THE BLANCHARD GROUP OF FUNDS
            BLANCHARD GLOBAL GROWTH FUND
            BLANCHARD PRECIOUS METALS FUND, INC.
            BLANCHARD 100% TREASURY MONEY MARKET FUND
            BLANCHARD SHORT-TERM GLOBAL INCOME FUND
            BLANCHARD AMERICAN EQUITY FUND
            BLANCHARD FLEXIBLE INCOME FUND
            BLANCHARD SHORT-TERM BOND FUND
            BLANCHARD FLEXIBLE TAX-FREE BOND FUND
            BLANCHARD WORLDWIDE EMERGING MARKETS FUND
SUPPLEMENT TO PROSPECTUS DATED AUGUST 31, 1994, AS SUPPLEMENTED ON JANUARY
1, 1995

    On July 12, 1995, as a result of the acquisition by subsidiaries of
Signet Banking Corporation ("SBC") of certain assets of Sheffield Management
Company ("SMC") and Sheffield Investments, Inc. ("SII"), the following
actions were taken:  (i) Virtus Capital Management, Inc. ("VCM"), a wholly-
owned subsidiary of SBC, replaced SMC as overall investment manager to
Blanchard Funds and Blanchard Precious Metals Fund, Inc. (collectively, the
"Funds"); (ii) VCM entered into new sub-advisory agreements with each
current sub-adviser of each Fund (with the exception of Blanchard 100%
Treasury Money Market Fund, Blanchard Capital Growth Fund and Blanchard
Growth & Income Fund); (iii) Federated Securities Corp. replaced SII as the
Funds' distributor; (iv) Federated Administrative Services ("FAS") was
engaged to provided administrative services to the Funds; and (i) Federated
Securities Corp. entered into new distribution plans with each Fund (other
than Blanchard 100% Treasury Money Market Fund).  No changes in the advisory
fees, sub-advisory fees or distribution plan fees will occur as a result of
these actions, and the acquisition agreement requires all parties to avoid
the imposition of any unfair burden on the Fund.
    Accordingly, please make the following changes to the Prospectus:
1.  On the front and back cover pages of the Prospectus, please change the
address of the Blanchard Group of Funds to the following:
"Federated Investors Tower, Pittsburgh, Pennsylvania  15222-3779."
2.  In the first paragraph on the front cover page of the Prospectus;  the
section "The Funds, Objectives and Policies" appearing on pages 10 through
26 of the Prospectus; the section "Portfolio Advisory Services" appearing on
page 27 through 32 of the Prospectus; and the section "Brokerage Allocation"
appearing on page 37 of the prospectus, please delete each reference to SMC
and replace it with VCM;
3.  Please insert the following paragraph after the third paragraph on the
front cover page of the Prospectus:
"Investment products offered through Signet Financial Services, Inc. are not
deposits, obligations of, or guaranteed by Signet Bank, and are not insured
by FDIC or any Federal agency. In addition, they involve risk, including
possible loss of principal invested. Member NASD."
4.  On page 3 of the prospectus under the sub-heading "Fund Management"
please delete the first and second paragraphs and replace them with the
following:
"Virtus Capital Management, Inc. ("VCM") provides the overall investment
advisory services necessary for the Funds' operations.  VCM selected,
continually monitors and evaluates the Funds' Portfolio advisers. The
Portfolio Advisers are responsible for the selection of each Fund's
portfolio investments.
VCM receives monthly compensation from each Fund based on the amount of
assets under management. VCM, not the Fund, pays the fees of each Portfolio
Adviser pursuant to a sub-advisory agreement.  See 'Management of the Funds
and Portfolio Advisory Services.' "
5.  Under the sub-heading "How to Invest and Redeem" on page 3 of the
prospectus, please delete the reference to SII and replace it with Federated
Securities Corp.
6.  Please delete footnote 1 to the Fee Table on page 5 of the prospectus
and replace it with the following:
"1.  VCM has conditioned its right to receive a portion of any earned but
deferred fees and expenses based upon these Funds reaching and maintaining a
certain level of net assets.  See 'Management of the Funds.' "
7.  In the footnotes to the tables in the Financial Highlights section
appearing on pages 6 through 9 of the Prospectus, please delete each
reference to "Manager" and "Distributor" and replace them with "Sheffield
Management Company" and "Sheffield Investments, Inc.", respectively.
8.  On page 26 of the Prospectus and continuing on page 27, please delete
the heading "The Manager and the Management Agreements," the sub-headings
"The Manager," and "The Management Agreements" and the paragraphs
thereunder, but not including the fee schedule and replace with the
following:
"MANAGEMENT OF THE FUNDS
BOARD OF TRUSTEES/DIRECTORS. The Board of Trustees and the Board of
Directors (the 'Boards' or the 'Board Members') are responsible for managing
the business affairs of the Funds and for exercising all of the powers of
the Funds except those reserved for the shareholders. The Executive
Committee of the Boards handle the Boards' responsibilities between meetings
of the Boards.
INVESTMENT ADVISER. VCM is responsible for managing the Funds and overseeing
the investment of their assets, subject at all times to the supervision of
the Board Members. In addition, VCM selects, monitors and evaluates the
Portfolio Advisers. VCM will review the Portfolio Advisers' performance
records periodically, and will make changes if necessary, subject to Board
Member and Shareholder approval.
ADVISORY FEES. VCM receives an annual investment advisory fee at annual
rates equal to percentages of the relevant Fund's average net assets as
follows:
Blanchard Global Growth Fund- 1.00% of the first $150 million of average
daily net assets, .875% of the Fund's average daily net assets in excess of
$150 million but not exceeding $300 million and .75% of the Fund' average
daily net assets in excess of $300 million. Blanchard 100% Treasury Money
Market Fund- .50% of the first $500 million of the Fund's average daily net
assets, .475% of the Fund's average daily net assets in excess of $500
million but not exceeding $1 billion, plus .45% of the Fund's average daily
net assets in excess of $1 billion; Blanchard Short-Term Global Income Fund-
 .75%; Blanchard American Equity Fund- 1.10%; Blanchard Precious Metals Fund,
Inc.- 1% of the first $150 million of the Fund's average daily net assets,
 .875% of the Fund's average daily net assets in excess of $150 million but
not exceeding $300 million and .75% of the Fund's average daily net assets
in excess of $300 million. Blanchard Flexible Income Fund- .75%; Blanchard
Short-Term Bond Fund- .75%; Blanchard Flexible Tax-Free Bond Fund- .75% and
Blanchard Worldwide Emerging Markets Fund- 1.25%.
The portion of the fee based upon the average daily net assets of the Fund
shall be accrued daily at the rate of 1/365th of the applicable percentage
applied to the daily net assets of the Fund.
The investment advisory contract provides for the voluntary waiver of
expenses by VCM from time to time. VCM can terminate this voluntary waiver
of expenses at any time with respect to a Fund at its sole discretion. VCM
has also undertaken to reimburse the Funds for operating expenses in excess
of limitations established by certain states.
VCM'S BACKGROUND. Virtus Capital Management, Inc., a Maryland corporation
formed in 1995, is a wholly owned subsidiary of Signet Banking Corporation.
Signet Banking Corporation is a multi-state, multi-bank holding company
which has provided investment management services since 1956. VCM, which is
a registered investment adviser, manages, in addition to the Funds, The
Virtus Funds, three equity common trust funds with $39 million in assets and
three fixed income common trust funds with $221 million in assets.
For the fiscal year ended April 30, 1994 the prior manager received from
each Fund a monthly fee at the following annual rates: BFIF, BSTBF, BSTGIF
and BFTFBF each paid the prior manager .75% of their average daily net
assets; BWEMF paid the prior manager 1.25% of its average daily net assets;
BPMF paid the prior manager 1.00% of its average daily net assets; BAEF paid
the prior manager 1.10% of its average daily net assets; BGGF paid the prior
manager 1.00% of its average daily net assets; and BTMMF paid the prior
manager .50% of its average daily net assets. Some of these fees are higher
than the fees charged by many investment companies because of the complexity
of managing these types of Funds.
VCM has conditioned its right to receive a portion of any earned but
deferred fees from BFIF and BSTBF and to receive reimbursement for absorbed
expenses (measured on a rolling two-year period, starting from the date the
portion of the fee is deferred and/or the expenses are absorbed) upon theses
Funds reaching and then maintaining the following specified levels of net
assets for a period of 30 continuous days (excluding assets exchanged into a
Fund after June 1, 1993 from other funds in the Blanchard Group of Funds),
provided that such reimbursement would not cause the Fund's expenses in such
year to exceed 1.75%.
9.  On page 32 of the prospectus, please delete the first sentence of the
paragraph under the heading "How to Invest" and replace it with the
following:
"You may purchase shares of any Fund from Federated Securities Corp., the
Funds' principal Distributor."
10. On page 37 of the prospectus and continuing on page 38, please delete
the heading "Distribution Agreements and Marketing Plans," the sub-headings
"Distribution Agreements" and "Marketing Plans" and the paragraphs
thereunder and replace with the following:
"DISTRIBUTION OF SHARES OF THE FUNDS
Federated Securities Corp. is the principal distributor for shares of the
Funds. It is a Pennsylvania corporation organized on November 14, 1969, and
is the principal distributor for a number of investment companies. Federated
Securities Corp. is a subsidiary of Federated Investors.
DISTRIBUTION PLAN. According to the provisions of a distribution plan
adopted pursuant to Investment Company Act Rule 12b-1, the distributor may
select brokers and dealers to provide distribution and administrative
services as to shares of the Funds. The distributor may also select
administrators (including financial institutions, fiduciaries, custodians
for public funds and investment advisers) to provide administrative
services. Administrative services may include, but are not limited to, the
following functions: providing office space, equipment, telephone
facilities, and various personnel including clerical, supervisory, and
computer, as necessary or beneficial to establish and maintain shareholder
accounts and records; processing purchase and redemption transactions and
automatic investments of client account cash balances; answering routine
client inquiries regarding shares; assisting clients in changing dividend
options, account designations and addresses; and providing such other
services as each Fund reasonably requests for its shares.

Brokers, dealers, and administrators will receive fees based upon shares
owned by their clients or customers. The schedules of such fees and the
basis upon which such fees will be paid will be determined from time to time
by the Board of Trustees, provided that for any period the total amount of
fees representing an expense to the Trust shall not exceed an annual rate of
 .25 of 1% of the average daily net assets of shares of BSTGIF, BFIF, BSTBF
and BFTFBF; .50 of 1% of the average daily net assets of shares of BGIF,
BCGF, BWEMF and BAEF; and .75 of 1% of the average daily net assets of
shares of BGGF and BPMF held in the accounts during the period for which the
brokers, dealers, and administrators provide services. Any fees paid by the
distributor with respect to shares of a Fund pursuant to the distribution
plan will be reimbursed by the Trust from the assets of the shares of that
Fund.
The distributor will, periodically, uniformly offer to pay cash or
promotional incentives in the form of trips to sales seminars at luxury
resorts, tickets or other items to all dealers selling shares of the Funds.
Such payments will be predicated upon the account of shares of the Funds
that are sold by the dealer. Such payments, if made, will be in addition to
amounts paid under the distribution plan and will not be an expense of a
Fund.
ADMINISTRATIVE ARRANGEMENTS. The distributor may pay financial institutions
a fee based upon the average net asset value of shares of their customers
invested in the Trust for providing administrative services. This fee, if
paid, will be reimbursed by VCM and not the Trust.
GLASS-STEAGALL ACT. The Glass-Steagall act prohibits a depository
institution (such as a commercial bank or a savings and loan association)
from being an underwriter or distributor of most securities. In the event
the Glass-Steagall Act is deemed to prohibit depository institutions from
acting in the administrative capacities described above or should Congress
relax current restrictions on depository institutions, the Board of Trustee
will consider appropriate changes in the administrative services.
State securities laws governing the ability of depository institutions to
act as underwriters or distributors of securities may differ from
interpretations given to the Glass-Steagall Act and, therefore, banks and
financial institutions may be required to register as dealers pursuant to
state law.
ADMINISTRATIVE SERVICES. Federated Administrative Services, a subsidiary of
Federated Investors, provides the Funds with certain administrative
personnel and services necessary to operate each Fund. Such services include
shareholder servicing and certain legal and accounting services. Federated
Administrative Services provides these at an annual rate as specified below:
                Maximum                   Average Aggregate Daily Net
             Administrative Fee           Assets of the Trust/Corporation
                .150 of 1%                  on the first $250 million
                .125 of 1%                  on the next $250 million
                .100 of 1%                  on the next $250 million
                .075 of 1%                 on assets in excess of $750 million
The administrative fee received during any fiscal year shall be at least
$75,000 per Fund. Federated Administrative services may voluntarily waive a
portion of its fee.
11. On page 42 of the prospectus under the sub-heading "All Funds" please
add the following as the final paragraph:
"The Code of Ethics of the Investment Adviser and 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 both the Funds and
Investment Adviser is that their operations be carried out for the exclusive
benefit of the Funds' shareholders. Both organizations maintain careful
monitoring of compliance with the Code of Ethics."
July 12, 1995


    FEDERATED SECURITIES CORP.

    Distributor
    A subsidiary of Federated Investors
    Federated Investors Tower
    Pittsburgh, PA  15222-3779
    (7/95)



THE BLANCHARD GROUP OF FUNDS
            BLANCHARD GROWTH & INCOME FUND
            BLANCHARD CAPITAL GROWTH FUND
SUPPLEMENT TO PROSPECTUS DATED APRIL 25, 1995

    On July 12, 1995, as a result of the acquisition by subsidiaries of
Signet Banking Corporation ("SBC") of certain assets of Sheffield Management
Company ("SMC") and Sheffield Investments, Inc. ("SII"), the following
actions were taken:  (i) Virtus Capital Management, Inc. ("VCM"), a wholly-
owned subsidiary of SBC, replaced SMC as overall investment manager to
Blanchard Funds and Blanchard Precious Metals Fund, Inc. (collectively, the
"Funds"); (ii) VCM entered into new sub-advisory agreements with each
current sub-adviser of each Fund (with the exception of Blanchard 100%
Treasury Money Market Fund, Blanchard Capital Growth Fund and Blanchard
Growth & Income Fund); (iii) Federated Securities Corp. replaced SII as the
Funds' distributor; (iv) Federated Administrative Services ("FAS") was
engaged to provided administrative services to the Funds; and (i) Federated
Securities Corp. entered into new distribution plans with each Fund (other
than Blanchard 100% Treasury Money Market Fund).  No changes in the advisory
fees, sub-advisory fees or distribution plan fees will occur as a result of
these actions, and the acquisition agreement requires all parties to avoid
the imposition of any unfair burden on the Funds.
    Accordingly, please make the following changes to the Prospectus:
1.  On the front and back cover pages and on page 2 of the Prospectus,
please change the address of the Blanchard Group of Funds, and Blanchard
Growth &  Income Fund and Blanchard Capital Growth Fund, to the following:
"Federated Investors Tower, Pittsburgh, Pennsylvania  15222-3779."
2.  In the first paragraph on the front cover page of the Prospectus, please
delete the reference to SMC and replace it with VCM;
3.  Please insert the following paragraph after the third paragraph on the
front cover page of the Prospectus:
"Investments in the Funds are subject to risk - including possible loss of
principal - and will fluctuate in value.  Shares of the Funds are not bank
deposits or obligations of, or endorsed or guaranteed by, Signet Bank or The
Chase Manhattan Bank, N.A. or any of their respective affiliates and are not
insured by, obligations of or otherwise supported by the U.S. Government,
the Federal Deposit Insurance Corporation, the Federal Reserve Board or any
other agency."
4.  Please delete the last two paragraphs on page 2 of the Prospectus and
replace them with the following:
"Virtus Capital Management, Inc. is the Funds' investment adviser."
5.  On page 3 of the Prospectus, under the heading "Fund Management," please
delete the first paragraph and replace it with the following:
"VCM provides investment advisory services for the Funds' operations.  VCM
manages, in addition to the Funds, the Virtus Funds, three equity common
trust funds with $39 million in assets and three fixed income common trust
funds with $221 million in assets.  VCM receives monthly compensation from
each Fund based on the amount of assets under management.  VCM evaluates the
performance of the Funds' Portfolio Adviser.  The Portfolio Adviser is
responsible for the selection of each Portfolio's investments.  See
"Management of the Trust."
6.  Under the sub-heading "How to Invest and Redeem" on page 3 of the
prospectus, please delete the reference to SII and replace it with
"Federated Securities Corp. "
7.  In the fee table on page 5 of the Prospectus, please delete the cross-
references to "The Manager and Management Agreement", and replace them with
cross-references to "Management of the Funds."
8.  On page 12 of the Prospectus, please delete the heading "The Manager and
the Management Agreements," the sub-headings "The Manager," and "The
Management Agreements" and the paragraphs thereunder, and replace with the
following:
"MANAGEMENT OF THE FUNDS
BOARD OF TRUSTEES The Board of Trustees (the 'Board' or the 'Trustees') is
responsible for managing the business affairs of the Funds and for
exercising all of the powers of the Funds except those reserved for the
shareholders. The Executive Committee of the Board handles the Board's
responsibilities between meetings of the Board.
INVESTMENT ADVISER. VCM is responsible for managing the Funds and overseeing
the investment of their assets, subject at all times to the supervision of
the Board Members. In addition, VCM selects, monitors and evaluates the
Portfolio Advisers. VCM will review the Portfolio Advisers' performance
records periodically, and will make changes if necessary, subject to Board
member and Shareholder approval.
ADVISORY FEES.  Under the terms of the Investment Advisory Contract, VCM
receives a monthly fee of .70% of each Fund's average daily net assets and
the Portfolio Adviser receives .40% per annum of each Fund's average daily
net assets directly from the Portfolio, as described below.
The portion of the fee based upon the average daily net assets of the Fund
shall be accrued daily at the rate of 1/365th of the applicable percentage
applied to the daily net assets of the Fund.
The investment advisory contract provides for the voluntary waiver of
expenses by VCM from time to time. VCM can terminate this voluntary waiver
of expenses at any time with respect to a Fund at its sole discretion. VCM
has also undertaken to reimburse the Funds for operating expenses in excess
of limitations established by certain states.
VCM'S BACKGROUND. Virtus Capital Management, Inc., a Maryland corporation
formed in 1995, is a wholly owned subsidiary of Signet Banking Corporation.
Signet Banking Corporation is a multi-state, multi-bank holding company
which has provided investment management services since 1956. VCM, which is
a registered investment adviser, manages, in addition to the Funds, The
Virtus Funds, three equity common trust funds with $39 million in assets and
three fixed income common trust funds with $221 million in assets.
The Portfolios pay for all their expenses including legal and auditing
expenses; registration fees; taxes on the sales of portfolio securities;
brokerage commissions; Portfolio trustee fees, expenses connected with the
execution, recording and settlement of security transactions; fees and
expenses of the Portfolios; custodian for all services to the Portfolios;
expenses of preparing and mailing reports to investors and to government
agencies and commissions; expenses of meetings of investors and the advisory
fees of .40% of each Portfolio's average daily net assets payable to the
Portfolio Adviser under the Investment Advisory Agreements.  In addition,
each Portfolio pays an administrative fee to The Chase Manhattan Trust
Corporation Limited ("CMTC"), at an annual rate of .05% of the Portfolio;s
average daily net assets pursuant to an Administration Agreement wherein
CMTC provides facilities and personnel necessary to operate the Portfolio.
9.  On page 14 of the prospectus, please delete the first sentence of the
paragraph under the heading "How to Invest" and replace it with the
following:
"You may purchase shares of any Fund from Federated Securities Corp., the
Funds' principal Distributor."
10. On page 18 of the prospectus, please delete the heading "Distribution
Agreements and Marketing Plans," the sub-headings "Distribution Agreements"
and "Marketing Plans" and the paragraphs thereunder and replace with the
following:
"DISTRIBUTION OF SHARES OF THE FUNDS
Federated Securities Corp. is the principal distributor for shares of the
Funds. It is a Pennsylvania corporation organized on November 14, 1969, and
is the principal distributor for a number of investment companies. Federated
Securities Corp. is a subsidiary of Federated Investors.
DISTRIBUTION PLAN. According to the provisions of a distribution plan
adopted pursuant to Investment Company Act Rule 12b-1, the distributor may
select brokers and dealers to provide distribution and administrative
services as to shares of the Funds. The distributor may also select
administrators (including financial institutions, fiduciaries, custodians
for public funds and investment advisers) to provide administrative
services. Administrative services may include, but are not limited to, the
following functions: providing office space, equipment, telephone
facilities, and various personnel including clerical, supervisory, and
computer, as necessary or beneficial to establish and maintain shareholder
accounts and records; processing purchase and redemption transactions and
automatic investments of client account cash balances; answering routine
client inquiries regarding shares; assisting clients in changing dividend
options, account designations and addresses; and providing such other
services as each Fund reasonably requests for its shares.

Brokers, dealers, and administrators will receive fees based upon shares
owned by their clients or customers. The schedules of such fees and the
basis upon which such fees will be paid will be determined from time to time
by the Board of Trustees, provided that for any period the total amount of
fees representing an expense to the Trust shall not exceed an annual rate of
 .50 of 1% of the average daily net assets of shares of each Fund held in the
accounts during the period for which the brokers, dealers, and
administrators provide services. Any fees paid by the distributor with
respect to shares of a Fund pursuant to the distribution plan will be
reimbursed by the Trust from the assets of the shares of that Fund.
The distributor will, periodically, uniformly offer to pay cash or
promotional incentives in the form of trips to sales seminars at luxury
resorts, tickets or other items to all dealers selling shares of the Funds.
Such payments will be predicated upon the account of shares of the Funds
that are sold by the dealer. Such payments, if made, will be in addition to
amounts paid under the distribution plan and will not be an expense of a
Fund.
ADMINISTRATIVE ARRANGEMENTS. The distributor may pay financial institutions
a fee based upon the average net asset value of shares of their customers
invested in the Trust for providing administrative services. This fee, if
paid, will be reimbursed by VCM and not the Trust.
GLASS-STEAGALL ACT. The Glass-Steagall act prohibits a depository
institution (such as a commercial bank or a savings and loan association)
from being an underwriter or distributor of most securities. In the event
the Glass-Steagall Act is deemed to prohibit depository institutions from
acting in the administrative capacities described above or should Congress
relax current restrictions on depository institutions, the Board of Trustee
will consider appropriate changes in the administrative services.
State securities laws governing the ability of depository institutions to
act as underwriters or distributors of securities may differ from
interpretations given to the Glass-Steagall Act and, therefore, banks and
financial institutions may be required to register as dealers pursuant to
state law.
ADMINISTRATIVE SERVICES. Federated Administrative Services, a subsidiary of
Federated Investors, provides the Funds with certain administrative
personnel and services necessary to operate each Fund. Such services include
shareholder servicing and certain legal and accounting services. Federated
Administrative Services provides these at an annual rate as specified below:
                Maximum                   Average Aggregate Daily Net
             Administrative Fee           Assets of the Trust/Corporation
                .150 of 1%                  on the first $250 million
                .125 of 1%                  on the next $250 million
                .100 of 1%                  on the next $250 million
                .075 of 1%                  on assets in excess of $750 million
The administrative fee received during any fiscal year shall be at least
$75,000 per Fund. Federated Administrative services may voluntarily waive a
portion of its fee.
July 12, 1995


    FEDERATED SECURITIES CORP.

    Distributor
    A subsidiary of Federated Investors
    Federated Investors Tower
    Pittsburgh, PA  15222-3779
    (7/95)



THE BLANCHARD GROUP OF FUNDS
         BLANCHARD GROWTH & INCOME FUND
SUPPLEMENT TO STATEMENT OF ADDITIONAL INFORMATION DATED APRIL 25, 1995

    On July 12, 1995, as a result of acquisition by subsidiaries of Signet
Banking Corporation ("SBC") of certain assets of Sheffield Management
Company ("SMC") and Sheffield Investments, Inc. ("SII"), the following
actions were taken:  (i) Virtus Capital Management, Inc. ("VCM"), a wholly-
owned subsidiary of SBC, replaced SMC as overall investment manager to
Blanchard Funds and Blanchard Precious Metals Fund, Inc. (collectively, the
"Funds"); (ii) VCM entered into new sub-advisory agreements with each
current sub-adviser of each Fund (with the exception of Blanchard 100%
Treasury Money Market Fund, Blanchard Capital Growth Fund and Blanchard
Growth & Income Fund); (iii) Federated Securities Corp. replaced SII as the
Funds' distributor; (iv) Federated Administrative Services ("FAS") was
engaged to provided administrative services to the Funds; and (i) Federated
Securities Corp. entered into new distribution plans with each Fund (other
than Blanchard 100% Treasury Money Market Fund).  No changes in the advisory
fees, sub-advisory fees or distribution plan fees will occur as a result of
these actions, and the acquisition agreement requires all parties to avoid
the imposition of any unfair burden on the Fund.
    Accordingly, please make the following changes to the Statement of
Additional Information:
1.  On page 1 of the Statement of Additional Information, please change the
address of the Blanchard Group of Funds to the following:
"Federated Investors Tower, Pittsburgh, Pennsylvania  15222-3779."
2.  Throughout the Statement of Additional Information, please delete each
reference to Sheffield Management Company or SMC and replace with Virtus
Capital Management, Inc. or VCM, as the case may be.
3.  Throughout the Statement of Additional Information, please delete the
reference to Sheffield Investments, Inc. and replace with Federated
Securities Corp.
4.  On page 30 of the Statement of Additional Information, please delete the
heading "The Management of the Fund" and the paragraphs thereunder and
replace with the following:
"THE MANAGEMENT OF THE FUND
Officers and Trustees are listed with their ages, addresses, principal 
occupations, and present positions, including any affiliation with Virtus 
Capital Management, Inc., Signet Trust
Company, Federated Investors, Federated Securities Corp., Federated Services
Company, and Federated Administrative Services or the Funds (as defined
below).

