485BPOS 1 formrigg.htm Riggs Funds 6/27/03


                                          1933 Act File No. 33-40428
                                          1940 Act File No. 811-6309

                             SECURITIES AND EXCHANGE COMMISSION
                                   Washington, D.C. 20549

                                         Form N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933            X

    Pre-Effective Amendment No.         ....................       _

    Post-Effective Amendment No.  23 .......................       X

                                           and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940    X

    Amendment No.  23 ......................................       X

                                        RIGGS FUNDS
                     (Exact Name of Registrant as Specified in Charter)

                                    5800 Corporate Drive
                            Pittsburgh, Pennsylvania 15237-7010
                          (Address of Principal Executive Offices)

                                       (412) 288-1900
                              (Registrant's Telephone Number)

                                John W. McGonigle, Esquire,
                                 Federated Investors Tower,
                                    1001 Liberty Avenue
                            Pittsburgh, Pennsylvania 15222-3779
                          (Name and Address of Agent for Service)
                     (Notices should be sent to the Agent for Service)

It is proposed that this filing will become effective:

 X immediately upon filing pursuant to paragraph (b).
   on ____________ pursuant to paragraph (b).
   60 days after filing pursuant to paragraph (a) (i).
   on                pursuant to paragraph (a) (i).
   75 days after filing pursuant to paragraph (a)(ii).
   on ____________ pursuant to paragraph (a)(ii) of Rule 485.

If appropriate, check the following box:

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

                                          Copies To:

                                 Matthew G. Maloney, Esquire
                            Dickstein Shapiro Morin & Oshinsky LLP
                                     2101 L Street, N.W.
                                    Washington, D.C. 20037

COMBINED PROSPECTUS

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June 30, 2003

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Class R Shares

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Riggs Stock Fund
Riggs Small Company Stock Fund
Riggs U.S. Government Securities Fund
Riggs Bond Fund
Riggs Short Term Tax Free Bond Fund (formerly Riggs Intermediate Tax Free Bond Fund)
Riggs Intermediate Tax Free Bond Fund (formerly Riggs Long Term Tax Free Bond Fund)
Riggs Prime Money Market Fund
Riggs U.S. Treasury Money Market Fund

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[Logo of Riggs Funds]

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RIGGS FUNDS JUNE 30, 2003

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Federated Securities Corp., Distributor

PROSPECTUS

Riggs Funds

CLASS R SHARES

Riggs Stock Fund
Riggs Small Company Stock Fund

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Riggs U.S. Government Securities Fund

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Riggs Bond Fund

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Riggs Short Term Tax Free Bond Fund (formerly Intermediate Tax Free Bond Fund)
Riggs Intermediate Tax Free Bond Fund (formerly Long Term Tax Free Bond Fund)

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Riggs Prime Money Market Fund
Riggs U.S. Treasury Money Market Fund

As with all mutual funds, the Securities and Exchange Commission (SEC) has not approved or disapproved these securities or passed upon the adequacy of this prospectus. Any representation to the contrary is a criminal offense.

Fund Goals, Strategies, Performance and Risk		1
What are the Funds' Fees and Expenses?		11
Principal Securities in Which the Funds Invest		14
Specific Risks of Investing in the Funds		17
What do Shares Cost?		18
How are the Funds Sold?		19
How to Purchase Shares		19
How to Redeem and Exchange Shares		21
Account and Share Information		22
Who Manages the Funds?		23
Financial Information		23

NOT FDIC INSURED
MAY LOSE VALUE
NO BANK GUARANTEE

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June 30, 2003

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Fund Goals, Strategies, Performance and Risk

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Riggs Funds offer eight portfolios, including two equity funds, four income funds, and two money market funds. The following describes the investment goals, strategies, and principal risks of the Riggs Stock Fund (Stock Fund), Riggs Small Company Stock Fund (Small Company Stock Fund), Riggs U.S. Government Securities Fund (U.S. Government Securities Fund), Riggs Bond Fund (Bond Fund), Riggs Short Term Tax Free Bond Fund (Short Term Tax Free Bond Fund), Riggs Intermediate Tax Free Bond Fund (Intermediate Tax Free Bond Fund), Riggs Prime Money Market Fund (Prime Money Market Fund) and Riggs U.S. Treasury Money Market Fund (U.S. Treasury Money Market Fund) (collectively, the "Funds"). There can be no assurance that a Fund will achieve its goal.

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The investment goal of each Fund described in this section may only be changed upon the approval of a majority of the outstanding Shares of the Fund which would be affected by the change. The investment strategies may be changed without shareholder approval.

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The Shares offered by this prospectus are not deposits or obligations of any bank, including Riggs Bank, N.A. (Riggs Bank), are not endorsed or guaranteed by any bank and are not insured or guaranteed by the U.S. government, the Federal Deposit Insurance Corporation, the Federal Reserve Board, or any other government agency.

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RIGGS STOCK FUND

Goal

Seeks to provide growth of capital and income.

Strategy

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The Fund pursues its investment objective by investing primarily in common stocks of improving quality, large capitalization U.S. companies. These will generally be companies whose market capitalizations are $5 billion or more, at time of purchase, and whose earnings and dividends are growing at above average rates relative to the historic growth rates of such companies, and relative to the current growth rates of other companies comprising the Standard & Poor's 500 Index (S&P 500). The Fund's investment adviser (Adviser) selects stocks which it believes are undervalued based on such factors as low price/earnings ratios relative to earnings growth and history; rising earnings estimates; relative price strength; high or improved earnings, and credit quality. The Adviser may sell a portfolio security if it determines that the issuer's prospects have deteriorated or if it finds an attractive security which it deems to have superior risk and return characteristics to a security held by the Fund.

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Under normal circumstances, the Fund will invest at least 80% of the value of its net assets plus the amount of any borrowings for investment purposes in equity investments. The Fund will provide shareholders with at least 60 days prior notice of any changes in this policy as required by Rule 35d-1. This policy shall be interpreted and implemented in accordance with its purpose, which is solely to comply with Rule 35d-1.

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Risk/Return Bar Chart and Table

The performance information shown below will help you analyze the Fund's investment risks in light of its historical returns. The bar chart shows the variability of the Fund's Class R Shares total returns on a calendar year-by-year basis. The Average Annual Total Return table shows returns averaged over the stated periods, and includes comparative performance information. The Fund's performance will fluctuate, and past performance (before and after taxes) is no guarantee of future results.

The total returns shown in the bar chart for the Fund's Class R Shares do not reflect the payment of any sales charges or recurring shareholder account fees. If these charges or fees had been included, the returns shown would have been lower.

The Fund's Class R Shares total return for the three-month period from January 1, 2003 to March 31, 2003 was (4.60)%.

Within the period shown in the bar chart, the Fund's Class R Shares highest quarterly return was 22.00% (quarter ended December 31, 1998). Its lowest quarterly return was (17.49)% (quarter ended September 30, 2001).

Average Annual Total Return Table

The Average Annual Total Returns for the Fund's Class R Shares are reduced to reflect applicable sales charges. Return Before Taxes is shown. In addition, Return After Taxes is shown for Class R Shares to illustrate the effect of federal taxes on Fund returns. Actual after-tax returns depend on each investor's personal tax situation, and are likely to differ from those shown. The table also shows returns for the S&P 500, a broad-based market index. Index returns do not reflect taxes, sales charges, expenses or other fees that the SEC requires to be reflected in the Fund's performance. Indexes are unmanaged and it is not possible to invest directly in an index.

(For the periods ended December 31, 2002)

	1 Year	5 Years	10 Years
Class R Shares:
Return Before Taxes	(26.25)%	(7.21)%	6.05%
Return After Taxes on Distributions¹	(26.25)%	(9.28)%	3.13%
Return After Taxes on Distributions and Sale of Fund Shares¹	(16.12)%	(4.98)%	4.92%
S&P 500	(22.10)%	(0.59)%	9.34%

1 After-tax returns are calculated using a standard set of assumptions. The stated returns assume the highest historical federal income and capital gains tax rates. Return After Taxes on Distributions assumes a continued investment in the Fund and shows the effect of taxes on Fund distributions. Return After Taxes on Distributions and Sale of Fund Shares assumes all Shares were redeemed at the end of each measurement period, and shows the effect of any taxable gain (or offsetting loss) on redemption, as well as the effects of taxes on Fund distributions. These after-tax returns do not reflect the effect of any applicable state and local taxes. After-tax returns are not relevant to investors holding shares through tax-deferred programs, such as IRA or 401(k) plans.

RIGGS SMALL COMPANY STOCK FUND

Goal

Seeks to provide long-term capital appreciation.

Strategy

The Fund pursues its investment objective by investing primarily in a diversified portfolio of stocks of small-sized U.S. companies which are either listed on the New York or American Stock Exchange or Nasdaq, or trade in the over-the-counter market and which, in the opinion of the Fund's investment adviser (Adviser), have potential to become significant factors in their respective industries in terms of market share. The Fund seeks to invest primarily in companies whose market capitalizations are less than $2 billion. In selecting securities, the Adviser uses a similar style of investing described on the previous page with respect to Stock Fund. The Adviser may sell a portfolio security if it determines that the issuer's prospects have deteriorated or if it finds an attractive security which it deems to have superior risk and return characteristics to a security held by the Fund.

Under normal circumstances, the Fund will invest at least 80% of the value of its net assets plus the amount of any borrowings for investment purposes in small capitalization equity investments. The Fund will provide shareholders with at least 60 days prior notice of any changes in this policy as required by Rule 35d-1. This policy shall be interpreted and implemented in accordance with its purpose, which is solely to comply with Rule 35d-1.

Risk/Return Bar Chart and Table

The Fund's Class R Shares total return for the three-month period from January 1, 2003 to March 31, 2003 was (2.59)%.

Within the period shown in the bar chart, the Fund's Class R Shares highest quarterly return was 24.61% (quarter ended December 31, 2001). Its lowest quarterly return was (29.19)% (quarter ended September 30, 1998).

Average Annual Total Return Table

The Average Annual Total Returns for the Fund's Class R Shares are reduced to reflect applicable sales charges. Return Before Taxes is shown. In addition, Return After Taxes is shown for Class R Shares to illustrate the effect of federal taxes on Fund returns. Actual after-tax returns depend on each investor's personal tax situation, and are likely to differ from those shown. The table also shows returns for the Russell 2000 Index (RUS2), a broad-based market index. Index returns do not reflect taxes, sales charges, expenses or other fees that the SEC requires to be reflected in the Fund's performance. Indexes are unmanaged and it is not possible to invest directly in an index.

(For the periods ended December 31, 2002)

	1 Year	5 Years	Start of Performance¹
Class R Shares:
Return Before Taxes	(15.96)%	(2.86)%	8.15%
Return After Taxes on Distributions²	(16.26)%	(4.93)%	5.42%
Return After Taxes on Distributions and Sale of Fund Shares²	(9.51)%	(3.09)%	5.61%
RUS2	(20.48)%	(1.36)%	6.86%

1 The Fund's Class R Shares start of performance date was February 27, 1995.

2 After-tax returns are calculated using a standard set of assumptions. The stated returns assume the highest historical federal income and capital gains tax rates. Return After Taxes on Distributions assumes a continued investment in the Fund and shows the effect of taxes on Fund distributions. Return After Taxes on Distributions and Sale of Fund Shares assumes all Shares were redeemed at the end of each measurement period, and shows the effect of any taxable gain (or offsetting loss) on redemption, as well as the effects of taxes on Fund distributions. These after-tax returns do not reflect the effect of any applicable state and local taxes. After-tax returns are not relevant to investors holding shares through tax-deferred programs, such as IRA or 401(k) plans.

RIGGS U.S. GOVERNMENT SECURITIES FUND

Goal

Seeks to achieve current income.

Strategy

The Fund pursues its investment objective by investing primarily in U.S. Treasury and government agency securities, including mortgage backed securities and collateralized mortgage obligations. The Fund may also invest in non-governmental debt securities, such as investment grade debt securities issued by corporations or banks, and in privately issued collateralized mortgage obligations. The Fund's investment adviser (Adviser) uses a broad, overall analysis of the U.S. credit markets as a basis for its selection of portfolio securities. In so doing, it assesses a variety of factors, including the current and expected U.S. economic growth, interest rates and inflation rates. Under ordinary market conditions, the portfolio's average duration will be equal to not less than 80%, nor more than 120%, of the duration of the Merrill Lynch U.S. Treasury Agency Master Index (MLTAM). The Adviser may sell a portfolio security if it determines that the issuer's prospects have deteriorated or if it finds an attractive sec urity which it deems to have superior risk and return characteristics to a security held by the Fund.

Under normal circumstances, the Fund will invest at least 80% of the value of its net assets plus the amount of any borrowings for investment purposes in U.S. government investments. The Fund will provide shareholders with at least 60 days prior notice of any changes in this policy as required by Rule 35d-1. This policy shall be interpreted and implemented in accordance with its purpose, which is solely to comply with Rule 35d-1.

Risk/Return Bar Chart and Table

The Fund's Class R Shares total return for the three-month period from January 1, 2003 to March 31, 2003 was 0.79%.

Within the period shown in the bar chart, the Fund's Class R Shares highest quarterly return was 6.49% (quarter ended June 30, 1995). Its lowest quarterly return was (3.03)% (quarter ended March 31, 1994).

Average Annual Total Return Table

The Average Annual Total Returns for the Fund's Class R Shares are reduced to reflect applicable sales charges. Return Before Taxes is shown. In addition, Return After Taxes is shown for Class R Shares to illustrate the effect of federal taxes on Fund returns. Actual after-tax returns depend on each investor's personal tax situation, and are likely to differ from those shown.The table also shows returns for the MLTAM, a broad based market index. Index returns do not reflect taxes, sales charges, expenses or other fees that the SEC requires to be reflected in the Fund's performance. Indexes are unmanaged and it is not possible to invest directly in an index.

(For the periods ended December 31, 2002)

	1 Year	5 Years	10 Years
Class R Shares:
Return Before Taxes	7.94%	6.36%	6.65%
Return After Taxes on Distributions¹	5.93%	4.21%	4.15%
Return After Taxes on Distributions and Sale of Fund Shares¹	4.81%	4.01%	4.05%
MLTAM	11.30%	7.73%	7.54%

1 After-tax returns are calculated using a standard set of assumptions. The stated returns assume the highest historical federal income and capital gains tax rates. Return After Taxes on Distributions assumes a continued investment in the Fund and shows the effect of taxes on Fund distributions. Return After Taxes on Distributions and Sale of Fund Shares assumes all Shares were redeemed at the end of each measurement period, and shows the effect of any taxable gain (or offsetting loss) on redemption, as well as the effects of taxes on Fund distributions. These after-tax returns do not reflect the effect of any applicable state and local taxes. After-tax returns are not relevant to investors holding shares through tax-deferred programs, such as IRA or 401(k) plans.

RIGGS BOND FUND

Goal

Seeks to provide as high a level of current income as is consistent with the preservation of capital.

Strategy

The Fund pursues its investment objective by investing primarily in a diversified portfolio of fixed income securities consisting primarily of U.S. government securities, corporate obligations rated BBB or higher by a national rating agency and mortgage backed securities. The Fund's investment adviser (Adviser) allocates the Fund's portfolio among the various types of fixed income securities, and adjusts the maturity of the portfolio, by analyzing the expected relative value of the securities types invested in by the Fund, and the expected changes in interest rates. In selecting a corporate debt obligation, the Adviser analyzes the business, competitive position and financial condition of the issuer to assess whether the security's potential return outweighs its risk. The Adviser may sell a portfolio security if it determines that the issuer's prospects have deteriorated or if it finds an attractive security which it deems to have superior risk and return characteristics to a security held by the Fund.

As a matter of investment policy, under normal market conditions, the portfolio's average duration will be equal to not less than 80%, nor more than 120%, of the duration of the Lehman Brothers Government/Credit (Total) Index (LBGCT). The Adviser adjusts the portfolio's duration within the duration limitation based upon the Adviser's interest rate outlook, generally maintaining a longer duration when rates are expected to fall, and a shorter duration when they are expected to increase.

Under normal circumstances, the Fund will invest at least 80% of the value of its net assets plus the amount of any borrowings for investment purposes in fixed income investments. The Fund will provide shareholders with at least 60 days prior notice of any changes in this policy as required by Rule 35d-1. This policy shall be interpreted and implemented in accordance with its purpose, which is solely to comply with Rule 35d-1.

Risk/Return Bar Chart and Table

The Fund's Class R Shares total return for the three-month period from January 1, 2003 to March 31, 2003 was 1.02%.

Within the period shown in the bar chart, the Fund's Class R Shares highest quarterly return was 4.86% (quarter ended September 30, 2002). Its lowest quarterly return was (0.78)% (quarter ended December 31, 2001).

Average Annual Total Return Table

The Average Annual Total Returns for the Fund's Class R Shares are reduced to reflect applicable sales charges. Return Before Taxes is shown. In addition, Return After Taxes is shown for Class R Shares to illustrate the effect of federal taxes on Fund returns. Actual after-tax returns depend on each investor's personal tax situation, and are likely to differ from those shown. The table also shows returns for the LBGCT, a broad-based market index. Index returns do not reflect taxes, sales charges, expenses or other fees that the SEC requires to be reflected in the Fund's performance. Indexes are unmanaged, and it is not possible to invest directly in an index.

(For the periods ended December 31, 2002)

	1 Year	Start of Performance¹
Class R Shares:
Return Before Taxes	7.89%	8.30%
Return After Taxes on Distributions²	5.76%	6.06%
Return After Taxes on Distributions and Sale of Fund Shares²	4.78%	5.54%
LBGCT	11.04%	10.12%

1 The Fund's Class R Shares start of performance date was December 20, 1999.

2 After-tax returns are calculated using a standard set of assumptions. The stated returns assume the highest historical federal income and capital gains tax rates. Return After Taxes on Distributions assumes a continued investment in the Fund and shows the effect of taxes on Fund distributions. Return After Taxes on Distributions and Sale of Fund Shares assumes all Shares were redeemed at the end of each measurement period, and shows the effect of any taxable gain (or offsetting loss) on redemption, as well as the effects of taxes on Fund distributions. These after-tax returns do not reflect the effect of any applicable state and local taxes. After-tax returns are not relevant to investors holding Shares through tax-deferred programs, such as IRA or 401(k) plans.

RIGGS SHORT TERM TAX FREE BOND FUND
(FORMERLY RIGGS INTERMEDIATE TAX FREE BOND FUND)

Goal

Seeks to provide a high level of current income which is exempt from federal income tax consistent with the preservation of principal.

Strategy

The Fund pursues its investment objective by investing primarily in a portfolio of investment grade (BBB or higher) tax exempt securities so that at least 80% of the income the Fund distributes will be exempt from federal regular income tax and not subject to federal alternative minimum tax for individuals and corporations (AMT). Not all distributions will be free from AMT. The Fund will invest primarily in short to intermediate term securities. As a matter of investment policy, under normal market conditions, the portfolio's average duration will be equal to not less than 80%, nor more than 120%, of the Lehman Brothers 3 Year Municipal Bond Index (LB3MB); i.e., its duration will range from one to three years. The Fund's investment adviser (Adviser) adjusts the portfolio's duration within the duration limitation based on the Adviser's interest rate outlook, generally maintaining a longer duration when rates are expected to fall, and a shorter duration when they are expected to rise.

In selecting individual securities, the Adviser performs a fundamental analysis of the issuer's ability to pay principal and interest on the security to assess whether the security's potential return outweighs its potential risk. The Adviser attempts to enhance the Fund's income, subject to the Fund's quality and duration constraints, by purchasing securities offering the highest expected returns. The Adviser may sell a portfolio security if it determines that the issuer's prospects have deteriorated or if it finds an attractive security which it deems to have superior risk and return characteristics to a security held by the Fund.

As a fundamental investment policy, the Fund will invest its assets so that at least 80% of the income it distributes will be exempt from federal income taxes.

Risk/Return Bar Chart and Table

The Fund's Class R Shares total return for the three-month period from January 1, 2003 to March 31, 2003 was 0.21%.

Within the period shown in the bar chart, the Fund's Class R Shares highest quarterly return was 3.56% (quarter ended September 30, 2002). Its lowest quarterly return was (0.18)% (quarter ended December 31, 2001).

Average Annual Total Return Table

The Average Annual Total Returns for the Fund's Class R Shares are reduced to reflect applicable sales charges. Return Before Taxes is shown. In addition, Return After Taxes is shown for Class R Shares to illustrate the effect of federal taxes on Fund returns. Actual after-tax returns depend on each investor's personal tax situation, and are likely to differ from those shown. The table also shows returns for the LB3MB and the Lehman Brothers 5 Year Municipal Bond Index (LB5MB), both broad-based market indexes. The Fund has elected to change its benchmark from the LB5MB to the LB3MB. The LB3MB is more representative of the securities typically held by the Fund. Index returns do not reflect taxes, sales charges, expenses or other fees that the SEC requires to be reflected in the Fund's performance. Indexes are unmanaged, and it is not possible to invest directly in an index.

(For the periods ended December 31, 2002)

	1 Year	Start of Performance¹
Class R Shares:
Return Before Taxes	5.33%	5.73%
Return After Taxes on Distributions²	5.09%	5.64%
Return After Taxes on Distributions and Sale of Fund Shares²	4.95%	5.41%
LB3MB	6.72%	6.39%
LB5MB	9.27%	7.53%

1 The Fund's Class R Shares start of performance date was December 20, 1999.

2 After-tax returns are calculated using a standard set of assumptions. The stated returns assume the highest historical federal income and capital gains tax rates. Return After Taxes on Distributions assumes a continued investment in the Fund and shows the effect of taxes on Fund distributions. Return After Taxes on Distributions and Sale of Fund Shares assumes all Shares were redeemed at the end of each measurement period, and shows the effect of any taxable gain (or offsetting loss) on redemption, as well as the effects of taxes on Fund distributions. These after-tax returns do not reflect the effect of any applicable state and local taxes. After-tax returns are not relevant to investors holding Shares through tax-deferred programs, such as IRA or 401(k) plans.

RIGGS INTERMEDIATE TAX FREE BOND FUND
(FORMERLY RIGGS LONG TERM TAX FREE BOND FUND)

Goal

Seeks to provide a high level of current income which is exempt from federal income tax.

Strategy

The Fund pursues its investment objective by investing primarily in a portfolio of investment grade (BBB or higher) tax exempt securities so that at least 80% of the income the Fund distributes will be exempt from federal regular income tax and not subject to federal alternative minimum tax for individuals and corporations (AMT). Not all distributions will be free from AMT. The Fund will invest primarily in intermediate to long term securities. As a matter of investment policy, under normal market conditions, the portfolio's average duration will be equal to not less than 80%, nor more than 120%, of the Lehman Brothers 10 Year Municipal Bond Index (LB10MB); i.e., its duration will range from three to ten years. The Fund's investment adviser (Adviser) adjusts the portfolio's duration within the duration limitation based on the Adviser's interest rate outlook, generally maintaining a longer duration when rates are expected to fall, and a shorter duration when they are expected to rise.

In selecting individual securities, the Adviser performs a fundamental analysis of the issuer's ability to pay principal and interest on the security to assess whether the security's potential return outweighs its potential risk. The Adviser attempts to provide high levels of after tax total return relative to tax free bond funds with shorter average durations. After tax total return consists of two components: (1) changes in the market value of the Fund's portfolio securities and attendant increase or decrease in the market value of Fund Shares; and (2) income received from the Fund's portfolio securities. The Adviser may sell a portfolio security if it determines that the issuer's prospects have deteriorated, or if it finds an attractive security which it deems to have superior risk and return characteristics to a security held by the Fund.

As a fundamental investment policy, the Fund will invest its assets so that at least 80% of the income it distributes will be exempt from federal income taxes.

Risk/Return Bar Chart and Table

The Fund's Class R Shares total return for the three-month period from January 1, 2003 to March 31, 2003 was 1.11%.

Within the period shown in the bar chart, the Fund's highest quarterly return was 5.57% (quarter ended September 30, 2002). Its lowest quarterly return was (0.62)% (quarter ended December 31, 2001).

Average Annual Total Return Table

The Average Annual Total Returns for the Fund's Class R Shares are reduced to reflect applicable sales charges. Return Before Taxes is shown. In addition, Return After Taxes is shown for Class R Shares to illustrate the effect of federal taxes on Fund returns. Actual after-tax returns depend on each investor's personal tax situation, and are likely to differ from those shown. The table also shows returns for the LB10MB, a broad-based market index. Index returns do not reflect taxes, sales charges, expenses or other fees that the SEC requires to be reflected in the Fund's performance. Indexes are unmanaged, and it is not possible to invest directly in an index.

(For the periods ended December 31, 2002)

	1 Year	Start of Performance¹
Class R Shares:
Return Before Taxes	7.92%	7.10%
Return After Taxes on Distributions²	7.58%	6.87%
Return After Taxes on Distributions and Sale of Fund Shares²	6.63%	6.54%
LB10MB	10.17%	8.21%

1 The Fund's Class R Shares start of performance date was December 20, 1999.

2 After-tax returns are calculated using a standard set of assumptions. The stated returns assume the highest historical federal income and capital gains tax rates. Return After Taxes on Distributions assumes a continued investment in the Fund and shows the effect of taxes on Fund distributions. Return After Taxes on Distributions and Sale of Fund Shares assumes all Shares were redeemed at the end of each measurement period, and shows the effect of any taxable gain (or offsetting loss) on redemption, as well as the effects of taxes on Fund distributions. These after-tax returns do not reflect the effect of any applicable state and local taxes. After-tax returns are not relevant to investors holding Shares through tax-deferred programs, such as IRA or 401(k) plans.

RIGGS PRIME MONEY MARKET FUND

Goal

Seeks to provide current income consistent with stability of principal and liquidity.

Strategy

The Fund pursues its investment objective by investing exclusively in a portfolio of corporate, U.S. government and other money market instruments (high-quality, short-term debt securities) maturing in 397 days or less. The dollar-weighted average maturity of the Fund's portfolio will be 90 days or less. The securities in which the Fund invests must be rated in the highest short-term category by two nationally recognized statistical rating organizations or be of comparable quality to securities having such ratings. The Fund's investment adviser (Adviser) uses a broad, overall analysis of the U.S. credit markets as a basis for its selection of portfolio securities. In so doing, it assesses a variety of factors including the current and expected U.S. economic growth, interest rates and inflation rates.

Risk/Return Bar Chart and Table

Historically, the Fund has maintained a constant $1.00 net asset value per Share. The bar chart shows the variability of the Fund's Class R Shares total returns on a calendar year-end basis.

The Fund's Class R Shares are sold without a sales charge (load). The total returns displayed above are based upon net asset value.

The Fund's Class R Shares total return for the three-month period from January 1, 2003 to March 31, 2003 was 0.06%.

Within the period shown in the bar chart, the Fund's Class R Shares highest quarterly return was 1.43% (quarter ended December 31, 2000). Its lowest quarterly return was 0.15% (quarter ended December 31, 2002).

Average Annual Total Return Table

The following table represents the Fund's Class R Shares Average Annual Total Returns for the calendar periods ended December 31, 2002.

Calendar Period		Class R Shares
1 Year		0.82%
5 Years		3.67%
Start of Performance¹		3.93%

1 The Fund's Class R Shares start of performance dates was December 12, 1995.

The Fund's Class R Shares 7-Day Net Yield as of December 31, 2002 was 0.37%. You may call the Fund at (202) 835-5300 or outside the Washington D.C. metropolitan area toll-free 1-800-934-3883 for current 7-Day Net Yield.

Past performance is no guarantee of future results. This information provides you with historical performance information so that you can analyze whether the Fund's investment risks are balanced by its potential returns.

RIGGS U.S. TREASURY MONEY MARKET FUND

Goal

Seeks to provide current income consistent with stability of principal and liquidity.

Strategy

The Fund pursues its investment objective by investing only in a portfolio of short-term U.S. Treasury obligations maturing in 397 days or less and repurchase agreements fully collateralized by U.S. Treasury obligations. The dollar-weighted average maturity of the Fund's portfolio will be 90 days or less. U.S. Treasury obligations are issued by the U.S. government, and are fully guaranteed as to payment of principal and interest by the United States. The Fund's investment adviser (Adviser) uses a broad, overall analysis of the U.S. credit markets as a basis for its selection of portfolio securities. In doing so, it assesses a variety of factors, including the current and expected U.S. economic growth interest rates and inflation rates.

Under normal circumstances, the Fund will invest at least 80% of the value of its net assets plus the amount of any borrowings for investment purposes in U.S. Treasury investments, including repurchase agreements fully collateralized by U.S. Treasury obligations. The Fund will provide shareholders with at least 60 days prior notice of any changes in this policy as required by Rule 35d-1. This policy shall be interpreted and implemented in accordance with its purpose, which is solely to comply with Rule 35d-1.

Risk/Return Bar Chart and Table

Historically, the Fund has maintained a constant $1.00 net asset value per Share. The bar chart shows the variability of the Fund's Class R Shares total returns on a calendar year-end basis.

The Fund's Class R Shares are sold without a sales charge (load). The total returns displayed above are based upon net asset value.

The Fund's Class R Shares total return for the three-month period from January 1, 2003 to March 31, 2003 was 0.09%.

Within the period shown in the bar chart, the Fund's Class R Shares highest quarterly return was 1.36% (quarter ended December 31, 2000). Its lowest quarterly return was 0.12% (quarter ended December 31, 2002).

Average Annual Total Return Table

The following table represents the Fund's Class R Shares Average Annual Total Returns for the calendar periods ended December 31, 2002.

Calendar Period		Class R Shares
1 Year		0.65%
Start of Performance¹		3.29%

1 The Fund's Class R Shares start of performance date was July 7, 1998.

The Fund's Class R Shares 7-Day Net Yield as of December 31, 2002 was 0.44%. You may call the Fund at (202) 835-5300 or outside the Washington D.C. metropolitan area toll-free 1-800-934-3883 for current 7-Day Net Yield.

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PRINCIPAL RISKS OF THE FUNDS

Set forth below are risks specific to an investment in a particular Fund or Funds. For more information on these risks, see "Specific Risks of Investing in the Funds."

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In addition, all Funds are subject to the risk that a Fund's Share price may decline and an investor could lose money. Thus, although Prime Money Market Fund and Treasury Money Market Fund seek to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in any of the Riggs Funds. Also, there is no assurance that a Fund will achieve its investment objective.

Risks

Stock
Fund

Small
Company
Stock
Fund

U.S.
Government
Securities
Fund

Bond
Fund

Short Term
Tax Free
Bond Fund

Intermediate
Tax Free
Bond Fund

Prime
Money
Market
Fund

U.S. Treasury
Money
Market
Fund

Stock Market Risks¹

Liquidity Risks²

Credit Risks³

Interest Rate Risks⁴

Call Risks⁵

Sector Risks⁶

Risks Related to Company Size⁷

Prepayment Risks⁸

Tax Risks⁹

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1 The value of equity securities rise and fall.

2 Limited trading opportunities for certain securities and the inability to sell a security at will could result in losses to a Fund.

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3 An issuer may possibly default on a security by failing to pay interest or principal when due.

4 Prices of fixed income securities rise and fall in response to interest rate changes. Interest rate changes have a greater effect on the price of fixed income securities with longer durations.

5 A Fund's performance may be adversely affected by the possibility that an issuer of a security held by a Fund may redeem the security prior to maturity at a price below its current market value.

6 Because companies providing credit enhancement with regard to Prime Money Market Fund's securities may be concentrated in certain industry sectors, the creditworthiness of Prime Money Market Fund's securities may be adversely affected by developments which adversely affect such sectors.

7 The smaller the capitalization of a company, the less liquid its stock and the more volatile its price. Companies with smaller market capitalizations also tend to have unproven track records and are more likely to fail than companies with larger market capitalizations.

8 When interest rates decline, unscheduled prepayments of principal could accelerate and require a Fund to reinvest the proceeds of the prepayments at lower interest rates.

9 Any failure of municipal securities invested in by a Fund to meet certain applicable legal requirements, or any proposed or actual changes in the federal or a state's tax law, could cause the interest received and distributed by a Fund to shareholders to be taxable.

WHAT ARE THE FUNDS' FEES AND EXPENSES?

RIGGS STOCK FUND, RIGGS SMALL COMPANY STOCK FUND, RIGGS U.S. GOVERNMENT SECURITIES FUND, RIGGS BOND FUND AND RIGGS SHORT TERM TAX FREE BOND FUND CLASS R SHARES

FEES AND EXPENSES

This table describes the fees and expenses that you may pay if you buy and hold Class R Shares of the Funds.

Shareholder Fees Fees Paid Directly From Your Investment	Stock Fund	Small Company Stock Fund	U.S. Government Securities Fund	Bond Fund	Short Term Tax Free Bond Fund
						Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of offering price)	None	None	None	None	None
						Maximum Deferred Sales Charge (Load) (as a percentage of original purchase price or redemption proceeds, as applicable)	2.00%	2.00%	2.00%	2.00%	2.00%
Maximum Sales Charge (Load) Imposed on Reinvested Dividends (and other Distributions) (as a percentage of offering price)	None	None	None	None	None
Redemption Fee (as a percentage of amount redeemed, if applicable)	None	None	None	None	None
Exchange Fee	None	None	None	None	None

Annual Fund Operating Expenses (Before Waivers) ¹ Expenses That are Deducted From Fund Assets (as percentage of average net assets)
Management Fee²	0.75%	0.80%	0.75%	0.75%	0.75%
Distribution (12b-1) Fee	0.25%	0.25%	0.25%	0.25%³	0.25%³
Shareholder Services Fee	0.25%⁴	0.25%	0.25%⁴	0.25%⁴	0.25%⁴
Other Expenses	0.89%	0.87%	0.53%	0.82%	0.45%
Total Annual Fund Operating Expenses⁵	2.14%	2.17%	1.78%	2.07%	1.70%
1 Although not contractually obligated to do so, the Adviser, distributor and shareholder services provider expect to voluntarily waive certain amounts. These are shown below along with the net expenses the Funds expect to pay for the fiscal year ending April 30, 2004.
Total Waiver of Fund Expenses	0.46%	0.37%	0.81%	1.02%	0.72%
Total Actual Annual Fund Operating Expenses (after waivers)	1.68%	1.80%	0.97%	1.05%	0.98%
2 The Adviser expects to voluntarily waive a portion of the management fee. The Adviser can terminate this voluntary waiver at any time. The management fee paid by Stock Fund, Small Company Stock Fund, U.S. Government Securities Fund, Bond Fund and Short Term Tax Free Bond Fund (after the voluntary waiver) is expected to be 0.48%, 0.43%, 0.19%, 0.13% and 0.43%, respectively, for the fiscal year ending April 30, 2004.
3 The distribution (12b-1) fee is expected to be voluntarily waived. This voluntary waiver can be terminated at any time. The distribution (12b-1) fee paid by the Class R Shares of Bond Fund and Short Term Tax Free Bond Fund (after the voluntary waiver) is expected to be 0.00% and 0.00%, respectively, for the fiscal year ending April 30, 2004.
4 A portion of the shareholder services fee is expected to be voluntarily waived. This voluntary waiver can be terminated at any time. The shareholder service fee paid by the Class R Shares of Stock Fund, U.S. Government Securities Fund, Bond Fund and Short Term Tax Free Bond Fund (after the voluntary waiver) is expected to be 0.06%, 0.00%, 0.10% and 0.10%, respectively, for the fiscal year ending April 30, 2004.
5 Total Annual Fund Operating Expenses have been restated to reflect current fees.

EXAMPLE

This Example is intended to help you compare the cost of investing in the Fund's Class R Shares with the cost of investing in other mutual funds.

The Example assumes that you invest $10,000 in the Fund's Class R Shares for the time periods indicated and then redeem all of your Shares at the end of those periods. Expenses assuming no redemption are also shown. The Example also assumes that your investment has a 5% return each year and that the Fund's Class R Shares operating expenses are before waivers as shown in the table and remain the same. Although your actual costs and returns may be higher or lower, based on these assumptions your costs would be:

	1 Year	3 Years	5 Years	10 Years
Stock Fund
Expenses assuming redemption	$417	$870	$1,349	$2,472
Expenses assuming no redemption	$217	$670	$1,149	$2,472
Small Company Stock Fund
Expenses assuming redemption	$420	$879	$1,364	$2,503
Expenses assuming no redemption	$220	$679	$1,164	$2,503
U.S. Government Securities Fund
Expenses assuming redemption	$381	$760	$1,164	$2,095
Expenses assuming no redemption	$181	$560	$ 964	$2,095
Bond Fund
Expenses assuming redemption	$410	$849	$1,314	$2,400
Expenses assuming no redemption	$210	$649	$1,114	$2,400
Short Term Tax Free Bond Fund
Expenses assuming redemption	$373	$736	$1,123	$2,009
Expenses assuming no redemption	$173	$536	$ 923	$2,009

What are the Fund's Fees and Expenses?

