TRANS ADVISER FUNDS INC, 485BPOS, 1996-03-29

TRANS ADVISER FUNDS INC
485BPOS, 1996-03-29

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<PAGE>

Reg. ICA No. 811-9068
File No. 33-94412

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 29, 1996

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. 1 /X/

and

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

Amendment No. 3 /X/

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

TRANS ADVISER FUNDS, INC.
(Exact Name of Registrant as Specified in Charter)

P.O. Box 90001
Bowling Green, Kentucky 42102-9001
(Address of Principal Executive Office) (Zip Code)

Registrant's Telephone Number, including Area Code: (502) 781-5000

Copy to:

Thomas A. Trantum Carl Frischling, Esq.
Mastrapasqua & Associates Kramer, Levin, Naftalis, Nessen, Kamin &
1801 West End Avenue, 18th Floor Frankel
Nashville, Tennessee 37203 919 Third Avenue
New York, New York 10022
(Name and Address of Agent for Service)

It is proposed that this filing will become effective:

/X/ immediately upon filing pursuant to paragraph (b)
/ / on ( ) pursuant to paragraph (b)
/ / 60 days after filing pursuant to paragraph (a)(1)
/ / on ( ) pursuant to paragraph (a)(1)
/ / 75 days after filing pursuant to paragraph (a)(2) rule 485.
/ / on ( ) pursuant to paragraph (a)(2)

If appropriate, check the following box:

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

___________________________________________________
<PAGE>

Pursuant to Rule 24f-2 under the Investment Company Act of 1940, the
Registrant has declared that an indefinite number or amount of its shares of
common stock be registered under the Securities Act of 1933. The $500 filing
fee required by said Rule was paid upon the initial filing.
<PAGE>

CROSS-REFERENCE SHEET

(Pursuant to Rule 404 showing location in each form of Prospectus of
the responses to the Items in Part A and location in each form of Prospectus and
the Statement of Additional Information of the responses to the Items in Part B
of Form N-1A).

Item Number
Form N-1A,
Part A Prospectus Caption
- ----------- ------------------

1 Front Cover Page

2(a) Fee Table

(b) Not Applicable

3(a) Not Applicable

(b) Not Applicable

(d) Not Applicable

4(a) Investment Objectives and Policies

5(a) Management of Trans Adviser Funds

(b) Management of Trans Adviser Funds

(d) Management of Trans Adviser Funds

(e) Management Trans Adviser of Funds

<PAGE>

Item Number
Form N-1A,
Part A Prospectus Caption
- ----------- ------------------

(f) Management of Trans Adviser Funds

(g) Management of Trans Adviser Funds

5A Not Applicable

6(a) General Information

(b) Not Applicable

(d) Not Applicable

(e) Cover Page

(f) Dividends and Taxes

(g) Dividends and Taxes

(h) Not Applicable

7(a) How to Invest

(b) Valuation of Shares; How to Redeem Shares

(d) How to Invest

(e) Not Applicable

(f) Management of Trans Advisor Funds

8(a) How to Redeem Shares

(b) How to Redeem Shares

(d) How to Redeem Shares

9 Not Applicable

-2-
<PAGE>

Item Number
Form N-1A, Statement of Additional
Part A Prospectus Caption Information Caption
- ----------- ------------------ -----------------------

Item Number Statement of Additional
Part B Information Caption
----------- -----------------------

10 Front Cover Page

11 Table of Contents

12 Trans Adviser Funds

13 Investment Objectives and
Policies

14 Management of the Company

15(a) Additional Information

(b) Additional Information

16(a) Management of the Company

(b) Management of the Company

(d) Management of the Company

(e) Management of the Company

(f) Management of the Company

(g) Not Applicable

(h) Management of the Company

(i) Not Applicable

17 Management of the Company

-3-
<PAGE>

Item Number
Form N-1A, Statement of Additional
Part A Prospectus Caption Information Caption
- ----------- ------------------ -----------------------

Item Number Statement of Additional
Part B Information Caption
----------- -----------------------

18 Additional Information

19(a) Additional Purchase and
Redemption Information

(b) Valuation

20 Additional Purchase and
Redemption Information

21(a) Management of the Company

(b) Not Applicable

22 Performance Information

23 Financial Statements

PART C

Information required to be included in Part C is set forth under the
appropriate Item, so numbered, in Part C to this Registration Statement.

-4-
<PAGE>

[LOGO]
For Fund information, call (800) 308-TRAN or
contact us by E-mail at [email protected]

Trans Adviser Funds, Inc. (the "Company") is an open-end management investment
company incorporated under the laws of the State of Maryland. The Company
currently consists of six separate non-diversified investment funds, the
Growth/Value Fund, the Aggressive Growth Fund, the Intermediate Bond Fund, the
Kentucky Tax-Free Fund, the Tennessee Tax-Free Fund and the Money Market Fund
(collectively, the "Funds"). Each of the Funds has a different investment
objective and the net asset value per share of each of the Funds (except the
Money Market Fund) will fluctuate as the value of its investment portfolio
changes in response to changing market conditions and other factors. THE MONEY
MARKET FUND SEEKS TO MAINTAIN A CONSTANT NET ASSET VALUE OF $1.00 PER SHARE, BUT
THERE CAN BE NO ASSURANCE THAT NET ASSET VALUE WILL NOT VARY.

Additional information about the Funds, contained in a Statement of Additional
Information, has been filed with the Securities and Exchange Commission and is
available upon request without charge by writing to the Company at its address
or by calling the Company at the telephone number (E-mail address) shown above.
The Statement of Additional Information bears the same date as this Prospectus
and is incorporated by reference in its entirety into this Prospectus.

This Prospectus sets forth concisely the information about the Funds that a
prospective investor ought to know before investing. Investors should read this
Prospectus and retain it for future reference.

THE COMPANY'S SHARES ARE NOT OBLIGATIONS, DEPOSITS OR ACCOUNTS OF, OR ENDORSED
OR GUARANTEED BY TRANS FINANCIAL BANK, N.A., ANY OF ITS AFFILIATES, OR ANY OTHER
BANK. THE COMPANY'S SHARES ARE NOT FEDERALLY INSURED OR GUARANTEED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR BY ANY
OTHER AGENCY. AN INVESTMENT IN THE COMPANY'S SHARES INVOLVES INVESTMENT RISKS,
INCLUDING THE POSSIBLE LOSS OF THE PRINCIPAL AMOUNT INVESTED.

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

The date of this Prospectus is March 29, 1996

<PAGE>
HIGHLIGHTS

SUMMARY. The Trans Adviser Family of Funds consists of a Growth/Value Fund,
Aggressive Growth Fund, Intermediate Bond Fund, Kentucky Tax-Free Fund,
Tennessee Tax-Free Fund and a Money Market Fund. Trans Financial Bank, N.A.,
headquartered in Bowling Green, Kentucky, is the Adviser and as such provides
the overall management necessary for the Funds' operations and oversees the
investment of their assets. The Adviser is a subsidiary of Trans Financial, Inc.
which is a full service financial services company with approximately $650
million in assets under management as of December 31, 1995. Mastrapasqua &
Associates, Inc. ("M&A"), located in Nashville, TN, is the sub-adviser of the
Funds and in this capacity will directly manage the Growth/Value and Aggressive
Growth Funds as well as provide an economic and strategic overview that will be
utilized by the entire Family of Funds.

INVESTMENT STYLE. The Fixed Income Funds will be actively managed using a
disciplined, relative-value investment style. Return enhancement and risk
control will be managed through interest rate and duration analysis, term
structure, and issue selection. The Growth Funds interrelate economic and
monetary factors such as liquidity, interest rates with sector analysis,
capitalization cycles and individual company fundamentals. In selecting
investments for the Growth Funds, M&A will purchase securities with a view
towards potential appreciation within a 36-month period.

COMPENSATION. The Adviser receives monthly compensation from each Fund based on
the amount of assets under management. The Adviser, not the Funds, compensates
M&A pursuant to a sub-advisory agreement. See "Management of Trans Adviser
Funds."

HOW TO INVEST AND REDEEM SHARES. Shares can be purchased or redeemed from Forum
Financial Services, Inc. ("Forum"), the principal distributor, at (800) 811-8258
or broker-dealers that have entered into a dealer agreement with Forum. See:
"How to Invest."

INVESTOR SERVICES AND PRIVILEGES. Free telephone exchange. See: "How to Invest"
and "How to Redeem Shares."

DIVIDENDS. GROWTH FUNDS: declare and pay dividends at least annually from net
investment income; FIXED INCOME FUNDS: declare dividends daily and pay dividends
monthly from net investment income; election for automatic reinvestment or cash
receipt. See "Dividends and Taxes."

RISK FACTORS AND SPECIAL CONSIDERATIONS. The Funds are non-diversified funds
(however, the Money Market Fund intends to comply with the diversification
requirements of Rule 2a-7 of the Investment Company Act of 1940).
Non-diversified Funds may be invested in a limited number of issues; thus, there
may be greater risk in an investment in these Funds than in diversified
investment companies. Moreover, there are potential risks associated with
certain of the Funds' investments and additional risk considerations that may be
associated with certain techniques and strategies employed by the Funds,
including those relating to futures and options transactions. Such risks may not
be incurred by other investment companies which have similar investment
objectives, but which do not use these techniques and strategies.

- 2 -
<PAGE>
FEE TABLE

For a better understanding of the expenses you will incur when investing in a
Fund offered pursuant to this Prospectus, a summary of estimated expenses is set
forth below.

<TABLE>
<CAPTION>
Growth/ Aggressive Intermediate Kentucky Tennessee Money
Value Growth Bond Tax-Free Tax-Free Market
Fund Fund Fund Fund Fund Fund
--------- --------- ----------- ---------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Commission Imposed on
Purchases (as a percentage of offering
price) 4.50% 4.50% 4.50% 4.50% 4.50% NONE
Maximum Sales Commission Imposed on
Reinvested Dividends (as a percentage
of offering price) NONE NONE NONE NONE NONE NONE
Maximum Contingent Deferred Sales
Commission (as a percentage of original
purchase price or redemption proceeds,
as applicable) NONE NONE NONE NONE NONE NONE
Redemption Fees (as a percentage of
amount redeemed, if applicable) NONE NONE NONE NONE NONE NONE
Exchange Fee NONE NONE NONE NONE NONE NONE
ANNUAL FUND OPERATING EXPENSES (AS A
PERCENTAGE OF NET ASSETS)
Advisory Fees .00% .00% .00% .00% .40% .00%
12b-1 Fees NONE NONE NONE NONE NONE NONE
Shareholder Servicing .25% .25% .25% .25% .25% .25%
Other Expenses 1.70% 1.69% .27% .59% .20% .40%
Total Fund Operating Expenses 1.95%* 1.94%* .52%* .84%* .85%* .65%*
</TABLE>

EXAMPLE:

You would pay the following expenses on a $1,000 investment, assuming (1) 5%
annual return and (2) redemption at the end of each time period:

<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Growth/Value Fund $ 20 $ 61 $ 105 $ 227
Aggressive Growth Fund $ 20 $ 61 $ 105 $ 226
Intermediate Bond Fund $ 5 $ 17 $ 29 $ 65
Kentucky Tax-Free Fund $ 9 $ 27 $ 47 $ 104
Tennessee Tax-Free
Fund $ 53 $ 71 $ $
Money Market Fund $ 7 $ 21 $ 36 $ 81
</TABLE>

The purpose of the table above is to assist an investor in the Funds in
understanding the various costs and expenses that an investor in a Fund will
bear directly or indirectly. See "Management of Trans Adviser Funds" for a more
complete discussion of annual operating expenses of the Funds. THE FOREGOING
EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE EXPENSES.
ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.

*Total Fund Operating Expenses reflect the voluntary waiver of Advisory Fees and
certain other expenses. Absent such voluntary waiver, Advisory Fees, Other
Expenses and Total Fund Operating Expenses, for each fund would be:
Growth/Value Fund: 1.00%, 2.67% and 3.92%, respectively; Aggresive Growth Fund:
1.00%, 9.39% and 10.64%; Intermediate Bond Fund: .40%, 1.66% and 2.31%;
Kentucky Tax-Free Fund: .40%, 1.31% and 1.96%; and Money Market Fund: .20%,
.69% and 1.14%.

- 3 -
<PAGE>

FINANCIAL HIGHLIGHTS

The table set forth below provides selected per share data and ratios for one
share outstanding of each Fund. This information is supplemented by financial
statements and accompanying notes appearing in the Fund's Semi-Annual Report to
Shareholders for the fiscal period ended February 29, 1996, which is
incorporated by reference into the Statement of Additional Information.
Shareholders can obtain a copy of this report by contacting the Funds or their
Shareholder Servicing Agent.

<TABLE>
<CAPTION>
SELECTED PER SHARE DATA
AND RATIOS FOR A SHARE
OUTSTANDING THROUGHOUT AGGRESSIVE INTERMEDIATE KENTUCKY MONEY
THE PERIOD ENDED FEBRUARY GROWTH/VALUE GROWTH BOND TAX-FREE MARKET
29, 1996.(A) FUND FUND FUND FUND FUND
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Beginning Net Asset Value
Per Share.............. $10.00 $10.00 $10.00 $10.00 $1.00
Net Investment
Income/(Loss)(d)....... (0.02) (0.03) 0.25 0.24 0.21
Net Realized and
Unrealized Gain (Loss)
on Investments......... 1.36 0.57 (0.01) 0.31 --
Distributions from Net
Investment Income...... -- -- (0.25) (0.24) (0.21)
Ending Net Asset Value
Per Share.............. $11.34 $10.54 $9.99 $10.31 $1.00

Ratios to Average Net
Assets:
Expenses(b)............ 1.95%(c) 1.95%(c) 0.52%(c) 0.85%(c) 0.65%(c)
Net Investment Income
(Loss)................ (0.40)%(c) (0.79)%(c) 6.12%(c) 5.33%(c) 5.03%(c)
Total Return............. 13.40% 5.40% 2.40% 5.55% 2.16%
Portfolio Turnover
Rate................... 2.00% 12.10% 7.89% 59.97% N/A
Net Assets at End of
Period (000's
omitted)............... $ 8,061 $ 2,629 $ 10,420 $ 17,755 $ 57,882
</TABLE>

(a) See note 1 of notes to financial statements for commencement of operations.

(b) During the period, various fees and expenses were waived and reimbursed. Had
such waiver and reimbursement not occurred, the ratio of expenses to average
net assets would have been:

(d) Using weighted average shares outstanding.

- 4 -
<PAGE>
INVESTMENT OBJECTIVES AND POLICIES

The investment objectives and policies of each Fund are described below.
Specific investment techniques that may be employed by the Funds are described
in a separate section of this Prospectus and in the Statement of Additional
Information. While each Fund's objective is fundamental and can only be changed
by vote of the majority of the outstanding shares of a particular Fund, the
Board of Directors of the Company reserves the right to change any of the
investment policies, strategies or practices of any of the Funds without
shareholder approval, except in those instances where shareholder approval is
expressly required.

The GROWTH/VALUE FUND seeks long-term capital appreciation primarily through
equity investments in companies whose valuation may not yet reflect the prospect
for accelerating earnings/cash flow growth. The Fund seeks to achieve its
objective by investing primarily in common stocks but also in preferred stocks,
convertible bonds and warrants of companies which in the opinion of the Fund's
investment adviser are expected to achieve growth of investment principal over
time. The investment style is to focus on companies that have a demonstrated
record of achievement with excellent prospects for earnings and/or cash flow
growth over a 3 to 5 year period. It is anticipated that the average stock
holding period will be within an 18 to 36 month time frame. Of course, changes
in fundamental outlook and market conditions can alter these time horizons
materially.

It is anticipated that common stocks will be the principal form of investment by
the Fund. The Fund's portfolio is comprised of securities of two basic
categories of companies: (1) "core" companies, which Fund management considers
to have experienced above-average and consistent long-term growth in
earnings/cash flow and to have excellent prospects for outstanding future
growth, and (2) "earnings/cash flow acceleration" companies, which Fund
management believes are either currently enjoying or are projected to enjoy a
dramatic increase in earnings and/or cash flow. Investments will largely be made
in companies of greater than $750 million capitalization. The Fund will invest
no more than 10% of its assets in companies with market capitalization of less
than $750 million at the time of purchase.

The AGGRESSIVE GROWTH FUND seeks long-term capital appreciation primarily
through equity investments. The Fund will seek growth opportunities among
companies of various sizes. The Fund seeks to achieve its objective by investing
primarily in common stocks but also in preferred stocks, convertible bonds,
options and warrants of companies which in the opinion of the Fund's investment
adviser are expected to achieve growth of investment principal over time. Many
of these companies are in the small to medium-sized category (companies with
market capitalizations of less than $750 million at the time of purchase). In
addition, up to 15% of the Fund's assets may be invested in illiquid investments
or in private companies whose common shares are not actively traded on any
national or regional exchange.

The investment style is to focus on companies that have an excellent prospect
for earnings cash flow growth over a 3 to 5 year period. Of course, changes in
fundamental outlook and market conditions can alter potential returns
substantially. It is intended that the Aggressive Growth Fund will assume a more
expanded risk profile than will be the case with the Growth/Value Fund. While
this could result in above-average appreciation (depreciation), there is no
assurance that this will in fact be the case.

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<PAGE>

in earnings and/or cash flow. Investments will largely be made in companies of
varying sizes, even those with less than $750 million capitalization.

Additionally, the Aggressive Growth Fund may invest a maximum of 20% of its
assets, and the Growth/Value Fund may invest a maximum of 30% of its assets, in
fixed-income securities rated Baa3 or better by Moody's Investors Service, Inc.
("Moody's") or BBB or better by Standard & Poor's Corporation ("S&P") or, if
unrated, deemed to be of comparable quality by M&A. The fixed income securities
in which such Funds may invest include U.S. Government obligations, mortgage-
backed securities, asset-backed securities, bank obligations, corporate debt
obligations and unrated obligations, including those of foreign issuers.

M&A will be particularly interested in growth companies that are likely to
benefit from new or innovative products, services or processes that should
enhance such companies' prospects for future growth in earnings/cash flow. As a
result of this policy, the market prices of many of the securities purchased and
held by the Growth/Value and Aggressive Growth Funds (the "Growth Funds") may
fluctuate widely. Any income received from securities held by the Growth Funds
will be incidental, and an investor should not consider a purchase of shares of
the Growth Funds as equivalent to a complete investment program.

The INTERMEDIATE BOND FUND seeks to provide as high a level of current income as
is consistent with the preservation of capital. The Fund invests substantially
all of its assets in marketable corporate debt securities, U.S. Government
securities, mortgage-related securities, other asset-backed securities and cash
or money market instruments. Normally, at least 65% of the Fund's assets will be
invested in bonds (debt securities of the types listed below).

At least 60% of the value of the Intermediate Bond Fund's assets, measured at
the time of any purchase, must be invested in the following categories:

- marketable corporate debt securities such as
bonds rated at the time of purchase within the three highest investment
grade ratings (A or better) assigned by Moody's or S&P (all ratings
discussed below refer to those assigned by these two rating agencies) or, if
not rated by either of these rating agencies, determined by the Fund's
investment adviser as being of investment quality equivalent to securities
rated A or better;

- U.S. Government securities including (1)
direct obligations of the U.S. Treasury (such as Treasury bills, notes and
bonds), (2) obligations guaranteed as to principal and interest by the U.S.
Treasury such as Government National Mortgage Association certificates
(described below) and Federal Housing Administration debentures, and (3)
securities issued by U.S. Government instrumentalities and certain Federal
agencies that are neither direct obligations of, nor guaranteed by, the U.S.
Treasury;

- mortgage-related securities rated A or better
or unrated securities that are determined to be of equivalent quality of (1)
governmental issuers, including Government National Mortgage Association
certificates, which are securities representing part ownership of a pool of
mortgage loans on which timely payment of interest and principal is
guaranteed by the U.S. Government, and securities issued and guaranteed as
to the payment of interest and principal by the Federal National Mortgage
Association or the Federal Home Loan Mortgage Corporation (but not backed by
the U.S. Government); (2) private issuers, including mortgage pass-through
certificates or mortgage-backed bonds; and (3) the governmental issuers
mentioned above or private issuers, including collateralized mortgage
obligations and real estate mortgage investment conduits which are issued in
portions or tranches with varying maturities and characteristics; some
tranches may only receive the interest paid on the underlying mortgages
(IOs) and others may only receive the principal payments (POs); the values
of IOs and POs are extremely sensitive to interest rate fluctuations and
prepayment rates, and IOs are also

- 6 -
<PAGE>
subject to the risk of early prepayment of the underlying mortgages which
will substantially reduce or eliminate interest payments (see the Statement
of Additional Information for more about these securities);

- other asset-backed securities rated A or better
or unrated securities that are determined by the Adviser to be of equivalent
quality (unrelated to mortgage loans) such as securities whose assets
consist of a pool of motor vehicle retail installment sales contracts and
security interests in the vehicles securing the contracts or a pool of
credit card loan receivables (see the Statement of Additional Information
for more about these securities); and

- cash or money market instruments, including
commercial bank obligations (certificates of deposit, which are
interest-bearing time deposits; bankers' acceptances, which are time drafts
on a commercial bank where the bank accepts an irrevocable obligation to pay
at maturity and demand or time deposits) and commercial paper (short-term
notes with maturities of up to nine months issued by corporations or
government bodies).

The remaining 40% of the Intermediate Bond Fund's assets, measured at the time
of purchase, may be invested in debt securities rated below A or unrated
securities that are determined to be of equivalent quality, including marketable
corporate debt securities, mortgage-related securities and other asset-backed
securities. Securities rated within the fourth highest category (BBB, Baa) may
have speculative characteristics and display a weakened ability to pay interest
and repay principal under adverse economic conditions or changing circumstances.
However, securities rated lower than Baa or BBB or unrated securities that are
determined to be of equivalent quality (commonly known as "junk" or "high-yield,
high-risk" bonds) will represent less than 20% of the Fund's net assets and are
subject to independent investment analysis by the Adviser before purchase. The
Fund may from time to time invest in fixed-income securities of corporations
outside the U.S. or governmental entities, and the Fund may purchase or sell
various currencies on either a spot or forward basis in connection with these
investments.

MATURITY. The maturity composition of the Intermediate Bond Fund's portfolio of
fixed-income securities will be adjusted in response to market conditions and
expectations. There are no restrictions on the maturity composition of the
portfolio, although it is anticipated that the Fund normally will be invested
substantially in intermediate-term (3 to 10 years to maturity) and long-term
(over 10 years to maturity) securities and have a dollar-weighted average
portfolio maturity of more than 3 years, but not more than 10 years.

LOAN PARTICIPATIONS. The Intermediate Bond Fund may invest, subject to an
overall 10% limit on loans, in loan participations, typically made by a
syndicate of banks to U.S. and non-U.S. corporate or governmental borrowers for
a variety of purposes. The underlying loans may be secured or unsecured, and
will vary in term and legal structure. When purchasing such instruments the Fund
may assume the credit risks associated with the original bank lender as well as
the credit risks associated with the borrower. Investments in loan
participations present the possibility that the Fund could be held liable as a
co-lender under emerging legal theories of lender liability. In addition, if the
loan is foreclosed, the Fund could be part owner of any collateral, and could
bear the costs and liabilities of owning and disposing of the collateral. Loan
participations are generally not rated by major rating agencies and may not be
protected by the securities laws. Also, loan participations are generally
considered to be illiquid and are therefore subject to the Fund's overall 15%
limitation on illiquid securities.

The KENTUCKY TAX-FREE FUND seeks to provide as high a level of current income
exempt from Kentucky and Federal income taxes as is consistent with preservation
of capital by investing in municipal obligations which pay interest exempt from
Kentucky State and Federal income taxes. These municipal obligations must, at
the time of purchase, either be rated within the four highest credit ratings
(considered as investment grade) assigned by

- 7 -
<PAGE>
Moody's or S&P, or, if unrated, be determined to be of comparable quality by the
Fund's Adviser. The Fund's shares are designed to be a suitable investment for
investors who seek income exempt from Kentucky State and regular Federal income
taxes.

The TENNESSEE TAX-FREE FUND seeks to provide as high a level of current income
exempt from Tennessee and Federal income taxes as is consistent with
preservation of capital by investing in municipal obligations which pay interest
exempt from Tennessee State and Federal income taxes. These municipal
obligations must, at the time of purchase, either be rated within the four
highest credit ratings (considered as investment grade) assigned by Moody's or
S&P, or, if unrated, be determined to be of comparable quality by the Fund's
Adviser. The Fund's shares are designed to be a suitable investment for
investors who seek income exempt from Tennessee State and regular Federal income
taxes.

MUNICIPAL OBLIGATIONS. The Kentucky Tax-Free Fund and the Tennessee Tax-Free
Fund (the "Tax-Free Funds") invest in municipal obligations. Municipal
obligations are issued by or on behalf of states, territories and possessions of
the United States and their political subdivisions, agencies and
instrumentalities to obtain funds for various public purposes. The two principal
classifications of municipal obligations are "notes" and "bonds." Municipal
notes are generally used to provide for short-term capital needs and generally
have maturities of one year or less while municipal bonds have extended
maturities. Municipal notes include: project notes, which sometimes carry a U.S.
Government guarantee; tax anticipation notes; revenue anticipation notes; bond
anticipation notes; construction loan notes; and floating and variable rate
demand notes. Municipal obligations also include short-term debt, often issued
for general purposes, known as "municipal commercial paper." Municipal
obligations include municipal lease/purchase agreements which are similar to
installment purchase contracts for property or equipment. The purposes for which
municipal obligations such as bonds are issued include the construction of a
wide range of public facilities such as airports, highways, bridges, schools,
hospitals, housing, mass transportation, streets and water and sewer works.
Other public purposes for which municipal obligations may be issued include the
refunding of outstanding obligations, the obtaining of funds for general
operating expenses and the obtaining of funds to lend to other public
institutions and facilities.

In general, there are nine separate ratings, ranging from the highest to the
lowest quality standards for municipal obligations. So that each Tax-Free Fund
will have a portfolio of quality oriented (investment grade) securities, the
municipal obligations which each Fund will purchase must, at the time of
purchase, either (i) be rated within the four highest credit ratings assigned by
Moody's or S&P; or (ii) if unrated, be determined to be of comparable quality to
municipal obligations so rated by the Adviser, subject to the direction and
control of the Company's Board of Directors. Municipal obligations rated in the
fourth highest credit rating are considered by such rating agencies to be of
medium quality and thus may present investment risks not present in more highly
rated obligations. Such bonds lack outstanding investment characteristics and
may in fact have speculative characteristics as well; changes in economic
conditions or other circumstances are more likely to lead to a weakened capacity
to make principal and interest payments than is the case for higher grade bonds.
If after purchase, the rating of any rated municipal obligation is downgraded
such that it could not then be purchased by a Tax-Free Fund, or, in the case of
an unrated municipal obligation, if the Adviser determines that the unrated
obligation is no longer of comparable quality to those rated obligations which
the Fund may purchase, it is the current policy of the Funds to cause any such
obligation to be sold as promptly thereafter as the Adviser in its discretion
determines to be consistent with the Fund's objectives; such obligation remains
in the Fund's portfolio until it is sold. In addition, because a downgrade often
results in a reduction in the market price of a downgraded obligation, sale of

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<PAGE>
such an obligation may result in a loss. See Appendix A to the Statement of
Additional Information for further information as to these ratings.

In seeking its objective of providing as high a level of current income which is
exempt from both Kentucky State and regular Federal income taxes as is
consistent with the preservation of capital, the Kentucky Tax-Free Fund will
invest in Kentucky Obligations (as defined below). There is no assurance that
the Fund will achieve its objective, which is a fundamental policy of the Fund.

As used in this Prospectus and the Statement of Additional Information, the term
"Kentucky Obligations" means obligations, including those of certain
non-Kentucky issuers, of any maturity which pay interest which, in the opinion
of bond counsel or other appropriate counsel, is exempt from regular Federal
income taxes and Kentucky income taxes. Although exempt from regular Federal
income tax, interest paid on certain types of Kentucky Obligations and dividends
which the Fund might pay from this interest are preference items as to the
Federal alternative minimum tax; for further information, see "Dividends and
Taxes." As a fundamental policy, at least 80% of the Fund's net assets will be
invested in Kentucky Obligations the income paid upon which will not be subject
to the alternative minimum tax; accordingly, the Fund can invest up to 20% of
its net assets in obligations which are subject to the Federal alternative
minimum tax. The Fund may refrain entirely from purchasing these types of
Kentucky Obligations.

The non-Kentucky bonds or other obligations the interest on which is exempt
under present law from regular Federal and Kentucky income taxes are the bonds
or other obligations issued by or under the authority of Guam, the Northern
Mariana Islands, Puerto Rico and the Virgin Islands. As a Kentucky-oriented
fund, at least 65% of the Fund's total assets will be invested in Kentucky
Obligations of Kentucky issuers. The Fund invests in futures and options on
futures (see below) for protective (hedging) purposes. The Fund can purchase
industrial development bonds only if they meet the definition of Kentucky
Obligations, i.e., the interest on them is exempt from Kentucky State and
regular Federal income taxes.

In seeking its objective of providing as high a level of current income which is
exempt from both Tennessee State and regular Federal income taxes as is
consistent with the preservation of capital, the Tennessee Tax-Free Fund will
invest in Tennessee Obligations (as defined below). There is no assurance that
the Fund will achieve its objective, which is a fundamental policy of the Fund.

As used in this Prospectus and the Statement of Additional Information, the term
"Tennessee Obligations" means obligations of any maturity which pay interest
which, in the opinion of bond counsel or other appropriate counsel, is exempt
from regular Federal income taxes and Tennessee income taxes. Although exempt
from regular Federal income tax, interest paid on certain types of Tennessee
Obligations and dividends which the Fund might pay from this interest are
preference items as to the Federal alternative minimum tax; for further
information, see "Dividends and Taxes." As a fundamental policy, at least 80% of
the Fund's net assets will be invested in Tennessee Obligations the income paid
upon which will not be subject to the alternative minimum tax; accordingly, the
Fund can invest up to 20% of its net assets in obligations which are subject to
the Federal alternative minimum tax. The Fund may refrain entirely from
purchasing these types of Tennessee Obligations.

As a Tennessee-oriented fund, at least 65% of the Fund's total assets will be
invested in Tennessee Obligations of Tennessee issuers. The Fund invests in
futures and options on futures (see below) for protective (hedging) purposes.
The Fund can purchase industrial development bonds only if they meet the
definition of Tennessee Obligations, i.e., the interest on them is exempt from
Tennessee State and regular Federal income taxes.

CERTAIN STABILIZING MEASURES

In attempting to protect against declines in the value of its investments and
other market risks, the

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<PAGE>
Tax-Free Funds will employ such traditional measures as varying maturities,
upgrading credit
standards for portfolio purchases, broadening diversification and increasing its
position in cash and cash equivalents. Although the Funds have no current
intention of using futures or options, to the limited degree described below,
these may be used to attempt to hedge against changes in the market price of a
Fund's municipal obligations caused by interest rate fluctuations. Futures and
options also may provide a hedge against increases in the cost of securities the
Funds intend to purchase.

Although they do not currently do so, the Tax-Free Funds may buy and sell
futures contracts relating to indices on municipal bonds ("municipal bond index
futures") and to U.S. Government securities ("U.S. Government securities
futures"); both kinds of futures contracts are "futures." The Funds may also
write and purchase put and call options on futures. As a matter of fundamental
policy, each Tax-Free Fund will not buy or sell a future or an option on a
future if thereafter more than 5% of the Fund's total assets would be in initial
or variation margin on such futures and options on them, and in premiums on such
options. (See the Statement of Additional Information).

PARTICIPATION INTERESTS

The Tax-Free Funds may purchase from financial institutions participation
interests in municipal obligations (such as industrial development bonds and
municipal lease/purchase agreements). A participation interest gives a Fund an
undivided interest in the underlying municipal obligations in the proportion
that the Fund's participation interest bears to the total amount of the
underlying municipal obligations. All such participation interests must meet a
Fund's credit requirements. Municipal lease obligations are issued by a state or
local government or authority to acquire land and a wide variety of equipment
and facilities. These obligations typically are not fully backed by the
municipality's credit, and their interest may become taxable if the lease is
assigned. If the funds are not available for the following year's lease
payments, the lease may terminate, with the possibility of default on the lease
obligation and significant loss to the Fund. Certificates of participation in
municipal lease obligations or installment sales contracts entitle the holder to
a proportionate interest in the lease-purchase payments made. Each Tax-Free Fund
may invest up to 10% of its assets in participation interests.

CURRENT POLICY AS TO CERTAIN OBLIGATIONS

Each Tax-Free Fund will not invest more than 25% of its total assets in (i)
municipal obligations the interest on which is paid from revenues of similar
type projects or (ii) industrial development bonds, unless this Prospectus
and/or the Statement of Additional Information are supplemented to reflect the
change and to give additional information.

KENTUCKY. Kentucky's economy in many ways resembles a scaled-down version of
the U.S. economy in its diversity. The Kentucky economy, once dominated by coal,
horses, bourbon and tobacco has become a diversified modern economy including
manufacturing of industrial machinery, automobiles and automobile parts,
consumer appliances, and nondurable goods such as apparel. In addition,
Kentucky's nonmanufacturing industries have grown considerably in recent years,
with strong gains in air transportation, health and business services, and
retail trade. Kentucky's parks, horsebreeding and racing industry, symbolized by
the Kentucky Derby, play an important role in expanding the tourism industry in
Kentucky.

TENNESSEE. Historically, the Tennessee economy has been characterized by a
greater concentration in manufacturing employment than the U.S. as a whole. The
economy is, however, undergoing a structural change through the increase in
service sector employment.

Tennessee's financial operations are considerably different than most other
states because there is no state payroll income tax. This factor, together with
the State's reliance on the sales tax for approximately 55% of General Fund
receipts, exposes total State tax collections to considerably more volatility
than would otherwise be the case and, in the event

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<PAGE>
of an economic downswing, could affect the State's ability to pay principal and
interest in a timely manner.

The MONEY MARKET FUND seeks current income with liquidity and stability of
principal. The Money Market Fund seeks to achieve this objective by investing in
a portfolio of high-quality, U.S. dollar-denominated money market instruments.
All securities in which the Money Market Fund invests have remaining maturities
of 397 days or less. The dollar-weighted average maturity of the securities will
not exceed 90 days. The Fund invests in:

- obligations of domestic financial institutions
including certificates of deposit, bankers' acceptances and time deposits.

- obligations of foreign branches of U.S. banks
(Eurodollars) consisting of certificates of deposit, bankers' acceptances
and time deposits.

- obligations of the U.S. Government or any of
its agencies or instrumentalities which may be backed by the
credit-worthiness of the issuing agency.

- short-term corporate obligations, consisting of
commercial paper, notes, and bonds, with remaining maturities of 397 days or
less.

- repurchase agreements with member banks of
the Federal Reserve System and primary dealers in U.S. Government securities
with respect to any security in which the Fund is authorized to invest.

- other short-term debt obligations of domestic
issuers discussed in this Prospectus.

The Money Market Fund may invest in obligations of foreign branches of U.S.
banks (Eurodollars). Payment of interest and principal upon these obligations
may also be affected by governmental action in the country of domicile of the
branch (generally referred to as sovereign risk). In addition, evidences of
ownership of portfolio securities may be held outside of the U.S. and the Fund
may be subject to the risks associated with the holding of such property
overseas. Various provisions of Federal law governing the establishment and
operation of domestic branches do not apply to foreign branches of domestic
banks. The Adviser, subject to the overall supervision of the Company's Board of
Directors, carefully considers these factors when making investments. The Fund
does not limit the amount of its assets which can be invested in any one type of
instrument or in any foreign country in which a branch of a U.S. bank or the
parent of a U.S. branch is located. Investments in obligations of foreign banks
are subject to the overall limit of 25% of total assets which may be invested in
a single industry.

Available cash invested in the Money Market Fund earns income at current money
market rates while remaining conveniently liquid. In order to provide full
liquidity, the Fund will seek to maintain a stable $1.00 share price; limit
portfolio average maturity to 90 days or less; buy U.S. dollar-denominated
securities which mature in 397 days or less; and buy only high quality
securities with minimal credit risks. As required by Rule 2a-7 under the
Investment Company Act of 1940, as amended ("Rule 2a-7"), the Fund's Board of
Directors (the "directors") will monitor the quality of the Fund's investments.

Of course, a $1.00 share price cannot be guaranteed, but these practices help to
minimize any price fluctuations that might result from rising or declining
interest rates. Accordingly, while the Fund invests in high quality securities,
investors should be aware that an investment is not without risk even if all
securities are paid in full at maturity. All money market instruments, including
U.S. government securities, can change in value when interest rates change or an
issuer's creditworthiness changes.

LIMITING INVESTMENT RISKS

The Money Market Fund follows specific guidelines in buying portfolio
securities:

The Fund will only purchase obligations that (i) are rated high quality by two
of the following four nationally recognized rating services: Duff & Phelps Inc.
("Duff"), Fitch Investors Service, Inc. ("Fitch"), Moody's, and S&P, if rated by
two or

- 11 -
<PAGE>
more services; (ii) are rated high quality if rated by only one rating service;
or (iii) if unrated, are determined to be of equivalent quality pursuant to
procedures reviewed by the directors. Obligations that are not rated are not
necessarily of lower quality than those which are rated, but may be less
marketable and therefore may provide higher yields.

Currently, only obligations in the top two categories are considered to be rated
high quality for commercial paper. The two highest rating categories of Duff,
Fitch, Moody's and S&P are Duff 1 and Duff 2, Fitch-1 and Fitch-2, Prime-1 and
Prime-2, and A-1 and A-2, respectively. Under Rule 2a-7, the Fund is not
permitted to invest more than 5% of its total assets in securities that would be
considered to be in the second highest rating category, and, subject to this
limitation, the Fund may not invest more than the greater of 1% of its total
assets or $1 million in such securities of any one issuer. The Fund may purchase
an instrument rated below highest quality by a rating service if two other
services have given that instrument a highest quality rating ("split rated"
obligation), and if the Adviser considers that the instrument is of highest
quality and presents minimal credit risks.

For other corporate obligations, the two highest rating categories are AAA and
AA by Duff, AAA and AA by Fitch, Aaa and Aa by Moody's and AAA and AA by S&P.
For a more complete description of these ratings see the Appendix to the
Statement of Additional Information.

The Money Market Fund will commit no more than 10% of its net assets to illiquid
securities, including repurchase agreements maturing in more than seven days.

In addition, the Money Market Fund has certain other limitations. As a matter of
nonfundamental policy, the Fund will limit the percentage allocation of its
investments so as to comply with Rule 2a-7, which generally limits to 5% of
total assets the amount which may be invested in the securities of any one
issuer and to no more than 25% of total assets the amount which would be
invested in a particular industry, except that the Fund may invest more than 25%
of total assets in the securities of banks.

Currently, the Securities and Exchange Commission (the "Commission") defines the
term "bank" to include U.S. banks and their foreign branches if, in the case of
foreign branches, the parent U.S. bank is unconditionally liable for such
obligations. These limitations do not apply to obligations of the U.S.
Government or any of its agencies or instrumentalities. The Money Market Fund
does not consider utilities or companies engaged in finance generally to be one
industry. Finance companies will be considered a part of the industry they
finance (e.g., GMAC - auto; VISA - credit cards). Utilities will be divided
according to the types of services they provide; for example, gas, gas
transmission, electric and gas, electric and telephone will each be considered a
separate industry.

The Money Market Fund may borrow money from banks or from other lenders, but not
in an amount equal to or exceeding 33 1/3% of the current value of its total
assets.

As a matter of operating policy, the Money Market Fund does not intend to
purchase securities for investment during periods when the sum of temporary bank
borrowings entered into to facilitate redemptions exceeds 5% of its total
assets. This operating policy is not fundamental and may be changed without
shareholder notification.

OTHER INVESTMENT PRACTICES

SECURITIES LENDING. In order to generate additional income, the Funds may, from
time to time, lend their portfolio securities to broker-dealers, banks or
institutional borrowers of securities. While the lending of securities may
subject the Fund to certain risks, such as delays or the inability to regain the
securities in the event the borrower were to default on its lending agreement or
enter into bankruptcy, the Funds will receive at least 100% collateral in the
form of cash or U.S. Government securities. This collateral will be valued daily
by the Adviser (M&A) and should the market value of the

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<PAGE>
loaned securities increase, the borrower will furnish additional collateral to
the Funds. During the time portfolio securities are on loan, the borrower pays
the Funds any dividends or interest paid on such securities. Loans are subject
to termination by the Funds or the borrower at any time. While the Funds do not
have the right to vote securities on loan, the Funds intend to terminate the
loan and regain the right to vote if that is considered important with respect
to the investment. The Funds will only enter into loan arrangements with broker-
dealers, banks or other institutions which the Adviser (M&A) has determined are
creditworthy under guidelines established by the Company's Board of Directors.

BORROWING. The Funds may borrow money from banks (including their custodian
bank) or from other lenders to the extent permitted under applicable law, for
temporary or emergency purposes and to meet redemptions and may pledge their
assets to secure such borrowings. Additionally, the Aggressive Growth Fund may
borrow for purposes of leveraging. Borrowing for investment increases both
investment opportunity and investment risk. Such borrowings in no way affect the
Federal tax status of the Funds or their dividends. If the investment income on
securities purchased with borrowed money exceeds the interest paid on the
borrowing, the net asset value of the Aggressive Growth Fund's shares will rise
faster than would otherwise be the case. On the other hand, if the investment
income fails to cover the Aggressive Growth Fund's costs, including the interest
on borrowings or if there are losses, the net asset value of such Fund's shares
will decrease faster than would otherwise be the case. This is the speculative
factor known as leverage.

The Investment Company Act of 1940, as amended (the "1940 Act") requires the
Funds to maintain asset coverage of at least 300% for all such borrowings, and
should such asset coverage at any time fall below 300%, the Funds would be
required to reduce their borrowings within three days to the extent necessary to
meet the requirements of the 1940 Act. To reduce their borrowings, the Funds
might be required to sell securities at a time when it would be disadvantageous
to do so.

In addition, because interest on money borrowed is a Fund expense that it would
not otherwise incur, the Funds may have less net investment income during
periods when its borrowings are substantial. The interest paid by the Funds on
borrowings may be more or less than the yield on the securities purchased with
borrowed funds, depending on prevailing market conditions.

SHORT-TERM TRADING. The Aggressive Growth Fund may engage in the technique of
short-term trading. Such trading involves the selling of securities held for a
short time, ranging from several months to less than a day. The object of such
short-term trading is to increase the potential for capital appreciation and/or
income of the Aggressive Growth Fund in order to take advantage of what M&A
believes are changes in market, industry or individual company conditions or
outlook. Any such trading would increase the turnover rate of the Aggressive
Growth Fund and its transaction costs.