John F. Donahue, 70 (1)(2)
Federated Investors Tower
Pittsburgh, PA                            Chairman and Trustee/Director of
                                          Blanchard Funds and Blanchard
                                          Precious Metals Fund, Inc.;
                                          Chairman and Trustee of The Virtus
                                          Funds; Chairman and Trustee,
                                          Federated Investors, Federated
                                          Advisers, Federated Management,
                                          and Federated Research; Chairman
                                          and Director, Federated Research
                                          Corp.,; Chairman, Passport
                                          Research, Ltd.; Director, AEtna
                                          Life and Casualty Company; Chief
                                          Executive Officer and Director,
                                          Trustee, or Managing General
                                          Partner of the Funds.
                                          
Thomas G. Bigley, 61
28th Floor
One Oxford Centre
Pittsburgh, PA                            Trustee/Director of the Blanchard
                                          Funds and Blanchard Precious
                                          Metals Fund, Inc.; Trustee of the
                                          Virtus Funds; Director, Oberg
                                          Manufacturing Co.; Chairman of the
                                          Board, Children's Hospital of
                                          Pittsburgh; Director, Trustee, or
                                          Managing General Partner of the
                                          Funds; formerly, Senior Partner,
                                          Ernst & Young LLP.
John T. Conroy, Jr., 57 (3)
Wood/IPC Commercial Department
John R. Wood and Associates, Inc., Realtors
3255 Tamiami Trail North
Naples, FL                                Trustee/Director of the Blanchard
                                          Funds and Blanchard Precious
                                          Metals Fund, Inc.; Trustee of the
                                          Virtus Funds; President,
                                          Investment Properties Corporation;
                                          Senior Vice-President, John R.
                                          Wood and Associates, Inc.,
                                          Realtors; President, Northgate
                                          Village Development Corporation;
                                          Partner or Trustee in private real
                                          estate ventures in Southwest
                                          Florida; Director, Trustee, or
                                          Managing General Partner of the
                                          Funds; formerly, President, Naples
                                          Property Management, Inc.
William J. Copeland, 76 (3)
One PNC Plaza - 23rd Floor
Pittsburgh, PA                            Trustee/Director of the Blanchard
                                          Funds and Blanchard Precious
                                          Metals Fund, Inc.; Trustee of the
                                          Virtus Funds; Director and Member
                                          of the Executive Committee,
                                          Michael Baker, Inc.; Director,
                                          Trustee, or Managing General
                                          Partner of the Funds; formerly,
                                          Vice Chairman and Director, PNC
                                          Bank, N.A., and PNC Bank Corp. and
                                          Director, Ryan Homes, Inc.
James E. Dowd, 72 (3)
571 Hayward Mill Road
Concord, MA                               Trustee/Director of the Blanchard
                                          Funds and Blanchard Precious
                                          Metals Fund, Inc.; Trustee of the
                                          Virtus Funds; Attorney-at-law;
                                          Director, The Emerging Germany
                                          Fund, Inc.; Director, Trustee, or
                                          Managing General Partner of the
                                          Funds; formerly, Director, Blue
                                          Cross of Massachusetts, Inc.
                                          
Lawrence D. Ellis, M.D., 62 (1)
3471 Fifth Avenue, Suite 1111
Pittsburgh, PA                            Trustee/Director of the Blanchard
                                          Funds and Blanchard Precious
                                          Metals Fund, Inc.; Trustee of the
                                          Virtus Funds; Hematologist,
                                          Oncologist, and Internist,
                                          Presbyterian and Montefiore
                                          Hospitals; Professor of Medicine
                                          and Member, Board of Trustees,
                                          University of Pittsburgh; Medical
                                          Director, University of Pittsburgh
                                          Medical Center - Downtown; Member,
                                          Board of Directors, University of
                                          Pittsburgh Medical Center;
                                          Director, Trustee, or Managing
                                          General Partner of the Funds.
Edward L. Flaherty, Jr., 70 (1)(3)
Two Gateway Center - Suite 674
Pittsburgh, PA                            Trustee/Director of the Blanchard
                                          Funds and Blanchard Precious
                                          Metals Fund, Inc.; Trustee of the
                                          Virtus Funds; Attorney-at-law;
                                          Partner, Henny, Kochuba, Meyer and
                                          Flaherty; Director, Eat'N Park
                                          Restaurants, Inc., and Statewide
                                          Settlement Agency, Inc.; Director,
                                          Trustee, or Managing General
                                          Partner of the Funds; formerly,
                                          Counsel, Horizon Financial, F.A.,
                                          Western Region.
Edward C. Gonzales, 64 (1)
Federated Investor Tower
Pittsburgh, PA                            President, Treasurer and
                                          Trustee/Director of the Blanchard
                                          Funds and Blanchard Precious
                                          Metals Fund, Inc.; President,
                                          Treasurer and Trustee of The
                                          Virtus Funds;  Vice President,
                                          Treasurer, and Trustee, Federated
                                          Investors; Vice President and
                                          Treasurer, Federated Advisers,
                                          Federated Management, Federated
                                          Research, Federated Research
                                          Corp., and Passport Research,
                                          Ltd.; Executive Vice President,
                                          Treasurer, and Director, Federated
                                          Securities Corp.; Trustee,
                                          Federated Services Company and
                                          Federated Shareholder Services;
                                          Chairman, Treasurer, and Trustee,
                                          Federated Administrative Services;
                                          Trustee or Director of some of the
                                          Funds; Vice President and
                                          Treasurer of the Funds.
Peter E. Madden, 53
225 Franklin Street
Boston, MA                                Trustee/Director of the Blanchard
                                          Funds and Blanchard Precious
                                          Metals Fund, Inc.; Trustee of The
                                          Virtus Funds; Consultant; State
                                          Representative, Commonwealth of
                                          Massachusetts; Director, Trustee,
                                          or Managing General Partner of the
                                          Funds; formerly, President, State
                                          Street Bank and Trust Company and
                                          State Street Boston Corporation
                                          and Trustee, Lahey Clinic
                                          Foundation, Inc.
                                          
Gregor F. Meyer, 68
Two Gateway Center - Suite 674
Pittsburgh, PA                            Trustee/Director of the Blanchard
                                          Funds and Blanchard Precious
                                          Metals Fund, Inc.; Trustee of The
                                          Virtus Funds; Attorney-at-law;
                                          Partner, Henny, Kochuba, Meyer and
                                          Flaherty; Chairman, Meritcare,
                                          Inc.; Director, Eat'N Park
                                          Restaurants, Inc.; Director,
                                          Trustee, or Managing General
                                          Partner of the Funds; formerly,
                                          Vice Chairman, Horizon Financial,
                                          F.A.
John E. Murray, Jr., J.D., S.J.D., 62
[MAILING ADDRESS
CITY, STATE & ZIP CODE]                   Trustee/Director of the Blanchard
                                          Funds and Blanchard Precious
                                          Metals Fund, Inc.; Trustee of The
                                          Virtus Funds; President, Law
                                          Professor, Duquesne University;
                                          Consulting Partner, Mollica,
                                          Murray and Hogue; Director,
                                          Trustee or Managing General
                                          Partner of the Funds.
Wesley W. Posvar, 69
1202 Cathedral of Learning
University of Pittsburgh
Pittsburgh, PA                            Trustee/Director of the Blanchard
                                          Funds and Blanchard Precious
                                          Metals Fund, Inc.; Trustee of The
                                          Virtus Funds; Professor, Foreign
                                          Policy and Management Consultant;
                                          Trustee, Carnegie Endowment for
                                          International Peace, RAND
                                          Corporation, Online Computer
                                          Library Center, Inc., and U.S.
                                          Space Foundation; Chairman, Czecho
                                          Slovak Management Center;
                                          Director, Trustee, or Managing
                                          General Partner of the Funds;
                                          President Emeritus, University of
                                          Pittsburgh; formerly , Chairman,
                                          National Advisory Council for
                                          Environmental Policy and
                                          Technology.
Marjorie P. Smuts, 59
4905 Bayard Street
Pittsburgh, PA                            Trustee/Director of the Blanchard
                                          Funds and Blanchard Precious
                                          Metals Fund, Inc.; Trustee of The
                                          Virtus Funds; Public
                                          relations/marketing consultant;
                                          Director, Trustee, or Managing
                                          General Partner of the Funds.
(1)This Trustee is deemed to be an "interested person" as defined in the 
   Investment Company Act of 1940,
   as amended.
(2)Member of the Executive Committee. The Executive Committee of the Board of 
   Trustees handles the responsibilities of the Board of Trustees between 
   meetings of the Board.
(3)Member of the Audit Committee.  The Audit Committee is responsible for 
   reviewing compliance with all internal controls and all regulations 
   related to the financial
   reporting process.
The Funds
As referred to in the list of Trustees and Officers, "Funds" includes the
following investment companies:
American Leaders Fund, Inc.; Annuity Management Series; Arrow Funds; Automated 
Cash Management Trust; Automated Government Money Trust; California 
Municipal Cash Trust; Cash Trust
Series II; Cash Trust Series, Inc.; DG Investor Series; Edward D. Jones &
Co. Daily Passport Cash Trust; Federated ARMs Fund; Federated Exchange Fund,
Ltd.; Federated GNMA Trust; Federated Government Trust; Federated Growth
Trust; Federated High Yield Trust; Federated Income Securities Trust;
Federated Income Trust; Federated Index Trust; Federated Institutional
Trust; Federated Intermediate Government Trust; Federated Master Trust;
Federated Municipal Trust; Federated Short-Term U.S. Government Trust;
Federated Stock Trust; Federated Tax-Free Trust; Federated U.S. Government
Bond Fund; Federated U.S. Government Securities Fund: 1-3 Years; First
Priority Funds; Fixed Income Securities, Inc.; Fortress Adjustable Rate U.S.
Government Fund, Inc.; Fortress Municipal Income Fund, Inc.; Fortress
Utility Fund, Inc.; Fund for U.S. Government Securities, Inc.; Government
Income Securities, Inc.; High Yield Cash Trust; Insight Institutional
Series, Inc.; Insurance Management Series; Intermediate Municipal Trust;
International Series, Inc.; Investment Series Funds, Inc.; Investment Series
Trust; Liberty Equity Income Fund, Inc.; Liberty High Income Bond Fund,
Inc.; Liberty Municipal Securities Fund, Inc.; Liberty U.S. Government Money
Market Trust; Liberty Term Trust, Inc. - 1999; Liberty Utility Fund, Inc.;
Liquid Cash Trust; Managed Series Trust; Money Market Management, Inc.;
Money Market Obligations Trust; Money Market Trust; Municipal Securities
Income Trust; Newpoint Funds; New York Municipal Cash Trust; 111 Corcoran
Funds; Peachtree Funds; The Planters Funds; RIMCO Monument Funds; The
Shawmut Funds; Short-Term Municipal Trust; Star Funds; The Starburst Funds;
The Starburst Funds II; Stock and Bond Fund, Inc.;  Sunburst Funds; Targeted
Duration Trust; Tax-Free Instruments Trust; Trademark Funds; Trust for
Financial Institutions; Trust For Government Cash Reserves; Trust for Short-
Term U.S. Government Securities; Trust for U.S. Treasury Obligations; and
World Investment Series, Inc.
Fund Ownership
As of June 30, 1995, Officers and Trustees own less than 1% of the
outstanding shares of each Fund.
To the best knowledge of the FUND, as of June 30, 1995, no shareholder owned 
5% or more of the outstanding shares of the FUND.
Officers and Trustees Compensation
NAME, POSITION                 AGGREGATE     TOTAL COMPENSATION
WITH THE FUND                COMPENSATION    PAID TO THE TRUSTEES FROM
                            FROM THE FUND+   THE FUND AND THE FUND COMPLEX*
John F. Donahue,                $ -0-        $0 for the Fund Complex
Chairman and Trustee
Thomas G. Bigley, Trustee       $ -0-        $489.00 the Fund Complex
John T. Conroy, Jr., Trustee    $ -0-        $2,001.50 for the Fund Complex
William J. Copeland, Trustee    $ -0-        $2,001.50 for the Fund Complex
James E. Dowd, Trustee          $ -0-        $2,001.50 for the Fund Complex
Lawrence D. Ellis, M.D., Trustee             $ -0-$1,816.00 for the Fund Complex
Edward L. Flaherty, Jr., Trustee             $ -0-$2,001.50 for the Fund Complex
Edward C. Gonzales, President   $ -0-        $ -0- for the Fund Complex
 and Trustee
Peter E. Madden, Trustee        $ -0-        $1,517.50 for the Fund Complex
Gregor F. Meyer, Trustee        $ -0-        $1,816.00 for the Fund Complex
John E. Murray, Jr., Trustee    $ -0-        $-0- for the Fund Complex
Wesley W. Posvar, Trustee       $ -0-        $1,816.00 for the Fund Complex
Marjorie P. Smuts, Trustee      $ -0-        $1,816.00 for the Fund Complex

*     Fund Complex = Blanchard Funds, Blanchard Precious Metals Fund, Inc.
and the Virtus Funds

INVESTMENT ADVISORY SERVICES
Advisor to the Trust
The Fund's investment adviser is Virtus Capital Management, Inv. ("VCM"), 
which is a division of Signet Trust Company, a wholly-owned subsidiary of 
Signet Banking Corporation.  Because
of the internal controls maintained by Signet to restrict the flow of non-
public information, FUND investments are typically made without any
knowledge of Signet Bank's or its affiliates' lending relationship with an
issuer.
The adviser shall not be liable to the Trust, a Fund, or any shareholder of
the Funds for any losses that may be sustained in the purchase, holding, 
or sale of any security or for
anything done or omitted by it, except acts or omissions involving willful
misfeasance, bad faith, gross negligence, or reckless disregard of the
duties imposed upon it by its contract with the Trust.
Advisory Fees
For its services, VCM receives an annual investment advisory fee as
described in the prospectus.
ADMINISTRATIVE SERVICES
Federated Administrative Services, which is a subsidiary of Federated
Investors, provides administrative personnel and services to the Funds for
the fees set forth in the prospectus.
DISTRIBUTION PLAN
The Trust has adopted a Plan for Shares of the Fund pursuant to Rule 12b-1 
which was promulgated by the Securities and Exchange Commission pursuant to 
the Investment Company Act of
1940.  The Plan provides that the Funds' Distributor shall act as the
Distributor of shares, and it permits the payment of fees to brokers and
dealers for distribution and administrative services and to administrators
for administrative services.  The Plan is designed to (i) stimulate brokers
and dealers to provide distribution and administrative support services to
the Fund and its shareholders and (ii) stimulate administrators to render
administrative support services to the Fund and its shareholders.  These
services are to be provided by a representative who has knowledge of the
shareholders' particular circumstances and goals, and include, but are not
limited to:  providing office space, equipment, telephone facilities, and
various personnel including clerical, supervisory, and computer, as
necessary or beneficial to establish and maintain shareholder accounts and
records; processing purchase and redemption transactions and automatic
investments of client account cash balances; answering routine client
inquiries regarding the Funds; assisting clients in changing dividend
options, account designations, and addresses; and providing such other
services as the Trust reasonably requests.
Other benefits which the Fund hopes to achieve through the Plan include, 
but are not limited to the following:  (1) an efficient and effective 
administrative system; (2) a more
efficient use of assets of shareholders by having them rapidly invested in
the Fund with a minimum  of delay and administrative detail; and (3) an
efficient and reliable records system for shareholders and prompt responses
to shareholder requests and inquiries concerning their accounts.
By adopting the Plan, the then Board of Trustees expected that the Fund 
will be able to achieve a more predictable flow of cash for investment 
purposes and to meet redemptions.  This
will facilitate more efficient portfolio management and assist the Fund in
seeking to achieve its investment objectives.  By identifying potential
investors in shares whose needs are served by the Fund's objectives, and
properly servicing these account, the Fund may be able to curb sharp
fluctuations in rates of redemptions and sales."
July 12, 1995


    FEDERATED SECURITIES CORP.

    Distributor
    A subsidiary of Federated Investors
    Federated Investors Tower
    Pittsburgh, PA  15222-3779
    (7/95)



THE BLANCHARD GROUP OF FUNDS
         BLANCHARD CAPITAL GROWTH FUND
SUPPLEMENT TO STATEMENT OF ADDITIONAL INFORMATION DATED APRIL 25, 1995

    On July 12, 1995, as a result of acquisition by subsidiaries of Signet
Banking Corporation ("SBC") of certain assets of Sheffield Management
Company ("SMC") and Sheffield Investments, Inc. ("SII"), the following
actions were taken:  (i) Virtus Capital Management, Inc. ("VCM"), a wholly-
owned subsidiary of SBC, replaced SMC as overall investment manager to
Blanchard Funds and Blanchard Precious Metals Fund, Inc. (collectively, the
"Funds"); (ii) VCM entered into new sub-advisory agreements with each
current sub-adviser of each Fund (with the exception of Blanchard 100%
Treasury Money Market Fund, Blanchard Capital Growth Fund and Blanchard
Growth & Income Fund); (iii) Federated Securities Corp. replaced SII as the
Funds' distributor; (iv) Federated Administrative Services ("FAS") was
engaged to provided administrative services to the Funds; and (i) Federated
Securities Corp. entered into new distribution plans with each Fund (other
than Blanchard 100% Treasury Money Market Fund).  No changes in the advisory
fees, sub-advisory fees or distribution plan fees will occur as a result of
these actions, and the acquisition agreement requires all parties to avoid
the imposition of any unfair burden on the Fund.
    Accordingly, please make the following changes to the Statement of
Additional Information:
1.  On page 1 of the Statement of Additional Information, please change the
address of the Blanchard Group of Funds to the following:
"Federated Investors Tower, Pittsburgh, Pennsylvania  15222-3779."
2.  Throughout the Statement of Additional Information, please delete each
reference to Sheffield Management Company or SMC and replace with Virtus
Capital Management, Inc. or VCM, as the case may be.
3.  Throughout the Statement of Additional Information, please delete each
reference to Sheffield Investments, Inc. and replace with Federated
Securities Corp.
4.  On page 28 of the Statement of Additional Information, please delete the
heading "The Management of the Fund" and the paragraphs thereunder and
replace with the following:
"THE MANAGEMENT OF THE FUND
Officers and Trustees are listed with their ages, addresses, principal 
occupations, and present positions, including any affiliation with Virtus 
Capital Management, Inc., Signet Trust
Company, Federated Investors, Federated Securities Corp., Federated Services
Company, and Federated Administrative Services or the Funds (as defined
below).

John F. Donahue, 70 (1)(2)
Federated Investors Tower
Pittsburgh, PA                            Chairman and Trustee/Director of
                                          Blanchard Funds and Blanchard
                                          Precious Metals Fund, Inc.;
                                          Chairman and Trustee of The Virtus
                                          Funds; Chairman and Trustee,
                                          Federated Investors, Federated
                                          Advisers, Federated Management,
                                          and Federated Research; Chairman
                                          and Director, Federated Research
                                          Corp.,; Chairman, Passport
                                          Research, Ltd.; Director, AEtna
                                          Life and Casualty Company; Chief
                                          Executive Officer and Director,
                                          Trustee, or Managing General
                                          Partner of the Funds.
                                          
Thomas G. Bigley, 61
28th Floor
One Oxford Centre
Pittsburgh, PA                            Trustee/Director of the Blanchard
                                          Funds and Blanchard Precious
                                          Metals Fund, Inc.; Trustee of the
                                          Virtus Funds; Director, Oberg
                                          Manufacturing Co.; Chairman of the
                                          Board, Children's Hospital of
                                          Pittsburgh; Director, Trustee, or
                                          Managing General Partner of the
                                          Funds; formerly, Senior Partner,
                                          Ernst & Young LLP.
John T. Conroy, Jr., 57 (3)
Wood/IPC Commercial Department
John R. Wood and Associates, Inc., Realtors
3255 Tamiami Trail North
Naples, FL                                Trustee/Director of the Blanchard
                                          Funds and Blanchard Precious
                                          Metals Fund, Inc.; Trustee of the
                                          Virtus Funds; President,
                                          Investment Properties Corporation;
                                          Senior Vice-President, John R.
                                          Wood and Associates, Inc.,
                                          Realtors; President, Northgate
                                          Village Development Corporation;
                                          Partner or Trustee in private real
                                          estate ventures in Southwest
                                          Florida; Director, Trustee, or
                                          Managing General Partner of the
                                          Funds; formerly, President, Naples
                                          Property Management, Inc.
William J. Copeland, 76 (3)
One PNC Plaza - 23rd Floor
Pittsburgh, PA                            Trustee/Director of the Blanchard
                                          Funds and Blanchard Precious
                                          Metals Fund, Inc.; Trustee of the
                                          Virtus Funds; Director and Member
                                          of the Executive Committee,
                                          Michael Baker, Inc.; Director,
                                          Trustee, or Managing General
                                          Partner of the Funds; formerly,
                                          Vice Chairman and Director, PNC
                                          Bank, N.A., and PNC Bank Corp. and
                                          Director, Ryan Homes, Inc.
James E. Dowd, 72 (3)
571 Hayward Mill Road
Concord, MA                               Trustee/Director of the Blanchard
                                          Funds and Blanchard Precious
                                          Metals Fund, Inc.; Trustee of the
                                          Virtus Funds; Attorney-at-law;
                                          Director, The Emerging Germany
                                          Fund, Inc.; Director, Trustee, or
                                          Managing General Partner of the
                                          Funds; formerly, Director, Blue
                                          Cross of Massachusetts, Inc.
                                          
Lawrence D. Ellis, M.D., 62 (1)
3471 Fifth Avenue, Suite 1111
Pittsburgh, PA                            Trustee/Director of the Blanchard
                                          Funds and Blanchard Precious
                                          Metals Fund, Inc.; Trustee of the
                                          Virtus Funds; Hematologist,
                                          Oncologist, and Internist,
                                          Presbyterian and Montefiore
                                          Hospitals; Professor of Medicine
                                          and Member, Board of Trustees,
                                          University of Pittsburgh; Medical
                                          Director, University of Pittsburgh
                                          Medical Center - Downtown; Member,
                                          Board of Directors, University of
                                          Pittsburgh Medical Center;
                                          Director, Trustee, or Managing
                                          General Partner of the Funds.
Edward L. Flaherty, Jr., 70 (1)(3)
Two Gateway Center - Suite 674
Pittsburgh, PA                            Trustee/Director of the Blanchard
                                          Funds and Blanchard Precious
                                          Metals Fund, Inc.; Trustee of the
                                          Virtus Funds; Attorney-at-law;
                                          Partner, Henny, Kochuba, Meyer and
                                          Flaherty; Director, Eat'N Park
                                          Restaurants, Inc., and Statewide
                                          Settlement Agency, Inc.; Director,
                                          Trustee, or Managing General
                                          Partner of the Funds; formerly,
                                          Counsel, Horizon Financial, F.A.,
                                          Western Region.
Edward C. Gonzales, 64 (1)
Federated Investor Tower
Pittsburgh, PA                            President, Treasurer and
                                          Trustee/Director of the Blanchard
                                          Funds and Blanchard Precious
                                          Metals Fund, Inc.; President,
                                          Treasurer and Trustee of The
                                          Virtus Funds;  Vice President,
                                          Treasurer, and Trustee, Federated
                                          Investors; Vice President and
                                          Treasurer, Federated Advisers,
                                          Federated Management, Federated
                                          Research, Federated Research
                                          Corp., and Passport Research,
                                          Ltd.; Executive Vice President,
                                          Treasurer, and Director, Federated
                                          Securities Corp.; Trustee,
                                          Federated Services Company and
                                          Federated Shareholder Services;
                                          Chairman, Treasurer, and Trustee,
                                          Federated Administrative Services;
                                          Trustee or Director of some of the
                                          Funds; Vice President and
                                          Treasurer of the Funds.
Peter E. Madden, 53
225 Franklin Street
Boston, MA                                Trustee/Director of the Blanchard
                                          Funds and Blanchard Precious
                                          Metals Fund, Inc.; Trustee of The
                                          Virtus Funds; Consultant; State
                                          Representative, Commonwealth of
                                          Massachusetts; Director, Trustee,
                                          or Managing General Partner of the
                                          Funds; formerly, President, State
                                          Street Bank and Trust Company and
                                          State Street Boston Corporation
                                          and Trustee, Lahey Clinic
                                          Foundation, Inc.
                                          