RIGGS INTERMEDIATE TAX FREE BOND FUND, RIGGS PRIME MONEY MARKET FUND, AND RIGGS U.S. TREASURY MONEY MARKET FUND CLASS R SHARES

FEES AND EXPENSES

This table describes the fees and expenses that you may pay if you buy and hold Class R Shares of the Funds.

Shareholder Fees
Fees Paid Directly From Your Investment

Intermediate
Tax Free
Bond Fund

Prime Money
Market Fund

U.S. Treasury
Money Market Fund

Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of offering price)

None

Maximum Deferred Sales Charge (Load) (as a percentage of original purchase price or redemption proceeds, as applicable)

2.00%

None

Maximum Sales Charge (Load) Imposed on Reinvested Dividends (and other Distributions) (as a percentage of offering price)

None

Redemption Fee (as a percentage of amount redeemed, if applicable)

None

Exchange Fee

None

Annual Fund Operating Expenses (Before Waivers)¹
Expenses That are Deducted From Fund Assets (as percentage of average net assets)

Management Fee²

0.75%

0.50%

Distribution (12b-1) Fee³

0.25%

0.50%

Shareholder Services Fee⁴

0.25%

Other Expenses

0.51%

0.25%

0.38%

Total Annual Fund Operating Expenses⁵

1.76%

1.50%

1.63%

1 Although not contractually obligated to do so, the Adviser, distributor and shareholder services provider expect to voluntarily waive certain amounts. These are shown below along with the net expenses the Funds expect to pay for the fiscal year ending April 30, 2004.

Total Waiver of Fund Expenses

0.78%

0.42%

0.72%

Total Actual Annual Fund Operating Expenses (after waivers)

0.98%

1.08%

0.91%

2 The Adviser expects to voluntarily waive a portion of the management fee. The Adviser can terminate this voluntary waiver at any time. The management fee paid by Intermediate Tax Free Bond Fund, Prime Money Market Fund and U.S. Treasury Money Market Fund (after the voluntary waiver) is expected to be 0.37%, 0.48% and 0.41%, respectively, for the fiscal year ending April 30, 2004.

3 All or a portion of the distribution (12b-1) fee is expected to be voluntarily waived. The voluntarily waiver can be terminated at any time. The distribution (12b-1) fee paid by the Class R Shares of Intermediate Tax Free Bond Fund, Prime Money Market Fund and U.S. Treasury Money Market Fund (after the voluntary waiver) is expected to be 0.00%, 0.25% and 0.02%, respectively, for the fiscal year ending April 30, 2004.

4 A portion of the shareholder services fee is expected to be voluntarily waived. This voluntary waiver can be terminated at any time. The shareholder services fee paid by the Class R Shares of Intermediate Tax Free Bond Fund, Prime Money Market Fund and U.S. Treasury Money Market Fund (after the voluntary waiver) is expected to be 0.10%, 0.10% and 0.10%, respectively, for the fiscal year ending April 30, 2004.

5 Total Annual Fund Operating Expenses have been restated to reflect current fees.

EXAMPLE

This Example is intended to help you compare the cost of investing in the Fund's Class R Shares with the cost of investing in other mutual funds.

	1 Year	3 Years	5 Years	10 Years
Intermediate Tax Free Bond Fund
Expenses assuming redemption	$379	$754	$1,154	$2,073
Expenses assuming no redemption	$179	$554	$ 954	$2,073
Prime Money Market Fund
Expenses assuming redemption	$153	$474	$ 818	$1,791
Expenses assuming no redemption	$153	$474	$ 818	$1,791
U.S. Treasury Money Market Fund
Expenses assuming redemption	$166	$514	$ 887	$1,933
Expenses assuming no redemption	$166	$514	$ 887	$1,933

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Principal Securities in Which the Funds Invest

EQUITY SECURITIES

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Equity securities held represent a share of an issuer's earnings and assets, after the issuer pays its liabilities. A Fund cannot predict the income they will receive from equity securities, because issuers generally have discretion as to the payment of any dividends or distributions. However, equity securities offer greater potential for appreciation than many other types of securities, because their value increases directly with the value of the issuer's business.

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The following describes the principal type of equity security in which a Fund may invest:

Common Stocks

Common stocks are the most prevalent type of equity security. Common stocks receive the issuer's earnings after the issuer pays its creditors and any preferred stockholders. As a result, changes in an issuer's earnings directly influence the value of its common stock.

FIXED INCOME SECURITIES

Fixed income securities pay interest, dividends or distributions at a specified rate. The rate may be a fixed percentage of the principal or adjusted periodically. In addition, the issuer of a fixed income security must repay the principal amount of the security, normally within a specified time. Fixed income securities provide more regular income than equity securities. However, the returns on fixed income securities are limited and normally do not increase with the issuer's earnings. This limits the potential appreciation of fixed income securities as compared to equity securities.

A security's yield measures the annual income earned on a security as a percentage of its price. A security's yield will increase or decrease depending upon whether it costs less (a discount) or more (a premium) than the principal amount. If the issuer may redeem the security before its scheduled maturity, the price and yield on a discount or premium security may change based upon the probability of an early redemption. Securities with higher risks generally have higher yields.

The following describes the principal types of fixed income securities in which a Fund may invest, where that security has been referred to in each Fund's strategy section above:

Treasury Securities

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Treasury securities are direct obligations of the federal government of the United States. Treasury securities held by a Fund are generally regarded as having the lowest credit risks.

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Agency Securities

Agency securities are issued or guaranteed by a federal agency or other government sponsored entity acting under federal authority (a GSE). The United States supports some GSEs with its full faith and credit. Other GSEs receive support through federal subsidies, loans or other benefits. A few GSEs have no explicit financial support, but are regarded as having implied support because the federal government sponsors their activities. Agency securities are generally regarded as having low credit risks, but not as low as Treasury securities.

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A Fund treats mortgage backed securities guaranteed by GSEs as agency securities. Although a GSE guarantee protects against credit risks, it does not reduce the market and prepayment risks of these mortgage backed securities.

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Corporate Debt Securities

Corporate debt securities are fixed income securities issued by businesses. Notes, bonds, debentures and commercial paper are the most prevalent types of corporate debt securities. A Fund may also purchase interests in bank loans to companies. The credit risks of corporate debt securities vary widely among issuers. In addition, the credit risk of an issuer's debt security may vary based on its priority for repayment. For example, higher ranking (senior) debt securities have a higher priority than lower ranking (subordinated) securities. This means that the issuer might not make payments on subordinated securities while continuing to make payments on senior securities. In addition, in the event of bankruptcy, holders of senior securities may receive amounts otherwise payable to the holders of subordinated securities. Some subordinated securities, such as trust preferred and capital securities notes, also permit the issuer to defer payments under certain circumstances. For example, insurance companies issue se curities known as surplus notes that permit the insurance company to defer any payment that would reduce its capital below regulatory requirements.

COMMERCIAL PAPER

Commercial paper is an issuer's obligation with a maturity of less than nine months. Companies typically issue commercial paper to pay for current expenditures. Most issuers constantly reissue their commercial paper and use the proceeds (or bank loans) to repay maturing paper. If the issuer cannot continue to obtain liquidity in this fashion, its commercial paper may default. The short maturity of commercial paper reduces both the market and credit risks as compared to other debt securities of the same issuer.

DEMAND INSTRUMENTS

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Demand instruments are corporate debt securities that the issuer must repay upon demand. Other demand instruments require a third party, such as a dealer or bank, to repurchase the security for its face value upon demand. A Fund treats demand instruments as short-term securities, even though their stated maturity may extend beyond one year.

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Municipal Securities

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Municipal securities are issued by states, counties, cities, and other political subdivisions and authorities. Although many municipal securities are exempt from federal income tax, a Fund may invest in taxable municipal securities.

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Mortgage Backed Securities

Mortgage backed securities represent interests in pools of mortgages. The mortgages that comprise a pool normally have similar interest rates, maturities, and other terms. Mortgages may have fixed or adjustable interest rates. Interests in pools of adjustable rate mortgages are known as ARMs.

Mortgage backed securities come in a variety of forms. Many have extremely complicated terms. The simplest form of mortgage backed securities is a pass-through certificate. An issuer of pass-through certificates gathers monthly payments from an underlying pool of mortgages. Then, the issuer deducts its fees and expenses and passes the balance of the payments on to the certificate holders once a month. Holders of pass-through certificates receive a pro rata share of all payments and pre-payments from the underlying mortgages. As a result, the holders assume all the prepayment risks of the underlying mortgages.

COLLATERALIZED MORTGAGE OBLIGATIONS (CMOs)

CMOs, including interests in real estate mortgage investment conduits (REMICs), allocate payments and prepayments from an underlying pass-through certificate among holders of different classes of mortgage backed securities. This creates different prepayment and interest rate risks for each CMO class. The degree of increased or decreased prepayment risks depends upon the structure of the CMOs. However, the actual returns on any type of mortgage backed security depend upon the performance of the underlying pool of mortgages, which no one can predict and will vary among pools.

SEQUENTIAL CMOs

In a sequential pay CMO, one class of CMOs receives all principal payments and prepayments. The next class of CMOs receives all principal payments after the first class is paid off. This process repeats for each sequential class of CMO. As a result, each class of sequential pay CMOs reduces the prepayment risks of subsequent classes. The degree of increased or decreased prepayment risks depends upon the structure of the CMOs. However, the actual returns on any type of mortgage backed security depend upon the performance of the underlying pool of mortgages, which no one can predict and will vary among pools.

BANK INSTRUMENTS

Bank instruments are unsecured interest bearing deposits with banks. Bank instruments include bank accounts, time deposits, certificates of deposit and banker's acceptances. Yankee instruments are denominated in U.S. dollars and issued by U.S. branches of foreign banks. Eurodollar instruments are denominated in U.S. dollars and issued by non-U.S. branches of U.S. or foreign banks.

CREDIT ENHANCEMENT

Credit enhancement consists of an arrangement in which a company agrees to pay amounts due on a fixed income security if the issuer defaults. In some cases the company providing credit enhancement makes all payments directly to the security holders and receives reimbursement from the issuer. Normally, the credit enhancer has greater financial resources and liquidity than the issuer. For this reason, the Adviser usually evaluates the credit risk of a fixed income security based solely upon its credit enhancement.

Common types of credit enhancement include guarantees, letters of credit, bond insurance and surety bonds. Credit enhancement also includes arrangements where securities or other liquid assets secure payment of a fixed income security. If a default occurs, these assets may be sold and the proceeds paid to security's holders. Either form of credit enhancement reduces credit risks by providing another source of payment for a fixed income security.

TAX EXEMPT SECURITIES

Tax exempt securities are fixed income securities that pay interest that is not subject to regular federal income taxes. Typically, states, counties, cities, and other political subdivisions and authorities issue tax exempt securities. The market categorizes tax exempt securities by their source of repayment.

General Obligation Bonds

General obligation bonds are supported by the issuer's power to exact property or other taxes. The issuer must impose and collect taxes sufficient to pay principal and interest on the bonds. However, the issuer's authority to impose additional taxes may be limited by its charter or state law.

Special Revenue Bonds

Special revenue bonds are payable solely from specific revenues received by the issuer such as specific taxes, assessments, tolls or fees. Bondholders may not collect from the municipality's general taxes or revenues. For example, a municipality may issue bonds to build a toll road and pledge the tolls to repay the bonds. Therefore, a shortfall in the tolls normally would result in a default on the bonds.

PRIVATE ACTIVITY BONDS

Private activity bonds are special revenue bonds used to finance private entities. For example, a municipality may issue bonds to finance a new factory to improve its local economy. The municipality would lend the proceeds from its bonds to the company using the factory, and the company would agree to make loan payments sufficient to repay the bonds. The bonds would be payable solely from the company's loan payments, not from any other revenues of the municipality. Therefore, any default on the loan normally would result in a default on the bonds.

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The interest on many types of private activity bonds is subject to the federal alternative minimum tax (AMT). Short Term Tax Free Bond Fund and Intermediate Tax Free Bond Fund may invest in bonds subject to AMT.

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Tax Increment Financing Bonds

Tax increment financing (TIF) bonds are payable from increases in taxes or other revenues attributable to projects financed by the bonds. For example, a municipality may issue TIF bonds to redevelop a commercial area. The TIF bonds would be payable solely from any increase in sales taxes collected from merchants in the area. The bonds could default if merchants' sales, and related tax collections, failed to increase as anticipated.

Municipal Notes

Municipal notes are short-term tax exempt securities. Many municipalities issue such notes to fund their current operations before collecting taxes or other municipal revenues. Municipalities may also issue notes to fund capital projects prior to issuing long-term bonds. The issuers typically repay the notes at the end of their fiscal year, either with taxes, other revenues or proceeds from newly issued notes or bonds.

Variable Rate Demand Instruments

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Variable rate demand instruments are tax exempt securities that require the issuer or a third party, such as a dealer or bank, to repurchase the security for its face value upon demand. The securities also pay interest at a variable rate intended to cause the securities to trade at their face value. A Fund treats demand instruments as short-term securities, because their variable interest rate adjusts in response to changes in market rates, even though their stated maturity may extend beyond thirteen months.

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Municipal Leases

Municipalities may enter into leases for equipment or facilities. In order to comply with state public financing laws, these leases are typically subject to annual appropriation. In other words, a municipality may end a lease, without penalty, by not providing for the lease payments in its annual budget. After the lease ends, the lessor can resell the equipment or facility but may lose money on the sale.

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A Fund may invest in securities supported by pools of municipal leases. The most common type of lease backed securities are certificates of participation (COPs). However, a Fund may also invest directly in individual leases.

SPECIAL TRANSACTIONS

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Repurchase Agreements

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Repurchase agreements are transactions in which a Fund buys a security from a dealer or bank and agrees to sell the security back at a mutually agreed upon time and price. The repurchase price exceeds the sale price, reflecting a Fund's return on the transaction. This return is unrelated to the interest rate on the underlying security. A Fund will enter into repurchase agreements only with banks and other recognized financial institutions, such as securities dealers, deemed creditworthy by the Adviser.

A Fund's custodian or subcustodian will take possession of the securities subject to repurchase agreements. The Adviser or subcustodian will monitor the value of the underlying security each day to ensure that the value of the security always equals or exceeds the repurchase price.

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Repurchase agreements are subject to credit risks.

Delayed Delivery Transactions

Delayed delivery transactions, including when-issued transactions, are arrangements in which a Fund buys securities for a set price, with payment and delivery of the securities scheduled for a future time. During the period between purchase and settlement, no payment is made by a Fund to the issuer and no interest accrues to a Fund. A Fund records the transaction when it agrees to buy the securities and reflects their value in determining the price of its Shares. Settlement dates may be a month or more after entering into these transactions so that the market values of the securities bought may vary from the purchase prices. Therefore, delayed delivery transactions create interest rate risks for a Fund. Delayed delivery transactions also involve credit risks in the event of a counterparty default.

Investment Ratings for Prime Money Market Fund

The securities in which Prime Money Market Fund invests must be rated in the highest short-term category by two nationally recognized statistical rating organizations (NRSROs) or be of comparable quality to securities having such ratings.

Investment Ratings for Corporate Fixed Income Securities

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The Adviser will determine a security's rating based upon the credit ratings given by one or more NRSROs. For example, Standard & Poor's, a rating service, assigns ratings to securities (AAA, AA, A, BBB and below) based on their assessment of the likelihood of the issuer's inability to pay interest or principal (default) when due on each security. Lower credit ratings correspond to higher credit risk. If a security has not received a rating, a Fund must rely entirely upon the Adviser's credit assessment that the security is comparable to a rated security.

If a security is downgraded below the minimum quality grade discussed in a Fund's investment strategy, the Adviser will reevaluate the security, but will not be required to sell it.

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Portfolio Turnover

Each Fund actively trades its portfolio securities in an attempt to achieve their investment objectives. Active trading will cause a Fund to have an increased portfolio turnover rate, which is likely to generate shorter-term gains (losses) for its shareholders, which are taxed at a higher rate than longer-term gains (losses). Actively trading portfolio securities increases a Fund's trading costs and may have an adverse impact on a Fund's performance.

Temporary Defensive Investments

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Each Fund may temporarily depart from its principal investment strategy by investing its assets in cash and shorter-term debt securities and similar obligations. A Fund may do this to minimize potential losses and maintain liquidity to meet shareholder redemptions during adverse market conditions. This may cause a Fund to fail to meet its investment objective and to give up greater investment returns to maintain the safety of principal, that is, the original amount invested by shareholders. Temporary investments will be of comparable quality to other debt securities in which a Fund may invest. For Short Term Tax Free Bond Fund and Intermediate Tax Free Bond Fund, these securities may be subject to federal income tax and may cause these Funds to receive and distribute taxable income to investors.

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Specific Risks of Investing in the Funds

STOCK MARKET RISKS

The value of equity securities in a Fund's portfolio will rise and fall. These fluctuations could be a sustained trend or a drastic movement. A Fund's portfolio will reflect changes in prices of individual portfolio stocks or general changes in stock valuations. Consequently, a Fund's Share price may decline.

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The Adviser attempts to manage market risk by limiting the amount a Fund invests in each company's equity securities. However, diversification will not protect a Fund against widespread or prolonged declines in the stock market.

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LIQUIDITY RISKS--FIXED INCOME SECURITIES

Trading opportunities are more limited for fixed income securities that have not received any credit ratings, have received ratings below investment grade or are not widely held.
Trading opportunities are more limited for CMOs that have complex terms or that are not widely held. These features may make it more difficult to sell or buy a security at a favorable price or time. Consequently, a Fund may have to accept a lower price to sell a security, sell other securities to raise cash or give up an investment opportunity, any of which could have a negative effect on a Fund's performance. Infrequent trading of securities may also lead to an increase in their price volatility.
Liquidity risk also refers to the possibility that a Fund may not be able to sell a security when it wants to. If this happens, a Fund will be required to continue to hold the security or keep the position open, and a Fund could incur losses.

LIQUIDITY RISKS--EQUITY SECURITIES

Trading opportunities are more limited for equity securities that are not widely held. This may make it more difficult to sell or buy a security at a favorable price or time. Consequently, a Fund may have to accept a lower price to sell a security, sell other securities to raise cash or give up an investment opportunity, any of which could have a negative effect on a Fund's performance. Infrequent trading of securities may also lead to an increase in their price volatility.
Liquidity risk also refers to the possibility that a Fund may not be able to sell a security when it wants to. If this happens, a Fund will be required to continue to hold the security or keep the position open, and a Fund could incur losses.

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CREDIT RISKS

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Credit risk is the possibility that an issuer will default on a security by failing to pay interest or principal when due. If an issuer defaults, a Fund will lose money.

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Many fixed income securities receive credit ratings from services such as Standard & Poor's and Moody's Investors Service. These services assign ratings to securities by assessing the likelihood of issuer default. Lower credit ratings correspond to higher credit risk. If a security has not received a rating, a Fund must rely entirely upon the Adviser's credit assessment.

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Fixed income securities generally compensate for greater credit risk by paying interest at a higher rate. The difference between the yield of a security and the yield of a U.S. Treasury security with a comparable maturity (the spread) measures the additional interest paid for risk. Spreads may increase generally in response to adverse economic or market conditions. A security's spread may also increase if the security's rating is lowered, or the security is perceived to have an increased credit risk. An increase in the spread will cause the price of the security to decline.
Credit risk includes the possibility that a party to a transaction involving a Fund will fail to meet its obligations. This could cause a Fund to lose the benefit of the transaction or prevent a Fund from selling or buying other securities to implement its investment strategy.

INTEREST RATE RISKS

Prices of fixed income securities rise and fall in response to changes in the interest rate paid by similar securities. Generally, when interest rates rise, prices of fixed income securities fall. However, market factors, such as the demand for particular fixed income securities, may cause the price of certain fixed income securities to fall while the prices of other securities rise or remain unchanged.
Interest rate changes have a greater effect on the price of fixed income securities with longer durations.

CALL RISKS

Call risk is the possibility that an issuer may redeem a fixed income security before maturity (a call) at a price below its current market price. An increase in the likelihood of a call may reduce the security's price.
If a fixed income security is called, a Fund may have to reinvest the proceeds in other fixed income securities with lower interest rates, higher credit risks, or other less favorable characteristics.

SECTOR RISKS

A substantial part of a Fund's portfolio may be comprised of securities issued or credit enhanced by companies in similar businesses or with other similar characteristics. As a result, a Fund will be more susceptible to any economic, business, political or other developments which generally affect these issuers.

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Companies with similar characteristics may be grouped together in broad categories called sectors. Sector risk is the possibility that a certain sector may underperform other sectors or the market as a whole. As the Adviser allocates more of a Fund's portfolio holdings to a particular sector, a Fund's performance will be more susceptible to any economic, business or other developments which generally affect that sector.

RISKS RELATED TO COMPANY SIZE

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Generally, the smaller the market capitalization of a company, the fewer the number of shares traded daily, the less liquid its stock and the more volatile its price. Market capitalization is determined by multiplying the number of its outstanding shares by the current market price per share.
Companies with smaller market capitalizations also tend to have unproven track records, a limited product or service base, and limited access to capital. These factors also increase risks and make these companies more likely to fail than companies with larger market capitalizations.

PREPAYMENT RISKS

Generally, homeowners have the option to prepay their mortgages at any time without penalty. Homeowners frequently refinance high interest rate mortgages when mortgage rates fall. This results in the prepayment of mortgage backed securities with higher interest rates. Conversely, prepayments due to refinancings decrease when mortgage rates increase. This extends the life of mortgage backed securities with lower interest rates. Other economic factors can also lead to increases or decreases in prepayments. Increases in prepayments of high interest rate mortgage backed securities, or decreases in prepayments of lower interest rate mortgage backed securities, may reduce their yield and price. These factors, particularly the relationship between interest rates and mortgage prepayments, makes the price of mortgage backed securities held by a Fund more volatile than many other types of fixed income securities with comparable credit risks.
Mortgage backed securities generally compensate for greater prepayment risk by paying a higher yield. The difference between the yield of a mortgage backed security and the yield of a U.S. Treasury security with a comparable maturity (the spread) measures the additional interest paid for risk. Spreads may increase generally in response to adverse economic or market conditions. A security's spread may also increase if the security is perceived to have an increased prepayment risk or perceived to have less market demand. An increase in the spread will cause the price of the security to decline.
A Fund may have to reinvest the proceeds of mortgage prepayments in other fixed income securities with lower interest rates, higher prepayment risks or other less favorable characteristics.

TAX RISKS

In order to be tax-exempt, municipal securities must meet certain legal requirements. Failure to meet such requirements may cause the interest received and distributed by a Fund to shareholders to be taxable.
Changes or proposed changes in federal tax laws may cause the prices of municipal securities to fall.
Income from a Fund may be subject to the AMT.

What do Shares Cost?

You can purchase, redeem or exchange Shares any day the New York Stock Exchange (NYSE) is open. When a Fund receives your transaction request in proper form (as described in this prospectus) it is processed at the next calculated net asset value (NAV).

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The Funds do not charge a front-end sales charge. The NAV for Stock Fund, Small Company Stock Fund, U.S. Government Securities Fund, Bond Fund, Short Term Tax Free Bond Fund, and Intermediate Tax Free Bond Fund is determined at the end of regular trading (normally 4:00 p.m. Eastern time) each day the NYSE is open. The NAV for Prime Money Market Fund and U.S. Treasury Money Market Fund (together, the "Money Market Funds") is determined at 12:00 noon and 4:00 p.m. (Eastern time). A Fund's NAV is determined as follows: The Money Market Funds attempt to stabilize the NAV of their Shares at $1.00 by valuing the portfolio securities using the amortized cost method. The Money Market Funds cannot guarantee that their NAVs will always remain at $1.00 per share. Equity securities are generally valued according to the last sale price in the market in which they are primarily traded (either a national securities exchange or the over-the-counter market). Fixed income securities are generally valued according to the mean between bid and asked prices as furnished by an independent pricing service, except that fixed income securities with remaining maturities of less than 60 days at the time of purchase may be valued at amortized cost.

Outside of Automatic Investment Programs, the minimum initial investment in each Fund is $1000, except for an Individual Retirement Account (IRA), which requires a minimum initial investment of $500. Subsequent investments must be in amounts of at least $100, except for an IRA, which must be in amounts of at least $50. An investor's minimum investment will be calculated by combining all accounts it maintains in the Riggs Funds. Within Automatic Investment Programs, the minimum investment requirements would be specified in the Riggs Bank or Riggs Investment Advisors Inc. Service Agreement.

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The minimum investment required may be waived for purchases by employees or retirees of the Riggs National Corporation and/or its subsidiaries, and their spouses and children under the age of 21. The minimum investment may also be waived for investors participating in a payroll deduction program. Keep in mind that investment professionals may charge you fees for their services in connection with your Share transactions.

SALES CHARGE WHEN YOU REDEEM

Your redemption proceeds may be reduced by a sales charge, commonly referred to as a contingent deferred sales charge (CDSC). Shareholders redeeming Class R Shares from the Funds (with the exception of the Money Market Funds, unless the Money Market Fund Shares were acquired in exchange for Class R Shares of a Fund which is not a Money Market Fund) within five years of the purchase date will be charged a CDSC equal to 2.00% on the lesser of the NAV of the redeemed Shares at the time of purchase or the NAV of the redeemed Shares at the time of redemption. The CDSC will be deducted from the redemption proceeds otherwise payable to the shareholder and will be retained by the Fund's distributor. In determining the applicability of the CDSC, the required holding period for new Shares received through an exchange will include the period for which the original Shares were held.

You will not be charged a CDSC when redeeming Shares:

as a shareholder who acquired Shares prior to July 1, 1998 (including Shares acquired in exchange for Shares acquired prior to July 1, 1998);
purchased with reinvested dividends or capital gains;
following the death or disability, as defined in Section 72(m)(7) of the Internal Revenue Code of 1986, of the last surviving shareholder;
representing minimum required distributions from an IRA or other retirement plan to a shareholder who has attained the age of 70;
if a Fund redeems your Shares and closes your account for not meeting the minimum balance requirement; and
which are qualifying redemptions of Shares under a Systematic Withdrawal Program.

In addition, you will not be charged a CDSC:

on Shares held by Trustees, employees and retired employees of the Funds, Riggs National Corporation and/or its subsidiaries, or Federated Securities Corp. and/or its affiliates, and their spouses and children under the age of 21;

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on Shares originally purchased (i) through the Trust Division or the Private Banking Division of Riggs Bank; (ii) through an investment adviser registered under the Investment Advisers Act of 1940; (iii) through retirement plans where the third party administrator has entered into certain arrangements with Riggs Bank or its affiliates; or (iv) by any bank or dealer (in each case for its own account) having a sales agreement with Federated Securities Corp.; and
on Shares purchased through entities having no transaction fee agreements or wrap accounts with Riggs Bank or its affiliates.

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To keep the sales charge as low as possible, the Funds redeem your Shares in this order:

Shares that are not subject to a CDSC; and
Shares held the longest.

The CDSC is then calculated using the Share price at the time of purchase or redemption, whichever is lower.

How are the Funds Sold?

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Stock Fund, Small Company Stock Fund, U.S. Government Securities Fund and the Money Market Funds offer Class R Shares and Class Y Shares; Bond Fund, Short Term Tax Free Bond Fund and Intermediate Tax Free Bond Fund offer Class R Shares. Each class represents interests in a single portfolio of securities. This prospectus relates only to Class R Shares. Each Share class has different sales charges and other expenses which affect their performance. Class Y Shares impose a 0.25% shareholder services fee, are not subject to a Rule 12b-1 fee and do not impose a CDSC. For more information concerning Class Y Shares, contact Riggs Securities Inc. at (202) 835-5300 or outside the Washington, D.C. metropolitan area toll-free at1-800-934-3883.

The Funds' Distributor, Federated Securities Corp., markets the Shares described in this prospectus. Class R Shares of the Money Market Funds are sold primarily to retail customers of Riggs Bank through Riggs Bank and its affiliates and to other retail customers through non-affiliated, authorized broker/dealers. Class R Shares of the Money Market Funds are also available to retail and institutional investors in connection with an Asset Management Program for automatic investment.

Class R Shares of Stock Fund, Small Company Stock Fund, U.S. Government Securities Fund, Bond Fund, Short Term Tax Free Bond Fund and Intermediate Tax Free Bond Fund are sold primarily to retail customers of Riggs Bank through Riggs Bank and its affiliates.

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When the Distributor receives marketing fees, it may pay some or all of them to investment professionals. The Distributor and its affiliates may pay out of their assets other amounts (including items of material value) to investment professionals for marketing and servicing Shares. The Distributor is a subsidiary of Federated Investors, Inc. (Federated).

RULE 12B-1 PLAN

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Each Fund has adopted a Rule 12b-1 Plan, which allows the Fund to pay marketing fees to the Distributor and investment professionals for the sale, distribution, and customer servicing of the Fund's Class R Shares at an annual rate of up to 0.25% of the average daily assets of Stock Fund, Small Company Stock Fund, U.S. Government Securities Fund, Bond Fund, Short Term Tax Free Bond Fund and Intermediate Tax Free Bond Fund; and up to 0.50% of the average daily assets of the Money Market Funds. Because these Shares pay marketing fees on an ongoing basis, your investment cost may be higher over time than other shares with different sales charges and marketing fees.

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How to Purchase Shares

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You may purchase Shares through Riggs Securities Inc., Riggs Bank, a Riggs-affiliated broker/dealer or through an exchange from another Riggs Fund. The Funds reserve the right to reject any request to purchase or exchange Shares.

THROUGH RIGGS SECURITIES INC.

To place an order to purchase Shares of a Fund, an investor may write to or call Riggs Securities Inc. at (202) 835-5300 or outside the Washington, D.C. metropolitan area toll-free at 1-800-934-3883. Representatives are available from 8:30 a.m. to 5:00 p.m. (Eastern time). Payment may be made either by mail or federal funds or by debiting a customer's account at Riggs Bank, N.A. With respect to the Money Market Funds, purchase orders must be received by Riggs Securities Inc. before 11:00 a.m. (Eastern time). Payment is normally required on the same business day. With respect to Stock Fund, Small Company Stock Fund, U.S. Government Securities Fund, Bond Fund, Short Term Tax Free Bond Fund and Intermediate Tax Free Bond Fund, purchase orders must be received by Riggs Securities Inc. before 4:00 p.m. (Eastern time). Payment is normally required on the next business day.

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By Wire

Shares of the Riggs Funds may be purchased by wire. For wiring instructions, call Riggs Funds Shareholder Services (RFSS) at (202) 835-5300 or outside the Washington, D.C. metropolitan area toll-free at 1-800-934-3883.

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With respect to the Money Market Funds, payment by wire must be received by Riggs Securities Inc. before 12:30 p.m. (Eastern time) on the same day as the order is placed to earn dividends for that day. With respect to Stock Fund, Small Company Stock Fund, U.S. Government Securities Fund, Bond Fund, Short Term Tax Free Bond Fund and Intermediate Tax Free Bond Fund, payment by wire must be received by Riggs Securities Inc. before 3:00 p.m. (Eastern time) on the next business day after placing the order. You cannot purchase Shares by wire on holidays when wire transfers are restricted.

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By Check

Make your check payable to Riggs Funds, note the name of the Fund and the Share class on the check, and mail it to:

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Riggs Securities Inc.

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P.O. Box 96656
Washington, D.C. 20090-6656

If you send your check by a private courier or overnight delivery service that requires a street address, mail it to:

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Riggs Securities Inc.

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808 17th Street, N.W.
Washington, D.C. 20006

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Payment should be made in U.S. dollars and drawn on a U.S. bank. The Funds reserve the right to reject any purchase request. For example, to protect against check fraud the Funds may reject any purchase request involving a check that is not made payable to The Riggs Funds (including, but not limited to, requests to purchase Shares using third-party checks), or involving temporary checks or credit card checks.

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Orders received by mail are considered received after payment by check is converted by Riggs Bank into federal funds. This is normally the next business day.

THROUGH RIGGS-AFFILIATED BROKER/DEALERS

An investor may place an order through Riggs-affiliated broker/dealers to purchase Shares of a Fund. Shares will be purchased at the public offering price next determined after a Fund receives the purchase request from the broker/dealer. Purchase requests through Riggs-affiliated broker/dealers must be received by the broker/dealer before 3:00 p.m. (Eastern time) in order for Shares to be purchased at that day's public offering price.

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THROUGH AUTOMATIC INVESTING PROGRAMS OFFERED THROUGH RIGGS BANK

You may establish an account with Riggs Investment Advisors Inc. or Riggs Bank to automatically purchase Class R Shares of Prime Money Market Fund or U.S. Treasury Money Market Fund when your bank account reaches a certain level. Prospective investors in an Automatic Investing Program should refer to the Riggs Securities Inc. or Riggs Bank Service Agreement for details regarding the services, fees, restrictions and limitations related to the Automatic Investment Program. You should read this prospectus along with the Service Agreement.

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THROUGH AN EXCHANGE

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You may purchase Class R Shares of a Fund (with the exception of Prime Money Market Fund) through an exchange from Class R Shares of another Riggs Fund. You must meet the minimum initial investment requirement for purchasing Shares and both accounts must have identical registrations.

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BY SYSTEMATIC INVESTMENT PROGRAM

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Once a Fund account has been opened, shareholders may add to their investment on a regular basis in a minimum amount of $50. Under this program, funds may be automatically withdrawn on a periodic schedule from the shareholder's checking or savings account or an account in one of the Riggs Funds and invested in Fund Shares at the NAV next determined after an order is received. Shareholders may apply for participation in this program through Riggs Securities Inc., Riggs Bank or an authorized broker/dealer.

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Due to the nature of the Automatic Investing Programs, systematic investment privileges are unavailable to participants in these programs.

BY AUTOMATED CLEARING HOUSE (ACH)

Once you have opened an account, you may purchase additional Shares through a depository institution that is an ACH member. This purchase option can be established by completing the appropriate sections of the New Account Form.

AUTOMATIC INVESTING PROGRAMS

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Clients who have executed a Riggs Bank or Riggs Securities Inc. Service Agreement should refer to the Agreement for information about redeeming Class R Shares the Money Market Funds purchased through that program.

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RETIREMENT INVESTMENTS

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Shares of a Fund can be purchased as an investment for retirement plans or for IRA accounts. For further details, contact Riggs Securities Inc. and consult a tax adviser.

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How to Redeem and Exchange Shares

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Each Fund redeems Class R Shares at their NAV, less (with the exception of the Money Market Funds, unless the Money Market Funds' Shares were acquired in exchange for Class R Shares or Class B Shares of a Fund which is not a Money Market Fund) any applicable CDSC, next determined after Riggs Securities Inc. receives the redemption request.

Redemptions will be made on days on which both the NYSE and Federal Reserve Wire system are open for business. Telephone or written requests for redemption must be received in proper form by Riggs Bank.

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DIRECTLY FROM THE FUND

By Telephone

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You may redeem or exchange Shares by calling Riggs Securities Inc. at (202) 835-5300 or outside the Washington, D.C. metropolitan area toll-free at 1-800-934-3883. An authorization form permitting a Fund to accept telephone redemption requests must first be completed. Although Riggs Securities Inc. does not charge for telephone redemptions, it reserves the right to charge a fee for the cost of wire-transferred redemptions of less than $5,000, or in excess of one per month.

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With respect to the Money Market Funds, if you call before 11:00 a.m. (Eastern time) your redemption will be wired to you the same day. You will not receive that day's dividend. If you call after 11:00 a.m. (Eastern time) your redemption will be wired to you the following business day. You will receive that day's dividend.

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With respect to Stock Fund, Small Company Stock Fund, U.S. Government Securities Fund, Bond Fund, Short Term Tax Free Bond Fund and Intermediate Tax Free Bond Fund, if you call before the end of regular trading on the NYSE (normally 4:00 p.m. Eastern time) you will receive a redemption amount based on that day's NAV.

