IPS FUNDS, 485APOS, 1998-05-07

IPS FUNDS
485APOS, 1998-05-07

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File Nos. 33-83132 and 811-8718

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. 5 /X/

and/or

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

Amendment No. 6 /X/
(Check appropriate box or boxes)

IPS FUNDS

625 S. Gay Street, Suite 630, Knoxville, Tennessee 37902
--------------------------------------------------------
(Address of Principal Executive Offices)

Registrant's Telephone Number, including Area Code: (423) 524-1676
--------------

Gregory D'Amico, 625 S. Gay Street, Suite 630, Knoxville, TN 7902
------------------------------------------------------------------
(Name and Address of Agent for Service)

With copy to: Reinaldo Pascual, Esq., Kilpatrick Stockton LLP,
1100 Peachtree Street, Suite 2800, Atlanta, Georgia 30309

Release Date: _______ ____, 1998

It is proposed that this filing will become effective:

_____________ immediately upon filing pursuant to paragraph (b)

_____________ on (date) pursuant to paragraph (b)

_____________ 60 days after filing pursuant to paragraph (a)

_____________ on (date) pursuant to paragraph (a) of Rule 485

x 75 days after filing pursuant to paragraph (a)(2)
_____________

_____________ on (date) pursuant to paragraph (a)(2) of Rule 485

TITLE OF SECURITIES BEING REGISTERED: Common Stock, par value
$0.0001 per share

The Registrant hereby registers an indefinite number of
securities under Rule 24f-2 of the Investment Company Act of
1940.

<PAGE>
IPS FUNDS

A FAMILY OF NO-LOAD FUNDS

PROSPECTUS

_______ ___, 1998

625 S. GAY STREET, SUITE 630 KNOXVILLE, TN 37902

For questions about investing in the Funds: 1-800-232-9142
For Shareholder Services: 1-800-232-9142

The IPS Funds (the "Trust") is an open-end management investment
company presently consisting of three funds representing separate
portfolios of investments. Two of the funds comprising the Trust
which are described in detail in this Prospectus, (the "Funds")
are as follows:

IPS MILLENNIUM FUND (the "Millennium Fund")
IPS NEW FRONTIER FUND (the "New Frontier Fund")

The Millennium Fund is a diversified series of the Trust, and the
New Frontier Fund is a non-diversified series. Each Fund's
investment objective is to achieve the growth of capital.
In addition, the Millennium Fund has a second investment
objective of growth of income. Each Fund seeks to accomplish its
objective by investing primarily in common stocks with constant
supervision of these stocks. Each Fund seeks to accomplish its
objective using a different investment strategy. Each Fund is
designed for long term investors and should not be considered by
investors with short term time horizons.

Each Fund is "no-load", which means there are no sales charges or
commissions. In addition, there are no 12b-1 fees, distribution
expenses or deferred sales charges which are borne by the
shareholders. There is a $1,000 minimum investment requirement
to open an account.

Shares of the Funds are not deposits or obligations of any bank,
are not endorsed or guaranteed by any bank, and are not insured
by the Federal Deposit Insurance Corporation (FDIC), the Federal
Reserve Board or any other government agency, entity, or person.
The purchase of shares of the Funds involves investment risks,
including the possible loss of principal.

This Prospectus provides information you should know before
investing in either Fund. It should be read and retained for
future reference. A Statement of Additional Information for the
Funds dated __________ ___, 1998, containing additional
information about the Funds, has been filed with the Securities
and Exchange Commission, and is incorporated by reference into
this Prospectus. The Statement of Additional Information may be
obtained without charge by contacting the Secretary of the Trust
at the above address.

The third Fund comprising the Trust is the Dynamic Style Rotation(SM)
(the "DSR(SM) Fund"), a diversified mutual fund which is described in
a separate Prospectus that may be obtained by contacting the DSR(SM)
Fund at 1-800-232-9142.

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

TABLE OF CONTENTS

SUMMARY OF EXPENSES . . . . . . . . . . . . 1

FINANCIAL HIGHLIGHTS . . . . . . . . . . . 2

THE TRUST . . . . . . . . . . . . . . . . . 3

INVESTMENT OBJECTIVES AND POLICIES . . . . 3

The Millennium Fund . . . . . . . . . . . . 4
The New Frontier Fund . . . . . . . . . . . 5
Fundamental Policies . . . . . . . . . . . 6
Fund Turnover . . . . . . . . . . . . . . . 7

HOW TO PURCHASE SHARES OF THE FUNDS . . . . 7

By Mail . . . . . . . . . . . . . . . . . . 7
Additional and Pre-authorized Purchases . . 7
Payment for Shares . . . . . . . . . . . . 7
Telephone Purchases by Securities Firms . . 8
Exchange Privilege . . . . . . . . . . . . 8
Automatic Monthly Exchange . . . . . . . . 9

DIVIDENDS AND DISTRIBUTIONS . . . . . . . . 9

TAXES . . . . . . . . . . . . . . . . . . . 9

OPERATIONS OF THE FUNDS . . . . . . . . . . 10

Board of Trustees . . . . . . . . . . . . . 10
The Investment Advisor . . . . . . . . . . 10
Advisor Compensation . . . . . . . . . . . 10
Shareholder Rights . . . . . . . . . . . . 11
Shareholder Inquiries . . . . . . . . . . . 11
Fund Transactions . . . . . . . . . . . . . 11
Transfer Agent . . . . . . . . . . . . . . 12
How The Fund Measures Its Performance . . . 12
Net Asset Value . . . . . . . . . . . . . . 12
How to Redeem or Sell Shares of the Funds . 13
Systematic Withdrawals . . . . . . . . . . 13
Retirement Plans . . . . . . . . . . . . . 14

<PAGE>
SUMMARY OF EXPENSES

This table is designed to help you understand the cost an
investor in each Fund may incur as a shareholder. The expense
information is based upon anticipated operating expenses for each
Fund for the current fiscal year; the actual expenses may be more
or less than those shown.

Shareholder Transaction Expenses
<TABLE>
<CAPTION>
Millennium Fund New Frontier Fund
--------------- -----------------
<S> <C> <C>
Maximum sales load on purchases................... None None
Maximum sales load on reinvested dividends......... None None
Deferred sales load ............................... None None
Redemption fees ................................... None <F1> None <F1>
Exchange fees ..................................... None None

Annual Fund Operating Expenses (as a percentage of average net assets)

Millennium Fund New Frontier Fund
--------------- -----------------
Management fees ................................... 1.40% <F2> 1.40%<F2>
12b-1 expenses ................................... None None
Other expenses ................................... None None
Total Fund operating expenses ..................... 1.40% <F2> 1.40%

<CAPTION>
Example 1 year 3 years 5 years 10 years
------ ------- ------- --------
<S> <C> <C> <C> <C>
You would pay the following total
expenses on a $1,000 investment, assuming $14 $44 77 168
a 5% annual return <F3> and redemption
at the end of the period.
______________________
<FN>
<F1> The Fund's Custodian charges a $10 fee for each wire
redemption.
<F2> The total operating expenses for the Fund are equal to the
management fees paid to the Advisor because the Advisor pays all
of the Fund operating expenses.
<F3> Use of this assumed 5% return is required by the Securities
and Exchange Commission; it is not an illustration of past or
future investment results. The purpose of this table is to
assist the investor in understanding the various costs and
expenses that an investor in the Fund will bear, directly or
indirectly. This example should not be considered a
representation of past or future expenses.
</FN>
</TABLE>

Shareholders should be aware that the Funds are part of a no-load
fund family and, accordingly, shareholders of the Funds do not
pay any sales charge or commission upon purchase or redemption of
shares. In addition, neither Funds has a 12b-1 Plan. Unlike most
other mutual funds, the Fund does not pay directly for transfer
agency, pricing, custodial, auditing or legal services, nor does
it pay directly any general administrative or other operating
expenses for any of the Funds. Instead, the Advisor for each
Fund pays all of the expenses of the Fund except brokerage,
taxes, interest and extraordinary expenses.

-1-<PAGE>
FINANCIAL HIGHLIGHTS

IPS Millennium Fund. The Millennium Fund began operations
January 3, 1995. The following table sets forth financial
information regarding the Millennium Fund and is included in the
Millennium Fund's annual report to shareholders. The Millennium
Fund's annual report contains further information, including
financial statements audited by Cherry Bakaert and Holland,
L.L.P., regarding the performance of the Millennium Fund. The
annual report is available without charge by contacting the
Millennium Fund.

IPS MILLENNIUM FUND

Financial Highlights, Selected Per Share Data and Ratios

FINANCIAL HIGHLIGHTS:
For the 11 Months
For the Years Ended Ended
----------------------------------- -----------------
Nov. 30, 1997 Nov. 30, 1996 Nov. 30, 1995
PER SHARE DATA: PER SHARE DATA PER SHARE DATA
-------------- -------------- --------------
<S> <C> <C> <C>
NET ASSET VALUE:
Beginning of year $ 18.86 $ 14.996 $ 12.000

INCOME FROM INVESTMENT OPERATIONS
Net Investment income (0.046) 0.021 0.121
Net realized and unrealized gain
(loss) on investments 3.576 3.959 2.982
----------- ---------- ----------
TOTAL INCOME (LOSS) FROM INVESTMENT
OPERATIONS 3.53 3.980 3.103

LESS DISTRIBUTIONS:
Dividends from net investment income 0.00 (0.035) 0.107
Distributions from capital gains (0.80) (0.081) 0.000
----------- ---------- ----------
Total distributions $ (0.80) $ (0.116) $ (0.107)
Net Increase in net asset value 3.450 3.864 2.996
NET ASSET VALUE:
End of year $ 22.310 $ 18.860 $ 14.996
=========== ========== ==========
Total return (annualized) 18.746% 26.751% 28.831%
RATIOS:
Net assets, end of period (thousands) $ 11,684.215 $5,613.515 $1,625.600
Ratio of expenses to average net assets 1.40% 1.40% 1.40%
Ratio of net income to average net assets 0.23% 0.76% 1.00%
Portfolio turnover rate 33.17% 55.17% 26.7%
Average commissions rate paid (per share) $ 0.0405 $ 0.05705 $ 0.10056

<FN>
<F1> The Millennium Fund began operations on January 3, 1995.
Financial Highlights for the period ended November 30, 1995 have
been annualized.
</FN>

-2-<PAGE>
The New Frontier Fund. As a newly organized series of the Fund,
the New Frontier Fund has no financial results to report.

THE TRUST

IPS Funds (the "Trust") was organized as an Ohio business trust
on August 10, 1994, and commenced operations on January 3, 1995.
The Trust currently offers three Funds representing separate
portfolios of investments.

Two of the series of the IPS Funds, both of which are described
in detail in this Prospectus (the "Funds"), are the IPS
Millennium Fund, a diversified fund (the "Millennium Fund") and
the IPS New Frontier Fund, a non-diversified fund (the "New
Frontier Fund"). IPS Advisory, Inc. (the "Advisor") serves as
investment advisor to the Funds. Each of the Funds is managed
separately and has its own investment objectives and policies
designed to meet its investment goals. Investments in the Funds
involve risk, and there can be no assurance that either Fund will
achieve its investment objectives.

The third Fund comprising the Trust is the Dynamic Style
Rotation(SM) Fund (the "DSR(SM) Fund") a non-diversified portfolio which
is described in a separate Prospectus that may be obtained by
contacting the DSR(SM) Fund at 1-800-232-9142.

INVESTMENT OBJECTIVES AND POLICIES

The investment objective of each of the Funds is to achieve
long-term growth of capital from buying common stocks of U.S.
corporations the Advisor believes can grow at a higher rate
than the overall economy, and that are undervalued based on
future prospects. In addition, the Millennium Fund will also
attempt to balance the volatility inherent in high growth rate
sectors by buying the common stocks of companies that have
relatively high, well-protected, and increasing dividend yields.

In managing both Funds, the Advisor will attempt to predict
broadly where civilization is heading to identify the major
investment sectors that will benefit from these changes and
invest in the companies it believes have the best chance of using
these changes to add long-term value for shareholders. It will
attempt to identify the companies with the most consistent
growth, and with characteristics that make them more resistant
than most companies to economic contractions. The Advisor will
not attempt to time the stock market, and expects to remain fully
invested during all normal times, including normal bear markets
and recessions.

The Advisor uses Economic Value Added (EVA) as a measure of
companies' operating and capital efficiency. EVA, developed by Stern,
Steward & Co., adjusts a company's financial statements for distortions,
caused by GAAP accounting. Without EVA, many widely-used performance
metrics (e.g., return on equity, return on capital, P/B and P/E ratios)
may be unreliable. EVA measures whether management is earning a
return on invested capital that is higher than their weighted cost
of capital. It imposes on management an obligation to earn an adequate
return on all the capital entrusted to it by shareholders and debtholders,

-3-<PAGE>
something that it is not always possible to know using
traditional GAAP accounting methodology.

The Millennium Fund is diversified, which generally means that as
to 75% of its assets, the Millennium Fund may not invest more
than 5% of its assets at the time of investment in any one issuer
nor own more than 10% of the outstanding voting securities of any
one issuer.

The New Frontier Fund is non-diversified, which means that it is
not subject to the restrictions to which the Millennium Fund is
subject as a diversified fund. However, because the New Frontier
Fund intends to conduct its operations so as to qualify as a
"regulated investment company" for purposes of the Internal
Revenue Code of 1986, as amended (the "Code"), the New Frontier
Fund will be subject to the diversification restrictions imposed
by the Code.

The Code's limitations generally mean that, at the end of each
quarter, (i) as to 50% its assets, a fund may not have more than
5% of its assets invested in the securities of any one issuer,
and (ii) as to the other 50% of its assets, a fund may not have
more than 25% of its assets invested in the securities of any one
issuer. In general, these restrictions require the New Frontier
Fund, when fully invested, to own a minimum of 12 common stocks,
10 of which may each represent no more than 5% of the New
Frontier Fund's assets and 2 of which may each represent no more
than 25% of the New Frontier Fund's assets. For more information
regarding these diversification restrictions, see "Taxes" below.

Although the Funds' investment objectives are the same, the Funds
will seek to achieve their objectives using different investment
strategies as described below.

THE MILLENNIUM FUND

The investment objective of the Millennium Fund is to achieve
long-term growth of capital from buying common stocks of U.S.
corporations the Advisor believes can grow at a higher rate than
the overall economy, and that are undervalued based on future
prospects, and growth of income.

The Fund is managed as a whole and does not seek to fulfill all
of its objectives in any one security. It is anticipated that
under normal market conditions common stocks (including dividend
paying common stocks) will constitute over 65% of the Fund's
investment portfolio, with the belief they will participate in
the long term growth of American business. However, it is also
anticipated that the Fund will hold less than 35% of its assets
in money market instruments, U.S. government securities,
repurchase agreements collateralized by U.S. Government
securities, and shares of other investment companies for
liquidity purposes or when common stocks are viewed as
overvalued. In addition, for temporary defensive purposes under
abnormal market or economic conditions, the Fund may hold up to
100% of its assets in such securities. If the Fund acquires
securities of another investment company, the shareholders of the
Fund generally will be subject to duplicate management fees. The
Fund does not attempt to time the market. The Fund will try to
minimize fluctuations in value through diversification among
companies and industries, and constant monitoring.

-4-<PAGE>
There are no restrictions as to company size, although the Advisor
normally will avoid very small companies (micro-caps) under
approximately $250 million in market capitalization (market value).
Thus, the Fund may own everything from small to very large companies,
with a median company size somewhere under $10 billion most of the
time. The Advisor considers companies under $1 billion in market
cap to be small cap, and over $10 billion in market value to be
large cap. In most cases the Fund will hold the common stock of
the market leading companies in their industry, although in some
sectors even the market leader may be quite small. When possible
and in the best interest of the Fund, the Millennium Fund will
attempt to minimize taxable gains distributions to its investors
by temporarily selling loss positions to balance capital gains
during the year. No assurance can be given, however, that gains
will be minimized and the Fund will make investment decisions
independent of tax considerations.

The Fund does not buy securities on margin, sell securities
short, use commodities or futures contracts, or use derivative
securities of any kind. See "Investment Limitations" in the
Statement of Additional Information.

THE NEW FRONTIER FUND

The investment objective of the New Frontier Fund is long-term
growth of capital from buying common stocks of U.S. corporations
the Advisor believes can grow at a higher rate than the overall
economy, and that are undervalued based on future prospects. The
Fund is managed as a whole and does not seek to fulfill all of
its objectives in any one security. However, the Fund may seek
to fulfill all of its objectives by investing in a small number
of select common stocks (e.g., 20 or fewer) which the Advisor
determines are most likely to enable the Fund to meet its
objectives at any given time.

The Advisor anticipates that the New Frontier Fund will invest a
significant portion of its assets in equity securities of issuers
that derive a substantial portion of their income from products
and services in technology related industries. Although the Fund
will not concentrate its investments in any one industry, it is
contemplated that substantial investments will be made in issuers
engaged in such technology related industries as
telecommunications equipment and services, computer hardware,
semiconductors, networking, internet and on-line service and
content, office automation, information storage and service,
electronic commerce and software design, consulting and service.
Common stocks of companies in many technology related industries
tend to be subject to greater volatility than common stocks in
other areas of the economy. For more information, see
"Investment Risks" below.

It is anticipated that under normal market conditions common
stocks (including dividend paying common stocks) will constitute
over 50% of the New Frontier Fund's investment portfolio,
with the belief they will participate in the long term growth of
American business. It is also anticipated that any assets not invested
in common stocks will be invested in money market instruments, U.S.
government securities, repurchase agreements collateralized by
U.S. Government securities, and shares of other investment
companies for liquidity purposes or when common stocks are viewed
as overvalued. In addition, for temporary defensive purposes
under abnormal market or economic conditions, the Fund may hold

-5-<PAGE>
up to 100% of its assets in such securities. If the Fund
acquires securities of another investment company, the
shareholders of the Fund generally will be subject to duplicate
management fees.

There are no restrictions as to company size, although the
Advisor normally will avoid very small companies (micro-caps)
under approximately $250 million in market capitalization (market
value). Thus, the Fund may own everything from small to very
large companies, with a median company size somewhere under $10
billion most of the time. The Advisor considers companies under
$1 billion in market cap to be small cap, and over $10 billion in
market value to be large cap. In most cases the Fund will hold
the common stock of the market leading companies in their
industry, although in some sectors even the market leader may be
quite small.

