BLANCHARD CAPITAL GROWTH FUND
(A Portfolio of Blanchard Group of Funds)

SUPPLEMENT TO THE PROSPECTUS DATED FEBRUARY 29, 1996
Effective March 31, 1996, the merger of The Chase Manhattan Corporation with
and into Chemical Banking Corporation, as described in the Prospectus, was
consummated, and Chemical Banking Corporation thereupon changed its name to
The Chase Manhattan Corporation ("New Chase").  New Chase is now the parent
of The Chase Manhattan Bank, N.A. (the "Portfolio Adviser"), the adviser to
Capital Growth Portfolio (the "Portfolio").  The merger resulted in the
automatic termination of the investment advisory agreement between the
Portfolio Adviser and the Portfolio.
Pursuant to a vote of the shareholders of Blanchard Capital Growth Fund (the
"Fund") and the other mutual funds which invest their assets in the
Portfolio, a new investment advisory agreement between the Portfolio Adviser
and the Portfolio, and a sub-advisory agreement between the Portfolio Adviser
and Chase Asset Management, Inc., became effective on May 6, 1996.
The foregoing changes did not result in any change to contractual advisory
fees payable by the Portfolio, or in any change in the investment management
or operation of the Portfolio.
In addition to reflecting the forgoing changes, this Supplement reflects the
restatement of certain portions of the Fund's Prospectus to conform the
disclosure style to that now employed by the Portfolio and to reflect certain
changes to the investment policies of the Fund.

1.   Please delete the first four paragraphs on the cover page of the
prospectus and replace them with the following:

"Blanchard Capital Growth Fund (the "Fund") seeks long-term capital growth.
The Fund, unlike many other investment companies which directly acquire and
manage their own portfolios of securities, seeks its investment objective by
investing all of its investable assets in Capital Growth Portfolio (the
"Portfolio"), an open-end management investment company with an investment
objective identical to that of the Fund.  Investors should carefully consider
this investment approach.  For additional information regarding this
investment structure, see "Unique Characteristics of the Fund and Portfolio
Structure" on page 22."

2.   Please replace the next to the last sentence of the fifth paragraph of
the cover page with the following:

"Virtus Capital Management, Inc. ("VCM") is the Funds' overall investment
manager."



3.   Please replace the second paragraph  of the sub-section entitled "Fund
Management" under the section entitled "Highlights" on page 1 with the
following:

"The Chase Manhattan Bank, N.A. (the "Portfolio Adviser" or "Chase"), a
wholly owned subsidiary of The Chase Manhattan Corporation, a registered bank
holding company, is a commercial bank offering a wide range of banking and
investment services to customers throughout the United States and around the
world.  Its headquarters is at 270 Park Avenue, New York, New York 10017.
The Portfolio Adviser, including its predecessor organizations, has over 100
years of money management experience. See "Portfolio Advisory Services- The
Portfolio Adviser."

4.   Please delete the sections entitled "Investment Objectives and Policies"
and "Additional Information on Investment Policies, Techniques and Risk
Factors" which begin on page 6 and end at page 10 of the prospectus and
replace them with the following:
"FUND OBJECTIVE

Blanchard Capital Growth Fund seeks long-term capital growth.  The Fund is
not intended to be a complete investment program, and there is no assurance
it will achieve its objective.
INVESTMENT POLICIES

INVESTMENT APPROACH
The Fund seeks to achieve its objective by investing all of its investable
assets in the Portfolio.  The Portfolio will invest primarily in a broad
portfolio of common stocks.  Under normal market conditions, the Portfolio
will invest at least 80% of its total assets in common stocks.  The Portfolio
will seek to invest in stocks of companies with capitalizations of $750
million to $4.0 billion.  Current income, if any, is a consideration
incidental to the Portfolio's objective of long-term capital growth.  The
Portfolio's advisers intend to utilize both quantitative and fundamental
research to identify undervalued stocks with a catalyst for positive change.
The Portfolio is classified as a "non-diversified" fund under federal
securities law.  The Portfolio's assets may be more concentrated in the
securities of any single issuer or group of issuers than if the Portfolio
were diversified.
The Portfolio may invest any portion of its assets not invested in common
stocks in high quality money market instruments and repurchase agreements.
For temporary defensive purposes, the Portfolio may invest without limitation
in these instruments.  To the extent that the Portfolio departs from its
investment policies during temporary defensive periods, the Fund's investment
objective may not be achieved.
FUND STRUCTURE
The Portfolio has an objective identical to that of the Fund.  The Fund may
withdraw its investment from the Portfolio at any time if the Trustees
determine that it is in the best interest of the Fund to do so.  Upon any
such withdrawal, the Trustees would consider what action might be taken,
including investing all of the Fund's investable assets in another pooled
investment entity having substantially the same objective and policies as the
Fund or retaining an investment adviser to manage the Fund's assets directly.

