CARDINAL GROUP, 485BPOS, 1996-01-19

CARDINAL GROUP
485BPOS, 1996-01-19

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<PAGE> 1

As filed with the Securities and
Exchange Commission on January 19, 1996

1933 Act Registration No. 33-59984
1940 Act File No. 811-7588

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 /X/

Pre-Effective Amendment No. / /

Post Effective Amendment No. 4 /X/

and

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 /X/

Amendment No. 5 /X/

THE CARDINAL GROUP
(Exact Name of Registrant as Specified in Charter)

155 East Broad Street, Columbus, Ohio 43215
(Address of Principal Executive Offices)

Registrant's Telephone Number, including Area Code: 614/464-5511

Frank W. Siegel, 155 East Broad Street, Columbus, Ohio 43215
(Name and Address of Agent for Service)

Copy to: Charles H. Hire, Esq.
Baker & Hostetler
65 East State Street
Columbus, Ohio 43215

Approximate Date of Proposed Public Offering:
Immediately, upon effectiveness

It is proposed that this filing will become effective (check appropriate box)

__X__ immediately upon filing pursuant to paragraph (b)
_____ on (date) pursuant to paragraph (b)
_____ 60 days after filing pursuant to paragraph (a)(1)
_____ on (date) pursuant to paragraph (a)(1)
_____ 75 days after filing pursuant to paragraph (a)(2)
_____ on (date) pursuant to paragraph (a)(2) of Rule 485

If appropriate, check the following box:

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

<PAGE> 2

<TABLE>
<CAPTION>
CALCULATION OF FEE*

Title of Securities Amount Being Proposed Maximum Proposed Maximum Amount of
Being Registered Registered Offering Price Per Aggregate Offering Registration Fee
Unit** Price***
<S> <C> <C> <C> <C>
Shares of
Beneficial
Interest, without
par value, of
Cardinal Balanced
Fund 178,428 $11.75 $145,000 $ 50

Shares of
Beneficial
Interest, without
par value, of
Cardinal Aggressive
Growth Fund 117,487 $10.57 $145,000 $ 50
------- -------- ----
Total 295,915 $290,000 $100
======= ======== ====

<FN>
* The Registrant has also registered an indefinite number or amount of
securities under the Securities Act of 1933 pursuant to Rule 24f-2(a)(1)
under the Investment Company Act of 1940. On November 1, 1995, the
Registrant filed its Rule 24f-2 Notice with respect to the fiscal year ended
September 30, 1995.

** Based on the offering price per share on January 15, 1996.

*** Calculated pursuant to Rule 24e-2 under the Investment Company Act of 1940.
During the fiscal year ended September 30, 1995, the total amount of
securities redeemed was $6,342,725; of the redeemed amount, $3,294,345 were
used for reductions pursuant to Rule 24f-2(c) under said Act in the current
fiscal year and $3,048,380 are being used for reduction in this Amendment
under Rule 24e-2.

</TABLE>

<PAGE> 3
CARDINAL BALANCED FUND

Cross Reference Sheet Required By
Rule 481(a) under the Securities Act of 1933

<TABLE>
<CAPTION>
PART A OF FORM N-1A ITEM NO. CAPTION(S) IN PROSPECTUS
---------------------------- ------------------------
<S> <C>
1.(a)(i) ............................. Cover Page
(ii) ............................. Cover Page
(iii) ............................. Cover Page
(iv) ............................. Cover Page
(v) ............................. Cover Page
(vi) ............................. *
(vii)............................. *
(b) ................................ *
2.(a)(i) ............................. "Fee Table"
(ii) ............................. *
(b) ................................ "Prospectus Highlights"
(c) ................................ "Prospectus Highlights"
3.(a) ................................ "Financial Highlights"
(b) ................................ "Financial Highlights"
(c) ................................ "Performance Information"
(d) ................................ "Performance Information"
4.(a)(i)(A) .......................... "What Is The Fund?"
(i)(B) .......................... "What Is The Fund?"
(ii) ............................. "What Are The Investment Objectives
And Policies Of The Fund?"
(ii)(A) .......................... *
(ii)(B)(1) ....................... "What Are The Investment Objectives
And Policies Of The Fund?"
(ii)(B)(2) ....................... *
(ii)(C) .......................... "What Are The Investment Objectives
And Policies Of The Fund?"
(ii)(D) .......................... "What Are The Investment Objectives
And Polices Of The Fund?"
(b)(i) ............................. "What Are The Investment Objectives
And Policies Of The Fund?"
(ii) ............................. "What Are The Investment Objectives
And Policies Of The Fund?"
(c) ................................ "What Are The Investment Objectives
and Policies Of The Fund?"
5.(a) ................................ "Who Manages My Investment In The
Fund?"
(b)(i) ............................. "Who Manages My Investment In The
Fund?"
(b)(ii) ............................ "Who Manages My Investment In The
Fund?"
<FN>
- --------------
*Indicates items which are omitted or inapplicable or answer to which is in the negative and omitted from Prospectus.
</TABLE>

- i -

<PAGE> 4

<TABLE>
<CAPTION>
PART A OF FORM N-1A ITEM NO. CAPTION(S) IN PROSPECTUS
---------------------------- ------------------------
<S> <C>
(b)(iii) ........................... "Who Manages My Investment In The
Fund?"
(c) ................................ "Who Manages My Investment In The
Fund?"
(d) ................................ "Who Manages My Investment In The
Fund?"
(e) ................................ "Who Manages My Investment In The
Fund?"
(f) ................................ "Who Manages My Investment In The
Fund?"
(g)(i)(A) .......................... *
(g)(i)(B) .......................... *
(g)(i)(C) .......................... *
(g)(ii) ............................ *
5A.(a) ............................... *
(b) ................................ *
(c) ................................ *
6.(a) ................................ "What Are My Rights As A
Shareholder?"
(b) ................................ "What Are My Rights As A
Shareholder?"
(c) ................................ *
(d) ................................ "What Are My Rights As A
Shareholder?"
(e) ................................ "What Are My Rights As A
Shareholder?"; "Who Provides
Shareholder Reports?"
(f) ................................ "What Distributions Will I Receive?"
(g) ................................ "Does The Fund Pay Federal Income
Tax?"; "What About My Taxes?"
7.(a) ................................ "How Do I Purchase Shares Of The
Fund?"
(b) ................................ "How Do I Purchase Shares Of The
Fund?"; "How Is Net Asset Value
Calculated?"
(c) ................................ "May My Tax Sheltered Retirement Plan
Invest In The Fund?"; "How May I
Qualify For Quantity Discounts?"
(d) ................................. "How Do I Purchase Shares Of The
Fund?"
(e) ................................. "Who Manages My Investment In The
Fund?"
(f) ................................. "Who Manages My Investment In The
Fund?"
8.(a) ................................. "How May I Redeem My Shares?"
(b) ................................. "How May I Redeem My Shares?"
(c) ................................. "How May I Redeem My Shares?"
(d) ................................. "How May I Redeem My Shares?"
9. ................................... *
<FN>
- --------------
*Indicates items which are omitted or inapplicable or answer to which is in the negative and omitted from Prospectus.
</TABLE>

- ii -

<PAGE> 5

PROSPECTUS----------------------------------------------------------------------

(LOGO)

CARDINAL BALANCED FUND

Cardinal Balanced Fund (the "Fund") is a diversified investment fund of The
Cardinal Group (the "Group"), an open-end, management investment company. The
Trustees of the Group have divided the Fund's beneficial ownership into an
unlimited number of transferable units called shares (the "Shares").

The Fund seeks as its investment objectives current income and long-term growth
of both capital and income. There can be no assurance that the Fund's objectives
will be achieved.

THE SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY ANY BANK, NOR ARE SUCH SHARES FEDERALLY INSURED BY THE U.S.
GOVERNMENT, THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD
OR ANY OTHER GOVERNMENTAL AGENCY. AN INVESTMENT IN THE FUND INVOLVES CERTAIN
INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.

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

FOR FURTHER INFORMATION REGARDING THE FUND OR FOR ASSISTANCE
IN OPENING AN ACCOUNT OR REDEEMING SHARES, PLEASE CALL (800) 282-9446 TOLL FREE.

INQUIRIES MAY ALSO BE MADE BY MAIL ADDRESSED
TO THE FUND AT ITS PRINCIPAL OFFICE:

155 EAST BROAD STREET
COLUMBUS, OHIO 43215
- --------------------------------------------------------------------------------

The Prospectus relates only to Cardinal Balanced Fund, currently one fund of the
Group and one of six funds of the Cardinal family of funds. Interested persons
who wish to obtain copies of the prospectus of Cardinal Aggressive Growth Fund,
another fund of the Group, or of The Cardinal Fund Inc., Cardinal Government
Obligations Fund, Cardinal Government Securities Trust or Cardinal Tax Exempt
Money Trust, the other members of the Cardinal family of funds (collectively,
with the Fund, the "Cardinal Funds"), should contact The Ohio Company at the
number above. Additional information about the Fund, contained in a Statement Of
Additional Information dated January 19, 1996, has been filed with the
Securities and Exchange Commission and is incorporated herein by reference. Such
Statement is available upon request without charge from the Fund at the above
address or by calling the phone number provided above.

This Prospectus sets forth concisely the information about the Fund that a
prospective investor ought to know before investing in the Fund. This Prospectus
should be retained for future reference.

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

(THE OHIO CO. LOGO)

The date of this Prospectus is January 19, 1996.

- --------------------------------------------------------------------------------
<PAGE> 6

- --------------------------------------------------------------------------------
KEY FEATURES
- --------------------------------------------------------------------------------

<TABLE>
<S> <C>
PROFESSIONAL MANAGERS.......... The Fund's portfolio is fully managed by professional
portfolio managers. (See pages 22 and 23.)
DIVERSIFICATION................ The Fund's portfolio of securities represents an interest
in many companies and industries and therefore provides a
diversification of risk.
REDUCED SALES CHARGE........... An investor will pay a reduced sales charge for large
investments. (See pages 15 and 16.)
LOW INITIAL INVESTMENT......... An investor can acquire shares of a balanced portfolio
with a smaller investment than would be needed to
purchase a similar portfolio directly.
RETIREMENT PROGRAMS............ The Fund is a permissible investment for qualified
retirement plans.
DIVIDEND REINVESTMENT.......... You may reinvest dividends, capital gains or both in
additional Shares of the Fund at no charge. (See pages 5
and 18.)
ACH PROCESSING................. Investors may use Automated Clearing House ("ACH")
processing for subsequent purchases of Shares,
redemptions, and/or distributions paid. (See page 19.)
</TABLE>

2
<PAGE> 7

- --------------------------------------------------------------------------------
PROSPECTUS HIGHLIGHTS
- --------------------------------------------------------------------------------

<TABLE>
<S> <C>
SHARES OFFERED................. Units of beneficial interest without par value ("Shares")
of Cardinal Balanced Fund, a separate investment
portfolio (the "Fund") of The Cardinal Group, an Ohio
business trust (the "Group"). (See page 8.)
OFFERING PRICE & SALES
CHARGE....................... The public offering price is equal to net asset value per
share plus a sales charge equal to 4.50% of the public
offering price (4.71% of net amount invested) reduced on
investments of $100,000 or more. (See pages 15 and 16.)
MINIMUM PURCHASE............... $1,000 minimum initial investment and $50 minimum subse-
quent investments. (See page 15.)
TYPE OF COMPANY................ The Fund is a diversified series of an open-end,
management investment company, organized as an Ohio
business trust. (See page 8.)
INVESTMENT OBJECTIVES.......... Current income and long-term growth of both capital and
income. (See page 8.)
INVESTMENT POLICIES............ Under normal market conditions, the Fund will invest in
common stocks, preferred stocks, fixed income securities
and securities convertible into common stocks. At least
25% of the value of the Fund's assets will be invested in
fixed income senior securities. (See pages 8 through 10.)
RISK FACTORS AND SPECIAL
CONSIDERATIONS............... An investment in a mutual fund such as the Fund involves
a certain amount of risk and may not be suitable for all
investors. Some investment policies of the Fund may
entail certain risks. (See "WHAT ARE THE INVESTMENT
OBJECTIVES AND POLICIES OF THE FUND? -- Risk Factors and
Investment Techniques" on pages 11 through 14.)
INVESTMENT ADVISER AND
MANAGER...................... The Fund has entered into an Investment Advisory and
Management Agreement with Cardinal Management Corp., a
wholly-owned subsidiary of The Ohio Company (the "Ad-
viser"). The Adviser also serves as investment adviser to
Cardinal Aggressive Growth Fund, another fund of the
Group. (See page 23.)
</TABLE>

3
<PAGE> 8

<TABLE>
<S> <C>
MANAGEMENT FEE................. The annual rate is .75% of the average daily net assets
of the Fund. (See page 23.)
DISTRIBUTIONS.................. Dividends and distributions are made with such frequency
as the Fund shall determine. (See page 18.)
REDEMPTION..................... At net asset value per share without charge, except that
broker-dealers may charge a service fee for assisting in
a redemption. (See page 18.)
TRANSFER AGENT................. Cardinal Management Corp. (the "Transfer Agent") (See
page 23.)
</TABLE>

4
<PAGE> 9

- --------------------------------------------------------------------------------
FEE TABLE
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Load Imposed on Purchases
(as a percentage of offering price).......................... 4.50%
Maximum Sales Load Imposed on Reinvested Dividends
(as a percentage of offering price).......................... 0%
Deferred Sales Load
(as a percentage of original purchase price or redemption
proceeds, as applicable)...................................... 0%
Redemption Fees
(as a percentage of amount redeemed, if applicable).......... 0%
Exchange Fee................................................... $0

ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets)
Management Fees................................................ .75%
12b-1 Fees After Fee Waiver(1)................................. 0
Other Expenses................................................. .96
----
Total Fund Operating Expenses.................................. 1.71%
====
</TABLE>

<TABLE>
<CAPTION>
EXAMPLE 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
You would pay the following expenses on
a $1,000 investment, assuming (1) 5%
annual return and (2) redemption at the
end of each time period:................ $ 62 $ 96 $134 $238

<FN>
(1) The Ohio Company, as the Fund's distributor, has agreed with the Group to
waive all of its Rule 12b-1 fees until September 30, 1996. Absent such
waiver, Rule 12b-1 Fees and Total Fund Operating Expenses would be 0.25% and
1.96%, respectively.
</TABLE>

The purpose of the above table is to assist a potential purchaser of the Fund's
Shares in understanding the various costs and expenses that an investor in the
Fund will bear directly or indirectly. See "WHO MANAGES MY INVESTMENT IN THE
FUND?" for a more complete discussion of the shareholder transaction expenses
and annual operating expenses of the Fund. The example and expenses above
reflect current fees. THE FOREGOING EXAMPLE SHOULD NOT BE CONSIDERED A
REPRESENTATION OF PAST OR FUTURE EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR
LESS THAN THOSE SHOWN.

5
<PAGE> 10

- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------

The following Financial Highlights with respect to the two fiscal years ended
September 30, 1995, and the period from June 24, 1993, through September 30,
1993, have been audited by KPMG Peat Marwick LLP, independent auditors, whose
report thereon, together with certain financial statements, are contained in the
Fund's Statement of Additional Information and which may be obtained by
shareholders and prospective investors.

FINANCIAL HIGHLIGHTS FOR EACH SHARE OF BENEFICIAL INTEREST
OUTSTANDING THROUGHOUT EACH PERIOD:

<TABLE>
<CAPTION>
PERIOD FROM
JUNE 24, 1993
YEARS ENDED SEPTEMBER 30, (DATE OF COMMENCEMENT OF
------------------------- OPERATIONS) THROUGH
1995 1994 SEPTEMBER 30, 1993*
------- ------- --------------------
<S> <C> <C> <C>
Net asset value, Beginning of period............. $ 9.90 $ 10.13 $ 10.00
Income from investment operations:
Net investment income.......................... 0.34 0.23 0.02
Net gains or losses on securities (both
realized and unrealized).................... 1.67 (0.20) 0.12
------- ------- -------
Total from investment operations............... 2.01 0.03 0.14
------- ------- -------
Less Distributions:
Dividends (from net investment income)......... (0.35) (0.23) (0.01)
Distributions (from capital gains)............. (0.04) (0.03) --
Returns of capital............................. -- -- --
------- ------- -------
Total Distributions............................ (0.39) (0.26) (0.01)
------- ------- -------
Net asset value, End of period................... $ 11.52 $ 9.90 $ 10.13
======= ======= =======
Ratios/Supplemental Data:
Total Return****................................. 20.76%*** 0.37% 1.40%**
Net assets, End of period (000) omitted........ $14,535 $13,973 $ 10,811
Ratio of expenses to average net assets........ 1.94%*** 2.07% 0.70%
Ratio of net investment income to average net
assets...................................... 3.24%*** 2.44% 0.35%
Portfolio Turnover Rate........................ 37.62% 59.09% 60.67%
- ---------------
<FN>
* Commencement of operations.

** This total return figure reflects aggregate total return. Aggregate total
return is calculated similarly to average annual total return except that
the return figure is aggregated over the relevant period instead of
annualized.

*** Effective September 15, 1995, The Ohio Company began waiving payments under
the Distribution and Shareholder Service Plan. Had the payments been
charged, the 1995 total return, ratio of expenses to average net assets,
and ratio of net investment income to average net assets would have been
20.75%, 1.95%, and 3.23%, respectively.

**** The total return figure does not reflect the imposition of the maximum
front-end sales load.

</TABLE>
See notes to financial statements appearing in the Fund's Statement of
Additional Information.

6
<PAGE> 11

Pursuant to a Revolving Credit Agreement between the Group, on behalf of the
Fund, and The Fifth Third Bank dated as of May 2, 1994 (the "Loan Agreement"),
the Fund may borrow money from The Fifth Third Bank in an amount not exceeding
the lesser of $2 million or 10% of the value of the Fund's total assets at the
time of borrowing. The table below sets forth certain information concerning the
Loan Agreement.

<TABLE>
<CAPTION>
AVERAGE NUMBER OF
AMOUNT OF DEBT AVERAGE AMOUNT OF FUND'S SHARES AVERAGE AMOUNT OF
YEAR ENDED OUTSTANDING AT END DEBT OUTSTANDING OUTSTANDING DURING DEBT PER SHARE
SEPTEMBER 30, OF PERIOD DURING THE PERIOD THE PERIOD DURING THE PERIOD
- ------------------ ------------------ ------------------ ------------------ ------------------
<S> <C> <C> <C> <C>
1995 $0 $ 0 1,285,211 $ 0
1994 $0 $532 1,239,389 $0.0004292
</TABLE>

- --------------------------------------------------------------------------------
PERFORMANCE INFORMATION
- --------------------------------------------------------------------------------

From time to time the Fund may advertise its average annual total return,
cumulative total return and/or yield. SUCH TOTAL RETURN FIGURES AND YIELD
FIGURES ARE BASED UPON HISTORICAL EARNINGS AND ARE NOT INTENDED TO INDICATE
FUTURE PERFORMANCE. The average annual total return advertised by the Fund
refers to the return generated by an investment in the Fund over certain
specified periods since the establishment of the Fund. The average annual total
return over a period equates the amount of an initial investment in the Fund to
the amount redeemable at the end of that period assuming that any dividends and
distributions earned by an investment in the Fund are immediately reinvested and
the maximum applicable sales charge (currently 4.5%) is deducted from the
initial investment at the time of investment. The cumulative total return
advertised refers to the total return on a hypothetical investment over the
relevant period and equates the amount of an initial investment in the Fund to
the amount redeemable at the end of that period assuming that any dividends and
distributions are immediately reinvested and the maximum sales charge is
deducted from the initial investment. Yield will be computed by dividing the
Fund's net investment income per share earned during a recent one-month period
by the Fund's per share maximum offering price (reduced by any undeclared earned
income expected to be paid shortly as a dividend) on the last day of the period
and annualizing the result. If the sales charge were not deducted, the average
annual total return, cumulative total return and yield advertised would be
higher.

In addition, from time to time the Fund may include in its sales literature and
shareholder reports a quote of the current "distribution" rate for the Fund. A
distribution rate is simply a measure of the level of dividends distributed for
a specified period and is computed by dividing the total amount of dividends per
share paid by the Fund during the past 12 months by a current maximum offering
price. It differs from yield, which is a measure of the income actually earned
by the Fund's investments, and from total return, which is a measure of the
income actually earned by, plus the effect of any realized and unrealized
appreciation or depreciation of, such investments during a stated period. A
distribution rate is, therefore, not intended to be a complete measure of
performance. A distribution rate may sometimes be greater than yield since, for
instance, it may including short-term and possibly long-term gains (which may be
non-recurring), may not include the effect of amortization of bond premiums and
does not reflect unrealized gains or losses.

Investors may also judge the performance of the Fund by comparing or referencing
its performance to the performance of other mutual funds or mutual fund
portfolios with comparable investment objectives and policies through various
mutual fund or market indices such as those prepared by Dow Jones & Co., Inc.,
and Standard & Poor's Corporation, and to data prepared by Lipper Analytical
Services, Inc., Morningstar, Inc. and CDA Investment Technologies, Inc.
Comparisons may also be made to indices or data published in Money Magazine,
Forbes, Barron's, The Wall Street Journal, The New York Times, The Columbus
Dispatch, Business Week, U.S.A. Today and Consumer Reports. In addition to
performance information, general information about the Fund that appears in a
publication such as those mentioned above may be included in advertisements and
in reports to shareholders.

7
<PAGE> 12

Further information about the performance of the Fund is contained in the Fund's
Annual Report to Shareholders which may be obtained without charge by contacting
the Fund at the telephone numbers set forth on the cover page of this
Prospectus.

- --------------------------------------------------------------------------------
WHAT IS THE FUND?
- --------------------------------------------------------------------------------

The Fund is one separate diversified investment fund of the Group, which was
organized on March 23, 1993, as an Ohio business trust. The Group is registered
and operates as an open-end management investment company as defined in the
Investment Company Act of 1940, as amended (the "1940 Act").

- --------------------------------------------------------------------------------
WHAT ARE THE INVESTMENT OBJECTIVES AND POLICIES OF THE FUND?
- --------------------------------------------------------------------------------

IN GENERAL

The investment objectives of the Fund are to seek current income and long-term
growth of both capital and income. The Fund intends to invest based on combined
considerations of risk, income and capital enhancement. The investment
objectives of the Fund are fundamental policies and as such may not be changed
without a vote of the holders of a majority of the outstanding Shares of the
Fund (as defined below under "WHAT ARE MY RIGHTS AS A SHAREHOLDER?"). There can
be no assurance that the investment objectives of the Fund will be achieved.

Under normal market conditions the Fund will invest in common stocks, preferred
stocks, fixed income securities and securities convertible into common stocks
(i.e., warrants, rights, convertible preferred stock, fixed rate preferred stock
and convertible fixed-income securities). At least 25% of the value of the
Fund's assets will be invested in fixed income senior securities. For purposes
of compliance with such 25% limitation, only that portion of any convertible
senior security attributable to its fixed income characteristics will be used.
By investing primarily in common stocks the Fund will pursue its objectives of
long-term growth of both capital and income. However, the Fund, through its
fixed-income and convertible securities as well as the dividend attributes of
certain of its common and preferred stock holdings will place considerable
emphasis on generating current income.

The common and preferred stocks and securities convertible into common stocks
will be selected if the Adviser believes that such securities can contribute to
the Fund's objectives of providing current income and growth in income and/or
long-term growth of capital. The Fund will invest in the common and preferred
stocks and securities convertible into common stocks of domestic issuers and
foreign issuers (subject to the limitations described below), with market
capitalizations of not less than $25 million and which are traded either in
established over-the-counter markets or on national exchanges.

The Adviser will select convertible securities primarily upon its evaluation
that the underlying common stocks meet the criteria for selection of common
stocks as described above. The Fund may invest up to 10% of its net assets in
non-investment grade convertible debt securities rated no lower than B by an
appropriate nationally recognized statistical rating organization (an "NRSRO")
or in unrated securities which are deemed by the Adviser to be of comparable
quality. Non-investment grade securities are commonly referred to as high yield
or high risk securities. High yield, high risk securities are generally riskier
than higher quality securities and are subject to more credit risk, including
risk of default, and volatility than higher quality securities. In addition,
such securities have less liquidity and experience more price fluctuation than
higher quality securities.

Convertible debt securities which are rated B by Moody's Investor Services
("Moody's") generally lack characteristics of a desirable investment, since the
assurance of interest and principal payments or maintenance of other terms of
the contract over any long period of time may be small. Debt rated B by Standard
& Poor's Corporation ("S&P") is regarded, on balance, as predominantly
speculative with respect to capacity to pay interest and repay principal in
accordance with the terms of the obligation. While such debt will likely have
some quality and protective characteristics, these are outweighed by large
uncertain-

8
<PAGE> 13

ties or major risk exposures to adverse conditions. In the event that a
convertible debt security's rating falls below a "B" by the appropriate NRSROs,
the Adviser will reevaluate the security in order to determine whether to sell
or convert, if possible, such security. In such an event, however, the Fund
would not be required to liquidate such security if it would suffer a loss on
the sale of such security.

The Fund's fixed income senior securities consist of bonds, debentures, notes,
zero-coupon securities, mortgage-related securities, obligations issued or
guaranteed by the U.S. Government or its agencies or instrumentalities,
certificates of deposit, time deposits, high quality commercial paper and
bankers' acceptances. The Fund may also invest in repurchase agreements.

The Fund expects to invest in a variety of bills, notes and bonds issued by the
U.S. Treasury, differing in their interest rates, maturities, and times of
issuance, as well as "stripped" U.S. Treasury obligations such as Treasury
Receipts issued by the U.S. Treasury representing either future interest or
principal payments, and other obligations issued or guaranteed by the U.S.
Government or its agencies or instrumentalities. Stripped securities are issued
at a discount to their "face value" and may exhibit greater price volatility
than ordinary debt securities because of the manner in which their principal and
interest are returned to investors. Certain of such U.S. Government obligations
may have variable or floating rates of interest, whose value on the adjustment
of its interest rate can reasonably be expected to approximate its par value.
However, in the event the interest rate of such security is tied to an index or
interest rate that may from time to time lag behind other market interest rates,
there is the risk that such security's market value, upon adjustment of its
interest rate, will not approximate its par value. Obligations of certain
agencies and instrumentalities of the U.S. Government, such as the Government
National Mortgage Association and the Export-Import Bank of the United States,
are supported by the full faith and credit of the U.S. Treasury; others, such as
those of the Federal National Mortgage Association, are supported by the right
of the issuer to borrow from the Treasury; others, such as those of the Student
Loan Marketing Association, are supported by the discretionary authority of the
U.S. Government to purchase the agency's obligations; still others, such as
those of the Federal Farm Credit Banks or the Federal Home Loan Mortgage
Corporation, are supported only by the credit of the instrumentality. No
assurance can be given that the U.S. Government would provide financial support
to U.S. Government-sponsored agencies or instrumentalities if it is not
obligated to do so by law. The Fund will invest in the obligations of such
agencies or instrumentalities only when the Adviser believes that the credit
risk with respect thereto is minimal.

The Fund also expects to invest in bonds, notes and debentures of U.S. corporate
issuers. Such obligations, in the case of debentures, will represent unsecured
promises to pay, in the case of notes and bonds, may be secured by mortgages on
real property or security interests in personal property and will in most cases
differ in their interest rates, maturities and times of issuance.

The Fund will invest only in corporate fixed income senior and municipal
securities which are rated at the time of purchase within the four highest
rating groups assigned by an appropriate NRSRO (which are considered to be
investment grade) or, if unrated, which the Adviser deems present attractive
opportunities and are of comparable quality. For a description of the rating
symbols of the NRSROs, see the Appendix to the Statement of Additional
Information. For a discussion of debt securities rated within the fourth highest
rating group assigned by an NRSRO, see "Risk Factors and Investment Techniques
- -- General" below.

Under normal market conditions, the Fund may hold up to 10% of the value of its
total assets in short-term obligations (with maturities of 12 months or less)
consisting of domestic commercial paper, bankers' acceptances, certificates of
deposit and time deposits of U.S. banks and repurchase agreements. The Fund may
also invest in securities of other investment companies, as further described
below, and in income participation loans.

The Fund may invest in obligations of the Export-Import Bank of the United
States, in U.S. dollar denominated international securities for which the
primary trading market is in the United States ("Yankee Securities"), or for
which the primary trading market is abroad ("Eurodollar Securities"), and in
Canadian Bonds and bonds issued by institutions organized for a specific
purpose, such as the World Bank and the

9
<PAGE> 14

European Economic Community, by two or more sovereign governments
("Supranational Agency Bonds").

The Fund may also invest in mortgage-related securities issued or guaranteed by
the U.S. Government or its agencies or instrumentalities or by nongovernmental
entities which are rated, at the time of purchase, within the four highest bond
rating categories assigned by an appropriate NRSRO, or, if unrated, which the
Adviser deems present attractive opportunities and are of comparable quality.
Under normal market conditions, the Fund's investment in mortgage-related
securities will not exceed 25% of the value of its total assets. Such
mortgage-related securities have mortgage obligations backing such securities,
including among others, conventional thirty year fixed rate mortgage
obligations, graduated payment mortgage obligations, fifteen year mortgage
obligations and adjustable rate mortgage obligations. All of these mortgage
obligations can be used to create pass-through securities. A pass-through
security is created when mortgage obligations are pooled together and undivided
interests in the pool or pools are sold. The cash flow from the mortgage
obligations is passed through to the holders of the securities in the form of
periodic payments of interest, principal and prepayments (net of a service fee).
Prepayments occur when the holder of an individual mortgage obligation prepays
the remaining principal before the mortgage obligation's scheduled maturity
date. As a result of the pass-through of prepayments of principal on the
underlying securities, mortgage-backed securities are often subject to more
rapid prepayment of principal than their stated maturity would indicate. Because
the prepayment characteristics of the underlying mortgage obligations vary, it
is not possible to predict accurately the realized yield or average life of a
particular issue of pass-through certificates. Prepayment rates are important
because of their effect on the yield and price of the securities. Accelerated
prepayments have an adverse impact on yields for pass-throughs purchased at a
premium (i.e., a price in excess of principal amount) and may involve additional
risk of loss of principal because the premium may not have been fully amortized
at the time the obligations are repaid. The opposite is true for pass-throughs
purchased at a discount. The Fund may purchase mortgage-related securities at a
premium or a discount. Reinvestment of principal payments may occur at higher or
lower rates than the original yield on such securities. Due to the prepayment
feature and the need to reinvest payments and prepayments of principal at
current rates, mortgage-related securities can be less effective than typical
bonds of similar maturities at maintaining yields during periods of declining
interest rates.

Also included among the mortgage-related securities that the Fund may purchase
are collateralized mortgage obligations ("CMOs") and real estate mortgage
investment conduits ("REMICs"). CMOs may be collateralized by whole mortgage
loans but are more typically collateralized by portfolios of mortgage
pass-through securities guaranteed by the Government National Mortgage
Association, the Federal Home Loan Mortgage Corporation or the Federal National
Mortgage Association, and their income streams. Certain CMOs and REMICs are
issued by private issuers. Such securities may be eligible for purchase by the
Fund if (1) the issuer has obtained an exemptive order from the Securities and
Exchange Commission regarding purchases by investment companies of equity
interests of other investment companies or (2) such purchase is within the
limitations imposed by Section 12 of the 1940 Act.

The Fund may also invest in asset-backed securities such as Certificates of
Automobile Receivables ("CARS") and Certificates of Amortized Revolving Debts
("CARDS"), each of which must be rated at the time of purchase within the four
highest rating groups assigned by Moody's or S&P. For a description of the
fourth highest rating group, see "Risk Factors and Investment Techniques" below.

The amount invested in stocks, bonds and short-term obligations may be varied
from time to time, depending upon the Adviser's assessment of business, economic
and market conditions, including any potential advantage of price shifts between
the stock market and the bond market. The Fund reserves the right to hold
short-term securities in whatever proportion deemed desirable for temporary
defensive periods during adverse market conditions as determined by the Adviser.
However, to the extent that the Fund is so invested, its investment objectives
may not be achieved during that time.

10
<PAGE> 15

RISK FACTORS AND INVESTMENT TECHNIQUES

GENERAL. Like any investment program, an investment in the Fund entails certain
risks. As a fund investing primarily in common stocks, the Fund is subject to
stock market risk, i.e., the possibility that stock prices in general will
decline over short or even extended periods.

Since the Fund also invests in bonds, investors in the Fund are also exposed to
bond market risk, i.e., fluctuations in the market value of bonds. Bond prices
are influenced primarily by changes in the level of interest rates. When
interest rates rise, the prices of bonds generally fall; conversely, when
interest rates fall, bond prices generally rise. While bonds normally fluctuate
less in price than stock, there have been in the past extended periods of
cyclical increases in interest rates that have caused significant declines in
bond prices.

Current income by its nature always contributes positively to total return.
Therefore, the current income expected to be generated from an investment in the
Fund will counterbalance to some degree the adverse price fluctuations of the
securities held by the Fund. The effective result should therefore be lower
total return volatility for the Fund than a fund which does not provide such
current income.

The Fund may invest in certain variable or floating rate government securities
and, as described below, in put and call options and futures. Such instruments
are considered to be derivatives. A derivative is generally defined as an
instrument whose value is based upon, or derived from, some underlying index,
reference rate (e.g., interest rates), security, commodity or other asset. The
Fund will not invest more than 10% of its total assets in such derivatives at
any one time.

REPURCHASE AGREEMENTS. Securities held by the Fund may be subject to repurchase
agreements. Under the terms of the repurchase agreement, the Fund would acquire
securities from a financial institution such as a well-established securities
dealer or a bank which is a member of the Federal Reserve System which the
Adviser deems creditworthy under guidelines approved by the Group's Board of
Trustees. At the time of purchase, the bank or securities dealer agrees to
repurchase the underlying securities from the Fund at a specified time and
price. The resale price reflects the purchase price plus an agreed upon market
rate of interest which is unrelated to the coupon rate or maturity of the
underlying security. Under the 1940 Act, repurchase agreements are considered to
be loans by the Fund. The Fund will only enter into a repurchase agreement where
(i) the underlying securities are of the type which the Fund's investment
policies would allow it to purchase directly, (ii) the market value of the
underlying security, including interest accrued, will at all times be equal to
or exceed the value of the repurchase agreement, and (iii) payment for the
underlying securities is made only upon physical delivery or evidence of
book-entry transfer to the account of the Fund's custodian or a bank acting as
agent. The Adviser will be responsible for continuously monitoring such
requirements. In the event of a bankruptcy or other default of a seller of a
repurchase agreement, the Fund could experience both delays in liquidating the
underlying securities and losses, including: (a) possible decline in the value
of the underlying securities during the period while the Fund seeks to enforce
its rights thereto; (b) possible subnormal levels of income and lack of access
to income during this period; and (c) expenses of enforcing its rights.