Gregor F. Meyer, 68
Two Gateway Center - Suite 674
Pittsburgh, PA                            Trustee/Director of the Blanchard
                                          Funds and Blanchard Precious
                                          Metals Fund, Inc.; Trustee of The
                                          Virtus Funds; Attorney-at-law;
                                          Partner, Henny, Kochuba, Meyer and
                                          Flaherty; Chairman, Meritcare,
                                          Inc.; Director, Eat'N Park
                                          Restaurants, Inc.; Director,
                                          Trustee, or Managing General
                                          Partner of the Funds; formerly,
                                          Vice Chairman, Horizon Financial,
                                          F.A.
John E. Murray, Jr., J.D., S.J.D., 62
[MAILING ADDRESS
CITY, STATE & ZIP CODE]                   Trustee/Director of the Blanchard
                                          Funds and Blanchard Precious
                                          Metals Fund, Inc.; Trustee of The
                                          Virtus Funds; President, Law
                                          Professor, Duquesne University;
                                          Consulting Partner, Mollica,
                                          Murray and Hogue; Director,
                                          Trustee or Managing General
                                          Partner of the Funds.
Wesley W. Posvar, 69
1202 Cathedral of Learning
University of Pittsburgh
Pittsburgh, PA                            Trustee/Director of the Blanchard
                                          Funds and Blanchard Precious
                                          Metals Fund, Inc.; Trustee of The
                                          Virtus Funds; Professor, Foreign
                                          Policy and Management Consultant;
                                          Trustee, Carnegie Endowment for
                                          International Peace, RAND
                                          Corporation, Online Computer
                                          Library Center, Inc., and U.S.
                                          Space Foundation; Chairman, Czecho
                                          Slovak Management Center;
                                          Director, Trustee, or Managing
                                          General Partner of the Funds;
                                          President Emeritus, University of
                                          Pittsburgh; formerly , Chairman,
                                          National Advisory Council for
                                          Environmental Policy and
                                          Technology.
Marjorie P. Smuts, 59
4905 Bayard Street
Pittsburgh, PA                            Trustee/Director of the Blanchard
                                          Funds and Blanchard Precious
                                          Metals Fund, Inc.; Trustee of The
                                          Virtus Funds; Public
                                          relations/marketing consultant;
                                          Director, Trustee, or Managing
                                          General Partner of the Funds.
(1)This Trustee is deemed to be an "interested person" as defined in the 
Investment Company Act of 1940,
      as amended.
(2)Member of the Executive Committee. The Executive Committee of the Board of 
Trustees handles the responsibilities of the Board of Trustees between 
meetings of the Board.
(3)Member of the Audit Committee.  The Audit Committee is responsible for 
reviewing compliance with all internal controls and all regulations 
related to the financial reporting process.
The Funds
As referred to in the list of Trustees and Officers, "Funds" includes the
following investment companies:
American Leaders Fund, Inc.; Annuity Management Series; Arrow Funds; Automated 
Cash Management Trust; Automated Government Money Trust; California 
Municipal Cash Trust; Cash Trust
Series II; Cash Trust Series, Inc.; DG Investor Series; Edward D. Jones &
Co. Daily Passport Cash Trust; Federated ARMs Fund; Federated Exchange Fund,
Ltd.; Federated GNMA Trust; Federated Government Trust; Federated Growth
Trust; Federated High Yield Trust; Federated Income Securities Trust;
Federated Income Trust; Federated Index Trust; Federated Institutional
Trust; Federated Intermediate Government Trust; Federated Master Trust;
Federated Municipal Trust; Federated Short-Term U.S. Government Trust;
Federated Stock Trust; Federated Tax-Free Trust; Federated U.S. Government
Bond Fund; Federated U.S. Government Securities Fund: 1-3 Years; First
Priority Funds; Fixed Income Securities, Inc.; Fortress Adjustable Rate U.S.
Government Fund, Inc.; Fortress Municipal Income Fund, Inc.; Fortress
Utility Fund, Inc.; Fund for U.S. Government Securities, Inc.; Government
Income Securities, Inc.; High Yield Cash Trust; Insight Institutional
Series, Inc.; Insurance Management Series; Intermediate Municipal Trust;
International Series, Inc.; Investment Series Funds, Inc.; Investment Series
Trust; Liberty Equity Income Fund, Inc.; Liberty High Income Bond Fund,
Inc.; Liberty Municipal Securities Fund, Inc.; Liberty U.S. Government Money
Market Trust; Liberty Term Trust, Inc. - 1999; Liberty Utility Fund, Inc.;
Liquid Cash Trust; Managed Series Trust; Money Market Management, Inc.;
Money Market Obligations Trust; Money Market Trust; Municipal Securities
Income Trust; Newpoint Funds; New York Municipal Cash Trust; 111 Corcoran
Funds; Peachtree Funds; The Planters Funds; RIMCO Monument Funds; The
Shawmut Funds; Short-Term Municipal Trust; Star Funds; The Starburst Funds;
The Starburst Funds II; Stock and Bond Fund, Inc.;  Sunburst Funds; Targeted
Duration Trust; Tax-Free Instruments Trust; Trademark Funds; Trust for
Financial Institutions; Trust For Government Cash Reserves; Trust for Short-
Term U.S. Government Securities; Trust for U.S. Treasury Obligations; and
World Investment Series, Inc.
Fund Ownership
As of June 30, 1995, Officers and Trustees own less than 1% of the
outstanding shares of each Fund.
To the best knowledge of the FUND, as of June 30, 1995, no shareholder owned 
5% or more of the outstanding shares of the FUND.
Officers and Trustees Compensation
NAME, POSITION             AGGREGATE            TOTAL COMPENSATION
WITH THE FUND              COMPENSATION         PAID TO THE TRUSTEES FROM
                           FROM THE FUND+       THE FUND AND THE FUND COMPLEX*
John F. Donahue,                $ -0-           $0 for the Fund Complex
Chairman and Trustee
Thomas G. Bigley, Trustee       $ -0-           $489.00 the Fund Complex
John T. Conroy, Jr., Trustee    $ -0-           $2,001.50 for the Fund Complex
William J. Copeland, Trustee    $ -0-           $2,001.50 for the Fund Complex
James E. Dowd, Trustee          $ -0-           $2,001.50 for the Fund Complex
Lawrence D. Ellis, M.D., Trustee                $ -0-$1,816.00 for the Fund
                                                   Complex
Edward L. Flaherty, Jr., Trustee                $ -0-$2,001.50 for the Fund
                                                Complex
Edward C. Gonzales, President   $ -0-           $ -0- for the Fund Complex
and Trustee
Peter E. Madden, Trustee        $ -0-           $1,517.50 for the Fund Complex
Gregor F. Meyer, Trustee        $ -0-           $1,816.00 for the Fund Complex
John E. Murray, Jr., Trustee    $ -0-           $-0- for the Fund Complex
Wesley W. Posvar, Trustee       $ -0-           $1,816.00 for the Fund Complex
Marjorie P. Smuts, Trustee      $ -0-           $1,816.00 for the Fund Complex

*     Fund Complex = Blanchard Funds, Blanchard Precious Metals Fund, Inc.
and the Virtus Funds

INVESTMENT ADVISORY SERVICES
Advisor to the Trust
The Fund's investment adviser is Virtus Capital Management, Inv. ("VCM"), 
which is a division of Signet Trust Company, a wholly-owned subsidiary of 
Signet Banking Corporation.  Because
of the internal controls maintained by Signet to restrict the flow of non-
public information, FUND investments are typically made without any
knowledge of Signet Bank's or its affiliates' lending relationship with an
issuer.
The adviser shall not be liable to the Trust, a Fund, or any shareholder of 
the Funds for any losses that may be sustained in the purchase, holding, or 
sale of any security or for
anything done or omitted by it, except acts or omissions involving willful
misfeasance, bad faith, gross negligence, or reckless disregard of the
duties imposed upon it by its contract with the Trust.
Advisory Fees
For its services, VCM receives an annual investment advisory fee as
described in the prospectus.
ADMINISTRATIVE SERVICES
Federated Administrative Services, which is a subsidiary of Federated
Investors, provides administrative personnel and services to the Funds for
the fees set forth in the prospectus.
DISTRIBUTION PLAN
The Trust has adopted a Plan for Shares of the Fund pursuant to Rule 12b-1 
which was promulgated by the Securities and Exchange Commission pursuant to 
the Investment Company Act of
1940.  The Plan provides that the Funds' Distributor shall act as the
Distributor of shares, and it permits the payment of fees to brokers and
dealers for distribution and administrative services and to administrators
for administrative services.  The Plan is designed to (i) stimulate brokers
and dealers to provide distribution and administrative support services to
the Fund and its shareholders and (ii) stimulate administrators to render
administrative support services to the Fund and its shareholders.  These
services are to be provided by a representative who has knowledge of the
shareholders' particular circumstances and goals, and include, but are not
limited to:  providing office space, equipment, telephone facilities, and
various personnel including clerical, supervisory, and computer, as
necessary or beneficial to establish and maintain shareholder accounts and
records; processing purchase and redemption transactions and automatic
investments of client account cash balances; answering routine client
inquiries regarding the Funds; assisting clients in changing dividend
options, account designations, and addresses; and providing such other
services as the Trust reasonably requests.
Other benefits which the Fund hopes to achieve through the Plan include, 
but are not limited to the following:  (1) an efficient and effective 
administrative system; (2) a more
efficient use of assets of shareholders by having them rapidly invested in
the Fund with a minimum  of delay and administrative detail; and (3) an
efficient and reliable records system for shareholders and prompt responses
to shareholder requests and inquiries concerning their accounts.
By adopting the Plan, the then Board of Trustees expected that the Fund will
be able to achieve a more predictable flow of cash for investment purposes 
and to meet redemptions.  This
will facilitate more efficient portfolio management and assist the Fund in
seeking to achieve its investment objectives.  By identifying potential
investors in shares whose needs are served by the Fund's objectives, and
properly servicing these account, the Fund may be able to curb sharp
fluctuations in rates of redemptions and sales."
July 12, 1995


    FEDERATED SECURITIES CORP.

    Distributor
    A subsidiary of Federated Investors
    Federated Investors Tower
    Pittsburgh, PA  15222-3779
    (7/95)


THE BLANCHARD GROUP OF FUNDS
          BLANCHARD GLOBAL GROWTH FUND
SUPPLEMENT TO STATEMENT OF ADDITIONAL INFORMATION DATED AUGUST 31, 1994

    On July 12, 1995, as a result of acquisition by subsidiaries of Signet
Banking Corporation ("SBC") of certain assets of Sheffield Management
Company ("SMC") and Sheffield Investments, Inc. ("SII"), the following
actions were taken:  (i) Virtus Capital Management, Inc. ("VCM"), a wholly-
owned subsidiary of SBC, replaced SMC as overall investment manager to
Blanchard Funds and Blanchard Precious Metals Fund, Inc. (collectively, the
"Funds"); (ii) VCM entered into new sub-advisory agreements with each
current sub-adviser of each Fund (with the exception of Blanchard 100%
Treasury Money Market Fund, Blanchard Capital Growth Fund and Blanchard
Growth & Income Fund); (iii) Federated Securities Corp. replaced SII as the
Funds' distributor; (iv) Federated Administrative Services ("FAS") was
engaged to provided administrative services to the Funds; and (i) Federated
Securities Corp. entered into new distribution plans with each Fund (other
than Blanchard 100% Treasury Money Market Fund).  No changes in the advisory
fees, sub-advisory fees or distribution plan fees will occur as a result of
these actions, and the acquisition agreement requires all parties to avoid
the imposition of any unfair burden on the Fund.
    Accordingly, please make the following changes to the Statement of
Additional Information:
1.  On page 1 of the Statement of Additional Information, please change the
address of the Blanchard Group of Funds to the following:
"Federated Investors Tower, Pittsburgh, Pennsylvania  15222-3779."
2.  Throughout the Statement of Additional Information, please delete each
reference to Sheffield Management Company or SMC and replace with Virtus
Capital Management, Inc. or VCM, as the case may be.
3.  Throughout the Statement of Additional Information, please delete each
reference to Sheffield Investments, Inc. and replace with Federated
Securities Corp.
4.  On page 39 of the Statement of Additional Information, please delete the
heading "The Management of the Fund" and the paragraphs thereunder and
replace with the following:
"THE MANAGEMENT OF THE FUND
Officers and Trustees are listed with their ages, addresses, principal 
occupations, and present positions, including any affiliation with Virtus 
Capital Management, Inc., Signet Trust
Company, Federated Investors, Federated Securities Corp., Federated Services
Company, and Federated Administrative Services or the Funds (as defined
below).

John F. Donahue, 70 (1)(2)
Federated Investors Tower
Pittsburgh, PA                            Chairman and Trustee/Director of
                                          Blanchard Funds and Blanchard
                                          Precious Metals Fund, Inc.;
                                          Chairman and Trustee of The Virtus
                                          Funds; Chairman and Trustee,
                                          Federated Investors, Federated
                                          Advisers, Federated Management,
                                          and Federated Research; Chairman
                                          and Director, Federated Research
                                          Corp.,; Chairman, Passport
                                          Research, Ltd.; Director, AEtna
                                          Life and Casualty Company; Chief
                                          Executive Officer and Director,
                                          Trustee, or Managing General
                                          Partner of the Funds.
                                          
Thomas G. Bigley, 61
28th Floor
One Oxford Centre
Pittsburgh, PA                            Trustee/Director of the Blanchard
                                          Funds and Blanchard Precious
                                          Metals Fund, Inc.; Trustee of the
                                          Virtus Funds; Director, Oberg
                                          Manufacturing Co.; Chairman of the
                                          Board, Children's Hospital of
                                          Pittsburgh; Director, Trustee, or
                                          Managing General Partner of the
                                          Funds; formerly, Senior Partner,
                                          Ernst & Young LLP.
John T. Conroy, Jr., 57 (3)
Wood/IPC Commercial Department
John R. Wood and Associates, Inc., Realtors
3255 Tamiami Trail North
Naples, FL                                Trustee/Director of the Blanchard
                                          Funds and Blanchard Precious
                                          Metals Fund, Inc.; Trustee of the
                                          Virtus Funds; President,
                                          Investment Properties Corporation;
                                          Senior Vice-President, John R.
                                          Wood and Associates, Inc.,
                                          Realtors; President, Northgate
                                          Village Development Corporation;
                                          Partner or Trustee in private real
                                          estate ventures in Southwest
                                          Florida; Director, Trustee, or
                                          Managing General Partner of the
                                          Funds; formerly, President, Naples
                                          Property Management, Inc.
William J. Copeland, 76 (3)
One PNC Plaza - 23rd Floor
Pittsburgh, PA                            Trustee/Director of the Blanchard
                                          Funds and Blanchard Precious
                                          Metals Fund, Inc.; Trustee of the
                                          Virtus Funds; Director and Member
                                          of the Executive Committee,
                                          Michael Baker, Inc.; Director,
                                          Trustee, or Managing General
                                          Partner of the Funds; formerly,
                                          Vice Chairman and Director, PNC
                                          Bank, N.A., and PNC Bank Corp. and
                                          Director, Ryan Homes, Inc.
James E. Dowd, 72 (3)
571 Hayward Mill Road
Concord, MA                               Trustee/Director of the Blanchard
                                          Funds and Blanchard Precious
                                          Metals Fund, Inc.; Trustee of the
                                          Virtus Funds; Attorney-at-law;
                                          Director, The Emerging Germany
                                          Fund, Inc.; Director, Trustee, or
                                          Managing General Partner of the
                                          Funds; formerly, Director, Blue
                                          Cross of Massachusetts, Inc.
                                          
Lawrence D. Ellis, M.D., 62 (1)
3471 Fifth Avenue, Suite 1111
Pittsburgh, PA                            Trustee/Director of the Blanchard
                                          Funds and Blanchard Precious
                                          Metals Fund, Inc.; Trustee of the
                                          Virtus Funds; Hematologist,
                                          Oncologist, and Internist,
                                          Presbyterian and Montefiore
                                          Hospitals; Professor of Medicine
                                          and Member, Board of Trustees,
                                          University of Pittsburgh; Medical
                                          Director, University of Pittsburgh
                                          Medical Center - Downtown; Member,
                                          Board of Directors, University of
                                          Pittsburgh Medical Center;
                                          Director, Trustee, or Managing
                                          General Partner of the Funds.
Edward L. Flaherty, Jr., 70 (1)(3)
Two Gateway Center - Suite 674
Pittsburgh, PA                            Trustee/Director of the Blanchard
                                          Funds and Blanchard Precious
                                          Metals Fund, Inc.; Trustee of the
                                          Virtus Funds; Attorney-at-law;
                                          Partner, Henny, Kochuba, Meyer and
                                          Flaherty; Director, Eat'N Park
                                          Restaurants, Inc., and Statewide
                                          Settlement Agency, Inc.; Director,
                                          Trustee, or Managing General
                                          Partner of the Funds; formerly,
                                          Counsel, Horizon Financial, F.A.,
                                          Western Region.
Edward C. Gonzales, 64 (1)
Federated Investor Tower
Pittsburgh, PA                            President, Treasurer and
                                          Trustee/Director of the Blanchard
                                          Funds and Blanchard Precious
                                          Metals Fund, Inc.; President,
                                          Treasurer and Trustee of The
                                          Virtus Funds;  Vice President,
                                          Treasurer, and Trustee, Federated
                                          Investors; Vice President and
                                          Treasurer, Federated Advisers,
                                          Federated Management, Federated
                                          Research, Federated Research
                                          Corp., and Passport Research,
                                          Ltd.; Executive Vice President,
                                          Treasurer, and Director, Federated
                                          Securities Corp.; Trustee,
                                          Federated Services Company and
                                          Federated Shareholder Services;
                                          Chairman, Treasurer, and Trustee,
                                          Federated Administrative Services;
                                          Trustee or Director of some of the
                                          Funds; Vice President and
                                          Treasurer of the Funds.
Peter E. Madden, 53
225 Franklin Street
Boston, MA                                Trustee/Director of the Blanchard
                                          Funds and Blanchard Precious
                                          Metals Fund, Inc.; Trustee of The
                                          Virtus Funds; Consultant; State
                                          Representative, Commonwealth of
                                          Massachusetts; Director, Trustee,
                                          or Managing General Partner of the
                                          Funds; formerly, President, State
                                          Street Bank and Trust Company and
                                          State Street Boston Corporation
                                          and Trustee, Lahey Clinic
                                          Foundation, Inc.
                                          
Gregor F. Meyer, 68
Two Gateway Center - Suite 674
Pittsburgh, PA                            Trustee/Director of the Blanchard
                                          Funds and Blanchard Precious
                                          Metals Fund, Inc.; Trustee of The
                                          Virtus Funds; Attorney-at-law;
                                          Partner, Henny, Kochuba, Meyer and
                                          Flaherty; Chairman, Meritcare,
                                          Inc.; Director, Eat'N Park
                                          Restaurants, Inc.; Director,
                                          Trustee, or Managing General
                                          Partner of the Funds; formerly,
                                          Vice Chairman, Horizon Financial,
                                          F.A.
John E. Murray, Jr., J.D., S.J.D., 62
[MAILING ADDRESS
CITY, STATE & ZIP CODE]                   Trustee/Director of the Blanchard
                                          Funds and Blanchard Precious
                                          Metals Fund, Inc.; Trustee of The
                                          Virtus Funds; President, Law
                                          Professor, Duquesne University;
                                          Consulting Partner, Mollica,
                                          Murray and Hogue; Director,
                                          Trustee or Managing General
                                          Partner of the Funds.
Wesley W. Posvar, 69
1202 Cathedral of Learning
University of Pittsburgh
Pittsburgh, PA                            Trustee/Director of the Blanchard
                                          Funds and Blanchard Precious
                                          Metals Fund, Inc.; Trustee of The
                                          Virtus Funds; Professor, Foreign
                                          Policy and Management Consultant;
                                          Trustee, Carnegie Endowment for
                                          International Peace, RAND
                                          Corporation, Online Computer
                                          Library Center, Inc., and U.S.
                                          Space Foundation; Chairman, Czecho
                                          Slovak Management Center;
                                          Director, Trustee, or Managing
                                          General Partner of the Funds;
                                          President Emeritus, University of
                                          Pittsburgh; formerly , Chairman,
                                          National Advisory Council for
                                          Environmental Policy and
                                          Technology.
Marjorie P. Smuts, 59
4905 Bayard Street
Pittsburgh, PA                            Trustee/Director of the Blanchard
                                          Funds and Blanchard Precious
                                          Metals Fund, Inc.; Trustee of The
                                          Virtus Funds; Public
                                          relations/marketing consultant;
                                          Director, Trustee, or Managing
                                          General Partner of the Funds.
(1)This Trustee is deemed to be an "interested person" as defined in the 
   Investment Company Act of 1940, as amended.
(2)Member of the Executive Committee. The Executive Committee of the Board of 
Trustees handles the responsibilities of the Board of Trustees between 
meetings of the Board.
(3)Member of the Audit Committee.  The Audit Committee is responsible for 
reviewing compliance with all internal controls and all regulations related 
to the financial reporting process.
The Funds
As referred to in the list of Trustees and Officers, "Funds" includes the
following investment companies:
American Leaders Fund, Inc.; Annuity Management Series; Arrow Funds; 
Automated Cash Management Trust; Automated Government Money Trust; 
California Municipal Cash Trust; Cash Trust
Series II; Cash Trust Series, Inc.; DG Investor Series; Edward D. Jones &
Co. Daily Passport Cash Trust; Federated ARMs Fund; Federated Exchange Fund,
Ltd.; Federated GNMA Trust; Federated Government Trust; Federated Growth
Trust; Federated High Yield Trust; Federated Income Securities Trust;
Federated Income Trust; Federated Index Trust; Federated Institutional
Trust; Federated Intermediate Government Trust; Federated Master Trust;
Federated Municipal Trust; Federated Short-Term U.S. Government Trust;
Federated Stock Trust; Federated Tax-Free Trust; Federated U.S. Government
Bond Fund; Federated U.S. Government Securities Fund: 1-3 Years; First
Priority Funds; Fixed Income Securities, Inc.; Fortress Adjustable Rate U.S.
Government Fund, Inc.; Fortress Municipal Income Fund, Inc.; Fortress
Utility Fund, Inc.; Fund for U.S. Government Securities, Inc.; Government
Income Securities, Inc.; High Yield Cash Trust; Insight Institutional
Series, Inc.; Insurance Management Series; Intermediate Municipal Trust;
International Series, Inc.; Investment Series Funds, Inc.; Investment Series
Trust; Liberty Equity Income Fund, Inc.; Liberty High Income Bond Fund,
Inc.; Liberty Municipal Securities Fund, Inc.; Liberty U.S. Government Money
Market Trust; Liberty Term Trust, Inc. - 1999; Liberty Utility Fund, Inc.;
Liquid Cash Trust; Managed Series Trust; Money Market Management, Inc.;
Money Market Obligations Trust; Money Market Trust; Municipal Securities
Income Trust; Newpoint Funds; New York Municipal Cash Trust; 111 Corcoran
Funds; Peachtree Funds; The Planters Funds; RIMCO Monument Funds; The
Shawmut Funds; Short-Term Municipal Trust; Star Funds; The Starburst Funds;
The Starburst Funds II; Stock and Bond Fund, Inc.;  Sunburst Funds; Targeted
Duration Trust; Tax-Free Instruments Trust; Trademark Funds; Trust for
Financial Institutions; Trust For Government Cash Reserves; Trust for Short-
Term U.S. Government Securities; Trust for U.S. Treasury Obligations; and
World Investment Series, Inc.
Fund Ownership
As of June 30, 1995, Officers and Trustees own less than 1% of the
outstanding shares of each Fund.
To the best knowledge of the FUND, as of June 30, 1995, no shareholder owned 
5% or more of the outstanding shares of the FUND.
Officers and Trustees Compensation
NAME, POSITION             AGGREGATE            TOTAL COMPENSATION
WITH THE FUND              COMPENSATION         PAID TO THE TRUSTEES FROM
                           FROM THE FUND+       THE FUND AND THE FUND COMPLEX*
John F. Donahue,                $ -0-           $0 for the Fund Complex
Chairman and Trustee
Thomas G. Bigley, Trustee       $ -0-           $489.00 the Fund Complex
John T. Conroy, Jr., Trustee    $ -0-           $2,001.50 for the Fund Complex
William J. Copeland, Trustee    $ -0-           $2,001.50 for the Fund Complex
James E. Dowd, Trustee          $ -0-           $2,001.50 for the Fund Complex
Lawrence D. Ellis, M.D., Trustee                $ -0-$1,816.00 for the Fund
                                                  Complex
Edward L. Flaherty, Jr., Trustee                $ -0-$2,001.50 for the Fund
                                                  Complex
Edward C. Gonzales, President   $ -0-           $ -0- for the Fund Complex
and Trustee
Peter E. Madden, Trustee        $ -0-           $1,517.50 for the Fund Complex
Gregor F. Meyer, Trustee        $ -0-           $1,816.00 for the Fund Complex
John E. Murray, Jr., Trustee    $ -0-           $-0- for the Fund Complex
Wesley W. Posvar, Trustee       $ -0-           $1,816.00 for the Fund Complex
Marjorie P. Smuts, Trustee      $ -0-           $1,816.00 for the Fund Complex

*     Fund Complex = Blanchard Funds, Blanchard Precious Metals Fund, Inc.
and the Virtus Funds

INVESTMENT ADVISORY SERVICES
Advisor to the Trust
The Fund's investment adviser is Virtus Capital Management, Inv. ("VCM"), 
which is a division of Signet Trust Company, a wholly-owned 
subsidiary of Signet Banking Corporation.  Because
of the internal controls maintained by Signet to restrict the flow of non-
public information, FUND investments are typically made without any
knowledge of Signet Bank's or its affiliates' lending relationship with an
issuer.
The adviser shall not be liable to the Trust, a Fund, or any shareholder of 
the Funds for any losses that may be sustained in the purchase, holding, or 
sale of any security or for
anything done or omitted by it, except acts or omissions involving willful
misfeasance, bad faith, gross negligence, or reckless disregard of the
duties imposed upon it by its contract with the Trust.
Advisory Fees
For its services, VCM receives an annual investment advisory fee as described 
in the prospectus.  For the fiscal years ended April 30, 1994, 1993, 
and 1992, aggregate amount paid or
accrued by the FUND to the prior manager was $943,678, $1,038,443 and
$1,560,949."
5.  On page 46 of the Statement of Additional Information after the last
paragraph under the sub-heading "Global Allocation Strategist," please add
the following headings and paragraphs thereunder:
"ADMINISTRATIVE SERVICES
Federated Administrative Services, which is a subsidiary of Federated
Investors, provides administrative personnel and services to the Funds for
the fees set forth in the prospectus."
DISTRIBUTION PLAN
The Trust has adopted a Plan for Shares of the Fund pursuant to Rule 12b-1 
which was promulgated by the Securities and Exchange Commission pursuant 
to the Investment Company Act of
1940.  The Plan provides that the Funds' Distributor shall act as the
Distributor of shares, and it permits the payment of fees to brokers and
dealers for distribution and administrative services and to administrators
for administrative services.  The Plan is designed to (i) stimulate brokers
and dealers to provide distribution and administrative support services to
the Fund and its shareholders and (ii) stimulate administrators to render
administrative support services to the Fund and its shareholders.  These
services are to be provided by a representative who has knowledge of the
shareholders' particular circumstances and goals, and include, but are not
limited to:  providing office space, equipment, telephone facilities, and
various personnel including clerical, supervisory, and computer, as
necessary or beneficial to establish and maintain shareholder accounts and
records; processing purchase and redemption transactions and automatic
investments of client account cash balances; answering routine client
inquiries regarding the Funds; assisting clients in changing dividend
options, account designations, and addresses; and providing such other
services as the Trust reasonably requests.
Other benefits which the Fund hopes to achieve through the Plan include, 
but are not limited to the following:  (1) an efficient and effective 
administrative system; (2) a more
efficient use of assets of shareholders by having them rapidly invested in
the Fund with a minimum  of delay and administrative detail; and (3) an
efficient and reliable records system for shareholders and prompt responses
to shareholder requests and inquiries concerning their accounts.
By adopting the Plan, the then Board of Trustees expected that the Fund 
will be able to achieve a more predictable flow of cash for investment 
purposes and to meet redemptions.  This
will facilitate more efficient portfolio management and assist the Fund in
seeking to achieve its investment objectives.  By identifying potential
investors in shares whose needs are served by the Fund's objectives, and
properly servicing these account, the Fund may be able to curb sharp
fluctuations in rates of redemptions and sales."
July 12, 1995


    FEDERATED SECURITIES CORP.