OTHER INVESTMENT PRACTICES
The Portfolio may also engage in the following investment practices, when
consistent with the Portfolio's overall objective and policies.  These
practices, and certain associated risks, are more fully described in the
Statement of Additional Information.
FOREIGN SECURITIES.  The Portfolio may invest up to 20% of its total assets
in foreign securities, including Depositary Receipts.  Since foreign
securities are normally denominated and traded in foreign currencies, the
values of the Portfolio's foreign investments may be affected favorably or
unfavorably by currency exchange rates and exchange control regulations.
There may be less information publicly available about foreign companies than
U.S. companies, and they are not generally subject to accounting, auditing
and financial reporting standards and practices comparable to those in the
U.S.  The securities of foreign companies may be less liquid and more
volatile than the securities of comparable U.S. companies.  Foreign
settlement procedures and trade regulations may involve certain risks (such
as delay in payment or delivery of securities or in the recovery of the
Portfolio's assets held abroad) and expenses.  It is possible that
nationalization or expropriation of assets, imposition of currency exchange
controls, confiscatory taxation, political or financial instability and
diplomatic developments could affect the value of the Portfolio's investments
in certain foreign countries.  Foreign laws may restrict the ability to
invest in certain countries or issuers and special tax considerations will
apply to foreign securities. The risks can increase if the Portfolio invests
in securities of issuers in emerging markets.
The Portfolio may invest its assets in securities of foreign issuers in the
form of American Depositary Receipts, European Depositary Receipts, Global
Depositary Receipts or other similar securities representing securities of
foreign issuers (collectively, "Depositary Receipts").   The Portfolio treats
Depositary Receipts as interests in the underlying securities for purposes of
its investment policies.  The Portfolio will limit its investment in
Depositary Receipts not sponsored by the issuer of the underlying securities
to no more than 5% of the value of its net assets (at the time of
investment).
MONEY MARKET INSTRUMENTS.  The Portfolio may invest in cash or high-quality,
short-term money market instruments.  Such instruments may include U.S.
Government securities, commercial paper of domestic and foreign issuers and
obligations of domestic and foreign banks.  Investments in foreign money
market instruments may involve certain risks associated with foreign
investment.
REPURCHASE AGREEMENTS, SECURITIES LOANS AND FORWARD COMMITMENTS.  The
Portfolio may enter into agreements to purchase and resell securities at an
agreed-upon price and time.  The Portfolio also has the ability to lend
portfolio securities in an amount equal to not more than 30% of its total
assets to generate additional income. These transactions must be fully
collateralized at all times.  The Portfolio may purchase securities for
delivery at a future date, which may increase its overall investment exposure
and involves a risk of loss if the value of the securities declines prior to
the settlement date.  These transactions involve some risk to the Portfolio
if the other party should default on its obligation and the Portfolio is
delayed or prevented from recovering the collateral or completing the
transaction.



BORROWING AND REVERSE REPURCHASE AGREEMENTS.  The Portfolio may borrow money
from banks for temporary or short-term purposes, but will not borrow for
leveraging purposes.  The Portfolio may also sell and simultaneously commit
to repurchase a portfolio security at an agreed-upon price and time, to avoid
selling securities during unfavorable market conditions in order to meet
redemptions.  Whenever the Portfolio enters into a reverse repurchase
agreement, it will establish a segregated account in which it will maintain
liquid assets on a daily basis in an amount at least equal to the repurchase
price (including accrued interest).  The Portfolio would be required to pay
interest on amounts obtained through reverse repurchase agreements, which are
considered borrowing under federal securities laws.
STAND-BY COMMITMENTS.  The Portfolio may enter into put transactions,
including transactions sometimes referred to as stand-by commitments, with
respect to money market instruments in its portfolio.  In these transactions,
the Portfolio would acquire the right to sell a security at an agreed upon
price within a specified period prior to its maturity date.  These
transactions involve some risk to the Portfolio if the other party should
default on its obligation and the Portfolio is delayed or prevented from
recovering the collateral or completing the transaction. Acquisition of puts
will have the effect of increasing the cost of the securities subject to the
put and thereby reducing the yields otherwise available from such securities.
CONVERTIBLE SECURITIES.  The Portfolio may invest up to 20% of its net assets
in convertible securities, which are securities generally offering fixed
interest or dividend yields which may be converted either at a stated price
or stated rate for common or preferred stock.  Although to a lesser extent
than with fixed-income securities generally, the market value of convertible
securities tends to decline as interest rates increase, and increase as
interest rates decline.  Because of the conversion feature, the market value
of convertible securities also tends to vary with fluctuations in the market
value of the underlying common or preferred stock.
OTHER INVESTMENT COMPANIES.  The Portfolio may invest up to 10% of its total
assets in shares of other investment companies, subject to applicable
regulatory limitations.
STRIPS.  The Portfolio may  invest up to 20% of its total assets in
separately traded principal and interest components of securities backed by
the full faith and credit of the U.S. Government,  including instruments
known as "STRIPS".  The value of these instruments tends to fluctuate more in
response to changes in interest rates than the value of ordinary interest-
paying debt securities with similar maturities.  The risk is greater when the
period to maturity is longer.
DERIVATIVES AND RELATED INSTRUMENTS.  The Portfolio may invest its assets in
derivative and related instruments to hedge various market risks or to
increase the Portfolio's income or gain.  Some of these instruments will be
subject  to asset segregation requirements to cover the Portfolio's
obligations.  The Portfolio may (i) purchase, write and exercise call and put
options on securities and securities indexes (including using options in
combination with securities, other options or derivative instruments); (ii)
enter into swaps, futures contracts and options on futures contracts; (iii)
employ forward currency contracts; and (iv) purchase and sell structured
products, which are instruments designed to restructure or reflect the
characteristics of certain other investments.
There are a number of risks associated with the use of derivatives and
related instruments and no assurance can be given that any strategy will
succeed.  The value of certain derivatives or related instruments in which
the Portfolio invests may be particularly sensitive to changes in prevailing
economic conditions and market value. The ability of the Portfolio to
successfully utilize these instruments may depend in part upon the ability of
the Portfolio's advisers to forecast these factors

