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BB&T MUTUAL FUNDS GROUP
CLASS A AND B SHARES
Supplement dated June 22, 1998
to Prospectus dated February 1, 1998
Capital terms not defined in this Supplement have the meaning assigned to
them in the Prospectus.
1. Under "HOW TO PURCHASE AND REDEEM SHARES" -- AUTO INVEST PLAN on page
44, the third and fourth sentences are deleted in their entirety and replaced as
follows:
The required minimum initial investment when opening an account using
the Auto Invest Plan is $25 per Fund; the minimum amount for subsequent
automatic investments in a Fund is $25. To participate in the Auto Invest
Plan, Shareholders should complete the appropriate section of the Account
Registration Form or supplemental sign-up form that can be acquired by
calling the Distributor and attach a voided check and (for new Shareholders
only) send a check for the initial $25 Fund Share purchase.
2. Under "HOW TO PURCHASE AND REDEEM SHARES" -- AUTO WITHDRAWAL PLAN on
page 48, the first paragraph is deleted in its entirety and replaced as follows:
BB&T Mutual Funds Group Auto Withdrawal Plan enables Shareholders to
make regular redemptions of Class A Shares and Class B Shares of a Fund.
With Shareholder authorization, the Group's transfer agent will
automatically redeem Class A Shares and Class B Shares at the net asset
value of the applicable Fund on the dates of withdrawal and have the amount
specified transferred according to the instructions of the Shareholder. In
certain cases, Class B Shareholders may redeem using the Auto Withdrawal
Plan without paying a contingent deferred sales charge as described in "How
To Purchase and Redeem Shares -- Contingent Deferred Sales Charge."
Shareholders participating in the Auto Withdrawal Plan must maintain a
minimum account balance of $1,000 in the Fund from which Class A Shares or
Class B Shares are being redeemed. Purchase of additional Shares concurrent
with withdrawals may be disadvantageous to certain Shareholders because of
tax liabilities.
3. Under "HOW TO PURCHASE AND REDEEM SHARES" -- CONTINGENT DEFERRED SALES
CHARGE on page 43, the following sales waiver is added to the last paragraph as
follows:
(iii) provided that the Shareholder withdraws no more than 12% of
the account value annually using the Auto Withdrawal Plan
Feature.
4. Under "OTHER INVESTMENT PRACTICES" on page 29, the third paragraph
regarding the Group's securities lending policy is deleted and replaced in its
entirety as follows:
In order to generate additional income, each Fund except the North
Carolina Fund and the South Carolina Fund may, from time to time, lend its
portfolio securities to broker-dealers, banks or institutional borrowers of
securities which BB&T and/or a Fund's respective subadviser has determined
are creditworthy under guidelines established by the Group's Board of
Trustees. The Group will employ one or more securities lending agents to
initiate and effect securities lending transactions for the Group. While
the lending of securities may subject a Fund to certain risks, such as
delays or the inability to regain the securities in the event the borrower
was to default on its lending agreement or enter into bankruptcy, the Fund
will lend only on a fully collateralized basis in order to reduce such
risk. During the time portfolio securities are on loan, the Fund is
entitled to receive any dividends or interest paid on such securities.
Additionally, cash collateral received will be invested on behalf of the
Fund exclusively in money market instruments. While a Fund will not have
the right to vote securities on loan, the Funds intend to terminate the
loan and regain the right to vote if that is considered important with
respect to the investment. Each Fund will restrict its securities lending
to 33 1/3% of its total assets.
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5. Under "MANAGEMENT OF BB&T MUTUAL FUNDS GROUP" on page 58, a new
provision is added as follows:
PORTFOLIO BROKERAGE. When placing orders for the Group's securities
transactions, BB&T or a Fund's respective sub-adviser will use its judgment
to obtain best price and execution. The full range and quality of brokerage
services available are considered in making these determinations. BB&T or a
Fund's respective sub-adviser may use a qualified affiliated broker or
dealer of BB&T to execute the Group's transactions when it reasonably
believes that commissions (or prices) charged and transaction quality will
be at least comparable to those available from other qualified brokers or
dealers.