WHEN-ISSUED AND DELAYED-DELIVERY TRANSACTIONS. The Fund may also purchase
securities on a when-issued or delayed-delivery basis. The Fund will engage in
when-issued and delayed-delivery transactions only for the purpose of acquiring
portfolio securities consistent with its investment objectives and policies, not
for investment leverage, although such transactions represent a form of
leveraging. When-issued securities are securities purchased for delivery beyond
the normal settlement date at a stated price and yield and thereby involve a
risk that the yield obtained in the transaction will be less than those
available in the market when delivery takes place. The Fund will not pay for
such securities or start earning interest on them until they are received. When
the Fund agrees to purchase such securities, its custodian will set aside cash
or liquid securities equal to the amount of the commitment in a separate
account. Securities purchased on a when-issued basis are recorded as an asset
and are subject to changes in the value based upon changes in the general level
of interest rates. In when-issued and delayed-delivery transactions, the

11
<PAGE> 16

Fund relies on the seller to complete the transaction; the seller's failure to
do so may cause the Fund to miss a price or yield considered to be advantageous.

The Fund's commitments to purchase when-issued securities will not exceed 25% of
the value of its total assets absent unusual market conditions. In the event
that its commitments to purchase when-issued securities ever exceed 25% of the
value of its assets, the Fund's liquidity and the ability of the investment
adviser to manage it might be adversely affected.

MEDIUM-GRADE SECURITIES. As described above, the Fund may invest in debt
securities within the fourth highest rating group assigned by an NRSRO (e.g.,
BBB or Baa by S&P and Moody's, respectively) and comparable unrated securities.
These types of debt securities are considered by Moody's to have some
speculative characteristics, and are more vulnerable to changes in economic
conditions, higher interest rates or adverse issuer-specific developments which
are more likely to lead to a weaker capacity to make principal and interest
payments than comparable higher rated debt securities.

Should subsequent events cause the rating of a debt security purchased by the
Fund to fall below BBB or Baa, as the case may be, the Adviser will consider
such an event in determining whether the Fund should continue to hold that
security. In no event, however, would the Fund be required to liquidate any such
portfolio security where the Fund would suffer a loss on the sale of such
security.

FOREIGN SECURITIES. The Fund may also invest up to 25% of its net assets in
foreign securities through the purchase of sponsored and unsponsored American
Depositary Receipts ("ADRs"). Unsponsored ADRs may be less liquid than sponsored
ADRs, and there may be less information available regarding the underlying
foreign issuer for unsponsored ADRs. Investment in foreign securities is subject
to special investment risks that differ in some respects from those related to
investments in securities of U.S. domestic issuers. Such risks include trade
balances and imbalances, and related economic policies, future adverse
political, economic and social developments, the possible imposition of
withholding taxes on interest income, possible seizure, nationalization, or
expropriation of foreign investments or deposits, less stringent disclosure
requirements, the possible establishment of exchange controls or taxation at the
source, or the adoption of other foreign governmental restrictions. In addition,
foreign issuers may be subject to different accounting, auditing, reporting, and
recordkeeping standards than those applicable to U.S. domestic issuers, and
securities markets in foreign countries may be structured differently from and
may not be as liquid as the U.S. markets. The Fund will acquire securities
issued by foreign issuers only when the Adviser believes that the risks
associated with such investments are minimal.

RESTRICTED SECURITIES. Securities in which the Fund may invest include
securities issued by corporations without registration under the Securities Act
of 1933, as amended (the "1933 Act"), in reliance on the exemption from such
registration afforded by Section 3(a)(3) thereof, and securities issued in
reliance on the so-called "private placement" exemption from registration which
is afforded by Section 4(2) of the 1933 Act ("Section 4(2) securities"). Section
4(2) securities are restricted as to disposition under the Federal securities
laws, and generally are sold to institutional investors such as the Fund who
agree that they are purchasing the securities for investment and not with a view
to public distribution. Any resale must also generally be made in an exempt
transaction. Section 4(2) securities are normally resold to other institutional
investors through or with the assistance of the issuer or investment dealers who
make a market in such Section 4(2) securities, thus providing some liquidity.

Pursuant to procedures adopted by the Board of Trustees of the Group, the
Adviser may determine Section 4(2) securities to be liquid if such securities
are eligible for resale under Rule 144A under the 1933 Act and are readily
saleable. Rule 144A permits the Fund to purchase securities which have been
privately placed and resell such securities to certain qualified institutional
buyers, such as the Fund, without restriction. For purposes of determining
whether a Rule 144A security is readily saleable, and therefore liquid, the
Adviser must consider, among other things, the frequency of trades and quotes
for the security, the number of dealers willing to purchase or sell the security
and the number of potential purchasers, dealer undertakings to make a market in
the security, and the nature of the security and marketplace trades of such
security. However, investing in Rule 144A securities, even if such securities
are initially determined to be liquid,

12
<PAGE> 17

could have the effect of increasing the level of the Fund's illiquidity to the
extent that qualified institutional buyers become, for a time, uninterested in
purchasing these securities.

PUT AND CALL OPTIONS. Subject to its investment policies and for purposes of
hedging against market risks related to its portfolio securities, the Fund may
purchase put and call options on securities. Purchasing options is a specialized
investment technique that entails a substantial risk of a complete loss of the
amounts paid as premiums to writers of options. The Fund will purchase put
options only on securities in which the Fund may otherwise invest. The Fund may
also engage in writing call options from time to time as the Adviser deems
appropriate. The Fund will write only covered call options (options on
securities owned by the Fund). In order to close out a call option it has
written, the Fund will enter into a "closing purchase transaction" -- the
purchase of a call option on the same security with the same exercise price and
expiration date as the call option which the Fund previously has written. When a
portfolio security subject to a call option is sold, the Fund will effect a
closing purchase transaction to close out any existing call option on that
security. If the Fund is unable to effect a closing purchase transaction, it
will not be able to sell the underlying security until the option expires or the
Fund delivers the underlying security upon exercise. Under normal market
conditions, it is not expected that the underlying value of portfolio securities
subject to such options would exceed 25% of the net assets of the Fund.

The Fund, as part of its option transactions, also may purchase index put and
call options and write index options. As with options on individual securities,
the Fund will write only covered index call options. Through the writing or
purchase of index options the Fund can achieve many of the same objectives as
through the use of options on individual securities. Options on securities
indices are similar to options on a security except that, rather than the right
to take or make delivery of a security at a specified price, an option on a
securities index gives the holder the right to receive, upon exercise of the
option, an amount of cash if the closing level of the securities index upon
which the option is based is greater than, in the case of a call, or less than,
in the case of a put, the exercise price of the option.

Price movements in securities which the Fund owns or intends to purchase
probably will not correlate perfectly with movements in the level of an index
and, therefore, the Fund bears the risk of a loss on an index option that is not
completely offset by movements in the price of such securities. Because index
options are settled in cash, a call writer cannot determine the amount of its
settlement obligations in advance and, unlike call writing on specific
securities, cannot provide in advance for, or cover, its potential settlement
obligations by acquiring and holding the underlying securities. The Fund may be
required to segregate assets or provide an initial margin to cover index options
that would require it to pay cash upon exercise.

FUTURES CONTRACTS. The Fund may also enter into contracts for the future
delivery of securities and futures contracts based on a specific security, class
of securities or an index, purchase or sell options on any such futures
contracts and engage in related closing transactions. A futures contract on a
securities index is an agreement obligating either party to pay, and entitling
the other party to receive, while the contract is outstanding, cash payments
based on the level of a specified securities index.

The Fund may engage in such futures contracts in an effort to hedge against
market risks. For example, when interest rates are expected to rise or market
values of portfolio securities are expected to fall, the Fund can seek through
the sale of futures contracts to offset a decline in the value of its portfolio
securities. When interest rates are expected to fall or market values are
expected to rise, the Fund, through the purchase of such contracts, can attempt
to secure better rates or prices for the Fund than might later be available in
the market when it effects anticipated purchases.

The acquisition of put and call options on futures contracts will, respectively,
give the Fund the right (but not the obligation), for a specified price, to sell
or to purchase the underlying futures contract, upon exercise of the option, at
any time during the option period.

13
<PAGE> 18

and options (both for receipt and delivery) may not exceed one-third of the
market value of the Fund's total assets. Futures transactions will be limited to
the extent necessary to maintain the Fund's qualification as a regulated
investment company.

Futures transactions involve brokerage costs and require the Fund to segregate
assets to cover contracts that would require it to purchase securities. The Fund
may lose the expected benefit of futures transactions if interest rates or
securities prices move in an unanticipated manner. Such unanticipated changes
may also result in poorer overall performance than if the Fund had not entered
into any futures transactions. In addition, the value of the Fund's futures
positions may not prove to be perfectly or even highly correlated with the value
of its portfolio securities, limiting the Fund's ability to hedge effectively
against interest rate and/or market risk and giving rise to additional risks.
There is no assurance of liquidity in the secondary market for purposes of
closing out futures positions.

INVESTMENT COMPANY SECURITIES. The Fund may also invest up to 10% of the value
of its total assets in the securities of other investment companies subject to
the limitations set forth in the 1940 Act. The Fund intends to invest in the
securities of other investment companies which, in the opinion of the Adviser,
will assist the Fund in achieving its objectives and in money market mutual
funds for purposes of short-term cash management. The Fund's investment in such
other investment companies may result in the duplication of fees and expenses,
particularly investment advisory fees. For a further discussion of the
limitations on the Fund's investments in other investment companies, see
"INVESTMENT OBJECTIVES AND POLICIES -- Additional Information on Portfolio
Instruments -- Securities of Other Investment Companies" in the Group's
Statement of Additional Information.

INVESTMENT RESTRICTIONS

The Fund is subject to a number of investment restrictions that may be changed
only by a vote of a majority of the outstanding Shares of the Fund (as defined
below under "WHAT ARE MY RIGHTS AS A SHAREHOLDER?").

The Fund will not:

1. Purchase securities of any one issuer, other than obligations issued or
guaranteed by the U.S. Government or its agencies or instrumentalities,
if, immediately after such purchase, more than 5% of the value of the
Fund's total assets would be invested in such issuer, or the Fund would
hold more than 10% of the outstanding voting securities of the issuer,
except that up to 25% of the value of the Fund's total assets may be
invested without regard to such limitations. There is no limit to the
percentage of assets that may be invested in U.S. Treasury bills, notes,
or other obligations issued or guaranteed by the U.S. Government or its
agencies or instrumentalities.

2. Purchase any securities which would cause more than 25% of the value of
the Fund's total assets at the time of purchase to be invested in
securities of one or more issuers conducting their principal business
activities in the same industry, provided that: (a) there is no
limitation with respect to obligations issued or guaranteed by the U.S.
Government or its agencies or instrumentalities and repurchase
agreements secured by obligations of the U.S. Government or its agencies
or instrumentalities; (b) wholly owned finance companies will be
considered to be in the industries of their parents if their activities
are primarily related to financing the activities of their parents; and
(c) utilities will be divided according to their services. For example,
gas, gas transmission, electric and gas, electric, and telephone will
each be considered a separate industry.

3. Borrow money or issue senior securities, except that the Fund may borrow
from banks or enter into reverse repurchase agreements or dollar roll
agreements for temporary purposes in amounts up to 10% of the value of
its total assets at the time of such borrowing and except as permitted
pursuant to an exemption from the 1940 Act. The Fund will not purchase
securities while its borrowings (including reverse repurchase agreements
and dollar roll agreements) exceed 5% of its total assets.

14
<PAGE> 19

4. Make loans, except that the Fund may purchase or hold debt instruments
and lend portfolio securities in accordance with its investment
objectives and policies, make time deposits with financial institutions
and enter into repurchase agreements.

The following additional investment restriction may be changed without the vote
of a majority of the outstanding Shares of the Fund.

The Fund may not:

1. Purchase or otherwise acquire any securities, if as a result, more than
15% of the Fund's net assets would be invested in securities that are
illiquid.

The Group, however, has represented to the Wisconsin Securities Bureau, on
behalf of the Fund, that so long as the Shares of the Fund are registered for
sale in the State of Wisconsin, the Fund will limit its investment in certain
securities which may not be sold to the public without being registered under
the Securities Act of 1933, as amended, to not more than 5% of its total assets.
For more information regarding such representations, see "INVESTMENT OBJECTIVES
AND POLICIES -- Investment Restrictions" in the Statement of Additional
Information.

- --------------------------------------------------------------------------------
HOW DO I PURCHASE SHARES OF THE FUND?
- --------------------------------------------------------------------------------

GENERAL

The Fund's Shares may be purchased at the public offering price, as described
below under "Public Offering Price," through The Ohio Company, principal
underwriter of the Fund's Shares, at its address and telephone number set forth
on the cover page of this Prospectus, and through other broker-dealers who are
members of the National Association of Securities Dealers, Inc. and have sales
agreements with The Ohio Company.

Subsequent purchases of Shares of the Fund may be made by ACH processing as
described under "WHAT OTHER SHAREHOLDER PROGRAMS ARE PROVIDED? -- ACH
Processing" below. In addition, if an Account Information Form has previously
been received by The Ohio Company, Shares may also be purchased by wiring funds
to the Fund's custodian. Prior to wiring any such funds and in order to ensure
that wire orders are invested properly, you must call The Ohio Company to obtain
the necessary instructions and information.

The minimum initial investment for individuals is $1,000, except the initial
investment for an applicant investing by means of the Automatic Investment Plan,
as described below, must be at least $50. Subsequent investments must be in
amounts of at least $50.

The Group reserves the right to reject any order for the purchase of Shares in
whole or in part. You will receive a confirmation of each new transaction in
your account, which will also show the total number of Shares owned by you and
the number of Shares being held in safekeeping by the Transfer Agent for your
account. Certificates representing Shares will not be issued.

PUBLIC OFFERING PRICE

The public offering price of Shares of the Fund is the net asset value per share
(see "HOW IS NET ASSET VALUE CALCULATED?") next determined after receipt by The
Ohio Company, its agents or broker-dealers with whom it has an agreement, of an
order and payment, plus a sales charge as follows:

15
<PAGE> 20

<TABLE>
<CAPTION>
SALES CHARGE AS A PERCENTAGE
AS A OF OFFERING PRICE
PERCENTAGE ------------------------
AMOUNT OF OF THE NET SALES DEALER'S
SINGLE TRANSACTION AMOUNT INVESTED CHARGE CONCESSION
--------------------------------------------------- --------------- ---------- ----------
<S> <C> <C> <C>
Less than $100,000................................. 4.71% 4.50% 4.00%
$100,000 but less than $250,000.................... 3.63 3.50 3.00
$250,000 but less than $500,000.................... 2.56 2.50 2.00
$500,000 but less than $1,000,000.................. 1.52 1.50 1.00
$1,000,000 or more................................. 0.50 0.50 0.40
</TABLE>

(See "HOW IS NET ASSET VALUE CALCULATED?" for a description of the computation
of net asset value per share.)

The above charges on investments of $100,000 or more are applicable to purchases
made at one time by an individual, or an individual, his spouse and their
children not of legal age, or a trustee, guardian or other like fiduciary of
certain single trust estates or certain single fiduciary accounts.

No sales charge is imposed on purchases of Shares by officers, trustees, and
employees of the Group, or by full-time employees of The Ohio Company or the
Adviser, who have been such for at least 90 days or by qualified retirement
plans for such persons.

From time to time, The Ohio Company, from its own resources, may also provide
additional compensation to securities dealers in connection with sales of Shares
of the Fund. Such compensation will include financial assistance to securities
dealers in connection with conferences, sales or training programs for their
employees, seminars for the public, advertising, sales campaigns and/or
shareholder services and programs regarding the Fund and other dealer-sponsored
programs or events. In some instances, this compensation may be made available
only to certain securities dealers whose representatives have sold or are
expected to sell significant amounts of Shares of the Fund. Compensation will
include payment for travel expenses, including lodging, incurred in connection
with trips taken by invited registered representatives and members of their
families to locations within or outside of the United States for meetings or
seminars of a business nature. Securities dealers may not use sales of the
Fund's Shares to qualify for this compensation to the extent such may be
prohibited by the laws of any state or any self-regulatory agency, such as the
National Association of Securities Dealers, Inc. In addition, The Ohio Company
may make ongoing payments to brokerage firms, financial institutions (including
banks) and others to facilitate the administration and servicing of shareholder
accounts. None of the aforementioned additional compensation is paid for by the
Fund or its shareholders.

AUTOMATIC INVESTMENT PLAN

The Fund has made arrangements to enable you to make automatic monthly or
quarterly investments, in the minimum amount of $50 per transaction, from your
checking account. Assuming the cooperation of your financial institution, your
checking account therein will be debited to purchase Shares of the Fund on the
periodic basis you select. Confirmation of your purchase of Fund Shares will be
provided by the Transfer Agent. The debit of your checking account will be
reflected in the checking account statement you receive from your financial
institution. Please contact The Ohio Company for the appropriate form.

- --------------------------------------------------------------------------------
MAY MY TAX SHELTERED RETIREMENT PLAN INVEST IN THE FUND?
- --------------------------------------------------------------------------------

Shares of the Fund qualify for purchase in connection with the following tax
sheltered retirement plans:

-- Individual retirement account ("IRAs") plans

-- Simplified Employee Pension Plans

16
<PAGE> 21

-- 403(b)(7) Custodial Plans sponsored by certain tax-exempt
employers

-- Pension, profit-sharing and 401(k) plans qualifying under Section
401(a) of the Internal Revenue Code

- --------------------------------------------------------------------------------
HOW MAY I QUALIFY FOR QUANTITY DISCOUNTS?
- --------------------------------------------------------------------------------

LETTER OF INTENTION

If you (including your spouse and children not of legal age) intend to purchase
$100,000 or more of Shares of the Fund and of any other Cardinal Fund sold with
a sales charge (a "Cardinal Load Fund") during any 13-month period you may sign
a letter of intention to that effect obtained from The Ohio Company and pay the
reduced sales charge applicable to the total amount of shares to be so
purchased. The 13-month period during which the Letter of Intention is in effect
will begin on the date of the earliest purchase to be included. In addition,
trustees, guardians or other like fiduciaries of single trust estates or certain
single fiduciary accounts may take advantage of the quantity discounts pursuant
to a letter of intention.

A letter of intention is not a binding obligation upon you to purchase the full
amount indicated. Shares purchased with the first 5% of such amount will be held
in escrow (while remaining registered in your name) to secure payment of the
higher sales charge applicable to the shares actually purchased. If the full
amount indicated is not purchased, such escrowed shares will be involuntarily
redeemed to pay the additional sales charge, if necessary. Dividends on escrowed
shares, whether paid in cash or reinvested in additional shares of the
applicable Cardinal Load Fund, are not subject to escrow. The escrowed shares
will not be available for disposal by you until all purchases pursuant to the
letter of intention have been made or the higher sales charge has been paid.
When the full amount indicated has been purchased, the escrow will be released.
To the extent that you purchase more than the dollar amount indicated on the
Letter of Intention and qualify for a further reduced sales charge, the sales
charge will be adjusted for the entire amount purchased at the end of the
13-month period. The difference in sales charge will be, as you instruct, either
delivered to you in cash or used to purchase additional shares of the Cardinal
Load Fund designated by you subject to the rate of sales charge applicable to
the actual amount of the aggregate purchases. This program, however, may be
modified or eliminated at any time or from time to time by the Group without
notice.

CONCURRENT PURCHASES

For purposes of qualifying for a lower sales charge, you have the privilege of
combining "concurrent purchases" of Shares of the Fund and of one or more of the
other Cardinal Load Funds. For example, if you concurrently purchase Shares of
the Fund at the total public offering price of $50,000 and shares of another
Cardinal Load Fund at the total public offering price of $50,000, the sales
charge would be that applicable to a $100,000 purchase as shown in the table
above. "Concurrent purchases," as described above, shall include the combined
purchases of you, your spouse and your children not of legal age. To receive the
applicable public offering price pursuant to this privilege, you must, at the
time of purchase, give The Ohio Company sufficient information to permit
confirmation of qualification. This privilege, however, may be modified or
eliminated at any time or from time to time by the Group without notice thereof.

RIGHTS OF ACCUMULATION

After your initial purchase of Shares you may also be eligible to pay a reduced
sales charge for your subsequent purchases of Shares where the total public
offering price of Shares then being purchased plus the then aggregate current
net asset value of Shares of the Fund and of shares of any Cardinal Load Fund
held in your account equals $100,000 or more. You would be able to purchase
Shares at the public offering price applicable to the total of (a) the total
public offering price of the Shares of the Fund then being purchased plus (b)
the then current net asset value of Shares of the Fund and of shares of any
other Cardinal Load Fund held in your account. For purposes of determining the
aggregate current net asset value

17
<PAGE> 22

of shares held in your account, you may include shares then owned by your spouse
and children not of legal age.

You may obtain additional information about the foregoing special purchase
method from The Ohio Company. You are responsible for notifying The Ohio Company
at the time of purchase when purchases may be accumulated to take advantage of
the reduced sales charge. This program, however, may be modified or eliminated
at any time or from time to time by the Group without notice thereof.

- --------------------------------------------------------------------------------
WHAT DISTRIBUTIONS WILL I RECEIVE?
- --------------------------------------------------------------------------------

Dividends and distributions shall generally be paid quarterly (long term capital
gains normally will be distributed only once annually) and in such amounts as
the Fund from time to time shall determine and from net income and net realized
capital gains of the Fund. It is the policy of the Fund to distribute, at least
annually, substantially all of its net investment income and to distribute
annually any net realized capital gains. Unless a shareholder specifically
requests otherwise in writing to the Transfer Agent, dividends and distributions
will be made only in additional full and fractional Shares of the Fund and not
in cash. Dividends are paid in cash not later than seven days after a
shareholder's complete redemption of his Shares in the Fund.

Shareholders may also elect to receive dividends and distributions in cash by
using ACH processing as described under "WHAT OTHER SHAREHOLDER PROGRAMS ARE
PROVIDED? -- ACH Processing" below.

- --------------------------------------------------------------------------------
HOW MAY I REDEEM MY SHARES?
- --------------------------------------------------------------------------------

Investors may redeem Shares of the Fund at the net asset value per share next
determined following the receipt by the Fund's transfer agent, Cardinal
Management Corp. (the "Transfer Agent"), 215 East Capital Street, Columbus, Ohio
43215, of written or telephonic notice to redeem, as described more fully below.
See "HOW IS NET ASSET VALUE CALCULATED?", below, for a description of when net
asset value is determined.

As requested, The Ohio Company, on behalf of a shareholder, will forward the
foregoing notice to redeem to the Transfer Agent without charge. Other
broker-dealers may assist a shareholder in redeeming his Shares and may charge a
fee for such services.

The Group will make payment for redeemed Shares as promptly as practicable but
in no event more than seven days after receipt by the Transfer Agent of the
foregoing notice. The Group reserves the right to delay payment for the
redemption of Shares where such Shares were purchased with other than
immediately available funds, but only until the purchase payment has cleared
(which may take fifteen or more days from the date the purchase payment is
received by the Fund). The purchase of Fund Shares by wire transfer of federal
funds would avoid any such delay.

The Group intends to pay cash for all Shares redeemed, but, under abnormal
conditions which make payment in cash unwise, the Group may make payment wholly
or partly in portfolio securities at their then market value equal to the
redemption price. In such cases, an investor may incur brokerage costs in
converting such securities to cash.

The Group may suspend the right of redemption or may delay payment during any
period the determination of net asset value is suspended. See "HOW IS NET ASSET
VALUE CALCULATED?".

Due to the high cost of maintaining accounts, the Group reserves the right to
redeem, at net asset value, involuntarily Shares in any account at the then
current net asset value if at any time redemptions (but not as a result of a
decrease in the market price of such Shares or the deduction of any sales
charge) have reduced a shareholder's total investment in the Fund to a net asset
value below $500. A shareholder will be notified in writing that the value of
Fund Shares in the account is less than $500 and allowed 30 days to increase his

18
<PAGE> 23

investment in the Fund to $500 before the redemption is processed. Proceeds of
redemptions so processed, including dividends declared to the date of
redemption, will be promptly paid to the shareholder.

REDEMPTION BY MAIL

Shareholders may elect to redeem Shares of the Fund by submitting a written
request therefor to the Transfer Agent at 215 East Capital Street, Columbus,
Ohio 43215. The Transfer Agent will request a signature guarantee by an eligible
guarantor institution as described below. However, a signature guarantee will
not be required if (1) the redemption check is payable to the Shareholder(s) of
record, and (2) the redemption check is mailed to the Shareholder(s) at the
address of record, provided, however, that the address of record has not been
changed within the preceding 15 days. For purposes of this policy, an "eligible
guarantor institution" shall include banks, brokers, dealers, credit unions,
securities exchanges and associations, clearing agencies and savings
associations as those terms are defined in the Securities Exchange Act of 1934.
The Transfer Agent reserves the right to reject any signature guarantee if (1)
it has reason to believe that the signature is not genuine or (2) it has reason
to believe that the transaction would otherwise be improper.

REDEMPTION BY TELEPHONE

Shareholders may elect to redeem Shares of the Fund by calling the Group at the
telephone numbers set forth on the front of this Prospectus. The Shareholder may
direct that the redemption proceeds be mailed to the address of record.

Neither the Group, the Fund nor its service providers will be liable for any
loss, damages, expense or cost arising out of any telephone redemption effected
in accordance with the Group's telephone redemption procedures, acting upon
instructions reasonably believed to be genuine. The Group will employ procedures
designed to provide reasonable assurances that instructions by telephone are
genuine; if these procedures are not followed, the Group, the Fund or its
service providers may be liable for any losses due to unauthorized or fraudulent
instructions. These procedures may include recording all phone conversations,
sending confirmations to Shareholders within 72 hours of the telephone
transaction, and verification of account name and account number or tax
identification number. If, due to temporary adverse conditions, investors are
unable to effect telephone transactions, Shareholders may also redeem their
Shares by mail as described above.

AUTOMATIC WITHDRAWAL

Shareholders may elect to have the proceeds from redemptions of Shares
transmitted to an authorized bank account at a Federal Reserve member bank
through ACH processing as described under "WHAT OTHER SHAREHOLDER PROGRAMS ARE
PROVIDED? -- ACH Processing" below.

SYSTEMATIC WITHDRAWAL PLAN

If you are the owner of Shares of the Fund having a total value of $10,000 or
more at the current net asset value, you may elect to redeem your Shares monthly
or quarterly in amounts of $50 or more, pursuant to the Fund's Systematic
Withdrawal Plan. Please contact The Ohio Company for the appropriate form.

- --------------------------------------------------------------------------------
WHAT OTHER SHAREHOLDER PROGRAMS ARE PROVIDED?
- --------------------------------------------------------------------------------

ACH PROCESSING

19
<PAGE> 24

or from an authorized bank account at a Federal Reserve member bank that is an
ACH member. Please contact your representative if you are interested in ACH
processing.

EXCHANGE PRIVILEGE

Shareholders of the Fund may, provided the amount to be exchanged meets the
applicable minimum investment requirements and the exchange is made in states
where it is legally authorized, exchange Shares of the Fund for shares of:

Cardinal Aggressive Growth Fund,
an equity fund seeking appreciation of capital
(upon the payment of the applicable sales charge);

The Cardinal Fund Inc.,
an equity fund seeking long-term growth
of capital and income (upon the payment of
the applicable sales charge);

Cardinal Government Obligations Fund,
a fund investing in securities issued
or guaranteed by the U.S. Government
(upon the payment of the appropriate
sales charge);

Cardinal Government Securities Trust,
a U.S. Government securities money market fund
(without payment of any sales charge); or

Cardinal Tax Exempt Money Trust,
a tax-free money market fund
(without payment of any sales charge).

Notwithstanding the foregoing and subject to the limitations contained in the
following paragraph, (i) exchanges by holders of Fund Shares, for whom the sales
charge has been waived, for shares of a Cardinal Load Fund may be completed
without the payment of a sales charge, and (ii) exchanges of Fund Shares by all
other shareholders for shares of a Cardinal Load Fund may be completed upon the
payment of a sales charge equal to the difference, if any, between the sales
charge payable upon purchase of shares of such Cardinal Load Fund and the sales
charge previously paid on the Fund Shares to be exchanged.

The foregoing exchange privilege may be exercised only once in each calendar
quarter and must be made by written or telephonic authorization. A shareholder
should notify The Ohio Company of his desire to make an exchange, and The Ohio
Company will furnish, as necessary, a prospectus and an application form to open
the account. The Transfer Agent will require that any written authorization of
an exchange include a signature guarantee as described above under "HOW MAY I
REDEEM MY SHARES? -- Redemption by mail." However, a signature guarantee will
not be required if the exchange is requested to be made within the same account
or into an existing account of the shareholder held in the same name or names
and in the same capacity as the account from which the exchange is to be made.
Shareholders may also authorize an exchange of shares of the Fund by telephone.
Neither the Group, the Fund nor any of its service providers will be liable of
any loss, damages, expense or cost arising out of any telephone exchange
authorization to the extent and subject to the requirements set forth under "HOW
MAY I REDEEM MY SHARES? -- Redemption by telephone" above.

For tax purposes, an exchange is treated as a redemption and a new purchase.
However, a shareholder may not include any sales charge on Shares of the Fund
for purposes of calculating the gain or loss realized upon an exchange of those
Shares within 90 days of their purchase.

20
<PAGE> 25

The Fund may, at any time, modify or terminate the foregoing exchange privilege.
The Fund, however, will give shareholders of the Fund 60 days' advance written
notice of any such modification or termination.

- --------------------------------------------------------------------------------
HOW IS NET ASSET VALUE CALCULATED?
- --------------------------------------------------------------------------------

The net asset value of the Fund is determined once daily as of 4:00 P.M.,
Columbus, Ohio time, on each Business Day. A "Business Day" is a day on which
the New York Stock Exchange is open for business and any other day (other than a
day on which no Shares of the Fund are tendered for redemption and no order to
purchase any Shares of the Fund is received) during which there is a sufficient
degree of trading in the Fund's portfolio securities that the net asset value
might be materially affected by changes in the value of the portfolio
securities. The net asset value per share of the Fund is computed by dividing
the sum of the value of the Fund's portfolio securities plus any cash and other
assets (including interest and dividends accrued but not received) minus all
liabilities (including estimated accrued expenses) by the total number of Shares
then outstanding.

The net asset value per share will fluctuate as the value of the investment
portfolio of the Fund changes.

Portfolio securities which are traded on United States stock exchanges are
valued at the last sale price on such an exchange as of the time of valuation on
the day the securities are being valued. Securities traded in the
over-the-counter market are valued at either the mean between the bid and ask
prices or the last sale price as one or the other may be quoted by the National
Association of Securities Dealers Automated Quotation System ("NASDAQ") as of
the time of valuation on the day the securities are being valued. The Group uses
one or more pricing services to provide such market quotations. Securities and
other assets for which market quotations are not readily available are valued at
fair value as determined in good faith by or under the direction of the Board of
Trustees of the Group.

Determination of the net asset value may be suspended at times when (a) trading
on the New York Stock Exchange is restricted by applicable rules and regulations
of the Securities and Exchange Commission, (b) the New York Stock Exchange is
closed for other than customary weekend and holiday closings, (c) an emergency
exists as a result of which disposal by the Group of portfolio securities owned
by the Fund or valuation of net assets of the Fund is not reasonably
practicable, or (d) the Securities and Exchange Commission has by order
permitted such suspension.

- --------------------------------------------------------------------------------
DOES THE FUND PAY FEDERAL INCOME TAX?
- --------------------------------------------------------------------------------

Each of the funds of the Group, including the Fund, is treated as a separate
entity for federal income tax purposes and intends to qualify as a "regulated
investment company" under the Code for so long as such qualification is in the
best interest of that fund's shareholders. Qualification as a regulated
investment company under the Code requires, among other things, that the
regulated investment company distribute to its shareholders at least 90% of its
investment company taxable income. The Fund contemplates declaring as dividends
100% of the Fund's investment company taxable income (before deduction of
dividends paid).

A non-deductible 4% excise tax is imposed on regulated investment companies that
do not distribute in each calendar year (regardless of whether they otherwise
have a non-calendar taxable year) an amount equal to 98% of their ordinary
income for the calendar year plus 98% of their capital gain net income for the
one-year period ending on October 31 of such calendar year. The balance of such
income must be distributed during the next calendar year. If distributions
during a calendar year were less than the required amount, the Fund would be
subject to a nondeductible excise tax equal to 4% of the deficiency.

- --------------------------------------------------------------------------------
WHAT ABOUT MY TAXES?
- --------------------------------------------------------------------------------

21
<PAGE> 26

distributed net realized capital gains will be taxable income to shareholders
for federal income tax purposes, even if paid in additional Shares of the Fund
and not in cash. The dividends-received deduction for corporations will apply to
the aggregate of such ordinary income distributions in the same proportion as
the aggregate dividends eligible for the dividends received deduction, if any,
received by the Fund bear to its gross income.

Distribution by the Fund of the excess of net long-term capital gain over net
short-term capital loss is taxable to shareholders as long-term capital gain in
the year in which it is received, regardless of how long the shareholder has
held the Shares. Such distributions are not eligible for the dividends-received
deduction.

If the net asset value of a Share is reduced below the shareholder's cost of
that Share by the distribution of income or gain realized on the sale of
securities, the distribution is a return of invested principal, although taxable
as described above.

Prior to purchasing Shares, the impact of dividends or capital gains
distributions which are expected to be declared or have been declared, but have
not been paid, should be carefully considered. Any such dividends or capital
gains distributions paid shortly after a purchase of Shares prior to the record
date will have the effect of reducing the per share net asset value of the
Shares by the amount of the dividends or distributions. All or a portion of such
dividends or distributions, although in effect a return of capital, is subject
to tax.

Foreign taxes may be imposed on the Fund by foreign countries with respect to
its income from foreign securities. Since less than 50% in value of the Fund's
total assets at the end of its fiscal year are expected to be invested in stock
or securities of foreign corporations, the Fund will not be entitled under the
Code to pass through to its Shareholders their pro rata share of the foreign
taxes paid by the Fund. These taxes will be taken as a deduction by the Fund.

The foregoing is intended only as a brief summary of some of the important tax
considerations generally affecting the Fund and its shareholders. Potential
investors in the Fund are urged to consult their tax advisers concerning the
application of federal, state and local taxes as such laws and regulations
affect their own tax situation.

The Transfer Agent will inform shareholders at least annually of the amount and
nature of such income and capital gains.

- --------------------------------------------------------------------------------
WHO MANAGES MY INVESTMENT IN THE FUND?
- --------------------------------------------------------------------------------

Except where shareholder action is required by law, all of the authority of the
Group is exercised under the direction of the Group's Trustees, who are elected
by the shareholders of the Group's funds and who are empowered to elect officers
and contract with and provide for the compensation of agents, consultants and
other professionals to assist and advise in its day-to-day operations. The Group
will be managed in accordance with its Declaration of Trust and the laws of Ohio
governing business trusts.

The Trustees of the Group receive fees and are reimbursed for their expenses in
connection with each meeting of the Board of Trustees they attend. However, no
officer or employee of the Adviser or The Ohio Company receives any compensation
from the Group for acting as a Trustee of the Group. The officers of the Group
receive no compensation directly from the Group for performing the duties of
their offices. The Adviser receives fees from the Group for acting as investment
adviser and manager and as dividend and transfer agent. The Ohio Company
receives no fees under its Distribution Agreement with the Group but may retain
all or a portion of the sales charge and may receive fees under the Distribution
Plan discussed below.

