MILESTONE FUNDS, 497, 1999-04-05

MILESTONE FUNDS
497, 1999-04-05

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<PAGE>

Filed Pursuant to Rule 497(c)
Registration File No. 33-81574
Registration File No. 811-8620

THE
MILESTONE
FUNDS

THE MILESTONE FUNDS
TREASURY OBLIGATIONS PORTFOLIO

INVESTMENT ADVISER
Milestone Capital Management, L.P.

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

PROSPECTUS
MARCH 30, 1999
PREMIUM SHARES

THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED THE ABOVE LISTED
FUND. THE SECURITIES AND EXCHANGE COMMISSION ALSO HAS NOT DETERMINED
WHETHER THIS PROSPECTUS IS ACCURATE OR COMPLETE. ANY PERSON WHO TELLS YOU
THAT THE SECURITIES AND EXCHANGE COMMISSION HAS MADE SUCH AN APPROVAL OR
DETERMINATION IS COMMITTING A CRIME.

<PAGE>
THE MILESTONE FUNDS
TREASURY OBLIGATIONS PORTFOLIO
PREMIUM SHARES
ONE EXECUTIVE BOULEVARD, YONKERS, NEW YORK 10701
(800) 941-MILE

<TABLE>
<CAPTION>
TABLE OF CONTENTS

PAGE PAGE
---- ----
<S> <C> <C> <C>
Risk/Return Summary............................. 2 How to Redeem Shares of the Portfolio........... 8
Investment Objective and Principal Dividends, Distributions and Tax Matters........ 8
Investment Strategies......................... 4 Other Information............................... 9
Management of the Portfolio..................... 5 Financial Highlights............................ 10
How to Invest in the Portfolio.................. 6
</TABLE>

RISK/RETURN SUMMARY

INVESTMENT OBJECTIVE

The Treasury Obligations Portfolio is a money market fund that seeks to provide
its shareholders with the maximum current income that is consistent with the
preservation of capital and the maintenance of liquidity.

INVESTMENT STRATEGIES

As a fundamental policy, the Portfolio invests ONLY in the following money
market instruments:

o short-term obligations of the U.S. Treasury; and

o repurchase agreements fully collateralized by obligations of the U.S.
Treasury.

The Portfolio will maintain an average maturity, computed on a dollar-weighted
basis, of 90 days or less.

PRINCIPAL RISKS

Although the Portfolio invests in short-term Treasury obligations, an investment
in the Portfolio is subject to risk even if all securities in the Portfolio are
paid in full at maturity. All money market instruments, including U.S. Treasury
obligations, can change in value in response to changes in interest rates, and a
major change in rates could cause the share price to change. While U.S. Treasury
obligations are backed by the full faith and credit of the U.S. Government, an
investment in the Portfolio is neither insured nor guaranteed by the Federal
Deposit Insurance Corporation, U.S. Government or any other government agency.
Thus, while the Portfolio seeks to maintain a stable net asset value of $1.00
per share, there is no assurance that it will do so.

2
<PAGE>
BAR CHART AND PERFORMANCE TABLE

The following chart demonstrates the risks of investing in the Portfolio by
showing changes in the Portfolio's performance from December 31, 1997 through
December 31, 1998. Past performance is not an indication of future performance.

[BAR CHART]

Annual Returns

12/31/98

Premium Shares 4.96%

During 1998, the best performance for a quarter was 1.26% (for the quarter ended
September 30, 1998). The worst performance was 1.12% (for the quarter ended
December 31, 1998).

The following table demonstrates these risks by showing how the Portfolio's
average annual returns compare with those of the Lipper U.S. Taxable Money
Market Funds Index.

<TABLE>
<CAPTION>
SINCE INCEPTION
AVERAGE ANNUAL RETURNS AS OF 12/31/98 ONE YEAR OF THE SHARE CLASS
------------------------------------- -------- ------------------
<S> <C> <C>
Treasury Obligations Portfolio 4.96% 5.03%
Lipper U.S. Taxable Money Market Funds Index 4.95% N/A
</TABLE>

The returns listed above are quoted net of all fees. The inception date of the
Premium Share Class was 5/20/97. The inception date of the Fund was 12/30/94.

The Portfolio's seven-day current yield on 12/31/98 was 4.37%. For the
Portfolio's current yield, please call us at 800-941-MILE (6453).

FEES AND EXPENSES OF THE FUND

This table describes the fees and expenses you may pay if you buy and hold
Premium Shares of the Portfolio.