correctly.  Inaccurate forecasts could expose the Portfolio to a risk of
loss.  There can be no guarantee that there will be a correlation between
price movements in a hedging instrument and in the portfolio assets being
hedged.  The Portfolio is not required to use any hedging strategies.
Hedging strategies, while reducing risk of loss, can also reduce the
opportunity for gain.  Derivatives transactions  not involving hedging may
have speculative characteristics, involve leverage and result in more risk to
the Portfolio than hedging strategies using the same instruments.  There can
be no assurance that a liquid market will exist at a time when the Portfolio
seeks to close out a derivatives  position.  Activities of large traders in
the futures and securities markets involving arbitrage, "program trading,"
and other investment strategies may cause price distortions in derivatives
markets.  In certain instances, particularly those involving over-the-counter
transactions or forward contracts, there is a greater potential that a
counterparty or broker may default.  In the event of a default, the Portfolio
may experience a loss.  For additional information concerning derivatives,
related instruments and the associated risks, see the Statement of Additional
Information.
PORTFOLIO TURNOVER.  The frequency of the Portfolio's portfolio transactions
will vary from year to year.  The Portfolio's investment policies may lead to
frequent changes in investments, particularly in periods of rapidly changing
market conditions.  High portfolio turnover rates would generally result in
high transaction costs, including brokerage commissions or dealer mark-ups,
and would make it more difficult for the Portfolio to qualify as a regulated
investment company under federal tax law.
LIMITING INVESTMENT RISKS
Specific investment restrictions help the Portfolio limit investment risks
for the Fund's shareholders.  These restrictions prohibit the Portfolio from:
(a) with respect to 50% of its total assets, holding more than 10% of the
voting securities of any issuer; (b) investing more than 15% of its net
assets in illiquid securities (which include securities restricted as to
resale unless they are determined to be readily marketable in accordance with
procedures established by the Board of Trustees of the Portfolio); or (c)
investing more than 25% of its total assets in any one industry.  A complete
description of these and other investment policies is included in the
Statement of Additional Information.  Except for restriction (c) above and
investment policies designated as fundamental in the Statement of Additional
Information, the investment objective and policies of the Portfolio and the
investment policies of the Fund are not fundamental.  Shareholder approval is
not required to change any non-fundamental investment policy.  However, in
the event of a change in the Fund's or Portfolio's investment objective or
policies, shareholders will be given at least 30 days' prior written notice.
RISK FACTORS
The Fund does not constitute a balanced or complete investment program, and
the net asset value of the shares of the Fund can be expected to fluctuate
based on the value of the securities held by the Portfolio.  The Portfolio is
subject to the general risks and considerations associated with equity
investing, as well as the risks discussed herein.
Because the Portfolio is "non-diversified," the value of the Fund's shares is
more susceptible to developments affecting issuers in which the Portfolio
invests.
For a discussion of certain other risks associated with the Portfolio's
additional investment activities, see "Other Investment Practices" above."



5.   Please delete the last sentence of the fourth paragraph under the sub-
section entitled "Management Fees", under the section "Management of the
Fund" on page 10 and replace it with the following:

"In addition, the Portfolio pays an administrative fee to The Chase Manhattan
Bank, N.A. at an annual rate of .05% of the Portfolio's average daily net
assets pursuant to an Administration Agreement wherein Chase provides
facilities and personnel necessary to operate the Portfolio."

6.   Please delete the section entitled "The Portfolio Adviser" which begins
on page 11 of the prospectus and replace it with the following:

"THE PORTFOLIO'S ADVISERS
Chase acts as investment adviser to the Portfolio pursuant to an Investment
Advisory Agreement and has overall responsibility for investment decisions of
the Portfolio, subject to the oversight of the Board of Trustees.  Chase is a
wholly owned subsidiary of The Chase Manhattan Corporation, a bank holding
company.  Chase and its predecessors have over 100 years of money management
experience.  For its investment advisory services to the Portfolio, Chase is
entitled to receive an annual fee computed daily and paid monthly based at an
annual rate equal to 0.40% of the Portfolio's average daily net assets.
Chase is located at 270 Park Avenue, New York, New York 10017.
Chase Asset Management, Inc. ("CAM"), a registered investment adviser, is the
sub-investment adviser to the Portfolio pursuant to a Sub-Investment Advisory
Agreement between CAM and Chase.  CAM is a wholly-owned operating subsidiary
of Chase.  CAM makes investment decisions for the Portfolio on a day-to-day
basis.  For these services, CAM is entitled to receive a fee, payable by
Chase from its advisory fee, at an annual rate equal to 0.20% of the
Portfolio's average daily net assets.  CAM was recently formed for the
purpose of providing discretionary investment advisory services to
institutional clients and to consolidate Chase's investment management
function.  The same individuals who serve as portfolio managers for Chase
also serve as portfolio managers for CAM.  CAM is located at 1211 Avenue of
the Americas, New York, New York 10036.
PORTFOLIO MANAGER.  Dave Klassen, Director of Domestic Equity Management at
Chase, and Tony Gleason, Vice President of Chase, have been responsible for
the day-to-day management of the Portfolio since September, 1995.  Mr.
Klassen joined Chase in March 1992 and, in addition to managing the Capital
Growth Portfolio, is a manager of  the Vista Small Cap Equity Fund and the
Growth and Income Portfolio.  Prior to joining Chase, Mr. Klassen was a Vice-
President and portfolio manager at Dean Witter Reynolds, responsible for
managing several mutual funds and other accounts.  Mr. Gleason is also
responsible for managing the Vista Equity Income Fund.  Mr. Gleason joined
Chase in 1995 with 10 year of investment experience. In addition, the
portfolio managers utilize a computer model program, which scans over 1600
equity securities in their quest for attractive value, used in the U.S.
equity selection process."



7.   Please delete the section entitled "Unique Characteristics of the Fund
and Portfolio Structure" which begins on page 22 of the prospectus and
replace it with the following:

"UNIQUE CHARACTERISTICS OF THE FUND AND PORTFOLIO STRUCTURE
Unlike other mutual funds which directly acquire and manage their own
portfolio securities, the Fund invests all of its investable assets in the
Portfolio, a separate registered investment company.  Therefore, a
shareholder's interest in the Portfolio's securities is indirect.  In
addition to selling a beneficial interest to the Fund, the Portfolio may sell
beneficial interests to other mutual funds or institutional investors.  Such
investors will invest in the Portfolio on the same terms and conditions and
will pay a proportionate share of the Portfolio's expenses.  However, other
investors investing in the Portfolio are not required to sell their shares at
the same public offering price as the Fund and may bear different levels of
ongoing expenses than the Fund.  Shareholders of the Fund should be aware
that these differences may result in differences in returns experienced in
the different funds that invest in the Portfolio.  Such differences in
returns are also present in other mutual fund structures.
Smaller funds investing in the Portfolio may be materially affected by the
actions of larger funds investing in the Portfolio.  For example, if a large
fund withdraws from the Portfolio, the remaining funds may experience higher
pro rata operating expenses, thereby producing lower returns.  Additionally,
the Portfolio may become less diverse, resulting in increased portfolio risk.
However, this possibility also exists for traditionally structured funds
which have large or institutional investors.  Funds with a greater pro rata
ownership in the Portfolio could have effective voting control of the
operations of the Portfolio.  Whenever the Trust is requested to vote on
matters pertaining to the Portfolio, the Trust will hold a meeting of
shareholders of the Fund and will cast all of its votes in the same
proportion as do the Fund's shareholders.  Shares of the Fund for which no
voting instructions have been received will be voted in the same proportion
as those shares for which voting instructions are received.  Certain changes
in the Portfolio's objective, policies or restrictions may require the Trust
to withdraw the Fund's interest in the Portfolio.  Any withdrawal could
result in a distribution in kind of portfolio securities (as opposed to a
cash distribution from the Portfolio).  The Fund could incur brokerage fees
or other transaction costs in converting such securities to cash.  In
addition, a distribution in kind may result in a less diversified portfolio
of investments or adversely affect the liquidity of the Fund.



State securities regulations generally do not permit the same individuals who
are disinterested Trustees of the Trust to be Trustees of the Portfolio
absent the adoption of written procedures by a majority of the disinterested
Trustees of the Trust reasonably appropriate to deal with potential conflicts
of interest up to and including creating a separate Board of Trustees.  The
Trustees of the Trust, including a majority of the disinterested Trustees,
have adopted procedures they believe are reasonably appropriate to deal with
any conflict of interest up to and including creating a separate Board of
Trustees.
Investors in the Fund may obtain information about whether an investment in
the Portfolio may be available through other funds by calling 1-800-829-
3863."