22
<PAGE> 27

INVESTMENT ADVISER

Cardinal Management Corp. (the "Adviser"), 155 East Broad Street, Columbus, Ohio
43215, a wholly owned subsidiary of The Ohio Company, is the investment adviser
and manager of the Fund. The Adviser is also the investment adviser and manager
of Cardinal Aggressive Growth Fund, another fund of the Group ("CAGF"), and of
Cardinal Government Securities Trust ("CGST"), Cardinal Tax Exempt Money Trust
("CTEMT") and Cardinal Government Obligations Fund ("CGOF"), each of which is a
separate diversified management investment company.

The Ohio Company, an investment banking firm organized in 1925, is a member of
the New York and Chicago Stock Exchanges, other regional stock exchanges and the
National Association of Securities Dealers, Inc. Descendants of H.P. and R.F.
Wolfe, deceased, and members of their families, through their possession of a
majority of a voting stock, may be considered controlling persons of The Ohio
Company. In addition to acting as the principal underwriter for the Fund, CAGF,
CGST, CTEMT and CGOF, The Ohio Company also serves as investment adviser and
principal underwriter for The Cardinal Fund Inc.

In its capacity as investment adviser, and subject to the ultimate authority of
the Group's Board of Trustees, the Adviser, in accordance with its investment
objectives and policies manages the Fund, makes decisions with respect to and
places orders for all purchases and sales of its portfolio securities. Since the
Fund's inception, Barry G. McMahon has been primarily responsible for the
day-to-day management of the Fund's portfolio. Mr. McMahon has been a portfolio
manager with the Adviser since 1992. Prior thereto, Mr. McMahon was a portfolio
manager with Columbus Mutual Life Insurance Company. In addition, pursuant to
the Investment Advisory Agreement, the Adviser generally assists in all aspects
of the Fund's administration and operation.

For the services provided and expenses assumed pursuant to its investment
advisory agreement with the Group with respect to the Fund, the Adviser receives
a fee from the Fund, computed daily and paid monthly at the annual rate of .75%
of average net daily assets of the Fund. While in the opinion of the staff of
the Securities and Exchange Commission such fee is higher than the advisory fee
paid by most mutual funds, the Group's Board of Trustees believes them to be
comparable to advisory fees paid by many funds having similar objectives and
policies.

DIVIDEND AND TRANSFER AGENT AND FUND ACCOUNTANT

The Group has entered into a Transfer Agency and Fund Accounting Agreement with
Cardinal Management Corp. (the "Transfer Agent"), 215 East Capital Street,
Columbus, Ohio 43215, pursuant to which the Transfer Agent has agreed to act as
the Fund's transfer agent and dividend disbursing agent. In consideration of
such services, the Fund has agreed to pay the Transfer Agent an annual fee, paid
monthly, equal to $18 per shareholder account plus out-of-pocket expenses. In
addition, the Transfer Agent provides certain fund accounting services for the
Fund. The Transfer Agent receives a fee from the Fund for such services equal to
a fee computed daily and paid periodically at an annual rate of .03% of the
Fund's average daily net assets.

DISTRIBUTOR

The Group has entered into a Distributor's Contract with The Ohio Company, 155
East Broad Street, Columbus, Ohio 43215, pursuant to which Shares of the Fund
will be offered continuously on a best efforts basis by The Ohio Company and
dealers selected by The Ohio Company. H. Keith Allen is an officer and trustee
of the Group and an officer and director of The Ohio Company. Frank W. Siegel is
an officer and trustee of the Group and an officer of The Ohio Company. James M.
Schrack II is an officer of both the Group and The Ohio Company.

23
<PAGE> 28

EXPENSES

The Adviser bears all expenses in connection with the performance of its
services as investment adviser, manager, transfer agent and fund accountant
other than the cost of securities (including brokerage commissions, if any)
purchased for the Fund.

DISTRIBUTION PLAN

Pursuant to Rule 12b-1 under the 1940 Act, the Group has adopted a Distribution
and Shareholder Service Plan (the "Plan"), under which the Fund is authorized to
pay or reimburse The Ohio Company, as the Fund's principal underwriter, a
periodic amount calculated at an annual rate not to exceed twenty-five one-
hundredths of one percent (.25%) of the average daily net asset value of the
Fund. Such amount may be used by The Ohio Company to pay broker-dealers
(including The Ohio Company), banks and other institutions (a "Participating
Organization") for distribution and/or shareholder service assistance pursuant
to an agreement between The Ohio Company and the Participating Organization or
for distribution assistance and/or shareholder service provided by The Ohio
Company pursuant to an agreement between The Ohio Company and the Group. Under
the Plan, a Participating Organization may include The Ohio Company, its
subsidiaries, and its affiliates. The Ohio Company may from time to time waive
all or a portion of the fees payable to it pursuant to the Plan. Any such waiver
will cause the total return and yield of the Fund to be higher than they would
otherwise be absent such a waiver.

As authorized by the Plan, The Ohio Company has entered into a Rule 12b-1
Agreement with the Group pursuant to which The Ohio Company has agreed to
provide certain shareholder services in connection with Shares of the Fund
purchased and held by The Ohio Company for the accounts of its customers and
Shares of the Fund purchased and held by customers of The Ohio Company directly,
including, but not limited to, answering Shareholder questions concerning the
Fund, providing information to Shareholders on their investments in the Fund and
providing such personnel and communication equipment as is necessary and
appropriate to accomplish such matters. In consideration of such services the
Group has agreed to pay The Ohio Company a monthly fee, computed at the annual
rate of .25% of the average aggregate net asset value of Shares held during the
period in customer accounts for which The Ohio Company has provided services
under this Agreement. Such fees paid by the Group will be borne solely by the
Fund. Such fee may exceed the actual costs incurred by The Ohio Company in
providing such services.

In addition, The Ohio Company may enter into, from time to time, other Rule
12b-1 Agreements with selected dealers pursuant to which such dealers will
provide certain Shareholder services such as those described above.

CUSTODIAN

The Group has appointed The Fifth Third Bank ("Fifth Third") 38 Fountain Square
Plaza, Cincinnati, Ohio 45263, as the Fund's custodian. In such capacity, Fifth
Third will hold or arrange for the holding of all portfolio securities and other
assets acquired and owned by the Fund.

- --------------------------------------------------------------------------------
WHAT ARE MY RIGHTS AS A SHAREHOLDER?
- --------------------------------------------------------------------------------

The Group was organized as an Ohio business trust on March 23, 1993. The Group
currently consists of two funds, each having its own class of shares. The other
fund of the Group is Cardinal Aggressive Growth Fund. Each share represents an
equal proportional interest in a fund with other shares of the same fund, and is
entitled to such dividends and distributions out of the income earned on the
assets belonging to that fund as are declared at the discretion of the Trustees.

24
<PAGE> 29

independent accountants. However, shareholders of the Fund will vote as a fund,
and not in the aggregate with other shareholders of the Group, for purposes of
approval of amendments to the Fund's investment advisory agreement, the Plan or
any of the Fund's fundamental policies.

Overall responsibility for the management of the Fund is vested in the Board of
Trustees of the Group. See "WHO MANAGES MY INVESTMENT OF THE FUND?" Individual
Trustees are elected by the shareholders of the Group and may be removed by the
Board of Trustees or shareholders in accordance with the provisions of the
Declaration of Trust and By-Laws of the Group and Ohio law. See "ADDITIONAL
INFORMATION -- Miscellaneous" in the Statement of Additional Information for
further information.

An annual or special meeting of shareholders to conduct necessary business is
not required by the Declaration of Trust, the 1940 Act or other authority
except, under certain circumstances, to elect Trustees, amend the Declaration of
Trust, approve the investment advisory agreement and to satisfy certain other
requirements. To the extent that such a meeting is not required, the Group may
elect not to have an annual or special meeting.

The Group has represented to the Securities and Exchange Commission that the
Trustees will call a special meeting of shareholders for purposes of considering
the removal of one or more Trustees upon written request thereof from
shareholders holding not less than 10% of the outstanding votes of the Group and
that the Group will assist in communications with other shareholders as required
by Section 16(c) of the 1940 Act. At such meeting, a quorum of shareholders
(constituting a majority of votes attributable to all outstanding shares of the
Group), by majority vote, has the power to remove one or more Trustees.

As used in this Prospectus and in the Statement of Additional Information,
"assets belonging to a fund" means the consideration received by the fund upon
the issuance or sale of shares in that fund, together with all income, earnings,
profits, and proceeds derived from the investment thereof, including any
proceeds from the sale, exchange, or liquidation of such investments, and any
funds or amounts derived from any reinvestment of such proceeds, and any general
assets of the Group not readily identified as belonging to a particular fund
that are allocated to the fund by the Group's Board of Trustees. The Board of
Trustees may allocate such general assets in any manner it deems fair and
equitable. Determinations by the Board of Trustees of the Group as to the timing
of the allocation of general liabilities and expenses and as to the timing and
allocable portion of any general assets with respect to the Fund are conclusive.

As used in this Prospectus and in the Statement of Additional Information, a
"vote of a majority of the outstanding shares" of the Fund means the affirmative
vote, at a meeting of Shareholders duly called, of the lesser of (a) 67% or more
of the votes of shareholders of the Fund present at a meeting at which the
holders of more than 50% of the votes attributable to shareholders of record of
the Fund are represented in person or by proxy, or (b) the holders of more than
50% of the outstanding votes of shareholders of the Fund.

Holders of Shares should direct all inquiries concerning such matters to the
Transfer Agent, 215 East Capital Street, Columbus, Ohio 43215.

Shareholders will receive unaudited semi-annual reports describing the
investment operations of the Fund and annual financial reports audited by
independent auditors.

25
<PAGE> 30

[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE> 31

Investment Adviser and Manager
Cardinal Management Corp.
155 East Broad Street
Columbus, Ohio 43215

Distributor
The Ohio Company
155 East Broad Street
Columbus, Ohio 43215

Transfer Agent and Dividend Paying
Agent
Cardinal Management Corp.
215 East Capital Street
Columbus, Ohio 43215

Custodian
The Fifth Third Bank
38 Fountain Square Plaza
Cincinnati, Ohio 45263

Legal Counsel
Baker & Hostetler
65 East State Street
Columbus, Ohio 43215

Independent Auditors
KPMG Peat Marwick LLP
Two Nationwide Plaza
Columbus, Ohio 43215
<PAGE> 32
===================================================

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
------

<S> <C>
KEY FEATURES................................ 2
PROSPECTUS HIGHLIGHTS....................... 3
FEE TABLE................................... 5
FINANCIAL HIGHLIGHTS........................ 6
PERFORMANCE INFORMATION..................... 7
WHAT IS THE FUND?........................... 8
WHAT ARE THE INVESTMENT OBJECTIVES
AND POLICIES OF THE FUND?................. 8
HOW DO I PURCHASE SHARES
OF THE FUND?.............................. 15
MAY MY TAX SHELTERED RETIREMENT PLAN INVEST
IN THE FUND?.............................. 16
HOW MAY I QUALIFY FOR QUANTITY DISCOUNTS?... 17
WHAT DISTRIBUTIONS WILL I RECEIVE?.......... 18
HOW MAY I REDEEM MY SHARES?................. 18
WHAT OTHER SHAREHOLDER PROGRAMS ARE
PROVIDED?................................. 19
HOW IS NET ASSET VALUE CALCULATED?.......... 21
DOES THE FUND PAY FEDERAL INCOME TAX?....... 21
WHAT ABOUT MY TAXES?........................ 21
WHO MANAGES MY INVESTMENT IN THE FUND?...... 22
WHAT ARE MY RIGHTS AS A
SHAREHOLDER?.............................. 24
</TABLE>

______________________

NO DEALER, SALESMAN OR ANY OTHER PERSON HAS BEEN
AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS, OTHER THAN THOSE CONTAINED IN
THIS PROSPECTUS, IN CONNECTION WITH THE OFFER
CONTAINED IN THIS PROSPECTUS AND, IF GIVEN OR
MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE FUND, THE ADVISER, OR THE DISTRIBUTOR. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER BY THE
FUND OR BY THE DISTRIBUTOR TO SELL OR A
SOLICITATION OF AN OFFER TO BUY ANY OF THE
SECURITIES OFFERED HEREBY IN ANY JURISDICTION TO
ANY PERSON TO WHOM IT IS UNLAWFUL FOR THE FUND TO
MAKE SUCH AN OFFER IN SUCH JURISDICTION.

===================================================

----------------------
PROSPECTUS
----------------------

January 19, 1996

THE OHIO COMPANY

CARDINAL
BALANCED
FUND

[ LOGO ]

C A R D I N A L F U N D S

===================================================
<PAGE> 33
CARDINAL AGGRESSIVE GROWTH FUND

Cross Reference Sheet Required By
Rule 481(a) under the Securities Act of 1933

<TABLE>
<CAPTION>
PART A OF FORM N-1A ITEM NO. CAPTION(S) IN PROSPECTUS
---------------------------- ------------------------
<S> <C>
1.(a)(i) ............................. Cover Page
(ii) ............................. Cover Page
(iii) ............................. Cover Page
(iv) ............................. Cover Page
(v) ............................. Cover Page
(vi) ............................. *
(vii)............................. *
(b) ................................ *
2.(a)(i) ............................. "Fee Table"
(ii) ............................. *
(b) ................................ "Prospectus Highlights"
(c) ................................ "Prospectus Highlights"
3.(a) ................................ "Financial Highlights"
(b) ................................ *
(c) ................................ "Performance Information"
(d) ................................ "Performance Information"
4.(a)(i)(A) .......................... "What Is The Fund?"
(i)(B) .......................... "What Is The Fund?"
(ii) ............................. "What Are The Investment
Objectives And Policies
Of The Fund?"
(ii)(A) .......................... *
(ii)(B)(1) ....................... "What Are The Investment
Objectives And Policies
Of The Fund?"
(ii)(B)(2) ....................... *
(ii)(C) .......................... "What Are The Investment
Objectives And Policies
Of The Fund?"
(ii)(D) .......................... "What Are The Investment
Objectives And Policies
Of The Fund?"
(b)(i) ............................. "What Are The Investment
Objectives And Policies
Of The Fund?"
(ii) ............................. "What Are The Investment
Objectives And Policies
Of The Fund?"
(c) ................................ "What Are The Investment
Objectives and Policies
Of The Fund?"
5.(a) ................................ "Who Manages My
Investment In The Fund?"
(b)(i) ............................. "Who Manages My
Investment In The Fund?"
(b)(ii) ............................ "Who Manages My Investment In The
Fund?"
<FN>
- --------------
*Indicates items which are omitted or inapplicable or answer to which is in the negative and omitted from Prospectus.
</TABLE>
- i -
<PAGE> 34

<TABLE>
<CAPTION>
PART A OF FORM N-1A ITEM NO. CAPTION(S) IN PROSPECTUS
---------------------------- ------------------------
<S> <C>
(b)(iii) ........................... "Who Manages My
Investment In The Fund?"
(c) ................................ "Who Manages My
Investment In The Fund?"
(d) ................................ "Who Manages My
Investment In The Fund?"
(e) ................................ "Who Manages My
Investment In The Fund?"
(f) ................................ "Who Manages My
Investment In The Fund?"
(g)(i)(A) .......................... *
(g)(i)(B) .......................... *
(g)(i)(C) .......................... *
(g)(ii) ............................ *
5A.(a) ............................... *
(b) ................................ *
(c) ................................ *
6.(a) ................................ "What Are My Rights As A
Shareholder?"
(b) ................................ "What Are My Rights As A
Shareholder?"
(c) ................................ *
(d) ................................ "What Are My Rights As A
Shareholder?"
(e) ................................ "What Are My Rights As A
Shareholder?"; "Who
Provides Shareholder
Reports?"
(f) ................................ "What Distributions Will
I Receive?"
(g) ................................ "Does The Fund Pay
Federal Income Tax?";
"What About My Taxes?"
7.(a) ................................ "How Do I Purchase Shares
Of The Fund?"
(b) ................................ "How Do I Purchase Shares
Of The Fund?"; "How Is
Net Asset Value
Calculated?"
(c) ................................ "May My Tax Sheltered
Retirement Plan Invest In
The Fund?"; "How May I
Qualify For Quantity
Discounts?"
(d) ................................. "How Do I Purchase Shares
Of The Fund?"
(e) ................................. "Who Manages My
Investment In The Fund?"
(f) ................................. "Who Manages My
Investment In The Fund?"
8.(a) ................................. "How May I Redeem My
Shares?"
(b) ................................. "How May I Redeem My
Shares?"
(c) ................................. "How May I Redeem My
Shares?"
(d) ................................. "How May I Redeem My
Shares?"
9. ................................... *

<FN>
- --------------
*Indicates items which are omitted or inapplicable or answer to which is in the negative and omitted from Prospectus.
</TABLE>

- ii -

<PAGE> 35

PROSPECTUS ____________________________________________________________________

[ LOGO ]

CARDINAL AGGRESSIVE GROWTH FUND

Cardinal Aggressive Growth Fund (the "Fund") is a diversified investment fund of
The Cardinal Group (the "Group"), an open-end, management investment company.
The Trustees of the Group have divided the Fund's beneficial ownership into an
unlimited number of transferable units called shares (the "Shares").

The Fund seeks as its investment objective appreciation of capital. The Fund
intends to invest primarily in common stocks and securities convertible into
common stocks. There can be no assurance that the Fund's objective will be
achieved.

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

FOR FURTHER INFORMATION REGARDING THE FUND OR FOR ASSISTANCE
IN OPENING AN ACCOUNT OR REDEEMING SHARES, PLEASE CALL (800) 282-9446 TOLL FREE.

INQUIRIES MAY ALSO BE MADE BY MAIL ADDRESSED
TO THE FUND AT ITS PRINCIPAL OFFICE:

155 EAST BROAD STREET
COLUMBUS, OHIO 43215

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

This Prospectus relates only to Cardinal Aggressive Growth Fund, currently one
fund of the Group and one of six funds of the Cardinal family of funds.
Interested persons who wish to obtain copies of the prospectus of Cardinal
Balanced Fund, another fund of the Group, or of The Cardinal Fund Inc., Cardinal
Government Obligations Fund, Cardinal Government Securities Trust or Cardinal
Tax Exempt Money Trust, the other members of the Cardinal family of funds,
should contact The Ohio Company at the number above. Additional information
about the Fund, contained in a Statement Of Additional Information dated January
19, 1996, has been filed with the Securities and Exchange Commission and is
incorporated herein by reference. Such Statement is available upon request
without charge from the Fund at the above address or by calling the phone number
provided above.

This Prospectus sets forth concisely the information about the Fund that a
prospective investor ought to know before investing in the Fund. This Prospectus
should be retained for future reference.

THE OHIO CO.

The date of this Prospectus is January 19, 1996

- --------------------------------------------------------------------------------
<PAGE> 36

- --------------------------------------------------------------------------------
KEY FEATURES
- --------------------------------------------------------------------------------

<TABLE>
<S> <C>
PROFESSIONAL MANAGERS.......... The Fund's portfolio is fully managed by professional
portfolio managers. (See page 19.)
DIVERSIFICATION................ The Fund's portfolio of securities represents an interest
in many companies and industries and therefore provides a
diversification of risk.
REDUCED SALES CHARGE........... An investor will pay a reduced sales charge for large
investments. (See page 12.)
LOW INITIAL INVESTMENT......... An investor can acquire shares of a portfolio of common
stocks and securities convertible into common stocks with
a smaller investment than would be needed to purchase a
similar portfolio directly.
RETIREMENT PROGRAMS............ The Fund is a permissible investment for qualified
retirement plans.
DIVIDEND REINVESTMENT.......... You may reinvest dividends, capital gains or both in
additional Shares of the Fund at no charge. (See pages 5
and 14.)
ACH PROCESSING................. Investors may use Automated Clearing House ("ACH")
processing for subsequent purchases of Shares,
redemptions, and/or distributions paid. (See page 16.)
</TABLE>

2
<PAGE> 37

- --------------------------------------------------------------------------------
PROSPECTUS HIGHLIGHTS
- --------------------------------------------------------------------------------

<TABLE>
<S> <C>
SHARES OFFERED................. Units of beneficial interest without par value ("Shares")
of Cardinal Aggressive Growth Fund, a separate investment
portfolio (the "Fund") of The Cardinal Group, an Ohio
business trust (the "Group"). (See page 7.)
OFFERING PRICE & SALES
CHARGE....................... The public offering price is equal to net asset value per
share plus a sales charge equal to 4.50% of the public
offering price (4.71% of net amount invested) reduced on
investments of $100,000 or more. (See page 12.)
MINIMUM PURCHASE............... $1,000 minimum initial investment and $50 minimum subse-
quent investments. (See page 12.)
TYPE OF COMPANY................ The Fund is a diversified series of an open-end,
management investment company, organized as an Ohio
business trust. (See page 7.)
INVESTMENT OBJECTIVE........... Appreciation of capital. (See page 7.)
INVESTMENT POLICIES............ The Fund will invest primarily in common stocks and
securities convertible into common stocks of
growth-oriented companies. (See pages 7 and 8.)
RISK FACTORS AND SPECIAL
CONSIDERATIONS............... An investment in a mutual fund such as the Fund involves
a certain amount of risk and may not be suitable for all
investors. Some investment policies of the Fund may
entail certain risks. (See "WHAT ARE THE INVESTMENT
OBJECTIVES AND POLICIES OF THE FUND? -- Risk Factors and
Investment Techniques" on pages 8 through 10.)
INVESTMENT ADVISER AND
MANAGER...................... The Fund has entered into an Investment Advisory and
Management Agreement with Cardinal Management Corp., a
wholly-owned subsidiary of The Ohio Company (the "Ad-
viser"). The Adviser also serves as investment adviser to
Cardinal Balanced Fund, another fund of the Group. (See
page 19.)
</TABLE>

3
<PAGE> 38

<TABLE>
<S> <C>
MANAGEMENT FEE................. The annual rate is .75% of the average daily net assets
of the Fund. (See pages 19 and 20.)
DISTRIBUTIONS.................. Dividends and distributions are made with such frequency
as the Fund shall determine. (See page 14.)
REDEMPTION..................... At net asset value per share without charge, except that
broker-dealers may charge a service fee for assisting in
a redemption. (See page 15.)
TRANSFER AGENT................. Cardinal Management Corp. (the "Transfer Agent") (See
page 20.)
</TABLE>

4
<PAGE> 39

- --------------------------------------------------------------------------------
FEE TABLE
- --------------------------------------------------------------------------------

<TABLE>
<S> <C>
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Load Imposed on Purchases
(as a percentage of offering price).......................... 4.50%
Maximum Sales Load Imposed on Reinvested Dividends
(as a percentage of offering price).......................... 0%
Deferred Sales Load
(as a percentage of original purchase price or redemption
proceeds, as applicable)...................................... 0%
Redemption Fees
(as a percentage of amount redeemed, if applicable).......... 0%
Exchange Fee................................................... $0

ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets)
Management Fees................................................ .75%
12b-1 Fees After Fee Waiver(1)................................. 0
Other Expenses................................................. 1.25
----
Total Fund Operating Expenses.................................. 2.00%
====
</TABLE>

<TABLE>
<CAPTION>
EXAMPLE 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- --------------------------------------------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
You would pay the following expenses on a
$1,000 investment, assuming (1) 5% annual
return and (2) redemption at the end of each
time period:................................. $ 64 $105 $148 $267

<FN>
- ---------------

(1) The Ohio Company, as the Fund's distributor, has agreed with the Group to
waive all of its Rule 12b-1 fees until September 30, 1996. Absent such
waiver, Rule 12b-1 Fees and Total Fund Operating Expenses would be 0.25% and
2.25%, respectively.

</TABLE>

5
<PAGE> 40

- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------

FINANCIAL HIGHLIGHTS FOR EACH SHARE OF BENEFICIAL INTEREST
OUTSTANDING THROUGHOUT EACH PERIOD:

<TABLE>
<CAPTION>
PERIOD FROM
JUNE 24, 1993
(DATE OF
COMMENCEMENT OF
YEARS ENDED OPERATIONS)
SEPTEMBER 30, THROUGH
--------------------- SEPTEMBER 30,
1995 1994 1993*
------- ------ ---------------
<S> <C> <C> <C>
Net asset value, Beginning of period......... $ 9.94 $10.47 $ 10.00
Income (Loss) from investment operations:
Net investment loss........................ (0.10) (0.13) (0.03)
Net gains or losses on securities (both
realized and unrealized)................ 2.53 (0.36) 0.50
------- ------ -------
Total from investment operations........... 2.43 (0.49) 0.47
------- ------ -------
Less Distributions:
Dividends (from net investment loss)....... -- -- --
Distributions (from capital gains)......... -- (0.04) --
Returns of capital......................... -- -- --
------- ------ -------
Total Distributions........................ 0 (0.04) 0.00
------- ------ -------
Net asset value, End of period............... $ 12.37 $ 9.94 $ 10.47
======== ====== =======
Ratios/Supplemental Data:
Total Return****........................... 24.35%*** (4.74%) 4.70%**
Net assets, End of period (000) omitted.... $10,434 $9,460 $ 6,320
Ratio of expenses to average net assets.... 2.24%*** 2.51% 0.91%
Ratio of net investment loss to average net
assets.................................. (0.92%)*** (1.50%) (0.53%)
Portfolio Turnover Rate.................... 80.35% 95.70% 31.15%

<FN>
- ---------------

*Commencement of operations.

**This total return figure reflects aggregate total return. Aggregate total
return is calculated similarly to average annual total return except that
the return figure is aggregated over the relevant period instead of
annualized.

***Effective September 15, 1995, The Ohio Company began waiving payments under
the Distribution and Shareholder Service Plan. Had the payments been
charged, the 1995 total return, ratio of expenses to average net assets, and
ratio of net investment loss to average net assets would have been 24.34%,
2.25%, and (0.93%), respectively.

****The total return figure does not reflect the imposition of the maximum
front-end sales load.

</TABLE>

See notes to financial statements appearing in the Fund's Statement of
Additional Information.

6
<PAGE> 41

- --------------------------------------------------------------------------------
PERFORMANCE INFORMATION
- --------------------------------------------------------------------------------

From time to time the Fund may advertise its average annual total return and/or
cumulative total return. SUCH TOTAL RETURN FIGURES ARE BASED UPON HISTORICAL
EARNINGS AND ARE NOT INTENDED TO INDICATE FUTURE PERFORMANCE. The average annual
total return advertised by the Fund refers to the return generated by an
investment in the Fund over certain specified periods since the establishment of
the Fund. The average annual total return over a period equates the amount of an
initial investment in the Fund to the amount redeemable at the end of that
period assuming that any dividends and distributions earned by an investment in
the Fund are immediately reinvested and the maximum applicable sales charge
(currently 4.5%) is deducted from the initial investment at the time of
investment. The cumulative total return advertised refers to the total return on
a hypothetical investment over the relevant period and equates the amount of an
initial investment in the Fund to the amount redeemable at the end of that
period assuming that any dividends and distributions are immediately reinvested
and the maximum sales charge is deducted from the initial investment. If the
sales charge were not deducted, the average annual total return and cumulative
total return advertised would be higher.

- --------------------------------------------------------------------------------
WHAT IS THE FUND?
- --------------------------------------------------------------------------------

IN GENERAL

The investment objective of the Fund is to seek appreciation of capital. The
Fund will invest primarily in common stocks and securities convertible into
common stocks of growth oriented companies. The investment objective of the Fund
is a fundamental policy and as such may not be changed without a vote of the
holders of a majority of the outstanding Shares of the Fund (as defined below
under "WHAT ARE MY RIGHTS AS A SHAREHOLDER?"). There can be no assurance that
the investment objective of the Fund will be achieved.

In determining the securities to be purchased by the Fund, emphasis will be
placed on securities of companies which, in the opinion of the Adviser, are
growth oriented and exhibit the potential for above-average growth in earnings.
The securities to be purchased by the Fund are traded either in established
over-the-counter markets or on national exchanges and are issued by companies
having a market capitalization of at least $10 million.

7
<PAGE> 42

The Adviser will select convertible securities primarily upon its evaluation
that the underlying common stocks meet the criteria for selection of common
stocks as described above. The Fund may invest up to 10% of its net assets in
non-investment grade convertible debt securities rated no lower than B by an
appropriate nationally recognized statistical rating organization (an "NRSRO")
or in unrated securities which are deemed by the Adviser to be of comparable
quality. Non-investment grade securities are commonly referred to as high yield
or high risk securities. High yield, high risk securities are generally riskier
than higher quality securities and are subject to more credit risk, including
risk of default, and volatility than higher quality securities. In addition,
such securities may have less liquidity and experience more price fluctuation
than higher quality securities.

Convertible debt securities which are rated B by Moody's Investor Services
generally lack characteristics of desirable investment, since the assurance of
interest and principal payments or maintenance of other terms of the contract
over any long period of time may be small. Debt rated B by Standard & Poor's
Corporation is regarded, on balance, as predominantly speculative with respect
to capacity to pay interest and repay principal in accordance with the terms of
the obligation. While such debt will likely have some quality and protective
characteristics, these are outweighed by large uncertainties or major risk
exposures to adverse conditions. In the event that a convertible debt security's
rating falls below a "B" by the appropriate NRSROs, the Adviser will reevaluate
the security in order to determine whether to sell or convert, if possible, such
security. In such an event, however, the Fund would not be required to liquidate
such security if it would suffer a loss on the sale of such security.

The Fund will, under normal market conditions, be invested fully in common
stocks and securities convertible into common stocks and may engage in the
investment techniques more fully described below. However, for cash management
purposes the Adviser may invest a portion of the Fund's assets in short-term
fixed income securities, consisting of commercial paper, bankers' acceptances,
certificates of deposit, obligations issued or guaranteed by the U.S. Government
or its agencies or instrumentalities, demand and time deposits of domestic
banks, repurchase agreements and securities of other investment companies, as
described below. During temporary defensive periods, as determined by the
Adviser, the Fund may hold up to 100% of its total assets in such short-term,
fixed income securities. However, to the extent that the Fund is so invested,
the Fund is not pursuing and may not achieve its investment objective.

RISK FACTORS AND INVESTMENT TECHNIQUES

GENERAL. Like any investment program, an investment in the Fund entails certain
risks. The Fund is intended for investors who can accept the higher risks
involved in seeking potentially higher capital appreciation through investments
in growth oriented companies. A growth oriented company typically invests most
of its net income in its enterprise and does not pay out much, if any, in
dividends. Accordingly, the Fund does not anticipate any significant
distributions to shareholders from net investment income, and potential
investors should be in a financial position to forego current income from their
investment in this Fund. The securities of less seasoned companies may have
limited marketability and may be subject to more abrupt or erratic market
movements over time than securities of more seasoned companies or the market as
a whole.

As described below, the Fund may invest in put and call options and futures.
Such instruments are considered to be derivatives. A derivative is generally
defined as an instrument whose value is based upon, or derived from, some
underlying index, reference rate (e.g., interest rates), security, commodity or
other asset. The Fund will not invest more than 10% of its total assets in such
derivatives at any one time.

8
<PAGE> 43

interest which is unrelated to the coupon rate or maturity of the underlying
security. Under the 1940 Act, repurchase agreements are considered to be loans
by the Fund. The Fund will only enter into a repurchase agreement where (i) the
underlying securities are of the type which the Fund's investment policies would
allow it to purchase directly, (ii) the market value of the underlying security,
including interest accrued, will at all times be equal to or exceed the value of
the repurchase agreement, and (iii) payment for the underlying securities is
made only upon physical delivery or evidence of book-entry transfer to the
account of the Fund's custodian or a bank acting as agent. The Adviser will be
responsible for continuously monitoring such requirements. In the event of a
bankruptcy or other default of a seller of a repurchase agreement, the Fund
could experience both delays in liquidating the underlying securities and
losses, including: (a) possible decline in the value of the underlying
securities during the period while the Fund seeks to enforce its rights thereto;
(b) possible subnormal levels of income and lack of access to income during this
period; and (c) expenses of enforcing its rights.

FOREIGN SECURITIES. The Fund may also invest up to 25% of its net assets in
foreign securities through the purchase of sponsored and unsponsored American
Depositary Receipts ("ADRs"). Unsponsored ADRs may be less liquid than sponsored
ADRs, and there may be less information available regarding the underlying
foreign issues for unsponsored ADRs. Investment in foreign securities is subject
to special investment risks that differ in some respects from those related to
investments in securities of U.S. domestic issuers. Such risks include trade
balances and imbalances, and related economic policies, future adverse
political, economic and social developments, the possible imposition of
withholding taxes on interest income, possible seizure, nationalization, or
expropriation of foreign investments or deposits, less stringent disclosure
requirements, the possible establishment of exchange controls or taxation at the
source, or the adoption of other foreign governmental restrictions. In addition,
foreign issuers may be subject to different accounting, auditing, reporting, and
recordkeeping standards than those applicable to U.S. domestic issuers, and
securities markets in foreign countries may be structured differently from and
may not be as liquid as the U.S. markets. The Fund will acquire securities
issued by foreign issuers only when the Adviser believes that the risks
associated with such investments are minimal.

9
<PAGE> 44

index option that is not completely offset by movements in the price of such
securities. Because index options are settled in cash, a call writer cannot
determine the amount of its settlement obligations in advance and, unlike call
writing on specific securities, cannot provide in advance for, or cover, its
potential settlement obligations by acquiring and holding the underlying
securities. The Fund may be required to segregate assets or provide an initial
margin to cover index options that would require it to pay cash upon exercise.

The Fund may engage in such futures contracts in an effort to hedge against
market risks. For example, when market values of portfolio securities are
expected to fall, the Fund can seek through the sale of futures contracts to
offset a decline in the value of its portfolio securities. When market values
are expected to rise, the Fund, through the purchase of such contracts, can
attempt to secure better prices for the Fund than might later be available in
the market when it effects anticipated purchases.

Aggregate initial margin deposits for futures contracts, and premiums paid for
related options, may not exceed five percent of the Fund's total assets, and the
value of securities that are the subject of such futures and options (both for
receipt and delivery) may not exceed one-third of the market value of the Fund's
total assets. Futures transactions will be limited to the extent necessary to
maintain the Fund's qualification as a regulated investment company.

Futures transactions involve brokerage costs and require the Fund to segregate
assets to cover contracts that would require it to purchase securities. The Fund
may lose the expected benefit of futures transactions if securities prices move
in an unanticipated manner. Such unanticipated changes may also result in poorer
overall performance than if the Fund had not entered into any futures
transactions. In addition, the value of the Fund's futures positions may not
prove to be perfectly or even highly correlated with the value of its portfolio
securities, limiting the Fund's ability to hedge effectively against market risk
and giving rise to additional risks. There is no assurance of liquidity in the
secondary market for purposes of closing out futures positions.

INVESTMENT COMPANY SECURITIES. The Fund may also invest up to 10% of the value
of its total assets in the securities of other investment companies subject to
limitations set forth in the 1940 Act. The Fund intends to invest in the
securities of money market mutual funds for purposes of short-term cash
management. The Fund's investment in such other investment companies may result
in the duplication of fees and expenses, particularly investment advisory fees.
For a further discussion of the limitations on the Fund's investments in other
investment companies, see "INVESTMENT OBJECTIVES AND POLICIES -- Additional
Information on Portfolio Instruments -- Securities of Other Investment
Companies" in the Group's Statement of Additional Information.