SHAREHOLDER FEES (fees paid directly from your investment)::

<TABLE>
<S> <C>
Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of offering
price)......................................................................... None
Maximum Deferred Sales Charge (Load)............................................. None
Maximum Sales Charge (Load) Imposed on Reinvested Dividends...................... None
Redemption Fee................................................................... None
Exchange Fee..................................................................... None
Maximum Account Fee.............................................................. None
</TABLE>

3
<PAGE>
ANNUAL PORTFOLIO OPERATING EXPENSES (EXPENSES THAT ARE DEDUCTED FROM PORTFOLIO
ASSETS):

<TABLE>
<S> <C>
Management Fees.................................................................. 0.10%
Distribution (12b-1) Fees........................................................ 0.35%*
Shareholder Servicing Fees....................................................... 0.25%
Other Expenses................................................................... 0.05%
-----
Total Annual Fund Operating Expenses............................................. 0.75%*
-----
-----
Expenses Reimbursed to Fund...................................................... 0.15%*
Net Annual Fund Operating Expenses
(expenses actually incurred by the Fund)....................................... 0.60%
</TABLE>

- ------------------
* Under the Rule 12b-1 Plan, the Premium Shares may incur distribution expenses
of up to 0.35% of the average daily net assets attributable to such shares.
For the current fiscal year, the Adviser has contractually agreed to waive up
to 100% of the 12b-1 fees in order to limit the total annual expenses of the
Premium Shares to 0.65%.

EXAMPLE

This example is to help you compare the cost of investing in Premium Shares of
the Portfolio with the cost of investing in other mutual funds.

The Example assumes that:

o you invest $10,000 in the Portfolio for the time periods indicated and that
you redeem all of your Shares at the end of those periods;
o your investment has a 5% return each year; and
o the Portfolio's operating expenses remain the same.

<TABLE>
<CAPTION>
1 Year* 3 Years* 5 Years* 10 Years*
------- ------- -------- ---------
<S> <C> <C> <C> <C>
Although your actual costs may be higher or lower, under these
assumptions, your costs would be:................................ $61 $225 $402 $916
</TABLE>

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

* This example is based on the fees listed in the table and assumes the
reinvestment of dividends. Your costs of investing in the Portfolio for one
year reflect the amount you would pay after the Adviser reimburses the
Portfolio for some or all of the Portfolio's total expenses. Your costs of
investing in the Portfolio for three, five and 10 years reflect the amount
you would pay if the Adviser did not reimburse the Portfolio for some or all
of the Portfolio's total expenses. If the Adviser continues to limit the
Portfolio's total expenses for three, five or 10 years as we are doing for
the first year, your actual costs would be lower than the amounts shown. The
Adviser is currently under no obligation to limit total expenses for any
period beyond the current fiscal year.

INVESTMENT OBJECTIVE AND PRINCIPAL INVESTMENT STRATEGIES

INVESTMENT OBJECTIVE

The Portfolio seeks to provide investors with maximum current income
consistent with the preservation of capital and the maintenance of liquidity. As
with any mutual fund, there is no assurance that the Portfolio will achieve this
goal.

PRINCIPAL INVESTMENT STRATEGIES

The Portfolio seeks to achieve its investment objective by investing ONLY in:

U.S. Treasury obligations maturing in 397 days or less. U.S. Treasury
obligations are securities issued by the United States Treasury, such
as Treasury bills, notes and bonds, that are fully guaranteed as to
payment of principal and interest by the United States Government.

Repurchase agreements fully collateralized by U.S. Treasury
obligations. Repurchase agreements are transactions in which the
Portfolio purchases a security and simultaneously

4
<PAGE>
commits to resell that security to the seller at an agreed-upon price
on an agreed-upon future date, normally one-to-seven days later. The
resale price reflects a market rate of interest that is not related to
the coupon rate or maturity of the purchased security. The Portfolio
enters into repurchase agreements ONLY WITH PRIMARY DEALERS designated
by the Federal Reserve Bank of New York which the Adviser believes
present minimal credit risks in accordance with guidelines established
by the Board of Trustees of the Trust (the "Board"). The Adviser
monitors the credit-worthiness of sellers under the Board's general
supervision. If a seller defaults on its repurchase obligation,
however, the Portfolio might suffer a loss.

The Portfolio may invest in U.S. Treasury obligations or repurchase agreements
without limit. Although the Portfolio intends to be fully invested in these
instruments, it may hold a de minimis amount of cash for a short period prior to
investment or payment of the proceeds
of redemption.

The Portfolio will make no investment unless the Adviser first determines that
it is eligible for purchase and presents minimal credit risks, pursuant to
procedures adopted by the Board. The Portfolio's investments are subject to the
restrictions imposed by Rule 2a-7 under the Investment Company Act of 1940.

As a fundamental policy, the Portfolio WILL NOT invest in structured notes or
instruments commonly known as derivatives; variable, adjustable or floating rate
instruments of any kind; reverse repurchase agreements; securities issued by
agencies or instrumentalities of the U.S. Government; or zero coupon bonds.

