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SEC Company Response from MUNDER SERIES TRUST (CIK 0001214511) — Jul 8, 2005

MUNDER SERIES TRUST (CIK 0001214511)
Date: July 8, 2005 · CIK: 0001214511 · Accession: 0000950124-05-004180

AI Filing Summary & Sentiment

File numbers found in text: 333-125247, 333-125249

Date
July 8, 2005
Author
Not clearly detected
Form
CORRESP
Company
MUNDER SERIES TRUST (CIK 0001214511)

Letter

VIA EDGAR CORRESPONDENCE July 8, 2005 Christian Sandoe Division of Investment Management Securities and Exchange Commission 450 Fifth Street, N.W. Washington, D.C. 20549 Munder Series Trust, on behalf of the Munder U.S. Government Income Fund, Proxy Statement/Prospectus on Form N-14 SEC File No. 333-125247

Re: Munder Series Trust, on behalf of the Munder Tax-Free Bond Fund, Proxy Statement/Prospectus on Form N-14 SEC File No. 333-125249

Dear Mr. Sandoe:

We are writing on behalf of the Munder Series Trust ("Registrant") in response to comments you provided telephonically on Thursday, June 23, 2005, with respect to two proxy statements/prospectuses separately filed on Form N-14 for the Registrant (each a "Proxy Statement" and together the "Proxy Statements"). The Proxy Statements relate to the proposed reorganizations of (i) the Munder Tax-Free Bond Fund ("Tax-Free Bond Fund") with and into the Munder Tax-Free Short & Intermediate Bond Fund ("Tax-Free Short & Intermediate Bond Fund"), each a series of the Registrant and (ii) the Munder U.S. Government Income Fund ("U.S. Government Fund") with and into the Munder Bond Fund ("Bond Fund"), each a series of the Registrant.

Summaries of the comments and our responses thereto, are provided below.

PROXY STATEMENT FOR TAX-FREE BOND FUND

1. COMMENT: On page iv of the Proxy Statement, please confirm that the documents set forth in the second paragraph as being filed with the Securities and Exchange Commission (the "SEC") are not incorporated by reference into the Proxy Statement.

RESPONSE: The documents set forth in the second paragraph on page iv of the Proxy Statement as being filed with the SEC are intended to notify shareholders of other documents that are available to them should they wish to seek additional information about either of the Funds. By listing these documents, Registrant does not intend for these to be incorporated by reference into the Proxy Statement. With the exception noted below regarding the Statement of Additional Information, the Proxy Statement includes all of the information required by Form N-14 to be included from these other documents, rather than incorporating such information by reference into the Proxy Statement. However, as stated in the paragraph immediately preceding the referenced paragraph on page iv, Registrant is incorporating by reference the Statement of Additional Information to the Proxy Statement in accordance with the instructions to Form N-14.

<PAGE>

2. COMMENT: On page 6 of the Proxy Statement, please disclose the difference between the investment objectives for the Tax-Free Short & Intermediate Bond Fund and the Tax-Free Bond Fund. Please highlight this difference in any section that relates to the investment objectives for the Funds in the Proxy Statement.

RESPONSE: As stated in the Proxy Statement, the Tax-Free Bond Fund's investment objectives are to provide as high a level of current interest income exempt from Federal income taxes and to generate as competitive a long-term rate of return as is consistent with prudent investment management and preservation of capital. The disclosure on page 6 of the Proxy Statement has been amended to add the phrase, "which objectives are consistent with bonds with longer maturities", at the end of the statement of the Tax-Free Bond Fund's investment objectives.

The Tax-Free Short & Intermediate Bond Fund's investment objectives are to provide a competitive level of current interest income exempt from Federal income taxes and a total return which, over time, exceeds the rate of inflation and the return provided by tax-free money market instruments. The disclosure on page 6 of the Proxy Statement has been amended to add the phrase, "which objectives are consistent with bonds with shorter maturities", at the end of the statement of the Tax-Free Short & Intermediate Bond Fund's investment objectives.

In addition, the following disclosure has been added to the end of the first paragraph under the heading "Investment Objectives, Policies and Restrictions" on page 6 of the Proxy Statement and to the end of the first paragraph under the heading "Investment Objectives of Each Fund" which begins on page 28 of the Proxy Statement:

The differences between the investment objectives of the Funds primarily reflect the differences in the maturities of the obligations in which each Fund invests. The municipal obligations in which the Tax-Free Bond Fund invests generally have longer maturities than the municipal obligations in which the Tax-Free Short & Intermediate Bond Fund invests. Bonds with longer maturities generally pay higher rates of interest and involve more interest rate risk than bonds with shorter maturities.