Investment Risks
- - ----------------

All investments carry risks. There is no such thing as a risk-
free investment. Stocks are subject to short term loss of
principal because their value fluctuates significantly during the
year. Stocks are more resistant than debt-based securities or
cash to the other major risk of the long-term erosion of
purchasing power.

It is normal for most stocks that do not have high dividend
yields to drop in price from 30% to 60% during the course of any
12 month period. Thus, investors in either Fund must be able to
tolerate such short-term price volatility in order to benefit
from the potentially higher longer term growth of stocks. Such
characteristics can prevent investors or the Funds from achieving
their investment objectives, especially over shorter periods of a
few years or less.

In addition, each Fund will invest a substantial proportion of
its assets in fast growing, more volatile companies. The Advisor
expects that the Funds will have higher risk, or overall
volatility, than their peer group of funds, and the stock market
in general.

Because, unlike the Millennium Fund, the New Frontier Fund will
not normally invest in dividend-paying common stocks and the
New Frontier Fund will invest in a smaller number of securities
than the Millennium Fund, the Advisor expects that the New
Frontier Fund will have higher risk, or overall volatility,
than the Millennium Fund. In addition, because the New Frontier
Fund will likely invest a significant portion of its assets in
companies in technology-related industries, the Fund may be
subject to certain risks that may not exist to the same degree
in other types of investments. Technology-related securities,
in general, tend to be more volatile than other types of

-6-
<PAGE>
investments. Industries throughout the technology field include
many smaller and less seasoned issuers that may have limited
product lines, markets, or financial resources, or may depend
on a limited management group. In addition, technology-related
securities may be strongly affected by worldwide scientific or
technological developments, and many issuers' products may become
obsolescent more rapidly than products in more mature sectors of
the economy.

While the income-oriented portion of the Millennium Fund will
dampen its volatility somewhat, investors should still expect
greater than normal volatility in the share price. Either Fund
may perform better or worse that it has in the past. No
investment strategy works all the time, and investors should
expect that there will be extended periods when either or both
Funds' investment philosophies and strategies will not be aligned
with where the overall stock market, or particular large segments
of the market (i.e., large vs. small or growth vs. value
companies), are going.

Fundamental Policies
- - --------------------

The Trustees of the Trust, on behalf of the Funds, have adopted
certain investment restrictions which are fundamental policies
and may not be changed with respect to either Fund without the
affirmative vote of the holders of a majority of such Fund's
outstanding voting securities. The investment objective of
either Fund may be changed without the affirmative vote of a
majority of the outstanding shares of the such Fund.

Fund Turnover
- - ----------------------

Generally, the rate of portfolio turnover will not be a limiting
factor when either Fund deems changes appropriate; however, it is
anticipated that generally the Millennium Fund's annual portfolio
turnover rate will exceed 60%. It is expected that the New
Frontier Fund's turnover may exceed 100% annually. In any
particular year, however, market conditions could result in
portfolio activity at a greater rate than anticipated. Turnover
rate for the Funds, along with the Funds' brokerage allocation
policies, are discussed in the Statement of Additional
Information.

HOW TO PURCHASE FUND SHARES

By Mail
- - -------

Each Fund's minimum investment is $1,000. Shares may be
purchased in each Fund by making your check payable to the
applicable Fund and mailing your application and check to:

IPS FUNDS c/o The Provident Bank
P.O. Box 14967
Cincinnati, Ohio 45250-0967

The price at which the purchase will be effected is based on the
next calculation of net asset value after the application is
received. A confirmation indicating the details of the
transaction will be promptly sent to shareholders. The purchase
will be made in full and fractional shares calculated to three
decimal places.

-7-<PAGE>
Additional and Pre-authorized Purchases
- - ---------------------------------------

After becoming a shareholder in either Fund, you may, at any
time, purchase additional shares in that Fund subject to a
minimum investment of $100. A check made payable to the
respective Fund in the amount to be invested, should be sent to
The Provident Bank at the address set forth above. Each
additional purchase request must contain your name and account
number. If you prefer to invest automatically each month, you
may authorize the respective Fund to debit your bank account for
the periodic purchase of shares of a Fund in the middle of the
month. You will receive a confirmation every time you make a
transaction in any Fund.

Payment for Shares
- - ------------------

Payment for shares purchased should be made by check or money
order in dollars drawn on a United States Bank. Funds for
investment may also be wired by the investor's bank to the
Custodian. Please call 1-800-232-9142 for wiring instructions.

Each Fund reserves the right in its sole discretion to reject
purchase orders when, in the judgment of management, such
rejection is in the best interests of the Funds' shareholders.
Each Fund also reserves the right at any time to waive or
increase the minimum investment requirements applicable to
initial or subsequent investments for the Fund. No application
to purchase shares in a Fund is binding until accepted in writing
by the applicable Fund.

Telephone Purchases by Securities Firms
- - ---------------------------------------

Member firms of the NASD may telephone the Transfer Agent at 1-
800-232-9142 and place purchase orders on behalf of investors who
carry investments in either Fund through the member's account
with the applicable Fund. By electing telephone purchase
privileges, NASD member firms, on behalf of themselves and their
clients, agree that neither the Funds, the Underwriter nor the
Transfer Agent shall be liable for following instructions
communicated by telephone and reasonably believed to be genuine.
The Funds and their agents provide written confirmations of
transactions initiated by telephone as a procedure designed to
confirm that telephone instructions are genuine. In addition,
all telephone transactions with the Transfer Agent are recorded.
As a result of these and other policies, the NASD member firms
may bear the risk of any loss in the event of such a transaction.
However, if the Transfer Agent or a Fund fails to employ these or
other related established procedures, the Transfer Agent or the
applicable Fund may be liable. Each Fund reserves the right to
modify or terminate these telephone privileges at any time.

Exchange Privilege
- - ------------------

Investors in either Fund may exchange shares of their respective
Fund for shares of the other Fund or for shares of the DSR(SM) Fund.
There is no charge for such exchanges. This offer is limited to
residents of states in which the shares of the Fund being

-8-<PAGE>
acquired are registered for sale. Before making an exchange, the
investor should review a current Prospectus of the Funds and, if
applicable, for the DSR(SM) Fund, for information relating to the
fund in which he is acquiring shares. Investors should consider
the differences in the investment objectives and portfolio
compositions of such funds.

An exchange request may be given in writing or by telephone to
the Transfer Agent. Shares may also be exchanged through any
registered securities dealer acting for the shareholder. An
exchange order must comply with the requirements for a
redemption. (See "Redemption of Shares"). If the exchange
request is in proper order, the exchange will be based on the
respective net asset values of the shares involved which is next
determined after the request is received. The exchange of shares
of one Fund for shares of the other Fund or the DSR(SM) Fund is
treated for federal income tax purposes as a sale of the shares
given in exchange and an investor (other than a tax-exempt
investor) may, therefore, realize a taxable gain or loss. The
Funds reserve the right, upon 60 days' notice to shareholders, to
impose reasonable fees and restrictions with respect to the
exchange privilege and to modify or terminate the exchange
privilege. Except for those limited instances where redemptions
of the exchanged security are suspended under Section 22(e) of
the 1940 Act, or where sales of the Fund into which the
shareholder is exchanging are temporarily stopped, notice of all
such modifications or termination of the exchange privilege will
be given at least 60 days prior to the date of termination or the
effective date of the modification.

By signing an Application to Purchase Shares of a Fund, the
investor has agreed that the Trust and the applicable Fund will
not be liable for following instructions communicated by
telephone that it reasonably believes to be genuine. The Trust
provides written confirmation of transactions in a Fund initiated
by telephone as a procedure designed to confirm that telephone
instructions are genuine. As a result of this policy, the
investor may bear the risk of any loss in the event of such a
transaction; provided, however, if a Fund fails to employ this
and other established procedures, the Fund may be liable.

Automatic Monthly Exchange
- - --------------------------

Shareholders of the Funds may arrange for a fixed dollar amount
of their shares to be automatically exchanged for shares of the
other Fund or the DSR(SM) Fund on a monthly basis. The minimum
monthly exchange in this program is $100. This automatic
exchange program may be changed by the shareholder at any time by
writing to the Transfer Agent at least two weeks prior to the
date the change is to be made. Further information regarding
this service can be obtained by contacting the Transfer Agent.

DIVIDENDS AND DISTRIBUTIONS

Each Fund intends to declare dividends representing the Fund's
net investment income two times annually, generally in the months
of October and December. It is the present policy of each Fund
to distribute annually the Fund's net long term capital gains in
the month of December. When a dividend or capital gain is
distributed, the net asset value per share is reduced by the
amount of the payment.

-9-<PAGE>
All dividends or capital gains distributions paid by each Fund
will be automatically reinvested in shares of the respective Fund
at the next determined net asset value, unless an investor
specifically requests that either dividends or capital gains
distributions or both be paid in cash. If cash payment is
requested, a check normally will be mailed within five business
days after the payable date. If you withdraw your entire
account, all dividends accrued to the time of withdrawal,
including the day of withdrawal, will be paid at that time. You
may elect to have distributions on shares held in IRA's and
403(b) plans paid in cash only if you are 59 1/2 years old or
permanently and totally disabled or if you otherwise qualify
under the applicable plan. To change the election of dividends
or capital gains distributions, send a written request regarding
the appropriate Fund to the IPS Funds, 625 S. Gay Street, Suite
630, Knoxville, TN 37902.

TAXES

Each Fund is treated as a separate entity for federal income tax
purposes and each Fund intends to elect to qualify for the
special tax treatment afforded regulated investment companies
under the Internal Revenue Code of 1986, as amended (the "Code").
Each Fund that so qualifies will not be subject to federal income
tax on the part of its net ordinary income and net realized
capital gains which it distributes to shareholders.

To qualify for special tax treatment afforded investment
companies under the Code, each Fund is required, at the end of
each quarter of the taxable year, to have (i) at least 50% of the
market value of the Fund's total assets be invested in cash, U.S.
Government securities, the securities of other regulated
investment companies, and other securities, with such other
securities of any one issuer limited for the purposes of this
calculation to an amount not greater than 5% of the value of the
Fund's total assets, and (ii) not more than 25% of the value of
its total assets be invested in the securities of any one issuer
(other than U.S. Government securities or the securities of other
regulated investment companies).

Dividends paid by each Fund from its ordinary income and
distributions of each Fund's net realized short-term capital
gains are taxable to non-tax-exempt investors as ordinary income.
Distributions made from each Fund's net realized long-term
capital gains are taxable to shareholders as long-term capital
gains regardless of how long the shareholder has owned shares in
the applicable Fund. Each Fund will provide its shareholders
with a written notice as to the amounts of any dividends or
capital gains distributions no later than 30 days after December
31 of each year. If you redeem your shares in a Fund you will
have a capital gain or loss, which will be short-term or long-
term depending upon the period of time you owned the shares.

Shareholders are urged to consult their tax advisors as to the
particular tax consequences of the acquisition, ownership and
disposition of shares of each Fund, including the application of
state, local, and foreign tax laws and possible future changes in
federal tax laws. Foreign investors should consider applicable
foreign taxes in their evaluation of an investment in each Fund.

-10-<PAGE>
OPERATIONS OF THE FUNDS

Board of Trustees
- - -----------------

The Funds are series of the IPS Funds, an open-end management
investment company organized as an Ohio business trust on August
10, 1994. The Board of Trustees of the Trust supervises the
operations of each Fund according to applicable state and federal
law and is responsible for the overall management of the Funds'
business affairs.

The Investment Advisor
- - ----------------------

IPS Advisory, Inc., 625 S. Gay Street, Suite 630, Knoxville, TN
37902 serves as the investment advisor for each Fund. The
Advisor manages the investments and business affairs, and
provides investment research, for each Fund. The principals of
the Advisor are Greg D'Amico, President and Robert Loest, Ph.D.,
CFA, Chief Executive Officer. Both have extensive experience in
equities analysis, having managed investment portfolios for
individual clients, including corporations and retirement plans,
on a full time basis since 1986.

The Advisor is under the supervisory control of Securities
Service Network, Inc. ("SSN"), located at 9041 Executive Park
Drive, Suite 500, Knoxville, TN 37923. SSN is a Securities and
Exchange Commission and Tennessee registered Broker-Dealer and
Investment Advisor. SSN exercises supervisory control of the
Advisor through a Consent Guaranty letter and compliance
guidelines established by SSN and approved by the Securities
Division of the State of Tennessee. SSN also acts as the
exclusive agent for distribution of shares of the Funds. Greg
D'Amico and Robert Loest will be responsible for the day-to-day
management of the Funds. Greg D'Amico is President, Trustee and
Treasurer of the Trust. Mr. D'Amico is President and a Director
of the Advisor. Robert Loest Ph.D., CFA, is Vice President,
Trustee and Secretary of the Trust. Mr. Loest is also Chief
Executive Officer and a Director of the Advisor. Mr. D'Amico and
Mr. Loest both are controlling persons and may be deemed
affiliates of the Advisor. Mr. D'Amico and Mr. Loest are both
securities representatives with Securities Service Network, Inc.
(since 1986).

Advisor Compensation
- - --------------------

Under each Fund's respective Management Agreement, the respective
Fund has agreed to compensate the Advisor for its services by the
payment of a monthly fee at the annual rate of 1.40% of the
average daily net assets of the Fund to and including
$100,000,000, 1.15% of the average daily net assets of the Fund
from $100,000,000 to and including $250,000,000, and .90% of the
average daily net assets of the Fund in excess of $250,000,000.

Under each Fund's Management Agreement, the Advisor pays all of
the expenses of the Fund except brokerage, taxes, interest and
extraordinary expenses. The Advisor may also use its own
resources, which may include a portion of its fee under the
Management Agreement, to pay for distribution or other marketing
related expenses of each Fund under its respective management.

-11-<PAGE>
In this regard, it should be noted that most investment companies
pay their own operating expenses directly, while each Fund's
expenses (except those specified above) are paid by the Advisor.

Shareholder Rights
- - ------------------

Each share in a Fund has equal voting rights with respect to
other shares in the Fund regarding matters submitted for a vote
of all shareholders in the Fund, and equal voting rights with
respect to other shares in the Trust regarding matters submitted
for a vote of shareholders in the Trust. Shareholders of each
Fund are entitled to one vote for each full share held (and
fractional votes for fractional shares) and may vote in the
election of Trustees and on other matters submitted to meetings
of shareholders of the Trust or their respective Fund. Neither
the Trust nor either of the Funds holds annual meetings of
shareholders.

The Trust's Declaration of Trust provides that the Funds'
shareholders have the right, upon the vote of more than two-
thirds of its outstanding shares, to remove a Trustee. The
Trustees will call a meeting of shareholders to vote on the
removal of a trustee upon the written request of the record
holders of ten percent of the Trust's shares.

Shareholder Inquiries
- - ---------------------

Shareholders can make inquiries about the Trust, the Millennium
Fund, the New Frontier Fund or a shareholder's personal account
by calling the Funds' Transfer Agent at 800-232-9142 or writing
the appropriate Fund at the address listed on the cover page.

Fund Transactions
- - ----------------------

The Advisor places all orders for the purchase and sale of the
Funds' securities. In selecting broker-dealers, the Advisor may
consider research and brokerage services furnished to it and its
affiliates. Consistent with the Rules of Fair Practice of the
National Association of Securities Dealers, Inc. and subject to
its objective of seeking best qualitative execution of portfolio
transactions, the Advisor may consider sales of shares of the
Fund in its selection of broker-dealers. Securities Service
Network, Inc., which may be deemed to be an affiliate of the
Advisor, will place trades for the Funds through National
Financial Services Corporation (NFSC), a subsidiary of the
Fidelity companies and a member of the New York Stock Exchange.
The Statement of Additional Information contains more information
about the brokerage practices of the Funds.

Transfer Agent
- - --------------

IPS Advisory, Inc., 625 S. Gay Street, Suite 630, Knoxville,
Tennessee 37902 is the Transfer Agent for both Funds. The
Transfer Agent performs shareholder service functions for the
Funds for a fee, which fee is determined from time to time by the
Trust and the Transfer Agent.

-12-<PAGE>
How the Funds Measure Performance
- - ---------------------------------

Each Fund may periodically advertise "average annual total
return." The "average annual total return" of a Fund refers to
the average annual compounded rate of return over the stated
period that would equate an initial amount invested at the
beginning of a stated period to the ending redeemable value of
the investment. The calculation of "average annual total return"
assumes the reinvestment of all dividends and distributions.

Each Fund may also periodically advertise its total return over
various periods in addition to the value of a $10,000 investment
(made on the date of the initial public offering of the Fund's
shares) as of the end of a specified period. The "total return"
for a Fund refers to the percentage change in the value of an
account between the beginning and end of the stated period,
assuming no activity in the account other than reinvestment of
dividends and capital gains distributions.

Each Fund may also include in advertisements data comparing
performance with other mutual funds as reported in non-related
investment media, published editorial comments and performance
rankings compiled by independent organizations and publications
that monitor the performance of mutual funds (such as Morningstar
or Lipper Analytical Services). Performance information may be
quoted numerically, or may be presented in a table, graph or
other illustration. In addition, Fund performance may be
compared to well-known indices of market performance including
the Standard & Poor's (S&P) 500 Index, S&P MidCap 400 Index,
S&P/BARRA Growth and Value Indices, the Value Line Composite
Index (GEOM), the NASDAQ Composite Index, or the Dow Jones
Industrial Average. The Trust's annual report will contain
additional performance information for the Funds that will be
made available upon request and without charge.

Net Asset Value
- - ---------------

Shares in each Fund are purchased at the next offering price
after the order is received by the Fund. The net asset value is
determined at the close of the New York Stock Exchange each day
that the exchange is open. The current value of each Fund's
total assets, less all liabilities, divided by the total number
of shares outstanding rounded to the nearest cent, is the net
asset value per share.

Securities which are traded on any exchange or on the NASDAQ
over-the-counter market are valued at the last quoted sale price
of the day. Lacking a last sale price, a security is valued at
its last bid price except when, in the Advisor's opinion, the
last bid price does not accurately reflect the current value of
the security. All other securities for which over-the-counter
market quotations are readily available are valued at their last
bid price. When market quotations are not readily available,
when the Advisor determines the last bid price does not
accurately reflect the current value or when restricted
securities are being valued, such securities are valued as
determined in good faith by the Advisor, in conformity with
guidelines adopted by and subject to review of the Board of
Trustees of the Trust.