    Distributor
    A subsidiary of Federated Investors
    Federated Investors Tower
    Pittsburgh, PA  15222-3779
    (7/95)


THE BLANCHARD GROUP OF FUNDS
         BLANCHARD 100% TREASURY MONEY MARKET FUND
SUPPLEMENT TO STATEMENT OF ADDITIONAL INFORMATION DATED AUGUST 31, 1994

    On July 12, 1995, as a result of acquisition by subsidiaries of Signet
Banking Corporation ("SBC") of certain assets of Sheffield Management
Company ("SMC") and Sheffield Investments, Inc. ("SII"), the following
actions were taken:  (i) Virtus Capital Management, Inc. ("VCM"), a wholly-
owned subsidiary of SBC, replaced SMC as overall investment manager to
Blanchard Funds and Blanchard Precious Metals Fund, Inc. (collectively, the
"Funds"); (ii) VCM entered into new sub-advisory agreements with each
current sub-adviser of each Fund (with the exception of Blanchard 100%
Treasury Money Market Fund, Blanchard Capital Growth Fund and Blanchard
Growth & Income Fund); (iii) Federated Securities Corp. replaced SII as the
Funds' distributor; (iv) Federated Administrative Services ("FAS") was
engaged to provided administrative services to the Funds; and (i) Federated
Securities Corp. entered into new distribution plans with each Fund (other
than Blanchard 100% Treasury Money Market Fund).  No changes in the advisory
fees, sub-advisory fees or distribution plan fees will occur as a result of
these actions, and the acquisition agreement requires all parties to avoid
the imposition of any unfair burden on the Fund.
    Accordingly, please make the following changes to the Statement of
Additional Information:
1.  On page 1 of the Statement of Additional Information, please change the
address of the Blanchard Group of Funds to the following:
"Federated Investors Tower, Pittsburgh, Pennsylvania  15222-3779."
2.  Throughout the Statement of Additional Information, please delete each
reference to Sheffield Management Company or SMC and replace with Virtus
Capital Management, Inc. or VCM, as the case may be.
3.  On page 1 of the Statement of Additional Information, please delete the
reference to Sheffield Investments, Inc. and replace with Federated
Securities Corp.
4.  On page 5 of the Statement of Additional Information, please delete the
heading "The Management of the Fund" and the paragraphs thereunder and
replace with the following:
"THE MANAGEMENT OF THE FUND
Officers and Trustees are listed with their ages, addresses, principal 
occupations, and present positions, including any affiliation with 
Virtus Capital Management, Inc., Signet Trust
Company, Federated Investors, Federated Securities Corp., Federated Services
Company, and Federated Administrative Services or the Funds (as defined
below).

John F. Donahue, 70 (1)(2)
Federated Investors Tower
Pittsburgh, PA                            Chairman and Trustee/Director of
                                          Blanchard Funds and Blanchard
                                          Precious Metals Fund, Inc.;
                                          Chairman and Trustee of The Virtus
                                          Funds; Chairman and Trustee,
                                          Federated Investors, Federated
                                          Advisers, Federated Management,
                                          and Federated Research; Chairman
                                          and Director, Federated Research
                                          Corp.,; Chairman, Passport
                                          Research, Ltd.; Director, AEtna
                                          Life and Casualty Company; Chief
                                          Executive Officer and Director,
                                          Trustee, or Managing General
                                          Partner of the Funds.
                                          
Thomas G. Bigley, 61
28th Floor
One Oxford Centre
Pittsburgh, PA                            Trustee/Director of the Blanchard
                                          Funds and Blanchard Precious
                                          Metals Fund, Inc.; Trustee of the
                                          Virtus Funds; Director, Oberg
                                          Manufacturing Co.; Chairman of the
                                          Board, Children's Hospital of
                                          Pittsburgh; Director, Trustee, or
                                          Managing General Partner of the
                                          Funds; formerly, Senior Partner,
                                          Ernst & Young LLP.
John T. Conroy, Jr., 57 (3)
Wood/IPC Commercial Department
John R. Wood and Associates, Inc., Realtors
3255 Tamiami Trail North
Naples, FL                                Trustee/Director of the Blanchard
                                          Funds and Blanchard Precious
                                          Metals Fund, Inc.; Trustee of the
                                          Virtus Funds; President,
                                          Investment Properties Corporation;
                                          Senior Vice-President, John R.
                                          Wood and Associates, Inc.,
                                          Realtors; President, Northgate
                                          Village Development Corporation;
                                          Partner or Trustee in private real
                                          estate ventures in Southwest
                                          Florida; Director, Trustee, or
                                          Managing General Partner of the
                                          Funds; formerly, President, Naples
                                          Property Management, Inc.
William J. Copeland, 76 (3)
One PNC Plaza - 23rd Floor
Pittsburgh, PA                            Trustee/Director of the Blanchard
                                          Funds and Blanchard Precious
                                          Metals Fund, Inc.; Trustee of the
                                          Virtus Funds; Director and Member
                                          of the Executive Committee,
                                          Michael Baker, Inc.; Director,
                                          Trustee, or Managing General
                                          Partner of the Funds; formerly,
                                          Vice Chairman and Director, PNC
                                          Bank, N.A., and PNC Bank Corp. and
                                          Director, Ryan Homes, Inc.
James E. Dowd, 72 (3)
571 Hayward Mill Road
Concord, MA                               Trustee/Director of the Blanchard
                                          Funds and Blanchard Precious
                                          Metals Fund, Inc.; Trustee of the
                                          Virtus Funds; Attorney-at-law;
                                          Director, The Emerging Germany
                                          Fund, Inc.; Director, Trustee, or
                                          Managing General Partner of the
                                          Funds; formerly, Director, Blue
                                          Cross of Massachusetts, Inc.
                                          
Lawrence D. Ellis, M.D., 62 (1)
3471 Fifth Avenue, Suite 1111
Pittsburgh, PA                            Trustee/Director of the Blanchard
                                          Funds and Blanchard Precious
                                          Metals Fund, Inc.; Trustee of the
                                          Virtus Funds; Hematologist,
                                          Oncologist, and Internist,
                                          Presbyterian and Montefiore
                                          Hospitals; Professor of Medicine
                                          and Member, Board of Trustees,
                                          University of Pittsburgh; Medical
                                          Director, University of Pittsburgh
                                          Medical Center - Downtown; Member,
                                          Board of Directors, University of
                                          Pittsburgh Medical Center;
                                          Director, Trustee, or Managing
                                          General Partner of the Funds.
Edward L. Flaherty, Jr., 70 (1)(3)
Two Gateway Center - Suite 674
Pittsburgh, PA                            Trustee/Director of the Blanchard
                                          Funds and Blanchard Precious
                                          Metals Fund, Inc.; Trustee of the
                                          Virtus Funds; Attorney-at-law;
                                          Partner, Henny, Kochuba, Meyer and
                                          Flaherty; Director, Eat'N Park
                                          Restaurants, Inc., and Statewide
                                          Settlement Agency, Inc.; Director,
                                          Trustee, or Managing General
                                          Partner of the Funds; formerly,
                                          Counsel, Horizon Financial, F.A.,
                                          Western Region.
Edward C. Gonzales, 64 (1)
Federated Investor Tower
Pittsburgh, PA                            President, Treasurer and
                                          Trustee/Director of the Blanchard
                                          Funds and Blanchard Precious
                                          Metals Fund, Inc.; President,
                                          Treasurer and Trustee of The
                                          Virtus Funds;  Vice President,
                                          Treasurer, and Trustee, Federated
                                          Investors; Vice President and
                                          Treasurer, Federated Advisers,
                                          Federated Management, Federated
                                          Research, Federated Research
                                          Corp., and Passport Research,
                                          Ltd.; Executive Vice President,
                                          Treasurer, and Director, Federated
                                          Securities Corp.; Trustee,
                                          Federated Services Company and
                                          Federated Shareholder Services;
                                          Chairman, Treasurer, and Trustee,
                                          Federated Administrative Services;
                                          Trustee or Director of some of the
                                          Funds; Vice President and
                                          Treasurer of the Funds.
Peter E. Madden, 53
225 Franklin Street
Boston, MA                                Trustee/Director of the Blanchard
                                          Funds and Blanchard Precious
                                          Metals Fund, Inc.; Trustee of The
                                          Virtus Funds; Consultant; State
                                          Representative, Commonwealth of
                                          Massachusetts; Director, Trustee,
                                          or Managing General Partner of the
                                          Funds; formerly, President, State
                                          Street Bank and Trust Company and
                                          State Street Boston Corporation
                                          and Trustee, Lahey Clinic
                                          Foundation, Inc.
                                          
Gregor F. Meyer, 68
Two Gateway Center - Suite 674
Pittsburgh, PA                            Trustee/Director of the Blanchard
                                          Funds and Blanchard Precious
                                          Metals Fund, Inc.; Trustee of The
                                          Virtus Funds; Attorney-at-law;
                                          Partner, Henny, Kochuba, Meyer and
                                          Flaherty; Chairman, Meritcare,
                                          Inc.; Director, Eat'N Park
                                          Restaurants, Inc.; Director,
                                          Trustee, or Managing General
                                          Partner of the Funds; formerly,
                                          Vice Chairman, Horizon Financial,
                                          F.A.
John E. Murray, Jr., J.D., S.J.D., 62
[MAILING ADDRESS
CITY, STATE & ZIP CODE]                   Trustee/Director of the Blanchard
                                          Funds and Blanchard Precious
                                          Metals Fund, Inc.; Trustee of The
                                          Virtus Funds; President, Law
                                          Professor, Duquesne University;
                                          Consulting Partner, Mollica,
                                          Murray and Hogue; Director,
                                          Trustee or Managing General
                                          Partner of the Funds.
Wesley W. Posvar, 69
1202 Cathedral of Learning
University of Pittsburgh
Pittsburgh, PA                            Trustee/Director of the Blanchard
                                          Funds and Blanchard Precious
                                          Metals Fund, Inc.; Trustee of The
                                          Virtus Funds; Professor, Foreign
                                          Policy and Management Consultant;
                                          Trustee, Carnegie Endowment for
                                          International Peace, RAND
                                          Corporation, Online Computer
                                          Library Center, Inc., and U.S.
                                          Space Foundation; Chairman, Czecho
                                          Slovak Management Center;
                                          Director, Trustee, or Managing
                                          General Partner of the Funds;
                                          President Emeritus, University of
                                          Pittsburgh; formerly , Chairman,
                                          National Advisory Council for
                                          Environmental Policy and
                                          Technology.
Marjorie P. Smuts, 59
4905 Bayard Street
Pittsburgh, PA                            Trustee/Director of the Blanchard
                                          Funds and Blanchard Precious
                                          Metals Fund, Inc.; Trustee of The
                                          Virtus Funds; Public
                                          relations/marketing consultant;
                                          Director, Trustee, or Managing
                                          General Partner of the Funds.
(1)This Trustee is deemed to be an "interested person" as defined in the 
Investment Company Act of 1940,
      as amended.
(2)Member of the Executive Committee. The Executive Committee of the Board of 
Trustees handles the responsibilities of the Board of Trustees between 
meetings of the Board.
(3)Member of the Audit Committee.  The Audit Committee is responsible for 
reviewing compliance with all internal controls and all regulations 
related to the financial
      reporting process.
The Funds
As referred to in the list of Trustees and Officers, "Funds" includes the
following investment companies:
American Leaders Fund, Inc.; Annuity Management Series; Arrow Funds; Automated 
Cash Management Trust; Automated Government Money Trust; California 
Municipal Cash Trust; Cash Trust
Series II; Cash Trust Series, Inc.; DG Investor Series; Edward D. Jones &
Co. Daily Passport Cash Trust; Federated ARMs Fund; Federated Exchange Fund,
Ltd.; Federated GNMA Trust; Federated Government Trust; Federated Growth
Trust; Federated High Yield Trust; Federated Income Securities Trust;
Federated Income Trust; Federated Index Trust; Federated Institutional
Trust; Federated Intermediate Government Trust; Federated Master Trust;
Federated Municipal Trust; Federated Short-Term U.S. Government Trust;
Federated Stock Trust; Federated Tax-Free Trust; Federated U.S. Government
Bond Fund; Federated U.S. Government Securities Fund: 1-3 Years; First
Priority Funds; Fixed Income Securities, Inc.; Fortress Adjustable Rate U.S.
Government Fund, Inc.; Fortress Municipal Income Fund, Inc.; Fortress
Utility Fund, Inc.; Fund for U.S. Government Securities, Inc.; Government
Income Securities, Inc.; High Yield Cash Trust; Insight Institutional
Series, Inc.; Insurance Management Series; Intermediate Municipal Trust;
International Series, Inc.; Investment Series Funds, Inc.; Investment Series
Trust; Liberty Equity Income Fund, Inc.; Liberty High Income Bond Fund,
Inc.; Liberty Municipal Securities Fund, Inc.; Liberty U.S. Government Money
Market Trust; Liberty Term Trust, Inc. - 1999; Liberty Utility Fund, Inc.;
Liquid Cash Trust; Managed Series Trust; Money Market Management, Inc.;
Money Market Obligations Trust; Money Market Trust; Municipal Securities
Income Trust; Newpoint Funds; New York Municipal Cash Trust; 111 Corcoran
Funds; Peachtree Funds; The Planters Funds; RIMCO Monument Funds; The
Shawmut Funds; Short-Term Municipal Trust; Star Funds; The Starburst Funds;
The Starburst Funds II; Stock and Bond Fund, Inc.;  Sunburst Funds; Targeted
Duration Trust; Tax-Free Instruments Trust; Trademark Funds; Trust for
Financial Institutions; Trust For Government Cash Reserves; Trust for Short-
Term U.S. Government Securities; Trust for U.S. Treasury Obligations; and
World Investment Series, Inc.
Fund Ownership
As of June 30, 1995, Officers and Trustees own less than 1% of the
outstanding shares of each Fund.
To the best knowledge of the FUND, as of June 30, 1995, no shareholder owned 
5% or more of the outstanding shares of the FUND.
Officers and Trustees Compensation
NAME, POSITION             AGGREGATE            TOTAL COMPENSATION
WITH THE FUND              COMPENSATION         PAID TO THE TRUSTEES FROM
                           FROM THE FUND+       THE FUND AND THE FUND COMPLEX*
John F. Donahue,                $ -0-           $0 for the Fund Complex
Chairman and Trustee
Thomas G. Bigley, Trustee       $ -0-           $489.00 the Fund Complex
John T. Conroy, Jr., Trustee    $ -0-           $2,001.50 for the Fund Complex
William J. Copeland, Trustee    $ -0-           $2,001.50 for the Fund Complex
James E. Dowd, Trustee          $ -0-           $2,001.50 for the Fund Complex
Lawrence D. Ellis, M.D., Trustee                $ -0-$1,816.00 for the Fund
                                                  Complex
Edward L. Flaherty, Jr., Trustee                $ -0-$2,001.50 for the Fund
                                                  Complex
Edward C. Gonzales, President   $ -0-           $ -0- for the Fund Complex
and Trustee
Peter E. Madden, Trustee        $ -0-           $1,517.50 for the Fund Complex
Gregor F. Meyer, Trustee        $ -0-           $1,816.00 for the Fund Complex
John E. Murray, Jr., Trustee    $ -0-           $-0- for the Fund Complex
Wesley W. Posvar, Trustee       $ -0-           $1,816.00 for the Fund Complex
Marjorie P. Smuts, Trustee      $ -0-           $1,816.00 for the Fund Complex
*     Fund Complex = Blanchard Funds, Blanchard Precious Metals Fund, Inc.
and the Virtus Funds.

INVESTMENT ADVISORY SERVICES
Advisor to the Trust
The Fund's investment adviser is Virtus Capital Management, Inv. ("VCM"), 
which is a division of Signet Trust Company, a wholly-owned subsidiary of 
Signet Banking Corporation.  Because
of the internal controls maintained by Signet to restrict the flow of non-
public information, FUND investments are typically made without any
knowledge of Signet Bank's or its affiliates' lending relationship with an
issuer.
The adviser shall not be liable to the Trust, a Fund, or any shareholder of 
any of the Funds for any losses
that may be sustained in the purchase, holding, or sale of any security or
for anything done or omitted by it, except acts or omissions involving
willful misfeasance, bad faith, gross negligence, or reckless disregard of
the duties imposed upon it by its contract with the Trust.
Advisory Fees
For its services, VCM receives an annual investment advisory fee as described 
in the prospectus.  For the fiscal years ended April 30, 1994, 1993, and 
1992, aggregate amount paid or
accrued by the FUND to the prior manager was under the management agreement
then in effect were $851,522, $588,587 and $165,203, respectively, after
voluntary waivers of $759,018, $588,587 and $75,502, respectively."
5.  On page 11 of the Statement of Additional Information after the last
paragraph under the heading "Portfolio Advisory Services," please add the
following heading and paragraph thereunder:
"ADMINISTRATIVE SERVICES
Federated Administrative Services, which is a subsidiary of Federated
Investors, provides administrative personnel and services to the Funds for
the fees set forth in the prospectus."
July 12, 1995


    FEDERATED SECURITIES CORP.

    Distributor
    A subsidiary of Federated Investors
    Federated Investors Tower
    Pittsburgh, PA  15222-3779
    (7/95)


THE BLANCHARD GROUP OF FUNDS
         BLANCHARD SHORT-TERM GLOBAL INCOME FUND
SUPPLEMENT TO STATEMENT OF ADDITIONAL INFORMATION DATED AUGUST 31, 1994

    On July 12, 1995, as a result of acquisition by subsidiaries of Signet
Banking Corporation ("SBC") of certain assets of Sheffield Management
Company ("SMC") and Sheffield Investments, Inc. ("SII"), the following
actions were taken:  (i) Virtus Capital Management, Inc. ("VCM"), a wholly-
owned subsidiary of SBC, replaced SMC as overall investment manager to
Blanchard Funds and Blanchard Precious Metals Fund, Inc. (collectively, the
"Funds"); (ii) VCM entered into new sub-advisory agreements with each
current sub-adviser of each Fund (with the exception of Blanchard 100%
Treasury Money Market Fund, Blanchard Capital Growth Fund and Blanchard
Growth & Income Fund); (iii) Federated Securities Corp. replaced SII as the
Funds' distributor; (iv) Federated Administrative Services ("FAS") was
engaged to provided administrative services to the Funds; and (i) Federated
Securities Corp. entered into new distribution plans with each Fund (other
than Blanchard 100% Treasury Money Market Fund).  No changes in the advisory
fees, sub-advisory fees or distribution plan fees will occur as a result of
these actions, and the acquisition agreement requires all parties to avoid
the imposition of any unfair burden on the Fund.
    Accordingly, please make the following changes to the Statement of
Additional Information:
1.  On page 1 of the Statement of Additional Information, please change the
address of the Blanchard Group of Funds to the following:
"Federated Investors Tower, Pittsburgh, Pennsylvania  15222-3779."
2.  Throughout the Statement of Additional Information, please delete each
reference to Sheffield Management Company or SMC and replace with Virtus
Capital Management, Inc. or VCM, as the case may be.
3.  Throughout the Statement of Additional Information, please delete each
reference to Sheffield Investments, Inc. and replace with Federated
Securities Corp.
4.  On page 35 of the Statement of Additional Information, please delete the
heading "The Management of the Fund" and the paragraphs thereunder and
replace with the following:
"THE MANAGEMENT OF THE FUND
Officers and Trustees are listed with their ages, addresses, principal 
occupations, and present positions, including any affiliation with Virtus 
Capital Management, Inc., Signet Trust
Company, Federated Investors, Federated Securities Corp., Federated Services
Company, and Federated Administrative Services or the Funds (as defined
below).

John F. Donahue, 70 (1)(2)
Federated Investors Tower
Pittsburgh, PA                            Chairman and Trustee/Director of
                                          Blanchard Funds and Blanchard
                                          Precious Metals Fund, Inc.;
                                          Chairman and Trustee of The Virtus
                                          Funds; Chairman and Trustee,
                                          Federated Investors, Federated
                                          Advisers, Federated Management,
                                          and Federated Research; Chairman
                                          and Director, Federated Research
                                          Corp.,; Chairman, Passport
                                          Research, Ltd.; Director, AEtna
                                          Life and Casualty Company; Chief
                                          Executive Officer and Director,
                                          Trustee, or Managing General
                                          Partner of the Funds.
                                          
Thomas G. Bigley, 61
28th Floor
One Oxford Centre
Pittsburgh, PA                            Trustee/Director of the Blanchard
                                          Funds and Blanchard Precious
                                          Metals Fund, Inc.; Trustee of the
                                          Virtus Funds; Director, Oberg
                                          Manufacturing Co.; Chairman of the
                                          Board, Children's Hospital of
                                          Pittsburgh; Director, Trustee, or
                                          Managing General Partner of the
                                          Funds; formerly, Senior Partner,
                                          Ernst & Young LLP.
John T. Conroy, Jr., 57 (3)
Wood/IPC Commercial Department
John R. Wood and Associates, Inc., Realtors
3255 Tamiami Trail North
Naples, FL                                Trustee/Director of the Blanchard
                                          Funds and Blanchard Precious
                                          Metals Fund, Inc.; Trustee of the
                                          Virtus Funds; President,
                                          Investment Properties Corporation;
                                          Senior Vice-President, John R.
                                          Wood and Associates, Inc.,
                                          Realtors; President, Northgate
                                          Village Development Corporation;
                                          Partner or Trustee in private real
                                          estate ventures in Southwest
                                          Florida; Director, Trustee, or
                                          Managing General Partner of the
                                          Funds; formerly, President, Naples
                                          Property Management, Inc.
William J. Copeland, 76 (3)
One PNC Plaza - 23rd Floor
Pittsburgh, PA                            Trustee/Director of the Blanchard
                                          Funds and Blanchard Precious
                                          Metals Fund, Inc.; Trustee of the
                                          Virtus Funds; Director and Member
                                          of the Executive Committee,
                                          Michael Baker, Inc.; Director,
                                          Trustee, or Managing General
                                          Partner of the Funds; formerly,
                                          Vice Chairman and Director, PNC
                                          Bank, N.A., and PNC Bank Corp. and
                                          Director, Ryan Homes, Inc.
James E. Dowd, 72 (3)
571 Hayward Mill Road
Concord, MA                               Trustee/Director of the Blanchard
                                          Funds and Blanchard Precious
                                          Metals Fund, Inc.; Trustee of the
                                          Virtus Funds; Attorney-at-law;
                                          Director, The Emerging Germany
                                          Fund, Inc.; Director, Trustee, or
                                          Managing General Partner of the
                                          Funds; formerly, Director, Blue
                                          Cross of Massachusetts, Inc.
                                          
Lawrence D. Ellis, M.D., 62 (1)
3471 Fifth Avenue, Suite 1111
Pittsburgh, PA                            Trustee/Director of the Blanchard
                                          Funds and Blanchard Precious
                                          Metals Fund, Inc.; Trustee of the
                                          Virtus Funds; Hematologist,
                                          Oncologist, and Internist,
                                          Presbyterian and Montefiore
                                          Hospitals; Professor of Medicine
                                          and Member, Board of Trustees,
                                          University of Pittsburgh; Medical
                                          Director, University of Pittsburgh
                                          Medical Center - Downtown; Member,
                                          Board of Directors, University of
                                          Pittsburgh Medical Center;
                                          Director, Trustee, or Managing
                                          General Partner of the Funds.
Edward L. Flaherty, Jr., 70 (1)(3)
Two Gateway Center - Suite 674
Pittsburgh, PA                            Trustee/Director of the Blanchard
                                          Funds and Blanchard Precious
                                          Metals Fund, Inc.; Trustee of the
                                          Virtus Funds; Attorney-at-law;
                                          Partner, Henny, Kochuba, Meyer and
                                          Flaherty; Director, Eat'N Park
                                          Restaurants, Inc., and Statewide
                                          Settlement Agency, Inc.; Director,
                                          Trustee, or Managing General
                                          Partner of the Funds; formerly,
                                          Counsel, Horizon Financial, F.A.,
                                          Western Region.
Edward C. Gonzales, 64 (1)
Federated Investor Tower
Pittsburgh, PA                            President, Treasurer and
                                          Trustee/Director of the Blanchard
                                          Funds and Blanchard Precious
                                          Metals Fund, Inc.; President,
                                          Treasurer and Trustee of The
                                          Virtus Funds;  Vice President,
                                          Treasurer, and Trustee, Federated
                                          Investors; Vice President and
                                          Treasurer, Federated Advisers,
                                          Federated Management, Federated
                                          Research, Federated Research
                                          Corp., and Passport Research,
                                          Ltd.; Executive Vice President,
                                          Treasurer, and Director, Federated
                                          Securities Corp.; Trustee,
                                          Federated Services Company and
                                          Federated Shareholder Services;
                                          Chairman, Treasurer, and Trustee,
                                          Federated Administrative Services;
                                          Trustee or Director of some of the
                                          Funds; Vice President and
                                          Treasurer of the Funds.
Peter E. Madden, 53
225 Franklin Street
Boston, MA                                Trustee/Director of the Blanchard
                                          Funds and Blanchard Precious
                                          Metals Fund, Inc.; Trustee of The
                                          Virtus Funds; Consultant; State
                                          Representative, Commonwealth of
                                          Massachusetts; Director, Trustee,
                                          or Managing General Partner of the
                                          Funds; formerly, President, State
                                          Street Bank and Trust Company and
                                          State Street Boston Corporation
                                          and Trustee, Lahey Clinic
                                          Foundation, Inc.
                                          
