus. The Transfer Agent must be notified at the time of purchase that
the investor is entitled to a reduced sales charge. The reduced sales charges
will be granted subject to confirmation of the investor's holdings. Rights of
accumulation are not available to individual participants in the retirement
and group plans described below under "Flex-Partners Retirement Plans."

<PAGE>

LETTERS OF INTENTION. Reduced sales charges are also available to
investors (or an eligible group of related investors) who enter into a
written Letter of Intention providing for the purchase, within a
thirteen-month period, of Class A shares of the Fund and Class A
shares of other Flex-Partners Funds. All Class A shares of the Fund and Class
A shares of other Flex-Partners Funds which were previously purchased and are
still owned are also included in determining the applicable reduction. The
Transfer Agent must be notified at the time of purchase that the investor is
entitled to a reduced sales charge. The reduced sales charges will be granted
subject to confirmation of the investor's holdings. Letters of Intention are
not available to individual participants in retirement and group plans
described below under "Flex-Partners Retirement Plans."

A Letter of Intention permits a purchase to establish a total
investment goal to be achieved by any number of investments over a
thirteen-month period. Each investment made during the period will receive the
reduced sales charge applicable to the amount represented by the goal, as if
it were a single investment. Shares totaling 5% of the dollar amount of the
Letter of Intention will be held by the Transfer Agent in escrow in the name
of the purchaser. The effective date of a Letter of Intention may be
back-dated up to 90 days, in order that any investments made during this
90-day period, valued at the purchaser's cost, can be applied to the
fulfillment of the Letter of Intention goal.

The Letter of Intention does not obligate the investor to purchase, nor
the Fund to sell, the indicated amount. In the event the Letter of Intention
goal is not achieved within the thirteen-month period, the purchaser is required
to pay the difference between the sales charge otherwise applicable to the
purchases made during this period and sales charges actually paid. Such
payment may be made directly to the Transfer Agent or, if not paid, the
Transfer Agent will liquidate sufficient escrowed shares to obtain such
difference. If the goal is exceeded in an amount which qualifies for a lower
sales charge, a price adjustment is made by refunding to the purchaser the
amount of excess sales charge, if any, paid during the thirteen-month period.
Investors electing to purchase Class A shares of the Fund pursuant to a Letter
of Intention should carefully read such Letter of Intention.

AUTOMATIC ACCOUNT BUILDER. An investor may arrange to have a fixed amount
of $100 or more automatically invested in shares of the Fund monthly by
authorizing his or her bank account to be debited to invest specified dollar
amounts in shares of the Fund. The investor's bank must be a member of the
Automatic Clearing House System.

Further information about these programs and an application form can
be obtained from the Fund's Transfer Agent.

SYSTEMATIC WITHDRAWAL PROGRAM. A systematic withdrawal plan is
available for shareholders having Class A and Class C shares of the Fund with
a minimum value of $10,000, based upon the offering price. The plan provides
for monthly, quarterly or annual checks in any amount, but not less than $100

<PAGE>

(which amount is not necessarily recommended). Except as otherwise provided in
the Prospectus, to the extent such withdrawals exceed the current net asset
value of reinvested dividends, they may be subject to the contingent deferred
sales charge. See "How to Buy Shares - Class C Shares" and "Other Shareholder
Services" in the Prospectus.

Dividends and/or distributions on shares held under this plan are
invested in additional full and fractional shares at net asset value. See
"Shareholder Investment Account - Automatic Reinvestment of Dividends and/or
Distributions" above. The Transfer Agent acts as agent for the shareholder
in redeeming sufficient full and fractional shares to provide the amount of
the periodic withdrawal payment. The plan may be terminated at any time.

Withdrawal payments should not be considered as dividends, yield or
income. If periodic withdrawals continuously exceed reinvested dividends and
distributions, the shareholder's original investment will be correspondingly
reduced and ultimately exhausted.

Furthermore, each withdrawal constitutes a redemption of shares, and
any gain or loss realized must be recognized for federal income tax purposes.
In addition, withdrawals made concurrently with purchases of additional shares
are inadvisable because of the applicable sales charges to (i) the purchase of
Class A shares and (ii) the withdrawal of Class C shares. Each shareholder
should consult his or her own tax adviser with regard to the tax consequences
of the plan, particularly if used in connection with a retirement plan.

DISTRIBUTIONS AND TAXES

DISTRIBUTIONS. If you request to have distributions mailed to you and
the U.S. Postal Service cannot deliver your checks, or if your checks remain
uncashed for six months, the Transfer Agent may reinvest your distributions at
the then-current NAV. All subsequent distributions will then be reinvested until
you provide the Transfer Agent with alternate instructions.

DIVIDENDS. A portion of the Fund's dividends derived from certain
U.S. government obligations may be exempt from state and local taxation. The
Fund will send each shareholder a notice in January describing the tax status
of dividends and capital gain distributions for the prior year.

CAPITAL GAIN DISTRIBUTIONS. Long-term capital gains earned by the
Fund on the sale of securities by the Portfolio and distributed to
shareholders of the Fund are federally taxable as long-term capital gains
regardless of the length of time shareholders have held their shares. If a
shareholder receives a long-term capital gain distribution on shares of the
Fund and such shares are held six months or less and are sold at a loss, the
portion of the loss equal to the amount of the long-term capital gain
distribution will be considered a long-term loss for tax purposes.

<PAGE>

Short-term capital gains distributed by the Fund are taxable to
shareholders as dividends, not as capital gains. Distributions from short-term
capital gains do not qualify for the dividends-received deduction.

TAX STATUS OF THE FUND. The Fund intends to qualify each year as a
"regulated investment company" for tax purposes so that it will not be liable
for federal tax on income and capital gains distributed to shareholders. In
order to qualify as a regulated investment company and avoid being subject to
federal income or excise taxes at the Fund level, the Fund intends to
distribute substantially all of its net investment income (consisting of the
income it earns from its investment in the Portfolio, less expenses) and net
realized capital gains within each calendar year as well as on a fiscal year
basis. The Fund intends to comply with other tax rules applicable to regulated
investment companies, including a requirement that capital gains from the sale
of securities held less than three months constitute less than 30% of the
Fund's gross income for each fiscal year. Gains from some futures contracts
and options are included in this 30% calculation, which may limit the Fund's
investments in such instruments.