-13-<PAGE>
Since neither Fund imposes any front end sales load or redemption
fee, both the purchase price and the redemption price of a Fund
share on any date will be equal to the next calculated net asset
value of a share.

How to Redeem or Sell Shares of the Funds
- - -----------------------------------------

To redeem shares, send a letter of instruction to the Transfer
Agent, specifying the name of the Fund, the number of shares or
dollar amount to be sold, your name and your account number.
Each Fund will buy back (redeem), at current net asset value (no
charge), all shares of the Fund offered for redemption and
meeting the requirements of this Prospectus. The net asset value
will be the next net asset value determined after receipt of the
request for redemption. Payment will be made within seven days
of receipt of a valid redemption request.

Redemption requests should be sent to the appropriate Fund:

c/o IPS Advisory, Inc., 625 S. Gay Street,
Suite 630, Knoxville, TN 37902

Requests for redemption by telephone will not be accepted.

The written request for redemption must be signed by each
registered owner exactly as the shares are registered. A
signature guarantee is required for any withdrawal which is over
$50,000, or which is mailed to another address that is not the
address of record. Signature guarantees are available at any
bank or financial institution. The signature guarantee is used
to protect shareholders from the possibility of fraudulent
application for redemption.

Payment for shares redeemed will be made by check after receipt
by the Transfer Agent of the properly executed redemption request
and any outstanding certificates for the shares to be redeemed.
If shares are purchased with a check, redemption within the first
fifteen days may be delayed until the check clears. A
shareholder wishing to redeem proceeds through wire redemption
will be charged $10 toward his or her account.

To keep share expenses to a minimum, each Fund is authorized to
redeem accounts that fall below $1,000, or such other minimum
amount as the Fund may determine from time to time. Redemption
will only occur when the account is reduced by redemptions and
not by a decline in market value. The account holder will be
notified 60 days in advance before an account is redeemed. An
involuntary redemption constitutes a sale. You should consult
your tax advisor concerning the tax consequences of involuntary
redemptions. To prevent redemption, an account can be increased
by contributing additional funds to bring it over the account
minimum. Each share of a Fund is subject to redemption at any
time if the Board of Trustees determines in its sole discretion
that failure to so redeem may have materially adverse
consequences to all or any of the shareholders of the Fund.

-14-<PAGE>
Systematic Withdrawals
- - ----------------------

Accounts valued at $10,000 or above, using the current net asset
value, are eligible for normal distributions under a systematic
withdrawal program. Setting up a Systematic Withdrawal Program
allows investors to withdraw a fixed sum each month or calendar
quarter. The minimum amount that can be withdrawn each month or
quarter under the Systematic Withdraw Program is $250. This
program may be terminated by a shareholder or the shareholder's
Fund at any time without charge or penalty, and will become
effective five business days following receipt of shareholder
instructions. A withdrawal under the Systematic Withdrawal
Program involves a redemption of shares, and may result in a gain
or loss for federal income tax purposes. In addition, if the
amount withdrawn exceeds the dividends credited to the
shareholder's account, the account ultimately may be depleted.

Retirement Plans
- - ----------------

Each Fund offers several tax qualified retirement plans for
adoption by individuals and employers. The following plans are
available: Traditional Individual Retirement Accounts (IRAs),
Simplified Employee Pension Plans, 403(b) plans, and 401(K)
corporate profit-sharing retirement plans. Contributions to these
plans are tax-deductible and earnings are tax exempt until
distributed. Also available are Roth IRAs and Education IRAs.
When investing in a retirement plan, you should consult with a
tax advisor to determine which plan is best for your situation.
To receive all the necessary information on fees, plan agreements
and applications, contact the Advisor at 625 S. Gay Street, Suite
630, Knoxville, TN 37902 or call 1-800-232-9142.

-15-

<PAGE>
IPS MILLENNIUM FUND AND IPS NEW FRONTIER FUND

PART B

STATEMENT OF ADDITIONAL INFORMATION

____________, 1998

The third fund comprising the Trust is the Dynamic Style
Rotation(SM) Fund (the "DSR(SM) Fund") a non-diversified portfolio which
is described in a separate Prospectus that may be obtained by
contacting the DSR(SM) Fund at 1-800-232-9142.

This Statement of Additional Information is not a prospectus, but
should be read in conjunction with the current Prospectus for the
Funds dated _______ __, 1998. The Prospectus may be obtained by
writing to the Trust at the following address:

IPS FUNDS, TWO CENTER SQUARE, 625 S. GAY STREET, SUITE 630
KNOXVILLE, TN 37902

Shareholder Services: 1-800-232-9142

<PAGE>
TABLE OF CONTENTS

Page

General Information and History . . . . . . . . . . . 1
U.S. Government Securities . . . . . . . . . . . . . 2
Repurchase Agreements . . . . . . . . . . . . . . . . 2
Investment Restrictions . . . . . . . . . . . . . . . 3
Fundamental . . . . . . . . . . . . . . . . . . . . 3
Borrowing Money . . . . . . . . . . . . . . . . . 3
Senior Securities . . . . . . . . . . . . . . . . 3
Underwriting . . . . . . . . . . . . . . . . . . . 3
Real Estate . . . . . . . . . . . . . . . . . . . 3
Commodities . . . . . . . . . . . . . . . . . . . 3
Loans . . . . . . . . . . . . . . . . . . . . . . 4
Concentration. . . . . . . . . . . . . . . . . . . 4
Non-Fundamental . . . . . . . . . . . . . . . . . . 4
Pledging . . . . . . . . . . . . . . . . . . . . . 4
Borrowing . . . . . . . . . . . . . . . . . . . . 4
Margin Purchases . . . . . . . . . . . . . . . . . 4
Short Sales . . . . . . . . . . . . . . . . . . . 4
Options . . . . . . . . . . . . . . . . . . . . . 5
Illiquid Investments . . . . . . . . . . . . . . . 5
Trust Trustees and Officers . . . . . . . . . . . . . 5
The Investment Advisor and Underwriter . . . . . . . 6
Dividends, Distributions and Taxes . . . . . . . . . 7
Transfer Agent . . . . . . . . . . . . . . . . . . . 9
Custodian . . . . . . . . . . . . . . . . . . . . . . 10
Independent Accountants . . . . . . . . . . . . . . . 10
Fund Transactions and Brokerage . . . . . . . . . . . 10
Net Asset Value . . . . . . . . . . . . . . . . . . . 12
Performance . . . . . . . . . . . . . . . . . . . . . 13
<PAGE>
General Information and History
- - -------------------------------

IPS Funds (the "Trust") was organized as an Ohio business trust
on August 10, 1994, and commenced operations on January 3, 1995.
The Trust currently offers three funds representing separate
portfolios of investments. Two of the funds (the "funds"), both
of which are described in detail in the funds' Prospectus and
this Statement of Additional Information, are the IPS Millennium
Fund, a diversified fund (the "Millennium Fund") and the IPS New
Frontier Fund, a non-diversified fund (the "New Frontier Fund").
IPS Advisory, Inc. (the "Advisor") serves as investment advisor
to the Funds.

Each of the Funds is managed separately and has its own
investment objectives and policies designed to meet its
investment goals. Investments in the Funds involve risk, and
there can be no assurance that any of the Funds will achieve
their investment objectives.

Each share of a Fund represents an equal proportionate interest
in the assets and liabilities belonging to that Fund with each
other share of that series and is entitled to such dividends and
distributions out of income belonging to the series as are
declared by the Trustees. The shares do not have cumulative
voting rights or any preemptive or conversion rights, and the
Trustees have the authority from time to time to divide or
combine the shares of any series into a greater or lesser number
of shares of that series so long as the proportionate beneficial
interest in the assets belonging to that series and the rights of
shares of any other series are in no way affected. In case of
any liquidation of a series, the holders of shares of the series
being liquidated will be entitled to receive as a class a
distribution out of the assets, net of the liabilities, belonging
to that series. Expenses attributable to any series are borne by
that series. Any general expenses of the Trust not readily
identifiable as belonging to a particular series are allocated by
or under the direction of the Trustees in such manner as the
Trustees determine to be fair and equitable. No shareholder is
liable to further calls or to assessment by the Trust without his
or her express consent.

If at least ten shareholders (the "Petitioning Shareholders")
wish to obtain signatures to request a meeting for the purpose of
voting upon removal of any Trustee of the Trust, they may make a
written application to the Trust requesting to communicate with
other shareholders. The Petitioning Shareholders must hold in
the aggregate at least 1% of the shares then outstanding or
shares then having a net asset value of $25,000, whichever is
less, and each Petitioning Shareholder must have been a
shareholder for at least six months prior to the date of the
application. The application must be accompanied by the form of
communication which the shareholders wish to transmit. Within
five business days after receipt of the application, the Trust
will (a) provide the Petitioning Shareholders with access to a
list of the names and addresses of all shareholders of the Trust;
or (b) inform the Petitioning Shareholders of the approximate
number of shareholders and the estimated costs of mailing such

-1-
<PAGE>
communication, and undertake such mailing promptly after tender
by the Petitioning Shareholders to the Trust of the material to
be mailed and the reasonable expenses of such mailing. The
Trustees will promptly call a meeting for the purpose of voting
upon the question of removal of any Trustee when requested in
writing to do so by the record holders of not less than 10% of
the outstanding shares.

Upon sixty days prior written notice to shareholders, the Funds
may make redemption payments in whole or in part in securities or
other property if the Trustees determine that existing conditions
make cash payments undesirable. For other information concerning
the purchase and redemption of shares of the Funds, see "How to
Purchase Shares of the Funds" and "How to Redeem or Sell Shares
of the Funds" in the Prospectus. For a description of the
methods used to determine the share price and value of the Funds'
assets, see "Net Asset Value" in the Prospectus.

U.S. Government Securities
- - --------------------------

As described in the Porspectus, each Fund may invest in U.S.
government securities. U.S. government securities may be backed
by the credit of the government as a whole or only by the issuing
agency. U.S. Treasury bonds, notes, and bills and some agency
securities, such as those issued by the Federal Housing
Administration and the Government National Mortgage Association
(GNMA), are backed by the full faith and credit of the U.S.
government as to payment of principal and interest and are the
highest quality government securities. Other securities issued
by U.S. government agencies or instrumentalities, such as
securities issued by the Federal Home Loan Banks and the Federal
Home Loan Mortgage Corporation, are supported only by the credit
of the agency that issued them, and not by the U.S. government.
Securities issued by the Federal Farm Credit System, the Federal
Land Banks, and the Federal National Mortgage Association (FNMA)
are supported by the agency's right to borrow money from the U.S.
Treasury under certain circumstances, but are not backed by the
full faith and credit of the U.S. government.

Repurchase Agreements
- - ---------------------

As explained in the prospectus, each Fund may invest in
repurchase agreements. A repurchase agreement is a short term
investment in which the purchaser (i.e., a Fund) acquires
ownership of a U.S. Government security and the seller agrees to
repurchase the security at a future time at a set price, thereby
determining the yield during the purchaser's holding period. Any
repurchase transaction in which either Fund engages will require
full collateralization of the seller's obligation during the
entire term of the repurchase agreement. In the event of a
bankruptcy or other default of the seller, the Fund could
experience both delays in liquidating the underlying security and
losses in value. However, each Fund intends to enter into
repurchase agreements only with the Fund's Custodian, other banks
with assets of $1 billion or more, and registered securities
dealers determined by the Advisor (subject to review by the Board
of Trustees) to be creditworthy.

-2-<PAGE>
Investment Restrictions
- - -----------------------

FUNDAMENTAL. The investment limitations described below have
been adopted by each Fund as indicated and are fundamental
("Fundamental"), i.e., they may not be changed as to a Fund
without the affirmative vote of a majority of the outstanding
shares of the applicable Fund. As used in the Prospectus and
this Statement of Additional Information, the term "majority" of
the outstanding shares of the applicable Fund means the lesser of
(1) 67% or more of the outstanding shares of the Fund present at
a meeting, if the holders of more than 50% of the outstanding
shares of the Fund are present or represented at such meeting; or
(2) more than 50% of the outstanding shares of the Fund. Other
investment practices which may be changed on behalf of a Fund by
the Board of Trustees without the approval of shareholders to the
extent permitted by applicable law, regulation or regulatory
policy are considered non-fundamental ("Non-Fundamental").

The following policies have been adopted as fundamental by both
the Millennium Fund and the New Frontier Fund:

1. BORROWING MONEY. The Fund will not borrow money, except (a)
from a bank, provided that immediately after such borrowing there
is an asset coverage of 300% for all borrowings of the Fund; or
(b) from a bank or other persons for temporary purposes only,
provided that such temporary borrowings are in an amount not
exceeding 5% of the Fund's total assets at the time when the
borrowing is made. This limitation does not preclude the Fund
from entering into reverse repurchase transactions, provided that
the Fund has an asset coverage of 300% for all borrowings and
repurchase commitments of the Fund pursuant to reverse repurchase
transactions.

2. SENIOR SECURITIES. The Fund will not issue senior
securities. This limitation is not applicable to activities that
may be deemed to involve the issuance or sale of a senior
security by the Fund, provided that the Fund's engagement in such
activities is (a) consistent with or permitted by the Investment
Company Act of 1940, as amended, the rules and regulations
promulgated thereunder or interpretations of the Securities and
Exchange Commission or its staff and (b) as described in the
Prospectus and this Statement of Additional Information.

3. UNDERWRITING. The Fund will not act as underwriter of
securities issued by other persons. This limitation is not
applicable to the extent that, in connection with the disposition
of portfolio securities (including restricted securities), the
Fund may be deemed an underwriter under certain federal
securities laws.

4. REAL ESTATE. The Fund will not purchase or sell real estate.
This limitation is not applicable to investments in marketable
securities which are secured by or represent interests in real
estate. This limitation does not preclude the Fund from
investing in mortgage-backed securities or investing in companies
engaged in the real estate business.

5. COMMODITIES. The Fund will not purchase or sell commodities
unless acquired as a result of ownership of securities or other
investments.

-3-<PAGE>
6. LOANS. The Fund will not make loans to other persons, except
(a) by loaning portfolio securities, (b) by engaging in
repurchase agreements, or (c) by purchasing nonpublicly offered
debt securities. For purposes of this limitation, the term
"loans" shall not include the purchase of a portion of an issue
of publicly distributed bonds, debentures or other securities.

7. CONCENTRATION. The Fund will not invest 25% or more of its
total assets in a particular industry. This limitation is not
applicable to investments in obligations issued or guaranteed by
the U.S. government, its agencies and instrumentalities or
repurchase agreements with respect thereto.

With respect to the percentages adopted by a Fund as maximum
limitations on its investment policies and limitations, an excess
above the fixed percentage due to growth will not be a violation
of the policy or limitation unless the excess results immediately
and directly from the acquisition of any security or the action
taken. This paragraph does not apply to the borrowing policy set
forth in paragraph 1 above.

Notwithstanding any of the foregoing limitations, any investment
company, whether organized as a trust, association or
corporation, or a personal holding company, may be merged or
consolidated with or acquired by the Fund, provided that if such
merger, consolidation or acquisition results in an investment in
the securities of any issuer prohibited by said paragraphs, the
Fund shall, within ninety days after the consummation of such
merger, consolidation or acquisition, dispose of all of the
securities of such issuer so acquired or such portion thereof as
shall bring the total investment therein within the limitations
imposed by said paragraphs above as of the date of consummation.

NON-FUNDAMENTAL. The following policies have been adopted by
each Fund as Non-Fundamental (see "Investment Restrictions-
Fundamental" above):

1. PLEDGING. The Fund will not mortgage, pledge, hypothecate or
in any manner transfer, as security for indebtedness, any assets
of the Fund except as may be necessary in connection with
borrowings described in limitation (1) above. Margin deposits,
security interests, liens and collateral arrangements with
respect to transactions involving options, futures contracts,
short sales and other permitted investments and techniques are
not deemed to be a mortgage, pledge or hypothecation of assets
for purposes of this limitation.

2. BORROWING. The Fund will not enter into reverse repurchase
agreements. The Fund will not purchase any security while
borrowings (including reverse repurchase agreements) representing
more than 5% of its total assets are outstanding.

3. MARGIN PURCHASES. The Fund will not purchase securities or
evidences of interest thereon on "margin." This limitation is
not applicable to short term credit obtained by the Fund for the
clearance of purchases and sales or redemption of securities, or
to arrangements with respect to transactions involving permitted
investments and techniques.

4. SHORT SALES. The Fund will not effect short sales of
securities unless it owns or has the right to obtain securities
equivalent in kind and amount to the securities sold short.

-4-<PAGE>
5. OPTIONS. The Fund will not purchase or sell put or call
options.

6. ILLIQUID INVESTMENTS. The Fund will not invest more than 15%
of its net assets in securities for which there are legal or
contractual restrictions on resale and other illiquid securities.

Trust Trustees and Officers
- - --------------------------

The Trustees and executive officers of the Trust and their
principal occupations during the last five years are set forth
below. Each Trustee who is an "interested person" of the Trust,
as defined in the Investment Company Act of 1940, is indicated by
an asterisk.

NAME (AGE) AND ADDRESS, POSITIONS HELD
- - ---------------------- --------------

*Greg D'Amico (34), 625 S. Gay Street, Suite 630, Knoxville, TN
37902, President, Chief Financial Officer, Treasurer and Trustee

*Robert Loest (54), 625 S. Gay Street, Suite 630, Knoxville, TN
37902, Vice President, Secretary and Trustee

Woodrow Henderson (40), 6504 Clary Lane, Knoxville, TN 37919,
Trustee

Veenita Bisaria (37), 12416 Fort West Drive, Knoxville, TN 37922,
Trustee

Billy Wayne Stegall, Jr. (41), 309 Kingston Court, Knoxville, TN
37919, Trustee

Mr. D'Amico is also President of IPS Advisory, Inc., and a
portfolio manager for individually managed accounts as a
registered representative of Securities Service Network, Inc.

Mr. Loest is also Chief Executive Officer of IPS Advisory, Inc.,
and a senior portfolio manager and research analyst for
individually managed accounts as a registered representative of
Securities Service Network, Inc. Mr. Loest is a Chartered
Financial Analyst and has a Ph.D. in Biology.

Mr. Henderson is also Director of Planned Giving for the
University of Tennessee at Knoxville.