PORTFOLIO TURNOVER

The portfolio turnover rate for the Fund is calculated by dividing the lesser of
the Fund's purchases or sales of portfolio securities for the year by the
monthly average value of the portfolio securities. The Securities and Exchange
Commission requires that the calculation exclude all securities whose remaining
maturities at the time of acquisition are one year or less. The portfolio
turnover rate for the Fund may vary greatly from year to year, as well as within
a particular year and may also be affected by cash requirements for redemptions
of Shares. High portfolio turnover rates will generally result in higher
transaction costs,

10
<PAGE> 45

including brokerage commissions, to the Fund and may result in additional tax
consequences to the Fund's Shareholders. Portfolio turnover will not be a
limiting factor in making investment decisions.

INVESTMENT RESTRICTIONS

The Fund will not:

4. Make loans, except that the Fund may purchase or hold debt instruments
and lend portfolio securities in accordance with its investment
objective and policies, make time deposits with financial institutions
and enter into repurchase agreements.

The following additional investment restriction may be changed without the vote
of a majority of the outstanding Shares of the Fund.

The Fund may not:

1. Purchase or otherwise acquire any securities, if as a result, more than
15% of the Fund's net assets would be invested in securities that are
illiquid.

11
<PAGE> 46

IN GENERAL

PUBLIC OFFERING PRICE

(See "HOW IS NET ASSET VALUE CALCULATED?" for a description of the computation
of net asset value per share.)

12
<PAGE> 47

AUTOMATIC INVESTMENT PLAN

Shares of the Fund qualify for purchase in connection with the following tax
sheltered retirement plans:

-- Individual retirement account ("IRAs") plans

-- Simplified Employee Pension Plans

-- 403(b)(7) Custodial Plans sponsored by certain tax-exempt
employers

-- Pension, profit-sharing and 401(k) plans qualifying under Section
401(a) of the Internal Revenue Code

LETTER OF INTENTION

13
<PAGE> 48

not be available for disposal by you until all purchases pursuant to the letter
of intention have been made or the higher sales charge has been paid. When the
full amount indicated has been purchased, the escrow will be released. To the
extent that you purchase more than the dollar amount indicated on the Letter of
Intention and qualify for a further reduced sales charge, the sales charge will
be adjusted for the entire amount purchased at the end of the 13-month period.
The difference in sales charge will be, as you instruct, either delivered to you
in cash or used to purchase additional shares of the Cardinal Load Fund
designated by you subject to the rate of sales charge applicable to the actual
amount of the aggregate purchases. This program, however, may be modified or
eliminated at any time or from time to time by the Group without notice.

CONCURRENT PURCHASES

RIGHTS OF ACCUMULATION

After your initial purchase of Shares you may also be eligible to pay a reduced
sales charge for your subsequent purchases of Shares where the total public
offering price of Shares then being purchased plus the then aggregate current
net asset value of Shares of the Fund and of shares of any other Cardinal Load
Fund held in your account equals $100,000 or more. You would be able to purchase
Shares at the public offering price applicable to the total of (a) the total
public offering price of the Shares of the Fund then being purchased plus (b)
the then current net asset value of Shares of the Fund and of shares of any
other Cardinal Load Fund held in your account. For purposes of determining the
aggregate current net asset value of shares held in your account, you may
include Shares then owned by your spouse and children not of legal age.

Shareholders may also elect to receive dividends and distributions in cash by
using ACH processing as described under "WHAT OTHER SHAREHOLDER PROGRAMS ARE
PROVIDED? -- ACH Processing" below.

14
<PAGE> 49

- --------------------------------------------------------------------------------
HOW MAY I REDEEM MY SHARES?
- --------------------------------------------------------------------------------

The Group may suspend the right of redemption or may delay payment during any
period the determination of net asset value is suspended. See "HOW IS NET ASSET
VALUE CALCULATED?".

REDEMPTION BY MAIL

REDEMPTION BY TELEPHONE

15
<PAGE> 50

AUTOMATIC WITHDRAWAL

SYSTEMATIC WITHDRAWAL PLAN

ACH PROCESSING

The Fund offers ACH privileges. Investors may use ACH processing to make
subsequent purchases, redeem Shares and/or electronically transfer distributions
paid on Fund Shares, in addition to the other methods described in this
Prospectus. ACH provides a method by which funds may be automatically
transferred to or from an authorized bank account at a Federal Reserve member
bank that is an ACH member. Please contact your representative if you are
interested in ACH processing.

EXCHANGE PRIVILEGE

Cardinal Balanced Fund,
a fund seeking current income and
long-term growth of both capital and income
(upon the payment of the applicable sales charge);

The Cardinal Fund Inc.,
an equity fund seeking long-term growth
of capital and income (upon the payment of
the applicable sales charge);

Cardinal Government Obligations Fund,
a fund investing in securities issued
or guaranteed by the U.S. Government
(upon the payment of the appropriate
sales charge);

16
<PAGE> 51

Cardinal Government Securities Trust,
a U.S. Government securities money market fund
(without payment of any sales charge); or

Cardinal Tax Exempt Money Trust,
a tax-free money market fund
(without payment of any sales charge).

The foregoing exchange privilege may be exercised only once in each calendar
quarter and must be made by written or telephonic authorization. A shareholder
should notify The Ohio Company of his desire to make an exchange, and The Ohio
Company will furnish, as necessary, a prospectus and an application form to open
the account. The Transfer Agent will require that any written authorization of
an exchange include a signature guarantee as described above under "HOW MAY I
REDEEM MY SHARES? -- Redemption by mail." However, a signature guarantee will
not be required if the exchange is requested to be made within the same account
or into an existing account of the shareholder held in the same name or names
and in the same capacity as the account from which the exchange is to be made.
Shareholders may also authorize an exchange of Shares of the Fund by telephone.
Neither the Group, the Fund nor any of its service providers will be liable for
any loss, damages, expense or cost arising out of any telephone exchange
authorization to the extent and subject to the requirements set forth under "HOW
MAY I REDEEM MY SHARES? -- Redemption by telephone" above.

The Group may, at any time, modify or terminate the foregoing exchange
privilege. The Group, however, will give shareholders of the Fund 60 days'
advance written notice of any such modification or termination.

The net asset value of the Fund is determined once daily as of 4:00 P.M.
Columbus, Ohio time, on each Business Day. A "Business Day" is a day on which
the New York Stock Exchange is open for business and any other day (other than a
day on which no Shares of the Fund are tendered for redemption and no order to
purchase any Shares of the Fund is received) during which there is a sufficient
degree of trading in the Fund's portfolio securities that the net asset value
might be materially affected by changes in the value of the portfolio
securities. The net asset value per share of the Fund is computed by dividing
the sum of the value of the Fund's portfolio securities plus any cash and other
assets (including interest and dividends accrued but not received) minus all
liabilities (including estimated accrued expenses) by the total number of Shares
then outstanding.

The net asset value per share will fluctuate as the value of the investment
portfolio of the Fund changes.

Portfolio securities which are traded on United States stock exchanges are
valued at the last sale price on such an exchange as of the time of valuation
on the day the securities are being valued. Securities traded in the
over-the-counter market are valued at either the mean between the bid and ask
prices or the last sale price as one or the other may be quoted by the National
Association of Securities Dealers Automated Quotation System ("NASDAQ") as of
the time of valuation on the day the securities are being valued. The Group
uses one or more pricing services to provide such market quotations. Securities
and other assets for

17
<PAGE> 52

which market quotations are not readily available are valued at fair value as
determined in good faith by or under the direction of the Board of Trustees of
the Group.

- --------------------------------------------------------------------------------
WHAT ABOUT MY TAXES?
- --------------------------------------------------------------------------------

It is expected that the Fund will distribute annually to shareholders all or
substantially all of the Fund's net ordinary income and net realized capital
gains and that such distributed net ordinary income and distributed net realized
capital gains will be taxable income to shareholders for federal income tax
purposes, even if paid in additional Shares of the Fund and not in cash. The
dividends-received deduction for corporations will apply to the aggregate of
such ordinary income distributions in the same proportion as the aggregate
dividends eligible for the dividends received deduction, if any, received by the
Fund bear to its gross income.

18
<PAGE> 53

be invested in stock or securities of foreign corporations, the Fund will not be
entitled under the Code to pass through to its Shareholders their pro rata share
of the foreign taxes paid by the Fund. These taxes will be taken as a deduction
by the Fund.

The Transfer Agent will inform shareholders at least annually of the amount and
nature of such income and capital gains.

INVESTMENT ADVISER

Cardinal Management Corp. (the "Adviser"), 155 East Broad Street, Columbus, Ohio
43215, a wholly owned subsidiary of The Ohio Company, is the investment adviser
and manager of the Fund. The Adviser is also the investment adviser and manager
of Cardinal Balanced Fund, another fund of the Group ("CBF"), and of Cardinal
Government Securities Trust ("CGST"), Cardinal Tax Exempt Money Trust ("CTEMT")
and Cardinal Government Obligations Fund ("CGOF"), each of which is a separate
diversified management investment company.

The Ohio Company, an investment banking firm organized in 1925, is a member of
the New York and Chicago Stock Exchanges, other regional stock exchanges and the
National Association of Securities Dealers, Inc. Descendants of H.P. and R.F.
Wolfe, deceased, and members of their families, through their possession of a
majority of a voting stock, may be considered controlling persons of The Ohio
Company. In addition to acting as the principal underwriter for the Fund, CBF,
CGST, CTEMT and CGOF, The Ohio Company also serves as investment adviser and
principal underwriter for The Cardinal Fund Inc.

In its capacity as investment adviser, and subject to the ultimate authority of
the Group's Board of Trustees, the Adviser, in accordance with its investment
objectives and policies manages the Fund, makes decisions with respect to and
places orders for all purchases and sales of its portfolio securities. Since
August, 1995, John Bevilacqua has been primarily responsible for the day-to-day
management of the Fund's portfolio. Mr. Bevilacqua has been a Vice President and
Portfolio Manager for The Ohio Company since October, 1994. Prior thereto and
since February, 1984, Mr. Bevilacqua served as Second Vice President --
Investments for Midland Mutual Life Insurance Company, Columbus, Ohio. In
addition, pursuant to the Investment Advisory Agreement, the Adviser generally
assists in all aspects of the Fund's administration and operation.

19
<PAGE> 54

For the services provided and expenses assumed pursuant to its investment
advisory agreement with the Group with respect to the Fund, the Adviser receives
a fee from the Fund, computed daily and paid monthly at the annual rate of .75%
of average net daily assets of the Fund. While in the opinion of the staff of
the Securities and Exchange Commission such fee is higher than the advisory fee
paid by most mutual funds, the Group's Board of Trustees believes it to be
comparable to advisory fees paid by many funds having similar objectives and
policies.

DIVIDEND AND TRANSFER AGENT AND FUND ACCOUNTANT

DISTRIBUTOR

EXPENSES

DISTRIBUTION PLAN

Pursuant to Rule 12b-1 under the 1940 Act, the Group has adopted a Distribution
and Shareholder Service Plan (the "Plan"), under which the Fund is authorized to
pay or reimburse The Ohio Company, as the Fund's principal underwriter, a
periodic amount calculated at an annual rate not to exceed twenty-five one-
hundredths of one percent (.25%) of the average daily net asset value of the
Fund. Such amount may be used by The Ohio Company to pay broker-dealers
(including The Ohio Company), banks and other institutions (a "Participating
Organization") for distribution and/or shareholder service assistance pursuant
to an agreement between The Ohio Company and the Participating Organization or
for distribution assistance and/or shareholder service provided by The Ohio
Company pursuant to an agreement between The Ohio Company and the Group. Under
the Plan, a Participating Organization may include The Ohio Company, its
subsidiaries, and its affiliates. The Ohio Company may from time to time waive
all or a portion of the fees payable to it pursuant to the Plan. Any such waiver
will cause the total return of the Fund to be higher than it would otherwise be
absent such a waiver.

20
<PAGE> 55

and appropriate to accomplish such matters. In consideration of such services
the Group has agreed to pay The Ohio Company a monthly fee, computed at the
annual rate of .25% of the average aggregate net asset value of Shares held
during the period in customer accounts for which The Ohio Company has provided
services under this Agreement. Such fees paid by the Group will be borne solely
by the Fund. Such fee may exceed the actual costs incurred by The Ohio Company
in providing such services.

CUSTODIAN

The Group was organized as an Ohio business trust on March 23, 1993. The Group
currently consists of two funds, each having its own class of shares. The other
fund of the Group is Cardinal Balanced Fund. Each share represents an equal
proportional interest in a fund with other shares of the same fund, and is
entitled to such dividends and distributions out of the income earned on the
assets belonging to that fund as are declared at the discretion of the Trustees.

Shareholders are entitled to one vote for each dollar of value invested and a
proportionate fractional vote for any fraction of a dollar invested, and will
vote in the aggregate and not by series except as otherwise expressly required
by law. For example, shareholders of the Fund will vote in the aggregate with
other shareholders of the Group with respect to the election of trustees and
ratification of the selection of independent accountants. However, shareholders
of the Fund will vote as a fund, and not in the aggregate with other
shareholders of the Group, for purposes of approval of amendments to the Fund's
investment advisory agreement, the Plan, or any of the Fund's fundamental
policies.

21
<PAGE> 56

from any reinvestment of such proceeds, and any general assets of the Group not
readily identified as belonging to a particular fund that are allocated to the
fund by the Group's Board of Trustees. The Board of Trustees may allocate such
general assets in any manner it deems fair and equitable. Determinations by the
Board of Trustees of the Group as to the timing of the allocation of general
liabilities and expenses and as to the timing and allocable portion of any
general assets with respect to the Fund are conclusive.

Holders of Shares should direct all inquiries concerning such matters to the
Transfer Agent, 215 East Capital Street, Columbus, Ohio 43215.

Shareholders will receive unaudited semi-annual reports describing the
investment operations of the Fund and annual financial reports audited by
independent auditors.

22
<PAGE> 57

Investment Adviser and Manager
Cardinal Management Corp.
155 East Broad Street
Columbus, Ohio 43215

Distributor
The Ohio Company
155 East Broad Street
Columbus, Ohio 43215

Transfer Agent and Dividend Paying Agent
Cardinal Management Corp.
215 East Capital Street
Columbus, Ohio 43215

Custodian
The Fifth Third Bank
38 Fountain Square Plaza
Cincinnati, Ohio 45263

Legal Counsel
Baker & Hostetler
65 East State Street
Columbus, Ohio 43215

Independent Auditors
KPMG Peat Marwick LLP
Two Nationwide Plaza
Columbus, Ohio 43215

<PAGE> 58
====================================================

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
------

<S> <C>
KEY FEATURES................................ 2
PROSPECTUS HIGHLIGHTS....................... 3
FEE TABLE................................... 5
FINANCIAL HIGHLIGHTS........................ 6
PERFORMANCE INFORMATION..................... 7
WHAT IS THE FUND?........................... 7
WHAT ARE THE INVESTMENT OBJECTIVES
AND POLICIES OF THE FUND?................. 7
HOW DO I PURCHASE SHARES
OF THE FUND?.............................. 12
MAY MY TAX SHELTERED RETIREMENT PLAN INVEST
IN THE FUND?.............................. 13
HOW MAY I QUALIFY FOR QUANTITY DISCOUNTS?... 13
WHAT DISTRIBUTIONS WILL I RECEIVE?.......... 14
HOW MAY I REDEEM MY SHARES?................. 15
WHAT OTHER SHAREHOLDER PROGRAMS ARE
PROVIDED?................................. 16
HOW IS NET ASSET VALUE CALCULATED?.......... 17
DOES THE FUND PAY FEDERAL INCOME TAX?....... 18
WHAT ABOUT MY TAXES?........................ 18
WHO MANAGES MY INVESTMENT IN THE FUND?...... 19
WHAT ARE MY RIGHTS AS A
SHAREHOLDER?.............................. 21
</TABLE>

__________________

====================================================

----------------------
PROSPECTUS
----------------------

January 19, 1996

THE OHIO COMPANY

CARDINAL
AGGRESSIVE
GROWTH
FUND

[ LOGO ]

C A R D I N A L F U N D S

====================================================
<PAGE> 59

STATEMENT OF ADDITIONAL INFORMATION

CARDINAL BALANCED FUND

CARDINAL AGGRESSIVE GROWTH FUND

TWO INVESTMENT PORTFOLIOS OF

THE CARDINAL GROUP

Cardinal Balanced Fund ("CBF") and Cardinal Aggressive Growth Fund
("CAGF") (collectively, the "Funds" and individually a "Fund") are each a
separate diversified, investment portfolio of The Cardinal Group, an open-end,
management investment company (the "Group"). The investment objectives of CBF
are current income and long-term growth of both capital and income. CBF seeks
to achieve its objectives by investing in a diversified portfolio consisting
primarily of common stocks and bonds. The investment objective of CAGF is
appreciation of capital. CAGF seeks to achieve its objective by investing
primarily in common stocks and securities convertible into common stock.

_______________________________________________________

For further information regarding the Funds or
for assistance in opening an account or redeeming
Shares, please call (800) 282-9446 toll free.

Inquiries may also be made by mail addressed to the Group at its principal
office:

155 East Broad Street
Columbus, Ohio 43215

_____________________________________________________

This Statement Of Additional Information is not a prospectus and
should be read in conjunction with the Prospectuses of the Funds, each dated
January 19, 1996, which have been filed with the Securities and Exchange
Commission. This Statement of Additional Information is incorporated by
reference in its entirety into the Prospectuses. The Prospectuses are
available upon request without charge from the Group at the above address or by
calling the phone number provided above.

JANUARY 19, 1996

<PAGE> 60

<TABLE>
<CAPTION>
TABLE OF CONTENTS
-----------------

Page
----
<S> <C>
THE CARDINAL GROUP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-1

INVESTMENT OBJECTIVES AND POLICIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-1

Additional Information on Portfolio Instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . B-1
Investment Restrictions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-11
Portfolio Turnover . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-13

MANAGEMENT OF THE GROUP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-13

PRINCIPAL SHAREHOLDERS OF THE GROUP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-17

THE ADVISER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-17

PORTFOLIO TRANSACTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-18

TRANSFER AND DIVIDEND AGENT AND FUND ACCOUNTANT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-21

EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-22

THE DISTRIBUTOR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-22

CUSTODIAN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-24

LEGAL COUNSEL AND INDEPENDENT AUDITORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-24

ADDITIONAL PURCHASE AND REDEMPTION INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-24

TAXES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-25

ADDITIONAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-28

Description of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-28
Vote of a Majority of the Outstanding Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-29
Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-29

PERFORMANCE INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-30

Yield . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-30
Calculation of Total Return. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-30
Performance Comparisons . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-31

FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-32

APPENDIX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-1
</TABLE>

<PAGE> 61
STATEMENT OF ADDITIONAL INFORMATION

THE CARDINAL GROUP

The Cardinal Group (the "Group") is an open-end management investment
company which currently offers two separate diversified investment portfolios,
each with different investment objectives.

This Statement of Additional Information contains information about
Cardinal Balanced Fund ("CBF") and Cardinal Aggressive Growth Fund ("CAGF")
(collectively, the "Funds" and individually a "Fund").

Much of the information contained in this Statement of Additional
Information expands upon subjects discussed in the Prospectus of the respective
Fund. Capitalized terms not defined herein are defined in the Prospectuses.
No investment in Shares of a Fund should be made without first reading the
Prospectus of that Fund.

INVESTMENT OBJECTIVES AND POLICIES

Additional Information on Portfolio Instruments
- -----------------------------------------------

The following policies supplement the investment objectives and
policies of the Funds as set forth in their respective Prospectuses.

BANK OBLIGATIONS. Each Fund may invest in bank obligations consisting
of bankers' acceptances, certificates of deposit, and time deposits.

Bankers' acceptances are negotiable drafts or bills of exchange
typically drawn by an importer or exporter to pay for specific merchandise,
which are "accepted" by a bank, meaning, in effect, that the bank
unconditionally agrees to pay the face value of the instrument on maturity.
Bankers' acceptances invested in by the Fund will be those guaranteed by
domestic and foreign banks having, at the time of investment, capital, surplus,
and undivided profits in excess of $100,000,000 (as of the date of their most
recently published financial statements).

Certificates of deposit are negotiable certificates issued against
funds deposited in a commercial bank or a savings and loan association for a
definite period of time and earning a specified return. Certificates of
deposit and time deposits will be those of domestic banks and savings and loan
associations, if (a) at the time of investment the depository institution has
capital, surplus, and undivided profits in excess of $100,000,000 (as of the
date of its most recently published financial statements), or (b) the

B-1
<PAGE> 62
principal amount of the instrument is insured in full by the Federal Deposit
Insurance Corporation.

COMMERCIAL PAPER. Commercial paper consists of unsecured promissory
notes issued by corporations. Except as noted below with respect to variable
amount master demand notes, issues of commercial paper normally have maturities
of less than nine months and fixed rates of return.

Each Fund may invest in commercial paper rated at the time of purchase
within the two highest rating groups assigned rating by S&P, Moody's, or Fitch
Investors Service ("Fitch"), or, if unrated, which the Adviser determines to be
of comparable quality. For a description of the rating symbols of S&P,
Moody's, and Fitch used in this paragraph, see the Appendix.

U.S. GOVERNMENT OBLIGATIONS. Each Fund may also invest in obligations
issued or guaranteed by the U.S. Government or its agencies or
instrumentalities. Obligations of certain agencies and instrumentalities of
the U.S. Government are supported by the full faith and credit of the U.S.
Treasury; others are supported by the right of the issuer to borrow from the
Treasury; others are supported by the discretionary authority of the U.S.
Government to purchase the agency's obligations; and still others are supported
only by the credit of the instrumentality. No assurance can be given that the
U.S. Government would provide financial support to U.S. Government-sponsored
agencies or instrumentalities if it is not obligated to do so by law.

WHEN-ISSUED AND DELAYED-DELIVERY SECURITIES. As discussed in the
Prospectus of CBF, CBF may purchase securities on a "when-issued" or
"delayed-delivery" basis (I.E., for delivery beyond the normal settlement date
at a stated price and yield). When CBF agrees to purchase securities on a
"when-issued" or "delayed-delivery" basis, CBF's custodian will set aside in a
separate account cash or liquid portfolio securities equal to the amount of the
commitment. Normally, the custodian will set aside portfolio securities to
satisfy the purchase commitment, and in such a case, CBF may be required
subsequently to place additional assets in the separate account in order to
assure that the value of the account remains equal to the amount of CBF's
commitment. It may be expected that CBF's net assets will fluctuate to a
greater degree when it sets aside portfolio securities to cover such purchase
commitments than when it sets aside cash. In addition, because CBF will set
aside cash or liquid portfolio securities to satisfy its purchase commitments
in the manner described above, CBF's liquidity and the ability of the Adviser
to manage it might be affected in the event its commitments to purchase
"when-issued" or "delayed-delivery" securities ever exceeded 25% of the value
of its assets. Under normal market conditions, however, CBF's commitments to
purchase "when-issued" or "delayed-delivery" securities will not exceed 25% of
the value of its assets.

B-2
<PAGE> 63
When CBF engages in "when-issued" or "delayed-delivery" transactions,
it relies on the seller to consummate the trade. Failure of the seller to do
so may result in CBF's incurring a loss or missing the opportunity to obtain a
price considered to be advantageous. CBF will engage in "when-issued" or
"delayed-delivery" transactions only for the purpose of acquiring portfolio
securities consistent with CBF's investment objectives and policies and not for
investment leverage.

MORTGAGE-RELATED SECURITIES. CBF may, consistent with its investment
objectives and policies, invest in mortgage-related securities issued or
guaranteed by the U.S. Government or its agencies or instrumentalities. CBF
may, in addition, invest in mortgage-related securities issued by
nongovernmental entities; provided, however, that to the extent CBF purchases
mortgage-related securities from such issuers which may, solely for purposes of
Section 12 of the 1940 Act, be deemed to be investment companies, CBF's
investment in such securities will be subject to the limitations on its
investment in investment company securities set forth below in its investment
restrictions.

Mortgage-related securities, for purposes of CBF's Prospectus and this
Statement of Additional Information, represent pools of mortgage loans
assembled for sale to investors by various governmental agencies such as the
Government National Mortgage Association and government-related organizations
such as the Federal National Mortgage Association and the Federal Home Loan
Mortgage Corporation. Although certain mortgage-related securities are
guaranteed by a third party or otherwise similarly secured, the market value of
the security, which may fluctuate, is not so secured. If CBF purchases a
mortgage-related security at a premium, that portion may be lost if there is a
decline in the market value of the security whether resulting from changes in
interest rates or prepayments in the underlying mortgage collateral. As with
other interest-bearing securities, the prices of such securities are inversely
affected by changes in interest rates. However, though the value of a
mortgage-related security may decline when interest rates rise, the converse is
not necessarily true, since in periods of declining interest rates the
mortgages underlying the securities are prone to prepayment, thereby shortening
the average life of the security and shortening the period of time over which
income at the higher rate is received. Conversely, when interest rates are
rising, the rate of prepayment tends to decrease, thereby lengthening the
period of time over which income at the lower rate is received. For these and
other reasons, a mortgage-related security's average maturity may be shortened
or lengthened as a result of interest rate fluctuations and, therefore, it is
not possible to predict accurately the security's return to CBF. In addition,
regular payments received in respect of mortgage-related securities include
both interest and principal. No assurance can be given as to the return CBF
will receive when these amounts are reinvested.

B-3
<PAGE> 64
CBF may invest in mortgage-related securities which are collateralized
mortgage obligations structured on pools of mortgage pass- through certificates
or mortgage loans. Collateralized mortgage obligations will be purchased only
if rated in the four highest bond rating categories assigned by an appropriate
NRSRO or, if unrated, which the Adviser deems to present attractive
opportunities and are of comparable quality.

There are a number of important differences among the agencies and
instrumentalities of the U.S. Government that issue mortgage-related securities
and among the securities that they issue. Mortgage-related securities issued
by the Government National Mortgage Association ("GNMA") include GNMA Mortgage
Pass-Through Certificates (also known as "Ginnie Maes") which are guaranteed as
to the timely payment of principal and interest by GNMA and such guarantee is
backed by the full faith and credit of the United States. GNMA is a
wholly-owned U.S. Government corporation within the Department of Housing and
Urban Development. GNMA certificates also are supported by the authority of
GNMA to borrow funds from the U.S. Treasury to make payments under its
guarantee. Mortgage-related securities issued by the Federal National Mortgage
Association ("FNMA") include FNMA Guaranteed Mortgage Pass-Through Certificates
(also known as "Fannie Maes") which are solely the obligations of FNMA and are
not backed by or entitled to the full faith and credit of the United States.
FNMA is a government-sponsored organization owned entirely by private
stockholders. Fannie Maes are guaranteed as to timely payment of the principal
and interest by FNMA. Mortgage-related securities issued by the Federal Home
Loan Mortgage Corporation ("FHLMC") include FHLMC Mortgage Participation
Certificates (also known as "Freddie Macs" or "PCs"). FHLMC is a corporate
instrumentality of the United States, created pursuant to an Act of Congress,
which is owned entirely by Federal Home Loan Banks. Freddie Macs are not
guaranteed by the United States or by any Federal Home Loan Banks and do not
constitute a debt or obligation of the United States or of any Federal Home
Loan Bank. Freddie Macs entitle the holder to timely payment of interest,
which is guaranteed by FHLMC. FHLMC guarantees either ultimate collection or
timely payment of all principal payments on the underlying mortgage loans.
When FHLMC does not guarantee timely payment of principal, FHLMC may remit the
amount due on account of its guarantee of ultimate payment of principal at any
time after default on an underlying mortgage, but in no event later than one
year after it becomes payable.

OTHER ASSET-BACKED SECURITIES. CBF may also invest in interests in
pools of receivables, such as motor vehicle installment purchase obligations
(known as Certificates of Automobile Receivables or CARS) and credit card
receivables (known as Certificates of Amortizing Revolving Debts or CARDS).
Such securities are generally issued as pass-through certificates, which
represent undivided fractional ownership interests in the underlying pools of
assets. Such securities may also be debt

B-4
<PAGE> 65
instruments which are also known as collateralized obligations and are
generally issued as the debt of a special purpose entity organized solely for
the purpose of owning such assets and issuing such debt.

Such securities are not issued or guaranteed by the U.S. Government or
its agencies or instrumentalities; however, the payment of principal and
interest on such obligations may be guaranteed up to certain amounts and for a
certain time period by a letter of credit issued by a financial institution
(such as a bank or insurance company) unaffiliated with the issuers of such
securities. Non-mortgage backed securities will be purchased by CBF only when
rated in one of the four highest rating categories by an appropriate NRSRO at
the time of purchase.

The development of these asset-backed securities is at an early state
compared to mortgage backed securities. While the market for asset-backed
securities is becoming increasingly liquid, the market for mortgage backed
securities issued by certain private organization and non-mortgage backed
securities is not as well developed. The Adviser will limit purchases of
asset-backed securities to securities that are deemed to be readily marketable
by the Adviser at the time of purchase.

Asset-backed securities held by CBF arise through the grouping by
governmental, government-related and private organizations of loans,
receivables and other assets originated by various lenders. Interests in pools
of these assets differ from other forms of debt securities, which normally
provide for periodic payment of interest in fixed amounts with principal paid
at maturity or specified call dates. Instead, asset-backed securities provide
periodic payments which generally consist of both interest and principal
payments.

The estimated life of an asset-backed security may vary with the
prepayment experience with respect to the underlying debt instruments. The
rate of such prepayments, and hence the life of an asset-backed security, will
be a function of current market interest rates and other economic and
demographic factors. Since prepayment experience can vary, asset-backed
securities may be a less effective vehicle for locking in high long-term
yields.

SECURITIES OF OTHER INVESTMENT COMPANIES. Each Fund may invest in
securities issued by other investment companies. Each Fund currently intends
to limit its investments so that, as determined immediately after a securities
purchase is made: (a) not more than 5% of the value of its total assets will
be invested in the securities of any one investment company; (b) not more than
10% of the value of its total assets will be invested in the aggregate in
securities of investment companies as a group; and (c) not more than 3% of the
outstanding voting stock of any one investment company will be owned by such
Fund. As a shareholder of another investment company, a Fund would bear, along
with other

B-5
<PAGE> 66
shareholders, its pro rata portion of that company's expenses, including
advisory fees. These expenses would be in addition to the advisory and other
expenses that such Fund bears directly in connection with its own operations.
Investment companies in which the Funds may invest may also impose a sales or
distribution charge in connection with the purchase or redemption of their
shares and other types of commissions or charges. Such charges will be payable
by such Fund and, therefore, will be borne directly by shareholders.

INCOME PARTICIPATION LOANS. CBF may make or acquire participation in
privately negotiated loans to borrowers. Frequently, such loans have variable
interest rates and may be backed by a bank letter of credit; in other cases
they may be unsecured. Such transactions may provide an opportunity to achieve
higher yields than those that may be available from other securities offered
and sold to the general public.

Privately arranged loans, however, will generally not be rated by a
credit rating agency and will normally be liquid, if at all, only through a
provision requiring repayment following demand by the lender. Such loans made
by CBF may have a demand provision permitting such Fund to require repayment
within seven days. Participation in such loans, however, may not have such a
demand provision and may not be otherwise marketable. To the extent these
securities are not readily marketable, they will be subject to CBF's 15%
limitation on investments in illiquid securities. Recovery of an investment in
any such loan that is illiquid and payable on demand will depend on the ability
of the borrower to meet an obligation for full repayment of principal and
payment of accrued interest within the demand period, normally seven days or
less (unless such Fund determines that a particular loan issue, unlike most
such loans, has a readily available market). As it deems appropriate, the
Group's Board of Trustees will establish procedures to monitor the credit
standing of each such borrower, including its ability to honor contractual
payment obligations.

CBF will purchase income participation loans only if such instruments
are, in the opinion of CBF's investment adviser, of comparable quality to
securities rated within the four highest rating groups assigned by Moody's or
S&P.

REPURCHASE AGREEMENTS. Securities held by each of the Funds may be
subject to repurchase agreements. Under the terms of a repurchase agreement, a
Fund would acquire securities from member banks of the Federal Reserve System
and registered broker-dealers which the Adviser deems creditworthy under
guidelines approved by the Group's Board of Trustees, subject to the seller's
agreement to repurchase such securities at a mutually agreed-upon date and
price. The repurchase price would generally equal the price paid by the Fund
plus interest negotiated on the basis of current short-term rates, which may be
more or less than the rate on the

B-6
<PAGE> 67
underlying portfolio securities. The seller under a repurchase agreement will
be required to maintain at all times the value of collateral held pursuant to
the agreement at not less than the repurchase price (including accrued
interest). If the seller were to default on its repurchase obligation or
become insolvent, the Fund would suffer a loss to the extent that the proceeds
from a sale of the underlying portfolio securities were less than the
repurchase price under the agreement, or to the extent that the disposition of
such securities by the Fund were delayed pending court action. Additionally,
there is no controlling legal precedent confirming that the Fund would be
entitled, as against a claim by such seller or its receiver or trustee in
bankruptcy, to retain the underlying securities, although the Board of Trustees
of the Group believes that, under the regular procedures normally in effect for
custody of the Fund's securities subject to repurchase agreements and under
federal laws, a court of competent jurisdiction would rule in favor of the
Group if presented with the question. Securities subject to repurchase
agreements will be held by the Group's custodian or another qualified custodian
or in the Federal Reserve/Treasury book-entry system. Repurchase agreements
are considered to be loans by a Fund under the 1940 Act.

FOREIGN INVESTMENT. Investment in foreign securities is subject to
special investment risks that differ in some respects from those related to
investments in securities of U.S. domestic issuers. Since investments in the
securities of foreign issuers may involve currencies of foreign countries, the
Funds may be affected favorably or unfavorably by changes in currency rates and
in exchange control regulations and may incur costs in connection with
conversions between various currencies.

Since foreign companies are not subject to uniform accounting,
auditing and financial reporting standards, practices and requirements
comparable to those applicable to U.S. companies, there may be less publicly
available information about a foreign company than about a U.S. company.
Securities of many foreign companies are less liquid and more volatile than
securities of comparable U.S. companies.

In addition, with respect to certain foreign countries, there is the
possibility of expropriation or confiscatory taxation, political or social
instability, or diplomatic developments which could affect a Fund's investments
in those countries. Moreover, individual foreign economies may differ
favorably or unfavorably from the U.S. economy in such respects as growth of
gross national product, rate of inflation, capital reinvestment, resource
self-sufficiency and balance of payments position.

The Funds will acquire such securities only when the Adviser believes
the risks associated with such investments are minimal.

B-7
<PAGE> 68
OPTIONS TRADING. Each of the Funds may purchase put and call options.
A call option gives the purchaser of the option the right to buy, and a writer
has the obligation to sell, the underlying security at the stated exercise
price at any time prior to the expiration of the option, regardless of the
market price of the security. The premium paid to the writer is consideration
for undertaking the obligations under the option contract. A put option gives
the purchaser the right to sell the underlying security at the stated exercise
price at any time prior to the expiration date of the option, regardless of the
market price of the security. Put and call options purchased by the Funds will
be valued at the last sale price, or in the absence of such a price, at the
mean between bid and asked price.