ADDITIONAL INVESTMENT STRATEGIES

The Portfolio may purchase U.S. Treasury obligations on a when-issued or forward
commitment basis. The Portfolio may also invest in other investment companies
and may invest up to 10% of its assets in illiquid securities. For temporary or
emergency purposes, the Portfolio may borrow up to 33 1/3% of its total assets.
Each of these investment techniques and their related risks are described in
detail in the Statement of Additional Information.

TEMPORARY DEFENSIVE POSITIONS

Under abnormal market or economic conditions, the Portfolio temporarily may hold
up to 100% of its investable assets in cash. When taking such temporary
positions, the Portfolio may not achieve its investment objective.

MANAGEMENT OF THE PORTFOLIO

BOARD OF TRUSTEES

The business of the Trust and the Portfolio is managed under the direction of
the Board of Trustees. The Board formulates the general policies of the
Portfolio and meets regularly to review the Portfolio's performance, monitor its
investment activities and practices, and review other matters affecting the
Portfolio and the Trust. Additional information regarding the Trustees, as well
as the Trust's executive officers, may be found in the Statement of Additional
Information under the heading "Management of the Portfolio--Trustees and
Officers".

THE ADVISER

Milestone Capital Management, L.P. (the "Adviser") serves as investment adviser
to the Portfolio pursuant to an investment advisory agreement with the Trust.
Subject to the general control of the Board, the Adviser continually manages the
Portfolio, including the purchase, retention and disposition of its securities
and other assets. The Adviser is a limited partnership organized under the laws
of the State of New York on August 1, 1994, and is a registered investment
adviser under the Investment Advisers Act of

5
<PAGE>
1940. The General Partner of the Adviser is Milestone Capital Management Corp.,
a New York corporation.

Janet Tiebout Hanson is President and Chief Executive Officer of the Adviser,
and she holds the controlling interest in Milestone Capital Management, L.P.
With over 18 years of institutional money market management and sales
experience, Ms. Hanson directs the Adviser's major business activities,
including the oversight of investment policies and strategies as Co-Chief
Investment Officer. Prior to forming Milestone Capital in 1994, Ms. Hanson was a
former vice-president of Goldman, Sachs & Co., a leading investment banking
firm. During her fourteen year tenure with Goldman Sachs, Ms. Hanson held
significant sales, marketing, and management positions in both the Fixed Income
and Asset Management Divisions, including co-manager of Money Market Sales in
New York. Ms. Hanson was responsible for developing many of the firm's key
relationships with major institutional investors. In addition, she was
instrumental in raising assets for Goldman Sachs Asset Management's money market
and bond mutual funds. Ms. Hanson holds a BA in government from Wheaton College
in Massachusetts and an MBA in finance from Columbia University.

Marc H. Pfeffer is Co-Chief Investment Officer and Portfolio Manager of the
Adviser. He has 12 years of money market investment experience. As head of the
Adviser's portfolio management and research team, he is primarily responsible
for the day-to-day management of the Treasury Obligations Portfolio. Before
joining the Adviser, Mr. Pfeffer was with Goldman, Sachs & Co. for eight years.
As a vice-president and portfolio manager of Goldman Sachs' Asset Management, he
was responsible for managing six institutional money market portfolios which
grew to over $3 billion in total assets as of November 1994. Mr. Pfeffer holds a
BS in finance from the State University of New York at Buffalo and an MBA in
finance from Fordham University.

For its services, the Adviser may receive a fee at an annual rate equal to 0.10%
of the Portfolio's average daily net assets. The Adviser is responsible for
payment of salaries of its portfolio manager and staff as well as other expenses
necessary to the performance of its duties under the investment advisory
agreement. The Adviser may, at its own expense and from its own resources,
compensate certain persons who provide services in connection with the sale or
expected sale of shares of the Portfolio without reimbursement from the Trust.
The Trust, on behalf of the Portfolio, is responsible for all expenses other
than those expressly borne by the Adviser under the investment advisory
agreement. The expenses borne by the Trust include, but are not limited to, the
investment advisory fee, administration fee, transfer agent fee, and custodian
fee, costs of preparing, printing and delivering to shareholders the Trust's
prospectuses, statements of additional information, and shareholder reports,
legal fees, auditing and tax fees, taxes, blue sky fees, SEC fees, compliance
expenses, insurance expenses, and compensation of certain of the Trust's
Trustees, officers and employees and other personnel performing services for the
Trust. Should the expenses of the Portfolio (including the fees of the Adviser
but excluding interest, taxes, brokerage commissions, litigation and
indemnification expenses and other extraordinary expenses) for any fiscal year
exceed the limits prescribed by any state in which the Portfolio's shares are
qualified for sale, the Adviser will reduce its fee or reimburse expenses by the
amount of such excess.

The Adviser may enter into separate agreements with third parties that provide
various services to those shareholders of the Trust who purchase shares of the
Portfolio. For these services, the Adviser, at its own expense and from its own
resources, may pay a fee which would not increase the amount of any advisory
fees paid to the Adviser by the Portfolio.