Gregor F. Meyer, 68
Two Gateway Center - Suite 674
Pittsburgh, PA                            Trustee/Director of the Blanchard
                                          Funds and Blanchard Precious
                                          Metals Fund, Inc.; Trustee of The
                                          Virtus Funds; Attorney-at-law;
                                          Partner, Henny, Kochuba, Meyer and
                                          Flaherty; Chairman, Meritcare,
                                          Inc.; Director, Eat'N Park
                                          Restaurants, Inc.; Director,
                                          Trustee, or Managing General
                                          Partner of the Funds; formerly,
                                          Vice Chairman, Horizon Financial,
                                          F.A.
John E. Murray, Jr., J.D., S.J.D., 62
[MAILING ADDRESS
CITY, STATE & ZIP CODE]                   Trustee/Director of the Blanchard
                                          Funds and Blanchard Precious
                                          Metals Fund, Inc.; Trustee of The
                                          Virtus Funds; President, Law
                                          Professor, Duquesne University;
                                          Consulting Partner, Mollica,
                                          Murray and Hogue; Director,
                                          Trustee or Managing General
                                          Partner of the Funds.
Wesley W. Posvar, 69
1202 Cathedral of Learning
University of Pittsburgh
Pittsburgh, PA                            Trustee/Director of the Blanchard
                                          Funds and Blanchard Precious
                                          Metals Fund, Inc.; Trustee of The
                                          Virtus Funds; Professor, Foreign
                                          Policy and Management Consultant;
                                          Trustee, Carnegie Endowment for
                                          International Peace, RAND
                                          Corporation, Online Computer
                                          Library Center, Inc., and U.S.
                                          Space Foundation; Chairman, Czecho
                                          Slovak Management Center;
                                          Director, Trustee, or Managing
                                          General Partner of the Funds;
                                          President Emeritus, University of
                                          Pittsburgh; formerly , Chairman,
                                          National Advisory Council for
                                          Environmental Policy and
                                          Technology.
Marjorie P. Smuts, 59
4905 Bayard Street
Pittsburgh, PA                            Trustee/Director of the Blanchard
                                          Funds and Blanchard Precious
                                          Metals Fund, Inc.; Trustee of The
                                          Virtus Funds; Public
                                          relations/marketing consultant;
                                          Director, Trustee, or Managing
                                          General Partner of the Funds.
(1)This Trustee is deemed to be an "interested person" as defined in the 
Investment Company Act of 1940,
      as amended.
(2)Member of the Executive Committee. The Executive Committee of the Board of 
Trustees handles the responsibilities of the Board of Trustees between 
meetings of the Board.
(3)Member of the Audit Committee.  The Audit Committee is responsible for 
reviewing compliance with all internal controls and all regulations 
related to the financial reporting process.
The Funds
As referred to in the list of Trustees and Officers, "Funds" includes the
following investment companies:
American Leaders Fund, Inc.; Annuity Management Series; Arrow Funds; 
Automated Cash Management Trust; Automated Government Money Trust; 
California Municipal Cash Trust; Cash Trust
Series II; Cash Trust Series, Inc.; DG Investor Series; Edward D. Jones &
Co. Daily Passport Cash Trust; Federated ARMs Fund; Federated Exchange Fund,
Ltd.; Federated GNMA Trust; Federated Government Trust; Federated Growth
Trust; Federated High Yield Trust; Federated Income Securities Trust;
Federated Income Trust; Federated Index Trust; Federated Institutional
Trust; Federated Intermediate Government Trust; Federated Master Trust;
Federated Municipal Trust; Federated Short-Term U.S. Government Trust;
Federated Stock Trust; Federated Tax-Free Trust; Federated U.S. Government
Bond Fund; Federated U.S. Government Securities Fund: 1-3 Years; First
Priority Funds; Fixed Income Securities, Inc.; Fortress Adjustable Rate U.S.
Government Fund, Inc.; Fortress Municipal Income Fund, Inc.; Fortress
Utility Fund, Inc.; Fund for U.S. Government Securities, Inc.; Government
Income Securities, Inc.; High Yield Cash Trust; Insight Institutional
Series, Inc.; Insurance Management Series; Intermediate Municipal Trust;
International Series, Inc.; Investment Series Funds, Inc.; Investment Series
Trust; Liberty Equity Income Fund, Inc.; Liberty High Income Bond Fund,
Inc.; Liberty Municipal Securities Fund, Inc.; Liberty U.S. Government Money
Market Trust; Liberty Term Trust, Inc. - 1999; Liberty Utility Fund, Inc.;
Liquid Cash Trust; Managed Series Trust; Money Market Management, Inc.;
Money Market Obligations Trust; Money Market Trust; Municipal Securities
Income Trust; Newpoint Funds; New York Municipal Cash Trust; 111 Corcoran
Funds; Peachtree Funds; The Planters Funds; RIMCO Monument Funds; The
Shawmut Funds; Short-Term Municipal Trust; Star Funds; The Starburst Funds;
The Starburst Funds II; Stock and Bond Fund, Inc.;  Sunburst Funds; Targeted
Duration Trust; Tax-Free Instruments Trust; Trademark Funds; Trust for
Financial Institutions; Trust For Government Cash Reserves; Trust for Short-
Term U.S. Government Securities; Trust for U.S. Treasury Obligations; and
World Investment Series, Inc.
Fund Ownership
As of June 30, 1995, Officers and Trustees own less than 1% of the
outstanding shares of each Fund.
To the best knowledge of the FUND, as of June 30, 1995, no shareholder owned 
5% or more of the outstanding shares of the FUND.
Officers and Trustees Compensation
NAME, POSITION             AGGREGATE            TOTAL COMPENSATION
WITH THE FUND              COMPENSATION         PAID TO THE TRUSTEES FROM
                           FROM THE FUND+       THE FUND AND THE FUND COMPLEX*
John F. Donahue,                $ -0-           $0 for the Fund Complex
Chairman and Trustee
Thomas G. Bigley, Trustee       $ -0-           $489.00 the Fund Complex
John T. Conroy, Jr., Trustee    $ -0-           $2,001.50 for the Fund Complex
William J. Copeland, Trustee    $ -0-           $2,001.50 for the Fund Complex
James E. Dowd, Trustee          $ -0-           $2,001.50 for the Fund Complex
Lawrence D. Ellis, M.D., Trustee                $ -0-$1,816.00 for the Fund
                                                  Complex
Edward L. Flaherty, Jr., Trustee                $ -0-$2,001.50 for the Fund
                                                  Complex
Edward C. Gonzales, President   $ -0-           $ -0- for the Fund Complex
and Trustee
Peter E. Madden, Trustee        $ -0-           $1,517.50 for the Fund Complex
Gregor F. Meyer, Trustee        $ -0-           $1,816.00 for the Fund Complex
John E. Murray, Jr., Trustee    $ -0-           $-0- for the Fund Complex
Wesley W. Posvar, Trustee       $ -0-           $1,816.00 for the Fund Complex
Marjorie P. Smuts, Trustee      $ -0-           $1,816.00 for the Fund Complex

*     Fund Complex = Blanchard Funds, Blanchard Precious Metals Fund, Inc.
and the Virtus Funds

INVESTMENT ADVISORY SERVICES
Advisor to the Trust
The Fund's investment adviser is Virtus Capital Management, Inv. ("VCM"), 
which is a division of Signet Trust Company, a wholly-owned subsidiary of 
Signet Banking Corporation.  Because
of the internal controls maintained by Signet to restrict the flow of non-
public information, Fund investments are typically made without any
knowledge of Signet Bank's or its affiliates' lending relationship with an
issuer.
The adviser shall not be liable to the Trust, a Fund, or any shareholder of 
any of the Funds for any losses
that may be sustained in the purchase, holding, or sale of any security or
for anything done or omitted by it, except acts or omissions involving
willful misfeasance, bad faith, gross negligence, or reckless disregard of
the duties imposed upon it by its contract with the Trust.
Advisory Fees
For its services, VCM receives an annual investment advisory fee as described 
in the prospectus.  For the fiscal years ended April 30, 1994, 1993, 
and 1992, aggregate amount paid or
accrued by the FUND to the prior manager under the management agreement then
in effect was $4,845,290, $8,417,706 and $6,511,756 respectively, of which
$472,690 was waived by the prior manager during 1992. The prior manager has
paid the Portfolio Adviser $1,039,688 for the year ended April 30, 1994."
ADMINISTRATIVE SERVICES
Federated Administrative Services, which is a subsidiary of Federated
Investors, provides administrative personnel and services to the Funds for
the fees set forth in the prospectus."
DISTRIBUTION PLAN
The Trust has adopted a Plan for Shares of the Fund pursuant to Rule 12b-1 
which was promulgated by the Securities and Exchange Commission pursuant to 
the Investment Company Act of
1940.  The Plan provides that the Funds' Distributor shall act as the
Distributor of shares, and it permits the payment of fees to brokers and
dealers for distribution and administrative services and to administrators
for administrative services.  The Plan is designed to (i) stimulate brokers
and dealers to provide distribution and administrative support services to
the Fund and its shareholders and (ii) stimulate administrators to render
administrative support services to the Fund and its shareholders.  These
services are to be provided by a representative who has knowledge of the
shareholders' particular circumstances and goals, and include, but are not
limited to:  providing office space, equipment, telephone facilities, and
various personnel including clerical, supervisory, and computer, as
necessary or beneficial to establish and maintain shareholder accounts and
records; processing purchase and redemption transactions and automatic
investments of client account cash balances; answering routine client
inquiries regarding the Funds; assisting clients in changing dividend
options, account designations, and addresses; and providing such other
services as the Trust reasonably requests.
Other benefits which the Fund hopes to achieve through the Plan include, but 
are not limited to the following:  (1) an efficient and effective 
administrative system; (2) a more
efficient use of assets of shareholders by having them rapidly invested in
the Fund with a minimum  of delay and administrative detail; and (3) an
efficient and reliable records system for shareholders and prompt responses
to shareholder requests and inquiries concerning their accounts.
By adopting the Plan, the then Board of Trustees expected that the Fund will 
be able to achieve a more predictable flow of cash for investment purposes 
and to meet redemptions.  This
will facilitate more efficient portfolio management and assist the Fund in
seeking to achieve its investment objectives.  By identifying potential
investors in shares whose needs are served by the Fund's objectives, and
properly servicing these account, the Fund may be able to curb sharp
fluctuations in rates of redemptions and sales."
July 12, 1995


    FEDERATED SECURITIES CORP.

    Distributor
    A subsidiary of Federated Investors
    Federated Investors Tower
    Pittsburgh, PA  15222-3779
    (7/95)


THE BLANCHARD GROUP OF FUNDS
         BLANCHARD AMERICAN EQUITY FUND
SUPPLEMENT TO STATEMENT OF ADDITIONAL INFORMATION DATED AUGUST 31, 1994

    On July 12, 1995, as a result of acquisition by subsidiaries of Signet
Banking Corporation ("SBC") of certain assets of Sheffield Management
Company ("SMC") and Sheffield Investments, Inc. ("SII"), the following
actions were taken:  (i) Virtus Capital Management, Inc. ("VCM"), a wholly-
owned subsidiary of SBC, replaced SMC as overall investment manager to
Blanchard Funds and Blanchard Precious Metals Fund, Inc. (collectively, the
"Funds"); (ii) VCM entered into new sub-advisory agreements with each
current sub-adviser of each Fund (with the exception of Blanchard 100%
Treasury Money Market Fund, Blanchard Capital Growth Fund and Blanchard
Growth & Income Fund); (iii) Federated Securities Corp. replaced SII as the
Funds' distributor; (iv) Federated Administrative Services ("FAS") was
engaged to provided administrative services to the Funds; and (i) Federated
Securities Corp. entered into new distribution plans with each Fund (other
than Blanchard 100% Treasury Money Market Fund).  No changes in the advisory
fees, sub-advisory fees or distribution plan fees will occur as a result of
these actions, and the acquisition agreement requires all parties to avoid
the imposition of any unfair burden on the Fund.
    Accordingly, please make the following changes to the Statement of
Additional Information:
1.  On page 1 of the Statement of Additional Information, please change the
address of the Blanchard Group of Funds to the following:
"Federated Investors Tower, Pittsburgh, Pennsylvania  15222-3779."
2.  Throughout the Statement of Additional Information, please delete each
reference to Sheffield Management Company or SMC and replace with Virtus
Capital Management, Inc. or VCM, as the case may be.
3.  Throughout the Statement of Additional Information, please delete each
reference to Sheffield Investments, Inc. and replace with Federated
Securities Corp.
4.  On page 26 of the Statement of Additional Information, please delete the
heading "The Management of the Fund" and the paragraphs thereunder and
replace with the following:
"THE MANAGEMENT OF THE FUND
Officers and Trustees are listed with their ages, addresses, principal 
occupations, and present positions, including any affiliation with Virtus 
Capital Management, Inc., Signet Trust
Company, Federated Investors, Federated Securities Corp., Federated Services
Company, and Federated Administrative Services or the Funds (as defined
below).

John F. Donahue, 70 (1)(2)
Federated Investors Tower
Pittsburgh, PA                            Chairman and Trustee/Director of
                                          Blanchard Funds and Blanchard
                                          Precious Metals Fund, Inc.;
                                          Chairman and Trustee of The Virtus
                                          Funds; Chairman and Trustee,
                                          Federated Investors, Federated
                                          Advisers, Federated Management,
                                          and Federated Research; Chairman
                                          and Director, Federated Research
                                          Corp.,; Chairman, Passport
                                          Research, Ltd.; Director, AEtna
                                          Life and Casualty Company; Chief
                                          Executive Officer and Director,
                                          Trustee, or Managing General
                                          Partner of the Funds.
                                          
Thomas G. Bigley, 61
28th Floor
One Oxford Centre
Pittsburgh, PA                            Trustee/Director of the Blanchard
                                          Funds and Blanchard Precious
                                          Metals Fund, Inc.; Trustee of the
                                          Virtus Funds; Director, Oberg
                                          Manufacturing Co.; Chairman of the
                                          Board, Children's Hospital of
                                          Pittsburgh; Director, Trustee, or
                                          Managing General Partner of the
                                          Funds; formerly, Senior Partner,
                                          Ernst & Young LLP.
John T. Conroy, Jr., 57 (3)
Wood/IPC Commercial Department
John R. Wood and Associates, Inc., Realtors
3255 Tamiami Trail North
Naples, FL                                Trustee/Director of the Blanchard
                                          Funds and Blanchard Precious
                                          Metals Fund, Inc.; Trustee of the
                                          Virtus Funds; President,
                                          Investment Properties Corporation;
                                          Senior Vice-President, John R.
                                          Wood and Associates, Inc.,
                                          Realtors; President, Northgate
                                          Village Development Corporation;
                                          Partner or Trustee in private real
                                          estate ventures in Southwest
                                          Florida; Director, Trustee, or
                                          Managing General Partner of the
                                          Funds; formerly, President, Naples
                                          Property Management, Inc.
William J. Copeland, 76 (3)
One PNC Plaza - 23rd Floor
Pittsburgh, PA                            Trustee/Director of the Blanchard
                                          Funds and Blanchard Precious
                                          Metals Fund, Inc.; Trustee of the
                                          Virtus Funds; Director and Member
                                          of the Executive Committee,
                                          Michael Baker, Inc.; Director,
                                          Trustee, or Managing General
                                          Partner of the Funds; formerly,
                                          Vice Chairman and Director, PNC
                                          Bank, N.A., and PNC Bank Corp. and
                                          Director, Ryan Homes, Inc.
James E. Dowd, 72 (3)
571 Hayward Mill Road
Concord, MA                               Trustee/Director of the Blanchard
                                          Funds and Blanchard Precious
                                          Metals Fund, Inc.; Trustee of the
                                          Virtus Funds; Attorney-at-law;
                                          Director, The Emerging Germany
                                          Fund, Inc.; Director, Trustee, or
                                          Managing General Partner of the
                                          Funds; formerly, Director, Blue
                                          Cross of Massachusetts, Inc.
                                          
Lawrence D. Ellis, M.D., 62 (1)
3471 Fifth Avenue, Suite 1111
Pittsburgh, PA                            Trustee/Director of the Blanchard
                                          Funds and Blanchard Precious
                                          Metals Fund, Inc.; Trustee of the
                                          Virtus Funds; Hematologist,
                                          Oncologist, and Internist,
                                          Presbyterian and Montefiore
                                          Hospitals; Professor of Medicine
                                          and Member, Board of Trustees,
                                          University of Pittsburgh; Medical
                                          Director, University of Pittsburgh
                                          Medical Center - Downtown; Member,
                                          Board of Directors, University of
                                          Pittsburgh Medical Center;
                                          Director, Trustee, or Managing
                                          General Partner of the Funds.
Edward L. Flaherty, Jr., 70 (1)(3)
Two Gateway Center - Suite 674
Pittsburgh, PA                            Trustee/Director of the Blanchard
                                          Funds and Blanchard Precious
                                          Metals Fund, Inc.; Trustee of the
                                          Virtus Funds; Attorney-at-law;
                                          Partner, Henny, Kochuba, Meyer and
                                          Flaherty; Director, Eat'N Park
                                          Restaurants, Inc., and Statewide
                                          Settlement Agency, Inc.; Director,
                                          Trustee, or Managing General
                                          Partner of the Funds; formerly,
                                          Counsel, Horizon Financial, F.A.,
                                          Western Region.
Edward C. Gonzales, 64 (1)
Federated Investor Tower
Pittsburgh, PA                            President, Treasurer and
                                          Trustee/Director of the Blanchard
                                          Funds and Blanchard Precious
                                          Metals Fund, Inc.; President,
                                          Treasurer and Trustee of The
                                          Virtus Funds;  Vice President,
                                          Treasurer, and Trustee, Federated
                                          Investors; Vice President and
                                          Treasurer, Federated Advisers,
                                          Federated Management, Federated
                                          Research, Federated Research
                                          Corp., and Passport Research,
                                          Ltd.; Executive Vice President,
                                          Treasurer, and Director, Federated
                                          Securities Corp.; Trustee,
                                          Federated Services Company and
                                          Federated Shareholder Services;
                                          Chairman, Treasurer, and Trustee,
                                          Federated Administrative Services;
                                          Trustee or Director of some of the
                                          Funds; Vice President and
                                          Treasurer of the Funds.
Peter E. Madden, 53
225 Franklin Street
Boston, MA                                Trustee/Director of the Blanchard
                                          Funds and Blanchard Precious
                                          Metals Fund, Inc.; Trustee of The
                                          Virtus Funds; Consultant; State
                                          Representative, Commonwealth of
                                          Massachusetts; Director, Trustee,
                                          or Managing General Partner of the
                                          Funds; formerly, President, State
                                          Street Bank and Trust Company and
                                          State Street Boston Corporation
                                          and Trustee, Lahey Clinic
                                          Foundation, Inc.
                                          
Gregor F. Meyer, 68
Two Gateway Center - Suite 674
Pittsburgh, PA                            Trustee/Director of the Blanchard
                                          Funds and Blanchard Precious
                                          Metals Fund, Inc.; Trustee of The
                                          Virtus Funds; Attorney-at-law;
                                          Partner, Henny, Kochuba, Meyer and
                                          Flaherty; Chairman, Meritcare,
                                          Inc.; Director, Eat'N Park
                                          Restaurants, Inc.; Director,
                                          Trustee, or Managing General
                                          Partner of the Funds; formerly,
                                          Vice Chairman, Horizon Financial,
                                          F.A.
John E. Murray, Jr., J.D., S.J.D., 62
[MAILING ADDRESS
CITY, STATE & ZIP CODE]                   Trustee/Director of the Blanchard
                                          Funds and Blanchard Precious
                                          Metals Fund, Inc.; Trustee of The
                                          Virtus Funds; President, Law
                                          Professor, Duquesne University;
                                          Consulting Partner, Mollica,
                                          Murray and Hogue; Director,
                                          Trustee or Managing General
                                          Partner of the Funds.
Wesley W. Posvar, 69
1202 Cathedral of Learning
University of Pittsburgh
Pittsburgh, PA                            Trustee/Director of the Blanchard
                                          Funds and Blanchard Precious
                                          Metals Fund, Inc.; Trustee of The
                                          Virtus Funds; Professor, Foreign
                                          Policy and Management Consultant;
                                          Trustee, Carnegie Endowment for
                                          International Peace, RAND
                                          Corporation, Online Computer
                                          Library Center, Inc., and U.S.
                                          Space Foundation; Chairman, Czecho
                                          Slovak Management Center;
                                          Director, Trustee, or Managing
                                          General Partner of the Funds;
                                          President Emeritus, University of
                                          Pittsburgh; formerly , Chairman,
                                          National Advisory Council for
                                          Environmental Policy and
                                          Technology.
Marjorie P. Smuts, 59
4905 Bayard Street
Pittsburgh, PA                            Trustee/Director of the Blanchard
                                          Funds and Blanchard Precious
                                          Metals Fund, Inc.; Trustee of The
                                          Virtus Funds; Public
                                          relations/marketing consultant;
                                          Director, Trustee, or Managing
                                          General Partner of the Funds.
(1)This Trustee is deemed to be an "interested person" as defined in the 
Investment Company Act of 1940,
      as amended.
(2)Member of the Executive Committee. The Executive Committee of the Board of 
Trustees handles the responsibilities of the Board of Trustees between 
meetings of the Board.
(3)Member of the Audit Committee.  The Audit Committee is responsible for 
reviewing compliance with all internal controls and all regulations related 
to the financial reporting process.
The Funds
As referred to in the list of Trustees and Officers, "Funds" includes the
following investment companies:
American Leaders Fund, Inc.; Annuity Management Series; Arrow Funds; Automated 
Cash Management Trust; Automated Government Money Trust; California 
Municipal Cash Trust; Cash Trust
Series II; Cash Trust Series, Inc.; DG Investor Series; Edward D. Jones &
Co. Daily Passport Cash Trust; Federated ARMs Fund; Federated Exchange Fund,
Ltd.; Federated GNMA Trust; Federated Government Trust; Federated Growth
Trust; Federated High Yield Trust; Federated Income Securities Trust;
Federated Income Trust; Federated Index Trust; Federated Institutional
Trust; Federated Intermediate Government Trust; Federated Master Trust;
Federated Municipal Trust; Federated Short-Term U.S. Government Trust;
Federated Stock Trust; Federated Tax-Free Trust; Federated U.S. Government
Bond Fund; Federated U.S. Government Securities Fund: 1-3 Years; First
Priority Funds; Fixed Income Securities, Inc.; Fortress Adjustable Rate U.S.
Government Fund, Inc.; Fortress Municipal Income Fund, Inc.; Fortress
Utility Fund, Inc.; Fund for U.S. Government Securities, Inc.; Government
Income Securities, Inc.; High Yield Cash Trust; Insight Institutional
Series, Inc.; Insurance Management Series; Intermediate Municipal Trust;
International Series, Inc.; Investment Series Funds, Inc.; Investment Series
Trust; Liberty Equity Income Fund, Inc.; Liberty High Income Bond Fund,
Inc.; Liberty Municipal Securities Fund, Inc.; Liberty U.S. Government Money
Market Trust; Liberty Term Trust, Inc. - 1999; Liberty Utility Fund, Inc.;
Liquid Cash Trust; Managed Series Trust; Money Market Management, Inc.;
Money Market Obligations Trust; Money Market Trust; Municipal Securities
Income Trust; Newpoint Funds; New York Municipal Cash Trust; 111 Corcoran
Funds; Peachtree Funds; The Planters Funds; RIMCO Monument Funds; The
Shawmut Funds; Short-Term Municipal Trust; Star Funds; The Starburst Funds;
The Starburst Funds II; Stock and Bond Fund, Inc.;  Sunburst Funds; Targeted
Duration Trust; Tax-Free Instruments Trust; Trademark Funds; Trust for
Financial Institutions; Trust For Government Cash Reserves; Trust for Short-
Term U.S. Government Securities; Trust for U.S. Treasury Obligations; and
World Investment Series, Inc.
Fund Ownership
As of June 30, 1995, Officers and Trustees own less than 1% of the
outstanding shares of each Fund.
To the best knowledge of the FUND, as of June 30, 1995, no shareholder owned 
5% or more of the outstanding shares of the FUND.
Officers and Trustees Compensation
NAME, POSITION             AGGREGATE            TOTAL COMPENSATION
WITH THE FUND              COMPENSATION         PAID TO THE TRUSTEES FROM
                           FROM THE FUND+       THE FUND AND THE FUND COMPLEX*
John F. Donahue,                $ -0-           $0 for the Fund Complex
Chairman and Trustee
Thomas G. Bigley, Trustee       $ -0-           $489.00 the Fund Complex
John T. Conroy, Jr., Trustee    $ -0-           $2,001.50 for the Fund Complex
William J. Copeland, Trustee    $ -0-           $2,001.50 for the Fund Complex
James E. Dowd, Trustee          $ -0-           $2,001.50 for the Fund Complex
Lawrence D. Ellis, M.D., Trustee                $ -0-$1,816.00 for the Fund
                                                 Complex
Edward L. Flaherty, Jr., Trustee                $ -0-$2,001.50 for the Fund
                                                 Complex
Edward C. Gonzales, President   $ -0-           $ -0- for the Fund Complex
and Trustee
Peter E. Madden, Trustee        $ -0-           $1,517.50 for the Fund Complex
Gregor F. Meyer, Trustee        $ -0-           $1,816.00 for the Fund Complex
John E. Murray, Jr., Trustee    $ -0-           $-0- for the Fund Complex
Wesley W. Posvar, Trustee       $ -0-           $1,816.00 for the Fund Complex
Marjorie P. Smuts, Trustee      $ -0-           $1,816.00 for the Fund Complex
*     Fund Complex = Blanchard Funds, Blanchard Precious Metals Fund, Inc.
and the Virtus Funds

INVESTMENT ADVISORY SERVICES
Advisor to the Trust
The Fund's investment adviser is Virtus Capital Management, Inv. ("VCM"), 
which is a division of Signet Trust Company, a wholly-owned subsidiary of 
Signet Banking Corporation.  Because
of the internal controls maintained by Signet to restrict the flow of non-
public information, Fund investments are typically made without any
knowledge of Signet Bank's or its affiliates' lending relationship with an
issuer.
The adviser shall not be liable to the Trust, a Fund, or any shareholder of 
any of the Funds for any losses
that may be sustained in the purchase, holding, or sale of any security or
for anything done or omitted by it, except acts or omissions involving
willful misfeasance, bad faith, gross negligence, or reckless disregard of
the duties imposed upon it by its contract with the Trust.
Advisory Fees
For its services, VCM receives an annual investment advisory fee as described 
in the prospectus.  For the period from November 9, 1992 (commencement of 
operations) to April 30, 1993,
and the fiscal year ended April 30, 1994, the FUND's investment management
fees paid to the prior manager were $75,933, and $252,733, respectively,
less voluntary expense reimbursements of $42,014 and $2,469, respectively."
5.  On page 32 of the Statement of Additional Information after the last
paragraph under the heading "Portfolio Advisory Services," please add the
following headings and paragraphs thereunder:
"ADMINISTRATIVE SERVICES
Federated Administrative Services, which is a subsidiary of Federated
Investors, provides administrative personnel and services to the Funds for
the fees set forth in the prospectus."
DISTRIBUTION PLAN
The Trust has adopted a Plan for Shares of the Fund pursuant to Rule 12b-1 
which was promulgated by the Securities and Exchange Commission pursuant 
to the Investment Company Act of
1940.  The Plan provides that the Funds' Distributor shall act as the
Distributor of shares, and it permits the payment of fees to brokers and
dealers for distribution and administrative services and to administrators
for administrative services.  The Plan is designed to (i) stimulate brokers
and dealers to provide distribution and administrative support services to
the Fund and its shareholders and (ii) stimulate administrators to render
administrative support services to the Fund and its shareholders.  These
services are to be provided by a representative who has knowledge of the
shareholders' particular circumstances and goals, and include, but are not
limited to:  providing office space, equipment, telephone facilities, and
various personnel including clerical, supervisory, and computer, as
necessary or beneficial to establish and maintain shareholder accounts and
records; processing purchase and redemption transactions and automatic
investments of client account cash balances; answering routine client
inquiries regarding the Funds; assisting clients in changing dividend
options, account designations, and addresses; and providing such other
services as the Trust reasonably requests.
Other benefits which the Fund hopes to achieve through the Plan include, but 
are not limited to the following:  (1) an efficient and effective 
administrative system; (2) a more
efficient use of assets of shareholders by having them rapidly invested in
the Fund with a minimum  of delay and administrative detail; and (3) an
efficient and reliable records system for shareholders and prompt responses
to shareholder requests and inquiries concerning their accounts.
By adopting the Plan, the then Board of Trustees expected that the Fund will
be able to achieve a more predictable flow of cash for investment purposes 
and to meet redemptions.  This
will facilitate more efficient portfolio management and assist the Fund in
seeking to achieve its investment objectives.  By identifying potential
investors in shares whose needs are served by the Fund's objectives, and
properly servicing these account, the Fund may be able to curb sharp
fluctuations in rates of redemptions and sales."
July 12, 1995


    FEDERATED SECURITIES CORP.