                                                                 May 17. 1996
   FEDERATED SECURITIES CORP.
   Distributor
   A subsidiary of FEDERATED INVESTORS
   Federated Investors Tower
   PITTSBURGH, PA  15222-3779
   CUSIP 093265403
   G01687-01 (5/96)



BLANCHARD GROWTH & INCOME FUND
(A Portfolio of Blanchard Group of Funds)

SUPPLEMENT TO THE PROSPECTUS DATED FEBRUARY 29, 1996
Effective March 31, 1996, the merger of The Chase Manhattan Corporation with
and into Chemical Banking Corporation, as described in the Prospectus, was
consummated, and Chemical Banking Corporation thereupon changed its name to
The Chase Manhattan Corporation ("New Chase").  New Chase is now the parent
of The Chase Manhattan Bank, N.A. (the "Portfolio Adviser"), the adviser to
Growth and Income Portfolio (the "Portfolio").  The merger resulted in the
automatic termination of the investment advisory agreement between the
Portfolio Adviser and the Portfolio.
Pursuant to a vote of the shareholders of Blanchard Growth & Income Fund (the
"Fund") and the other mutual funds which invest their assets in the
Portfolio, a new investment advisory agreement between the Portfolio Adviser
and the Portfolio, and a sub-advisory agreement between the Portfolio Adviser
and Chase Asset Management, Inc., became effective on May 6, 1996.
The foregoing changes did not result in any change to contractual advisory
fees payable by the Portfolio, or in any change in the investment management
or operation of the Portfolio.
In addition to reflecting the forgoing changes, this Supplement reflects the
restatement of certain portions of the Fund's Prospectus to conform the
disclosure style to that now employed by the Portfolio and to reflect certain
changes to the investment policies of the Fund.

1.   Please delete the first four paragraphs on the cover page of the
prospectus and replace them with the following:

"Blanchard Growth & Income Fund (the "Fund") seeks to provide long-term
capital appreciation and dividend income. The Fund, unlike many other
investment companies which directly acquire and manage their own portfolios
of securities, seeks its investment objective by investing all of its
investable assets in Growth and Income Portfolio (the "Portfolio"), an open-
end management investment company with investment objectives identical to
those of the Fund.  Investors should carefully consider this investment
approach.  For additional information regarding this investment structure,
see "Unique Characteristics of the Fund and Portfolio Structure", on page
23."

2.   Please replace the next to the last sentence of the fifth paragraph of
the cover page with the following:

"Virtus Capital Management, Inc. ("VCM") is the Funds' overall investment
manager."



3.   Please replace the second paragraph  of the sub-section entitled "Fund
Management" under the section entitled "Highlights" on page 1 with the
following:

"The Chase Manhattan Bank, N.A. (the "Portfolio Adviser" or "Chase"), a
wholly owned subsidiary of The Chase Manhattan Corporation, a bank holding
company, is a commercial bank offering a wide range of banking and investment
services to customers throughout the United States and around the world.  Its
headquarters is at 270 Park Avenue, New York, New York 10017.  The Portfolio
Adviser, including its predecessor organizations, has over 100 years of money
management experience.  See "Portfolio Advisory Services- The Portfolio
Adviser."

4.   Please delete the sections entitled "Investment Objectives and Policies"
and "Additional Information on Investment Policies, Techniques and Risk
Factors" which begin on page 6 and end at page 10 of the prospectus and
replace them with the following:

    "FUND OBJECTIVE

The Blanchard Growth & Income Fund seeks to provide long-term capital
appreciation and dividend income.  The Fund is not intended to be a complete
investment program, and there is no assurance it will achieve its objectives.
    INVESTMENT POLICIES

INVESTMENT APPROACH
The Fund seeks to achieve its objective by investing all of its investable
assets in the Portfolio.  The Portfolio invests in common stocks of issuers
with a broad range of market capitalizations.  Under normal market
conditions, the Portfolio will invest at least 80% of its total assets in
common stocks.  In addition, the Portfolio may invest up to 20% of its total
assets in convertible securities.
The Portfolio's advisers intend to utilize both quantitative and fundamental
research to identify undervalued stocks with a catalyst for positive change.
The advisers believe that the market risk involved in seeking capital
appreciation will be moderated to an extent by the anticipated dividend
returns on the stocks in which the Portfolio invests.
The Portfolio is classified as a "non-diversified" fund under federal
securities law.  The Portfolio's assets may be more concentrated in the
securities of any single issuer or group of issuers than if the Portfolio
were diversified.
The Portfolio may invest any portion of its assets not invested as described
above in high quality money market instruments and repurchase agreements.
For temporary defensive purposes, the Portfolio may invest without limitation
in these instruments as well as investment grade debt securities.  To the
extent that the Portfolio departs from its investment policies during
temporary defensive periods, the Fund's investment objective may not be
achieved.
FUND STRUCTURE
The Portfolio has an objective identical to that of the Fund.  The Fund may
withdraw its investment from the Portfolio at any time if the Trustees
determine that it is in the best interest of the Fund to do so.  Upon any
such withdrawal, the Trustees would consider what action might be taken,
including investing all of the Fund's investable assets in another pooled
investment entity having substantially the same objective and policies as the
Fund or retaining an investment adviser to manage the Fund's assets directly.
OTHER INVESTMENT PRACTICES
The Portfolio may also engage in the following investment practices, when
consistent with the Portfolio's overall objective and policies.  These
practices, and certain associated risks, are more fully described in the
Statement of Additional Information.
FOREIGN SECURITIES.  The Portfolio may invest up to 20% of its total assets
in foreign securities, including Depositary Receipts.  Since foreign
securities are normally denominated and traded in foreign currencies, the
values of the Portfolio's foreign investments may be affected favorably or
unfavorably by currency exchange rates and exchange control regulations.
There may be less information publicly available about foreign companies than
U.S. companies, and they  are not generally subject to accounting, auditing
and financial reporting standards and practices comparable to those in the
U.S.  The securities of foreign companies may be less liquid and more
volatile than the securities of comparable U.S. companies.  Foreign
settlement procedures and trade regulations may involve certain risks (such
as delay in payment or delivery of securities or in the recovery of the
Portfolio's assets held abroad) and expenses.  It is possible that
nationalization or expropriation of assets, imposition of currency exchange
controls, confiscatory taxation, political or financial instability and
diplomatic developments could affect the value of the Portfolio's investments
in certain foreign countries.  Foreign laws may restrict the ability to
invest in certain countries or issuers and special tax considerations will
apply to foreign securities. The risks can increase if the Portfolio invests
in securities of issuers in emerging markets.
The Portfolio may invest its assets in securities of foreign issuers in the
form of American Depositary Receipts, European Depositary Receipts, Global
Depositary Receipts or other similar securities representing securities of
foreign issuers (collectively, "Depositary Receipts").   The Portfolio treats
Depositary Receipts as interests in the underlying securities for purposes of
its investment policies.  The Portfolio will limit its investment in
Depositary Receipts not sponsored by the issuer of the underlying securities
to no more than 5% of the value of its net assets (at the time of
investment).
SUPRANATIONAL AND ECU OBLIGATIONS.    The Portfolio may invest in securities
issued by supranational organizations, which include organizations such as
The World Bank, the European Community, the European Coal and Steel Community
and the Asian Development Bank.   The Portfolio may also invest in securities
denominated in the ECU, which is a "basket" consisting of specified amounts
of the currencies of certain member states of the European Community.  These
securities are typically issued by European governments and supranational
organizations.