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By Mail

You may redeem or exchange Shares by mailing a written request to:

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Riggs Securities Inc.

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P.O. Box 96656
Washington, D.C. 20090-6656

Send requests by private courier or overnight delivery service to:

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Riggs Securities Inc.

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808 17th Street, N.W.
Washington, D.C. 20006

All requests must include:

Fund Name, Share Class, account number and account registration;
amount to be redeemed or exchanged;
signatures of all shareholders exactly as registered; and
if exchanging, the Fund Name and Share Class, account number and account registration into which you are exchanging.

Call your investment professional or the Fund if you need special instructions.

Signature Guarantees

Signatures must be guaranteed if:

your redemption will be sent to an address other than the address of record;
your redemption will be sent to an address of record that was changed within the last 30 days;
a redemption is payable to someone other than the shareholder(s) of record; or
if exchanging (transferring) into another fund with a different shareholder registration.

A signature guarantee is designed to protect your account from fraud. Obtain a signature guarantee from a bank or trust company, savings association, credit union or broker, dealer, or securities exchange member. A notary public cannot provide a signature guarantee.

PAYMENT METHODS FOR REDEMPTIONS

Your redemption proceeds will be mailed by check to your address of record. The following payment options are available if you complete the appropriate section of the New Account Form or an Account Service Options Form. These payment options require a signature guarantee if they were not established when the account was opened:

an electronic transfer to your account at a financial institution that is an ACH member; or
wire payment to your account at a domestic commercial bank that is a Federal Reserve System member.

Redemption in Kind

Although the Funds intend to pay Share redemptions in cash, they reserve the right to pay the redemption price in whole or in part by a distribution of the Funds' portfolio securities.

LIMITATIONS ON REDEMPTION PROCEEDS

Redemption proceeds normally are wired or mailed within one business day after receiving a request in proper form. Payment may be delayed up to seven days:

to allow your purchase to clear;
during periods of market volatility; or
when a shareholder's trade activity or amount adversely impacts the Funds' ability to manage its assets.

You will not accrue interest or dividends on uncashed checks from a Fund if those checks are undeliverable and returned to a Fund.

REDEMPTIONS FROM RETIREMENT ACCOUNTS

In the absence of your specific instructions, 10% of the value of your redemption from a retirement account in a Fund may be withheld for taxes. This withholding only applies to certain types of retirement accounts.

EXCHANGE PRIVILEGE

A shareholder may generally exchange Class R Shares of one Fund for Class R Shares of any of the other Funds in the Riggs Funds (with the exception of Prime Money Market Fund) at NAV by writing to or calling RFSS at (202) 835-5300 or outside the Washington, D.C. metropolitan area toll-free at 1-800-934-3883. A CDSC is not assessed in connection with such exchanges, but if the shareholder redeems Shares (other than Shares of a Money Market Fund, unless a Money Market Fund's Shares were acquired in exchange for Class R Shares of a Fund which is not a Money Market Fund) within five years of the original purchase, a CDSC will be imposed. For purposes of computing the CDSC, the length of time the shareholder has owned Shares will be measured from the date of original purchase and will not be affected by the exchange.

Orders for exchanges received by a Fund prior to 4:00 p.m. (Eastern time) on any day that Fund is open for business will be executed as of the close of business that day. Orders for exchanges received after 4:00 p.m. (Eastern time) on any business day will be executed at the close of the next business day.

To execute an order to exchange you must first:

complete an authorization form permitting the Fund to accept telephone exchange requests;
ensure that the account registrations are identical;
meet any minimum initial investment requirements;
specify the dollar value or number of Shares to be exchanged; and
receive a prospectus for the Fund into which you wish to exchange.

An exchange is treated as a redemption and a subsequent purchase, and is a taxable transaction.

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A Fund may modify or terminate the exchange privilege at any time. A Fund's management or Adviser may determine from the amount, frequency, and pattern of exchanges that a shareholder is engaged in excessive trading that is detrimental to a Fund and other shareholders. If this occurs, a Fund may terminate the availability of exchanges to that shareholder.

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Shareholders may obtain further information on the exchange privilege by calling RFSS at (202) 835-5300 or outside the Washington, D.C. metropolitan area toll-free at 1-800-934-3883.

SYSTEMATIC WITHDRAWAL PROGRAM

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You may automatically redeem Shares in a minimum amount of $50 on a regular basis. To be eligible to participate in this program, a shareholder must have an account value of at least $10,000. A shareholder may make arrangements to have amounts systematically withdrawn from their accounts in the Money Market Funds and automatically invested in Class R Shares of one of the other Funds in the Riggs Funds. A shareholder may apply for participation in this program through Riggs Securities Inc., Riggs Bank or an authorized broker/dealer. This program may reduce, and eventually deplete, your account. Payments should not be considered yield or income.

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Due to the nature of the Automatic Investment Programs, systematic withdrawal privileges are not available to participants in those programs.

SYSTEMATIC EXCHANGE PROGRAM

Shareholders who desire to automatically exchange Shares of a predetermined amount on a monthly, quarterly or annual basis may take advantage of a systematic exchange privilege. The minimum amount that may be exchanged is $50. This privilege is not available to shareholders of Class R Shares of the Money Market Funds. Shareholders interested in participating in this program should contact RFSS.

CHECKWRITING

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Class R shareholders who at June 30, 1998 were Class A shareholders of Prime Money Market Fund and U.S. Treasury Money Market Fund with a minimum balance of $5,000 can redeem Shares by writing a check in the amount of at least $100. Shareholders must complete the checkwriting section of the account application or complete a subsequent checkwriting application form which can be obtained from Riggs Securities Inc. The Fund will then provide checks. Checks cannot be used to close a shareholder's account. Checkwriting is not permitted with respect to Shares held in IRA accounts, corporate accounts or an Automatic Investing Program. For further information, contact RFSS.

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ADDITIONAL CONDITIONS

Telephone Transactions

The Funds will record your telephone instructions. If a Fund does not follow reasonable procedures, it may be liable for losses due to unauthorized or fraudulent telephone instructions.

Share Certificates

The Funds do not issue Share certificates. If you are redeeming or exchanging Shares represented by certificates previously issued by a Fund, you must return the certificates with your written redemption or exchange request. For your protection, send your certificates by registered or certified mail, but do not endorse them.

Account and Share Information

CONFIRMATIONS AND ACCOUNT STATEMENTS

You will receive confirmation of purchases, redemptions and exchanges (except for systematic transactions). In addition, you will receive periodic statements reporting all account activity, including systematic transactions, dividends and capital gains paid.

DIVIDENDS AND CAPITAL GAINS

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With respect to U.S. Government Securities Fund, Bond Fund, Short Term Tax Free Bond Fund, Intermediate Tax Free Bond Fund and the Money Market Funds, dividends are declared daily and paid monthly. Unless shareholders request cash payments by so indicating on the account application or by writing to one of these Funds, dividends are automatically reinvested in additional Shares of the respective Fund on payment dates at NAV on the ex-dividend date without a sales charge. With respect to Stock Fund and Small Company Stock Fund, dividends are declared and paid quarterly. Unless cash payments are requested by shareholders in writing to the appropriate Fund or by indication on the account application, dividends are automatically reinvested in additional Shares of the Fund on payment dates at the ex-dividend date NAV without a sales charge.

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In addition, the Funds pay any capital gains at least annually. Your dividends and capital gains distributions will be automatically reinvested in additional Shares without a sales charge, unless you elect cash payments.

If you purchase Shares just before a Fund declares a dividend or capital gain distribution, you will pay the full price for the Shares and then receive a portion of the price back in the form of a taxable distribution, whether or not you reinvest the distribution in Shares. Therefore, you should consider the tax implications of purchasing Shares shortly before a Fund declares a dividend or capital gain. Contact your investment professional or the Fund for information concerning when dividends and capital gains will be paid.

ACCOUNTS WITH LOW BALANCES

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Due to the high cost of maintaining accounts with low balances, non-retirement accounts may be closed if redemptions or exchanges cause the account balance to fall below the minimum initial investment amount. Before an account is closed, you will be notified and allowed 30 days to purchase additional Shares to meet the minimum. The required minimum may be waived for employees or retirees of Riggs National Corporation and/or its subsidiaries, employees of any broker/dealer operating on the premises of Riggs Bank and their spouses and children under 21.

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TAX INFORMATION

The Funds send an annual statement of your account activity to assist you in completing your federal, state and local tax returns. Fund distributions of dividends and capital gains are taxable to you whether paid in cash or reinvested in a Fund. Dividends are taxable as ordinary income; capital gains are taxable at different rates depending upon the length of time a Fund holds its assets.

Fund distributions are expected to be both dividends and capital gains. Redemptions and exchanges are taxable sales. Please consult your tax adviser regarding your federal, state and local tax liability.

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With respect to Short Term Tax Free Bond Fund and Intermediate Tax Free Bond Fund, an annual statement of your account activity will be sent to assist you in completing your federal, state and local tax returns. It is anticipated that a Fund's distributions will be primarily dividends that are exempt from federal income tax, although a portion of a Fund's dividends may not be exempt. Dividends may be subject to state and local taxes. Capital gains and non-exempt dividends are taxable whether paid in cash or reinvested in the Fund. Redemptions and exchanges are taxable sales. Please consult your tax adviser regarding your federal, state and local tax liability.

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Who Manages the Funds?

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The Board of Trustees (the Board) governs the Funds. The Board selects and oversees the Adviser, Riggs Investment Advisors Inc. The Adviser manages the Funds' assets, including buying and selling portfolio securities. The Adviser's address is 800 17th Street N.W., Washington, D.C. 20006.

The Adviser or its affiliates have advised the Riggs Funds since September 1991, and as of April 30, 2003, provide investment advice for assets of over $1.9 billion. Riggs Investment Advisors Inc. has a varied client base of approximately 200 other relationships including corporate pension plans, foundations, endowments, associations.

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THE FUNDS' PORTFOLIO MANAGERS ARE:

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A team, composed of investment managers with extensive equity research and stock selection experience at Riggs, are jointly and primarily responsible for the day-to-day management of Stock Fund and Small Company Stock Fund.

A team composed of investment managers with extensive fixed income research and security selection experience at Riggs, are jointly and primarily responsible for the day-to-day management of U.S. Government Securities Fund, Bond Fund, Short Term Tax Free Bond Fund, Intermediate Tax Free Bond Fund, Prime Money Market Fund and U.S. Treasury Money Market Fund.

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ADVISORY FEES

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The Adviser receives an annual investment advisory fee at annual rates equal to percentages of the relevant Fund's average net assets as follows: Stock Fund, U.S. Government Securities Fund, Bond Fund, Short Term Tax Free Bond Fund and Intermediate Tax Free Bond Fund--0.75%; Small Company Stock Fund--0.80%; and Prime Money Market Fund and U.S. Treasury Money Market Fund--0.50%. The Adviser may voluntarily waive a portion of its fee or reimburse a Fund for certain operating expenses.

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Financial Information

FINANCIAL HIGHLIGHTS

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The Financial Highlights will help you understand the Funds' financial performance for the past five fiscal years, or since inception, if the life of a Fund is shorter. Some of the information is presented on a per share basis. Total returns represent the rate an investor would have earned (or lost) on an investment in the Funds, assuming reinvestment of any dividends and capital gains. This information for each of the years in the two-year period ended April 30, 2003, has been audited by KPMG LLP, whose report, along with the Funds' audited financial statements, is included in the Annual Report. Information for all other years and periods was audited by the Funds' previous auditors.

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Riggs Funds
Financial Highlights Class R Shares

(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)

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Year Ended April 30,	Net Asset Value, beginning of period	Net Investment Income (Net Operating Loss)	Net Realized and Unrealized Gain (Loss) on Investments	Total From Investment Operations	Distributions from Net Investment Income	Distributions from Net Realized Gain on Investments

Stock Fund
1999	$16.57	0.04	0.94	0.98	(0.04)	(1.71)
2000	$15.80	0.01	(0.38)	(0.37)	(0.01)	(2.20)
2001	$13.22	(0.03)³	(1.53)	(1.56)	--	(2.71)
2002	$8.95	(0.04)³	(1.54)	(1.58)	--	(0.08)
2003	$7.29	(0.00)^3,4	(1.01)	(1.01)	--	--

Small Company Stock Fund
1999	$18.80	(0.02)	(5.66)	(5.68)	--	(1.85)
2000	$11.27	(0.05)³	1.94	1.89	--	--
2001	$13.16	(0.02)	(0.15)	(0.17)	--	(1.77)
2002	$11.22	(0.09)³	1.16	1.07	--	--
2003	$12.29	(0.10)³	(1.38)	(1.48)	--	(0.18)

U.S. Government Securities Fund
1999	$9.77	0.52	0.06	0.58	(0.50)	--
2000	$9.85	0.50	(0.37)	0.13	(0.51)	--
2001	$9.47	0.52	0.45	0.97	(0.51)	--
2002	$9.93	0.45^3,6	0.11⁶	0.56	(0.49)	--
2003	$10.00	0.40³	0.51	0.91	(0.47)	--

Bond Fund
2000⁷	$10.00	0.21	0.01	0.22	(0.21)	--
2001	$10.01	0.58	0.49	1.07	(0.58)	--
2002	$10.50	0.54^3,6	0.07⁶	0.61	(0.52)	--
2003	$10.59	0.46³	0.52	0.98	(0.53)	--

1 Based on net asset value, which does not reflect the sales charge or contingent deferred sales charge, if applicable.

2 This voluntary expense decrease is reflected in both the expense and the net investment income (net operating loss) ratios shown above.

3 Per share amount is based upon the average number of shares outstanding.

4 Per share amount does not round to $0.01 or $(0.01).

5 Percentage amount does not round to 0.01%.

6 Effective May 1, 2001, U.S. Government Securities Fund and Bond Fund adopted the provisions of the American Institute of Certified Public Accountants ("AICPA") Audit and Accounting Guide for Investment Companies and began accreting discount/amortizing premium on long-term debt securities. The effect of this change for the year ended April 30, 2002 was as follows:

	Net Investment Income per Share	Net Realized and Unrealized Gain/Loss per Share	Ratio of Net Investment Income to Average Net Assets
Increase (Decrease)
U.S. Government Securities Fund R Shares	$(0.07)	$0.07	(0.57)%
Bond Fund R Shares	(0.04)	0.04	(0.24)%

Per share, ratios and supplemental data for periods prior May 1, 2001 have not been restated to reflect this change in presentation.

7 Reflects operations for the period from December 20, 1999 (date of initial public investment) to April 30, 2000.

8 Computed on an annualized basis.

			Ratios to Average Net Assets
Total Distributions	Net Asset Value, end of period	Total Return¹	Expenses	Net Investment Income (Net Operating Loss)	Expense waiver reimbursement²	Net Assets, end of period (000 omitted)	Portfolio Turnover


(1.75)	$15.80	6.50%	1.22%	0.26%	0.26%	$101,474	52%
(2.21)	$13.22	(1.04)%	1.41%	0.08%	0.14%	$51,968	79%
(2.71)	$8.95	(12.59)%	1.52%	(0.29)%	0.01%	$30,385	95%
(0.08)	$7.29	(17.75)%	1.61%	(0.46)%	--	$21,064	49%
--	$6.28	(13.85)%	1.68%	(0.02)%	--	$14,864	99%


(1.85)	$11.27	(30.33)%	1.37%	(0.14)%	0.26%	$38,728	100%
--	$13.16	16.77%	1.60%	(0.44)%	0.13%	$33,163	116%
(1.77)	$11.22	0.37%	1.60%	(0.14)%	0.00%⁵	$16,637	146%
--	$12.29	9.54%	1.66%	(0.75)%	--	$15,114	183%
(0.18)	$10.63	(11.94)%	1.70%	(0.99)%	--	$11,458	213%


(0.50)	$9.85	6.03%	0.91%	5.12%	0.67%	$38,928	55%
(0.51)	$9.47	1.39%	1.06%	5.19%	0.55%	$29,898	55%
(0.51)	$9.93	10.44%	0.93%	5.27%	0.55%	$25,415	58%
(0.49)	$10.00	5.78%	0.96%	4.51%⁶	0.55%	$20,861	64%
(0.47)	$10.44	9.29%	0.96%	3.91%	0.55%	$17,675	22%


(0.21)	$10.01	2.18%	1.00%⁸	5.73%⁸	0.67%⁸	$41,597	16%
(0.58)	$10.50	10.94%	0.87%	5.63%	0.67%	$37,858	42%
(0.52)	$10.59	5.54%	0.90%	5.04%⁶	0.67%	$29,606	83%
(0.53)	$11.04	9.84%	0.94%	4.26%	0.68%	$19,619	23%

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Riggs Funds
Financial Highlights Class R Shares

(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)

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Year Ended April 30,	Net Asset Value, beginning of period	Net Investment Income (Net Operating Loss)	Net Realized and Unrealized Gain (Loss) on Investments	Total From Investment Operations	Distributions from Net Investment Income	Distributions from Net Realized Gain on Investments

Short Term Tax Free Bond Fund³
2000⁴	$10.00	0.15	(0.02)	0.13	(0.15)	--
2001	$9.98	0.43	0.27	0.70	(0.43)	--
2002	$10.25	0.42^6,7	0.12⁷	0.54	(0.41)	--
2003	$10.38	0.38	0.21	0.59	(0.38)	(0.10)

Intermediate Tax Free Bond Fund⁸
2000⁴	$10.00	0.16	0.01	0.17	(0.16)	--
2001	$10.01	0.45	0.34	0.79	(0.46)	(0.05)
2002	$10.29	0.43⁷	0.18⁷	0.61	(0.43)	(0.10)
2003	$10.37	0.40	0.56	0.96	(0.40)	(0.14)

Prime Money Market Fund
1999	$1.00	0.04	0.00⁹	0.04	(0.04)	--
2000	$1.00	0.04	(0.00)⁹	0.04	(0.04)	--
2001	$1.00	0.05	0.00⁹	0.05	(0.05)	--
2002	$1.00	0.02	(0.00)⁹	0.02	(0.02)	--
2003	$1.00	0.01	--	0.01	(0.01)	--

U.S. Treasury Money Market Fund
1999¹¹	$1.00	0.03	--	0.03	(0.03)	--
2000	$1.00	0.04	(0.00)⁹	0.04	(0.04)	--
2001	$1.00	0.05	0.00⁹	0.05	(0.05)	--
2002	$1.00	0.02	--	0.02	(0.02)	--
2003	$1.00	0.01	--	0.01	(0.01)	--

1 Based on net asset value, which does not reflect the sales charge or contingent deferred sales charge, if applicable.

2 This voluntary expense decrease is reflected in both the expense and the net investment income (net operating loss) ratios shown above.

3 Fund name changed (former name Intermediate Tax Free Bond Fund), effective date February 28, 2003.

4 Reflects operations for the period from December 20, 1999 (date of initial public investment) to April 30, 2000.

5 Computed on an annualized basis.

6 Per share amount is based upon the average number of shares outstanding.

7 Effective May 1, 2001, Short Term Tax Free Bond Fund and Intermediate Tax Free Bond Fund adopted the provisions of the American Institute of Certified Public Accountants ("AICPA") Audit and Accounting Guide for Investment Companies and began accreting discount/amortizing premium on long-term debt securities. The effect of this change for the year ended April 30, 2002 was as follows:

		Net Investment Income per Share		Net Realized and Unrealized Gain/Loss per Share		Ratio of Net Investment Income to Average Net Assets
Short Term Tax Free Bond Fund R Shares		0.01		(0.01)		0.07%
Intermediate Tax Free Bond Fund R Shares		--		--		0.01%

Per share, ratios and supplemental data for periods prior May 1, 2001 have not been restated to reflect this change in presentation.

8 Fund name changed (former name Long Term Tax Free Bond Fund), effective date February 28, 2003.

9 Per share amount does not round to $0.01 or $(0.01).

10 On April 24, 2003, the adviser made a voluntary contribution to the Fund for expired capital losses. This voluntary contribution had no effect on the fund's total return.

11 Reflects operations for the period from July 7, 1998 (date of initial public investment) to April 30, 1999.

			Ratios to Average Net Assets
Total Distributions	Net Asset Value, end of period	Total Return¹	Expenses	Net Investment Income	Expense waiver/ reimbursement²	Net Assets, end of period (000 omitted)	Portfolio Turnover


(0.15)	$9.98	1.31%	1.00%⁵	4.16%⁵	0.61%⁵	$66,582	9%
(0.43)	$10.25	7.08%	0.89%	4.18%	0.61%	$59,483	25%
(0.41)	$10.38	5.37%	0.93%	4.05%⁷	0.61%	$56,280	27%
(0.48)	$10.49	5.78%	0.94%	3.64%	0.58%	$43,370	38%


(0.16)	$10.01	1.76%	1.00%⁵	4.57%⁵	0.60%⁵	$69,119	0%
(0.51)	$10.29	8.00%	0.91%	4.48%	0.60%	$57,481	48%
(0.53)	$10.37	6.02%	0.93%	4.09%⁷	0.60%	$48,389	25%
(0.54)	$10.79	9.43%	0.94%	3.82%	0.60%	$36,928	11%


(0.04)	$1.00	4.49%	1.03%	4.25%	0.46%	$8,422	--
(0.04)	$1.00	4.53%	1.07%	4.55%	0.40%	$23,842	--
(0.05)	$1.00	5.32%	1.07%	5.13%	0.40%	$103,460	--
(0.02)	$1.00	1.96%	1.07%	1.90%	0.40%	$43,742	--
(0.01)	$1.00	0.59%¹⁰	1.07%	0.60%	0.40%	$33,054	--


(0.03)	$1.00	3.35%	1.08%⁵	3.86%⁵	0.47%⁵	$3,309	--
(0.04)	$1.00	4.20%	1.10%	4.20%	0.40%	$4,373	--
(0.05)	$1.00	5.11%	1.08%	5.03%	0.40%	$5,449	--
(0.02)	$1.00	1.77%	1.08%	1.02%	0.40%	$42,919	--
(0.01)	$1.00	0.50%	1.01%	0.53%	0.48%	$19,062	--

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Riggs Funds

CLASS R SHARES

Riggs Stock Fund
Riggs Small Company Stock Fund

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Riggs U.S. Government Securities Fund

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Riggs Bond Fund

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Riggs Short Term Tax Free Bond Fund (formerly Riggs Intermediate Tax Free Bond Fund)
Riggs Intermediate Tax Free Bond Fund (formerly Riggs Long Term Tax Free Bond Fund)

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Riggs Prime Money Market Fund
Riggs U.S. Treasury Money Market Fund

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June 30, 2003

A Statement of Additional Information (SAI) dated June 30, 2003 is incorporated by reference into this prospectus. Additional information about the Funds' and their investments is contained in the Funds' SAI, and Annual and Semi-Annual Reports to shareholders as they become available. The Annual Report discusses market conditions and investment strategies that significantly affected the Funds' performance during their last fiscal year. To obtain the SAI, Annual Report, Semi-Annual Report, and other information without charge, call your investment professional or Riggs Funds Shareholder Services at (202) 835-5300 or outside the Washington, DC metropolitan area toll-free at 1-800-934-3883.

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You can obtain information about the Funds (including the SAI) by writing to or visiting the SEC's Public Reference Room in Washington, DC. You may also access Fund information from the EDGAR Database on the SEC's Internet site at http://www.sec.gov. You can purchase copies of this information by contacting the SEC by email at publicinfo@sec.gov. or by writing to the SEC's Public Reference Section, Washington, DC 20549-0102. Call 1-202-942-8090 for information on the SEC's Public Reference Room's operations and copying fees.

Investment Company Act File No. 811-6309

Cusip 76656A 609 Riggs Stock Fund RISTX
Cusip 76656A 807 Riggs Small Company Stock Fund RISCX

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Cusip 76656A 500 Riggs U.S. Government Securities Fund RIBDX

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Cusip 76656A 872 Riggs Bond Fund RIBRX

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Cusip 76656A 864 Riggs Short Term Tax Free Bond Fund RSTBX
Cusip 76656A 856 Riggs Intermediate Tax Free Bond Fund RTTFX
Cusip 76656A 203 Riggs Prime Money Market Fund RRPXX

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Cusip 76656A 401 Riggs U.S. Treasury Money Market Fund RGSXX

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1061803A (06/03)

Cusip 76656A		609
Cusip 76656A		807
Cusip 76656A		500
Cusip 76656A		872
Cusip 76656A		864
Cusip 76656A		856
Cusip 76656A		203
Cusip 76656A		401

1061803A (06/03)

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COMBINED PROSPECTUS

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June 30, 2003

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Class Y Shares

Riggs Stock Fund

Riggs Small Company Stock Fund

Riggs U.S. Government Securities Fund

Riggs Prime Money Market Fund

Riggs U.S. Treasury Money Market Fund

[Logo of Riggs Funds]

RIGGS FUNDS JUNE 30, 2003

Federated Securities Corp., Distributor

PROSPECTUS

Riggs Funds

CLASS Y SHARES

Riggs Stock Fund
Riggs Small Company Stock Fund
Riggs U.S. Government Securities Fund
Riggs Prime Money Market Fund
Riggs U.S. Treasury Money Market Fund

Fund Goals, Strategies, Performance and Risk		1
What are the Funds' Fees and Expenses?		8
Principal Securities in Which the Funds Invest		9
Specific Risks of Investing in the Funds		11
What Do Shares Cost?		12
How are the Funds Sold?		13
How to Purchase Shares		13
How to Redeem Shares		14
Account and Share Information		15
Who Manages the Funds?		16
Financial Information		17

NOT FDIC INSURED
MAY LOSE VALUE
NO BANK GUARANTEE

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JUNE 30, 2003

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Fund Goals, Strategies, Performance and Risk

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Riggs Funds offer eight portfolios, including two equity funds, four income funds, and two money market funds. The following describes the investment goals, strategies, and principal risks of Riggs Stock Fund (Stock Fund), Riggs Small Company Stock Fund (Small Company Stock Fund), Riggs U.S. Government Securities Fund (U.S. Government Securities Fund), Riggs Prime Money Market Fund (Prime Money Market Fund) and Riggs U.S. Treasury Money Market Fund (U.S. Treasury Money Market Fund) (collectively, the "Funds"). There can be no assurance that a Fund will achieve its goal.

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RIGGS STOCK FUND

Goal

Seeks to provide growth of capital and income.

Strategy

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Risk/Return Bar Chart and Table

The performance information shown below will help you analyze the Fund's investment risks in light of its historical returns. The bar chart shows the variability of the Fund's Class Y Shares total returns on a calendar year-by-year basis. The Average Annual Total Return table shows returns averaged over the stated periods, and includes comparative performance information. The Fund's performance will fluctuate, and past performance (before and after taxes) is no guarantee of future results.

The Fund's Class Y Shares are sold without a sales charge (load). The total returns shown in the bar chart are based upon net asset value.

The Fund's Class Y Shares total return for the three-month period from
January 1, 2003 to March 31, 2003 was (4.55)%.

Within the period shown in the bar chart, the Fund's Class Y Shares highest quarterly return was 9.76% (quarter ended December 31, 2001). Its lowest quarterly return was (17.37)% (quarter ended September 30, 2001).

Average Annual Total Return Table

Return Before Taxes is shown. In addition, Return After Taxes is shown for Class Y Shares to illustrate the effect of federal taxes on Fund returns. Actual after-tax returns depend on each investor's personal tax situation, and are likely to differ from those shown. The table also shows returns for the S&P 500, a broad-based market index. Index returns do not reflect taxes, sales charges, expenses or other fees that the SEC requires to be reflected in the Fund's performance. Indexes are unmanaged and it is not possible to invest directly in an index.

(For the periods ended December 31, 2002)

	1 Year	Start of Performance¹
Class Y Shares:
Return Before Taxes	(24.43)%	(14.31)%
Return After Taxes on Distributions²	(24.43)%	(15.73)%
Return After Taxes on Distributions and Sale of Fund Shares²	(15.00)%	(10.59)%
S&P 500	(22.10)%	(13.41)%

(1) The Fund's Class Y Shares start of performance date was December 20, 1999.

(2) After-tax returns are calculated using a standard set of assumptions. The stated returns assume the highest historical federal income and capital gains tax rates. Return After Taxes on Distributions assumes a continued investment in the Fund and shows the effect of taxes on Fund distributions. Return After Taxes on Distributions and Sale of Fund Shares assumes all Shares were redeemed at the end of each measurement period, and shows the effect of any taxable gain (or offsetting loss) on redemption, as well as the effects of taxes on Fund distributions. These after-tax returns do not reflect the effect of any applicable state and local taxes. After-tax returns are not relevant to investors holding shares through tax-deferred programs, such as IRA or 401(k) plans.

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RIGGS SMALL COMPANY STOCK FUND

Goal

Seeks to provide long-term capital appreciation.

Strategy

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Risk/Return Bar Chart and Table

The performance information shown below will help you analyze the Fund's investment risks in light of its historical returns. The bar chart shows the variability of the Fund's Class Y Shares total returns on a calendar year-by-year basis. The Average Annual Total Return table shows returns averaged over the stated periods, and includes comparative performance information. The Fund's performance will fluctuate, and past performance (before and after taxes) is no guarantee of future results.

The Fund's Class Y Shares are sold without a sales charge (load). The total returns shown in the bar chart are based upon net asset value.

The Fund's Class Y Shares total return for the three-month period from
January 1, 2003 to March 31, 2003 was (2.46)%.

Within the period shown in the bar chart, the Fund's Class Y Shares highest quarterly return was 24.69% (quarter ended December 31, 2001). Its lowest quarterly return was (19.26)% (quarter ended September 30, 2001).

Average Annual Total Return Table

Return Before Taxes is shown. In addition, Return After Taxes is shown for Class Y Shares to illustrate the effect of federal taxes on Fund returns. Actual after-tax returns depend on each investor's personal tax situation, and are likely to differ from those shown. The table also shows returns for the Russell 2000 Index (RUS2), a broad-based market index. Index returns do not reflect taxes, sales charges, expenses or other fees that the SEC requires to be reflected in the Fund's performance. Indexes are unmanaged and it is not possible to invest directly in an index.

(For the periods ended December 31, 2002)

	1 Year	Start of Performance¹
Class Y Shares:
Return Before Taxes	(14.05)%	1.86%
Return After Taxes on Distributions²	(14.35)%	(0.18)%
Return After Taxes on Distributions and Sale of Fund Shares²	(8.34)%	0.59%
RUS2	(20.48)%	(5.06)%

(1) The Fund's Class Y Shares start of performance date was December 20, 1999.

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RIGGS U.S. GOVERNMENT SECURITIES FUND

Goal

Seeks to achieve current income.

Strategy

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The Fund pursues its investment objective by investing primarily in U.S. Treasury and government agency securities, including mortgage backed securities and collateralized mortgage obligations. The Fund may also invest in non-governmental debt securities, such as investment grade debt securities issued by corporations or banks, and in privately issued collateralized mortgage obligations. The Fund's investment adviser (Adviser) uses a broad, overall analysis of the U.S. credit markets as a basis for its selection of portfolio securities. In so doing, it assesses a variety of factors, including the current and expected U.S. economic growth, interest rates and inflation rates. Under ordinary market conditions, the portfolio's average duration will be equal to not less than 80%, nor more than 120%, of the duration of the Merrill Lynch U.S. Treasury Agency Master Index (MLTAM). The Adviser may sell a portfolio security if it determines that the issuer's prospects have deteriorated or if it finds an attractive security which it deems to have superior risk and return characteristics to a security held by the Fund.

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Risk/Return Bar Chart and Table

The performance information shown below will help you analyze the Fund's investment risks in light of its historical returns. The bar chart shows the variability of the Fund's Class Y Shares total returns on a calendar year-by-year basis. The Average Annual Total Return table shows returns averaged over the stated periods, and includes comparative performance information. The Fund's performance will fluctuate, and past performance (before and after taxes) is no guarantee of future results.

The Fund's Class Y Shares are sold without a sales charge (load). The total returns shown in the bar chart are based upon net asset value.

The Fund's Class Y Shares total return for the three-month period from
January 1, 2003 to March 31, 2003 was 0.86%.

Within the period shown in the bar chart, the Fund's Class Y Shares highest quarterly return was 5.01% (quarter ended September 30, 2002). Its lowest quarterly return was (0.62)% (quarter ended March 31, 2002).

Average Annual Total Return Table

Return Before Taxes is shown. In addition, Return After Taxes is shown for Class Y Shares to illustrate the effect of federal taxes on Fund returns. Actual after-tax returns depend on each investor's personal tax situation, and are likely to differ from those shown. The table also shows returns for the MLTAM, a broad based market index. Index returns do not reflect taxes, sales charges, expenses or other fees that the SEC requires to be reflected in the Fund's performance. Indexes are unmanaged and it is not possible to invest directly in an index.

(For the periods ended December 31, 2002)

	1 Year	Start of Performance¹
Class Y Shares:
Return Before Taxes	10.21%	9.13%
Return After Taxes on Distributions²	8.10%	6.91%
Return After Taxes on Distributions and Sale of Fund Shares²	6.21%	6.23%
MLTAM	11.30%	10.39%

(1) The Fund's Class Y Shares start of performance date was December 20, 1999.

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RIGGS PRIME MONEY MARKET FUND

Goal

Seeks to provide current income consistent with stability of principal and liquidity.

Strategy

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The Fund pursues its investment objective by investing exclusively in a portfolio of corporate, U.S. government and other money market instruments (high-quality, short-term debt securities) maturing in 397 days or less. The dollar-weighted average maturity of the Fund's portfolio will be 90 days or less. The securities in which the Fund invests must be rated in the highest short-term category by two recognized nationally recognized statistical rating organizations or be of comparable quality to securities having such ratings. The Fund's investment adviser (Adviser) uses a broad, overall analysis of the U.S. credit markets as a basis for its selection of portfolio securities. In so doing, it assesses a variety of factors including the current and expected U.S. economic growth, interest rates and inflation rates.

Risk/Return Bar Chart and Table

Historically, the Fund has maintained a constant $1.00 net asset value per Share. The bar chart shows the variability of the Fund's Class Y Shares total returns on a calendar year-end basis.

The Fund's Class Y Shares are sold without a sales charge (load). The total returns displayed above are based upon net asset value.

The Fund's Class Y Shares total return for the three-month period from January 1, 2003 to March 31, 2003 was 0.15%.

Within the period shown in the bar chart, the Fund's Class Y Shares highest quarterly return was 1.52%. (quarter ended December 31, 2000). Its lowest quarterly return was 0.24% (quarter ended December 31, 2002).

Average Annual Total Return Table

The following table represents the Fund's Class Y Shares Average Annual Total Returns for the calendar periods ended December 31, 2002.

Calendar Period		Class Y Shares
1 Year		1.17%
5 Year		4.01%
10 Years		4.31%

The Fund's Class Y Shares 7-Day Net Yield as of December 31, 2002 was 0.72%.

You may call the Fund at (202) 835-5300 or outside the Washington D.C. metropolitan area toll-free 1-800-934-3883 for current 7-Day Net Yield.

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RIGGS U.S. TREASURY MONEY MARKET FUND

Goal

Seeks to provide current income consistent with stability of principal and liquidity.

Strategy

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Under normal circumstances, the Fund will invest at least 80% of the value of its net assets plus the amount of any borrowings for investment purposes in U.S. Treasury investments, including repurchase agreements fully collateralized by U.S. Treasury obligtions. The Fund will provide shareholders with at least 60 days prior notice of any changes in this policy as required by Rule 35d-1. This policy shall be interpreted and implemented in accordance with its purpose, which is solely to comply with Rule 35d-1.

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Risk/Return Bar Chart and Table

Historically, the Fund has maintained a constant $1.00 net asset value per Share. The bar chart shows the variability of the Fund's Class Y Shares total returns on a calendar year-end basis.

The Fund's Class Y Shares are sold without a sales charge (load). The total returns displayed above are based upon net asset value.

The Fund's Class Y Shares total return for the three-month period from January 1, 2003 to March 31, 2003 was 0.11%.

Within the period shown in the bar chart, the Fund's Class Y Shares highest quarterly return was 1.45% (quarter ended December 31, 2000). Its lowest quarterly return was 0.18% (quarter ended December 31, 2002).

Average Annual Total Return Table

The following table represents the Fund's Class Y Shares Average Annual Total Returns for the calendar periods ended December 31, 2002.