3. COMMENT: On page 7 of the Proxy Statement, there is a discussion on the differences in maturity of the obligations in which each Fund invests and each Fund's dollar-weighted average maturity. Please include this disclosure in all applicable sections in the Proxy Statement that relate to the investment objectives, policies and restrictions.

RESPONSE: The disclosure in the Proxy Statement has been revised to comply with the comment.

4. COMMENT: On page 36 of the Proxy Statement under the section "Publication of Portfolio Holdings," please revise the disclosure to comply with Item 11(f)(2), Instruction 3, or otherwise confirm to the Staff that the Registrant is relying on 11(f)(2), Instruction 2 for any non-public disclosures.

RESPONSE: The disclosure has been revised in its entirety as follows:

Each Fund publishes a complete list of its portfolio holdings as of the end of each calendar month not earlier than 30 days after the end of such month on the Munder Funds website (www.munder.com) under the "All Holdings" link on the Fund's Profile Page. The three most recent previously published month-end portfolio holdings lists can be accessed through the "Historical All Holdings" link on the Fund's Profile Page. Each Fund may also publish other information on the Fund's Profile Page relating to its

<PAGE>

portfolio holdings (e.g., top ten holdings, sector information and other portfolio characteristic data) as of the end of the calendar month not earlier than 15 days after the end of such month. A description of the Funds' policies and procedures with respect to the disclosure of information regarding the Funds' portfolio securities is available in the Funds' Statement of Additional Information.

5. COMMENT: On page 80 under the section "Portfolio Managers," please provide a brief description of each person's role on the team (e.g., lead member), including a description of any limitations on the person's role and the relationship between the person's role and the roles of other persons who have responsibility for the day-to-day management of the Fund's portfolio.

RESPONSE: The following disclosure has been added after the first sentence under the section "Portfolio Managers" on page 80:

Mr. Soderstrom is primarily responsible for the day-to-day management of each Fund's assets. He determines the strategy for each Fund and initiates trades. Mr. Thayer provides analytical support and assists in trading.

STATEMENT OF ADDITIONAL INFORMATION FOR TAX-FREE SHORT & INTERMEDIATE BOND FUND

6. COMMENT: On page B-28 of the Pro Forma Combining Schedule of Investments footnote (a), Registrant states, "No holdings of the Tax-Free Bond Fund are expected to require liquidation in the merged environment due to prospectus or other limitations." Please explain this statement.

RESPONSE: In order for the reorganization of the Tax-Free Short & Intermediate Bond Fund and the Tax-Free Bond Fund to qualify as a tax-free reorganization under applicable federal tax laws, the Funds must satisfy certain continuity of business tests. As a result, the Tax-Free Short & Intermediate Bond Fund must continue to hold a specified portion of the Tax-Free Bond Fund's assets following the Reorganization, which the referenced statement is intended, at least in part, to convey. In addition, the statement was added upon advice of the Funds' external legal counsel, who has received a request to include a similar statement from the accounting staff of the SEC's Division of Investment Management in the proxy statements/prospectuses concerning other reorganizations.

7. COMMENT: On pages B-31 to B-33 under the section "Portfolio Managers," please make the following changes pursuant to Item 5 of Form N-1A:

a. On page B-31, please confirm to the Staff that no advisory fee with respect to any account listed in the table is based on the performance of any such accounts, or otherwise revise the disclosure in accordance with Item 15(a)(3).

RESPONSE: To the best of the Registrant's knowledge, no advisory fee with respect to any account listed in the table is based on the performance of any such account. Accordingly, no changes to the disclosure have been made.

b. On page B-32, under the "Portfolio Manager Compensation" sub-section, revise the description of "base salary" to confirm whether it is fixed or variable.

RESPONSE: The disclosure has been revised to state "fixed base salary."

<PAGE>

8. COMMENT: On pages B-33 to B-36 under the section "Disclosure of Portfolio Holdings," please make the following changes:

a. Under the "Service Providers" sub-section, please confirm to the Staff that the service providers enumerated is an exhaustive list or otherwise revise the list.