Ms. Bisaria has been a financial analyst for the Tennessee Valley
Authority since February 1, 1997. Prior to that time she was
Director of Business Planning at Lockhead Martin Energy Systems,
and is a Chartered Financial Analyst (CFA).

Mr. Stegall has been an account executive at Colony Life &
Accident since June 1, 1995. Prior to that time, he was a
teacher of history and economics at Austin East High School in
Knoxville, Tennessee.

Pursuant to the terms of its Management Agreements with the
Trust, the Adviser pays all of the fees and expenses of the
Trustees. Each Trustee who is not affiliated with the Adviser

-5-<PAGE>
receives an annual retainer of $100, plus $50 for each Board
meeting attended. During the fiscal year ended November 30,
1997, each Trustee not related to the Advisor received aggregate
compensation of $300.

As of March 18, 1998, Charles Schwab & Co., Inc. (Schwab) is a
record-holder of 11.95% of the Millennium Fund's outstanding
shares on behalf of its clients, but Schwab has advised that no
single Schwab client owns more than 5% of the outstanding shares.
Schwab's address is 101 Montgomery Street, San Francisco,
California 94104.

As of March 18, 1998, the Trustees and Officers of the Trust,
as a group, beneficially owned 1.28% of the outstanding shares of
the Millennium Fund.

As a newly organized series of the Trust, the New Frontier Fund
has only one initial shareholder as of ______________, 1998,
[Greg D'Amico].

The Investment Advisor and Underwriter
- - --------------------------------------

IPS Advisory, Inc. (the "Advisor"), 625 S. Gay St., Suite 630,
Knoxville, TN 37902, serves as the investment advisor for each
Fund pursuant to separate agreements (collectively, the
"Management Agreements"). Greg D'Amico and Robert Loest may be
deemed to be controlling persons and affiliates of the Advisor
due to their ownership of its shares and their positions as
directors and officers of the Advisor. Because of such
affiliation, they may receive benefits from the management fees
paid to the Advisor. Pursuant to the Management Agreements with
each Fund, the Advisor manages the Funds' business affairs, and
furnishes advice and recommendations to each Fund regarding
securities to be purchased and sold by the Fund.

Securities Service Network, Inc., 9041 Executive Park Drive,
Suite 500, Knoxville, TN 37923 (the "Underwriter") serves as the
exclusive agent for distribution of shares of the Funds pursuant
to a separate agreement with each Fund (collectively, the
"Underwriting Agreements"). The Underwriter is a registered
investment advisor and securities broker-dealer. Pursuant to the
Underwrting Agreements, the Underwriter is obligated to sell the
shares of the Funds on a best efforts basis only against purchase
orders for the shares. Shares of the Funds are offered to the
public on a continuous basis. The Underwriter exerts supervisory
control over the Advisor through a Consent Guaranty Letter, and
by means of specialized compliance procedures approved by the
Securities Division of the Tennessee Department of Commerce and
Insurance.

The Advisor is staffed by experienced investment professionals
with extensive experience in company analysis, and who have been
officers of IPS since 1986. Analysis is performed in-house for
all core portfolio companies, using a variety of proprietary,
fundamental analytical methods.

Under the terms of each respective Management Agreement, the
Advisor manages the investments of the Funds, subject to approval
of the Board of Trustees of the Trust, and pays all of the
expenses of the Funds except brokerage, taxes, interest and
extraordinary expenses. As compensation for its management
services and agreement to pay the Funds' expenses pursuant to
each respective Management Agreement, the Millennium Fund is
obligated to pay the Advisor a fee computed and accrued daily and
paid monthly at an annual rate of 1.40% of its average daily net

-6-<PAGE>
assets to and including $100,000,000, 1.15% of such assets from
$100,000,000 to and including $250,000,000, and .90% of such
assets in excess of $250,000,000.

For the period from January 1, 1995, the Millennium Fund's
inception, through November 30, 1995, the Millennium Fund paid
fees of $9,923 to the Advisor. For the period from December 1,
1995 through November 30, 1996, the Millennium Fund paid fees of
$47,950 to the Adviser. For the period from December 1, 1996
through November 30, 1997, the Millennium Fund paid fees of
$112,787 to the Advisor. As a newly organized Fund, the New
Frontier Fund has yet to pay any fees to the Advisor.

The Advisor retains the rights to use the names "IPS,"
"Millennium" and "New Frontier" in connection with another
investment company or business enterprise with which the Advisor
is or may become associated. The Fund's right to use the names
"IPS," "Millennium," and "New Frontier" automatically ceases
thirty days after termination of the applicable Management
Agreement(s) and may be withdrawn by the Advisor on thirty days'
written notice.

The Advisor may make payments to banks or other financial
institutions that provide shareholder services and administer
shareholder accounts. The Glass-Steagall Act prohibits banks
from engaging in the business of underwriting, selling or
distributing securities. Although the scope of this prohibition
under the Glass-Steagall Act has not been clearly defined by the
courts or appropriate regulatory agencies, management of the
Funds believes that the Glass-Steagall Act should not preclude a
bank from providing such services. However, state securities
laws on this issue may differ from the interpretations of federal
law expressed herein and banks and financial institutions may be
required to register as dealers pursuant to state law. If a bank
were prohibited from continuing to perform all or a part of such
services, management of the Funds believes that there would be no
material impact on either Fund or its shareholders. Banks may
charge their customers fees for offering these services to the
extent permitted by applicable regulatory authorities, and the
overall return to those shareholders availing themselves of the
bank services will be lower than to those shareholders who do
not. The Funds may from time to time purchase securities issued
by banks which provide such services; however, in selecting
investments for a Fund, no preference will be shown for such
securities.

Dividends, Distributions and Taxes
- - ----------------------------------

The following summary is based on current tax laws and
regulations, which may be changed by legislative, judicial or
administrative action. No attempt has been made to present a
detailed explanation of the federal, state or local income tax
treatment of the Funds or their shareholders. Accordingly, you
are urged to consult your tax advisers regarding specific
questions as to federal, state and local income taxes.

-7-<PAGE>
Each Fund that so qualifies will not be subject to federal income
tax on the part of its net ordinary income and net realized
capital gains which it distributes to shareholders.

Dividends paid by each Fund from its ordinary income, and
distributions of each Fund's net realized short-term capital
gains, are taxable to non-tax-exempt investors as ordinary
income. Ordinary income dividends may be eligible for the 70%
dividends received deduction allowed to corporations under the
Code, if certain requirements are met.

Distributions made from each Fund's net realized long-term
capital gains are taxable to shareholders as long-term capital
gains regardless of the length of time the shareholder has owned
such shares. Pursuant to the Taxpayer Relief Act of 1997,
different maximum rates of tax are imposed on individuals,
estates or trusts on various transactions giving rise to long-
term capital gain. For this purpose, long-term capital gains are
divided into two tax-rate groups: a 20% group (for capital gains
from assets held for more than 18 months) and a 28% group (for
all other long-term capital gain). Each Fund will supply
information to its shareholders to determine the appropriate
tax-rate group of its long-term capital gain distributions.

Upon redemption of shares of either Fund held by a non-tax-exempt
investor, such investor, generally, will realize a capital gain
or loss equal to the difference between the redemption price
received by the investor and the adjusted basis of the shares
redeemed. If the redemption is in-kind, capital gain or loss
will be measured by the difference between the fair market value
of securities received and the adjusted basis of the shares
redeemed. Such capital gain or loss, generally, will constitute
a short-term capital gain or loss if the redeemed shares were
held for twelve months or less, and long-term capital gain or
loss if the redeemed Fund shares were held for more than twelve
months. If, however, shares of either Fund were redeemed within
six months of their purchase by an investor, and if a capital
gain dividend was paid with respect to the applicable Fund's
shares while they were held by the investor, then any loss
realized by the investor will be treated as long-term capital
loss to the extent of the capital gain dividend.

-8-<PAGE>
with the applicable Fund or who, to such Fund's knowledge, have
furnished an incorrect number. When establishing an account, an
investor must certify under penalty of perjury that such number
is correct and that he is not otherwise subject to back-up
withholding.

Dividends paid by each Fund from its ordinary income and
distributions of each Fund's net realized short-term capital
gains paid to shareholders who are non-resident aliens will be
subject to a 30% United States withholding tax under existing
provisions of the Code applicable to foreign individuals and
entities unless a reduced rate of withholding or a withholding
exemption is provided under applicable treaty law. Non-resident
shareholders are urged to consult their own tax advisers
concerning the applicability of the United States withholding
tax.

The Code requires each regulated investment company to pay a
nondeductible 4% excise tax to the extent the company does not
distribute, during each calendar year, 98% of its ordinary
income, determined on a calendar year basis, and 98% of its
capital gains, determined, in general, on an October 31 year-end,
plus any undistributed amount from prior years. Each Fund
anticipates that it will make sufficient timely distributions to
avoid imposition of the excise tax. If either Fund pays a
dividend in May which was declared in the previous October,
November or December to shareholders of record on a date in those
months, then such dividend or distribution will be treated for
tax purposes as being paid on December 31 and will be taxable to
shareholders as if received on December 31.

The foregoing is a general and abbreviated summary of the
applicable provisions of the Code and Treasury regulations
presently in effect. For the complete provisions, reference
should be made to the pertinent Code sections and the Treasury
regulations promulgated thereunder. The Code and these Treasury
regulations are subject to change by legislative or
administrative action.

Dividends and capital gains distributions may also be subject to
state and local taxes.

The federal income tax consequences set forth above do not
address any particular tax considerations a shareholder of either
Fund might have. Shareholders are urged to consult their tax
advisers as to the particular tax consequences of the
acquisition, ownership and disposition of shares of each Fund,
including the application of state, local and foreign tax laws
and possible future changes in federal tax laws. Foreign
investors should consider applicable foreign taxes in their
evaluation of an investment in either Fund.

Transfer Agent
- - --------------

The Transfer Agent for each Fund is IPS Advisory, Inc., 625 S.
Gay Street, Suite 630, Knoxville, TN 37902. The Transfer Agent
performs shareholder service functions such as maintaining the
records of each shareholder's account, answering shareholders'
inquiries concerning their accounts, processing purchase and

-9-<PAGE>
redemptions of each Fund's shares, acting as dividend and
distribution disbursing agent and performing other accounting and
shareholder service functions.

Custodian
- - ---------

The Provident Bank, One East Fourth Street, Cincinnati, Ohio
45202, is the Custodian of each Fund's investments. The
Custodian acts as each Fund's depository, safekeeps its portfolio
securities, collects all income and other payments with respect
thereto, disburses funds at the Fund's request and maintains
records in connection with its duties.

Independent Accountants
- - -----------------------

The independent accounting firm for each Fund is Cherry Bekaert
Holland, L.L.P., Certified Public Accountants, located at 625 S.
Gay Street, Suite 550, Knoxville, TN 37902. Cherry Bekaert
Holland, L.L.P. performs an annual audit of each Fund's financial
statements and provides financial, tax and accounting consulting
services as requested.

Fund Transactions and Brokerage
- - -------------------------------

Subject to policies established by the Board of Trustees of the
Trust on behalf of each Fund, the Advisor is responsible for the
Funds' investment decisions and the placing of the Funds'
investment transactions.

In placing portfolio transactions, the Advisor seeks the best
qualitative execution for each Fund, taking into account such
factors as price (including the applicable brokerage commission
or dealer spread), the execution capability, financial
responsibility and responsiveness of the broker or dealer and the
brokerage and research services provided by the broker or dealer.
The Advisor generally seeks favorable prices and commission rates
that are reasonable in relation to the benefits received.

The Advisor is specifically authorized to select brokers or
dealers who also provide brokerage and research services to
either Fund and/or the other accounts over which the Advisor
exercises investment discretion and to pay such brokers or
dealers a commission in excess of the commission another broker
or dealer would charge if the Advisor determines in good faith
that the commission is reasonable in relation to the value of the
brokerage and research services provided. The determination may
be viewed in terms of a particular transaction or the Advisor's
overall responsibilities with respect to either Fund and to other
accounts over which it exercises investment discretion.

-10-<PAGE>
and information provided by brokers or dealers serving other
clients may be useful to principals of the Advisor in connection
with the Advisor's services to each Fund. Although research
services and other information are useful to each Fund and the
Advisor, it is not possible to place a dollar value on the
research and other information received. It is the opinion of
the Board of Trustees and the Advisor that the review and study
of the research and other information will not reduce the overall
cost to the Advisor of performing its duties to each Fund under
each respective Management Agreement. While the Funds do not
deem it practicable and in their respective best interests to
solicit competitive bids for commission rates on each
transaction, consideration is regularly given to posted
commission rates as well as other information concerning the
level of commissions charged on comparable transactions by
qualified brokers.

Neither Fund has an obligation to deal with any broker or dealer
in the execution of its transactions. However, it is
contemplated that the Underwriter, in its capacity as a
registered broker-dealer, will effect substantially all
securities transactions which are executed on a national
securities exchange and over-the-counter transactions conducted
on an agency basis. Such transactions will be executed at
competitive commission rates through National Financial Services
Corporation ("NFSC").

Transactions in the over-the-counter market can be placed
directly with market makers who act as principals for their own
account and include mark-ups in the prices charged for over-the-
counter securities. Transactions in the over-the-counter market
can also be placed with broker-dealers who act as agents and
charge brokerage commissions for effecting over-the-counter
transactions. The Funds may place over-the-counter transactions
either directly with principal market makers, or with broker-
dealers if that is consistent with the Advisor's obligation to
obtain best qualitative execution. Under the Investment Company
Act of 1940, persons who may be deemed to be affiliated with the
Advisor such as the Underwriter are prohibited from dealing with
either Fund as a principal in the purchase and sale of
securities. Therefore, the Underwriter will not serve as either
Fund's dealer in connection with over-the-counter transactions.
However, the Underwriter may serve as broker for either Fund in
over-the-counter transactions conducted on an agency basis and
will receive brokerage commissions in connection with such
transactions. Such agency transactions will be executed through
NFSC.

The Funds will not effect any brokerage transactions in portfolio
securities with the Underwriter if such transactions would be
unfair or unreasonable to the respective Fund's shareholders, and
the commissions will be paid solely for the execution of trades
and not for any other services. The Underwriting Agreements
provide that the Underwriter may receive brokerage commissions in
connection with effecting such transactions for the respective
Fund. In determining the commissions to be paid to the
Underwriter, it is the policy of each Fund that such commissions
will, in the judgment of the Fund's Board of Trustees, be (a) at
least as favorable to the Fund as those which would be charged by
other qualified brokers having comparable execution capability,
and (b) at least as favorable to the Fund as commissions

11<PAGE>
contemporaneously charged by the Underwriter on comparable
transactions for its most favored unaffiliated customers, except
for customers of the Underwriter considered by a majority of the
Trust's disinterested Trustees not to be comparable to the Fund.
The disinterested Trustees from time to time review, among other
things, information relating to the commissions charged by the
Underwriter to each Fund and the Underwriter's other customers,
and rates and other information concerning the commissions
charged by other qualified brokers.

Any profits from brokerage commissions earned by the Underwriter
as a result of portfolio transactions for either Fund will accrue
to Greg D'Amico and Robert Loest as registered representatives of
the Underwriter. Neither Underwriting Agreement provides for a
reduction of the Advisor's fee by the amount of any profits
earned by the Underwriter from brokerage commissions generated
from portfolio transactions of the Fund.

While the Funds contemplate no ongoing arrangements with any
other brokerage firms, brokerage business may be given from time
to time to other firms. The Underwriter will not receive
reciprocal brokerage business as a result of the brokerage
business placed by the Funds with others.

To the extent that either Fund and another of the Advisor's
clients seek to acquire the same security at about the same time,
the applicable Fund may not be able to acquire as large a
position in such security as it desires or it may have to pay a
higher price for the security. Similarly, the Fund may not be
able to obtain as large an execution of an order to sell or as
high a price for any particular portfolio security if the other
client desires to sell the same portfolio security at the same
time. On the other hand, if the same securities are bought or
sold at the same time by more than one client, the resulting
participation in volume transactions could produce better
executions for the applicable Fund. In the event that more than
one client wants to purchase or sell the same security on a given
date, the purchases and sales will normally be allocated on a
random selection basis.

For the fiscal years ended November 30, 1995, November 30, 1996,
and November 30, 1997, the Millennium Fund paid brokerage
commissions of $5,251, $10,980, and $10,332, respectively, to
Securities Service Network, Inc. for effecting 100% of the
Millennium Fund's commission transactions. As a newly organized
series of the Trust, the New Frontier Fund has yet to incur any
brokerage commissions.

Net Asset Value
- - ---------------

Shares of the Funds are purchased at the next offering price
after the order is received. The offering price is effective for
orders received prior to the time of determination of the net
asset value prior to the close of business.

-12-<PAGE>
traded on the New York Stock Exchange, the American Stock
Exchange, or the NASDAQ National Market System are valued at the
last sale price or the last bid price if there is no sale.
Securities or other assets for which quotations are not readily
available are valued at fair values determined in good faith by
the Board of Trustees. See "Net Asset Value" in the Prospectus.

Performance
- - -----------

The average annual total return for each Fund that will be
reported by the Trust will be calculated according to the
following formula:

P(1+T)n = ERV

Where:

P is a hypothetical initial payment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value of hypothetical $1,000 payment made
at the beginning of the 1, 5, or 10 year periods (or fractional
portion thereof).

All total return figures reflect the deduction of a proportional
share of the Fund's expenses on an annual basis, and assume that
all dividends and distributions are reinvested in the Fund when
paid.

From time to time, in advertisements, sales literature and
information furnished to present or prospective shareholders, the
performance of each Fund may be compared to indices of broad
groups of unmanaged securities considered to be representative of
or similar to the portfolio holdings of the applicable Fund or
considered to be representative of the stock market in general or
the fixed income securities market in general. The Funds may use
the Standard & Poor's 500 Stock Index, the Dow Jones Industrial
Average, the Value Line Composite Average, and the NASDAQ
Composite Index, as well as other appropriate indexes.

In addition, the performance of each Fund may be compared to
other groups of mutual funds tracked by any widely used
independent research firm which ranks mutual funds by overall
performance, investment objectives and assets, such as Lipper
Analytical Services, Inc. or Morningstar, Inc. The objectives,
policies, limitations and expenses of other mutual funds in a
group may not be the same as those of the applicable Fund.
Performance rankings and ratings reported periodically in
national financial publications such as Barron's may also be
used.