Calendar Period		Class Y Shares
1 Year		0.97%
5 Years		3.76%
10 Years		4.02%

The Fund's Class Y Shares 7-Day Net Yield as of December 31, 2002 was 0.54%. You may call the Fund at (202) 835-5300 or outside the Washington D.C. metropolitan area toll-free 1-800-934-3883 for current 7-Day Net Yield.

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PRINCIPAL RISKS OF THE FUNDS

Set forth below are risks specific to an investment in a particular Fund, or Funds. For more information on these risks, see "Specific Risks of Investing in the Funds."

Risks	Stock Fund	Small Company Stock Fund	U.S. Government Securities Fund	Prime Money Market Fund	U.S. Treasury Money Market Fund
Stock Market Risks¹	X	X
Liquidity Risks²		X	X
Risks Related to Company Size³		X
Credit Risks⁴			X	X
Interest Rate Risks⁵			X	X	X
Prepayment Risks⁶			X
Sector Risks⁷				X

1 The value of equity securities rise and fall.

2 Limited trading opportunities for certain securities and the inability to sell a security at will could result in losses to a Fund.

3 The smaller the capitalization of a company, the less liquid its stock and the more volatile its price. Companies with smaller market capitalizations also tend to have unproven track records and are more likely to fail than companies with larger market capitalizations.

4 An issuer may possibly default on a security by failing to pay interest or principal when due.

5 Prices of fixed income securities rise and fall in response to interest rate changes. Interest rate changes have a greater effect on the price of fixed income securities with longer durations.

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6 When interest rates decline, unscheduled prepayments of principal could accelerate and require a Fund to reinvest the proceeds of the prepayments at lower interest rates.

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7 Because companies providing credit enhancement with regard to Prime Money Market Fund's securities may be concentrated in certain industry sectors, the creditworthiness of the Prime Money Market Fund's securities may be adversely affected by developments which adversely affect such sectors.

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What are the Funds' Fees and Expenses?

RIGGS STOCK FUND, RIGGS SMALL COMPANY STOCK FUND, RIGGS U.S. GOVERNMENT SECURITIES FUND, RIGGS PRIME MONEY MARKET FUND AND RIGGS U.S. TREASURY MONEY MARKET FUND CLASS Y SHARES

FEES AND EXPENSES

This table describes the fees and expenses that you may pay if you buy and hold Class Y Shares of the Funds.

Shareholder Fees Fees Paid Directly From Your Investment	Stock Fund	Small Company Stock Fund	U.S. Government Securities Fund	Prime Money Market Fund	U.S. Treasury Money Market Fund
Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of offering price)	None	None	None	None	None
Maximum Deferred Sales Charge (Load) (as a percentage of original purchase price or redemption proceeds, as applicable)	None	None	None	None	None
Maximum Sales Charge (Load) Imposed on Reinvested Dividends (and other Distributions) (as a percentage of offering price).	None	None	None	None	None
Redemption Fee (as a percentage of amount redeemed, if applicable)	None	None	None	None	None
Exchange Fee	None	None	None	None	None

Annual Fund Operating Expenses (Before Waivers)¹
Expenses That are Deducted From Fund Assets (as percentage of average net assets)
Management Fee²	0.75%	0.80%	0.75%	0.50%	0.50%
Distribution (12b-1) Fee	None	None	None	None	None
Shareholder Services Fee	0.25%³	0.25%	0.25%³	0.25%³	0.25%³
Other Expenses	0.89%	0.87%	0.53%	0.25%	0.38%
Total Annual Fund Operating Expenses⁴	1.89%	1.92%	1.53%	1.00%	1.13%
1 Although not contractually obligated to do so, the Adviser and shareholder services provider expect to voluntarily waive certain amounts. These are shown below along with the net expenses the Funds expect to pay for the fiscal year ending April 30, 2004.
Total Waiver of Fund Expenses	0.46%	0.37%	0.81%	0.27%	0.34%
Total Actual Annual Fund Operating Expenses (after waivers)	1.43%	1.55%	0.72%	0.73%	0.79%
2 The Adviser expects to voluntarily waive a portion of the management fee. The Adviser can terminate this voluntary waive at any time. The management fee paid by Stock Fund, Small Company Stock Fund, U.S. Government Securities Fund, Prime Money Market Fund and U.S. Treasury Money Market Fund (after the voluntary waiver) is expected to be 0.48%, 0.43%, 0.19%, 0.48% and 0.41%, respectively for the fiscal year ending April 30, 2004.
3 All or a portion of the shareholder services fee is expected to be voluntarily waived. This voluntary waiver can be terminated at any time. The shareholder services fee paid by the Class Y Shares of Stock Fund, U.S Government Securities Fund, Prime Money Market Fund and U.S. Treasury Money Market Fund (after the voluntary waiver) is expected to be 0.06%, 0.00%, 0.00% and 0.00%, respectively, for the fiscal year ending April 30, 2004.
4 Total Annual Fund Operating Expenses have been restated to reflect current fees.

EXAMPLE

This Example is intended to help you compare the cost of investing in the Fund's Class Y Shares with the cost of investing in other mutual funds.

The Example assumes that you invest $10,000 in the Fund's Class Y Shares for the time periods indicated and then redeem all of your Shares at the end of those periods. Expenses assuming no redemption are also shown. The Example also assumes that your investment has a 5% return each year and operating expenses are before waivers as shown in the table and remain the same. Although your actual costs and returns may be higher or lower, based on these assumptions your costs would be:

	1 Year	3 Years	5 Years	10 Years
Stock Fund	$192	$594	$1,021	$2,212
Small Company Stock Fund	$195	$603	$1,037	$2,243
U.S. Government Securities Fund	$156	$483	$834	$1,824
Prime Money Market Fund	$102	$318	$552	$1,225
U.S Treasury Money Market Fund	$115	$359	$622	$1,375

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Principal Securities in Which the Funds Invest

EQUITY SECURITIES

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The following describes the principal type of equity security in which a Fund may invest:

Common Stocks

FIXED INCOME SECURITIES

Fixed income securities pay interest, dividends, or distributions at a specified rate. The rate may be a fixed percentage of the principal or adjusted periodically. In addition, the issuer of a fixed income security must repay the principal amount of the security, normally within a specified time. Fixed income securities provide more regular income than equity securities. However, the returns on fixed income securities are limited and normally do not increase with the issuer's earnings. This limits the potential appreciation of fixed income securities as compared to equity securities.

The following describes the principal types of fixed income securities in which a Fund may invest, where that security has been referred to in each Fund's strategy section above:

Treasury Securities

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Treasury securities are direct obligations of the federal government of the United States. Treasury securities held by a Fund are generally regarded as having the lowest credit risks.

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Agency Securities

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Corporate Debt Securities

Corporate debt securities are fixed income securities issued by businesses. Notes, bonds, debentures, and commercial paper are the most prevalent types of corporate debt securities. A Fund may also purchase interests in bank loans to companies. The credit risks of corporate debt securities vary widely among issuers. In addition, the credit risk of an issuer's debt security may vary based on its priority for repayment. For example, higher ranking (senior) debt securities have a higher priority than lower ranking (subordinated) securities. This means that the issuer might not make payments on subordinated securities while continuing to make payments on senior securities. In addition, in the event of bankruptcy, holders of senior securities may receive amounts otherwise payable to the holders of subordinated securities. Some subordinated securities, such as trust preferred and capital securities notes, also permit the issuer to defer payments under certain circumstances. For example, insurance companies issue s ecurities known as surplus notes that permit the insurance company to defer any payment that would reduce its capital below regulatory requirements.

COMMERCIAL PAPER

DEMAND INSTRUMENTS

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MUNICIPAL SECURITIES

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MORTGAGE BACKED SECURITIES

Collateralized Mortgage Obligations (CMOs)

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SEQUENTIAL CMOs

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BANK INSTRUMENTS

CREDIT ENHANCEMENT

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TAX EXEMPT SECURITIES

Variable Rate Demand Instruments

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SPECIAL TRANSACTIONS

Repurchase Agreements

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Repurchase agreements are subject to credit risks.

Investment Ratings for Prime Money Market Fund

Investment Ratings for Corporate Fixed Income Securities

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If a security is downgraded below the minimum quality grade discussed in a Fund's investment strategy, the Adviser will reevaluate the security, but will not be required to sell it.

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Portfolio Turnover

Each Fund actively trade their portfolio securities in an attempt to achieve their investment objectives. Active trading will cause a Fund to have an increased portfolio turnover rate, which is likely to generate shorter-term gains (losses) for its shareholders, which are taxed at a higher rate than longer-term gains (losses). Actively trading portfolio securities increases a Fund's trading costs and may have an adverse impact on a Fund's performance.

Temporary Defensive Investments

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Each Fund may temporarily depart from their principal investment strategy by investing their assets in cash and shorter-term debt securities and similar obligations. A Fund may do this to minimize potential losses and maintain liquidity to meet shareholder redemptions during adverse market conditions. This may cause a Fund to fail to meet its investment objective and to give up greater investment returns to maintain the safety of principal, that is, the original amount invested by shareholders. Temporary investments will be of comparable quality to other debt securities in which a Fund may invest.

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Specific Risks of Investing in the Funds

STOCK MARKET RISKS

The value of equity securities in a Fund's portfolio will rise and fall. These fluctuations could be a sustained trend or a drastic movement. A Fund's portfolio will reflect changes in prices of individual portfolio stocks or general changes in stock valuations. Consequently, a Fund's Share price may decline.

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The Adviser attempts to manage market risk by limiting the amount a Fund invests in each company's equity securities. However, diversification will not protect a Fund against widespread or prolonged declines in the stock market.

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LIQUIDITY RISKS--FIXED INCOME SECURITIES

Trading opportunities are more limited for fixed income securities that have not received any credit ratings, have received ratings below investment grade or are not widely held.
Trading opportunities are more limited for CMOs that have complex terms or that are not widely held. These features may make it more difficult to sell or buy a security at a favorable price or time. Consequently, a Fund may have to accept a lower price to sell a security, sell other securities to raise cash or give up an investment opportunity, any of which could have a negative effect on a Fund's performance. Infrequent trading of securities may also lead to an increase in their price volatility.
Liquidity risk also refers to the possibility that a Fund may not be able to sell a security when it wants to. If this happens, a Fund will be required to continue to hold the security or keep the position open, and a Fund could incur losses.

LIQUIDITY RISKS--EQUITY SECURITIES

Trading opportunities are more limited for equity securities that are not widely held. This may make it more difficult to sell or buy a security at a favorable price or time. Consequently, a Fund may have to accept a lower price to sell a security, sell other securities to raise cash or give up an investment opportunity, any of which could have a negative effect on a Fund's performance. Infrequent trading of securities may also lead to an increase in their price volatility.
Liquidity risk also refers to the possibility that a Fund may not be able to sell a security when it wants to. If this happens, a Fund will be required to continue to hold the security or keep the position open, and a Fund could incur losses.

RISKS RELATED TO INVESTING FOR VALUE

Due to their relatively low valuations, value stocks are typically less volatile than growth stocks. For instance, the price of a value stock may experience a smaller increase on a forecast of higher earnings, a positive fundamental development, or positive market development. Further, value stocks tend to have higher dividends than growth stocks. This means they depend less on price changes for returns and may lag behind growth stocks in an up market.

RISKS RELATED TO COMPANY SIZE

Generally, the smaller the market capitalization of a company, the fewer the number of shares traded daily, the less liquid its stock and the more volatile its price. Market capitalization is determined by multiplying the number of its outstanding shares by the current market price per share.
Companies with smaller market capitalizations also tend to have unproven track records, a limited product or service base, and limited access to capital. These factors also increase risks and make these companies more likely to fail than companies with larger market capitalizations.

CREDIT RISKS

Credit risk is the possibility that an issuer will default on a security by failing to pay interest or principal when due. If an issuer defaults, a Fund will lose money.

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Many fixed income securities receive credit ratings from services such as Standard & Poor's and Moody's Investors Service. These services assign ratings to securities by assessing the likelihood of issuer default. Lower credit ratings correspond to higher credit risk. If a security has not received a rating, a Fund must rely entirely upon the Adviser's credit assessment.

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Fixed income securities generally compensate for greater credit risk by paying interest at a higher rate. The difference between the yield of a security and the yield of a U.S. Treasury security with a comparable maturity (the spread) measures the additional interest paid for risk. Spreads may increase generally in response to adverse economic or market conditions. A security's spread may also increase if the security's rating is lowered, or the security is perceived to have an increased credit risk. An increase in the spread will cause the price of the security to decline.
Credit risk includes the possibility that a party to a transaction involving a Fund will fail to meet its obligations. This could cause a Fund to lose the benefit of the transaction or prevent a Fund from selling or buying other securities to implement its investment strategy.

INTEREST RATE RISKS

Prices of fixed income securities rise and fall in response to changes in the interest rate paid by similar securities. Generally, when interest rates rise, prices of fixed income securities fall. However, market factors, such as the demand for particular fixed income securities, may cause the price of certain fixed income securities to fall while the prices of other securities rise or remain unchanged.
Interest rate changes have a greater effect on the price of fixed income securities with longer durations.

PREPAYMENT RISKS

Generally, homeowners have the option to prepay their mortgages at any time without penalty. Homeowners frequently refinance high interest rate mortgages when mortgage rates fall. This results in the prepayment of mortgage backed securities with higher interest rates. Conversely, prepayments due to refinancings decrease when mortgage rates increase. This extends the life of mortgage backed securities with lower interest rates. Other economic factors can also lead to increases or decreases in prepayments. Increases in prepayments of high interest rate mortgage backed securities, or decreases in prepayments of lower interest rate mortgage backed securities, may reduce their yield and price. These factors, particularly the relationship between interest rates and mortgage prepayments, makes the price of mortgage backed securities held by a Fund more volatile than many other types of fixed income securities with comparable credit risks.
Mortgage backed securities generally compensate for greater prepayment risk by paying a higher yield. The difference between the yield of a mortgage backed security and the yield of a U.S. Treasury security with a comparable maturity (the spread) measures the additional interest paid for risk. Spreads may increase generally in response to adverse economic or market conditions. A security's spread may also increase if the security is perceived to have an increased prepayment risk or perceived to have less market demand. An increase in the spread will cause the price of the security to decline.
A Fund may have to reinvest the proceeds of mortgage prepayments in other fixed income securities with lower interest rates, higher prepayment risks or other less favorable characteristics.

SECTOR RISKS

A substantial part of Prime Money Market Fund's portfolio may be comprised of securities issued or credit enhanced by companies in similar businesses or with other similar characteristics. As a result, the Fund will be more susceptible to any economic, business, political, or other developments which generally affect these issuers.

What Do Shares Cost?

You can purchase or redeem Shares any day the New York Stock Exchange (NYSE) is open. When a Fund receives your transaction request in proper form (as described in this prospectus) it is processed at the next calculated net asset value (NAV). The Funds do not charge a front-end sales charge. The NAV for Stock Fund, Small Company Stock Fund and U.S. Government Securities Fund is determined at the end of regular trading (normally 4:00 p.m. Eastern time) each day the NYSE is open. The NAV for the Prime Money Market Fund and U.S. Treasury Money Market Fund (together, the "Money Market Funds") is determined at 12:00 noon and 4:00 p.m. (Eastern time).

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A Fund's NAV is determined as follows: The Money Market Funds attempt to stabilize the NAV of their Shares at $1.00 by valuing the portfolio securities using the amortized cost method. The Money Market Funds cannot guarantee that their NAVs will always remain at $1.00 per share. Equity securities are generally valued at the last sale price in the market in which they are primarily traded (either a national securities exchange or the over-the- counter market). Fixed income securities are generally valued according to the mean between bid and asked prices as furnished by an independent pricing service, except that fixed income securities with remaining maturities of less than 60 days at the time of purchase may be valued at amortized cost.

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The minimum initial investment in each Fund is $100,000. Subsequent investments must be in amounts of at least $100. An investor's minimum investment will be calculated by combining all mutual fund accounts it maintains in the Riggs Funds.

How are the Funds Sold?

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The Funds offer two share classes: Class R Shares and Class Y Shares, each represents interests in a single portfolio of securities. This prospectus relates only to Class Y Shares. Each Share class has different sales charges and expenses which affect their performance. Class R Shares are subject to a 0.25% Rule 12b-1 fee (0.50% in the case of Prime Money Market Fund and U.S. Treasury Money Market Fund), and a 0.25% shareholder services fee, and impose a 2.00% CDSC. For more information concerning Class R Shares, contact Riggs Securities Inc. at (202) 835-5300 or outside the Washington, D.C. metropolitan area toll-free at 1-800-934-3883.

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The Funds' Distributor, Federated Securities Corp., markets the Shares described in this prospectus. Class Y Shares of the Funds are sold primarily to trusts, fiduciaries and institutions, and to persons and entities ("Class A shareholders") who held Class Y Shares (formerly known as "Class A Shares") of U.S. Treasury Money Market Fund and Prime Money Market Fund (together, the "Money Market Funds") on June 30, 1998.

The Distributor and its affiliates may pay out of their assets other amounts (including items of material value) to investment professionals for marketing and servicing Shares. The Distributor is a subsidiary of Federated Investors, Inc. (Federated).

How to Purchase Shares

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You may purchase Shares through Riggs Securities Inc. or Riggs Bank. The Funds reserve the right to reject any request to purchase or exchange Shares.

THROUGH RIGGS SECURITIES INC.

To place an order to purchase Shares of a Fund, an investor may write to or call Riggs Securities Inc. at
(202) 835-5300 or outside the Washington, D.C. metropolitan area toll-free at 1-800-934-3883. Representatives are available from 8:30 a.m. to 5:00 p.m. (Eastern time). Payment may be made either by mail or federal funds or by debiting a customer's account at Riggs Bank. With respect to the Money Market Funds, purchase orders must be received by Riggs Securities Inc. before 11:00 a.m. (Eastern time). Payment is normally required on the same business day. With respect to Stock Fund, Small Company Stock Fund and U.S. Government Securities Fund, purchase orders must be received by Riggs Securities Inc. before 4:00 p.m. (Eastern time). Payment is normally required on the next business day.

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By Wire

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With respect to the Money Market Funds, payment by wire must be received by Riggs Securities Inc. before 12:30 p.m. (Eastern time) on the same day as the order is placed to earn dividends for that day. With respect to Stock Fund, Small Company Stock Fund and U.S. Government Securities Fund, payment by wire must be received by Riggs Securities Inc. before 3:00 p.m. (Eastern time) on the next business day after placing the order. You cannot purchase Shares by wire on holidays when wire transfers are restricted.

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By Check

Make your check payable to Riggs Funds, note the name of the Fund and the Share class on the check, and mail it to:

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Riggs Securities Inc.
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P.O. Box 96656
Washington, D.C. 20090-6656

If you send your check by a private courier or overnight delivery service that requires a street address, mail it to:

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Riggs Securities Inc.
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808 17th Street, N.W.
Washington, D.C. 20006

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Payment should be made in U.S. dollars and drawn on a U.S. bank. The Funds reserve the right to reject any purchase request. For example, to protect against check fraud the Funds may reject any purchase request involving a check that is not made payable to The Riggs Funds (including, but not limited to, requests to purchase Shares using third-party checks), or involving temporary checks or credit cards.

Orders received by mail are considered received after payment by check is converted by Riggs Bank into federal funds. This is normally the next business day.

THROUGH AUTOMATIC INVESTING PROGRAMS OFFERED THROUGH RIGGS BANK

If you were a holder of Class Y Shares of a Money Market Fund at December 31, 1999, you may establish an account with Riggs Securities Inc., or Riggs Bank to automatically purchase Class Y Shares of Prime Money Market Fund or U.S. Treasury Money Market Fund when your bank account reaches a certain level. Prospective investors in an Automatic Investing Program should refer to the Riggs Securities Inc. or Riggs Bank Service Agreement for details regarding the services, fees, restrictions, and limitations related to the Automatic Investment Program. You should read this prospectus along with the Service Agreement.

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BY SYSTEMATIC INVESTMENT PROGRAM

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If you were a holder of Class Y Shares of a Money Market Fund at December 31, 1999, you may add to your investment on a regular basis in a minimum amount of $50. Under this program, funds may be automatically withdrawn on a periodic schedule from the shareholder's checking or savings account or an account in one of the Riggs Funds and invested in Fund Shares at the NAV next determined after an order is received. Shareholders may apply for participation in this program through Riggs Securities Inc., Riggs Bank or an authorized broker/dealer.

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Due to the nature of the Automatic Investing Programs, systematic investment privileges are unavailable to participants in these programs.

BY AUTOMATED CLEARING HOUSE (ACH)

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If you were a holder of Class Y Shares of a Money Market Fund at December 31, 1999, you may purchase additional Shares through a depository institution that is an ACH member. This purchase option can be established by completing the appropriate sections of the New Account Form.

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RETIREMENT INVESTMENTS

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Shares of the Funds can be purchased as an investment for retirement plans or for IRA accounts. For further details, contact Riggs Securities Inc. and consult a tax adviser.

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How to Redeem Shares

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Each Fund redeems Class Y Shares at their NAV (with the exception of the Money Market Funds, unless the Money Market Fund Shares were acquired in exchange for Class R Shares of a Fund which is not a Money Market Fund) next determined after Riggs Securities Inc. receives the redemption request.

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DIRECTLY FROM THE FUND

By Telephone

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You may redeem Shares by calling Riggs Securities Inc. at (202) 835-5300 or outside the Washington, D.C. metropolitan area toll-free at 1-800-934-3883. An authorization form permitting a Fund to accept telephone redemption requests must first be completed. Although Riggs Securities Inc. does not charge for telephone redemptions, it reserves the right to charge a fee for the cost of wire-transferred redemptions of less than $5,000, or in excess of one per month.

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With respect to Stock Fund, Small Company Stock Fund and U.S. Government Securities Fund, if you call before the end of regular trading on the NYSE (normally 4:00 p.m. Eastern time) you will receive a redemption amount based on that day's NAV.

By Mail

You may redeem Shares by mailing a written request to:

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Riggs Securities Inc.
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P.O. Box 96656
Washington, D.C. 20090-6656

Send requests by private courier or overnight delivery
service to:

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Riggs Securities Inc.
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808 17th Street, N.W.
Washington, D.C. 20006

All requests must include:

Fund Name, Share Class, account number and account registration;
amount to be redeemed; and
signatures of all shareholders exactly as registered.

Call your investment professional or the Fund if you need special instructions.

Signature Guarantees

Signatures must be guaranteed if:

your redemption will be sent to an address other than the address of record;
your redemption will be sent to an address of record that was changed within the last 30 days; or
a redemption is payable to someone other than the shareholder(s) of record.

PAYMENT METHODS FOR REDEMPTIONS

an electronic transfer to your account at a financial institution that is an ACH member; or
wire payment to your account at a domestic commercial bank that is a Federal Reserve System member.

Redemption in Kind

Although the Funds intend to pay Share redemptions in cash, they reserve the right to pay the redemption price in whole or in part by a distribution of the Funds' portfolio securities.

LIMITATIONS ON REDEMPTION PROCEEDS

Redemption proceeds normally are wired or mailed within one business day after receiving a request in proper form. Payment may be delayed up to seven days:

to allow your purchase to clear;
during periods of market volatility; or
when a shareholder's trade activity or amount adversely impacts the Funds' ability to manage its assets.

You will not accrue interest or dividends on uncashed checks from a Fund if those checks are undeliverable and returned to a Fund.

REDEMPTIONS FROM RETIREMENT ACCOUNTS

CHECKWRITING

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If you were a shareholder of Class Y Shares of a Money Market Fund at December 31, 1999, and have a minimum balance of $5,000, you can redeem Shares by writing a check in the amount of at least $100. Shareholders must complete the checkwriting section of the account application or complete a subsequent checkwriting application form which can be obtained from Riggs Securities Inc. The Fund will then provide checks. Checks cannot be used to close a shareholder's account. Checkwriting is not permitted with respect to Shares held in IRA accounts, corporate accounts, or an Automatic Investing Program. For further information, contact RFSS at (202) 835-5300 or outside the Washington, D.C. metropolitan area toll-free at 1-800-934-3883.

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SYSTEMATIC WITHDRAWAL PROGRAM

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If you were a shareholder of Class Y Shares of a Money Market Fund at December 31, 1999, you may automatically redeem Shares in a minimum amount of $50 on a regular basis. To be eligible to participate in this program, a shareholder must have an account value of at least $10,000. A shareholder may apply for participation in this program through Riggs Securities Inc., Riggs Bank or an authorized broker or dealer. This program may reduce, and eventually deplete, your account. Payments should not be considered yield or income.

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Due to the nature of the Automatic Investment Programs, systematic withdrawal privileges are not available to participants in those programs.

SYSTEMATIC EXCHANGE PROGRAM

If you were a holder of Class Y Shares of a Money Market Fund at December 31, 1999, you may automatically exchange Shares of a predetermined amount on a monthly, quarterly or annual basis and may take advantage of a systematic exchange privilege. The minimum amount that may be exchanged is $50. Shareholders interested in participating in this program should contact RFSS.

ADDITIONAL CONDITIONS

Telephone Transactions

The Funds will record your telephone instructions. If a Fund does not follow reasonable procedures, it may be liable for losses due to unauthorized or fraudulent telephone instructions.

Share Certificates

The Funds no longer issues Share certificates. If you are redeeming or exchanging Shares represented by certificates previously issued by a Fund, you must return the certificates with your written redemption or exchange request. For your protection, send your certificates by registered or certified mail, but do not endorse them.

Account and Share Information

CONFIRMATIONS AND ACCOUNT STATEMENTS

You will receive confirmation of purchases and redemptions except for systematic transactions. In addition, you will receive periodic statements reporting all account activity, including systematic transactions, dividends and capital gains paid.

DIVIDENDS AND CAPITAL GAINS

With respect to the Money Market Funds and U.S. Government Securities Fund, dividends are declared daily and paid monthly. With respect to the Stock Fund and Small Company Stock Fund, dividends are declared and paid quarterly. Unless shareholders request cash payments by so indicating on the account application or by writing to one of these Funds, dividends are automatically reinvested in additional Shares of the respective Fund on payment dates at NAV on the ex-dividend date without a sales charge.

ACCOUNTS WITH LOW BALANCES

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Due to the high cost of maintaining non-retirement accounts with low balances, accounts may be closed if redemptions or exchanges cause the account balance to fall below the minimum initial investment amount. Before an account is closed, you will be notified and allowed 30 days to purchase additional Shares to meet the minimum. The required minimum may be waived for employees or retirees of Riggs National Corporation and/or its subsidiaries, employees of any broker/dealer operating on the premises of Riggs Bank, and their spouses and children under 21.

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TAX INFORMATION

The Funds send an annual statement of your account activity to assist you in completing your federal, state, and local tax returns. Fund distributions of dividends and capital gains are taxable to you whether paid in cash or reinvested in a Fund. Dividends are taxable as ordinary income; capital gains are taxable at different rates depending upon the length of time a Fund holds its assets.

Who Manages the Funds?

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THE FUNDS' PORTFOLIO MANAGERS ARE:

A team composed of investment managers with extensive equity research and stock selection experience at Riggs, are jointly and primarily responsible for the day-to-day management of Stock Fund and Small Company Stock Fund.

A team composed of investment managers with extensive fixed income research and security selection experience at Riggs, are jointly and primarily responsible for the day-to-day management of U.S. Government Securities Fund, Prime Money Market Fund and U.S. Treasury Money Market Fund.

ADVISORY FEES

The Adviser receives an annual investment advisory fee at annual rates equal to percentages of the relevant Fund's average net assets as follows: Stock Fund--0.75%; Small Company Stock Fund-- 0.80%; U.S. Government Securities Fund--0.75%; Prime Money Market Fund and U.S. Treasury Money Market Fund--0.50%. The Adviser may voluntarily waive a portion of its fee or reimburse the Funds for certain operating expenses.

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FINANCIAL HIGHLIGHTS

The following Financial Highlights will help you understand the Funds' financial performance for the past five fiscal years, or since inception, if the life of a Fund is shorter. Some of the information is presented on a per share basis. Total returns represent the rate an investor would have earned (or lost) on an investment in the Funds, assuming reinvestment of any dividends and capital gains. This information for each of the years in the two-year period ended April 30, 2003, has been audited by KPMG LLP, whose report, along with the Funds' audited financial statements, is included in the Annual Report. Information for all other years and periods was audited by the Funds' previous auditors.

Riggs Funds
Financial Highlights Class Y Shares

(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD).

Year Ended April 30,	Net Asset Value, beginning of period	Net Investment Income (Net Operating Loss)	Net Realized and Unrealized Gain (Loss) on Investments	Total From Investment Operations	Distributions from Net Investment Income	Distributions from Net Realized Gain on Investments
Stock Fund
2000³	$12.38	0.01	0.85	0.86	(0.01)	--
2001	$13.23	0.00^5,6	(1.50)	(1.50)	--	(2.71)
2002	$9.02	(0.02)⁵	(1.56)	(1.58)	--	(0.08)
2003	$7.36	0.01⁵	(1.02)	(1.01)	--	--
Small Company Stock Fund
2000³	$11.50	0.00^5,6	1.68	1.68	--	--
2001	$13.18	0.02	(0.11)	(0.09)	--	(1.77)
2002	$11.32	(0.06)⁵	1.17	1.11	(0.01)	--
2003	$12.42	(0.08)⁵	(1.38)	(1.46)	--	(0.18)
U.S. Government Securities Fund
2000³	$9.42	0.19	0.05	0.24	(0.19)	--
2001	$9.47	0.54	0.45	0.99	(0.53)	--
2002	$9.93	0.48^5,8	0.11⁸	0.59	(0.52)	--
2003	$10.00	0.43⁵	0.51	0.94	(0.50)	--
Prime Money Market Fund
1999	$1.00	0.05	0.00⁶	0.05	(0.05)	--
2000	$1.00	0.05	(0.00)⁶	0.05	(0.05)	--
2001	$1.00	0.06	0.00⁶	0.06	(0.06)	--
2002	$1.00	0.02	(0.00)⁶	0.02	(0.02)	--
2003	$1.00	0.01	--	0.01	(0.01)	--
U.S. Treasury Money Market Fund
1999	$1.00	0.04	--	0.04	(0.04)	--
2000	$1.00	0.04	(0.00)⁶	0.04	(0.04)	--
2001	$1.00	0.05	0.00⁶	0.05	(0.05)	--
2002	$1.00	0.02	--	0.02	(0.02)	--
2003	$1.00	0.01	--	0.01	(0.01)	--

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(1) Based on net asset value, which does not reflect the sales charge or contingent deferred sales charge, if applicable.

(2) This voluntary expense decrease is reflected in both the expense and the net investment income (net operating loss) ratios shown above.

(3) Reflects operations for the period from December 20, 1999 (date of initial public investment) to April 30, 2000.

(4) Computed on an annualized basis.

(5) Per share amount is based upon the average number of shares outstanding.

(6) Per share amount does not round to $0.01 or $(0.01).

(7) Percentage amount does not round to 0.01%.

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(8) Effective May 1, 2001, the U.S. Government Securities Fund adopted the provisions of the American Institute of Certified Public Accountants ("AICPA") Audit and Accounting Guide for Investment Companies and began accreting discount/amortizing premium on long-term debt securities. The effect of this change for the year ended April 30, 2002 was to decrease net investment income per share by $0.07, increase net realized and unrealized gain/loss per share by $0.07 and decrease the ratio of net investment income to average net assets from 5.35% to 4.77%. Per share, ratios and supplemental data for periods prior May 1, 2001 have not been restated to reflect this change in presentation.

(9) On April 24, 2003, the advisor made a voluntary payment to the Fund for expired capital losses. This voluntary contribution had no effect on the fund's total return.

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			Ratios to Average Net Assets
Total Distributions	Net Asset Value, end of period	Total Return¹	Expenses	Net Investment Income (Net Operating Loss)	Expense waiver/ reimbursement²	Net Assets, end of period (000 omitted)	Portfolio Turnover

(0.01)	$13.23	6.98%	1.20%⁴	0.14%⁴	0.12%⁴	$107,045	79%
(2.71)	$9.02	(12.01)%	1.27%	(0.03)%	0.01%	$57,861	95%
(0.08)	$7.36	(17.61)%	1.36%	(0.21)%	--	$32,406	49%
--	$6.35	(13.72)%	1.43%	0.23%	--	$8,759	99%

--	$13.18	14.61%	1.37%⁴	0.02%⁴	0.11%⁴	$57,182	116%
(1.77)	$11.32	1.04%	1.35%	0.12%	0.00%⁷	$38,893	146%
(0.01)	$12.42	9.79%	1.41%	(0.50)%	--	$29,114	183%
(0.18)	$10.78	(11.65)%	1.45%	(0.74)%	--	$14,686	213%

(0.19)	$9.47	2.58%	0.81%⁴	5.57%⁴	0.55%⁴	$102,968	55%
(0.53)	$9.93	10.72%	0.68%	5.52%	0.55%	$84,298	58%
(0.52)	$10.00	6.04%	0.71%	4.77%⁸	0.55%	$69,463	64%
(0.50)	$10.44	9.56%	0.71%	4.16%	0.55%	$26,960	22%

(0.05)	$1.00	4.76%	0.69%	4.65%	0.25%	$425,054	--
(0.05)	$1.00	4.90%	0.72%	4.83%	0.25%	$323,076	--
(0.06)	$1.00	5.69%	0.72%	5.56%	0.25%	$243,367	--
(0.02)	$1.00	2.31%	0.72%	2.30%	0.25%	$230,531	--
(0.01)	$1.00	0.94%⁹	0.72%	0.95%	0.25%	$191,104	--

(0.04)	$1.00	4.49%	0.72%	4.39%	0.25%	$138,097	--
(0.04)	$1.00	4.57%	0.75%	4.52%	0.25%	$150,085	--
(0.05)	$1.00	5.48%	0.73%	5.35%	0.25%	$159,287	--
(0.02)	$1.00	2.12%	0.73%	2.26%	0.25%	$81,867	--
(0.01)	$1.00	0.74%	0.76%	0.76%	0.25%	$61,568	--

</R>

Riggs Funds

CLASS Y SHARES

Riggs Stock Fund
Riggs Small Company Stock Fund
Riggs U.S. Government Securities Fund
Riggs Prime Money Market Fund
Riggs U.S. Treasury Money Market Fund

<R>

JUNE 30, 2003

A Statement of Additional Information (SAI) dated June 30, 2003 is incorporated by reference into this prospectus. Additional information about the Funds' and their investments is contained in the Funds' SAI, and Annual and Semi-Annual Reports to shareholders as they become available. The Annual Report discusses market conditions and investment strategies that significantly affected the Funds' performance during their last fiscal year. To obtain the SAI, the Annual Report, Semi-Annual Report and other information without charge, call your investment professional or Riggs Funds Shareholder Services at (202) 835-5300 or outside the Washington, D.C. metropolitan area toll-free at 1-800-934-3883.

</R>

You can obtain information about the Funds (including the SAI) by writing to or visiting the SEC's Public Reference Room in Washington, DC. You may also access Fund information from the EDGAR Database on the SEC's Internet site at http://www.sec.gov. You can purchase copies of this information by contacting the SEC by email at publicinfo@sec.gov. or by writing to the SEC's Public Reference Section, Washington, D.C. 20549-0102. Call 1-202-942-8090 for information on the SEC's Public Reference Room's operations and copying fees.

Investment Company Act File No. 811-6309

Cusip 76656A	781	Riggs Stock Fund	RIYSX
Cusip 76656A	799	Riggs Small Company Stock Fund	RISYX
Cusip 76656A	773	Riggs U.S. Government Securities Fund	RIUSX
Cusip 76656A	104	Riggs Prime Money Market Fund	RYPXX
Cusip 76656A	302	Riggs U.S. Treasury Money Market Fund	RYTXX

<R>

G00355-02 (06/03)

</R>

Cusip 76656A 781

Cusip 76656A 799

Cusip 76656A 773

Cusip 76656A 104

Cusip 76656A 302

<R>

G00355-02 (6/03)

</R>

RIGGS FUNDS

Riggs Stock Fund
Class R Shares
Class Y Shares
Riggs Small Company Stock Fund
Class R Shares
Class Y Shares
Riggs U.S. Government Securities Fund
Class R Shares
Class Y Shares
Riggs Bond Fund
Class R Shares
<R>
Riggs Short Term Tax Free Bond Fund (formerly Riggs Intermediate Tax Free Bond Fund)
Class R Shares
Riggs Intermediate Tax Free Bond Fund (formerly Riggs Long Term Tax Free Bond Fund)
Class R Shares
</R>
Riggs Prime Money Market Fund
Class R Shares
Class Y Shares
Riggs U.S. Treasury Money Market Fund
Class R Shares
Class Y Shares

Statement of Additional Information
<R>
June 30, 2003

This Statement of Additional Information (SAI) is not a prospectus. Read this SAI in
conjunction with the prospectuses for Riggs Funds
dated June 30, 2003.