RESPONSE: The disclosure has been revised to include a list that, to the best of Registrant's knowledge, is exhaustive, other than with respect to the various broker-dealers with whom MCM places trades for the Funds:

MCM and/or the Funds may disclose portfolio holdings information to the Funds' primary service providers (i.e., the Funds' adviser, custodian, distributor, fund accountant, administrator, sub-administrator, independent public accountants, and external legal counsel) and to other service providers (such as proxy voting services, pricing information vendors, broker-dealers who effect portfolio securities transactions, broker-dealers who provide pricing information, and providers of printing and/or regulatory filing services) who need access to such information to perform services for the benefit of the Funds. Portfolio holdings information will be disclosed to a service provider to the extent and as frequently as necessary to allow such service provider to perform its duties and responsibilities, which may be immediate with no lag time. These service providers are subject to duties of confidentiality, including a duty not to trade on non-public information, imposed by law and/or contract. The Funds' current primary service providers are MCM, State Street Bank and Trust, Funds Distributor, Inc., PFPC Inc., Ernst &Young LLP, Dechert LLP, and Morgan Lewis & Bockius LLP. Other service providers who routinely receive portfolio holdings information from the Funds include Institutional Shareholder Services, FT Interactive, Reuters, Thomsen Financial/ILX, R.R. Donnelley, Bowne & Co., as well as various broker-dealers with whom MCM places trades for the Funds or who provide pricing information.

b. Under the "Other" sub-section, disclosure of portfolio holdings pursuant to the sub-section is subject to the condition that it "must be disclosed pursuant to the terms of a written confidentiality agreement between the recipient and the Funds..." Please revise the disclosure to state whether such condition also includes prohibitions on trading or, if not, confirm to the Staff that such condition is not placed on any such disclosures.

RESPONSE: The Registrant believes that the disclosure in the third paragraph on page B-35 of the Statement of Additional Information, which summarizes the general terms of the confidentiality agreement, addresses the Staff's comment. Accordingly, no changes to the disclosure have been made.

c. Under the sub-sections which describe various persons (i.e., service providers) that portfolio holdings information is being disclosed to prior to the time such information is publicly disclosed, please provide the information required pursuant to Item 11(f)(1)(iii) for each person.

RESPONSE: The following disclosure has been added after the first sentence of the sub-paragraph entitled "Service Providers": "Portfolio holdings information will be disclosed to a service provider to the extent and as frequently as necessary to allow such service provider to perform its duties and responsibilities, which may be immediate with no lag time."

<PAGE>

The Registrant believes that the disclosure in the second sentence of the sub-paragraph entitled "Comerica Bank and Affiliates" addresses the Staff's comment. Accordingly, no changes to the disclosure in that section have been made.

d. Disclose pursuant to Item 11(f)(1)(iii) of Form N-1A any procedures to monitor the use of information.

RESPONSE: The Registrant has not adopted any procedures with respect to monitoring the use of information that is disclosed about portfolio securities.

PROXY STATEMENT FOR U.S. GOVERNMENT FUND

9. COMMENT: On page iii of the Proxy Statement, the statement "While the investment objectives and policies of the U.S. Government Fund and the Bond Fund are similar, there are certain differences in investment policies..." Please disclose the differences between the Funds including the credit quality of the instruments that each Fund may invest in.

RESPONSE: The disclosure in the Proxy Statement has been revised to comply with the comment.

10. COMMENT: On page 1 of the Proxy Statement - Proposal 1 "Why is the Reorganization being recommended?", please explain in more detail the statement "As a result, it is MCM's view that only by combining these two Funds into a single Fund will the Funds have sufficient assets in order to be sustainable." In addition, please highlight the different investment risks for the Funds.

RESPONSE: In the second paragraph on page 1 of the Proxy Statement, Registrant notes that both Funds have been experiencing asset declines in recent years. Consequently, the U.S. Government Fund and the Bond Fund have each experienced an increase in total annual operating expenses. Please note that the Proxy Statement has been revised to include information concerning the adverse impact this decline in assets has had on the expense ratio of the U.S. Government Fund.