The Fund is treated as a separate entity from the other funds of The
Flex-Partners Trust for tax purposes.

OTHER TAX INFORMATION. The information above is only a summary of
some of the tax consequences generally affecting the Fund and its
shareholders, and no attempt has been made to discuss individual tax
consequences. In addition to federal income taxes, shareholders may be subject
to state and local taxes on Fund distributions. Investors should consult their
tax advisers to determine whether the Fund is suitable to their particular tax
situation.

INVESTMENT ADVISER AND MANAGER

R. Meeder & Associates, Inc. (the "Manager") is the investment adviser
and manager for, and has an Investment Advisory Contract with, the Portfolio.

Pursuant to the Investment Advisory Contract, the Manager, subject to
the supervision of the Portfolio's Board of Trustees and in conformity with
the stated objective and policies of the Portfolio, has general oversight
responsibility for the investment operations of the Portfolio. In connection
therewith, the Manager is obligated to keep certain books and records of the
Portfolio. The Manager also administers the Fund's corporate affairs, and in
connection therewith, furnishes the Fund with office facilities, together with
those ordinary clerical and bookkeeping services which are not being furnished
by Star Bank, N.A., the Portfolio's custodian and Mutual Funds Service Co.,
the Fund's transfer and disbursing agent. The management services of the
Manager are not exclusive under the terms of the Investment Advisory Contract
and the Manager is free to, and does, render management services to others.

<PAGE>

The Manager invests the Portfolio's liquidity reserves and may invest
the Portfolio's assets in financial futures contracts and related options.

The Investment Advisory Contract for the Portfolio was separately
approved by a vote of a majority of the Trustees, including a majority of
those Trustees who are not "interested persons" (as defined in the Investment
Company Act of 1940) of the Portfolio. The Investment Advisory Contract is to
remain in force so long as renewal thereof is specifically approved at least
annually by a majority of the Trustees or by vote of a majority of the
interests in the Portfolio, and in either case by vote of a majority of the
Trustees who are not "interested persons" (as defined in the Investment
Company Act of 1940) at a meeting called for the purpose of voting on such
renewal.

The Investment Advisory Contract provides that the Manager will not
be liable for any error of judgment or mistake of law or for any loss suffered
by the Portfolio in connection with the matters to which the Investment
Advisory Contract relates except for a loss resulting from willful
misfeasance, bad faith, gross negligence or reckless disregard of duty. The
Investment Advisory Contract will terminate automatically if assigned and may
be terminated without penalty at any time upon 60 days prior written notice by
Majority Vote of the Portfolio, by the Trustees of the Portfolio, or by the
Manager.

Costs, expenses and liabilities of the Trust attributable to a
particular fund are allocated to that fund. Costs, expenses and liabilities
which are not readily attributable to a particular fund are allocated among
all of the Trust's funds. Thus, each fund pays its proportionate share of: the
fees of the Trust's independent auditors, legal counsel, custodian, transfer
agent and accountants; insurance premiums; the fees and expenses of Trustees
who do not receive compensation from R. Meeder & Associates, Sector Capital
Management, L.L.C or any of the Sector Advisers; association dues; the cost of
printing and mailing confirmations, prospectuses, proxies, proxy statements,
notices and reports to existing shareholders; state registration fees;
distribution expenses within the percentage limitations of each Class of
Shares' distribution and service plan, including the cost of printing and
mailing of prospectuses and other materials incident to soliciting new
accounts; and other miscellaneous expenses.

The expenses of the Portfolio include the compensation of the
Trustees who are not affiliated with the Manager, Subadviser or Sector
Advisers; registration fees; membership dues allocable to the Portfolio; fees
and expenses of independent accountants, of legal counsel and of any transfer
agent or accountant of the Portfolio; insurance premiums and other
miscellaneous expenses.

Expenses of the Portfolio also include all fees under its Accounting
and Administrative Service Agreement; the expenses connected with the
execution, recording and settlement of security transactions, fees and
expenses of the Portfolio's custodian for all services to the Portfolio,
including safekeeping of funds and securities and maintaining required books
and accounts; expenses of preparing and mailing reports to investors and to
governmental offices and commissions; expenses of meetings of investors and

<PAGE>

Trustees; the advisory fees payable to the Manager under the Investment
Advisory Contract and other miscellaneous expenses.

The Board of Trustees of the Trust believe that the aggregate per
share expenses of the Fund and the Portfolio will be less than the expenses
which the Fund would incur if it retained the services of an investment
adviser and the assets of the Fund were invested directly in the type of
securities being held by the Portfolio.

The Manager earns an annual fee, payable in monthly installments, at
the rate of 1% of the first $50 million, 0.75% of the next $50 million, and
0.60% in excess of $100 million, of the Portfolio's average net assets. The
Manager will receive 70% and the Subadviser 30% of the fee payable with
respect to the net assets of the Portfolio upon effectiveness of the
subadvisory arrangement; then the Manager will receive 30% and the Subadviser
70% of the fee attributable to any additional net assets of the Portfolio up
to an amount of net assets equal to the net assets upon effectiveness of the
subadvisory arrangement, then the Manager and the Subadviser will share
equally the fee attributable to any additional net assets of the Portfolio up
to $50 million of the net assets. With respect to net assets of more than $50
million and less than $100 million, the applicable fees of 0.75% will be
shared such that the Manager would receive 0.35% and the Subadviser 0.40%. For
net assets of $100 million and more, the applicable 0.60% fee will be shared
such that the Manager will receive 0.25% and the Subadviser 0.35%. For the
year ended December 31, 1996, the Portfolio paid fees to the Manager totaling
$258,239 ($238,640 in 1995; $240,045 in 1994).