CONVERTIBLE SECURITIES.  The Portfolio may invest up to 20% of its net assets
in convertible securities, which are securities generally offering fixed
interest or dividend yields which may be converted either at a stated price
or stated rate for common or preferred stock.  Although to a lesser extent
than with fixed-income securities generally, the market value of convertible
securities tends to decline as interest rates increase, and increase as
interest rates decline.  Because of the conversion feature, the market value
of convertible securities also tends to vary with fluctuations in the market
value of the underlying common or preferred stock.
MONEY MARKET INSTRUMENTS.  The Portfolio may invest in cash or high-quality,
short-term money market instruments.  Such instruments may include U.S.
Government securities, commercial paper of domestic and foreign issuers and
obligations of domestic and foreign banks.  Investments in foreign money
market instruments may involve certain risks associated with foreign
investment.
INVESTMENT GRADE DEBT SECURITIES.  Investment grade debt securities are
securities rated in the category BBB or higher by Standard & Poor's
Corporation ("S&P"), Baa or higher by Moody's Investors Services, Inc.
("Moody's") or the equivalent by another national rating organization, or, if
unrated, determined by the advisers to be of comparable  quality.
REPURCHASE AGREEMENTS , SECURITIES LOANS AND FORWARD COMMITMENTS.  The
Portfolio may enter into agreements to purchase and resell securities at an
agreed-upon price and time.  The Portfolio also has the ability to lend
portfolio securities in an amount equal to not more than 30% of its total
assets to generate additional income.  These transactions must be fully
collateralized at all times.  The Portfolio may purchase securities for
delivery at a future date, which may increase its overall investment exposure
and involves a risk of loss if the value of the securities declines prior to
the settlement date.  These transactions involve some risk to the Portfolio
if the other party should default on its obligation and the Portfolio is
delayed or prevented from recovering the collateral or completing the
transaction.
BORROWINGS AND REVERSE REPURCHASE AGREEMENTS.  The Portfolio may borrow money
from banks for temporary or short-term purposes, but will not borrow for
leveraging purposes.  The Portfolio may also sell and simultaneously commit
to repurchase a portfolio security at an agreed-upon price and time, to avoid
selling securities during unfavorable market conditions in order to meet
redemptions.  Whenever the Portfolio enters into a reverse repurchase
agreement, it will establish a segregated account in which it will maintain
liquid assets on a daily basis in an amount at least equal to the repurchase
price (including accrued interest).  The Portfolio would be required to pay
interest on amounts obtained through reverse repurchase agreements, which are
considered borrowings under federal securities laws.
STAND-BY COMMITMENTS.  The Portfolio may enter into put transactions,
including transactions sometimes referred to as stand-by commitments, with
respect to securities in its portfolio.  In these transactions, the Portfolio
would acquire the right to sell a security at an agreed upon price within a
specified period prior to its maturity date.  These transactions involve some
risk to the Portfolio if the other party should default on its obligation and
the Portfolio is delayed or prevented from recovering the collateral or
completing the transaction. Acquisition of puts will have the effect of
increasing the cost of the securities subject to the put and thereby reducing
the yields otherwise available from such securities.
OTHER INVESTMENT COMPANIES.  The Portfolio may invest up to 10% of its total
assets in shares of other investment companies, subject to applicable
regulatory limitations.