When a Fund writes an option, an amount equal to the net premium (the
premium less the commission) received by the Fund is included in the liability
section of the Fund's statement of assets and liabilities as a deferred credit.
The amount of the deferred credit will be subsequently marked-to-market to
reflect the current value of the option written. The current value of the
traded option is the last sale price or, in the absence of a sale, the average
of the closing bid and asked prices. If an option expires on the stipulated
expiration date or if the Fund enters into a closing purchase transaction, it
will realize a gain (or a loss if the cost of a closing purchase transaction
exceeds the net premium received when the option is sold) and the deferred
credit related to such option will be eliminated. If an option is exercised,
the Fund may deliver the underlying security in the open market. In either
event, the proceeds of the sale will be increased by the net premium originally
received and the Fund will realize a gain or loss.

The Funds may also purchase or sell index options. Index options (or
options on securities indices) are similar in many respects to options on
securities except that an index option gives the holder the right to receive,
upon exercise, cash instead of securities, if the closing level of the
securities index upon which the option is based is greater than, in the case of
a call, or less than, in the case of a put, the exercise price of the option.

MEDIUM-GRADE DEBT SECURITIES. As stated in the Prospectus for CBF,
CBF may invest in securities within the four highest rating groups assigned by
an appropriate NRSRO (e.g. S&P and Moody's), including securities rated BBB by
S&P or Baa by Moody's or, if unrated, judged by the Adviser to be of comparable
quality ("Medium-Grade Securities").

As with other fixed-income securities, Medium-Grade Securities are
subject to credit risk and market risk. Market risk relates to changes in a
security's value as a result of changes in interest rates. Credit risk relates
to the ability of the issuer to make

B-8
<PAGE> 69
payments of principal and interest. Medium-Grade Securities are considered by
Moody's to have speculative characteristics.

Medium-Grade Securities are generally subject to greater credit risk
than comparable higher-rated securities because issuers are more vulnerable to
economic downturns, higher interest rates or adverse issuer-specific
developments. In addition, the prices of Medium-Grade Securities are generally
subject to greater market risk and therefore react more sharply to changes in
interest rates. The value and liquidity of Medium-Grade Securities may be
diminished by adverse publicity and investor perceptions.

Because certain Medium-Grade Securities are traded only in markets
where the number of potential purchasers and sellers, if any, is limited, the
ability of CBF to sell such securities at their fair value either to meet
redemption requests or to respond to changes in the financial markets may be
limited.

Particular types of Medium-Grade Securities may present special
concerns. The prices of payment-in-kind or zero-coupon securities may react
more strongly to changes in interest rates than the prices of other
Medium-Grade Securities. Some Medium-Grade Securities in which CBF may invest
may be subject to redemption or call provisions that may limit increases in
market value that might otherwise result from lower interest rates while
increasing the risk that CBF may be required to reinvest redemption or call
proceeds during a period of relatively low interest rates.

The credit ratings issued by NRSROs are subject to various
limitations. For example, while such ratings evaluate credit risk, they
ordinarily do not evaluate the market risk of Medium-Grade Securities. In
certain circumstances, the ratings may not reflect in a timely fashion adverse
developments affecting an issuer. For these reasons, the Adviser conducts its
own independent credit analysis of Medium-Grade Securities.

FUTURES CONTRACTS. As discussed in the Prospectuses of the Funds,
each of the Funds may enter into futures contracts. This investment technique
is designed primarily to hedge against anticipated future changes in market
conditions which otherwise might adversely affect the value of securities which
a Fund holds or intends to purchase. For example, when interest rates are
expected to rise or market values of portfolio securities are expected to fall,
a Fund can seek through the sale of futures contracts to offset a decline in
the value of its portfolio securities. When interest rates are expected to
fall or market values are expected to rise, a Fund, through the purchase of
such contracts, can attempt to secure better rates or prices for the Fund than
might later be available in the market when it effects anticipated purchases.

B-9
<PAGE> 70
The acquisition of put and call options on futures contracts will,
respectively, give a Fund the right (but not the obligation), for a specified
price, to sell or to purchase the underlying futures contract, upon exercise of
the option, at any time during the option period.

Futures transactions involve brokerage costs and require a Fund to
segregate liquid assets, such as cash, U.S. Government securities or other
liquid high grade debt obligations, to cover its performance under such
contracts. A Fund may lose the expected benefit of futures transactions if
interest rates, securities prices or foreign exchange rates move in an
unanticipated manner. Such unanticipated changes may also result in poorer
overall performance than if the Fund had not entered into any futures
transactions. In addition, the value of a Fund's futures positions may not
prove to be perfectly or even highly correlated with the value of its portfolio
securities, limiting the Fund's ability to hedge effectively against interest
rate and/or market risk and giving rise to additional risks. There is no
assurance of liquidity in the secondary market for purposes of closing out
futures positions.

REGULATORY RESTRICTIONS. To the extent required to comply with
Securities and Exchange Commission Release No. IC-10666, when purchasing a
futures contract or writing a put option, a Fund will maintain in a segregated
account cash or liquid high-grade securities equal to the value of such
contracts.

To the extent required to comply with Commodity Futures Trading
Commission Regulation 4.5 and thereby avoid being classified as a "commodity
pool operator," a Fund will not enter into a futures contract or purchase an
option thereon if immediately thereafter the initial margin deposits for
futures contracts held by such Fund plus premiums paid by it for open options
on futures would exceed 5% of such Fund's total assets. A Fund will not engage
in transactions in financial futures contracts or options thereon for
speculation, but only to attempt to hedge against changes in market conditions
affecting the values of securities which such Fund holds or intends to
purchase. When futures contracts or options thereon are purchased to protect
against a price increase on securities intended to be purchased later, it is
anticipated that at least 25% of such intended purchases will be completed.
When other futures contracts or options thereon are purchased, the underlying
value of such contracts will at all times not exceed the sum of: (1) accrued
profit on such contracts held by the broker; (2) cash or high quality money
market instruments set aside in an identifiable manner; and (3) cash proceeds
from investments due in 30 days.

B-10
<PAGE> 71
Investment Restrictions
- -----------------------
Each Fund's investment objectives are fundamental policies and as such
may not be changed without a vote of the holders of a majority of that Fund's
outstanding Shares. In addition, the following investment restrictions of the
Funds may be changed only by a vote of a majority of the outstanding Shares of
a Fund (as defined under "ADDITIONAL INFORMATION - Vote of a Majority of the
Outstanding Shares" in this Statement of Additional Information).

In addition to the investment restrictions set forth in their
respective Prospectus, each Fund may not:

1. Purchase securities on margin, except for use of short-term
credit necessary for clearance of purchases of portfolio securities and except
as may be necessary to make margin payments in connection with derivative
securities transactions;

2. Underwrite the securities issued by other persons, except to
the extent that the Fund may be deemed to be an underwriter under certain
securities laws in the disposition of "restricted securities";

3. Purchase or sell commodities or commodities contracts, except
to the extent disclosed in the current Prospectus of the Fund; and

4. Purchase or sell real estate (although investments in
marketable securities of companies engaged in such activities and securities
secured by real estate or interests therein are not prohibited by this
restriction).

The following additional investment restrictions may be changed
without the majority vote of the outstanding Shares of a Fund. Each Fund may
not:

1. Engage in any short sales;

2. Purchase securities of other investment companies, except (a)
in connection with a merger, consolidation, acquisition or reorganization, and
(b) to the extent permitted by the 1940 Act or pursuant to any exemptions
therefrom;

3. Invest more than 10% of the Fund's total assets in securities
of issuers, which together with any predecessors, have a record of less than
three years of continuous operation;

4. Purchase or retain securities of any issuer if the officers
and trustees of the Group and the officers and directors of its investment
adviser, who each owns beneficially more than 1/2 of 1% of the outstanding
securities of such issuer, together own beneficially more than 5% of such
securities;

B-11
<PAGE> 72
5. Mortgage or hypothecate the Fund's assets in excess of one-
third of the Fund's total assets;

6. Purchase participations or direct interests in oil, gas or
other mineral exploration or development programs (although investments by the
Fund in marketable securities of companies engaged in such activities are not
prohibited by this restriction); and

7. Invest more than 15% of the Fund's total assets in securities
which are restricted as to disposition.

If a percentage restriction or requirement set forth above is met at
the time of investment, a later increase or decrease in such percentage
resulting from a change in net asset value will not be considered a violation
of the policy. However, should a change in net asset value or other external
events cause a Fund's investments in illiquid securities to exceed the 15%
limitation set forth in its Prospectus, the Fund will act to cause the
aggregate amount of illiquid securities to come within such 15% limit as soon
as reasonably practicable. In such an event, however, the Fund would not be
required to liquidate any portfolio securities where the Fund would suffer a
loss on the sale of such securities.

The Group has represented to the Texas State Securities Board and to
the Wisconsin Securities Bureau on behalf of each of the Funds that each Fund
will limit its investments in warrants, valued at the lower of cost or market,
to no more than 5% of the value of its net assets. Included within such amount
(but not in excess of 2% of the value of such Fund's net assets) are warrants
which are not listed on the New York or American Stock Exchanges. For purposes
of this limitation, warrants acquired in units or attached to other securities
will be deemed to be without value.

The Group has also represented to the Texas State Securities Board on
behalf of each of the Funds that neither Fund may purchase or sell interests in
real estate limited partnerships, although investments in readily marketable
interests in real estate investment trusts or readily marketable securities of
companies or limited partnerships which invest in real estate are not
prohibited.

In addition, the Group has represented to the Wisconsin Securities
Bureau on behalf of each of the Funds that each Fund (1) will limit to 5% of
its total assets its investments in securities of issuers that the Fund is
restricted from selling to the public without registration under the Securities
Act of 1933, as amended (the "Securities Act") (excluding restricted securities
eligible for resale pursuant to Rule 144A under the Securities Act that have
been determined to be liquid by the Group's Board of Trustees based upon the
trading markets for such securities), including those securities that are
subject to legal or contractual restrictions on disposition; provided, however,
that upon appropriately amending a Fund's prospectus, the Group reserves the
right to increase the 5% limitation described in this paragraph to

B-12
<PAGE> 73
10%; and (2) will limit to 5% of its total assets its investments in securities
of unseasoned issuers, including their predecessors, which have been in
operation for less than 3 years and equity securities of issuers which are not
readily marketable.

The Group intends to comply with these representations on behalf of a
Fund for so long as such Fund has its Shares registered for sale in the state
to which such representations were made.

The Group, on behalf of each Fund, has represented to the California
Department of Corporations that, in order to comply with applicable
regulations, each Fund will acquire or retain securities of other open-end
management investment companies if such investments are made in open-end
management investment companies sold with no sales commission and such Fund's
investment adviser waives its management fee with respect to such investments.
The Group intends to comply with this undertaking for so long as the Funds have
their shares registered for sale in the State of California or such
representation is required by the California Department of Corporations.

Portfolio Turnover
- ------------------
The portfolio turnover rate for each Fund is calculated by dividing
the lesser of that Fund's purchases or sales of portfolio securities for the
year by the monthly average value of the portfolio securities. The calculation
excludes all securities whose remaining maturities at the time of acquisition
were one year or less.

The portfolio turnover rates for the fiscal years ended September 30,
1995, and 1994 for CBF were 37.62% and 59.09%, respectively, and for CAGF were
80.35% and 95.70%, respectively. The portfolio turnover rate for a Fund may
vary greatly from year to year as well as within a particular year, and may
also be affected by cash requirements for redemptions of Shares. Portfolio
turnover will not be a limiting factor in making investment decisions.

MANAGEMENT OF THE GROUP

The trustees and officers of the Group, together with their addresses
and principal business occupations and other affiliations during the last five
years, are shown below. Each person named as a trustee also serves as a
director of The Cardinal Fund Inc. and also serves as a trustee of Cardinal
Government Securities Trust, Cardinal Tax Exempt Money Trust and Cardinal
Government Obligations Fund. Each trustee who is an "interested person" of the
Group, as that term is defined in the 1940 Act, is indicated by an asterisk.

B-13
<PAGE> 74

<TABLE>
<CAPTION>
Name, Age and Position(s) Held Principal Occupation(s)
Business Address with the Group During Past 5 Years
---------------- ---------------- -----------------------
<S> <C> <C>
*H. Keith Allen Chairman and Trustee, Member of Executive, Chief Operating Officer,
155 East Broad Street Nominating and Investment Committees Secretary, Treasurer and a Director of
Columbus, Ohio 43215 The Ohio Company (investment banking);
Age: 54 formerly, Senior Executive Vice
President of The Ohio Company.

Gordon B. Carson Trustee, Member of Executive Committee Principal, Whitfield Robert Associates
5413 Gardenbrook Drive (construction consulting firm).
Midland, Michigan 48642
Age: 84

John B. Gerlach, Jr. Trustee, Member of Audit Since 1994, President and a
37 West Broad Street Committee Director of Lancaster Colony
Columbus, Ohio 43215 Corporation (diversified consumer
Age: 41 products); prior thereto, Executive
Vice President, Secretary and a
Director of Lancaster Colony
Corporation.

Michael J. Knilans Trustee, Member of From November, 1989 to August,
1119 Kingsdale Terrace Executive Committee 1995, Member of the Ohio Bureau of
Columbus, Ohio 43220 Workers' Compensation and Chairman
Age: 68 from 1992 through August, 1995.

James I. Luck Trustee President, The Columbus Foundation
1234 East Broad Street (philanthropic public foundation).
Columbus, Ohio 43205
Age: 50

David L. Nelson Trustee, Member of Audit and Chairman of the Board of Directors
18 James Lane Nominating Committees of Herman Miller, Inc. (furniture
Stamford, CT 06903 manufacturer); former Vice President,
Age: 65 Customer Support, Americas Region,
and Vice President, Customer
Satisfaction, Industry Segment, of
Asea Brown Boveri, Inc. (designer and
manufacturer of process automation
systems for basic industries).

*C. A. Peterson Trustee Chartered Financial Analyst; former
150 E. Wilson Bridge Rd. Senior Executive Vice President and
Worthington, Ohio 43085 Director of The Ohio Company
Age: 69 (investment banking).

</TABLE>

B-14
<PAGE> 75

<TABLE>
<CAPTION>
Name, Age and Position(s) Held Principal Occupation(s)
Business Address with the Group During Past 5 Years
---------------- ---------------- -----------------------
<S> <C> <C>
Lawrence H. Rogers II Trustee Self-employed author; former
4600 Drake Road Vice Chairman, Motor Sports Inc.
Cincinnati, Ohio 45243 Enterprises, Inc.
Age: 74

*Frank W. Siegel President and Chartered Financial Analyst and
155 East Broad Street Trustee, Member of Senior Vice President, The Ohio
Columbus, Ohio 43215 Executive and Nominating Company (investment banking);
Age: 43 Committees former Vice President, Keystone
Group (mutual fund
management/administration); former
Senior Vice President, Trust
Advisory Group (mutual fund
consulting).

Joseph H. Stegmayer Trustee, Member of Audit President and a Director of Clayton
724 Hampton Roads Dr. and Nominating Committees Homes, Inc. (manufactured homes);
Knoxville, TN 37922-4071 former Vice President, Treasurer,
Age: 44 Chief Financial Officer and a
Director of Worthington Industries,
Inc. (specialty steel and plastics
manufacturer).

Karen J. Hipsher Secretary Executive Secretary, The Ohio
155 East Broad Street Company (investment banking).
Columbus, Ohio 43215

James M. Schrack II Treasurer Vice President and Trust Officer
155 East Broad Street of The Ohio Company
Columbus, Ohio 43215 (investment banking).

Bruce E. McKibben Assistant Treasurer Since April, 1991, Employee of The
155 East Broad Street Ohio Company (investment banking);
Columbus, Ohio 43215 prior thereto, student at The Ohio
State University.
</TABLE>

As of January 11, 1996, all trustees and officers of the Group as a
group owned fewer than one percent of the Shares of each Fund then outstanding.

Pursuant to the ultimate authority of the Board of Trustees of the
Group, the Executive Committee is responsible for the general management of the
affairs of the Group. This Committee's actions are reported to and reviewed by
the Board of Trustees.

Messrs. Allen and Siegel are Chairman, President and a director, and
Vice President and a director, respectively, of the Adviser, and Mr. Schrack is
a Vice President of the Adviser. The compensation of trustees and officers of
the Group who are employed

B-15
<PAGE> 76
by The Ohio Company is paid by The Ohio Company. Trustees' fees (currently
$500 per meeting attended, $500 annual retainer and $500 per audit committee
meeting attended) plus expenses are paid by the Group, except that Messrs.
Allen and Siegel receive no fees from the Group.

The following table sets forth information regarding all compensation
paid by the Group to its Trustees for their services as trustees during the
fiscal year ended September 30, 1995. The Group has no pension or retirement
plans.

<TABLE>
<CAPTION>
COMPENSATION TABLE

Name and Position Aggregate Compensation Total Compensation From the
With the Group* From the Group Group and the Fund Complex**
--------------- -------------- -----------------------------
<S> <C> <C>
Gordon B. Carson $2,000 $12,000
Trustee and Member of Executive
Committee

H. Keith Allen $ 0 $ 0
Chairman, Trustee and Member of
Executive, Nominating and Investment
Committees

John B. Gerlach $2,000 $13,000
Trustee and Member of Audit Committee

Michael J. Knilans $2,000 $12,000
Trustee and Member of Executive
Committee

James I. Luck $2,000 $12,000
Trustee

David L. Nelson $2,000 $13,000
Trustee and Member of Audit and
Nominating Committees

C.A. Peterson $2,000 $12,000
Trustee

Lawrence H. Rogers, II $2,000 $12,000
Trustee

Frank W. Siegel $ 0 $ 0
Trustee, President and Member of
Executive and Nominating Committees
</TABLE>

B-16
<PAGE> 77

<TABLE>
<CAPTION>
Name and Position Aggregate Compensation Total Compensation From the
With the Group* From the Group Group and the Fund Complex**
--------------- -------------- -----------------------------
<S> <C> <C>
Joseph H. Stegmayer $1,500 $10,000
Trustee and Member of Audit and
Nominating Committees

<FN>
- -----------------
*During the fiscal year ended September 30, 1995, John L. Schlater, a
former officer of The Ohio Company and the Adviser, had served as a trustee of
the Group but no longer does so as of the date hereof. Mr. Schlater did not
receive any compensation from the Group or the Fund Complex.

**For purposes of this Table, Fund Complex means one or more mutual
funds, including the Group, which have a common investment adviser or
affiliated investment advisers or which hold themselves out to the public as
being related.
</TABLE>

PRINCIPAL SHAREHOLDERS OF THE GROUP

There were no persons known to the Group to be the beneficial owner of
more than 5% of any Fund's Shares or of the total number of the Group's shares
outstanding as of January 11, 1996.

THE ADVISER

The Group has entered into an Investment Advisory and Management
Agreement dated as of June 18, 1993 (the "Investment Advisory Agreement"), with
Cardinal Management Corp. (the "Adviser"). Pursuant to the Investment Advisory
Agreement, the Adviser has agreed to provide investment advisory and management
services as described in the Prospectuses of the Funds. As compensation for
such services, facilities and expenses, the Adviser receives a fee from each
Fund, computed and accrued daily and paid monthly, based on an annual rate of
.75% of the daily net asset value of that Fund. For the fiscal years ended
September 30, 1995 and 1994, and the fiscal period ended September 30, 1993,
fees earned under the Investment Advisory Agreement, with respect to CBF, were
$101,585, $103,264 and $11,128, respectively, and, with respect to CAGF, were
$71,508, $66,792 and $5,058, respectively.

The Adviser is a wholly owned subsidiary of The Ohio Company, an
investment banking firm organized in 1925. Descendants of H. P. and R. F.
Wolfe, deceased, and members of their families, through their possession of a
majority of the voting stock, may be considered controlling persons of The Ohio
Company. H. Keith Allen

B-17
<PAGE> 78
is an officer and director of The Ohio Company. Frank W. Siegel and James M.
Schrack II are each officers of The Ohio Company.

Unless sooner terminated, the Investment Advisory Agreement with
respect to a Fund continues for successive one-year periods ending June 18 of
each year if such continuance is approved at least annually by the Group's
Board of Trustees or by vote of a majority of the outstanding Shares of that
Fund (as defined under "ADDITIONAL INFORMATION -- Vote of a Majority of the
Outstanding Shares" below), and a majority of the Trustees who are not parties
to the Investment Advisory Agreement or interested persons (as defined in the
1940 Act) of any party to the Investment Advisory Agreement by votes cast in
person at a meeting called for such purpose. The Investment Advisory Agreement
is terminable as to a Fund at any time on 60 days' written notice without
penalty by the Trustees, by vote of a majority of the outstanding Shares of
that Fund, or by the Adviser. The Investment Advisory Agreement also
terminates automatically in the event of any assignment, as defined in the 1940
Act.

The Investment Advisory Agreement provides that the Adviser shall not
be liable for any error of judgment or mistake of law or for any loss suffered
by the Group in connection with the performance of the Investment Advisory
Agreement, except a loss resulting from a breach of fiduciary duty with respect
to the receipt of compensation for services or a loss resulting from willful
misfeasance, bad faith, or negligence on the part of the Adviser in the
performance of its duties, or from negligent disregard by the Adviser of its
duties and obligations thereunder.

PORTFOLIO TRANSACTIONS

Pursuant to the Investment Advisory Agreement, the Adviser, subject to
the policies established by the Board of Trustees of the Group and in
accordance with the Funds' investment restrictions and policies, is responsible
for each Fund's portfolio decisions and the placing of the Funds' portfolio
transactions. Purchases and sales of portfolio securities which are debt
securities usually are principal transactions in which such portfolio
securities are normally purchased directly from the issuer or from an
underwriter or market maker for the securities. Purchases from underwriters of
portfolio securities generally include a commission or concession paid by the
issuer to the underwriter, and purchases from dealers serving as market makers
may include the spread between the bid and asked price. Transactions on stock
exchanges involve the payment of negotiated brokerage commissions.
Transactions in the over-the-counter market are generally principal
transactions with dealers. With respect to the over-the-counter market, the
Group, where possible, will deal directly with dealers who make a market in the
securities involved except in those circumstances where better price and
execution are available elsewhere. For the Group's fiscal years ended
September 30, 1995 and 1994, and the fiscal

B-18
<PAGE> 79

period ended September 30, 1993, total brokerage fees paid by CBF were $20,490,
$18,285 and $3,260, respectively, and by CAGF were $22,011, $20,634 and $7,530,
respectively, none of which were paid to The Ohio Company.

In executing such transactions, the Adviser seeks to obtain the best
net results for a Fund taking into account such factors as price (including the
applicable brokerage commission or dealer spread), size of order, difficulties
of execution and operational facilities of the firm involved and the firm's
risk in positioning a block of securities. While the Adviser generally seeks
reasonably competitive commission rates, for the reasons stated in the prior
sentence, a Fund will not necessarily be paying the lowest commission or spread
available.

The Adviser may consider provision of research, statistical and other
information to the Group, a Fund or the Adviser in the selection of qualified
broker-dealers who effect portfolio transactions for a Fund so long as the
Adviser's ability to obtain the best net results for portfolio transactions of
that Fund is not diminished. Such research services include supplemental
research, securities and economic analyses, and statistical services and
information with respect to the availability of securities or purchasers or
sellers of securities. Such research services may also be useful to the
Adviser in connection with its services to other clients. Similarly, research
services provided by brokers serving such other clients may be useful to the
Adviser in connection with its services to a Fund. Although this information
is useful to a Fund and the Adviser, except as described below, it is not
possible to place a dollar value on it. It is the opinion of the Board of
Trustees and the Adviser that the review and study of this information will not
reduce the overall cost to the Adviser of performing its duties to the Fund
under the Investment Advisory Agreement. The Group has authorized The Ohio
Company to place brokerage transactions through Pershing and Company, a
division of Donaldson, Lufkin & Jenrette, in return for Lipper Data information
prepared for the Group's Trustees relating to information on fees and expenses
of other mutual funds. In addition, the Adviser, on behalf of the Funds, may
direct brokerage transactions to Columbine Research in return for the provision
of research services. For the fiscal year ended September 30, 1995, no
brokerage transactions were so directed. Such brokerage transactions, with
both Pershing and Company and Columbine Capital, are subject to the
requirements as to price and execution as described above. The Group is not
authorized to pay brokerage commissions which are in excess of those which
another qualified broker would charge solely by reason of brokerage and
research services provided.

Investment decisions for a Fund are made independently from those for
another Fund of the Group or any other investment company or account managed by
the Adviser. Any such other Funds, investment company or account may also
invest in the same securities as a Fund. When a purchase or sale of the same
security

B-19
<PAGE> 80
is made at substantially the same time on behalf of a Fund and another Fund,
investment company or account, the transaction will be averaged as to price and
available investments will be allocated as to amount in a manner which the
Adviser believes to be equitable to the Fund and such other Fund, investment
company or account. In some instances, this investment procedure may adversely
affect the price paid or received by a Fund or the size of the position
obtained by that Fund. To the extent permitted by law, the Adviser may
aggregate the securities to be sold or purchased for a Fund with those to be
sold or purchased for other funds or for other investment companies or accounts
in order to obtain best execution. As provided by the Investment Advisory
Agreement, in making investment recommendations for the Group, the Adviser will
not inquire or take into consideration whether an issuer of securities proposed
for purchase or sale by the Group is a customer of the Adviser, its parent or
its subsidiaries or affiliates and, in dealing with its customers, the Adviser,
its parent, subsidiaries and affiliates will not inquire or take into
consideration whether securities of such customers are held by the Group.

During the fiscal year ended September 30, 1995, CAGF did not hold
any securities of its regular brokers or dealers, as defined in Rule 10b-1
under the 1940 Act, or their parent companies. During such year, CBF held
commercial paper of Ford Motor Credit Corp., CIGNA Corp., Sears Acceptance Corp.
and General Motors Acceptance Corp., each of which is a regular dealer for CBF.
As of September 30, 1995, CBF held $500,000 of commercial paper of each such
dealer.

Pursuant to Investment Advisory Agreement, the Adviser also serves as
general manager and administrator to each of the Funds. The Adviser assists in
supervising all operations of each Fund (other than those performed by The
Fifth Third Bank under the Custodian Agreement and by the Adviser under the
Transfer Agency and Fund Accounting Agreement).

The Adviser has agreed to maintain office facilities; furnish
statistical and research data, clerical, certain bookkeeping services and
stationery and office supplies; prepare the periodic reports to the Commission
on Form N-SAR or any replacement forms therefor; compile data for, prepare for
execution by each Fund's and file all of each Fund's federal and state tax
returns and required tax filings other than those required to be made by each
Fund's custodian and Transfer Agent; prepare compliance filings pursuant to
state securities laws with the advice of the Group's counsel; assist to the
extent requested by the Group with the Group's preparation of its Annual and
Semi-Annual Reports to Shareholders and its Registration Statement (on Form
N-1A or any replacement therefor); compile data for, prepare and file timely
Notices to the Commission required pursuant to Rule 24f-2 under the 1940 Act;
keep and maintain the financial accounts and records of each Fund, including
calculation of daily expense accruals; and generally assist in all aspects of
each Fund's operations.

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<PAGE> 81
TRANSFER AND DIVIDEND AGENT AND FUND ACCOUNTANT

The Group has entered into a Transfer Agency and Fund Accounting
Agreement dated as of June 18, 1993 (the "Transfer Agency Agreement"), with the
Transfer Agent, pursuant to which the Transfer Agent has agreed to act as the
transfer agent, dividend disbursing agent and administrator of plans for each
Fund and to provide certain fund accounting services for each Fund. Pursuant
to the Transfer Agency Agreement, the Transfer Agent, among other things,
performs the following services in connection with each Fund's shareholders of
record: maintenance of shareholder records for each of the Group's shareholders
of record; processing shareholder purchase and redemption orders; processing
transfers and exchanges of shares of the Group on the shareholder files and
records; processing dividend payments and reinvestments; and assistance in the
mailing of shareholder reports and proxy solicitation materials. In
consideration of such services each Fund has agreed to pay the Transfer Agent
monthly an annual fee equal to $18 per shareholder account plus out-of-pocket
expenses.

In addition, the Transfer Agency provides certain fund accounting
services to each of the Funds, including maintaining the accounting books and
records for each Fund, including journals containing an itemized daily record
of all purchases and sales of portfolio securities, all receipts and
disbursements of cash and all other debits and credits, general and auxiliary
ledgers reflecting all asset, liability, reserve, capital, income and expense
accounts, including interest accrued and interest received, and other required
separate ledger accounts; maintaining a monthly trial balance of all ledger
accounts; performing certain accounting services for each Fund, including
calculation of the net asset value per share, calculation of the dividend and
capital gain distributions, if any, and of yield, reconciliation of cash
movements with such Fund's custodian, affirmation to that Fund's custodian of
all portfolio trades and cash settlements, verification and reconciliation with
that Fund's custodian of all daily trade activity; providing certain reports;
obtaining dealer quotations, prices from a pricing service or matrix prices on
all portfolio securities in order to mark the portfolio to the market; and
preparing an interim balance sheet, statement of income and expense, and
statement of changes in net assets for each Fund. In consideration for such
services, each Fund has agreed to pay the Transfer Agent a fee, computed daily
and paid periodically at an annual rate of .03% of such Fund's average daily
net assets. For the fiscal years ended September 30, 1995 and 1994, and the
fiscal period ended September 30, 1993, fees earned under the Transfer Agency
Agreement, with respect to CBF, were $25,950, $25,266 and $3,536,
respectively, and, with respect to CAGF, were $25,079, $25,671 and $3,184,
respectively.

B-21
<PAGE> 82
EXPENSES

If total expenses borne by a Fund in any fiscal year exceed expense
limitations imposed by applicable state securities regulations, the Adviser
will reimburse that Fund by the amount of such excess. As of the date of this
Statement of Additional Information, the most restrictive expense limitation
applicable to the Funds limit each Fund's aggregate annual expenses, including
management and advisory fees but excluding interest, taxes, brokerage
commissions, and certain other expenses, to 2 1/2% of the first $30 million of
a Fund's average net assets, 2% of the next $70 million of such Fund's average
net assets, and 1 1/2% of such Fund's remaining average net assets. Any
expense reimbursements will be estimated daily and reconciled and paid on a
monthly basis.

THE DISTRIBUTOR

The Ohio Company serves as agent for the Funds in the distribution of
their Shares pursuant to a Distribution Agreement dated June 18, 1993 (the
"Distribution Agreement"). Unless otherwise terminated, the Distribution
Agreement remains in effect for successive annual periods ending on June 18 if
approved at least annually (i) by the Group's Board of Trustees or by the vote
of a majority of the outstanding shares of the Group, and (ii) by the vote of a
majority of the Trustees of the Group who are not parties to the Distribution
Agreement or interested persons (as defined in the 1940 Act) of any party to
the Distribution Agreement, cast in person at a meeting called for the purpose
of voting on such approval. The Distribution Agreement may be terminated in
the event of any assignment, as defined in the 1940 Act.

In its capacity as Distributor, The Ohio Company solicits orders for
the sale of Shares, advertises and pays the costs of advertising, office space
and the personnel involved in such activities. The Distributor receives no
compensation from the Group under the Distribution Agreement, but may receive
compensation under the Distribution and Shareholder Service Plan described
below. In addition, for the Group's fiscal years ended September 30, 1995 and
1994, and the fiscal period ended September 30, 1993, commissions paid to The
Ohio Company under the Distribution Agreement with respect to the sale of
Shares of the Funds, after discounts to dealers, were $120,827, $412,331 and
$721,677, respectively.

As described in the Prospectus, the Group has adopted a Distribution
and Shareholder Service Plan (the "Plan") pursuant to Rule 12b-1 under the 1940
Act under which each Fund is authorized to pay The Ohio Company for payments it
makes to broker-dealers, including The Ohio Company, banks and other
institutions (with all of the foregoing organizations being referred to as
"Participating Organizations") for providing distribution or shareholder
service

B-22
<PAGE> 83
assistance or for distribution assistance and/or shareholder service provided
by The Ohio Company pursuant to an agreement between The Ohio Company and the
Group. Payments to such Participating Organizations may be made pursuant to
agreements entered into with The Ohio Company. The Plan authorizes each Fund to
make payments to The Ohio Company in an amount not in excess, on an annual
basis, of 0.25% of the average daily net asset value of that Fund.

As required by Rule 12b-1, the Plan was approved by the initial sole
shareholder of each Fund and by the Board of Trustees, including a majority of
the Trustees who are not interested persons of that Fund and who have no direct
or indirect financial interest in the operation of the Plan (the "Independent
Trustees"). The Plan may be terminated as to a Fund by vote of a majority of
the Independent Trustees, or by vote of majority of the outstanding Shares of
that Fund. Any change in the Plan that would materially increase the
distribution cost to a Fund requires shareholder approval. The Trustees review
quarterly a written report of such costs and the purposes for which such costs
have been incurred. The Plan may be amended by vote of the Trustees, including
a majority of the Independent Trustees, cast in person at a meeting called for
that purpose. For so long as the Plan is in effect, selection and nomination
of those Trustees who are not interested persons of the Group shall be
committed to the discretion of such disinterested persons. All agreements with
any person relating to the implementation of the Plan with respect to a Fund
may be terminated at any time on 60 days' written notice without payment of any
penalty, by vote of a majority of the Independent Trustees or by a vote of the
majority of the outstanding Shares of such Fund.

The Plan will continue in effect for successive one-year periods,
provided that each such continuance is specifically approved (i) by the vote of
a majority of the Independent Trustees, and (ii) by a vote of a majority of the
entire Board of Trustees cast in person at a meeting called for that purpose.
The Board of Trustees has a duty to request and evaluate such information as
may be reasonably necessary for them to make an informed determination of
whether the Plan should be implemented or continued. In addition the Trustees
in approving the Plan must determine that there is a reasonable likelihood that
the Plan will benefit the Funds and their Shareholders.

The Board of Trustees of the Group believes that the Plan is in the
best interests of the Funds since it encourages Fund growth and retention of
Fund assets. As a Fund grows in size, certain expenses, and therefore total
expenses per Share, may be reduced and overall performance per Share may be
improved.

As authorized by the Plan, the Group has entered into a Rule 12b-1
Agreement with The Ohio Company pursuant to which The Ohio Company has agreed
to provide certain shareholder services in connection with Shares purchased and
held by The Ohio Company for

B-23
<PAGE> 84

the accounts of its customers and Shares purchased and held by customers of The
Ohio Company directly, including, but not limited to, answering Shareholder
questions concerning the Funds, providing information to Shareholders on their
investments in the Funds and providing such personnel and communication
equipment as is necessary and appropriate to accomplish such matters. In
consideration of such services the Group, on behalf of each Fund, has agreed to
pay The Ohio Company a monthly fee, computed at the annual rate of .25% of the
average aggregate net asset value of Shares of that Fund held during the period
in customer accounts for which The Ohio Company has provided services under
this Agreement. For the fiscal year ended September 30, 1995, fees earned by
The Ohio Company under this Rule 12b-1 Agreement, with respect to CBF, were
$32,534, and, with respect to CAGF, were $22,594.