INVESTORS SHOULD RETAIN THIS SUPPLEMENT WITH THE PROSPECTUS FOR FUTURE
REFERENCE.
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BB&T MUTUAL FUNDS GROUP
TRUST SHARES
Supplement dated June 22, 1998
to Prospectus dated February 1, 1998
Capital terms not defined in this Supplement have the meaning assigned to
them in the Prospectus.
1. On page 26 under "OTHER INVESTMENT PRACTICES" the second full paragraph
regarding the Group's securities lending policy is deleted and replaced in its
entirety as follows:
In order to generate additional income, each Fund except the North
Carolina Fund and the South Carolina Fund may, from time to time, lend its
portfolio securities to broker-dealers, banks or institutional borrowers of
securities which BB&T and/or a Fund's respective sub-adviser has determined
are creditworthy under guidelines established by the Group's Board of
Trustees. The Group will employ one or more securities lending agents to
initiate and effect securities lending transactions for the Group. While
the lending of securities may subject a Fund to certain risks, such as
delays or the inability to regain the securities in the event the borrower
was to default on its lending agreement or enter into bankruptcy, the Fund
will lend only on a fully collateralized basis in order to reduce such
risk. During the time portfolio securities are on loan, the Fund is
entitled to receive any dividends or interest paid on such securities.
Additionally, cash collateral received will be invested on behalf of the
Fund exclusively in money market instruments. While a Fund will not have
the right to vote securities on loan, the Funds intend to terminate the
loan and regain the right to vote if that is considered important with
respect to the investment. Each Fund will restrict its securities lending
to 33 1/3% of its total assets.
2. Under "MANAGEMENT OF BB&T MUTUAL FUNDS GROUP" on page 46, a new
provision is added as follows:
Portfolio Brokerage. When placing orders for the Group's securities
transactions, BB&T or a Fund's respective sub-adviser will use its judgment
to obtain best price and execution. The full range and quality of brokerage
services available are considered in making these determinations. BB&T or a
Fund's respective sub-adviser may use a qualified affiliated broker or
dealer of BB&T to execute the Group's transactions when it reasonably
believes that commissions (or prices) charged and transaction quality will
be at least comparable to those available from other qualified brokers or
dealers.
INVESTORS SHOULD RETAIN THIS SUPPLEMENT WITH THE PROSPECTUS FOR
FUTURE REFERENCE.
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BB&T MUTUAL FUNDS GROUP
MONEY MARKET FUNDS
CLASS A SHARES
TRUST CLASS SHARES
Supplement dated June 22, 1998
to Prospectus dated February 1, 1998
Capital terms not defined in this Supplement have the meaning assigned to
them in the Prospectus.
1. Under "HOW TO PURCHASE AND REDEEM SHARES" -- "AUTO INVEST PLAN" on page
15, the third and fourth sentences are deleted in their entirety and replaced as
follows:
The required minimum initial investment when opening an account using
the Auto Invest Plan is $25 per Fund; the minimum amount for subsequent
automatic investments in a Fund is $25. To participate in the Auto Invest
Plan, Shareholders should complete the appropriate section of the Account
Registration Form or supplemental sign-up from that can be acquired by
calling the Distributor and attach a voided check and (for new Shareholders
only) send a check for the initial $25 Fund Share purchase.
2. On page 12 under "SECURITIES LENDING" the section is deleted and
replaced in its entirety as follows:
In order to generate additional income, each Money Market Fund may,
from time to time, lend its portfolio securities to broker-dealers, banks
or institutional borrowers of securities which BB&T and/or a Fund's
sub-adviser has determined are creditworthy under guidelines established by
the Group's Board of Trustees. The Group will employ one or more securities
lending agents to initiate and effect securities lending transactions for
the Group. While the lending of securities may subject a Money Market Fund
to certain risks, such as delays or the inability to regain the securities
in the event the borrower was to default on its lending agreement or enter
into bankruptcy, a Money Market Fund will lend only on a fully
collateralized basis in order to reduce such risk. During the time
portfolio securities are on loan, the Money Market Fund is entitled to
receive any dividends or interest paid on such securities. Additionally,
cash collateral received will be invested on behalf of the Money Market
Fund exclusively in money market instruments. While a Money Market Fund
will not have the right to vote securities on loan, each Money Market Fund
intends to terminate the loan and regain the right to vote if that is
considered important with respect to the investment. Each Money Market Fund
will restrict its securities lending to 33 1/3% of its total assets.