</R>

This SAI incorporates by reference the Funds' Annual Report. Obtain the prospectuses or the
Annual Report without charge by calling
Riggs Funds Shareholder Services at (202) 835-5300 or outside the Washington, D.C.
metropolitan area toll-free at 1-800-934-3883.

<R>

============================================================================================
CONTENTS
How Are the Funds Organized?.......................................... 1
Securities in Which the Funds Invest.................................. 1
What Do Shares Cost?..................................................16
How Are the Funds Sold?...............................................17
Subaccounting Services................................................18
Redemption in Kind....................................................18
Massachusetts Partnership Law.........................................18
Account and Share Information.........................................18
Tax Information.......................................................19
Who Manages and Provides Services to the Funds?.......................20
Fees Paid by the Funds for Services...................................29
How Do the Funds Measure Performance?.................................30
Financial Information.................................................35
Investment Ratings....................................................36
Addresses.......................................................Back Cover
</R>
Federated Securities Corp., Distributor,
subsidiary of Federated Investors, Inc.
<R>
1061803B (06/03)
<R>

HOW ARE THE FUNDS ORGANIZED?
============================================================================================

<R>
Riggs Funds (the "Trust") is a diversified, open-end management investment company that was
established under the laws of the Commonwealth of Massachusetts on April 1, 1991. The Trust
may offer separate series of Shares representing interests in separate portfolios of
securities. The Board of Trustees (the Board) has established two classes of Shares known
as Class R Shares and Class Y Shares. This SAI relates to both classes of Shares. The
Funds' investment adviser is Riggs Investment Advisors Inc. (Adviser).
</R>

SECURITIES IN WHICH THE FUNDS INVEST
============================================================================================

In pursuing their investment strategy, the Funds may invest in the following securities for
any purpose that is consistent with their investment objective.

The following table indicates which types of securities are a:

P = Principal investment of a Fund;
A = Acceptable (but not principal) investment of a Fund; or
N = Not an acceptable investment of a Fund.

<R>
--------------------------------------------------------------------------------------
---------------------- Stock Small U.S. Bond Short IntermediPrime U.S.
Securities Fund Company GovernmenFund Term Tax Money Treasury
Stock Securities Tax Free Market Money
Fund Fund Free Bond Fund Market
Bond Fund Fund
Fund
--------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------
Agency Securities A A P A A A P N
--------------------------------------------------------------------------------------
American Depository A A N A N N N N
Receipts 1
-------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------
Asset Backed N N A A N N N N
Securities
--------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------
Bank Instruments A A A A A A P N
--------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------
Collateralized N N P A N N N N
Mortgage Obligations
--------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------
Commercial Paper 2, 3 A A A P A A P N
--------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------
Common Stocks P P N A N N N N
--------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------
Convertible Securities A A N P A A N N
--------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------
Corporate Debt A A A P A A P N
Obligations 4
--------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------
Credit Enhancement 5 A A N A P P P N
--------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------
Demand Instruments A A A A A A A N
--------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------
Foreign Securities A A N A N N N N
--------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------
Futures and Options A A A A A A N N
Transactions
--------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------
General Obligation N N N A P P N N
Bonds
--------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------
Insurance Contracts N N N A N N A N
--------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------
Inverse Floaters N N N A A A N N
--------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------
Mortgage Backed N N P A N N N N
Securities
--------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------
Municipal Securities N N N P P P N N
--------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------
Preferred Stocks A A N P N N N N
--------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------
Private Activity Bonds N N N N P P A N
--------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------
Real Estate A A N A N N N N
Investment Trusts
--------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------
Repurchase Agreements A A A P P P A P
--------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------
Reverse Repurchase A A A A A A A A
Agreements
--------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------
Securities of Other A A A A A A A A
Investment Companies
--------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------
Special Revenue Bonds N N N A P P N N
--------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------
Treasury Securities A A P A A A P P
--------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------
Variable Rate Demand A A A A P P P N
Notes
--------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------
Warrants A A N A N N N N
--------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------
When-Issued A A A P P P A A
Transactions
--------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------
Zero Coupon Securities N N A A A A A N
--------------------------------------------------------------------------------------

</R>

1. Stock Fund and Small Company Stock Fund may invest up to 20% of their total assets in
American Depositary Receipts (ADRs).
2. U.S. Government Securities Fund may invest in commercial paper that has at least two
high quality ratings by a nationally recognized statistical rating organization (NRSRO).
3. Stock Fund and Small Company Stock Fund may invest in commercial paper rated A-1 by
Standard & Poor's (S&P), Prime-1 by
Moody's Investors Service (Moody's) or F-1+ or F-1 by Fitch Ratings (Fitch).
4. U.S. Government Securities Fund may invest in corporate debt obligations and U.S. dollar
denominated debt obligations of foreign corporations and governments rated Baa or better,
Aaa, Aa or A by Moody's; BBB or better, AAA, AA or A by S&P; or BBB or better, AAA, AA, or
A by Fitch. The Fund will limit its investment in bonds rated in the lowest investment
grade category to 10% of its total assets. In the event that any such security is
downgraded below the fourth highest rating category, the Fund will dispose of the security.
5. Prime Money Market Fund may have more than 25% of its total assets invested in
securities credit-enhanced by banks.

SECURITIES DESCRIPTIONS AND TECHNIQUES

Equity Securities
Equity securities represent a share of an issuer's earnings and assets, after the issuer
pays its liabilities. A Fund cannot predict the income it will receive from equity
securities, because issuers generally have discretion as to the payment of any dividends or
distributions. However, equity securities offer greater potential for appreciation than
many other types of securities, because their value increases directly with the value of
the issuer's business. The following describes the types of equity securities in which a
Fund invests:

Common Stocks
Common stocks are the most prevalent type of equity security. Common stocks receive the
issuer's earnings after the issuer pays its creditors and any preferred stockholders. As
a result, changes in an issuer's earnings directly influence the value of its common
stock.

Preferred Stocks
Preferred stocks have the right to receive specified dividends or distributions before
the issuer makes payments on its common stock. Some preferred stocks also participate in
dividends and distributions paid on common stock. Preferred stocks may also permit the
issuer to redeem the stock. A Fund may treat such redeemable preferred stock as a fixed
income security.

Real Estate Investment Trusts (REITs)
REITs are real estate investment trusts that lease, operate and finance commercial real
estate. REITs are exempt from federal corporate income tax if they limit their
operations and distribute most of their income. Such tax requirements limit a REIT's
ability to respond to changes in the commercial real estate market.

Warrants
Warrants give a Fund the option to buy the issuer's equity securities at a specified
price (the exercise price) at a specified future date (the expiration date). A Fund may
buy the designated securities by paying the exercise price before the expiration date.
Warrants may become worthless if the price of the stock does not rise above the exercise
price by the expiration date. This increases the market risks of warrants as compared to
the underlying security.

Rights are the same as warrants, except companies typically issue rights to existing
stockholders.

Fixed Income Securities
Fixed income securities pay interest, dividends, or distributions at a specified rate. The
rate may be a fixed percentage of the principal or adjusted periodically. In addition, the
issuer of a fixed income security must repay the principal amount of the security, normally
within a specified time. Fixed income securities provide more regular income than equity
securities. However, the returns on fixed income securities are limited and normally do not
increase with the issuer's earnings. This limits the potential appreciation of fixed income
securities as compared to equity securities.

A security's yield measures the annual income earned on a security as a percentage of its
price. A security's yield will increase or decrease depending upon whether it costs less (a
discount) or more (a premium) than the principal amount. If the issuer may redeem the
security before its scheduled maturity, the price and yield on a discount or premium
security may change based upon the probability of an early redemption. Securities with
higher risks generally have higher yields.

The following describes the types of fixed income securities in which a Fund may invest:

Treasury Securities
Treasury securities are direct obligations of the federal government of the United
States. Treasury securities are generally regarded as having the lowest credit risks.

Agency Securities
Agency securities are issued or guaranteed by a federal agency or other government
sponsored entity acting under federal authority (a GSE). The United States supports some
GSEs with its full faith and credit. Other GSEs receive support through federal
subsidies, loans, or other benefits. A few GSEs have no explicit financial support, but
are regarded as having implied support because the federal government sponsors their
activities. Agency securities are generally regarded as having low credit risks, but not
as low as Treasury securities.

A Fund treats mortgage backed securities guaranteed by GSEs as agency securities.
Although a GSE guarantee protects against credit risks, it does not reduce the market
and prepayment risks of these mortgage backed securities.

Corporate Debt Securities
Corporate debt securities are fixed income securities issued by businesses. Notes,
bonds, debentures and commercial paper are the most prevalent types of corporate debt
securities. A Fund may also purchase interests in bank loans to companies. The credit
risks of corporate debt securities vary widely among issuers. In addition, the credit
risk of an issuer's debt security may vary based on its priority for repayment. For
example, higher ranking (senior) debt securities have a higher priority than lower
ranking (subordinated) securities. This means that the issuer might not make payments on
subordinated securities while continuing to make payments on senior securities. In
addition, in the event of bankruptcy, holders of senior securities may receive amounts
otherwise payable to the holders of subordinated securities. Some subordinated
securities, such as trust preferred and capital securities notes, also permit the issuer
to defer payments under certain circumstances. For example, insurance companies issue
securities known as surplus notes that permit the insurance company to defer any payment
that would reduce its capital below regulatory requirements.

Commercial Paper
Commercial paper is an issuer's obligation with a maturity of less than nine months.
Companies typically issue commercial paper to pay for current expenditures. Most
issuers constantly reissue their commercial paper and use the proceeds (or bank
loans) to repay maturing paper. If the issuer cannot continue to obtain liquidity in
this fashion, its commercial paper may default.

Demand Instruments
Demand instruments are corporate debt securities that the issuer must repay upon
demand. Other demand instruments require a third party, such as a dealer or bank, to
repurchase the security for its face value upon demand. A Fund treats demand
instruments as short-term securities, even though their stated maturity may extend
beyond one year.

Municipal Securities
Municipal securities are issued by states, counties, cities and other political
subdivisions and authorities. Although many municipal securities are exempt from federal
income tax, a Fund may invest in taxable municipal securities.

Mortgage Backed Securities
Mortgage backed securities represent interests in pools of mortgages. The mortgages that
comprise a pool normally have similar interest rates, maturities and other terms.
Mortgages may have fixed or adjustable interest rates. Interests in pools of adjustable
rate mortgages are known as ARMs.

Mortgage backed securities come in a variety of forms. Many have extremely complicated
terms. The simplest form of mortgage backed securities is a pass-through certificate. An
issuer of pass-through certificates gathers monthly payments from an underlying pool of
mortgages. Then, the issuer deducts its fees and expenses and passes the balance of the
payments on to the certificate holders once a month. Holders of pass-through
certificates receive a pro rata share of all payments and pre-payments from the
underlying mortgages. As a result, the holders assume all the prepayment risks of the
underlying mortgages.

Collateralized Mortgage Obligations (CMOs)
CMOs, including interests in real estate mortgage investment conduits (REMICs),
allocate payments and prepayments from an underlying pass-through certificate among
holders of different classes of mortgage backed securities. This creates different
prepayment and interest rate risks for each CMO class. The degree of increased or
decreased prepayment risks depends upon the structure of the CMOs. However, the
actual returns on any type of mortgage backed security depend upon the performance of
the underlying pool of mortgages, which no one can predict and will vary among pools.

Sequential CMOs
In a sequential pay CMO, one class of CMOs receives all principal payments and
prepayments. The next class of CMOs receives all principal payments after the
first class is paid off. This process repeats for each sequential class of CMO. As
a result, each class of sequential pay CMOs reduces the prepayment risks of
subsequent classes.

PACs, TACs and Companion Classes
More sophisticated CMOs include planned amortization classes (PACs) and targeted
amortization classes (TACs). PACs and TACs are issued with companion classes. PACs
and TACs receive principal payments and prepayments at a specified rate. The
companion classes receive principal payments and prepayments in excess of the
specified rate. In addition, PACs will receive the companion classes' share of
principal payments, if necessary, to cover a shortfall in the prepayment rate.
This helps PACs and TACs to control prepayment risks by increasing the risks to
their companion classes.

IOs and POs
CMOs may allocate interest payments to one class (Interest Only or IOs) and
principal payments to another class (Principal Only or POs). POs increase in value
when prepayment rates increase. In contrast, IOs decrease in value when
prepayments increase, because the underlying mortgages generate less interest
payments. However, IOs tend to increase in value when interest rates rise (and
prepayments decrease), making IOs a useful hedge against interest rate risks.

Floaters and Inverse Floaters
Another variant allocates interest payments between two classes of CMOs. One class
(Floaters) receives a share of interest payments based upon a market index such as
the London Interbank Offered Rate (LIBOR). The other class (Inverse Floaters)
receives any remaining interest payments from the underlying mortgages. Floater
classes receive more interest (and Inverse Floater classes receive correspondingly
less interest) as interest rates rise. This shifts prepayment and interest rate
risks from the Floater to the Inverse Floater class, reducing the price volatility
of the Floater class and increasing the price volatility of the Inverse Floater
class.

Z Classes and Residual Classes
CMOs must allocate all payments received from the underlying mortgages to some
class. To capture any unallocated payments, CMOs generally have an accrual (Z)
class. Z classes do not receive any payments from the underlying mortgages until
all other CMO classes have been paid off. Once this happens, holders of Z class
CMOs receive all payments and prepayments. Similarly, REMICs have residual
interests that receive any mortgage payments not allocated to another REMIC class.

The degree of increased or decreased prepayment risks depends upon the structure
of the CMOs. However, the actual returns on any type of mortgage backed security
depend upon the performance of the underlying pool of mortgages, which no one can
predict and will vary among pools.

Asset Backed Securities
Asset backed securities are payable from pools of obligations other than mortgages. Most asset
backed securities involve consumer or commercial debts with maturities of less than ten
years. However, almost any type of fixed income assets (including other fixed income
securities) may be used to create an asset backed security. Asset backed securities may
take the form of commercial paper, notes, or pass through certificates. Asset backed
securities have prepayment risks. Like CMOs, asset backed securities may be structured
like Floaters, Inverse Floaters, IOs and POs.

Zero Coupon Securities
Zero coupon securities do not pay interest or principal until final maturity unlike debt
securities that provide periodic payments of interest (referred to as a coupon payment).
Investors buy zero coupon securities at a price below the amount payable at maturity.
The difference between the purchase price and the amount paid at maturity represents
interest on the zero coupon security. Investors must wait until maturity to receive
interest and principal, which increases the market and credit risks of a zero coupon
security. A zero coupon step-up security converts to a coupon security before final
maturity.

There are many forms of zero coupon securities. Some are issued at a discount and are
referred to as zero coupon or capital appreciation bonds. Others are created from
interest bearing bonds by separating the right to receive the bond's coupon payments
from the right to receive the bond's principal due at maturity, a process known as
coupon stripping. Treasury STRIPs, IOs and POs are the most common forms of stripped
zero coupon securities. In addition, some securities give the issuer the option to
deliver additional securities in place of cash interest payments, thereby increasing the
amount payable at maturity. These are referred to as pay-in-kind or PIK securities.

Bank Instruments
Bank instruments are unsecured interest bearing deposits with banks. Bank instruments
include bank accounts, time deposits, certificates of deposit and banker's acceptances.
Yankee instruments are denominated in U.S. dollars and issued by U.S. branches of
foreign banks. Eurodollar instruments are denominated in U.S. dollars and issued by
non-U.S. branches of U.S. or foreign banks.

Insurance Contracts
Insurance contracts include guaranteed investment contracts, funding agreements and
annuities. A Fund treats these contracts as fixed income securities.

Credit Enhancement
<R>

Credit enhancement consists of an arrangement in which a company agrees to pay amounts
due on a fixed income security if the issuer defaults. In some cases the company
providing credit enhancement makes all payments directly to the security holders and
receives reimbursement from the issuer. Normally, the credit enhancer has greater
financial resources and liquidity than the issuer. For this reason, the Adviser usually
evaluates the credit risk of a fixed income security based solely upon its credit
enhancement.

</R>

Common types of credit enhancement include guarantees, letters of credit, bond insurance
and surety bonds. Credit enhancement also includes arrangements where securities or
other liquid assets secure payment of a fixed income security. If a default occurs,
these assets may be sold and the proceeds paid to a security's holders. Either form of
credit enhancement reduces credit risks by providing another source of payment for a
fixed income security.

Convertible Securities
Convertible securities are fixed income securities that a Fund has the option to exchange
for equity securities at a specified conversion price. The option allows a Fund to realize
additional returns if the market price of the equity securities exceeds the conversion
price. For example, a Fund may hold fixed income securities that are convertible into
shares of common stock at a conversion price of $10 per share. If the market value of the
shares of common stock reached $12, a Fund could realize an additional $2 per share by
converting its fixed income securities.

Convertible securities have lower yields than comparable fixed income securities. In
addition, at the time a convertible security is issued the conversion price exceeds the
market value of the underlying equity securities. Thus, convertible securities may provide
lower returns than non-convertible fixed income securities or equity securities depending
upon changes in the price of the underlying equity securities. However, convertible
securities permits a Fund to realize some of the potential appreciation of the underlying
equity securities with less risk of losing its initial investment, but the value of the
convertible security may also be adversely affected by the source of the potential
depreciation of the equity security.

A Fund treats convertible securities as both fixed income and equity securities for
purposes of its investment policies and limitations, because of their unique
characteristics.

Tax Exempt Securities
Tax exempt securities are fixed income securities that pay interest that is not subject to
regular federal income taxes. Typically, states, counties, cities and other political
subdivisions and authorities issue tax exempt securities. The market categorizes tax
exempt securities by their source of repayment.

General Obligation Bonds
General obligation bonds are supported by the issuer's power to exact property or other
taxes. The issuer must impose and collect taxes sufficient to pay principal and interest
on the bonds. However, the issuer's authority to impose additional taxes may be limited
by its charter or state law.

Special Revenue Bonds
Special revenue bonds are payable solely from specific revenues received by the issuer
such as specific taxes, assessments, tolls, or fees. Bondholders may not collect from
the municipality's general taxes or revenues. For example, a municipality may issue
bonds to build a toll road and pledge the tolls to repay the bonds. Therefore, a
shortfall in the tolls normally would result in a default on the bonds.

Private Activity Bonds
Private activity bonds are special revenue bonds used to finance private entities. For
example, a municipality may issue bonds to finance a new factory to improve its local
economy. The municipality would lend the proceeds from its bonds to the company using
the factory, and the company would agree to make loan payments sufficient to repay the
bonds. The bonds would be payable solely from the company's loan payments, not from any
other revenues of the municipality. Therefore, any default on the loan normally would
result in a default on the bonds.

The interest on many types of private activity bonds is subject to the federal
alternative minimum tax (AMT). A Fund may invest in bonds subject to AMT.

Tax Increment Financing Bonds
Tax increment financing (TIF) bonds are payable from increases in taxes or other
revenues attributable to projects financed by the bonds. For example, a municipality may
issue TIF bonds to redevelop a commercial area. The TIF bonds would be payable solely
from any increase in sales taxes collected from merchants in the area. The bonds could
default if merchants' sales and related tax collections, failed to increase as
anticipated.

Variable Rate Demand Instruments
Variable rate demand instruments are tax exempt securities that require the issuer or a
third party, such as a dealer or bank, to repurchase the security for its face value
upon demand. The securities also pay interest at a variable rate intended to cause the
securities to trade at their face value. A Fund treats demand instruments as short-term
securities, because their variable interest rate adjusts in response to changes in
market rates, even though their stated maturity may extend beyond thirteen months.

Municipal Notes
Municipal notes are short-term tax exempt securities. Many municipalities issue such
notes to fund their current operations before collecting taxes or other municipal
revenues. Municipalities may also issue notes to fund capital projects prior to issuing
long-term bonds. The issuers typically repay the notes at the end of their fiscal year,
either with taxes, other revenues, or proceeds from newly issued notes or bonds.

Foreign Securities
Foreign securities are securities of issuers based outside the United States. A Fund
considers an issuer to be based outside the United States if:

o it is organized under the laws of, or has a principal office located in, another
country;

o the principal trading market for its securities is in another country; or

o it (or its subsidiaries) derived in its most current fiscal year at least 50% of its
total assets, capitalization, gross revenue, or profit from goods produced, services
performed, or sales made in another country.

The foreign securities in which a Fund invests are primarily denominated in U.S. dollars.
Along with the risks normally associated with domestic securities of the same type,
foreign securities are subject to risks of foreign investing.

Depositary Receipts
Depositary receipts represent interests in underlying securities issued by a foreign
company. Depositary receipts are not traded in the same market as the underlying
security. The foreign securities underlying American Depositary Receipts (ADRs) are
traded outside the United States. ADRs provide a way to buy shares of foreign-based
companies in the United States rather than in overseas markets. ADRs are also traded in
U.S. dollars, eliminating the need for foreign exchange transactions. The foreign
securities underlying European Depositary Receipts (EDRs), Global Depositary Receipts
(GDRs) and International Depositary Receipts (IDRs), are traded globally or outside the
United States. Depositary receipts involve many of the same risks of investing directly
in foreign securities, including currency risks and risks of foreign investing.

Derivative Contracts
Derivative contracts are financial instruments that require payments based upon changes in
the values of designated (or underlying) securities, currencies, commodities, financial
indices, or other assets. Some derivative contracts (such as futures, forwards and options)
require payments relating to a future trade involving the underlying asset. Other
derivative contracts (such as swaps) require payments relating to the income or returns
from the underlying asset. The other party to a derivative contract is referred to as a
counterparty.

Many derivative contracts are traded on securities or commodities exchanges. In this case,
the exchange sets all the terms of the contract except for the price. Investors make
payments due under their contracts through the exchange. Most exchanges require investors
to maintain margin accounts through their brokers to cover their potential obligations to
the exchange. Parties to the contract make (or collect) daily payments to the margin
accounts to reflect losses (or gains) in the value of their contracts. This protects
investors against potential defaults by the counterparty. Trading contracts on an exchange
also allows investors to close out their contracts by entering into offsetting contracts.

For example, a Fund could close out an open contract to buy an asset at a future date by
entering into an offsetting contract to sell the same asset on the same date. If the
offsetting sale price is more than the original purchase price, a Fund realizes a gain; if
it is less, a Fund realizes a loss. Exchanges may limit the amount of open contracts
permitted at any one time. Such limits may prevent a Fund from closing out a position. If
this happens, a Fund will be required to keep the contract open (even if it is losing money
on the contract) and to make any payments required under the contract (even if it has to
sell portfolio securities at unfavorable prices to do so). Inability to close out a
contract could also harm a Fund by preventing it from disposing of or trading any assets it
has been using to secure its obligations under the contract.

A Fund may also trade derivative contracts over-the-counter (OTC) in transactions
negotiated directly between the Fund and the counterparty. OTC contracts do not necessarily
have standard terms, so they cannot be directly offset with other OTC contracts. In
addition, OTC contracts with more specialized terms may be more difficult to price than
exchange traded contracts.

Depending upon how a Fund uses derivative contracts and the relationships between the
market value of a derivative contract and the underlying asset, derivative contracts may
increase or decrease a Fund's exposure to market and currency risks and may also expose a
Fund to liquidity and leverage risks. OTC contracts also expose a Fund to credit risks in
the event that a counterparty defaults on the contract.

A Fund may trade in the following types of derivative contracts:

Futures Contracts
Futures contracts provide for the future sale by one party and purchase by another party
of a specified amount of an underlying asset at a specified price, date and time.
Entering into a contract to buy an underlying asset is commonly referred to as buying a
contract or holding a long position in the asset. Entering into a contract to sell an
underlying asset is commonly referred to as selling a contract or holding a short
position in the asset. Futures contracts are considered to be commodity contracts.
Futures contracts traded OTC are frequently referred to as forward contracts.

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Stock Fund, Small Company Stock Fund, U.S. Government Securities Fund, Bond Fund, Short
Term Tax Free Bond Fund and Intermediate Tax Free Bond Fund may buy/sell the following
types of futures contracts: Financial Futures and Stock Index Futures.

</R>

Options
Options are rights to buy or sell an underlying asset for a specified price (the
exercise price) during, or at the end of, a specified period. A call option gives the
holder (buyer) the right to buy the underlying asset from the seller (writer) of the
option. A put option gives the holder the right to sell the underlying asset to the
writer of the option. The writer of the option receives a payment, or premium, from the
buyer, which the writer keeps regardless of whether the buyer uses (or exercises) the
option.

<R>

Stock Fund, Small Company Stock Fund, U.S. Government Securities Fund, Bond Fund, Short
Term Tax Free Bond Fund and Intermediate Tax Free Bond Fund may:

</R>

o Buy call options on portfolio securities and on futures contracts in anticipation of
an increase in the value of the underlying asset.;

o Buy put options on portfolio securities and on futures contracts in anticipation of a
decrease in the value of the underlying asset.; and

o Buy or write options to close out existing options positions.

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Stock Fund, Small Company Stock Fund, U.S. Government Securities Fund, Bond Fund, Short
Term Tax Free Bond Fund and Intermediate Tax Free Bond Fund may also write call options
to generate income from premiums and in anticipation of a decrease or only limited
increase in the value of the underlying asset. If a call written by a Fund is exercised,
the Fund foregoes any possible profit from an increase in the market price of the
underlying asset over the exercise price plus the premium received.

</R>

When a Fund writes options on futures contracts, it will be subject to margin
requirements similar to those applied to futures contracts.

Special Transactions

Repurchase Agreements
Repurchase agreements are transactions in which a Fund buys a security from a dealer or
bank and agrees to sell the security back at a mutually agreed upon time and price. The
repurchase price exceeds the sale price, reflecting a Fund's return on the transaction.
This return is unrelated to the interest rate on the underlying security. A Fund will enter
into repurchase agreements only with banks and other recognized financial institutions,
such as securities dealers, deemed creditworthy by the Adviser.

A Fund's custodian or subcustodian will take possession of the securities subject to
repurchase agreements. The Adviser or subcustodian will monitor the value of the underlying
security each day to ensure that the value of the security always equals or exceeds the
repurchase price.

Repurchase agreements are subject to counterparty risks.

Reverse Repurchase Agreements
Reverse repurchase agreements are repurchase agreements in which a Fund is the seller
(rather than the buyer) of the securities and agrees to repurchase them at an agreed upon
time and price. A reverse repurchase agreement may be viewed as a type of borrowing by a
Fund. Reverse repurchase agreements are subject to credit risks. In addition, reverse
repurchase agreements create leverage risks because a Fund must repurchase the underlying
security at a higher price, regardless of the market value of the security at the time of
repurchase.

Delayed Delivery Transactions
Delayed delivery transactions, including when issued transactions, are arrangements in
which a Fund buys securities for a set price, with payment and delivery of the securities
scheduled for a future time. During the period between purchase and settlement, no payment
is made by the Fund to the issuer and no interest accrues to the Fund. The Fund records the
transaction when it agrees to buy the securities and reflects their value in determining
the price of its Shares. Settlement dates may be a month or more after entering into these
transactions so that the market values of the securities bought may vary from the purchase
prices. Therefore, delayed delivery transactions create market risks for the Fund. Delayed
delivery transactions also involve credit risks in the event of a counterparty default.
These transactions create leverage risks.

Securities Lending
A Fund may lend portfolio securities to borrowers that the Adviser deems creditworthy. In
return, the Fund receives cash or liquid securities from the borrower as collateral. The
borrower must furnish additional collateral if the market value of the loaned securities
increases. Also, the borrower must pay the Fund the equivalent of any dividends or interest
received on the loaned securities.

A Fund will reinvest cash collateral in securities that qualify as an acceptable investment
for the Fund. However, a Fund must pay interest to the borrower for the use of cash
collateral. Loans are subject to termination at the option of the Fund or the borrower. The
Fund will not have the right to vote on securities while they are on loan, but they will
terminate a loan in anticipation of any important vote. A Fund may pay administrative and
custodial fees in connection with a loan and may pay a negotiated portion of the interest
earned on the cash collateral to a securities lending agent or broker.

Securities lending activities are subject to market risks and credit risks. These
transactions create leverage risks.

Asset Coverage
In order to secure their obligations in connection with derivatives contracts or special
transactions, a Fund will either own the underlying assets, enter into an offsetting
transaction, or set aside readily marketable securities with a value that equals or exceeds
the Fund's obligations. Unless a Fund has other readily marketable assets to set aside, it
cannot trade assets used to secure such obligations without entering into an offsetting
derivative contract or terminating a special transaction. This may cause a Fund to miss
favorable trading opportunities or to realize losses on derivative contracts or special
transactions.

Hedging
Hedging transactions are intended to reduce specific risks. For example, to protect a Fund
against circumstances that would normally cause a Fund's portfolio securities to decline in
value, a Fund may buy or sell a derivative contract that would normally increase in value
under the same circumstances. A Fund may also attempt to hedge by using combinations of
different derivatives contracts, or derivatives contracts and securities. A Fund's ability
to hedge may be limited by the costs of the derivatives contracts. A Fund may attempt to
lower the cost of hedging by entering into transactions that provide only limited
protection, including transactions that (1) hedge only a portion of its portfolio, (2) use
derivatives contracts that cover a narrow range of circumstances, or (3) involve the sale
of derivatives contracts with different terms. Consequently, hedging transactions will not
eliminate risk even if they work as intended. In addition, hedging strategies are not
always successful and could result in increased expenses and losses to a Fund.

Investing in Securities of Other Investment Companies
A Fund may invest its assets in securities of other investment companies, including the
securities of affiliated money market funds, as an efficient means of carrying out its
investment policies and managing its uninvested cash.

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Investment Ratings
An NRSRO's highest rating category is determined without regard for sub-categories and
gradations. For example, securities rated A-1 or A-1+ by S&P, Prime-1 by Moody's, or F-1+
or F-1 by Fitch, are all considered rated in the highest short-term rating category.

Investment Ratings for Corporate Fixed Income Securities
The Adviser will determine whether a security is investment grade based upon the credit
ratings given by one or more nationally recognized rating services. For example, S&P, a
rating service, assigns ratings to securities (AAA, AA, A, BBB and below) based on their
assessment of the likelihood of the issuer's inability to pay interest or principal
(default) when due on each security. Lower credit ratings correspond to higher credit risk.
If a security has not received a rating, a Fund must rely entirely upon the Adviser's
credit assessment that the security is comparable to a rated security.

If a security is downgraded below the minimum quality grade discussed in a Fund's
investment strategy, the Adviser will reevaluate the security, but will not be required to
sell it.

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INVESTMENT RISKS
There are many factors that may affect an investment in the Funds. The Funds' risks are
described below:

Stock Market Risks
The value of equity securities in a Fund's portfolio will rise and fall. These fluctuations
could be a sustained trend or a drastic movement. A Fund's portfolio will reflect changes
in prices of individual portfolio stocks or general changes in stock valuations.
Consequently, a Fund's Share price may decline.

<R>

The Adviser attempts to manage market risk by limiting the amount a Fund invests in each
company's equity securities. However, diversification will not protect a Fund against
widespread or prolonged declines in the stock market.

</R>

Interest Rate Risks
Prices of fixed income securities rise and fall in response to changes in the interest rate
paid by similar securities. Generally, when interest rates rise, prices of fixed income
securities fall. However, market factors, such as the demand for particular fixed income
securities, may cause the price of certain fixed income securities to fall while the prices
of other securities rise or remain unchanged.

Interest rate changes have a greater effect on the price of fixed income securities with
longer durations. Duration measures the price sensitivity of a fixed income security to
changes in interest rates.

Prepayment Risks
Generally, homeowners have the option to prepay their mortgages at any time without
penalty. Homeowners frequently refinance high interest rate mortgages when mortgage rates
fall. This results in the prepayment of mortgage backed securities with higher interest
rates. Conversely, prepayments due to refinancings decrease when mortgage rates increase.
This extends the life of mortgage backed securities with lower interest rates. Other
economic factors can also lead to increases or decreases in prepayments. Increases in
prepayments of high interest rate mortgage backed securities, or decreases in prepayments
of lower interest rate mortgage backed securities, may reduce their yield and price. These
factors, particularly the relationship between interest rates and mortgage prepayments
makes the price of mortgage backed securities more volatile than many other types of fixed
income securities with comparable credit risks.

Mortgage backed securities generally compensate for greater prepayment risk by paying a
higher yield. The difference between the yield of a mortgage backed security and the yield
of a U.S. Treasury security with a comparable maturity (the spread) measures the additional
interest paid for risk. Spreads may increase generally in response to adverse economic or
market conditions. A security's spread may also increase if the security is perceived to
have an increased prepayment risk or perceived to have less market demand. An increase in
the spread will cause the price of the security to decline.

A Fund may have to reinvest the proceeds of mortgage prepayments in other fixed income
securities with lower interest rates, higher prepayment risks, or other less favorable
characteristics.

Risks Related to Investing for Growth
Due to their relatively high valuations, growth stocks are typically more volatile than
value stocks. For instance, the price of a growth stock may experience a larger decline on
a forecast of lower earnings, a negative fundamental development, or an adverse market
development. Further, growth stocks may not pay dividends or may pay lower dividends than
value stocks. This means they depend more on price changes for returns and may be more
adversely affected in a down market compared to value stocks that pay higher dividends.

Risks Related to Investing for Value
Due to their relatively low valuations, value stocks are typically less volatile than
growth stocks. For instance, the price of a value stock may experience a smaller increase
on a forecast of higher earnings, a positive fundamental development, or positive market
development. Further, value stocks tend to have higher dividends than growth stocks. This
means they depend less on price changes for returns and may lag behind growth stocks in an
up market.

Risks Related to Company Size
Generally, the smaller the market capitalization of a company, the fewer the number of
shares traded daily, the less liquid its stock and the more volatile its price. Market
capitalization is determined by multiplying the number of its outstanding shares by the
current market price per share.

Companies with smaller market capitalizations also tend to have unproven track records, a
limited product or service base and limited access to capital. These factors also increase
risks and make these companies more likely to fail than companies with larger market
capitalizations.

Liquidity Risks
Trading opportunities are more limited for equity securities that are not widely held and
for fixed income securities that have not received any credit ratings, have received
ratings below investment grade, or are not widely held. This may make it more difficult to
sell or buy a security at a favorable price or time. Consequently, a Fund may have to
accept a lower price to sell a security, sell other securities to raise cash, or give up an
investment opportunity, any of which could have a negative effect on a Fund's performance.
Infrequent trading of securities may also lead to an increase in their price volatility.

Liquidity risk also refers to the possibility that a Fund may not be able to sell a
security or close out a derivative contract when it wants to. If this happens, a Fund will
be required to continue to hold the security or keep the position open and a Fund could
incur losses.

OTC derivative contracts generally carry greater liquidity risk than exchange-traded
contracts.

o Trading opportunities are more limited for fixed income securities that have not
received any credit ratings, have received ratings below investment grade or are not
widely held.

o Trading opportunities are more limited for CMOs that have complex terms or that are
not widely held. These features may make it more difficult to sell or buy a security at a
favorable price or time. Consequently, a Fund may have to accept a lower price to sell a
security, sell other securities to raise cash or give up an investment opportunity, any
of which could have a negative effect on a Fund's performance. Infrequent trading of
securities may also lead to an increase in their price volatility.

o Liquidity risk also refers to the possibility that a Fund may not be able to sell a
security when it wants to. If this happens, a Fund will be required to continue to hold
the security or keep the position open and a Fund could incur losses.

Leverage Risks
Leverage risk is created when an investment exposes a Fund to a level of risk that exceeds
the amount invested. Changes in the value of such an investment magnify a Fund's risk of
loss and potential for gain.

Investments can have these same results if their returns are based on a multiple of a
specified index, security, or other benchmark.

Credit Risks
Credit risk is the possibility that an issuer will default on a security by failing to pay
interest or principal when due. If an issuer defaults, a Fund will lose money.