In addition, The Ohio Company may enter into, from time to time, Rule
12b-1 Agreements with selected dealers pursuant to which such dealers will
provide certain Shareholder services including, but not limited to, those
discussed above.

CUSTODIAN

The Fifth Third Bank, 38 Fountain Square Plaza, Cincinnati, Ohio
45263, has been selected to serve as the Funds' custodian pursuant to the
Custody Agreement dated June 18, 1993. In such capacity the custodian will
hold or arrange for the holding of all portfolio securities and other assets of
the Funds.

LEGAL COUNSEL AND INDEPENDENT AUDITORS

Baker & Hostetler, 65 East State Street, Columbus, Ohio 43215, is
counsel to the Group and will pass upon the legality of the Shares offered
thereby. The Group has selected KPMG Peat Marwick LLP, Two Nationwide Plaza,
Columbus, Ohio 43215, as independent auditors for the Funds. The financial
statements of the Funds included in this Statement of Additional Information
have been included herein in reliance upon the report of KPMG Peat Marwick LLP,
independent auditors, given upon the authority of said firm as experts in
accounting and auditing.

ADDITIONAL PURCHASE AND REDEMPTION INFORMATION

The Funds' Shares may be purchased at the public offering price and
are sold on a continuous basis through The Ohio Company, principal underwriter
of the Funds' Shares, at its address and number set forth on the cover page of
this Statement of Additional Information, and through other broker-dealers who
are members of the National Association of Securities Dealers, Inc. and have
sales agreements with The Ohio Company.

B-24
<PAGE> 85
Based upon the value of CBF's portfolio securities and other assets
and the number of outstanding Shares as of the fiscal year ended September 30,
1995, the net asset value and redemption price per share was $11.52. The total
offering price per share was $12.06 per share (net asset value divided by .955,
assuming the then current maximum sales charge of 4.50% of the offering price).
The total offering price is reduced on sales of $100,000 or more.

Based upon the value of CAGF's portfolio securities and other assets
and the number of outstanding Shares as of the fiscal year ended September 30,
1995, the net asset value and redemption price per share was $12.37. The total
offering price per share was $12.95 per share (net asset value divided by .955,
assuming the then current maximum sales charge of 4.50% of the offering price).
The total offering price is reduced on sales of $100,000 or more.

The Group may suspend the right of redemption or postpone the date of
payment for Shares during any period when (a) trading on the New York Stock
Exchange (the "Exchange") is restricted by applicable rules and regulations of
the Securities and Exchange Commission, (b) the Exchange is closed for other
than customary weekend and holiday closings, (c) the Securities and Exchange
Commission has by order permitted such suspension, or (d) an emergency exists
as a result of which (i) disposal by the Group of securities owned by it is not
reasonably practical or (ii) it is not reasonably practical for the Group to
determine the fair value of its net assets.

TAXES

Each Fund intends to qualify as a "regulated investment company" under
the Code for so long as such qualification is in the best interest of that
Fund's shareholders. In order to qualify as a regulated investment company, a
Fund must, among other things: derive at least 90% of its gross income from
dividends, interest, payments with respect to securities loans, and gains from
the sale or other disposition of securities or foreign currencies, or other
income derived with respect to its business of investing in such stock,
securities, or currencies; derive less than 30% of its gross income from the
sale or other disposition of stock, securities, options, future contracts or
foreign currencies held less than three months; and diversify its investments
within certain prescribed limits. In addition, to utilize the tax provisions
specially applicable to regulated investment companies, a Fund must distribute
to its shareholders at least 90% of its investment company taxable income for
the year. In general, a Fund's investment company taxable income will be its
taxable income subject to certain adjustments and excluding the excess of any
net long-term capital gain for the taxable year over the net short-term capital
loss, if any, for such year.

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<PAGE> 86
A non-deductible 4% excise tax is imposed on regulated investment
companies that do not distribute in each calendar year (regardless of whether
they otherwise have a non-calendar taxable year) an amount equal to 98% of
their ordinary income for the calendar year plus 98% of their capital gain net
income for the one-year period ending on October 31 of such calendar year. The
balance of such income must be distributed during the next calendar year. If
distributions during a calendar year were less than the required amount, such
Fund would be subject to a non-deductible excise tax equal to 4% of the
deficiency.

Although each Fund expects to qualify as a "regulated investment
company" and to be relieved of all or substantially all federal income taxes,
depending upon the extent of its activities in states and localities in which
its offices are maintained, in which its agents or independent contractors are
located, or in which it is otherwise deemed to be conducting business, a Fund
may be subject to the tax laws of such states or localities. In addition, if
for any taxable year a Fund does not qualify for the special tax treatment
afforded regulated investment companies, all of its taxable income will be
subject to federal tax at regular corporate rates (without any deduction for
distributions to its shareholders). In such event, dividend distributions
would be taxable to shareholders to the extent of earnings and profits, and
would be eligible for the dividends received deduction for corporations.

It is expected that each Fund will distribute annually to shareholders
all or substantially all of that Fund's net ordinary income and net realized
capital gains and that such distributed net ordinary income and distributed net
realized capital gains will be taxable income to shareholders for federal
income tax purposes, even if paid in additional Shares of the Fund and not in
cash.

Distribution by a Fund of the excess of net long-term capital gain
over net short-term capital loss is taxable to shareholders as long- term
capital gain in the year in which it is received, regardless of how long the
shareholder has held the Shares. Such distributions are not eligible for the
dividends-received deduction.

Federal taxable income of individuals is subject to graduated tax
rates of 15%, 28%, 31%, 36% and 39.6%. Further, the marginal tax rate may be
in excess of 39.6%, because adjustments reduce or eliminate the benefit of the
personal exemption and itemized deductions for individuals with gross income in
excess of certain threshold amounts.

Capital gains of individuals are subject to tax at the same rates
applicable to ordinary income; however, the tax rate on capital gains of
individuals cannot exceed 28%. Capital losses may be used to offset capital
gains. In addition, individuals may

B-26
<PAGE> 87
deduct up to $3,000 of net capital loss each year to offset ordinary income.
Excess net capital loss may be carried forward to future years.

Federal taxable income of corporations in excess of $75,000 up to $10
million is subject to a 34% tax rate; however, because the benefit of lower tax
rates on a corporation's taxable income of less than $75,000 is phased out for
corporations with income in excess of $100,000 but lower than $335,000, a
maximum marginal tax rate of 39% may result. Federal taxable income of
corporations in excess of $10 million is subject to a tax rate of 35%.
Further, a corporation's federal taxable income in excess of $15 million is
subject to an additional tax equal to 3% of taxable income over $15 million,
but not more than $100,000.

Capital gains of corporations are subject to tax at the same rates
applicable to ordinary income. Capital losses may be used only to offset
capital gains and excess net capital loss may be carried back three years and
forward five years.

Certain corporations are entitled to a 70% dividends received
deduction for distributions from certain domestic corporations. Each Fund will
designate the portion of any distributions which qualify for the 70% dividends
received deduction. The amount so designated may not exceed the amount
received by that Fund for its taxable year that qualifies for the dividends
received deduction.

A Fund will be required in certain cases to withhold and remit to the
United States Treasury 31% of taxable dividends paid to any shareholder who has
provided either an incorrect tax identification number or no number at all, or
who is subject to withholding by the Internal Revenue Service for failure
properly to include on his return payments of interest or dividends.

Information set forth in the Prospectuses and this Statement of
Additional Information which relates to federal taxation is only a summary of
some of the important federal tax considerations generally affecting purchasers
of Shares of a Fund. No attempt has been made to present a detailed
explanation of the federal income tax treatment of a Fund or its shareholders
and this discussion is not intended as a substitute for careful tax planning.
Accordingly, potential purchasers of Shares of a Fund are urged to consult
their tax advisers with specific reference to their own tax situation. In
addition, the tax discussion in the Prospectuses and this Statement of
Additional Information is based on tax laws and regulations which are in effect
on the date of the Prospectus and this Statement of Additional Information;
such laws and regulations may be changed by legislative or administrative
action.

B-27
<PAGE> 88
ADDITIONAL INFORMATION

Description of Shares
- ---------------------
The Group is an Ohio business trust. The Group was organized on March
23, 1993, and the Group's Declaration of Trust was filed with the Secretary of
State of Ohio on March 23, 1993. The Declaration of Trust authorizes the Board
of Trustees to issue an unlimited number of Shares, which are units of
beneficial interest, without par value. The Group presently offers two series
of Shares, which represent interests in the Funds; however, the Group has
created four additional series of shares, representing interests in The
Cardinal Fund, Cardinal Government Obligations Fund, Cardinal Government
Securities Money Market Fund and Cardinal Tax Exempt Money Market Fund. These
series have been created to buy all of the assets and liabilities of the other
funds of the Cardinal family of funds. The Group's Declaration of Trust
authorizes the Board of Trustees to divide or redivide any unissued Shares of
the Group into one or more additional series by setting or changing in any one
or more respects their respective preferences, conversion or other rights,
voting power, restrictions, limitations as to dividends, qualifications, and
terms and conditions of redemption.

Shares have no subscription or preemptive rights and only such
conversion or exchange rights as the Board of Trustees may grant in its
discretion. When issued for payment as described in the respective Prospectus
and this Statement of Additional Information, a Fund's Shares will be fully
paid and non-assessable. In the event of a liquidation or dissolution of the
Group, shareholders of a Fund are entitled to receive the assets available for
distribution belonging to that Fund, and a proportionate distribution, based
upon the relative asset values of the respective Fund, of any general assets
not belonging to any particular Fund which are available for distribution.

Rule 18f-2 under the 1940 Act provides that any matter required to be
submitted to the holders of the outstanding voting securities of an investment
company such as the Group shall not be deemed to have been effectively acted
upon unless approved by the holders of a majority of the outstanding shares of
each series affected by the matter. For purposes of determining whether the
approval of a majority of the outstanding shares of a series will be required
in connection with a matter, a series will be deemed to be affected by a matter
unless it is clear that the interests of each series in the matter are
identical, or that the matter does not affect any interest of the series.
Under Rule 18f-2, the approval of any amendment to the Investment Advisory
Agreement or any change in investment policy submitted to shareholders would be
effectively acted upon with respect to a series only if approved by a majority
of the outstanding shares of such series. However, Rule 18f-2 also provides
that the ratification of independent public

B-28
<PAGE> 89
accountants, the approval of principal underwriting contracts, and the election
of Trustees may be effectively acted upon by shareholders of the Group voting
without regard to series.

Vote of a Majority of the Outstanding Shares
- --------------------------------------------
As used in the Prospectuses and this Statement of Additional
Information, "vote of a majority of the outstanding Shares" of the Group or a
Fund, means the affirmative vote, at an annual or special meeting of
shareholders duly called, of the lesser of (a) 67% or more of the votes of
shareholders of the Group or that Fund present at such meeting at which the
holders of more than 50% of the votes attributable to the shareholders of
record of the Group or that Fund are represented in person or by proxy, or (b)
the holders of more than 50% of the outstanding votes of shareholders of the
Group or such Fund.

Miscellaneous
- -------------
Individual Trustees are elected by the Shareholders and, subject to
removal by the vote of two-thirds of the Board of Trustees, serve for a term
lasting until the next meeting of shareholders at which Trustees are elected.
Such meetings are not required to be held at any specific intervals.
Generally, Shareholders owning not less than 20% of the outstanding shares of
the Group entitled to vote may cause the Trustees to call a special meeting.
However, the Group has represented to the Securities and Exchange Commission
that the Trustees will call a special meeting for the purpose of considering
the removal of one or more Trustees upon written request therefor from
Shareholders owning not less than 10% of the outstanding votes of the Group
entitled to vote and that the Group will assist in communications with other
shareholders as required by Section 16(c) of the 1940 Act. At such a meeting,
a quorum of shareholders (constituting a majority of votes attributable to all
outstanding shares of the Group), by majority vote, has the power to remove one
or more Trustees.

The Group is registered with the Securities and Exchange Commission as
a management investment company. Such registration does not involve
supervision by the Securities and Exchange Commission of the management or
policies of the Group.

The Prospectuses and this Statement of Additional Information omit
certain of the information contained in the Registration Statement filed with
the Securities and Exchange Commission. Copies of such information may be
obtained from the Securities and Exchange Commission upon payment of the
prescribed fee.

The Prospectuses and this Statement of Additional Information are not
an offering of the securities herein described in any state in which such
offering may not lawfully be made. No salesman, dealer, or other person is
authorized to give any information or

B-29
<PAGE> 90
make any representation other than those contained in the Prospectuses and this
Statement of Additional Information.

PERFORMANCE INFORMATION

Yield
- -----
For the 30 day period ended September 30, 1995, the yield of CBF was
2.48%. As summarized in the Prospectus under the heading "PERFORMANCE
INFORMATION," the yield of CBF will be computed by annualizing net investment
income per share for a recent 30-day period and dividing that amount by a
Share's maximum offering price (as of the date hereof, 4.5%) (reduced by any
undeclared earned income expected to be paid shortly as a dividend) on the last
trading day of that period. Net investment income will reflect amortization of
any market value premium or discount of fixed income securities (except for
obligations backed by mortgages or other assets) and may include recognition of
a pro rata portion of the stated dividend rate of dividend paying portfolio
securities. The yield of CBF will vary from time to time depending upon market
conditions, the composition of CBF's portfolio and operating expenses of the
Group allocated to CBF. These factors and possible differences in the methods
used in calculating yield should be considered when comparing CBF's yield to
yields published for other investment companies and other investment vehicles.
Yield should also be considered relative to changes in the value of CBF's
Shares and to the relative risks associated with the investment objectives and
policies of CBF.

Calculation of Total Return
- ---------------------------
For the one-year period ended September 30, 1995, and the period from
June 24, 1993 (commencement of operations) to September 30, 1995, the average
annual total returns, with respect to CBF, were 15.29% and 7.32%, respectively,
and with respect to CAGF, were 18.75% and 7.75%, respectively. For the
one-year period ended September 30, 1995, and the period from June 24, 1993
(commencement of operations) to September 30, 1995, the cumulative returns
were, for CBF, 15.29% and 17.39%, respectively, and, for CAGF, 18.75% and
18.45%, respectively. Each quotation of average annual total return will be
computed by finding the average annual compounded rate of return over that
period which would equate the value of an initial amount of $1,000 invested in
a Fund equal to the ending redeemable value, according to the following
formula:
n
P(T + 1) = ERV

Where: P = a hypothetical initial payment of $1,000, T = average
annual total return, n = number of years, and ERV = ending redeemable value of
a hypothetical $1,000 payment at the beginning of the period at the end of the
period for which average annual total return is being calculated assuming a
complete redemption.

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<PAGE> 91
The calculation of average annual total return assumes the deduction of the
maximum sales charge from the initial investment of $1,000, assumes the
reinvestment of all dividends and distributions at the price stated in the then
effective Prospectus on the fees that are charged to all Shareholder accounts
assuming such Fund's average account size. Cumulative return is computed by
using average annual total return, as calculated above, for each year of the
relevant period to determine the total return on a hypothetical initial
investment of $1,000 over such period.

In addition, as described in CBF's Prospectus, from time to time CBF
may include in its sales literature and shareholder reports a quote of a
current "distribution" rate. For the 12-month period ended September 30, 1995,
CBF's distribution rate was 2.88%. The current distribution rate is computed
by dividing the total amount of dividends per share paid by CBF during the past
twelve months by a current maximum offering price. Under certain
circumstances, such as when there has been a change in the amount of dividend
payout, or a fundamental change in investment policies, it might be appropriate
to annualize the dividends paid over the period such changed policies were in
effect, rather than using the dividends during the past twelve months. The
current distribution rate differs from the current yield computation because it
may include distributions to shareholders from sources other than dividends and
interest, such as premium income from option writing, short-term capital gains
and net equalization credits and is calculated over a different period of time.

At any time in the future, yields and total return may be higher or
lower than past yields and total return and there can be no assurance that any
historical results will continue. Investors in the Funds are specifically
advised that Share prices, expressed as the net asset values per share, will
vary just as yields and total return will vary.

Performance Comparisons
- -----------------------
Investors may also judge the performance of a Fund by comparing its
performance to the performance of other mutual funds or mutual fund portfolios
with comparable investment objectives and policies through various mutual fund
or market indices such as those prepared by Dow Jones & Co., Inc. and, Standard
& Poor's Corporation and to data prepared by Lipper Analytical Services, Inc.,
Morningstar, Inc. and CDA Investment Technologies, Inc. Comparisons may also
be made to indices or data published in Money Magazine, Forbes, Barron's, The
Wall Street Journal, The New York Times, The Columbus Dispatch, Business Week,
U.S.A. Today and Consumer Reports. In addition to performance information,
general information about the Funds that appears in a publication such as those
mentioned above may be included in advertisements and in reports to
shareholders.

B-31
<PAGE> 92

FINANCIAL STATEMENTS

B-32
<PAGE> 93

CARDINAL BALANCED FUND
- --------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (MARKET VALUE IN THOUSANDS)
- --------------------------------------------------------------------------------

SEPTEMBER 30, 1995

<TABLE>
<CAPTION>
FACE/ MARKET
SHARES VALUE
--------- -----------
<S> <C> <C>
COMMON STOCK 44.23%
America West Airlines Class B*...................................................... 12,000 $ 186
American Express Company............................................................ 8,000 355
American Health Properties.......................................................... 10,000 216
Arco Chemical Company............................................................... 7,500 366
Banc One Corporation................................................................ 8,000 292
Cinergy Corporation................................................................. 10,000 279
Commerce Bancshares Incorporated.................................................... 5,250 207
Dow Chemical Company................................................................ 4,500 335
Excel Industries Incorporated....................................................... 15,000 210
Forest Laboratories*................................................................ 3,000 133
GTE Corporation..................................................................... 7,500 294
Glendale Federal Savings Bank*...................................................... 5,000 82
IntelCom Group Incorporated*........................................................ 15,000 191
Mellon Bank Corporation............................................................. 7,500 335
Monsanto Company.................................................................... 3,500 353
Mutual Risk Management.............................................................. 5,000 197
National Semiconductor Company*..................................................... 5,000 138
J.C. Penney Company Incorporated.................................................... 6,000 298
Progress Software Corporation*...................................................... 4,000 268
Reliastar Financial Corporation..................................................... 1,000 41
Southern Indiana Gas and Electric................................................... 6,000 202
Structural Dynamics Research*....................................................... 15,000 278
Tribune Company..................................................................... 5,000 332
Trinova Corporation................................................................. 6,000 202
Universal Foods Corporation......................................................... 4,000 139
U.S. Healthcare Incorporated........................................................ 5,000 177
Viewlogic Systems Incorporated*..................................................... 4,000 56
Willamette Industries Incorporated.................................................. 4,000 267
-----------
TOTAL COMMON STOCK (COST $4,982,002).............................................. 6,429
-----------
CONVERTIBLE PREFERRED STOCK 3.24%
California Federal Bank............................................................. 6,000 145
Ford Motor Company, 8.40%, Series A................................................. 1,500 154
Glendale Federal, 8.75%, Series E................................................... 4,000 172
-----------
TOTAL CONVERTIBLE PREFERRED STOCK (COST $471,349)................................. 471
-----------
PREFERRED STOCK 5.95%
American General Capital, 8.45%..................................................... 7,500 189
American Health Psychiatric Group Preferred......................................... 8,250 134
Chase Manhattan Corporation, 8.40%, Cumulative Series M............................. 7,500 193
Enron Capital Resources, 9.00%, Series A, LP........................................ 6,000 157
Utilicorp Capital, 8.875%........................................................... 7,500 192
-----------
TOTAL PREFERRED STOCK (COST $864,463)............................................. 865
-----------
*Non-income producing
(continued)
</TABLE>

B-33
<PAGE> 94

CARDINAL BALANCED FUND
- --------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (CONTINUED)
- --------------------------------------------------------------------------------

SEPTEMBER 30, 1995

<TABLE>
<CAPTION>
FACE/ MARKET
SHARES VALUE
--------- -----------
<S> <C> <C>
CONVERTIBLE CORPORATE BONDS 6.02%
Ashland Oil, Inc., 6.75%, due 7-01-2014............................................. 150,000 $ 147
Beverly Enterprises, 7.625%, due 3-15-2003.......................................... 100,000 98
Cabot Medical Co., 7.50%, due 3-01-1999............................................. 100,000 101
Enserch Corporation, 6.375%, due 4-01-2002.......................................... 150,000 147
Federated Department Stores, 9.72%, due 2-15-2004................................... 150,000 151
Gran Care Incorporated, 6.50%, due 1-15-2003........................................ 100,000 95
Masco Corporation, 5.25%, due 2-15-2012............................................. 150,000 136
-----------
TOTAL CONVERTIBLE CORPORATE BONDS (COST $888,296)................................. 875
-----------
U.S. GOVERNMENT AGENCY OBLIGATIONS 8.41%
GNMA I # 368080, 7.00%, due 11-15-2008.............................................. 268,378 271
GNMA I # 251959, 7.50%, due 6-15-2023............................................... 260,649 263
GNMA II # 1213, 7.50%, due 6-20-2023................................................ 337,135 338
GNMA II # 1268, 8.00%, due 7-20-2023................................................ 343,197 351
-----------
TOTAL U.S. GOVERNMENT AGENCIES (COST $1,268,259).................................. 1,223
-----------
CORPORATE BONDS 14.90%
American Airlines, Series 91A, 10.18%, due 1-02-2013................................ 250,000 289
Consumers Power Co., 7.50%, due 6-01-2002........................................... 300,000 306
Dole Foods Inc., 7.00%, due 5-15-2003............................................... 200,000 198
First USA Bank, Wilmington, 5.75%, due 1-15-1999.................................... 300,000 293
General Motors Acceptance Corp., 7.00%, due 9-15-2002............................... 200,000 204
Kemper Corp., 6.875%, due 9-15-2003................................................. 250,000 246
Pulte Homes Corp., 7.00%, due 12-15-2003............................................ 150,000 143
Tele-Communications Inc., 7.25%, due 8-01-2005...................................... 250,000 244
Time Warner, 7.25%, due 9-01-2008................................................... 250,000 243
-----------
TOTAL CORPORATE BONDS (COST $2,129,904)........................................... 2,166
-----------
COMMERCIAL PAPER 13.76%
Ford Motor Credit Corporation, 5.75%, due 10-02-1995................................ 500,000 500
Sears Acceptance Corporation, 5.74%, due 10-03-1995................................. 500,000 500
General Motors Acceptance Corporation, 5.80%, due 10-04-1995........................ 500,000 500
Cigna Corporation, 5.88%, due 10-10-1995............................................ 500,000 500
-----------
TOTAL COMMERCIAL PAPER (COST $1,999,839).......................................... 2,000
-----------
REPURCHASE AGREEMENTS, FULLY COLLATERALIZED BY U.S. GOVERNMENT OBLIGATIONS 3.10%
The Fifth Third Bank, 5.95%, dated 9-29-95, due 10-04-95............................ 450,000 450
-----------
TOTAL REPURCHASE AGREEMENTS (COST $450,000)....................................... 450
-----------
TOTAL INVESTMENTS (COST $13,054,112) 99.61%....................................... $ 14,479
===========
</TABLE>

GNMA -- Government National Mortgage Association

Cost also represents cost for Federal income tax purposes.

See accompanying notes to financial statements.

B-34
<PAGE> 95

CARDINAL BALANCED FUND
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS & LIABILITIES (AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
- --------------------------------------------------------------------------------

SEPTEMBER 30, 1995

<TABLE>
<S> <C>
ASSETS
Investments in securities, at value (cost $13,054)............................... $ 14,479
Cash............................................................................. 42
Receivable for Fund shares sold.................................................. 113
Interest receivable.............................................................. 56
Dividends receivable............................................................. 16
Prepaid expenses................................................................. 7
Deferred organizational cost..................................................... 27
--------
Total assets........................................................... 14,740
--------
LIABILITIES
Payable for investment securities purchased...................................... 125
Payable for Fund shares redeemed................................................. 47
Accrued investment management, shareholder service, accounting and transfer agent
fees (note 3).................................................................. 14
Other accrued expenses........................................................... 19
--------
Total liabilities...................................................... 205
--------
COMMITMENTS AND CONTINGENCIES (NOTE 4)
NET ASSETS -- applicable to 1,261,727 outstanding no par value shares of
beneficial interest (unlimited number of shares authorized).................... $ 14,535
========
NET ASSET VALUE PER SHARE........................................................ $ 11.52
========
</TABLE>

See accompanying notes to financial statements.

B-35
<PAGE> 96

CARDINAL BALANCED FUND
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS (AMOUNTS IN THOUSANDS)
- --------------------------------------------------------------------------------

YEAR ENDED SEPTEMBER 30, 1995

<TABLE>
<S> <C>
INVESTMENT INCOME:
Dividends........................................................................ $ 245
Interest......................................................................... 461
-------
Total income................................................................ 706
-------
EXPENSES:
Investment management fees (note 3).............................................. 102
Transfer agent fees and expenses (note 3)........................................ 26
Shareholder service fees (note 3)................................................ 32
Accounting fees (note 3)......................................................... 5
-------
Total affiliated expenses.............................................. 165
-------
Custodian fees................................................................... 13
Professional fees................................................................ 26
Reports to shareholders.......................................................... 21
Directors' fees.................................................................. 8
Registration fees................................................................ 13
Other expenses................................................................... 9
Amortization of organizational cost (note 1)..................................... 10
-------
Total non-affiliated expenses.......................................... 100
-------
Total expenses......................................................... 265
-------
Net investment income.................................................. 441
-------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS (NOTE 2):
Net realized gain from security transactions..................................... 307
Increase in unrealized gain on investments....................................... 1,810
-------
Net realized gain and increase in unrealized gain on investments............ 2,117
-------
Net increase in net assets from operations.................................. $ 2,558
======
</TABLE>

See accompanying notes to financial statements.

B-36
<PAGE> 97

CARDINAL BALANCED FUND
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS (AMOUNTS IN THOUSANDS)
- --------------------------------------------------------------------------------

YEARS ENDED SEPTEMBER 30, 1995 AND 1994

<TABLE>
<CAPTION>
1995 1994
-------- --------
<S> <C> <C>
FROM OPERATIONS:
Net investment income..................................................... $ 441 $ 335
Net realized gain from security transactions.............................. 307 158
Increase (decrease) in unrealized gain on investments..................... 1,810 (462)
-------- --------
Net increase in net assets from operations........................... 2,558 31
-------- --------
FROM DISTRIBUTIONS TO SHAREHOLDERS:
Distribution of net investment income ($.35 and $.23 per share,
respectively)........................................................... (453) (333)
Distribution of net realized gains from security transactions ($.04 and
$.03 per share, respectively)........................................... (49) (36)
-------- --------
Total distributions to shareholders.................................. (502) (369)
-------- --------
FROM CAPITAL SHARE TRANSACTIONS (NOTE 5):
Proceeds from sales of Fund shares........................................ 1,485 5,251
Net asset value of Fund shares issued in connection with reinvestment of
distributions to shareholders........................................... 458 335
-------- --------
1,943 5,586
Cost of Fund shares redeemed.............................................. (3,437) (2,086)
-------- --------
Increase (decrease) in net assets derived from capital share
transactions........................................................ (1,494) 3,500
-------- --------
Net increase in net assets........................................... 562 3,162
NET ASSETS -- beginning of period......................................... 13,973 10,811
-------- --------
NET ASSETS -- end of period (undistributed net investment income of $3 and
$15, respectively)...................................................... $ 14,535 $ 13,973
======== ========
</TABLE>

See accompanying notes to financial statements.

B-37
<PAGE> 98

CARDINAL BALANCED FUND
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------

SEPTEMBER 30, 1995

(1) -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Cardinal Balanced Fund (the "Fund") is one of two portfolios of The Cardinal
Group (the "Group"), a diversified open-end management investment company
established as an Ohio Business Trust on March 23, 1993. The Group currently
consists of Cardinal Aggressive Growth Fund and Cardinal Balanced Fund. Before
June 24, 1993 the Fund had no operations other than those relating to
organizational matters, including the issuance of 5,000 shares of beneficial
interest for cash at $10.00 per share on June 4, 1993 to Cardinal Management
Corp. ("CMC"), the Group's investment adviser. The following is a summary of
significant accounting policies followed by the Fund in preparation of its
financial statements. The policies are in conformity with generally accepted
accounting principles for investment companies.

Security Valuation -- Investments listed or traded on a national securities
exchange are valued at the last sale price or, if there has been no recent sale,
at the last bid price. Investments traded in the over-the-counter market are
valued at either the mean between the bid and ask prices or the last sale price.
If no quotations are available, portfolio securities are valued in good faith by
the Board of Trustees to reflect their fair value.

Security Transactions and Investment Income -- Security transactions are
accounted for on the trade date and dividend income is recorded on the
ex-dividend date. Interest income is recorded on the accrual basis and includes,
when applicable, the pro rata amortization of premium or accretion of discount.
In determining the net realized gain or loss on securities sold, the cost of the
securities will be determined by the first-in, first-out (FIFO) basis. It is the
Group's policy for its Custodian, or a third-party bank, to take possession of
all securities pledged as collateral for repurchase agreements and monitor the
market value of the collateral to ensure that it remains sufficient to cover the
repurchase agreements.

Deferred Organizational Cost -- Costs incurred with the organization and
registration of the Fund have been deferred and are being amortized on a
straight-line basis over a 60 month period from the commencement of public
offering of its shares. In the event that any of the initial shares of the Fund
are redeemed by the Fund's investment adviser or any subsequent holders thereof
during the 60 month amortization period, the Fund will reduce the redemption
proceeds otherwise payable by any unamortized organizational costs of the Fund
in the same proportion as the number of initial shares of the Fund being
redeemed bears to the number of initial shares of the Fund outstanding at the
time of redemption.

Distributions to Shareholders -- Distributions and dividends will be recorded on
the record date. The Fund intends to declare income dividends quarterly and any
capital gain distributions annually.

Federal Income Tax -- The Fund intends to comply with the provisions of the
Internal Revenue Code applicable to regulated investment companies and to make
sufficient distributions of taxable income and capital gains within the required
time to relieve it from all, or substantially all, Federal income taxes.

(continued)

B-38
<PAGE> 99

CARDINAL BALANCED FUND
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------

SEPTEMBER 30, 1995

(2) -- PURCHASES AND SALES OF SECURITIES

The cost of purchases and proceeds from sales of investment securities
(excluding short-term obligations) during the period ended September 30, 1995
aggregated $4,318,959 and $6,447,176, respectively.

During the period ended September 30, 1995 the Fund realized on a FIFO cost
basis a net capital gain of $306,446 for both book and tax purposes.

As of September 30, 1995, for both book and tax purposes, gross unrealized gains
and gross unrealized losses on investment securities were $1,612,056 and
$186,699, respectively; resulting in a net unrealized gain of $1,425,357.

(3) -- TRANSACTIONS WITH AFFILIATES

As investment adviser for the Fund, CMC, an affiliated company, is allowed an
annual fee of 0.75% of the average daily net assets of the Fund. CMC has agreed
that if the aggregate expenses of the Fund, as defined, for any fiscal year
exceed the expense limitation of any state having jurisdiction over the Fund,
CMC will refund to the Fund, or otherwise bear, such excess. This limitation did
not affect the calculation of the management fee during the period ended
September 30, 1995. CMC also serves the Fund as transfer agent and fund
accountant. Under the terms of the Group's Transfer Agency and Fund Accounting
Agreement, the transfer agent is entitled to receive fees based on a monthly
charge per shareholder account plus out-of-pocket expenses and the fund
accountant is entitled to receive fees based on a percentage of the average net
assets of the Fund. For the period ended September 30, 1995 the Fund paid or
accrued $25,950 and $4,697 for transfer agent and fund accounting services,
respectively.

The Ohio Company ("TOC") serves the Group as distributor. TOC receives fees from
the Fund for providing services under the Distribution and Shareholder Service
Plan (the "Plan") pursuant to Rule 12b-1 of the Investment Company Act of 1940.
Under the Plan, the Fund pays TOC a fee not to exceed, on an accrual basis,
0.25% of the average daily net assets of the Fund for payments it makes to
banks, broker/dealers, including TOC, and other institutions for providing
shareholder services. The Fund paid or accrued shareholder service fees of
$32,534 for the period ended September 30, 1995. The Ohio Company reported to
the Fund that it had received commissions after discounts to dealers from the
sale of shares of the Fund of $66,772 for the period ended September 30, 1995.

(4) -- COMMITMENTS AND CONTINGENCIES

The Fund has an available $2,000,000 line of credit with its custodian, Fifth
Third Bank, which was unused at September 30, 1995. When used, borrowings under
this arrangement are secured by portfolio securities and can be used only for
short term needs of the Fund. No compensating balances are required and the
arrangement bears an interest rate of 106% of the custodian's prime lending
rate.
(continued)

B-39
<PAGE> 100

SEPTEMBER 30, 1995

(5) -- CAPITAL STOCK

At September 30, 1995, there were an unlimited number of no par value shares of
capital stock and the capital amounts were as follows:

<TABLE>
<S> <C>
Paid in capital............................................................... $12,716,361
Accumulated net realized gain on investments.................................. 390,571
Unrealized gain on investments................................................ 1,425,357
Undistributed net investment income........................................... 3,201
-----------
Net assets.................................................................... $14,535,490
============
</TABLE>

Transactions in capital stock were as follows:

<TABLE>
<CAPTION>
YEARS ENDED
SEPTEMBER 30,
----------------------------
1995 1994
----------- -----------
<S> <C> <C>
Shares sold.......................................................... 140,750 519,358
Shares issued in connection with reinvestment of distributions
to shareholders.................................................... 44,785 33,364
----------- -----------
185,535 552,722
Shares repurchased................................................... (335,102) (208,912)
----------- -----------
Net increase (decrease).............................................. (149,567) 343,810
Shares outstanding:
Beginning of period.................................................. 1,411,294 1,067,484
----------- -----------
End of period........................................................ 1,261,727 1,411,294
========== ==========
</TABLE>

(6) -- SUBSEQUENT EVENT

On November 13, 1995 the Board of Trustees approved an Agreement and Plan of
Reorganization and Liquidation between the Group and The Cardinal Fund Inc.,
Cardinal Government Securities Trust, Cardinal Tax Exempt Money Trust, and
Cardinal Government Obligations Fund (collectively the "Old Funds"). The plan
calls for the transfer of all assets and liabilities of each of the Old Funds to
newly created series of the Group with the same basic investment objectives and
restrictions. The Trustees have determined that this action is in the best
interests of the shareholders of the Old Funds and the Group. Shareholders of
the Old Funds must approve the transaction before any transfer can take place.