INVESTORS SHOULD RETAIN THIS SUPPLEMENT WITH THE PROSPECTUS FOR FUTURE
REFERENCE.
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BB&T MUTUAL FUNDS GROUP
SMALL COMPANY GROWTH FUND
TRUST SHARES
Supplement dated June 22, 1998
to Prospectus dated February 1, 1998
Capital terms not defined in this Supplement have the meaning assigned to
them in the Prospectus.
1. On page 12 under "OTHER INVESTMENT PRACTICES" the first paragraph
regarding the Group's securities lending policy is deleted and replaced in its
entirety as follows:
In order to generate additional income, the Fund may, from time to
time, lend its portfolio securities to broker-dealers, banks or
institutional borrowers of securities which BB&T and/or the Fund's
sub-adviser has determined are creditworthy under guidelines established by
the Group's Board of Trustees. The Group will employ one or more securities
lending agents to initiate and effect securities lending transactions for
the Group. While the lending of securities may subject the Fund to certain
risks, such as delays or the inability to regain the securities in the
event the borrower was to default on its lending agreement or enter into
bankruptcy, the Fund will lend only on a fully collateralized basis in
order to reduce such risk. During the time portfolio securities are on
loan, the Fund is entitled to receive any dividends or interest paid on
such securities. Additionally, cash collateral received will be invested on
behalf of the Fund exclusively in money market instruments. While the Fund
will not have the right to vote securities on loan, the Fund intend to
terminate the loan and regain the right to vote if that is considered
important with respect to the investment. The Fund will restrict its
securities lending to 33 1/3% of its total assets.
2. Under "MANAGEMENT OF BB&T MUTUAL FUNDS GROUP" on page 21, a new
provision is added as follows:
PORTFOLIO BROKERAGE. When placing orders for the Group's securities
transactions, BB&T or the Fund's sub-adviser will use its judgment to
obtain best price and execution. The full range and quality of brokerage
services available are considered in making these determinations. BB&T or
the Fund's sub-adviser may use a qualified affiliated broker or dealer of
BB&T to execute the Group's transactions when it reasonably believes that
commissions (or prices) charged and transaction quality will be at least
comparable to those available from other qualified brokers or dealers.
INVESTORS SHOULD RETAIN THIS SUPPLEMENT WITH THE PROSPECTUS FOR FUTURE
REFERENCE.
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BB&T MUTUAL FUNDS GROUP
Supplement dated June 22, 1998 to
Statement of Additional Information dated
February 1, 1998
Capital terms not defined in this Supplement have the meaning assigned to
them in the Prospectus.
The third paragraph on page B-46 of the Statement of Additional Information
is deleted in its entirety and is replaced with the following:
To the extent permitted by applicable rules and regulations, either
BB&T or the Sub-Advisers may execute portfolio transactions on behalf of
the Funds through an affiliate of BB&T. As required by Rule 17e-1 under the
Investment Company Act of 1940, the Funds have adopted procedures which
provide that commissions paid to such affiliate must be fair and reasonable
compared to the commission, fees or other remuneration paid to other
brokers in connection with comparable transactions. The procedures also
provide that the Board will review reports of such affiliated brokerage
transactions in connection with the foregoing standard.
On page B-51, the following section is added:
SECURITIES LENDING AGENT
The Group has retained Cantor Fitzgerald & Co. ("Cantor Fitzgerald")
as its securities lending agent and will compensate that firm based on a
percentage of the profitability generated by securities lending
transactions effected on the Group's behalf. Cantor Fitzgerald has employed
BISYS to provide certain administrative services relating to securities
lending transactions entered into on behalf of the Group. Cantor
Fitzgerald, rather than the Group, will compensate BISYS for those
services.
INVESTORS SHOULD RETAIN THIS SUPPLEMENT WITH THE STATEMENT OF ADDITIONAL
INFORMATION PROSPECTUS FOR FUTURE REFERENCE.