The following table provides the total rates of return for the
Millennium Fund from its inception to Nov. 30, 1997:

1 year (December 1, 1996 - Nov. 18.75%
30, 1997)
2 year (December 1, 1995 - Nov. 59.6%
30, 1997)
Since Inception (January 3, 89.52%
1995 - Nov. 30, 1997)

-13-<PAGE>
CHERRY BEKAERT HOLLAND, L.L.P.

FINANCIAL STATEMENTS

The audited financial statements of the Millennium Fund are
incorporated by reference from the Millennium Fund's Annual
Report to Shareholders for the fiscal year ended Nov. 30, 1997.
A copy of such report accompanies this Statement of Additional
Information. Additional copies are available, without charge by
calling the Fund.

-14-
<PAGE>
DYNAMIC STYLE ROTATION(SM) FUND

PROSPECTUS

___________, 1998

625 S. GAY STREET, SUITE 630
KNOXVILLE, TN 37902

For questions about investing in the Fund: 1-800-232-9142

For Shareholder Services: 1-800-232-9142

The Dynamic Style Rotation(SM) Fund (the "DSR(SM) Fund" or the
"Fund"), a non-diversified fund, is a separate series of the IPS
Funds (the "Trust"), an open-end management company consisting of
three funds representing separate portfolios of investment.

The investment objective of Fund is to provide long-term growth
of capital, without regard to federal income tax considerations.
The Fund seeks to attain its objective primarily by investing in
common stock of companies with large, medium, and small market
capitalizations. The Fund is designed for long term investors
and should not be considered by investors with short time
horizons.

The Fund is "no-load", which means there are no sales charges or
commissions. In addition, there are no 12b-1 fees, distribution
expenses or deferred sales charges which are borne by the
shareholders. There is a $2,000 minimum investment requirement
to open an account.

Shares of the Fund are not deposits or obligations of any bank,
are not endorsed or guaranteed by any bank, and are not insured
by the Federal Deposit Insurance Corporation (FDIC), the Federal
Reserve Board or any other government agency, entity, or person.
The purchase of Fund shares involves investment risks, including
the possible loss of principal.

This Prospectus provides information you should know before
investing in the Fund. It should be read and retained for future
reference. A Statement of Additional Information for the Fund
dated ___________, 1998 containing additional information about
the Fund, has been filed with the Securities and Exchange
Commission, and is incorporated by reference into this
Prospectus. The Statement of Additional Information may be
obtained without charge by writing to the Secretary of the Fund
at the above address.

The other two series of the Trust, both of which are described in
detail in a separate Prospectus, are the IPS Millennium Fund, a
diversified fund (the "Millennium Fund") and the IPS New Frontier
Fund, a non-diversified fund (the "New Frontier Fund"). You may
obtain a copy of the Prospectus for the Millennium Fund and the
New Frontier Fund by contacting the Trust at 1-800-932-9142.

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

<PAGE>
TABLE OF CONTENTS

SUMMARY OF EXPENSES ............................ 1

THE TRUST ...................................... 2

INVESTMENT OBJECTIVES AND POLICIES ............. 2

Investment Objective............................ 2
Portfolio Construction/Equity Style
Rotation ..................................... 2
Investment Risks ............................... 4
Fund Turnover .................................. 4

HOW TO PURCHASE SHARES OF THE FUND ............. 5

By Mail ........................................ 5
Additional and Pre-authorized Purchases ........ 5
Payment for Shares ............................ 5
Telephone Purchases by Securities Firms ........ 5
Exchange Privilege ............................. 6

DIVIDENDS AND DISTRIBUTIONS .................... 8

Automatic Monthly Exchange ..................... 8

TAXES .......................................... 8

OPERATIONS OF THE FUND ........................ 9

Board of Trustees .............................. 9
The Investment Advisor and Sub-Advisor.......... 9
Advisor Compensation .......................... 10
Shareholder Rights ............................ 11
Shareholder Inquiries .......................... 11
Portfolio Transactions ......................... 11
Transactions ................................... 11
Transfer Agent ................................ 11
How The Fund Measures Its Performance .......... 11
Net Asset Value ................................ 12
How to Redeem or Sell Fund Shares ............. 12
Systematic Withdrawals ........................ 13
Retirement Plans .............................. 14

<PAGE>
SUMMARY OF EXPENSES

</TABLE>
<TABLE>
<CAPTION>

Shareholder Transaction Expenses
<S> <C>
Maximum sales load on purchases.................................. None
Maximum sales load on reinvested dividends ...................... None
Deferred sales load ............................................. None
Redemption fees ................................................. None <F1>
Exchange fees ................................................... None

Annual Fund Operating Expenses (as a percentage of average net assets)

Management fees ................................................ 1.50% <F2>
12b-1 expenses ................................................. None
Other expenses ................................................. None
Total Fund operating expenses ................................... 1.50% <F2>

Example
<S> <C> <C>
1 year 3 years
You would pay the following total
expenses on a $1,000 investment, assuming $15 $49
a 5% annual return <F3> and redemption
at the end of the period.
______________________
<FN>
<F1> The Fund's Custodian charges a $10 fee for each wire
redemption.

<F2> The Fund's total operating expenses are equal to the
management fees paid to the Advisor because the Advisor pays all
of the Fund's operating expenses.

<F3> Use of this assumed 5% return is required by the Securities
and Exchange Commission; it is not an illustration of past or
future investment results. The purpose of this table is to
assist the investor in understanding the various costs and
expenses that an investor in the Fund will bear, directly or
indirectly. This example should not be considered a
representation of past or future expenses.
</FN>
</TABLE>

Shareholders should be aware that the Fund is a no-load fund and,
accordingly, a shareholder does not pay any sales charge or
commission upon purchase or redemption of shares of the Fund.
The Fund does not have a 12b-1 Plan. Unlike most other mutual
funds, the Fund does not pay directly for transfer agency,
pricing, custodial, auditing or legal services, nor does it pay
directly any general administrative or other operating expenses.
The Advisor pays all of the expenses of the Fund except
brokerage, taxes, interest and extraordinary expenses.

-1-<PAGE>
THE TRUST

One series of the Trust is the Dynamic Style Rotation(SM) Fund
(the "DSR(SM) Fund" or the "Fund"), a non-diversified portfolio which
is described in detail in this Prospectus. Investments in the
Fund involve risk, and there can be no assurance that the Fund
will achieve its investment objectives. The address of the Fund
is 625 S. Gay Street, Suite 630, Knoxville, Tennessee, 37902 and
the telephone number is 1-800-232-9142.

The investment advisor to the Fund is IPS Advisory, Inc. (the
"Advisor"). The Fund's Advisor has entered into a Sub-Advisory
Agreement with High Street Financial Services, Inc. (the "Sub-
Advisor") pursuant to which the Sub-Advisor furnishes investment
advisory services in connection with the management of the Fund.
Subject to the oversight of the Trust's Board of Trustees and the
Advisor, the Sub-Advisor will manage the investment of the Fund's
assets in accordance with the policies and objectives of the
Fund.

The other two series of the IPS Funds are the IPS Millennium
Fund, a diversified fund (the "Millennium Fund") and the IPS New
Frontier Fund, a non-diversified fund (the "New Frontier Fund"),
both of which are described in detail in a separate Prospectus
that may be obtained by contacting the Trust at 1-800-232-9142.

INVESTMENT OBJECTIVES AND POLICIES

Investment Objective
- - ---------------------

The investment objective of the Fund is to provide long-term
growth of capital without regard to federal income tax
considerations. The Fund seeks to attain its objective by
investing primarily in common stock of companies with large,
medium, and small market capitalizations. The Fund employs a
technique of "Dynamic Style Rotation(SM)," the rotation or
tilting of the Fund's investment weightings between growth and
value equity securities as general economic conditions change.
By rotating the Fund's investment emphasis in accordance with
favorable market conditions for the appropriate equity investment
strategy, the Fund believes that it will be able to employ the
most effective equity investment style for a given set of market
conditions.

Portfolio Construction / Equity Style Rotation
- - -------------------------------------------------

In managing the Fund, the Sub-Advisor will continually adjust
weightings in the Fund's portfolio among various equity
investment strategies and investment disciplines which, in the
opinion of the Sub-Advisor, are most likely at any given time to
enable the Fund to meet its investment objective.

Equity securities are typically classified as being either a
growth or value stock. In general, growth stocks are stocks of
companies whose earnings per share are expected by the investment
manager to grow faster than the market average. In general,
value stocks are stocks of companies that are perceived by the

-2-<PAGE>
investment manager as undervalued in the market. Because market
conditions are constantly changing, no one investment emphasis
(growth stocks, value stocks, or other) outperforms all others at
all times. Accordingly, the Fund attempts to identify market
conditions at any given time and, based upon the Sub-Advisor's
proprietary computer models, allocates the Fund's investments
among growth stocks, value stocks and other types of investments
so as to weight the portfolio more heavily in the type of
investments that the Sub-Advisor believes present greater return
opportunities for the particular market conditions. Because
allocation decisions are generally based upon long-term
considerations, changes in the Fund's portfolio are generally
gradual.

The Fund is managed as a whole and does not seek to fulfill all
of its objectives in any one security. The Fund's investments
are not limited to any particular investment sector, industry or
company size; and the Fund's investments may, depending upon
market circumstances, emphasize the securities of small, medium
or large-sized companies from time to time. It is anticipated
that under normal market conditions common stocks (including
dividend paying common stocks) will constitute at least 75% of
the Fund's investment portfolio.

However, the Fund may hold its assets in money market
instruments, U.S. government securities, repurchase agreements
collateralized by U.S. Government securities, and shares of other
investment companies for liquidity purposes or when common stocks
are viewed as overvalued. In addition, for temporary defensive
purposes under abnormal market or economic conditions, the Fund
may hold up to 100% of its assets in such securities. If the
Fund acquires securities of another investment company, the
shareholders of the Fund generally will be subject to duplicate
management fees. The Fund will try to minimize fluctuations in
value through diversification among companies and industries, and
constant monitoring.

Although it is anticipated that the Fund will invest primarily in
common stocks, the Fund may also purchase convertible securities,
such as bonds and preferred stocks (including warrants and
rights). The Fund will not buy securities on margin, sell
securities short, engage in options or futures transactions or
use commodities or futures contracts. See "Investment
Limitations" in the Statement of Additional Information.

The Fund is "non-diversified," which means that it is not subject
to the restrictions to which a "diversified" fund, as defined in
Section 5 of the 1940 Act, is subject. (In general, a
diversified may not, as to 75% of its assets, invest more than 5%
of its assets at the time of investment in any one issuer nor own
more than 10% of the outstanding voting securities of any one
issuer.) Although the Fund is non-diversified, because the Fund
intends to conduct its operations so as to qualify as a
"regulated investment company" for purposes of the Internal
Revenue Code of 1986, as amended (the "Code"), the Fund will be
subject to certain diversification restrictions imposed by the
Code.

-3-<PAGE>
invest its assets in a minimum of 12 common stocks, 10 of which
may each represent no more than 5% of the Fund's assets and 2 of
which may each represent no more than 25% of the Fund's assets.
For more information regarding these diversification
restrictions, see "Taxes" below.

Investment Risks
- - ----------------

All investments carry risks. There is no such thing as a risk-
free investment. Stocks are subject to short term loss of
principal because their value fluctuates significantly during the
year. Stocks are more resistant to the other major risk of the
long-term erosion of purchasing power due to inflation, as can
happen with debt securities and cash.

It is normal for most stocks that do not have high dividend
yields to drop in price from 30% to 60% during the course of any
12 month period. Thus, investors in the Fund must be able to
tolerate such short-term price volatility in order to benefit
from the potentially higher longer term growth of stocks. Such
characteristics can prevent investors or the Fund from achieving
their investment objectives, especially over shorter periods of a
few years or less.

The Fund expects that it will have risk, or overall volatility,
similar to that of other asset allocation funds. Under ordinary
circumstances, the Fund should experience slightly lower
volatility than the stock market in general. The Fund may not do
as well in the future as it has in the past. No investment
strategy works all the time, and investors should expect that
there will be extended periods when the Fund's investment
philosophy and strategies will not be aligned with where the
overall stock market, or particular large segments of the market
(i.e., large vs. small companies), is going.

Fundamental Policies
- - --------------------

The investment limitations set forth in the Statement of
Additional Information as fundamental policies may not be changed
without the affirmative vote of the majority of the outstanding
shares of the Fund. The investment objective of the Fund may be
changed without the affirmative vote of a majority of the
outstanding shares of the Fund.

Portfolio Turnover
- - ------------------

The Fund does not intend to purchase or sell securities for short
term trading purposes. The Fund will, however, sell any
portfolio security (without regard to the length of time it has
been held) when the Sub-Advisor believes that market conditions,
company-specific factors or general economic conditions warrant
such action. It is anticipated that the Fund will have a
portfolio turnover rate of less than 150%.

-4-<PAGE>
HOW TO PURCHASE FUND SHARES

By Mail
- - -------

The Fund's minimum investment is $2,000. Shares may be purchased
in the Fund by making your check payable to Dynamic Style
Rotation(SM) Fund and mailing your application and check to:

Dynamic Style Rotation Fund c/o The Provident Bank
P.O. Box 14967 Cincinnati, Ohio 45250-0967

Additional and Pre-authorized Purchases
- - ---------------------------------------

After becoming a shareholder in the Fund, you may, at any time,
purchase additional shares in the Fund subject to a minimum
investment of $100. A check made payable to the Fund in the
amount to be invested should be sent to The Provident Bank at the
address set forth above. Each additional purchase request must
contain your name and account number. If you prefer to invest
automatically each month, you may authorize the Fund to debit
your bank account for the periodic purchase of shares of the Fund
in the middle of the month. You will receive a confirmation
every time you make a transaction in the Fund.

Payment for Shares
- - ------------------

The Fund reserves the right in its sole discretion to reject
purchase orders when, in the judgment of management, such
rejection is in the best interests of the Fund' shareholders.
The Fund also reserves the right at any time to waive or increase
the minimum investment requirements applicable to initial or
subsequent investments for the Fund. No application to purchase
shares in the Fund is binding until accepted in writing by the
Fund.

Telephone Purchases by Securities Firms
- - ------------------------------------

Member firms of the NASD may telephone IPS Advisory, Inc. at 1-
800-232-9142 and place purchase orders on behalf of investors who
carry their Fund investments through the member's account with
the Fund. By electing telephone purchase privileges, NASD member
firms, on behalf of themselves and their clients, agree that
neither the Fund, the Underwriter nor the Transfer Agent shall be
liable for following instructions communicated by telephone and
reasonably believed to be genuine. The Fund and its agents
provide written confirmations of transactions initiated by

-5-<PAGE>
telephone as a procedure designed to confirm that telephone
instructions are genuine. In addition, all telephone
transactions with the Transfer Agent are recorded. As a result
of these and other policies, the NASD member firms may bear the
risk of any loss in the event of such a transaction. However, if
the Transfer Agent or the Fund fails to employ this and other
established procedures, the Transfer Agent or the Fund may be
liable. The Fund reserves the right to modify or terminate these
telephone privileges at any time.

Exchange Privilege
- - -----------------

Investors in the Fund may exchange shares of of the Fund for
shares of the Millennium Fund or the New Frontier Fund. There is
no charge for such exchanges. This offer is limited to residents
of states in which the shares being acquired are registered for
sale. Before making an exchange, the investor should review a
current Prospectus of the Millennium Fund and the New Frontier
Fund for information relating to the fund in which he is
acquiring shares. Investors should consider the differences in
the investment objectives and portfolio compositions of such
fund.

An exchange request may be given in writing or by telephone to
the Transfer Agent. Shares may also be exchanged through any
registered securities dealer acting for the shareholder. An
exchange order must comply with the requirements for a
redemption. (See "Redemption of Shares"). If the exchange
request is in proper order, the exchange will be based on the
respective net asset values of the shares involved which is next
determined after the request is received. The exchange of shares
of the Fund for shares of the Millennium Fund or the New Frontier
Fund is treated for federal income tax purposes as a sale of the
shares given in exchange and an investor (other than a tax-exempt
investor) may, therefore, realize a taxable gain or loss. The
Fund reserves the right, upon 60 days' notice to shareholders, to
impose reasonable fees and restrictions with respect to the
exchange privilege and to modify or terminate the exchange
privilege. Except for those limited instances where redemptions
of the exchanged security are suspended under Section 22(e) of
the 1940 Act, or where sales of the fund into which the
shareholder is exchanging are temporarily stopped, notice of all
such modifications or termination of the exchange privilege will
be given at least 60 days prior to the date of termination or the
effective date of the modification.

By signing an Application to Purchase Shares of the Fund, the
investor has agreed that the Transfer Agent and the Fund will not
be liable for following instructions communicated by telephone
that it reasonably believes to be genuine. The Fund provides
written confirmation of transactions in the Fund initiated by
telephone as a procedure designed to confirm that telephone
instructions are genuine. As a result of this policy, the
investor may bear the risk of any loss in the event of such a
transaction; provided, however, if the Fund fails to employ this
and other established procedures, the Fund may be liable.

-7-<PAGE>
Automatic Monthly Exchange
- - --------------------------

Shareholders of the Fund may arrange for a fixed dollar amount of
their shares to be automatically exchanged for shares of the
other fund or the DSR(SM) Fund on a monthly basis. The minimum
monthly exchange in this program is $100. This automatic
exchange program may be changed by the shareholder at any time by
writing to the Transfer Agent at least two weeks prior to the
date the change is to be made. Further information regarding
this service can be obtained by contacting the Transfer Agent.

DIVIDENDS AND DISTRIBUTIONS

The Fund intends to declare dividends representing net investment
income two times annually, generally in the months of October and
December. It is the present policy of the Fund to distribute
annually all of its net long term capital gains in the month of
December. When a dividend or capital gain is distributed, the
net asset value per share is reduced by the amount of the
payment.