R. Meeder & Associates, Inc. was incorporated in Ohio on February 1,
1974 and maintains its principal offices at 6000 Memorial Drive, Dublin, Ohio
43017. The Manager is a wholly-owned subsidiary of Muirfield Investors, Inc.
("MII"), which is controlled by Robert S. Meeder, Sr. through the ownership of
voting common stock. The Manager's officers and directors are: Robert S. Meeder,
Sr. Chairman and Sole Director; Philip A. Voelker, Senior Vice President and
Chief Operating Officer; Donald F. Meeder, Vice President and Secretary; Sherrie
L. Acock, Vice President; Robert D. Baker, Vice President; Robert S. Meeder,
Jr., President; Wesley F. Hoag, Vice President and General Counsel; Steven T.
McCabe, Vice President; and Thomas G. Roediger, Vice President. Mr. Robert S.
Meeder, Sr. is President and a Trustee of the Trust, the Portfolio, The
Flex-funds and the other corresponding portfolios. Each of Donald F. Meeder,
Wesley F. Hoag and Steven T. McCabe is an officer of the Trust, the Portfolio,
The Flex-funds and other corresponding portfolios. Each of Philip A. Voelker and
Robert S. Meeder, Jr. is a Trustee and officer of the Trust, the Portfolio, The
Flex-funds and the other corresponding portfolios.

INVESTMENT SUBADVISER

Sector Capital Management L.L.C. serves as the Portfolio's
subadviser. The Subadviser is a Georgia limited liability company. William L.
Gurner and John K. Donaldson control the Subadviser. Messrs. Gurner and

<PAGE>

Donaldson are Managers and Members of the Subadviser. The Subadviser's officers
are as set forth as follows: William L. Gurner, President and Administrator;
George S. Kirk, Director, Sales and Marketing; and Kenneth L. Riffle, Director,
Client Relations. Mr. Gurner is a Trustee of the Trust; the Portfolio; The
Flex-funds, mutual funds whose corresponding portfolios are also advised by the
Manager; and such portfolios. The Investment Subadvisory Agreement provides that
the Subadviser shall furnish investment advisory services in connection with the
management of the Portfolio. The Portfolio and the Manager have entered into an
Investment Subadvisory Agreement with the Subadviser which, in turn, has entered
into a investment sub-subadvisory agreement with each of the Sector Advisers
selected for the Portfolio. Under the Investment Subadvisory Agreement, the
Subadviser is required to (i) supervise the general management and investment of
the assets and securities portfolio of the Portfolio; (ii) provide overall
investment programs and strategies for the Portfolio and (iii) select Sector
Advisers for the Portfolio, except as otherwise provided, and allocate the
Portfolio's assets among such Sector Advisers. The Subadviser is obligated to
keep certain books and records of the Portfolio. The Manager continues to have
responsibility for all investment advisory services pursuant to the Investment
Advisory Agreement and supervises the Subadviser's performance of such services.
Under the Investment Subadvisory Agreement, the Manager, not the Portfolio, pays
the Subadviser an investment advisory fee in an amount described above under
"Investment Adviser and Manager."

The Subadviser may invest the Portfolio's assets in financial futures
contracts and related options.

The Investment Subadvisory Agreement provides that the Subadviser
will not be liable for any error of judgment or mistake of law or for any loss
arising out of any investment or for any act or omission in the execution of
portfolio transactions for the Portfolio, except a loss resulting from
misfeasance, bad faith, gross negligence or reckless disregard of duty. The
Investment Subadvisory Agreement provides that it will terminate automatically
if assigned, and that it may be terminated without penalty to the Fund or the
Portfolio by the Manager, the Trustees of the Portfolio or by the vote of a
majority of the outstanding voting securities of the Portfolio upon not less
than 30 days written notice. The Investment Subadvisory Agreement will
continue in effect for a period of more than two years from the date of
execution only so long as such continuance is specifically approved at least
annually in conformity with the 1940 Act. The Investment Subadvisory Agreement
was approved by the Board of Trustees of the Portfolio, including all of the
Trustees who are not parties to the contract or "interested persons" of any
such party, and by the investors in the Portfolio.

INVESTMENT SUB-SUBADVISERS

Except as otherwise described above under "Investment Adviser and
Manager" and "Investment Subadviser", the assets of the Portfolio are managed
by asset managers (each a "Sector Manager" and collectively, the "Sector
Managers") selected by the Subadviser, subject to the review and approval of
the Trustees of the Portfolio. The Subadviser recommends, to the Trustees of

<PAGE>

the Portfolio, Sector Advisers for each industry sector based upon its
continuing quantitative and qualitative evaluation of the Sector Advisers'
skills in managing assets pursuant to specific investment styles and
strategies. The Portfolio has applied for an exemptive order from the SEC
permitting the Subadviser, subject to certain conditions, to enter into
sub-subadvisory agreements with Sector Advisers approved by the Trustees of
the Portfolio but without the requirement of investor approval. At a meeting
held on December 20, 1996, the shareholders of the Portfolio approved the
operation of the Portfolio in this manner. Pursuant to the terms of the
exemptive application, the Subadviser is to be able, subject to the approval
of the Trustees of the Portfolio, but without investor approval, to employ new
Sector Advisers for the Portfolio. Although investor approval will not be
required for the termination of sub-subadvisory agreements, investors of the
Portfolio will continue to have the right to terminate such agreements for the
Portfolio at any time by a vote of a majority of outstanding voting securities
of the Portfolio.

Except as otherwise provided above under "Investment Adviser and
Manager" and "Investment Subadviser," the assets of the Portfolio are
allocated by the Subadviser among the Sector Advisers selected for the
Portfolio. Each Sector Adviser has discretion, subject to oversight by the
Trustees and the Subadviser, to purchase and sell portfolio assets, consistent
with the Portfolio's investment objectives, policies and restrictions. For its
services, the Subadviser receives a management fee from the Manager. A part of
the fee paid to the Subadviser is used by the Subadviser to pay the advisory
fees of the Sector Advisers. Each Sector Adviser is paid a fee for its
investment advisory services that is computed daily and paid monthly based on
the value of the average net assets of the Portfolio assigned by the
Subadvisor to the Sector Adviser at an annual rate equal to .25%.