    Distributor
    A subsidiary of Federated Investors
    Federated Investors Tower
    Pittsburgh, PA  15222-3779
    (7/95)


THE BLANCHARD GROUP OF FUNDS
         BLANCHARD FLEXIBLE INCOME FUND
SUPPLEMENT TO STATEMENT OF ADDITIONAL INFORMATION DATED AUGUST 31, 1994

    On July 12, 1995, as a result of acquisition by subsidiaries of Signet
Banking Corporation ("SBC") of certain assets of Sheffield Management
Company ("SMC") and Sheffield Investments, Inc. ("SII"), the following
actions were taken:  (i) Virtus Capital Management, Inc. ("VCM"), a wholly-
owned subsidiary of SBC, replaced SMC as overall investment manager to
Blanchard Funds and Blanchard Precious Metals Fund, Inc. (collectively, the
"Funds"); (ii) VCM entered into new sub-advisory agreements with each
current sub-adviser of each Fund (with the exception of Blanchard 100%
Treasury Money Market Fund, Blanchard Capital Growth Fund and Blanchard
Growth & Income Fund); (iii) Federated Securities Corp. replaced SII as the
Funds' distributor; (iv) Federated Administrative Services ("FAS") was
engaged to provided administrative services to the Funds; and (i) Federated
Securities Corp. entered into new distribution plans with each Fund (other
than Blanchard 100% Treasury Money Market Fund).  No changes in the advisory
fees, sub-advisory fees or distribution plan fees will occur as a result of
these actions, and the acquisition agreement requires all parties to avoid
the imposition of any unfair burden on the Fund.
    Accordingly, please make the following changes to the Statement of
Additional Information:
1.  On page 1 of the Statement of Additional Information, please change the
address of the Blanchard Group of Funds to the following:
"Federated Investors Tower, Pittsburgh, Pennsylvania  15222-3779."
2.  Throughout the Statement of Additional Information, please delete each
reference to Sheffield Management Company or SMC and replace with Virtus
Capital Management, Inc. or VCM, as the case may be.
3.  Throughout the Statement of Additional Information, please delete each
reference to Sheffield Investments, Inc. and replace with Federated
Securities Corp.
4.  On page 42 of the Statement of Additional Information, please delete the
heading "The Management of the Fund" and the paragraphs thereunder and
replace with the following:
"THE MANAGEMENT OF THE FUND
Officers and Trustees are listed with their ages, addresses, principal 
occupations, and present positions, including any affiliation with Virtus 
Capital Management, Inc., Signet Trust
Company, Federated Investors, Federated Securities Corp., Federated Services
Company, and Federated Administrative Services or the Funds (as defined
below).

John F. Donahue, 70 (1)(2)
Federated Investors Tower
Pittsburgh, PA                            Chairman and Trustee/Director of
                                          Blanchard Funds and Blanchard
                                          Precious Metals Fund, Inc.;
                                          Chairman and Trustee of The Virtus
                                          Funds; Chairman and Trustee,
                                          Federated Investors, Federated
                                          Advisers, Federated Management,
                                          and Federated Research; Chairman
                                          and Director, Federated Research
                                          Corp.,; Chairman, Passport
                                          Research, Ltd.; Director, AEtna
                                          Life and Casualty Company; Chief
                                          Executive Officer and Director,
                                          Trustee, or Managing General
                                          Partner of the Funds.
                                          
Thomas G. Bigley, 61
28th Floor
One Oxford Centre
Pittsburgh, PA                            Trustee/Director of the Blanchard
                                          Funds and Blanchard Precious
                                          Metals Fund, Inc.; Trustee of the
                                          Virtus Funds; Director, Oberg
                                          Manufacturing Co.; Chairman of the
                                          Board, Children's Hospital of
                                          Pittsburgh; Director, Trustee, or
                                          Managing General Partner of the
                                          Funds; formerly, Senior Partner,
                                          Ernst & Young LLP.
John T. Conroy, Jr., 57 (3)
Wood/IPC Commercial Department
John R. Wood and Associates, Inc., Realtors
3255 Tamiami Trail North
Naples, FL                                Trustee/Director of the Blanchard
                                          Funds and Blanchard Precious
                                          Metals Fund, Inc.; Trustee of the
                                          Virtus Funds; President,
                                          Investment Properties Corporation;
                                          Senior Vice-President, John R.
                                          Wood and Associates, Inc.,
                                          Realtors; President, Northgate
                                          Village Development Corporation;
                                          Partner or Trustee in private real
                                          estate ventures in Southwest
                                          Florida; Director, Trustee, or
                                          Managing General Partner of the
                                          Funds; formerly, President, Naples
                                          Property Management, Inc.
William J. Copeland, 76 (3)
One PNC Plaza - 23rd Floor
Pittsburgh, PA                            Trustee/Director of the Blanchard
                                          Funds and Blanchard Precious
                                          Metals Fund, Inc.; Trustee of the
                                          Virtus Funds; Director and Member
                                          of the Executive Committee,
                                          Michael Baker, Inc.; Director,
                                          Trustee, or Managing General
                                          Partner of the Funds; formerly,
                                          Vice Chairman and Director, PNC
                                          Bank, N.A., and PNC Bank Corp. and
                                          Director, Ryan Homes, Inc.
James E. Dowd, 72 (3)
571 Hayward Mill Road
Concord, MA                               Trustee/Director of the Blanchard
                                          Funds and Blanchard Precious
                                          Metals Fund, Inc.; Trustee of the
                                          Virtus Funds; Attorney-at-law;
                                          Director, The Emerging Germany
                                          Fund, Inc.; Director, Trustee, or
                                          Managing General Partner of the
                                          Funds; formerly, Director, Blue
                                          Cross of Massachusetts, Inc.
                                          
Lawrence D. Ellis, M.D., 62 (1)
3471 Fifth Avenue, Suite 1111
Pittsburgh, PA                            Trustee/Director of the Blanchard
                                          Funds and Blanchard Precious
                                          Metals Fund, Inc.; Trustee of the
                                          Virtus Funds; Hematologist,
                                          Oncologist, and Internist,
                                          Presbyterian and Montefiore
                                          Hospitals; Professor of Medicine
                                          and Member, Board of Trustees,
                                          University of Pittsburgh; Medical
                                          Director, University of Pittsburgh
                                          Medical Center - Downtown; Member,
                                          Board of Directors, University of
                                          Pittsburgh Medical Center;
                                          Director, Trustee, or Managing
                                          General Partner of the Funds.
Edward L. Flaherty, Jr., 70 (1)(3)
Two Gateway Center - Suite 674
Pittsburgh, PA                            Trustee/Director of the Blanchard
                                          Funds and Blanchard Precious
                                          Metals Fund, Inc.; Trustee of the
                                          Virtus Funds; Attorney-at-law;
                                          Partner, Henny, Kochuba, Meyer and
                                          Flaherty; Director, Eat'N Park
                                          Restaurants, Inc., and Statewide
                                          Settlement Agency, Inc.; Director,
                                          Trustee, or Managing General
                                          Partner of the Funds; formerly,
                                          Counsel, Horizon Financial, F.A.,
                                          Western Region.
Edward C. Gonzales, 64 (1)
Federated Investor Tower
Pittsburgh, PA                            President, Treasurer and
                                          Trustee/Director of the Blanchard
                                          Funds and Blanchard Precious
                                          Metals Fund, Inc.; President,
                                          Treasurer and Trustee of The
                                          Virtus Funds;  Vice President,
                                          Treasurer, and Trustee, Federated
                                          Investors; Vice President and
                                          Treasurer, Federated Advisers,
                                          Federated Management, Federated
                                          Research, Federated Research
                                          Corp., and Passport Research,
                                          Ltd.; Executive Vice President,
                                          Treasurer, and Director, Federated
                                          Securities Corp.; Trustee,
                                          Federated Services Company and
                                          Federated Shareholder Services;
                                          Chairman, Treasurer, and Trustee,
                                          Federated Administrative Services;
                                          Trustee or Director of some of the
                                          Funds; Vice President and
                                          Treasurer of the Funds.
Peter E. Madden, 53
225 Franklin Street
Boston, MA                                Trustee/Director of the Blanchard
                                          Funds and Blanchard Precious
                                          Metals Fund, Inc.; Trustee of The
                                          Virtus Funds; Consultant; State
                                          Representative, Commonwealth of
                                          Massachusetts; Director, Trustee,
                                          or Managing General Partner of the
                                          Funds; formerly, President, State
                                          Street Bank and Trust Company and
                                          State Street Boston Corporation
                                          and Trustee, Lahey Clinic
                                          Foundation, Inc.
                                          
Gregor F. Meyer, 68
Two Gateway Center - Suite 674
Pittsburgh, PA                            Trustee/Director of the Blanchard
                                          Funds and Blanchard Precious
                                          Metals Fund, Inc.; Trustee of The
                                          Virtus Funds; Attorney-at-law;
                                          Partner, Henny, Kochuba, Meyer and
                                          Flaherty; Chairman, Meritcare,
                                          Inc.; Director, Eat'N Park
                                          Restaurants, Inc.; Director,
                                          Trustee, or Managing General
                                          Partner of the Funds; formerly,
                                          Vice Chairman, Horizon Financial,
                                          F.A.
John E. Murray, Jr., J.D., S.J.D., 62
[MAILING ADDRESS
CITY, STATE & ZIP CODE]                   Trustee/Director of the Blanchard
                                          Funds and Blanchard Precious
                                          Metals Fund, Inc.; Trustee of The
                                          Virtus Funds; President, Law
                                          Professor, Duquesne University;
                                          Consulting Partner, Mollica,
                                          Murray and Hogue; Director,
                                          Trustee or Managing General
                                          Partner of the Funds.
Wesley W. Posvar, 69
1202 Cathedral of Learning
University of Pittsburgh
Pittsburgh, PA                            Trustee/Director of the Blanchard
                                          Funds and Blanchard Precious
                                          Metals Fund, Inc.; Trustee of The
                                          Virtus Funds; Professor, Foreign
                                          Policy and Management Consultant;
                                          Trustee, Carnegie Endowment for
                                          International Peace, RAND
                                          Corporation, Online Computer
                                          Library Center, Inc., and U.S.
                                          Space Foundation; Chairman, Czecho
                                          Slovak Management Center;
                                          Director, Trustee, or Managing
                                          General Partner of the Funds;
                                          President Emeritus, University of
                                          Pittsburgh; formerly , Chairman,
                                          National Advisory Council for
                                          Environmental Policy and
                                          Technology.
Marjorie P. Smuts, 59
4905 Bayard Street
Pittsburgh, PA                            Trustee/Director of the Blanchard
                                          Funds and Blanchard Precious
                                          Metals Fund, Inc.; Trustee of The
                                          Virtus Funds; Public
                                          relations/marketing consultant;
                                          Director, Trustee, or Managing
                                          General Partner of the Funds.
(1)This Trustee is deemed to be an "interested person" as defined in the 
Investment Company Act of 1940, as amended.
(2)Member of the Executive Committee. The Executive Committee of the Board of 
Trustees handles the responsibilities of the Board of Trustees between 
meetings of the Board.
(3)Member of the Audit Committee.  The Audit Committee is responsible for 
reviewing compliance with all internal controls and all regulations related 
to the financial reporting process.
The Funds
As referred to in the list of Trustees and Officers, "Funds" includes the
following investment companies:
American Leaders Fund, Inc.; Annuity Management Series; Arrow Funds; 
Automated Cash Management Trust; Automated Government Money Trust; 
California Municipal Cash Trust; Cash Trust
Series II; Cash Trust Series, Inc.; DG Investor Series; Edward D. Jones &
Co. Daily Passport Cash Trust; Federated ARMs Fund; Federated Exchange Fund,
Ltd.; Federated GNMA Trust; Federated Government Trust; Federated Growth
Trust; Federated High Yield Trust; Federated Income Securities Trust;
Federated Income Trust; Federated Index Trust; Federated Institutional
Trust; Federated Intermediate Government Trust; Federated Master Trust;
Federated Municipal Trust; Federated Short-Term U.S. Government Trust;
Federated Stock Trust; Federated Tax-Free Trust; Federated U.S. Government
Bond Fund; Federated U.S. Government Securities Fund: 1-3 Years; First
Priority Funds; Fixed Income Securities, Inc.; Fortress Adjustable Rate U.S.
Government Fund, Inc.; Fortress Municipal Income Fund, Inc.; Fortress
Utility Fund, Inc.; Fund for U.S. Government Securities, Inc.; Government
Income Securities, Inc.; High Yield Cash Trust; Insight Institutional
Series, Inc.; Insurance Management Series; Intermediate Municipal Trust;
International Series, Inc.; Investment Series Funds, Inc.; Investment Series
Trust; Liberty Equity Income Fund, Inc.; Liberty High Income Bond Fund,
Inc.; Liberty Municipal Securities Fund, Inc.; Liberty U.S. Government Money
Market Trust; Liberty Term Trust, Inc. - 1999; Liberty Utility Fund, Inc.;
Liquid Cash Trust; Managed Series Trust; Money Market Management, Inc.;
Money Market Obligations Trust; Money Market Trust; Municipal Securities
Income Trust; Newpoint Funds; New York Municipal Cash Trust; 111 Corcoran
Funds; Peachtree Funds; The Planters Funds; RIMCO Monument Funds; The
Shawmut Funds; Short-Term Municipal Trust; Star Funds; The Starburst Funds;
The Starburst Funds II; Stock and Bond Fund, Inc.;  Sunburst Funds; Targeted
Duration Trust; Tax-Free Instruments Trust; Trademark Funds; Trust for
Financial Institutions; Trust For Government Cash Reserves; Trust for Short-
Term U.S. Government Securities; Trust for U.S. Treasury Obligations; and
World Investment Series, Inc.
Fund Ownership
As of June 30, 1995, Officers and Trustees own less than 1% of the
outstanding shares of each Fund.
To the best knowledge of the FUND, as of June 30, 1995, no shareholder owned 
5% or more of the outstanding shares of the FUND.
Officers and Trustees Compensation
NAME, POSITION             AGGREGATE            TOTAL COMPENSATION
WITH THE FUND              COMPENSATION         PAID TO THE TRUSTEES FROM
                           FROM THE FUND+       THE FUND AND THE FUND
COMPLEX*
John F. Donahue,                $ -0-           $0 for the Fund Complex
Chairman and Trustee
Thomas G. Bigley, Trustee       $ -0-           $489.00 the Fund Complex
John T. Conroy, Jr., Trustee    $ -0-           $2,001.50 for the Fund Complex
William J. Copeland, Trustee    $ -0-           $2,001.50 for the Fund Complex
James E. Dowd, Trustee          $ -0-           $2,001.50 for the Fund Complex
Lawrence D. Ellis, M.D., Trustee                $ -0-$1,816.00 for the Fund
                                                  Complex
Edward L. Flaherty, Jr., Trustee                $ -0-$2,001.50 for the Fund
                                                  Complex
Edward C. Gonzales, President   $ -0-           $ -0- for the Fund Complex
and Trustee
Peter E. Madden, Trustee        $ -0-           $1,517.50 for the Fund Complex
Gregor F. Meyer, Trustee        $ -0-           $1,816.00 for the Fund Complex
John E. Murray, Jr., Trustee    $ -0-           $-0- for the Fund Complex
Wesley W. Posvar, Trustee       $ -0-           $1,816.00 for the Fund Complex
Marjorie P. Smuts, Trustee      $ -0-           $1,816.00 for the Fund Complex
*     Fund Complex = Blanchard Funds, Blanchard Precious Metals Fund, Inc.
and the Virtus Funds

INVESTMENT ADVISORY SERVICES
Advisor to the Trust
The Fund's investment adviser is Virtus Capital Management, Inv. ("VCM"), 
which is a division of Signet Trust Company, a wholly-owned subsidiary of 
Signet Banking Corporation.  Because
of the internal controls maintained by Signet to restrict the flow of non-
public information, FUND investments are typically made without any
knowledge of Signet Bank's or its affiliates' lending relationship with an
issuer.
The adviser shall not be liable to the Trust, a Fund, or any shareholder of 
any of the Funds for any losses
that may be sustained in the purchase, holding, or sale of any security or
for anything done or omitted by it, except acts or omissions involving
willful misfeasance, bad faith, gross negligence, or reckless disregard of
the duties imposed upon it by its contract with the Trust.
Advisory Fees
For its services, VCM receives an annual investment advisory fee as 
described in the prospectus.  For the period from November 2, 1992 
(commencement of operations) to April 30, 1993,
the FUND's investment management fee paid to the prior manager was $433,589
less voluntary expense reimbursement of $433,589. For the fiscal year ended
April 30, 1994 the FUND'S investment management fee paid to the prior
manager was $4,285,213 less voluntary expense reimbursement of $1,252,529."
5.  On page 50 of the Statement of Additional Information after the last
paragraph under the heading "The Sub-Advisory Agreement," please add the
following headings and paragraphs thereunder:
"ADMINISTRATIVE SERVICES
Federated Administrative Services, which is a subsidiary of Federated
Investors, provides administrative personnel and services to the Funds for
the fees set forth in the prospectus."
PURCHASING SHARES
Shares of the Funds are sold at their net asset value without a sales charge
on days the New York Stock Exchange is open for business. The procedure for
purchasing Shares of the Funds is explained in the prospectus under
"Investing in Shares."
DISTRIBUTION PLAN
The Trust has adopted a Plan for Shares of the Fund pursuant to Rule 12b-1
which was promulgated by the Securities and Exchange Commission pursuant to
the Investment Company Act of 1940.  The Plan provides that the Funds'
Distributor shall act as the Distributor of shares, and it permits the
payment of fees to brokers and dealers for distribution and administrative
services and to administrators for administrative services.  The Plan is
designed to (i) stimulate brokers and dealers to provide distribution and
administrative support services to the Fund and its shareholders and (ii)
stimulate administrators to render administrative support services to the
Fund and its shareholders.  These services are to be provided by a
representative who has knowledge of the shareholders' particular
circumstances and goals, and include, but are not limited to:  providing
office space, equipment, telephone facilities, and various personnel
including clerical, supervisory, and computer, as necessary or beneficial to
establish and maintain shareholder accounts and records; processing purchase
and redemption transactions and automatic investments of client account cash
balances; answering routine client inquiries regarding the Funds; assisting
clients in changing dividend options, account designations, and addresses;
and providing such other services as the Trust reasonably requests.

Other benefits which the Fund hopes to achieve through the Plan include, but 
are not limited to the following:  (1) an efficient and effective 
administrative system; (2) a more
efficient use of assets of shareholders by having them rapidly invested in
the Fund with a minimum  of delay and administrative detail; and (3) an
efficient and reliable records system for shareholders and prompt responses
to shareholder requests and inquiries concerning their accounts.
By adopting the Plan, the then Board of Trustees expected that the Fund will
be able to achieve a more predictable flow of cash for investment 
purposes and to meet redemptions.  This
will facilitate more efficient portfolio management and assist the Fund in
seeking to achieve its investment objectives.  By identifying potential
investors in shares whose needs are served by the Fund's objectives, and
properly servicing these account, the Fund may be able to curb sharp
fluctuations in rates of redemptions and sales."
July 12, 1995


    FEDERATED SECURITIES CORP.

    Distributor
    A subsidiary of Federated Investors
    Federated Investors Tower
    Pittsburgh, PA  15222-3779
    (7/95)


THE BLANCHARD GROUP OF FUNDS
         BLANCHARD SHORT-TERM BOND FUND
SUPPLEMENT TO STATEMENT OF ADDITIONAL INFORMATION DATED AUGUST 31, 1994

    On July 12, 1995, as a result of acquisition by subsidiaries of Signet
Banking Corporation ("SBC") of certain assets of Sheffield Management
Company ("SMC") and Sheffield Investments, Inc. ("SII"), the following
actions were taken:  (i) Virtus Capital Management, Inc. ("VCM"), a wholly-
owned subsidiary of SBC, replaced SMC as overall investment manager to
Blanchard Funds and Blanchard Precious Metals Fund, Inc. (collectively, the
"Funds"); (ii) VCM entered into new sub-advisory agreements with each
current sub-adviser of each Fund (with the exception of Blanchard 100%
Treasury Money Market Fund, Blanchard Capital Growth Fund and Blanchard
Growth & Income Fund); (iii) Federated Securities Corp. replaced SII as the
Funds' distributor; (iv) Federated Administrative Services ("FAS") was
engaged to provided administrative services to the Funds; and (i) Federated
Securities Corp. entered into new distribution plans with each Fund (other
than Blanchard 100% Treasury Money Market Fund).  No changes in the advisory
fees, sub-advisory fees or distribution plan fees will occur as a result of
these actions, and the acquisition agreement requires all parties to avoid
the imposition of any unfair burden on the Fund.
    Accordingly, please make the following changes to the Statement of
Additional Information:
1.  On page 1 of the Statement of Additional Information, please change the
address of the Blanchard Group of Funds to the following:
"Federated Investors Tower, Pittsburgh, Pennsylvania  15222-3779."
2.  Throughout the Statement of Additional Information, please delete each
reference to Sheffield Management Company or SMC and replace with Virtus
Capital Management, Inc. or VCM, as the case may be.
3.  Throughout the Statement of Additional Information, please delete each
reference to Sheffield Investments, Inc. and replace with Federated
Securities Corp.
4.  On page 27 of the Statement of Additional Information, please delete the
heading "The Management of the Fund" and the paragraphs thereunder and
replace with the following:
"THE MANAGEMENT OF THE FUND
Officers and Trustees are listed with their ages, addresses, principal 
occupations, and present positions, including any affiliation with Virtus 
Capital Management, Inc., Signet Trust
Company, Federated Investors, Federated Securities Corp., Federated Services
Company, and Federated Administrative Services or the Funds (as defined
below).