HOW TO INVEST IN THE PORTFOLIO

PURCHASING SHARES. You may purchase shares of the Portfolio by wire only. Shares
are sold at the net asset value next determined after receipt of a purchase
order in the manner described below. Purchase orders are accepted on any day on
which the New York Stock Exchange and the Federal Reserve Bank of New York are
open ("Fund Business Day") between the hours of 8:30 a.m. and 7:00 p.m. (Eastern
Time). The Trust does not determine net asset value, and purchase orders are not
accepted, on the days those institutions observe the following holidays: New
Year's Day, Martin Luther King, Jr. Day, Presidents'

6
<PAGE>
Day, Good Friday, Memorial Day, Independence Day, Labor Day, Columbus Day,
Veterans' Day, Thanksgiving and Christmas.

To purchase shares of the Portfolio by Federal Reserve wire, call the Transfer
Agent at (800) 363-7660. If the Transfer Agent receives a firm indication of the
approximate size of the intended investment before 2:30 p.m. (Eastern Time) and
the completed purchase order before 4:30 p.m. (Eastern Time), and the Custodian
receives Federal Funds the same day, purchases of shares of the Portfolio begin
to earn dividends that day. Completed orders received after 4:30 p.m. begin to
earn dividends the next Fund Business Day upon receipt of Federal Funds.

To allow the Adviser to manage the Portfolio most effectively, investors are
encouraged to execute as many trades as possible before 2:30 p.m. To protect the
Portfolio's performance and shareholders, the Adviser discourages frequent
trading in response to short-term market fluctuations. The Portfolio reserves
the right to refuse any investment that, in its sole discretion, would disrupt
the Portfolio's management.

If the Public Securities Association recommends that the government securities
markets close early, the Trust may advance the time at which the Transfer Agent
must receive notification of orders for purposes of determining eligibility for
dividends on that day. Investors who notify the Transfer Agent after the
advanced time become entitled to dividends on the following Fund Business Day.
If the Transfer Agent receives notification of a redemption request after the
advanced time, it ordinarily will wire redemption proceeds on the next Fund
Business Day.

If an investor does not remit Federal Funds, such payment must be converted into
Federal Funds. This usually occurs within one Fund Business Day of receipt of a
bank wire. Prior to receipt of Federal Funds, the investor's monies will not be
invested.

The following procedure will help assure prompt receipt of your Federal Funds
wire:

A. Telephone the Transfer Agent at (800) 363-7660 and provide the following
information:

Your name
Address
Telephone number
Taxpayer ID number
The amount being wired
The identity of the bank wiring funds.

You will then be provided with a Portfolio account number. (Investors with
existing accounts must also notify the Trust before wiring funds.)

B. Instruct your bank to wire the specified amount to the Trust as follows:

The Bank of New York, ABA # 021000018
A/C # 8900276541
FBO Milestone Funds Treasury Obligations Portfolio Operating Account
Ref: Shareholder Name and Account Number

You may open an account when placing an initial order by telephone, provided you
thereafter submit an Account Registration Form by mail. An Account Registration
Form is included with this Prospectus.

The Trust and the Transfer Agent each reserves the right to reject any purchase
order for any reason.

SHARE CERTIFICATES. The Transfer Agent maintains a share account for each
shareholder. The Trust does not issue share certificates.

ACCOUNT STATEMENTS. Monthly account statements are sent to investors to report
transactions such as purchases and redemptions as well as dividends paid during
the month.

MINIMUM INVESTMENT REQUIRED. The minimum initial investment in Premium Shares of
the Portfolio is $100,000. There is no minimum subsequent investment. The Trust
reserves the right to waive the minimum investment requirement.

7
<PAGE>
HOW TO REDEEM SHARES OF THE PORTFOLIO

REDEEMING SHARES. You may redeem your shares without charge at the net asset
value next determined after the Portfolio receives the redemption request.
Redemption requests must be received in proper form and can be made by telephone
request or wire request on any Fund Business Day between the hours of 8:30 a.m.
and 7:00 p.m. (Eastern Time).

BY TELEPHONE. You may redeem your shares by telephoning the Transfer Agent at
(800) 363-7660. You must provide the Transfer Agent with the your account
number, the exact name in which the shares are registered and some additional
form of identification such as a password. A redemption by telephone may be made
only if the telephone redemption authorization has been completed on the Account
Registration Form included with this Prospectus. In an effort to prevent
unauthorized or fraudulent redemption requests by telephone, the Transfer Agent
will follow reasonable procedures to confirm that such instructions are genuine.
If such procedures are followed, neither the Transfer Agent nor the Trust will
be liable for any losses due to unauthorized or fraudulent redemption requests.

In times of drastic economic or market changes, it may be difficult to make
redemptions by telephone. If a shareholder cannot reach the Transfer Agent by
telephone, redemption requests may be mailed or hand-delivered to the Transfer
Agent.