As disclosed in the Proxy Statement, this continually declining asset base and rising operating expenses led MCM to re-evaluate its current fixed income fund offerings and recommend that the Board approve

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<TEXT>
<PAGE>
                                             State Street Bank and Trust Company
                                                   One Federal Street, 9th Floor
                                                                      Boston, MA
                                                                           02110

VIA EDGAR CORRESPONDENCE

July 8, 2005

Christian Sandoe
Division of Investment Management
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C.  20549

Re:  Munder Series Trust, on behalf of the Munder Tax-Free Bond Fund, Proxy
     Statement/Prospectus on Form N-14 SEC File No. 333-125249

     Munder Series Trust, on behalf of the Munder U.S. Government Income
     Fund, Proxy Statement/Prospectus on Form N-14 SEC File No. 333-125247

Dear Mr. Sandoe:

We are writing on behalf of the Munder Series Trust ("Registrant") in response
to comments you provided telephonically on Thursday, June 23, 2005, with respect
to two proxy statements/prospectuses separately filed on Form N-14 for the
Registrant (each a "Proxy Statement" and together the "Proxy Statements"). The
Proxy Statements relate to the proposed reorganizations of (i) the Munder
Tax-Free Bond Fund ("Tax-Free Bond Fund") with and into the Munder Tax-Free
Short & Intermediate Bond Fund ("Tax-Free Short & Intermediate Bond Fund"), each
a series of the Registrant and (ii) the Munder U.S. Government Income Fund
("U.S. Government Fund") with and into the Munder Bond Fund ("Bond Fund"), each
a series of the Registrant.

Summaries of the comments and our responses thereto, are provided below.

PROXY STATEMENT FOR TAX-FREE BOND FUND

1.   COMMENT: On page iv of the Proxy Statement, please confirm that the
documents set forth in the second paragraph as being filed with the Securities
and Exchange Commission (the "SEC") are not incorporated by reference into the
Proxy Statement.

     RESPONSE: The documents set forth in the second paragraph on page iv of
the Proxy Statement as being filed with the SEC are intended to notify
shareholders of other documents that are available to them should they wish to
seek additional information about either of the Funds. By listing these
documents, Registrant does not intend for these to be incorporated by reference
into the Proxy Statement. With the exception noted below regarding the Statement
of Additional Information, the Proxy Statement includes all of the information
required by Form N-14 to be included from these other documents, rather than
incorporating such information by reference into the Proxy Statement. However,
as stated in the paragraph immediately preceding the referenced paragraph on
page iv, Registrant is incorporating by reference the Statement of Additional
Information to the Proxy Statement in accordance with the instructions to Form
N-14.

<PAGE>

2.   COMMENT: On page 6 of the Proxy Statement, please disclose the difference
between the investment objectives for the Tax-Free Short & Intermediate Bond
Fund and the Tax-Free Bond Fund. Please highlight this difference in any section
that relates to the investment objectives for the Funds in the Proxy Statement.

     RESPONSE: As stated in the Proxy Statement, the Tax-Free Bond Fund's
investment objectives are to provide as high a level of current interest income
exempt from Federal income taxes and to generate as competitive a long-term rate
of return as is consistent with prudent investment management and preservation
of capital. The disclosure on page 6 of the Proxy Statement has been amended to
add the phrase, "which objectives are consistent with bonds with longer
maturities", at the end of the statement of the Tax-Free Bond Fund's investment
objectives.

     The Tax-Free Short & Intermediate Bond Fund's investment objectives are to
provide a competitive level of current interest income exempt from Federal
income taxes and a total return which, over time, exceeds the rate of inflation
and the return provided by tax-free money market instruments. The disclosure on
page 6 of the Proxy Statement has been amended to add the phrase, "which
objectives are consistent with bonds with shorter maturities", at the end of the
statement of the Tax-Free Short & Intermediate Bond Fund's investment
objectives.

     In addition, the following disclosure has been added to the end of the
first paragraph under the heading "Investment Objectives, Policies and
Restrictions" on page 6 of the Proxy Statement and to the end of the first
paragraph under the heading "Investment Objectives of Each Fund" which begins on
page 28 of the Proxy Statement:

     The differences between the investment objectives of the Funds primarily
     reflect the differences in the maturities of the obligations in which each
     Fund invests. The municipal obligations in which the Tax-Free Bond Fund
     invests generally have longer maturities than the municipal obligations in
     which the Tax-Free Short & Intermediate Bond Fund invests. Bonds with
     longer maturities generally pay higher rates of interest and involve more
     interest rate risk than bonds with shorter maturities.

3.   COMMENT: On page 7 of the Proxy Statement, there is a discussion on the
differences in maturity of the obligations in which each Fund invests and each
Fund's dollar-weighted average maturity. Please include this disclosure in all
applicable sections in the Proxy Statement that relate to the investment
objectives, policies and restrictions.