John F. Donahue, 70 (1)(2)
Federated Investors Tower
Pittsburgh, PA                            Chairman and Trustee/Director of
                                          Blanchard Funds and Blanchard
                                          Precious Metals Fund, Inc.;
                                          Chairman and Trustee of The Virtus
                                          Funds; Chairman and Trustee,
                                          Federated Investors, Federated
                                          Advisers, Federated Management,
                                          and Federated Research; Chairman
                                          and Director, Federated Research
                                          Corp.,; Chairman, Passport
                                          Research, Ltd.; Director, AEtna
                                          Life and Casualty Company; Chief
                                          Executive Officer and Director,
                                          Trustee, or Managing General
                                          Partner of the Funds.
                                          
Thomas G. Bigley, 61
28th Floor
One Oxford Centre
Pittsburgh, PA                            Trustee/Director of the Blanchard
                                          Funds and Blanchard Precious
                                          Metals Fund, Inc.; Trustee of the
                                          Virtus Funds; Director, Oberg
                                          Manufacturing Co.; Chairman of the
                                          Board, Children's Hospital of
                                          Pittsburgh; Director, Trustee, or
                                          Managing General Partner of the
                                          Funds; formerly, Senior Partner,
                                          Ernst & Young LLP.
John T. Conroy, Jr., 57 (3)
Wood/IPC Commercial Department
John R. Wood and Associates, Inc., Realtors
3255 Tamiami Trail North
Naples, FL                                Trustee/Director of the Blanchard
                                          Funds and Blanchard Precious
                                          Metals Fund, Inc.; Trustee of the
                                          Virtus Funds; President,
                                          Investment Properties Corporation;
                                          Senior Vice-President, John R.
                                          Wood and Associates, Inc.,
                                          Realtors; President, Northgate
                                          Village Development Corporation;
                                          Partner or Trustee in private real
                                          estate ventures in Southwest
                                          Florida; Director, Trustee, or
                                          Managing General Partner of the
                                          Funds; formerly, President, Naples
                                          Property Management, Inc.
William J. Copeland, 76 (3)
One PNC Plaza - 23rd Floor
Pittsburgh, PA                            Trustee/Director of the Blanchard
                                          Funds and Blanchard Precious
                                          Metals Fund, Inc.; Trustee of the
                                          Virtus Funds; Director and Member
                                          of the Executive Committee,
                                          Michael Baker, Inc.; Director,
                                          Trustee, or Managing General
                                          Partner of the Funds; formerly,
                                          Vice Chairman and Director, PNC
                                          Bank, N.A., and PNC Bank Corp. and
                                          Director, Ryan Homes, Inc.
James E. Dowd, 72 (3)
571 Hayward Mill Road
Concord, MA                               Trustee/Director of the Blanchard
                                          Funds and Blanchard Precious
                                          Metals Fund, Inc.; Trustee of the
                                          Virtus Funds; Attorney-at-law;
                                          Director, The Emerging Germany
                                          Fund, Inc.; Director, Trustee, or
                                          Managing General Partner of the
                                          Funds; formerly, Director, Blue
                                          Cross of Massachusetts, Inc.
                                          
Lawrence D. Ellis, M.D., 62 (1)
3471 Fifth Avenue, Suite 1111
Pittsburgh, PA                            Trustee/Director of the Blanchard
                                          Funds and Blanchard Precious
                                          Metals Fund, Inc.; Trustee of the
                                          Virtus Funds; Hematologist,
                                          Oncologist, and Internist,
                                          Presbyterian and Montefiore
                                          Hospitals; Professor of Medicine
                                          and Member, Board of Trustees,
                                          University of Pittsburgh; Medical
                                          Director, University of Pittsburgh
                                          Medical Center - Downtown; Member,
                                          Board of Directors, University of
                                          Pittsburgh Medical Center;
                                          Director, Trustee, or Managing
                                          General Partner of the Funds.
Edward L. Flaherty, Jr., 70 (1)(3)
Two Gateway Center - Suite 674
Pittsburgh, PA                            Trustee/Director of the Blanchard
                                          Funds and Blanchard Precious
                                          Metals Fund, Inc.; Trustee of the
                                          Virtus Funds; Attorney-at-law;
                                          Partner, Henny, Kochuba, Meyer and
                                          Flaherty; Director, Eat'N Park
                                          Restaurants, Inc., and Statewide
                                          Settlement Agency, Inc.; Director,
                                          Trustee, or Managing General
                                          Partner of the Funds; formerly,
                                          Counsel, Horizon Financial, F.A.,
                                          Western Region.
Edward C. Gonzales, 64 (1)
Federated Investor Tower
Pittsburgh, PA                            President, Treasurer and
                                          Trustee/Director of the Blanchard
                                          Funds and Blanchard Precious
                                          Metals Fund, Inc.; President,
                                          Treasurer and Trustee of The
                                          Virtus Funds;  Vice President,
                                          Treasurer, and Trustee, Federated
                                          Investors; Vice President and
                                          Treasurer, Federated Advisers,
                                          Federated Management, Federated
                                          Research, Federated Research
                                          Corp., and Passport Research,
                                          Ltd.; Executive Vice President,
                                          Treasurer, and Director, Federated
                                          Securities Corp.; Trustee,
                                          Federated Services Company and
                                          Federated Shareholder Services;
                                          Chairman, Treasurer, and Trustee,
                                          Federated Administrative Services;
                                          Trustee or Director of some of the
                                          Funds; Vice President and
                                          Treasurer of the Funds.
Peter E. Madden, 53
225 Franklin Street
Boston, MA                                Trustee/Director of the Blanchard
                                          Funds and Blanchard Precious
                                          Metals Fund, Inc.; Trustee of The
                                          Virtus Funds; Consultant; State
                                          Representative, Commonwealth of
                                          Massachusetts; Director, Trustee,
                                          or Managing General Partner of the
                                          Funds; formerly, President, State
                                          Street Bank and Trust Company and
                                          State Street Boston Corporation
                                          and Trustee, Lahey Clinic
                                          Foundation, Inc.
                                          
Gregor F. Meyer, 68
Two Gateway Center - Suite 674
Pittsburgh, PA                            Trustee/Director of the Blanchard
                                          Funds and Blanchard Precious
                                          Metals Fund, Inc.; Trustee of The
                                          Virtus Funds; Attorney-at-law;
                                          Partner, Henny, Kochuba, Meyer and
                                          Flaherty; Chairman, Meritcare,
                                          Inc.; Director, Eat'N Park
                                          Restaurants, Inc.; Director,
                                          Trustee, or Managing General
                                          Partner of the Funds; formerly,
                                          Vice Chairman, Horizon Financial,
                                          F.A.
John E. Murray, Jr., J.D., S.J.D., 62
[MAILING ADDRESS
CITY, STATE & ZIP CODE]                   Trustee/Director of the Blanchard
                                          Funds and Blanchard Precious
                                          Metals Fund, Inc.; Trustee of The
                                          Virtus Funds; President, Law
                                          Professor, Duquesne University;
                                          Consulting Partner, Mollica,
                                          Murray and Hogue; Director,
                                          Trustee or Managing General
                                          Partner of the Funds.
Wesley W. Posvar, 69
1202 Cathedral of Learning
University of Pittsburgh
Pittsburgh, PA                            Trustee/Director of the Blanchard
                                          Funds and Blanchard Precious
                                          Metals Fund, Inc.; Trustee of The
                                          Virtus Funds; Professor, Foreign
                                          Policy and Management Consultant;
                                          Trustee, Carnegie Endowment for
                                          International Peace, RAND
                                          Corporation, Online Computer
                                          Library Center, Inc., and U.S.
                                          Space Foundation; Chairman, Czecho
                                          Slovak Management Center;
                                          Director, Trustee, or Managing
                                          General Partner of the Funds;
                                          President Emeritus, University of
                                          Pittsburgh; formerly , Chairman,
                                          National Advisory Council for
                                          Environmental Policy and
                                          Technology.
Marjorie P. Smuts, 59
4905 Bayard Street
Pittsburgh, PA                            Trustee/Director of the Blanchard
                                          Funds and Blanchard Precious
                                          Metals Fund, Inc.; Trustee of The
                                          Virtus Funds; Public
                                          relations/marketing consultant;
                                          Director, Trustee, or Managing
                                          General Partner of the Funds.
(1)This Trustee is deemed to be an "interested person" as defined in the 
Investment Company Act of 1940, as amended.
(2)Member of the Executive Committee. The Executive Committee of the Board of 
Trustees handles the responsibilities of the Board of Trustees between 
meetings of the Board.
(3)Member of the Audit Committee.  The Audit Committee is responsible for 
reviewing compliance with all internal controls and all regulations 
related to the financial reporting process.
The Funds
As referred to in the list of Trustees and Officers, "Funds" includes the
following investment companies:
American Leaders Fund, Inc.; Annuity Management Series; Arrow Funds; 
Automated Cash Management Trust; Automated Government Money Trust; 
California Municipal Cash Trust; Cash Trust
Series II; Cash Trust Series, Inc.; DG Investor Series; Edward D. Jones &
Co. Daily Passport Cash Trust; Federated ARMs Fund; Federated Exchange Fund,
Ltd.; Federated GNMA Trust; Federated Government Trust; Federated Growth
Trust; Federated High Yield Trust; Federated Income Securities Trust;
Federated Income Trust; Federated Index Trust; Federated Institutional
Trust; Federated Intermediate Government Trust; Federated Master Trust;
Federated Municipal Trust; Federated Short-Term U.S. Government Trust;
Federated Stock Trust; Federated Tax-Free Trust; Federated U.S. Government
Bond Fund; Federated U.S. Government Securities Fund: 1-3 Years; First
Priority Funds; Fixed Income Securities, Inc.; Fortress Adjustable Rate U.S.
Government Fund, Inc.; Fortress Municipal Income Fund, Inc.; Fortress
Utility Fund, Inc.; Fund for U.S. Government Securities, Inc.; Government
Income Securities, Inc.; High Yield Cash Trust; Insight Institutional
Series, Inc.; Insurance Management Series; Intermediate Municipal Trust;
International Series, Inc.; Investment Series Funds, Inc.; Investment Series
Trust; Liberty Equity Income Fund, Inc.; Liberty High Income Bond Fund,
Inc.; Liberty Municipal Securities Fund, Inc.; Liberty U.S. Government Money
Market Trust; Liberty Term Trust, Inc. - 1999; Liberty Utility Fund, Inc.;
Liquid Cash Trust; Managed Series Trust; Money Market Management, Inc.;
Money Market Obligations Trust; Money Market Trust; Municipal Securities
Income Trust; Newpoint Funds; New York Municipal Cash Trust; 111 Corcoran
Funds; Peachtree Funds; The Planters Funds; RIMCO Monument Funds; The
Shawmut Funds; Short-Term Municipal Trust; Star Funds; The Starburst Funds;
The Starburst Funds II; Stock and Bond Fund, Inc.;  Sunburst Funds; Targeted
Duration Trust; Tax-Free Instruments Trust; Trademark Funds; Trust for
Financial Institutions; Trust For Government Cash Reserves; Trust for Short-
Term U.S. Government Securities; Trust for U.S. Treasury Obligations; and
World Investment Series, Inc.
Fund Ownership
As of June 30, 1995, Officers and Trustees own less than 1% of the
outstanding shares of each Fund.
To the best knowledge of the FUND, as of June 30, 1995, no shareholder owned 
5% or more of the outstanding shares of the FUND.
Officers and Trustees Compensation
NAME, POSITION             AGGREGATE            TOTAL COMPENSATION
WITH THE FUND              COMPENSATION         PAID TO THE TRUSTEES FROM
                           FROM THE FUND+       THE FUND AND THE FUND
COMPLEX*
John F. Donahue,                $ -0-           $0 for the Fund Complex
Chairman and Trustee
Thomas G. Bigley, Trustee       $ -0-           $489.00 the Fund Complex
John T. Conroy, Jr., Trustee    $ -0-           $2,001.50 for the Fund Complex
William J. Copeland, Trustee    $ -0-           $2,001.50 for the Fund Complex
James E. Dowd, Trustee          $ -0-           $2,001.50 for the Fund Complex
Lawrence D. Ellis, M.D., Trustee                $ -0-$1,816.00 for the Fund
                                                  Complex
Edward L. Flaherty, Jr., Trustee                $ -0-$2,001.50 for the Fund
                                                  Complex
Edward C. Gonzales, President   $ -0-           $ -0- for the Fund Complex
and Trustee
Peter E. Madden, Trustee        $ -0-           $1,517.50 for the Fund Complex
Gregor F. Meyer, Trustee        $ -0-           $1,816.00 for the Fund Complex
John E. Murray, Jr., Trustee    $ -0-           $-0- for the Fund Complex
Wesley W. Posvar, Trustee       $ -0-           $1,816.00 for the Fund Complex
Marjorie P. Smuts, Trustee      $ -0-           $1,816.00 for the Fund Complex
*     Fund Complex = Blanchard Funds, Blanchard Precious Metals Fund, Inc.
and the Virtus Funds

INVESTMENT ADVISORY SERVICES
Advisor to the Trust
The Fund's investment adviser is Virtus Capital Management, Inv. ("VCM"), 
which is a division of Signet Trust Company, a wholly-owned subsidiary of 
Signet Banking Corporation.  Because
of the internal controls maintained by Signet to restrict the flow of non-
public information, Fund investments are typically made without any
knowledge of Signet Bank's or its affiliates' lending relationship with an
issuer.
The adviser shall not be liable to the Blanchard Funds and Blanchard 
Precious Metals Fund, Inc., a Fund, or
any shareholder of the Funds for any losses that may be sustained in the
purchase, holding, or sale of any security or for anything done or omitted
by it, except acts or omissions involving willful misfeasance, bad faith,
gross negligence, or reckless disregard of the duties imposed upon it by its
contract with the Trust.
Advisory Fees
For its services, VCM receives an annual investment advisory fee as described 
in the prospectus.  For the fiscal years ended April 16, 1993 (commencement 
of operations) to April 30,
1993 and for the fiscal year ended April 30, 1994, the FUND's investment
management fees paid to the prior manager were $486 and $192,383,
respectively, all of which were deferred by the prior manager."
5.  On page 32 of the Statement of Additional Information after the last
paragraph under the heading "The Sub-Advisory Agreement," please add the
following headings and paragraphs thereunder:
"ADMINISTRATIVE SERVICES
Federated Administrative Services, which is a subsidiary of Federated
Investors, provides administrative personnel and services to the Funds for
the fees set forth in the prospectus."
DISTRIBUTION PLAN
The Trust has adopted a Plan for Shares of the Fund pursuant to Rule 12b-1 
which was promulgated by the Securities and Exchange Commission pursuant 
to the Investment Company Act of
1940.  The Plan provides that the Funds' Distributor shall act as the
Distributor of shares, and it permits the payment of fees to brokers and
dealers for distribution and administrative services and to administrators
for administrative services.  The Plan is designed to (i) stimulate brokers
and dealers to provide distribution and administrative support services to
the Fund and its shareholders and (ii) stimulate administrators to render
administrative support services to the Fund and its shareholders.  These
services are to be provided by a representative who has knowledge of the
shareholders' particular circumstances and goals, and include, but are not
limited to:  providing office space, equipment, telephone facilities, and
various personnel including clerical, supervisory, and computer, as
necessary or beneficial to establish and maintain shareholder accounts and
records; processing purchase and redemption transactions and automatic
investments of client account cash balances; answering routine client
inquiries regarding the Funds; assisting clients in changing dividend
options, account designations, and addresses; and providing such other
services as the Trust reasonably requests.
Other benefits which the Fund hopes to achieve through the Plan include, 
but are not limited to the following:  (1) an efficient and 
effective administrative system; (2) a more
efficient use of assets of shareholders by having them rapidly invested in
the Fund with a minimum  of delay and administrative detail; and (3) an
efficient and reliable records system for shareholders and prompt responses
to shareholder requests and inquiries concerning their accounts.
By adopting the Plan, the then Board of Trustees expected that the Fund will 
be able to achieve a more predictable flow of cash for investment purposes 
and to meet redemptions.  This
will facilitate more efficient portfolio management and assist the Fund in
seeking to achieve its investment objectives.  By identifying potential
investors in shares whose needs are served by the Fund's objectives, and
properly servicing these account, the Fund may be able to curb sharp
fluctuations in rates of redemptions and sales."
July 12, 1995


    FEDERATED SECURITIES CORP.

    Distributor
    A subsidiary of Federated Investors
    Federated Investors Tower
    Pittsburgh, PA  15222-3779
    (7/95)


THE BLANCHARD GROUP OF FUNDS
         BLANCHARD FLEXIBLE TAX-FREE BOND FUND
SUPPLEMENT TO STATEMENT OF ADDITIONAL INFORMATION DATED AUGUST 31, 1994

    On July 12, 1995, as a result of acquisition by subsidiaries of Signet
Banking Corporation ("SBC") of certain assets of Sheffield Management
Company ("SMC") and Sheffield Investments, Inc. ("SII"), the following
actions were taken:  (i) Virtus Capital Management, Inc. ("VCM"), a wholly-
owned subsidiary of SBC, replaced SMC as overall investment manager to
Blanchard Funds and Blanchard Precious Metals Fund, Inc. (collectively, the
"Funds"); (ii) VCM entered into new sub-advisory agreements with each
current sub-adviser of each Fund (with the exception of Blanchard 100%
Treasury Money Market Fund, Blanchard Capital Growth Fund and Blanchard
Growth & Income Fund); (iii) Federated Securities Corp. replaced SII as the
Funds' distributor; (iv) Federated Administrative Services ("FAS") was
engaged to provided administrative services to the Funds; and (i) Federated
Securities Corp. entered into new distribution plans with each Fund (other
than Blanchard 100% Treasury Money Market Fund).  No changes in the advisory
fees, sub-advisory fees or distribution plan fees will occur as a result of
these actions, and the acquisition agreement requires all parties to avoid
the imposition of any unfair burden on the Fund.
    Accordingly, please make the following changes to the Statement of
Additional Information:
1.  On page 1 of the Statement of Additional Information, please change the
address of the Blanchard Group of Funds to the following:
"Federated Investors Tower, Pittsburgh, Pennsylvania  15222-3779."
2.  Throughout the Statement of Additional Information, please delete each
reference to Sheffield Management Company or SMC and replace with Virtus
Capital Management, Inc. or VCM, as the case may be.
3.  Throughout the Statement of Additional Information, please delete each
reference to Sheffield Investments, Inc. and replace with Federated
Securities Corp.
4.  On page 20 of the Statement of Additional Information, please delete the
heading "The Management of the Fund" and the paragraphs thereunder and
replace with the following:
"THE MANAGEMENT OF THE FUND
Officers and Trustees are listed with their ages, addresses, principal 
occupations, and present positions, including any affiliation with Virtus 
Capital Management, Inc., Signet Trust
Company, Federated Investors, Federated Securities Corp., Federated Services
Company, and Federated Administrative Services or the Funds (as defined
below).

John F. Donahue, 70 (1)(2)
Federated Investors Tower
Pittsburgh, PA                            Chairman and Trustee/Director of
                                          Blanchard Funds and Blanchard
                                          Precious Metals Fund, Inc.;
                                          Chairman and Trustee of The Virtus
                                          Funds; Chairman and Trustee,
                                          Federated Investors, Federated
                                          Advisers, Federated Management,
                                          and Federated Research; Chairman
                                          and Director, Federated Research
                                          Corp.,; Chairman, Passport
                                          Research, Ltd.; Director, AEtna
                                          Life and Casualty Company; Chief
                                          Executive Officer and Director,
                                          Trustee, or Managing General
                                          Partner of the Funds.
                                          
Thomas G. Bigley, 61
28th Floor
One Oxford Centre
Pittsburgh, PA                            Trustee/Director of the Blanchard
                                          Funds and Blanchard Precious
                                          Metals Fund, Inc.; Trustee of the
                                          Virtus Funds; Director, Oberg
                                          Manufacturing Co.; Chairman of the
                                          Board, Children's Hospital of
                                          Pittsburgh; Director, Trustee, or
                                          Managing General Partner of the
                                          Funds; formerly, Senior Partner,
                                          Ernst & Young LLP.
John T. Conroy, Jr., 57 (3)
Wood/IPC Commercial Department
John R. Wood and Associates, Inc., Realtors
3255 Tamiami Trail North
Naples, FL                                Trustee/Director of the Blanchard
                                          Funds and Blanchard Precious
                                          Metals Fund, Inc.; Trustee of the
                                          Virtus Funds; President,
                                          Investment Properties Corporation;
                                          Senior Vice-President, John R.
                                          Wood and Associates, Inc.,
                                          Realtors; President, Northgate
                                          Village Development Corporation;
                                          Partner or Trustee in private real
                                          estate ventures in Southwest
                                          Florida; Director, Trustee, or
                                          Managing General Partner of the
                                          Funds; formerly, President, Naples
                                          Property Management, Inc.
William J. Copeland, 76 (3)
One PNC Plaza - 23rd Floor
Pittsburgh, PA                            Trustee/Director of the Blanchard
                                          Funds and Blanchard Precious
                                          Metals Fund, Inc.; Trustee of the
                                          Virtus Funds; Director and Member
                                          of the Executive Committee,
                                          Michael Baker, Inc.; Director,
                                          Trustee, or Managing General
                                          Partner of the Funds; formerly,
                                          Vice Chairman and Director, PNC
                                          Bank, N.A., and PNC Bank Corp. and
                                          Director, Ryan Homes, Inc.
James E. Dowd, 72 (3)
571 Hayward Mill Road
Concord, MA                               Trustee/Director of the Blanchard
                                          Funds and Blanchard Precious
                                          Metals Fund, Inc.; Trustee of the
                                          Virtus Funds; Attorney-at-law;
                                          Director, The Emerging Germany
                                          Fund, Inc.; Director, Trustee, or
                                          Managing General Partner of the
                                          Funds; formerly, Director, Blue
                                          Cross of Massachusetts, Inc.
                                          
Lawrence D. Ellis, M.D., 62 (1)
3471 Fifth Avenue, Suite 1111
Pittsburgh, PA                            Trustee/Director of the Blanchard
                                          Funds and Blanchard Precious
                                          Metals Fund, Inc.; Trustee of the
                                          Virtus Funds; Hematologist,
                                          Oncologist, and Internist,
                                          Presbyterian and Montefiore
                                          Hospitals; Professor of Medicine
                                          and Member, Board of Trustees,
                                          University of Pittsburgh; Medical
                                          Director, University of Pittsburgh
                                          Medical Center - Downtown; Member,
                                          Board of Directors, University of
                                          Pittsburgh Medical Center;
                                          Director, Trustee, or Managing
                                          General Partner of the Funds.
Edward L. Flaherty, Jr., 70 (1)(3)
Two Gateway Center - Suite 674
Pittsburgh, PA                            Trustee/Director of the Blanchard
                                          Funds and Blanchard Precious
                                          Metals Fund, Inc.; Trustee of the
                                          Virtus Funds; Attorney-at-law;
                                          Partner, Henny, Kochuba, Meyer and
                                          Flaherty; Director, Eat'N Park
                                          Restaurants, Inc., and Statewide
                                          Settlement Agency, Inc.; Director,
                                          Trustee, or Managing General
                                          Partner of the Funds; formerly,
                                          Counsel, Horizon Financial, F.A.,
                                          Western Region.
Edward C. Gonzales, 64 (1)
Federated Investor Tower
Pittsburgh, PA                            President, Treasurer and
                                          Trustee/Director of the Blanchard
                                          Funds and Blanchard Precious
                                          Metals Fund, Inc.; President,
                                          Treasurer and Trustee of The
                                          Virtus Funds;  Vice President,
                                          Treasurer, and Trustee, Federated
                                          Investors; Vice President and
                                          Treasurer, Federated Advisers,
                                          Federated Management, Federated
                                          Research, Federated Research
                                          Corp., and Passport Research,
                                          Ltd.; Executive Vice President,
                                          Treasurer, and Director, Federated
                                          Securities Corp.; Trustee,
                                          Federated Services Company and
                                          Federated Shareholder Services;
                                          Chairman, Treasurer, and Trustee,
                                          Federated Administrative Services;
                                          Trustee or Director of some of the
                                          Funds; Vice President and
                                          Treasurer of the Funds.
Peter E. Madden, 53
225 Franklin Street
Boston, MA                                Trustee/Director of the Blanchard
                                          Funds and Blanchard Precious
                                          Metals Fund, Inc.; Trustee of The
                                          Virtus Funds; Consultant; State
                                          Representative, Commonwealth of
                                          Massachusetts; Director, Trustee,
                                          or Managing General Partner of the
                                          Funds; formerly, President, State
                                          Street Bank and Trust Company and
                                          State Street Boston Corporation
                                          and Trustee, Lahey Clinic
                                          Foundation, Inc.
                                          