WRITTEN REQUESTS. Redemption requests may be made by writing to The Milestone
Funds, c/o Unified Fund Services, Inc., 431 North Pennsylvania Street,
Indianapolis, Indiana 46204-1806. Written requests must be in proper form. You
will need to provide the exact name in which the shares are registered, the
Portfolio name, account number, and the share or dollar amount requested.

A signature guarantee is required for any written redemption request and for any
instruction to change the shareholder's record name or address, a designated
bank account, the dividend election, or the telephone redemption or other option
elected on an account. Signature guarantees may be provided by any eligible
institution acceptable to the Transfer Agent, including a bank, a broker, a
dealer, national securities exchange, a credit union, or a savings association
which is authorized to guarantee signatures. Other procedures may be implemented
from time to time.

The Transfer Agent may request additional documentation to establish that a
redemption request has been authorized properly. A redemption request will not
be considered to have been received in proper form until such additional
documentation has been submitted to the Transfer Agent.

<TABLE>
<CAPTION>
FIRM INDICATION OF REDEMPTION COMPLETED REDEMPTION
REQUEST AND APPROXIMATE SIZE OF REDEMPTION PROCEEDS
REDEMPTION RECEIVED ORDER RECEIVED ORDINARILY DIVIDENDS
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
By 2:30 p.m. Eastern Time By 4:30 p.m. Wired same Not earned on
Eastern Time Business Day the day request received

After 2:30 p.m. Eastern Time After Wired next Earned on day
4:30 p.m. Business Day request received
Eastern Time
</TABLE>

Due to the cost to the Trust of maintaining smaller accounts, the Trust reserves
the right to redeem, upon 60 days written notice, all shares in an account with
an aggregate net asset value of less than $10,000 unless an investment is made
to restore the minimum value.

DIVIDENDS, DISTRIBUTIONS AND TAX MATTERS

DIVIDENDS. Dividends are declared daily and paid monthly, following the close of
the last Fund Business Day of the month. Shares purchased by wire before 4:30
p.m. (Eastern Time) begin earning dividends that day. Dividends are
automatically reinvested on payment dates in additional shares of the Portfolio
unless cash payments are requested by contacting the Trust. The election to
reinvest dividends and distributions or receive them in cash may be changed at
any time upon written notice to the Transfer Agent. All dividends and other
distributions are treated in the same manner for federal income tax purposes
whether received in cash or reinvested in shares of the Portfolio. If no
election is made, all dividends and distributions will be reinvested.

8
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CAPITAL GAINS DISTRIBUTIONS. Net realized short-term capital gains, if any, will
be distributed whenever the Trustees determine that such distributions would be
in the best interest of the shareholders, which will be at least once per year.
The Trust does not anticipate that the Portfolio will realize any long-term
capital gains, but should they occur, they also will be distributed at least
once every 12 months.

DISTRIBUTIONS. Dividends paid by the Portfolio out of its net investment income
(including realized net short-term capital gains) are taxable to the
shareholders of the Portfolio as ordinary income. Distributions of net long-term
capital gains, if any, realized by the Portfolio are taxable to the shareholders
as long-term capital gains, regardless of the length of time the shareholder may
have held shares in the Portfolio at the time of distribution. Distributions are
subject to federal income tax when they are paid, whether received in cash or
reinvested in shares of the Portfolio. Distributions declared in December and
paid in January, however, are taxable as if paid on December 31st.

The Portfolio is required by federal law to withhold 31% of reportable payments
(which may include dividends and capital gain distributions) paid to a
non-corporate shareholder unless that shareholder certifies in writing that the
social security or other taxpayer identification number provided is correct and
that the shareholder is not subject to backup withholding for prior
underreporting to the Internal Revenue Service.

Some states and localities do not tax dividends paid on shares of the Portfolio
that are attributable to interest from U.S. Treasury obligations (but not
necessarily interest earned on repurchase agreements).

Reports containing appropriate information with respect to the federal income
tax status of dividends, distributions and redemptions, including the
proportions attributable to capital gains and interest on U.S. Treasury
obligations, paid during the year by the Portfolio will be mailed to
shareholders shortly after the close of each calendar year.

The foregoing is only a summary of some of the tax considerations generally
affecting the Portfolio and its shareholders. The Statement of Additional
Information contains a more detailed discussion. Because other federal, state or
local tax considerations may apply, investors are urged to consult their tax
advisors.

OTHER INFORMATION

DETERMINATION OF NET ASSET VALUE. The net asset value per share of the Portfolio
is determined at 4:30 p.m. (Eastern Time) on each Fund Business Day. The net
asset value is determined by subtracting total liabilities from total assets and
dividing the remainder by the number of shares outstanding. The Portfolio's
securities are valued at their amortized cost which does not take into account
unrealized gains or losses on securities. This method involves initially valuing
an instrument at its cost and thereafter assuming a constant amortization to
maturity of any premium paid or accreting discount received. The amortized cost
method minimizes changes in the market value of the securities held by the
Portfolio and helps it maintain a stable price of $1.00 per share.