     RESPONSE: The disclosure in the Proxy Statement has been revised to comply
     with the comment.

4.   COMMENT: On page 36 of the Proxy Statement under the section "Publication
of Portfolio Holdings," please revise the disclosure to comply with Item
11(f)(2), Instruction 3, or otherwise confirm to the Staff that the Registrant
is relying on 11(f)(2), Instruction 2 for any non-public disclosures.

     RESPONSE: The disclosure has been revised in its entirety as follows:

     Each Fund publishes a complete list of its portfolio holdings as of the end
     of each calendar month not earlier than 30 days after the end of such month
     on the Munder Funds website (www.munder.com) under the "All Holdings" link
     on the Fund's Profile Page. The three most recent previously published
     month-end portfolio holdings lists can be accessed through the "Historical
     All Holdings" link on the Fund's Profile Page. Each Fund may also publish
     other information on the Fund's Profile Page relating to its

                                                                               2

<PAGE>

     portfolio holdings (e.g., top ten holdings, sector information and other
     portfolio characteristic data) as of the end of the calendar month not
     earlier than 15 days after the end of such month. A description of the
     Funds' policies and procedures with respect to the disclosure of
     information regarding the Funds' portfolio securities is available in the
     Funds' Statement of Additional Information.

5.   COMMENT: On page 80 under the section "Portfolio Managers," please provide
a brief description of each person's role on the team (e.g., lead member),
including a description of any limitations on the person's role and the
relationship between the person's role and the roles of other persons who have
responsibility for the day-to-day management of the Fund's portfolio.

     RESPONSE: The following disclosure has been added after the first sentence
under the section "Portfolio Managers" on page 80:

     Mr. Soderstrom is primarily responsible for the day-to-day management of
     each Fund's assets. He determines the strategy for each Fund and initiates
     trades. Mr. Thayer provides analytical support and assists in trading.

STATEMENT OF ADDITIONAL INFORMATION FOR TAX-FREE SHORT & INTERMEDIATE BOND FUND

6.   COMMENT: On page B-28 of the Pro Forma Combining Schedule of Investments
footnote (a), Registrant states, "No holdings of the Tax-Free Bond Fund are
expected to require liquidation in the merged environment due to prospectus or
other limitations." Please explain this statement.

     RESPONSE: In order for the reorganization of the Tax-Free Short &
Intermediate Bond Fund and the Tax-Free Bond Fund to qualify as a tax-free
reorganization under applicable federal tax laws, the Funds must satisfy certain
continuity of business tests. As a result, the Tax-Free Short & Intermediate
Bond Fund must continue to hold a specified portion of the Tax-Free Bond Fund's
assets following the Reorganization, which the referenced statement is intended,
at least in part, to convey. In addition, the statement was added upon advice of
the Funds' external legal counsel, who has received a request to include a
similar statement from the accounting staff of the SEC's Division of Investment
Management in the proxy statements/prospectuses concerning other
reorganizations.

7.   COMMENT: On pages B-31 to B-33 under the section "Portfolio Managers,"
please make the following changes pursuant to Item 5 of Form N-1A:

     a.   On page B-31, please confirm to the Staff that no advisory fee with
     respect to any account listed in the table is based on the performance of
     any such accounts, or otherwise revise the disclosure in accordance with
     Item 15(a)(3).

          RESPONSE: To the best of the Registrant's knowledge, no advisory fee
     with respect to any account listed in the table is based on the performance
     of any such account. Accordingly, no changes to the disclosure have been
     made.

     b.   On page B-32, under the "Portfolio Manager Compensation" sub-section,
     revise the description of "base salary" to confirm whether it is fixed or
     variable.

          RESPONSE: The disclosure has been revised to state "fixed base
     salary."

                                                                               3

<PAGE>

8.   COMMENT: On pages B-33 to B-36 under the section "Disclosure of Portfolio
Holdings," please make the following changes:

     a.   Under the "Service Providers" sub-section, please confirm to the Staff
     that the service providers enumerated is an exhaustive list or otherwise
     revise the list.