The Investment Sub-subadvisory Agreements provide that the Sector
Advisers will not be liable for any error of judgment or mistake of law or for
any loss arising out of any investment or for any act or omission in the
execution of portfolio transactions for the Portfolio, except a loss resulting
from misfeasance, bad faith, gross negligence or reckless disregard of duty.
The Investment Sub-subadvisory Agreements provide that they will terminate
automatically if assigned, and that they may be terminated without penalty to
the Fund or the Portfolio by the Subadviser, the Trustees of the Portfolio or
by the vote of a majority of the outstanding voting securities of the
Portfolio upon not less than 15 days written notice. The Investment
Sub-subadvisory Agreements will continue in effect for a period of more than
two years from the date of execution only so long as such continuance is
specifically approved at least annually in conformity with the 1940 Act. The
Investment Sub-subadvisory Agreements were approved by the Board of Trustees
of the Portfolio, including all of the Trustees who are not parties to the
contract or "interested persons" of any such party, and by the investors in
the Portfolio.

A Sector Adviser may also serve as a discretionary or
non-discretionary investment adviser to management or advisory accounts
unrelated in any manner to the Portfolio or its affiliates. The investment
Sub-subadvisory agreements among the Sector Advisers, the Portfolio and the

<PAGE>

Subadviser require fair and equitable treatment to the Portfolio in the
selection of the Portfolio investments and the allocation of investment
opportunities, but do not obligate the Sector Advisers to give the Portfolio
exclusive or preferential treatment.

Although the Sector Advisers make investment decisions for the
Portfolio independent of those for their other clients, it is likely that
similar investment decisions will be made from time to time. When the
Portfolio and another client of a Sector Adviser are simultaneously engaged in
the purchase or sale of the same security, the transactions are, to the extent
feasible and practicable, averaged as to price and allocated as to amount
between the Portfolio and the other client(s). In specific cases, this system
could have detrimental effect on the price or volume of the security to be
purchased or sold, as far as the Portfolio is concerned. However, the Trustees
of the Portfolio believe, over time, that coordination and the ability to
participate in volume transactions should be to the benefit of the Portfolio.

Listed below are the Sector Advisers selected by the Subadviser to
invest certain of the Portfolio's assets:

MILLER/HOWARD INVESTMENTS, INC. serves as Sector Adviser to the
utilities and transportation sectors of the Portfolio. Miller/Howard is a
registered investment adviser which has been providing investment services to
broker-dealers, investment advisers, employee benefit plans, endowment
portfolios, foundations and other institutions and individuals since 1984. As of
December 31, 1996, Miller/Howard held discretionary investment authority over
approximately $183 million of assets. Lowell G. Miller and Helen Hamada who are,
respectively, Miller/Howard's President, Secretary and a director and its Vice
President, Treasurer and a director, each owns more than 10% of the outstanding
voting securities of Miller/Howard. Mr. Miller controls Miller/Howard through
his stock ownership. Miller/Howard is also the subadviser to the Utilities Stock
Portfolio, a corresponding portfolio to The Flex-funds' Total Return Utilities
Fund and the Flex-Partners' Utility Growth Fund. Mr. Miller is the portfolio
manager primarily responsible for the day-to-day management of those assets of
the Portfolio allocated to Miller/Howard. Mr. Miller has been associated with
Miller/Howard since 1984. Mr. Miller is a Trustee of the Trust, the Portfolio,
The Flex-funds, mutual funds whose corresponding portfolios are also advised by
the Manager, and such portfolios. Miller/Howard's principal executive offices
are located at 141 Upper Byrdcliffe Road, Post Office Box 549, Woodstock, New
York 12498.

<PAGE>

Board, President, and Chief Executive Officer, Thomas S. Moore, Senior Vice
President and Chief Investment Officer, and Kathryn A. Skwieralski, Senior
Vice President, Treasurer, Chief Financial and Administrative Officer, are the
directors of Hallmark. Mr. Hagerman is the portfolio manager primarily
responsible for the day-to-day management of those assets of the Portfolio
allocated to Hallmark. Mr. Hagerman has been associated with Hallmark
since 1986. Hallmark's principal executive offices are located at One
Greenbrook Corporate Center, 100 Passaic Avenue, Fairfield, New Jersey 07004.

BARROW, HANLEY, MEWHINNEY & STRAUSS, INC. serves as Sector Adviser to
the consumer durable and non-durable sectors of the Portfolio. Barrow is a
registered investment adviser which has been providing investment services to
banks; investment companies; pension and profit sharing plans; charitable
organizations and corporations since 1979. As of December 31, 1996, Barrow
held discretionary investment authority over approximately $20.5 billion of
assets. Barrow is a wholly-owned subsidiary of United Asset Management. Bryant
M. Hanley, Jr., President and Chief Executive Officer, is the sole director of
Barrow. Michael C. Mewhinney is the portfolio manager primarily responsible
for the day-to-day management of those assets of the Portfolio allocated to
Barrow. Mr. Mewhinney has been associated with Barrow since 1979. Barrow's
principal executive offices are located at 3232 McKinney Avenue, 15th Floor,
Dallas, Texas 75204-2429.

THE MITCHELL GROUP, INC. serves as Sector Adviser to the energy sector
of the Portfolio. The Mitchell Group is a registered investment adviser which
has been providing investment services to individuals; banks; investment
companies; pension and profit sharing plans; charitable organizations,
corporations and other institutions since 1989. As of December 31, 1996, The
Mitchell Group held discretionary investment authority over approximately $245
million of assets. Rodney Mitchell, President, Chief Executive Officer, Chief
Financial Officer and sole director, owns more than 10% of the outstanding
voting securities of The Mitchell Group. Mr. Mitchell is the portfolio manager
primarily responsible for the day-to-day management of those assets of the
Portfolio allocated to The Mitchell Group. Mr. Mitchell has been associated with
The Mitchell Group since 1989. The Mitchell Group's principal executive offices
are located at 1100 Louisiana, #4810, Houston, Texas 77002.