WHEN-ISSUED SECURITIES. Each of the Funds may also purchase securities on a
"when-issued" basis. When-issued securities are securities purchased for
delivery beyond the normal settlement date at a stated price and yield and
thereby involve a risk that the yield obtained in the transaction will be less
than those available in the market when delivery takes place. The Funds will
generally not pay for such securities or start earning interest on them until
they are received. When a Fund agrees to purchase securities on a "when-issued"
basis, the Company's custodian will set aside cash or liquid Fund securities
equal to the amount of the commitment in a segregated account. Securities
purchased on a "when-issued" basis are recorded as an asset and are subject to
changes in value based upon changes in the general level of interest rates. Each
of the Funds expects that commitments to purchase "when-issued" securities will
not exceed 25% of the value of its total assets under normal market conditions
and that a commitment to purchase

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<PAGE>
"when-issued" securities will not exceed 60 days. In the event its commitment to
purchase "when-issued" securities ever exceeded 25% of the value of its assets,
a Fund's liquidity and the investment advisor's ability to manage it might be
adversely affected. The Funds do not intend to purchase "when-issued" securities
for speculative purposes, but only for the purpose of acquiring portfolio
securities.

VARIABLE AND FLOATING RATE SECURITIES. Each of the Funds may acquire variable
and floating rate securities, subject to each Fund's investment objectives,
policies and restrictions. A variable rate security is one whose terms provide
for the readjustment of its interest rate on set dates and which, upon such
readjustment, can reasonably be expected to have a market value that
approximates its par value. A floating rate security is one whose terms provide
for the readjustment of its interest rate whenever a specified interest rate
changes and which, at any time, can reasonably be expected to have a market
value that approximates its par value.

REPURCHASE AGREEMENTS. The Money Market Fund, the Intermediate Bond Fund and
the Aggressive Growth Fund may enter into repurchase agreements. Under a
repurchase agreement, a Fund acquires a debt instrument for a relatively short
period (usually not more than one week), subject to the obligation of the seller
to repurchase and the Fund to resell such debt instrument at a fixed price. The
resale price is in excess of the purchase price in that it reflects an
agreed-upon market interest rate effective for the period of time during which
the Fund's money is invested. Each Fund's repurchase agreements will at all
times be fully collateralized in an amount at least equal to 100% of the
purchase price including accrued interest earned on the underlying securities.
The instruments held as collateral are valued daily by the Adviser (M&A) and as
the value of instruments declines, the Funds will require additional collateral.
If the seller defaults and the value of the collateral securing the repurchase
agreement declines, a Fund may incur a loss. If such a defaulting seller were to
become insolvent and subject to liquidation or reorganization under applicable
bankruptcy or other laws, disposition of the underlying securities could involve
certain costs or delays pending court action. Finally, it is not certain whether
the Funds would be entitled, as against a claim of the seller or its receiver,
trustee in bankruptcy or creditors, to retain the underlying securities.
Repurchase agreements are considered by the staff of the Commission to be loans
by the Funds.

REVERSE REPURCHASE AGREEMENTS. The Aggressive Growth Fund may borrow funds for
temporary purposes by entering into reverse repurchase agreements. Pursuant to
such agreements, the Fund sells portfolio securities to financial institutions
such as banks and broker-dealers, and agrees to repurchase them at a mutually
agreed-upon date and price. At the time the Fund enters into a reverse
repurchase agreement, it must place in a segregated custodial account cash and
liquid, high-grade debt securities having a value equal to the repurchase price
(including accrued interest); the collateral will be marked to market on a daily
basis, and will be continuously monitored to ensure that such equivalent value
is maintained. Reverse repurchase agreements involve the risk that the market
value of the securities sold by the Fund may decline below the price at which
the Fund is obligated to repurchase the securities. Reverse repurchase
agreements are considered to be borrowings under the 1940 Act.

CONVERTIBLE SECURITIES. The Growth Funds may invest in all types of common
stocks and equivalents (such as convertible debt securities and warrants) and
preferred stocks. The Funds may invest in convertible securities which may offer
higher income than the common stocks into which they are convertible. The
convertible securities in which the Funds may invest consist of bonds, notes,
debentures and preferred stocks which may be converted or exchanged at a stated
or determinable exchange ratio into underlying shares of common stock. The Funds
may be required to permit the issuer of a convertible security to redeem the
security, convert it into the underlying common stock or sell it to a third
party. Thus, the Funds may not be able to control whether the issuer of a
convertible

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<PAGE>
security chooses to convert that security. If the issuer chooses to do so, this
action could have an adverse effect on a Fund's ability to achieve its
investment objectives.

Convertible securities are bonds, debentures, notes, preferred stock or other
securities which may be converted or exchanged by the holder into shares of the
underlying common stock at a stated exchange ratio. A convertible security may
also be subject to redemption by the issuer, but only after a date and under
certain circumstances (including a specified price) established on issue.
Adjustable rate preferred stocks are preferred stocks which adjust their
dividend rates quarterly based on specified relationships to certain indices of
U.S. Treasury securities. A Fund may continue to hold securities obtained as a
result of the conversion of convertible securities held by the Fund when M&A
believes retaining such securities is consistent with the Fund's investment
objectives.

LOWER-RATED SECURITIES. The Aggressive Growth Fund may invest up to 20% of its
assets, the Growth/Value Fund may invest up to 10% of its assets and the
Intermediate Bond Fund may invest up to 30% of its assets in higher yielding
(and, therefore, higher risk), lower rated fixed-income securities, including
debt securities, convertible securities and preferred stocks and unrated fixed-
income securities. Lower rated fixed-income securities, commonly referred to as
"junk bonds", are considered speculative and involve greater risk of default or
price changes due to changes in the issuer's creditworthiness than higher rated
fixed-income securities. See "Risk Factors - Lower Rated Fixed-Income
Securities" below for a discussion of certain risks.

Differing yields on fixed-income securities of the same maturity are a function
of several factors, including the relative financial strength of the issuers.
Higher yields are generally available from securities in the lower categories of
recognized rating agencies, i.e., Ba or lower by Moody's or BB or lower by S&P.
The Funds may invest in any security which is rated by Moody's or by S&P, or in
any unrated security which the Adviser (M&A) determines is of suitable quality.
Securities in the rating categories below Baa as determined by Moody's and BBB
as determined by S&P are considered to be of poor standing and predominantly
speculative. The rating services descriptions of these rating categories,
including the speculative characteristics of the lower categories, are set forth
in Appendix A of the Statement of Additional Information.

Securities ratings are based largely on the issuer's historical financial
information and the rating agencies' investment analysis at the time of rating.
Consequently, the rating assigned to any particular security is not necessarily
a reflection of the issuer's current financial condition, which may be better or
worse than the rating would indicate. Although the Adviser (M&A) will consider
security ratings when making investment decisions in the high yield market, it
will perform its own investment analysis and will not rely principally on the
ratings assigned by the rating services. The Adviser's (M&A's) analysis
generally may include, among other things, consideration of the issuer's
experience and managerial strength, changing financial conditions, borrowing
requirements or debt maturity schedules, and its responsiveness to changes in
business conditions and interest rates. It also considers relative values based
on anticipated cash flow, interest or dividend coverage, asset coverage and
earnings prospects.

ADRS. The Growth Funds may invest in foreign securities through the purchase of
American Depositary Receipts but will not do so if immediately after a purchase
and as a result of the purchase the total value of such foreign securities owned
by a Fund would exceed 10% of the value of the total assets of the Fund.
Investment in foreign securities is subject to special risks, such as future
adverse political and economic developments, possible seizure, nationalization,
or expropriation of foreign investments, less stringent disclosure requirements,
the possible establishment of exchange controls or taxation at the source and
the adoption of other foreign governmental restrictions. Additional risks
include less publicly available information, the risk that companies may not be
subject to the accounting, auditing and financial reporting

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<PAGE>
standards and requirements of U.S. companies, the risk that foreign securities
markets may have less volume and therefore less liquidity and greater price
volatility than U.S. securities, and the risk that custodian and brokerage costs
may be higher.

OPTIONS. The Aggressive Growth Fund may engage in writing put and call options
from time to time as M&A deems to be appropriate. Such options must be listed on
a national securities exchange and issued by the Options Clearing Corporation.
In order to close out a written call option position, the Fund will enter into a
"closing purchase transaction" - the purchase of a call option on the same
security with the same exercise price and expiration date as any call option
which it may previously have written on any particular securities. When the
portfolio security is sold, the Fund effects a closing purchase transaction so
as to close out any existing call option on that security. If the Fund is unable
to effect a closing purchase transaction, it will not be able to sell the
underlying security until the option expires or the Fund delivers the underlying
security upon exercise. When writing a covered call option, the Fund, in return
for the premium, gives up the opportunity for profit from a price increase in
the underlying security above the exercise price, but retains the risk of loss
should the price of the security decline. The Fund seeks to terminate its
position in a put option it writes before exercise by closing out the option in
the secondary market at its current price. If the secondary market is not liquid
for a put option the Fund has written, however, the Fund must continue to be
prepared to pay the strike price while the option is outstanding, regardless of
price changes and must continue to set aside assets to cover its position.

The Aggressive Growth Fund may purchase put options from time to time as M&A
deems to be appropriate. A put is a right to sell a specified security (or
securities) within a specified period of time at a specified exercise price. The
Fund has no intention of investing more than 5% of its assets in put options.

WARRANTS. The Growth Funds may invest in warrants which entitle the holder to
buy equity securities at a specific price for a specific period of time.
Warrants may be considered more speculative than certain other types of
investments because they do not entitle a holder to dividends or voting rights
with respect to the securities which may be purchased, nor do they represent any
rights in the assets of the issuing company. The value of a warrant may be more
volatile than the value of the securities underlying the warrants. Also, the
value of the warrant does not necessarily change the value of the underlying
securities and a warrant ceases to have value if it is not exercised prior to
the expiration date.

SHORT-TERM OBLIGATIONS. With respect to each Fund there may be times when, in
the opinion of the Adviser (M&A), adverse market conditions exist, including any
period during which it believes that the return on certain money market type
instruments would be more favorable than that obtainable through a Fund's normal
investment programs. Accordingly, for temporary defensive purposes, each Fund
may hold up to 100% of its total assets in cash and/or short-term obligations.
To the extent that a Fund's assets are so invested, they will not be invested so
as to meet its investment objective. The instruments may include high grade
liquid debt securities such as variable amount master demand notes, commercial
paper, certificates of deposit, bankers' acceptances, repurchase agreements
which mature in less than seven days and obligations issued or guaranteed by the
U.S. Government, its agencies and instrumentalities. Bankers' acceptances are
instruments of United States banks which are drafts or bills of exchange
"accepted" by a bank or trust company as an obligation to pay on maturity.

FUTURES CONTRACTS. The Aggressive Growth Fund and the Tax-Free Funds may also
enter into contracts for the future delivery of securities and futures contracts
based on a specific security, class of securities or an index, purchase or sell
options on any such futures contracts and engage in related closing
transactions. A futures contract on a securities index is an agreement
obligating either party to

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<PAGE>
pay, and entitling the other party to receive, while the contract is
outstanding, cash payments based on the level of a specified securities index.

The Funds may enter into futures contracts in an effort to hedge against market
risks and in anticipation of future purchases or sales of securities. For
example, when interest rates are expected to rise or market values of portfolio
securities are expected to fall, a Fund can seek to offset a decline in the
value of its portfolio securities by entering into futures contract
transactions. When interest rates are expected to fall or market values are
expected to rise, the Fund, through the purchase of such contracts, can attempt
to secure better rates or prices than might later be available in the market
when it effects anticipated purchases.

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

Aggregate initial margin deposits for futures contracts, and premiums paid for
related options, may not exceed 5% of a Fund's total assets (other than in
connection with bona fide hedging purposes), and the value of securities that
are the subject of such futures and options (both for receipt and delivery) may
not exceed one-third of the market value of the Fund's total assets. Futures
transactions will be limited to the extent necessary to maintain the Fund's
qualification as a regulated investment company.

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

ZERO COUPON BONDS. The Growth/Value Fund, the Intermediate Bond Fund and the
Tax-Free Funds are permitted to purchase zero coupon securities ("zero coupon
bonds"). Zero coupon bonds are purchased at a discount from the face amount
because the buyer receives only the right to receive a fixed payment on a
certain date in the future and does not receive any periodic interest payments.
The effect of owning instruments which do not make current interest payments is
that a fixed yield is earned not only on the original investment but also, in
effect, on all discount accretion during the life of the obligations. This
implicit reinvestment of earnings at the same rate eliminates the risk of being
unable to reinvest distributions at a rate as high as the implicit yields on the
zero coupon bond, but at the same time eliminates the holder's ability to
reinvest at higher rates in the future. For this reason, zero coupon bonds are
subject to substantially greater price fluctuations during periods of changing
market interest rates than are comparable securities which pay interest
currently, which fluctuation increases the longer the period of maturity.
Although zero coupon bonds do not pay interest to holders prior to maturity,
Federal income tax law requires a Fund to recognize as interest income a portion
of the bond's discount each year and this income must then be distributed to
shareholders along with other income earned by the Fund. To the extent that any
shareholders in a Fund elect to receive their dividends in cash rather than
reinvest such dividends in additional shares, cash to make these distributions
will have to be provided from the assets of the Fund or other sources such as
proceeds of sales of Fund shares and/or sales of portfolio securities. In such
cases, the Fund will not be able to purchase additional income producing
securities with cash used to make such distributions and its current income may
ultimately be reduced as a result.

- 17 -
<PAGE>
RECEIPTS. The Growth/Value Fund and the Intermediate Bond Fund may also
purchase separately traded interest and principal component parts of such
obligations that are transferable through the Federal book entry system, known
as Separately Traded Registered Interest and Principal Securities ("STRIPS") and
Coupon Under Book Entry Safekeeping ("CUBES"). These instruments are issued by
banks and brokerage firms and are created by depositing Treasury notes and
Treasury bonds into a special account at a custodian bank; the custodian holds
the interest and principal payments for the benefit of the registered owner of
the certificates or receipts. The custodian arranges for the issuance of the
certificates or receipts evidencing ownership and maintains the register.
Receipts include Treasury Receipts ("TRs"), Treasury Investment Growth Receipts
("TIGRs") and Certificates of Accrual on Treasury Securities ("CATS").

STRIPS, CUBES, TRs, TIGRs and CATS are sold as zero coupon securities, which
means that they are sold at a substantial discount and redeemed at face value at
their maturity date without interim cash payments of interest or principal. This
discount is amortized over the life of the security, and such amortization will
constitute the income earned on the security for both accounting and tax
purposes. Because of these features, these securities may be subject to greater
interest rate volatility than interest-paying U.S. Treasury obligations. Each
Fund will limit its investment in such instruments to 20% of its total assets.

INVESTMENT COMPANY SECURITIES. Each Fund may invest in the securities of other
investment companies to the extent permissible under the applicable regulations
and interpretations of the 1940 Act or an exemptive order. To the extent
required by the laws of any state in which shares of the Fund are sold, M&A
and/or the Adviser will waive their respective fees as to all assets invested in
other open-end investment companies.

ILLIQUID INVESTMENTS AND RESTRICTED SECURITIES. Each Fund may invest up to 15%
(but, as a non-fundamental policy, the Money Market Fund may invest up to 10%)
of its assets in illiquid investments (investments that cannot be readily sold
within seven days), including restricted securities which do not meet the
criteria for liquidity established by the Company's Board of Directors. The
Adviser, under the supervision of the Company's Board of Directors, and M&A,
under the supervision of the Company's Board of Directors and the Adviser,
determine the liquidity of a Fund's investments. The absence of a trading market
can make it difficult to ascertain a market value for illiquid investments.
Disposing of illiquid investments may involve time-consuming negotiation and
legal expenses. Restricted Securities are securities which cannot be sold to the
public without registration under the Securities Act of 1933. Unless registered
for sale, these securities can only be sold in privately negotiated transactions
or pursuant to an exemption from registration.

PRIVATE PLACEMENT INVESTMENTS. The Aggressive Growth Fund and the Money Market
Fund may invest in commercial paper issued in reliance on the exemption from
registration afforded by Section 4(2) of the Securities Act of 1933. Section
4(2) commercial paper is restricted as to disposition under Federal securities
laws and is generally sold to institutional investors who agree that they are
purchasing the paper for investment purposes and not with a view to public
distribution. Any resale by the purchaser must be in an exempt transaction.
Section 4(2) commercial paper is normally resold to other institutional
investors through or with the assistance of the issuer or investment dealers who
make a market in Section 4(2) commercial paper, thus providing liquidity. The
Company believes that Section 4(2) commercial paper and possibly certain other
restricted securities which meet the criteria for liquidity established by the
directors are quite liquid. The Company intends therefore, to treat the
restricted securities which meet the criteria for liquidity established by the
directors, including Section 4(2) commercial paper, as determined by the Adviser
(M&A), as liquid and not subject to the investment limitation applicable to
illiquid securities. In addition, because Section 4(2)

- 18 -
<PAGE>
commercial paper is liquid, the Company intends to not subject such paper to the
limitation applicable to restricted securities.

The ability of the directors to determine the liquidity of certain restricted
securities is permitted under a position of the staff of the Commission set
forth in the adopting release for Rule 144A under the Securities Act of 1933
(the "Rule"). The Rule is a nonexclusive safe-harbor for certain secondary
market transactions involving securities subject to restrictions on resale under
Federal securities laws. The Rule provides an exemption from registration for
resales of otherwise restricted securities to qualified institutional buyers.
The Rule was expected to further enhance the liquidity of the secondary market
for securities eligible for resale under Rule 144A. The staff of the Commission
has left the question of determining the liquidity of all restricted securities
to the directors. The directors consider the following criteria in determining
the liquidity of certain restricted securities (including Section 4(2)
commercial paper): the frequency of trades and quotes for the security; the
number of dealers willing to purchase or sell the security and the number of
other potential buyers; dealer undertakings to make a market in the security;
and the nature of the security and the nature of the marketplace trades. The
directors have delegated to the Adviser (M&A) the daily function of determining
and monitoring the liquidity of restricted securities pursuant to the above
criteria and guidelines adopted by the Board of Directors. The directors will
continue to monitor and periodically review the Adviser's (M&A's) selection of
Rule 144A and Section 4(2) commercial paper as well as any determinations as to
their liquidity.

RISK FACTORS

LOWER RATED FIXED-INCOME SECURITIES. Lower quality fixed-income securities
generally produce a higher current yield than do fixed-income securities of
higher ratings. However, these fixed-income securities are considered
speculative because they involve greater price volatility and risk than do
higher rated fixed-income securities and yields on these fixed-income securities
will tend to fluctuate over time. Although the market value of all fixed-income
securities varies as a result of changes in prevailing interest rates (e.g.,
when interest rates rise, the market value of fixed-income securities can be
expected to decline), values of lower rated fixed-income securities tend to
react differently than the values of higher rated fixed-income securities. The
prices of lower rated fixed-income securities are less sensitive to changes in
interest rates than higher rated fixed-income securities. Conversely, lower
rated fixed-income securities also involve a greater risk of default by the
issuer in the payment of principal and income and are more sensitive to economic
downturns and recessions than higher rated fixed-income securities. The
financial stress resulting from an economic downturn could have a greater
negative effect on the ability of issuers of lower rated fixed-income securities
to service their principal and interest payments, to meet projected business
goals and to obtain additional financing than on more creditworthy issuers. In
the event of an issuer's default in payment of principal or interest on such
securities, or any other fixed-income securities in a Fund's portfolio, the net
asset value of the Fund will be negatively affected. Moreover, as the market for
lower rated fixed-income securities is a relatively new one, a severe economic
downturn might increase the number of defaults, thereby adversely affecting the
value of all outstanding lower rated fixed-income securities and disrupting the
market for such securities. Fixed-income securities purchased by a Fund as part
of an initial underwriting present an additional risk due to their lack of
market history. These risks are exacerbated with respect to fixed-income
securities rated Caa or lower by Moody's or CCC or lower by S&P. Unrated
fixed-income securities generally carry the same risks as do lower rated
fixed-income securities.

Lower rated fixed-income securities are typically traded among a smaller number
of broker-dealers rather than in a broad secondary market. Purchasers of lower
rated fixed-income securities tend to be institutions, rather than individuals,
a factor that further limits the secondary market. To the extent

- 19 -
<PAGE>
that no established retail secondary market exists, many lower rated
fixed-income securities may not be as liquid as Treasury and investment grade
bonds. The ability of a Fund to sell lower rated fixed-income securities will be
adversely affected to the extent that such securities are thinly traded or
illiquid. Moreover, the ability of a Fund to value lower rated fixed-income
securities becomes more difficult, and judgment plays a greater role in
valuation, as there is less reliable, objective data available with respect to
such securities that are thinly traded or illiquid.

Because investors may perceive that there are greater risks associated with the
lower rated fixed-income securities of the type in which a Fund may invest, the
yields and prices of such securities may tend to fluctuate more than those for
fixed-income securities with a higher rating. Changes in perception of issuer's
creditworthiness tend to occur more frequently and in a more pronounced manner
in the lower quality segments of the fixed-income securities market than do
changes in higher quality segments of the fixed-income securities market,
resulting in greater yield and price volatility. The speculative characteristics
of lower rated fixed-income securities are set forth in Appendix A of the
Statement of Additional Information.

The Adviser (M&A) believes that the risks of investing in such high yielding,
fixed-income securities may be minimized through careful analysis of prospective
issuers. Although the opinion of ratings services such as Moody's and S&P is
considered in selecting portfolio securities, they evaluate the safety of the
principal and the interest payments of the security, not their market value
risk. Additionally, credit rating agencies may experience slight delays in
updating ratings to reflect current events. The Adviser (M&A) relies, primarily,
on its own credit analysis. This may suggest, however, that the achievement of a
Fund's investment objective is more dependent on the Adviser's (M&A's)
proprietary credit analysis, than is otherwise the case for a fund that invests
exclusively in higher quality fixed-income securities.

Once the rating of a portfolio security or the quality determination ascribed by
the Adviser (M&A) to an unrated fixed-income security has been downgraded, the
Adviser (M&A) will consider all circumstances deemed relevant in determining
whether to continue to hold the security, but in no event will a Fund retain
such securities if it would cause the Fund to have 35% or more of the value of
its net assets invested in fixed-income securities rated lower than Baa by
Moody's or BBB by S&P, or if unrated, are judged by the Adviser (M&A) to be of
comparable quality.

The Funds may also invest in unrated fixed-income securities. Unrated
fixed-income securities are not necessarily of lower quality than rated
fixed-income securities, but they may not be attractive to as many buyers.

There is no minimum rating standard for a Fund's investments in the high yield
market; therefore, a Fund may at times invest in fixed-income securities not
currently paying interest or in default. The Funds will invest in such
fixed-income securities where the Adviser (M&A) perceives a substantial
opportunity to realize a Fund's objective based on its analysis of the
underlying financial condition of the issuer. It is not, however, the current
intention of any Fund to make such investments.

These limitations and the policies discussed in this Prospectus are considered
and applied by the Adviser (M&A) at the time of purchase of an investment; the
sale of securities by a Fund is not required in the event of a subsequent change
in circumstances.

OTHER RISK FACTORS

[The portfolio turnover of each Fund may vary greatly from year to year as well
as within a particular year. High turnover rates will generally result in higher
transaction costs and higher levels of taxable realized gains to the Fund's
shareholders. It is expected that portfolio turnover for each of the Funds
(other than the Money Market Fund) will not exceed 100%. (See "Additional Tax
Information" in the Statement of Additional Information.)]

- 20 -
<PAGE>
Particular portfolio securities and yields will differ due to differences in the
types of investments permitted, cash flow, and the availability of particular
portfolio investments. Market conditions and interest rates may affect the types
and yields of securities held in each Fund. The investment objectives of the
Funds are fundamental and may be changed only by a vote of a majority of the
outstanding shares of that Fund (as defined below under "General Information -
Miscellaneous"). There can be, of course, no assurance that a Fund will achieve
its investment objective. Changes in prevailing interest rates may affect the
yield, and possibly the net asset value, of a Fund.

Each Fund is classified as a "non-diversified" investment company under the 1940
Act. Each Fund also intends to qualify as a "regulated investment company" under
the Internal Revenue Code of 1986, as amended (the "Code"). One of the tests for
such qualification under the Code is, in general, that at the end of each fiscal
quarter of each Fund, at least 50% of its assets must consist of (i) cash and
U.S. Government securities and (ii) securities which, as to any one issuer, do
not exceed 5% of the value of the Fund's assets. If a Fund had elected to
register under the 1940 Act as a "diversified" investment company, it would have
to meet the same test as to 75% of its assets. Each Fund may therefore not have
as much diversification among securities, and thus diversification of risk, as
if it had made this election under the 1940 Act. In general, the more a Fund
invests in the securities of specific issuers, the more that Fund is exposed to
risks associated with investments in those issuers.

VALUATION OF SHARES

The net asset value per share of each Fund for purposes of pricing purchase and
redemption orders is determined as of the close of regular trading of the New
York Stock Exchange (the "Exchange")) on each Business Day of the Fund. Fund
Business Days do not include the following holidays observed by the Exchange:
New Year's Day, Presidents' Day, Good Friday, Memorial Day (observed),
Independence Day (observed), Labor Day, Thanksgiving Day and Christmas Day
(observed). Days on which the Federal Reserve Wire Transfer Service is closed
(which include: Martin Luther King Day, Columbus Day and Veterans' Day), in
addition to Exchange holidays, are not Business Days for the Money Market Fund.
Net asset value per share for purposes of pricing sales and redemptions is
calculated by dividing the value of all securities and other assets belonging to
a Fund, less the liabilities charged to that Fund, by the number of the
outstanding shares of that Fund.

The securities in each Fund except the Money Market Fund will be valued at
market value. If market quotations are not available, the securities will be
valued by a method which the Board of Directors of the Company believes
accurately reflects fair value. Investments in debt securities with remaining
maturities of 60 days or less will be valued based upon the amortized cost
method. For further information about valuation of investments
in the Funds, see the Statement of Additional Information.

The assets in the Money Market Fund are valued based upon the amortized cost
method. Pursuant to rules and regulations of the Commission regarding the use of
the amortized cost method, the Money Market Fund will maintain a dollar-weighted
average portfolio maturity of 90 days or less. Although the Company seeks to
maintain the Money Market Fund's net asset value per share at $1.00, there can
be no assurance that net asset value will not vary.

PURCHASES AND REDEMPTIONS OF SHARES

Shares of each Fund are sold and redeemed on all Fund Business Days at their net
asset value, plus a sales charge where applicable, next determined after receipt
of an order in proper form.

HOW TO INVEST

GENERAL INFORMATION. Investments in a Fund may be made by an investor directly
or through certain

- 21 -
<PAGE>
brokers and financial institutions of which the investor is a customer. All
transactions in Fund shares are effected through the Transfer Agent, which
accepts orders for purchases and redemptions from shareholders of record and new
investors. Shareholders of record will receive from the Company periodic
statements listing all account activity during the statement period. The Company
reserves the right in the future to modify, limit or terminate any shareholder
privilege upon appropriate notice to shareholders and to charge a fee for
certain shareholder services, although no such fees are currently contemplated.

MINIMUM INVESTMENT REQUIRED. The minimum initial investment in a Fund is
$1,000. There is no minimum subsequent investment. The Company and Forum
Financial Corp. ("FFC") each reserves the right to waive the minimum investment
requirement.

PURCHASES BY MAIL. To purchase shares of a Fund by mail, simply send a
completed Account Registration Form obtainable from the Fund, to Trans Adviser
Funds, Inc., P.O. Box 446, Portland, Maine 04112, together with a check payable
to the Trans Adviser Funds in payment for the shares. If you need assistance in
completing the Account Registration Form call (800) 811-8258.

All purchases must be made in United States dollars and checks must be drawn on
a United States bank. Payment for shares may not be made by third party checks,
however, second party checks are acceptable when properly endorsed. The Company
reserves the right to limit the number of checks from one account processed at
one time. If your check does not clear, your purchase will be canceled and you
could be responsible for any losses or fees incurred. Payments transmitted by
check are subject to collection at full face amount.

PURCHASES BY WIRE. To purchase shares of the Funds by federal reserve wire,
call FFC at (800) 811-8258 by 12:00 noon (Eastern time) for the Money Market
Fund and by 4:00 p.m. (Eastern time) for each of the other Funds to place an
order. If FFC receives an order in proper form prior to 12:00 noon for the Money
Market Fund and prior to 4:00 p.m. (Eastern time) for each of the other Funds
and federal funds are received by the custodian by 12:00 noon (Eastern time) for
the Money Market Fund and by 4:00 p.m. for each of the other Funds that same
day, purchases of shares of the Funds will become effective on that Fund
Business Day and purchases of shares of the Money Market Fund will begin to earn
dividends on that Fund Business Day. Orders received after 12:00 noon for the
Money Market Fund and after 4:00 p.m. (Eastern time) for each of the other Funds
will become effective on the next Fund Business Day upon receipt of federal
funds.

If an investor does not remit federal funds, such payment must be converted into
federal funds. Prior to receipt of federal funds, the investors monies will not
be invested.

The following procedure will help insure prompt receipt of your federal funds
wire:

A. Telephone FFC toll free at (800) 811-8258 and provide the following
information:

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

You will then be provided with a wire control number as well as a Fund account
number. (Investors with existing accounts must also notify the Company prior to
wiring funds.)

B. Instruct your bank to wire the specified amount to the Funds' custodian:

First National Bank of Boston
Boston, Massachusetts
ABA # 011 000 390
For Credit To: Forum Financial Corp.
Account Number: 541-54171
Trans Adviser Funds (Name of Fund)
Account Number: ___________________________________________________________
Account Name: _____________________________________________________________

- 22 -
<PAGE>
An investor may open an account when placing an initial order by telephone,
provided the investor thereafter submits an Account Registration Form by mail.
An Account Registration Form may be obtained from the Funds.

If you own securities meeting the criteria for investment by the Fund in which
you want to invest, you may exchange such securities for shares of such Fund.
All such exchanges are discretionary with the Fund. If you desire to make such
an exchange, you should contact the Fund prior to delivering any securities in
order to establish that the securities are acceptable for exchange, to determine
what transaction charges, if any, may be imposed and to obtain delivery
instructions for such securities. The value of the securities being exchanged
will be determined in the same manner as the value of such Fund's portfolio
securities is determined (see "Valuation of Shares"); the specific method of
determining the value will be provided to you on request. A Fund reserves the
right to refuse any such exchange, even if the securities offered by an investor
meet the general investment criteria of the Fund. A capital gain or loss for
Federal income tax purposes may be realized by the investor following the
exchange. Maturing bonds or detached coupons submitted within five (5) business
days of the payment date are credited on the payment date.

The Company and FFC each reserves the right to reject any purchase order for any
reason.

SHARE CERTIFICATES. FFC maintains a share account for each shareholder. No
share certificates will be issued for shares unless requested in writing. In
order to facilitate redemptions and transfers, most shareholders elect not to
receive certificates. Shares are held in unissued form by FFC. Shares for which
certificates have been issued cannot be redeemed unless the certificates are
received together with the redemption request in proper form. Share certificates
are not issued for fractional shares.

SALES CHARGES. The public offering price of a share of a Fund equals the Fund's
net asset value per share plus a sales charge (except the Money Market Fund,
shares of which are sold at net asset value), set forth below as a percentage of
the Fund's average daily net assets. The Distributor receives this sales charge,
and may reallow all of it as dealer discounts and brokerage commissions. From
time to time, dealers who receive dealer discounts and brokerage commissions
from the Distributor may reallow all or a portion of such dealer discounts and
brokerage commissions to other dealers or brokers. A broker or dealer who
receives reallowances in excess of 90% of the sales charge may be deemed to be
an "underwriter" for purposes of the Securities Act of 1933. The Funds have a
reinstatement policy which allows an investor who redeems his/her shares to
reinvest within 90 days without incurring a sales charge.

<TABLE>
<CAPTION>
Sales Charge as a
Percentage of: Dealer
Offering Amount Reallowance of
Amount of Purchase Price Invested Offering Price
- ------------------- ------------ ------------ -----------------
<S> <C> <C> <C>
Less than $50,000 4.50% 4.71% 4.00%
$50,000 to $99,999 4.00% 4.17% 3.50%
$100,000 to
$249,999 3.50% 3.63% 3.00%
$250,000 to
$499,999 2.50% 2.56% 2.25%
$500,000 to
$999,999 1.00% 1.01% .90%
$1,000,000 and over .25% . % .25%
</TABLE>

The Distributor, at its expense, may also provide additional cash compensation
to dealers in connection with sales of shares of the Funds. The maximum cash
compensation payable by the Distributor is 90% of the sales charge as a percent
of the offering price. In addition, the Distributor will, from time to time and
at its own expense, provide compensation, including financial assistance, to
dealers in connection with conferences, sales or training programs for their
employees, seminars for the public, advertising campaigns regarding one or more
Funds and/or other dealer-sponsored special events including payment for travel
expenses, including lodging, incurred in connection with trips taken by invited
registered representatives and members of their families to locations within or
outside of the United States for meetings or seminars of a business nature.
Compensation will include the following types of non-cash compensation offered
through sales contests:

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<PAGE>
(1) vacation trips including the provision of travel arrangements and lodging;
(2) tickets for entertainment events (such as concerts, cruises and sporting
events) and (3) merchandise (such as clothing, trophies, clocks and pens).
Dealers may not use sales of a Fund's shares to qualify for this compensation to
the extent such may be prohibited by the laws of any state or any
self-regulatory agency, such as the National Association of Securities Dealers,
Inc. None of the aforementioned compensation is paid for by the Fund or its
shareholders.

The sales charges set forth in the above table are applicable to purchases made
at one time by any investor, which includes: (i) an individual, his or her
spouse and children under the age of 21; (ii) a trustee or other fiduciary of a
single trust estate or single fiduciary account; or (iii) any other organized
group of persons, whether incorporated or not, provided that such organization
has been in existence for at least six months and has some purpose other than
the purchase of redeemable securities of a registered investment company. In
order to qualify for a lower sales charge, all orders from an investor will have
to be placed through a single investment dealer and identified at the time of
purchase as originating from the same investor, although such orders may be
placed into more than one account which identifies the investor.

SALES CHARGE WAIVERS

The following classes of investors may purchase shares of the Funds at no sales
charge (which classes may be changed or eliminated at any time):

(1) Current or retired directors of the Trans Adviser Funds; employees,
directors, trustees, and their family members (i.e., an employee's, director's
or trustee's spouse, parents and children) of Trans Financial, Inc. or an
Affiliated Provider (Affiliated Providers refer to affiliates and subsidiaries
of Trans Financial, Inc. and service providers to the Trans Adviser Funds),
dealers having an agreement with the Distributor and any trade organization to
which Trans Financial Bank, N.A. or the Administrator belongs;

(2) Investors who purchase shares for trust, investment management or certain
other advisory accounts established with Trans Financial, Inc. or any of its
affiliates;

(3) Investors who purchase shares through a 401(k) plan sponsored by an
Affiliated Provider;

(4) Investors who reinvest assets received in a distribution from a qualified,
non-qualified or deferred compensation plan, agency, trust or custody account
that was either (a) maintained by Trans Financial, Inc. or an Affiliated
Provider, or (b) invested in a fund of the Trans Adviser Funds; and

(5) Investors who, within 90 days of redemption, use the proceeds from the
redemption of shares of another mutual fund complex for which they previously
paid a front end sales charge or sales charge upon redemption of shares.

Purchases may also be made at net asset value provided that such purchases are
placed through an institution that maintains an omnibus account with a Fund and
such purchases are made by the following: Investment advisers or financial
planners who place trades for their own accounts or the accounts of their
clients and who charge a management, consulting or other fee for their services;
and clients of such investment advisers or financial planners who place trades
for their own accounts if the accounts are linked to the master account of such
investment adviser or financial planner on the books and records of the broker
or agent; retirement and deferred compensation plans and trusts used to fund
those plans, including, but not limited to, those defined in Sections 401(a),
403(b) or 457 of the Code and "rabbi trusts." Investors may be charged a fee if
they effect transactions in Fund shares through a broker or agent.

LETTER OF INTENT

Investors may also obtain reduced sales charges based on cumulative purchases by
means of a written Letter of Intent. A Letter of Intent states your intention to
purchase shares of a Fund at a total public offering price within a period of 13
months. Each purchase of shares under a Letter of Intent will be subject to the
sales charges that would have

- 24 -
<PAGE>
applied if you had purchased the dollar amount specified in the Letter of Intent
in a single transaction.

A Letter of Intent is not a binding obligation to purchase the full amount
indicated. The minimum initial investment under a Letter of Intent is 5% of the
indicated amount. Shares purchased with the first 5% of the amount indicated in
the Letter of Intent will be held subject to a registered pledge (while
remaining registered in the name of the investor) to secure payment of the
higher sales charge applicable to the shares actually purchased if the full
amount indicated is not purchased within 13 months. Pledged shares will be
involuntarily redeemed to pay the additional sales charge, if necessary. When
the full amount indicated has been purchased, the shares will be released from
pledge. Share certificates are not issued for shares purchased under a Letter of
Intent. Investors wishing to enter into a Letter of Intent can obtain a form of
Letter of Intent from their broker or financial institution or by contacting
FFC.

A Letter of Intent may include purchases of shares of any fund of the Trans
Adviser Funds to which a sales charge applies or applied made not more than 90
days prior to the date on which you sign a Letter of Intent; however, the
13-month period during which the Letter of Intent is in effect will begin on the
date of the earliest purchase to be included. You may combine purchases that are
made in your individual capacity with (1) purchases that are made by members of
your immediate household and (2) purchases made by businesses that you own as
sole proprietorships, for purposes of obtaining reduced sales charges by means
of a written Letter of Intent. In order to accomplish this, however, you must
designate on the account application the accounts that are to be combined for
this purpose. You can only designate accounts that are open at the time the
Letter of Intent is executed.

If you qualify for a further reduced sales charge because you have either
purchased more than the dollar amount indicated on the Letter of Intent or have
entered into a Letter of Intent which includes shares purchased prior to the
date of the Letter of Intent, the difference in the sales charge will be used to
purchase additional shares of a Fund on your behalf; thus, the total purchases
(included in the Letter of Intent) will reflect the applicable reduced sales
charge of the Letter of Intent.

If you purchase more than the dollar amount indicated on the Letter of Intent,
or you enter into a Letter of Intent that includes shares purchased prior to the
date of the Letter of Intent and qualify for a reduced sales charge, all such
additional shares will be purchased immediately in the form of additional
shares, credited to your account at the then-current public offering price
applicable to a single purchase of the total amount of the purchases.

For further information about Letters of Intent, contact FFC at (800) 811-8258.
This program, however, may be modified or eliminated at any time or from time to
time without notice.

AUTOMATIC INVESTMENT PLAN

Investors may also purchase shares by arranging systematic monthly, bi-monthly
or quarterly investments into the Funds with the Company's Automatic Investment
Plan ("AIP"). The minimum investment amounts are $50 per transfer and the
maximum amount with respect to any transfer is $100,000. After investors give
the Company proper authorization, their bank accounts, which must be with banks
that are members of the Automated Clearing House, will be debited accordingly to
purchase shares. Investors will receive a confirmation from the Company for
every transaction, and a withdrawal will appear on their bank statements.

To participate in AIP, investors must complete the appropriate sections of the
Account Registration Form or the Automatic Investment/Withdrawal Plan Form.
These forms may be obtained by calling the Company at (800) . The amount
investors specify will automatically be invested in shares at the specified
Fund's net asset value per share next determined after the debit is made.

To change the frequency or amount invested, written instructions must be
received by the Company

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<PAGE>

at least seven Business Days in advance of the next transfer. If the bank or
bank account number is changed, instructions must be received by the Company at
least 20 Business Days in advance. In order to change a bank or bank account
number, investors also must have their signature guaranteed by a bank, broker,
dealer, credit union, securities exchange, securities association, clearing
agency or savings association, as those terms are defined in Rule 17Ad-15 under
the Securities Exchange Act of 1934 (an "Eligible Guarantor Institution").
Signature guarantees are described more fully under "HOW TO REDEEM SHARES"
below. If there are insufficient funds in the investor's designated bank account
to cover the shares purchased using AIP, the investor's bank may charge the
investor a fee or may refuse to honor the transfer instruction (in which case no
Fund shares will be purchased).

Investors should check with their banks to determine whether they are members of
the Automatic Clearing House and whether their banks charge a fee for
transferring funds through the Automatic Clearing House. Expenses incurred by
the Funds related to AIP are borne by the Funds and therefore there is no direct
charge by the Funds to investors for use of these services.

RIGHT OF ACCUMULATION AND CONCURRENT PURCHASES

You may qualify for a reduced sales charge on purchases of a Fund's shares by
combining a current purchase with certain prior purchases of shares of any fund
of the Trans Adviser Funds. The applicable sales charge is based on the sum of
(i) your current purchase plus (ii) the current public offering price of your
previous purchases of (a) all shares held by you in such Fund and (b) all shares
held by you in any other fund of the Trans Adviser Funds, except the Money
Market Fund.

To receive the applicable public offering price pursuant to the right of
accumulation, you must provide FFC with sufficient information at the time of
purchase to permit confirmation of qualification. Accumulation privileges may be
amended or terminated without notice at any time by the Distributor.

INDIVIDUAL RETIREMENT ACCOUNTS

Shares of the Funds are available to shareholders on a tax-deferred basis
through the following retirement plans:

INDIVIDUAL RETIREMENT ACCOUNT ("IRA")

An IRA enables individuals, even if they participate in an employer-sponsored
retirement plan, to establish their own retirement program. IRA contributions
may be tax-deductible and earnings are tax-deferred. Under the Tax Reform Act of
1986, the tax deductibility of IRA contributions is restricted or eliminated for
individuals who participate in certain employer pension plans and whose annual
income exceeds certain limits. Existing IRAs and future contributions up to the
IRA maximums, whether deductible or not, still earn income on a tax-deferred
basis.

SIMPLIFIED EMPLOYEE PENSION PLAN
("SEP/IRA")

A SEP/IRA may be established on a group basis by an employer who wishes to
sponsor a tax-sheltered retirement program by making contributions into IRAs on
behalf of all eligible employees.

For more information call (800) 308-TRAN. Shareholders are advised to consult a
tax adviser on
IRA contribution and withdrawal requirements and restrictions.

ACCOUNT STATEMENTS

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

HOW TO REDEEM SHARES

REDEMPTION BY TELEPHONE. Redemption requests may be made by telephoning FFC at
(800) 811-8258. Shareholders must provide FFC with the shareholder's account
number, the exact name in which the shares are registered and some additional
form of identification such as a password. A redemption by telephone may be made
only if the telephone redemption privilege option has been

- 26 -
<PAGE>
elected on the Account Registration Form. In an effort to prevent unauthorized
or fraudulent redemption requests by telephone, FFC will follow reasonable
procedures to confirm that such instructions are genuine. If such procedures are
followed, neither FFC, Forum nor the Company will be liable for any losses due
to unauthorized or fraudulent redemption requests. Redemptions for amounts of
less than $10,000 will be made by check. Redemptions of $10,000 or more may be
wired at the shareholder's request.

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

WRITTEN REQUESTS. Redemption requests may be made by writing to Trans Adviser
Funds, Inc., P.O. Box 446, Portland, Maine 04112. Written requests must be in
proper form. The shareholder will need to provide the exact name in which the
shares are registered, the Fund name, account number, and the share or dollar
amount requested.