DISTRIBUTION PLAN. The Trust has adopted a distribution plan for Premium Shares
of the Portfolio. Pursuant to this Plan, the Portfolio may incur distribution
expenses related to the sale of Premium Shares of up to 0.35% per year of the
average daily net assets of the Premium Shares.

SHAREHOLDER SERVICES. The Trust has adopted a shareholder service plan under
which it pays the Adviser 0.25% of the average daily net assets of the Premium
Shares such that the Trust may obtain the services of the Adviser and other
qualified financial institutions to act as shareholder servicing agents for
their customers. Under this Plan, the Trust has authorized the Adviser to enter
into agreements pursuant to which the shareholder servicing agent performs
certain shareholder services. For these services, the Adviser pays the
shareholder servicing agent a fee based upon the average daily net assets of the
Premium Shares owned by investors for which the shareholder servicing agent
maintains a servicing relationship. In addition to Premium Shares, the Portfolio
also offers Institutional Shares, Investor Shares, Financial Shares and Service
Shares by separate prospectus which are subject to different expenses that
affect their performance. For further information about these other classes of
shares, please call (800) 941-MILE (6453).

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<PAGE>
YEAR 2000 COMPLIANCE. As with any mutual fund, the Portfolio or its service
providers could be disrupted by problems in their computer systems related to
the Year 2000. At present, the Portfolio's service providers have provided the
Portfolio with documentation that assures they are Year 2000 compliant in all
mission critical functions. Although the Portfolio and the Adviser have taken
steps to closely evaluate and monitor the progress and preparedness of all the
Portfolio's service providers, there can be no guarantee that a Year 2000
compliance problem will not arise. The Adviser has formulated a detailed Year
2000 compliance plan, including contingencies in the event problems do occur.

No person has been authorized to give any information or to make any
representations other than those contained in this Prospectus, the Statement of
Additional Information and the Portfolio's official sales literature in
connection with the offering of the Portfolio's shares, and if given or made,
such information or representations must not be relied upon as having been
authorized by the Trust. This Prospectus does not constitute an offer in any
state in which, or to any person to whom, such offer may not lawfully be made.

FINANCIAL HIGHLIGHTS

The financial highlights table is intended to help you understand the
Portfolio's financial performance since the inception of the Share Class on
May 20, 1997. The total returns in the table represent the rate that an investor
would have earned (or lost) on an investment in the Portfolio (assuming
reinvestment of all dividends and distributions). This information has been
audited by Deloitte & Touche, LLP, independent certified public accountants,
whose report, along with the Portfolio's financial statements, are included in
the Statement of Additional Information, which is available upon request.

<TABLE>
<CAPTION>
FOR THE PERIOD
FOR THE YEAR MAY 20, 1997*
ENDED THROUGH
NOVEMBER 30, 1998 NOVEMBER 30, 1997
----------------- -----------------
<S> <C> <C>
Beginning net asset value per share................................. $ 1.00 $ 1.00
----------- -----------
Net investment income............................................... 0.049 0.027
Dividends from net investment income................................ (0.049) (0.027)
----------- -----------
Ending net asset value per share.................................... $ 1.00 $ 1.00
----------- -----------
----------- -----------
Total return........................................................ 5.03% 5.06%(a)
Net assets at the end of period (000's omitted)..................... $ 85,937 $ 84,239
Ratios to average net assets:
Expenses.......................................................... 0.60% 0.60%(a)
Net investment income............................................. 4.92% 5.01%(a)
</TABLE>

- ------------------
(a) Annualized

* Inception of the Share Class

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<PAGE>

<TABLE>
<CAPTION>
THE
MILESTONE
FUNDS
<S> <C>
Adviser Administrator / Custodian
------------------------------------------------ ------------------------------------------------
Milestone Capital Management, L.P. The Bank of New York
One Executive Boulevard 90 Washington Street
Yonkers, NY 10701 New York, NY 10286

Legal Counsel Independent Auditors
------------------------------------------------ ------------------------------------------------
Kramer Levin Naftalis & Frankel LLP Deloitte & Touche, LLP
919 Third Avenue Two World Financial Center
New York, NY 10022 New York, NY 10281-1434

Underwriter / Transfer Agent
- ------------------------------------------------------------------------------------------------------------------
Unified Management Corporation / Unified Fund Services, Inc.
431 North Pennsylvania Street
Indianapolis, Indiana 46204-1806
</TABLE>

STATEMENT OF ADDITIONAL INFORMATION. The Statement of Additional Information
provides a more complete discussion about the Portfolio and is incorporated by
reference into this prospectus, which means that it is considered a part of this
prospectus.