All dividends or capital gains distributions paid by the Fund
will be automatically reinvested in shares of the Fund at the
next determined net asset value, unless an investor specifically
requests that either dividends or capital gains distributions or
both be paid in cash. If cash payment is requested, a check
normally will be mailed within five business days after the
payable date. If you withdraw your entire account, all dividends
accrued to the time of withdrawal, including the day of
withdrawal, will be paid at that time. You may elect to have
distributions on shares held in IRA's and 403(b) plans paid in
cash only if you are 59 1/2 years old or permanently and totally
disabled or if you otherwise qualify under the applicable plan.
To change the election of dividends or capital gains
distributions, send a written request to the Dynamic Style
Rotation(SM) Fund, 625 S. Gay Street, Suite 630, Knoxville, TN
37902.

TAXES

The Fund intends to elect to qualify for the special tax
treatment afforded regulated investment companies under the
Internal Revenue Code of 1986, as amended (the "Code"). A fund
so qualified is not subject to federal income tax on the part of
its net ordinary income and net realized capital gains which it
distributes to shareholders.

To qualify for special tax treatment afforded investment
companies under the Code, the Fund is required, at the end of
each quarter of the taxable year, to have (i) at least 50% of the
market value of the Fund's total assets be invested in cash, U.S.
Government securities, the securities of other regulated
investment companies, and other securities, with such other
securities of any one issuer limited for the purposes of this
calculation to an amount not greater than 5% of the value of the
Fund's total assets, and (ii) not more than 25% of the value of
its total assets be invested in the securities of any one issuer
(other than U.S. Government securities or the securities of other
regulated investment companies).

-8-
<PAGE>
Dividends paid by the Fund from its ordinary income and
distributions of the Fund's net realized short-term capital gains
are taxable to non-tax-exempt investors as ordinary income.
Distributions made from the Fund's net realized long-term capital
gains are taxable to shareholders as long-term capital gains
regardless of how long the shareholder has owned shares in the
Fund. The Fund will provide its shareholders with a written
notice as to the amounts of any dividends or capital gains
distributions no later than 30 days after December 31 of each
year. If you redeem your shares in the Fund you will have a
capital gain or loss, which will be short-term or long-term
depending upon the period of time you owned the shares.

Shareholders are urged to consult their tax advisors as to the
particular tax consequences of the acquisition, ownership and
disposition of shares of the Fund, including the application of
state, local, and foreign tax laws and possible future changes in
federal tax laws. Foreign investors should consider applicable
foreign taxes in their evaluation of an investment in the Fund.

OPERATIONS OF THE FUND

Board of Trustees
- - -----------------

The Fund is a non-diversified series of IPS Funds, an open-end
management investment company organized as an Ohio business trust
on August 10, 1994. The Board of Trustees of the Trust
supervises the operations of the Fund according to applicable
state and federal law and is responsible for the overall
management of the Fund's business affairs.

The Investment Advisor and Sub-Advisor
- - --------------------------------------

IPS Advisory, Inc., 625 S. Gay Street, Suite 630, Knoxville, TN
37902 is the investment adviser engaged to supervise the
operation of the Fund, to manage its investments and business
affairs, and provide investment research for the Fund. The
principals of the Advisor are Greg D'Amico, President and Robert
Loest, Ph.D., CFA, Chief Executive Officer. Both have extensive
experience in equities analysis, having managed investment
portfolios for individual clients, including corporations and
retirement plans, on a full time basis since 1986.

The Advisor is under the supervisory control of Securities
Service Network, Inc. ("SSN"), located at 9041 Executive Park
Drive, Suite 500, Knoxville, TN 37923. SSN is a Securities and
Exchange Commission and Tennessee registered Broker-Dealer and
Investment Advisor, and exercises supervisory control of the
Advisor through a Consent Guaranty letter and compliance
guidelines established by SSN and approved by the Securities
Division of the State of Tennessee. SSN also acts as the
exclusive agent for distribution of shares of the Fund. Greg
D'Amico and Robert Loest will be responsible for the day to day
management of the portfolio of the Fund. Greg D'Amico is
President, Trustee and Treasurer to the Trust. Mr. D'Amico is
President and a Director of the Advisor. Robert Loest Ph.D.,
CFA, is Vice President, Trustee and Secretary of the Trust. Mr.
Loest is also Chief Executive Officer and a Director of the
Advisor. Mr. D'Amico and Mr. Loest both are controlling persons

-9-<PAGE>
and may be deemed affiliates of the Advisor. Mr. D'Amico and Mr.
Loest are both securities representatives with Securities Service
Network, Inc. (since 1986).

The Investment Advisor has retained the services of High Street
Financial Services, Inc. (the "Sub-Advisor"), a Florida
corporation located at 777 Harbour Island Boulevard, Suite 175,
Tampa, Florida 33602, to manage the investment and reinvestment
of the DSR(SM) Fund assets. Founded in 1992, the Sub-Advisor provides
investment advisory services to other investment advisory
organizations, institutions, and individuals. As of December 31,
1997, the Sub-Advisor provided investment advisory services to
clients having assets with an approximate value of $180 million.
John J. Bartoletta is the President and a controlling person of
the Sub-Advisor. Payment for the services of the Sub-Advisor is
the responsibility of the Advisor and is not a separate expense
of the Fund. The Sub-Advisor discharges its responsibilities
subject to the oversight of the Officers and Directors of the
Trust and the Advisor.

Advisor Compensation
- - --------------------

The Fund has approved a Management Agreement with the Advisor.
Under the Management Agreement, the Fund has agreed to compensate
the Advisor for its services by the payment of a monthly fee at
the annual rate of 1.50% of the average daily net assets of the
Fund to and including $100,000,000, 1.30% of the average daily
net assets of the Fund from $100,000,000 to and including
$250,000,000, and 1.10 % of the average daily net assets of the
Fund in excess of $250,000,000. The Advisor pays all of the
expenses of the Fund except brokerage, taxes, interest and
extraordinary expenses. The Advisor may also use its own
resources, which may include a portion of its fee under the
Management Agreement, to pay for distribution or other marketing
related expenses of the Fund. In this regard, it should be noted
that most investment companies pay their own operating expenses
directly, while the Fund's expenses (except those specified
above) are paid by the Advisor.

For services rendered by the Sub-Advisor, IPS Advisory, Inc. pays
to the Sub-Advisor a fee at the annual rate of .75% of the
average daily net assets of the Fund to and including
$100,000,000, .65% of the average daily net assets of the Fund
from $100,000,000 to and including $250,000,000, and .55% of the
average daily net assets of the Fund in excess of $250,000,000
and paid as of the last day of each month on the basis of the
Fund's daily net asset value using for each daily calculation the
most recently determined net asset value of the Fund. See "Net
Asset Value."

Shareholder Rights
- - ------------------

Each share in the Fund has equal voting rights with respect to
other shares in the Fund regarding matters submitted for a vote
of shareholders in the Fund, and equal voting rights with respect
to other shares in the Trust regarding matters submitted for a
vote of shareholders in the Trust. Shareholders are entitled to
one vote for each full share held (and fractional votes for

-10-<PAGE>
fractional shares) and may vote in the election of Trustees and
on other matters submitted to meetings of shareholders of the
Trust or the Fund. Neither the Trust nor the Fund holds annual
meetings of shareholders.

The Trust's Declaration of Trust provides that the Fund's
shareholders have the right, upon the vote of more than two-
thirds of its outstanding shares, to remove a Trustee. The
Trustees will call a meeting of shareholders to vote on the
removal of a trustee upon the written request of the record
holders of ten percent of the Trust's shares. In addition, ten
shareholders holding the lesser of $25,000 worth or one percent
of Fund shares may advise the Trustees in writing that they wish
to communicate with other shareholders for the purpose of
requesting a meeting to remove a Trustee.

Shareholder Inquiries
- - ---------------------

Shareholders can make inquiries about the Fund or their personal
account by calling the Fund's Transfer Agent at 800-232-9142 or
writing the Fund at the address listed on the cover page.

Portfolio Transactions
- - ----------------------

Subject to policies established by the Trust's Board of Trustees
and its agreement with the Advisor, the Sub-Advisor is primarily
responsible for the execution of the Fund's portfolio
transactions and the allocation of the brokerage business. In
selecting broker-dealers, the Sub-Advisor may consider research
and brokerage services furnished to it and its affiliates.
Consistent with the Rules of Fair Practice of the National
Association of Securities Dealers, Inc. and subject to its
objective of seeking best qualitative execution of portfolio
transactions, the Sub-Advisor may consider sales of shares of the
Fund in its selection of broker-dealers. Securities Service
Network, Inc., which may be deemed to be an affiliate of the
Advisor, may place trades for the Fund through National Financial
Services Corporation (NFSC), a subsidiary of the Fidelity
companies and a member of the New York Stock Exchange. The
Statement of Additional Information contains more information
about the Fund's brokerage practices.

Transfer Agent
- - --------------

IPS Advisory, Inc., 625 S. Gay Street, Suite 630, Knoxville,
Tennessee 37902 is the Fund's Transfer Agent. The Transfer Agent
performs shareholder service functions for a fee.

How The Fund Measures Its Performance
- - -------------------------------------

The Fund may periodically advertise "average annual total
return." The "average annual total return" of the Fund refers to
the average annual compounded rate of return over the stated
period that would equate an initial amount invested at the
beginning of a stated period to the ending redeemable value of
the investment. The calculation of "average annual total return"
assumes the reinvestment of all dividends and distributions.

-11-<PAGE>
The Fund may also periodically advertise its total return over
various periods in addition to the value of a $10,000 investment
(made on the date of the initial public offering of the Fund's
shares) as of the end of a specified period. The "total return"
for the Fund refers to the percentage change in the value of an
account between the beginning and end of the stated period,
assuming no activity in the account other than reinvestment of
dividends and capital gains distributions.

The Fund may also include in advertisements data comparing
performance with other mutual funds as reported in non-related
investment media, published editorial comments and performance
rankings compiled by independent organizations and publications
that monitor the performance of mutual funds (such as Morningstar
or Lipper Analytical Services). Performance information may be
quoted numerically, or may be presented in a table, graph or
other illustration. In addition, Fund performance may be
compared to well-known indices of market performance including
the Standard & Poor's (S&P) 500 Index, S&P MidCap 400 Index,
S&P/BARRA Growth and Value Indices, the Value Line Composite
Index (GEOM), the NASDAQ Composite Index, or the Dow Jones
Industrial Average. The Fund's annual report will contain
additional performance information that will be made available
upon request and without charge.

Net Asset Value
- - ---------------

Shares are purchased at the next offering price after the order
is received. The net asset value is determined at the close of
the New York Stock Exchange each day that the exchange is open.
The current value of the Fund's total assets, less all
liabilities, divided by the total number of shares outstanding
rounded to the nearest cent, is the net asset value per share.

Since the Fund does not impose any front end sales load or
redemption fee, both the purchase price and the redemption price
of a Fund share on any date will be equal to the next calculated
net asset value of a share.

How to Redeem or Sell Fund Shares
- - ---------------------------------

To redeem shares, send a letter of instruction to the Transfer
Agent, specifying the number of shares or dollar amount to be
sold, your name and your account number. The Fund will buy back

-12-<PAGE>
(redeem), at current net asset value (no charge), all shares of
the Fund offered for redemption and meeting the requirements of
this Prospectus. The net asset value will be the next net asset
value determined after receipt of the request for redemption.
Payment will be made within seven days of receipt of a valid
redemption request.

Redemption requests should be sent to the DSR(SM) Fund:

c/o IPS Advisory, Inc., 625 S. Gay Street, Suite 630, Knoxville,
TN 37902

Requests for redemption by telephone will not be accepted.

To keep Fund share expenses to a minimum, the Fund is authorized
to redeem accounts that fall below $2,000, or such other minimum
amount as the Fund may determine from time to time. Redemption
will only occur when the account is reduced by redemptions and
not by a decline in market value. The account holder will be
notified 60 days in advance before an account is redeemed. An
involuntary redemption constitutes a sale. You should consult
your tax adviser concerning the tax consequences of involuntary
redemptions. To prevent redemption, an account can be increased
by contributing additional funds to bring it over the account
minimum. Each share of the Fund is subject to redemption at any
time if the Board of Trustees determines in its sole discretion
that failure to so redeem may have materially adverse
consequences to all or any of the shareholders of the Fund.

Systematic Withdrawals
- - ----------------------

Accounts valued at $10,000 or above, using the current net asset
value, are eligible for normal distributions under a systematic
withdrawal program. Setting up a Systematic Withdrawal Program
allows investors to withdraw a fixed sum each month or calendar
quarter. The minimum amount that can be withdrawn each month or
quarter under the Systematic Withdraw Program is $100. This
program may be terminated by a shareholder or the Fund at any
time without charge or penalty, and will become effective five
business days following receipt of shareholder instructions. A
withdrawal under the Systematic Withdrawal Program involves a
redemption of shares, and may result in a gain or loss for
federal income tax purposes. In addition, if the amount
withdrawn exceeds the dividends credited to the shareholder's
account, the account ultimately may be depleted.

-13-<PAGE>
Retirement Plans
- - ----------------

The Fund offers several tax qualified retirement plans for
adoption by individuals and employers. The following plans are
available: Traditional Individual Retirement Accounts (IRAs),
Simplified Employee Pension Plans, 403(b) plans, and 401(K)
corporate profit-sharing retirement plans. Contributions to
these plans are tax-deductible and earnings are tax exempt until
distributed. Also available are Roth IRAs and Education IRAs.
When investing in a retirement plan, you should consult with a
tax adviser to determine which plan is best for your situation.
To receive all the necessary information on fees, plan agreements
and applications, contact the Advisor at 625 S. Gay Street, Suite
630, Knoxville, TN 37902 or call 1-800-232-9142.

-14-<PAGE>
DYNAMIC STYLE ROTATION(SM) FUND

PART B

STATEMENT OF ADDITIONAL INFORMATION

_____________, 1998

The Dynamic Style Rotation(SM) Fund (the "DSR(SM) Fund" or the
"Fund"), a non-diversified portfolio which is described in detail
in the Fund's Prospectus and in this Statement of Additional
Information, is a series of the IPS Funds (the "Trust"), an Ohio
business trust organized on August 10, 1994, that commenced
operations on January 3, 1995. The Trust currently offers three
Funds representing separate portfolios of investments.

Investments in the Fund involve risk, and there can be no
assurance that the Fund will achieve its investment objectives.
The address of the Fund is 625 S. Gay Street, Suite 630,
Knoxville, Tennessee 37902 and the telephone number is 1-800-232-
9142.

The other two series of the Trust are the IPS Millennium Fund, a
diversified fund (the "Millennium Fund") and the IPS New Frontier
Fund, a non-diversified fund (the "New Frontier Fund"), both of
which are described in detail in a separate Prospectus and
Statement of Additional Information that may be obtained by
contacting the Trust at ___________________________.

This Statement of Additional Information is not a prospectus, but
should be read in conjunction with the current Prospectus of the
Fund, dated _________, 1998. The Prospectus may be obtained by
contacting the Fund at the following address: Dynamic Style
Rotation(SM) Fund, 625 S. Gay Street, Suite 630, Knoxville,
Tennessee 37902, 1-800-232-9142.

<PAGE>
DYNAMIC STYLE ROTATION(SM) FUND

Statement of Additional Information

TABLE OF CONTENTS

Page

General Information and History . . . . . . . . . . . 1
U.S. Government Securities . . . . . . . . . . . . . 2
Repurchase Agreements . . . . . . . . . . . . . . . . 2
Investment Restrictions . . . . . . . . . . . . . . . 2
Fundamental . . . . . . . . . . . . . . . . . . . . . 2
Borrowing Money . . . . . . . . . . . . . . . . . 4
Senior Securities . . . . . . . . . . . . . . . . 4
Underwriting . . . . . . . . . . . . . . . . . . . 4
Real Estate . . . . . . . . . . . . . . . . . . . 4
Commodities . . . . . . . . . . . . . . . . . . . 4
Loans . . . . . . . . . . . . . . . . . . . . . . 4
Concentration. . . . . . . . . . . . . . . . . . . 4
Non-Fundamental . . . . . . . . . . . . . . . . . . . 5
Pledging . . . . . . . . . . . . . . . . . . . . . 5
Borrowing . . . . . . . . . . . . . . . . . . . . 5
Margin Purchases . . . . . . . . . . . . . . . . . 5
Short Sales . . . . . . . . . . . . . . . . . . . 5
Illiquid Investments . . . . . . . . . . . . . . . 5
Trust Trustees and Officers . . . . . . . . . . . . . 6
Name, Address and Positions Held . . . . . . . . . . 6
The Investment Advisor, and Underwriter . . . . . . . 7
The Sub-Advisor . . . . . . . . . . . . . . . . . . . 8
Dividends, Distributions and Taxes . . . . . . . . . 9
Transfer Agent . . . . . . . . . . . . . . . . . . . 11
Custodian . . . . . . . . . . . . . . . . . . . . . . 11
Independent Accountants . . . . . . . . . . . . . . . 11
Portfolio Transactions and Brokerage . . . . . . . . 11
Net Asset Value . . . . . . . . . . . . . . . . . . . 14
Performance . . . . . . . . . . . . . . . . . . . . . 14

<PAGE>
General Information and History
- - -------------------------------

The Dynamic Style Rotation(SM) Fund (the "DSR(SM) Fund" or the
"Fund"), a non-diversified portfolio which is described in detail
in the Fund's Prospectus and this Statement of Additional
Information, is a series of the IPS Funds (the "Trust"), an Ohio
business trust organized on August 10, 1994, that commenced
operations on January 3, 1995. The Trust currently offers three
Funds representing separate portfolios of investments.

Investments in the Fund involve risk, and there can be no
assurance that the Fund will achieve its investment objectives.
The address of the Fund is 625 S. Gay Street, suite 630,
Knoxville, Tennessee, 37902 and the telephone number is 1-800-
232-9142.

Each share of the Fund represents an equal proportionate interest
in the assets and liabilities belonging to that series with each
other share of that series and is entitled to such dividends and
distributions out of income belonging to the series as are
declared by the Trustees. The shares do not have cumulative
voting rights or any preemptive or conversion rights, and the
Trustees have the authority from time to time to divide or
combine the shares of any series into a greater or lesser number
of shares of that series so long as the proportionate beneficial
interest in the assets belonging to that series and the rights of
shares of any other series are in no way affected. In case of
any liquidation of a series, the holders of shares of the series
being liquidated will be entitled to receive as a class a
distribution out of the assets, net of the liabilities, belonging
to that series. Expenses attributable to any series are borne by
that series. Any general expenses of the Trust not readily
identifiable as belonging to a particular series are allocated by
or under the direction of the Trustees in such manner as the
Trustees determine to be fair and equitable. No shareholder is
liable to further calls or to assessment by the Trust without his
or her express consent.