Many fixed income securities receive credit ratings from services such as S&P's and
Moody's. These services assign ratings to securities by assessing the likelihood of issuer
default. Lower credit ratings correspond to higher credit risk. If a security has not
received a rating, a Fund must rely entirely upon the Adviser's credit assessment.

Fixed income securities generally compensate for greater credit risk by paying interest at
a higher rate. The difference between the yield of a security and the yield of a U.S.
Treasury security with a comparable maturity (the spread) measures the additional interest
paid for risk. Spreads may increase generally in response to adverse economic or market
conditions. A security's spread may also increase if the security's rating is lowered, or
the security is perceived to have an increased credit risk. An increase in the spread will
cause the price of the security to decline.

Credit risk includes the possibility that a party to a transaction involving a Fund will
fail to meet its obligations. This could cause a Fund to lose the benefit of the
transaction or prevent a Fund from selling or buying other securities to implement its
investment strategy.

Currency Risks
o Exchange rates for currencies fluctuate daily. The combination of currency risk and
market risks tends to make securities traded in foreign markets more volatile than
securities traded exclusively in the U.S.

o The Adviser attempts to manage currency risk by limiting the amount a Fund invests in
securities denominated in a particular currency. However, diversification will not
protect a Fund against a general increase in the value of the U.S. dollar relative to
other currencies.

Risks of Foreign Investing
Foreign securities pose additional risks because foreign economic or political conditions
may be less favorable than those of the United States. Securities in foreign markets may
also be subject to taxation policies that reduce returns for U.S. investors.

Foreign companies may not provide information (including financial statements) as
frequently or to as great an extent as companies in the United States. Foreign companies
may also receive less coverage than United States companies by market analysts and the
financial press. In addition, foreign countries may lack uniform accounting, auditing, and
financial reporting standards or regulatory requirements comparable to those applicable to
U.S. companies. These factors may prevent a Fund and its Adviser from obtaining information
concerning foreign companies that is as frequent, extensive and reliable as the information
available concerning companies in the United States.

Foreign countries may have restrictions on foreign ownership of securities or may impose
exchange controls, capital flow restrictions, or repatriation restrictions that could
adversely affect the liquidity of a Fund's investments.

Tax Risks
In order to be tax-exempt, municipal securities must meet certain legal requirements.
Failure to meet such requirements may cause the interest received and distributed by a Fund
to shareholders to be taxable.

Changes or proposed changes in federal tax laws may cause the prices of municipal
securities to fall.

Sector Risks
A substantial part of a Fund's portfolio may be comprised of securities issued or credit
enhanced by companies in similar businesses, or with other similar characteristics. As a
result, a Fund will be more susceptible to any economic, business, political, or other
developments that generally affect these issuers.

Noninvestment Grade Securities Risks
Securities rated below investment grade, also known as junk bonds, generally entail greater
market, credit and liquidity risks than investment grade securities. For example, their
prices are more volatile, economic downturns and financial setbacks may affect their prices
more negatively and their trading market may be more limited.

Call Risks
Call risk is the possibility that an issuer may redeem a fixed income security before
maturity (a call) at a price below its current market price. An increase in the likelihood
of a call may reduce the security's price.

If a fixed income security is called, a Fund may have to reinvest the proceeds in other
fixed income securities with lower interest rates, higher credit risks, or other less
favorable characteristics.

fundamental investment objectiveS

Riggs Stock Fund seeks to provide growth of capital and income.

Riggs Small Company Stock Fund seeks to provide long-term capital appreciation.

<R>

</R>

Riggs U.S. Government Securities Fund seeks to achieve current income.

Riggs Bond Fund seeks to provide as high a level of current income as is consistent with
the preservation of capital.

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Riggs Short Term Tax Free Bond Fund seeks to provide a high level of current income which
is exempt from federal income tax consistent with the preservation of principal.

Riggs Intermediate Tax Free Bond Fund seeks to provide a high level of current income which
is exempt from federal income tax.

</R>

Riggs Prime Money Market Fund seeks to provide current income consistent with stability of
principal and liquidity.

Riggs U.S. Treasury Money Market Fund seeks to provide current income consistent with
stability of principal and liquidity.

The above listed fundamental investment objectives cannot be changed by the Funds' Board
without shareholder approval.

INVESTMENT LIMITATIONS

Borrowing Money and Issuing Senior Securities
The Funds may borrow money, directly or indirectly, and issue senior securities to the
maximum extent permitted under the Investment Company Act of 1940 (1940 Act).

Lending
The Funds may not make loans, provided that this restriction does not prevent the Funds
from purchasing debt obligations, entering into repurchase agreements, lending its assets
to broker/dealers or institutional investors, and investing in loans, including assignments
and participation interests.

Investing in Commodities
The Funds may not purchase or sell physical commodities, provided that the Funds may
purchase securities of companies that deal in commodities. For purposes of this
restriction, investments in transactions involving futures contracts and options, forward
currency contracts that settle by payment of cash are not deemed to be investments in
commodities.

Investing in Real Estate
The Funds may not purchase or sell real estate, provided that this restriction does not
prevent the Funds from investing in issuers which invest, deal, or otherwise engage in
transactions in real estate or interests therein, or investing in securities that are
secured by real estate or interests therein. The Funds may exercise their rights under
agreements relating to such securities, including the right to enforce security interests
and to hold real estate acquired by reason of such enforcement until that real estate could
be liquidated in an orderly manner.

Diversification
With respect to securities comprising 75% of the value of its total assets, the Funds will
not purchase securities of any one issuer (other than cash; cash items; securities issued
or guaranteed by the government of the United States or its agencies or instrumentalities
and repurchase agreements collateralized by such U.S. government securities; and securities
of other investment companies) if, as a result, more than 5% of the value of their total
assets would be invested in securities of that issuer, or the Funds would own more than 10%
of the outstanding voting securities of that issuer.

Concentration
The Funds will not make investments that will result in the concentration of its
investments in the securities of issuers primarily engaged in the same industry. Government
securities, municipal securities and bank instruments will not be deemed to constitute an
industry.

Underwriting
The Funds may not underwrite the securities of other issuers, except that the Funds may
engage in transactions involving the acquisition, disposition, or resale of their portfolio
securities, under circumstances where they may be considered to be an underwriter under the
Securities Act of 1933.

The above limitations cannot be changed unless authorized by the Board and by the "vote of
a majority of its outstanding voting securities", as defined by the 1940 Act. The following
limitations, however, may be changed by the Board without shareholder approval.
Shareholders will be notified before any material change in these limitations becomes
effective.

Pledging Assets
The Funds will not mortgage, pledge, or hypothecate any of their assets, provided that this
shall not apply to the transfer of securities in connection with any permissible borrowing
or to collateral arrangements in connection with permissible activities.

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Buying on Margin
Stock Fund, Small Company Stock Fund, U.S. Government Securities Fund, Bond Fund, Short
Term Tax Free Bond Fund and Intermediate Tax Free Bond Fund will not purchase securities on
margin, provided that the Funds may obtain short-term credits necessary for the clearance
of purchases and sales of securities, and further provided that the Funds may make margin
deposits in connection with their use of financial options and futures, forward and spot
currency contracts, swap transactions and other financial contracts or derivative
instruments. Prime Money Market Fund and U.S. Treasury Money Market Fund will not purchase
securities on margin, provided that the Funds may obtain short-term credits necessary for
the clearance of purchases and sales of securities.

Illiquid Securities
Stock Fund, Small Company Stock Fund, U.S. Government Securities Fund, Bond Fund, Short
Term Tax Free Bond Fund, Intermediate Tax Free Bond Fund and Prime Money Market Fund will
not purchase securities for which there is no readily available market, or enter into
repurchase agreements, or purchase time deposits maturing in more than seven days if
immediately after and as a result, the value of such securities would exceed, in the
aggregate, 15% of the net assets of Stock Fund, Small Company Stock Fund, U.S. Government
Securities Fund, Bond Fund, Short Term Tax Free Bond Fund and Intermediate Tax Free Bond
Fund and 10% of the nets assets of Prime Money Market Fund.

</R>

Investing in Other Investment Companies
Each Fund may invest its assets in securities of other investment companies as an efficient means
of carrying out its investment policies. It should be noted that investment companies incur
certain expenses, such as management fees, and, therefore, any investment by a Fund in
shares of other investment companies may be subject to such duplicate expenses. At the
present time, each Fund expects that its investments in other investment companies may
include shares of money market funds, including funds affiliated with the Funds' Adviser.

The Funds may invest in the securities of affiliated money market funds as an efficient means
of managing the Funds' uninvested cash.

In applying Stock Fund, Small Company Stock Fund, U.S. Government Securities Fund, Prime
Money Market Fund and U.S. Treasury Money Market Fund's concentration restriction: (a)
utility companies will be divided according to their services, for example, gas, gas
transmission, electric and telephone will each be considered a separate industry; (b)
financial service companies will be classified according to the end users of their
services, for example, automobile finance, bank finance and diversified finance will each
be considered a separate industry; and (c) asset-backed securities will be classified
according to the underlying assets securing such securities.

For purposes of the concentration policy, to conform to the current view of the Securities
and Exchange Commission (SEC) staff that only domestic bank instruments may be excluded
from industry concentration limitations, the Funds will not exclude foreign bank
instruments from industry concentration tests so long as the policy of the SEC remains in
effect. The Funds will consider concentration to be the investment of more than 25% of the
value of its total assets in any one industry.

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FUNDAMENTAL INVESTMENT POLICIES
Short Term Tax Free Bond Fund and Intermediate Tax Free Bond Fund will each, as a
fundamental investment policy, invest its assets so that at least 80% of the income it
distributes will be exempt from federal income taxes. These fundamental investment policies
may not be changed by the Funds' Board without shareholder approval.

REGULATORY COMPLIANCE
With respect to Prime Money Market Fund and U.S. Treasury Money Market Fund, each Fund may
follow non-fundamental operational policies that are more restrictive than its fundamental
investment limitations, as set forth in the prospectuses and this SAI, in order to comply
with applicable laws and regulations, including the provisions of and regulations under the
1940 Act. In particular, each Fund will comply with the various requirements of Rule 2a-7
(the Rule), which regulates money market mutual funds. Each Fund will determine the
effective maturity of its investments according to the Rule. Each Fund may change these
operational policies to reflect changes in the laws and regulations without the approval of
its shareholders.

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DETERMINING MARKET VALUE OF SECURITIES
With respect to Prime Money Market Fund and U.S. Treasury Money Market Fund, the Board has
decided that the best method for determining the value of portfolio instruments is
amortized cost. Under this method, portfolio instruments are valued at the acquisition cost
as adjusted for amortization of premium or accumulation of discount rather than at current
market value. Accordingly, neither the amount of daily income nor the net asset value (NAV)
is affected by any unrealized appreciation or depreciation of the portfolio. In periods of
declining interest rates, the indicated daily yield on Shares of a Fund computed by
dividing the annualized daily income on a Fund's portfolio by the NAV computed as above may
tend to be higher than a similar computation made by using a method of valuation based upon
market prices and estimates. In periods of rising interest rates, the opposite may be true.

A Fund's use of the amortized cost method of valuing portfolio instruments depends on its
compliance with certain conditions in the Rule promulgated by the SEC under the 1940 Act.
Under the Rule, the Board must establish procedures reasonably designed to stabilize the
NAV per share, as computed for purposes of distribution and redemption, at $1.00 per share,
taking into account current market conditions and a Fund's investment objective. The
procedures include monitoring the relationship between the amortized cost value per share
and the NAV per share based upon available indications of market value. The Board will
decide what, if any, steps should be taken if there is a difference of more than 0.5 of 1%
between the two values. The Board will take any steps it considers appropriate (such as
redemption in kind or shortening the average portfolio maturity) to minimize any material
dilution or other unfair results arising from differences between the two methods of
determining NAV.

<R>

With respect to Stock Fund, Small Company Stock Fund, U.S. Government Securities Fund, Bond
Fund, Short Term Tax Free Fund and Intermediate Tax Free Bond Fund, the market values of
the Funds' portfolio securities are determined as follows:

</R>

o for equity securities, according to the last sale price in the market in which they
are primarily traded (either a national securities exchange or the OTC market), if
available;

o in the absence of recorded sales for equity securities, according to the mean between
the last closing bid and asked prices;

o futures contracts and options are generally valued at market values established by
the exchanges on which they are traded at the close of trading on such exchanges. Options
traded in the OTC market are generally valued according to the mean between the last bid
and the last asked price for the option as provided by an investment dealer or other
financial institution that deals in the option. The Board may determine in good faith
that another method of valuing such investments is necessary to appraise their fair
market value;

o for fixed income securities, according to the mean between bid and asked prices as
furnished by an independent pricing service, except that fixed income securities with
remaining maturities of less than 60 days at the time of purchase may be valued at
amortized cost; and

o for all other securities at fair value as determined in good faith by the Board.

Prices provided by independent pricing services may be determined without relying
exclusively on quoted prices and may consider institutional trading in similar groups of
securities, yield, quality, stability, risk, coupon rate, maturity, type of issue, trading
characteristics and other market data or factors. From time to time, when prices cannot be
obtained from an independent pricing service, securities may be valued based on quotes from
broker/dealers or other financial institutions that trade the securities.

WHAT DO SHARES COST?
============================================================================================

<R>

Stock Fund, Small Company Stock Fund, U.S. Government Securities Fund, Bond Fund, Short
Term Tax Free Bond Fund and Intermediate Tax Free Bond Fund's NAV per share fluctuates and
is based on the market value of all securities and other assets of the Funds.

</R>

The NAV for each class of Shares may differ due to the variance in daily net income
realized by each class. Such variance will reflect only accrued net income to which the
shareholders of a particular class are entitled.

<R>

REDUCING OR ELIMINATING THE CONTINGENT DEFERRED SALES CHARGE [Class R shares of Stock Fund,
small company stock fund, u.s. government securities fund, bond fund, short term tax free
bond fund and intermediate tax free bond fund]

<R>

You will not be charged a CDSC when redeeming Shares:
o as a shareholder who acquired Shares prior to July 1, 1998 (including Shares acquired
in exchange for Shares acquired prior to July 1, 1998);

o purchased with reinvested dividends or capital gains;

o following the death or disability, as defined in Section 72(m)(7) of the Internal
Revenue Code of 1986, of the last surviving shareholder;

o representing minimum required distributions from an Individual Retirement Account or
other retirement plan to a shareholder who has attained the age of 701/2;

o if a Fund redeems your Shares and closes your account for not meeting the minimum
balance; and

o which are qualifying redemptions of Shares under a Systematic Withdrawal Program.

In addition, you will not be charged a CDSC:

<R>
o on Shares held by Trustees, employees and retired employees of the Funds, Riggs
National Corporation and/or its subsidiaries, or Federated Securities Corp. and/or its
affiliates and their spouses and children under the age of 21;

o on Shares originally purchased (i) through the Trust Division or the Private Banking
Division of Riggs Bank, N.A. (Riggs Bank); (ii) through an investment adviser registered
under the Investment Advisers Act of 1940; (iii) through retirement plans where the third
party administrator has entered into certain arrangements with Riggs Bank or its
affiliates; or (iv) by any bank or dealer (in each case for its own account) having a
sales agreement with Federated Securities Corp.; and

</R>

o on Shares purchased through entities having no transaction fee agreements or wrap
accounts with Riggs Bank or its affiliates.

HOW ARE THE FUNDS SOLD?
============================================================================================

Under the Distributor's Contract with the Funds, the Distributor (Federated Securities
Corp.) offers Shares on a continuous, best-efforts basis.

RULE 12B-1 PLAN (Class R Shares)
<R>
As a compensation-type plan, the Rule 12b-1 Plan is designed to pay the Distributor for
activities principally intended to result in the sale of Shares such as advertising and
marketing of Shares (including printing and distributing prospectuses and sales literature
to prospective shareholders and financial institutions) and providing incentives to
investment professionals to sell Shares. The Rule 12b-1 Plan allows the Distributor to
contract with investment professionals to perform activities covered by the Plan. The Rule
12b-1 Plan is expected to benefit the Funds in a number of ways. For example, it is
anticipated that the Plan will help the Funds attract and retain assets, thus providing
cash for orderly portfolio management and Share redemptions and possibly helping to
stabilize or reduce other operating expenses. In addition, the Plan is integral to the
multiple class structure of the Funds, which promotes the sale of Shares by providing a
range of options to investors. The Funds' service providers that receive asset-based fees
also benefit from stable or increasing Fund assets.

</R>

The Funds may compensate the Distributor more or less than its actual marketing expenses.
In no event will the Funds pay for any expenses of the Distributor that exceed the maximum
Rule 12b-1 Plan fee.

For some classes of Shares, the maximum Rule 12b-1 Plan fee that can be paid in any one
year may not be sufficient to cover the marketing-related expenses the Distributor has
incurred. Therefore, it may take the Distributor a number of years to recoup these expenses.

<R>

SERVICE FEES
The Funds may pay fees not to exceed 0.25% of average daily net assets ("Service Fees") to
investment professionals or to Federated Shareholder Services Company ("FSSC"), a
subsidiary of Federated Investors, Inc. (Federated), for providing services to shareholders
and maintaining shareholder accounts. Under certain agreements, rather than paying
investment professionals directly, the Funds may pay Service Fees to FSSC and FSSC will use
the fees to compensate investment professionals.

SUPPLEMENTAL PAYMENTS
Investment professionals may be paid fees, in significant amounts, out of the assets of the
Distributor.. These fees do not come out of Fund assets. The Distributor may be reimbursed
by the Adviser or its affiliates.

These supplemental payments may be based upon such factors as the number or value of Shares
the investment professional sells or may sell; the value of client assets invested; and/or
the type and nature of services, sales support or marketing support furnished by the
investment professional. In addition to these supplemental payments, an investment
professional may also receive payments under the Rule 12b-1 Plan and/or Service fees.

</R>

SUBACCOUNTING SERVICES
============================================================================================

Certain investment professionals may wish to use the transfer agent's subaccounting system
to minimize their internal recordkeeping requirements. The transfer agent may charge a fee
based on the level of subaccounting services rendered. Investment professionals holding
Shares in a fiduciary, agency, custodial, or similar capacity may charge or pass through
subaccounting fees as part of or in addition to normal trust or agency account fees. They
may also charge fees for other services that may be related to the ownership of Shares.
This information should, therefore, be read together with any agreement between the
customer and the investment professional about the services provided, the fees charged for
those services and any restrictions and limitations imposed.

REDEMPTION IN KIND
============================================================================================

Although the Funds intend to pay Share redemptions in cash, they reserve the right, as
described below, to pay the redemption price in whole or in part by a distribution of the
Funds' portfolio securities.

Because the Funds have elected to be governed by Rule 18f-1 under the 1940 Act, the Funds
are obligated to pay Share redemptions to any one shareholder in cash only up to the lesser
of $250,000 or 1% of the net assets represented by such Share class during any 90-day
period.

Any Share redemption payment greater than this amount will also be in cash unless the
Funds' Board determines that payment should be in kind. In such a case, the Funds will pay
all or a portion of the remainder of the redemption in portfolio securities, valued in the
same way as the Funds determine their NAV. The portfolio securities will be selected in a
manner that the Funds' Board deems fair and equitable and, to the extent available, such
securities will be readily marketable.

Redemption in kind is not as liquid as a cash redemption. If redemption is made in kind,
shareholders receiving the portfolio securities and selling them before their maturity
could receive less than the redemption value of the securities and could incur certain
transaction costs.

MASSACHUSETTS PARTNERSHIP LAW
============================================================================================

Under certain circumstances, shareholders may be held personally liable as partners under
Massachusetts law for obligations of the Funds. To protect its shareholders, the Funds have
filed legal documents with Massachusetts that expressly disclaim the liability of its
shareholders for acts or obligations of the Funds.

In the unlikely event a shareholder is held personally liable for a Fund's obligations, a
Fund is required by the Declaration of Trust to use its property to protect or compensate
the shareholder. On request, a Fund will defend any claim made and pay any judgment against
a shareholder for any act or obligation of a Fund. Therefore, financial loss resulting from
liability as a shareholder will occur only if a Fund itself cannot meet its obligations to
indemnify shareholders and pay judgments against them.

ACCOUNT AND SHARE INFORMATION
============================================================================================

<R>
VOTING RIGHTS
Each Share of a Fund gives the shareholder one vote in Trustee elections and other matters
submitted to shareholders for vote. All Shares of the Trust have equal voting rights,
except that in matters affecting only a particular Fund or class, only Shares of that Fund
or class are entitled to vote. Trustees may be removed by the Board or by shareholders at a
special meeting. A special meeting of shareholders will be called by the Board upon the
written request of shareholders who own at least 10% of the Trust's outstanding Shares of
all series entitled to vote.

As of June 3, 2003, the following shareholders owned of record, beneficially, or both, 5%
or more of outstanding Shares of the following Funds:

Stock Fund - Class R Shares

Carn & Co., Washington, D.C., owned approximately 577,349 Shares (24.85%); EAMCO - Riggs
Funds, Washington, D.C., owned approximately 506,895 Shares (21.82%); Fiserv Securities
Inc., Philadelphia, PA, owned approximately 122,238 Shares (5.26%); and Riggs Bank, N.A.
custodian for the IRA of William P. McClure, Washington, D.C., owned approximately 119,016
Shares (5.12%).

Stock Fund - Class Y Shares

EAMCO - Riggs Funds, Washington, D.C., owned approximately 1,074,614 Shares (100.00%).

Small Company Stock Fund - Class R Shares

EAMCO - Riggs Funds, Washington D.C., owned approximately 676,226 Shares (62.26%); and Carn
& Co., Washington, D.C., owned approximately 230,320 Shares (21.20%).

Small Company Stock Fund - Class Y Shares

EAMCO - Riggs Funds, Washington, D.C., owned approximately 1,239,752 Shares (99.44%).

U.S. Government Securities Fund - Class R Shares

EAMCO - Riggs Funds, Washington, D.C., owned approximately 858,313 Shares (52.18%); and
Carn & Co., Washington, D.C., owned approximately 266,617 Shares (16.21%).

U.S. Government Securities Fund - Class Y Shares

EAMCO - Riggs Funds, Washington, D.C., owned approximately 2,094,683 Shares (98.65%).

Bond Fund - Class R Shares

EAMCO - Riggs Funds, Washington, D.C., owned approximately 1,651,570 Shares (98.76%).

Short Term Tax Free Bond Fund - Class R Shares

EAMCO - Riggs Funds, Washington, D.C., owned approximately 4,013,201 Shares (98.50%).

Intermediate Tax Free Bond Fund - Class R Shares

EAMCO - Riggs Funds, Washington, D.C., owned approximately 3,286,387 Shares (98.37%).

Prime Money Market Fund - Class R Shares

Fiserv Securities Inc., Philadelphia, PA, owned approximately 33,865,775 Shares (91.63%);
and EAMCO - Riggs Funds, Washington, D.C., owned approximately 2,532,347 Shares (6.85%).

Prime Money Market Fund - Class Y Shares

EAMCO - Riggs Funds, Washington, D.C., owned approximately 91,281,368 Shares (51.58%); and
Riggs Bank, N.A., Washington, D.C., owned approximately 45,300,000 Shares (25.60%).

U.S. Treasury Money Market Fund - Class R Shares

EAMCO - Riggs Funds, Washington, D.C., owned approximately 19,173,724 Shares; and Fiserv
Securities Inc., Philadelphia, PA, owned approximately 1,850,164 Shares (8.64)%.

U.S. Treasury Money Market Fund - Class Y Shares

EAMCO - Riggs Funds, Washington, D.C., owned approximately 26,317,638 Shares; and Riggs
Bank, N.A., Washington, D.C., owned approximately 13,900,000 Shares (28.19%).

Shareholders owning 25% or more of outstanding Shares may be in control and be able to
affect the outcome of certain matters presented for a vote of shareholders.
</R>

TAX INFORMATION
============================================================================================

FEDERAL INCOME TAX
The Funds intend to meet requirements of Subchapter M of the Internal Revenue Code
applicable to regulated investment companies. If these requirements are not met, it will
not receive special tax treatment and will pay federal corporate income tax.

Each Fund will be treated as a single, separate entity for federal income tax purposes so
that income earned and capital gains and losses realized by the Trust's other portfolios
will be separate from those realized by a Fund.

FOREIGN INVESTMENTS
If a Fund purchases foreign securities, its investment income may be subject to foreign
withholding or other taxes that could reduce the return on these securities. Tax treaties
between the United States and foreign countries, however, may reduce or eliminate the
amount of foreign taxes to which a Fund would be subject. The effective rate of foreign tax
cannot be predicted since the amount of Fund assets to be invested within various countries
is uncertain. However, the Funds intend to operate so as to qualify for treaty-reduced tax
rates when applicable.

Distributions from a Fund may be based on estimates of book income for the year. Book
income generally consists solely of the coupon income generated by the portfolio, whereas
tax-basis income includes gains or losses attributable to currency fluctuation. Due to
differences in the book and tax treatment of fixed income securities denominated in foreign
currencies, it is difficult to project currency effects on an interim basis. Therefore, to
the extent that currency fluctuations cannot be anticipated, a portion of distributions to
shareholders could later be designated as a return of capital, rather than income, for
income tax purposes, which may be of particular concern to simple trusts.

If a Fund invests in the stock of certain foreign corporations, they may constitute Passive
Foreign Investment Companies (PFIC), and a Fund may be subject to federal income taxes upon
disposition of PFIC investments.

If more than 50% of the value of a Fund's assets at the end of the tax year is represented
by stock or securities of foreign corporations, a Fund intends to qualify for certain Code
stipulations that would allow shareholders to claim a foreign tax credit or deduction on
their U.S. income tax returns. The Code may limit a shareholder's ability to claim a
foreign tax credit. Shareholders who elect to deduct their portion of a Fund's foreign
taxes rather than take the foreign tax credit must itemize deductions on their income tax
returns.

WHO MANAGES AND PROVIDES SERVICES TO THE FUNDS?
============================================================================================

<R>
BOARD OF TRUSTEES
The Board is responsible for managing the Trust's business affairs and for exercising all
the Trust's powers except those reserved for the shareholders. The following tables give
information about each Board member and the senior officers of the Funds. Where required,
the tables separately list Board members who are "interested persons" of the Funds (i.e.,
"Interested" Board members) and those who are not (i.e., "Independent" Board members).
Unless otherwise noted, the address of each person listed is Federated Investors Tower,
1001 Liberty Avenue, Pittsburgh, PA. The Trust comprises eight portfolios. Unless otherwise
noted, each Officer is elected annually. Unless otherwise noted, each Board member oversees
all portfolios in the Riggs Fund Complex; serves for an indefinite term; and also serves as
a Board member of the following investment company complexes: Banknorth Funds-four
portfolios; CCMI Funds-two portfolios; Federated Investors Funds-138 portfolios; Regions
Funds-nine portfolios; and WesMark Funds-five portfolios.

As of June 3 2003, the Funds' Board and Officers as a group owned less than 1% of the
Funds' outstanding Class R and Class Y Shares.

INTERESTED TRUSTEES BACKGROUND AND COMPENSATION

Name rincipal Occupation(s) for Past ggregate
Birth Date ive Years, Other Directorships Aompensation
Address eld and Previous Position(s) Crom Trust
Positions Held with P Fpast
Trust F (iscal year)
Date Service Began H f
Principal Occupations: Chairman $0
John F. Donahue* and Director or Trustee of the
Birth Date: July Federated Fund Complex; Chairman
28, 1924 and Director, Federated
CHAIRMAN AND TRUSTEE Investors, Inc.
Began serving: ---------------------------------
April 1991
Previous Positions: Trustee,
Federated Investment Management
Company and Chairman and
Director, Federated Investment
Counseling.

Principal Occupations: Principal $0
J. Christopher Executive Officer and President
Donahue* of the Federated Fund Complex;
Birth Date: April Director or Trustee of some of
11, 1949 the Funds in the Federated Fund
EXECUTIVE VICE Complex; President, Chief
PRESIDENT AND Executive Officer and Director,
TRUSTEE Federated Investors, Inc.;
Began serving: July Chairman and Trustee, Federated
1999 Investment Management Company;
Trustee, Federated Investment
Counseling; Chairman and
Director, Federated Global
Investment Management Corp.;
Chairman, Passport Research,
Ltd.; Trustee, Federated
Shareholder Services Company;
Director, Federated Services
Company.

Previous Positions: President,
Federated Investment Counseling;
President and Chief Executive
Officer, Federated Investment
Management Company, Federated
Global Investment Management
Corp. and Passport Research, Ltd.

Principal Occupations: Director $1166.03
Lawrence D. Ellis, or Trustee of the Federated Fund
M.D.* Complex; Professor of Medicine,
Birth Date: October University of Pittsburgh;
11, 1932 Medical Director, University of
3471 Fifth Avenue Pittsburgh Medical Center
Suite 1111 Downtown; Hematologist,
Pittsburgh, PA Oncologist and Internist,
TRUSTEE University of Pittsburgh Medical
Began serving: Center.
April 1991
Other Directorships Held:
Member, National Board of
Trustees, Leukemia Society of
America.

Previous Positions: Trustee,
University of Pittsburgh;
Director, University of
Pittsburgh Medical Center.

* Family relationships and reasons for "interested" status: John F. Donahue is the father
of J. Christopher Donahue; both are "interested" due to the positions they hold with
Federated and its subsidiaries. Lawrence D. Ellis, M.D. is "interested" because his
son-in-law is employed by the Fund's principal underwriter, Federated Securities Corp.
--------------------------------------------------------------------------------------------

INDEPENDENT TRUSTEES BACKGROUND AND COMPENSATION

Name rincipal Occupation(s) for Past ggregate
Birth Date ive Years, Other Directorships Aompensation
Address eld and Previous Position(s) Crom Trust
Positions Held with P Fpast
Trust F (iscal year)
Date Service Began H f
Principal Occupation: Director $1286.63
Thomas G. Bigley or Trustee of the Federated Fund
Birth Date: Complex.
February 3, 1934
15 Old Timber Trail Other Directorships Held:
Pittsburgh, PA Director, Member of Executive
TRUSTEE Committee, Children's Hospital
Began serving: of Pittsburgh; Director,
October 1995 University of Pittsburgh.

Previous Position: Senior
Partner, Ernst & Young LLP.

Principal Occupations: Director $1282.63
John T. Conroy, Jr. or Trustee of the Federated Fund
Birth Date: June Complex; Chairman of the Board,
23, 1937 Investment Properties
Grubb & Corporation; Partner or Trustee
Ellis/Investment in private real estate ventures
Properties in Southwest Florida.
Corporation
3838 Tamiami Trail Previous Positions: President,
N. Investment Properties
Naples, FL Corporation; Senior Vice
TRUSTEE President, John R. Wood and
Began serving: Associates, Inc., Realtors;
August 1991 President, Naples Property
Management, Inc. and Northgate
Village Development Corporation.

Principal Occupation: Director $1282.63
Nicholas P. or Trustee of the Federated Fund
Constantakis Complex.
Birth Date:
September 3, 1939 Other Directorships Held:
175 Woodshire Drive Director and Member of the Audit
Pittsburgh, PA Committee, Michael Baker
TRUSTEE Corporation (engineering and
Began serving: energy services worldwide).
February 1998
Previous Position: Partner,
Anderson Worldwide SC.

Principal Occupation: Director $1166.03
John F. Cunningham or Trustee of the Federated Fund
Birth Date: March Complex.
5, 1943
353 El Brillo Way Other Directorships Held:
Palm Beach, FL Chairman, President and Chief
TRUSTEE Executive Officer, Cunningham &
Began serving: July Co., Inc. (strategic business
1999 consulting); Trustee Associate,
Boston College.

Previous Positions: Director,
Redgate Communications and EMC
Corporation (computer storage
systems); Chairman of the Board
and Chief Executive Officer,
Computer Consoles, Inc.;
President and Chief Operating
Officer, Wang Laboratories;
Director, First National Bank of
Boston; Director, Apollo
Computer, Inc.

Principal Occupation: Director $1166.03
Peter E. Madden or Trustee of the Federated Fund
Birth Date: March Complex; Management Consultant.
16, 1942
One Royal Palm Way Other Directorships Held: Board
100 Royal Palm Way of Overseers, Babson College.
Palm Beach, FL
TRUSTEE Previous Positions:
Began serving: Representative, Commonwealth of
August 1991 Massachusetts General Court;
President, State Street Bank and
Trust Company and State Street
Corporation (retired); Director,
VISA USA and VISA International;
Chairman and Director,
Massachusetts Bankers
Association; Director,
Depository Trust Corporation;
Director, The Boston Stock
Exchange.

Principal Occupations: Director $1282.63
Charles F. or Trustee of the Federated Fund
Mansfield, Jr. Complex; Management Consultant;
Birth Date: April Executive Vice President, DVC
10, 1945 Group, Inc. (marketing,
80 South Road communications and technology)
Westhampton Beach, (prior to 9/1/00).
NY
TRUSTEE Previous Positions: Chief
Began serving: Executive Officer, PBTC
January 2000 International Bank; Partner,
Arthur Young & Company (now
Ernst & Young LLP); Chief
Financial Officer of Retail
Banking Sector, Chase Manhattan
Bank; Senior Vice President,
HSBC Bank USA (formerly, Marine
Midland Bank); Vice President,
Citibank; Assistant Professor of
Banking and Finance, Frank G.
Zarb School of Business, Hofstra
University.

John E. Murray, Principal Occupations: Director $1399.24
Jr., J.D., S.J.D. or Trustee of the Federated Fund
Birth Date: Complex; Chancellor and Law
December 20, 1932 Professor, Duquesne University;
Chancellor, Consulting Partner, Mollica &
Duquesne University Murray.
Pittsburgh, PA
TRUSTEE Other Directorships Held:
Began serving: Director, Michael Baker Corp.
February 1995 (engineering, construction,
operations and technical
services).

Previous Positions: President,
Duquesne University; Dean and
Professor of Law, University of
Pittsburgh School of Law; Dean
and Professor of Law, Villanova
University School of Law.

Principal Occupations: Director $1166.03
Marjorie P. Smuts or Trustee of the Federated Fund
Birth Date: June Complex; Public
21, 1935 Relations/Marketing
4905 Bayard Street Consultant/Conference
Pittsburgh, PA Coordinator.
TRUSTEE
Began serving: Previous Positions: National
April 1991 Spokesperson, Aluminum Company
of America; television producer;
President, Marj Palmer Assoc.;
Owner, Scandia Bord.

Principal Occupations: Director $1166.03
John S. Walsh or Trustee of the Federated Fund
Birth Date: Complex; President and Director,
November 28, 1957 Heat Wagon, Inc. (manufacturer
2604 William Drive of construction temporary
Valparaiso, IN heaters); President and
TRUSTEE Director, Manufacturers
Began serving: Products, Inc. (distributor of
January 1999 portable construction heaters);
President, Portable Heater
Parts, a division of
Manufacturers Products, Inc.

Previous Position: Vice
President, Walsh & Kelly, Inc.

OFFICERS**
--------------------------------------------------------------------------------------------

Name rincipal Occupation(s) and Previous Position(s)
Birth Date
Address
Positions Held with Trust P
Principal Occupations: Senior Vice President, Federated
Peter J. Germain Services Company; President, Edgewood Service, Inc.
Birth Date: September 3, 1959
PRESIDENT Previous Positions: Senior Corporate Counsel and Vice
Began serving: August 2000 President of Federated Services Company.

Principal Occupations: Executive Vice President and
John W. McGonigle Secretary of the Federated Fund Complex; Executive Vice
Birth Date: October 26, 1938 President, Secretary and Director, Federated Investors,
EXECUTIVE VICE PRESIDENT AND Inc.
SECRETARY
Began serving: July 1995 Previous Positions: Trustee, Federated Investment
Management Company and Federated Investment Counseling;
Director, Federated Global Investment Management Corp.,
Federated Services Company and Federated Securities
Corp.

Principal Occupations: Principal Financial Officer and
Richard J. Thomas Treasurer of the Federated Fund Complex; Senior Vice
Birth Date: June 17, 1954 President, Federated Administrative Services.
TREASURER
Began serving: August 2000 Previous Positions: Vice President, Federated
Administrative Services; held various management
positions within Funds Financial Services Division of
Federated Investors, Inc.