B-40
<PAGE> 101

- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------

Selected data for each share of capital stock outstanding throughout each
period:

<TABLE>
<CAPTION>
PERIOD
FROM JUNE
YEARS ENDED 24, 1993*
SEPTEMBER 30, THROUGH
---------------------- SEPTEMBER
1995 1994 30, 1993
-------- -------- ---------
<S> <C> <C> <C>
Net Asset Value, beginning............................................ $ 9.90 $ 10.13 $ 10.00
-------- -------- ---------
Income from investment operations:
Net investment income............................................... 0.34 0.23 0.02
Net realized and unrealized gain (loss) on securities............... 1.67 (0.20) 0.12
-------- -------- ---------
Total from investment operations...................................... 2.01 0.03 0.14
-------- -------- ---------
Less distributions:
Dividends........................................................... (0.35) (0.23) (0.01)
Capital gain distribution........................................... (0.04) (0.03) 0
-------- -------- ---------
Total distributions................................................... (0.39) (0.26) (0.01)
-------- -------- ---------
Net Asset Value, ending............................................... $ 11.52 $ 9.90 $ 10.13
======= ======= ========
Ratios/Supplemental Data:
Total return (aggregate return for period)**.......................... 20.76% 0.37% 1.40%
======= ======= ========
Net assets, ending (000).............................................. $ 14,535 $ 13,973 $10,811
======= ======= ========
Ratio of expenses to average net assets**............................. 1.94% 2.07% 0.70%
======= ======= ========
Ratio of net investment income to average net assets**................ 3.24% 2.44% 0.35%
======= ======= ========
Portfolio turnover rate............................................... 37.62% 59.09% 60.67%
======= ======= ========
<FN>
*Commencement of operations

**Effective September 15, 1995, The Ohio Company began waiving payments under
the Distribution and Shareholder Service Plan. Had the payments been charged,
total return, the ratio of expenses to average net assets, and the ratio of
net investment income to average net assets would have been 20.75%, 1.95%, and
3.23%, respectively.

</TABLE>

See accompanying notes to financial statements.

B-41
<PAGE> 102

INDEPENDENT AUDITORS' REPORT
- --------------------------------------------------------------------------------

The Shareholders and Board of Trustees
Cardinal Balanced Fund:

We have audited the accompanying statement of assets and liabilities of Cardinal
Balanced Fund (the Fund), including the statement of investments, as of
September 30, 1995, and the related statement of operations for the year then
ended, the statements of changes in net assets for each of the years in the
two-year period then ended, and the financial highlights for each of the periods
indicated herein. These financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included verification of securities owned as of
September 30, 1995, by confirmation with the custodian and other appropriate
audit procedures. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Cardinal Balanced Fund as of September 30, 1995, the results of its operations
for the year then ended, the changes in its net assets for each of the years in
the two-year period then ended, and the financial highlights for each of the
periods indicated herein, in conformity with generally accepted accounting
principles.

KPMG Peat Marwick LLP
Columbus, Ohio
November 17, 1995

B-42
<PAGE> 103

CARDINAL AGGRESSIVE GROWTH FUND
- --------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (MARKET VALUE IN THOUSANDS)
- --------------------------------------------------------------------------------

SEPTEMBER 30, 1995

<TABLE>
<CAPTION>
FACE/ MARKET
SHARES VALUE
-------- ----------
<S> <C> <C>
COMMON STOCK 79.22%
ADVANCED MEDICAL DEVICES 2.48%
Biomet, Inc.*....................................................... 15,000 $ 259
----------
BIO TECHNOLOGY 6.43%
Alkermes, Inc.*..................................................... 8,000 52
Cytel Corporation*.................................................. 15,000 105
Magainin Pharmaceuticals*........................................... 12,000 131
Matrix Pharmaceuticals*............................................. 14,000 196
Vertex Pharmaceuticals*............................................. 10,000 187
----------
671
----------
BROADLINE RETAILERS 2.66%
Consolidated Stores Corp.*.......................................... 12,000 278
----------
COMMERCIAL SERVICES 1.61%
Medaphis Corporation*............................................... 6,000 168
----------
COMMUNICATIONS 20.49%
Airtouch Communications*............................................ 10,000 306
Arch Communications Group*.......................................... 10,000 262
BroadBand Technologies*............................................. 5,000 108
DSC Communications Corp.*........................................... 4,000 237
General DataComm Industries*........................................ 12,500 184
MFS Communications Co., Inc.*....................................... 9,000 394
Metricom, Inc.*..................................................... 11,000 248
Motorola, Inc....................................................... 3,000 229
Tellabs, Inc.*...................................................... 4,000 169
----------
2,137
----------
COMPUTERS/INFORMATION 5.47%
Compaq Computer Corp.*.............................................. 9,000 435
E M C Corporation*.................................................. 7,500 136
----------
571
----------
CONSUMER SERVICES 4.99%
Banta Corporation................................................... 6,000 255
Block, H&R, Inc..................................................... 7,000 266
----------
521
----------
DIVERSIFIED FINANCIAL SERVICES 3.25%
Bear Stearns Companies, Inc......................................... 15,750 339
----------
EDUCATIONAL 1.45%
Westcott Communications, Inc.*...................................... 10,000 151
----------
<FN>
*Non-income producing
</TABLE>
(continued)

B-43
<PAGE> 104

CARDINAL AGGRESSIVE GROWTH FUND
- --------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (CONTINUED)
- --------------------------------------------------------------------------------

SEPTEMBER 30, 1995

COMMON STOCK (CONTINUED)

<TABLE>
<CAPTION>
FACE/ MARKET
SHARES VALUE
-------- ------------
<S> <C> <C>
ELECTRICAL COMPONENTS 0.92%
GenRad, Inc.*...................................................... 10,000 $ 96
------------
HEALTH-CARE PROVIDERS 4.39%
Humana, Inc.*...................................................... 10,000 201
Mariner Health Group, Inc.*........................................ 5,000 71
Maxicare Healthplans, Inc.*........................................ 10,000 186
------------
458
------------
INTEGRATED OILS 2.32%
Triton Energy Corp.*............................................... 5,000 242
------------
PHARMACEUTICALS 2.87%
Mylan Laboratories, Inc............................................ 15,000 300
------------
SEMICONDUCTORS 11.47%
Advanced Micro Devices*............................................ 9,000 262
Analog Devices, Inc.*.............................................. 8,000 277
Intel Corporation.................................................. 4,500 270
National Semiconductor*............................................ 14,000 387
------------
1,196
------------
SOFTWARE/PROCESSING 8.42%
Computer Sciences Corp.*........................................... 4,500 290
Optical Data Systems Corp.*........................................ 6,000 234
Sybase Incorporated*............................................... 10,000 321
Telescan, Inc.*.................................................... 5,000 34
------------
879
------------
TOTAL COMMON STOCK (COST $7,254,464)............................. 8,266
------------
REPURCHASE AGREEMENTS, FULLY COLLATERALIZED BY U.S. GOVERNMENT
OBLIGATIONS 16.29%
Fifth Third Bank, 5.75%, dated 9/28/95, due 10/02/95............... 1,700,000 1,700
------------
TOTAL REPURCHASE AGREEMENTS (COST $1,700,000).................... 1,700
------------
TOTAL INVESTMENTS (COST $8,954,464) 95.51%....................... $ 9,966
==========
<FN>
*Non-income producing

Cost also represents cost for Federal income tax purposes.
</TABLE>

See accompanying notes to financial statements.

B-44
<PAGE> 105

CARDINAL AGGRESSIVE GROWTH FUND
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS & LIABILITIES (AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
- --------------------------------------------------------------------------------
SEPTEMBER 30, 1995

<TABLE>
<S> <C>
ASSETS
Investments in securities, at value (cost $8,954)................................ $ 9,966
Cash............................................................................. 375
Receivable for Fund shares sold.................................................. 125
Dividends receivable............................................................. 6
Interest receivable.............................................................. 1
Deferred organizational cost..................................................... 27
Prepaid expenses................................................................. 7
--------
Total assets................................................................ 10,507
--------
LIABILITIES
Payable for investment securities purchased...................................... 45
Accrued investment management, shareholder service, accounting and transfer agent
fees (note 3).................................................................. 11
Other accrued expenses........................................................... 17
--------
Total liabilities........................................................... 73
--------
COMMITMENTS AND CONTINGENCIES (NOTE 4)
NET ASSETS -- applicable to 843,808 outstanding no par value shares of beneficial
interest (unlimited number of shares authorized)............................... $ 10,434
========
NET ASSET VALUE PER SHARE........................................................ $ 12.37
========
</TABLE>

See accompanying notes to financial statements.

B-45
<PAGE> 106

CARDINAL AGGRESSIVE GROWTH FUND
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS (AMOUNTS IN THOUSANDS)
- --------------------------------------------------------------------------------

YEAR ENDED SEPTEMBER 30, 1995

<TABLE>
<S> <C>
INVESTMENT INCOME:
Dividends........................................................................ $ 71
Interest......................................................................... 58
--------
Total income......................................................... 129
--------
EXPENSES:
Investment management fees (note 3).............................................. 71
Transfer agent fees and expenses (note 3)........................................ 25
Shareholder service fees (note 3)................................................ 23
Accounting fees (note 3)......................................................... 3
--------
Total affiliated expenses............................................ 122
--------
Custodian fees................................................................... 10
Professional fees................................................................ 23
Reports to shareholders.......................................................... 23
Directors' fees.................................................................. 8
Registration fees................................................................ 14
Other expenses................................................................... 5
Amortization of organizational cost (note 1)..................................... 10
--------
Total non-affiliated expenses........................................ 93
--------
Total expenses....................................................... 215
--------
Net loss from investment activities.................................. (86)
--------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS (NOTE 2):
Net realized gain from security transactions..................................... 999
Increase in unrealized gain on investments....................................... 1,158
--------
Net realized gain and increase in unrealized gain on investments..... 2,157
--------
Net increase in net assets from operations........................... $ 2,071
========
</TABLE>

See accompanying notes to financial statements.

B-46
<PAGE> 107

CARDINAL AGGRESSIVE GROWTH FUND
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS (AMOUNTS IN THOUSANDS)
- --------------------------------------------------------------------------------

YEARS ENDED SEPTEMBER 30, 1995 AND 1994

<TABLE>
<CAPTION>
1995 1994
-------- -------
<S> <C> <C>
FROM OPERATIONS:
Net loss from investment activities......................................... $ (86) $ (136)
Net realized gain from security transactions................................ 999 118
Increase (decrease) in unrealized gain on investments....................... 1,158 (444)
-------- -------
Net increase (decrease) in net assets from operations..................... 2,071 (462)
-------- -------
FROM DISTRIBUTIONS TO SHAREHOLDERS:
Distribution of net realized gains from security transactions ($0 and $.04
per share, respectively).................................................. 0 (30)
-------- -------
Total distributions to shareholders.................................... 0 (30)
-------- -------
FROM CAPITAL SHARE TRANSACTIONS (NOTE 5):
Proceeds from sale of Fund shares........................................... 1,809 5,108
Net asset value of Fund shares issued in connection with reinvestment of
distributions to shareholders............................................. 0 30
-------- -------
1,809 5,138
Cost of Fund shares redeemed................................................ (2,906) (1,506)
-------- -------
Increase (decrease) in net assets derived from capital share
transactions........................................................... (1,097) 3,632
-------- -------
Net increase in net assets................................................ 974 3,140
NET ASSETS -- beginning of period........................................... 9,460 6,320
-------- -------
NET ASSETS -- end of period (undistributed net investment loss of $113 and
$113, respectively)....................................................... $ 10,434 $ 9,460
======== ======
</TABLE>

See accompanying notes to financial statements.

B-47
<PAGE> 108

CARDINAL AGGRESSIVE GROWTH FUND
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------

SEPTEMBER 30, 1995

(1) -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Cardinal Aggressive Growth Fund (the "Fund") is one of two portfolios of The
Cardinal Group (the "Group"), a diversified open-end management investment
company established as an Ohio Business Trust on March 23, 1993. The Group
currently consists of Cardinal Aggressive Growth Fund and Cardinal Balanced
Fund. Before June 24, 1993 the Fund had no operations other than those relating
to organizational matters, including the issuance of 5,000 shares of beneficial
interest for cash at $10.00 per share on June 4, 1993 to Cardinal Management
Corp. ("CMC"), the Group's investment adviser. The following is a summary of
significant accounting policies followed by the Fund in preparation of its
financial statements. The policies are in conformity with generally accepted
accounting principles for investment companies.

Security Transactions and Investment Income -- Security transactions are
accounted for on the trade date and dividend income is recorded on the
ex-dividend date. Interest income is recorded on the accrual basis and includes,
when applicable, the pro rata amortization of premium or accretion of discount.
In determining the net realized gain or loss on securities sold, the cost of the
securities is determined by the first-in, first-out (FIFO) basis. It is the
Group's policy for its Custodian, or a third-party bank, to take possession of
all securities pledged as collateral for repurchase agreements and monitor the
market value of the collateral to ensure that it remains sufficient to cover the
repurchase agreements.

Distributions to Shareholders -- Distributions and dividends will be recorded on
the record date. The Fund intends to declare income dividends quarterly and any
capital gain distributions annually.

(continued)

B-48
<PAGE> 109

CARDINAL AGGRESSIVE GROWTH FUND
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------

SEPTEMBER 30, 1995

(2) -- PURCHASES AND SALES OF SECURITIES

The cost of purchases and proceeds from sales of investment securities
(excluding short-term obligations) during the period ended September 30, 1995
aggregated $6,912,244 and $10,041,187, respectively.

During the period ended September 30, 1995 the Fund realized on a FIFO cost
basis a net capital gain of $999,587 for both book and tax purposes.

As of September 30, 1995, for both book and tax purposes, gross unrealized gains
and gross unrealized losses on investment securities were $1,268,610 and
$257,136, respectively; resulting in a net unrealized gain of $1,011,474.

(3) -- TRANSACTIONS WITH AFFILIATES

As investment adviser for the Fund, CMC, an affiliated company, is allowed an
annual fee of 0.75% of the average daily net assets of the Fund. CMC has agreed
that if the aggregate expenses of the Fund, as defined, for any fiscal year
exceed the expense limitation of any state having jurisdiction over the Fund,
CMC will refund to the Fund, or otherwise bear, such excess. This limitation did
not affect the calculation of the management fee during the period ended
September 30, 1995. CMC also serves the Fund as transfer agent and fund
accountant. Under the terms of the Group's Transfer Agency and Fund Accounting
Agreement, the transfer agent is entitled to receive fees based on a monthly
charge per shareholder account plus out-of-pocket expenses and the fund
accountant is entitled to receive fees based on a percentage of the average net
assets of the Fund. For the period ended September 30, 1995 the Fund paid or
accrued $25,079 and $3,255 for transfer agent and fund accounting services,
respectively.

The Ohio Company ("TOC") serves the Group as distributor. TOC receives fees from
the Fund for providing services under the Distribution and Shareholder Service
Plan (the "Plan") pursuant to Rule 12b-1 of the Investment Company Act of 1940.
Under the Plan, the Fund pays TOC a fee not to exceed, on an accrual basis,
0.25% of the average daily net assets of the Fund for payments it makes to
banks, broker/dealers, including TOC, and other institutions for providing
shareholder services. The Fund paid or accrued shareholder service fees of
$22,594 for the period ended September 30, 1995. The Ohio Company reported to
the Fund that it had received commissions after discounts to dealers from the
sale of shares of the Fund of $54,055 for the period ended September 30, 1995.

(4) -- COMMITMENTS AND CONTINGENCIES

(continued)

B-49
<PAGE> 110

SEPTEMBER 30, 1995

(5) -- CAPITAL STOCK

At September 30, 1995, there were an unlimited number of no par value shares of
capital stock and the capital amounts were as follows:

<TABLE>
<S> <C>
Paid in capital.................................................................. $ 8,618,852
Accumulated net realized gain on investments..................................... 916,812
Unrealized gain on investments................................................... 1,011,474
Undistributed net investment loss................................................ (112,926)
---------------
Net assets....................................................................... $10,434,212
===============
</TABLE>

Transactions in capital stock were as follows:

<TABLE>
<CAPTION>
YEARS ENDED
SEPTEMBER 30,
------------------------
1995 1994
--------- ---------
<S> <C> <C>
Shares sold............................................................. 160,511 499,598
Shares issued in connection with reinvestment of distributions to
shareholders.......................................................... 0 2,836
--------- ---------
160,511 502,434
Shares repurchased...................................................... (268,141) (154,659)
--------- ---------
Net increase (decrease)................................................. (107,630) 347,775
Shares outstanding:
Beginning of period..................................................... 951,438 603,663
--------- ---------
End of period........................................................... 843,808 951,438
========= =========
</TABLE>

(6) -- SUBSEQUENT EVENT

B-50
<PAGE> 111

- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------

Selected data for each share of capital stock outstanding throughout each
period:

<TABLE>
<CAPTION>
PERIOD FROM
YEARS ENDED JUNE 24, 1993*
SEPTEMBER 30, THROUGH
---------------------- SEPTEMBER 30,
1995 1994 1993
-------- -------- ---------------
<S> <C> <C> <C>
Net Asset Value, beginning.............................. $ 9.94 $ 10.47 $ 10.00
-------- -------- ---------------
Income from investment operations:
Net investment loss................................... (0.10) (0.13) (0.03)
Net realized and unrealized gain (loss) on
securities......................................... 2.53 (0.36) 0.50
-------- -------- ---------------
Total from investment operations........................ 2.43 (0.49) 0.47
-------- -------- ---------------
Less distributions:
Capital gain distribution............................. 0 (0.04) 0
-------- -------- ---------------
Total distributions..................................... 0 (0.04) 0
-------- -------- ---------------
Net Asset Value, ending................................. $ 12.37 $ 9.94 $ 10.47
======== ======== ===============
Ratios/Supplemental Data:
Total return (aggregate return for period)**............ 24.35% (4.74%) 4.70%
======== ======== ===============
Net assets, ending (000)................................ $ 10,434 $ 9,460 $ 6,320
======== ======== ===============
Ratio of expenses to average net assets**............... 2.24% 2.51% 0.91%
======== ======== ===============
Ratio of net investment loss to average net assets**.... (0.92%) (1.50%) (0.53%)
======== ======== ===============
Portfolio turnover rate................................. 80.35% 95.70% 31.15%
======== ======== ===============
<FN>
*Commencement of operations

**Effective September 15, 1995, The Ohio Company began waiving payments under
the Distribution and Shareholder Service Plan. Had the payments been charged,
total return, the ratio of expenses to average net assets, and the ratio of
net investment loss to average net assets would have been 24.34%, 2.25%, and
(0.93%), respectively.

</TABLE>

See accompanying notes to financial statements.
- --------------------------------------------------------------------------------
INDEPENDENT AUDITORS' REPORT
- --------------------------------------------------------------------------------

The Shareholders and Board of Trustees
Cardinal Aggressive Growth Fund:

We have audited the accompanying statement of assets and liabilities of Cardinal
Aggressive Growth Fund (the Fund), including the statement of investments, as of
September 30, 1995, and the related statement of operations for the year then
ended, the statements of changes in net assets for each of the years in the
two-year period then ended, and the financial highlights for each of the periods
indicated herein. These financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.

In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Cardinal Aggressive Growth Fund as of September 30, 1995, the results of its
operations for the year then ended, the changes in its net assets for each of
the years in the two-year period then ended, and the financial highlights for
each of the periods indicated herein, in conformity with generally accepted
accounting principles.

KPMG Peat Marwick LLP
Columbus, Ohio
November 17, 1995

B-51
<PAGE> 112
APPENDIX

COMMERCIAL PAPER RATINGS. Commercial paper ratings of Standard &
Poor's Corporation ("S&P") are current assessments of the likelihood of timely
payment of debts having original maturities of no more than 365 days.
Commercial paper rated A-1 by S&P indicates that the degree of safety regarding
timely payment is either overwhelming or very strong. Those issues determined
to possess overwhelming safety characteristics are denoted A-1+. Commercial
paper rated A-2 by S&P indicates that capacity for timely payment on issues is
strong. However, the relative degree of safety is not as high as for issues
designated A-1.

The rating Prime-1 is the highest commercial paper rating assigned by
Moody's Investors Service, Inc. ("Moody's"). Issuers rated Prime-1 (or related
supporting institutions) are considered to have a superior capacity for
repayment of short-term promissory obligations. Issuers rated Prime-2 (or
related supporting institutions) have a strong capacity for repayment of
short-term promissory obligations. This will normally be evidenced by many of
the characteristics of Prime-1 rated issuers, but to a lesser degree. Earnings
trends and coverage ratios, while sound, will be more subject to variations.
Capitalization characteristics, while still appropriate, may be more affected
by external conditions. Ample alternative liquidity is maintained.

Commercial paper rated F-1 by Fitch Investors Service ("Fitch") is
regarded as having the strongest degree of assurance for timely payments.
Commercial paper rated F-2 by Fitch is regarded as having an assurance of
timely payment only slightly less than the strongest rating, I.E., F-1.

The plus (+) sign is used after a rating symbol to designate the
relative position of an issuer within the rating category.

CORPORATE DEBT RATINGS. A S&P corporate debt rating is a current
assessment of the creditworthiness of an obligor with respect to a specific
obligation. Debt rated AAA has the highest rating assigned by S&P. Capacity
to pay interest and repay principal is extremely strong. Debt rated AA has a
very strong capacity to pay interest and to repay principal and differs from
the highest rated issues only in small degree. Debt rated A has a strong
capacity to pay interest and repay principal although it is somewhat more
susceptible to adverse effects of changes in circumstances and economic
conditions than debt in higher rated categories. Debt rated BBB is regarded as
having an adequate capacity to pay interest and repay principal. Whereas it
normally exhibits adequate protection parameters, adverse economic conditions
or changing circumstances are more likely to lead to a weakened capacity to pay
interest and repay principal for debt in this category than in higher rated
categories. Debt rated BB and B is regard as having predominantly speculative
characteristics

A-1
<PAGE> 113
with respect to capacity to pay interest and repay principal. BB indicates the
lease degree of speculation. While such debt will likely have some quality and
protective characteristics, these are outweighed by large uncertainties or
major exposures to adverse conditions. Debt rated BB has less near-term
vulnerability to default than other speculative issues. However, it faces
major ongoing uncertainties or exposure to adverse business, financial, or
economic conditions which could lead to inadequate capacity to meet timely
interest and principal payments. The BB rating category is also used for debt
subordinated to senior debt that is assigned an actual or implied BBB rating.
Debt rated B has a greater vulnerability to default but currently has the
capacity to meet interest payments and principal repayments. Adverse business,
financial or economic conditions will likely impair capacity or willingness to
pay interest and repay principal. The B rating category is also used for debt
subordinated to senior debt that is assigned an actual or implied BB or BB-
rating.

The following summarizes the six highest ratings used by Moody's for
corporate debt. Bonds that are rated Aaa by Moody's are judged to be of the
best quality. They carry the smallest degree of investment risk and are
generally referred to as "gilt edged." Interest payments are protected by a
large or by an exceptionally stable margin and principal is secure. While the
various protective elements are likely to change, such changes as can be
visualized are most unlikely to impair the fundamentally strong position of
such issues. Bonds that are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group, they comprise what are generally known
as high-grade bonds. They are rated lower than the best bonds because margins
of protection may not be as large as in Aaa securities or fluctuation of
protective elements may be of greater amplitude or there may be other elements
present which make the long-term risks appear somewhat larger than in Aaa
securities. Bonds that are rated A by Moody's 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 some time in the future. Bonds that are rated Baa by Moody's are
considered as medium grade obligations, i.e., they are neither highly protected
nor poorly secured. Interest payments and principal security appear adequate
for the present but certain protective elements may be lacking or may be
characteristically unreliable over any great length of time. Such bonds lack
outstanding investment characteristics and in fact have speculative
characteristics as well. Bonds that are rated Ba are judged to have
speculative elements; their future cannot be considered as well assured. Often
the protection of interest and principal payments may be very moderate and
thereby not well safeguarded during both good and bad times over the future.
Uncertainty of position characterizes bonds in this class. Bond which are
rated B generally lack characteristics of the desirable investment. Assurance
of interest and principal payments or of maintenance of

A-2
<PAGE> 114
other terms of the contract over any long period of time may be small.

Moody's applies numerical modifiers (1, 2, and 3) with respect to
bonds rated Aa through B. The modifier 1 indicates that the bond being rated
ranks in the higher end of its generic rating category; the modifier 2
indicates a mid-range ranking; and the modifier 3 indicates that the bond ranks
in the lower end of its generic rating category.

The following summarizes the six highest long-term debt ratings by
Duff. Debt rated AAA has the highest credit quality. The risk factors are
negligible being only slightly more than for risk-free U.S. Treasury debt.
Debt rated AA has a high credit quality and protection factors are strong.
Risk is modest but may vary slightly from time to time because of economic
conditions. Debt rated A has protection factors that are average but adequate.
However, risk factors are more variable and greater in periods of economic
stress. Debt rated BBB has below average protection factors but is still
considered sufficient for prudent investment. However, there is considerable
variability in risk during economic cycles. Debt rated BB is below investment
grade but deemed likely to meet obligations when due. Present or prospective
financial protection factors fluctuate according to industry conditions or
company fortunes. Overall quality may move up or down frequently within this
category. Debt rated B is below investment grade and possesses risk that
obligations will not be met when due. Financial protection factors will
fluctuate widely according to economic cycles, industry conditions and/or
company fortunes. Potential exists for frequent changes in the rating within
this category or into a higher or lower rating grade.

To provide more detailed indications of credit quality, the ratings
from AA to B may be modified by the addition of a plus or minus sign to show
relative standing within this major rating category.

The following summarizes the six highest long-term debt ratings by
Fitch (except for AAA ratings, plus or minus signs are used with a rating
symbol to indicate the relative position of the credit within the rating
category). Bonds rated AAA are considered to be investment grade and of the
highest credit quality. The obligor has an exceptionally strong ability to pay
interest and repay principal, which is unlikely to be affected by reasonably
foreseeable events. Bonds rated AA are considered to be investment grade and
of very high credit quality. The obligor's ability to pay interest and repay
principal is very strong, although not quite as strong as bonds rated "AAA."
Because bonds rated in the "AAA" and "AA" categories are not significantly
vulnerable to foreseeable future developments, short-term debt of these issues
is generally rated "F-1+." Bonds rated as A are considered to be investment
grade and of high credit quality. The obligor's ability to pay interest and
repay principal is considered to be strong, but may be

A-3
<PAGE> 115
more vulnerable to adverse changes in economic conditions and circumstances
than bonds with higher ratings. Bonds rated BBB are considered to be
investment grade and of satisfactory credit quality. The obligor's ability to
pay interest and repay principal is considered to be adequate. Adverse changes
in economic conditions and circumstances, however, are more likely to have
adverse impact on these bonds, and therefore, impair timely payment. The
likelihood that the ratings for these bonds will fall below investment grade is
higher than for bonds with higher ratings. Bonds rated BB are considered
speculative. The obligor's ability to pay interest and repay principal may be
affected over time by adverse economic changes. However, business and
financial alternatives can be identified which could assist the obligor in
satisfying its debt service requirements. Bonds rated B are considered highly
speculative. While bonds in this class are currently meeting debt service
requirements, the probability of continued timely payment of principal and
interest reflects the obligor's limited margin of safety and the need for
reasonable business and economic activity throughout the life of the issue.

The following summarizes IBCA's six highest long-term debt ratings.
Obligations rated AAA are those for which there is the lowest expectation of
investment risk. Capacity for timely repayment of principal and interest is
substantial, such that adverse changes in business, economic or financial
conditions are unlikely to increase investment risk significantly. Obligations
rated AA are those for which there is a very low expectation of investment
risk. Capacity for timely repayment of principal and interest is substantial.
Adverse changes in business, economic, or financial conditions may increase
investment risk albeit not very significantly. Obligations rated A are those
for which there is a low expectation of investment risk. Capacity for timely
repayment of principal and interest is strong, although adverse changes in
business, economic or financial conditions may lead to increased investment
risk. Obligations rated BBB are those for which there is currently a low
expectation of investment risk. Capacity for timely repayment of principal and
interest is adequate, although adverse changes in business, economic, or
financial conditions are more likely to lead to increased investment risk than
for obligations in other categories. Obligations rated BB are those for which
there is a possibility of investment risk developing. Capacity for timely
repayment of principal and interest exists, but is susceptible over time to
adverse changes in business, economic or financial conditions. Obligations
rated B are those for which investment risk exists. Timely repayment of
principal and interest is not sufficiently protected against adverse changes in
business, economic or financial conditions.

The following summarizes Thomson's description of its six highest
long-term debt ratings (Thomson may include a plus (+) or minus (-) designation
to indicate where within the respective category the issue is placed). AAA is
the highest category and indicates that the ability to repay principal and
interest on a timely basis is very high. AA is the second highest category and
indicates a superior ability to repay principal and interest on a

A-4
<PAGE> 116
timely basis with limited incremental risk versus issues rated in the highest
category. A is the third highest category and indicates the ability to repay
principal and interest is strong. Issues rated "A" could be more vulnerable to
adverse developments (both internal and external) than obligations with higher
ratings. BBB is the lowest investment grade category and indicates an
acceptable capacity to repay principal and interest. Issues rated "BBB" are,
however, more vulnerable to adverse developments (both internal and external)
than obligations with higher ratings. While not investment grade, the BB
rating suggests that the likelihood of default is considerably less than for
lower-rated issues. However, there are significant uncertainties that could
affect the ability to adequately service debt obligations. Issuer rated B show
a higher degree of uncertainty and therefore greater likelihood of default that
higher-rated issuers. Adverse developments could well negatively affect the
payment of interest and principal on a timely basis.

DEFINITIONS OF CERTAIN MONEY MARKET INSTRUMENTS
- -----------------------------------------------

Commercial Paper

Commercial paper consists of unsecured promissory notes issued by
corporations. Issues of commercial paper normally have maturities of less than
nine months and fixed rates of return.

Certificates of Deposit

Certificates of Deposit are negotiable certificates issued against
funds deposited in a commercial bank or a savings and loan association for a
definite period of time and earning a specified return.

Bankers' Acceptances

Bankers' acceptances are negotiable drafts or bills of exchange,
normally drawn by an importer or exporter to pay for specific merchandise,
which are "accepted" by a bank, meaning, in effect, that the bank
unconditionally agrees to pay the face value of the instrument on maturity.

U.S. Treasury Obligations

U.S. Treasury Obligations are obligations issued or guaranteed as to
payment of principal and interest by the full faith and credit of the U.S.
Government. These obligations may include Treasury bills, notes and bonds, and
issues of agencies and instrumentalities of the U.S. Government, provided such
obligations

A-5
<PAGE> 117
are guaranteed as to payment of principal and interest by the full faith and
credit of the U.S. Government.

U.S. Government Agency and Instrumentality Obligations

Obligations of the U.S. Government include Treasury bills,
certificates of indebtedness, notes and bonds, and issues of agencies and
instrumentalities of the U.S. Government, such as the Government National
Mortgage Association, the Export-Import Bank of the United States, the
Tennessee Valley Authority, the Farmers Home Administration, the Federal Home
Loan Banks, the Federal Intermediate Credit Banks, the Federal Farm Credit
Banks, the Federal Land Banks, the Federal Housing Administration, the Federal
National Mortgage Association, the Federal Home Loan Mortgage Corporation, and
the Student Loan Marketing Association. Some of these obligations, such as
those of the Government National Mortgage Association and the Export-Import
Bank of the United States, are supported by the full faith and credit of the
U.S. Treasury; others, such as those of the Federal National Mortgage
Association, are supported by the right of the issuer to borrow from the
Treasury; others, such as those of the Student Loan Marketing Association, are
supported by the discretionary authority of the U.S. Government to purchase the
agency's obligations; still others, such as those of the Federal Farm Credit
Banks, are supported only by the credit of the instrumentality. No assurance
can be given that the U.S. Government would provide financial support to U.S.
Government-sponsored instrumentalities if it is not obligated to do so by law.

A-6

<PAGE> 118

Registration Statement
of
THE CARDINAL GROUP
on
Form N-1A

PART C. OTHER INFORMATION

Item 24. FINANCIAL STATEMENTS AND EXHIBITS
---------------------------------

(a) Financial Statements:

Included in Part A:

(i) Cardinal Balanced Fund

Financial Highlights

(ii) Cardinal Aggressive Growth Fund

Financial Highlights

(iii) The Cardinal Fund

To be filed by amendment

(iv) Cardinal Government Obligations Fund

To be filed by amendment

(v) Cardinal Government Securities Money Market Fund

To be filed by amendment

(vi) Cardinal Tax Exempt Money Market Fund

To be filed by amendment

Included in Part B:

(i) Cardinal Balanced Fund

-- Statement of Investments
September 30, 1995

-- Statement of Assets and Liabilities
September 30, 1995

-- Statement of Operations for the year ended
September 30, 1995

-- Statement of Changes in Net Assets for the
years ended September 30, 1995 and 1994

<PAGE> 119

-- Notes to Financial Statements
September 30, 1995

-- Independent Auditors' Report dated November 17,
1995

(ii) Cardinal Aggressive Growth Fund

-- Statement of Investments
September 30, 1995

-- Statement of Assets and Liabilities
September 30, 1995

-- Statement of Operations for the year ended
September 30, 1995

-- Statement of Changes in Net Assets for the
years ended September 30, 1995 and 1994

-- Notes to Financial Statements
September 30, 1995

-- Independent Auditors' Report dated November
17, 1995

(iii) The Cardinal Fund

To be filed by amendment

(iv) Cardinal Government Obligations Fund

To be filed by amendment

(v) Cardinal Government Securities Money Market
Fund

To be filed by amendment

(vi) Cardinal Tax Exempt Money Market Fund

To be filed by amendment

(vii) All required financial statements are
included in Part B hereof. All other
financial statements and schedules are
inapplicable.

(b) Exhibits

(1) (a) Declaration of Trust, dated as of
March 23, 1993, is incorporated by
reference to Exhibit (1)(a) of Post-

C-2
<PAGE> 120
Effective Amendment No. 3 to
Registrant's Registration Statement
on Form N-1A (No. 33-59984) filed
on October 27, 1995.

(b) Amendment to Declaration of Trust as
adopted October 20, 1995, is
incorporated by reference to Exhibit
(1)(b) of Post-Effective Amendment
No. 3 to Registrant's Registration
Statement on Form N-1A (No.
33-59984) filed on October 27, 1995.

(2) By-Laws are incorporated by reference to
Exhibit (2) of Post-Effective Amendment No. 3
to Registrant's Registration Statement on
Form N-1A (No. 33-59984) filed on October 27,
1995.

(3) None.

(4) None.

(5) Investment Advisory and Management Agreement
dated as of June 18, 1993, as proposed to be
amended between Registrant and Cardinal
Management Corp. is incorporated by reference
to Exhibit (5) of Post-Effective Amendment
No. 3 to Registrant's Registration Statement
on Form N-1A (No. 33-59984) filed on October
27, 1995.

(6) (a) Distribution Agreement dated as of
June 18, 1993, as proposed to be
amended between Registrant and The
Ohio Company is incorporated by
reference to Exhibit (6)(a) of
Post-Effective Amendment No. 3 to
Registrant's Registration Statement
on Form N-1A (No. 33-59984) filed on
October 27, 1995.

(b) Form of revised Selected Dealer
Agreement is incorporated by
reference to Exhibit (6)(b) of Post-
Effective Amendment No. 3 to
Registrant's Registration Statement
on Form N-1A (No. 33-59984) filed on
October 27, 1995.

(7) None.

(8) Custody Agreement dated as of June 18, 1993,
as proposed to be amended between Registrant
and The Fifth Third Bank is incorporated by
reference to Exhibit (8) of Post-Effective
Amendment No. 3 to Registrant's Registration

C-3
<PAGE> 121

Statement on Form N-1A (No. 33-59984) filed
on October 27, 1995.