-1-
<PAGE>
by the Petitioning Shareholders to the Trust of the material to
be mailed and the reasonable expenses of such mailing. The
Trustees will promptly call a meeting for the purpose of voting
upon the question of removal of any Trustee when requested in
writing to do so by the record holders of not less than 10% of
the outstanding shares.

Upon sixty days prior written notice to shareholders, the Fund
may make redemption payments in whole or in part in securities or
other property if the Trustees determine that existing conditions
make cash payments undesirable. For other information concerning
the purchase and redemption of shares of the Fund, see "How to
Purchase Shares of the Fund" and "How to Redeem or Sell Shares of
the Fund" in the Prospectus. For a description of the methods
used to determine the share price and value of the Fund's assets,
see "Net Asset Value" in the Prospectus.

U.S. Government Securities
- - --------------------------

U.S. government securities may be backed by the credit of the
government as a whole or only by the issuing agency. U.S.
Treasury bonds, notes, and bills and some agency securities, such
as those issued by the Federal Housing Administration and the
Government National Mortgage Association (GNMA), are backed by
the full faith and credit of the U.S. government as to payment of
principal and interest and are the highest quality government
securities. Other securities issued by U.S. government agencies
or instrumentalities, such as securities issued by the Federal
Home Loan Banks and the Federal Home Loan Mortgage Corporation,
are supported only by the credit of the agency that issued them,
and not by the U.S. government. Securities issued by the Federal
Farm Credit System, the Federal Land Banks, and the Federal
National Mortgage Association (FNMA) are supported by the
agency's right to borrow money from the U.S. Treasury under
certain circumstances, but are not backed by the full faith and
credit of the U.S. government.

Repurchase Agreements
- - ---------------------

A repurchase agreement is a short term investment in which the
purchaser (i.e., the Fund) acquires ownership of a U.S.
Government security and the seller agrees to repurchase the
security at a future time at a set price, thereby determining the
yield during the purchaser's holding period. Any repurchase
transaction in which the Fund engages will require full
collateralization of the seller's obligation during the entire
term of the repurchase agreement. In the event of a bankruptcy
or other default of the seller, the Fund could experience both
delays in liquidating the underlying security and losses in
value. However, the Fund intends to enter into repurchase
agreements only with the Fund's Custodian, other banks with
assets of $1 billion or more, and registered securities dealers
determined by the Advisor (subject to review by the Board of
Trustees) to be creditworthy.

Investment Restrictions
- - -----------------------

FUNDAMENTAL. The investment limitations described below have
been adopted by the Fund and are fundamental ("Fundamental"),
i.e., they may not be changed without the affirmative vote of a
majority of the outstanding shares of the Fund. As used in the

-2-<PAGE>
Prospectus and this Statement of Additional Information, the term
"majority" of the outstanding shares of the Fund means the lesser
of (1) 67% or more of the outstanding shares of the Fund present
at a meeting, if the holders of more than 50% of the outstanding
shares of the Fund are present or represented at such meeting; or
(2) more than 50% of the outstanding shares of the Fund. Other
investment practices which may be changed by the Board of
Trustees without the approval of shareholders to the extent
permitted by applicable law, regulation or regulatory policy are
considered non-fundamental ("Non-Fundamental").

5. COMMODITIES. The Fund will not purchase or sell commodities
unless acquired as a result of ownership of securities or other
investments.

6. LOANS. The Fund will not make loans to other persons, except
(a) by loaning portfolio securities, (b) by engaging in
repurchase agreements, or (c) by purchasing nonpublicly offered
debt securities. For purposes of this limitation, the term
"loans" shall not include the purchase of a portion of an issue
of publicly distributed bonds, debentures or other securities.

-4-<PAGE>
With respect to the percentages adopted by the Fund as maximum
limitations on its investment policies and limitations, an excess
above the fixed percentage due to growth will not be a violation
of the policy or limitation unless the excess results immediately
and directly from the acquisition of any security or the action
taken. This paragraph does not apply to the borrowing policy set
forth in paragraph 1 above.

NON-FUNDAMENTAL. The Fund intends to adhere to the following
limitations, which are Non-Fundamental (see "Investment
Restrictions- Fundamental" above).

4. SHORT SALES. The Fund will not effect short sales of
securities unless it owns or has the right to obtain securities
equivalent in kind and amount to the securities sold short.

5. OPTIONS. The Fund will not purchase or sell put or call
options.

6. ILLIQUID INVESTMENTS. The Fund will not invest more than 15%
of its net assets in securities for which there are legal or
contractual restrictions on resale and other illiquid securities.

-5-<PAGE>
Trust Trustees and Officers
- - ---------------------------

NAME (AGE) AND ADDRESS, POSITIONS HELD
- - --------------------------------------

*Greg D'Amico (33), 625 S. Gay Street, Suite 630, Knoxville, TN
37902, President, Chief Financial Officer, Treasurer and Trustee

*Robert Loest (53), 625 S. Gay Street, Suite 630, Knoxville, TN
37902, Vice President, Secretary and Trustee

Woodrow Henderson (39), 6504 Clary Lane, Knoxville, TN 37919,
Trustee

Veenita Bisaria (36), 12416 Fort West Drive, Knoxville, TN
37922, Trustee

Billy Wayne Stegall, Jr. (40), 309 Kingston Court, Knoxville, TN
37919, Trustee

Mr. D'Amico is also President of IPS Advisory, Inc., and a
portfolio manager for individually managed accounts as a
registered representative of Securities Service Network, Inc.

Mr. Henderson is also Director of Planned Giving for the
University of Tennessee at Knoxville.

Pursuant to the terms of its Management Agreement with the Trust,
the Advisor pays all of the fees and expenses of the Trustees.
Each trustee who is not affiliated with the Advisor receives an
annual retainer of $100, plus $50 for each Board meeting
attended. During the fiscal year ended November 30, 1997, each
Trustee not related to the Advisor received aggregate
compensation of $300.

As a newly organized series of the Trust, the Fund has only one
initial shareholder as of ____________, 1998, [Greg D'Amico].

-6-
<PAGE>
The Investment Advisor, and Underwriter
- - ------------------------------------

IPS Advisory, Inc. (the "Advisor"), 625 S. Gay St., Suite 630,
Knoxville, TN 37902, is the investment adviser for the Fund.
Greg D'Amico and Robert Loest may be deemed to be controlling
persons and affiliates of the Advisor due to their ownership of
its shares and their positions as directors and officers of the
Advisor. Because of such affiliation, they may receive benefits
from the management fees paid to the Advisor. The Fund retains
the Advisor to manage the business affairs of the Fund, and to
furnish advice and recommendations to the Fund regarding
securities to be purchased and sold by the Fund.

Securities Service Network, Inc., 9041 Executive Park Drive,
Suite 500, Knoxville, TN 37923 (the "Underwriter") is the
exclusive agent for distribution of shares of the Fund. The
Underwriter is a registered investment adviser and securities
broker-dealer. The Underwriter is obligated to sell the shares
of the Fund on a best efforts basis only against purchase orders
for the shares. Shares of the Fund are offered to the public on
a continuous basis. The Underwriter exerts supervisory control
over the Advisor through a Consent Guaranty Letter, and by means
of specialized compliance procedures approved by the Securities
Division of the Tennessee Department of Commerce and Insurance.

The Advisor is staffed by experienced investment professionals
with extensive experience in company analysis, and who have been
officers of IPS since 1986. Under the terms of the Management
Agreement, the Advisor manages the Fund's investment subject to
approval of the Board of Trustees and pays all of the expenses of
the Fund except brokerage, taxes, interest and extraordinary
expenses. As compensation for its management services and
agreement to pay the Fund's expenses, the Fund is obligated to
pay the Advisor a fee computed and accrued daily and paid monthly
at an annual rate of 1.50% of its average daily net assets to and
including $100,000,000, 1.30 % of such assets from $100,000,000
to and including $250,000,000, and 1.10% of such assets in excess
of $250,000,000.

The Advisor retains the right to use the name "IPS" in connection
with another investment company or business enterprise with which
the Advisor is or may become associated. The Fund's right to use
the name abovementioned automatically ceases thirty days after
termination of the Management Agreement and may be withdrawn by
the Advisor on thirty days written notice.

-7-<PAGE>
charge their customers fees for offering these services to the
extent permitted by applicable regulatory authorities, and the
overall return to those shareholders availing themselves of the
bank services will be lower than to those shareholders who do
not. The Fund may from time to time purchase securities issued
by banks which provide such services; however, in selecting
investments for the Fund, no preference will be shown for such
securities.

The Sub-Advisor
- - ---------------

The Advisor has retained the services of High Street Financial
Services, Inc. (the "Sub-Advisor") to serve as the Sub-Advisor
for the Fund. The Sub-Advisor, a Florida corporation founded in
1992, provides investment advisory services to other investment
advisory organizations, institutions, and individuals. John J.
Bartoletta, president, owns 100% of the outstanding shares of the
Sub-Advisor. As of December 31, 1997, the Sub-Advisor provided
investment advisory services to clients having assets with an
approximate value of $180 million. The Sub-Advisor's address is
High Street Financial Services, Inc., 777 Harbour Island
Boulevard, Suite 175, Tampa, Florida 33602

Pursuant to a Sub-Advisory Agreement with the Advisor, the Sub-
Advisor provides investment advice to the Fund and manages its
investments, including brokerage and other investment portfolio-
related services, subject to the investment policies and
objectives of the Fund, and the oversight of the Advisor and the
Trust's Board of Trustees. Payment for the services of the Sub-
Advisor is made by the Advisor and is not a separate expense of
the Trust.

The Advisor pays the Sub-Advisor a fee for its services at the
annual rate of .75% of the average daily net assets of the Fund
to and including $100,000,000, .65% of the average daily net
assets of the Fund from $100,000,000 to and including
$250,000,000, and .55% of the average daily net assets of the
Fund in excess of $250,000,000 and paid as of the last day of
each month on the basis of the Fund's daily net asset value
using for each daily calculation the most recently determined net
asset value of the Fund. See "Net Asset Value."

The Sub-Advisory Agreement provides that the Sub-Advisor will not
be liable for any error of judgment or for any loss suffered by
the Trust in connection with the matters to which the Sub-
Advisory Agreement relates, except for liability resulting from
willful misfeasance, bad faith or gross negligence in the
performance of its duties or by reason of the Sub-Advisor's
reckless disregard of its duties and obligations under the Sub-
Advisory Agreement. The Fund and the Advisor will indemnify the
Sub-Advisor against liabilities, costs and expenses that the Sub-
Advisor may incur in connection with any action, suit,
investigation or other proceeding arising out of or otherwise
based on any action actually or allegedly taken or omitted to be
taken by the Sub-Advisor in connection with the performance of
its duties or obligations under the Sub-Advisory Agreement. The
Sub-Advisor is not entitled to indemnification with respect to
any liability to the Fund or its shareholders by reason of
willful misfeasance, bad faith or gross negligence in the
performance of its duties, or its reckless disregard of its
duties and obligations under the Sub-Advisory Agreement. The

-8-<PAGE>
Sub-Advisory Agreement provides that it will terminate in the
event of its assignment (as defined in the Investment Company
Act). The Sub-Advisory Agreement may be terminated by the
Advisor, the Trust (by the Board of Trustees of the Trust or vote
of a majority of the outstanding voting securities of the DSR(SM)
Fund) or the Sub-Advisor upon 60 days' written notice, without
payment of any penalty. The Sub-Advisory Agreement provides that
it will continue in effect for a period of more than two years
from its execution only so long as such continuance is
specifically approved at least annually in conformity with the
Investment Company Act.

Dividends, Distributions and Taxes
- - ----------------------------------

Dividends paid by the Fund from its ordinary income and
distributions of the Fund's net realized short-term capital gains
are taxable to non-tax-exempt investors as ordinary income.
Ordinary income dividends may be eligible for the 70% dividends
received deduction allowed to corporations under the Code, if
certain requirements are met.

Distributions made from the Fund's net realized long-term capital
gains are taxable to shareholders as long-term capital gains
regardless of the length of time the shareholder has owned such
shares. Pursuant to the Taxpayer Relief Act of 1997, different
maximum rates of tax are imposed on individuals, estates or
trusts on various transactions giving rise to long-term capital
gain. For this purpose, long-term capital gains are divided into
two tax-rate groups: a 20% group (for capital gains from assets
held for more than 18 months) and a 28% group (for all other
long-term capital gain). The Fund will supply information to its
shareholders to determine the appropriate tax-rate group of its
long-term capital gain distributions.

-9-<PAGE>
Upon redemption of shares of the Fund held by a non-tax-exempt
investor, such investor, generally, will realize a capital gain
or loss equal to the difference between the redemption price
received by the investor and the adjusted basis of the shares
redeemed. If the redemption is in-kind, capital gain or loss
will be measured by the difference between the fair market value
of securities received and the adjusted basis of the shares
redeemed. Such capital gain or loss, generally, will constitute
a short-term capital gain or loss if the redeemed shares were
held for twelve months or less, and long-term capital gain or
loss if the redeemed Fund shares were held for more than twelve
months. If, however, shares of the Fund were redeemed within six
months of their purchase by an investor, and if a capital gain
dividend was paid with respect to the Fund's shares while they
were held by the investor, then any loss realized by the investor
will be treated as long-term capital loss to the extent of the
capital gain dividend.

Under certain provisions of the Code, some shareholders may be
subject to 31% withholding on reportable dividends, capital gains
distributions and redemption payments ("back-up withholding").
Generally, shareholders subject to back-up withholding will be
those for whom a taxpayer identification number is not on file
with the Fund or who, to the Fund's knowledge, have furnished an
incorrect number. When establishing an account, an investor must
certify under penalty of perjury that such number is correct and
that he is not otherwise subject to back-up withholding.

Dividends paid by the Fund from its ordinary income and
distributions of the Fund's net realized short-term capital gains
paid to shareholders who are non-resident aliens will be subject
to a 30% United States withholding tax under existing provisions
of the Code applicable to foreign individuals and entities unless
a reduced rate of withholding or a withholding exemption is
provided under applicable treaty law. Non-resident shareholders
are urged to consult their own tax advisers concerning the
applicability of the United States withholding tax.

The Code requires each regulated investment company to pay a
nondeductible 4% excise tax to the extent the company does not
distribute, during each calendar year, 98% of its ordinary
income, determined on a calendar year basis, and 98% of its
capital gains, determined, in general, on an October 31 year-end,
plus any undistributed amount from prior years. The Fund
anticipates that it will make sufficient timely distributions to
avoid imposition of the excise tax. [If the Fund pays a dividend
in May which was declared in the previous October, November or
December to shareholders of record on a date in those months,
then such dividend or distribution will be treated for tax
purposes as being paid on December 31 and will be taxable to
shareholders as if received on December 31.]

Dividends and capital gains distributions may also be subject to
state and local taxes.

-10-<PAGE>
The federal income tax consequences set forth above do not
address any particular tax considerations a shareholder of the
Fund might have. Shareholders are urged to consult their tax
advisers as to the particular tax consequences of the
acquisition, ownership and disposition of shares of the Fund,
including the application of state, local and foreign tax laws
and possible future changes in federal tax laws. Foreign
investors should consider applicable foreign taxes in their
evaluation of an investment in the Fund.

Transfer Agent
- - --------------

The Fund's Transfer Agent is IPS Advisory, Inc., 625 S. Gay
Street, Suite 630, Knoxville, TN 37902. The Transfer Agent
performs shareholder service functions such as maintaining the
records of each shareholder's account, answering shareholders'
inquiries concerning their accounts, processing purchase and
redemptions of the Fund's shares, acting as dividend and
distribution disbursing agent and performing other accounting and
shareholder service functions.

Custodian
- - ---------

The Provident Bank, One East Fourth Street, Cincinnati, Ohio
45202, is the Custodian of the Fund's investments. The Custodian
acts as the Fund's depository, safekeeps its portfolio
securities, collects all income and other payments with respect
thereto, disburses funds at the Fund's request and maintains
records in connection with its duties.

Independent Accountants
- - -----------------------

The independent accounting firm for the Fund is Cherry Bekaert
Holland, L.L.P., Certified Public Accountants, located at 625 S.
Gay Street, Suite 550, Knoxville, TN 37902. Cherry Bekaert
Holland, L.L.P. performs an annual audit of the Trust's financial
statements and provides financial, tax and accounting consulting
services as requested.

Portfolio Transactions and Brokerage
- - ------------------------------------

Subject to the oversight of the Board of Trustees of the Trust
and the Advisor, the Sub-Advisor is responsible for the Fund's
portfolio decisions and the placing of the Fund's portfolio
transactions in accordance with the Fund's policies and
objectives.

In placing portfolio transactions, the Sub-Advisor seeks the best
qualitative execution for the Fund, taking into account such
factors as price (including the applicable brokerage commission
or dealer spread), the execution capability, financial
responsibility and responsiveness of the broker or dealer and the
brokerage and research services provided by the broker or dealer.
The Sub-Advisor generally seeks favorable prices and commission
rates that are reasonable in relation to the benefits received.

-11-<PAGE>
The Sub-Advisor is specifically authorized to select brokers or
dealers who also provide brokerage and research services to the
Fund and/or the other accounts over which the Sub-Advisor
exercises investment discretion and to pay such brokers or
dealers a commission in excess of the commission another broker
or dealer would charge if the Sub-Advisor determines in good
faith that the commission is reasonable in relation to the value
of the brokerage and research services provided. The
determination may be viewed in terms of a particular transaction
or the Sub-Advisor's overall responsibilities with respect to the
Fund and to other accounts over which it exercises investment
discretion.

Research services include supplemental research, securities and
economic analyses, statistical services and information with
respect to the availability of securities or purchasers or
sellers of securities and analyses of reports concerning
performance of accounts. The research services and other
information furnished by brokers through whom the Fund effects
securities transactions may also be used by principals of the
Sub-Advisor in servicing all of their accounts. Similarly,
research and information provided by brokers or dealers serving
other clients may be useful to principals of the Sub-Advisor in
connection with the Sub-Advisor's services to the Fund. Although
research services and other information are useful to the Fund
and the Sub-Advisor, it is not possible to place a dollar value
on the research and other information received. It is the
opinion of the Board of Trustees and the Sub-Advisor that the
review and study of the research and other information will not
reduce the overall cost to the Sub-Advisor of performing its
duties to the Fund under the Agreement. While the Fund does not
deem it practicable and in its best interests to solicit
competitive bids for commission rates on each transaction,
consideration is regularly given to posted commission rates as
well as other information concerning the level of commissions
charged on comparable transactions by qualified brokers.