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

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

Due to the cost to the Company of maintaining smaller accounts, the Company
reserves the right to redeem, upon 60 days' written notice, all shares in an
account with an aggregate net asset value of less than $500 unless an investment
is made to restore the minimum value. The Company will not redeem accounts that
fall below this amount solely as a result of a reduction in the net asset value
of a Fund's shares.

EXCHANGES

Shareholders may exchange shares of a Fund for shares of any other Trans Adviser
Fund so long as they maintain the respective minimum account balance in each
Fund in which they own shares. Exchanges between each Fund, except for exchanges
from the Money Market Fund, are at net asset value. Exchanges into another Trans
Adviser Fund from the Money Market Fund will be effected at net asset value plus
any applicable sales charge.

An exchange is considered to be a sale of shares for Federal income tax purposes
on which a shareholder may realize a capital gain or loss.

An exchange may be made by calling FFC at (800) 811-8258 or by mailing written
instructions to Trans Adviser Funds, Inc., P.O. Box 446, Portland, Maine 04112.
Exchange privileges may be exercised only in those states where shares of the
other Trans Adviser Fund may legally be sold, and may be amended or terminated
at any time upon sixty (60) days' notice.

AUTOMATIC WITHDRAWAL PLAN

The Automatic Withdrawal Plan enables shareholders of the Funds to make regular
monthly or quarterly redemptions of shares. With shareholder authorization, FFC
will automatically redeem such shares at net asset value and have the amount
specified transferred according to the written instructions of the shareholder.
Shareholders participating in this Plan must maintain a minimum account balance
of $1,000. The required minimum withdrawal is $250, monthly, quarterly,
semi-annually or annually.

The Automatic Withdrawal Plan may be modified or terminated without notice. In
addition, the Funds may suspend a shareholder's withdrawal

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<PAGE>
plan without notice if the account contains insufficient funds to effect a
withdrawal or in the event that the account balance is less than the minimum
$1,000 amount.

To participate in the Automatic Withdrawal Plan, shareholders should call (800)
811-8258 for more information. Purchases of additional shares concurrently with
withdrawals may be disadvantageous to certain shareholders because of tax
liabilities and sales charges. For a shareholder to change the Automatic
Withdrawal instructions, the request must be made in writing to the Distributor
and may take up to 15 days to implement.

PAYMENTS TO SHAREHOLDERS

Redemption orders are effected at the net asset value per share next determined
after the shares are properly tendered for redemption, as described above.
Payment to shareholders for shares redeemed will be made within seven days after
receipt by FFC of the request for redemption. However, with respect to the Money
Market Fund only, to the greatest extent possible, the Company will attempt to
honor requests from shareholders for same day payments upon redemption of shares
if the request for redemption is received by FFC before 12:00 noon, Eastern
Time, on a Fund Business Day or, if the request for redemption is received after
12:00 noon, Eastern Time, to honor requests for payment on the next Fund
Business Day, unless it would be disadvantageous to the Company or the
shareholders of the particular Fund to sell or liquidate portfolio securities in
an amount sufficient to satisfy requests for payments in that manner.

At various times, the Company may be requested to redeem shares for which it has
not yet received good payment. In such circumstances, the Company may delay the
forwarding of proceeds only until payment has been collected for the purchase of
such shares which may take up to 15 days or more. To avoid delay in payment upon
redemption shortly after purchasing shares, investors should purchase shares by
certified or bank check or by wire transfer. The Company intends to pay cash for
all shares redeemed, but under abnormal conditions which make payment in cash
unwise, the Company may make payment wholly or partly in portfolio securities at
their then market value equal to the redemption price. In such cases, an
investor may incur brokerage costs in converting such securities to cash.

See "Additional Purchase and Redemption Information" and "Valuation - Valuation
of the Funds" in the Statement of Additional Information for examples of when
the Company may suspend the right of redemption or redeem shares involuntarily
if it appears appropriate to do so in light of the Company's responsibilities
under the 1940 Act.

DIVIDENDS AND TAXES

Net income is declared daily for the Money Market Fund, the Kentucky Tax-Free
Fund, the Tennessee Tax-Free Fund and the Intermediate Bond Fund, and annually
for the Growth/Value Fund and the Aggressive Growth Fund, as a dividend to the
shareholders of the Fund at the close of business on the day of declaration.
Dividends will generally be paid monthly for the Money Market Fund, the Kentucky
Tax-Free Fund, the Tennessee Tax-Free Fund and the Intermediate Bond Fund and
annually for the Growth/Value Fund and the Aggressive Growth Fund. Distributable
net realized capital gains, if any, are distributed at least annually to
shareholders of record. A shareholder will automatically receive all income
dividends and capital gains distributions in additional full and fractional
shares at net asset value as of the date of payment unless the shareholder
elects to receive such dividends or distributions in cash. Reinvested dividends
receive the same tax treatment as dividends paid in cash. Such election, or any
revocation thereof, must be made in writing to FFC at Two Portland Square,
Portland, Maine 04101, and will become effective with respect to dividends and
distributions having record dates after its receipt by FFC. Dividends are paid
in cash not later than seven Fund Business Days after a shareholder's

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<PAGE>
complete redemption of his or her shares. Dividends are generally taxable when
received. However, dividends declared in October, November, or December to
shareholders of record during those months and paid during the following January
are treated for tax purposes as if they were received by each shareholder on
December 31 of the prior year.

Each Fund intends to qualify as a regulated investment company by satisfying the
requirements under Subchapter M of the Code, including the requirements with
respect to diversification of assets, distribution of income and sources of
income. It is each Fund's policy to distribute to shareholders all of its
investment income (net of expenses) and any capital gains (net of capital
losses) in accordance with the timing requirements imposed by the Code, so that
each Fund will not be subject to Federal income taxes or the 4% excise tax on
undistributed income.

Distributions by a Fund of its net investment income and the excess, if any, of
its net short-term capital gain over its net long-term capital loss are taxable
to shareholders as ordinary income. Distributions by a Fund of the excess, if
any, of its net long-term capital gain over its net short-term capital loss are
designated as capital gain dividends and are taxable to shareholders as
long-term capital gains, regardless of the length of time shareholders have held
their shares.

Distributions by a Fund which are taxable to shareholders as ordinary income are
treated as dividends for Federal income tax purposes, but will not qualify for
the 70% dividends-received deduction for corporate shareholders. Portions of a
Fund's investment income may be subject to foreign income taxes withheld at the
source. If a Fund meets certain requirements, it may elect to "pass-through" to
shareholders any such foreign taxes, which may enable shareholders to claim a
foreign tax credit or a deduction with respect to their share thereof.

If a Fund fails to satisfy any of the Code requirements for qualification as a
regulated investment company, it will be taxed at regular corporate tax rates on
all its taxable income (including capital gains) without any deduction for
distributions to shareholders, and distributions to shareholders will be taxable
as ordinary dividends (even if derived from a Fund's net long-term capital
gains) to the extent of a Fund's current and accumulated earnings and profits.

Distributions to shareholders will be treated in the same manner for Federal
income tax purposes whether they elect to receive them in cash or reinvest them
in additional shares. In general, shareholders take distributions into account
in the year in which they are made. However, they are required to treat certain
distributions made during January as having been paid by the Fund and received
by them on December 31 of the preceding year. A statement setting forth the
Federal income tax status of all distributions made (or deemed made) during the
year, and any foreign taxes "passed-through" to shareholders, will be sent to
shareholders promptly after the end of each year.

If a shareholder is a non-resident alien or other foreign shareholder, ordinary
income dividends paid to such shareholder generally will be subject to United
States withholding tax at the rate of 30% (or a lower rate under an applicable
treaty). Non-U.S. shareholders are urged to consult their own tax advisers
concerning the applicability of the United States withholding tax.

Under the back-up withholding rules of the Code, shareholders may be subject to
31% withholding of Federal income tax on ordinary income dividends, capital gain
dividends and redemption payments made by a Fund. In order to avoid this back-up
withholding, shareholders must provide the Fund with a correct taxpayer
identification number (which for an individual is usually his/her Social
Security number) and certify that they are corporations or otherwise exempt from
or not subject to back-up withholding.

KENTUCKY TAX INFORMATION. Since the Kentucky Tax-Free Fund may, except as
indicated below, purchase only Kentucky Obligations (which, as defined, means
obligations, including those of non-Kentucky issuers, of any maturity which pay
interest that, in the opinion of bond counsel, is exempt from regular Federal
income taxes and Kentucky

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<PAGE>
income taxes), all of the exempt-interest dividends paid by the Fund will be
excludable from the shareholders' gross income for Kentucky income tax purposes.
The Fund may also pay "short-term gains distributions" and "long-term gains
distributions," each as discussed under "Dividends and Distributions" above.
Under Kentucky income tax law, short-term gains distributions to Kentucky
residents and corporations domiciled in Kentucky are not generally exempt from
Kentucky income tax unless the statute authorizing the issuance of the
particular obligations involved expressly exempts such gains. Kentucky taxes
long-term gains distributions to Kentucky residents and corporations domiciled
in Kentucky at its ordinary individual and corporate rates. Any gains on futures
and options (including gains imputed under the Code) paid as part or all of a
short-term gains distribution or a long-term gains distribution will be taxed as
indicated above. Under the laws of Kentucky relating to ad valorem taxation of
property, the shareholders (rather than the Fund) are considered the owners of
the Fund's assets. Each shareholder will be deemed to be the owner of a pro-rata
portion of the Fund. According to the Kentucky Revenue Cabinet, to the extent
that such portion consists of Kentucky Obligations, it will be exempt from
property taxes, but it will be subject to property taxes on intangibles to the
extent it consists of cash on hand, cash in out-of-state banks, futures, options
and other non-exempt assets.

In the opinion of Wyatt, Tarrant & Combs, special Kentucky tax counsel to the
Kentucky Tax-Free Fund, shareholders of the Kentucky Tax-Free Fund who are
residents of Kentucky or have their corporate domicile in Kentucky will not be
subject to such taxes on distributions with respect to their shares in the
Kentucky Tax-Free Fund to the extent that such distributions are attributable to
interest on Kentucky Obligations. Depending on the level and nature of its
activities within Kentucky, a corporate shareholder of the Kentucky Tax-Free
Fund may have a portion or all of its Kentucky Tax-Free shares deemed to
constitute capital employed in Kentucky for purposes of the Kentucky corporate
license tax. To the extent that the Kentucky Tax-Free Fund's holdings consist of
obligations of the Commonwealth of Kentucky or its political subdivisions or
instrumentalities and the balance are obligations of the United States, shares
in the Kentucky Fund will be exempt from the Kentucky Intangibles Tax.
Shareholders who are residents of Kentucky or who have their corporate domicile
in Kentucky will be required to include the entire amount of capital gain
dividends in income to the same extent for state income tax purposes as for
Federal income tax purposes, unless the statute which authorized the issuance of
the particular obligations involved specifically exempts profits from the sale
of those obligations.

Many local governments in Kentucky, including Louisville, Jefferson County,
Lexington-Fayette County, Bowling Green and Covington, impose taxes on the net
profits of businesses operating (in any form, including sole proprietorships)
within the local jurisdiction.

Persons contemplating an investment in the Kentucky Tax-Free Fund are encouraged
to consult their own tax advisers regarding the potential impact, if any, that a
particular local tax may have in connection with such an investment.

TENNESSEE TAXES. Tennessee imposes a limited personal income tax, applicable
only to dividends from stocks and interest on bonds ("Tennessee Income Tax").
Under Tennessee law, dividends received from a qualified regulated investment
company are exempt from the Tennessee Income Tax provided that the value of the
investments of the investment company are in bonds or securities of the U.S.
Government or any agency or instrumentality thereof or in bonds of the State of
Tennessee, of any county or any municipality or political subdivision thereof,
including any agency, board, authority or commission of any of the above. If
less than all of the investments of the company are in such securities and
bonds, only that portion of the investments attributable to the above listed
securities and bonds will be exempted.

In the opinion of Wyatt, Tarrant & Combs, special Tennessee tax counsel to the
Tennessee Tax-Free Fund, shareholders of the Tennessee Tax-Free Fund

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<PAGE>
who otherwise would be subject to the Tennessee Income Tax will not be subject
to the tax on distributions received from the Tennessee Tax-Free Fund to the
extent such distributions are attributable to interest the Tennessee Tax-Free
Fund receives on bonds or securities of the U.S. Government or any agency or
instrumentality thereof or in bonds of the State of Tennessee, of any county or
any municipality or political subdivision thereof, including any agency, board,
authority or commission of any of the above. To the extent such distributions
are received by corporations doing business in Tennessee, the distributions
would be included in the determination of the amount of net earnings earned by
the corporation, which is the tax base for the determination of Tennessee Excise
Tax and could as a result be subject to that tax. In addition, the amount of
such distributions received by corporations doing business in Tennessee could
also be included in the tax base for the determination of the amount due of
Tennessee Franchise Tax.

Shareholders will be advised at least annually as to the character for Federal
income tax purposes of distributions made to them during the year.

MANAGEMENT OF TRANS
ADVISER FUNDS

DIRECTORS OF THE COMPANY

Overall responsibility for management of the Company rests with the Board of
Directors of the Company, who are elected by the shareholders of the Company.

THE ADVISER

Trans Financial Bank, N.A. (the "Adviser") provides the overall management
necessary for the Funds' operations and oversees the investment of their assets
pursuant to an advisory agreement dated September 8, 1995 (the "Advisory
Agreement"). Trans Financial Bank, N.A. is a subsidiary of Trans Financial, Inc.
which is a full service financial services provider with approximately $650
million in assets under management as of December 31, 1995.

THE ADVISORY AGREEMENT

In managing the Funds and overseeing the investment of their assets, the Adviser
is subject at all times to the supervision of the Company's Board of Directors.
The Adviser also furnishes or procures on behalf of the Funds all services
necessary for the proper conduct of the Funds' business and administration. In
addition to the foregoing, the Adviser selects, monitors and evaluates the
Funds' Sub-Adviser. The Adviser, through its Fixed-Income Investment Management
Group, has primary responsibility for managing the Tax-Free Funds, the
Intermediate Bond Fund and the Money Market Fund. T. Radford Hazelip and Mary A.
Dennis, CFA co-manage the Tax-Free Funds. Mr. Hazelip joined Trans Financial
Trust and Investment Services as Director of Fixed Income in May, 1995.
Previously, he managed the Tax-Exempt Fixed Income Department of PNC Investment
Management & Research. Ms. Dennis joined Trans Financial Trust and Investment
Services as Manager of Tax-Exempt Investments in May, 1995. Previously, she was
a Municipal Portfolio Manager at PNC Investment Management & Research. Marshall
Cox manages the Money Market and Intermediate Bond Funds. Mr. Cox joined Trans
Financial Trust and Investment Services as Manager of Taxable Fixed Income
Investments in September, 1995. Previously, he was Director of Fixed Income at
Bradford Investment Management.

Under the terms of the Advisory Agreement, the Funds pay all of their expenses,
including, but not limited to, the costs incurred in connection with the
registration and maintenance of registration of the Funds and their shares with
the Commission and various states and other jurisdictions, printing and mailing
prospectuses and statements of additional information to shareholders, transfer
taxes on the sales of portfolio securities, brokerage commissions, custodial and
transfer charges, legal and auditing expenses, certain insurance premiums, out
of pocket expenses of the Custodian, Transfer Agent and Fund Accountants,
preparation of shareholder reports, directors' fees and expenses of director and
shareholder meetings.

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<PAGE>

For the services it provides under the terms of the Advisory Agreement, the
Adviser receives a monthly fee of .20% per annum of the Money Market Fund's
average daily net assets, 1.00% per annum of each of the Growth/Value and
Aggressive Growth Fund's average daily net assets and .40% per annum of the
Intermediate Bond Fund's and each Tax-Free Fund's average daily net assets. The
Adviser may, from time to time, voluntarily agree to defer or waive fees or
absorb some or all of the expenses of the Funds.

THE SUB-ADVISER

The Adviser has retained Mastrapasqua & Associates, Inc., 1801 West End Avenue,
Nashville, Tennessee ("M&A") to provide sub-advisory services pursuant to a
Sub-Advisory Agreement dated September 8, 1995. M&A is a registered investment
adviser formed in March, 1993. Its core business is portfolio management for
institutions, individuals and business owners, including the Adviser. M&A
currently manages approximately $300 million in assets. M&A shares primary
responsibility for managing the Growth/Value and Aggressive Growth Funds with
the Adviser and provides the Adviser with economic forecasts and strategic
analysis for each of the other Funds. Frank Mastrapasqua, Ph.D., Chairman and
Chief Executive Officer of M&A, and Thomas A. Trantum, President of M&A,
co-manage the Growth/Value and Aggressive Growth Funds. Prior to forming M&A in
1993, Mr. Mastrapasqua was Partner, Director of Research and Chief Investment
Strategist, J.C. Bradford & Co. and Mr. Trantum was Partner and Senior Security
Analyst, J.C. Bradford & Co. Mr. Mastrapasqua also serves as a director of Trans
Financial, Inc. For its services, M&A is paid by the Adviser as follows: with
respect to the Aggressive Growth and the Growth/Value Funds, the Adviser (not
the Fund) pays to M&A an annual fee, calculated daily and paid monthly, of .50%
on the first $100 million of such Funds' combined average daily net assets plus
.25% of such Funds' combined average daily net assets in excess of $100 million
for its services, and, with respect to each other Trans Adviser Fund, the
Adviser (not the Fund) pays M&A an annual fee, calculated daily and paid
monthly, of .03% of average daily net assets for its services.

ADMINISTRATOR AND DISTRIBUTOR

Forum Financial Services, Inc. ("Forum") supervises administration of the
Company and acts as distributor of the Funds' shares pursuant to separate
Administration and Distribution Agreements with the Company. Forum and Forum
Financial Corp., the Company's Transfer Agent, are members of the Forum
Financial Group of companies, and together provide a full range of services to
the investment company and financial services industry. As of the date of this
Prospectus, Forum acted as administrator and distributor of registered
investment companies with assets of approximately $ billion. Forum, whose
address is Two Portland Square, Portland, Maine 04101, is a registered
broker-dealer and investment adviser and is a member of the National Association
of Securities Dealers, Inc. As of the date of this Prospectus, Forum and Forum
Financial Corp. are controlled by John Y. Keffer.

Under the Administration Agreement, Forum supervises the administration of all
aspects of the Company's operations, including the Company's receipt of services
for which the Company is obligated to pay, provides the Company with general
office facilities and provides, at the Company's expense, the services of
persons necessary to perform such supervisory, administrative and clerical
functions as are needed to effectively operate the Company. Those persons, as
well as certain employees and officers of the Company, may be directors,
officers or employees of (and persons providing services to the Company may
include) Forum and its affiliates. For these services and facilities, Forum
receives with respect to each Fund a fee computed and paid monthly at an annual
rate of 0.15% of the average daily net assets of the Fund, subject to an annual
minimum fee of $25,000 per Fund.

Under the Distribution Agreement, Forum acts as distributor of the Funds'
shares. Forum acts as the

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<PAGE>
agent of the Company in connection with the offering of shares of the Funds.
Forum receives no compensation for its services under the Distribution
Agreement. Forum may enter into arrangements with banks, broker-dealers or other
financial institutions ("Selected Dealers") through which investors may purchase
or redeem shares. Forum may, at its own expense and from its own resources,
compensate certain persons who provide services in connection with the sale or
expected sale of shares of the Funds. Investors purchasing shares of the Funds
through another financial institution should read any materials and information
provided by the financial institution to acquaint themselves with its procedures
and any fees that it may charge.

SHAREHOLDER SERVICING

Shareholder services are provided to the Funds pursuant to agreements between
the Company and various shareholder servicing agents, including Trans Financial
Bank, N.A. and other financial institutions and securities brokers (each a
"Shareholder Servicing Agent"). Each Shareholder Servicing Agent generally will
provide support services to shareholders by establishing and maintaining
accounts and records, processing dividend and distribution payments, providing
account information, arranging for bank wires, responding to routine inquiries,
forwarding shareholder communications, assisting in the processing of purchase,
exchange and redemption requests, and assisting shareholders in changing
dividend options, account designations and addresses. For expenses incurred and
services provided as Shareholder Servicing Agent pursuant to its respective
Shareholder Servicing Agreement, a Fund pays each Shareholder Servicing Agent a
fee computed daily and paid monthly, in amounts aggregating not more than
twenty-five one-hundredths of one percent (.25%) of the average daily net assets
of a Fund per year. A Shareholder Servicing Agent may from time to time waive
all or a portion of its respective shareholder servicing fees with respect to a
Fund.

CUSTODIAN

First National Bank of Boston, 150 Royall Street, Canton, MA 02021 serves as
Custodian for the Company.

TRANSFER AGENT

FFC, a registered transfer agent, acts as the Company's Transfer Agent and
Dividend Disbursing Agent. FFC maintains an account for each shareholder of the
Fund (unless such accounts are maintained by sub-transfer agents or processing
agents) and performs other transfer agency and related functions. For these
services, FFC will receive an annual fee of $12,000 plus account and series
charges. The Company will also reimburse FFC for certain expenses incurred on
behalf of the Funds.

FFC is authorized to subcontract any or all of its functions to one or more
qualified sub-transfer agents, shareholder servicing agents, or processing
agents, who may be affiliates of FFC, and who agree to comply with the terms of
FFC's agreement with the Company. Among the services provided by such agents are
processing trades through automated interfaces with brokers and institutions;
answering customer inquiries regarding account matters; assisting shareholders
in designating and changing various account options; aggregating and processing
purchase and redemption orders and transmitting and receiving funds for
shareholder orders; transmitting, on behalf of the Company, proxy statements,
prospectuses and shareholder reports to shareholders and tabulating proxies;
processing dividend payments and providing subaccounting services for Fund
shares held beneficially; and providing such other services as the Company or a
shareholder may request. The Fund will bear directly any fees or expenses
charged to FFC by such sub-transfer agents.

EXPENSES

The Adviser, M&A and the Administrator/Distributor each bear all expenses in
connection with the performance of their services as Adviser, Sub-Adviser and
Administrator/Distributor, respectively, other than the cost of securities
(including brokerage commissions, if any) purchased for a Fund.

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<PAGE>
BANKING LAWS

The Adviser believes that it possesses the legal authority to perform the
advisory services for the Funds contemplated by its management agreement with
the Company and described in this Prospectus without violation of applicable
banking laws and regulations. Future changes in Federal or state statutes and
regulations relating to permissible activities of banks or bank holding
companies and their subsidiaries and affiliates as well as further judicial or
administrative decisions or interpretations of present and future statutes and
regulations could change the manner in which Trans Financial Bank, N.A. could
continue to perform such services for the Company. See "Management of the
Company - Glass-Steagall Act" in the Statement of Additional Information for
further discussion of applicable banking laws and regulations.

GENERAL INFORMATION

DESCRIPTION OF THE COMPANY
AND ITS SHARES

The Company was organized as a Maryland corporation on June 20, 1995. The
Company is authorized to issue shares of common stock, par value $.001 per
share, which may, without shareholder approval, be divided into an unlimited
number of series or classes of such shares, and which are presently divided into
seven series of shares, one for each of the following Funds: the Money Market
Fund, the Growth/Value Fund, the Aggressive Growth Fund, the Intermediate Bond
Fund, the Kentucky Tax-Free Fund, the Tennessee Tax-Free Fund and the
International Fund (which is not currently offered). Each share represents an
equal proportionate interest in a Fund with other shares of the same series, and
is entitled to such dividends and distributions out of the income earned on the
assets belonging to that Fund as are declared at the discretion of the directors
(see "Miscellaneous" below).

Shareholders are entitled to one vote per share (with proportional voting for
fractional shares) on such matters as shareholders are entitled to vote.
Shareholders vote as a single class except (i) when required by the 1940 Act,
shares shall be voted by individual series and (ii) when the directors have
determined that the matter affects only the interests of one or more series,
then only shareholders of such series shall be entitled to vote thereon. The
Company will not hold annual meetings, however, shareholders with beneficial
ownership of 10% or more of the Company's shares have the right to call a
meeting for the purpose of voting upon the removal of a director or directors.

Overall responsibility for the management of the Company is vested in the Board
of Directors. See "Management of Trans Adviser Funds - Directors of the
Company." Individual directors are elected by the shareholders and may be
removed by the Board of Directors or shareholders at a meeting held for such
purpose in accordance with the provisions of the Articles of Incorporation and
the By-laws of the Company and Maryland law. See "Additional Information -
Miscellaneous" in the Statement of Additional Information for further
information.

PERFORMANCE INFORMATION

From time to time performance information for a Fund showing its total return,
distribution rate and/ or yield may be presented in advertisements and sales
literature. Average annual total return will be calculated for the past year and
the period since the establishment of the Fund. Total return is measured by
comparing the value of an investment in the Fund at the beginning of the
relevant period to the redemption value of the investment at the end of the
period (assuming the investor paid the maximum sales load on the investment and
assuming immediate reinvestment of any dividends or capital gains
distributions). Yield will be computed by dividing the Fund's net investment
income per share earned during a recent one-month period by the Fund's per share
net asset value (reduced by any undeclared earned income expected to be paid
shortly as a dividend) on the last day of the period and analyzing the result.
In addition, the Tax-Free Funds may present tax-equivalent yield in
advertisements and sales literature.

- 34 -
<PAGE>
The Funds may also publish a distribution rate in investor communications
preceded or accompanied by a copy of the current Prospectus. The current
distribution rate for a Fund will be calculated by dividing the maximum offering
price per share into the annualization of the total distributions made by the
Fund during the same thirty-day period. The current distribution rate may differ
from current yield because the distribution rate may contain items of capital
gain and other items of income, while yield reflects only earned interest and
dividend items of income. In each case, the yield, distribution rates and total
return figures will reflect all recurring charges against Fund income and will
assume the payment of the maximum sales load.

Investors may also judge the performance of each Fund by comparing its
performance to the performance of other mutual funds with comparable investment
objectives and policies through various mutual fund or market indices or
rankings and data published by various services such as that provided by Lipper
Analytical Services, Inc. Comparisons and references may also be made to indices
or data published in MONEY MAGAZINE, FORBES, BARRON'S, THE WALL STREET JOURNAL,
THE NEW YORK TIMES, BUSINESS WEEK, AMERICAN BANKER, INSTITUTIONAL INVESTOR,
PENSIONS AND INVESTMENTS, U.S.A. TODAY, FORTUNE, CDA/WIESENBERGER, IBBOTSON
ASSOCIATES, INC., MORNINGSTAR and local newspapers and periodicals. In addition
to performance information, general information about these Funds that appears
in a publication such as those mentioned above may be included in
advertisements, sales literature and in reports to shareholders.

Information about the performance of a Fund is based on a Fund's record up to a
certain date and is not intended to indicate future performance. Total return,
yield and distribution rate are functions of the type and quality of instruments
held in a Fund, operating expenses, and marketing conditions. Any fees charged
by Trans Financial Bank or any of its affiliates or a broker-dealer with respect
to customer accounts investing in shares of a Fund will not be included in
performance calculations.

MISCELLANEOUS

Shareholders will receive unaudited semi-annual reports and annual reports
audited by independent public accountants.

Inquiries regarding the Company may be directed in writing to the Company at
P.O. Box 90001, Bowling Green, KY 42102-9001, or by calling toll free (800)
308-TRAN.

PRINCIPAL HOLDERS OF SECURITIES

- 35 -
<PAGE>
TRANS ADVISER FUNDS
P.O. Box 90001
Bowling Green, KY 42102-9001

ADVISER
Trans Financial Bank
P.O. Box 90001
Bowling Green, KY 42102-9001

SUB-ADVISER
Mastrapasqua & Associates, Inc.
814 Church Street
Nashville, TN 37203

ADMINISTRATOR/DISTRIBUTOR
Forum Financial Services, Inc.
Two Portland Square
Portland, ME 04101

TRANSFER AGENT
Forum Financial Corp.
Two Portland Square
Portland, ME 04101

LEGAL COUNSEL
Kramer, Levin, Naftalis, Nessen,
Kamin & Frankel
919 Third Avenue
New York, NY 10022

AUDITORS
KPMG Peat Marwick LLP
99 High Street
Boston, MA 02110

Table of Contents

<TABLE>
<CAPTION>
Page
<S> <C>
Highlights................................ 2
Fee Table................................. 3
Financial Highlights...................... 4
Investment Objectives and Policies........ 5
Risk Factors.............................. 19
Valuation of Shares....................... 21
Purchases and Redemptions of Shares....... 21
How to Invest............................. 22
How to Redeem Shares...................... 27
Dividends and Taxes....................... 28
Management of Trans Adviser Funds......... 31
General Information....................... 34
</TABLE>

NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS IN CONNECTION WITH THE OFFERING
MADE BY THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY
OR THE DISTRIBUTOR. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING BY THE
COMPANY OR BY THE DISTRIBUTOR IN ANY JURISDICTION IN WHICH SUCH OFFERING MAY NOT
LAWFULLY BE MADE.

[LOGO]

GROWTH/VALUE FUND
AGGRESSIVE GROWTH FUND
INTERMEDIATE BOND FUND
KENTUCKY TAX-FREE FUND
TENNESSEE TAX-FREE FUND
MONEY MARKET FUND

PROSPECTUS
DATED
MARCH 29, 1996

NOT FDIC INSURED
<PAGE>

TRANS ADVISER FUNDS

Statement of Additional Information

March 29, 1996

_____________________

This Statement of Additional Information is not a Prospectus, but should be read
in conjunction with the Prospectus of Trans Adviser Funds dated the same date
hereof (the "Prospectus"). This Statement of Additional Information is
incorporated by reference in its entirety into the Prospectus. Copies of the
Prospectus may be obtained by writing Trans Adviser Funds at P.O. Box 90001,
Bowling Green, KY 42102-9001, or by telephoning toll free (800) 308-TRAN.

<PAGE>

TABLE OF CONTENTS
Page
----

TRANS ADVISER FUNDS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

INVESTMENT OBJECTIVES AND POLICIES . . . . . . . . . . . . . . . . . . . . . 1
Additional Information on Portfolio Instruments . . . . . . . . . . . . 1
Investment Restrictions . . . . . . . . . . . . . . . . . . . . . . . . 12
Portfolio Turnover. . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Risks and Special Considerations Regarding Investment in Kentucky
Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Risks and Special Considerations Regarding Investment in Tennessee
Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

VALUATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Valuation of the Money Market Fund. . . . . . . . . . . . . . . . . . . 16
Valuation of the Funds (other than the Money Market Fund) . . . . . . . 16

ADDITIONAL PURCHASE AND REDEMPTION INFORMATION . . . . . . . . . . . . . . . 16
Purchase of Shares. . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Matters Affecting Redemption. . . . . . . . . . . . . . . . . . . . . . 16

ADDITIONAL TAX INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . 17
Qualification as a Regulated Investment Company . . . . . . . . . . . . 17
Excise Tax on Regulated Investment Companies. . . . . . . . . . . . . . 20
Additional Tax Information Concerning Other Funds . . . . . . . . . . . 20
Sale or Redemption of Shares. . . . . . . . . . . . . . . . . . . . . . 21
Foreign Shareholders. . . . . . . . . . . . . . . . . . . . . . . . . . 21
Effect of Future Legislation; Local Tax Considerations. . . . . . . . . 22

MANAGEMENT OF THE COMPANY. . . . . . . . . . . . . . . . . . . . . . . . . . 22
Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .22
Remuneration of Directors and Certain Executive Order . . . . . . . . . .25
Officers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Adviser and Sub-Adviser . . . . . . . . . . . . . . . . . . . . . . . . .26
Portfolio Transactions. . . . . . . . . . . . . . . . . . . . . . . . . 27
Glass-Steagall Act. . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Administrator . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Distributor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Custodian . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Transfer Agent. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Auditors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Legal Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

PERFORMANCE INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Yield of the Money Market Fund. . . . . . . . . . . . . . . . . . . . . 31
Yield of the Funds (other than the Money Market Fund) . . . . . . . . . 32
Calculation of Total Return . . . . . . . . . . . . . . . . . . . . . . 32
Calculation of Distribution Rate. . . . . . . . . . . . . . . . . . . . .32
Performance Comparisons . . . . . . . . . . . . . . . . . . . . . . . . 33

ADDITIONAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Organization and Description of Shares. . . . . . . . . . . . . . . . . 33
Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34

APPENDIX A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-1
APPENDIX B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-1

<PAGE>

STATEMENT OF ADDITIONAL INFORMATION

TRANS ADVISER FUNDS

Trans Adviser Funds, Inc. (the "Company") is a non-diversified, open-
end management investment company. The Company consists of six separate
investment portfolios: the Growth/Value Fund, the Aggressive Growth Fund, the
Intermediate Bond Fund, the Kentucky Tax-Free Fund, the Tennessee Tax-Free Fund
and the Money Market Fund (collectively, the "Funds"). Much of the information
contained in this Statement of Additional Information expands on subjects
discussed in the Prospectus. Capitalized terms not defined herein are defined
in the Prospectus. No investment in shares of a Fund should be made without
first reading the Prospectus.

INVESTMENT OBJECTIVES AND POLICIES

ADDITIONAL INFORMATION ON PORTFOLIO INSTRUMENTS

The following policies supplement the investment objectives and
policies of each Fund as set forth in the Prospectus.

WHEN-ISSUED SECURITIES. As discussed in the Prospectus, each of the
Funds may purchase securities on a when-issued basis (I.E., for delivery beyond
the normal settlement date at a stated price and yield). When the Funds agree
to purchase securities on a when-issued basis, the Funds' custodian will set
aside cash or liquid portfolio securities equal to the amount of the commitment
in a separate account. Normally, the custodian will set aside portfolio
securities to satisfy the purchase commitment, and in such a case, the Funds may
be required subsequently to place additional assets in the separate account in
order to assure that the value of the account remains equal to the amount of the
Funds' commitment. It may be expected that the Funds' net assets will fluctuate
to a greater degree when it sets aside portfolio securities to cover such
purchase commitments than when it sets aside cash. In addition, because the
Funds will set aside cash or liquid portfolio securities to satisfy their
purchase commitments in the manner described above, the Funds' liquidity and the
ability of the Adviser (M&A) to manage them might be affected in the event their
commitment to purchase when-issued securities ever exceeded 25% of the value of
their assets.

When the Funds engage in when-issued transactions, they rely on the
seller to consummate the trade. Failure of the seller to do so may result in
the Funds incurring a loss or missing the opportunity to obtain a price
considered to be advantageous. The Funds do not intend to purchase when-issued
securities for speculative purposes but only in furtherance of their investment
objectives, the achievement of which is not dependent upon when-issued
securities.

VARIABLE AND FLOATING RATE SECURITIES. Each Fund may acquire variable
and floating rate securities, subject to the relevant Fund's investment
objectives, policies and restrictions. A variable rate security is one whose
terms provide for the readjustment of its interest rate on set dates and which,
upon such readjustment, can reasonably be expected to have a market value that
approximates its par value. A floating rate security is one whose terms provide
for the readjustment of its interest rate whenever a specified interest rate
changes and which, at any time, can reasonably be expected to have a market
value that approximates its par value. Such securities are frequently not rated
by credit rating agencies; however, unrated variable and floating rate
securities determined by the Adviser (M&A) under guidelines established by the
Company's Board of Directors to be of comparable quality at the time of purchase
to rated instruments eligible for purchase under a Fund's investment policies
may be purchased by a Fund. In making such determinations, the Adviser (M&A)
will consider the earning power, cash flow and other liquidity ratios of the
issuers of such securities (such issuers include financial, merchandising, bank
holding and other companies) and will continuously monitor their financial
condition. Although there may be no active secondary market with respect to a
particular variable or floating rate security purchased by a Fund, a Fund may
resell the security at any time to a third party. The absence of an active
secondary market, however, could make it difficult for a Fund to dispose of a
variable or floating rate security in the event the issuer of the security
defaulted on its payment obligations and the Fund
<PAGE>

could, as a result or for other reasons, suffer a loss to the extent of the
default. Variable or floating rate securities may be secured by bank letters of
credit.

PARTICIPATION INTERESTS. The Tax-Free Funds may purchase
participation interests in loans to municipal issuers, which are made available
through a commercial bank that arranges the tax-exempt loan. Participation
interests are frequently backed by an irrevocable bank letter of credit or a
guarantee by a financial institution and give the Funds the right to demand, on
short notice (usually not more than seven days), payment of all or any part of
the principal amount and accrued interest. Banks retain fees for their role in
an amount equal to the excess of the interest paid on the municipal securities
over the negotiated yield at which the participation interests were purchased.
In the event that the participation interest that a Fund acquires includes the
right to demand payment of principal and accrued interest from the issuer of the
participation interest pursuant to a letter of credit or other commitment, the
maturity will be deemed to be equal to the time remaining until the principal
amount can be recovered from the issuer through demand, although the stated
maturity may be in excess of one year. To the extent that variable rate
instruments and loan participations may lack liquidity (unless payable on
demand or within seven days), they are subject to the restriction on illiquid
securities, described herein under the caption "Investment Restrictions". See
"Illiquid Investments" below for an explanation of how liquidity is determined.

REPURCHASE AGREEMENTS. Securities held by the Money Market Fund, the
Intermediate Bond Fund and the Aggressive Growth Fund may be subject to
repurchase agreements. Under the terms of a repurchase agreement, the Fund
would acquire securities from member banks of the Federal Deposit Insurance
Corporation with capital, surplus, and undivided profits of not less than
$100,000,000 (as of the date of their most recently published financial
statements) and from registered broker-dealers which the Adviser (M&A) deems
creditworthy under guidelines approved by the Board of Directors, subject to the
seller's agreement to repurchase such securities at a mutually agreed-upon date
and price. The repurchase price would generally equal the price paid by the
Fund plus interest negotiated on the basis of current short-term rates, which
may be more or less than the rate on the underlying portfolio securities. The
seller under a repurchase agreement will be required to maintain the value of
collateral held pursuant to the agreement at not less than the repurchase price
(including accrued interest) and the Adviser (M&A) will monitor the collateral's
value to ensure that it equals or exceeds the repurchase price (including
accrued interest). In addition, securities subject to repurchase agreements
will be held in a segregated account. If the seller were to default on its
repurchase obligation or become insolvent, the Fund, as the holder of such
obligation, would suffer a loss to the extent that the proceeds from a sale of
the underlying portfolio securities were less than the repurchase price under
the agreement, or to the extent that the disposition of such securities by the
Fund were delayed pending court action. Finally, it is not certain whether a
Fund would be entitled, as against a claim of the seller or its receiver,
trustee in bankruptcy or creditors, to retain the underlying securities.
Securities subject to repurchase agreements will be held by the Company's
custodian or another qualified custodian or in the Federal Reserve/Treasury
book-entry system. Repurchase agreements are considered by the staff of the
Securities and Exchange Commission (the "Commission") to be loans by a Fund.

U.S. GOVERNMENT OBLIGATIONS. The Funds may invest in bills, notes and
bonds issued by the U.S. Treasury. Such obligations are supported by the full
faith and credit of the U.S. Government.

BANKERS' ACCEPTANCES AND CERTIFICATES OF DEPOSIT. The Funds (other
than the Tax-Free Funds) may invest in bankers' acceptances, certificates of
deposit, and demand and time deposits. Bankers' acceptances are negotiable
drafts or bills of exchange typically drawn by an importer or exporter to pay
for specific merchandise, which are "accepted" by a bank, meaning, in effect,
that the bank unconditionally agrees to pay the face value of the instrument on
maturity. Certificates of deposit are negotiable certificates issued against
funds deposited in a commercial bank or a savings and loan association for a
definite period of time and earning a specified return.

Bankers' acceptances will be those guaranteed by domestic and foreign
banks, if at the time of purchase, such banks have capital, surplus, and
undivided profits in excess of $100,000,000 (as of the date of their most
recently published financial statements). Certificates of deposit and demand
and time deposits will be those of domestic and foreign banks and savings and
loan associations, if (a) at the time of purchase they have

-2-
<PAGE>

capital, surplus, and undivided profits in excess of $100,000,000 (as of the
date of their most recently published financial statements) or (b) the principal
amount of the instrument is insured in full by the Federal Deposit Insurance
Corporation.

COMMERCIAL PAPER. The Funds (other than the Tax-Free Funds) may
invest in commercial paper. Commercial paper consists of unsecured promissory
notes issued by corporations. Issues of commercial paper normally have
maturities of less than nine months and fixed rates of return. The Funds (other
than the Tax-Free and Money Market Funds) may invest in (i) Canadian Commercial
Paper, which is commercial paper issued by a Canadian corporation or a Canadian
counterpart of a U.S. corporation, and (ii) Europaper, which is U.S. dollar-
denominated commercial paper of an issue located in Europe.

The Tax-Free Funds may invest in municipal obligations issued at a
discount, frequently referred to as municipal commercial paper, which are likely
to be issued to meet seasonal working capital needs of a municipality or to
provide interim construction financing and are to be paid from general revenues
of the municipality or refinanced with long-term debt. In most cases, municipal
commercial paper is backed by letters of credit, lending agreements, note
repurchase agreements, or other credit facility agreements offered by banks or
other institutions. The Tax-Free Funds would be able to draw on these
agreements on a default under the terms of the documents of the security.

VARIABLE AMOUNT MASTER DEMAND NOTES. Variable amount master demand
notes, in which a Fund may invest, are unsecured demand notes that permit the
indebtedness thereunder to vary and provide for periodic adjustments in the
interest rate according to the terms of the instrument. They are also referred
to as variable rate demand notes. Because these notes are direct lending
arrangements between the Fund and the issuer, they are not normally traded.
Although there may be no secondary market in the notes, the Fund may demand
payment of principal and accrued interest at any time or during specified
periods not exceeding one year, depending upon the instrument involved, and may
resell the note at any time to a third party. The absence of such an active
secondary market, however, could make it difficult for the Fund to dispose of a
variable amount master demand note if the issuer defaulted on its payment
obligations or during periods when the Fund is not entitled to exercise their
demand rights, and the Fund could, for this or other reasons, suffer a loss to
the extent of the default. While the notes are not typically rated by credit
rating agencies, issuers of variable amount master demand notes must satisfy the
same criteria as set forth above for commercial paper. The Adviser (M&A) will
consider the earning power, cash flow, and other liquidity ratios of the issuers
of such notes and will continuously monitor their financial status and ability
to meet payment on demand. Where necessary to ensure that a note is of "high
quality," the Fund will require that the issuer's obligation to pay the
principal of the note be backed by an unconditional bank letter or line of
credit, guarantee or commitment to lend. In determining dollar-weighted average
portfolio maturity, a variable amount master demand note will be deemed to have
a maturity equal to the period of time remaining until the principal amount can
be recovered from the issuer through demand.