(9) Transfer Agency and Fund Accounting Agreement
dated as of June 18, 1993, as proposed to be
amended between Registrant and Cardinal
Management Corp. is incorporated by reference
to Exhibit (9) of Post-Effective Amendment
No. 3 to Registrant's Registration Statement
on Form N-1A (No. 33-59984) filed on October
27, 1995.

(10) Opinion of Counsel with respect to shares of
Cardinal Balanced Fund and Cardinal
Aggressive Growth Fund being registered
pursuant to Section 24(e)(1) of the
Investment Company Act of 1940. Opinion of
Counsel with respect to shares of The
Cardinal Fund, Cardinal Government
Obligations Fund, Cardinal Government
Securities Money Market Fund and Cardinal Tax
Exempt Money Market Fund is incorporated by
reference to Exhibit (10) of Post-Effective
Amendment No. 3 to Registrant's Registration
Statement on Form N-1A (No. 33-59984) filed
on October 27, 1995. An Opinion of Counsel
with respect to the Shares of Cardinal
Balanced Fund and Cardinal Aggressive Growth
Fund was filed with Registrant's Notice filed
on November 21, 1995, pursuant to Rule 24f-2.

(11) Consent of KPMG Peat Marwick LLP.

(12) None.

(13) Purchase Agreement dated June 4, 1993,
between Registrant and Cardinal Management
Corp. is incorporated by reference to Exhibit
(13) of Post-Effective Amendment No. 3 to
Registrant's Registration Statement on Form
N- 1A (No. 33-59984) filed on October 27,
1995.

(14) None.

(15) (a) Rule 12b-1 Plan is incorporated by
reference to Exhibit (15)(a) of
Post-Effective Amendment No. 3 to
Registrant's Registration Statement
on Form N-1A (No. 33-59984) filed on
October 27, 1995.

(b) Rule 12b-1 Agreement dated June 18,
1993, as proposed to be amended
between

C-4
<PAGE> 122

Registrant and The Ohio Company
(a related agreement under the Rule
12b-1 Plan) is incorporated by
reference to Exhibit (15)(b) of
Post-Effective Amendment No. 3 to
Registrant's Registration Statement
on Form N-1A (No. 33-59984) filed
on October 27, 1995.

(c) Form of revised Selected Dealer
Agreement (a related agreement under
the Rule 12b-1 Plan) is incorporated
by reference to Exhibit (15)(c) of
Post-Effective Amendment No. 3 to
Registrant's Registration Statement
on Form N-1A (No. 33-59984) filed on
October 27, 1995.

(16) (a) Computation of Performance
Quotations for Cardinal Balanced
Fund is incorporated by reference to
Exhibit (16)(a) of Post-Effective
Amendment No. 2 to Registrant's
Registration Statement on Form N-1A
(File No. 33-59984) filed on
December 1, 1994.

(b) Computation of Performance
Quotations for Cardinal Aggressive
Growth Fund is incorporated by
reference to Exhibit (16)(b) of
Post-Effective Amendment No. 2 to
Registrant's Registration Statement
on Form N-1A (File No. 33-59984)
filed on December 1, 1994.

(d) Computation of Performance
Quotations for Cardinal Government
Obligations Fund to be filed by
amendment.

(e) Computation of Performance
Quotations for Cardinal Government
Securities Money Market Fund to be
filed by amendment.

(f) Computation of Performance
Quotations for Cardinal Tax Exempt
Money Market Fund to be filed by
amendment.

(17) Financial Data Schedules.

(18) None.

C-5
<PAGE> 123

(19) (a) Consent of Baker & Hostetler.

(b) Powers of Attorney of H. Keith
Allen, Gordon B. Carson, John B.
Gerlach, Jr., Michael J. Knilans,
James I. Luck, David L. Nelson, C.
A. Peterson, John L. Schlater, Frank
W. Siegel, Joseph H. Stegmayer,
Lawrence H. Rogers II and James M.
Schrack, II are incorporated by
reference to Exhibit (19)(b) of
Post-Effective Amendment No. 3 to
Registrant's Registration Statement
on Form N-1A (No. 33-59984) filed
on October 27, 1995.

Item 25. PERSONS CONTROLLED OR UNDER COMMON CONTROL WITH REGISTRANT
----------------------------------------------------------

None

Item 26. NUMBER OF HOLDERS OF SECURITIES
-------------------------------

The following table sets forth as of January 11, 1996, the
number of record holders of each series of shares of
Registrant:

<TABLE>
<CAPTION>
Number of
Title of Series Record Holders
--------------- --------------
<S> <C>
Cardinal Balanced Fund 1,224

Cardinal Aggressive Growth Fund 1,209

The Cardinal Fund 0

Cardinal Government Obligations
Fund 0

Cardinal Government Securities
Money Market Fund 0

Cardinal Tax Exempt Money Market
Fund 0
</TABLE>

Item 27. INDEMNIFICATION
---------------

Article VI, Section 6.4 of the Registrant's Declaration of
Trust, filed as Exhibit 1 hereto, provides for the
indemnification of Registrant's Trustees and officers.
Indemnification of the Group's principal underwriter,
custodian, investment adviser and manager, and transfer agent
is provided for, respectively, in Section 1.11 of the
Distribution Agreement filed as Exhibit 6(a) hereto,

C-6

<PAGE> 124
Section 8.1 of the Custody Agreement filed as Exhibit 8
hereto, Section 6 of the Investment Advisory and Management
Agreement filed as Exhibit 5 hereto, and Section 10 of the
Transfer Agency and Fund Accounting Agreement filed as Exhibit
9 hereto. As of the effective date of this Registration
Statement, the Group will have obtained from a major insurance
carrier a trustees' and officers' liability policy covering
certain types of errors and omissions. In no event will
Registrant indemnify any of its trustees, officers, employees
or agents against any liability to which such person would
otherwise be subject by reason of his willful misfeasance, bad
faith, or gross negligence in the performance of his duties,
or by reason of his reckless disregard of the duties involved
in the conduct of his office or under his agreement with
Registrant. Registrant will comply with Rule 484 under the
Securities Act of 1933 and Release 11330 under the Investment
Company Act of 1940 in connection with any indemnification.

Insofar as indemnification for liability arising under the
Securities Act of 1933 may be permitted to trustees, officers,
and controlling persons of Registrant pursuant to the
foregoing provisions, or otherwise, Registrant has been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such
liabilities (other than the payment by Registrant of expenses
incurred or paid by a trustee, officer, or controlling person
of Registrant in the successful defense of any action, suit,
or proceeding) is asserted by such trustee, officer, or
controlling person in connection with the securities being
registered, Registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question of
whether such indemnification by it is against public policy as
expressed in the Securities Act of 1933 and will be governed
by the final adjudication of such issue.

Item 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER
----------------------------------------------------

Information with respect to Cardinal Management Corp. and its
officers and directors as set forth under the captions "WHO
MANAGES MY INVESTMENT IN THE FUND?" contained in Prospectuses
and "MANAGEMENT OF THE GROUP" contained in the Statements of
Additional Information which are a part of this Registration
Statement is hereby incorporated herein by reference.

C-7
<PAGE> 125
To the knowledge of Registrant, none of the directors or
officers of Cardinal Management Corp., except those set forth
below, is or has been at any time during the past two fiscal
years engaged in any other business, profession, vocation or
employment of a substantial nature. Set forth below are the
names, principal businesses and addresses of those businesses
of the directors and officers of Cardinal Management Corp. who
are or have been engaged in any other business, profession,
vocation or employment of a substantial nature during the past
two fiscal years.

Officer or Director
of Cardinal Name and Address Nature of
Management Corp. of Business Connection
- ------------------- ---------------- ----------
<S> <C> <C>
H. Keith Allen The Ohio Company Chief Operating Officer,
155 East Broad Street Secretary/Treasurer and
Columbus, Ohio 43215 Director

Ad Management Corp. Secretary/Treasurer and
155 East Broad Street Director
Columbus, Ohio 43215

Cardinal Financial Secretary/Treasurer and
Management Corp. Director
155 East Broad Street
Columbus, Ohio 43215

Midwest Parking, Inc. Secretary/Treasurer
155 East Broad Street and Director
Columbus, Ohio 43215

InsuranceOhio Company Secretary/Treasurer and
Agency Director
155 East Broad Street
Columbus, Ohio 43215

Ohio Equities Inc. Secretary/Treasurer and
395 East Broad Street Director
Columbus, Ohio 43215

The Cardinal Fund Inc. Director and Chairman
155 East Broad Street
Columbus, Ohio 43215

Cardinal Tax Exempt Trustee and Chairman
Money Trust
155 East Broad Street
Columbus, Ohio 43215

Cardinal Government Trustee and Chairman
Obligations Fund
155 East Broad Street
Columbus, Ohio 43215

Cardinal Government Trustee and Chairman
Securities Trust
155 East Broad Street
Columbus, Ohio 43215
</TABLE>

C-8
<PAGE> 126

Officer or Director
of Cardinal Name and Address Nature of
Management Corp. of Business Connection
- ------------------- ---------------- ----------
<S> <C> <C>
The Cardinal Group Trustee and Chairman
155 East Broad Street
Columbus, Ohio 43215

Frank W. Siegel The Ohio Company Senior Vice President
155 East Broad Street
Columbus, Ohio 43215

The Cardinal Fund Inc. President and Director
155 East Broad Street
Columbus, Ohio 43215

Cardinal Tax Exempt President and Trustee
Money Trust
155 East Broad Street
Columbus, Ohio 43215

Cardinal Government President and Trustee
Obligations Fund
155 East Broad Street
Columbus, Ohio 43215

Cardinal Government President and Trustee
Securities Trust
155 East Broad Street
Columbus, Ohio 43215

The Cardinal Group President and Trustee
155 East Broad Street
Columbus, Ohio 43215

Keystone Group Vice President
200 Berkeley Street
Boston, Massachusetts 02116

Trust Advisory Group Senior Vice President
1 Morningstar Drive North
Westport, Connecticut 06880
</TABLE>

Item 29. PRINCIPAL UNDERWRITER
---------------------

(a) The Ohio Company acts as principal underwriter for
Registrant. The Ohio Company also is the principal
underwriter of The Cardinal Fund Inc., Cardinal
Government Obligations Fund, Cardinal Government
Securities Trust and Cardinal Tax Exempt Money Trust.
The Ohio Company also acts as Sponsor of Cardinal
Tax-Exempt Bond Trust, First through Thirty-Fifth
Series (there is no Thirteenth Series of this Trust)
and as Sponsor of Cardinal GNMA Trust, First, Second
and Third Series. The Ohio Company participates as a
member of various underwriting and selling groups and
as agent of other investment companies. It executes
orders for

C-9
<PAGE> 127
the purchase and sale of securities of investment
companies and, from time to time, sells securities to
such companies in its capacity as a broker-dealer
in securities.

(b) The Officers and Directors of The Ohio Company and
their positions with Registrant are as follows:

<TABLE>
<CAPTION>
Name and Principal Position and Offices Positions and Offices
Business Address with Underwriter with Registrant
- ------------------ -------------------- ---------------------
<S> <C> <C>
John F. Wolfe Chairman of the Board, President and
34 South Third Street Chief Exec. Officer and Director
Columbus, Ohio 43215

William C. Wolfe Director
34 South Third Street
Columbus, Ohio 43215

H. Keith Allen Chief Operating Officer, Secretary, Chairman and Trustee
155 East Broad Street Treasurer and Director
Columbus, Ohio 43215

John P. Campbell Senior Executive Vice President and
155 East Broad Street Director
Columbus, Ohio 43215

Daniel A. Fronk Senior Executive Vice President and
155 East Broad Street Director
Columbus, Ohio 43215

Curtis E. Stumpf Senior Executive Vice President,
155 East Broad Street Director and General Sales Manager
Columbus, Ohio 43215

Martin H. Vogtsberger Senior Executive Vice President and
155 East Broad Street Director
Columbus, Ohio 43215

Thomas A. Brownfield Senior Vice President
155 East Broad Street
Columbus, Ohio 43215

James A. Francis Senior Vice President/Compliance
155 East Broad Street
Columbus, Ohio 43215

Jerry L. Greene Senior Vice President/Accounting
155 East Broad Street
Columbus, Ohio 43215

Kenneth S. Koralewski Senior Vice President &
155 East Broad Street Manager, Municipal
Columbus, Ohio 43215 Syndicate & Trading

Curtis D. Milner Senior Vice President
155 East Broad Street
Columbus, Ohio 43215
</TABLE>

C-10
<PAGE> 128

<TABLE>
<CAPTION>
Name and Principal Position and Offices Positions and Offices
Business Address with Underwriter with Registrant
------------------ -------------------- ---------------------
<S> <C> <C>
Frank W. Siegel Senior Vice President President and Trustee
155 East Broad Street
Columbus, Ohio 43215

Thomas G. Terry Senior Vice President/OTC Trading
155 East Broad Street
Columbus, Ohio 43215

George E. Tootle, Jr. Senior Vice President/Operations
155 East Broad Street
Columbus, Ohio 43215

G. Douglas Voelz Senior Vice President
155 East Broad Street
Columbus, Ohio 43215

John C. Adams Vice President/Public
155 East Broad Street Finance-Negotiated
Columbus, Ohio 43215

William N. Anderson Vice President/NYSE Floor Broker
155 East Broad Street
Columbus, Ohio 43215

Gary E. Baird Vice President/Sales
155 East Broad Street
Columbus, Ohio 43215

John Bevilacqua Vice President/Asset Management
155 East Broad Street
Columbus, Ohio 43215

John R. Carle Vice President/Cardinal Government
155 East Broad Street Obligations Fund
Columbus, Ohio 43215

Mark R. Chambers Vice President/Public
155 East Broad Street Finance-Negotiated
Columbus, Ohio 43215

G. John Cooper Vice President/Public
155 East Broad Street Finance-Negotiated
Columbus, Ohio 43215

Robert A. Corea Vice President/Corporate Finance
155 East Broad Street
Columbus, Ohio 43215

Albert W. Erickson, III Vice President/Public
155 East Broad Street Finance-Negotiated
Columbus, Ohio 43215

Michael Goodman Vice President/Municipal Trading
155 East Broad Street
Columbus, Ohio 43215

Douglas W. Hindenlang Vice President/OTC Trading
155 East Broad Street
Columbus, Ohio 43215

</TABLE>

C-11
<PAGE> 129

<TABLE>
<CAPTION>
Name and Principal Position and Offices Positions and Offices
Business Address with Underwriter with Registrant
------------------ -------------------- ---------------------
<S> <C> <C>
Mark E. Koprucki Vice President/Research
155 East Broad Street
Columbus, Ohio 43215

Elwood W. Lewis Vice President/Asset Management
155 East Broad Street
Columbus, Ohio 43215

Barry G. McMahon Vice President/Asset Management
155 East Broad Street
Columbus, Ohio 43215

John R. Merrell Vice President/Sales
155 East Broad Street
Columbus, Ohio 43215

Thomas E. Murphy Vice President/Corporate Finance
155 East Broad Street
Columbus, Ohio 43215

C. Thomas Pfister Vice President/Public Finance -
155 East Broad Street Negotiated
Columbus, Ohio 43215

Larry J. Rapp Vice President/Manager, Technical
155 East Broad Street Services
Columbus, Ohio 43215

Kara L. Rider Vice President/Municipal Trading
155 East Broad Street
Columbus, Ohio 43215

James M. Schrack II Vice President/Trust and Trust Officer Treasurer
155 East Broad Street
Columbus, Ohio 43215

Richard H. Stillman Vice President/Public Finance-Negotiated
155 East Broad Street
Columbus, Ohio 43215

Michael S. Tedesco Vice President/Municipal Trading
155 East Broad Street
Columbus, Ohio 43215

James W. Trapp Vice President/Sales
155 East Broad Street
Columbus, Ohio 43215

William T. Weldon Vice President/Operations
155 East Broad Street
Columbus, Ohio 43215

David C. Will Vice President/Asset Management
155 East Broad Street
Columbus, Ohio 43215

Rodney A. Yeager Vice President/Telecommunications
155 East Broad Street
Columbus, Ohio 43215

</TABLE>

C-12
<PAGE> 130

Name and Principal Position and Offices Positions and Offices
Business Address with Underwriter with Registrant
------------------ -------------------- ---------------------
<S> <C> <C>
Mark E. Backes Assistant Vice President/Operations
155 East Broad Street
Columbus, Ohio 43215

Roger W. Butler Assistant Vice President/Compliance
155 East Broad Street
Columbus, Ohio 43215

James W. Carey Assistant Vice President/Corporate
155 East Broad Street Finance
Columbus, Ohio 43215

Scott E. Decker Assistant Vice President/Trust-Internal
155 East Broad Street Auditor
Columbus, Ohio 43215

William J. Denehy Assistant and Vice President/Corporate
155 East Broad Street Bond Trading
Columbus, Ohio 43215

Dave G. Duncan Assistant Vice President/Syndicate
155 East Broad Street
Columbus, Ohio 43215

Carolyn A. Garner Assistant Vice President
155 East Broad Street
Columbus, Ohio 43215

Charles H. Graves, Sr. Assistant Vice President/Sales
155 East Broad Street
Columbus, Ohio 43215

Ronald G. Hall Assistant Vice President/Operations
155 East Broad Street
Columbus, Ohio 43215

Helen J. Huntington Assistant Vice President/Operations
155 East Broad Street
Columbus, Ohio 43215

Jon P. Jones Assistant Vice President/Municipal
155 East Broad Street Trading
Columbus, Ohio 43215

Donna M. Knapp Assistant Vice President/Operations
155 East Broad Street
Columbus, Ohio 43215

Lawrence W. Landenberger Assistant Vice President/Operations
155 East Broad Street
Columbus, Ohio 43215

Matthew E. Lee Assistant Vice President/Trading
155 East Broad Street
Columbus, Ohio 43215

Virginia L. McCargish Assistant Vice President/
155 East Broad Street Operations
Columbus, Ohio 43215

</TABLE>

C-13
<PAGE> 131

Name and Principal Position and Offices Positions and Offices
Business Address with Underwriter with Registrant
------------------ -------------------- ---------------------
<S> <C> <C>
Kevin P. Morrow Assistant Vice President/Research
155 East Broad Street
Columbus, Ohio 43215

Richard D. Oltean Assistant Vice President/Trust -
155 East Broad Street Qualified Plans
Columbus, Ohio 43215

Mark Ostroske Assistant Vice President/Asset
155 East Broad Street Management
Columbus, Ohio 43215

E. Eugene Robinson Assistant Vice President/Research
155 East Broad Street
Columbus, Ohio 43215

Michael C. Roney Assistant Vice President/Asset
155 East Broad Street Management
Columbus, Ohio 43215

David A. Seely, Jr. Assistant Vice President/Operations
155 East Broad Street
Columbus, Ohio 43215

Susan H. Shaw Assistant Vice President/National
155 East Broad Street Syndicate
Columbus, Ohio 43215

Ronald J. Trubisky Assistant Vice President/Corporate Bond
155 East Broad Street Trading
Columbus, Ohio 43215

Douglas J. Walouke Assistant Vice President/Corporate Bond
155 East Broad Street Trading
Columbus, Ohio 43215

Richard J. Wayman Assistant Vice President/Research
155 East Broad Street
Columbus, Ohio 43215

Lori A. Wells Assistant Vice President/Technical
155 East Broad Street Services
Columbus, Ohio 43215

</TABLE>

Item 30. Location of Accounts and Records
--------------------------------
(1) Cardinal Management Corp., 155 East Broad Street,
Columbus, Ohio 43215 (records relating to its functions as
investment adviser and manager, Declaration of Trust,
By-Laws and Minute Books).

(2) The Ohio Company, 155 East Broad Street, Columbus, Ohio
43215 (records relating to its function as distributor).

C-14
<PAGE> 132
(3) Cardinal Management Corp., 215 East Capital Street,
Columbus, Ohio 43215 (records relating to its functions as
dividend and transfer agent and fund accountant).

(4) The Fifth Third Bank, 38 Fountain Square Plaza,
Cincinnati, Ohio 45263 (records relating to its functions
as custodian).

Item 31. Management Services
-------------------
None.

Item 32. Undertakings
------------
None.

C-15
<PAGE> 133
SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this
Registration Statement to be signed on its behalf by the undersigned thereunto
duly authorized, in the City of Columbus and State of Ohio on the 17th day of
January, 1996. Registrant hereby certifies that this Post-Effective Amendment
to Registration Statement meets all of the requirements for effectiveness
pursuant to paragraph (b) of Rule 485 under the Securities Act of 1933.

THE CARDINAL GROUP

By /s/ Frank W. Siegel
------------------------------
Frank W. Siegel, President

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the date indicated.

<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Frank W. Siegel President (Principal January 17, 1996
- ---------------------------- Executive Officer)
Frank W. Siegel

/s/*H. Keith Allen Chairman and Trustee January 17, 1996
- ----------------------------
H. Keith Allen

/s/*Gordon B. Carson Trustee January 17, 1996
- ---------------------------
Gordon B. Carson

/s/*John B. Gerlach, Jr. Trustee January 17, 1996
- ---------------------------
John B. Gerlach, Jr.

/s/*Michael J. Knilans Trustee January 17, 1996
- ---------------------------
Michael J. Knilans

/s/*James I. Luck Trustee January 17, 1996
- ---------------------------
James I. Luck

/s/*David L. Nelson Trustee January 17, 1996
- ---------------------------
David L. Nelson

/s/*C. A. Peterson Trustee January 17, 1996
- ---------------------------
C. A. Peterson

/s/*Lawrence H. Rogers II Trustee January 17, 1996
- ---------------------------
Lawrence H. Rogers II

/s/*Joseph H. Stegmayer Trustee January 17, 1996
- ---------------------------
Joseph H. Stegmayer

/s/ James M. Schrack II Treasurer (Principal January 17, 1996
- --------------------------- Financial and Accounting
James M. Schrack II Officer)

*By/s/James M. Schrack II January 17, 1996
------------------------
James M. Schrack II
Attorney-In-Fact
</TABLE>

C-16
<PAGE> 134
EXHIBIT INDEX

<TABLE>
<CAPTION>
Exhibit No. Description Page
----------- ----------------------------------------- ----
<S> <C> <C>
(1)(a) Declaration of Trust, dated as of March 23, 1993,
was filed as Exhibit (1)(a) of Post-Effective Amendment No.
3 to Registrant's Registration Statement on Form N-1A
(No. 33-59984) filed on October 27, 1995.

(b) Amendment to Declaration of Trust as adopted October 20, 1995,
was filed as Exhibit (1)(b) of Post-Effective Amendment No. 3
to Registrant's Registration Statement on Form N-1A
(No. 33-59984) filed on October 27, 1995.

(2) By-Laws were filed as Exhibit (2) of Post-Effective Amendment
No. 3 to Registrant's Registration Statement on Form N-1A
(No. 33-59984) filed on October 27, 1995.

(3) None

(4) None

(5) Investment Advisory and Management Agreement dated as of
June 18, 1993, as proposed to be amended between Registrant and
Cardinal Management Corp. was filed as Exhibit (5) of
Post-Effective Amendment No. 3 to Registrant's Registration
Statement on Form N-1A (No. 33-59984) filed on October 27, 1995.

(6)(a) Distribution Agreement dated as of June 18, 1993, as proposed to
be amended between Registrant and The Ohio Company was filed as
Exhibit (6)(a) of Post-Effective Amendment No. 3 to Registrant's
Registration Statement on Form N-1A (No. 33-59984) filed on
October 27, 1995.

(b) Form of revised Selected Dealer Agreement was filed as Exhibit (6)(b)
of Post-Effective Amendment No. 3 to Registrant's Registration
Statement on Form N-1A (No. 33-59984) filed on October 27, 1995.

(7) None
</TABLE>

C-17
<PAGE> 135

<TABLE>
<CAPTION>
Exhibit No. Description Page
----------- ----------------------------------------- ----
<S> <C> <C>
(8) Custody Agreement dated as of June 18, 1993, as
proposed to be amended between Registrant and The Fifth
Third Bank was filed as Exhibit (8) of Post-Effective
Amendment No. 3 to Registrant's Registration Statement on
Form N-1A (No. 33-59984) filed on October 27, 1995.

(9) Transfer Agency and Fund Accounting Agreement dated as
of June 18, 1993, as proposed to be amended between
Registrant and Cardinal Management Corp. was filed as
Exhibit (9) of Post-Effective Amendment No. 3 to
Registrant's Registration Statement on Form N-1A (No.
33-59984) filed on October 27, 1995.

(10) Opinion of Counsel with respect to shares of Cardinal Balanced
Fund and Cardinal Aggressive Growth Fund being
registered pursuant to Section 24(e)(1) of the Investment
Company Act of 1940. Opinion of Counsel with respect to
shares of The Cardinal Fund, Cardinal Government
Obligations Fund, Cardinal Government Securities Money
Market Fund and Cardinal Tax Exempt Money Market Fund was
filed as Exhibit (10) of Post-Effective Amendment No. 3
to Registrant's Registration Statement on Form N-1A (No.
33-59984) filed on October 27, 1995. An Opinion of
Counsel with respect to the Shares of Cardinal Balanced
Fund and Cardinal Aggressive Growth Fund was filed with
Registrant's Notice filed on November 21, 1995, pursuant
to Rule 24f-2.

(11) Consent of KPMG Peat Marwick LLP.

(12) None

(13) Purchase Agreement dated June 4, 1993, between Registrant
and Cardinal Management Corp. was filed as Exhibit (13)
of Post-Effective Amendment No. 3 to Registrant's
Registration Statement on Form N-1A (No. 33-59984) filed
on October 27, 1995.

(14) None

</TABLE>

C-18
<PAGE> 136

<TABLE>
<CAPTION>
Exhibit No. Description Page
----------- ----------------------------------------- ----
<S> <C> <C>
(15)(a) Rule 12b-1 Plan was filed as Exhibit (15)(a) of Post-Effective
Amendment No. 3 to Registrant's Registration Statement
on Form N-1A (No. 33-59984) filed on October 27, 1995.

(b) Rule 12b-1 Agreement dated June 18, 1993, as proposed to
be amended, between Registrant and The Ohio Company (a
related agreement under the Rule 12b-1 Plan) was filed as
Exhibit (15)(b) of Post-Effective Amendment No. 3 to
Registrant's Registration Statement on Form N-1A (No.
33-59984) filed on October 27, 1995.

(c) Form of revised Selected Dealer Agreement (a related agreement
under the Rule 12b-1 Plan) was filed as Exhibit (15)(c)
of Post-Effective Amendment No. 3 to Registrant's
Registration Statement on Form N-1A (No. 33-59984) filed
on October 27, 1995.

(16)(a) Computation of Performance Quotations for Cardinal Balanced Fund
was filed as Exhibit (16)(a) to Post- Effective
Amendment No. 2 to Registrant's Registration Statement on
December 1, 1994.

(b) Computation of Performance Quotations for Cardinal Aggressive Growth
Fund was filed as Exhibit (16)(a) to Post-Effective
Amendment No. 2 to Registrant's Registration Statement on
December 1, 1994.

(d) Computation of Performance Quotations for Cardinal Government
Obligations Fund to be filed by amendment.

(e) Computation of Performance Quotations for Cardinal Government
Securities Money Market Fund to be filed by amendment.

(f) Computation of Performance Quotations for Cardinal Tax Exempt
Money Market Fund to be filed by amendment.

</TABLE>

C-19
<PAGE> 137

<TABLE>
<CAPTION>
Exhibit No. Description Page
----------- ----------------------------------------- ----
<S> <C> <C>
(17) Financial Data Schedules.

(18) None.

(19)(a) Consent of Baker & Hostetler.

(b) Powers of Attorney of H. Keith Allen, Gordon B. Carson,
John B. Gerlach, Jr., Michael J. Knilans, James I. Luck,
David L. Nelson, C. A. Peterson, John L. Schlater, Frank
W. Siegel, Joseph H. Stegmayer, Lawrence H. Rogers II and
James M. Schrack, II were filed as Exhibit (19)(b) of
Post-Effective Amendment No. 3 to Registrant's
Registration Statement on Form N-1A (No. 33-59984) filed
on October 27, 1995.

</TABLE>

C-20

<PAGE> 1

EXHIBIT (10)

<PAGE> 2

---------
BAKER
&
HOSTETLER
---------
COUNSELLORS AT LAW
_______________________________________________________________________________
Capitol Square, Suite 2100 - 65 East State Street - Columbus, Ohio 43215-4260 -
(614) 228-1541

January 17, 1996

The Cardinal Group
155 East Broad Street
Columbus, Ohio 43215

Subject: THE CARDINAL GROUP (THE "GROUP") -- POST-EFFECTIVE
AMENDMENT NO. 4 TO REGISTRATION STATEMENT ON FORM N-1A,
FILE NO. 33-59984, FILED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, AND AMENDMENT NO. 4 TO REGISTRATION
STATEMENT ON FORM N-1A, FILE NO. 811-7588, FILED UNDER THE
INVESTMENT COMPANY ACT OF 1940, AS AMENDED (THE
"AMENDMENT")

Ladies and Gentlemen:

In connection with the filing of the Amendment, it is our opinion
that, upon the effectiveness of the Amendment, the 178,428 shares of beneficial
interest, without par value, of Cardinal Balanced Fund and the 117,487 shares
of beneficial interest, without par value, of Cardinal Aggressive Growth Fund,
when issued as described in the Amendment and for the consideration described
in the Amendment, will be legally issued, fully paid and nonassessable.

We hereby consent to the filing of this opinion as an exhibit to the
Amendment.

Very truly yours,

BAKER & HOSTETLER

<PAGE> 1

EXHIBIT (11)
<PAGE> 2

CONSENT OF KPMG PEAT MARWICK LLP

To the Board of Trustees
The Cardinal Group:

We consent to the use of our reports dated November 17, 1995, included
herein and to the references to our firm under the heading "Financial
Highlights" in the Prospectuses and under the heading "Legal Counsel and
Independent Auditors" in the Statement Of Additional Information.

Columbus, Ohio
January 17, 1996 KPMG PEAT MARWICK LLP

<PAGE> 1

EXHIBIT (17)
<PAGE> 2
[ARTICLE] 6
[CIK] 0000899580
[NAME] CARDINAL BALANCED FUND
[SERIES]
[NUMBER] 2
[NAME] THE CARDINAL GROUP
[MULTIPLIER] 1,000

<TABLE>
<S> <C>
[PERIOD-TYPE] YEAR
[FISCAL-YEAR-END] SEP-30-1995
[PERIOD-START] OCT-01-1994
[PERIOD-END] SEP-30-1995
[INVESTMENTS-AT-COST] 14,479
[INVESTMENTS-AT-VALUE] 0
[RECEIVABLES] 185
[ASSETS-OTHER] 0
[OTHER-ITEMS-ASSETS] 76
[TOTAL-ASSETS] 14,740
[PAYABLE-FOR-SECURITIES] 125
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 80
[TOTAL-LIABILITIES] 205
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 12,716
[SHARES-COMMON-STOCK] 1,262
[SHARES-COMMON-PRIOR] 1,411
[ACCUMULATED-NII-CURRENT] 3
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] 391
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] 1,425
[NET-ASSETS] 14,535
[DIVIDEND-INCOME] 245
[INTEREST-INCOME] 461
[OTHER-INCOME] 0
[EXPENSES-NET] 265
[NET-INVESTMENT-INCOME] 441
[REALIZED-GAINS-CURRENT] 307
[APPREC-INCREASE-CURRENT] 1,810
[NET-CHANGE-FROM-OPS] 2,558
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] 453
[DISTRIBUTIONS-OF-GAINS] 49
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 1,485
[NUMBER-OF-SHARES-REDEEMED] 3,437
[SHARES-REINVESTED] 458
[NET-CHANGE-IN-ASSETS] 562
[ACCUMULATED-NII-PRIOR] 15
[ACCUMULATED-GAINS-PRIOR] 133
[OVERDISTRIB-NII-PRIOR] 0
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 102
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 265
[AVERAGE-NET-ASSETS] 13,662
[PER-SHARE-NAV-BEGIN] 9.90
[PER-SHARE-NII] 0.34
[PER-SHARE-GAIN-APPREC] 1.67
[PER-SHARE-DIVIDEND] 0.35
[PER-SHARE-DISTRIBUTIONS] 0.04
[RETURNS-OF-CAPITAL] 0
[PER-SHARE-NAV-END] 11.52
[EXPENSE-RATIO] 1.94
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0
</TABLE>

<PAGE> 3
[ARTICLE] 6
[CIK] 0000899580
[NAME] CARDINAL AGGRESSIVE GROWTH FUND
[SERIES]
[NUMBER] 1
[NAME] THE CARDINAL GROUP
[MULTIPLIER] 1,000

<TABLE>
<S> <C>
[PERIOD-TYPE] YEAR
[FISCAL-YEAR-END] SEP-30-1995
[PERIOD-START] OCT-01-1994
[PERIOD-END] SEP-30-1995
[INVESTMENTS-AT-COST] 9,966
[INVESTMENTS-AT-VALUE] 0
[RECEIVABLES] 132
[ASSETS-OTHER] 0
[OTHER-ITEMS-ASSETS] 409
[TOTAL-ASSETS] 10,507
[PAYABLE-FOR-SECURITIES] 45
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 28
[TOTAL-LIABILITIES] 73
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 8,619
[SHARES-COMMON-STOCK] 844
[SHARES-COMMON-PRIOR] 951
[ACCUMULATED-NII-CURRENT] (113)
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] 917
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] 1,011
[NET-ASSETS] 10,434
[DIVIDEND-INCOME] 71
[INTEREST-INCOME] 58
[OTHER-INCOME] 0
[EXPENSES-NET] 215
[NET-INVESTMENT-INCOME] (86)
[REALIZED-GAINS-CURRENT] 999
[APPREC-INCREASE-CURRENT] 1,158
[NET-CHANGE-FROM-OPS] 2,071
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] 0
[DISTRIBUTIONS-OF-GAINS] 0
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 1,809
[NUMBER-OF-SHARES-REDEEMED] 2,906
[SHARES-REINVESTED] 0
[NET-CHANGE-IN-ASSETS] 974
[ACCUMULATED-NII-PRIOR] (113)
[ACCUMULATED-GAINS-PRIOR] 3
[OVERDISTRIB-NII-PRIOR] 0
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 71
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 215
[AVERAGE-NET-ASSETS] 9,586
[PER-SHARE-NAV-BEGIN] 9.94
[PER-SHARE-NII] (0.10)
[PER-SHARE-GAIN-APPREC] 2.53
[PER-SHARE-DIVIDEND] 0
[PER-SHARE-DISTRIBUTIONS] 0
[RETURNS-OF-CAPITAL] 0
[PER-SHARE-NAV-END] 12.37
[EXPENSE-RATIO] 2.24
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0
</TABLE>

<PAGE> 1

EXHIBIT (19)(a)

<PAGE> 2
CONSENT OF COUNSEL

We hereby consent to the use of our name and to the references to our
firm under the caption of "LEGAL COUNSEL AND INDEPENDENT AUDITORS" included in
or made a part of the Registration Statement on Form N-1A, filed under the
Securities Act of 1933, as amended, of The Cardinal Group.

BAKER & HOSTETLER

Columbus, Ohio
January 17, 1996