ANNUAL AND SEMI-ANNUAL REPORTS. The annual and semi-annual reports to
shareholders contain additional information about the Portfolio's investments.

TO REVIEW OR OBTAIN THIS INFORMATION. The Statement of Additional Information
and annual and semi-annual reports are available without charge upon your
request by writing The Milestone Funds, One Executive Boulevard, Yonkers, New
York 10701, or by calling (800) 941-MILE (6453). This information may be
reviewed at the Public Reference Room of the Securities and Exchange Commission
or by visiting the SEC's World Wide Website at HTTP://WWW.SEC.GOV. In addition,
this information may be obtained for a fee by writing or calling the Public
Reference Room of the Securities and Exchange Commission, Washington, D.C.
20549-6009, telephone (800) SEC-0330.

INVESTMENT COMPANY ACT FILE NO. 811-8620

The Milestone Funds
800-941-MILE

<PAGE>

THE
MILESTONE
FUNDS

THE MILESTONE FUNDS
TREASURY OBLIGATIONS PORTFOLIO

INVESTMENT ADVISER
Milestone Capital Management, L.P.

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

PRIMARY DEALER
Bear, Stearns & Co. Inc.

PROSPECTUS
MARCH 30, 1999
INSTITUTIONAL SHARES

<PAGE>
THE MILESTONE FUNDS
TREASURY OBLIGATIONS PORTFOLIO
INSTITUTIONAL SHARES
ONE EXECUTIVE BOULEVARD, YONKERS, NEW YORK 10701
(800) 941-MILE

<TABLE>
<CAPTION>
TABLE OF CONTENTS

PAGE PAGE
---- ----
<S> <C> <C> <C>
Risk/Return Summary............................. 2 How to Redeem Shares of the Portfolio........... 8
Investment Objective and Principal Investment Dividends, Distributions and
Strategies.................................... 4 Tax Matters................................... 9
Management of the Portfolio..................... 6 Other Information............................... 10
How to Invest in the Portfolio.................. 7 Financial Highlights............................ 11
</TABLE>

RISK/RETURN SUMMARY

INVESTMENT OBJECTIVE

INVESTMENT STRATEGIES

As a fundamental policy, the Portfolio invests ONLY in the following money
market instruments:

o short-term obligations of the U.S. Treasury; and

o repurchase agreements fully collateralized by obligations of the U.S.
Treasury.

The Portfolio will maintain an average maturity, computed on a dollar-weighted
basis, of 90 days or less.

PRINCIPAL RISKS

2
<PAGE>
BAR CHART AND PERFORMANCE TABLE

The following chart demonstrates the risks of investing the Portfolio by showing
changes in the Portfolio's performance from December 31, 1996 through
December 31, 1998. Past performance is not an indication of future performance.

[BAR CHART]

Annual Returns

12/31/96 12/31/97 12/31/98

Institutional Shares 5.34% 5.47% 5.38%

During this period, the best performance for a quarter was 1.38% (for the
quarter ended December 31, 1997). The worst performance was 1.23% (for the
quarter ended December 31, 1998).

The following table demonstrates these risks by showing how the Portfolio's
average annual returns compare with those of the Lipper U.S. Taxable Money
Market Funds Index.

<TABLE>
<CAPTION>
SINCE INCEPTION
AVERAGE ANNUAL RETURNS AS OF 12/31/98 ONE YEAR OF THE SHARE CLASS
------------------------------------- -------- ------------------
<S> <C> <C>
Treasury Obligations Portfolio 5.38% 5.47%
Lipper U.S. Taxable Money Market Funds Index 4.95% N/A
</TABLE>

The returns listed above are quoted net of all fees. The inception date of the
Institutional Share Class was 6/20/95. The inception date of the Fund was
12/30/94.

The Portfolio's seven-day current yield on 12/31/98 was 4.77%. For the
Portfolio's current yield, please call us at 800-941-MILE (6453).

FEES AND EXPENSES OF THE FUND

This table describes the fees and expenses you may pay if you buy and hold
Institutional Shares of the Portfolio.

SHAREHOLDER FEES (fees paid directly from your investment):

3
<PAGE>
ANNUAL PORTFOLIO OPERATING EXPENSES (EXPENSES THAT ARE DEDUCTED FROM PORTFOLIO
ASSETS):

<TABLE>
<S> <C>
Management Fees.................................................................. 0.10%
Distribution (12b-1) Fees........................................................ None
Shareholder Servicing Fees....................................................... 0.10%*
Other Expenses................................................................... 0.05%
-----
Total Annual Fund Operating Expenses............................................. 0.25%*
-----
-----
Expenses Reimbursed to Fund...................................................... 0.05%*
Net Annual Fund Operating Expenses
(expenses actually incurred by the Fund)....................................... 0.20%
</TABLE>

- ------------------
* Under the Shareholder Servicing Plan, the Institutional Shares may incur
expenses of up to .10% of the average daily net assets attributable to such
shares. For the current fiscal year, the Adviser has contractually agreed to
waive up to 100% of the shareholder servicing fees in order to limit the
total annual expenses of the Institutional Shares to 0.20%.