FOREIGN INVESTMENT. The Growth Funds may, subject to their investment
objectives and policies, invest in certain obligations or securities of foreign
issuers. Permissible investments include Eurodollar Certificates of Deposit
("ECDs") which are U.S. dollar denominated certificates of deposit issued by
branches of foreign and domestic banks located outside the United States, Yankee
Certificates of Deposit ("Yankee CDs") which are certificates of deposit issued
by a U.S. branch of a foreign bank denominated in U.S. dollars and held in the
United States, Eurodollar Time Deposits ("ETDs") which are U.S. dollar
denominated deposits in a foreign branch of a U.S. bank or a foreign bank, and
Canadian Time Deposits ("CTDs") which are U.S. dollar denominated certificates
of deposit issued by Canadian offices of major Canadian Banks. Investments in
securities issued by foreign branches of U.S. banks, foreign banks, or other
foreign issuers, including American Depository Receipts ("ADRs") and securities
purchased on foreign securities exchanges and over-the-counter, may subject the
Growth Funds to investment risks that differ in some respects from those related
to investment in obligations of U.S. domestic issuers or in U.S. securities
markets. Such risks include future adverse political and economic developments,
possible seizure, nationalization or expropriation of foreign investments, less
stringent disclosure requirements, the possible establishment of exchange
controls or taxation at the source, and the adoption of other foreign
governmental restrictions. Additional risks include less publicly available
information, the risk that companies may not be subject to the accounting,
auditing and financial reporting

-3-
<PAGE>

standards and requirements of U.S. companies, the risk that foreign securities
markets may have less volume and therefore many securities traded in these
markets may be less liquid and their prices more volatile than U.S. securities,
and the risk that custodian and brokerage costs may be higher. Foreign issuers
of securities or obligations are often subject to accounting treatment and
engage in business practices different from those respecting domestic issuers of
similar securities or obligations. Foreign branches of U.S. banks and foreign
banks may be subject to less stringent reserve requirements than those
applicable to domestic branches of U.S. banks. The Growth Funds will acquire
such securities only when M&A believes the risk associated with such investments
are minimal.

REVERSE REPURCHASE AGREEMENTS. As discussed in the Prospectus, the
Aggressive Growth Fund may borrow funds for temporary purposes by entering into
reverse repurchase agreements in accordance with the Fund's investment
restrictions. Pursuant to such agreements, the Fund would sell portfolio
securities to financial institutions such as banks and broker-dealers, and agree
to repurchase the securities at a mutually agreed-upon date and price. The Fund
intends to enter into reverse repurchase agreements only to avoid otherwise
selling securities during unfavorable market conditions to meet redemptions. At
the time the Fund enters into a reverse repurchase agreement, it will place in a
segregated custodial account assets consistent with the Fund's investment
restrictions having a value equal to the repurchase price (including accrued
interest), and will subsequently monitor the account to ensure that such
equivalent value is maintained. Such assets will include U.S. Government
securities or other liquid, high-grade debt securities. Reverse repurchase
agreements involve the risk that the market value of the securities sold by the
Fund may decline below the price at which the Fund is obligated to repurchase
the securities. Reverse repurchase agreements are considered to be borrowings
by the Fund under the 1940 Act.

CALLS. The Aggressive Growth Fund may write (sell) "covered" call
options and purchase options to close out options previously written by it.
Such options must be listed on a National Securities Exchange and issued by the
Options Clearing Corporation. The purpose of writing covered call options is to
generate additional premium income for the Fund. This premium income will serve
to enhance the Fund's total return and will reduce the effect of any price
decline of the security involved in the option. Covered call options will
generally be written on securities which, in M&A's opinion, are not expected to
make any major price moves in the near future but which, over the long term, are
deemed to be attractive investments for the Fund.

A call option gives the holder (buyer) the "right to purchase" a
security at a specified price (the exercise price) at any time until a certain
date (the expiration date). So long as the obligation of the writer of a call
option continues, the writer may be assigned an exercise notice by the broker-
dealer through whom such option was sold, requiring the writer to deliver the
underlying security against payment of the exercise price. This obligation
terminates upon the expiration of the call option, or such earlier time at which
the writer effects a closing purchase transaction by repurchasing an option
identical to that previously sold. To secure the writer's obligation to deliver
the underlying security in the case of a call option, a writer is required to
deposit in escrow the underlying security or other assets in accordance with the
rules of the Options Clearing Corporation. The Aggressive Growth Fund will
write only covered call options. This means that the Aggressive Growth Fund
will only write a call option on a security which it already owns. (In order to
comply with the requirements of the securities laws in several states the Fund
will not write a covered call option if, as a result, the aggregate market value
of all portfolio securities covering call options or subject to put options
exceeds 25% of the market value of its total assets.)

Aggressive Growth Fund securities on which call options may be written
will be purchased solely on the basis of investment considerations consistent
with the Fund's investment objectives. The writing of covered call options is a
conservative investment technique believed to involve relatively little risk (in
contrast to the writing of naked or uncovered call options, which the Aggressive
Growth Fund will not do), but capable of enhancing the Fund's total return.
When writing a covered call option, the Fund, in return for the premium, gives
up the opportunity for profit from a price increase in the underlying security
above the exercise price, but retains the risk of loss should the price of the
security decline. Unlike an owner of securities not subject to an option, the
Aggressive Growth Fund will not have any control over when it may be required to
sell the underlying securities, since it may be assigned an exercise notice at
any time prior to the expiration of

-4-
<PAGE>

its obligation as a writer. If a call option which the Fund has written
expires, the Fund will realize a gain in the amount of the premium; however,
such gain may be offset by a decline in the market value of the underlying
security during the option period. If the call option is exercised, the Fund
will realize a gain or loss from the sale of the underlying security. The
security covering the call will be maintained in a segregated account of the
Fund's custodian. The Aggressive Growth Fund will not consider a security
covered by a call to be "pledged" as that term is used in its policy which
limits the pledging or mortgaging of its assets.

The premium received is the market value of an option. The premium
the Aggressive Growth Fund will receive from writing a call option will reflect,
among other things, the current market price of the underlying security, the
relationship of the exercise price to such market price, the historical price
volatility of the underlying security, and the length of the option period.
Once the decision to write a call option has been made, the Adviser, in
determining whether a particular call option should be written on a particular
security, will consider the reasonableness of the anticipated premium and the
likelihood that a liquid secondary market will exist for those options. The
premium received by the Fund for writing covered call options will be recorded
as a liability in the Fund's statement of assets and liabilities. This
liability will be adjusted daily to the option's current market value, which
will be the latest sale price at the time at which the net asset value per share
of the Fund is computed (close of the New York Stock Exchange), or, in the
absence of such sale, the latest asked price. The liability will be
extinguished upon expiration of the option, the purchase of an identical option
in the closing transaction, or delivery of the underlying security upon the
exercise of the option.

Closing transactions will be effected in order to realize a profit on
an outstanding call option, to prevent an underlying security from being called,
or to permit the sale of the underlying security. Furthermore, effecting a
closing transaction will permit the Aggressive Growth Fund to write another call
option on the underlying security with either a different exercise price or
expiration date or both. If the Fund desires to sell a particular security from
its portfolio on which it has written a call option, it will seek to effect a
closing transaction prior to, or concurrently with, the sale of the security.
There is, of course, no assurance that the Fund will be able to effect such
closing transactions at a favorable price. If the Fund cannot enter into such a
transaction, it may be required to hold a security that it might otherwise have
sold, in which case it would continue to be at market risk in the security.
This could result in higher transaction costs. The Fund will pay transaction
costs in connection with the writing of options to close out previously written
options. Such transaction costs are normally higher than those applicable to
purchases and sales of portfolio securities.

Call options written by the Aggressive Growth Fund will normally have
expiration dates of less than nine months from the date written. The exercise
price of the options may be below, equal to, or above the current market values
of the underlying securities at the time the options are written. From time to
time, the Fund may purchase an underlying security for delivery in accordance
with an exercise notice of a call option assigned to it, rather than delivering
such security from its portfolio. In such cases, additional costs will be
incurred.

The Aggressive Growth Fund will realize a profit or loss from a
closing purchase transaction if the cost of the transaction is less or more than
the premium received from the writing of the option. Because increases in the
market price of a call option will generally reflect increases in the market
price of the underlying security, any loss resulting from the repurchase of a
call option is likely to be offset in whole or in part by appreciation of the
underlying security owned by the Fund.

PUTS. When the Fund writes a put option, it takes the opposite side
of the transaction from the option's purchaser. In return for receipt of the
premium, the Fund assumes the obligation to pay the strike price for the
option's underlying instrument if the other party to the option chooses to
exercise it. When writing an option on a futures contract the Fund will be
required to make margin payments to a futures commission merchant for futures
contracts. The Fund may seek to terminate its position in a put option it
writes before exercise by closing out the option in the secondary market at its
current price. If the secondary market is not liquid for a put option the Fund
has written, however, the Fund must continue to be prepared to pay the strike
price while the option is outstanding, regardless of price changes, and must
continue to set aside assets to cover its position.

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<PAGE>

If security prices rise, a put writer would generally expect to
profit, although its gain would be limited to the amount of the premium it
received. If security prices remain the same over time, it is likely that the
writer will also profit, because it should be able to close out the option at a
lower price. If security prices fall, the put writer would expect to suffer a
loss. This loss should be less than the loss from purchasing the underlying
instrument directly, however, because the premium received for writing the
option should mitigate the effects of the decline. The Aggressive Growth Fund
may acquire "puts" with respect to securities held in its portfolio. A put is a
right to sell a specified security (or securities) within a specified period of
time at a specified exercise price. The Fund may sell, transfer, or assign a
put only in conjunction with the sale, transfer, or assignment of the underlying
security or securities.

The amount payable to the Aggressive Growth Fund upon its exercise of
a "put" is normally (i) the Fund's acquisition cost of the securities subject to
the put (excluding any accrued interest which the Fund paid on the acquisition),
less any amortized market premium or plus any amortized market or original issue
discount during the period the Fund owned the securities, plus (ii) all interest
accrued on the securities since the last interest payment date during that
period.

Puts may be acquired by the Aggressive Growth Fund to facilitate the
liquidity of portfolio assets. Puts may also be used to facilitate the
reinvestment of assets at a rate of return more favorable than that of the
underlying security.

FUTURES CONTRACTS. The Aggressive Growth Fund may enter into futures
contracts and options on futures contracts for the purposes of remaining fully
invested and reducing transaction costs. Futures contracts provide for the
future sale by one party and purchase by another party of a specified amount of
a specific security, class of securities, or an index at a specified future time
and at a specified price. A stock index futures contract is a bilateral
agreement pursuant to which two parties agree to take or make delivery of an
amount of cash equal to a specified dollar amount times the difference between
the stock index value at the close of trading of the contracts and the price at
which the futures contract is originally struck. Futures contracts which are
standardized as to maturity date and underlying financial instrument are traded
on national futures exchanges. Futures exchanges and trading are regulated
under the Commodity Exchange Act by the Commodity Futures Trading Commission
("CFTC"), a U.S. Government Agency.

The Tax-Free Funds are permitted to buy and sell futures contracts
relating to municipal bond indices ("Municipal Bond Index Futures") and to U.S.
Government securities ("U.S. Government Securities Futures," together referred
to as "Futures"), and exchange traded options based on Futures as a possible
means to protect the asset value of the Funds during periods of changing
interest rates, although in fact the Funds may never do so.

Municipal Bond Index Futures currently are based on a long-term
municipal bond index developed by the Chicago Board of Trade ("CBT") and The
Bond Buyer (the "Municipal Bond Index"). Financial futures contracts based on
the Municipal Bond Index began trading on June 11, 1985. The Municipal Bond
Index is comprised of 40 tax-exempt municipal revenue and general obligation
bonds. Each bond included in the Municipal Bond Index must be rated A or higher
by Moody's or S&P and must have a remaining maturity of 19 years or more. Twice
a month new issues satisfying the eligibility requirements are added to, and an
equal number of old issues are deleted from the Municipal Bond Index. The value
of the Municipal Bond Index is computed daily according to a formula based on
the price of each bond in the Municipal Bond Index, as evaluated by six dealer-
to-dealer brokers.

The Municipal Bond Index futures contract is traded only on the CBT.
Like other contract markets, the CBT assures performance under futures contracts
through a clearing corporation, a nonprofit organization managed by the exchange
membership which is also responsible for handling daily accounting of deposits
or withdrawals of margin.

There are at present U.S. Government financial futures contracts based
on long-term Treasury bonds, Treasury notes, GNMA Certificates and three-month
Treasury bills. U.S. Government Securities

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<PAGE>

Futures have traded longer than Municipal Bond Index Futures, and the depth and
liquidity available in the trading markets for them are in general greater.

Although futures contracts by their terms call for actual delivery and
acceptance of the underlying securities, in most cases the contracts are closed
out before the settlement date without the making or taking of delivery.
Closing out an open futures position is done by taking an opposite position
("buying" a contract which has previously been "sold," or "selling" a contract
previously purchased) in an identical contract to terminate the position. A
futures contract on a securities index is an agreement obligating either party
to pay, and entitling the other party to receive, while the contract is
outstanding, cash payments based on the level of a specified securities index.
The acquisition of put and call options on futures contracts will, respectively,
give the Funds the right (but not the obligation) for a specified price, to sell
or to purchase the underlying futures contract, upon exercise of the option, at
any time during the option period. Brokerage commissions are incurred when a
futures contract is bought or sold.

Futures traders are required to make a good faith margin deposit in
cash or government securities with a broker or custodian to initiate and
maintain open positions in futures contracts. A margin deposit is intended to
assure completion of the contract (delivery or acceptance of the underlying
security) if it is not terminated prior to the specified delivery date. Minimal
initial margin requirements are established by the futures exchange and may be
changed. Brokers may establish deposit requirements which are higher than the
exchange minimums. Initial margin deposits on futures contracts are customarily
set at levels much lower than the prices at which the underlying securities are
purchased and sold, typically ranging upward from less than 5% of the value of
the contract being traded.

After a futures contract position is opened, the value of the contract
is marked-to-market daily. If the futures contract price changes to the extent
that the margin on deposit does not satisfy margin requirements, payment of
additional "variation" margin will be required. Conversely, change in the
contract value may reduce the required margin, resulting in a repayment of
excess margin to the contract holder. Variation margin payments are made to and
from the futures broker for as long as the contract remains open. The Funds
expect to earn interest income on their margin deposits.

Traders in futures contracts may be broadly classified as either
"hedgers" or "speculators." Hedgers use the futures markets primarily to offset
unfavorable changes in the value of securities otherwise held for investment
purposes or expected to be acquired by them. Speculators are less inclined to
own the securities underlying the futures contracts which they trade, and use
futures contracts with the expectation of realizing profits from fluctuations in
the prices of underlying securities. The Funds may use futures contracts for
hedging purposes only.

When interest rates are expected to rise or market values of portfolio
securities are expected to fall, the Funds can seek through the sale of futures
contracts to offset a decline in the value of their portfolio securities. When
interest rates are expected to fall or market values are expected to rise, a
Fund, through the purchase of such contracts, can attempt to secure better rates
or prices for the Fund, than might later be available in the market when it
effects anticipated purchases.

Regulations of the CFTC require that a Fund enters into transactions
in futures contracts and options thereon for hedging purposes only, in order to
assure that it is not deemed to be a "commodity pool" under such regulations.
In particular, CFTC regulations require that all short futures positions be
entered into for the purpose of hedging the value of securities held in a Fund's
portfolio, and that all long futures positions either constitute bona fide
hedging transactions, as defined in such regulations, or have a total value not
in excess of an amount determined by reference to certain cash and securities
positions maintained for the Fund, and accrued profits on such positions. In
addition, the Fund may not purchase or sell such instruments if, immediately
thereafter, the sum of the amount of initial margin deposits on its existing
futures positions and premiums paid for options on futures contracts would
exceed 5% of the market value of the Fund's total assets.

When a Fund purchases a futures contract, an amount of cash or cash
equivalents or high quality debt securities will be deposited in a segregated
account with the Fund's custodian so that the amount so

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<PAGE>

segregated, plus the initial deposit and variation margin held in the account of
its broker, will at all times equal the value of the futures contract, thereby
insuring that the use of such futures is unleveraged.

The Funds will only sell futures contracts to protect securities they
own against price declines or purchase contracts to protect against an increase
in the price of securities they intend to purchase. As evidence of this hedging
interest, the Funds expect that approximately 75% of their futures contract
purchases will be "completed," that is, equivalent amounts of related securities
will have been purchased or are being purchased by the Funds upon sale of open
futures contracts.

Although techniques other than the sale and purchase of futures
contracts could be used to control the Funds' exposure to market fluctuations,
the use of futures contracts may be a more effective means of hedging this
exposure. While the Funds will incur commission expenses in both opening and
closing out futures positions, these costs are lower than transactions costs
incurred in the purchase and sale of the underlying securities.

RESTRICTIONS ON THE USE OF FUTURES CONTRACTS. A Fund will not enter
into futures contract transactions to the extent that, immediately thereafter,
the sum of its initial margin deposits on open contracts exceeds 5% of the
market value of a Fund's total assets. In addition, a Fund will not enter into
futures contracts to the extent that the value of the futures contracts held
would exceed 10% of the Fund's total assets. Futures transactions will be
limited to the extent necessary to maintain a Fund's qualification as a
regulated investment company.

Each Fund has undertaken to restrict its futures contract trading as
follows: first, the Funds will not engage in transactions in futures contracts
for speculative purposes; second, a Fund will not market itself to the public
as a commodity pool or otherwise as a vehicle for trading in the commodities
futures or commodity options markets; third, each Fund will disclose to all
prospective shareholders the purpose of and limitations on its commodity futures
trading; fourth, each Fund will submit to the CFTC special calls for
information. Accordingly, registration as a commodities pool operator with the
CFTC is not required.

In addition to the margin restrictions discussed above, transactions
in futures contracts may involve the segregation of funds pursuant to
requirements imposed by the SEC. Under those requirements, where a Fund has a
long position in a futures contract, it may be required to establish a
segregated account (not with a futures commission merchant or broker) containing
cash or certain liquid assets equal to the purchase price of the contract (less
any margin on deposit). For a short position in futures or forward contracts
held by a Fund, those requirements may mandate the establishment of a segregated
account (not with a futures commission merchant or broker) with cash or certain
liquid assets that, when added to the amounts deposited as margin, equal the
market value of the instruments underlying the futures contracts (but are not
less than the price at which the short positions were established). However,
segregation of assets is not required if a Fund "covers" a long position. For
example, instead of segregating assets, a Fund, when holding a long position in
a futures contract, could purchase a put option on the same futures contract
with a strike price as high or higher than the price of the contract held by the
Fund. In addition, where a Fund takes short positions, or engages in sales of
call options, it need not segregate assets if it "covers" these positions. For
example, where a Fund holds a short position in a futures contract, it may cover
by owning the instruments underlying the contract. A Fund may also cover such a
position by holding a call option permitting it to purchase the same futures
contract at a price no higher than the price at which the short position was
established. Where a Fund sells a call option on a futures contract, it may
cover either by entering into a long position in the same contract at a price no
higher than the strike price of the call option or by owning the instruments
underlying the futures contract. A Fund could also cover this position by
holding a separate call option permitting it to purchase the same futures
contract at a price no higher than the strike price of the call option sold by
the Fund.

RISK FACTORS IN FUTURES TRANSACTIONS. Positions in futures contracts
may be closed out only on an exchange that provides a secondary market for such
futures. However, there can be no assurance that a liquid secondary market will
exist for any particular futures contract at any specific time. Thus, it may
not be possible to close a futures position. In the event of adverse price
movements, a Fund would continue to be required to make daily cash payments to
maintain the required margin. In such situations, if a Fund has

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<PAGE>

insufficient cash, it may have to sell portfolio securities to meet daily margin
requirements at a time when it may be disadvantageous to do so. In addition, a
Fund may be required to make delivery of the instruments underlying futures
contracts it holds. The inability to close options and futures positions also
could have an adverse impact on the ability to effectively hedge them. A Fund
will minimize the risk that it will be unable to close out a futures contract by
only entering into futures contracts that are traded on national futures
exchanges and for which there appears to be a liquid secondary market.

The risk of loss in trading futures contracts in some strategies can
be substantial, due both to the low margin deposits required, and the extremely
high degree of leverage involved in futures pricing. Because the deposit
requirements in the futures markets are less onerous than margin requirements in
the securities market, there may be increased participation by speculators in
the futures market which may also cause temporary price distortions. A
relatively small price movement in a futures contract may result in immediate
and substantial loss (as well as gain) to the investor. For example, if at the
time of purchase, 10% of the value of the futures contract is deposited as
margin, a subsequent 10% decrease in the value of the futures contract would
result in a total loss of the margin deposit, before any deduction for the
transaction costs, if the account were then closed out. A 15% decrease would
result in a loss equal to 150% of the original margin deposit if the contract
were closed out. Thus, a purchase or sale of a futures contract may result in
losses in excess of the amount invested in the contract. A Fund would
presumably have sustained comparable losses if, instead of the futures contract,
it had invested in the underlying financial instrument and sold it after the
decline.

Utilization of futures transactions by a Fund does involve the risk of
imperfect or no correlation where the securities underlying futures contracts
have different maturities than the portfolio securities being hedged. It is
also possible that a Fund could both lose money on futures contracts and also
experience a decline in value of its portfolio securities. There is also the
risk of loss by a Fund of margin deposits in the event of bankruptcy of a broker
with whom a Fund has an open position in a futures contract or related option.

Most futures exchanges limit the amount of fluctuation permitted in
futures contract prices during a single trading day. The daily limit
establishes the maximum amount that the price of a futures contract may vary
either up or down from the previous day's settlement price at the end of a
trading session. Once the daily limit has been reached in a particular type of
contract, no trades may be made on that day at a price beyond that limit. The
daily limit governs only price movement during a particular trading day and
therefore does not limit potential losses, because the limit may prevent the
liquidation of unfavorable positions. Futures contract prices have occasionally
moved to the daily limit for several consecutive trading days with little or no
trading, thereby preventing prompt liquidation of future positions and
subjecting some futures traders to substantial losses.

AMERICAN DEPOSITORY RECEIPTS (ADRs) are certificates evidencing
ownership of shares of a foreign-based issuer held in trust by a bank or similar
financial institution. The Growth Funds may purchase ADRs. Designed for use in
U.S. markets, ADRs are alternatives to the purchase of the underlying securities
in their national markets and currencies. ADRs may be sponsored or unsponsored;
there is less publicly available information with respect to unsponsored ADRs.
It is anticipated that ADRs will not be relied upon to achieve the Growth Funds'
objectives.

LOWER-RATED DEBT SECURITIES. The Growth Funds and the Intermediate
Bond Fund may purchase lower-rated debt securities commonly referred to as "junk
bonds" (those rated Ba to C by Moody's or BB to C by S&P) that have poor
protection with respect to the payment of interest and repayment of principal,
or may be in default. These securities are often considered to be speculative
and involve greater risk of loss or price changes due to changes in the issuer's
capacity to pay. The market prices of lower-rated debt securities may fluctuate
more than those of higher-rated debt securities and may decline significantly in
periods of general economic difficulty, which may follow periods of rising
interest rates.

While the market for high-yield corporate debt securities has been in
existence for many years and has weathered previous economic downturns, the
1980s brought a dramatic increase in the use of such

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<PAGE>

securities to fund highly leveraged corporate acquisitions and restructuring.
Past experience may not provide an accurate indication of future performance of
the high yield bond market, especially during periods of economic recession. In
fact, from 1989 to 1991, the percentage of lower-rated debt securities that
defaulted rose significantly above prior levels, although the default rate
decreased in 1992.

The market for lower-rated securities may be thinner and less active
than that for higher-rated debt securities, which can adversely affect the
prices at which the former are sold. If market quotations are not available,
lower-rated debt securities will be valued in accordance with procedures
established by the Board of Directors, including the use of outside pricing
services. Judgment plays a greater role in valuing high-yield corporate debt
securities than is the case for securities for which more external sources for
quotations and last-sale information are available. Adverse publicity and
changing investor perceptions may affect the ability of outside pricing services
to value lower-rated debt securities and a Fund's ability to sell these
securities.

Since the risk of default is higher for lower-rated debt securities,
the Adviser's (M&A's) research and credit analysis are an especially important
part of managing securities of this type held by a Fund. In considering
investments for a Fund, the Adviser (M&A) will attempt to identify those issuers
of high-yielding debt securities whose financial condition is adequate to meet
future obligations, has improved, or is expected to improve in the future. The
Adviser's (M&A's) analysis focuses on relative values based on such factors as
interest or dividend coverage, asset coverage, earnings prospects, and the
experience and managerial strength of the issuer.

A Fund may choose, at its expense or in conjunction with others, to
pursue litigation or otherwise exercise its rights as security holder to seek to
protect the interests of security holders if it determines this to be in the
best interest of the Fund's shareholders.

ILLIQUID INVESTMENTS are investments that cannot be sold or disposed
of in the ordinary course of business, within seven days, at approximately the
prices at which they are valued. Each of the Funds may purchase illiquid
investments. Under the supervision of the Board Directors, the Adviser (M&A)
determines the liquidity of each Fund's investments and, through reports from
the Adviser (M&A), the Board monitors investments in illiquid instruments. In
determining the liquidity of a Fund's investments, the Adviser (M&A) may
consider various factors, including (1) the frequency of trades and quotations,
(2) the number of dealers and prospective purchasers in the marketplace, (3)
dealer undertakings to make a market, (4) the nature of the security (including
any demand or tender features), and (5) the nature of the marketplace for trades
(including the ability to assign or offset a Fund's rights and obligations
relating to the investment). Investments currently considered by a Fund to be
illiquid include repurchase agreements not entitling the holder to payment of
principal and interest within seven days. Also, the Adviser (M&A), may
determine some over-the-counter options, restricted securities and loans and
other direct debt instruments, and swap agreements to be illiquid. However,
with respect to over-the-counter options the Aggressive Growth Fund writes, all
or a portion of the value of the underlying instrument may be illiquid depending
on the assets held to cover the option and the nature and terms of any agreement
the Aggressive Growth Fund may have to close out the option before expiration.
In the absence of market quotations, illiquid investments are priced at fair
value as determined in good faith by a committee appointed by the Board of
Directors. If through a change in values, net assets, or other circumstances,
the Aggressive Growth Fund were in a position where more than 10% of its net
assets were invested in illiquid securities, it would seek to take appropriate
steps to protect liquidity.

LOANS AND OTHER DIRECT DEBT INSTRUMENTS are interests in amounts owed
by a corporate, governmental, or other borrower to another party. They may
represent amounts owed to lenders or lending syndicates (loans and loan
participation), to suppliers of goods or services (trade claims or other
receivables), or to other parties. Direct debt instruments involve a risk of
loss in case of default or insolvency of the borrower and may offer less legal
protection to a Fund in the event of fraud or misrepresentation. In addition,
loan participations involve a risk of insolvency of the lending bank or other
financial intermediary. Direct debt instruments may also include standby
financing commitments that obligate a Fund to supply additional cash to the
borrower on demand.

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<PAGE>

RESTRICTED SECURITIES generally can be sold in privately negotiated
transactions, pursuant to an exemption from registration under the Securities
Act of 1933, or in a registered public offering. Where registration is
required, a Fund may be obligated to pay all or part of the registration expense
and a considerable period may elapse between the time it decides to seek
registration and the time the Fund may be permitted to sell a security under an
effective registration statement. If, during such a period, adverse market
conditions were to develop, a Fund might obtain a less favorable price than
prevailed when it decided to seek registration of the shares. However, in
general, the Funds anticipate holding restricted securities to maturity or
selling them in an exempt transaction.

WARRANTS. Warrants are securities that give the Aggressive Growth
Fund the right to purchase equity securities from the issuer at a specific price
(the strike price) for a limited period of time. The strike price of warrants
typically is much lower than the current market price of the underlying
securities, yet they are subject to greater price fluctuations. As a result,
warrants may be more volatile investments than the underlying securities and may
offer greater potential for capital appreciation as well as capital
depreciation.

Warrants do not entitle a holder to dividends or voting rights with
respect to the underlying securities and do not represent any rights in the
assets of the issuing company. Also, the value of the warrant does not
necessarily change with the value of the underlying securities and a warrant
ceases to have value if it is not exercised prior to the expiration date. These
factors can make warrants more speculative than other types of investments.

SECURITIES LENDING. The Funds may lend their portfolio securities to
broker-dealers, banks or institutional borrowers of securities. A Fund must
receive a minimum of 100% collateral, plus any interest due in the form of cash
or U.S. Government securities. This collateral must be valued daily and should
the market value of the loaned securities increase, the borrower must furnish
additional collateral to the Fund. During the time portfolio securities are on
loan, the borrower will pay the Fund any dividends or interest paid on such
securities plus any interest negotiated between the parties to the lending
agreement. Loans will be subject to termination by the Fund or the borrower at
any time. While the Funds will not have the right to vote securities on loan,
each Fund intends to terminate the loan and regain the right to vote if that is
considered important with respect to the investment. A Fund will only enter
into loan arrangements with broker-dealers, banks or other institutions which
the Adviser (M&A) has determined are creditworthy under guidelines established
by the Company's Board of Directors.

OTHER INVESTMENT COMPANIES. A Fund may invest in the securities of
other investment companies to the extent permissible under the applicable
regulations and interpretations of the 1940 Act or an exemptive order. M&A
and/or the Adviser will waive its fee with respect to a Fund's assets invested
in an investment company to the extent required by the laws of any state in
which the Fund's shares are sold. It is anticipated that investment in other
investment companies will not be relied upon to achieve the Growth Funds'
objectives.

FUTURE DEVELOPMENTS. As discussed in the Prospectus, a Fund may take
advantage of other investment practices which are not at present contemplated
for use by a Fund or which currently are not available but which may be
developed, to the extent such investment practices are both consistent with a
Fund's investment objective and are legally permissible for the Fund. Such
investment practices, if they arise, may involve risks which exceed those
involved in the activities described in the Prospectus and Statement of
Additional Information. Prior to commencing any new investment practice, the
Fund will notify shareholders by means of a prospectus supplement.

INVESTMENT RESTRICTIONS

The following fundamental investment limitations cannot be changed
without approval by a "majority of the outstanding voting securities" (as
defined in the 1940 Act) of a Fund.

A Fund may not (unless otherwise indicated):

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<PAGE>

(1) issue any senior security (as defined in the 1940 Act), except
that (a) a Fund may engage in transactions which may result in
the issuance of senior securities to the extent permitted under
applicable regulations and interpretation of the 1940 Act or an
exemptive order; (b) a Fund may acquire other securities that may
be deemed senior securities to the extent permitted under
applicable regulations or interpretations of the 1940 Act; (c)
subject to the restrictions set forth below, the Fund may borrow
money as authorized by the 1940 Act;

(2) borrow money, except that (a) a Fund may enter into commitments
to purchase securities in accordance with its investment
program, including delayed-delivery and when-issued securities
and reverse repurchase agreements, provided that the total amount
of any such borrowing does not exceed 33 1/3% of the Fund's total
assets; and (b) a Fund may borrow money for temporary or
emergency purposes in an amount not exceeding 5% of the value of
its total assets at the time when the loan is made (the
Aggressive Growth Fund is not subject to this 5% limitation and
may borrow money for purposes of leveraging).

(3) underwrite securities issued by others, except to the extent that
a Fund may be considered an underwriter within the meaning of the
Securities Act of 1933 in the disposition of restricted
securities;

(4) purchase the securities of any issuer (other than securities
issued or guaranteed by the U.S. government or any of its
agencies or instrumentalities) if, as a result, more than 25% of
a Fund's total assets would be invested in the securities of
companies whose principal business activities are in the same
industry;

(5) purchase or sell real estate unless acquired as a result of
ownership of securities or other instruments (but this shall not
prevent a Fund from investing in securities or other instruments
backed by real estate or securities of companies engaged in the
real estate business);

(6) purchase or sell physical commodities unless acquired as a result
of ownership of securities or other instruments (but this shall
not prevent a Fund from purchasing or selling options and futures
contracts or from investing in securities or other instruments
backed by physical commodities); or

(7) lend any security or make any other loan if, as a result, more
than 33 1/3% of a Fund's total assets would be lent to other
parties, but this limitation does not apply to purchases of debt
securities or to repurchase agreements.

The following investment limitations are nonfundamental and may be
changed without shareholder approval:

(i) Each Fund does not currently intend to sell securities short,
unless it owns or has the right to obtain securities equivalent
in kind and amount to the securities sold short, and provided
that transactions in futures contracts and options are not deemed
to constitute selling securities short.

(ii) Each Fund does not currently intend to purchase securities on
margin, except that a Fund may obtain such short-term credits as
are necessary for the clearance of transactions, and provided
that margin payments in connection with futures contracts and
options on futures contracts shall not constitute purchasing
securities on margin.

(iii) Each Fund does not currently intend to purchase any security if,
as a result, more than 15% (10% with respect to the Money Market
Fund) of its net assets would be

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<PAGE>

invested in securities that are deemed to be illiquid because
they are subject to legal or contractual restrictions on resale
or because they cannot be sold or disposed of in the ordinary
course of business at approximately the prices at which they are
valued.

(iv) The Money Market Fund does not currently intend to invest in
securities of real estate investment trusts that are not readily
marketable, or to invest in securities of real estate limited
partnerships that are not listed on the New York Stock Exchange
or the American Stock Exchange or traded on the NASDAQ National
Market System.

(v) Each Fund does not currently intend to make loans, but this
limitation does not apply to purchases of debt securities or to
repurchase agreements.

(vi) Each Fund shall not invest in the securities of other investment
companies, except that a Fund may invest in the securities of
other investment companies that are not "affiliated persons" of
the Fund (unless permitted by SEC regulations or exemptive
relief) to the extent permissible under the applicable
regulations and interpretations of the 1940 Act or an exemptive
order. M&A and/or the Adviser will waive the portion of its fee
attributable to the assets of a Fund invested in such investment
companies to the extent required by the laws of any jurisdiction
in which shares of the Fund are registered for sale.

(vii) The Money Market Fund will not purchase the securities of any
issuer (other than securities issued or guaranteed by the U.S.
government or any of its agencies or instrumentalities) if, as a
result, (a) more than 5% of the Fund's total assets would be
invested in the securities of that issuer, or (b) the Fund would
hold more than 10% of the outstanding voting securities of that
issuer.

In addition to the above, at the close of each quarter of its taxable
year, at least 50% of the value of each Fund's assets must consist of cash and
cash items, U.S. Government securities, securities of other regulated investment
companies, and securities of other issuers (as to which a Fund has not invested
more than 5% of the value of the Fund's total assets in securities of any such
issuer and does not hold more than 10% of its outstanding voting securities),
and no more than 25% of the value of its total assets may be invested in the
securities of any one issuer (other than U.S. Government securities and
securities of other regulated investment companies), or in two or more issuers
which a Fund controls and which are engaged in the same or similar trades or
businesses.

As a condition to registration of their shares in the State of
Arkansas, the Intermediate Bond Fund, the Aggressive Growth Fund, the
Growth/Value Fund and the Money Market Fund will not (a) purchase securities of
unseasoned issuers, including their predecessors, which have been in operation
for less than three years, and equity securities of issuers which are not
readily marketable if by reason thereof the value of its aggregate investment in
such classes of securities will exceed 5% of a Fund's total assets or (b) invest
in interests in oil, gas or other mineral exploration or development programs; a
Fund may, however, purchase and sell securities engaged in the exploration,
development, production, refining, transporting and marketing of oil, gas or
minerals.

PORTFOLIO TURNOVER

The portfolio turnover rate for each of the Funds is calculated by
dividing the lesser of a Fund's purchases or sales of portfolio securities for
the year by the monthly average value of the portfolio securities. The
calculation excludes all securities whose maturities at the time of acquisition
were one year or less. Portfolio turnover with respect to the Money Market Fund
is expected to be zero percent for regulatory purposes. The portfolio turnover
rate with respect to a Fund may vary greatly from year to year as well as
within a particular year, and may also be affected by cash requirements for
redemptions of shares. A higher portfolio turnover rate may lead to increased
taxes and transaction costs. Portfolio turnover will not be a limiting factor
in making investment decisions. [Add portfolio turnover rates.]

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<PAGE>

RISKS AND SPECIAL CONSIDERATIONS REGARDING INVESTMENT IN KENTUCKY OBLIGATIONS
[TO BE REVISED]

The following is a discussion of the general factors that might
influence the ability of Kentucky issuers to repay principal and interest when
due on the Kentucky Obligations contained in the portfolio of the Kentucky Tax-
Free Fund. Such information is derived from sources that are generally
available to investors and is believed by the Kentucky Tax-Free Fund to be
accurate, but has not been independently verified and may not be complete.

Economic problems include a continuing high unemployment rate in the
non-urbanized area of the State. The Coal Severance Tax is a significant
revenue producer for the State and its political subdivisions, and any
substantial decrease in the amount of coal or other minerals produced could
result in revenue shortfalls. Additionally, any Federal legislation adversely
affecting the domestic and export tobacco and/or cigarette industry would have a
negative impact on Kentucky's economy. Although revenue obligations of the
State or its political subdivisions may be payable from a specific project,
there can be no assurances that further economic difficulties and the resulting
impact on State and local government finances will not adversely affect the
market value of the bonds issued by Kentucky municipalities or political
subdivisions or the ability of the respective entities to pay debt service.
Major legislative initiatives in the areas of education reform and medicaid
expenses are having an impact on the Commonwealth's financial profile.

The Commonwealth of Kentucky relies primarily upon sales and use tax,
individual income tax, property tax, corporate income tax, insurance premium
tax, alcohol beverage tax, corporate license tax, cigarette tax, and horse
racing tax for its revenue. The cities, counties and other local governments
are essentially limited to property taxes, occupational license taxes, transit
and restaurant meal taxes and various license fees for their revenue.
Obligations of non-Kentucky issuers are subject to the risks of general economic
and other factors affecting those issuers.

Because of constitutional limitations, the Commonwealth of Kentucky
cannot enter into a financial obligation of more than two years' duration, and
no other municipal issuer within the Commonwealth can enter into a financial
obligation of more than one year's duration. As a consequence, the payment and
security arrangements applicable to Kentucky revenue bonds differ significantly
from those generally applicable to municipal revenue bonds in other states.

FISCAL YEAR 1995 (UNAUDITED)

The Commonwealth of Kentucky continues to achieve structural balance
in its budget through consensus forecasting of state revenue and measures of
fiscal constraint. The General Fund ended the fiscal year with a budget surplus
of $134 million. The surplus was comprised of excess revenues of $84 million
above the original estimate of $5.07 billion and expenditure reductions of $50
million. Additionally, individual tax refunds for the second consecutive year
were paid prior to July 1.

An additional $10 million was deposited to the Budget Reserve Trust
Fund, on July 1, 1995, bringing the balance to the targeted level of $100
million. The Budget Reserve Trust Fund is a line item in the Commonwealth's
biennial budget.

On July 31, 1995, a special session of the Kentucky General Assembly
convened to address court ordered legislative redistricting, adding $100 million
to the Budget Reserve Trust F und, and approval of $50 million in secondary road
improvements to be funded from excess Road Fund Revenues. The General Assembly
adopted each of the referenced items and adjourned August 4, 1995. However, the
legislative redistricting plan adopted for the House of Representatives was
vetoed by Governor Jones and will have to be addressed in the next regular or
special session of the General Assembly.

RISKS AND SPECIAL CONSIDERATIONS REGARDING INVESTMENT IN TENNESSEE OBLIGATIONS

The Constitution of the State of Tennessee forbids the expenditure of
the proceeds of any debt obligation for a purpose other than the purpose for
which it was authorized by statute. Under Tennessee law,

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<PAGE>

the term of the State's bonds cannot exceed the life of the projects being
financed. Furthermore, the amount of debt obligations of the State of Tennessee
cannot exceed the amount authorized by the Tennessee General Assembly. The
procedure for funding State of Tennessee debt is provided by Chapter 9 of Title
9, Tennessee Code Annotated. The Funding Board of the State of Tennessee is the
entity authorized to issue general obligation indebtedness of the State of
Tennessee. Pursuant to Section 9-9-106, Tennessee Code Annotated, the Funding
Board of the State of Tennessee has a lien on the taxes, fees and revenues from
certain designated revenue sources for the full amount required to service the
State's general obligation indebtedness. Certain other agencies and authorities
in Tennessee issue obligations, payable solely from specific non-tax enterprise
fund revenues and which are not debts or liabilities of the State of Tennessee
nor is the full faith and credit pledged to the payment thereof.

Under current state statutes, the State of Tennessee's general
obligation bonded debt issuances are subject to an annual legal debt service
limitation based on a pledged portion of certain current year revenues. As of
June 30, 1994, the State of Tennessee's annual legal debt service limit of $351
million was well above the debt service required of $102 million, with a legal
debt service margin of $249 million. Debt per capita equaled $123, and the
ratio of net general long-term bonded debt to assessed property valuation was
1.32 percent.

The Constitution of the State of Tennessee requires a balanced budget.
As required by law, the legislature enacted a balanced budget for fiscal year
1994-95. Beginning January 1, 1994 the State of Tennessee received a waiver
from the federal government to replace Medicaid with the new program, TennCare.
TennCare was implemented to help control the sky-rocketing cost of health care
and to provide insurance coverage not only to previous Medicaid eligible
individuals but also to uninsured Tennesseans. Due principally to inaccurate
funding assumptions with respect to the TennCare program, the budget for the
year ending June 30, 1995 projected a shortfall of $126 million.

Despite the budgetary concerns caused by the costs associated with
implementing TennCare, the economic outlook for Tennessee remains favorable.
The State's economic diversity has improved substantially over the last eleven
years. Investments announced in new and expanding business exceeded one billion
dollars in each of those years and exceeded two billion in the last two years.
The $3.2 billion in announced capital investments in 1989 was the single largest
year and exceeded the $2.78 billion in 1985 when Saturn Corporation chose
Tennessee for its plan site. This growth created 23,800 new jobs in Tennessee
for the year ended June 1994.

The Tennessee General Assembly enacted a balanced budget for fiscal
year 1994-95. The budget included a two percent salary increase for State
employees, public higher education employees and teachers in the public school
system effective on July 1, 1994, and another two percent salary increase
effective on October 1, 1994. The revenue estimates were officially revised at
March 1 when the budget document for the fiscal year 1995-96 was presented to
the General Assembly. The revised revenue estimates for fiscal year 1994-95 and
projections for fiscal year 1995-96 are within the consensus estimates developed
by the State Funding Board in compliance with TCA Section 9-6-202(e).

Actual revenue collections for fiscal year 1994-95 through January
1995 reflected increases of 9.68 percent for the sales tax and 17.45 percent for
the combined excise tax and franchise tax. Total growth in collections,
excluding the health services tax, is 9.07 percent. Expenditures for TennCare
the housing of state prisoners, institutional operating costs in prisons, the
children's plan and some other services were in excess of the original budgeted
amounts for fiscal year 1994-95. Supplemental appropriations were accommodated
within the revised revenue estimates and a proposal to use one-time reserves.
The recommended budget for fiscal year 1995-96 continues the funding of
improvements in the Basic Education Program for public schools and begins
funding teacher salary equalization. It funds TennCare and the Administration's
proposed crime legislation. The revenue estimates for fiscal year 1995-96
assume a 6.3 percent growth in the sales tax, and a 5.0 percent growth in the
excise and franchise taxes. The assumed growth in all collections by the
Department of Revenue is 5.08 percent. The Revenue Fluctuation Reserve was
reduced to $101.4 million at June 30, 1994 due to accrued liabilities in the
children's plan and other programs. The new budget maintains the reserve at
$101.4 million for fiscal years 1994-95 and 1995-96.