          RESPONSE: The disclosure has been revised to include a list that, to
     the best of Registrant's knowledge, is exhaustive, other than with respect
     to the various broker-dealers with whom MCM places trades for the Funds:

          MCM and/or the Funds may disclose portfolio holdings information to
          the Funds' primary service providers (i.e., the Funds' adviser,
          custodian, distributor, fund accountant, administrator,
          sub-administrator, independent public accountants, and external legal
          counsel) and to other service providers (such as proxy voting
          services, pricing information vendors, broker-dealers who effect
          portfolio securities transactions, broker-dealers who provide pricing
          information, and providers of printing and/or regulatory filing
          services) who need access to such information to perform services for
          the benefit of the Funds. Portfolio holdings information will be
          disclosed to a service provider to the extent and as frequently as
          necessary to allow such service provider to perform its duties and
          responsibilities, which may be immediate with no lag time. These
          service providers are subject to duties of confidentiality, including
          a duty not to trade on non-public information, imposed by law and/or
          contract. The Funds' current primary service providers are MCM, State
          Street Bank and Trust, Funds Distributor, Inc., PFPC Inc., Ernst
          &Young LLP, Dechert LLP, and Morgan Lewis & Bockius LLP. Other service
          providers who routinely receive portfolio holdings information from
          the Funds include Institutional Shareholder Services, FT Interactive,
          Reuters, Thomsen Financial/ILX, R.R. Donnelley, Bowne & Co., as well
          as various broker-dealers with whom MCM places trades for the Funds or
          who provide pricing information.

     b.   Under the "Other" sub-section, disclosure of portfolio holdings
     pursuant to the sub-section is subject to the condition that it "must be
     disclosed pursuant to the terms of a written confidentiality agreement
     between the recipient and the Funds..." Please revise the disclosure to
     state whether such condition also includes prohibitions on trading or, if
     not, confirm to the Staff that such condition is not placed on any such
     disclosures.

          RESPONSE: The Registrant believes that the disclosure in the third
     paragraph on page B-35 of the Statement of Additional Information, which
     summarizes the general terms of the confidentiality agreement, addresses
     the Staff's comment. Accordingly, no changes to the disclosure have been
     made.

     c.   Under the sub-sections which describe various persons (i.e., service
     providers) that portfolio holdings information is being disclosed to prior
     to the time such information is publicly disclosed, please provide the
     information required pursuant to Item 11(f)(1)(iii) for each person.

          RESPONSE: The following disclosure has been added after the first
     sentence of the sub-paragraph entitled "Service Providers": "Portfolio
     holdings information will be disclosed to a service provider to the extent
     and as frequently as necessary to allow such service provider to perform
     its duties and responsibilities, which may be immediate with no lag time."

                                                                               4

<PAGE>

          The Registrant believes that the disclosure in the second sentence of
     the sub-paragraph entitled "Comerica Bank and Affiliates" addresses the
     Staff's comment. Accordingly, no changes to the disclosure in that section
     have been made.

     d.   Disclose pursuant to Item 11(f)(1)(iii) of Form N-1A any procedures to
     monitor the use of information.

          RESPONSE: The Registrant has not adopted any procedures with respect
     to monitoring the use of information that is disclosed about portfolio
     securities.

PROXY STATEMENT FOR U.S. GOVERNMENT FUND

9.   COMMENT: On page iii of the Proxy Statement, the statement "While the
investment objectives and policies of the U.S. Government Fund and the Bond Fund
are similar, there are certain differences in investment policies..." Please
disclose the differences between the Funds including the credit quality of the
instruments that each Fund may invest in.

     RESPONSE: The disclosure in the Proxy Statement has been revised to comply
with the comment.

10.  COMMENT: On page 1 of the Proxy Statement - Proposal 1 "Why is the
Reorganization being recommended?", please explain in more detail the statement
"As a result, it is MCM's view that only by combining these two Funds into a
single Fund will the Funds have sufficient assets in order to be sustainable."
In addition, please highlight the different investment risks for the Funds.

     RESPONSE: In the second paragraph on page 1 of the Proxy Statement,
Registrant notes that both Funds have been experiencing asset declines in recent
years. Consequently, the U.S. Government Fund and the Bond Fund have each
experienced an increase in total annual operating expenses. Please note that the
Proxy Statement has been revised to include information concerning the adverse
impact this decline in assets has had on the expense ratio of the U.S.
Government Fund.

     As disclosed in the Proxy Statement, this continually declining asset base
and rising operating expenses led MCM to re-evaluate its current fixed income
fund offerings and recommend that the Board approve