Gregor F. Meyer, 68
Two Gateway Center - Suite 674
Pittsburgh, PA                            Trustee/Director of the Blanchard
                                          Funds and Blanchard Precious
                                          Metals Fund, Inc.; Trustee of The
                                          Virtus Funds; Attorney-at-law;
                                          Partner, Henny, Kochuba, Meyer and
                                          Flaherty; Chairman, Meritcare,
                                          Inc.; Director, Eat'N Park
                                          Restaurants, Inc.; Director,
                                          Trustee, or Managing General
                                          Partner of the Funds; formerly,
                                          Vice Chairman, Horizon Financial,
                                          F.A.
John E. Murray, Jr., J.D., S.J.D., 62
[MAILING ADDRESS
CITY, STATE & ZIP CODE]                   Trustee/Director of the Blanchard
                                          Funds and Blanchard Precious
                                          Metals Fund, Inc.; Trustee of The
                                          Virtus Funds; President, Law
                                          Professor, Duquesne University;
                                          Consulting Partner, Mollica,
                                          Murray and Hogue; Director,
                                          Trustee or Managing General
                                          Partner of the Funds.
Wesley W. Posvar, 69
1202 Cathedral of Learning
University of Pittsburgh
Pittsburgh, PA                            Trustee/Director of the Blanchard
                                          Funds and Blanchard Precious
                                          Metals Fund, Inc.; Trustee of The
                                          Virtus Funds; Professor, Foreign
                                          Policy and Management Consultant;
                                          Trustee, Carnegie Endowment for
                                          International Peace, RAND
                                          Corporation, Online Computer
                                          Library Center, Inc., and U.S.
                                          Space Foundation; Chairman, Czecho
                                          Slovak Management Center;
                                          Director, Trustee, or Managing
                                          General Partner of the Funds;
                                          President Emeritus, University of
                                          Pittsburgh; formerly , Chairman,
                                          National Advisory Council for
                                          Environmental Policy and
                                          Technology.
Marjorie P. Smuts, 59
4905 Bayard Street
Pittsburgh, PA                            Trustee/Director of the Blanchard
                                          Funds and Blanchard Precious
                                          Metals Fund, Inc.; Trustee of The
                                          Virtus Funds; Public
                                          relations/marketing consultant;
                                          Director, Trustee, or Managing
                                          General Partner of the Funds.
(1)This Trustee is deemed to be an "interested person" as defined in the 
Investment Company Act of 1940, as amended.
(2)Member of the Executive Committee. The Executive Committee of the Board of 
Trustees handles the responsibilities of the Board of Trustees between 
meetings of the Board.
(3)Member of the Audit Committee.  The Audit Committee is responsible for 
reviewing compliance with all internal controls and all regulations related
to the financial reporting process.
The Funds
As referred to in the list of Trustees and Officers, "Funds" includes the
following investment companies:
American Leaders Fund, Inc.; Annuity Management Series; Arrow Funds; Automated 
Cash Management Trust; Automated Government Money Trust; California 
Municipal Cash Trust; Cash Trust
Series II; Cash Trust Series, Inc.; DG Investor Series; Edward D. Jones &
Co. Daily Passport Cash Trust; Federated ARMs Fund; Federated Exchange Fund,
Ltd.; Federated GNMA Trust; Federated Government Trust; Federated Growth
Trust; Federated High Yield Trust; Federated Income Securities Trust;
Federated Income Trust; Federated Index Trust; Federated Institutional
Trust; Federated Intermediate Government Trust; Federated Master Trust;
Federated Municipal Trust; Federated Short-Term U.S. Government Trust;
Federated Stock Trust; Federated Tax-Free Trust; Federated U.S. Government
Bond Fund; Federated U.S. Government Securities Fund: 1-3 Years; First
Priority Funds; Fixed Income Securities, Inc.; Fortress Adjustable Rate U.S.
Government Fund, Inc.; Fortress Municipal Income Fund, Inc.; Fortress
Utility Fund, Inc.; Fund for U.S. Government Securities, Inc.; Government
Income Securities, Inc.; High Yield Cash Trust; Insight Institutional
Series, Inc.; Insurance Management Series; Intermediate Municipal Trust;
International Series, Inc.; Investment Series Funds, Inc.; Investment Series
Trust; Liberty Equity Income Fund, Inc.; Liberty High Income Bond Fund,
Inc.; Liberty Municipal Securities Fund, Inc.; Liberty U.S. Government Money
Market Trust; Liberty Term Trust, Inc. - 1999; Liberty Utility Fund, Inc.;
Liquid Cash Trust; Managed Series Trust; Money Market Management, Inc.;
Money Market Obligations Trust; Money Market Trust; Municipal Securities
Income Trust; Newpoint Funds; New York Municipal Cash Trust; 111 Corcoran
Funds; Peachtree Funds; The Planters Funds; RIMCO Monument Funds; The
Shawmut Funds; Short-Term Municipal Trust; Star Funds; The Starburst Funds;
The Starburst Funds II; Stock and Bond Fund, Inc.;  Sunburst Funds; Targeted
Duration Trust; Tax-Free Instruments Trust; Trademark Funds; Trust for
Financial Institutions; Trust For Government Cash Reserves; Trust for Short-
Term U.S. Government Securities; Trust for U.S. Treasury Obligations; and
World Investment Series, Inc.
Fund Ownership
As of June 30, 1995, Officers and Trustees own less than 1% of the
outstanding shares of each Fund.
To the best knowledge of the FUND, as of June 30, 1995, no shareholder owned 
5% or more of the outstanding shares of the FUND.
Officers and Trustees Compensation
NAME, POSITION             AGGREGATE            TOTAL COMPENSATION
WITH THE FUND              COMPENSATION         PAID TO THE TRUSTEES FROM
                           FROM THE FUND+       THE FUND AND THE FUND
COMPLEX*
John F. Donahue,                $ -0-           $0 for the Fund Complex
Chairman and Trustee
Thomas G. Bigley, Trustee       $ -0-           $489.00 the Fund Complex
John T. Conroy, Jr., Trustee    $ -0-           $2,001.50 for the Fund Complex
William J. Copeland, Trustee    $ -0-           $2,001.50 for the Fund Complex
James E. Dowd, Trustee          $ -0-           $2,001.50 for the Fund Complex
Lawrence D. Ellis, M.D., Trustee                $ -0-$1,816.00 for the Fund
                                                   Complex
Edward L. Flaherty, Jr., Trustee                $ -0-$2,001.50 for the Fund
                                                  Complex
Edward C. Gonzales, President   $ -0-           $ -0- for the Fund Complex
and Trustee
Peter E. Madden, Trustee        $ -0-           $1,517.50 for the Fund Complex
Gregor F. Meyer, Trustee        $ -0-           $1,816.00 for the Fund Complex
John E. Murray, Jr., Trustee    $ -0-           $-0- for the Fund Complex
Wesley W. Posvar, Trustee       $ -0-           $1,816.00 for the Fund Complex
Marjorie P. Smuts, Trustee      $ -0-           $1,816.00 for the Fund Complex
*     Fund Complex = Blanchard Funds, Blanchard Precious Metals Fund, Inc.
and the Virtus Funds

INVESTMENT ADVISORY SERVICES
Advisor to the Trust
The Fund's investment adviser is Virtus Capital Management, Inv. ("VCM"), 
which is a division of Signet Trust Company, a wholly-owned subsidiary of 
Signet Banking Corporation.  Because
of the internal controls maintained by Signet to restrict the flow of non-
public information, Fund investments are typically made without any
knowledge of Signet Bank's or its affiliates' lending relationship with an
issuer.
The adviser shall not be liable to the Blanchard Funds and Blanchard Precious 
Metals Fund, Inc., a Fund, or
any shareholder of the Funds for any losses that may be sustained in the
purchase, holding, or sale of any security or for anything done or omitted
by it, except acts or omissions involving willful misfeasance, bad faith,
gross negligence, or reckless disregard of the duties imposed upon it by its
contract with the Trust.
Advisory Fees
For its services, VCM receives an annual investment advisory fee as described
in the prospectus.  For the period from August 12, 1993 (commencement of 
operations) to April 30, 1994,
the FUND's investment management fee to the prior manager was $89,180.00
which was voluntarily waived. For the same period, the prior manager paid
fees to the Portfolio Adviser of $9,758.00."
5.  On page 25 of the Statement of Additional Information after the last
paragraph under the heading "The Advisory Agreement," please add the
following headings and paragraphs thereunder:
"ADMINISTRATIVE SERVICES
Federated Administrative Services, which is a subsidiary of Federated
Investors, provides administrative personnel and services to the Funds for
the fees set forth in the prospectus."
DISTRIBUTION PLAN
The Trust has adopted a Plan for Shares of the Fund pursuant to Rule 12b-1 
which was promulgated by the Securities and Exchange Commission pursuant to 
the Investment Company Act of
1940.  The Plan provides that the Funds' Distributor shall act as the
Distributor of shares, and it permits the payment of fees to brokers and
dealers for distribution and administrative services and to administrators
for administrative services.  The Plan is designed to (i) stimulate brokers
and dealers to provide distribution and administrative support services to
the Fund and its shareholders and (ii) stimulate administrators to render
administrative support services to the Fund and its shareholders.  These
services are to be provided by a representative who has knowledge of the
shareholders' particular circumstances and goals, and include, but are not
limited to:  providing office space, equipment, telephone facilities, and
various personnel including clerical, supervisory, and computer, as
necessary or beneficial to establish and maintain shareholder accounts and
records; processing purchase and redemption transactions and automatic
investments of client account cash balances; answering routine client
inquiries regarding the Funds; assisting clients in changing dividend
options, account designations, and addresses; and providing such other
services as the Trust reasonably requests.
Other benefits which the Fund hopes to achieve through the Plan include, but 
are not limited to the following:  (1) an efficient and effective 
administrative system; (2) a more
efficient use of assets of shareholders by having them rapidly invested in
the Fund with a minimum  of delay and administrative detail; and (3) an
efficient and reliable records system for shareholders and prompt responses
to shareholder requests and inquiries concerning their accounts.
By adopting the Plan, the then Board of Trustees expected that the Fund will
be able to achieve a more predictable flow of cash for investment purposes 
and to meet redemptions.  This
will facilitate more efficient portfolio management and assist the Fund in
seeking to achieve its investment objectives.  By identifying potential
investors in shares whose needs are served by the Fund's objectives, and
properly servicing these account, the Fund may be able to curb sharp
fluctuations in rates of redemptions and sales."
July 12, 1995


    FEDERATED SECURITIES CORP.

    Distributor
    A subsidiary of Federated Investors
    Federated Investors Tower
    Pittsburgh, PA  15222-3779
    (7/95)


THE BLANCHARD GROUP OF FUNDS
         BLANCHARD WORLDWIDE EMERGING MARKETS FUND
SUPPLEMENT TO STATEMENT OF ADDITIONAL INFORMATION DATED AUGUST 31, 1994

    On July 12, 1995, as a result of acquisition by subsidiaries of Signet
Banking Corporation ("SBC") of certain assets of Sheffield Management
Company ("SMC") and Sheffield Investments, Inc. ("SII"), the following
actions were taken:  (i) Virtus Capital Management, Inc. ("VCM"), a wholly-
owned subsidiary of SBC, replaced SMC as overall investment manager to
Blanchard Funds and Blanchard Precious Metals Fund, Inc. (collectively, the
"Funds"); (ii) VCM entered into new sub-advisory agreements with each
current sub-adviser of each Fund (with the exception of Blanchard 100%
Treasury Money Market Fund, Blanchard Capital Growth Fund and Blanchard
Growth & Income Fund); (iii) Federated Securities Corp. replaced SII as the
Funds' distributor; (iv) Federated Administrative Services ("FAS") was
engaged to provided administrative services to the Funds; and (i) Federated
Securities Corp. entered into new distribution plans with each Fund (other
than Blanchard 100% Treasury Money Market Fund).  No changes in the advisory
fees, sub-advisory fees or distribution plan fees will occur as a result of
these actions, and the acquisition agreement requires all parties to avoid
the imposition of any unfair burden on the Fund.
    Accordingly, please make the following changes to the Statement of
Additional Information:
1.  On page 1 of the Statement of Additional Information, please change the
address of the Blanchard Group of Funds to the following:
"Federated Investors Tower, Pittsburgh, Pennsylvania  15222-3779."
2.  Throughout the Statement of Additional Information, please delete each
reference to Sheffield Management Company or SMC and replace with Virtus
Capital Management, Inc. or VCM, as the case may be.
3.  Throughout the Statement of Additional Information, please delete each
reference to Sheffield Investments, Inc. and replace with Federated
Securities Corp.
4.  On page 47 of the Statement of Additional Information, please delete the
heading "The Management of the Fund" and the paragraphs thereunder and
replace with the following:
"THE MANAGEMENT OF THE FUND
Officers and Trustees are listed with their ages, addresses, principal 
occupations, and present positions, including any affiliation with Virtus
Capital Management, Inc., Signet Trust
Company, Federated Investors, Federated Securities Corp., Federated Services
Company, and Federated Administrative Services or the Funds (as defined
below).

John F. Donahue, 70 (1)(2)
Federated Investors Tower
Pittsburgh, PA                            Chairman and Trustee/Director of
                                          Blanchard Funds and Blanchard
                                          Precious Metals Fund, Inc.;
                                          Chairman and Trustee of The Virtus
                                          Funds; Chairman and Trustee,
                                          Federated Investors, Federated
                                          Advisers, Federated Management,
                                          and Federated Research; Chairman
                                          and Director, Federated Research
                                          Corp.,; Chairman, Passport
                                          Research, Ltd.; Director, AEtna
                                          Life and Casualty Company; Chief
                                          Executive Officer and Director,
                                          Trustee, or Managing General
                                          Partner of the Funds.
                                          
Thomas G. Bigley, 61
28th Floor
One Oxford Centre
Pittsburgh, PA                            Trustee/Director of the Blanchard
                                          Funds and Blanchard Precious
                                          Metals Fund, Inc.; Trustee of the
                                          Virtus Funds; Director, Oberg
                                          Manufacturing Co.; Chairman of the
                                          Board, Children's Hospital of
                                          Pittsburgh; Director, Trustee, or
                                          Managing General Partner of the
                                          Funds; formerly, Senior Partner,
                                          Ernst & Young LLP.
John T. Conroy, Jr., 57 (3)
Wood/IPC Commercial Department
John R. Wood and Associates, Inc., Realtors
3255 Tamiami Trail North
Naples, FL                                Trustee/Director of the Blanchard
                                          Funds and Blanchard Precious
                                          Metals Fund, Inc.; Trustee of the
                                          Virtus Funds; President,
                                          Investment Properties Corporation;
                                          Senior Vice-President, John R.
                                          Wood and Associates, Inc.,
                                          Realtors; President, Northgate
                                          Village Development Corporation;
                                          Partner or Trustee in private real
                                          estate ventures in Southwest
                                          Florida; Director, Trustee, or
                                          Managing General Partner of the
                                          Funds; formerly, President, Naples
                                          Property Management, Inc.
William J. Copeland, 76 (3)
One PNC Plaza - 23rd Floor
Pittsburgh, PA                            Trustee/Director of the Blanchard
                                          Funds and Blanchard Precious
                                          Metals Fund, Inc.; Trustee of the
                                          Virtus Funds; Director and Member
                                          of the Executive Committee,
                                          Michael Baker, Inc.; Director,
                                          Trustee, or Managing General
                                          Partner of the Funds; formerly,
                                          Vice Chairman and Director, PNC
                                          Bank, N.A., and PNC Bank Corp. and
                                          Director, Ryan Homes, Inc.
James E. Dowd, 72 (3)
571 Hayward Mill Road
Concord, MA                               Trustee/Director of the Blanchard
                                          Funds and Blanchard Precious
                                          Metals Fund, Inc.; Trustee of the
                                          Virtus Funds; Attorney-at-law;
                                          Director, The Emerging Germany
                                          Fund, Inc.; Director, Trustee, or
                                          Managing General Partner of the
                                          Funds; formerly, Director, Blue
                                          Cross of Massachusetts, Inc.
                                          
Lawrence D. Ellis, M.D., 62 (1)
3471 Fifth Avenue, Suite 1111
Pittsburgh, PA                            Trustee/Director of the Blanchard
                                          Funds and Blanchard Precious
                                          Metals Fund, Inc.; Trustee of the
                                          Virtus Funds; Hematologist,
                                          Oncologist, and Internist,
                                          Presbyterian and Montefiore
                                          Hospitals; Professor of Medicine
                                          and Member, Board of Trustees,
                                          University of Pittsburgh; Medical
                                          Director, University of Pittsburgh
                                          Medical Center - Downtown; Member,
                                          Board of Directors, University of
                                          Pittsburgh Medical Center;
                                          Director, Trustee, or Managing
                                          General Partner of the Funds.
Edward L. Flaherty, Jr., 70 (1)(3)
Two Gateway Center - Suite 674
Pittsburgh, PA                            Trustee/Director of the Blanchard
                                          Funds and Blanchard Precious
                                          Metals Fund, Inc.; Trustee of the
                                          Virtus Funds; Attorney-at-law;
                                          Partner, Henny, Kochuba, Meyer and
                                          Flaherty; Director, Eat'N Park
                                          Restaurants, Inc., and Statewide
                                          Settlement Agency, Inc.; Director,
                                          Trustee, or Managing General
                                          Partner of the Funds; formerly,
                                          Counsel, Horizon Financial, F.A.,
                                          Western Region.
Edward C. Gonzales, 64 (1)
Federated Investor Tower
Pittsburgh, PA                            President, Treasurer and
                                          Trustee/Director of the Blanchard
                                          Funds and Blanchard Precious
                                          Metals Fund, Inc.; President,
                                          Treasurer and Trustee of The
                                          Virtus Funds;  Vice President,
                                          Treasurer, and Trustee, Federated
                                          Investors; Vice President and
                                          Treasurer, Federated Advisers,
                                          Federated Management, Federated
                                          Research, Federated Research
                                          Corp., and Passport Research,
                                          Ltd.; Executive Vice President,
                                          Treasurer, and Director, Federated
                                          Securities Corp.; Trustee,
                                          Federated Services Company and
                                          Federated Shareholder Services;
                                          Chairman, Treasurer, and Trustee,
                                          Federated Administrative Services;
                                          Trustee or Director of some of the
                                          Funds; Vice President and
                                          Treasurer of the Funds.
Peter E. Madden, 53
225 Franklin Street
Boston, MA                                Trustee/Director of the Blanchard
                                          Funds and Blanchard Precious
                                          Metals Fund, Inc.; Trustee of The
                                          Virtus Funds; Consultant; State
                                          Representative, Commonwealth of
                                          Massachusetts; Director, Trustee,
                                          or Managing General Partner of the
                                          Funds; formerly, President, State
                                          Street Bank and Trust Company and
                                          State Street Boston Corporation
                                          and Trustee, Lahey Clinic
                                          Foundation, Inc.
                                          
Gregor F. Meyer, 68
Two Gateway Center - Suite 674
Pittsburgh, PA                            Trustee/Director of the Blanchard
                                          Funds and Blanchard Precious
                                          Metals Fund, Inc.; Trustee of The
                                          Virtus Funds; Attorney-at-law;
                                          Partner, Henny, Kochuba, Meyer and
                                          Flaherty; Chairman, Meritcare,
                                          Inc.; Director, Eat'N Park
                                          Restaurants, Inc.; Director,
                                          Trustee, or Managing General
                                          Partner of the Funds; formerly,
                                          Vice Chairman, Horizon Financial,
                                          F.A.
John E. Murray, Jr., J.D., S.J.D., 62
[MAILING ADDRESS
CITY, STATE & ZIP CODE]                   Trustee/Director of the Blanchard
                                          Funds and Blanchard Precious
                                          Metals Fund, Inc.; Trustee of The
                                          Virtus Funds; President, Law
                                          Professor, Duquesne University;
                                          Consulting Partner, Mollica,
                                          Murray and Hogue; Director,
                                          Trustee or Managing General
                                          Partner of the Funds.
Wesley W. Posvar, 69
1202 Cathedral of Learning
University of Pittsburgh
Pittsburgh, PA                            Trustee/Director of the Blanchard
                                          Funds and Blanchard Precious
                                          Metals Fund, Inc.; Trustee of The
                                          Virtus Funds; Professor, Foreign
                                          Policy and Management Consultant;
                                          Trustee, Carnegie Endowment for
                                          International Peace, RAND
                                          Corporation, Online Computer
                                          Library Center, Inc., and U.S.
                                          Space Foundation; Chairman, Czecho
                                          Slovak Management Center;
                                          Director, Trustee, or Managing
                                          General Partner of the Funds;
                                          President Emeritus, University of
                                          Pittsburgh; formerly , Chairman,
                                          National Advisory Council for
                                          Environmental Policy and
                                          Technology.
Marjorie P. Smuts, 59
4905 Bayard Street
Pittsburgh, PA                            Trustee/Director of the Blanchard
                                          Funds and Blanchard Precious
                                          Metals Fund, Inc.; Trustee of The
                                          Virtus Funds; Public
                                          relations/marketing consultant;
                                          Director, Trustee, or Managing
                                          General Partner of the Funds.
(1)This Trustee is deemed to be an "interested person" as defined in the 
Investment Company Act of 1940,
      as amended.
(2)Member of the Executive Committee. The Executive Committee of the Board of 
Trustees handles the responsibilities of the Board of Trustees between 
meetings of the Board.
(3)Member of the Audit Committee.  The Audit Committee is responsible for 
reviewing compliance with all internal controls and all regulations 
related to the financial reporting process.
The Funds
As referred to in the list of Trustees and Officers, "Funds" includes the
following investment companies:
American Leaders Fund, Inc.; Annuity Management Series; Arrow Funds; Automated 
Cash Management Trust; Automated Government Money Trust; California 
Municipal Cash Trust; Cash Trust
Series II; Cash Trust Series, Inc.; DG Investor Series; Edward D. Jones &
Co. Daily Passport Cash Trust; Federated ARMs Fund; Federated Exchange Fund,
Ltd.; Federated GNMA Trust; Federated Government Trust; Federated Growth
Trust; Federated High Yield Trust; Federated Income Securities Trust;
Federated Income Trust; Federated Index Trust; Federated Institutional
Trust; Federated Intermediate Government Trust; Federated Master Trust;
Federated Municipal Trust; Federated Short-Term U.S. Government Trust;
Federated Stock Trust; Federated Tax-Free Trust; Federated U.S. Government
Bond Fund; Federated U.S. Government Securities Fund: 1-3 Years; First
Priority Funds; Fixed Income Securities, Inc.; Fortress Adjustable Rate U.S.
Government Fund, Inc.; Fortress Municipal Income Fund, Inc.; Fortress
Utility Fund, Inc.; Fund for U.S. Government Securities, Inc.; Government
Income Securities, Inc.; High Yield Cash Trust; Insight Institutional
Series, Inc.; Insurance Management Series; Intermediate Municipal Trust;
International Series, Inc.; Investment Series Funds, Inc.; Investment Series
Trust; Liberty Equity Income Fund, Inc.; Liberty High Income Bond Fund,
Inc.; Liberty Municipal Securities Fund, Inc.; Liberty U.S. Government Money
Market Trust; Liberty Term Trust, Inc. - 1999; Liberty Utility Fund, Inc.;
Liquid Cash Trust; Managed Series Trust; Money Market Management, Inc.;
Money Market Obligations Trust; Money Market Trust; Municipal Securities
Income Trust; Newpoint Funds; New York Municipal Cash Trust; 111 Corcoran
Funds; Peachtree Funds; The Planters Funds; RIMCO Monument Funds; The
Shawmut Funds; Short-Term Municipal Trust; Star Funds; The Starburst Funds;
The Starburst Funds II; Stock and Bond Fund, Inc.;  Sunburst Funds; Targeted
Duration Trust; Tax-Free Instruments Trust; Trademark Funds; Trust for
Financial Institutions; Trust For Government Cash Reserves; Trust for Short-
Term U.S. Government Securities; Trust for U.S. Treasury Obligations; and
World Investment Series, Inc.
Fund Ownership
As of June 30, 1995, Officers and Trustees own less than 1% of the
outstanding shares of each Fund.
To the best knowledge of the FUND, as of June 30, 1995, no shareholder owned 
5% or more of the outstanding shares of the FUND.
Officers and Trustees Compensation
NAME, POSITION             AGGREGATE            TOTAL COMPENSATION
WITH THE FUND              COMPENSATION         PAID TO THE TRUSTEES FROM
                           FROM THE FUND+       THE FUND AND THE FUND
COMPLEX*
John F. Donahue,                $ -0-           $0 for the Fund Complex
Chairman and Trustee
Thomas G. Bigley, Trustee       $ -0-           $489.00 the Fund Complex
John T. Conroy, Jr., Trustee    $ -0-           $2,001.50 for the Fund Complex
William J. Copeland, Trustee    $ -0-           $2,001.50 for the Fund Complex
James E. Dowd, Trustee          $ -0-           $2,001.50 for the Fund Complex
Lawrence D. Ellis, M.D., Trustee                $ -0-$1,816.00 for the Fund
                                                  Complex
Edward L. Flaherty, Jr., Trustee                $ -0-$2,001.50 for the Fund
                                                  Complex
Edward C. Gonzales, President   $ -0-           $ -0- for the Fund Complex
and Trustee
Peter E. Madden, Trustee        $ -0-           $1,517.50 for the Fund Complex
Gregor F. Meyer, Trustee        $ -0-           $1,816.00 for the Fund Complex
John E. Murray, Jr., Trustee    $ -0-           $-0- for the Fund Complex
Wesley W. Posvar, Trustee       $ -0-           $1,816.00 for the Fund Complex
Marjorie P. Smuts, Trustee      $ -0-           $1,816.00 for the Fund Complex

*     Fund Complex = Blanchard Funds, Blanchard Precious Metals Fund, Inc.
and the Virtus Funds

INVESTMENT ADVISORY SERVICES
Advisor to the Trust
The Fund's investment adviser is Virtus Capital Management, Inv. ("VCM"), 
which is a division of Signet Trust Company, a wholly-owned subsidiary of 
Signet Banking Corporation.  Because
of the internal controls maintained by Signet to restrict the flow of non-
public information, Fund investments are typically made without any
knowledge of Signet Bank's or its affiliates' lending relationship with an
issuer.
The adviser shall not be liable to the Blanchard Funds and Blanchard Precious 
Metals Fund, Inc., a Fund, or
any shareholder of the Funds for any losses that may be sustained in the
purchase, holding, or sale of any security or for anything done or omitted
by it, except acts or omissions involving willful misfeasance, bad faith,
gross negligence, or reckless disregard of the duties imposed upon it by its
contract with the Trust.
Advisory Fees
For its services, VCM receives an annual investment advisory fee as described 
in the prospectus.  For the period from March 1, 1994, (commencement of 
operations) to April 30, 1994, the
FUND's investment management fee paid to the prior manager was $9,452.00
less voluntary expense reimbursement of $9,452.00."
5.  On page 51 of the Statement of Additional Information after the last
paragraph under the heading "Portfolio Advisory Services," please add the
following headings and paragraphs thereunder:
"ADMINISTRATIVE SERVICES
Federated Administrative Services, which is a subsidiary of Federated
Investors, provides administrative personnel and services to the Funds for
the fees set forth in the prospectus."
DISTRIBUTION PLAN
The Trust has adopted a Plan for Shares of the Fund pursuant to Rule 12b-1 
which was promulgated by the Securities and Exchange Commission pursuant to 
the Investment Company Act of
1940.  The Plan provides that the Funds' Distributor shall act as the
Distributor of shares, and it permits the payment of fees to brokers and
dealers for distribution and administrative services and to administrators
for administrative services.  The Plan is designed to (i) stimulate brokers
and dealers to provide distribution and administrative support services to
the Fund and its shareholders and (ii) stimulate administrators to render
administrative support services to the Fund and its shareholders.  These
services are to be provided by a representative who has knowledge of the
shareholders' particular circumstances and goals, and include, but are not
limited to:  providing office space, equipment, telephone facilities, and
various personnel including clerical, supervisory, and computer, as
necessary or beneficial to establish and maintain shareholder accounts and
records; processing purchase and redemption transactions and automatic
investments of client account cash balances; answering routine client
inquiries regarding the Funds; assisting clients in changing dividend
options, account designations, and addresses; and providing such other
services as the Trust reasonably requests.
Other benefits which the Fund hopes to achieve through the Plan include, but 
are not limited to the following:  (1) an efficient and effective 
administrative system; (2) a more
efficient use of assets of shareholders by having them rapidly invested in
the Fund with a minimum  of delay and administrative detail; and (3) an
efficient and reliable records system for shareholders and prompt responses
to shareholder requests and inquiries concerning their accounts.
By adopting the Plan, the then Board of Trustees expected that the Fund will
be able to achieve a more predictable flow of cash for investment purposes 
and to meet redemptions.  This
will facilitate more efficient portfolio management and assist the Fund in
seeking to achieve its investment objectives.  By identifying potential
investors in shares whose needs are served by the Fund's objectives, and
properly servicing these account, the Fund may be able to curb sharp
fluctuations in rates of redemptions and sales."
July 12, 1995


    FEDERATED SECURITIES CORP.

    Distributor
    A subsidiary of Federated Investors
    Federated Investors Tower
    Pittsburgh, PA  15222-3779
    (7/95)