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<PAGE>

On March 22, 1993 the Tennessee Supreme Court affirmed a lower court
decision that funding for the public school system in Tennessee is
unconstitutional because citizens in more affluent school districts receive
greater educational funding. The case was remanded to the trial court for
further proceedings with respect to the State's providing additional funding to
less affluent school systems. After substantial subsequent litigation, the
Tennessee Supreme Court issued on February 16, 1995, an opinion approving the
State's plan set forth in the Educational Improvement Act of 1992 with the
modification that the plan should also include a provision to equalize teachers'
salaries in the same way that other expenditures were to be equalized under the
program. The result of this decision may be that the State must provide
additional funding to less affluent school systems.

TennCare, the managed care program, is the subject of litigation. In
TENNESSEE MEDICAL ASSOCIATION V. MANNING (Davidson County Chancery Court No. 93-
3839-1), plaintiffs challenged the State's Administrative Procedure Act
requirements. The Chancery Court concluded that the court had no jurisdiction,
the plaintiffs had no private cause of action against the State, and the
plaintiffs had no injuries and granted the State's motion for summary judgment.
The plaintiffs have appealed this ruling.

On December 19, 1994, the Health Care Financing Administration
("HCFA") notified the State that the State's inclusion of amounts received from
its nursing home bed tax and services tax in computing the amount of federal
financial participation in TennCare was under review and was possibly
inconsistent with federal methodology for such computation. At this time, the
State has received no notice of disallowance of federal funds and is vigorously
disputing HCFA's assertion of possible improper computation of the amount of
federal financial participation. If HCFA were to find that the State's use of
the amounts received from these taxes was inconsistent with federal methodology
for such computation, then HCFA would offset disallowed amounts against future
federal participation in TennCare.

VALUATION

As indicated in the Prospectus, the net asset value per share
("NAV") of each Fund for purposes of pricing purchase and redemption orders
is determined as of the close of regular trading of the New York Stock Exchange
(the "NYSE")) on each Business Day of the Fund. Fund Business Days do not
include the following observed by the NYSE: New Year's Day, Presidents' Day,
Good Friday, Memorial Day (observed), Independence Day (observed), Labor Day,
Thanksgiving Day and Christmas Day (observed). Days on which the Federal
Reserve Wire Transfer Service is closed (which include: Martin Luther King
Day, Columbus Day and Veterans Day), in addition to NYSE holidays, are not
Business Days for the Money Market Fund. Net asset value per share for
purposes of pricing sales and redemptions is calculated by dividing the value
of all securities and other assets belonging to a Fund, less the liabilities
charged to that Fund, by the number of the outstanding shares of that Fund.

VALUATION OF THE MONEY MARKET FUND

The Money Market Fund has elected to use the amortized cost method of
valuation pursuant to Rule 2a-7 under the 1940 Act. This involves valuing an
instrument at its cost initially and thereafter assuming a constant amortization
to maturity of any discount or premium, regardless of the impact of fluctuating
interest rates on the market value of the instrument. This method may result in
periods during which value, as determined by amortized cost, is higher or lower
than the price the Fund would receive if it sold the instrument. The value of
securities in the Fund can be expected to vary inversely with changes in
prevailing interest rates.

Pursuant to Rule 2a-7, the Money Market Fund will maintain a dollar-
weighted average portfolio maturity appropriate to its objective of maintaining
a stable net asset value per share, provided that the Fund will not purchase any
security with a remaining maturity of more than 397 days nor maintain a dollar-
weighted average portfolio maturity which exceeds 90 days. The Company's Board
of Directors has also undertaken to establish procedures reasonably designed,
taking into account current market conditions and the

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<PAGE>

Fund's investment objective, to stabilize the net asset value per share of the
Fund for purposes of sales and redemptions at $1.00. These procedures include
review by the Directors, at such intervals as they deem appropriate, to
determine the extent, if any, to which the net asset value per share of the Fund
calculated by using available market quotations deviates from $1.00 per share.
In the event such deviation exceeds one-half of one percent, Rule 2a-7 requires
that the Board of Directors promptly consider what action, if any, should be
initiated. If the Directors believe that the extent of any deviation from the
Fund's $1.00 amortized cost price per share may result in material dilution or
other unfair results to new or existing investors, they will take such steps as
they consider appropriate to eliminate or reduce to the extent reasonably
practicable any such dilution or unfair results. These steps may include
selling portfolio instruments prior to maturity, shortening the dollar-weighted
average portfolio maturity, withholding or reducing dividends, reducing the
number of the Fund's outstanding shares without monetary consideration, or
utilizing a net asset value per share determined by using available market
quotations.

VALUATION OF THE FUNDS (OTHER THAN THE MONEY MARKET FUND)

The value of the portfolio securities held by the Funds (other than
the Money Market Fund) for purposes of determining a Fund's net asset value per
share will be established on the basis of current valuations provided by Muller
Data Corporation or Kenny S&P Evaluation Services, whose procedures shall be
monitored by the Adviser and the Administrator, and which valuations shall be
the fair value of such securities. Investments in debt securities with
remaining maturities of 60 days or less will be valued based upon the amortized
cost method.

ADDITIONAL PURCHASE AND REDEMPTION INFORMATION

Forum Financial Services, Inc. (the "Distributor") acts as distributor
of the Funds' shares. (See "Management of the Company - Distributor"). In
addition to purchasing shares directly from the Distributor, shares may be
purchased through arrangements established by the Distributor with banks,
broker-dealers or other financial institutions. Customers purchasing shares of
the Company may include officers, directors, or employees of the Adviser or M&A.

PURCHASE OF SHARES

As stated in the Prospectus, the public offering price of shares of
each Fund is its net asset value, plus a sales charge where applicable, next
determined after receipt of an order in proper form.

MATTERS AFFECTING REDEMPTION

The Company may suspend the right of redemption or postpone the date
of payment for shares during any period when (a) trading on the NYSE is
restricted by applicable rules and regulations of the Commission, (b) the NYSE
is closed for other than customary weekend and holiday closings, (c) the
Commission has by order permitted such suspension, or (d) an emergency exists as
determined by the Commission.

The Company may redeem shares involuntarily if redemption appears
appropriate in light of the Company's responsibilities under the 1940 Act. See
"Valuation" above.

REDEMPTION IN KIND

Although each Fund intends to redeem shares in cash, each Fund
reserves the right under certain circumstances to pay the redemption price in
whole or in part by a distribution of securities from a Fund. To the extent
available, such securities will be readily marketable.

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<PAGE>

Redemption in kind will be made in conformity with applicable
Commission rules, taking such securities at the same value employed in
determining NAV and selecting the securities in a manner the Directors determine
to be fair and equitable.

The Funds have elected to be governed by Rule 18f-1 of the 1940 Act
under which each Fund is obligated to redeem shares for any one shareholder in
cash only up to the lesser of $250,000 or 1% of a Fund's net asset value during
any 90-day period.

ADDITIONAL TAX INFORMATION

The following is only a summary of certain additional tax
considerations generally affecting the Funds and their shareholders that are not
described in the Prospectus. No attempt is made to present a detailed
explanation of the tax treatment of the Funds or their shareholders, and the
discussion here and in the Prospectus is not intended as a substitute for
careful tax planning.

QUALIFICATION AS A REGULATED INVESTMENT COMPANY

Each Fund has elected to be taxed as a regulated investment company
under Subchapter M of the Internal Revenue Code of 1986, as amended (the
"Code"). As regulated investment companies, the Funds are not subject to
Federal income tax on the portion of their net investment income (I.E., taxable
interest, dividends and other taxable ordinary income, net of expenses,
including foreign currency gains and loss) and capital gain net income (I.E.,
the excess of capital gains over capital losses) that they distribute to
shareholders, provided that they distribute at least 90% of their investment
company taxable income (I.E., net investment income and the excess of net
short-term capital gain over net long-term capital loss) for the taxable year
(the "Distribution Requirement"), and satisfy certain other requirements of the
Code that are described below. Distributions by the Funds made during the
taxable year or, under specified circumstances, within twelve months after the
close of the taxable year, will be considered distributions of income and gains
of the taxable year and can therefore satisfy the Distribution Requirement.

In addition to satisfying the Distribution Requirement, a regulated
investment company must (1) derive at least 90% of its gross income from
dividends, interest, certain payments with respect to securities loans, gains
from the sale or other disposition of stock or securities or foreign currencies
(to the extent such currency gains are directly related to the regulated
investment company's principal business of investing in stock or securities) and
other income (including but not limited to gains from options, futures or
forward contracts) derived with respect to its business of investing in such
stock, securities or currencies (the "Income Requirement"); and (2) derive less
than 30% of its gross income (exclusive of certain gains on designated hedging
transactions that are offset by realized or unrealized losses on offsetting
positions) from the sale or other disposition of stock, securities or foreign
currencies (or options, futures or forward contracts thereon) held for less than
three months (the "Short-Short Gain Test"). For purposes of these calculations,
gross income includes tax-exempt income. However, foreign currency gains,
including those derived from options, futures and forwards, will not in any
event be characterized as Short-Short Gain if they are directly related to the
regulated investment company's investments in stock or securities (or options or
futures thereon). Because of the Short-Short Gain Test, a Fund may have to
limit the sale of appreciated securities that it held for less than three
months. However, the Short-Short Gain Test will not prevent a Fund from
disposing of investments at a loss, since the recognition of a loss before the
expiration of the three-month holding period is disregarded for this purpose.
Interest (including original issue discount) received by a Fund at maturity or
upon the disposition of a security held for less than three months will not be
treated as gross income derived from the sale or other disposition of a security
within the meaning of the Short-Short Gain Test. However, income attributable
to realized market appreciation will be treated as such income for that purpose.

In general, gain or loss recognized by a Fund on the disposition of an
asset will be a capital gain or loss. However, gain recognized on the
disposition of a debt obligation purchased by a Fund at a market discount
(generally, at a price less than its principal amount) will be treated as
ordinary income to the extent of the portion of the market discount which
accrued while the Fund held the debt obligation. In addition, under

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<PAGE>

the rules of Code Section 988, gain or loss recognized on a disposition of a
debt obligation denominated in a foreign currency or an option with respect
thereto (but only to the extent attributable to changes in foreign currency
exchange rates), and gain or loss recognized on the disposition of a forward
foreign currency contract, futures contract, option or similar financial
instrument, or of foreign currency itself, except for regulated futures
contracts or non-equity options subject to Section 1256, will generally be
treated as ordinary income or loss.

Generally, for purposes of determining whether capital gain or loss
recognized by a Fund on the disposition of an asset is long-term or short-term,
the holding period of the asset may be affected if (i) the asset is used to
close a "short sale" (which includes for certain purposes the acquisition of a
put option) or is substantially identical to another asset so used, or (ii) the
asset is otherwise held by a Fund as part of a "straddle". However, for
purposes of the Short-Short Gain Test, the holding period of the asset disposed
of may be reduced only in the case of clause (i) above. In addition, a Fund may
be required to defer the recognition of a loss on the disposition of an asset
held as part of a straddle to the extent of any unrecognized gain on the
offsetting position.

Any gain recognized by a Fund on the lapse of, or any gain or loss
recognized by a Fund from a closing transaction with respect to, an option
written by a Fund will be treated as a short-term capital gain or loss. For
purposes of the Short-Short Gain Test, the holding period of an option written
by a Fund will commence on the date it is written and end on the date it lapses
or the date a closing transaction is entered into. Accordingly, a Fund may be
limited in its ability to write options which expire within three months or
enter into closing transactions at a gain within three months of the writing of
options.

Certain transactions that may be engaged in by the Aggressive Growth
Fund (such as futures contracts and options on stock indexes and futures
contracts) will be subject to special tax treatment as "Section 1256 contracts."
Section 1256 contracts are treated as if they are sold for their fair market
value on the last business day of the taxable year, even though a taxpayer's
obligations (or rights) under such contract have not terminated (by delivery,
exercise, entering into a closing transaction or otherwise) as of such date.
Any gain or loss recognized as a consequence of the year-end deemed disposition
of Section 1256 contracts is combined with any other gain or loss that was
previously recognized upon the termination of actual Section 1256 contracts
during the taxable year. The net amount of such gain or loss for the entire
year (including any deemed gain or loss) is treated as 60% long-term and 40%
short-term capital gain or loss. The Internal Revenue Service has held in
several private rulings (not necessarily applicable to the Funds) that deemed
gains arising under Code Section 1256 will be treated for purposes of the
Short-Short Gain Test as derived from securities held for not less than three
months.

Treasury Regulations permit a regulated investment company, in
determining its investment company taxable income and net capital gain (I.E.,
the excess of net long-term capital gain over net short-term capital loss) for
any taxable year, to elect (unless it has made a taxable year election for
excise tax purposes as discussed below) to treat all or any part of any net
capital loss, or any net long-term capital loss incurred after October 31 as if
they had been incurred in the succeeding year.

In addition to satisfying the requirements described above, the Funds
must satisfy an asset diversification test in order to qualify as a regulated
investment company. Under this test, at the close of each quarter of its
taxable year, at least 50% of the value of each Fund's assets must consist of
cash and cash items, U.S. Government securities, securities of other regulated
investment companies, and securities of other issuers (as to which a Fund has
not invested more than 5% of the value of the Fund's total assets in securities
of any such issuer and does not hold more than 10% of its outstanding voting
securities), and no more than 25% of the value of its total assets may be
invested in the securities of any one issuer (other than U.S. Government
securities and securities of other regulated investment companies), or in two or
more issuers which the Funds controls and which are engaged in the same or
similar trades or businesses.

If for any taxable year a Fund does not qualify as a regulated
investment company, all of its taxable income (including its net capital gain)
will be subject to tax at regular corporate rates without any deduction for
distributions to shareholders, and such distributions will be taxable as
ordinary dividends to the

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<PAGE>

extent of the Fund's current and accumulated earnings and profits. Such
distributions generally will be eligible for the dividends-received deduction in
the case of corporate shareholders.

ADDITIONAL TAX INFORMATION CONCERNING THE TAX-FREE FUNDS

As indicated in the Prospectus, the Tax-Free Funds are designed to
provide shareholders with current interest income free from Federal income
taxation and, in the case of the Kentucky and Tennessee Tax-Free Funds, also the
Kentucky and Tennessee personal income tax, respectively. The Tax-Free Funds
are not intended to constitute balanced investment programs and are not designed
for investors seeking capital appreciation. Shares of the Tax-Free Funds would
not be suitable for tax-exempt institutions and may not be suitable for
retirement plans qualified under Section 401 of the Code, so-called Keogh or
H.R. 10 plans, and individual retirement accounts. Such plans and accounts are
generally tax-exempt and, therefore, would not benefit from the fact that
dividends from the Tax-Free Funds are tax-exempt; moreover, such dividends would
be ultimately taxable to the beneficiaries when distributed to them. In
addition, shareholders who under Code section 147(a) are "substantial users" or
"related persons" to substantial users with respect to facilities financed
through any tax-exempt obligations held by the Tax-Free Funds should consult a
tax adviser whether exempt-interest dividends would remain excludable from gross
income in their hands for federal tax purposes under Section 103 of the Code.

The Code permits a regulated investment company that invests at least
50% of its assets in tax-exempt Municipal Securities (for these purposes,
Kentucky and Tennessee Tax-Exempt Obligations are functionally equivalent to
Municipal Securities) to pass through to its investors, on a tax-exempt basis,
net Municipal Securities interest income. The policy of the Tax-Free Funds is
to pay each year as dividends substantially all of their Municipal Securities
interest income net of certain deductions, but not to exceed in the aggregate
the net exempt-interest income received by each Fund during the taxable year.
An exempt-interest dividend is any dividend or part thereof (other than a
capital gain dividend) paid by a Tax-Free Fund and designated as an
exempt-interest dividend in a written notice mailed to shareholders after the
close of the Fund's taxable year. The percentage of the total dividends paid
for any taxable year which qualifies as Federal exempt-interest dividends will
be the same for all shareholders receiving dividends from a Tax-Free Fund during
such year, regardless of the period for which the shares were held.

While the Tax-Free Funds do not expect to realize any significant
amount of long-term capital gains, any net realized capital gains (the excess,
if any, of net long-term capital gains over net short-term capital losses) will
be distributed annually. Distributions of net capital gain will be taxable to
shareholders as long-term capital gains, regardless of how long a shareholder
has held a Fund's shares. If a shareholder disposes of shares of a Fund, at a
loss, before holding such shares longer than 6 months, the loss will be treated
as a long-term capital loss (unless disallowed as specified in the next
sentence) to the extent that the shareholder has received a capital gain
dividend on the shares. In addition, if a shareholder receives any
exempt-interest dividends with respect to any shares held for 6 months or less,
any loss on the sale or exchange of such shares will be disallowed to the extent
of the amount of such dividends.

While the Tax-Free Funds do not expect to earn a significant amount of
taxable investment income or short-term gains, such income or short-term gains
earned by them will be distributed to shareholders and will be taxable to them
as ordinary income (whether paid in cash or in additional shares).

Although the Tax-Free Funds each expects to qualify as a regulated
investment company and to be relieved of all or substantially all Federal income
taxes, these Funds may be subject to the tax laws of states or localities in
which their offices are maintained, in which their agents or independent
contractors are located, or in which they are otherwise deemed to be conducting
business, depending upon the extent of their activities in such states and
localities. In addition, if for any taxable year either of the Tax-Free Funds
does not qualify for the special Federal tax treatment afforded regulated
investment companies, all of its taxable income will be subject to Federal
income tax at the Fund level at regular corporate rates (without any deduction
for distributions to shareholders). When distributed, such income, as well as
the Fund's Municipal Securities interest income, would be taxable to
shareholders as an ordinary dividend.

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<PAGE>

EXCISE TAX ON REGULATED INVESTMENT COMPANIES

A 4% non-deductible excise tax is imposed on a regulated investment
company that fails to distribute in each calendar year an amount equal to 98% of
its ordinary taxable income for the calendar year and 98% of capital gain net
income for the one-year period ended on October 31 of such calendar year (or, at
the election of a regulated investment company having a taxable year ending
November 30 or December 31, for its taxable year (a "taxable year election")).
The balance of such income must be distributed during the next calendar year.
For the foregoing purposes, a regulated investment company is treated as having
distributed any amount on which it is subject to income tax for any taxable year
ending in the calendar year.

Each Fund intends to make sufficient distributions or deemed
distributions of its ordinary taxable income and capital gain net income prior
to the end of each calendar year to avoid liability for the excise tax.
However, investors should note that the Funds may in certain circumstances be
required to liquidate portfolio investments to make sufficient distributions to
avoid excise tax liability.

ADDITIONAL TAX INFORMATION CONCERNING OTHER FUNDS

Each Fund anticipates distributing substantially all of its investment
company taxable income for each taxable year. Such distributions will be
taxable to shareholders as ordinary income and treated as dividends for Federal
income tax purposes, but they will not qualify for the 70% dividends-received
deduction for corporations.

Each Fund may either retain or distribute to shareholders its net
capital gain for each taxable year. Each Fund currently intends to distribute
any such amounts. Net capital gain is distributed and designated as a capital
gain dividend and will be taxable to shareholders as long-term capital gain,
regardless of the length of time the shareholder has held his shares or whether
such gain was recognized by a Fund prior to the date on which the shareholder
acquired his shares.

Investment income that may be received by a Fund from sources within
foreign countries may be subject to foreign taxes withheld at the source. The
United States has entered into tax treaties with many foreign countries which
entitle Fund to a reduced rate of, or exemption from, taxes on such income. It
is impossible to determine the effective rate of foreign tax in advance since
the amount of a Fund's assets to be invested in various countries is not known.
If more than 50% of the value of the Fund's total assets at the close of its
taxable year consists of the stock or securities of foreign corporations, the
Fund may elect to "pass through" to the Fund's shareholders the amount of
foreign taxes paid by the Fund. If the Fund so elects, each shareholder would
be required to include in gross income, even though not actually received, its
pro rata share of the foreign taxes paid by the Fund, but would be treated as
having paid its pro rata share of such foreign taxes and would therefore be
allowed to either deduct such amount in computing taxable income or use such
amount (subject to various Code limitations) as a foreign tax credit against
Federal income tax (but not both). For purposes of the foreign tax credit
limitation rules of the Code, each shareholder would treat as foreign source
income its pro rata share of such foreign taxes plus the portion of dividends
received from the Fund representing income derived from foreign sources. No
deduction for foreign taxes could be claimed by an individual shareholder who
does not itemize deductions.

Distributions by the Funds that do not constitute ordinary income
dividends or capital gain dividends will be treated as a return of capital to
the extent of (and in reduction of) the shareholder's tax basis in his shares;
any excess will be treated as gain from the sale of such shares, as discussed
below.

Distributions by the Funds will be treated in the manner described
above regardless of whether they are paid in cash or reinvested in additional
shares of a Fund (or of another fund). Shareholders receiving a distribution in
the form of additional shares will be treated as receiving a distribution in an
amount equal to the fair market value of the shares received, determined as of
the reinvestment date. In addition, if the net asset value at the time a
shareholder purchases shares of a Fund reflects undistributed net investment
income or recognized capital gain net income, or unrealized appreciation in the
value of the assets of the Fund,

-21-
<PAGE>

distributions of such amounts will be taxable to the shareholder in the manner
described above, although such distributions economically constitute a return of
capital to the shareholder.

Ordinarily, shareholders are required to take distributions by a Fund
into account in the year in which they are made. However, dividends declared in
October, November or December of any year and payable to shareholders of record
on a specified date in such a month will be deemed to have been received by the
shareholders (and made by the Fund) on December 31 of such calendar year if such
dividends are actually paid by January 31 of the following year. Shareholders
will be advised annually as to the U.S. federal income tax consequences of
distributions made (or deemed made) during the year.

The Funds will be required in certain cases to withhold and remit to
the U.S. Treasury 31% of ordinary income dividends and capital gain dividends,
and the proceeds of redemption of shares, paid to any shareholder (1) who has
provided either an incorrect tax identification number or no number at all,
(2) who is subject to backup withholding by the Internal Revenue Service for
failure to report the receipt of interest or dividend income properly, or
(3) who has failed to certify to the Funds that it is not subject to backup
withholding or that it is a corporation or other "exempt recipient."

SALE OR REDEMPTION OF SHARES

A shareholder will recognize gain or loss on the sale or redemption of
shares of a Fund in an amount equal to the difference between the proceeds of
the sale or redemption and the shareholder's adjusted tax basis in the shares.
All or a portion of any loss so recognized may be disallowed if the shareholder
purchases other shares of a Fund within 30 days before or after the sale or
redemption. In general, any gain or loss arising from (or treated as arising
from) the sale or redemption of shares of a Fund will be considered capital gain
or loss and will be long-term capital gain or loss if the shares were held for
longer than one year. However, any capital loss arising from the sale or
redemption of shares held for six months or less will be treated as a long-term
capital loss to the extent of the amount of capital gain dividends received on
such shares. For this purpose, the special holding period rules of Code Section
246(c)(3) and (4) generally will apply in determining the holding period of
shares. Long-term capital gains of noncorporate taxpayers are currently taxed
at a maximum rate 11.6% lower than the maximum rate applicable to ordinary
income. Capital losses in any year are deductible only to the extent of capital
gains plus, in the case of a noncorporate taxpayer, $3,000 of ordinary income.

FOREIGN SHAREHOLDERS

Taxation of a shareholder who, as to the United States, is a
nonresident alien individual, foreign trust or estate, foreign corporation, or
foreign partnership ("foreign shareholder"), depends on whether the income from
a Fund is "effectively connected" with a U.S. trade or business carried on by
such shareholder.

If the income from a Fund is not effectively connected with a U.S.
trade or business carried on by a foreign shareholder, ordinary income dividends
will be subject to U.S. withholding tax at the rate of 30% (or lower applicable
treaty rate) upon the gross amount of the dividend (including any adjustment on
account of a Fund's election to treat foreign taxes paid by it as paid by its
shareholders). Such a foreign shareholder would generally be exempt from U.S.
Federal income tax on gains realized on the sale or redemption of shares of a
Fund and capital gain dividends.

If the income from a Fund is effectively connected with a U.S. trade
or business carried on by a foreign shareholder, then ordinary income dividends,
capital gain dividends and any gains realized upon the sale of shares of a Fund
will be subject to U.S. Federal income tax at the rates applicable to U.S.
citizens or domestic corporations.

In the case of a foreign noncorporate shareholder, a Fund may be
required to withhold U.S. Federal income tax at a rate of 31% on distributions
that are otherwise exempt from withholding (or taxable at a reduced treaty rate)
unless the shareholder furnishes the Fund with proper notification of its
foreign status.

-22-
<PAGE>

The tax consequences to a foreign shareholder entitled to claim the
benefits of an applicable tax treaty may be different from those described
herein. Foreign shareholders are urged to consult their own tax advisers with
respect to the particular tax consequences to them of an investment in the
Funds, including the applicability of foreign taxes.

EFFECT OF FUTURE LEGISLATION; LOCAL TAX CONSIDERATIONS

The foregoing general discussion of U.S. Federal income tax
consequences is based on the Code and the Treasury Regulations issued thereunder
as in effect on the date of this Statement of Additional Information. Future
legislative, administrative changes or court decisions may significantly affect
the conclusions expressed herein, perhaps with retroactive effect.

Rules of state and local taxation of ordinary income dividends and
capital gain dividends from regulated investment companies often differ from the
rules for U.S. Federal income taxation described above. Shareholders are urged
to consult their tax advisers as to the consequences of these and other state
and local tax rules affecting investments in the Funds.

MANAGEMENT OF THE COMPANY
DIRECTORS

The directors of the Company, their addresses, ages and principal
occupations during the past five years are as follows:

Position(s) Held Principal Occupation
Name, Address, Age With the Company During Past 5 Years
- ------------------ ----------------- --------------------
Gordon B. Davidson, 69* Chairman and Director Chairman of Executive
Wyatt, Tarrant & Combs Committee and Senior
Citizens Plaza Counsel, Wyatt, Tarrant
Louisville, KY 40202 & Combs (a law firm);
Director, Duff & Phelps
Utilities Income, Inc.;
Alliant Healthcare
System, Inc.; (Ret)
Director, BellSouth
Corp.; Director,
Kentucky Center for the
Arts Foundation, Inc.;
Trustee, Center College.

Jerry E. Baker, 64* Director Chairman of the Board,
P.O. Box 1117 Mid America Airgas, Inc.
Bowling Green, KY 42102 (a subsidiary of Airgas,
Inc.); President, Mid
America Airgas, Inc.,
July 1986 - May 1995.

William H. Lomicka, 58 Director President, Mayfair
Mayfair Capital Capital; Director,
Providian Center Advocat Inc., Regal
400 West Market, Cinemas, Inc., Vencor,
Suite 2510 Inc., Automated
Louisville, KY 40202 Healthcare, Dynamic
Health, Health
Directions, Medecon,
Regent Communications,
Spectra Care and
Sabratek; Member , Board
of Advisors, the Tiber
Group.

- ---------------
* Interested person.

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<PAGE>

Charles K. McClure, III, 52 Director Retired and working on
1442 Cherokee Road several not-for-profit
Louisville, KY 40204 and community projects,
January 1995 - present;
Executive Director,
Isaac W. Bernheim
Foundation, April 1971 -
January 1995.

The Board of Directors has appointed an audit committee, a valuation
committee, and a nominating committee. The members of each committee are
William H. Lomicka and Charles K. McClure, III . The function of the audit
committee is to recommend independent auditors and review and report on
accounting and financial matters. The function of the valuation committee is to
determine and monitor the value of the Funds' assets. The function of the
nominating committee is to nominate persons to serve as disinterested directors
and directors to serve on committees of the Board.

REMUNERATION OF DIRECTORS AND CERTAIN EXECUTIVE OFFICERS

Each director receives a fee of $500 for each meeting attended plus
expenses.

COMPENSATION TABLE
(ESTIMATED COMPENSATION FOR EACH DIRECTOR
FOR THE CURRENT FISCAL YEAR)

AGGREGATE COMPENSATION FROM REGISTRANT

[UPDATE NUMBERS]

AGGRESSIVE KENTUCKY TENNESSEE MONEY
GROWTH/VALUE GROWTH INTERMEDIATE TAX-FREE TAX-FREE MARKET
NAME FUND FUND BOND FUND FUND FUND FUND
<S> <C> <C> <C> <C> <C> <C>

Gordon B. Davidson * * * * * *

Jerry E. Baker * * * * * *

William H. Lomicka * * * * * *

Charles K. McClure, III * * * * * *

PENSION OR
RETIREMENT
BENEFIT ESTIMATED TOTAL
ACCRUED ANNUAL COMPENSATION
AS PART OF BENEFITS FROM REGISTRANT
FUND UPON AND FUND COMPLEX
NAME EXPENSES RETIREMENT PAID TO DIRECTORS
<S> <C> <C> <C>

Gordon B. Davidson -0- -0- $2,000

Jerry E. Baker -0- -0- 2,000

William H. Lomicka -0- -0- 2,000

Charles K. McClure, III -0- -0- 2,000

</TABLE>

* Each director receives $500 per meeting attended plus expenses. Each Fund
contributes pro rata based on its assets.

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<PAGE>

OFFICERS

The officers of each Fund of the Company and their principal
occupations during the past five years are as follows (if no address is listed,
the address is Trans Adviser Funds, Inc., P.O. Box 90001, Bowling Green,
Kentucky 42101-9001):

Position(s) Held Principal Occupation
Name, Address With the Company During Past 5 Years
- ------------- ---------------- --------------------

Thomas A. Trantum, 51 President President, Mastrapasqua
& Associates, Inc.;
Secretary, Management
Plus Associates, Inc.;
Director, Phoenix
Ventures; Adjunct
Professor, Massey
Graduate School of
Business.

Michael D. Martins, 29 Treasurer Director of Fund
Two Portland Square Accounting, Forum
Portland, Maine 04101 Financial Services,
Inc., with which he has
been associated since
June, 1995. Prior
thereto, Mr. Martins was
associated with the
public accounting firm
of Deloitte & Touche
LLP, most recently as an
accounting Manager.

Max Berueffy, 43 Vice President and Secretary Counsel, Forum Financial
Two Portland Square Services, Inc., with
Portland, Maine 04101 which he has been
associated since 1994.
Prior thereto, Mr.
Berueffy was on the
staff of the U.S.
Securities and Exchange
Commission for seven
years, first in the
appellate branch of the
Office of the General
Counsel, then as a
counsel to Commissioner
Grundfest and finally as
a senior special counsel
in the Division of
Investment Management.

David I. Goldstein, 34 Vice President and Assistant Counsel, Forum Financial
Two Portland Square Secretary Services, Inc., with
Portland, Maine 04101 which he has been
associated since 1991.
Prior thereto, Mr.
Goldstein was associated
with the law firm of
Kirkpatrick & Lockhart.
Mr. Goldstein is also an
officer of various
registered investment
companies for which
Forum Financial
Services, Inc. serves as
manager, administrator
and/or distributor.

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<PAGE>

Michael J. McKeen, 24 Assistant Treasurer Fund Accounting Manager,
Two Portland Square Forum Financial
Portland, Maine 04101 Services, Inc., with
which he has been
associated since 1993.
Prior thereto, Mr.
McKeen attended the
University of Maine.

The officers of the Company receive no compensation directly from the
Company for performing the duties of their offices.

ADVISER AND SUB-ADVISER

THE ADVISER

Trans Financial Bank, N.A. (the "Adviser"), provides the overall
management necessary for each Fund's operations and oversees the investment of
their assets pursuant to an advisory agreement dated September 8, 1995 (the
"Advisory Agreement"). Trans Financial Bank, N.A., is a subsidiary of Trans
Financial, Inc. which is a full service financial services provider with
approximately $650 million in assets under management as of December 31, 1995.

THE ADVISORY AGREEMENT

In managing the Funds and overseeing the investment of their assets,
the Adviser is subject at all times to the supervision of the Company's
directors. The Adviser also furnishes or procures on behalf of the Funds all
services necessary for the proper conduct of the Funds' business and
administration. In addition to the foregoing, the Adviser selects, monitors and
evaluates the Funds' Sub-Adviser. Trans Financial Bank, N.A., through its
Fixed-Income Investment Management Group, has primary responsibility for
managing the Tax-Free Funds, the Intermediate Bond Fund and the Money Market
Fund.

Under the terms of the Advisory Agreement, the Funds pay all of their
expenses, including, but not limited to, the costs incurred in connection with
the registration and maintenance of registration of the Funds and their shares
with the SEC and various states and other jurisdictions, printing and mailing
prospectuses and statements of additional information to shareholders, transfer
taxes on the sales of portfolio securities, brokerage commissions, custodial and
transfer charges, legal and auditing expenses, certain insurance premiums, out
of pocket expenses of the Custodian, Transfer Agent and Fund Accountants,
preparation of shareholder reports, directors' fees and expenses of director and
shareholder meetings.

For the services it provides under the terms of the Advisory
Agreement, the Adviser receives a monthly fee of .20% per annum of the Money
Market Fund's average daily net assets, 1.00% per annum of each of the
Growth/Value and Aggressive Growth Fund's average daily net assets and .40% per
annum of the Intermediate Bond Fund's average daily net assets and of each Tax-
Free Fund's average daily net assets. The Adviser may, from time to time,
voluntarily agree to defer or waive fees or absorb some or all of the expenses
of the Funds.

THE SUB-ADVISER

The Adviser has retained Mastrapasqua & Associates, Inc., West End
Avenue, Nashville, Tennessee ("M&A") to provide sub-advisory services pursuant
to a Sub-Advisory Agreement dated September 8, 1995. M&A is a registered
investment adviser incorporated in March, 1993. Its core business is portfolio
management for institutions, individuals and business owners. M&A currently
manages approximately $300 million in assets. M&A shares primary responsibility
for managing the Growth/Value and Aggressive Growth Funds with the Adviser and
provides economic forecasts and strategic analysis for each of the other Funds.
For its services, M&A is paid by the Adviser as follows: with respect to the
Aggressive Growth and

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<PAGE>

the Growth/Value Funds, the Adviser (not the Fund) pays to M&A an annual fee,
calculated daily, and paid monthly, of .50% on the first $100 million of such
Funds' combined average daily net assets, plus .25% of such Funds' combined
average daily net assets in excess of $100 million for its services, and, with
respect to each other Trans Adviser Fund, the Adviser (not the Fund) pays M&A an
annual fee, calculated daily, and paid monthly, of .03% of average daily net
assets for its services.

PORTFOLIO TRANSACTIONS

Pursuant to an Advisory Agreement entered into with each Fund (the
"Advisory Agreement"), the Adviser determines, subject to the overall
supervision of the Board of Directors of the Company and in accordance with each
Fund's investment objective and restrictions, which securities are to be
purchased and sold by the Money Market Fund, the Intermediate Bond Fund and the
Tax-Free Funds, and which brokers are to be eligible to execute such Funds'
portfolio transactions. Pursuant to a Sub-Advisory Agreement entered into with
the Adviser and each Fund (the "Sub-Advisory Agreement"), M&A determines,
subject to review by the Adviser and the overall supervision of the Board of
Directors of the Company and in accordance with each Fund's investment objective
and restrictions, which securities are to be purchased and sold by the Growth
Funds, and which brokers are to be eligible to execute such Funds' portfolio
transactions. Purchases and sales of government securities and debt securities
usually are principal transactions in which portfolio securities are normally
purchased directly from the issuer or from an underwriter or market maker for
the securities. Purchases from underwriters of portfolio securities include a
commission or concession paid by the issuer to the underwriter and purchases
from dealers serving as market makers may include the spread between the bid and
asked prices. Transactions on stock exchanges involve the payment of a
negotiated brokerage commissions. Transactions in the over-the-counter market
are generally principal transactions with dealers. With respect to over-the-
counter market, the Company, where possible, will deal directly with dealers who
make a market in the securities involved except in those circumstances where
better price and execution are available elsewhere. While the Adviser (M&A)
generally seeks competitive spreads or commissions, the Company may not
necessarily pay the lowest spread or commission available on each transaction,
for reasons discussed below.

Allocation of transactions, including their frequency, to various
dealers is determined by the Adviser (M&A) in its best judgment and in a manner
deemed fair and reasonable to shareholders. The primary consideration is prompt
execution of orders in an effective manner at the most favorable price. Subject
to this consideration, dealers who provide supplemental investment research to
the Adviser (M&A) may receive orders for transactions on behalf of the Company.
Information so received is in addition to and not in lieu of services required
to be performed by the Adviser (M&A) and does not reduce the advisory fees
payable to the Adviser (M&A). Such information may be useful to the Adviser in
serving both the Company and other clients and, conversely, supplemental
information obtained by the placement of business of other clients may be useful
to the Adviser in carrying out its obligations to the Company.

The Adviser (M&A) is authorized, subject to best price and execution,
to place portfolio transactions with brokerage firms that have provided
assistance in the distribution of shares of the Fund and is authorized to use
the Distributor or an affiliated broker-dealer on an agency basis, to effect a
substantial amount of the portfolio transactions which are executed on the New
York or American Stock Exchanges, Regional Exchanges where relevant, or which
are traded in the Over-the-Counter market. The Advisory and Sub-Advisory
Agreements do not provide for any reduction in the management fee as a result of
profits resulting from brokerage commissions effected through an affiliated
broker-dealer.

The Directors have adopted certain procedures incorporating the
standards of Rule 17e-1 issued under the 1940 Act which requires that the
commissions paid the Distributor or an affiliated broker-dealer must be
"reasonable and fair compared to the commission, fee or other remuneration
received or to be received by other brokers in connection with comparable
transactions involving similar securities during a comparable period of time."
The Rule and the procedures also contain review requirements and require the
Adviser (M&A) to furnish reports to the Directors and to maintain records in
connection with such views.

Investment decisions for each Fund of the Company are made
independently from those for another Fund or any other investment company or
account managed by the Adviser (M&A). Any such other

-27-
<PAGE>

investment company or account may also invest in the same securities as the
Company. When a purchase or sale of the same security is made at substantially
the same time on behalf of a Fund and another Fund, investment company or
account, the transaction will be averaged as to price and available investments
will be allocated as to amount in a manner which the Adviser (M&A) believes to
be equitable to the Fund(s) and such other investment company or account. In
some instances, this investment procedure may adversely affect the price paid or
received by a Fund or the size of the position obtained by a Fund. To the
extent permitted by law, the Adviser (M&A) may aggregate the securities to be
sold or purchased for a Fund with those to be sold or purchased for the other
Fund or for other investment companies or accounts in order to obtain best
execution.

GLASS-STEAGALL ACT

In 1971, the United States Supreme Court held in INVESTMENT COMPANY
INSTITUTE V. CAMP that the Federal statute commonly referred to as the Glass-
Steagall Act prohibits a national bank from operating a mutual fund for the
collective investment of managing agency accounts. Subsequently, the Board of
Governors of the Federal Reserve System (the "Board") issued a regulation and
interpretation to the effect that the Glass-Steagall Act and such decision: (a)
forbid a bank holding company registered under the Federal Bank Holding Company
Act of 1956 (the "Holding Company Act") or any non-bank affiliate thereof from
sponsoring, organizing, or controlling a registered, open-end investment company
continuously engaged in the issuance of its shares, but (b) do not prohibit such
a holding company or affiliate from acting as investment adviser, transfer
agent, and custodian to such an investment company. In 1981, the United States
Supreme Court held in BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM V.
INVESTMENT COMPANY INSTITUTE that the Board did not exceed its authority under
the Holding Company Act when it adopted its regulation and interpretation
authorizing bank holding companies and their non-bank affiliates to act as
investment advisers to registered closed-end investment companies. In the
BOARD OF GOVERNORS case, the Supreme Court also stated that if a national bank
complied with the restrictions imposed by the Board in its regulation and
interpretation authorizing bank holding companies and their non-bank affiliates
to act as investment advisers to investment companies, a national bank
performing investment advisory services for an investment company would not
violate the Glass-Steagall Act.

The Adviser believes that it possesses the legal authority to perform
the services for each Fund contemplated by the Management Agreement regarding
that Fund and described in the Prospectus of that Fund and this Statement of
Additional Information. Future changes in either Federal or state statutes and
regulations relating to the permissible activities of banks or bank holding
companies and the subsidiaries or affiliates of those entities, as well as
further judicial or administrative decisions or interpretations of present and
future statutes and regulations, could prevent or restrict the Adviser from
continuing to perform such services for the Company. Depending upon the nature
of any changes in the services which could be provided by the Adviser, the Board
of Directors of the Company would review the Company's relationship with the
Adviser and consider taking all action necessary in the circumstances.

Should future legislative, judicial, or administrative action prohibit
or restrict the proposed activities of the Adviser in connection with customer
purchases of shares of the Company, the Adviser might be required to alter
materially or discontinue the services offered to its customers. It is not
anticipated, however, that any change in the Company's method of operations
would affect its net asset value per share or result in financial losses to any
customer.

ADMINISTRATOR

Forum Financial Services, Inc. ("Forum") acts as administrator to the
Company and its Funds pursuant to an Administration Agreement. As
administrator, Forum provides certain management and administrative services
necessary to the operation of the Company (which include, among other
responsibilities, negotiation of contracts and fees with, and monitoring of
performance and billing of, the transfer agent and custodian and arranging for
maintenance of books and records of the Company), and provides the Company with
general office facilities. The Administration Agreement will remain in effect
for a period of twelve months and thereafter is automatically renewed each year
for an additional term of one year.

-28-
<PAGE>

The Administration Agreement terminates automatically if it is
assigned and may be terminated without penalty with respect to a Fund by vote of
the Fund's shareholders or by either party on not more than 60 days' written
notice. The Administration Agreement also provides that Forum shall not be
liable for any error of judgment or mistake of law or for any act or omission in
the administration or management of the Company, except for willful misfeasance,
bad faith or gross negligence in the performance of Forum's duties or by reason
of reckless disregard of its obligations and duties under the Administration
Agreement.

EXPENSES

Each Fund bears the following expenses relating to its operations:
taxes, interest, any brokerage fees and commissions, fees of the Directors of
the Company, Commission fees, state securities qualification fees, costs of
preparing and printing prospectuses for regulatory purposes and for distribution
to current shareholders, outside auditing and legal expenses, management and
administration fees, fees and out-of-pocket expenses of the Custodian and the
Transfer Agent, dividend disbursing agents fees, fees and out-of-pocket expenses
for fund accounting services, expenses incurred for pricing securities owned by
it, certain insurance premiums, costs of maintenance of its existence, costs of
shareholders' and Directors' reports and meetings, and any extraordinary
expenses incurred in its operation.

If total expenses incurred by either of the Funds in any fiscal year
exceed expense limitations imposed by applicable state securities regulations,
the Adviser and the Administrator will reduce their own fees by the amount of
such excess in proportion to their respective fees. As of the date of the
Prospectus and this Statement of Additional Information, there are no state
expense limitations applicable to the Company. Any fee reduction by the Adviser
and the Administrator will be estimated daily and reconciled on a monthly basis.

