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SUPPLEMENT TO THE PROSPECTUS
AND
STATEMENT OF ADDITIONAL INFORMATION
OF
KEYSTONE SMALL COMPANY GROWTH FUND II
(the "Fund")
The following information is provided with reference to the performance for
one, five and ten years of Keystone Small Company Growth Fund (S-4) ("S-4
Fund")(1), a registered investment company managed by Keystone Investment
Management Company, which has an identical investment objective and investment
policies and strategies substantially similar to those of the Fund(2):
One-year return (without CDSC)(3) ................................ 36.27%
One-year return .................................................. 33.27%
Three-year average annual return ................................. 19.37%
Five-year average annual return .................................. 26.58%
Ten-year average annual return ................................... 15.47%
Investing in companies with small capitalizations involves greater risk than
investing in larger companies due to the volatility and lack of liquidity of the
securities of such smaller companies. You can lose money by investing in the
Fund.
March 1, 1996
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(1) Until March 1995, the S-4 Fund had an active and a passive component. Since
March 1995, the S-4 Fund has been fully actively managed.
(2) Past performance of the S-4 Fund is no guarantee of the future performance
of the Fund.
(3) A contingent deferred sales charge (CDSC) for the S-4 Fund declines from 4%
to 1% over four calendar years, with no redemption charges after the fourth
calendar year. (For the Fund, a contingent deferred sales charge declines
from 5% to 1% over six years from the month of purchase, with no redemption
charges after the fourth calendar year.)