ASHLAND MANAGEMENT INCORPORATED serves as Sector Adviser to the
materials and services sector of the Portfolio. Ashland is a registered
investment adviser which has been providing investment services to
individuals, pension and profit sharing plans, charitable organizations,
corporations and other institutions since 1975. As of December 31, 1996,
Ashland managed accounts having a value of approximately $1.45 billion.
Charles C. Hickox, Chairman of the Board, Chief Executive Officer and a
director, and Perry v.S. Jones, President, Chief Operating Officer and a
director, each owns more than 10% of the outstanding voting securities of
Ashland. Terence J. McLaughlin, Managing Director of Ashland, and Deborah C.
Ohl, a Portfolio Management Associate, are the portfolio managers primarily
responsible for the day-to-day management of those assets of the Portfolio
allocated to Ashland. Mr. McLaughlin has been associated with Ashland since

<PAGE>

1984. Ms. Ohl has been employed by Ashland since August, 1992 and has served
as a Portfolio Management Associate for Ashland since 1993. From May, 1991
until July, 1992, Ms. Ohl was a research and sales assistant with Kidder,
Peabody & Co., Incorporated. Ashland's principal executive offices are located
at 26 Broadway, New York, New York 10004.

DREMAN VALUE ADVISORS, L.P. serves as Sector Adviser to the finance
sector of the Portfolio. Dreman is a registered investment adviser which has
been providing investment services to individuals, banks, investment companies,
pension and profit sharing plans, charitable organizations, corporations and
other institutions since 1977. As of December 31, 1996, Dreman held
discretionary investment authority over approximately $3.8 billion of assets.
Dreman is a wholly-owned subsidiary of Zurich Kemper Investments, Inc. ("Zurich
Kemper"), which is a wholly-owned subsidiary of ZKI Holding Corporation, which
is approximately 97% owned by Zurich Holding Company of America, Inc., which is
a wholly-owned subsidiary of Zurich Insurance Company. The directors of Dreman
are James R. Neal, President and Chief Executive Officer of Dreman, John E.
Neal, President of Kemper Funds Group, a unit of Zurich Kemper, Stephen B.
Timbers, President, Chief Executive Officer and Chief Investment Officer of
Zurich Kemper, and David N. Dreman, Chairman of the Board of Dreman. Jonathan
Kay is the portfolio manager primarily responsible for the day-to-day management
of those assets of the Portfolio allocated to Dreman. Mr. Kay has been
associated with Dreman since 1993. From 1990 to 1993, Mr. Kay was an associate
with J.S. Eliezer, a management consulting firm serving primarily the media
industry. Dreman's principal executive offices are located at 280 Park Avenue,
40th Floor, New York, New York 10017.

RCM CAPITAL MANAGEMENT, L.L.C. serves as Sector Adviser to the
technology sector of the Portfolio. RCM is a registered investment adviser that
provides investment services to institutional and individual clients and
registered investment companies, with approximately $25.6 billion of assets
under management as of December 31, 1996. RCM was established in April 1996, as
the successor to the business and operations of RCM Capital Management, a
California Limited Partnership, which, with its predecessors, has been in
operation since 1970. RCM is a wholly-owned subsidiary of Dresdner Bank AG, an
international banking organization with principal executive offices in
Frankfurt, Germany. The Board of Managers of RCM is comprised of William L.
Price, Chairman of the Board, Chief Investment Officer and Principal of RCM,
Michael J. Apatoff, President, Chief Operating Officer and Principal of RCM,
Hans-Dieter Bauernfeind, General Manager of Dresdner, Gerhard Eberstadt, Senior
Chairman of Dresdner, George N. Fugelsang, Senior General Manager of Dresdner,
John D. Leland, Jr., Principal of RCM, Jeffrey S. Rudsten, Principal of RCM,
William S. Stack, Principal of RCM and Kenneth B. Weeman, Jr., Principal and
Head of Equity Trading of RCM. Walter C. Price and Huachen Chen, each Principals
of RCM, are the portfolio managers primarily responsible for the day-to-day
management of those assets of the Portfolio allocated to RCM. Messrs. Price and
Chen have managed equity portfolios on behalf of RCM since 1985. RCM's principal
executive offices are located at Four Embarcadero Center, San Francisco,
California 94111.

<PAGE>

Banking laws and regulations, including the Glass-Steagall Act as
presently interpreted by the Board of Governors of the Federal Reserve System,
prohibit certain banking entities, such as Dresdner, from sponsoring
organizing, controlling or distributing the shares of a registered investment
company continuously engaged in the issuance of its shares, and prohibit banks
generally from underwriting securities. However, banks and their affiliates
generally can act as an adviser (or sub-subadviser) to an investment company
and can purchase shares of an investment company as agent for and upon the
order of customers. RCM believes that it may perform the services contemplated
by the investment management agreement without violating these banking law
regulations. However, future changes in legal requirements relating to the
permissible activities of banks and their affiliates, as well as future
interpretations of current requirements, could present RCM from continuing to
perform investment management services for the Portfolio.

THE DISTRIBUTOR

Adviser Dealer Services, Inc. (the "Distributor"), 6000 Memorial
Drive, Dublin, Ohio 43017, acts as the distributor of the Class A shares and
the Class C shares of the Fund. The Distributor is an affiliate of the Manager
and a subsidiary of MII.

Pursuant to separate plans of distribution (the Class A Plan and the
Class C Plan, collectively, the Plans) adopted by the Fund under Rule 12b-1
under the 1940 Act and an underwriting agreement (the Underwriting Agreement)
the Distributor incurs the expenses of distributing the Fund's Class A shares
and Class C shares. See "Distribution Plans" in the Prospectus.

The Board of Trustees, including a majority of the Trustees who are
not interested persons of the Fund and who have no direct or indirect
financial interest in the operation of the Class A or Class C Plan or in any
agreement related to the Plans (the Rule 12b-1 Trustees), at a meeting called
for the purpose, have adopted a plan of distribution for each of the Class A
shares and the Class C shares of the Fund. The Class A Plan was approved by
Class A shareholders of the Fund. The Class C Plan was approved by Class C
shareholders of the Fund.