DISTRIBUTOR

Forum is also the Company's distributor and acts as the agent of the
Company in connection with the offering of shares of the Fund pursuant to a
Distribution Agreement. The Distribution Agreement will continue in effect for
twelve months and will continue in effect thereafter only if its continuance is
specifically approved at least annually by the Board or by vote of the
shareholders entitled to vote thereon, and in either case, by a majority of the
directors who (i) are not parties to the Distribution Agreement, (ii) are not
interested persons of any such party or of the Company and (iii) with respect to
any class for which the Company has adopted a distribution plan, have no direct
or indirect financial interest in the operation of that distribution plan or in
the Distribution Agreement, at a meeting called for the purpose of voting on the
Distribution Agreement. All subscriptions for shares obtained by Forum are
directed to the Company for acceptance and are not binding on the Company until
accepted by it. Forum receives no compensation or reimbursement of expenses for
the distribution services provided pursuant to the Distribution Agreement and is
under no obligation to sell any specific amount of Fund shares.

The Distribution Agreement provides that Forum shall not be liable for
any error of judgment or mistake of law or in any event whatsoever, except for
willful misfeasance, bad faith or gross negligence in the performance of Forum's
duties or by reason of reckless disregard of its obligations and duties under
the Distribution Agreement.

The Distribution Agreement is terminable with respect to a Fund
without penalty by the Company on 60 days' written notice when authorized either
by vote of the Fund's shareholders or by a vote of a majority of the Board, or
by Forum on 60 days' written notice. The Distribution Agreement will
automatically terminate in the event of its assignment.

Forum may enter into agreements with selected broker-dealers, banks,
or other financial institutions for distribution of shares of the Funds. These
financial institutions may charge a fee for their services and may receive
shareholders service fees even though shares of a Fund are sold at net asset
value. These financial institutions may otherwise act as processing agents, and
will be responsible for promptly transmitting purchase, redemption and other
requests to a Fund.

-29-
<PAGE>

Investors who purchase shares in this manner will be subject to the
procedures of the institution through whom they purchase shares, which may
include charges, investment minimums, cutoff times and other restrictions in
addition to, or different from, those listed herein. Information concerning any
charges or services will be provided to customers by the financial institution.
Investors purchasing shares of the Funds in this manner should acquaint
themselves with their institution's procedures and should read this Prospectus
in conjunction with any materials and information provided by their institution.
The financial institution and not its customers will be the shareholder of
record, although customers may have the right to vote shares depending upon
their arrangement with the institution.

CUSTODIAN

First National Bank of Boston, 150 Royall Street, Canton, MA 02021
(the "Custodian") serves as custodian to each Fund of the Company pursuant to a
Custodial Services Agreement with the Company. The Custodian's responsibilities
include safeguarding and controlling the Company's cash and securities, handling
the receipt and delivery of securities, and collecting interest and dividends on
the Company's investments.

TRANSFER AGENT

Forum Financial Corp. ("FFC") acts as Transfer Agent and Dividend
Disbursing Agent for the Company pursuant to a Transfer Agency Agreement. The
Transfer Agency Agreement will remain in effect for a period of twelve months
and thereafter is automatically renewed each year for an additional term of one
year.

Among the responsibilities of FFC as agent for the Company are, with
respect to shareholders of record: (1) answering shareholder inquiries
regarding account status and history, the manner in which purchases and
redemptions of shares of a Fund may be effected and certain other matters
pertaining to the Fund; (2) assisting shareholders in initiating and changing
account designations and addresses; (3) providing necessary personnel and
facilities to establish and maintain shareholder accounts and records, assisting
in processing purchase and redemption transactions and receiving wired funds;
(4) transmitting and receiving funds in connection with customer orders to
purchase or redeem shares; (5) verifying shareholder signatures in connection
with changes in the registration of shareholder accounts; (6) furnishing
periodic statements and confirmations of purchases and redemptions; (7)
arranging for the transmission of proxy statements, annual reports, prospectuses
and other communications from the Company to its shareholders; (8) arranging for
the receipt, tabulation and transmission to the Company of proxies executed by
shareholders with respect to meetings of shareholders of the Company; and (9)
providing such other related services as the Company or a shareholder may
reasonably request.

For these services, FFC will receive a fee of $12,000 per year and
annual account fees of $25.00 per shareholder account. The Company will also
reimburse FFC for certain expenses incurred on behalf of the Funds. These fees
are fixed through December 31, 1996 and are subject to adjustment thereafter.

FFC or any sub-transfer agent or processing agent may also act and
receive compensation for acting as custodian, investment manager, nominee, agent
or fiduciary for its customers or clients who are shareholders of the Funds with
respect to assets invested in the Portfolio. FFC or any sub-transfer agent or
other processing agent may elect to credit against the fees payable to it by its
clients or customers all or a portion of any fee received from the Company or
from FFC with respect to assets of those customers or clients invested in the
Funds. The sub-transfer agents or processing agents retained by FFC may be
affiliated persons of FFC or Forum.

PORTFOLIO ACCOUNTING

FFC performs portfolio accounting services for each Fund pursuant to a
Fund Accounting Agreement with the Company. The Fund Accounting Agreement will
continue in effect only if specifically approved at least annually by the Board
or by vote of the shareholders of the Company and in either case by a majority
of the Directors who are not parties to the Fund Accounting Agreement or
interested persons of any such party, at a meeting called for the purpose of
voting on the Fund Accounting Agreement.

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<PAGE>

Under its Agreement, FFC prepares and maintains books and records of
each Fund on behalf of the Company as required under the 1940 Act, calculates
the net asset value per share of each Fund and dividends and capital gain
distributions and prepares periodic reports to shareholders and the Securities
and Exchange Commission. For its services, FFC receives from the Company with
respect to each Fund a fee of $36,000 per year. In addition, FFC is paid
additional surcharges of $6,000 to $24,000 if the asset levels of a Fund exceed
certain levels and for funds that hold more than 30 international positions,
that invest certain percentages of their assets in asset backed securities, that
have more than 100 security positions or that have a monthly portfolio turnover
rate of 10% or more. FFC is required to use its best judgment and efforts in
rendering fund accounting services and is not liable to the Company for any
action or inaction in the absence of bad faith, willful misconduct or gross
negligence. FFC is not responsible or liable for any failure or delay in
performance of its fund accounting obligations arising out of or caused,
directly or indirectly, by circumstances beyond its reasonable control and the
Company has agreed to indemnify and hold harmless FFC, its employees, agents,
officers and directors against and from any and all claims, demands, actions,
suits, judgments, liabilities, losses, damages, costs, charges, counsel fees and
other expenses of every nature and character arising out of or in any way
related to FFC's actions taken or failure to act with respect to a Fund or
based, if applicable, upon information, instructions or requests with respect to
a Fund given or made to FFC by an officer of the Company duly authorized. This
indemnification does not apply to FFC's actions taken or failure to act in
cases of FFC's own bad faith, willful misconduct or gross negligence.

AUDITORS

KPMG Peat Marwick LLP, 99 High Street, Boston, Massachusetts, 02110
serves as independent auditors to the Company.

LEGAL COUNSEL

Kramer, Levin, Naftalis, Nessen, Kamin & Frankel, 919 Third Avenue,
New York, New York 10022 are counsel to the Company.

PERFORMANCE INFORMATION

YIELD OF THE MONEY MARKET FUND

As summarized in the Prospectus under the heading "General Information
- - Performance Information," the "yield" of the Money Market Fund for a seven-day
period (a "base period") will be computed return by 365/7 with the resulting
yield figure carried to the nearest hundredth of one percent. Net changes in
value of a hypothetical account will include the value of additional shares
purchased with dividends from the original share and dividends declared on both
the original share and any such additional shares, but will not include realized
gains or losses or unrealized appreciation or depreciation on portfolio
investments. Yield may also be calculated on a compound basis (the "effective
yield") which assumes that net income is reinvested in Fund shares at the same
rate as net income is earned for the base period. For the seven days ended
February 29, 1996, the Money Market Fund's yield and effective yield were 4.90%
and 5.02%, respectively.

YIELD OF THE FUNDS (OTHER THAN THE MONEY MARKET FUND)

As summarized in the Prospectus under the heading "General Information
- - Performance Information," yield of the Funds (other than the Money Market
Fund) will be computed by analyzing net investment income per share for a recent
30-day period and dividing that amount by the maximum offering price per share
(reduced by any undeclared earned income expected to be paid shortly as a
dividend) on the last trading day of that period. Net investment income will
reflect amortization of any market value premium or discount of fixed-income
securities (except for obligations backed by mortgages or other assets) and may
include recognition of a pro rata portion of the stated dividend rate of
dividend paying portfolio securities. The yield of the Funds will vary from
time to time depending upon market conditions, the composition of the Fund's
portfolio and operating expenses of the Company allocated to the Fund. These
factors and possible differences

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<PAGE>

in the methods used in calculating yield should be considered when comparing a
Fund's yield to yields published for other investment companies and other
investment vehicles. Yield should also be considered relative to changes in the
value of a Fund's shares and to the relative risks associated with the
investment objectives and policies of the Fund. For the 30-day period ended
February 29, 1996, the Funds' yields were as follows: Growth/Value Fund: N/A%;
Aggressive Growth Fund: N/A; Intermediate Bond Fund: 6.33%; Kentucky Tax-Free
Fund: 5.03%; and Tennessee Tax-Free Fund: N/A%.

Each Tax-Free Fund's tax-equivalent yield is the rate an investor
would have to earn from a fully taxable investment after taxes to equal a Tax-
Free Fund's tax-free yield. Tax-equivalent yields are calculated by dividing a
Tax-Free Fund's yield by the result of one minus a stated combined Federal and
state tax rate. (If only a portion of a Tax-Free Fund's yield was tax-exempt,
only that portion is adjusted in the calculation.) For the 30-day period ended
February 29, 1996, the tax-equivalent yields for the Kentucky Tax-Free Fund and
the Tennessee Tax-Free Fund were 7.33% and N/A, respectively.

At any time in the future, yield and total return may be higher or
lower than past yields and there can be no assurance that any historical results
will continue.

Investors in the Funds are specifically advised that share prices,
expressed as the net asset values per share, will vary just as yield will vary.

CALCULATION OF TOTAL RETURN

Total Return is a measure of the change in value of an investment in a
Fund over the period covered, assuming the investor paid the current maximum
applicable sales charge on the investment and that any dividends or capital
gains distributions were reinvested in the Fund immediately rather than paid to
the investor in cash. The formula for calculating Total Return includes four
steps: (1) adding to the total number of shares purchased by a hypothetical
$1,000 investment in the Fund all additional shares which would have been
purchased if all dividends and distributions paid or distributed during the
period had been immediately reinvested; (2) calculating the value of the
hypothetical initial investment of $1,000 as of the end of the period by
multiplying the total number of shares owned at the end of the period by the net
asset value per share on the last trading day of the period; (3) assuming
redemption at the end of the period; and (4) dividing this account value for the
hypothetical investor by the initial $1,000 investment and analyzing the result
for periods of less than one year. For the period ended February 29, 1996, the
Funds' total returns were as follows: Growth/Value Fund: 13.40%; Aggressive
Growth Fund: 5.40%; Intermediate Bond Fund: 2.40%; Kentucky Tax-Free Fund:
5.55%; and Tennessee Tax-Free Fund: N/A

CALCULATION OF DISTRIBUTION RATE

The Funds may also publish a distribution rate in investor
communications preceded or accompanied by a copy of the current Prospectus. The
current distribution rate for a Fund will be calculated by dividing the maximum
offering price per share into the annualization of the total distributions made
by the Fund during the same thirty-day period. The current distribution rate
may differ from current yield because the distribution rate may contain items of
capital gain and other items of income, while yield reflects only earned
interest and dividend items of income. In each case, the yield, distribution
rates and total return figures will reflect all recurring charges against Fund
income and will assume the payment of the maximum sales load. For the 30-day
period ended February 29, 1996, the Funds' distribution rates were as follows:
Growth/Value Fund: N/A; Aggressive Growth Fund: N/A; Intermediate Bond Fund:
6.33%; Kentucky Tax-Free Fund: 5.03%; and Tennessee Tax-Free Fund: N/A

PERFORMANCE COMPARISONS

YIELD AND TOTAL RETURN. From time to time, performance information
for the Funds showing their average annual total return and/or yield may be
included in advertisements or in information furnished to present or prospective
shareholders and the ranking of those performance figures relative to such
figures for

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<PAGE>

groups of mutual funds categorized by Lipper Analytical Services as having the
same investment objectives may be included in advertisements.

Total return and/or yield may also be used to compare the performance
of the Funds against certain widely acknowledged standards or indices for stock
and bond market performance. The Standard & Poor's Composite Index of 500
Stocks (the "S&P 500") is a market value-weighted and unmanaged index showing
the changes in the aggregate market value of 500 Stocks relative to the base
period 1941-43. The S&P 500 is composed almost entirely of common stocks of
companies listed on the New York Stock Exchange, although the common stocks of a
few companies listed on the American Stock Exchange or traded over-the-counter
are included. The 500 companies represented include 400 industrial, 60
transportation and 40 financial services concerns. The S&P 500 represents about
80% of the market value of all issues traded on the New York Stock Exchange.

The NASDAQ-OTC Price Index (the "NASDAQ Index") is a market value-
weighted and unmanaged index showing the changes in the aggregate market value
of approximately 3,500 stocks relative to the base measure of 100.00 on February
5, 1971. The NASDAQ Index is composed entirely of common stocks of companies
traded over-the-counter and often through the National Association of Securities
Dealers Automated Quotations ("NASDAQ") system. Only those over-the-counter
stocks having only one market maker or traded on exchanges are excluded.

The Shearson Lehman Government Bond Index (the "SL Government Index")
is a measure of the market value of all public obligations of the U.S. Treasury;
all publicly issued debt of all agencies of the U.S. Government and all quasi-
federal corporations; and all corporate debt guaranteed by the U.S. Government.
Mortgage backed securities, flower bonds and foreign targeted issues are not
included in the SL Government Index.

The Shearson Lehman Government/Corporate Bond Index (the "SL
Government/Corporate Index") is a measure of the market value of approximately
5,300 bonds with a face value currently in excess of $1.3 trillion. To be
included in the SL Government/Corporate Index, an issue must have amounts
outstanding in excess of $1 million, have at least one year to maturity and be
rated "Baa" or higher ("investment grade") by a nationally recognized
statistical rating agency.

ALL FUNDS. Current yields or performance will fluctuate from time to
time and are not necessarily representative of future results. Accordingly, a
Fund's yield or performance may not provide for comparison with bank deposits or
other investments that pay a fixed return for a stated period of time. Yield
and performance are functions of quality, composition, and maturity, as well as
expenses allocated to a Fund.

ADDITIONAL INFORMATION

ORGANIZATION AND DESCRIPTION OF SHARES

The Company was incorporated under the laws of the State of Maryland
on June 20, 1995. A copy of the company's Charter is on file with the
Department of Assessments and Taxation of the State of Maryland. The Charter
authorizes the Board of Directors to issue shares of common stock, par value
$.001 per share. The Company presently has seven series of shares which
represent interests in the Growth/Value Fund, the Aggressive Growth Fund, the
Fixed Income Fund (presently being marketed as the Intermediate Bond Fund), the
Kentucky Tax-Free Fund, the Tennessee Tax-Free Fund, the Money Market Fund and
the International Fund (which is not currently offered). The Company's Articles
of Incorporation authorize the Board of Directors to classify or reclassify any
unissued shares of the Company into one or more additional series.

Shares have no subscription, preemptive, conversion or exchange
rights. When issued for payment as described in the Prospectus and this
Statement of Additional Information, the shares will be fully paid and non-
assessable. In the event of a liquidation or dissolution of the Company,
shareholders of a Fund

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<PAGE>

are entitled to receive the assets available for distribution belonging to that
Fund, and a proportionate distribution, based upon the relative asset values of
the respective Funds, of any general assets not belonging to any particular Fund
which are available for distribution.

As described in the text of the Prospectus following the caption
"GENERAL INFORMATION -- Description of the Company and its Shares," shares of
the Company are entitled to one vote per share (with proportional voting for
fractional shares) on such matters as shareholders are entitled to vote.
Shareholders vote as a single class on all matters except (i) when required by
the 1940 Act, shares shall be voted by individual series, and (ii) when the
Directors have determined that the matter affects only the interests of one or
more series, then only shareholders of such series shall be entitled to vote
thereon. There will normally be no meetings of shareholders for the purposes of
electing Directors unless and until such time as less than a majority of the
Directors have been elected by the shareholders, at which time the Directors
then in office will call a shareholders' meeting for the election of Directors.
If requested to do so by the holders of at least 10% of the Company's
outstanding shares, a shareholder meeting will be called for the purpose of
voting upon the removal of a director or directors. Except as set forth above,
the Directors shall continue to hold office and may appoint their successors.

MISCELLANEOUS

The Company may include information in its Annual Reports and Semi-
Annual Reports to shareholders that (1) describes general economic trends, (2)
describes general trends within the financial services industry or the mutual
fund industry, (3) describes past or anticipated portfolio holdings for one or
more of the Funds within the Company, or (4) describes investment management
strategies for such Funds. Such information is provided to inform shareholders
of the activities of the Company for the most recent fiscal year or half-year
and to provide the views of the Adviser and M&A regarding expected trends and
strategies.

The Company is registered with the Commission as a non-diversified
management investment company. Such registration does not involve supervision
by the Commission of the management or policies of the Company.

As used in the Prospectus and in this Statement of Additional
Information, "assets belonging to a Fund" means the consideration received by
the Company upon the issuance or sale of shares in that Fund, together with all
income, earnings, profits and proceeds derived from the investment thereof,
including any proceeds from the sale, exchange, or liquidation of such
investments, and any funds or payments derived from any reinvestment of such
proceeds, and any general assets of the Company not readily identified as
belonging to a particular Fund that are allocated to that Fund by the Company's
Board of Directors. The Board of Directors may allocate such general assets in
any manner it deems fair and equitable. It is anticipated that the factor that
will be used by the Board of Directors in making allocations of general assets
to particular Funds will be the relative net assets of the respective Funds at
the time of allocation. Assets belonging to a particular Fund are charged with
the direct liabilities and expenses in respect of that Fund, and with a share of
the general liabilities and expenses of the Company not readily identified as
belonging to a particular Fund that are allocated to that Fund in proportion to
the relative net assets of the respective Funds at the time of allocation. The
timing of allocations of general assets and general liabilities and expenses of
the Company to particular Funds will be determined by the Board of Directors of
the Company and will be in accordance with generally accepted accounting
principles. Determinations by the Board of Directors of the Company as to the
timing of the allocation of general liabilities and expenses and as to the
timing and allocable portion of any general assets with respect to a particular
Fund are conclusive.

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

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<PAGE>

The Code of Ethics of the Funds prohibits all affiliated personnel
from engaging in personal investment activities which compete with or attempt to
take advantage of the Funds' planned portfolio transactions. The objective of
the Code of Ethics of the Funds is that their operations be carried out for the
exclusive benefit of the Funds' shareholders. The Funds maintain careful
monitoring of compliance with the Code of Ethics.

[As of March 1, 1996 the directors and officers of the company, as a
group, owned less than 1% of the outstanding shares of any Fund.]

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

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

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<PAGE>

APPENDIX A

CORPORATE DEBT RATINGS

MOODY'S INVESTORS SERVICE, INC. (MOODY'S)

Aaa: Bonds which are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to as
"gilt edge." Interest payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various protective elements
are likely to change, such changes as can be visualized are most unlikely to
impair the fundamentally strong position of such issues.

Aa: Bonds which are rated Aa are judged to be of high quality by all standards.
Together with the Aaa group they comprise what are generally known as high grade
bonds. They are rated lower than the best bonds because margins of protection
may not be as large as in Aaa securities or fluctuation of protective elements
may be of greater amplitude or there may be other elements present which make
the long-term risks appear somewhat larger than in Aaa securities.

A: Bonds which are rated A possess many favorable investment attributes and are
to be considered as upper medium grade obligations. Factors giving security to
principal and interest are considered adequate but elements may be present which
suggest a susceptibility to impairment sometime in the future.

Baa: Bonds which are rated Baa are considered as medium grade obligations,
i.e., they are neither highly protected nor poorly secured. Interest payments
and principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.

Ba: Bonds which are rated Ba are judged to have speculative elements; their
future cannot be considered as well assured. Often the protection of interest
and principal payments may be very moderate and thereby not well safeguarded
during both good and bad times over the future. Uncertainty of position
characterize bonds in this class.

B: Bonds which are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small.

Caa: Bonds which are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to principal or
interest.

Ca: Bonds which are rated Ca represent obligations which are speculative in a
high degree. Such issues are often in default or have other marked
shortcomings.

C: Bonds which are rated C are the lowest rated class of bonds and issues so
rated can be regarded as having extremely poor prospects of ever attaining any
real investment standing.

NOTE: Moody's applies numerical modifiers, 1, 2 and 3 in each generic rating
classification from Aa through B in its corporate bond rating system. The
modifier 1 indicates that the security ranks in the higher end of its generic
rating category; the modifier 2 indicates a mid-range ranking; and the modifier
3 indicates that the issue ranks in the lower end of its generic rating
category.

STANDARD & POOR'S RATINGS GROUP (S&P)

AAA: Debt rated AAA has the highest rating assigned by the S & P. Capacity to
pay interest and repay principal is extremely strong.

A-1
<PAGE>

AA: Debt rated AA has a very strong capacity to pay interest and repay
principal and differs from the higher rated issues only to a small degree.

A: Debt rated A has a strong capacity to pay interest and repay principal
although it is somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions than debt in higher rated categories.

BBB: Debt rated BBB is regarded as having an adequate capacity to pay interest
and repay principal. Whereas it normally exhibits adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay interest and repay principal for
debt in this category than in higher rated categories.

BB, B, CC, C: Debt rated BB, B, CCC, CC and C is regarded, on balance as
predominantly speculative with respect to capacity to pay interest and repay
principal in accordance with the terms of the obligation. BB indicates the
lowest degree of speculation and C the highest degree of speculation. While
such debt will likely have some quality and protective characteristics, these
are outweighed by large uncertainties or major risk exposures to adverse
conditions.

BB: Debt rated BB has less near-term vulnerability to default than other
speculative issues. However, it faces major ongoing uncertainties or exposure
to adverse business, financial, or economic conditions which could lead to
inadequate capacity to meet timely interest and principal payments. The BB
rating category is also used for debt subordinated to senior debt that is
assigned an actual or implied BBB rating.

B: Debt rated B has a greater vulnerability to default but currently has the
capacity to meet interest payments and principal repayments. Adverse business,
financial, or economic conditions will likely impair capacity or willingness to
pay interest and repay principal. The B rating category is also used for debt
subordinated to senior debt that is assigned an actual or implied BB or BB-
rating.

CCC: Debt rated CCC has a currently identifiable vulnerability to default and
is dependent upon favorable business, financial, or economic conditions to meet
timely payment of interest and repayment of principal. In the event of adverse
business, financial or economic conditions, it is not likely to have the
capacity to pay interest and repay principal. The CCC rating category is also
used for debt subordinated to senior debt that is assigned an actual or implied
B or B- rating.

CC: The rating CC is typically applied to debt subordinated to senior debt that
is assigned an actual or implied CCC rating.

C: The rating C is typically applied to debt subordinated to senior debt which
is assigned an actual or implied CCC- debt rating. The C rating may be used to
cover a situation where a bankruptcy has been filed but debt service payments
are continued.

CI: The rating CI is reserved for income bonds on which no interest is being
paid.

D: Debt rated D is in payment default. The D rating category is used when
interest payments or principal payments are not made on the date due even if the
applicable grace period has not expired, unless S&P believes that such payments
will be made during such grace period. The D rating also will be used upon the
filing of a bankruptcy petition of debt service payments are jeopardized.

NOTE: Plus (+) or Minus (-): The ratings from AA to CCC may be modified by the
addition of a plus or minus sign to show relative standing within the major
categories.

S&P applies numerical modifiers (1, 2, and 3) with respect to bonds
rated Aa, A or Baa. The modifier 1 indicates that the bond being rated ranks in
the higher end of its generic rating category; the modifier 2 indicates a mid-
range ranking; and the modifier 3 indicates that the bond ranks in the lower end
of its generic rating category.

A-2
<PAGE>

PREFERRED STOCK RATINGS

The following summarizes the three highest ratings used by Moody's for
preferred stock:

"aaa" An issue which is rated "aaa" is considered to be a top-quality
preferred stock. This rating indicates good asset protection and the
least risk of dividend impairment within the universe of preferred
stocks.

"aa" An issue which is rated "aa" is considered a highgrade preferred
stock. This rating indicates that there is a reasonable assurance
that earnings and asset protection will remain relatively well
maintained in the foreseeable future.

"a" An issue which is rated "a" is considered to be an upper-medium
grade preferred stock. While risks are judged to be somewhat greater
than in the "aaa" and "aa" classification, earnings and asset
protection are, nevertheless, expected to be maintained at adequate
levels.

The following summarizes the three highest ratings used by S &P for
preferred stock:

"AAA" This is the highest rating that may be assigned by S &P to a
preferred stock issue and indicates an extremely strong capacity to
pay the preferred stock obligations.

"AA" A preferred stock issue rated "AA" also qualifies as a high-
quality fixed income security. The capacity to pay preferred stock
obligations is very strong, although not as overwhelming as for issues
rated "AAA".

"A" An issue rated "A" is backed by a sound capacity to pay the
preferred stock obligations, although it is somewhat more susceptible
to the adverse effects of changes in circumstances and economic
conditions.

The nationally recognized statistical rating organizations (individually,
an "NRSRO") that may be utilized by the Adviser with regard to portfolio
investments for the Money Market Fund are Moody's, S&P, Duff & Phelps, Inc.
("Duff"), Fitch Investors Service, Inc. ("Fitch"), IBCA Limited and its
affiliate, IBCA Inc. (collectively, "IBCA"), and Thomson BankWatch, Inc.
("Thomson"). Set forth below is a description of the relevant ratings of each
such NRSRO. The NRSROs that may be utilized by the Adviser and the description
of each NRSRO's ratings is as of the date of this Statement of Additional
Information, and may subsequently change.

LONG-TERM DEBT RATINGS (may be assigned, for example, to corporate and
municipal bonds)

Description of the five highest long-term debt ratings by Moody's (Moody's
applies numerical modifiers (E.G., 1, 2, and 3) in each rating category to
indicate the security's ranking within the category):

Aaa. Bonds which are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to as
"gilt edged." Interest payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various protective elements
are likely to change, such changes as can be visualized are most unlikely to
impair the fundamentally strong position of such issues.

Aa. Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally known
as high grade bonds. They are rated lower than the best bonds because margins
of protection may not be as large as in Aaa securities or fluctuation of
protective elements may be of greater amplitude or there may be other elements
present which make the long-term risk appear somewhat larger than in Aaa
securities.

A-3
<PAGE>

A. Bonds which are rated A possess many favorable investment attributes
and are to be considered as upper-medium-grade obligations. Factors giving
security to principal and interest are considered adequate, but elements may be
present which suggest a susceptibility to impairment some time in the future.

Baa. Bonds which are rated Baa are considered as medium grade obligations,
I.E., they are neither highly protected nor poorly secured. Interest payments
and principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.

Ba. Bonds which are rated Ba are judged to have speculative elements -
their future cannot be considered as well assured. Often the protection of
interest and principal payments may be very moderate and thereby not well
safeguarded during both good and bad times in the future. Uncertainty of
position characterizes bonds in this class.

Description of the five highest long-term debt ratings by S&P (S&P may
apply a plus (+) or minus (-) to a particular rating classification to show
relative standing within that classification):

AAA. Debt rated AAA has the highest rating assigned by S&P. Capacity to
pay interest and repay principal is extremely strong.

AA. Debt rated AA has a very strong capacity to pay interest and repay
principal and differs from the higher rated issues only in small degree.

A. Debt rated A has a strong capacity to pay interest and repay principal
although it is somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions than debt in higher rated categories.

BBB. Debt rated BBB is regarded as having an adequate capacity to pay
interest and repay principal. Whereas it normally exhibits adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay interest and repay principal for
debt in this category than in higher rated categories.

BB. Debt rated BB is regarded, on balance, as predominately speculative
with respect to capacity to pay interest and repay principal in accordance with
the terms of the obligation. While such debt will likely have some quality and
protective characteristics, these are outweighed by large uncertainties or major
risk exposure to adverse conditions.

Description of the three highest long-term debt ratings by Duff:

AAA. Highest credit quality. The risk factors are negligible being only
slightly more than for risk-free U.S. Treasury debt.

AA+, AA, AA-. High credit quality protection factors are strong. Risk
is modest but may vary slightly from time to time because of economic
conditions.

A+, A,A-. Protection factors are average but adequate. However, risk
factors are more variable and greater in periods of economic stress.

Description of the three highest long-term debt ratings by Fitch (plus or
minus signs are used with a rating symbol to indicate the relative position of
the credit within the rating category):

AAA. Bonds considered to be investment grade and of the highest credit
quality. The obligor has an exceptionally strong ability to pay interest
and repay principal, which is unlikely to be affected by reasonably
foreseeable events.

A-4
<PAGE>

AA. Bonds considered to be investment grade and of very high credit
quality. The obligor's ability to pay interest and repay principal is very
strong, although not quite as strong as bonds rated "AAA." Because bonds
rated in the "AAA" and "AA" categories are not significantly vulnerable to
foreseeable future developments, short-term debt of these issues is
generally rated "[-]+."

A. Bonds considered to be investment grade and of high credit quality.
The obligor's ability to pay interest and repay principal is considered to
be strong, but may be more vulnerable to adverse changes in economic
conditions and circumstances than bonds with higher ratings.

IBCA's description of its three highest long-term debt ratings:

AAA. Obligations for which there is the lowest expectation of investment
risk. Capacity for timely repayment of principal and interest is
substantial. Adverse changes in business, economic or financial conditions
are unlikely to increase investment risk significantly.

AA. Obligations for which there is a very low expectation of investment
risk. Capacity for timely repayment of principal and interest is
substantial. Adverse changes in business, economic, or financial
conditions may increase investment risk albeit not very significantly.

A. Obligations for which there is a low expectation of investment risk.
Capacity for timely repayment of principal and interest is strong, although
adverse changes in business, economic or financial conditions may lead to
increased investment risk.

SHORT-TERM DEBT RATINGS (may be assigned, for example, to commercial paper,
master demand notes, bank instruments, and letters of credit)

Moody's description of its three highest short-term debt ratings:

Prime-1. Issuers rated Prime-1 (or supporting institutions) have a
superior capacity for repayment of senior short-term promissory obligations.
Prime-1 repayment capacity will normally be evidenced by many of the following
characteristics:

- Leading market positions in well-established industries.

- High rates of return on funds employed.

- Conservative capitalization structures with moderate reliance on debt
and ample asset protection.

- Broad margins in earnings coverage of fixed financial charges and high
internal cash generation.

- Well-established access to a range of financial markets and assured
sources of alternate liquidity.

Prime-2. Issuers rated Prime-2 (or supporting institutions) have a strong
capacity for repayment of senior short-term debt obligations. This will
normally be evidenced by many of the characteristics cited above but to a lesser
degree. Earnings trends and coverage ratios, while sound, may be more subject
to variation. Capitalization characteristics, while still appropriate, may be
more affected by external conditions. Ample alternate liquidity is maintained.

Prime-3. Issuers rated Prime-3 (or supporting institutions) have an
acceptable ability for repayment of senior short-term obligations. The effect
of industry characteristics and market compositions may be more pronounced.
Variability in earnings and profitability may result in changes in the level of
debt protection measurements and may require relatively high financial leverage.
Adequate alternate liquidity is maintained.

A-5
<PAGE>

S&P's description of its three highest short-term debt ratings:

A-1. This designation indicates that the degree of safety regarding timely
payment is strong. Those issues determined to have extremely strong safety
characteristics are denoted with a plus sign (+).

A-2. Capacity for timely payment on issues with this designation is
satisfactory. However, the relative degree of safety is not as high as for
issues designated "A-1."

A-3. Issues carrying this designation have adequate capacity for timely
payment. They are, however, more vulnerable to the adverse effects of
changes in circumstances than obligations carrying the higher designations.

Duff's description of its five highest short-term debt ratings (Duff
incorporates gradations of "1+" (one plus) and "1-" (one minus) to assist
investors in recognizing quality differences within the highest rating
category):

Duff 1+. Highest certainty of timely payment. Short-term liquidity,
including internal operating factors and/or access to alternative sources
of funds, is outstanding, and safety is just below risk-free U.S. Treasury
short-term obligations.

Duff 1. Very high certainty of timely payment. Liquidity factors are
excellent and supported by good fundamental protection factors. Risk
factors are minor.

Duff 1-. High certainty of timely payment. Liquidity factors are strong
and supported by good fundamental protection factors. Risk factors are
very small.

Duff 2. Good certainty of timely payment. Liquidity factors and company
fundamentals are sound. Although ongoing funding needs may enlarge total
financing requirements, access to capital markets is good. Risk factors
are small.

Duff 3. Satisfactory liquidity and other protection factors qualify issue
as to investment grade.

Risk factors are larger and subject to more variation. Nevertheless,
timely payment is expected.

Fitch's description of its four highest short-term debt ratings:

F-1+. Exceptionally Strong Credit Quality. Issues assigned this rating
are regarded as having the strongest degree of assurance for timely
payment.

F-1. Very Strong Credit Quality. Issues assigned this rating reflect an
assurance of timely payment only slightly less in degree than issues rated
F-1+.

F-2. Good Credit Quality. Issues assigned this rating have a satisfactory
degree of assurance for timely payment, but the margin of safety is not as
great as for issues assigned F-1+ or F-1 ratings.

F-3. Fair Credit Quality. Issues assigned this rating have
characteristics suggesting that the degree of assurance for timely payment
is adequate, however, near-term adverse changes could cause these
securities to be rated below investment grade.

IBCA's description of its three highest short-term debt ratings:

A+. Obligations supported by the highest capacity for timely repayment.

A1. Obligations supported by a very strong capacity for timely repayment.

A-6
<PAGE>

A2. Obligations supported by a strong capacity for timely repayment,
although such capacity may be susceptible to adverse changes in business,
economic or financial conditions.

SHORT-TERM LOAN/MUNICIPAL NOTE RATINGS

Moody's description of its two highest short-term loan/municipal note
ratings:

MIG-1/VMIG-1. This designation denotes best quality. There is present
strong protection by established cash flows, superior liquidity support or
demonstrated broad-based access to the market for refinancing.

MIG-2/VMIG-2. This designation denotes high quality. Margins of
protection are ample although not so large as in the preceding group.

S&P's description of its two highest municipal note ratings:
SP-1. Very strong or strong capacity to pay principal and interest. Those
issues determined to possess overwhelming safety characteristics will be
given a plus (+) designation.

SP-2. Satisfactory capacity to pay principal and interest.

SHORT-TERM DEBT RATINGS

Thomson BankWatch, Inc. ("TBW") ratings are based upon a qualitative and
quantitative analysis of all segments of the organization including, where
applicable, holding company and operating subsidiaries.

BankWatch Ratings do not constitute a recommendation to buy or sell
securities of any of these companies. Further, BankWatch does not suggest
specific investment criteria for individual clients.

The TBW Short-Term Ratings apply to commercial paper, other senior
short-term obligations and deposit obligations of the entities to which the
rating has been assigned.

The TBW Short-Term Ratings apply only to unsecured instruments that have a
maturity of one year or less.

The TBW Short-Term Ratings specifically assess the likelihood of an
untimely payment of principal or interest.

TBW-1. The highest category; indicates a very high degree of likelihood
that principal and interest will be paid on a timely basis.

TBW-2. The second highest category; while the degree of safety regarding
timely repayment of principal and interest is strong, the relative degree of
safety is not as high as for issues rated "TBW-1".

TBW-3. The lowest investment grade category; indicates that while more
susceptible to adverse developments (both internal and external) than
obligations with higher ratings, capacity to service principal and interest in a
timely fashion is considered adequate.

TBW-4. The lowest rating category; this rating is regarded as
non-investment grade and therefore speculative.

A-7
<PAGE>

COMMERCIAL PAPER

DESCRIPTION OF STANDARD AND POOR'S CORPORATION'S COMMERCIAL PAPER RATINGS:

An S&P commercial paper rating is a current assessment of the likelihood of
timely payment of debt having an original maturity of no more than 365 days.
Ratings are graded into four categories, ranging from "A" for the highest
quality obligations to "D" for the lowest. The top category is as follows:

A--Issues assigned this highest rating are regarded as having the greatest
capacity for timely payment. Issues in this category are delineated with the
numbers 1, 2 and 3 to indicate the relative degree of safety.

A-1--This designation indicates that the degree of safety regarding timely
payment is either overwhelming or very strong. Those issues determined to
possess overwhelming safety characteristics are denoted with a plus (+) sign
designation.

DESCRIPTION OF MOODY'S INVESTORS SERVICE, INC.'S COMMERCIAL PAPER RATINGS:

The term "commercial paper" as used by Moody's means promissory obligations not
having an original maturity in excess of nine months. Moody's commercial paper
ratings are opinions of the ability of issuers to repay punctually promissory
obligations not having an original maturity in excess of nine months. Moody's
employs the following designation, judged to be investment grade, to indicate
the relative repayment capacity for rated issuers.

PRIME-1 - Highest commercial paper rating assigned by Moody's. Issuers rated
Prime-1 (or related supporting institutions) are deemed to have a superior
capacity for repayment of short term promissory obligations. Repayment capacity
of Prime-1 issuers is normally evidenced by the following characteristics:

1) Leading market positions in well-established industries;
2) High rates of return on funds employed;
3) Conservative capitalization structures with moderate reliance on
debt and ample asset protection;
4) Broad margins in earnings coverage of fixed financial charges and
high internal cash generation; and
5) Well-established access to a range of financial markets and
assured sources of alternative liquidity.

In assigning ratings to issuers whose commercial paper obligations are supported
by the credit of another entity or entities, Moody's evaluates the financial
strength of the affiliated corporations, commercial banks, insurance companies,
foreign governments or other entities, but only as one factor in the total
rating assessment.

DESCRIPTION OF FITCH INVESTORS SERVICE, INC.'S COMMERCIAL PAPER RATINGS:

FITCH-1--(Highest Grade) Commercial paper assigned this rating is regarded as
having the strongest degree of assurance for timely payment.

FITCH-2--(Very Good Grade) Issues assigned this rating reflect an assurance of
timely payment only slightly less in degree than the strongest issues.

DESCRIPTION OF DUFF & PHELPS, INC.'S COMMERCIAL PAPER RATINGS:

DUFF-1 -- Very high certainty of timely payment. Liquidity factors are
excellent and supported by strong fundamental protection factors. Risk factors
are minor.

A-8
<PAGE>

DUFF-2 -- Good certainty of timely payment. Liquidity factors and company
fundamentals are sound. Although ongoing internal funds needs may enlarge total
financing requirements, access to capital markets is good. Risk factors are
small.

BONDS

DESCRIPTION OF STANDARD & POOR'S CORPORATION'S HIGH-GRADE CORPORATE BOND
RATINGS:

AAA -- Debt rated `AAA' has the highest rating assigned by Standard & Poor's.
Capacity to pay interest and repay principal is extremely strong.

AA -- Debt rated `AA' has a very strong capacity to pay interest and repay
principal and differs from highest rated debt issues only in small degree.

A -- Debt rated `A' has a strong capacity to pay interest and repay principal,
although it is somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions.

DESCRIPTION OF MOODY'S INVESTORS SERVICE, INC.'S HIGH-GRADE CORPORATE BOND
RATINGS:

AAA -- Bonds which are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to as
`gilt edge.' Interest payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various protective elements
are likely to change, such changes as can be visualized are most unlikely to
impair the fundamentally strong position of such issues.

AA -- Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally known
as high grade bonds. They are rated lower than the best bonds because margins
of protections may not be as large as in Aaa securities or fluctuation of
protective elements may be of greater amplitude or there may be other elements
present which make the long-term risks appear somewhat larger than Aaa
securities.

A -- Bonds which are rated A possess many favorable investment attributes and
are to be considered as upper medium grade obligations. Factors giving security
to principal and interest may be present which suggest a susceptibility to
impairment sometime in the future.

DESCRIPTION OF DUFF AND PHELPS INC.'S HIGH-GRADE CORPORATE BOND RATINGS:

AAA -- Highest credit quality. The risk factors are negligible, being only
slightly more than for risk-free U.S. Treasury debt.

AA+, AA, AA- -- High credit quality. Protection factors are strong. Risk is
modest but may vary slightly from time to time because of economic conditions.

A+, A, A- -- Protection factors are average but adequate. However, risk factors
are more variable and greater in periods of economic stress.

DESCRIPTION OF FITCH INVESTORS SERVICE, INC.'S HIGH-GRADE CORPORATE BOND
RATINGS:

AAA -- rated bonds are considered to be investment grade and are of the highest
quality. The obligor has an extraordinary ability to pay interest and repay
principal, which is unlikely to be affected by foreseeable events.

AA -- rated bonds are considered to be investment grade and of high quality.
The obligor's ability to pay interest and repay principal, while very strong, is
somewhat less than for AAA rated securities or more subject to change over the
term of the issue.

A-9
<PAGE>

APPENDIX B
FINANCIAL STATEMENTS

TRANS ADVISER FUNDS, INC.

Statements of Assets and Liabilities

September 11, 1995

Kentucky Tennessee Money
Tax-Free Tax-Free Market
-------- --------- -------
Assets:
Cash $ 1,000 1,000 100,000
Deferred organization costs 26,465 26,465 26,465
------- ------ -------
Total 27,465 27,465 126,465
------- ------ -------
Liabilities:
Accrued organization costs 26,465 26,465 26,465
------- ------ -------
Net assets $ 1,000 1,000 100,000
------- ------ -------
------- ------ -------
Shares outstanding 100 100 100,000
------- ------ -------
------- ------ -------
Net asset value per share $ 10.00 10.00 1.00
------- ------ -------
------- ------ -------

See notes to statements of assets and liabilities.
(Continued)

B-1

<PAGE>

TRANS ADVISER FUNDS, INC.

Statements of Assets and Liabilities (Continued)

September 11, 1995

Growth/ Aggressive Intermediate
Value Growth Bond
------ ---------- ------------
Assets:
Cash $ 1,000 1,000 1,000
Deferred organization costs 26,465 26,465 26,465
------- ------ -------
Total 27,465 27,465 27,465
------- ------ -------

Liabilities:
Accrued organization costs 26,465 26,465 26,465
------- ------ -------
Net assets $ 1,000 1,000 1,000
------- ------ -------
------- ------ -------
Shares outstanding 100 100 100
------- ------ -------
------- ------ -------
Net asset value per share $ 10.00 10.00 10.00
------- ------ -------
------- ------ -------

See notes to statements of assets and liabilities.

B-2

<PAGE>

TRANS ADVISER FUNDS, INC.