Principal Occupations: Vice President and Director of
Judith J. Mackin Administration and Business Management for the Mutual
Birth Date: May 30, 1960 Fund Services Group, Federated Services Company.
VICE PRESIDENT
Began serving: August 2000

James E. Ostrowski Principal Occupations: Vice President, Business Manager
----------------------------- and Relationship Manager for the Mutual Fund Services,
Birth Date: November 13, 1959 Federated Services Company.
VICE PRESIDENT
Began serving: August 2000

** Officers do not receive any compensation from the Funds.
--------------------------------------------------------------------------------------------
Thomas R. Donahue, Chief Financial Officer, Vice President, Treasurer and Assistant
Secretary of Federated and an officer of its various advisory and underwriting
subsidiaries, has served as a Term Member on the Board of Directors of Duquesne University,
Pittsburgh, Pennsylvania, since May 12, 2000. Mr. John E. Murray, Jr., an Independent
Trustee of the Funds, served as President of Duquesne from 1988 until his retirement from
that position in 2001, and became Chancellor of Duquesne on August 15, 2001. It should be
noted that Mr. Donahue abstains on any matter that comes before Duquesne's Board that
affects Mr. Murray personally.

COMMITTEES of the board
ommittee Functions Meetings
Held
During
Last
Board Committee Fiscal
Committee Members C Year
Executive In between meetings of the full Board, Two
John F. Donahue the Executive Committee generally may
John E. Murray, exercise all the powers of the full Board
Jr., J.D., S.J.D. in the management and direction of the
business and conduct of the affairs of
the Trust in such manner as the Executive
Committee shall deem to be in the best
interests of the Trust. However, the
Executive Committee cannot elect or
remove Board members, increase or
decrease the number of Trustees, elect or
remove any Officer, declare dividends,
issue shares or recommend to shareholders
any action requiring shareholder approval.

Audit The Audit Committee reviews and Four
Thomas G. Bigley recommends to the full Board the
John T. Conroy, independent auditors to be selected to
Jr. audit the Funds' financial statements;
Nicholas P. meets with the independent auditors
Constantakis periodically to review the results of the
Charles F. audits and reports the results to the
Mansfield, Jr. full Board; evaluates the independence of
the auditors, reviews legal and
regulatory matters that may have a
material effect on the financial
statements, related compliance policies
and programs, and the related reports
received from regulators; reviews the
Funds' internal audit function; reviews
compliance with the Funds' code of
conduct/ethics; reviews valuation issues;
monitors inter-fund lending transactions;
reviews custody services and issues and
investigates any matters brought to the
Committee's attention that are within the
scope of its duties.

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

Board ownership of shares in the funds and in the Riggs family of Investment companies AS
OF dECEMBER 31, 2002
Dollar Range of
Interested Shares Owned In
Board Member Name Funds
John F. Donahue None
J. Christopher None
Donahue
Lawrence D. Ellis, None
M.D.

Independent
Board Member Name
Thomas G. Bigley None
John T. Conroy, Jr. None
Nicholas P. None
Constantakis
John F. Cunningham None
Peter E. Madden None
Charles F. None
Mansfield, Jr.
John E. Murray, None
Jr., J.D., S.J.D.
Marjorie P. Smuts None
John S. Walsh None

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

INVESTMENT ADVISER
The Adviser conducts investment research and makes investment decisions for the Funds. The
Adviser is a subsidiary of Riggs National Corporation, a bank holding company.

The Adviser shall not be liable to the Trust or any Fund shareholder 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.

As required by the 1940 Act, the Funds' Board has reviewed the Funds' investment advisory
contract. The Board's decision to approve these contracts reflects the exercise of its
business judgment on whether to continue the existing arrangements. During its review of
these contracts, the Board considers many factors, among the most material of which are:
each Fund's investment objective and long term performance; the Adviser's management
philosophy, personnel and processes; the preferences and expectations of Fund shareholders
and their relative sophistication; the continuing state of competition in the mutual fund
industry; comparable fees in the mutual fund industry; the range and quality of services
provided to the Funds and their shareholders by the Riggs organization in addition to
investment advisory services; and the Funds' relationship to other funds in the Riggs fund
family.

In assessing the Adviser's performance of its obligations, the Board also considers whether
there has occurred a circumstance or event that would constitute a reason for it to not
renew an advisory contract. In this regard, the Board is mindful of the potential
disruptions of the Funds' operations and various risks, uncertainties and other effects
that could occur as a result of a decision to terminate or not renew an advisory contract.
In particular, the Board recognizes that most shareholders have invested in a Fund on the
strength of the Adviser's industry standing and reputation and in the expectation that the
Adviser will have a continuing role in providing advisory services to the Fund.

The Board also considers the compensation and benefits received by the Adviser. This
includes fees received for services provided to the Funds by other entities in the Riggs
organization and research services received by the Adviser from brokers that execute Fund
trades, as well as advisory fees. In this regard, the Board is aware that various courts
have interpreted provisions of the 1940 Act and have indicated in their decisions that the
following factors may be relevant to an Adviser's compensation: the nature and quality of
the services provided by the Adviser, including the performance of a Fund; the Adviser's
cost of providing the services; the extent to which the Adviser may realize "economies of
scale" as a Fund grows larger; any indirect benefits that may accrue to the Adviser and its
affiliates as a result of the Adviser's relationship with a Fund; performance and expenses
of comparable funds; and the extent to which the independent Board members are fully
informed about all facts bearing on the Adviser's service and fee. The Funds' Board is
aware of these factors and takes them into account in its review of the Funds' advisory
contract.

The Board considers and weighs these circumstances in light of its substantial accumulated
experience in governing a Fund and working with Riggs on matters relating to its funds, and
is assisted in its deliberations by the advice of independent legal counsel. In this
regard, the Board requests and receives a significant amount of information about the Funds
and the Riggs organization. Riggs provides much of this information at each regular meeting
of the Board and furnishes additional reports in connection with the particular meeting at
which the Board's formal review of the advisory contracts occurs. In between regularly
scheduled meetings, the Board may receive information on particular matters as the need
arises. Thus, the Board's evaluation of an advisory contract is informed by reports
covering such matters as: the Adviser's investment philosophy, personnel and processes; a
Fund's short- and long-term performance (in absolute terms as well as in relationship to
its particular investment program and certain competitor or "peer group" funds) and
comments on the reasons for performance; a Fund's expenses (including the advisory fee
itself and the overall expense structure of a Fund, both in absolute terms and relative to
similar and/or competing funds, with due regard for contractual or voluntary expense
limitations); the use and allocation of brokerage commissions derived from trading the
Funds' portfolio securities; the nature and extent of the advisory and other services
provided to the Funds by the Adviser and its affiliates; compliance and audit reports
concerning the Funds and the Riggs companies that service them; and relevant developments
in the mutual fund industry and how the funds and/or Riggs are responding to them.

The Board also receives financial information about Riggs, including reports on the
compensation and benefits Riggs derives from its relationships with the Funds. These
reports cover not only the fees under the advisory contracts, but also fees received by
Riggs' subsidiaries for providing other services to the Funds under separate contracts
(e.g., for serving as the Funds' administrator and transfer agent). The reports also
discuss any indirect benefit Riggs may derive from its receipt of research services from
brokers who execute fund trades.

The Board bases its decision to approve an advisory contract on the totality of the
circumstances and relevant factors and with a view to past and future long-term
considerations. Not all of the factors and considerations identified above are relevant to
every Fund, nor does the Board consider any one of them to be determinative. Because the
totality of circumstances includes considering the relationship of each Fund to the Riggs
family of funds, the Board does not approach consideration of every Fund's advisory
contract as if that were the only fund offered by Riggs.
</R>

Other Related Services
Affiliates of the Adviser may, from time to time, provide certain electronic equipment and
software to institutional customers in order to facilitate the purchase of Fund Shares
offered by the Distributor.

Code of Ethics Restrictions on Personal Trading
As required by SEC rules, the Funds, its Adviser and its Distributor have adopted codes of
ethics. These codes govern securities trading activities of investment personnel, Fund
Trustees and certain other employees. Although they do permit these people to trade in
securities, including those that the Funds could buy, they also contain significant
safeguards designed to protect the Funds and their shareholders from abuses in this area,
such as requirements to obtain prior approval for, and to report, particular transactions.

<R>
BROKERAGE TRANSACTIONS
With respect to Stock Fund, Small Company Stock Fund and Bond Fund, when selecting brokers
and dealers to handle the purchase and sale of portfolio instruments, the Adviser looks for
prompt execution of the order at a favorable price. The Adviser will generally use those
who are recognized dealers in specific portfolio instruments, except when a better price
and execution of the order can be obtained elsewhere. The Adviser may select brokers and
dealers based on whether they also offer research services (as described below). In
selecting among firms believed to meet these criteria, the Adviser may give consideration
to those firms that have sold or are selling Shares of the Funds and other funds
distributed by the Distributor and its affiliates. The Adviser makes decisions on portfolio
transactions and selects brokers and dealers subject to review by the Funds' Board.
Investment decisions for the Funds are made independently from those of other accounts
managed by the Adviser. Except as noted below, when the Funds and one or more of those
accounts invests in, or disposes of, the same security, available investments or
opportunities for sales will be allocated among the Funds and the account(s) in a manner
believed by the Adviser to be equitable. While the coordination and ability to participate
in volume transactions may benefit the Funds, it is possible that this procedure could
adversely impact the price paid or received and/or the position obtained or disposed of by
the Funds. Investments for other accounts managed by that fund's portfolio managers in
initial public offerings ("IPO") are made independently from any other accounts, and much
of their non-IPO trading may also be conducted independently from other accounts.

With respect to U.S. Government Securities Fund, Short Term Tax Free Bond Fund,
Intermediate Tax Free Bond Fund, Prime Money Market Fund and U.S. Treasury Money Market
Fund, when selecting brokers and dealers to handle the purchase and sale of portfolio
instruments, the Adviser looks for prompt execution of the order at a favorable price. The
Adviser will generally use those who are recognized dealers in specific portfolio
instruments, except when a better price and execution of the order can be obtained
elsewhere. In selecting among firms believed to meet these criteria, the Adviser may give
consideration to those firms which have sold or are selling Shares of the Funds and other
funds distributed by the Distributor and its affiliates. The Adviser makes decisions on
portfolio transactions and selects brokers and dealers subject to review by the Funds'
Board. Investment decisions for the Funds are made independently from those of other
accounts managed by the Adviser. When the Funds and one or more of those accounts invests
in, or disposes of, the same security, available investments or opportunities for sales
will be allocated among the Funds and the account(s) in a manner believed by the Adviser to
be equitable. While the coordination and ability to participate in volume transactions may
benefit the Funds, it is possible that this procedure could adversely impact the price paid
or received and/or the position obtained or disposed of by the Funds.

Research Services
Research services may include advice as to the advisability of investing in securities;
security analysis and reports; economic studies; industry studies; receipt of quotations
for portfolio evaluations; and similar services. Research services may be used by the
Adviser in advising other accounts. To the extent that receipt of these services may
replace services for which the Adviser or its affiliates might otherwise have paid, it
would tend to reduce their expenses. The Adviser and its affiliates exercise reasonable
business judgment in selecting those brokers who offer brokerage and research services to
execute securities transactions. They determine in good faith that commissions charged by
such persons are reasonable in relationship to the value of the brokerage and research
services provided.

For the fiscal year ended April 30, 2003, Stock Fund paid total brokerage commissions of
$179,155, Small Company Stock Fund paid total brokerage commissions of $421,570 and U.S.
Government Securities Fund paid total brokerage commissions of $8,645.

CO-ADMINISTRATORS
Federated Services Company ("Fserv") and Riggs Bank serve as co-administrators to the Trust
and provide the Funds with certain administrative personnel and services necessary to
operate the Funds. These services are provided for an annual fee as specified below:

Fees Payable to Fserv:

Maximum..... Average Daily Net Assets of the
Administrative Fee Riggs Group of Funds
0.125%...... on the first $4 million
0.100%...... on the next $250 million
0.075%...... on assets in excess of $650 million

Fees Payable to Riggs Bank:

Riggs Bank provide administrative services for an annual fee of 0.02% of the average daily
net assets of the Funds.

Service Arrangements Prior to June 1, 2003
Prior to June 1, 2003, FServ served as co-administrator, transfer agent and fund accountant
for the Trust for an aggregate annual fee as specified below:

Fees Payable to FServ:

Maximum..... Average Daily Net Assets of the
Administrative Fee Riggs Group of Funds
0.140%...... on the first $1.2 billion
0.120%...... on the next $1.3 billion
0.100%...... on the next $1.0 billion
0.080%...... on assets in excess of $3.5 billion

Fees Payable to Riggs Bank:

Riggs Bank provided administrative services for an annual fee of 0.02% of the average daily
net assets of the Funds.

Service Arrangements Prior To August 1, 2001
Prior to August 1, 2001, FServ served as sole administrator for the Trust and provided the
Funds with certain administrative personnel and services necessary to operate the Funds.
FServ served as transfer agent and fund accountant for the Trust and provided the Funds
with certain administrative, transfer agency and fund accounting services. These services
were provided for an aggregate annual fee of 0.16% of the average daily net assets of the
Trust.

FUND ACCOUNtANT
State Street Corporation serves as fund accountant to the Trust and provides the Funds with
certain fund accounting services.

CUSTODIAN
Riggs Bank, is custodian for the securities and cash of the Funds. Under the Custodian
Agreement, Riggs Bank holds the Funds' portfolio securities in safekeeping and keeps all
necessary records and documents relating to its duties.

TRANSFER AGENT AND DIVIDEND DISBURSING AGENT
FServ, through its registered transfer agent subsidiary, Federated Shareholder Services
Company, maintains all necessary shareholder records. The Funds pay the transfer agent a
fee based on the size, type and number of accounts and transactions made by shareholders.

</R>

INDEPENDENT auditors
The independent auditors for the Trust, KPMG LLP, conduct their audits in accordance with
auditing standards generally accepted in the United States of America, which require them
to plan and perform their audits to provide reasonable assurance about whether each Fund's
financial statements and financial highlights are free of material misstatement.

<R>
FEES PAID BY THE FUNDS FOR SERVICES
============================================================================================

--------------------------------------------------------------------------------------
Fund Advisory Fee Paid/ Shareholder Services Fee Administrative Fee
Advisory Fee Waived Paid Paid

------------------------------------------------
--------------------------------------------------------------------------
For the fiscal year ended For the fiscal year ended For the fiscal year
April 30, April 30, ended
April 30,
--------------------------------------------------------------------------
--------------------------------------------------------------------------
2003 2002 2001 2003 2002 2001 2003 2002 2001
--------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------
Stock Fund $ $ $ $40,705 $ $100,354 $ $104,44$198,702
282,153/ 489,565/931,417/ (R) 61,616 (R) 60,192
(R)

0 0 53,346 201,485
0 (Y) 101,573 (Y)
(Y)
--------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------
Small $ $ $ 29,555 $ $ $ $ $115,232
Company 263,174/ 377,454/576,162/ (R) 38,463 57,182 52,635 75,491
Stock Fund (R) (R)
52,687
0 0 0 (Y)
79,491 120,998
(Y) (Y)
--------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------
U. S. $ $ $ $20,034 $ $ $120,09$160,95$187,678
Government 562,956/ 754,480/879,741/ (R) 23,355 27,679
Securities (R) (R)
Fund
300,243 402,389 469,195 55,026 $
(Y) 77,242 89,620
(Y) (Y)
--------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------
Bond Fund $ $ $ $26,220 $ $ $ $ $
196,649/ 242,231/295,562/ (R) 32,298 39,409 41,952 51,676 63,053
(R) (R)

73,144 87,203 106,402

--------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------
Short Term $ $ $ $52,924 $ $ $ $ $101,656
Tax Free 396,933/ 428,550/476,515/ (R) 57,140 63,535 84,679 91,424
Bond Fund (R) (R)

92,878 119,994 133,424
--------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------
Intermediate$ $ $ 44,411 $ $ $ $ $
Tax Free 333,085/ 405,452/459,981/ (R) 54,061 61,331 71,058 86,496 98,129
Bond Fund (R) (R)

88,822 108,121 122,662

--------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------
Prime $1,163,06$1,472,4$1,606,57$38,080 $ $ $372,18$471,18$514,103
Money (R) 49,894 39,584
Market Fund (R) (R)
0 0 0
0 (Y)
0 (Y) 0 (Y)
--------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------
U.S. $ $ $ $29,848 $ $ $144,24$248,25$277,362
Treasury 450,763/ 775,808/866,756/ (R) 22,123 4,757
Money (R) (R)
Market Fund
0 0 0 0 (Y)
0 (Y) 0 (Y)
--------------------------------------------------------------------------------------
(R) Class R Shares (Y) Class Y Shares
----------------------------------------------
Funds For the fiscal year
ended
April 30, 2003
-----------------------
-----------------------
12b-1 Fee
-----------------------
-----------------------
Class R Shares
----------------------------------------------
----------------------------------------------
Stock Fund $40,705
----------------------------------------------
----------------------------------------------
Small Company Stock 29,555
Fund
----------------------------------------------
----------------------------------------------
U.S. Government 50,086
Securities Fund
----------------------------------------------
----------------------------------------------
Bond Fund 0
----------------------------------------------
----------------------------------------------
Short Term Tax Free 0
Bond Fund
----------------------------------------------
----------------------------------------------
Intermediate Tax Free 0
Bond Fund
----------------------------------------------
----------------------------------------------
Prime Money Market 95,199
Fund
----------------------------------------------
----------------------------------------------
U.S. Treasury Money 49,952
Market Fund
----------------------------------------------

</R>

Fees are allocated among classes based on their pro rata share of Fund assets, except for
marketing
(Rule 12b-1) fees and shareholder services fees, which are borne only by the applicable
class of Shares.

HOW DO THE FUNDS MEASURE PERFORMANCE?
============================================================================================

The Funds may advertise Share performance by using the SEC's standard methods for
calculating performance applicable to all mutual funds. The SEC also permits this standard
performance information to be accompanied by non-standard performance information.

Share performance reflects the effect of non-recurring charges, such as maximum sales
charges, which, if excluded, would increase the total return and yield. The performance of
Shares depends upon such variables as: portfolio quality; average portfolio maturity; type
and value of portfolio securities; changes in interest rates; changes or differences in the
Funds' or any class of Shares' expenses; and various other factors.

Share performance fluctuates on a daily basis largely because net earnings and/or the value
of portfolio holdings fluctuate daily. Both net earnings and offering price per share are
factors in the computation of yield and total return.

<R>
average Annual Total Returns, Yield and effective yield

----------------------------------------------------------------------------------
Fund Average Annual Total Yield Effective Yield
Return for the 7-day period for the 7-day
for the following ended period ended
periods ended April 30, 2003/ April 30, 2003
April 30, 2003 for the 30-day period
ended
April 30, 2003
---------------------------------------------------------------------
---------------------------------------------------------------------
Class R Class Y Class R Class Y Class R Class Y
Shares Shares Shares Shares Shares Shares
One Year One Year
Five Year Five Year
Ten Year or Ten Year
Since or
Inception Since
Inception
----------------------------------------------------------------------------------
----------------------------------------------------------------------------------
Stock Fund (15.58)% (13.72)% NA NA NA
(8.39)% NA
6.44% NA
(11.27)%
----------------------------------------------------------------------------------
----------------------------------------------------------------------------------
Small (13.67)% (11.65)% NA NA NA
Company (4.94)% NA
Stock Fund 8.59% NA
3.52%
----------------------------------------------------------------------------------
----------------------------------------------------------------------------------
U.S. 7.29% 9.56% 4.23% 4.48% NA
Government 6.23% 4.34% 4.59% NA
Securities 6.21% NA
Fund 8.60%
----------------------------------------------------------------------------------
----------------------------------------------------------------------------------
Bond Fund 7.84% 4.42% NA
NA NA 4.49% NA NA
7.97%
----------------------------------------------------------------------------------
----------------------------------------------------------------------------------
Short Term 3.78% 2.75% NA
Tax Free NA NA 2.72% NA NA
Bond Fund 5.29%
----------------------------------------------------------------------------------
----------------------------------------------------------------------------------
Intermediate 7.43% 4.01% NA
Tax Free NA NA 4.00% NA NA
Bond Fund 6.99%
----------------------------------------------------------------------------------
----------------------------------------------------------------------------------
Prime Money 0.59% 0.94% 0.20% 0.56% 0.20% 0.56%
Market Fund 3.36% 3.71% 0.22% 0.57%
3.77% 4.22%

----------------------------------------------------------------------------------
----------------------------------------------------------------------------------
U.S. 0.50% 0.74% 0.29% 0.39% 0.29% 0.39%
Treasury NA 3.47% 0.29% 0.39%
Money 3.09% 3.94%
Market Fund
----------------------------------------------------------------------------------

</R>

TOTAL RETURN
Total return represents the change (expressed as a percentage) in the value of Shares over
a specific period of time, and includes the investment of income and capital gains
distributions.

The average annual total return for Shares is the average compounded rate of return for a
given period that would equate a $10,000 initial investment to the ending redeemable value
of that investment. The ending redeemable value is computed by multiplying the number of
Shares owned at the end of the period by the NAV per share at the end of the period. The
number of Shares owned at the end of the period is based on the number of Shares purchased
at the beginning of the period with $10,000, less any applicable sales charge, adjusted
over the period by any additional Shares, assuming the annual reinvestment of all dividends
and distributions. Total returns after taxes are calculated in a similar manner, but
reflect additional standard assumptions required by the SEC.

YIELD AND EFFECTIVE YIELD
<R>

With respect to Stock Fund, Small Company Stock Fund, U.S. Government Securities Fund, Bond
Fund, Short Term Tax Free Bond Fund and Intermediate Tax Free Bond Fund, the yield of
Shares is calculated by dividing: (i) the net investment income per share earned by the
Shares over a 30-day period; by (ii) the maximum offering price per share on the last day
of the period. This number is then annualized using semi-annual compounding. This means
that the amount of income generated during the 30-day period is assumed to be generated
each month over a 12-month period and is reinvested every six months. The yield does not
necessarily reflect income actually earned by Shares because of certain adjustments
required by the SEC and, therefore, may not correlate to the dividends or other
distributions paid to shareholders.

</R>

With respect to Prime Money Market Fund and U.S. Treasury Money Market Fund, the yield of
Shares is based upon the seven days ending on the day of the calculation, called the "base
period." This yield is calculated by: determining the net change in the value of a
hypothetical account with a balance of one Share at the beginning of the base period, with
the net change excluding capital changes but including the value of any additional Shares
purchased with dividends earned from the original one Share and all dividends declared on
the original and any purchased Shares; dividing the net change in the account's value by
the value of the account at the beginning of the base period to determine the base period
return; and multiplying the base period return by 365/7. The effective yield is calculated
by compounding the unannualized base-period return by: adding one to the base-period
return, raising the sum to the 365/7th power; and subtracting one from the result. To the
extent investment professionals and broker/dealers charge fees in connection with services
provided in conjunction with an investment in Shares, the Share performance is lower for
shareholders paying those fees.

To the extent investment professionals and broker/dealers charge fees in connection with
services provided in conjunction with an investment in Shares, the Share performance is
lower for shareholders paying those fees.

PERFORMANCE COMPARISONS
Advertising and sales literature may include:

o references to ratings, rankings and financial publications and/or performance
comparisons of shares to certain indices;

o charts, graphs and illustrations using the Funds' returns, or returns in general,
that demonstrate investment concepts such as tax-deferred compounding, dollar-cost
averaging and systematic investment;

o discussions of economic, financial and political developments and their impact on the
securities market, including the portfolio manager's views on how such developments
could impact the Funds; and

o information about the mutual fund industry from sources such as the Investment
Company Institute.

Advertising and sales literature for the Funds may also include statements describing the
history of Riggs Bank. For example, reference may be made to Riggs Bank's heritage of
serving historical and political figures and financing projects that have been important to
the growth of the United States.

The Funds may compare their performance, or performance for the types of securities in
which they invest, to a variety of other investments, including federally insured bank
products such as bank savings accounts, certificates of deposit and Treasury bills.

The Funds may quote information from reliable sources regarding individual countries and
regions, world stock exchanges and economic and demographic statistics.

You may use financial publications and/or indices to obtain a more complete view of Share
performance. When comparing performance, you should consider all relevant factors such as
the composition of the index used, prevailing market conditions, portfolio compositions of
other funds, and methods used to value portfolio securities and compute offering price. The
financial publications and/or indices that the Funds use in advertising may include:

Consumer Price Index (CPI) is the measure of change in consumer prices, as determined by a
monthly survey of the U.S. Bureau of Labor Statistics. Many pension and employment
contracts are tied to changes in consumer prices, as protection against inflation and
reduced purchasing power. Among the CPI components are housing costs, food, transportation
and electricity. The CPI is also known as the cost-of-living index.

STOCK FUND:
o Standard & Poor's Daily Stock Price Index of 500 Common Stocks (S&P 500) is a
composite index of common stocks in industry, transportation and financial and public
utility companies. Can be used to compare to the total returns of funds whose
portfolios are invested primarily in common stocks. In addition, the S&P 500 assumes
reinvestments of all dividends paid by stocks listed on its index. Taxes due on any of
these distributions are not included, nor are brokerage or other fees calculated in
the S&P figures.

o Dow Jones Industrial Average ("DJIA") is an unmanaged index, which represents share
prices of selected blue-chip industrial corporations, as well as public utility and
transportation companies. The DJIA indicates daily changes in the average price of
stock any of its categories. It also reports total sales for each of its industries.
Because it represents the top corporations of America, the DJIA's index movements are
a leading economic indicator for the stock market as a whole.

o Lipper, Inc. ranks funds in various fund categories by making comparative
calculations using total return. Total return assumes the reinvestment of all capital
gains distributions and income dividends and takes into account any change in NAV over
a specific period of time. From time to time, the Funds will quote its Lipper ranking
in advertising and sales literature.

SMALL COMPANY STOCK FUND:
o Russell 2000 Index measures the performance of the 2,000 smallest companies in the
Russell 3000 Index, which represents 10% of the total market capitalization of the
Russell 3000 Index.

o Standard & Poor's Small Stock Index is a broadly diversified, unmanaged, index
consisting of approximately 600 small capitalization common stocks that can be used to
compare to the total returns of funds whose portfolios are invested primarily in small
capitalization common stocks.

o Morningstar, Inc., an independent rating service, is the publisher of the bi-weekly
Mutual Fund Values. Mutual Fund Values rates more than 1,000 NASDAQ listed mutual
funds of all types, according to their risk-adjusted returns. The maximum rating is
five stars, and ratings are effective for two weeks.

<R>

</R>

U.S. Government Securities Fund:
o Merrill Lynch U.S. Treasury/Agency Master Index is an unmanaged index comprised of
long-term bonds publicly issued by the U.S. government or its agencies.

o Lehman Brothers Government/Credit (Total) Index is comprised of approximately 5,000
issues which include non-convertible bonds publicly issued by the U.S. government or
its agencies; corporate bonds guaranteed by the U.S. government and quasi-federal
corporations; and publicly issued, fixed rate, non-convertible domestic bonds of
companies in industry, public utilities and finance. The average maturity of these
bonds approximates nine years. Tracked by Shearson Lehman Brothers, Inc., the index
calculates total returns for one month, three month, twelve month and ten year periods
and year-to-date.

o Lehman Brothers Aggregate Bond Index is an unmanaged index composed of securities
from the Lehman Brothers Government/Corporate Bond Index, Mortgage-Backed Securities
Index and the Asset-Backed Securities Index. Total return comprises price
appreciation/depreciation and income as a percentage of the original investment.
Indices are rebalanced monthly by market capitalization.

o Lipper, Inc., ranks funds in various fund categories by making comparative
calculations using total return. Total return assumes the reinvestment of all capital
gains distributions and income dividends and takes into account any change in NAV over
a specific period of time. From time to time, the Funds will quote its Lipper ranking
in advertising and sales literature.

Bond Fund:
o Merrill Lynch U.S. Treasury/Agency Master Index is an unmanaged index comprised of
long-term bonds publicly issued by the U.S. government or its agencies.

<R>

Short Term Tax Free Bond Fund:
o Lehman Brothers 3 Year Municipal Bond Index is an unmanaged index of municipal bonds
issued after January 1, 1991 with a minimum credit rating of at least Baa, been issued
as part of a deal of at least $50 million, have a maturity value of at least $5
million and a maturity range of 1-5 years. As of January 1996, the index also includes
zero coupon bonds and bonds subject to the Alternative Minimum Tax.

Intermediate Tax Free Bond Fund:
o Lehman Brothers 3 Year Municipal Bond Index is an unmanaged index of municipal bonds
issued after January 1, 1991 with a minimum credit rating of at least Baa, been issued
as part of a deal of at least $50 million, have a maturity value of at least $5
million and a maturity range of 1-5 years. As of January 1996, the index also includes
zero coupon bonds and bonds subject to the Alternative Minimum Tax.

o Lehman Brothers 5 Year Municipal Bond Index is an unmanaged index of municipal bonds
issued after January 1, 1991 with a minimum credit rating of at least Baa, been
issued as part of a deal of at least $50 million, have a maturity value of at least
$3 million and a maturity range of 1-9.99 years. As of January 1996 the index also
includes zero coupon bonds and bonds subject to the Alternative Minimum Tax.

o Lehman Brothers 7 Year Municipal Bond Index is an unmanaged index of municipal bonds
issued after January 1, 1991 with a minimum credit rating of at least Baa, been issued
as part of a deal of at least $50 million, have a maturity value of at least $5
million and a maturity range of 6-8 years. As of January 1996 the index also includes
zero coupon bonds and bonds subject to the Alternative Minimum Tax.

o Lehman Brothers 10 Year Municipal Bond Index is an unmanaged index of municipal bonds
issued after January 1, 1991 with a minimum credit rating of at least Baa, been issued
as part of a deal of at least $50 million, have a maturity value of at least $3
million and a maturity range of 10 years or greater. As of January 1996 the index also
includes zero coupon bonds and bonds subject to the Alternative Minimum Tax.

</R>

Prime Money Market Fund:
o iMoneyNet, Inc.'s Money Fund Report publishes annualized yields of money market funds
weekly. iMoneyNet Inc.'s Money Market Insight publication reports monthly and
12-month-to-date investment results for the same money funds.

o Salomon 30-Day Treasury Bill Index is a weekly quote of the most representative
yields for selected securities, issued by the U.S. Treasury, maturing in 30 days.

o Money, a monthly magazine, regularly ranks money market funds in various categories
based on the latest available seven-day effective yield. From time to time, the Funds
will quote its Money ranking in advertising and sales literature.

o Bank Rate Monitor National Index, Miami Beach, Florida, published weekly, is an
average of the interest rate of personal money market deposit accounts at ten of the
largest banks and thrifts in each of the five largest Standard Metropolitan
Statistical Areas. If more than one rate is offered, the lowest rate is used. Account
minimums and compounding methods may vary.

U.S. Treasury Money Market Fund:
o Salomon 30-Day Treasury Bill Index is a weekly quote of the most representative
yields for selected securities, issued by the U.S. Treasury, maturing in 30 days.

o iMoneyNet, Inc.'s Money Fund Report publishes annualized yields of money market funds
weekly. iMoneyNet Inc.'s Money Market Insight publication reports monthly and
12-month-to-date investment results for the same money funds.

FINANCIAL INFORMATION
============================================================================================

<R>

The Financial Statements for the Funds for the fiscal year ended April 30, 2003, are
incorporated herein by reference to the Annual Report to shareholders of the Riggs Funds
dated April 30, 2003.

</R>

<R>
============================================================================================
INVESTMENT RATINGS

For Prime Money Market Fund:

Standard & Poor's Short-Term Municipal Obligation Ratings
An S&P note rating reflects the liquidity concerns and market access risks unique to notes.

SP-1-- Strong capacity to pay principal and interest. An issue determined to possess a very
strong capacity to pay debt service is given a plus sign (+) designation.

SP-2--Satisfactory capacity to pay principal and interest, with some vulnerability to
adverse financial and economic changes over the term of the notes.

Variable Rate Demand Notes (VRDNs) And Tender Option Bonds (TOBs) Ratings
S&P assigns "dual" ratings to all long-term debt issues that have as part of their
provisions a demand feature. The first rating addresses the likelihood of repayment of
principal and interest as due, and the second rating addresses only the demand feature. The
long-term debt rating symbols are used for bonds to denote the long-term maturity and the
commercial paper rating symbols are usually used to denote the put (demand) options (i.e.,
AAA/A-1+). Normally demand notes receive note-rating symbols combined with commercial paper
symbols (i.e., SP-1+/A-1+).

Commercial Paper (CP) Ratings
An S&P commercial paper rating is a current assessment of the likelihood of timely payment
of debt having an original maturity of no more than 365 days.

A-1--A Short-term obligation rated 'A-1' is rated in the highest category by Standard &
Poor's. The obligor's capacity to meet its financial commitment on the obligation is
strong. Within this category, certain obligations are designated with a plus sign (+).
This indicates that the obligor's capacity to meet its financial commitment on these
obligations is extremely strong.

A-2--A Short-term obligation rated 'A-2' is somewhat more susceptible to the adverse
effects of changes in circumstances and economic conditions that obligations in higher
rating categories. However, the obligor's capacity to meet its financial commitment on the
obligation is satisfactory.

Standard & Poor's Long-Term Debt Ratings
AAA--An obligation rated 'AAA' has the highest assigned by Standard & Poor's. The
obligor's capacity to meet its financial commitment on the obligation is extremely strong.

AA--An obligation rated 'AA' differs from the highest rated obligations only in small
degree. The obligor's capacity to meet its financial commitment on the obligation is very
strong.

A--An obligation rated 'A' is somewhat more susceptible to the adverse effects of changes
in circumstances and economic conditions than obligations in higher rated categories.
However, the obligor's capacity to meet its financial commitment on the obligation is still
strong.

Moody's Investors Service Short-Term Municipal Obligation Ratings
Moody's short-term ratings are designated Moody's Investment Grade (MIG or VMIG). (See
below.) The purpose of the MIG or VMIG ratings is to provide investors with a simple system
by which the relative investment qualities of short-term obligations may be evaluated.

MIG1--This designation denotes best quality. There is present strong protection by
established cash flows, superior liquidity support or demonstrated broad based access to
the market for refinancing.

MIG2--This designation denotes high quality. Margins of protection are ample although not
so large as in the preceding group.

Variable Rate Demand Notes (VRDNs) And Tender Option Bonds (TOBs) Ratings
Short-term ratings on issues with demand features are differentiated by the use of the VMIG
symbol to reflect such characteristics as payment upon periodic demand rather than fixed
maturity dates and payment relying on external liquidity. In this case, two ratings are
usually assigned, (for example, Aaa/VMIG-1); the first representing an evaluation of the
degree of risk associated with scheduled principal and interest payments, and the second
representing an evaluation of the degree of risk associated with the demand feature. The
VMIG rating can be assigned a 1 or 2 designation using the same definitions described above
for the MIG rating.

Commercial Paper (CP) Ratings
Prime-1--Issuers rated Prime-1 (or supporting institutions) have a superior ability for
repayment of senior short-term debt obligations. Prime-1 repayment ability will often be
evidenced by many of the following characteristics: leading market positions in well
established industries, high rates of return on funds employed, conservative capitalization
structure with moderate reliance on debt and ample asset protection, broad margins in
earning coverage of fixed financial charges and high internal cash generation, and
well-established access to a range of financial markets and assured sources of alternate
liquidity.

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

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

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

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

NR--Indicates that both the bonds and the obligor or credit enhancer are not currently
rated by S&P or Moody's with respect to short-term indebtedness. However, management
considers them to be of comparable quality to securities rated A-1 or P-1.

NR(1)--The underlying issuer/obligor/guarantor has other outstanding debt rated AAA by S&P
or Aaa by Moody's.

NR(2)--The underlying issuer/obligor/guarantor has other outstanding debt rated AA by S&P
or Aa by Moody's.

NR(3)--The underlying issuer/obligor/guarantor has other outstanding debt rated A by S&P or
Moody's.

Fitch Ratings Short-Term Debt Rating Definitions
F-1--Indicates the strongest capacity for timely payment of financial commitments relative
to other issuers or issues in the same country. Under their national rating scale, this
rating is assigned to the "best" credit risk relative to all others in the same country and
is normally assigned to all financial commitments issued or guaranteed by the sovereign
state. Where the credit risk is particularly strong, a "+" is added to the assigned rating.

F-2-- Indicates a satisfactory capacity for timely payment of financial commitments
relative to other issuers or issues in the same country. However, the margin of safety is
not as great as in the case of the higher ratings.

