UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-17f-2

Certificate of Accounting of Securities and Similar
Investments in the Custody of
Management Investment Companies

Pursuant to Rule 17f-2 [17 CFR 270.17f-2]

1. Investment Company Act File Number:               811-5762
   Date examination completed:             September 30, 1998

2. State identification Number:

   AL     AK     AZ     AR     CA     CO
   CT     DE     DC     FL     GA     HI
   ID     IL     IN     IA     KS     KY
   LA     ME     MD     MA     MI     MN
   MS     MO     MT     NE     NV     NH
   NJ     NM     NY     NC     ND     OH
   OK     OR     PA     RI     SC     SD
   TN     TX     UT     VT     VA     WA
   WV     WI     WY     PUERTO RICO
   Other (specify):

3. Exact name of investment company as specified in registration statement:
   Star Funds

4. Address of principal executive office (number, street, city, state, zip
   code):
   Firstar Mutual Fund Services LLC, 615 East Michigan Street, Milwaukee,
   Wisconsin  53202


INSTRUCTIONS

This From must be completed by investment companies that have custody of 
securities or similar investments.

Investment Company

1.  All items must be completed by the investment company.
2.  Give this Form to the independent public accountant who, in compliance with 
Rule 17f-2 under the Act and applicable state law, examines securities and 
similar investments in the custody of the investment company.

Accountant

3.  Submit this Form to the Securities and Exchange Commission and appropriate 
state securities administrators when filing the certificate of accounting 
required by Rule 17f-2 under the Act and applicable state law.  File the 
original and one copy with the Securities and Exchange Commission's principal 
office in Washington, D.C., one copy with the regional office for the region in 
which the investment company's principal business operations are conducted, and 
one copy with the appropriate state of administrator(s), if applicable.

THIS FROM MUST BE GIVEN TO YOUR INDEPENDENT PUBLIC ACCOUNTANT
SEC 2198 (11-91)






Management Statement Regarding Compliance with
Certain Provisions of the Investment Company Act of 1940


Management of the Star Funds (the "Funds"), the investment company, and Star 
Bank, N.A., the custodian, are responsible for complying with the requirements 
of subsections (b) and (c) of Rule 17f-2, "Custody of Investments by Registered 
Management Investment Companies," of the Investment Company Act of 1940.  We are
also responsible for establishing and maintaining an effective internal control 
structure over compliance with those requirements.  We have performed an 
evaluation of the Funds' compliance with the requirements of subsections (b) and
(c) of Rule 17f-2 as of September 30, 1998 and from April 30, 1998 (date of the 
last examination) through September 30, 1998.

Based on this evaluation, we assert that the Funds were in compliance with those
requirements of Rule 17f-2 of the Investment Company Act of 1940 as of September
30, 1998 and from April 30, 1998 through September 30, 1998, with respect to 
securities reflected in the investment account of the Funds.



By: /s/ Daniel B. Benhase
Daniel B. Benhase
Executive Vice President, Star Bank, N.A.
President, Star Funds

January 4, 1999








Report of Independent Public Accountants
 

To the Board of Trustees of
    the Star Funds:


We have examined management's assertion about the Star Funds' (the "Funds") 
compliance with the requirements of subsections (b) and (c) of Rule 17f-2 under 
the Investment Company Act of 1940 (the "Act") as of September 30, 1998 included
in the accompanying Management Statement Regarding Compliance with Certain 
Provisions of the Investment Company Act of 1940.  The Funds represents a 
Massachusetts business trust and includes the Star Treasury Fund, Star Tax-Free 
Money Market Fund, Star Relative Value Fund, The Stellar Fund, Star U.S. 
Government Income Fund, Star Capital Appreciation Fund, Star Growth Equity Fund,
Star Strategic Income Fund, Star Ohio Tax-Free Money Market Fund, Star 
International Equity Fund, Star Market Capitalization Fund and Stellar Insured 
Tax-Free Bond Fund.  Management is responsible for the Funds' compliance with 
the requirements of the Act.  Our responsibility is to express an opinion on 
management's assertion about the Funds' compliance based on our examination. 

Our examination was made in accordance with standards established by the 
American Institute of Certified Public Accountants and, accordingly, included 
examining, on a test basis, evidence about the Funds' compliance with those 
requirements and performing such other procedures as we considered necessary in 
the circumstances.  Included among our procedures were the following tests 
performed as of September 30, 1998, and with respect to agreement of security 
purchases and sales, for the period from April 30, 1998 (date of the last 
examination) through September 30, 1998, without prior notice to management:

* Confirmation of all securities held by institutions in book entry form (the 
Federal Reserve Bank of Cleveland, Bankers Trust New York Corporation and The 
Depository Trust Company);

* Confirmation of all securities hypothecated, pledged, placed in escrow, or out
for transfer with brokers, pledgees, transfer agents, and/or remarketing agents;

* Reconciliation of all such securities to the books and records of the Funds 
and Star Bank, N.A., the custodian;

* Confirmation of all repurchase agreements with brokers/banks and agreement of 
underlying collateral with Star Bank, N.A. records; and 

* Agreement of two (2) security purchases and two (2) security sales or 
maturities for each fund identified above since our last report from the books 
and records of the Funds to broker confirmations.

We believe that our examination provides a reasonable basis for our opinion.  
Our examination does not provide a legal determination on the Funds' compliance 
with specified requirements.

In our opinion, management's assertion that the Star Funds was in compliance 
with the requirements of subsections (b) and (c) of Rule 17f-2 of the Investment
Company Act of 1940 as of September 30, 1998, with respect to securities 
reflected in the investment accounts of the Funds, is fairly stated, in all 
material respects.

This report is intended solely for the information and use of management of the 
Star Funds and the Securities and Exchange Commission and should not be used for
any other purpose.


/s/ Arthur Andersen LLP

Cincinnati, Ohio
January 4, 1999