The Distributor also receives the proceeds of contingent deferred
sales charges paid by investors upon certain redemptions of Class C shares.
See "How to Buy Shares" in the Prospectus.

The Plans continue in effect from year to year, provided that each
such continuance is approved at least annually by a vote of the Board of
Trustees, including a majority vote of the Rule 12b-1 Trustees, cast in
person at a meeting called for the purpose of voting on such continuance.
Either Plan may be terminated at any time, without penalty, by the vote of a
majority of the Trustees who are not interested persons or by the vote of
the holders of a majority of the relevant class of outstanding shares
of the Fund. Neither Plan may be amended to increase materially the amounts to

<PAGE>

be spent for the services described therein without approval by the
shareholders of Class A and Class C, as applicable, and all
material amendments are required to be approved by the Board of Trustees in
the manner described above. The Fund will not be contractually obligated to
pay expenses incurred under either the Class A or Class C Plan if it is
terminated or not continued.

Pursuant to each Plan, the Board of Trustees will review at least
quarterly a written report of the distribution expenses incurred on behalf of
the Class A and Class C shares of the Fund by the Distributor. The report
includes an itemization of the distribution expenses and the purposes of such
expenditures. In addition, as long as the Plans remain in effect, the selection
and nomination of Trustees who are not interested persons of the Fund shall be
committed to the Trustees who are not interested persons of the Fund.

Pursuant to the Underwriting Agreement, the Fund has agreed to
indemnify the Distributor to the extent permitted by applicable law against
certain liabilities under the Securities Act and the 1940 Act. The Underwriting
Agreement was approved by the Board of Trustees, including a majority of the
Rule 12b-1 Trustees.

TRUSTEES AND OFFICERS

The Trust and the Portfolio are managed by their trustees and
officers. Their names, positions and principal occupations during the past
five years are listed below. Except as indicated, each individual has held the
office shown or other offices in the same company for the last five years.
Except as otherwise shown, all persons named as Trustees also serve in similar
capacities for all other mutual funds advised by the Manager, including The
Flex-funds and the corresponding portfolios of the Flex-Partners and The
Flex-funds (collectively, the "Fund Complex"). Unless otherwise noted, the
business address of each Trustee and officer is 6000 Memorial Drive, Dublin,
Ohio 43017, which is also the address of the Manager. Those Trustees who are
"interested persons" (as defined in the Investment Company Act of 1940) by
virtue of their affiliation with the Fund Complex, the Manager, the Subadviser
or the Sector Advisers are indicated by an asterisk (*).

Position Principal
NAME, ADDRESS AND AGE HELD OCCUPATION

ROBERT S. MEEDER, SR.*+, 68 Trustee/ Chairman, R. Meeder &
President & Associates, Inc., an
investment adviser.

<PAGE>

MILTON S. BARTHOLOMEW, 68 Trustee Retired; formerly a practicing
1424 Clubview Boulevard, S attorney in Columbus Ohio;
Worthington, OH 43235 member of each fund and each
Portfolio's Audit Committee.

ROGER D. BLACKWELL, 56 Trustee Professor of Marketing and
Blackwell Associates, Inc. Consumer Behavior, The
3380 Tremont Road Ohio State University;
Columbus, OH 43221 President of Blackwell
Associates, Inc., a
strategic consulting firm.

JOHN M. EMERY, 76 Trustee Retired; formerly Vice
2390 McCoy Road President & Treasurer of
Columbus, OH 43220 Columbus & Southern Ohio
Electric Co.; member of each
fund and each Portfolio's
Audit Committee.

RICHARD A. FARR, 78 Trustee President of R&R Supply Co.
3250 W. Henderson Rd and Farrair Concepts, Inc.,
Columbus, OH 43220 two companies
involved in engineering,
consulting & sales of
heating & air conditioning
equipment.

WILLIAM L. GURNER*, 50 Trustee President, Sector Capital
Sector Capital Management, Inc. Management, an investment
5350 Poplar Avenue, Suite 490 adviser (since January 1995);
Memphis, TN 38119 Manager of Trust
Investments of Federal
Express Corporation
(1987-1994).

RUSSEL G. MEANS, 71 Trustee Retired; formerly Chairman of
5711 Barry Trace Employee Benefit Management
Dublin, OH 43017 Corporation, consultants and
administrators of
self-funded health and
retirement plans.

ROBERT S. MEEDER, JR.*+, 36 Trustee and President of R. Meeder &
Vice President Associates, Inc.

LOWELL G. MILLER*, 48 Trustee President, Miller/Howard
Miller/Howard Investments, Inc. Investments, Inc., an
141 Upper Byrdcliffe Road investment adviser whose
P. O. Box 549 clients include the Growth
Woodstock, NY 12498 Stock Portfolio and the
Utilities Stock Portfolio.

WALTER L. OGLE, 58 Trustee Executive Vice President of
Interstate North Parkway Aon Consulting, an
Suite 1630 employee benefits consulting
Atlanta, GA 30339 group.

PHILIP A. VOELKER*+, 43 Trustee and Senior Vice President and
Vice President Chief Operating Officer of
R. Meeder & Associates, Inc.

JAMES B CRAVER*, 53 Assistant Practicing Attorney; Special
42 Miller Hill Road Secretary Counsel to Flex-Partners,
Box 811 Flex-funds and their
Dover, MA 02030 Portfolios; Senior
Vice President of Signature
Financial Group, Inc.
(January 1991 to August 1995).

STEVEN T. MCCABE*+, 32 Assistant Vice President, R. Meeder &
Treasurer Associates, Inc., and Vice
President of Mutual Funds
Service Co.

DONALD F. MEEDER*+, 58 Secretary/ Vice President of R. Meeder
Treasurer & Associates, Inc., and
President of Mutual Funds
Service Company.

WESLEY F. HOAG*+, 40 Vice President Vice President and General
Counsel of R. Meeder & Associates,
Inc. (since July 1993);
Attorney, Porter, Wright,
Morris & Arthur, a law firm
(October 1984 to June 1993).