F-3--Indicates an adequate capacity for timely payment of financial commitments relative to
other issuers or issues in the same country. However, such capacity is more susceptible to
near-term adverse changes than for financial commitments in higher rated categories.

Fitch Ratings Long-Term Debt Rating Definitions
AAA--Highest credit quality. 'AAA' ratings denote the lowest expectation of credit risk.
They are assigned only in case of exceptionally strong capacity for timely payment of
financial commitments. This capacity is highly unlikely to be adversely affected by
foreseeable events.

AA--Very high credit quality. 'AA' ratings denote a very low expectation of credit risk.
They indicate very strong capacity for timely payment of financial commitments. This
capacity is not significantly vulnerable to foreseeable events.

A--High credit quality. 'A' ratings denote a low expectation of credit risk. The capacity
for timely payment of financial commitments is considered strong. This capacity may,
nevertheless, be more vulnerable to changes in circumstances or in economic conditions than
is the case for higher ratings.

BBB--Good credit quality. 'BBB' ratings indicate that there is currently a low expectation
of credit risk. The capacity for timely payment of financial commitments is considered
adequate, but adverse changes in circumstances and in economic conditions are more likely
to impair this capacity. This is the lowest investment-grade category.

BB--Speculative. 'BB' ratings indicate that there is a possibility of credit risk
developing, particularly as the result of adverse economic change over time; however,
business or financial alternatives may be available to allow financial commitments to be
met. Securities rated in this category are not investment grade.

B--Highly speculative. 'B' ratings indicate that significant credit risk is present, but a
limited margin of safety remains. Financial commitments are currently being met; however,
capacity for continued payment is contingent upon a sustained, favorable business and
economic environment.

CCC, CC, C--High default risk. Default is a real possibility. Capacity for meeting
financial commitments is solely reliant upon sustained, favorable business or economic
developments. A 'CC' rating indicates that default of some kind appears probable. 'C'
ratings signal imminent default.

Fitch Ratings Commercial Paper Rating Definitions
F-1--Indicates the strongest capacity for timely payment of financial commitments relative
to other issuers or issues in the same country. Under their national rating scale, this
rating is assigned to the "best" credit risk relative to all others in the same country and
is normally assigned to all financial commitments issued or guaranteed by the sovereign
state. Where the credit risk is particularly strong, a "+" is added to the assigned rating.

DBRS Short-Term Debt and Commercial Paper Rating Definitions
As is the case with all DBRS rating scales, commercial paper ratings are meant to give an
indication of the risk that the borrower will not fulfill its obligations in a timely
manner.

R-1 (high) Short-term debt rated "R-1 (high)" is of the highest credit quality, and
indicates an entity which possesses unquestioned ability to repay current liabilities as
they fall due. Entities rated in this category normally maintain strong liquidity
positions, conservative debt levels and profitability which is both stable and above
average. Companies achieving an "R-1 (high)" rating are normally leaders in structurally
sound industry segments with proven track records, sustainable positive future results and
no substantial qualifying negative factors. Given the extremely tough definition which DBRS
has established for an "R-1 (high)", few entities are strong enough to achieve this rating.

R-1 (middle) Short-term debt rated "R-1 (middle)" is of superior credit quality and, in
most cases, ratings in this category differ from "R-1 (high)" credits to only a small
degree. Given the extremely tough definition which DBRS has for the "R-1 (high)" category
(which few companies are able to achieve), entities rated "R-1 (middle)" are also
considered strong credits which typically exemplify above average strength in key areas of
consideration for debt protection.

R-1 (low) Short-term debt rated "R-1 (low)" is of satisfactory credit quality. The overall
strength and outlook for key liquidity, debt and profitability ratios is not normally as
favorable as with higher rating categories, but these considerations are still respectable.
Any qualifying negative factors which exist are considered manageable, and the entity is
normally of sufficient size to have some influence in its industry.

R-2 (high), R-2 (middle), R-2 (low) Short-term debt rated "R-2" is of adequate credit
quality and within the three subset grades, debt protection ranges from having reasonable
ability for timely repayment to a level which is considered only just adequate. The
liquidity and debt ratios of entities in the "R-2" classification are not as strong as
those in the "R-1" category, and the past and future trend may suggest some risk of
maintaining the strength of key ratios in these areas. Alternative sources of liquidity
support are considered satisfactory; however, even the strongest liquidity support will not
improve the commercial paper rating of the issuer. The size of the entity may restrict its
flexibility, and its relative position in the industry is not typically as strong as an
"R-1 credit". Profitability trends, past and future, may be less favorable, earnings not as
stable, and there are often negative qualifying factors present which could also make the
entity more vulnerable to adverse changes in financial and economic conditions

DBRS Long-Term Debt Rating Definitions
As is the case with all DBRS rating scales, long-term debt ratings are meant to give an
indication of the risk that the borrower will not fulfill its full obligations in a timely
manner with respect to both interest and principal commitments.

"AAA" Bonds rated "AAA" are of the highest credit quality, with exceptionally strong
protection for the timely repayment of principal and interest. Earnings are considered
stable, the structure of the industry in which the entity operates is strong, and the
outlook for future profitability is favorable. There are few qualifying factors present
which would detract from the performance of the entity, the strength of liquidity and
coverage ratios is unquestioned and the entity has established a creditable track record of
superior performance. Given the extremely tough definition which DBRS has established for
this category, few entities are able to achieve a AAA rating.

"AA" Bonds rated "AA" are of superior credit quality, and protection of interest and
principal is considered high. In many cases, they differ from bonds rated AAA only to a
small degree. Given the extremely tough definition which DBRS has for the AAA category
(which few companies are able to achieve), entities rated AA are also considered to be
strong credits which typically exemplify above-average strength in key areas of
consideration and are unlikely to be significantly affected by reasonably foreseeable
events.

"A" Bonds rated "A" are of satisfactory credit quality. Protection of interest and
principal is still substantial, but the degree of strength is less than with AA rated
entities. While a respectable rating, entities in the "A" category are considered to be
more susceptible to adverse economic conditions and have greater cyclical tendencies than
higher rated companies.

("high", "low") grades are used to indicate the relative standing of a credit within a
particular rating category. The lack of one of these designations indicates a rating which
is essentially in the middle of the category. Note that "high" and "low" grades are not
used for the AAA category.

For Short Term Tax Free Bond Fund and Intermediate tax free bond fund

Standard & Poor's Short-Term Municipal Obligation Ratings
A Standard & Poor's (S&P) note rating reflects the liquidity concerns and market access
risks unique to notes.

SP-1-- Strong capacity to pay principal and interest. An issue determined to possess a very
strong capacity to pay debt service is given a plus sign (+) designation.

SP-2--Satisfactory capacity to pay principal and interest, with some vulnerability to
adverse financial and economic changes over the term of the notes.

Variable Rate Demand Notes (VRDNs) And Tender Option Bonds (TOBs) Ratings
S&P assigns dual ratings to all long-term debt issues that have as part of their provisions
a variable rate demand feature. The first rating (long-term rating) addresses the
likelihood of repayment of principal and interest when due, and the second rating
(short-term rating) describes the demand characteristics. Several examples are AAA/A-1+,
AA/A-1+, A/A-1. (The definitions for the long-term and the short-term ratings are provided
below.)

Commercial Paper (CP) Ratings
An S&P commercial paper rating is a current assessment of the likelihood of timely payment
of debt having an original maturity of no more than 365 days.

AA--An obligation rated 'AA' differs from the highest rated obligations only in small
degree. The obligor's capacity to meet its financial commitment on the obligation is very
strong.

Moody's Investors Service Short-Term Municipal Obligation Ratings
Moody's Investors Service (Moody's) short-term ratings are designated Moody's Investment
Grade (MIG or VMIG). (See below.) The purpose of the MIG or VMIG ratings is to provide
investors with a simple system by which the relative investment qualities of short-term
obligations may be evaluated.

MIG1--This designation denotes best quality. There is present strong protection by
established cash flows, superior liquidity support or demonstrated broad based access to
the market for refinancing.

MIG2--This designation denotes high quality. Margins of protection are ample although not
so large as in the preceding group.

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

NR(1)--The underlying issuer/obligor/guarantor has other outstanding debt rated AAA by S&P
or Aaa by Moody's.

NR(2)--The underlying issuer/obligor/guarantor has other outstanding debt rated AA by S&P
or Aa by Moody's.

NR(3)--The underlying issuer/obligor/guarantor has other outstanding debt rated A by S&P or
Moody's.

F-3--Indicates an adequate capacity for timely payment of financial commitments relative to
other issuers or issues in the same country. However, such capacity

For Stock Fund and Small Company Stock Fund

Standard and Poor's Long-Term Debt Rating Definitions
AAA--Highest credit quality. 'AAA' ratings denote the lowest expectation of credit risk.
They are assigned only in case of exceptionally strong capacity for timely payment of
financial commitments. This capacity is highly unlikely to be adversely affected by
foreseeable events.

Prime-1--Issuers rated Prime-1 (or supporting institutions) have a superior ability for
repayment of senior short-term debt obligations. Prime-1 repayment ability will often be
evidenced by many of the following characteristics: leading market positions in well
established industries, high rates of return on funds employed, conservative capitalization
structure with moderate reliance on debt and ample asset protection, broad margins in
earning coverage of fixed financial charges and high internal cash generation, and
well-established access to a range of financial markets and assured sources of alternate
liquidity.

Standard and Poor's Commercial Paper Ratings
A-1-- A short-term obligation rated 'A-1' is rated in the highest category by Standard &
Poor's. The obligor's capacity to meet its financial commitment on the obligation is
strong. Within this category, certain obligations are designated with a plus sign (+). This
indicates that the obligor's capacity to meet its financial commitment on these obligations
is extremely strong.

A-2-- A short-term obligation rated 'A-2' is somewhat more susceptible to the adverse
effects of changes in circumstances and economic conditions than obligations in higher
rating categories. However, the obligor's capacity to meet its financial commitment on the
obligation is satisfactory.

</R>

ADDRESSES
============================================================================================

riggs funds
Class R Shares
Class Y Shares
5800 Corporate Drive
Pittsburgh, PA 15237-7010

Distributor
Federated Securities Corp.
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

<R>

Investment Adviser
Riggs Investment Advisors Inc.
800 17th Street N.W.
Washington, D.C. 20006-3950

</R>

Custodian
Riggs Bank N.A.
Riggs Funds
5700 RiverTech Court
Riverdale, MD 20737-1250

Transfer Agent and Dividend Disbursing Agent
Federated Shareholder Services Company
P.O. Box 8600
Boston, MA 02266-8600

<R>

Independent Auditors
KPMG LLP
99 High Street
Boston, MA 02110

</R>

Cusip 76656A 609 Riggs Stock Fund R Shares RISTX
Cusip 76656A 781 Riggs Stock Fund Y Shares RIYSX
Cusip 76656A 807 Riggs Small Company Stock Fund R Shares RISCX
Cusip 76656A 799 Riggs Small Company Stock Fund Y Shares RISYX
Cusip 76656A 500 Riggs U.S. Government Securities Fund R Shares RIBDX
Cusip 76656A 773 Riggs U.S. Government Securities Fund Y Shares RIUSX
Cusip 76656A 872 Riggs Bond Fund R Shares RIBRX
Cusip 76656A 864 Riggs Short Term Tax Free Bond Fund R Shares RSTBX
Cusip 76656A 856 Riggs Intermediate Tax Free Bond Fund R Shares RTTFX
Cusip 76656A 203 Riggs Prime Money Market Fund R Shares RRPXX
Cusip 76656A 104 Riggs Prime Money Market Fund Y Shares RYPXX
Cusip 76656A 401 Riggs U.S. Treasury Money Market Fund R Shares RGSXX
Cusip 76656A 302 Riggs U.S. Treasury Money Market Fund Y Shares RYTXX

</R>

PART C. OTHER INFORMATION.

Item 23. Exhibits:

(a) (i) Conformed Copy of the Declaration of Trust of the
Registrant; (1)
(ii) Conformed copy of Amendment No. 1 to the Declaration
of Trust of the Registrant; (16)
(iii) Conformed copy of Amendment No. 2 to the Declaration
of Trust of the Registrant; (16)
(iv) Conformed copy of Amendment No. 3 to the Declaration
of Trust of the Registrant; (8)
(v) Conformed copy of Amendment No. 4 to the Declaration
of Trust of the Registrant; (8)
(vi) Conformed copy of Amendment No. 5 to the Declaration
of Trust of the Registrant;(8)
(vii) Conformed copy of Amendment No. 6 to the Declaration
of Trust of the Registrant; (15)
(viii) Conformed copy of Amendment No. 7 to the Declaration
of Trust of the Registrant; (15)
(ix) Conformed copy of Amendment No. 8 to the Declaration
of Trust of the Registrant; (8)
(x) Conformed copy of Amendment No. 9 to the Declaration
of Trust of the Registrant; (8)
(xi) Conformed copy of Amendment No. 10 to the Declaration
of Trust of the Registrant; (17)
(xii) Conformed copy of Amendment No. 11 to the Declaration
of Trust of the Registrant; (17)
(xiii) Conformed copy of Amendment No. 12 to the Declaration
of Trust of the Registrant; +
(b) (i) Copy of the By-Laws of the Registrant;(1)
(ii) Copy of Amendment No. 1 to the By-Laws of the
Registrant; (16)
(iii) Copy of Amendment No. 2 to the By-Laws of the
Registrant; (16)
(iv) Copy of Amendment No. 3 to the By-Laws of the
Registrant; (16)
(v) Copy of Amendment No. 4 to the By-Laws of the
Registrant; (16)
(vi) Copy of Amendment No. 5 to the By-Laws of the
Registrant; +
(c) (i) Copy of the Specimen Certificate for Shares of
Beneficial Interest of RIMCO Monument U.S. Treasury
Money Market Fund, RIMCO Monument Bond Fund and RIMCO
Monument Stock Fund;(2)
(ii) Copy of the Specimen Certificate for Shares of
Beneficial Interest of RIMCO Monument Small
Capitalization Equity Fund; (6)
(iii) Copy of the Specimen Certificate for Shares of
Beneficial Interest of RIMCO Monument Prime Money
Market Fund - Class A Shares and Class B Shares; (8)
(d) (i) Conformed copy of the Investment Advisory Contract of
the Registrant and Exhibits A through I of the
Investment Advisory Contract; (17)
(ii) Conformed copy of the Sub-Advisory Contract between
Riggs Bank, N.A. and J. Bush & Co. and Exhibit A of
the Sub-Advisory Contract; (16)
(iii) Conformed copy of the Sub-Advisory Contract between
Riggs Investment Corp. and Riggs Investment Management
Corporation and Exhibits A through H of the
Sub-Advisory Contract; (17)
(e) (i) Conformed copy of the Distributor's Contract of the
Registrant and Exhibits A and B thereto;(7)
(ii) Conformed copy of Exhibit C to the Distributor's
Contract of the Registrant; (10)
(iii) Conformed copy of Exhibits D & E to the Distributor's
Contract of the Registrant; (13)
(iv) Conformed copy of Exhibits F & G to the Distributor's
Contract of the Registrant; (15)
(v) Conformed copy of Exhibit H to the Distributor's
Contract of the Registrant; (16)
(vi) Conformed copy of Exhibit I to the Distributor's
Contract of the Registrant; (17)
(vii) Conformed copy of Amendment to Distributor's Contract
of the Registrant; (18)
(f) Not applicable;
(g) (i) Conformed copy of the Custody Agreement of the
Registrant;(1)
(ii) Copy of the Custodial Compensation; (11)
(iii) Conformed copy of Custody Agreement between Riggs Bank
N.A and The Bank of New York dated June 8, 1998; (13)
(iv) Conformed copy of Appendix A to the Custody Agreement
of the Registrant; (16)
(v) Conformed copy of Amendment No. 2 to Appendix B to the
Custody Agreement of the Registrant; (16)
(vi) Conformed copy of Appendix C to the Custody Agreement
of the Registrant; (16)
(vii) Conformed copy of Exhibit A to the Custody Agreement
of the Registrant; (16)
(viii) Conformed copy of Exhibit B to the Custody Agreement
of the Registrant; (16)
(ix) Conformed copy of Exhibit B-1 to the Custody Agreement
of the Registrant; (16)
(x) Conformed copy of Exhibit C to the Custody Agreement
of the Registrant; (16)
(xi) Conformed copy of Exhibit D to the Custody Agreement
of the Registrant; (16)
(h) (i) Conformed copy of the Agreement for Fund Accounting
Services, Administrative Services, Transfer Agency
Services and Custody Services Procurement;(5)
(ii) Conformed copy of Amendment No. 1 and Exhibit 1 to the
Agreement for Fund Accounting Services, Administrative
Services, Transfer Agency Services and Custody
Services Procurement; (17)
(iii) Conformed copy of Amendment No. 1 to the Schedule of
Compensation for the Agreement for Fund Accounting
Services, Administrative Services, Transfer Agency
Services and Custody Services Procurement; (17)
(iv) Conformed copy of Amendment to the Agreement for Fund
Accounting Services, Administrative Services, Transfer
Agency Services and Custody Services Procurement; (18)
(v) Conformed copy of the Administrative Services
Agreement of the Registrant and Exhibit 1; (18)
(vi) Conformed copy of the Shareholder Services Agreement
of the Registrant; (12)
(vii) Conformed copy of Amendment No. 1 to Exhibit 1 to the
Shareholder Services Agreement of the Registrant; (16)
(viii) Conformed copy of Amendment No. 2 to Exhibit 1 to the
Shareholder Services Agreement of the Registrant; (16)
(ix) Conformed copy of Shareholder Services Plan of the
Registrant;(12)
(x) Conformed copy of Exhibit A to the Shareholder
Services Plan of the Registrant; (16)
(xi) Conformed copy of Exhibit B to the Shareholder
Services Plan of the Registrant; (16)
(xii) Conformed copy of Exhibit C to the Shareholder
Services Plan of the Registrant; (16)
(xiii) Conformed copy of Exhibit D to the Shareholder
Services Plan of the Registrant; (16)
(xiv) Conformed copy of Exhibit E to the Shareholder
Services Plan of the Registrant; (16)
(xv) Conformed copy of Exhibit F to the Shareholder
Services Plan of the Registrant; (16)
(xvi) Conformed copy of Exhibit G to the Shareholder
Services Plan of the Registrant; (16)
(xvii) Conformed copy of Exhibit H to the Shareholder
Services Plan of the Registrant; (16)
(xviii) Conformed copy of Exhibit I to the Shareholder
Services Plan of the Registrant; (16)
(xix) Conformed copy of Exhibit J to the Shareholder
Services Plan of the Registrant; (16)
(xx) Conformed copy of Exhibit K to Shareholder Services
Plan of the Registrant; (16)
(xxi) Conformed copy of Exhibit L to the Shareholder
Services Plan of the Registrant; (16)
(xxii) Conformed copy of Exhibit M to the Shareholder
Services Plan of the Registrant; (16)
(xxiii) Conformed copy of Exhibit N to the Shareholder
Services Plan of the Registrant; (17)
(i) Conformed copy of the Opinion and Consent of Counsel
as to legality of shares being registered; (9)
(j) Conformed copy of the Consent of Independent Auditors;
(18)
(k) Not applicable;
(l) Conformed copy of the Initial Capital Understanding;
(9)
(m) (i) Conformed copy of the Distribution Plan of the
Registrant; (8)
(ii) Conformed copy of Exhibit A to the Distribution Plan
of the Registrant; (16)
(iii) Conformed copy of Exhibits B & C to the Distribution
Plan of the Registrant; (13)
(iv) Conformed copy of Exhibit D to the Distribution Plan
of the Registrant; (16)
(v) Conformed copy of Exhibit E to the Distribution Plan
of the Registrant; (16)
(vi) Copy of Registrant's Rule 12b-1 Agreement of the
Registrant; (8)
(vii) Conformed copy of Exhibit A to the Rule 12b-1
Agreement of the Registrant; (16)
(n) (i) Conformed copy of the Multiple Class Plan of the
Registrant, as Amended, Effective September 1, 1998;
(13)
(ii) Conformed copy of Exhibit A to the Multiple Class Plan
of the Registrant; (16)
(iii) Conformed copy of Exhibit B to the Multiple Class Plan
of the Registrant; (16)
(iv) Conformed copy of Exhibit C to the Multiple Class Plan
of the Registrant; (16)
(o) Conformed copy of Power of Attorney of the Registrant;
(17)
(p) (i) Copy of the Code of Ethics for Adviser; (16)
(ii) Copy of the Code of Ethics for Sub-Adviser; (18)
(iii) Copy of the Code of Ethics for Access Persons; +

+ All exhibits are being filed electronically.

1. Response is incorporated by reference to Registrant's Initial Registration
Statement on Form N-1A filed May 9, 1991. (File Nos. 33-40428 and 811-6309).
2. Response is incorporated by reference to Registrant's Pre-Effective Amendment
No. 1 on Form N-1A filed July 19, 1991. (File Nos. 33-40428 and 811-6309).
5. Response is incorporated by reference to Registrant's Post-Effective Amendment
No. 4 on Form N-1A filed June 28, 1994. (File Nos. 33-40428 and 811-6309).
6. Response is incorporated by reference to Registrant's Post-Effective Amendment
No. 4 on Form N-1A filed June 28, 1994. (File Nos. 33-40428 and 811-6309).
7. Response is incorporated by reference to Registrant's Post-Effective Amendment
No. 7 on Form N-1A filed June 27, 1995. (File Nos. 33-40428 and 811-6309).
8. Response is incorporated by reference to Registrant's Post-Effective Amendment
No. 8 on Form N-1A filed October 10, 1995. (File Nos. 33-40428 and 811-6309).
9. Response is incorporated by reference to Registrant's Post-Effective Amendment
No. 9 on Form N-1A filed June 27, 1996. (File Nos. 33-40428 and 811-6309).
10. Response is incorporated by reference to Registrant's Post-Effective Amendment
No. 10 on Form N-1A filed June 26, 1997. (File Nos. 33-40428 and 811-6309).
11. Response is incorporated by reference to Registrant's Post-Effective Amendment
No. 11 on Form N-1A filed April 24, 1998. (File Nos. 33-40428 and 811-6309).
12. Response is incorporated by reference to Registrant's Post-Effective Amendment
No. 12 on Form N-1A filed June 29, 1998. (File Nos. 33-40428 and 811-6309).
13. Response is incorporated by reference to Registrant's Post-Effective Amendment
No. 13 on Form N-1A filed June 18, 1999. (File Nos. 33-40428 and 811-6309).
15. Response is incorporated by reference to Registrant's Post-Effective Amendment
No. 17 on Form N-1A filed September 10, 1999. (File Nos. 33-40428 and
811-6309).
16. Response is incorporated by reference to Registrant's Post-Effective Amendment
No. 20 on Form N-1A filed June 29, 2000. (File Nos. 33-40428 and 811-6309).
17. Response is incorporated by reference to Registrant's Post-Effective Amendment
No. 21 on Form N-1A filed June 27, 2001. (File Nos. 33-40428 and 811-6309).
18. Response is incorporated by reference to Registrant's Post-Effective Amendment
No. 22 on Form N-1A filed June 27, 2002. (File Nos. 33-40428 and 811-6309).

Item 24. Persons Controlled by or Under Common Control with the Fund:

None

Item 25. Indemnification: (2)

Item 26. Business and Other Connections of the Investment Adviser:

(a) The Board of Trustees (the Board) governs the Funds. The Board selects
and oversees the Adviser, Riggs Investment Advisors Inc. The Adviser
manages the Funds' assets, including buying and selling portfolio
securities. The Adviser's address is 800 17th Street N.W., Washington,
D.C. 20006.

Riggs Investment Advisors Inc. (RIA) has advised the Riggs Funds since September
1991, and as of April 30, 2003, provides investment advice for assets of over $1.9
billion. RIA has a varied client base of approximately 200 other relationships
including corporate pension plans, foundations, endowments and associations.

Other Business,
Name Substantial Profession,
Position with Vocation or
the Adviser Employment
-------------------------------------------------------------------------

Henry A. Dudley, Chairman and Executive Vice
Jr. Director- Board of President, Riggs
Directors Bank, N.A.

Mark N. Hendrix Director - Board of Executive Vice
Directors President and Chief
Marketing Officer,
Riggs Bank, N.A.

Steve Donald Director - Board of President, Riggs
Directors Securities Inc.

Henry D. Director - Board of Executive Vice
Morneault Directors President, Riggs
Bank, N.A.
Robert C. Roane Director - Board of Executive Vice
Directors President and Chief
Operating Officer,
Riggs Bank, N.A.
Steven T. Tamburo Director - Board of Executive Vice
Directors President, Riggs
Bank, N.A.

Timothy C. Chairman and President, Riggs
Coughlin Director- Riggs National Corp.
Investment Advisors
Inc. Board of
Directors
Henry A. Dudley, Director - Riggs Executive Vice
Jr. Investment Advisors President, Riggs
Inc. Board of Bank, N.A.
Directors
Lawrence I. Director - Riggs President, Perpetual
Hebert Investment Advisors Corp.
Inc. Board of
Directors

Henry D. Director - Riggs Executive Vice
Morneault Investment Advisors President, Riggs
Inc. Board of Bank, N.A.
Directors
Nathan Reischer Director - Riggs Managing Director,
Investment Advisors Riggs Investment
Inc. Board of Advisors Inc.
Directors

Robert Roane Director - Riggs Executive Vice
Investment Advisors President and Chief
Inc. Board of Operating Officer,
Directors Riggs Bank, N.A.

Pierre (Pete) G. Director - Riggs Senior Managing
Trinque Investment Advisors Director and Chief
Inc. Board of Operating Officer,
Directors Riggs Investment
Advisors Inc.

Item 27. Principal Underwriters:

(a) Federated Securities Corp. the Distributor for shares of
the Registrant, acts as principal underwriter for the
following open-end investment companies, including the
Registrant:

Cash Trust Series II; Cash Trust Series, Inc.; Edward Jones Money
Market Fund; Edward Jones Tax-Free Money Market Fund; Federated
American Leaders Fund, Inc.; Federated Adjustable Rate Securities
Fund; Federated Capital Income Fund, Inc.; Federated Core Trust;
Federated Equity Funds; Federated Equity Income Fund, Inc.;
Federated Fixed Income Securities, Inc.; Federated GNMA Trust;
Federated Government Income Securities, Inc.; Federated High Income
Bond Fund, Inc.; Federated High Yield Trust; Federated Income
Securities Trust; Federated Income Trust; Federated Index Trust;
Federated Institutional Trust; Federated Insurance Series;
Federated International Series, Inc.; Federated Investment Series
Funds, Inc.; Federated Limited Duration Government Fund, Inc.;
Federated Managed Allocation Portfolios; Federated Municipal
Opportunities Fund, Inc.; Federated Municipal Securities Fund,
Inc.; Federated Municipal Securities Income Trust; Federated
Short-Term Municipal Trust; Federated Stock and Bond Fund, Inc.;
Federated Stock Trust; Federated Total Return Government Bond Fund;
Federated Total Return Series, Inc.; Federated U.S. Government Bond
Fund; Federated U.S. Government Securities Fund: 1-3 Years;
Federated U.S. Government Securities Fund: 2-5 Years; Federated
World Investment Series, Inc.; Intermediate Municipal Trust; Money
Market Obligations Trust; CCMI Funds; Regions Morgan Keegan Select
Funds; RIGGS Funds; SouthTrust Funds; and Vision Group of Funds.

(b)

(1) (2) (3)
Positions and Offices Positions and Offices
With Distributor Name With Registrant
_____________________ _________________ ______________________

Chairman: Richard B. Fisher

Director: Arthur L. Cherry

President-Institutional
Sales and Director: John B. Fisher

Executive Vice
Vice President, Assistant
Secretary and Director: Thomas R. Donahue

President-Broker/Dealer
And Director: James F. Getz

Senior Vice Presidents:
Mark W. Bloss
Richard W. Boyd
Laura M. Deger
Peter W. Eisenbrandt
Theodore Fadool, Jr.
Christopher T. Fives
James S. Hamilton
James M. Heaton
Amy Michaliszyn
Keith Nixon

Senior Vice Presidents: Solon A. Person, IV
Ronald M. Petnuch
Timothy C. Pillion
Thomas E. Territ
Robert F. Tousignant

Vice Presidents: Irving Anderson
John B. Bohnet
Edward R. Bozek
Jane E. Broeren-Lambesis
Craig Burness
David J. Callahan
Mark Carroll
Scott Charlton
Steven R. Cohen
Mary J. Combs
R. Edmond Connell, Jr.
Kevin J. Crenny
Daniel T. Culbertson
G. Michael Cullen
Marc C. Danile
Robert J. Deuberry
Ron Dorman
William C. Doyle
Donald C. Edwards
Lee England
Timothy Franklin
Renee Gebben
Peter J. Germain
Joseph D. Gibbons
G. Tad Gullickson
Scott Gundersen
Dayna C. Haferkamp
Raymond J. Hanley
Vincent L. Harper, Jr.
Bruce E. Hastings
Teresa M. Johnson
Christopher L. Johnston
H. Joseph Kennedy
Stephen Kittel
Michael W. Koenig
Ed Koontz
Christopher A. Layton
Michael H. Liss
Michael R. Manning
Martin J. McCaffrey
Mary A. McCaffrey
Maurice W. McKinney
Mark J. Miehl
Richard C. Mihm
Vincent T. Morrow
Alec H. Neilly
Thomas A. Peter III
Raleigh Peters
Robert F. Phillips
Richard A. Recker
Christopher Renwick
Brian S. Ronayne
Thomas S. Schinabeck
Edward J. Segura
Peter Siconolfi
Edward L. Smith
David W. Spears
John A. Staley
Colin B. Starks
Jeffrey A. Stewart
Kevin Stutz
Timothy A. Rosewicz
Greg Spralding
William C. Tustin
Paul A. Uhlman
G. Walter Whalen

Vice Presidents: Stephen White
Patrick M. Wiethorn
Edward J. Wojnarowski
Michael P. Wolff

Assistant Vice Presidents: Lisa Arcuri
Robert W. Bauman
Charles L. Davis, Jr.
Beth C. Dell
Jennifer Fetteroff
John T. Glickson
William Rose
Lynn Sherwood-Long

Treasurer: Denis McAuley, III

Secretary: Stephen A. Keen

Assistant Secretaries: Peter J. Germain

The business address of each of the Officers of Federated Securities Corp. is
Federated Investors Tower, 1001 Liberty Avenue, Pittsburgh, Pennsylvania 15222-3779.

Item 28. Location of Accounts and Records:

All accounts and records required to be maintained by Section 31(a) of the
Investment Company Act of 1940 and Rules 31a-1 through 31a-3 promulgated thereunder
are maintained at one of the following locations:

Registrant Reed Smith LLP
Investment Management Group (IMG)
Federated Investors Tower
12th Floor
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

(Notices should be sent to the Agent for Service
at above address)

5800 Corporate Drive
Pittsburgh, PA 15237-7010

Federated Shareholder Services Company
("Transfer Agent, Dividend P.O. Box 8600
Disbursing Agent and Portfolio Boston, MA 02266-8600
Recordkeeper")

Federated Services Company Federated Investors Tower
("Administrator") 1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Riggs Investment Advisors Inc. 800 17th Street, N.W.
("Adviser") Washington, D.C. 20006-3950

Riggs Bank N.A.. Riggs Funds
("Custodian") 5700 RiverTech Court
Riverdale, MD 20737-1250

Item 29. Management Services: Not applicable.

Item 30. Undertakings:

Registrant hereby undertakes to comply with the provisions of Section 16(c) of
the 1940 Act with respect to the removal of Trustees and the calling of special
shareholder meetings by shareholders.

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Registrant, RIGGS FUNDS, certifies that it meets all of the
requirements for effectiveness of this Amendment to its Registration Statement
pursuant to Rule 485(b) under the Securities Act of 1933 and has duly caused this
Amendment to its Registration Statement to be signed on its behalf by the
undersigned, thereto duly authorized, in the City of Pittsburgh and Commonwealth of
Pennsylvania, on the 27th day of June, 2003.

RIGGS FUNDS
BY: /s/ C. Grant Anderson
C. Grant Anderson, Assistant Secretary
June 27, 2003

Pursuant to the requirements of the Securities Act of 1933, this Amendment to
its Registration Statement has been signed below by the following person in the
capacity and on the date indicated:

NAME TITLE DATE
By: /s/C. Grant Anderson Attorney In Fact June 27, 2003
C. Grant Anderson For the Persons
ASSISTANT SECRETARY Listed Below

NAME TITLE

John F. Donahue* Chairman and Trustee

Peter J. Germain* President
(Principal Executive Officer)

Richard J. Thomas* Treasurer
(Principal Financial Officer)

J. Christopher Donahue* Executive Vice President
and Trustee

Thomas G. Bigley* Trustee

John T. Conroy, Jr.* Trustee

Nicholas P. Constantakis* Trustee

John F. Cunningham* Trustee

Lawrence D. Ellis, M.D.* Trustee

Peter E. Madden* Trustee

Charles F. Mansfield, Jr.* Trustee

John E. Murray, Jr.* Trustee

Marjorie P. Smuts* Trustee

John S. Walsh* Trustee

*By Power of Attorney

Riggs Funds

CLASS R SHARES

Contents

June 30, 2003

Fund Goals, Strategies, Performance and Risk

RIGGS STOCK FUND

Goal

Strategy

Risk/Return Bar Chart and Table

Average Annual Total Return Table

RIGGS SMALL COMPANY STOCK FUND

Goal

Strategy

Risk/Return Bar Chart and Table

RIGGS U.S. GOVERNMENT SECURITIES FUND

Goal

Strategy

Risk/Return Bar Chart and Table

Average Annual Total Return Table

RIGGS BOND FUND

Goal

Strategy

Risk/Return Bar Chart and Table

Average Annual Total Return Table

RIGGS SHORT TERM TAX FREE BOND FUND (FORMERLY RIGGS INTERMEDIATE TAX FREE BOND FUND)

Goal

Strategy

Risk/Return Bar Chart and Table

Average Annual Total Return Table

RIGGS INTERMEDIATE TAX FREE BOND FUND (FORMERLY RIGGS LONG TERM TAX FREE BOND FUND)

Goal

Strategy

Risk/Return Bar Chart and Table

Average Annual Total Return Table

RIGGS PRIME MONEY MARKET FUND

Goal

Strategy

Risk/Return Bar Chart and Table

Average Annual Total Return Table

RIGGS U.S. TREASURY MONEY MARKET FUND

Goal

Strategy

Risk/Return Bar Chart and Table

Average Annual Total Return Table

PRINCIPAL RISKS OF THE FUNDS

WHAT ARE THE FUNDS' FEES AND EXPENSES?

RIGGS STOCK FUND, RIGGS SMALL COMPANY STOCK FUND, RIGGS U.S. GOVERNMENT SECURITIES FUND, RIGGS BOND FUND AND RIGGS SHORT TERM TAX FREE BOND FUND CLASS R SHARES

FEES AND EXPENSES

EXAMPLE

What are the Fund's Fees and Expenses?

RIGGS INTERMEDIATE TAX FREE BOND FUND, RIGGS PRIME MONEY MARKET FUND, AND RIGGS U.S. TREASURY MONEY MARKET FUND CLASS R SHARES

FEES AND EXPENSES

EXAMPLE

Principal Securities in Which the Funds Invest

EQUITY SECURITIES

Common Stocks

FIXED INCOME SECURITIES

Treasury Securities

Agency Securities

Corporate Debt Securities

Municipal Securities

Mortgage Backed Securities

BANK INSTRUMENTS

CREDIT ENHANCEMENT

TAX EXEMPT SECURITIES

General Obligation Bonds

Special Revenue Bonds

Tax Increment Financing Bonds

Municipal Notes

Variable Rate Demand Instruments

Municipal Leases

SPECIAL TRANSACTIONS

Repurchase Agreements

Delayed Delivery Transactions

Investment Ratings for Prime Money Market Fund

Investment Ratings for Corporate Fixed Income Securities

Portfolio Turnover

Temporary Defensive Investments

Specific Risks of Investing in the Funds

STOCK MARKET RISKS

RIGGS SHORT TERM TAX FREE BOND FUND
(FORMERLY RIGGS INTERMEDIATE TAX FREE BOND FUND)

RIGGS INTERMEDIATE TAX FREE BOND FUND
(FORMERLY RIGGS LONG TERM TAX FREE BOND FUND)