Notes to Statements of Assets and Liabilities

September 11, 1995

(1) GENERAL

(A) GENERAL
Trans Adviser Funds, Inc. (the Company) was incorporated on June 20, 1995,
in the State of Maryland and is registered as a open-ended management
investment company under the Investment Company Act of 1940, as amended.
The Company currently consists of six separate investment funds,
Growth/Value Fund, Aggressive Growth Fund, Intermediate Bond Fund,
Kentucky Tax-Free Fund, Tennessee Tax-Free Fund and Money Market Fund
(each a "Fund"). As of September 11, 1995, the Company and each Fund has
had no operations other than organizational matters and the issuance of
100 shares of each Funds' common stock for $1,000 (100,000 shares for
$100,000 in Money Market Fund) to Forum Financial Corp. The Company's
financial statements are prepared in accordance with generally accepted
accounting principles.

(B) ORGANIZATION COSTS
Costs incurred by the Company in connection with its organization, and the
organization of the Funds, have been deferred and will be amortized on a
straight-line basis from the date on which each Fund commences operation
of its investment activities over a five-year period. The accrued
organization costs are payable to Forum Financial Services, Inc.
("Forum"). If any of the initial shares of the Company are redeemed by
any shareholder thereof during the period of amortization of organization
costs, the redemption proceeds will be reduced by the pro-rate amount of
unamortized organization costs based on the number of initial shares
being redeemed to the number of initial shares outstanding at the time of
the redemption.

(2) INVESTMENT ADVISORY, ADMINISTRATION AND OTHER SERVICES

The investment adviser to the Company is Trans Financial Bank, N.A. (the
"Adviser"). Pursuant to an Investment Advisory Agreement, the Adviser
receives a monthly advisory fee of .20% per annum of the Money Market
Fund's average daily assets, 1.00% per annum of each of the Growth/Value
and Aggressive Growth Fund's average daily net assets and .40% per annum
of the Intermediate Bond Fund's average daily net assets and of Kentucky
Tax-Free Fund's and Tennessee Tax Free Fund's average daily assets.

Forum serves as the Company's administrator and is compensated for those
services at an annual rate of .15% of the average daily net assets of the
Fund, subject to an annual minimum fee of $25,000 per Fund. Forum also
acts as the Company's distributor pursuant to a separate Distribution
Agreement with the Company. Forum receives no compensation under that
agreement.

Forum Financial Corp. serves as the Company's transfer agent and dividend
disbursing agent and is compensated for those services by each Fund in
the amount of $12,000 per year, plus certain shareholder account fees.
Forum Financial Corp. also performs portfolio accounting for the Company
and is compensated for those services in the amount of $36,000 per year,
plus certain amounts based upon the number and types of portfolio
transactions. Forum Financial Corp. and Forum are affiliated companies.

B-3

<PAGE>

Independent Auditors' Report

The Board of Directors and Shareholders
Trans Adviser Funds, Inc.:

We have audited the accompanying statements of assets and liabilities of
Growth/Value Fund, Aggressive Growth Fund, Intermediate Bond Fund, Kentucky Tax-
Free Fund, Tennessee Tax-Free Fund and Money Market Fund, portfolios of Trans
Adviser Funds, Inc. (the Company) as of September 11, 1995. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

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

In our opinion, the statements of assets and liabilities referred to above
presents fairly, in all material respects, the financial position of
Growth/Value Fund, Aggressive Growth Fund, Intermediate Bond Fund, Kentucky Tax-
Free Fund, Tennessee Tax-Free Fund and Money Market Fund, at September 11, 1995,
in conformity with generally accepted accounting principles.

/s/ KMPG Peat Marwick LLP

Boston, Massachusetts
September 11, 1995

B-4

<PAGE>

PART C. OTHER INFORMATION

ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS

(a) Financial statements.

In Part A:

None.

In Part B:

Statement of Assets and Liabilities as of September 11,
1995.

In Part C:

Unaudited Financial Statements for the period ended
February 29, 1996.

(b) Exhibits

1.(a) Articles of Incorporation of Registrant are
incorporated herein by reference to Exhibit 1 to the
Registrant's Registration Statement on Form N-1A filed
on July 7, 1995.

(b) Articles of Amendment and Restatement are
incorporated herein by reference to Exhibit 1(b) to
Pre-Effective Amendment No. 2 to Registrant's
Registration Statement on Form N-1A filed on
September 18, 1995.

2. Amended By-laws are incorporated herein by reference to
Exhibit 2 to Pre-Effective Amendment No. 1 to the
Registrant's Registration Statement on Form N-1A filed
on August 25, 1995.

3. None.

4. Form of Stock Certificate is are incorporated herein
by reference to Exhibit 4 to Pre-Effective Amendment
No. 2 to Registrant's Registration Statement on Form N-
1A filed on September 18, 1995.

5. (a)(i) Form of Advisory Agreement between the Registrant and
Trans Financial Bank, N.A. is incorporated herein by
reference to Exhibit 5(a)(i) to Pre-Effective Amendment
No. 2 to Registrant's Registration Statement on Form N-
1A filed on September 18, 1995.

(a)(ii) Form of Sub-Advisory Agreement between Trans Financial
Bank, N.A. and Mastrapasqua & Associates, Inc. is
incorporated herein by reference to Exhibit 5(a)(ii) to
Pre-Effective Amendment No. 2 to

C-1
<PAGE>

Registrant's Registration Statement on Form N-1A filed
on September 18, 1995.

6. Form of Distribution Agreement between the Registrant
and Forum Financial Services, Inc. are incorporated
herein by reference to Exhibit 6 to Pre-Effective
Amendment No. 2 to Registrant's Registration Statement
on Form N-1A filed on September 18, 1995.

7. None.

8. To be filed.

9. (a) Form of Administration Agreement between the Registrant
and Forum Financial Services, Inc. is incorporated
herein by reference to Exhibit 9(a) to Pre-Effective
Amendment No. 2 to Registrant's Registration Statement
on Form N-1A filed on September 18, 1995.

(b)(i) Form of Shareholder Service Plan is incorporated
herein by reference to Exhibit 9(b)(i) to Pre-Effective
Amendment No. 2 to Registrant's Registration Statement
on Form N-1A filed on September 18, 1995.

(b)(ii) Form of Shareholder Services Agreement is
incorporated herein by reference to Exhibit 9(b)(ii) to
Pre-Effective Amendment No. 2 to Registrant's
Registration Statement on Form N-1A filed on
September 18, 1995.

(c) Form of Transfer Agency Agreement between the
Registrant and Forum Financial Corp. is incorporated
herein by reference to Exhibit 9(c) to Pre-Effective
Amendment No. 2 to Registrant's Registration Statement
on Form N-1A filed on September 18, 1995.

(d) Form of Fund Accounting Agreement between the
Registrant and Forum Financial Corp. is incorporated
herein by reference to Exhibit 9(d) to Pre-Effective
Amendment No. 2 to Registrant's Registration Statement
on Form N-1A filed on September 18, 1995.

10. (a) Opinion of Venable, Baetjer and Howard is
incorporated herein by reference to Exhibit 10(a) to
Pre-Effective Amendment No. 2 to Registrant's
Registration Statement on Form N-1A filed on
September 18, 1995.

(b) Opinion of Kramer, Levin, Naftalis, Nessen, Kamin &
Frankel is incorporated herein by reference to Exhibit
10(b) to Pre-Effective Amendment No. 2 to Registrant's
Registration Statement on Form N-1A filed on
September 18, 1995.

(c) Opinions of Wyatt, Tarrant & Combs are incorporated
herein by reference to Exhibit 10(c) to Pre-Effective
Amendment No. 2 to

C-2
<PAGE>

Registrant's Registration Statement on Form N-1A filed
on September 18, 1995.

11. (a) Consent of Kramer, Levin, Naftalis, Nessen, Kamin &
Frankel is filed herewith.

(b) Consent of KPMG Peat Marwick LLP is filed herewith.

12. Unaudited Financial Statements for the period ended
February 29, 1996.

13. Investment Letters are incorporated herein by
reference to Exhibit 13 to Pre-Effective Amendment No.
2 to Registrant's Registration Statement on Form N-1A
filed on September 18, 1995.

14. None.

15. None.

16. Forms of performance computation are incorporated
herein by reference to Exhibit 16 to Pre-Effective
Amendment No. 2 to Registrant's Registration Statement
on Form N-1A filed on September 18, 1995.

17. Financial Data Schedules are filed herewith.

18. None.

ITEM 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT

None.

ITEM 26. NUMBER OF HOLDERS OF SECURITIES

Title of Class; Shares Number of Record Holders
($0.001 par value) as of December 31, 1995
------------------------

Money Market Fund 41

Growth/Value Fund 18

Aggressive Growth Fund 20

Intermediate Bond Fund 10

Kentucky Tax-Free Fund 14

Tennessee Tax-Free Fund 0

C-3
<PAGE>

ITEM 27. INDEMNIFICATION

(1) Under the terms of the Registrant's Articles of Incorporation, to
the fullest extent that limitations on the liability of directors and officers
are permitted by the Maryland General Corporation Law, no director or officer of
the corporation or its stockholders for damages. This limitation on liability
applies to events occurring at the time a person serves as a director or officer
of the corporation whether or not such person is a director or officer at the
time of any proceeding in which liability is asserted.

(2) The corporation shall indemnify and advance expenses to its
currently acting and its former directors to the fullest extent that
indemnification of directors is permitted by the Maryland General Corporation
Law. The corporation shall indemnify and advance expenses to its officers to
the same extent as its directors and to such further extent as is consistent
with law. The Board of Directors may, through a by-law, resolution or
agreement, make further provisions for indemnification of directors, officers,
employees and agents to the fullest extent permitted by the Maryland General
Corporation Law.

(3) No provision of this Article SEVENTH shall be effective (i) to
require a waiver of compliance with any provision of the Securities Act of 1933,
or of the Investment Company Act of 1940, or of any valid rule, regulation or
order of the Securities and Exchange Commission thereunder or (ii) to protect or
purport to protect any director or officer of the corporation against any
liability to the corporation or its stockholders to which he would otherwise be
subject by reason of willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of his office.

(4) References to the Maryland General Corporation Law in this
Article SEVENTH are to the law as from time to time amended. No amendment to
the Articles of Incorporation of the corporation shall affect any right of any
person under this Article SEVENTH based on any event, omission or proceeding
prior to such amendment.

(5) Under the terms of the Registrant's By-Laws, the corporation
shall indemnify its directors to the fullest extent that indemnification of
directors is permitted by the law. The corporation shall indemnify its officers
to the same extent as its directors and to such further extent as is consistent
with law. The corporation shall indemnify its directors and officers who while
serving as directors or officers also serve at the request of the corporation as
a director, officer, partner, trustee, employee, agent or fiduciary of another
corporation, partnership, joint venture, trust, other enterprise or employee
benefit plan to the same extent as its directors and, in the case of officers,
to such further extent as is consistent with law. The indemnification and other
rights provided by this Article shall continue as to a person who has ceased to
be a director or officer and shall inure to the benefit of the heirs, executors
and administrators of such a person. This Article shall not protect any such
person against any liability to the corporation or any stockholder thereof to
which such 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 his office ("disabling conduct").

C-4
<PAGE>

ITEM 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER

Describe any other business, profession, vocation or employment of a
substantial nature in which each investment adviser of the Registrant, and each
director, officer or partner of any such investment adviser, is or has been, at
any time during the past two fiscal years, engaged for his own account or in the
capacity of director, officer, employee, partner, or trustee.

Trans Financial Bank and Mastrapasqua & Associates provide advisory
services to the Registrant and its series. The directors and officers of Trans
Financial Bank and Mastrapasqua & Associates have held the following positions
of a substantial nature:

TRANS FINANCIAL BANK:

Name Position with Adviser Other Business
- ---- --------------------- ---------------

Douglas M. Lester Chairman of the Board, Chairman of the Board,
President and Chief President and Chief
Executive Officer Executive Officer,
Trans Financial, Inc.

Floyd H. Ellis Vice Chairman of the Vice Chairman of the
Board Board, Trans Financial,
Inc.; President, Warren
Rural Electric Co-op
Corporation; Farmer

Barry D. Bray Director, Executive Vice Director, Executive
President, and Chief Vice President and
Credit Officer Chief Credit Officer,
Trans Financial, Inc.;
Chief Credit Officer,
Trans Financial Bank,
F.S.B.; Director and
Chief Credit Officer,
Trans Financial Bank
Tennessee, N.A.

C-5
<PAGE>

Name Position with Adviser Other Business
- ---- --------------------- ---------------

Mary D. Cohron Director Director, Trans
Financial, Inc.; Owner
Greencastle Farms, Inc.

J. David Francis Director Director, Trans
Financial, Inc.;
Retired; Former Judge,
Circuit Court

Roy E. Gaddie Director Director, Trans
Financial, Inc.;
Retired; Business
Consultant

John B. Gaines Director Director, Trans
Financial, Inc.;
President, News
Publishing Company,
Master Printers, Inc.
and Daily News
Broadcasting

David B. Garvin Director Director, Trans
Financial, Inc.;
Chairman of the Board,
Camping World, Inc.

Wayne Gaunce Director Director, Trans
Financial, Inc.;
President, Gaunce
Management, Inc.,
Caveland, Inc.;
Director, Papa John's
International, Inc.

C.C. Howard Gray Director Director, Trans
Financial, Inc.;
President, James N.
Gray Construction Co.,
Inc.

C-6
<PAGE>

Name Position with Adviser Other Business
- ---- --------------------- ---------------

Charles A. Hardcastle Director Director, Trans
Financial, Inc.;
President, B.G.
Chemicals, Inc., B.G.
Paper Company,
Consolidated Sanitary
Supply; Owner,
Hardcastle Company,
Southland
Manufacturing, Ashley
Center, Inc., Shoppers
Warehouse, Inc. and Ky.
Wood Products

Carroll Knicely Director Director, Trans
Financial, Inc.;
President, Associated
Publications, Inc.;
Chairman, West Kentucky
Corporation; Real
estate developer

C. Cecil Martin Director Director, Trans
Financial, Inc.;
President, Center of
Insurance, Inc.

Harold T. Matthews Director and Region
President, Glasgow,
Kentucky

Joseph I. Medalie Director Director, Trans
Financial, Inc.;
Retired; Former Vice-
Chairman of the Board,
Fruit-of-the-Loom, Inc.

C-7
<PAGE>

Name Position with Adviser Other Business
- ---- --------------------- ---------------

James D. Scott Director Director, Trans
Financial, Inc.; Owner,
Scotty's Contracting
and Stone Co., Inc.

Charles M. Stewart Director Director, Trans
Financial, Inc.;
Retired; Business
Consultant

William B. Van Meter Director Director, Trans
Financial, Inc.;
Chairman, Van Meter
Insurance Agency, Inc.;
Owner, Van Meter
Instruments

Thomas R. Wallingford Director Director, Trans
Financial, Inc.;
Retired; Former
Chairman of the Board
and President, Kentucky
Community Bancorp, Inc.

Vince A. Berta Executive Vice President Executive Vice
President, Trans
Financial, Inc.;
Director, Trans
Financial Bank, F.S.B.

Tommy Cole Executive Vice President None

Dallas Layne Executive Vice President None
and Region Senior Loan
Officer

Peggy Loafman Executive Vice President None

Ron Szejner Executive Vice President Chief Trust Officer,
and Chief Trust Officer Trans Financial, Inc.

C-8
<PAGE>

Name Position with Adviser Other Business
- ---- --------------------- ---------------

Jay B. Simmons Senior Vice President Senior Vice President,
and Assistant Secretary General Counsel and
Secretary, Trans
Financial, Inc.,
Director, Trans
Financial Bank, F.S.B.

Bob Canada Region President None
Maysville, KY

Dan Stratton Region President, None
Pikeville, KY

Sam Bready Vice President Vice President, Trans
Financial Mortgage
Company

Denise Kelley Vice President Vice President, Trans
Financial Mortgage
Company

Mike Norris Vice President President, Trans
Financial Mortgage
Company

Jim Oliver Vice President Executive Vice
President, Trans
Financial Mortgage
Company

Edward R. Matthews Treasurer and Chief Treasurer and Chief
Financial Officer Financial Officer,
Trans Financial, Inc.;
Treasurer, Trans
Financial Bank
Tennessee, N.A., and
Trans Financial Bank,
F.S.B.

C-9
<PAGE>

Name Position with Adviser Other Business
- ---- --------------------- ---------------

Ron Pigeon Controller Controller, Trans
Financial, Inc., Trans
Financial Bank
Tennessee, N.A. and
Trans Financial Bank,
F.S.B.

Kim Witherspoon Secretary and Executive Assistant Secretary,
Administrative Officer Trans Financial, Inc.

Bill Wright Accounting Officer Accounting Officer,
Trans Financial Bank
Tennessee, N.A. and
Trans Financial Bank,
F.S.B.

MASTRAPASQUA & ASSOCIATES, INC.

Name Position with Sub-Adviser Other Business
- ---- ------------------------- ---------------

Frank Mastrapasqua President and Chief Director, Trans
Executive Officer Financial, Inc.; Vice
President, Management
Plus Associates, Inc.;
Affiliated with M&M
Partners, Inc.

Thomas A. Trantum Senior Vice President Secretary, Management
Plus Associates, Inc.;
Director, Phoenix
Ventures; Adjunct
Professor, Massey
Graduate School of
Business

ITEM 29. PRINCIPAL UNDERWRITERS

(a) Forum Financial Services, Inc., the Registrant's underwriter,
serves as underwriter to Norwest Funds, Norwest Select Funds, Schroder Capital
Funds, Inc., Stone Bridge Funds, Inc., Forum Funds, Inc., Sound Shore Fund,
Inc., The Milestone Funds, Monarch Funds and The Cutler Trust.

C-10
<PAGE>

(b) John Y. Keffer is President and Secretary of Forum Financial
Services, Inc. David R. Keffer is Vice President and Treasurer of Forum
Financial Services, Inc. Their business addresses are Two Portland Square,
Portland, Maine 04101.

ITEM 30. LOCATION OF ACCOUNTS AND RECORDS

The majority of the accounts, books and other documents required to be
maintained by Section 31(a) of the Investment Company Act of 1940 (the "1940
Act") and the Rules thereunder are maintained at the offices of Forum Financial
Services, Inc. and Forum Financial Corp., Two Portland Square, Portland, Maine
04101. The records required to be maintained under Rule 31a-1(b)(1) with
respect to journals of receipts and deliveries of securities and receipts and
disbursements of cash are maintained at the offices of the Registrant's
custodian, as listed under "Management of the Company - Custodian" in Part B to
this Registration Statement.

ITEM 31. MANAGEMENT SERVICES

Not applicable.

ITEM 32. UNDERTAKINGS

(1) Registrant undertakes to file a post-effective amendment, using
financial statements which need not be certified within four to six months from
the effective date of registrant's 1933 Act registration statement, or the
initial public offering thereof, whichever is later.

(2) Registrant undertakes that, if requested to do so by the holders
of at least 10% of the Registrant's outstanding shares, a shareholder meeting
will be called for the purpose of voting upon the removal of a director or
directors and that communications with other shareholders will be assisted as
provided by Section 16(c) of the 1940 Act.

C-11
<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this amendment to
the Registration Statement on Form N-1A to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Louisville, and the State
of Kentucky on this 26th day of March, 1996.

TRANS ADVISER FUNDS, INC.

By:/s/ Thomas A. Trantum
---------------------
Thomas A. Trantum
President

As required by the Securities Act of 1933, this amendment to the Registration
Statement has been signed by the following persons in the capacities indicated
on the 26th day of March, 1996.

/s/ Thomas A. Trantum President and Director
- ----------------------
Thomas A. Trantum

/s/Michael D. Martins Treasurer
- ----------------------
Michael D. Martins

* Chairman of the Board and Director
- ----------------------
Gordon B. Davidson

* Director
- ----------------------
Jerry E. Baker

* Director
- ----------------------
William H. Lomicka

* Director
- ----------------------
Charles K. McClure, III

*By:/s/Joanne Doldo
----------------------------
Power of Attorney

C-12
<PAGE>

EXHIBIT INDEX

Exhibit 11(a) Consent of Kramer, Levin, Naftalis, Nessen, Kamin &
Frankel.

Exhibit 11(b) Consent of KPMG Peat Marwick, LLP.

Exhibit 12 Unaudited Financial Statements for the period ended
February 29, 1996

Exhibit 27 Financial Data Schedules.

C-13

<PAGE>

EXHIBIT 11(a)
CONSENT OF KRAMER, LEVIN, NAFTALIS, NESSEN,
KAMIN & FRANKEL, COUNSEL FOR THE REGISTRANT

<PAGE>

New York, New York

March 29, 1996

Trans Adviser Funds, Inc.
P.O. Box 90001
Bowling Green, Kentucky 42102-9001

Re: Trans Adviser Funds, Inc.
-------------------------

Gentlemen:

We hereby consent to the reference of our firm as Counsel in this
Post-Effective Amendment No. 1 to Registration Statement on Form N-1A.

Very truly yours,

/s/ Kramer, Levin, Naftalis, Nessen, Kamin &
Frankel

<PAGE>

EXHIBIT 11(b)

CONSENT OF KPMG PEAT MARWICK, LLP

<PAGE>

Consent of Independent Auditors

The Board of Directors
Trans Adviser Funds, Inc.

We consent to the use of our report, included herein, and to the reference
to our firm under the heading "Auditors" in the statement of additional
information.

/s/ KPMG Peat Marwick LLP
KPMG Peat Marwick LLP

Boston, Massachusetts
March 29, 1996

<PAGE>
GROWTH/VALUE FUND
SCHEDULE OF INVESTMENTS
FEBRUARY 29, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY
SHARES DESCRIPTION VALUE
- ---------- ---------------------------------- ------------
<C> <S> <C>
COMMON STOCK (88.4%):
AMUSEMENT AND RECREATION SERVICES (7.0%):
7,500 Harrah's Entertainment, Inc.*..... $ 203,437
2,000 ITT Corporation*.................. 120,750
7,500 Promus Hotel Corporation*......... 195,000
------------
519,187
------------
AUTOMOTIVE DEALERS AND GASOLINE SERVICE STATIONS (2.6%):
7,500 Autozone, Inc.*................... 193,125
------------
BUSINESS SERVICES (4.1%):
10,000 ADT Ltd.*......................... 147,500
3,000 Sun Microsystems, Inc.*........... 157,500
------------
305,000
------------
CHEMICALS AND ALLIED PRODUCTS (6.4%):
2,000 Bristol-Myers Squibb Company...... 170,250
2,000 Merck & Company, Inc.............. 132,500
3,000 Schering-Plough Corporation....... 168,375
------------
471,125
------------
COMMUNICATIONS (3.5%):
7,500 Tele-Communications, Inc.*........ 157,500
5,000 US West Media Group*.............. 104,375
------------
261,875
------------
DEPOSITORY INSTITUTIONS (11.0%):
3,500 BankAmerica Corporation........... 249,375
7,000 First Chicago NBD Corporation..... 303,625
4,000 First Tennessee National
Corporation..................... 126,000
5,000 Signet Banking Corporation........ 130,000
------------
809,000
------------
EATING AND DRINKING PLACES (2.5%):
3,000 McDonald's Corporation............ 150,000
2,000 Morrison Restaurants, Inc......... 33,500
------------
183,500
------------
ELECTRICAL EQUIPMENT (2.9%):
5,000 AMP, Inc.......................... 213,125
------------
FOOD STORES (1.3%):
2,500 Kroger Company*................... 92,812
------------
FOOD AND KINDRED PRODUCTS (1.1%):
15,000 Monterey Pasta Company*........... 78,750
------------

<CAPTION>
SECURITY
SHARES DESCRIPTION VALUE
- ---------- ---------------------------------- ------------
<C> <S> <C>
GENERAL MERCHANDISE STORES (2.5%):
4,000 Sears, Roebuck and Company........ $ 181,500
------------
HEALTH SERVICES (10.8%):
5,000 Living Centers of America, Inc.*.. 202,500
3,000 Columbia HCA Healthcare
Corporation..................... 164,250
2,345 Healthsouth Rehabilitation
Corporation*.................... 82,075
1,000 Quorum Health Group, Inc.*........ 24,625
6,000 Tenet Healthcare Corporation*..... 134,250
5,000 Vencor, Inc.*..................... 186,875
------------
794,575
------------
INDUSTRIAL AND COMMERCIAL MACHINERY AND COMPUTER EQUIPMENT
(2.3%):
8,000 Western Digital Corporation*...... 167,000
------------
INSURANCE CARRIERS (1.4%):
2,000 ITT Hartford Group, Inc........... 103,000
------------
MEASURING, ANALYZING, AND CONTROLLING INSTRUMENTS (2.9%):
3,000 Eastman Kodak Company............. 214,500
------------
MISCELLANEOUS MANUFACTURING INDUSTRIES (0.7%):
2,000 ITT Industries, Inc............... 52,500
------------
MOTION PICTURES (1.8%):
2,000 The Walt Disney Company........... 131,000
------------
NONDEPOSITORY CREDIT INSTITUTIONS (4.6%):
3,000 American Express Company.......... 138,000
7,500 Capital One Financial
Corporation..................... 200,625
------------
338,625
------------
PHARMECEUTICAL PREPARATIONS (2.7%):
2,000 American Home Products
Corporation..................... 197,000
------------
TRANSPORT EQUIPMENT (2.8%):
2,500 Boeing Company.................... 202,812
------------
TRANSPORTATION BY AIR (3.3%):
8,000 Southwest Airlines Company........ 246,000
------------
</TABLE>

See notes to financial statements. 4 TRANS ADVISER FUNDS, INC.
<PAGE>
GROWTH/VALUE FUND
SCHEDULE OF INVESTMENTS (continued)
FEBRUARY 29, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY
SHARES DESCRIPTION VALUE
- --------- ------------------------------ ----------
WHOLESALE TRADE--DURABLE GOODS (10.2%):
<C> <S> <C>
4,000 Arrow Electronics, Inc.*...... $ 197,000
4,000 Avnet, Inc.................... 199,500
2,500 Lockheed Martin Corporation... 190,625
7,000 Sybron International
Corporation-Wisconsin*...... 162,750
----------
749,875
----------
Total Common Stock
(cost $5,914,343)...................... 6,505,886
----------

FACE SECURITY
AMOUNT DESCRIPTION
- --------- ------------------------------ VALUE
----------
<C> <S> <C>
CASH MANAGEMENT ACCOUNTS (11.6%):
427,717 1784 U.S. Treasury Money
Market Fund................. $ 427,717
427,084 Forum Daily Assets Treasury
Fund........................ 427,084
----------
Total Cash Management Accounts
(cost $854,801)........................ 854,801
----------
Total Investments (100.0%)
(cost $6,769,144)...................... $7,360,687
----------
----------
</TABLE>

*Non-income producing security

See notes to financial statements. 5 TRANS ADVISER FUNDS, INC.
<PAGE>
AGGRESSIVE GROWTH FUND
SCHEDULE OF INVESTMENTS
FEBRUARY 29, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY
SHARES DESCRIPTION VALUE
- ---------- ---------------------------------- ------------
<C> <S> <C>
COMMON STOCK (86.6%):
AMUSEMENT AND RECREATION SERVICES (9.3%):
3,000 Harrah's Entertainment, Inc.*..... $ 81,375
4,000 Promus Hotel Corporation*......... 104,000
------------
185,375
------------
BUSINESS SERVICES (9.1%):
5,000 Cerplex Group*.................... 31,250
2,000 Landmark Graphics Corporation*.... 45,000
2,000 Sun Microsystems, Inc.*........... 105,000
------------
181,250
------------
COMMUNICATIONS (2.1%):
2,000 US West Media Group*.............. 41,750
------------
DEPOSITORY INSTITUTIONS (6.7%):
1,000 BankAmerica Corporation........... 71,250
2,000 First Tennessee National
Corporation..................... 63,000
------------
134,250
------------
EATING AND DRINKING PLACES (4.9%):
2,000 Quality Dining, Inc.*............. 57,000
5,000 Shoney's, Inc.*................... 41,875
------------
98,875
------------
FOOD STORES (0.9%):
500 Kroger Company*................... 18,562
------------
FOOD AND KINDRED PRODUCTS (1.3%):
5,000 Monterey Pasta Company*........... 26,250
------------
GENERAL MERCHANDISE STORES (2.6%):
2,000 Consolidated Stores
Corporation*.................... 52,000
------------
HEALTH SERVICES (12.5%):
2,000 Living Centers of America, Inc.*.. 81,000
2,000 Quorum Health Group, Inc.*........ 49,250
2,000 Tenet Healthcare Corporation*..... 44,750
2,000 Vencor, Inc.*..................... 74,750
------------
249,750
------------
HOLDING AND OTHER INVESTMENT OFFICES (1.5%):
1,000 Felcor Suite Hotels, Inc.......... 30,625
------------
HOME FURNITURE, FURNISHINGS, AND EQUIPMENT STORES (2.5%):
2,000 Movie Gallery, Inc.*.............. 49,500
------------

<CAPTION>
SECURITY
SHARES DESCRIPTION VALUE
- ---------- ---------------------------------- ------------
<C> <S> <C>
INDUSTRIAL AND COMMERCIAL MACHINERY AND COMPUTER EQUIPMENT
(6.6%):
6,000 Smart Modular Technologies*....... $ 90,750
2,000 Western Digital Corporation*...... 41,750
------------
132,500
------------
MISCELLANEOUS RETAIL (1.7%):
2,000 Friedman's, Inc. Class A*......... 33,500
------------
NONDEPOSITORY CREDIT INSTITUTIONS (2.7%):
2,000 Capital One Financial
Corporation..................... 53,500
------------
OIL AND GAS EXTRACTION (5.6%):
10,000 Pride Petroleum Services, Inc.*... 111,875
------------
PROFESSIONAL SERVICES(5.7%):
6,000 SCB Computer Technology, Inc.*.... 114,000
------------
TRANSPORTATION (3.0%):
3,000 United Transnet Inc.*............. 60,375
------------
TRANSPORTATION BY AIR (3.1%):
2,000 Southwest Airlines Company........ 61,500
------------
TRANSPORTATION SERVICES (2.5%):
5,000 Simon Transportation Services*.... 50,000
------------
WHOLESALE TRADE--DURABLE GOODS (2.3%):
2,000 Sybron International
Corporation-Wisconsin*.......... 46,500
------------
Total Common Stock
(cost $1,590,243)........................... 1,731,937
------------
<CAPTION>

FACE
AMOUNT
- ----------
<C> <S> <C>
CASH MANAGEMENT ACCOUNTS (13.4%):
133,497 1784 U.S. Treasury Money Market
Fund............................ 133,497
133,873 Forum Daily Assets Treasury
Fund............................ 133,873
------------
Total Cash Management Accounts
(cost $267,370)............................. 267,370
------------
Total Investments (100.0%)
(cost $1,857,613)........................... $ 1,999,307
------------
------------
</TABLE>

*Non-income producing security

See notes to financial statements. 6 TRANS ADVISER FUNDS, INC.
<PAGE>
INTERMEDIATE BOND FUND
SCHEDULE OF INVESTMENTS
FEBRUARY 29, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE SECURITY
AMOUNT DESCRIPTION VALUE
- ------------ ------------------------------- -------------
<C> <S> <C>
COLLATERALIZED MORTGAGE OBLIGATIONS (10.3%):
$ 300,000 Federal Home Loan Mortgage
Corporation, Series 1072,
Class G, 7.00%, due 5/15/6... $ 304,658
800,000 Federal Home Loan Mortgage
Corporation, Series 1720,
Class E, 7.50%, due
12/15/09..................... 816,423
-------------
Total Collateralized Mortgage Obligations
(cost $1,128,875).......................... 1,121,081
-------------
DISCOUNT NOTES--AGENCY (13.5%):
76,000 Federal Farm Credit Bank, 5.24%
yield, due 3/1/96............ 76,000
302,000 Federal Farm Credit Bank, 5.24%
yield, due 3/5/96............ 301,827
850,000 Federal Home Loan Mortgage
Corporation, 5.42% yield, due
3/1/96....................... 850,000
245,000 Federal National Mortgage
Association, 5.31% yield, due
3/6/96....................... 244,822
-------------
Total Discount Notes--Agency
(cost $1,472,649).......................... 1,472,649
-------------
FIXED RATE BONDS--CORPORATE (57.9%):
686,000 Alabama Power Company, 8.30%,
due 7/1/22................... 706,825
400,000 Anheuser Busch Companies, Inc.,
7.00%, due 9/1/05............ 406,071
140,000 Anheuser-Busch Companies, Inc.,
8.75%, due 12/01/99.......... 152,870
250,000 B.P. America, 6.50%, due
12/15/99..................... 252,470
250,000 Baltimore Gas & Electric
Company, 5.125%, due
4/15/96...................... 249,854
50,000 Berkley W.R. Corporation,
9.875%, due 5/15/08.......... 61,325
55,000 The Chase Manhattan
Corporation, 8.00%, due
5/15/04...................... 57,110
135,000 Citicorp, 10.50%, due 2/1/16... 137,439
140,000 Commonwealth Edison Company,
9.50%, due 5/1/16............ 147,285

<CAPTION>
FACE SECURITY
AMOUNT DESCRIPTION VALUE
- ------------ ------------------------------- -------------
<C> <S> <C>
FIXED RATE BONDS--CORPORATE, CONTINUED:
$ 250,000 Florida Power & Light Company,
7.875%, due 1/1/07........... $ 256,681
160,000 Florida Power & Light Company,
8.00%, due 8/25/22........... 166,109
100,000 Ford Motor Credit Company,
5.83%, due 6/29/98........... 99,876
160,000 Ford Motor Credit Company,
7.50%, due 1/15/03........... 168,089
160,000 GTE of Southeast, 8.00%, due
12/3/01...................... 162,792
69,000 Georgia Power Company First
Mortgage Bonds, 7.95%, due
2/1/23....................... 69,866
250,000 Greyhound Financial
Corporation, 7.82%, due
1/27/03...................... 264,024
300,000 Inco Ltd., 9.60%, due 6/15/22.. 333,343
75,000 Jersey Central Power & Light
Company, 9.20%, due 7/1/21... 84,962
56,000 Kaiser Permanente, 9.55%, due
7/15/05...................... 46,000
55,434 Kraft Inc., 8.50%, due
2/15/17...................... 58,427
200,000 Michigan Bell Telephone
Company, 6.375%, due
2/1/05....................... 196,051
60,000 Pacific Gas & Electric Company,
6.625%, due 6/1/00........... 59,778
419,000 Pennsylvania Power & Light
Company, 9.25%, due
10/1/19...................... 462,579
120,000 Public Service Electric and Gas
Company, 8.75%, due
11/1/21...................... 130,044
35,000 Rohm & Haas Company, 9.80%, due
4/15/20...................... 44,780
50,000 Sara Lee Corporation, 8.75%,
due 5/15/16.................. 52,517
200,000 Southern California Edison,
7.375%, due 12/15/03......... 204,999
85,000 Southwestern Public Service
Company, 8.20%, due
12/1/22...................... 90,789
</TABLE>

See notes to financial statements. 7 TRANS ADVISER FUNDS, INC.
<PAGE>
INTERMEDIATE BOND FUND
SCHEDULE OF INVESTMENTS (continued)
FEBRUARY 29, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE SECURITY
AMOUNT DESCRIPTION VALUE
- ------------ ------------------------------- -------------
FIXED RATE BONDS--CORPORATE, CONTINUED:
<C> <S> <C>
$ 60,000 U.S. Leasing International,
6.625%, due 5/15/03.......... $ 60,082
150,000 US Life Corporation, 9.15%, due
6/15/99...................... 151,292
130,000 Union Electric Company, 8.00%,
due 12/15/22................. 136,143
500,000 Unocal Corporation, 6.70%, due
10/15/07..................... 492,086
250,000 Washington Gas Light Company,
6.50%, due 1/14/97........... 252,057
65,000 Wisconsin Electric Power
Company, 7.75%, due
1/15/23...................... 66,250
-------------
Total Fixed Rate Bonds--Corporate
(cost $6,314,487).......................... 6,290,299
-------------
FIXED RATE NOTES--AGENCY (13.3%):
500,000 Federal Home Loan Bank, 6.62%,
due 12/6/00.................. 497,542
450,000 Federal Home Loan Bank, 8.25%,
due 4/4/05................... 451,262
150,000 Federal National Mortgage
Association, 6.17%, due
12/2/03...................... 144,793
265,000 Tennessee Valley Authority,
6.875%, due 1/15/02.......... 268,887
<CAPTION>
FACE SECURITY
AMOUNT DESCRIPTION VALUE
- ------------ ------------------------------- -------------
<C> <S> <C>
FIXED RATE NOTES--AGENCY, CONTINUED:
$ 50,000 Tennessee Valley Authority,
6.875%, due 8/1/02........... $ 50,620
30,000 Tennessee Valley Authority,
8.05%, due 7/15/24........... 29,851
-------------
Total Fixed Rate Notes--Agency
(cost $1,452,300).......................... 1,442,955
-------------
TREASURY NOTES (4.7%):
500,000 U.S. Treasury Notes, 6.50%, due
8/15/05...................... 511,875
-------------
Total Treasury Notes
(cost $510,156)............................ 511,875
-------------
CASH MANAGEMENT ACCOUNTS (0.3%):
1 1784 U.S. Treasury Money Market
Fund......................... 1
1 Dreyfus Government Cash
Management Fund.............. 1
35,761 Forum Daily Assets Treasury
Fund......................... 35,761
-------------
Total Cash Management Accounts
(cost $35,763)............................. 35,763
-------------
Total Investments (100.0%)
(cost $10,914,230)......................... $ 10,874,622
-------------
-------------
</TABLE>

See notes to financial statements. 8 TRANS ADVISER FUNDS, INC.
<PAGE>
KENTUCKY TAX-FREE FUND
SCHEDULE OF INVESTMENTS
FEBRUARY 29, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE SECURITY
AMOUNT DESCRIPTION VALUE
- ------------ ------------------------------- -------------
<C> <S> <C>
MUNICIPAL BONDS (100.0%):
AIRPORT REVENUE (5.5%):
$ 500,000 Kenton County Airport Revenue,
8.75%, due 3/1/15............ $ 533,680
50,000 Lexington-Fayette Urban County,
Kentucky Airport Corporation
First Mortgage Revenue,
7.75%, due 4/1/08............ 55,125
435,000 Louisville & Jefferson County,
Kentucky Airport Authority
Revenue, 5.25%, due 7/1/09... 427,931
-------------
Total Airport Revenue
(cost $1,011,246).......................... 1,016,736
-------------
ECONOMIC DEVELOPMENT REVENUE (15.9%):
100,000 Covington, Kentucky Municipal
Properties Corporation
Revenue, 8.25%, due 8/1/10... 112,375
360,000 Kentucky State Property &
Building Community Revenue,
5.05%, due 5/1/05............ 366,750
65,000 Kentucky State Property &
Building Community Revenue,
6.00%, due 8/1/97............ 67,031
70,000 Kentucky State Property &
Building Community Revenue,
6.50%, due 12/1/99........... 75,425
455,000 Kentucky State Property &
Building Project Number 51,
6.30%, due 8/1/01............ 494,812
100,000 Kentucky State Turnpike
Authority Economic
Development Revenue, 6.50%,
due 7/1/07................... 113,875
245,000 Kentucky State Turnpike
Authority Economic
Development Revenue, 7.25%,
due 5/15/10.................. 275,931

<CAPTION>
FACE SECURITY
AMOUNT DESCRIPTION VALUE
- ------------ ------------------------------- -------------
<C> <S> <C>
ECONOMIC DEVELOPMENT REVENUE, CONTINUED:
$ 150,000 Kentucky State Turnpike
Authority Economic
Development Revenue,
Revitalization Projects,
7.00%, due 5/15/99........... $ 163,125
750,000 Louisville & Jefferson County,
Kentucky Visitors &
Convention Commission,
6.625%, due 7/1/15........... 727,500
500,000 State of Kentucky Property &
Buildings Common Revenue,
Project #57, AMBAC insured,
5.50%, due 11/1/15........... 498,750
50,000 State of Kentucky Property &
Buildings Common Revenue,
Project #27, Prerefunded
11/1/96 at 102,
collateralized in U.S.
Government securities, 7.10%,
due 5/1/08................... 52,181
-------------
Total Economic Development Revenue
(cost $2,940,928).......................... 2,947,755
-------------
EDUCATION FACILITIES REVENUE (18.5%):
350,000 Fayette County Kentucky School
Building Revenue, 5.25%, due
10/1/09...................... 348,250
365,000 Fayette County Kentucky School
Building Revenue, 5.25%, due
10/1/10...................... 359,981
200,000 Hopkins County, Kentucky School
District Finance Corporation
School Building Revenue,
5.70%, due 6/1/06............ 211,750
495,000 Jefferson County, Kentucky
School District Finance
Corporation School Building
Revenues, 4.875%, due
1/1/11....................... 467,775
750,000 Jefferson County, Kentucky
School District Finance
Corporation School Building
Revenue, MBIA Insured, 5.00%,
due 2/1/07................... 752,812
</TABLE>

See notes to financial statements. 9 TRANS ADVISER FUNDS, INC.
<PAGE>
KENTUCKY TAX-FREE FUND
SCHEDULE OF INVESTMENTS (continued)
FEBRUARY 29, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE SECURITY
AMOUNT DESCRIPTION VALUE
- ------------ ------------------------------- -------------
EDUCATION FACILITIES REVENUE, CONTINUED:
<C> <S> <C>
$ 70,000 Lexington-Fayette Urban County
Government, Kentucky School
Buildings Revenue, 6.80%, due
10/1/01...................... $ 78,050
785,000 Oldham County, Kentucky School
District Finance Corporation
School Building, 5.50%, due
7/1/15....................... 400,000
393,000 Pendleton County, Kentucky
School District Finance
Corporation School Building
Revenue, 5.05%, 12/1/15...... 735,938
70,000 University of Louisville,
Kentucky Revenue, Series G,
6.25%, due 5/1/99............ 72,887
-------------
Total Education Facilities Revenue
(cost $3,417,998).......................... 3,420,443
-------------
GENERAL OBLIGATIONS--BOND BANK (1.6%):
305,000 Fern Creek, Kentucky Fire
Protection District Holding
Company Revenue, 5.75%,
1/15/14...................... 297,375
-------------
Total General Obligations--Bond Bank
(cost $295,140)............................ 297,375
-------------
HEALTH CARE REVENUE (18.1%):
1,035,000 Kentucky Development Finance
Authority Hospital Revenue,
Baptist Hospital, 7.20%, due
9/1/99....................... 1,157,906
1,600,000 Kentucky Economic Development
Finance Authority Health
Facilities Revenue, The
Medical Center at Scottsville
Project, Series A, 9.00%, due
11/1/24...................... 1,704,000
<CAPTION>
FACE SECURITY
AMOUNT DESCRIPTION VALUE
- ------------ ------------------------------- -------------
<C> <S> <C>
HEALTH CARE REVENUE, CONTINUED:
$ 500,000 Kentucky Economic Development
Finance Authority Hospital
Facilities Revenue, Baptist
Healthcare System Project,
MBIA insured, 5.00%, due
8/15/24...................... $ 453,750
40,000 McCracken County, Kentucky
Revenue, Lourdes Hospital
Inc., 6.00%, due 11/1/96..... 40,679
-------------
Total Health Care Revenue
(cost $3,326,574).......................... 3,356,335
-------------
HOUSING REVENUE (11.5%):
750,000 Boone County, Kentucky Public
Properties Corporation
Revenue, 5.15%, due
12/1/12...................... 725,625
475,000 Boone County, Kentucky Public
Properties Corporation
Revenue, 5.125%, due
12/1/10...................... 461,938
270,000 Florence, Kentucky Public
Property Corporation, 5.20%,
due 3/1/13................... 300,000
288,375 Greater Kentucky Housing
Assistance Corporation
Mortgage Revenue, FHA/
Section 8 Assisted Project,
Series A, MBIA/FHA insured,
6.25%, due 7/1/22............ 272,025
100,000 Jefferson County, Kentucky
Capital Projects Corporation
Revenue, 0.000%, due
8/15/99...................... 85,249
100,000 Kentucky Housing Corporation
Housing Revenue, Series B,
5.75%, due 8/1/05............ 190,000
191,187 Kentucky State Property &
Building Commission Revenue
Project 30, 7.00%, 12/1/96... 102,593
-------------
Total Housing Revenue
(cost $2,127,618).......................... 2,126,992
-------------
</TABLE>