<FN>
*"Interested Person" of the Trust (as defined in the Investment Company Act of
1940), The Flex-funds, and each Portfolio.

+P.O. Box 7177, 6000 Memorial Drive, Dublin, Ohio 43017
</FN>
</TABLE>
<PAGE>

Robert S. Meeder, Sr. is Robert S. Meeder, Jr.'s father and Donald F.
Meeder's uncle.

The following table shows the compensation paid by the Portfolio and
the Fund Complex as a whole to the Trustees of the Portfolio and the Fund
Complex during the fiscal year ended December 31, 1996 (the Fund was not in
existence during this period).

COMPENSATION TABLE

Pension or
Retirement Estimated Total
Aggregate Benefits Annual Compensation
Compensation Accrued as Part Benefits from Registrant
from the of Portfolio or Upon and Fund Complex
Trustee Portfolio Fund Expense Retirement Paid to Trustee

Robert S. Meeder, Sr. None None None None

Milton S. Bartholomew $1,485 None None $7,550

John M. Emery None None None $7,550

Richard A. Farr None None None $6,750

William F. Gurner None None None $5,250

Russel G. Means $1,325 None None $6,750

Lowell G. Miller None None None None

Robert S. Meeder, Jr. None None None None

Walter L. Ogle $1,200 None None $6,000

Philip A. Voelker None None None None

Roger D. Blackwell None None None $5,250

</TABLE>

Neither the Trust nor any other member of the Fund Complex pays any
pension or retirement benefits to any Trustee or officer or maintains any plan
for such purpose.

Each Trustee who is not an "interested person" is paid a meeting fee
of $250 per meeting for each of the five Portfolios. In addition, each such
Trustee earns an annual fee, payable quarterly, based on the average net
assets in each Portfolio based on the following schedule: Money Market
Portfolio, 0.0005% of the amount of average net assets between $500 million
and $1 billion; 0.00025% of the amount of average net assets exceeding $1

<PAGE>

billion. For the other four Portfolios, including the Portfolio, each Trustee is
paid a fee of 0.00375% of the amount of each Portfolio's average net assets
exceeding $15 million. Messers Bartholomew and Emery comprise the Audit
Committee for each of The Flex-Partners and The Flex-funds Trusts, and each
Portfolio. Each is paid $500 for each meeting of the Audit Committee attended
regardless of the number of Audit Committees on which he serves. All other
officers and Trustees serve without compensation from the Trust.

The Trustees and officers of the Fund and the Portfolio own, in the
aggregate, less than 1% of the Fund's total outstanding shares.

FLEX-PARTNERS RETIREMENT PLANS

The Trust offers retirement plans which are described in the
Prospectus. Minimum purchase requirements for retirement plan accounts are
subject to the same requirements as regular accounts, except for an IRA, which
has a $500 minimum purchase requirement. Information concerning contribution
limitations for IRA accounts are described below.

DEDUCTIBLE CONTRIBUTIONS

Individual Retirement Accounts (IRA):

Regular - Contributions to an IRA (except for rollovers) cannot
exceed the amount of compensation includible in gross income for the tax year
or $2,000, whichever is less. If neither you nor your spouse is an active
participant in an employer plan, you may make a contribution up to this limit
and take a deduction for the entire amount contributed. If you or your spouse
is an active participant and your adjusted gross income (AGI) is below a
certain level, you may also make a contribution and take a deduction for the
entire amount contributed. However, if you or your spouse is an active
participant and your AGI is above the specified level, the dollar limit of the
deductible contribution you make to your IRA may be reduced or eliminated.

Regular contributions are not allowed for the year in which you
attain age 70-1/2 or for any year thereafter. Contributions for a year may be
made during such year or by the tax return filing date for such year (not
including extensions), if irrevocably designated for such year, in writing,
when such contribution is made.

If you and your spouse each receive compensation during the year and
are otherwise eligible, each of you may establish your own IRA.

Spousal - You may make spousal IRA contributions for a year, if: 1)
your spouse has "compensation" that is includible in gross income for such
year; 2) you have less compensation than your spouse for such year; 3) you do
not reach age 70-1/2 by the end of such year; and 4) you file a joint
federal income tax return for such year.

For a tax year before 1997, the spousal contribution rules limit the
aggregate amount of the contributions to both of your IRAs for a year to the
lesser of $2,250 or the amount of the compensated spouse's compensation for
such year. The contributions do not have to be split equally between the IRAs
belonging to you and your spouse. However, the total contribution to either of
your IRAs may not exceed $2,000.

<PAGE>

For tax years after 1996, if you are the compensated spouse, your
contribution must be made in accordance with the regular contribution rules
above. If you are the noncompensated (or lower compensated) spouse, your
contribution may not exceed the lesser of $2,000 or 100% of the combined
compensation of you and your spouse, reduced by the amount of your spouse's
IRA contribution.

Contributions for your spouse must be made to a separate IRA
established for your spouse as the depositor or grantor of his or her own IRA
and your spouse becomes subject to all of the privileges, rules, and
restrictions generally applicable to IRAs.

Active Participant - If you are not self-employed, your Form W-2
should indicate your participation status. If you have questions about your
participation status, check with your employer or your tax advisor.

You are covered by a retirement plan for a year if your employer or
union has a retirement plan under which money is added to your account, or you
are eligible to earn retirement credits, even if you are not yet vested in
your retirement plan. Also, if you make required contributions or voluntary
contributions to an employer-sponsored retirement plan, you are an active
participant.

Adjusted Gross Income (AGI) - If you are an active participant, the
amount of your AGI for the year (if you and your spouse file a joint tax
return, your combined AGI) will be used to determine if you can make a
deductible IRA contribution. If you are at or below a certain AGI level,
called the Threshold Level, you can make a deductible contribution under the
same rules as a person who is not an active participant.

If you are single, or treated as being single, your AGI Threshold
Level is $25,000. If you are married and file a joint tax return, your AGI
Threshold Level is $40,000. If you are married, file a separate tax return,
and live with your spouse for any part of the year, your AGI Threshold is $0.