STRIPS.  The Portfolio may  invest up to 20% of its total assets in
separately traded principal and interest components of securities backed by
the full faith and credit of the U.S. Government,  including instruments
known as "STRIPS".  The value of these instruments tends to fluctuate more in
response to changes in interest rates than the value of ordinary interest-
paying debt securities with similar maturities.  The risk is greater when the
period to maturity is longer.
DERIVATIVES AND RELATED INSTRUMENTS.  The Portfolio may invest its assets in
derivative and related instruments to hedge various market risks or to
increase the Portfolio's income or gain.  Some of these instruments will be
subject  to asset segregation requirements to cover the Portfolio's
obligations.  The Portfolio may (i) purchase, write and exercise call and put
options on securities and securities indexes (including using options in
combination with securities, other options or derivative instruments); (ii)
enter into swaps, futures contracts and options on futures contracts; (iii)
employ forward currency contracts; and (iv) purchase and sell structured
products, which are instruments designed to restructure or reflect the
characteristics of certain other investments.
There are a number of risks associated with the use of derivatives and
related instruments and no assurance can be given that any strategy will
succeed.  The value of certain derivatives or related instruments in which
the Portfolio invests may be particularly sensitive to changes in prevailing
economic conditions and market value. The ability of the Portfolio to
successfully utilize these instruments may depend in part upon the ability of
the Portfolio's advisers to forecast these factors correctly.  Inaccurate
forecasts could expose the Portfolio to a risk of loss.  There can be no
guarantee that there will be a correlation between price movements in a
hedging instrument and in the portfolio assets being hedged.  The Portfolio
is not required to use any hedging strategies.  Hedging strategies, while
reducing risk of loss, can also reduce the opportunity for gain.  Derivatives
transactions  not involving hedging may have speculative characteristics,
involve leverage and result in more risk to the Portfolio than hedging
strategies using the same instruments.  There can be no assurance that a
liquid market will exist at a time when the Portfolio seeks to close out a
derivatives  position.  Activities of large traders in the futures and
securities markets involving arbitrage, "program trading," and other
investment strategies may cause price distortions in derivatives  markets.
In certain instances, particularly those involving over-the-counter
transactions or forward contracts, there is a greater potential that a
counterparty or broker may default.  In the event of a default, the Portfolio
may experience a loss.  For additional information concerning derivatives,
related instruments and the associated risks, see the Statement of Additional
Information.
PORTFOLIO TURNOVER.  The frequency of the Portfolio's portfolio transactions
will vary from year to year.  The Portfolio's investment policies may lead to
frequent changes in investments, particularly in periods of rapidly changing
market conditions.  High portfolio turnover rates would generally result in
higher transaction costs, including brokerage commissions or dealer mark-ups,
and would make it more difficult for the Portfolio to qualify as a regulated
investment company under federal tax law.
LIMITING INVESTMENT RISKS
Specific investment restrictions help the Portfolio limit investment risks
for the Fund's shareholders.  These restrictions prohibit the Portfolio from:
(a) with respect to 50% of its total assets, holding more than 10% of the
voting securities of any issuer; (b) investing more than 15% of its net
assets in illiquid securities (which include securities restricted as to
resale unless they are determined to be readily marketable in accordance with
procedures established by the Board of Trustees); or (c) investing more than
25% of its total assets in any one industry.  A complete description of these
and other investment policies is included in the Statement of Additional
Information.  Except for restriction (c) above and investment policies
designated as fundamental in the Statement of Additional Information, the
investment objective and policies of the Portfolio and the investment
policies of the Fund are not fundamental.  Shareholder approval is not
required to change any non-fundamental investment policy.  However, in the
event of a change in the Fund's or Portfolio's investment objective or
policies, shareholders will be given at least 30 days prior written notice.
RISK FACTORS
The net asset value of the shares of the Fund can be expected to fluctuate
based on the value of the securities held by the Portfolio. The Fund does not
constitute a balanced or complete investment program. The Fund is subject to
the general risks and considerations associated with equity investing.
Because the Portfolio is "non-diversified," the value of the Fund's shares is
more susceptible to developments affecting issuers in which the Portfolio
invests.
For a discussion of certain other risks associated with the Portfolio's
additional investment activities, see "Other Investment Practices" above."

5.   Please delete the last sentence of the fourth paragraph under the sub-
section entitled "Management Fees", under the section "Management of the
Fund" on page 11 and replace it with the following:

"In addition, the Portfolio pays an administrative fee to The Chase Manhattan
Bank, N.A. at an annual rate of .05% of the Portfolio's average daily net
assets pursuant to an Administration Agreement wherein Chase provides
facilities and personnel necessary to operate the Portfolio."