See notes to financial statements. 10 TRANS ADVISER FUNDS, INC.
<PAGE>
KENTUCKY TAX-FREE FUND
SCHEDULE OF INVESTMENTS (continued)
FEBRUARY 29, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE SECURITY
AMOUNT DESCRIPTION VALUE
- ------------ ------------------------------- -------------
INDUSTRIAL DEVELOPMENT REVENUE (2.8%):
<C> <S> <C>
$ 500,000 Clark County, Kentucky
Industrial Building Revenue,
Southern Wood Project, 7.00%,
due 12/1/08.................. $ 515,000
-------------
Total Industrial Development Revenue
(cost $512,207)............................ 515,000
-------------
JAIL FACILITIES REVENUE (0.6%):
100,000 Kentucky Local Correctional
Facilities Construction
Authority Revenue, 7.00%, due
11/1/97...................... 107,250
-------------
Total Jail Facilities Revenue
(cost $106,574)............................ 107,250
-------------
OTHER REVENUE (10.1%):
500,000 Kentucky Higher Education
Student Loan Corporation
Insured Student Loan Revenue,
6.40%, due 6/1/00............ 536,875
350,000 Kentucky Higher Education
Student Loan Corporation
Insured Student Loan Revenue,
Series D, 6.35%, due
12/1/1997.................... 361,375
300,000 Lexington-Fayette Urban County
Public Facilities Revenue,
7.90%, due 7/1/06............ 322,500
475,000 Lexington-Fayette Urban County
Government, Kentucky Sewer
System Revenue, 6.85%, due
7/1/98....................... 511,219
120,000 Puerto Rico Public Buildings
Authority Guaranteed Revenue,
Series K, collateralized in
U.S. Government securities,
6.875%, due 7/1/21........... 138,600
-------------
Total Other Revenue
(cost $1,865,134).......................... 1,870,569
-------------
<CAPTION>
FACE SECURITY
AMOUNT DESCRIPTION VALUE
- ------------ ------------------------------- -------------
<C> <S> <C>
POLLUTION CONTROL (2.1%):
$ 235,000 Jefferson County, Kentucky
Pollution Control Revenue
Louisville Gas & Electric
Company PJ-A, 7.45%, due
6/15/15...................... $ 259,969
200,000 Trimble County, Kentucky
Pollution Control Revenue
Unrefunded Balance Series A,
7.625, due 11/1/20........... 224,500
-------------
Total Pollution Control
(cost $388,194)............................ 390,438
-------------
POLLUTION CONTROL REVENUE (8.5%):
295,000 Ashland, Kentucky Solid Waste
Revenue, 7.20%, callable
10/1/01 @ 102., 7.20%, due
10/1/01...................... 313,806
100,000 Kentucky State Pollution
Abatement & Water Reserve
Finance Authority Revenue,
Escrowed in U.S. Government
securities, 7.40%, due
8/1/02....................... 116,250
235,000 Jefferson County, Kentucky
Pollution Control Revenue,
Louisville Gas & Electric
Company PJ-A, 7.45%, due
6/15/15...................... 259,969
500,000 Kentucky Infrastructure
Authority Revenue, Wastewater
Revolving Fund Project,
Series D, 5.50%, due
6/1/12....................... 498,125
500,000 Louisville & Jefferson County,
Kentucky Sewer District,
Sewer & Drain System, 6.50%,
due 5/15/00.................. 50,000
54,063 Meade County Kentucky Pollution
Control Revenue, 6.00%, due
7/1/96....................... 503,560
-------------
Total Pollution Control Revenue
(cost $1,569,158).......................... 1,579,835
-------------
</TABLE>

See notes to financial statements. 11 TRANS ADVISER FUNDS, INC.
<PAGE>
KENTUCKY TAX-FREE FUND
SCHEDULE OF INVESTMENTS (continued)
FEBRUARY 29, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE SECURITY
AMOUNT DESCRIPTION VALUE
- ------------ ------------------------------- -------------
TRANSPORTATION REVENUE (3.5%):
<C> <S> <C>
$ 100,000 Kentucky State Turnpike
Authority Resource Recovery,
6.00%, due 7/1/09............ $ 100,125
605,000 Kentucky State Turnpike
Authority Resource Recovery,
6.125%, due 7/1/97........... 649,619
-------------
Total Transportation Revenue
(cost $751,328)............................ 749,744
-------------
UTILITIES REVENUE (1.3%):
200,000 Owensboro, Kentucky Electric
Light & Power Revenue,
Deferred Current Interest,
Series A, 0.00% converting on
1/1/96 to 10.25%, due 1/1/09,
Prerefunded 1/1/00 at 102.... 237,750
-------------
Total Utilities Revenue
(cost $239,611)............................ 237,750
-------------
<CAPTION>
FACE SECURITY
AMOUNT DESCRIPTION VALUE
- ------------ ------------------------------- -------------
<C> <S> <C>
CASH MANAGEMENT ACCOUNTS (0.0%):
$ 2 1784 Tax Free Money Market
Fund......................... $ 2
1 Fidelity Tax Exempt Money
Market Fund.................. 1
-------------
3
-------------
Total Investments (100.0%)
(cost $18,551,723)......................... $ 18,616,225
-------------
-------------
</TABLE>

See notes to financial statements. 12 TRANS ADVISER FUNDS, INC.
<PAGE>
MONEY MARKET FUND
SCHEDULE OF INVESTMENTS
FEBRUARY 29, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE SECURITY
AMOUNT DESCRIPTION VALUE
- ------------ ------------------------------- -------------
<C> <S> <C>
DISCOUNT NOTES--AGENCY (47.2%):
$ 879,000 Federal Farm Credit Bank, 5.22%
yield, due 3/1/96............ $ 879,000
2,645,000 Federal Farm Credit Bank, 5.22%
yield, due 3/7/96............ 2,642,739
879,000 Federal Farm Credit Bank, 5.24%
yield, due 3/1/96............ 879,000
3,090,000 Federal Farm Credit Bank, 5.25%
yield, due 3/13/96........... 3,084,690
88,000 Federal Farm Credit Bank, 5.24%
yield, due 3/5/96............ 87,950
3,090,000 Federal Farm Credit Bank, 5.28%
yield, due 3/13/96........... 3,084,690
1,895,000 Federal Home Loan Bank, 5.23%
yield, due 3/4/96............ 1,894,190
3,500,000 Federal Home Loan Bank, 5.24%
yield, due 3/6/96............ 3,497,497
4,170,000 Federal Home Loan Mortgage
Corporation, 5.42% yield, due
3/1/96....................... 4,170,000
5,410,000 Federal National Mortgage
Association, 5.21% yield, due
3/4/96....................... 5,407,690
1,635,000 Federal National Mortgage
Association, 5.21% yield, due
3/1/96....................... 1,635,000
5,410,000 Federal National Mortgage
Association, 5.22% yield, due
3/4/96....................... 5,407,690
3,255,000 Federal National Mortgage
Association, 5.22% yield, due
3/8/96....................... 3,251,753
5,410,000 Federal National Mortgage
Association, 5.24% yield, due
3/4/96....................... 5,407,690
1,635,000 Federal National Mortgage
Association, 5.24% yield, due
3/1/96....................... 1,635,000
5,410,000 Federal National Mortgage
Association, 5.24% yield, due
3/4/96....................... 5,407,690
710,000 Federal National Mortgage
Association, 5.32% yield, due
3/6/96....................... 709,487
-------------
Total Discount Notes--Agency................. 27,259,996
-------------

<CAPTION>
FACE SECURITY
AMOUNT DESCRIPTION VALUE
- ------------ ------------------------------- -------------
<C> <S> <C>
FIXED RATE NOTES--AGENCY (4.3%):
$ 500,000 Federal Home Loan Bank, 8.10%,
due 3/25/96.................. $ 500,764
2,000,000 Tennessee Valley Authority,
4.375%, due 3/4/96........... 1,999,773
-------------
Total Fixed Rate Notes--Agency............... 2,500,537
-------------
FIXED RATE NOTES--CORPORATE (46.7%):
100,000 Albertson's, Inc., 4.90%, due
3/22/96...................... 99,960
500,000 American Express Credit
Corporation, 7.75%, due
3/1/97....................... 511,848
100,000 American General Finance
Corporation, 5.00%, due
6/15/96...................... 99,738
70,000 Associates Corporation of North
America, 6.875%, due
1/15/97...................... 70,806
165,000 Associates Corporation of North
America, 7.50%, due
10/15/96..................... 166,743
55,000 Bankers Trust New York
Corporation, 7.25%, due
11/1/96...................... 55,543
190,000 Bausch & Lomb, Inc., 6.80%, due
12/12/96..................... 191,484
100,000 British Petroleum America,
Inc., 10.15%, due 3/15/96.... 100,151
140,000 Burlington Northern
Corporation, 9.00%, due
4/1/96....................... 146,561
190,000 CIGNA Corporation, 8.00%, due
9/1/96....................... 192,263
125,000 CIT Group Holdings, Inc.,
4.75%, due 3/15/96........... 124,932
300,000 CNA Financial Corporation,
8.625%, due 3/1/96........... 300,000
479,000 CSX Corporation, 8.40%, due
8/1/96....................... 484,118
80,000 Caterpillar Financial Services
Corporation, 4.94%, due
4/30/96...................... 79,862
20,000 The Chase Manhattan
Corporation, 7.875%, due
1/15/97...................... 20,381
176,000 Citicorp, 8.75%, due 11/1/96... 179,357
</TABLE>

See notes to financial statements. 13 TRANS ADVISER FUNDS, INC.
<PAGE>
MONEY MARKET FUND
SCHEDULE OF INVESTMENTS (continued)
FEBRUARY 29, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE SECURITY
AMOUNT DESCRIPTION VALUE
- ------------ ------------------------------- -------------
FIXED RATE NOTES--CORPORATE, CONTINUED:
<C> <S> <C>
$ 250,000 Commercial Credit Company,
8.00%, due 9/1/96............ $ 252,484
500,000 Commercial Credit Company,
8.125%, due 3/1/97........... 512,875
499,204 Conrail Inc., 5.01%, due
4/1/96....................... 498,808
1,214,000 Dean Witter Discover & Company,
5.00%, due 4/1/96............ 1,213,103
50,000 Deere & Company, 8.25%, due
6/1/96....................... 50,316
667,000 Dupont Corporation, 8.45%, due
10/15/96..................... 678,859
430,000 Exxon Capital Corporation,
7.875%, due 4/15/96.......... 431,051
25,000 Farmers Group, 8.25%, due
7/15/96...................... 25,238
500,000 First Interstate Bancorp,
10.50%, due 3/1/96........... 500,000
150,000 Ford Capital B.V., 9.00%, due
6/1/96....................... 151,189
95,000 Ford Motor Credit Corporation,
7.875%, due 1/15/97.......... 96,837
45,000 Ford Motor Credit Corporation,
7.875%, due 10/15/96......... 45,506
492,000 Ford Motor Credit Corporation,
8.00%, due 10/1/96........... 497,906
1,040,000 Ford Motor Credit Corporation,
8.25%, due 5/15/96........... 1,045,112
527,000 Ford Motor Credit Corporation,
8.625%, due 4/15/96.......... 528,854
225,000 Ford Motor Credit Corporation,
8.875%, due 3/15/96.......... 225,270
500,000 G.E. Capital Credit
Corporation, 7.46%, due
9/27/96...................... 504,588
555,000 G.E. Capital Credit
Corporation, 8.75%, due
11/26/96..................... 566,518
<CAPTION>
FACE SECURITY
AMOUNT DESCRIPTION VALUE
- ------------ ------------------------------- -------------
<C> <S> <C>
FIXED RATE NOTES--CORPORATE, CONTINUED:
$ 789,000 General Electric Company,
7.875%, due 5/1/96........... $ 791,587
400,000 General Motors Acceptance
Corporation, 7.65%, due
2/4/97....................... 406,817
550,000 General Motors Acceptance
Corporation, 8.00%, due
10/1/96...................... 556,792
990,000 General Motors Acceptance
Corporation, 8.25%, due
8/1/96....................... 1,000,421
450,000 General Motors Acceptance
Corporation, 8.45%, due
8/13/96...................... 455,057
215,000 General Motors Acceptance
Corporation, 8.625%, due
7/15/96...................... 217,115
1,175,000 Georgia Power Company First
Mortgage Bonds, 4.75%, due
3/1/96....................... 1,175,000
100,000 Gillette Company, 4.75%, due
8/15/96...................... 99,511
50,000 Household Finance Corporation,
7.80%, due 11/1/96........... 50,706
140,000 International Lease Finance
Corporation, 6.625%, due
6/1/96....................... 140,326
25,000 International Lease Finance
Corporation, 7.90%, due
10/1/96...................... 25,317
480,000 Morgan Stanley & Co. Inc.,
8.875%, due 4/1/96........... 481,292
420,000 National City Corporation,
8.375%, due 3/15/96.......... 420,367
638,000 NationsBank Corporation, 4.75%,
due 8/15/96.................. 635,098
75,000 Northern Illinois Gas, 4.50%,
due 3/15/96.................. 74,954
50,000 Northern Illinois Gas, 5.50%,
due 2/1/97................... 49,975
135,000 Pacific Northwest Bell
Telephone Company, 7.50%, due
12/1/96...................... 136,524
255,000 PepsiCo, Inc., 7.875%, due
8/15/96...................... 257,266
</TABLE>

See notes to financial statements. 14 TRANS ADVISER FUNDS, INC.
<PAGE>
MONEY MARKET FUND
SCHEDULE OF INVESTMENTS (continued)
FEBRUARY 29, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE SECURITY
AMOUNT DESCRIPTION VALUE
- ------------ ------------------------------- -------------
FIXED RATE NOTES--CORPORATE, CONTINUED:
<C> <S> <C>
$ 1,050,000 Philip Morris Companies, Inc.,
8.875%, due 7/1/96........... $ 1,060,418
904,000 Philip Morris Corporation,
8.75%, due 12/1/96........... 923,476
250,000 Quaker Oats Company, 8.85%, due
11/15/96..................... 254,459
370,000 Ralston Purina Company, 9.00%,
due 6/15/96.................. 373,578
930,000 Sears Roebuck & Company, 8.55%,
due 8/1/96................... 940,824
1,582,000 Sears Roebuck & Company, 9.00%,
due 9/16/96.................. 1,608,131
75,000 Security Pacific Corporation,
7.75%, due 12/1/96........... 75,962
580,000 Southwestern Bell Telephone
Company, 8.30%, due 6/3/96... 583,501
179,000 Textron Inc., 9.25%, due
3/15/96...................... 187,397
55,000 Travelers Group, 8.375%, due
12/15/96..................... 56,156
1,295,000 U.S. West Capital Funding,
8.00%, due 10/15/96.......... 1,311,742
<CAPTION>
FACE SECURITY
AMOUNT DESCRIPTION VALUE
- ------------ ------------------------------- -------------
<C> <S> <C>
FIXED RATE NOTES--CORPORATE, CONTINUED:
$ 25,000 Union Electric Company, 5.50%,
due 3/1/97................... $ 24,976
250,000 Virginia Electric & Power
Company, 7.25%, due 3/1/97... 253,948
580,000 Wal-Mart Stores, Inc., 8.00%,
due 5/1/96................... 582,057
445,000 Waste Management, Inc., 4.625%,
due 4/14/96.................. 444,326
645,000 Waste Management, Inc., 7.875%,
due 8/15/96.................. 651,083
56,000 Wells Fargo and Company, 8.20%,
due 11/1/96.................. 56,781
-------------
Total Fixed Rate Notes--Corporate............ 27,011,201
-------------
MUNICIPAL BONDS (1.8%):
1,000,000 State of Connecticut General
Obligation Temporary Notes,
8.90%, due 8/1/96............ 1,014,400
-------------
Total Municipal Bonds........................ 1,014,400
-------------
Total Investments (100.0%)................... $ 57,786,134
-------------
-------------
</TABLE>

See notes to financial statements. 15 TRANS ADVISER FUNDS, INC.
<PAGE>
STATEMENTS OF ASSETS AND LIABILITIES
FEBRUARY 29, 1996
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
INTERMEDIATE
AGGRESSIVE BOND KENTUCKY MONEY MARKET
GROWTH/VALUE FUND GROWTH FUND FUND TAX-FREE FUND FUND
----------------- -------------- --------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
ASSETS:
Investments, at value................... $ 7,360,687 $ 1,999,307 $ 10,874,622 $ 18,616,225 $ 57,786,134
Cash.................................... 1,439,433 653,853 249 336,846 --
Interest, dividends and other
receivables........................... 9,125 3,548 156,777 295,182 736,914
Receivable for securities sold.......... -- -- -- -- 172,326
Receivable for shares issued............ 104,563 3,373 -- 77,774 --
Organization costs, net of
amortization.......................... 29,112 29,112 29,112 29,112 29,112
----------------- -------------- --------------- ------------- -------------
Total assets.............................. 8,942,920 2,689,193 11,060,760 19,355,139 58,724,486
----------------- -------------- --------------- ------------- -------------
LIABILITIES:
Payable for securities purchased........ 872,362 60,370 588,270 1,519,303 615,674
Administration fee payable.............. 2,083 -- 2,647 2,500 5,843
Accrued expenses and other payables..... 7,476 -- -- 9,396 28,306
Dividends payable....................... -- -- 49,964 69,214 192,620
----------------- -------------- --------------- ------------- -------------
Total liabilities......................... 881,921 60,370 640,881 1,600,413 842,443
----------------- -------------- --------------- ------------- -------------
NET ASSETS................................ $ 8,060,999 $ 2,628,823 $ 10,419,879 $ 17,754,726 $ 57,882,043
----------------- -------------- --------------- ------------- -------------
----------------- -------------- --------------- ------------- -------------
COMPONENTS OF NET ASSETS:
Capital paid in......................... $ 7,486,891 $ 2,497,634 $ 10,460,932 $ 17,645,459 $ 57,881,523
Undistributed net investment income..... (7,418) (3,702) -- -- --
Unrealized appreciation (depreciation).. 591,543 141,694 (39,608) 64,502 --
Accumulated net realized gains.......... (10,017) (6,803) (1,445) 44,765 520
----------------- -------------- --------------- ------------- -------------
NET ASSETS................................ $ 8,060,999 $ 2,628,823 $ 10,419,879 $ 17,754,726 $ 57,882,043
----------------- -------------- --------------- ------------- -------------
----------------- -------------- --------------- ------------- -------------
SHARES OUTSTANDING........................ 711,123 249,478 1,043,215 1,722,318 57,881,521
NET ASSET VALUE PER SHARE................. $ 11.34 $ 10.54 $ 9.99 $ 10.31 $ 1.00
COST OF INVESTMENTS....................... $ 6,769,144 $ 1,857,613 $ 10,914,230 $ 18,551,723 $ 57,786,134
----------------- -------------- --------------- ------------- -------------
----------------- -------------- --------------- ------------- -------------
</TABLE>

See notes to financial statements. 16 TRANS ADVISER FUNDS, INC.
<PAGE>
STATEMENTS OF OPERATIONS
PERIOD ENDED FEBRUARY 29, 1996 *
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
AGGRESSIVE INTERMEDIATE KENTUCKY MONEY
GROWTH/VALUE GROWTH BOND TAX-FREE MARKET
FUND FUND FUND FUND FUND
----------------- -------------- --------------- ----------- ----------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME
Interest and dividend income................ $ 28,068 $ 5,249 $ 216,658 $ 274,576 $ 933,103
----------------- -------------- --------------- ----------- ----------
EXPENSES:
Advisory.................................... 18,226 4,605 13,215 18,398 32,485
Administration.............................. 10,417 10,417 10,417 10,833 24,364
Transfer agent.............................. 14,917 11,405 17,685 23,017 51,113
Custodian................................... 427 307 1,551 1,040 5,514
Legal....................................... 1,184 266 2,293 3,022 11,339
Accounting.................................. 15,000 15,000 15,000 18,600 15,000
Trustees.................................... 482 110 985 995 3,997
Registration................................ 5,864 3,117 9,167 5,506 27,501
Amortization of organization costs.......... 2,647 2,647 2,647 2,647 2,647
Other....................................... 2,295 1,147 3,337 6,133 11,957
----------------- -------------- --------------- ----------- ----------
Total expenses................................ 71,459 49,021 76,297 90,191 185,917
Expenses reimbursed and fees waived......... (35,973) (40,070) (59,259) (51,362) (80,055)
----------------- -------------- --------------- ----------- ----------
Net expenses.................................. 35,486 8,951 17,038 38,829 105,862
----------------- -------------- --------------- ----------- ----------
NET INVESTMENT INCOME (LOSS).................. (7,418) (3,702) 199,620 235,747 827,241
----------------- -------------- --------------- ----------- ----------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS:
Net realized gain (loss) on investments..... (10,017) (6,803) (1,445) 44,765 520
Net change in unrealized appreciation
(depreciation)............................ 591,543 141,694 (39,608) 64,502 --
----------------- -------------- --------------- ----------- ----------
Net gain (loss) on investments................ 581,526 134,891 (41,053) 109,267 520
----------------- -------------- --------------- ----------- ----------
INCREASE IN NET ASSETS FROM OPERATIONS........ $ 574,108 $ 131,189 $ 158,567 $ 345,014 $ 827,761
----------------- -------------- --------------- ----------- ----------
----------------- -------------- --------------- ----------- ----------
</TABLE>

* See note 1 of notes to financial statements for commencement of operations.

See notes to financial statements. 17 TRANS ADVISER FUNDS, INC.
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
PERIOD ENDED FEBRUARY 29, 1996 *
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
AGGRESSIVE INTERMEDIATE KENTUCKY MONEY
GROWTH/VALUE GROWTH BOND TAX-FREE MARKET
FUND FUND FUND FUND FUND
----------------- -------------- --------------- ------------- ---------------
<S> <C> <C> <C> <C> <C>
NET ASSETS--September 1, 1995........... -- -- -- -- --
----------------- -------------- --------------- ------------- ---------------
OPERATIONS:
Net investment income (loss).......... $ (7,418) $ (3,702) $ 199,620 $ 235,747 $ 827,241
Net realized gain (loss) on
investments......................... (10,017) (6,803) (1,445) 44,765 520
Net change in unrealized appreciation
(depreciation)...................... 591,543 141,694 (39,608) 64,502 --
----------------- -------------- --------------- ------------- ---------------
574,108 131,189 158,567 345,014 827,761
----------------- -------------- --------------- ------------- ---------------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income................. -- -- (199,620) (235,747) (827,241)
----------------- -------------- --------------- ------------- ---------------
CAPITAL SHARE TRANSACTIONS:
Sale of shares........................ 7,601,317 2,551,860 10,707,416 18,671,280 188,894,580
Reinvested dividends.................. -- -- 1,687 139,548 25,307
Cost of shares repurchased............ (114,426) (54,226) (248,171) (1,165,369) (131,038,364)
----------------- -------------- --------------- ------------- ---------------
7,486,891 2,497,634 10,460,932 17,645,459 57,881,523
----------------- -------------- --------------- ------------- ---------------
NET ASSETS--February 29, 1996........... $ 8,060,999 $ 2,628,823 $ 10,419,879 $ 17,754,726 $ 57,882,043
----------------- -------------- --------------- ------------- ---------------
----------------- -------------- --------------- ------------- ---------------
</TABLE>

* See note 1 of notes to financial statements for commencement of operations.

See notes to financial statements. 18 TRANS ADVISER FUNDS, INC.
<PAGE>
NOTES TO FINANCIAL STATEMENTS
FEBRUARY 29, 1996
- --------------------------------------------------------------------------------

NOTE 1. ORGANIZATION
Trans Adviser Funds, Inc. (the "Company") is an open-end management investment
company incorporated under the laws of the State of Maryland. The Company
currently consists of five operational non-diversified investment portfolios,
the Growth/Value Fund, the Aggressive Growth Fund, the Intermediate Bond Fund,
the Kentucky Tax-Free Fund, and the Money Market Fund (each a "Fund" and
collectively the "Funds"). The Funds commenced investment operations on the
following dates:

<TABLE>
<S> <C>
Growth/Value Fund September 29, 1995
Aggressive Growth Fund September 29, 1995
Intermediate Bond Fund October 3, 1995
Kentucky Tax-Free Fund September 27, 1995
Money Market Fund September 29, 1995
</TABLE>

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
SECURITY VALUATION-All securities held by the Money Market Fund are valued
utilizing the amortized cost method, which approximates market value, in
accordance with Rule 2a-7 under the Investment Company Act of 1940. Securities,
other than short-term, held by the other Funds (the "Bond and Equity Funds") for
which market quotations are readily available are valued using the last reported
sales price provided by independent pricing services. If no sales are reported,
the mean of the last bid and ask price is used. In the absence of readily
available market quotations, securities are valued at fair value as determined
by the Board of Directors. Securities with a maturity of 60 days or less held by
the Bond and Equity Funds are valued at amortized cost.

PREMIUM AMORTIZATION AND DISCOUNT ACCRETION-In all Funds other than the Kentucky
Tax-Free Fund, if a fixed income investment is purchased at a premium, the
premium is not amortized. The Kentucky Tax-Free Fund amortizes premium on fixed
income investments to the maturity (or first call) date using the yield to
maturity method. If a fixed income investment is purchased at a discount (other
than original issue discount), the discount is not accreted. Original issue
discount on fixed income investments is accreted daily using yield to maturity
method.

INTEREST AND DIVIDEND INCOME AND DISTRIBUTIONS TO SHAREHOLDERS-Interest income
is accrued as earned. Dividends on securities held by the Funds are recorded on
the ex-dividend date. Distributions of net investment income are declared daily
and paid monthly for the Money Market Fund, the Kentucky Tax-Free Fund, and the
Intermediate Bond Fund, and declared and paid annually for the Growth/Value Fund
and the Aggressive Growth Fund. Net capital gain, if any, is distributed at
least annually to shareholders.

Distributions from net investment income and realized capital gains are based on
their tax basis. The significant difference between financial statement amounts
available for distribution and distributions made in accordance with income tax
regulations are primarily attributable to the deferral of post-October losses
and wash sales.

ORGANIZATION COSTS-The costs incurred by the Funds in connection with their
organization, in amounts of $31,759 for each Fund, have been capitalized and are
being amortized using the straight-line method over a five year period beginning
on the commencement of the Funds' investment operations. Certain of these costs
were paid by Forum Financial Services, Inc. and have been reimbursed by the
respective Funds.

FEDERAL INCOME TAX-Each Fund intends to qualify as a regulated investment
company and distribute all of its taxable income. Therefore, no Federal income
tax provision is required.

OTHER-Realized gains and losses on investments sold are recorded on the basis of
identified cost. Security transactions are accounted for on a trade date basis.

19 TRANS ADVISER FUNDS, INC.
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
FEBRUARY 29, 1996
- --------------------------------------------------------------------------------

NOTE 3. ADVISORY, SERVICING FEES AND OTHER TRANSACTIONS WITH AFFILIATES
The investment adviser of the Funds is Trans Financial Bank, N.A. (the
"Adviser"). The Adviser receives an advisory fee from Growth/Value Fund and
Aggressive Growth Fund at an annual rate of 1.00% of the respective Fund's
average daily net assets. The Adviser receives an advisory fee from Intermediate
Bond Fund and Kentucky Tax-Free Fund at an annual rate of 0.40% of the
respective Fund's average daily net assets. The Adviser receives an advisory fee
from Money Market Fund at an annual rate of 0.20% of the Fund's average daily
net assets. Pursuant to an agreement between the Adviser and Mastrapasqua and
Associates, Inc. ("M&A") (the "Sub-Adviser"), the Adviser may delegate certain
of its advisory responsibilities to the Sub-Adviser and pay the Sub-Adviser a
fee.

The Adviser has agreed to reimburse each Fund for certain operating expenses
(exclusive of interest, taxes, brokerage fees, fees and other expenses paid
pursuant to any distribution plan and organization expenses, all to the extent
permitted by applicable state law or regulation) which in any year exceed the
limits prescribed by any state in which the Fund's shares are qualified for
sale. The Funds' annual expenses are estimated and accrued daily, and any
related reimbursements are made monthly by the Adviser.

The administrator of the Company is Forum Financial Services, Inc. ("Forum"), a
registered broker-dealer and a member of the National Association of Securities
Dealers, Inc. For its administrative services Forum receives a fee for each Fund
equal to the greater of $25,000 per year or 0.15% of the annual average daily
net assets of each Fund. Forum also acts as the Company's distributor pursuant
to a separate Distribution Agreement with the Company. Forum receives no
compensation under that agreement. In addition, certain legal expenses were
charged to the Company by Forum. The amounts of legal expenses for Growth/Value
Fund, Aggressive Growth Fund, Intermediate Bond Fund, Kentucky Tax-Free Fund,
and Money Market Fund were: $756, $170, $1,458, $2,063, and $7,229,
respectively.

Forum Financial Corp. ("FFC"), an affiliate of Forum, serves as the Company's
transfer agent and dividend disbursing agent, and for those services receives an
annual fee equal to the greater of $12,000 per year for each Fund, an annual
shareholder account fee of $25 per shareholder, additional class charges, and
out of pocket expenses billed at cost. FFC also serves as the Company's fund
accountant and is compensated for those services at an amount of $36,000 per
year per Fund plus certain amounts based upon the number and types of portfolio
transactions within each Fund.

For the period ended February 29, 1996, fees waived and expenses reimbursed by
the Adviser were as follows:

<TABLE>
<CAPTION>
EXPENSES
FEES WAIVED REIMBURSED
------------- ------------
<S> <C> <C>
Growth/Value Fund........................................................ $ 18,226 $ 17,747
Aggressive Growth Fund................................................... 4,605 35,465
Intermediate Bond Fund................................................... 13,215 46,044
Kentucky Tax-Free Fund................................................... 18,398 32,964
Money Market Fund........................................................ 32,485 47,570
</TABLE>

20 TRANS ADVISER FUNDS, INC.
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
FEBRUARY 29, 1996
- --------------------------------------------------------------------------------

NOTE 4. SECURITIES TRANSACTIONS
Cost of purchases and proceeds from sales (including maturities) of securities
(excluding short-term investments) during the period ended February 29, 1996
were as follows:

<TABLE>
<CAPTION>
COST OF PURCHASES PROCEEDS FROM SALES
------------------ ---------------------
<S> <C> <C>
Growth/Value Fund......................................... $ 6,012,045 $ 87,683
Aggressive Growth Fund.................................... 1,731,243 134,196
Intermediate Bond Fund.................................... 13,147,299 627,635
Kentucky Tax-Free Fund.................................... 24,791,718 6,389,168
</TABLE>

The cost of investments for Federal income tax purposes is the same as for
financial accounting purposes. Unrealized appreciation and depreciation as of
February 29, 1996 were as follows:

<TABLE>
<CAPTION>
UNREALIZED APPRECIATION UNREALIZED DEPRECIATION
----------------------- -----------------------
<S> <C> <C>
Growth/Value Fund.................................. $ 644,934 $ 53,391
Aggressive Growth Fund............................. 185,370 43,676
Intermediate Bond Fund............................. 24,861 64,469
Kentucky Tax-Free Fund............................. 143,430 78,928
</TABLE>

NOTE 5. CAPITAL SHARE TRANSACTIONS
Transactions of Fund shares for the period ended February 29, 1996 are
summarized in the following table:

<TABLE>
<CAPTION>
GROWTH/VALUE AGGRESSIVE INTERMEDIATE KENTUCKY TAX- MONEY MARKET
FUND GROWTH FUND BOND FUND FREE FUND FUND
------------- ------------- ------------ -------------- --------------
<S> <C> <C> <C> <C> <C>
Sale of Shares......... 721,855 255,032 1,067,684 1,820,466 188,894,578
Shares Issued on
Reinvested
Dividends............. -- -- 239 14,607 25,307
Shares Repurchased..... 10,732 5,554 24,708 112,755 131,038,364
</TABLE>

21 TRANS ADVISER FUNDS, INC.
<PAGE>
FINANCIAL HIGHLIGHTS
FEBRUARY 29, 1996
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
SELECTED PER SHARE DATA AND
RATIOS FOR A SHARE OUTSTANDING AGGRESSIVE INTERMEDIATE KENTUCKY MONEY
THROUGHOUT THE PERIOD ENDED GROWTH/VALUE GROWTH BOND TAX-FREE MARKET
FEBRUARY 29, 1996.(A) FUND FUND FUND FUND FUND
----------- ----------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Beginning Net Asset Value Per
Share....................... $10.00 $10.00 $10.00 $10.00 $1.00
----------- ----------- ------------ ------------ ------------
Net Investment
Income/(Loss)(d)............ (0.02) (0.03) 0.25 0.24 0.21
Net Realized and Unrealized
Gain (Loss) on
Investments................. 1.36 0.57 (0.01) 0.31 --
----------- ----------- ------------ ------------ ------------
Distributions from Net
Investment Income........... -- -- (0.25) (0.24) (0.21)
----------- ----------- ------------ ------------ ------------
Ending Net Asset Value Per
Share....................... $11.34 $10.54 $9.99 $10.31 $1.00
----------- ----------- ------------ ------------ ------------
----------- ----------- ------------ ------------ ------------

Ratios to Average Net Assets:
Expenses(b)................. 1.95%(c) 1.95%(c) 0.52%(c) 0.85%(c) 0.65%(c)
Net Investment Income
(Loss).................... (0.40)%(c) (0.79)%(c) 6.12%(c) 5.33%(c) 5.03%(c)
Total Return.................. 13.40% 5.40% 2.40% 5.55% 2.16%
Portfolio Turnover Rate....... 2.00% 12.10% 7.89% 59.97% N/A
Net Assets at End of Period
(000's omitted)............. $8,061 $2,629 $10,420 $17,755 $57,882
</TABLE>

(a) See note 1 of notes to financial statements for commencement of operations.

(b) During the period, various fees and expenses were waived and reimbursed. Had
such waiver and reimbursement not occurred, the ratio of expenses to average
net assets would have been:

(d) Using weighted average shares outstanding.

See notes to financial statements. 22 TRANS ADVISER FUNDS, INC.

<PAGE>
<ARTICLE> 6
<CIK> 0000947789
<NAME> TRANS ADVISER FUNDS, INC.
<SERIES>
<NUMBER> 1
<NAME> GROWTH/VALUE FUND

<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> AUG-31-1996
<PERIOD-START> SEP-29-1995
<PERIOD-END> FEB-29-1996
<INVESTMENTS-AT-COST> 6,769,144
<INVESTMENTS-AT-VALUE> 7,360,687
<RECEIVABLES> 113,688
<ASSETS-OTHER> 1,439,433
<OTHER-ITEMS-ASSETS> 29,112
<TOTAL-ASSETS> 8,942,920
<PAYABLE-FOR-SECURITIES> 872,362
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 9,559
<TOTAL-LIABILITIES> 881,921
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 7,486,891
<SHARES-COMMON-STOCK> 711,123
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> (7,418)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (10,017)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 591,543
<NET-ASSETS> 8,060,999
<DIVIDEND-INCOME> 22,187
<INTEREST-INCOME> 5,881
<OTHER-INCOME> 0
<EXPENSES-NET> 35,486
<NET-INVESTMENT-INCOME> (7,418)
<REALIZED-GAINS-CURRENT> (10,017)
<APPREC-INCREASE-CURRENT> 591,543
<NET-CHANGE-FROM-OPS> 574,108
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 7,601,317
<NUMBER-OF-SHARES-REDEEMED> 114,426
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 8,060,999
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 18,226
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 71,459
<AVERAGE-NET-ASSETS> 4,388,723
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> (.01)
<PER-SHARE-GAIN-APPREC> 1.35
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 11.34
<EXPENSE-RATIO> 1.95
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<PAGE>
<ARTICLE> 6
<CIK> 0000947789
<NAME> TRANS ADVISER FUNDS, INC.
<SERIES>
<NUMBER> 2
<NAME> AGGRESSIVE GROWTH FUND

<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> AUG-31-1996
<PERIOD-START> SEP-29-1995
<PERIOD-END> FEB-29-1996
<INVESTMENTS-AT-COST> 1,857,613
<INVESTMENTS-AT-VALUE> 1,999,307
<RECEIVABLES> 6,921
<ASSETS-OTHER> 653,853
<OTHER-ITEMS-ASSETS> 29,112
<TOTAL-ASSETS> 2,689,193
<PAYABLE-FOR-SECURITIES> 60,370
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 60,370
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 2,497,634
<SHARES-COMMON-STOCK> 249,478
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> (3,702)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (6,803)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 141,694
<NET-ASSETS> 2,628,823
<DIVIDEND-INCOME> 3,162
<INTEREST-INCOME> 2,087
<OTHER-INCOME> 0
<EXPENSES-NET> 8,951
<NET-INVESTMENT-INCOME> (3,702)
<REALIZED-GAINS-CURRENT> (6,803)
<APPREC-INCREASE-CURRENT> 141,694
<NET-CHANGE-FROM-OPS> 131,189
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 2,551,860
<NUMBER-OF-SHARES-REDEEMED> 54,226
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 2,628,823
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 4,605
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 49,021
<AVERAGE-NET-ASSETS> 1,108,850
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> (.01)
<PER-SHARE-GAIN-APPREC> .55
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.54
<EXPENSE-RATIO> 1.95
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<PAGE>
<ARTICLE> 6
<CIK> 0000947789
<NAME> TRANS ADVISER FUNDS, INC.
<SERIES>
<NUMBER> 3
<NAME> INTERMEDIATE BOND FUND

<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> AUG-31-1996
<PERIOD-START> OCT-3-1995
<PERIOD-END> FEB-29-1996
<INVESTMENTS-AT-COST> 10,914,230
<INVESTMENTS-AT-VALUE> 10,874,622
<RECEIVABLES> 156,777
<ASSETS-OTHER> 249
<OTHER-ITEMS-ASSETS> 29,112
<TOTAL-ASSETS> 11,060,760
<PAYABLE-FOR-SECURITIES> 588,270
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 52,611
<TOTAL-LIABILITIES> 640,881
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 10,460,932
<SHARES-COMMON-STOCK> 1,043,215
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (1,445)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (39,608)
<NET-ASSETS> 10,419,879
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 216,658
<OTHER-INCOME> 0
<EXPENSES-NET> 17,038
<NET-INVESTMENT-INCOME> 199,620
<REALIZED-GAINS-CURRENT> (1,445)
<APPREC-INCREASE-CURRENT> (39,608)
<NET-CHANGE-FROM-OPS> 158,567
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 199,620
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 10,707,416
<NUMBER-OF-SHARES-REDEEMED> 248,171
<SHARES-REINVESTED> 1,687
<NET-CHANGE-IN-ASSETS> 10,419,879
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 13,215
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 76,297
<AVERAGE-NET-ASSETS> 7,955,256
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> .19
<PER-SHARE-GAIN-APPREC> (.20)
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 9.99
<EXPENSE-RATIO> .45
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<PAGE>
<ARTICLE> 6
<CIK> 0000947789
<NAME> TRANS ADVISER FUNDS, INC.
<SERIES>
<NUMBER> 4
<NAME> KENTUCKY TAX-FREE FUND

<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> AUG-31-1996
<PERIOD-START> SEP-27-1995
<PERIOD-END> FEB-29-1996
<INVESTMENTS-AT-COST> 18,551,723
<INVESTMENTS-AT-VALUE> 18,616,225
<RECEIVABLES> 295,182
<ASSETS-OTHER> 336,846
<OTHER-ITEMS-ASSETS> 29,112
<TOTAL-ASSETS> 19,355,139
<PAYABLE-FOR-SECURITIES> 1,519,303
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 81,110
<TOTAL-LIABILITIES> 1,600,413
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 17,645,459
<SHARES-COMMON-STOCK> 1,722,318
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 44,765
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 64,502
<NET-ASSETS> 17,754,726
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 274,576
<OTHER-INCOME> 0
<EXPENSES-NET> 38,829
<NET-INVESTMENT-INCOME> 235,747
<REALIZED-GAINS-CURRENT> 44,765
<APPREC-INCREASE-CURRENT> 64,502
<NET-CHANGE-FROM-OPS> 345,014
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 235,747
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 18,671,280
<NUMBER-OF-SHARES-REDEEMED> 1,165,369
<SHARES-REINVESTED> 139,548
<NET-CHANGE-IN-ASSETS> 17,754,726
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 18,398
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 90,191
<AVERAGE-NET-ASSETS> 10,654,488
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> .01
<PER-SHARE-GAIN-APPREC> .30
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.31
<EXPENSE-RATIO> .85
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<PAGE>
<ARTICLE> 6
<CIK> 0000947789
<NAME> TRANS ADVISER FUNDS, INC.
<SERIES>
<NUMBER> 6
<NAME> MONEY MARKET FUND

<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> AUG-31-1996
<PERIOD-START> SEP-29-1995
<PERIOD-END> FEB-29-1996
<INVESTMENTS-AT-COST> 57,786,134
<INVESTMENTS-AT-VALUE> 57,786,134
<RECEIVABLES> 909,240
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 29,112
<TOTAL-ASSETS> 58,724,486
<PAYABLE-FOR-SECURITIES> 615,674
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 226,769
<TOTAL-LIABILITIES> 842,443
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 57,881,523
<SHARES-COMMON-STOCK> 57,881,521
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 520
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 57,882,043
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 933,103
<OTHER-INCOME> 0
<EXPENSES-NET> 105,862
<NET-INVESTMENT-INCOME> 827,241
<REALIZED-GAINS-CURRENT> 520
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 827,761
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 827,241
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 188,894,580
<NUMBER-OF-SHARES-REDEEMED> 131,038,364
<SHARES-REINVESTED> 25,307
<NET-CHANGE-IN-ASSETS> 57,882,043
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 32,485
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 185,917
<AVERAGE-NET-ASSETS> 39,110,698
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> .01
<PER-SHARE-GAIN-APPREC> (.01)
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> .65
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>