NONDEDUCTIBLE CONTRIBUTIONS

Eligibility - Even if your deduction limit is less than $2,000, you
may still contribute using the rules in the "Deductible Contributions" section
above. The portion of your IRA contribution that is not deductible will be a
nondeductible contribution. You may choose to make a nondeductible IRA
contribution even if you could have deducted part or all of the contribution.
Generally, interest or other earnings on your IRA contribution, whether from
deductible or nondeductible contributions, will not be taxed until distributed
from your IRA.

Rollover Contributions - individuals who receive certain lump-sum
distributions from employer-sponsored retirement plans may make roll-over
contributions to an IRA and by doing so defer taxes on the distribution and
shelter any investment earnings.

<PAGE>

CONTRACTS WITH COMPANIES AFFILIATED WITH THE MANAGER

Mutual Funds Service Co. provides accounting, stock transfer,
dividend disbursing, and shareholder services to the Fund Complex. The minimum
annual fee for accounting services for the Portfolio is $7,500. Subject to the
applicable minimum fee, the Portfolio's annual fee, payable monthly, is
computed at the rate of 0.15% of the first $10 million, 0.10% of the next $20
million, 0.02% of the next $50 million and 0.01% in excess of $80 million of
the Portfolio's average net assets. Subject to a $4,000 annual minimum fee,
the Fund will incur an annual fee, payable monthly, which will be the greater
of $15 per shareholder account or 0.10% of the Fund's average net assets,
payable monthly, for stock transfer and dividend disbursing services. Mutual
Funds Service Co. also serves as Administrator to the Fund pursuant to an
Administration Services Agreement. Services provided to the Fund include
coordinating and monitoring any third party services to the Fund; providing
the necessary personnel to perform administrative functions for the Fund;
assisting in the preparation, filing and distribution of proxy materials,
periodic reports to Trustees and shareholders, registration statements and
other necessary documents. The Fund incurs an annual administrative fee,
payable monthly, of .05% of the Fund's average net assets. These fees are
reviewable annually by the respective Trustees of the Trust and the Portfolio.

For the year ended December 31, 1996, total payments to Mutual Funds
Service Co. by the Portfolio amounted to $30,867.

DESCRIPTION OF THE TRUST

TRUST ORGANIZATION. The assets of the Trust received for the issue or
sale of the shares of the Fund and all income, earnings, profits, and proceeds
thereof, subject only to the rights of creditors, are especially allocated to
the Fund and constitute the underlying assets of the Fund. These assets are
segregated on the books of account, and are to be charged with the liabilities
with respect to the Fund and with a share of the general expenses of the
Trust. Expenses with respect to the Trust are to be allocated in proportion to
the asset value of the respective funds except where allocations of direct
expense can otherwise be fairly made. The officers of the Trust, subject to
the general supervision of the Board of Trustees, have the power to determine
which expenses are allocable to a given fund, or which are general or
allocable to all of the funds. In the event of the dissolution or liquidation
of the Trust, shareholders of each fund are entitled to receive as a class the
underlying assets of such fund available for distribution.

SHAREHOLDER AND TRUSTEE LIABILITY. The Trust is an entity of the type
commonly known as a "Massachusetts business trust." Under Massachusetts law,
shareholders of such a trust may, under certain circumstances, be held
personally liable for the obligations of the trust. The Declaration of Trust
provides that the Trust shall not have any claim against shareholders except
for the payment of the purchase price of shares and requires that each
agreement, obligation, or instrument entered into or executed by the Trust or

<PAGE>

the Trustees include a provision limiting the obligations created thereby to
the Trust and its assets.

The Declaration of Trust provides for indemnification out of each
Fund's property of any shareholder held personally liable for the obligations
of the Fund. The Declaration of Trust also provides that each Fund shall, upon
request, assume the defense of any claim made against any shareholder for any
act or obligation of the Fund and satisfy any judgment thereon. Thus, the risk
of a shareholder incurring financial loss on account of shareholder liability
is limited to circumstances in which a Fund itself would be unable to meet its
obligations. The Manager believes that, in view of the above, the risk of
personal liability to shareholders is remote.

The Declaration of Trust further provides that the Trustees, if they
have exercised reasonable care, will not be liable for any neglect or
wrongdoing, but nothing in the Declaration of Trust protects Trustees against
any liability to which they would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence, or reckless disregard of the duties
involved in the conduct of their office.

VOTING RIGHTS. The Fund's capital consists of shares of beneficial
interest. As a shareholder, you receive one vote for each share you own. The
shares have no preemptive or conversion rights; the voting and dividend
rights, the right of redemption, and the privilege of exchange are described
in the Prospectus. Shares are fully paid and nonassessable, except as set
forth under the heading "Shareholder and Trustee Liability" above.
Shareholders representing 10% or more of the Trust or the Fund may, as set
forth in the Declaration of Trust; call meetings of the Trust or the Fund for
any purpose related to the Trust or Fund, as the case may be, including, in
the case of a meeting of the entire Trust, the purpose of voting on removal of
one or more Trustees. The Trust or any Fund may be terminated upon the sale of
its assets to another open-end management investment company, if approved by
vote of the holders of a majority of the Trust or the Fund, as determined by
the current value of each shareholder's investment in the Fund or Trust, or
upon liquidation and distribution of its assets, if approved by a majority of
the Trustees of the Trust. If not so terminated, the Trust and the Fund will
continue indefinitely.

CUSTODIAN Star Bank, N.A., 425 Walnut Street, Cincinnati, OH 45202,
is custodian of the assets of the Portfolio. The custodian is responsible for
the safekeeping of the Portfolio's assets and the appointment of subcustodian
banks and clearing agencies. The custodian takes no part in determining the
investment policies of the Portfolio or in deciding which securities are
purchased or sold by the Portfolio. The Portfolio may, however, invest in
obligations of the custodian and may purchase or sell securities from or to
the custodian.

AUDITOR. KPMG Peat Marwick LLP, Two Nationwide Plaza, Columbus, Ohio
43215, serves as the Trust's independent accountant. KPMG audits financial
statements for the Fund Complex and provides other audit, tax, and related
services.