6.   Please delete the section entitled "The Portfolio Adviser" which begins
on page 12 and replace it with the following:

"THE PORTFOLIO ADVISER
Chase acts as investment adviser to the Portfolio pursuant to an Investment
Advisory Agreement and has overall responsibility for investment decisions of
the Portfolio, subject to the oversight of the Board of Trustees.  Chase is a
wholly owned subsidiary of The Chase Manhattan Corporation, a bank holding
company.  Chase and its predecessors have over 100 years of money management
experience.  For its investment advisory services to the Portfolio, Chase is
entitled to receive an annual fee computed daily and paid monthly based at an
annual rate equal to 0.40% of the Portfolio's average daily net assets.
Chase is located at 270 Park Avenue, New York, New York 10017.
Chase Asset Management, Inc. ("CAM"), a registered investment adviser, is the
sub-investment adviser to the Portfolio pursuant to a Sub-Investment Advisory
Agreement between CAM and Chase.  CAM is a wholly-owned operating subsidiary
of Chase.  CAM makes investment decisions for the Portfolio on a day-to-day
basis.  For these services, CAM is entitled to receive a fee, payable by
Chase from its advisory fee, at an annual rate equal to 0.20% of the
Portfolio's average daily net assets.  CAM was recently formed for the
purpose of providing discretionary investment advisory services to
institutional clients and to consolidate Chase's investment management
function.  The same individuals who serve as portfolio managers for Chase
also serve as portfolio managers for CAM.  CAM is located at 1211 Avenue of
the Americas, New York, New York 10036.

PORTFOLIO MANAGER. Dave Klassen, Director of Domestic Equity Portfolio
Management at Chase, and Greg Adams, Director of U.S. Equity Research at
Chase, have been responsible for the day-to-day management of the Portfolio
since March 1995.  Mr. Klassen joined Chase in March 1992 and, in addition to
managing the Growth and Income Portfolio, is a manager of the Vista Small Cap
Equity Fund and the Capital Growth Portfolio.  Prior to joining Chase, Mr.
Klassen was a Vice President and portfolio manager at Dean Witter Reynolds,
responsible for managing several mutual funds and other accounts.  Mr. Adams
joined Chase in 1987 and is also a manager of the Vista Balanced Fund and the
Vista Large Cap Equity Fund.  In addition, Mr. Adams has been responsible for
overseeing the proprietary computer model program, which scans over 1600
equity securities in their quest for attractive value, used in the U.S.
equity selection process."

7.   Please delete the section entitled "Unique Characteristics of the Fund
and Portfolio Structure" which begins on page 23 and replace it with the
following:

"UNIQUE CHARACTERISTICS OF THE FUND AND PORTFOLIO STRUCTURE
Unlike other mutual funds which directly acquire and manage their own
portfolio securities, the Fund invests all of its investable assets in the
Portfolio, a separate registered investment company.  Therefore, a
shareholder's interest in the Portfolio's securities is indirect.  In
addition to selling a beneficial interest to the Fund, the Portfolio may sell
beneficial interests to other mutual funds or institutional investors.  Such
investors will invest in the Portfolio on the same terms and conditions and
will pay a proportionate share of the Portfolio's expenses.  However, other
investors investing in the Portfolio are not required to sell their shares at
the same public offering price as the Fund, and may bear different levels of
ongoing expenses than the Fund.  Shareholders of the Fund should be aware
that these differences may result in differences in returns experienced in
the different funds that invest in the Portfolio.  Such differences in
returns are also present in other mutual fund structures.
Smaller funds investing in the Portfolio may be materially affected by the
actions of larger funds investing in the Portfolio.  For example, if a large
fund withdraws from the Portfolio, the remaining funds may experience higher
pro rata operating expenses, thereby producing lower returns.  Additionally,
the Portfolio may become less diverse, resulting in increased portfolio risk.
However, this possibility also exists for traditionally structured funds
which have large or institutional investors.  Funds with a greater pro rata
ownership in the Portfolio could have effective voting control of the
operations of the Portfolio.  Whenever the Trust is requested to vote on
matters pertaining to the Portfolio, the Trust will hold a meeting of
shareholders of the Fund and will cast all of its votes in the same
proportion as do the Fund's shareholders.  Shares of the Fund for which no
voting instructions have been received will be voted in the same proportion
as those shares for which voting instructions are received.  Certain changes
in the Portfolio's objective, policies or restrictions may require the Trust
to withdraw the Fund's interest in the Portfolio.  Any withdrawal could
result in a distribution in kind of portfolio securities (as opposed to a
cash distribution from the Portfolio).  The Fund could incur brokerage fees
or other transaction costs in converting such securities to cash.  In
addition, a distribution in kind may result in a less diversified portfolio
of investments or adversely affect the liquidity of the Fund.



State securities regulations generally do not permit the same individuals who
are disinterested Trustees of the Trust to be Trustees of the Portfolio
absent the adoption of written procedures by a majority of the disinterested
Trustees of the Trust reasonably appropriate to deal with potential conflicts
of interest up to and including creating a separate Board of Trustees.  The
Trustees of the Trust, including a majority of the disinterested Trustees,
have adopted procedures they believe are reasonably appropriate to deal with
any conflict of interest up to and including creating a separate Board of
Trustees.
Investors in the Fund may obtain information about whether an investment in
the Portfolio may be available through other funds by calling 1-800-829-
3863."


                                                                 May 17, 1996


   FEDERATED SECURITIES CORP.

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