The Fund has no obligation to deal with any broker or dealer in
the execution of its transactions. However, it is contemplated
that the Underwriter, in its capacity as a registered broker-
dealer, may effect securities transactions which are executed for
the Fund on a national securities exchange and over-the-counter
transactions conducted on an agency basis. Such transactions
will be executed at competitive commission rates through National
Financial Services Corporation ("NFSC").

Transactions in the over-the-counter market can be placed
directly with market makers who act as principals for their own
account and include mark-ups in the prices charged for over-the-
counter securities. Transactions in the over-the-counter market
can also be placed with broker-dealers who act as agents and
charge brokerage commissions for effecting over-the-counter
transactions. The Fund may place its over-the-counter
transactions either directly with principal market makers, or
with broker-dealers if that is consistent with the Sub-Advisor's
obligation to obtain best qualitative execution. Under the
Investment Company Act of 1940, persons who may be deemed to be
affiliated with the Advisor or the Sub-Advisor (including the
Underwriter) are prohibited from dealing with the Fund as a
principal in the purchase and sale of securities. Therefore, the
Underwriter will not serve as the Fund's dealer in connection
with over-the-counter transactions. However, the Underwriter may

-12-<PAGE>
serve as the Fund's broker in over-the-counter transactions
conducted on an agency basis and will receive brokerage
commissions in connection with such transactions. Such agency
transactions will be executed through NFSC.

The Fund will not effect any brokerage transactions in its
portfolio securities with the Underwriter if such transactions
would be unfair or unreasonable to Fund shareholders, and the
commissions will be paid solely for the execution of trades and
not for any other services. The Underwriting Agreement provides
that the Underwriter may receive brokerage commissions in
connection with effecting such transactions for the Fund. In
determining the commissions to be paid to the Underwriter, it is
the policy of the Fund that such commissions will, in the
judgment of the Fund's Board of Trustees, be (a) at least as
favorable to the Fund as those which would be charged by other
qualified brokers having comparable execution capability and (b)
at least as favorable to the Fund as commissions
contemporaneously charged by the Underwriter on comparable
transactions for its most favored unaffiliated customers, except
for customers of the Underwriter considered by a majority of the
Trust's disinterested Trustees not to be comparable to the Fund.
The disinterested Trustees from time to time review, among other
things, information relating to the commissions charged by the
Underwriter to the Fund and its other customers, and rates and
other information concerning the commissions charged by other
qualified brokers.

Any profits from brokerage commissions earned by the Underwriter
as a result of portfolio transactions for the Fund will accrue to
Greg D'Amico and Robert Loest as registered representatives of
the Underwriter. The Underwriting Agreement does not provide for
a reduction of the Advisor's fee by the amount of any profits
earned by the Underwriter from brokerage commissions generated
from portfolio transactions of the Fund.

While the Fund contemplates no ongoing arrangements with any
other brokerage firms, brokerage business may be given from time
to time to other firms. The Underwriter will not receive
reciprocal brokerage business as a result of the brokerage
business placed by the Fund with others.

To the extent that the Fund and another of the Sub-Advisor's
clients seek to acquire the same security at about the same time,
the Fund may not be able to acquire as large a position in such
security as it desires or it may have to pay a higher price for
the security. Similarly, the Fund may not be able to obtain as
large an execution of an order to sell or as high a price for any
particular portfolio security if the other client desires to sell
the same portfolio security at the same time. On the other hand,
if the same securities are bought or sold at the same time by
more than one client, the resulting participation in volume
transactions could produce better executions for the Fund. In
the event that more than one client wants to purchase or sell the
same security on a given date, the purchases and sales will
normally be allocated on a random selection basis.

-13-
<PAGE>
Net Asset Value
- - ---------------

Shares of the Fund are purchased at the next offering price after
the order is received. The offering price is effective for
orders received by the transfer agent or the Custodian prior to
the time of determination of the net asset value prior to the
close of business.

The net asset value is determined at the close of the New York
Stock Exchange each day that the exchange is open. The Exchange
is closed on weekends and on New Years Day, Martin Luther King,
Jr. Day, President's Day, Good Friday, Memorial Day, July 4,
Labor Day, Thanksgiving Day, and Christmas each year. Securities
traded on the New York Stock Exchange, the American Stock
Exchange, or the NASDAQ National Market System are valued at the
last sale price or the last bid price if there is no sale.
Securities or other assets for which quotations are not readily
available are valued at fair values determined in good faith by
the Board of Trustees. See "Net Asset Value" in the Prospectus.

Performance
- - -----------

The average annual total return for the Fund that will be
reported by the Fund will be calculated according to the
following formula:

P(1+T)n = ERV

Where:

All total return figures reflect the deduction of a proportional
share of the Fund's expenses on an annual basis, and assume that
all dividends and distributions are reinvested in the Fund when
paid.

From time to time, in advertisements, sales literature and
information furnished to present or prospective shareholders, the
performance of the Fund may be compared to indices of broad
groups of unmanaged securities considered to be representative of
or similar to the portfolio holdings of the Fund or considered to
be representative of the stock market in general or the fixed
income securities market in general. The Fund may use the
Standard & Poor's 500 Stock Index, the Dow Jones Industrial
Average, the Value Line Composite Average, and the NASDAQ
Composite Index, as well as other appropriate indexes.

In addition, the performance of the Fund may be compared to other
groups of mutual funds tracked by any widely used independent
research firm which ranks mutual funds by overall performance,
investment objectives and assets, such as Lipper Analytical
Services, Inc. or Morningstar, Inc. The objectives, policies,
limitations and expenses of other mutual funds in a group may not
be the same as those of the Fund. Performance rankings and
ratings reported periodically in national financial publications
such as Barron's may also be used.

-14-<PAGE>
IPS FUNDS

PART C. OTHER INFORMATION

Item 24. Financial Statements and Exhibits

(a) Financial Statements

Included in Part A: Financial Highlights, For the Years Ended
November 30, 1997, 1996 and 1995

Incorporated by reference from Annual Report

(1) Report of Independent Certified Public Accountant
(2) Statement of Assets and Liabilities - November 30, 1997
(3) Investments in Securities - November 30, 1997
(4) Statement of Operations - for the year ended November 30,
1997
(5) Statement of Changes in Net Assets - for the years ended
November 30, 1997 and November 30, 1996
(6) Notes to Financial Statements
(7) Financial Highlights, Selected Per Share Data and Ratios -
For the Years Ended November 30, 1997, 1996 and 1995

(b) Exhibits

(1) (i) Copy of Registrant's Declaration of Trust, which was
filed as an exhibit to Registrant's Registration Statement, is
hereby incorporated by reference.

(ii) Copy of Amendment No. 1 to Registrant's Declaration of
Trust, which was filed as an exhibit to Registrant's Pre-
Effective Amendment No. 1, is hereby incorporated by reference.

(2) Copy of Registrant's By-Laws, as amended, which was filed as
an exhibit to Registrant's Pre-Effective Amendment No. 1, is
hereby incorporated by reference.

(3) Voting Trust Agreements - None.

(4) Specimen of Share Certificate for IPS Millennium Fund, which
was filed as an exhibit to Registrant's Pre-Effective Amendment
No. 1, is hereby incorporated by reference.

(5) (i) Copy of Registrant's Management Agreement with its
Advisor, IPS Advisory, Inc. regarding the IPS Millennium Fund
which was filed as an exhibit to Registrant's Pre-Effective
Amendment No. 1, is hereby incorporated by reference.

(ii) Form of Registrant's Management Agreement with IPS
Advisory, Inc. regarding the IPS New Frontier Fund dated
________________, 1998*

(iii) Form of Registrant's Management Agreement with IPS
Advisory, Inc. regarding the Dynamic Style Rotation(SM)
Fund dated ___________, 1998*

(iv) Form of Sub-Advisory Agreement by and between IPS
Advisory, Inc. and High Street(TM) Financial Services, Inc.
regarding the Dynamic Style Rotation(SM) Fund dated
_____________________, 1998*

(6) (i) Copy of Registrant's Underwriting Agreement with
Securities Service Network, Inc. regarding the Millennium Fund,
<PAGE>
which was filed as an exhibit to Registrant's Pre-Effective
Amendment No. 1, is hereby incorporated by reference.

(ii) Form of Registrant's Underwriting Agreement with
Securities Service Network, Inc., regarding the IPS New Frontier
Fund dated ________________, 1998*

(iii) Form of Registrant's Underwriting Agreement with
Securities Service Network, Inc., regarding the Dynamic Style
Rotation(SM) Fund dated _______________, 1998*

(7) Bonus, Profit Sharing, Pension or Similar Contracts for the
benefit of Directors or Officers - None

(8) Copy of Registrant's Agreement with the Custodian, The
Provident Bank, dated November 1, 1994, as amended on
____________________ **

(9) Other Material Contracts.

(i) Transfer Agency Agreement by and between the Trust and
IPS Advisory, Inc. dated April 15, 1997*

(10) (i) Opinion and Consent of Kilpatrick Stockton LLP which
was filed with Registrant's Rule 24f-2 Notice for the fiscal
year ended November 30, 1997, is hereby incorporated by
reference

(ii) Opinion and Consent of Kilpatrick Stockton LLP re: IPS
New Frontier Fund shares**

(iii) Opinion and Consent of Kilpatrick Stockton LLP re:
Dynamic Style Rotation(SM) Fund shares**

(11) Consent of Cherry, Bekaert Holland, L.L.P. which was filed
with Registrant's Post-Effective Amendment No. 5 is hereby
incorporated by reference

(12) Financial Statements Omitted from Item 23 - None

(13) Letters of Initial Stockholders, which was filed as an
exhibit to Registrant's Pre-Effective Amendment No. 1, is hereby
incorporated by reference

(14) Model Plan used in Establishment of any Retirement Plan -
None

(15) 12b-1 Distribution Expense Plan - None

(16) Schedule for Computation of Each Performance Quotation was
filed with Registrant's Post-Effective Amendment No. 2 and is
incorporated by reference herein

(17) Financial Data Schedule (incorporated by reference from
Registrant's Form NSAR filing for the fiscal year ended November 30,
1997)

(18) Inapplicable

(99) Consent of Independent Certified Accountants dated March 30, 1998
was filed with Registrant's Post-Effective Amendment No. 5 and is
incorporated by reference herein.

_________________________
* Filed herewith
** To be filed by Amendment

Item 25. Persons Controlled by or Under Common Control with the
Registrant - None

<PAGE>
Item 26. Number of Holders of Securities (as of June ____, 1998)

Title of Class Number of Record Holders
-------------- ------------------------
IPS Millennium Fund 618
IPS New Frontier Fund 1
Dynamic Style Rotation(SM) Fund 1

Item 27. Indemnification

(a) Article VI of the Registrant's Declaration of Trust provides
for indemnification of officers and Trustees as follows:

SECTION 6.4 INDEMNIFICATION OF TRUSTEES, OFFICERS, ETC. Subject
to and except as otherwise provided in the Securities Act of
1933, as amended, and the 1940 Act, the Trust shall indemnify
each of its Trustees and officers (including persons who serve at
the Trust's request as directors, officers or trustees of another
organization in which the Trust has any interest as a
shareholder, creditor or otherwise (hereinafter referred to as a
"Covered Person") against all liabilities, including but not
limited to amounts paid in satisfaction of judgments, in
compromise or as fines and penalties, and expenses, including
reasonable accountants' and counsel fees, incurred by any Covered
Person in connection with the defense or disposition of any
action, suit or other proceeding, whether civil or criminal,
before any court or administrative or legislative body, in which
such Covered Person may be or may have been involved as a party
or otherwise or with which such person may be or may have been
threatened, while in office or thereafter, by reason of being or
having been such a Trustee or officer, director or trustee, and
except that no Covered Person shall be indemnified against any
liability to the Trust or its Shareholders to which such Covered
Person would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of
the duties involved in the conduct of such Covered Person's
office.

SECTION 6.5 ADVANCES OF EXPENSES. The Trust shall advance
attorneys' fees or other expenses incurred by a Covered Person in
defending a proceeding to the full extent permitted by the
Securities Act of 1933, as amended, the 1940 Act, and Ohio
Revised Code Chapter 1707, as amended. In the event any of these
laws conflict with Ohio Revised Code Section 1701.13(E), as
amended, these laws, and not Ohio Revised Code Section
1701.13(E), shall govern.

SECTION 6.6 INDEMNIFICATION NOT EXCLUSIVE, ETC. The right of
indemnification provided by this Article VI shall not be
exclusive of or affect any other rights to which any such
Covered Person may be entitled. As used in this Article VI,
"Covered Person" shall include such person's heirs, executors and
administrators. Nothing contained in this article shall affect
any rights to indemnification to which personnel of the Trust,
other than Trustees and officers, and other persons may be
entitled by contract or otherwise under law, nor the power of the
Trust to purchase and maintain liability insurance on behalf of
any such person.

The Registrant may not pay for insurance which protects the
Trustees and officers against liabilities rising from action
involving willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of their
offices.
<PAGE>
(b) The Registrant may maintain a standard mutual fund and
investment advisory professional and directors and officers
liability policy. The policy, if maintained, would provide
coverage to the Registrant, its Trustees and officers, and its
Advisor, among others. Coverage under the policy would include
losses by reason of any act, error, omission, misstatement,
misleading statement, neglect or breach of duty.

(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to trustees, officers and
controlling persons of the Registrant pursuant to the provisions
of Ohio law and the Agreement and Declaration of the Registrant
or the By-Laws of the Registrant, or otherwise, the 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 the Registrant of expenses
incurred or paid by a trustee, officer or controlling person of
the Trust 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, the
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 whether such
indemnification by it is against public policy as expressed in
the Act and will be governed by the final adjudication of such
issue.

(d) Sections 10 and 11 of the Registrant's Underwriting
Agreement with Securities Service Network, Inc. (the
"Underwriter") provide for indemnification of the Underwriter
and the Underwriter's employees as well as advances of attorney's
fees and other expenses. The scope and limitations of these
provisions are analogous to Sections 6.4 and 6.5 of the
Registrant's Declaration of Trust, set forth in Item 27(a) of
this Part C.

Item 28. Business and Other Connections of Investment Advisor

A. IPS Advisory, Inc. (the "Advisor") is a registered investment
advisor. It has engaged in no other business during the past two
fiscal years.

B. The following list sets forth the business and other
connections of the Directors and officers of the Advisor during
the past two years.

(1) Gregory D'Amico

(a) President and a Director of IPS Advisory, Inc., Suite 630,
625 South Gay Street, Knoxville, Tennessee 37902.

(b) President, Chief Financial Officer, Treasurer and a Trustee
of IPS Funds, Suite 630, 625 South Gay Street, Knoxville,
Tennessee 37902.

<PAGE>
(2) Robert Loest

(a) Chief Executive Officer and a Director of IPS Advisory,
Inc., Suite 630, 625 South Gay Street, Knoxville, Tennessee
37902.

(b) Vice President, Secretary and a Trustee of IPS Funds, Suite
630, 625 South Gay Street, Knoxville, Tennessee 37902.

Item 29. Principal Underwriters

(a) Securities Service Network, Inc. does not currently act as a
principal underwriter for any other investment company.

(b)

Position with Position with
Name Underwriter Registrant
---- ------------- -------------

Carl Hollingsworth President, Treasurer None
and Director
David Coffey Secretary and None
Director
Michael E. Neubeck Executive Vice None
President

The address of all of the above-named persons is 9041 Executive
Park Drive, Suite 500, Knoxville, Tennessee 37923.

Item 30. Location of Accounts and Records

Accounts, books and other documents required to be maintained by
Section 31(a) of the Investment Company Act of 1940 and the Rules
promulgated thereunder will be maintained by the Registrant at
Suite 630, 625 South Gay Street, Knoxville, Tennessee 37902,
and/or by The Provident Bank, the Registrant's Custodian at One
East Fourth Street, Cincinnati, Ohio 45202.

Item 31. Management Services Not Discussed in Parts A or B

None.

Item 32. Undertakings

(a) Not Applicable.

(b) The Registrant undertakes to file a post effective
amendment, using Financial statements for the New Frontier Fund
and the DSR(SM) Fund which need not be certified, within four to six
months after the effective date of post effective amendment No. 5
to the Registrant's registration statement under the Securities
Act of 1933.

(c) The Registrant hereby undertakes to furnish each person to
whom a Prospectus is delivered with a copy of the Registrant's
latest annual report to shareholders, upon request and without
charge.

(d) The Registrant hereby undertakes that, within five business
days after receipt of a written application by shareholders
holding in the aggregate at least 1% of the shares then<PAGE>
outstanding or shares then having a net asset value of $25,000,
whichever is less, each of whom shall have been a shareholder for
at least six months prior to the date of application (hereinafter
the "Petitioning Shareholders"), requesting to communicate with
other shareholders with a view to obtaining signatures to a
request for a meeting for the purpose of voting upon such removal
of any Trustee of the Registrant, which application shall be
accompanied by a form of communication and request which such
Petitioning Shareholders wish to transmit, Registrant will:

(i) provide such Petitioning Shareholders with access to a list
of the names and addresses of all shareholders of the Registrant;
or

(ii) inform such Petitioning Shareholders of the approximate
number of shareholders and the estimated costs of mailing such
communication, and to undertake such mailing promptly after
tender by such Petitioning Shareholders to the Registrant of the
material to be mailed and the reasonable expenses of such
mailing.

The Registrant also undertakes to promptly call a meeting for the
purpose of voting upon the question of the removal of any Trustee
when requested in writing to do so by the record holders of not
less than 10% of the outstanding shares of the Trust.

<PAGE>
SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and
the Investment Company Act of 1940, the Registrant certifies that
it meets all of the requirements for effectiveness of this
Registration Statement pursuant to Rule 485(b) under the
Securities Act of 1933 and the Registrant has duly caused this
Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Knoxville,
State of Tennessee, on the 6th day of May, 1998.

IPS FUNDS

By: \s\ Gregory D'Amico
Gregory D'Amico, President

<PAGE>
EXHIBIT INDEX