SUNBURST SHORT-INTERMEDIATE GOVERNMENT BOND FUND
(A PORTFOLIO OF SUNBURST FUNDS)
Supplement to Prospectus dated October 28, 1993
Sunburst Short-Intermediate Government Bond Fund (the "Fund"),
will hold a Special Meeting of Shareholders on or about December
16, 1994, to seek, among other things, approval of a new
investment advisory contract on behalf of the Fund. These
actions are being taken as a result of the pending acquisition of
Grenada Sunburst System Corporation, ("GSSC") by Union Planters
Corporation ("UPC").
Sunburst Bank, Mississippi, the investment adviser to the Fund
(the "Adviser") is a subsidiary of GSSC. On July 1, 1994, GSSC
entered into a definitive Agreement and Plan of Reorganization,
whereby GSSC would be acquired by UPC, a bank holding company
headquartered in Memphis, Tennessee (the "Acquisition"). As a
result, upon completion of the Acquisition, all existing
subsidiaries of GSSC, including the Adviser, would become
subsidiaries of UPC. The agreement requires approval of both
companies' shareholders as well as the receipt of various
regulatory approvals. It is anticipated that the Acquisition
will be completed on or about December 31, 1994.
Under provisions of the Investment Company Act of 1940,
completion of the Acquisition would result in an assignment, and
automatic termination, of the Adviser's current investment
advisory contract with the Fund. Accordingly, the Board of
Trustees (the "Trustees") of the Fund has recommended that
shareholders approve a new investment advisory contract ("New
Contract") on behalf of the Fund. The terms of the New Contract
are identical in all material respects to the present contract,
except for the effective date which, in the case of the New
Contract, is expected to be on or before the consummation of the
Acquisition.
In addition, the Trustees have also recommended that shareholders
approve the re-election of the present Board of Trustees.
These proposals will be presented for the approval of
shareholders of the Fund at the Special Meeting. It is
anticipated that shareholders of record as of November 4, 1994,
will receive a proxy statement discussing these matters in
detail, and will be entitled to vote at the Special Meeting.
October 3, 1994
FEDERATED SECURITIES CORP.
Distributor
A subsidiary of Federated
Investors
Federated Investors Tower
Pittsburgh, PA 15222-3779
867094101
006005 (9/94)