EXAMPLE

This example is to help you compare the cost of investing in Institutional
Shares of the Portfolio with the cost of investing in other mutual funds.

The Example assumes that:

o you invest $10,000 in the Portfolio for the time periods indicated and that
you redeem all of your Shares at the end of those periods;

o your investment has a 5% return each year; and

o the Portfolio's operating expenses remain the same.

<TABLE>
<CAPTION>
1 Year* 3 Years* 5 Years* 10 Years*
------- -------- -------- ---------
<S> <C> <C> <C> <C>
Although your actual costs may be higher or lower, under these
assumptions, your costs would be:................................ $20 $75 $136 $313
</TABLE>

- ------------------
* This example is based on the fees listed in the table and assumes the
reinvestment of dividends. Your costs of investing in the Portfolio for one
year reflect the amount you would pay after the Adviser reimburses the
Portfolio for some or all of the Portfolio's total expenses. Your costs of
investing in the Portfolio for three, five and 10 years reflect the amount
you would pay if the Adviser did not reimburse the Portfolio for some or all
of the Portfolio's total expenses. If the Adviser continues to limit the
Portfolio's total expenses for three, five or 10 years as we are doing for
the first year, your actual costs for those periods would be lower than the
amounts shown. The Adviser is currently under no obligation to limit total
expenses for any period beyond the current fiscal year.

INVESTMENT OBJECTIVE AND PRINCIPAL INVESTMENT STRATEGIES

INVESTMENT OBJECTIVE

The Portfolio seeks to provide investors with maximum current income consistent
with the preservation of capital and the maintenance of liquidity. As with any
mutual fund, there is no assurance that the Portfolio will achieve this goal.

4
<PAGE>
PRINCIPAL INVESTMENT STRATEGIES

The Portfolio seeks to achieve its investment objective by investing ONLY in:

Repurchase agreements fully collateralized by U.S. Treasury
obligations. Repurchase agreements are transactions in which the
Portfolio purchases a security and simultaneously commits to resell
that security to the seller at an agreed-upon price on an agreed-upon
future date, normally one-to-seven days later. The resale price
reflects a market rate of interest that is not related to the coupon
rate or maturity of the purchased security. The Portfolio enters into
repurchase agreements ONLY WITH PRIMARY DEALERS designated by the
Federal Reserve Bank of New York which the Adviser believes present
minimal credit risks in accordance with guidelines established by the
Board of Trustees of the Trust (the "Board"). The Adviser monitors the
credit-worthiness of sellers under the Board's general supervision. If
a seller defaults on its repurchase obligation, however, the Portfolio
might suffer a loss.

As a Fundamental Policy, the Portfolio WILL NOT invest in structured notes or
instruments commonly known as derivatives; variable, adjustable or floating rate
instruments of any kind; reverse repurchase agreements; securities issued by
agencies or instrumentalities of the U.S. Government; or zero coupon bonds.

ADDITIONAL INVESTMENT STRATEGIES

TEMPORARY DEFENSIVE POSITIONS

5
<PAGE>
MANAGEMENT OF THE PORTFOLIO

BOARD OF TRUSTEES

The business of The Milestone Funds (the "Trust") and the Portfolio is managed
under the direction of the Board of Trustees. The Board formulates the general
policies of the Portfolio and meets regularly to review the Portfolio's
performance, monitor its investment activities and practices, and review other
matters affecting the Portfolio and the Trust. Additional information regarding
the Trustees, as well as the Trust's executive officers, may be found in the
Statement of Additional Information under the heading "Management of the
Portfolio--Trustees and Officers".

THE ADVISER

6
<PAGE>
agent fee, and custodian fee, costs of preparing, printing and delivering to
shareholders the Trust's prospectuses, statements of additional information, and
shareholder reports, legal fees, auditing and tax fees, taxes, blue sky fees,
SEC fees, compliance expenses, insurance expenses, and compensation of certain
of the Trust's Trustees, officers and employees and other personnel performing
services for the Trust. Should the expenses of the Portfolio (including the fees
of the Adviser but excluding interest, taxes, brokerage commissions, litigation
and indemnification expenses and other extraordinary expenses) for any fiscal
year exceed the limits prescribed by any state in which the Portfolio's shares
are qualified for sale, the Adviser will reduce its fee or reimburse expenses by
the amount of such excess.

HOW TO INVEST IN THE PORTFOLIO

7
<PAGE>
The following procedure will help assure prompt receipt of your Federal Funds
wire:

A. Telephone the Transfer Agent, at (800) 363-7660 and provide the following
information: