HARDING LOEVNER FUNDS INC, 497, 1998-07-08

HARDING LOEVNER FUNDS INC
497, 1998-07-08

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HARDING, LOEVNER FUNDS, INC.

Prospectus - January 13, 1998
(Supplemented June 30, 1998)

Harding, Loevner Funds, Inc. (the "Fund") is a no-load,
open-end management investment company (a "mutual fund")
that currently has four separate diversified portfolios
(each a "Portfolio"), each of which has distinct investment
objectives and policies. There is no sales charge for
purchase of shares. Shares of each Portfolio may be
purchased through AMT Capital Securities, L.L.C. ("AMT
Capital"), the Fund's exclusive distributor. The minimum
initial investment in any Portfolio is $100,000. Additional
investments or redemptions may be of any amount. The
Portfolios and their investment objectives are:

International Equity Portfolio - to seek long-term
capital appreciation through investments in equity
securities of companies based outside the United
States.

Global Equity Portfolio - to seek long-term capital
appreciation through investments in equity
securities of companies based both inside and
outside the United States.

Multi-Asset Global Portfolio - to seek long-term
capital appreciation and a growing stream of
current income through investments in equity and
debt securities of companies based both inside and
outside the United States and debt securities of
the United States and foreign governments and their
agencies and instrumentalities.

Emerging Markets Portfolio - to seek long-term
capital appreciation through investments in equity
securities of companies based in developing markets outside
the United States. (This Portfolio has not commenced
operations.)

No assurance can be given that a Portfolio's investment
objectives will be attained.

This Prospectus sets forth concisely the information that a
prospective investor should know before investing. It should
be read and retained for future reference. A Statement of
Additional Information dated January 13, 1998, (Supplemented
June 30, 1988), containing additional information about the
Fund (the "Statement of Additional Information"), has been
filed with the Securities and Exchange Commission (the
"Commission") and is incorporated by reference into this
Prospectus. It is available without charge and can be obtained
by calling or writing Investors Capital Services, Inc., a branch
office of AMT Capital, at the telephone numbers or
address listed on the cover of this Prospectus.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY
THE SECURITIES AND EXCHANGE COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.

TABLE OF CONTENTS

Prospectus Highlights.........................................................

Fund Expenses.................................................................

Financial Highlights..........................................................

The Fund and Its Investment Objectives

Investment Policies and Strategy............................................

Descriptions of Investments..................................................

Risks Associated with the Fund's Investment Policies and
Investment Techniques.........................................................

Investment Restrictions .....................................................

Brokerage Practices...........................................................

Yields and Total Return........................................................

Distribution of Fund Shares....................................................

Determination of Net Asset Value..............................................

Purchase and Redemption of Shares.............................................

Dividends.....................................................................

Management of the Fund........................................................

Tax Considerations............................................................

Shareholder Information.......................................................

Other Parties.................................................................

Shareholder Inquiries.........................................................

PROSPECTUS HIGHLIGHTS

Harding, Loevner Funds, Inc. is a no-load, open-end
management investment company that currently has four
separate diversified Portfolios, each of which has distinct
investment objectives and policies. There is no assurance
that a Portfolio will achieve its investment objective. For
more information, refer to "The Fund and Its Investment
Objectives."

Investment Adviser

Harding, Loevner Management, L.P. ("HLM"), which manages
approximately $1.7 billion in assets for private investors
and institutions, serves as investment adviser to the
Fund. HLM provides the Fund with business and asset
management services, including investment research and
advice and determining which portfolio securities shall be
purchased or sold on behalf of the Fund. For more
information, refer to "Management of the Fund."

Administrator

Investors Capital Services, Inc. ("Investors Capital")serves as
administrator to the Fund, supervising the general day-to-day
business activities and operations of the Fund other than
investment advisory activities. For more information, refer to
"Management of the Fund."

Distributor

AMT Capital serves as the exclusive distributor of shares of the Fund's
Portfolios.

How to Invest

Shares of each Portfolio may be purchased without any sales
charges, at their next determined net asset value, after
receipt of the order by submitting an Account Application to
Investors Capital and wiring federal funds to AMT Capital's "Fund
Purchase Account" at Investors Bank & Trust Company (the
"Transfer Agent"). The Portfolios are not available for sale
in all states. For information about the Fund's
availability, contact an account representative at
Investors Capital or at AMT Capital.

The minimum initial investment per Portfolio is $100,000.
There is no minimum amount for subsequent investments. There
are no sales commissions (loads) or 12b-1 fees. For more
information, refer to "Purchase and Redemption of Shares."

How to Redeem Shares

Shares of each Portfolio may be redeemed, without charge, at
their next determined net asset value after receipt by
either the Transfer Agent or Investors Capital of the redemption
request. For more information, refer to "Purchase and
Redemption of Shares."

Risks

Prospective investors should consider certain risks
associated with an investment in any Portfolio. There is no
assurance that a Portfolio will achieve its investment
objective. Each Portfolio invests in securities of companies
based outside of the United States. Investments in foreign
securities involve risks not associated with investments in
securities issued by United States entities. For more
information, refer to "Investment Policies and Strategy,"
"Descriptions of Investments," and "Risks Associated with
the Fund's Investment Policies and Investment Techniques."

FUND EXPENSES

The following table illustrates the expenses and fees that a
shareholder of the Fund can expect to incur. The purpose of
this table is to assist the investor in understanding the
various expenses that an investor in the Fund will bear
directly or indirectly.

Shareholder Transaction Expenses

Sales Load Imposed on Purchases None
Sales Load Imposed on Reinvested Dividends None
Deferred Sales Load None
Redemption Fees None
Exchange Fees None

Annual Fund Operating Expenses (after expense reimbursements, shown as a
percentage of average net assets)

Other Expenses
----------------------------------------------------------------
Other Total Other
Expenses Expenses Total
Advisory 12b-1 Administration (after expense (after expense Operating
Fees Fees Fees reimbursements) reimbursements) Expenses
International Equity 0.75% None 0.15% 0.10% (a) 0.25% 1.00% (a)
Portfolio

Global Equity 1.00% None 0.15% 0.10% (a) 0.25% 1.25% (a)
Portfolio

Multi-Asset Global 1.00% None 0.15% 0.10% (a) 0.25% 1.25% (a)
Portfolio

Emerging Markets 1.25% None 0.15% 0.35% (a) 0.50% 1.75% (a)
Portfolio*

</TABLE>

(a) Until further notice to shareholders, HLM has
voluntarily agreed to cap the total operating expenses at
1.00%, 1.25%, 1.25% and 1.75% (on an annualized basis) of
the average daily net assets of the International Equity
Portfolio, Global Equity Portfolio, Multi-Asset Global
Portfolio and Emerging Markets Portfolio, respectively.
Without such cap, the total operating expenses (on an
annualized basis) for International Equity Portfolio, Global
Equity Portfolio, Multi-Asset Global Portfolio and Emerging
Market Portfolio are estimated to be 1.06%, 1.37%, 2.17% and
2.00%, respectively, of their average daily net assets (of
which 0.16%, 0.22%, 1.02% and 0.60% is "other expenses").
Other expenses for the Emerging Markets Portfolio are based
on estimated amounts for the current fiscal year. Certain
portions of the transaction expenses (i.e., brokerage
commissions) are not included in the expenses subject to the
cap described above. See "Investment Policies and Strategy
- - Portfolio Turnover."

*The Emerging Markets Portfolio has not commenced operations.

The following table illustrates the expenses that an
investor would pay on each $1,000 increment of its
investment over various time periods, assuming a 5% annual
return. As noted in the table above, the Fund charges no
redemption fees of any kind.

Expenses Per $1,000 Investment (including expense waivers
and reimbursements)

1 Year 3 Years 5 Years 10 Years
International Equity Portfolio $10 $32 $55 $122
Global Equity Portfolio $13 $40 $69 $151
Multi-Asset Global Portfolio $13 $40 $69 $151
Emerging Markets Portfolio $18 $55
</TABLE>

These examples should not be considered a representation of
future expenses or performance. Actual operating expenses
and annual returns may be greater or less than those shown.

FINANCIAL HIGHLIGHTS

The financial information in the following tables which is
included in the financial statements of the Fund, has been
audited by Ernst & Young LLP, independent auditors. The
audited financial statements for the periods ended October
31, 1997 are incorporated by reference in the Statement of
Additional Information. The International Equity Portfolio,
previously the AMT Capital Fund, Inc. - HLM International
Equity Portfolio (the "AMT Capital Portfolio"), commenced
operations on May 11, 1994. Effective as of the close of
business on October 31, 1996, the AMT Capital Portfolio
merged into the International Equity Portfolio pursuant to
shareholder approval of the reorganization on October 30,
1996. The financial information should be read in
conjunction with the financial statements, which can be
obtained upon request without charge.

International Equity Portfolio

For the Year For the Ten For the Year For the Period
Ended Months Ended Ended Ended
Oct. 31, 1997 Oct. 31, 1996 Dec. 31, 1995 Dec. 31, 1994*

Per Share Data
Net asset value, beginning of period $ 11.61 $ 10.77 $ 9.71 $ 10.00
--------------- ----------------- ------------- ----------------
Increase (Decrease) in Net Assets from Operations
Investment income, net 0.13 0.08 0.10 0.04

Net realized and unrealized gain (loss) on
investments and foreign currency-
related transactions 0.05 (a) 0.97 1.06 (0.29)
--------------- --------------- ----------------- -------------

Net increase (decrease) from investment
operations 0.18 1.05 1.16 (0.25)
--------------- --------------- ----------------- -------------

Distributions to Shareholders from
Investment income, net 0.00 (b) 0.08 0.10 0.03

Excess of investment income, net - 0.03 - -

Net realized gain on investments and foreign
currency-related transactions - 0.10 - -

Excess of net realized gain
on investments and foreign
currency-related transactions - - - 0.01
--------------- --------------- ----------------- -------------

Total distributions 0.00 0.21 0.10 0.04
--------------- --------------- ----------------- -------------

Net asset value, end of period $ 11.79 $ 11.61 $ 10.77 $ 9.71

=============== =============== ================= =============

Total Return 1.57% 9.81% (c) 11.99% (2.47%) (c)

Ratios/Supplemental Data
Net assets, end of period (000's) $ 387,304 $241,357 $67,727 $ 8,904

Ratio of expenses to average net assets 1.00% 1.00% (d) 0.99% 0.95% (d)

Ratio of investment income, net 1.07% 1.29% (d) 1.30% 1.13% (d)
to average net assets

Decrease reflected in above ratios
due to waiver of investment advisory
and administration fees and
reimbursement of other expenses 0.06% 0.14% (d) 0.54% 1.33% (d)

Portfolio turnover 31% 17% (c) 28% 27% (c)

Average Commission Rate Paid** $ 0.0374 $0.0229 N/A N/A
</TABLE>

(a) Includes the effect of net realized gains prior to a
significant increase in shares outstanding.
(b) Rounds to less than $0.01
(c) Not Annualized
(d) Annualized
* Commencement of Operations was May 11, 1994
** For fiscal years beginning January 1, 1996, the
Portfolio is required to disclose its average
commission rate paid per share for purchases and
sales of investment securities.

Global Equity Portfolio Multi-Asset Global Portfolio
--------------------------- -----------------------------
For the Period From For the Period From
December 1, 1996* to November 1, 1996** to
October 31, 1997 October 31, 1997
- -----------------------------------------------------------------------------------------------------------------------------------

Per Share Data
Net asset value, beginning of period $ 17.58 (a) $ 10.00

Increase in Net Assets from Operations
Investment income, net 0.19 0.25

Net realized and unrealized gain on investments
and foreign currency-related transactions 0.94 1.04

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

Net increase from investment operations 1.13 1.29
--------------------------- -----------------------------

Distributions to Shareholders from:
Investment income, net 0.01 0.03

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

Net asset value, end of period
$ 18.70 $ 11.26

=========================== =============================

Total Return 6.45% (b) 12.92%

Ratios/Supplemental Data
Net assets, end of period (000's) $ 64,882 $ 5,175

Ratio of net operating expenses to average net assets 1.25% (c) 1.25%

Ratio of investment income, net to
average net 1.05% (c) 2.50%
assets

Decrease reflected in above expense ratios due to waiver
of investment advisory fees 0.12% (c) 0.92%

Portfolio turnover 39% 36%

Average commission rate paid ***
$ 0.0346 $ 0.0367
</TABLE>

(a) The beginning net asset value of the Portfolio was equal to the total net
asset value, as converted, of the outstanding Partnership Units
of Harding, Loevner Management, L.P.'s - Global Equity Limited
Partnership ("GELP") as of November 30, 1996
(b) Not Annualized
(c) Annualized
* Commencement of Operations was December 1, 1996 following a tax free merger
with GELP which was formed on September 27, 1991.
** Commencement of Operations
*** Represents average commission rate paid per share for purchases and sales
of investment securities

THE FUND AND ITS INVESTMENT OBJECTIVES

Harding, Loevner Funds, Inc. is a no-load, open-end management
investment company that currently has four separate
diversified portfolios, each of which has distinct investment
objectives and policies. There is no assurance that a
Portfolio will achieve its investment objective.

The investment objective and policies of each Portfolio are
described below. Except as otherwise indicated, the
investment policies may be changed at any time by the Fund's
Board of Directors to the extent that such changes are
consistent with the investment objective of the applicable
Portfolio. However, each Portfolio's investment objective is
fundamental and may not be changed without a majority vote of
the Portfolio's outstanding shares, which is defined as the
lesser of (a) 67% of the shares of the applicable Portfolio
present or represented if the holders of more than 50% of the
shares are present or represented at the shareholders'
meeting, or (b) more than 50% of the shares of the applicable
Portfolio (hereinafter, "majority vote"). The investment
objective of each of the Portfolios is:

Name of Portfolio Investment Objective

International Equity Portfolio To seek long-term capital appreciation
through investments in equity
securities of companies based outside
the United States.

Global Equity Portfolio To seek long-term capital appreciation
through investments in equity securities
of companies based both inside and outside
the United States.

Multi-Asset Global Portfolio To seek long-term capital appreciation
and a growing stream of current income
through investments in equity
and debt securities of companies based
both inside and outside the United States
and debt securities of the United States
and foreign governments and their
agencies and instrumentalities.

Emerging Markets Portfolio To seek long-term capital appreciation
through investments in equity securities of
companies based in developing markets
outside the United States. (This
Portfolio has not commenced operations.)

INVESTMENT POLICIES AND STRATEGY

International Equity Portfolio

The International Equity Portfolio invests at least 65% of
its total assets in common stocks, securities convertible
into such common stocks (including American Depositary
Receipts ("ADRs") and European Depositary Receipts
("EDRs")), closed-end investment companies, and rights and
warrants issued by companies that are based outside the
United States. The Portfolio may invest in forward foreign
currency exchange contracts, equity derivative securities
such as options on common stocks and options, futures and
options on futures on foreign common stock indices. The
Portfolio also may invest in securities of U.S. companies
which derive, or are expected to derive, a significant
portion of their revenues from their foreign operations,
although under normal circumstances not more than 15% of the
Portfolio's total assets will be invested in securities of
U.S. companies. The Portfolio also may invest up to 35% of
its total assets in the types of short-term securities and
in other debt securities described under the caption
"Descriptions of Investments" below.

The Portfolio may invest up to 20% of its total assets in
convertible securities and debt securities which are rated
below investment-grade, that is, rated below Baa by Moody's
Investors Service, Inc. ("Moody's") or below BBB by Standard
& Poor's Corporation ("Standard & Poor's," or "S&P"), "junk
bonds" and in unrated securities judged to be of equivalent
quality as determined by HLM.

The Portfolio will invest broadly in the available universe
of common stocks of companies domiciled in at least three
countries in the following groups: (1) Europe,
including Austria, Belgium, Denmark, Finland, France,
Germany, Ireland, Italy, Luxembourg, the Netherlands,
Norway, Spain, Sweden, Switzerland, and the United Kingdom;
(2) the Pacific Rim, including Australia, Hong Kong, Japan,
Malaysia, New Zealand, and Singapore; (3) Canada; and (4)
countries with "emerging markets" as defined by Morgan
Stanley Capital International ("MSCI"). At least 65% of
total assets will be denominated in one of at least three
currencies other than the U.S. dollar.

HLM's international equity investment approach is "bottom
up." The approach seeks to identify companies with excellent
long-term business prospects, and then to select from among
them those whose stocks appear to offer attractive absolute
returns. HLM's investment criteria include both growth and
value considerations. HLM seeks companies that it believes
have strong balance sheets, sustainable internal growth,
superior financial returns and defensible business
franchises. Typically, HLM will invest only in companies
that it has analyzed for a number of years. Country
allocation and sector weightings reflect the results of
stock selection, which itself is strongly influenced by
HLM's cyclical and secular outlook for various industries,
sectors, and national economies. Explicit country or sector
allocation decisions are taken only when necessary to ensure
that portfolios are well-diversified. HLM does not hedge
foreign currency exposure, except on rare occasions when it
has a strong view on the prospects for a particular currency
or when hedging is desirable to improve portfolio
diversification. Currency hedging is done through the use
of forward contracts or options.

Portfolio Turnover. Portfolio turnover will depend on
factors such as volatility in the markets that the Portfolio
invests in, or the variability of cash flows into and out of
the Portfolio. Portfolio turnover is expected to be low,
generally below 50%, due to the emphasis on stock selection.

Global Equity Portfolio

The Global Equity Portfolio invests at least 65% of its
total assets in common stocks, securities convertible into
such common stocks (including ADRs and EDRs), closed-end
investment companies, and rights and warrants issued by
companies that are based both inside and outside the United
States. The Portfolio may invest in forward foreign
currency exchange contracts, equity derivative securities
such as options on common stocks and options, futures and
options on futures on foreign common stock indices. The
Portfolio also may invest up to 35% of its total assets in
the types of short-term securities and in other debt
securities described under the caption "Descriptions of
Investments" below.

The Portfolio may invest up to 20% of its total assets in
convertible securities and debt securities which are rated
below investment-grade.

The Portfolio will invest broadly in the available universe
of common stocks of companies domiciled in one of at least
three countries including the United States and the
countries listed above in the description of the International
Equity Portfolio's investment policies and strategy. At least
65% of total assets will be denominated in at least three
currencies including the U.S. dollar.

HLM's "bottom up" approach also is utilized for this
Portfolio (see International Equity Portfolio, above). HLM
does not hedge foreign currency exposure, except on rare
occasions when it has a strong view on the prospects for a
particular currency or when hedging is desirable to improve
portfolio diversification. Currency hedging is done through
the use of forward contracts or options.

Multi-Asset Global Portfolio

The Multi-Asset Global Portfolio invests in common stocks,
securities convertible into such common stocks (including
ADRs and EDRs), closed-end investment companies, debt
securities and rights and warrants issued by companies that
are based both inside and outside the United States and debt
securities of the United States and foreign governments and
their agencies and instrumentalities. The Portfolio may
invest in forward foreign currency exchange contracts,
equity derivative securities such as options on common
stocks and options, futures and options on futures on
foreign common stock indices. The Portfolio also may invest
its assets in the types of short-term securities described
under the caption "Descriptions of Investments" below.

The Portfolio will invest broadly in the available universe
of equity and debt securities of companies and debt
securities of the United States and foreign governments and
their agencies and instrumentalities domiciled in at least
three countries including the United States. HLM's "bottom
up" approach is utilized for the selection of equity and
fixed income investments for this Portfolio (see
International Equity Porfolio, above). While the Portfolio
will generally emphasize equity investments, the allocation of
the Portfolio among equity, fixed income and cash equivalent
investments may range widely, and will vary over time
according to HLM's current assessment of the relative risk
and potential return of alternative investments. At least 65%
of total assets will be denominated in at least three currencies
including the U.S. dollar.

HLM does not hedge foreign currency exposure, except on rare
occasions when it has a strong view on the prospects for a
particular currency or when hedging is desirable to improve
portfolio diversification. Currency hedging is done through
the use of forward contracts or options.

Emerging Markets Portfolio (This Portfolio has not commenced
operations.)

The Emerging Markets Portfolio invests at least 65% of its
total assets in common stocks, securities convertible into
such common stocks (including ADRs and EDRs), closed-end
investment companies, and rights and warrants issued by
companies that are based in developing markets outside the
United States. The Portfolio may invest in forward foreign
currency exchange contracts, equity derivative securities
such as options on common stocks and options, futures and
options on futures on foreign common stock indices. The
Portfolio also may invest in securities of U.S. companies
which derive, or are expected to derive, a significant
portion of their revenues from their foreign operations,
although under normal circumstances not more than 15% of the
Portfolio's total assets will be invested in securities of
U.S. companies. The Portfolio also may invest up to 35% of
its total assets in the types of short-term securities and
in other debt securities described under the caption
"Descriptions of Investments" below.

The Portfolio may invest up to 20% of its total assets in
convertible securities and debt securities which are rated
below investment-grade.

The Portfolio will invest broadly in the available universe
of common stocks of companies domiciled in one of at least
three countries listed below under the caption "Description
of Investments - Emerging Markets Securities."

HLM's "bottom up" approach is utilized for this Portfolio
(see International Equity Portfolio, above). HLM does not
hedge foreign currency exposure, except on rare occasions when
it has a strong view on the prospects for a particular currency
or when hedging is desirable to improve portfolio
diversification. Currency hedging is done through the use
of forward contracts or options.

DESCRIPTIONS OF INVESTMENTS

The following briefly describes some of the different types
of securities in which each Portfolio, unless otherwise
specified, may invest and investment techniques in which
each Portfolio may engage, subject to each Portfolio's
investment objective and policies. For a more extensive
description of certain of these assets and the risks
associated with them, see the Statement of Additional
Information.

Equity Securities. The Portfolios will invest in various
types of equity securities, including common stocks,
preferred stocks, convertible securities, ADRs, EDRs, rights
and warrants. The stocks that the Portfolios will invest in
may be either growth-oriented or value-oriented.
Growth-oriented stocks are the stocks of companies that are
believed to have internal strengths, such as good financial
resources, a satisfactory rate of return on capital, a
favorable industry position, and superior management.
Value-oriented stocks have lower price multiples (either
price/earnings or price/book) than other stocks in their
industry and sometimes also can display weaker fundamentals
such as growth of earnings and dividends. Rights and
warrants are instruments which give the holder the right to
purchase the issue's securities at a stated price during a
stated term.

Foreign Securities. The Portfolios will invest in foreign
securities. Foreign securities include equity,
foreign-fixed income, or derivative securities denominated
in currencies other than the U.S. dollar, including any
single currency or multi-currency units, plus sponsored and
unsponsored ADRs and EDRs. ADRs typically are issued by a
U.S. bank or trust company and evidence ownership of
underlying securities issued by a foreign corporation.
EDRs, which sometimes are referred to as Continental
Depositary Receipts, are receipts issued in Europe,
typically by foreign banks and trust companies, that
evidence ownership of either foreign or domestic underlying
securities. Unsponsored ADRs and EDRs differ from sponsored
ADRs and EDRs in that the establishment of unsponsored ADRs
and EDRs is not approved by the issuer of the underlying
securities. Risks associated with investing in foreign
securities are described under the caption "Risks Associated
with the Fund's Investment Policies and Investment
Techniques - Foreign Investments" below.

Emerging Markets Securities. For purposes of its investment
policies, the Fund defines an emerging market as any
country, the economy and market of which is generally
considered to be emerging or developing by MSCI or, in the
absence of an MSCI classification, by the World Bank. Under
this definition, the Fund considers emerging markets to
include all markets except Australia, Austria, Belgium,
Canada, Denmark, Finland, France, Germany, Hong Kong,
Ireland, Italy, Japan, the Netherlands, New Zealand, Norway,
Singapore, Spain, Sweden, Switzerland, the United Kingdom,
and the United States.

Emerging Markets Debt Instruments. The Emerging Markets
Portfolio and the Multi-Asset Global Portfolio may invest in
zero coupon securities and convertible debt or other debt
securities acquired at a discount. A portion of the
Portfolio's sovereign debt securities may be acquired at a
discount. The Portfolio will purchase only such securities
to the extent consistent with the Portfolio's investment
objectives.

Foreign Governments and International and Supranational
Agency Securities. The Portfolios may purchase debt
obligations issued or guaranteed by foreign governments or
their subdivisions, agencies and instrumentalities, and
debt obligations issued or guaranteed by international agencies
and supranational entities.

Convertible Securities. The Portfolios may invest in
convertible preferred and debt securities which are
securities that may be converted into or exchanged for, at
either a stated price or stated rate, underlying shares of
common stock. Convertible securities have general
characteristics similar to both fixed-income and equity
securities. Although to a lesser extent than with
fixed-income securities generally, the market value of
convertible fixed income securities tends to decline as
interest rates increase and, conversely, tends to increase
as interest rates decline. In addition, because of the
conversion feature, the market value of convertible
securities tends to vary with fluctuations in the market
value of the underlying common stocks and therefore also
will react to variations in the general market for equity
securities. A unique feature of convertible securities is
that as the market price of the underlying common stock
declines, convertible securities tend to trade increasingly
on a yield basis, and so may not experience market value
declines to the same extent as the underlying common stock.
When the market price of the underlying common stock
increases, the prices of the convertible securities tend to
rise as a reflection of the value of the underlying common
stock. While no securities investments are without risk,
investments in convertible securities generally entail less
risk than investments in common stock of the same issuer.

Foreign Currency Transactions. The Portfolios do not hedge
foreign currency exposure, except on rare occasions when HLM
has a strong view on the prospects for a particular currency
or when hedging is desirable to improve portfolio
diversification. Each Portfolio will conduct its currency
transactions either on a spot (cash) basis at the rate
prevailing in the currency exchange market, or through
entering into forward contracts to purchase or sell
currency. A forward currency contract involves an
obligation to purchase or sell a specific currency at a
future date, which may be any fixed number of days from the
date of the contract agreed upon by the parties, at a price
set at the time of the contract. The use of forward
currency contracts does not eliminate fluctuations in the
underlying prices of the securities, but it does establish a
rate of exchange that can be achieved in the future. In
addition, although forward currency contracts limit the risk
of loss due to a decline in the value of the hedged
currency, at the same time, they also limit any potential
gain that might result should the value of the currency
increase. Each Portfolio will segregate cash, U.S.
Government securities or other high-grade liquid debt
obligations or portfolio securities with the custodian in an
amount at all times equal to or exceeding their
commitment with respect to contracts that are not part of a
designated hedge.

U.S. Treasury and other U.S. Government and Government
Agency Securities. Each Portfolio may purchase securities
issued by or guaranteed as to principal and interest by the
U.S. Government, its agencies or instrumentalities and
supported by the full faith and credit of the United States
("U.S. Government Securities"). Each Portfolio also may
purchase securities issued by a U.S. Government-sponsored
enterprise or federal agency that is supported either by its
ability to borrow from the U.S. Treasury (e.g., Student Loan
Marketing Association) or by its own credit standing (e.g.,
Federal National Mortgage Association). Such securities do
not constitute direct obligations of the United States but
are issued, in general, under the authority of an Act of
Congress.

Inflation-Indexed Securities. Each Portfolio may invest in
securities with a nominal return linked to the inflation
rate from bond markets worldwide such as the U.S. Treasury
Department's recently announced "inflation-protection"
issues. The initial issues are ten-year notes which are
issued quarterly. Other maturities will be added at a later
date. The principal is adjusted for inflation (payable at
maturity) and the semi-annual interest payments equal a
fixed percentage of the inflation-adjusted principal
amount. The inflation adjustments are based upon the
Consumer Price Index for Urban Consumers ("CPI-U"). These
securities may also be eligible for coupon stripping under
the U.S. Treasury "STRIPS" program.

Corporate Debt Instruments. Each Portfolio may purchase
commercial paper, short-term notes and other obligations of
U.S. and foreign corporate issuers meeting the Portfolio's
credit quality standards (including variable rate notes).
Other than the allowable 20% of a Portfolio's total assets
invested in below-investment grade convertible and other
debt securities, all investments in corporate debt
instruments will be rated at least "BBB" or "A-1" (in the
case of commercial paper) by S&P, "Baa" or "P-1" (in the
case of commercial paper) by Moody's, or of comparable
quality as determined by HLM.

Repurchase Agreements. Each Portfolio may enter into
repurchase agreements under which a bank or securities firm
(that is a dealer in U.S. Government Securities reporting to
the Federal Reserve Bank of New York) agrees, upon entering
into the contract, to sell U.S. Government Securities to a
Portfolio and repurchase such securities from the Portfolio
at a mutually agreed-upon price and date. Repurchase
agreements will generally be restricted to those that mature
within seven days. Securities subject to repurchase
agreements will be held by the Company's custodian,
sub-custodian or in the Federal Reserve/Treasury book-entry
system. Repurchase agreements are considered to be loans by
the Portfolio under the Investment Company Act of 1940, as
amended, (the "1940 Act"). The Portfolios will engage in
such transactions with parties selected on the basis of such
party's creditworthiness and will enter into repurchase
agreements only with financial institutions which are deemed
by HLM to be in good financial standing and which have been
approved by the Board of Directors.

For descriptions about other types of investments that each
portfolio may invest in, including, but not limited to warrants,
bank obligations, reverse repurchase agreements, when
issued securities, futures contracts, stock index options,
options on futures contracts, securities lending,
and the risks related to those investments, see "Supplemental
Descriptions of Investments," "Supplemental Investment Techniques,"
and Supplemental Discussion of Risks Associated with the Fund's
Investment Policies and Investment Techniques" in the
Statement of Additional Information.

RISKS ASSOCIATED WITH THE FUND'S INVESTMENT POLICIES
AND INVESTMENT TECHNIQUES

A more detailed discussion of the risks associated with the
investment policies and investment techniques of the
Portfolios appears in the Statement of Additional
Information.

Foreign Investments. Securities issued by foreign
governments, foreign corporations, international agencies
and obligations of foreign banks involve risks not
associated with securities issued by U.S. entities. Changes
in foreign currency exchange rates may affect the value of
investments of a Portfolio. With respect to certain foreign
countries, there is the possibility of expropriation of
assets, confiscatory taxation and political or social
instability or diplomatic developments that could affect
investment in those countries. There may be less publicly
available information about a foreign financial instrument
than about a United States instrument and foreign entities
may not be subject to accounting, auditing and financial
reporting standards and requirements comparable to those of
United States entities. A Portfolio could encounter
difficulties in obtaining or enforcing a judgment against
the issuer in certain foreign countries. In addition,
certain foreign investments may be subject to foreign
withholding or other taxes, although the Portfolio will seek
to minimize such withholding taxes whenever practical.
Investors may be able to deduct such taxes in computing
their taxable income or to use such amounts as credits
against their United States income taxes if more than 50% of
the Portfolio's total assets at the close of any taxable
year consist of stock or securities of foreign
corporations. Ownership of unsponsored ADRs may not entitle
the Portfolio to financial or other reports from the issuer
to which it would be entitled as the owner of sponsored
ADRs. See "Tax Considerations."

Emerging Markets Securities. The risks of investing in
foreign securities may be intensified in the case of
investments in issuers domiciled or doing substantial
business in emerging markets or countries with limited or
developing capital markets. Security prices in emerging
markets can be significantly more volatile than in the more
developed nations of the world, reflecting the greater
uncertainties of investing in less established markets and
economies. In particular, countries with emerging markets
may have relatively unstable governments, present the risk
of sudden adverse government action and even nationalization
of businesses, restrictions on foreign ownership, or
prohibitions of repatriation of assets, and may have less
protection of property rights than more developed countries.
The economies of countries with emerging markets may be
predominantly based on only a few industries, may be highly
vulnerable to changes in local or global trade conditions,
and may suffer from extreme and volatile debt burdens or
inflation rates. Local securities markets may trade a small
number of securities and may be unable to respond
effectively to increases in trading volume, potentially
making prompt liquidation of substantial holdings difficult
or impossible at times. Transaction settlement and dividend
collection procedures may be less reliable in emerging
markets than in developed markets. Securities of issuers
located in countries with emerging markets may have limited
marketability and may be subject to more abrupt or erratic
price movements.

Derivatives and Hedging. The Portfolios may engage in
hedging and other strategic transactions and certain other
investment practices which may entail certain risks.

Derivatives involve special risks, including possible
default by the other party to the transaction, illiquidity
and, to the extent HLM's view as to certain market movements
is incorrect, the risk that the use of Derivatives could
result in greater losses than if they had not been used.
Use of put and call options could result in losses to a
Portfolio, force the purchase or sale of portfolio
securities at inopportune times or for prices higher or
lower than current market values or cause the Portfolio to
hold a security it might otherwise sell. The use of options
and futures transactions entails certain special risks. In
particular, the variable degree of correlation between price
movements of futures contracts and price movements in the
related portfolio position of a Portfolio could create the
possibility that losses on the Derivative will be greater
than gains in the value of the Portfolio's position. The
loss from investing in futures transactions which are
unhedged or uncovered, is potentially unlimited. In
addition, futures and options markets could be illiquid in
some circumstances and certain over-the-counter options
could have no markets. A Portfolio might not be able to
close out certain positions without incurring substantial
losses. To the extent a Portfolio utilizes futures and
options transactions for hedging, such transactions should
tend to minimize the risk of loss due to a decline in the
value of the hedged position and, at the same time, limit
any potential gain to the Portfolio that might result from
an increase in value of the position. Finally, the daily
variation margin requirements for futures contracts create a
greater ongoing potential financial risk than would
purchases of options, in which case the exposure is limited
to the cost of the initial premium and transaction costs.
Losses resulting from the use of Derivatives will reduce the
Portfolio's net asset value, and possibly income, and the
losses may be greater than if Derivatives had not been
used. Additional information regarding the risks and
special considerations associated with Derivatives appears
in the Statement of Additional Information.

High Yield/High Risk Securities. Each Portfolio may invest
up to 20% of its total assets in convertible securities and
debt securities rated lower than Baa by Moody's or BBB by
S&P, or of equivalent quality as determined by HLM (commonly
referred to as "junk bonds"). The lower the ratings of such
debt securities, the greater their risks render them like
equity securities. Each Portfolio will invest no more than
10% of its total assets in securities rated B or lower by
Moody's or S&P, or of equivalent quality, but may invest in
securities rated C by Moody's or D by S&P, or the
equivalent, which may be in default with respect to payment
of principal or interest.

Illiquid and Restricted Securities. Each Portfolio will not
invest more than 15% of the value of its net assets in
illiquid securities. Illiquid securities are securities
which may not be sold or disposed of in the ordinary course
of business within seven days at approximately the value at
which a Portfolio has valued the investments, and include
securities with legal or contractual restrictions on resale,
time deposits, repurchase agreements having maturities
longer than seven days and securities that do not have
readily available market quotations. In addition, a
Portfolio may invest in securities that are sold in private
placement transactions between their issuers and their
purchasers and that are neither listed on an exchange nor
traded over-the counter. These factors may have an adverse
effect on the Portfolio's ability to dispose of particular
securities and may limit a Portfolio's ability to obtain
accurate market quotations for purposes of valuing
securities and calculating net asset value and to sell
securities at fair value. If any privately placed securities
held by a Portfolio are required to be registered under the
securities laws of one or more jurisdictions before being
resold, the Portfolio may be required to bear the expenses
of registration.

Repurchase Agreements. In the event the other party to a
repurchase agreement becomes subject to a bankruptcy or
other insolvency proceeding or such party fails to satisfy
its obligations thereunder, a Portfolio could (i) experience
delays in recovering cash or the securities sold (and during
such delay the value of the underlying securities may change
in a manner adverse to the Portfolio) or (ii) lose all or
part of the income, proceeds or rights in the securities to
which the Portfolio would otherwise be entitled.

INVESTMENT RESTRICTIONS

The following fundamental investment restrictions apply to
each Portfolio and may be changed with respect to a
particular Portfolio only by the majority vote of that
Portfolio's outstanding shares. Accordingly, no Portfolio
may:

(a) invest more than 5% of its total assets in
securities of any one issuer, other than securities
issued by the U.S. Government, its agencies and
instrumentalities, or purchase more than 10% of the
voting securities of any one issuer, with respect
to 75% of a Portfolio's total assets;

(b) invest more than 25% of its total
assets in the securities of companies primarily
engaged in any one industry other than the U.S.
Government, its agencies or instrumentalities.
Finance companies as a group are not considered a
single industry for purposes of this policy;

(c) borrow money, except through reverse
repurchase agreements or from a bank for temporary
or emergency purposes in an amount not exceeding
one third of the value of its total assets nor will
the Portfolios borrow for leveraging purposes. In
addition, although not a fundamental policy, the
Portfolios will repay any money borrowed before any
additional portfolio securities are purchased. See
the Statement of Additional Information for a
further description regarding reverse repurchase
agreements;
(d) purchase or sell real estate (other than
marketable securities representing interests in, or
backed by, real estate and securities of companies
that deal in real estate or mortgages) or real
estate limited partnerships, or purchase or sell
physical commodities or contracts relating to
physical commodities; or

(e) purchase or retain the securities of any
open-end investment companies.

The above percentage limits are based upon current asset
values at the time of the applicable transaction;
accordingly, a subsequent change in asset or security values
will not affect a transaction which was in compliance with
the investment restrictions at the time such transaction was
effected. See the Statement of Additional Information for
additional investment restrictions.

YIELDS AND TOTAL RETURN

The Portfolios' yield for any 30-day (or one month) period
is computed by dividing the net investment income per share
earned during such period by the maximum public offering
price per share on the last day of the period, and then
annualizing such 30-day (or one month) yield in accordance
with a formula prescribed by the Commission which provides
for compounding on a semiannual basis.
The Portfolios may from time to time advertise their total
return. Any total return quotations advertised will reflect
the average annual compounded rate of return during the
designated time period based on a hypothetical initial
investment and the redeemable value of that investment at
the end of the period.

The Portfolios will at times compare their performance to
applicable published indices, and also may disclose their
performance as ranked by certain analytical services. See
the Statement of Additional Information for more information
about the calculation of yields and total returns.
Performance figures are based upon historical earnings and
are not intended to indicate future performance.

DISTRIBUTION OF FUND SHARES

Shares of the Fund are distributed by AMT Capital pursuant
to a Distribution Agreement (the "Distribution Agreement")
dated as of May 29, 1998 between the Fund and AMT
Capital. No fees are payable by the Fund pursuant to the
Distribution Agreement.

DETERMINATION OF NET ASSET VALUE

The "net asset value" per share of each Portfolio is
calculated as of the close of business on days when the New
York Stock Exchange is open for business, (hereinafter,
"Business Day"). Each Portfolio determines its net asset
value per share by subtracting that Portfolio's liabilities
(including accrued expenses and dividends payable) from the
total value of the Portfolio's investments and other assets
and dividing the result by the total outstanding shares of
the Portfolio.

For purposes of calculating each Portfolio's net asset
value, securities are valued as follows: (1) all portfolio
securities for which over-the-counter ("OTC") market
quotations are readily available are valued at their last
sale price, or if there are no trades, at the latest bid
price; (2) deposits and repurchase agreements are valued at
their cost plus accrued interest unless HLM determines in
good faith, under procedures established by and under the
general supervision of the Fund's Board of Directors, that
such value does not approximate the fair value of such
assets; (3) U.S. securities listed or traded on an exchange
are valued at their last sale price on that exchange, or if
there are no trades, at the mean between the latest bid and
asked prices; (4) Non-U.S. securities listed or traded on an
exchange are valued at their last sale price on that
exchange on the current day, or if there are no trades on
that day, at the most recent sale price available on that
exchange, (5) securities which are traded both in the OTC
market and on a stock exchange will be valued according to
the broadest and most representative market; (6) short-term
obligations with maturities of 60 days or less are valued at
amortized cost, which constitutes fair value as determined
by the Fund's Board of Directors. Amortized cost involves
valuing an instrument at its original cost to the Portfolio
and thereafter assuming a constant amortization to maturity
of any discount or premium, regardless of the impact of
fluctuating interest rates on the market value of the
instrument; and (7) the value of other assets for which
market quotations are not readily available will be
determined in good faith by HLM at fair value under
procedures established by and under the general supervision
of the Fund's Board of Directors. Quotations of foreign
securities denominated in a foreign currency are converted
to a U.S. dollar-equivalent at exchange rates obtained from
an automated pricing service at 11:00 EST at the bid price
except for the Royal Currencies (United Kingdom, Ireland,
European Currency Unit, Australia and New Zealand), which
are valued at the ask price.

PURCHASE AND REDEMPTION OF SHARES

Purchases

There is no sales charge imposed by the Fund. The minimum
initial investment in any Portfolio of the Fund is $100,000;
additional purchases or redemptions may be of any amount.
The Fund has authorized one or more brokers to accept, on
its behalf, purchase orders. Such brokers are authorized to
designate other intermediaries to accept purchase orders on
the Fund's behalf. The Fund will be deemed to have
received a purchase order when an authorized broker
or, if applicable, a broker's authorized agent accepts the order.
Share purchase orders placed through an authorized broker or
the broker's authorized designee will be priced at the
Fund's Net Asset Value next computed after they are accepted
by an authorized broker or the broker's authorized
designee. With respect to purchases of Fund shares through
certain brokers: 1) a broker may charge transaction fees,
2) duplicate mailings of Fund material to shareholders who
reside at the same address may be eliminated, and 3) the
minimum initial investment through certain brokers may be
less than a direct purchase with the Fund.

The offering of shares of the Fund is continuous and
purchases of shares of the Fund may be made on any Business
Day. The Fund offers shares at a public offering price
equal to the net asset value next determined after receipt
of a purchase order.

Purchases of shares must be made by wire transfer of Federal
funds. Share purchase orders are effective on the date when
Investors Capital, a branh office of AMT Capital, receives a
completed Account Application Form (and other required
documents) and Federal funds become available to the Fund
in the Fund's account with the Transfer Agent as set forth
below. The shareholder's bank may impose a charge to execute
the wire transfer. The wiring instructions are:

Investors Bank & Trust Company, Boston, MA
ABA#: 011-001-438
Account Name: AMT Capital Securities, L.L.C.
- Fund Purchase Account
Account #: 933333333
Reference: Harding, Loevner Funds, Inc. - (designate
Portfolio)

In order to purchase shares on a particular Business Day, a
purchaser must call Investors Capital at (212) 332-5210 prior
to the close of business (normally 4:00 p.m. Eastern time) to
inform the Fund of the incoming wire transfer and must
clearly indicate which Portfolio is to be purchased. If
Federal funds are received by the Fund that same day, the
order will be effective on that day. If the Fund receives
notification after the above-mentioned cut-off times, or if
Federal funds are not received by the Transfer Agent, such
purchase order shall be executed as of the date that Federal
funds are received.

Redemptions

The Fund will redeem all full and fractional shares of the
Fund upon request of shareholders. The redemption price is
the net asset value per share next determined after receipt
by the Transfer Agent of proper notice of redemption as
described below. If such notice is received by the Transfer
Agent by the close of business (normally 4:00 p.m. Eastern
time) on any Business Day, the redemption will be effective
on the date of receipt. Payment ordinarily will be made by
wire on the next Business Day but within no more than seven
days from the date of receipt. If the notice is received on
a day that is not a Business Day or after the
above-mentioned cut-off times, the redemption notice will be
deemed received as of the next Business Day.

The Fund has authorized one or more brokers to accept, on its
behalf, redemption orders. Such brokers are authorized to
designate other intermediaries to accept redemption orders on
the Fund's behalf. The Fund will be deemed to have received a
redemption order when an authorized broker or, if applicable, a
broker's authorized agent accepts the order.

There is no charge imposed by the Fund to redeem shares of
the Fund; however, a shareholder's bank may impose its own
wire transfer fee for receipt of the wire. Redemptions may
be executed in any amount requested by the shareholder up to
the amount such shareholder has invested in the Fund.

To redeem shares, a shareholder or any authorized agent (so
designated on the Account Application Form) must provide the
Transfer Agent with the dollar or share amount to be
redeemed, the account to which the redemption proceeds
should be wired (which account shall have been previously
designated by the shareholder on its Account Application
Form), the name of the shareholder and the shareholder's
account number. Shares redeemed receive dividends up to and
including the day preceding the day the redemption proceeds
are wired.

A shareholder may change its authorized agent or the account
designated to receive redemption proceeds at any time by
writing to the Transfer Agent with an appropriate signature
guarantee. Further documentation may be required when
deemed appropriate by the Transfer Agent.

A shareholder may request redemption by calling the Transfer
Agent at (800) 247-0473. Telephone redemption is made
available to shareholders of the Fund on the Account
Application Form. The Fund or the Transfer Agent employ
reasonable procedures designed to confirm that instructions
communicated by telephone are genuine. If either the Fund
or the Transfer Agent does not employ such procedures, it
may be liable for losses due to unauthorized or fraudulent
instructions. The Fund or the Transfer Agent may require
personal identification codes and will only wire funds
through pre-existing bank account instructions. No bank
instruction changes will be accepted via telephone.

Exchange Privilege

Shares of each Portfolio may be exchanged for shares of
another Portfolio based on the respective net asset values
of the shares involved in the exchange, assuming that
shareholders wishing to exchange shares reside in states
where these mutual funds are qualified for sale. The Fund's
Portfolio minimum amounts of $100,000 would still apply. An
exchange order is treated the same as a redemption followed
by a purchase. Investors who wish to make exchange requests
should telephone Investors Capital at (212) 332-5210 or the
Transfer Agent at (800) 247-0473.

DIVIDENDS

Each Portfolio will declare and pay a dividend from its net
investment income, its realized net short-term capital gains
and net long-term capital gains, if any, at least annually by
automatically reinvesting (unless a shareholder has elected
to receive cash) such dividends, short-term or long-term
capital gains in additional shares of the Portfolio at the
net asset value on the ex-date of the distribution.

MANAGEMENT OF THE FUND

Board of Directors

The Board of Directors of the Fund are responsible for the
overall management and supervision of the Fund. The Fund's
Directors are James C. Brady III, Jane A. Freeman, Samuel R.
Karetsky, David R. Loevner and Carl W. Schafer. Additional
information about the Directors and the Fund's executive
officers may be found in the Statement of Additional Information
under the heading "Management of the Fund - Board of Directors."

Investment Adviser

Subject to the direction and authority of the Fund's Board
of Directors, HLM provides investment advisory services to
each Portfolio pursuant to Investment Advisory Agreements,
dated October 14, 1996. Under the Investment Advisory
Agreements, HLM is responsible for providing investment
research and advice, determining which portfolio securities
shall be purchased or sold by each Portfolio of the Fund,
purchasing and selling securities on behalf of the
Portfolios and determining how voting and other rights with
respect to the portfolio securities of the Portfolios are
exercised in accordance with each Portfolio's investment
objective, policies, and restrictions. HLM also provides
office space, equipment and personnel necessary to manage
the Fund.

HLM, established in 1989, is a registered investment adviser
that specializes in global investment management for private
investors and institutions. HLM currently has approximately
$1.7 billion in assets under management. HLM is located at
50 Division Street, Suite 401, Somerville, NJ 08876. HLM
manages assets for several other registered investment
companies.

HLM bears the expense of providing the above services to the
Fund. For its services, each of the International Equity
Portfolio, Global Equity Portfolio, Multi-Asset Global
Portfolio and Emerging Markets Portfolio pay HLM a monthly
fee at an annual rate of 0.75%, 1.00%, 1.00% and 1.25%,
respectively, of its average daily net assets. The
advisory fee paid by each Portfolio is higher than that
charged by most funds which invest primarily in U.S.
securities, but not necessarily higher than the fees charged
to funds with investment objectives similar to those of the
Portfolios.

Portfolio Managers

Daniel D. Harding, CFA, (responsible for global portfolio
management), co-founder of HLM and a director of its general
partner, is the firm's chief investment officer, with
overall responsibility for investment policy. Dan served
for twelve years as a senior investment manager with
Rockefeller & Co., investment adviser to the Rockefeller
family and related institutions. As manager of the family's
flagship equity, fixed income and balanced fund portfolios,
he set investment strategy and provided investment
counseling to family members, trusts and private
businesses. In this capacity he also spearheaded the
diversification of the firm's investments into overseas
markets. Dan began his career as a trust investment officer
at American National Bank & Trust in Morristown, NJ. He is
an honors graduate in History and International Relations
from Colgate University (1974), a Chartered Financial Analyst,
and a Chartered Investment Counselor. Dan is a trustee
and treasurer of the Peck School.

Simon Hallett (responsible for international portfolio
management), senior portfolio manager and a director of the
firm's general partner, is chairman of the investment
committee and a senior portfolio manager. Simon has managed
global portfolios for individuals and institutions since 1979,
when he joined the investment management department of London-based
Buckmaster and Moore. In 1981 he moved to Hong Kong, where
he began to concentrate on Asian markets, and in 1984 joined
Jardine Fleming Investment Management, one of Asia's largest
and most respected investment management companies. Simon's
ultimate position at Jardine Fleming was director in charge
of a team of six portfolio managers investing in the markets
of South East and North Asia for a diverse clientele
comprising European pension plans, governments, and private
clients, Rockefeller & Co. among them. He joined HLM in
1991. A British subject, Simon is an honors graduate of
Oxford University in Politics, Philosophy and Economics.

Ferrill D. Roll, (responsible for multi-asset global
portfolio management), a principle of the firm is a portfolio
manager and a member of the investment committee. Ferrill has
fifteen years' experience across a wide range of
international markets. For the four years prior to joining HLM
in 1996, he was general partner of Cesar Montemayor Capital,
L.P., a global investment partnership investing in fixed income,
currency, and equity markets. Six years before that, he worked
in international equity sales, first at First Boston (1985-1989)
and later at Baring Securities (1989-1992), focusing primarily on
European markets. During 1990, he acted as head of Baring's
German equity research, in Frankfurt. From 1980-1984 Ferrill
worked at JP Morgan, where he advised corporate clients on
foreign exchange markets and set up the currency options
trading department. He graduated from Stanford University
in 1980 with a degree in Economics.

David R. Loevner, CFA, co-founder, is the chief executive officer
of HLM and a director of the firm's general partner. He
serves on the investment committee, and is responsible for
the firm's administration, business development and client
service. His prior experience includes nine years with
Rockefeller & Co., where he managed equity portfolios,
counseled family members, and developed new financial
planning and asset allocation tools. David also managed a
number of professional service units with the Rockefeller
family office, including the Rockefeller Insurance Company,
which he established in 1985. In 1987, David
established Rockefeller's first Asian office, in Hong Kong,
from which he directed a region-wide investment program
comprising small company and venture investments. Before
Rockefeller, David worked for the World Bank, as country
economist for Brazil. He graduated summa cum laude
from Princeton University and, as a Sachs Scholar,
received graduate degrees in Statistics and in Economics
from Oxford University. David is a director of the Princeton
University Investment Company, a trustee of Goucher College
an advisory trustee of Outward Bound USA, and a Chartered
Investment Counselor.

Alexander T. Walsh, a principal of the firm, is a portfolio
manager and a member of the investment committee. From 1979
through 1982, he worked in money market trading and
operations for J. Henry Schroder Bank & Trust Co., New
York. Alec joined Merrill Lynch, New York in 1982 as an
account executive. In 1987 he moved to Paine Webber, where
he built an institutional equity clientele comprising
Fortune 100 accounts and investment advisers. Promoted to
1st Vice President in 1992, he remained with the firm until
joining HLM in 1994. Alec is a 1978 graduate of McGill
University with a BA in North American Studies.

G. "Rusty" Johnson III, CFA, a princiapl of the firm, is the
research manager and a member of the investment committee.
He began his career in Hong Kong in 1986, developing
computer-based arbitrage programs for Chin Tung Futures,
subsequently a subsidiary of Standard Chartered Bank. The
following year he joined Jardine Fleming Research to
concentrate on Asian equities. After three years in Hong
Kong and two years in Bangkok, Rusty moved to Jardine
Fleming's parent company, Robert Fleming, in New York as an
institutional broker of Asian equities. He spent an additional
year in institutional equity sales in New York with Peregrine
Securities before joining HLM in 1994. Rusty is a magna cum
laude graduate in Economics of Washington and Lee University,
(1986), where his program included studies at Fu Jen University,
Taiwan, and the Chinese University of Hong Kong.

S. Clarke Moody, a principal of the firm, is a research analyst. He
has sixteen years of corporate banking experience analyzing, marketing
and executing corporate finance transactions with companies across a
range of industries and geographies. Most recently, Clarke was a
managing director at ABN AMRO Bank, where he established and ran the
New York-based global media and communications finance unit. For the
previous two years, he was a Director at Barclays de Zoete Wedd in
New York, where he dealt with companies in the technology and defense
industries. Clarke spent the bulk of his career at Chase Manhattan
Bank, where he focused on companies in the multinational pharmaceutical
industry for seven years in New York and Puerto Rico, and the capital
goods and industrial components industries for another four years in New
York and Houston. A 1978 graduate of Colby College with a degree in
English Literature, Clarke also studied at the University of London.

Peter J. Baughan, CFA, is a securities analyst. He has fourteen years
experience analyzing and investing in companies in Asia, Europe and the
US. He joins HLM from Rockefeller & Co. where he has worked since 1988.
With Rockefeller, Peter spent two years in New York as an investment
analyst and six years in London and Paris as manager of the firm's
European private equity investment portfolio. From 1983-1988, Peter
worked at Chase Manhattan Bank. Following credit training and two years
in international credit audit, Peter spent two years in Chase's Jakarta
office managing problem loan workouts. Peter is a 1983 graduate of the
University of North Carolina at Chapel Hill with a degree in political
science.

Administrator

Pursuant to an Administration Agreement between the Fund and
Investors Capital, dated as of May 29, 1998, Investors Capital
provides for administrative services to, and assists in
managing and supervising all aspects of, the general
day-to-day business activities and operations of the Fund
other than investment advisory activities, including
custodial, transfer agency, dividend disbursing, accounting,
auditing, compliance and related services.

The Fund pays Investors Capital a monthly fee at an annual rate
of 0.15% on the first $500 million of the average daily net
assets of the Fund, 0.10% on the next $500 million of the
average daily net assets of the Fund, and 0.05% on the
average daily net assets over $1 billion. Each Portfolio
pays a proportionate share of the fee based on its relative
net assets.

Investors Capital, formerly AMT Capital Services, Inc. prior to
its merger with Investors Financial Services, Corp. on May 29,
1998, is an affiliate of Investors Bank & Trust, Co. which
serves as the Fund's custodian, funda accounting agent and
transfer agent. The senior managers of Investors Capital are
former officers of Morgan Stanley and the Vanguard Group,
where they were responsible for the private label
administration group of Vanguard, which administered nearly
$10 billion in assets for 45 portfolios, respectively.

Year 2000 Problem

Like other mutual funds, financial and business organizations and
individuals around the world, the Fund could be adversely affected
if the computer systems used by the advisor/administrator and other
service providers do not properly process and calculate date-related
information and data from and after January 1, 2000. This is commonly
known as the "Year 2000 Problem," The advisor/administrator are taking
steps that they believe are reasonably designed to address the Year
2000 Problem with respect to computer systems that they use and to
obtain reasonable assurances that comparable steps are being taken by
the Fund's other major service providers. At this time, however, there
can be no assurance that these steps will be sufficient to avoid any
adverse impact to the Fund nor can there by any assurance that the Year
2000 Problem will not have an adverse effect on the companies whose
securities are held by the Fund or on global markets or economies,
generally.

TAX CONSIDERATIONS

The following discussion is for general information only.
An investor should consult with his or her own tax adviser
as to the tax consequences of an investment in a Portfolio,
including the status of distributions from each Portfolio
under applicable state or local law.

Federal Income Taxes

Each active Portfolio has qualified and intends to continue
to qualify to be treated as a regulated investment company
("RIC") under the Internal Revenue Code of 1986, as amended.
To qualify, a Portfolio must meet certain income,
distribution and diversification requirements. In any year
in which a Portfolio qualifies as a RIC and distributes all
of its taxable income and substantially all of its net
tax-exempt interest income on a timely basis, the Portfolio
generally will not pay U.S. federal income or excise tax.
If in any year a Portfolio should fail to qualify as a regulated
investment company, the Portfolio would be subject to
federal income tax in the same manner as an ordinary
corporation, and distributions to shareholders would be
taxable to such holders as ordinary income to the extent of
the earnings and profits of the Portfolio. Distributions in
excess of earnings and profits will be treated as a tax-free
return of capital, to the extent of a holder's basis in its
shares, and any excess, as a long- or short-term capital
gain.

Each Portfolio intends to distribute all of its taxable
income by automatically reinvesting such amount in
additional shares of the Portfolio and distributing those
shares to its shareholders, unless a shareholder elects on
the Account Application Form, to receive cash payments for
such distributions. Shareholders receiving distributions
from the Fund in the form of additional shares will be
treated for federal income tax purposes as receiving a
distribution in an amount equal to the fair market value of
the additional shares on the date of such a distribution.

Dividends paid by a Portfolio from its investment company
taxable income (including interest and net short-term
capital gains) will be taxable to a U.S. shareholder as
ordinary income, whether received in cash or in additional
Fund shares. Distributions of net capital gains (the excess
of net long-term capital gains over net short-term capital
losses) are generally taxable to shareholders at the
applicable mid-term or long-term capital gains rates,
regardless of how long they have held their Portfolio
shares. If a portion of a Portfolio's income consists of
dividends paid by U.S. corporations, a portion of the
dividends paid by the Portfolio may be eligible for the
corporate dividends-received deduction. Under the Taxpayer
Relief Act of 1997, different tax rates apply to net capital
gain depending on the taxpayers holding period and marginal
rate of federal income tax - generally, 28% for gain
recognized on capital assets held for more than one year but
not more than 18 months and 20% (10% for taxpayers in the
15% marginal tax bracket) for gain recognized on capital
assets held for more than 18 months. Each Portfolio will
notify its shareholders regarding the portions of any net
capital gain distribution taxed at the 28% and 20% tax rates.

A distribution will be treated as paid on December 31 of the
current calendar year if it is declared by a Portfolio in
October, November or December with a record date in any such
month and paid by the Portfolio during January of the
following calendar year. Such distributions will be taxable
to shareholders in the calendar year in which the
distributions are declared, rather than the calendar year in
which the distributions are received. Each Portfolio will
inform shareholders of the amount and tax status of all
amounts treated as distributed to them not later than 60
days after the close of each calendar year.

The foregoing discussion is only a brief summary of the
important federal tax considerations generally affecting the
Fund and its shareholders. As noted above, IRAs receive
special tax treatment. No attempt is made to present a
detailed explanation of the federal, state or local income
tax treatment of the Fund or its shareholders, and this
discussion is not intended as a substitute for careful tax
planning. Accordingly, potential investors in the Fund
should consult their tax advisers with specific reference to
their own tax situation.

State and Local Taxes

A Portfolio may be subject to state, local or foreign
taxation in any jurisdiction in which the Portfolio may be
deemed to be doing business.

Portfolio distributions may be subject to state and local
taxes. Distributions of a Portfolio which are derived from
interest on obligations of the U.S. Government and certain
of its agencies, authorities and instrumentalities may be
exempt from state and local taxes in certain states.
Shareholders should consult their own tax advisers regarding
the particular tax consequences of an investment in a
Portfolio.

SHAREHOLDER INFORMATION

Description of the Fund

The Fund was established under Maryland law by the filing of
its Articles of Incorporation on July 31, 1996. The Fund's
Articles of Incorporation permit the Directors to authorize
the creation of additional Portfolios, each of which may
issue separate classes of shares. Currently, the Fund has
four separate Portfolios.

Voting Rights

Each share of common stock of a Portfolio or class is entitled
to one vote for each dollar of net asset value and a
proportionate fraction of a vote for each fraction of a
dollar of net asset value. Generally, shares of each
Portfolio and class vote together on any matter submitted
to shareholders, except when otherwise required by the
1940 Act or when a matter affects the interests of each
Portfolio or class in a different way, in which case the
shareholders of each Portfolio or class vote separately.
If the Directors determine that a matter does not affect
the interests of a Portfolio or class, then the shareholders
of that Portfolio or class will not be entitled to vote
on that matter. Approval of the investment advisory
agreements are matters to be determined separately by each
Portfolio (but not by each class of a Portfolio).

The election of the Fund's Board of Directors and the
approval of the Fund's independent auditors are voted upon
by shareholders on a Fund-wide basis. As a Maryland
corporation, the Fund is not required to hold annual
shareholder meetings. Shareholder approval will be sought
only for certain changes in the Fund's or a Portfolio's
operation and for the election of Directors under certain
circumstances.

Directors may be removed by shareholders at a special
meeting. A special meeting of the Fund shall be called by
the Directors upon written request of shareholders owning at
least 10% of the Fund's outstanding shares. Shareholders
will be assisted in communicating with other shareholders in
connection with removing a Director as if Section 16(c) of
the 1940 Act were applicable.

OTHER PARTIES

Custodian and Accounting Agent

Investors Bank & Trust Company, P.O. Box 1537, Boston,
Massachusetts 02205-1537, is Custodian for the securities
and cash of the Fund and Accounting Agent for the Fund.

Transfer and Dividend Disbursing Agent

Investors Bank & Trust Company, P.O. Box 1537, Boston,
Massachusetts 02205-1537, is Transfer Agent for the shares
of the Fund, and Dividend Disbursing Agent for the Fund.

Legal Counsel

Dechert Price & Rhoads, 1500 K Street, N.W., Washington,
D.C. 20005-1208, is legal counsel for the Fund.

Independent Auditors

Ernst & Young LLP, 787 Seventh Avenue, New York, New York
10019 is the independent auditors for the Fund.

SHAREHOLDER INQUIRIES

Inquiries concerning the Fund may be made by writing to
Investors Capital, 600 Fifth Avenue, 26th Floor, New
York, New York 10020-2302 or by calling Investors
Capital at (212) 332-5210.

STATEMENT OF ADDITIONAL INFORMATION

Harding, Loevner Funds, Inc.
Distributed By: AMT Capital Securities, L.L.C.
600 Fifth Avenue
26th Floor
New York, NY 10020
(212) 332-5210

Harding, Loevner Funds, Inc. (the "Fund") is a no-load,
open-end management investment company consisting of four
diversified portfolios: International Equity Portfolio,
Global Equity Portfolio, Emerging Markets Portfolio and
Multi-Asset Global Portfolio (each a "Portfolio"). There is
no sales charge for purchase of shares. Each Portfolio is
managed by Harding, Loevner Management, L.P. ("HLM"). Shares
of each Portfolio may be purchased through AMT Capital
Securities, L.L.C.("AMT Capital").

This Statement of Additional Information is not a prospectus
and should be read in conjunction with the prospectus of the
Fund, dated January 13, 1998, (Supplemented June 30, 1998),
(the "Prospectus"), which has been filed with the Securities
and Exchange Commission (the "Commission") and can be obtained,
without charge, by calling or writing Investors Capital Services,
Inc. ("Investors Capital"), a branch office of AMT Capital,at the
telephone number or address stated above. This Statement of
Additional Information incorporates by reference the Prospectus.

January 13, 1998 (Supplemented June 30, 1998)

TABLE OF CONTENTS
Page

Organization of the Fund...................................................3

Management of the Fund.....................................................4
Board of Directors and Officers...................................4
Investment Adviser................................................5
Administrator.....................................................6

Distribution of Fund Shares................................................6

Principal Holders of Securities............................................6

Supplemental Descriptions of Investments...................................8

Supplemental Investment Techniques........................................12

Supplemental Discussion of Risks Associated With the
Fund's Investment Policies and Investment Techniques......................14
Investment Restrictions...................................................18

Portfolio Transactions....................................................19

Net Asset Value...........................................................19

Tax Considerations........................................................20

Shareholder Information...................................................24

Calculation of Performance Data...........................................24

Ratings Descriptions......................................................25

Financial Statements......................................................26

ORGANIZATION OF THE FUND

The authorized capital stock of the Fund consists of
2,500,000,000 shares with $.001 par value, allocated as
follows: (i) 500,000,000 shares to the International Equity
Portfolio; (ii) 500,000,000 shares to the Global Equity
Portfolio; (iii) 500,000,000 shares to the Emerging Markets
Portfolio; (iv) 500,000,000 shares to the Multi-Asset Global
Portfolio and (v) 500,000,000 shares not yet allocated to
any Portfolio. Holders of shares of a Portfolio have one
vote for each dollar, and a proportionate fraction of a vote
for each fraction of a dollar, of net asset value held by a
shareholder. All shares issued and outstanding are fully
paid and non-assessable, transferable, and redeemable at net
asset value at the option of the shareholder. Shares have
no preemptive or conversion rights. The Board of Directors of
the Fund, under Maryland General Corporation Law, is authorized
to establish more than one class of shares for each portfolio
of the Fund.

The shares of the Fund have non-cumulative voting rights,
which means that the holders of more than 50% of the shares
voting for the election of Directors can elect 100% of the
Directors if they choose to do so, and, in such event, the
holders of the remaining less than 50% of the shares voting
for the election of Directors will not be able to elect any
person or persons to the Board of Directors.

MANAGEMENT OF THE FUND

BOARD OF DIRECTORS AND OFFICERS

The Fund is managed by its Board of Directors. The
individuals listed below are the officers and directors of
the Fund. An asterisk (*) has been placed next to the name
of each director who is an "interested person" of the Fund,
as such term is defined in the Investment Company Act of
1940, as amended (the "1940 Act"), by virtue of his or her
affiliation with the Fund or HLM.

Position with the Principal Occupation
Name Adress and Age Company During Past Five Years

*James C. Brady III Director Brady Realty Company
Brady Realty Company 1988-present.
Box 351 Gladstone NJ 07934
Age, 40

Jane A. Freeman Director Rockefeller & Co., Investment Manager 1988-
Rockefeller & Co. present.
30 Rockefeller Plaza Suite 5425
NY, NY 10112
Age, 44

Samuel R. Karetsky Director Samuel R. Karetsky L.L.C., 3/97-present;
180 East 79th Street Morgan Stanley & Co., Managing Director
New York, NY 10021 6/95 - 3/97; OFFITBANK, Managing Director
Age, 53 4/90-6/95

Carl W. Schafer Director The Atlantic Foundation, President 1990-present
66 Witherspoon Street
Princeton, NJ 08542
Age, 62

*David R. Loevner Director Harding Loevner Management, L.P. President
Harding Loevner Management, L.P. and CEO 7/89 - present; Rockefeller & Co.,
50 Division Street Suite 401, Investment Manager 1/81-7/89
Somerville, NJ 08876
Age, 44

William E. Vastardis Secretary and Investors Capital Services, Inc., (Formerly
Investors Capital Services, Inc. Treasurer AMT Capital Services, Inc.) Managing Director
600 Fifth Avenue, 26th Floor 7/92 - present; Vanguard Group, Inc., Vice President,
New York, NY 10020 1/87 - 4/92.
Age, 42

Richard Reiter Assistant Secretary Harding, Loevner Management, L.P.Product
Harding Loevner Management, L.P. Information Manager 4/96-present;
50 Division Street Suite 401, HarrisTrust, Vice President 4/91-4/96.
Somerville, NJ 08876
Age, 32

Carla E. Dearing Assistant Treasurer Investors Capital Services, Inc., (Formerly
Investors Capital Services, Inc. AMT Capital Services, Inc.), Managing Director,
600 Fifth Avenue, 26th Floor Principal and Director, 1/92-present; AMT Capital
New York, NY 10020 Advisers, Inc., Principal and Senior Vice President,
Age, 35 1/92-present; Morgan Stanley & Co., Vice
President, 11/88 - 1/92.
</TABLE>

No employee of HLM or Investors Capital receives any
compensation from the Fund for acting as an officer or
director of the Fund. The Fund pays each director who
is not a director, officer or employee of HLM, Investors
Capital or any of their affiliates, a fee of $1,000 for each
meeting attended, and each of the Directors receives an annual
retainer of $10,000 which is paid in quarterly installments
at the end of each quarter. Directors and officers of the Fund
collectively owned less than 1% of the Fund's outstanding shares
as of December 31, 1997.

By virtue of the responsibilities assumed by HLM, Investors Capital
and AMT Capital and their affiliates under their respective agreements
with the Fund, the Fund itself requires no employees in addition to
its officers.

Director's Compensation Table for the period ended October 31, 1997
Director Aggregate Compensation Pension or Retirement Estimated Annual Total Compensation From
From Registrant Benefits Accrued As Part benefits Registrant and Fund
of Fund Expenses Upon Retirement Complex Paid to Directors

David R. Loevner $0 $0 $0 $0
James C. Brady III $15, 000 $0 $0 $15, 000
Jane A. Freeman $15, 000 $0 $0 $15, 000
Carl W. Schafer $15, 000 $0 $0 $15, 000

</TABLE>

INVESTMENT ADVISER

HLM provides investment advisory services to the Fund. The
terms of the investment advisory agreements (the "Advisory
Agreements") between the Fund, on behalf of each Portfolio,
and HLM obligate HLM to provide investment advisory and
portfolio management services to the Portfolios. HLM is a
registered investment adviser organized in 1989. HLM
provides investment advisory services to private investors
and institutions.

The Advisory Agreements will remain in effect for two years
following their date of execution and thereafter will
automatically continue for successive annual periods, so
long as such continuance is specifically approved at least
annually by (a) the Board of Directors or (b) the vote of a
"majority" (as defined in the 1940 Act) of a Portfolio's
outstanding shares voting as a single class; provided, that
in either event the continuance is also approved by at least
a majority of the Board of Directors who are not "interested
persons" (as defined in the 1940 Act) of the Fund by vote
cast in person at a meeting called for the purpose of voting
on such approval.

The Advisory Agreements are terminable without penalty on
not less than 60 days' notice by the Board of Directors or
by a vote of the holders of a majority of the relevant
Portfolio's outstanding shares voting as a single class, or
upon not less than 60 days' notice by HLM. Each of the
Advisory Agreements will terminate automatically in the
event of its "assignment" (as defined in the 1940 Act).

HLM pays all of its own expenses arising from the
performance of its obligations under the Advisory
Agreements. Under its Advisory Agreements, HLM also pays
all executive salaries and expenses of the Directors and
Officers of the Fund who are employees of HLM or its
affiliates, and office rent of the Fund. Subject to the
expense reimbursement provisions described in the Prospectus
under "Fund Expenses," other expenses incurred in the
operation of the Fund are borne by the Fund, including,
without limitation, investment advisory fees and
administration fees, brokerage commissions, interest, fees
and expenses of independent attorneys, auditors, custodians,
accounting agents, transfer agents, taxes, cost of stock
certificates and any other expenses (including clerical
expenses) of issue, sale, repurchase or redemption of
shares, expenses of registering and qualifying shares of the
Fund under federal and state laws and regulations, expenses
of printing and distributing reports, notices and proxy
materials to existing shareholders, expenses of printing and
filing reports and other documents filed with governmental
agencies, expenses of annual and special shareholders'
meetings, expense of printing and distributing prospectuses,
fees and expenses of Directors of the Fund who are not
employees of HLM or its affiliates, membership dues in the
Investment Company Institute, insurance premiums and
extraordinary expenses such as litigation expenses. Fund
expenses directly attributable to a Portfolio are charged to
that Portfolio; other expenses are allocated proportionately
among all the Portfolios in relation to the net assets of
each Portfolio.

for the periods ended October 31, 1997, the ten months ended
October 31, 1996, and the year ended December 31, 1995, the
amount of advisory fees (net of waivers and reimbursements)
paid by each Portfolio were as follows:

Periods Ended Period Ended Year Ended
Portfolio October 31, 1997 October 31, 1996 December 31, 1995

International Equiy
Portfolio $2,440,398 $724,042 $70,156

Global Equity
Portfolio (1) 562,613 N/A N/A

Multi-Asset Global
Portfolio (2) 3,824 N/A N/A

(1) Commencement of Operations was December 1, 1996.
(2) Commencement of Operations was November 1, 1996.

ADMINISTRATOR

Pursuant to its terms, the administration agreement (the
"Administration Agreement") between the Fund and Investors Capital,
as Administrator, obligates the Administrator to manage and
supervise all aspects of the general day-to-day business
activities and operations of the Fund other than investment
advisory activities, including custodial, transfer agency,
dividend disbursing, accounting, auditing, compliance and
related services. The Administration Agreement will remain
in effect until October 14, 2001 and thereafter will
automatically continue unless terminated on notice.

DISTRIBUTION OF FUND SHARES

Shares of the Fund are distributed by AMT Capital pursuant
to a Distribution Agreement (the "Distribution Agreement")
between the Fund and AMT Capital. The Fund and AMT Capital
have agreed to indemnify one another against certain
liabilities. The Distribution Agreement will remain in
effect until October 14, 1998 and thereafter will continue
for successive annual periods only if its continuance is
approved annually by a majority of the Board of Directors who
are not parties to such agreements or "interested persons"
of any such party and either by votes of a majority of
the Directors or a majority of the outstanding voting
securities of the Fund.

PRINCIPAL HOLDERS OF SECURITIES

As of June 19, 1998, no shareholder is deemed
a "control person" of the Fund as such term is defined in the
1940 Act.

As of June 19, 1998, the following persons held 5
percent or more of the outstanding shares of the International
Equity Portfolio:

Name and Address of Amount and Nature of Percent
Title of Class Beneficial Owner Beneficial Ownership of Portfolio
Common Stock, NationsBank Montgomery Direct Ownership 9.37%
$.001 per Share Securities, Inc. - Custody Account
for the Exclusive Benefit of Customers
600 Montgomery Street
San Francisco, CA 94111

Common Stock, Wilmington Trust Company Direct Ownership 8.27%
$.001 per Share Agent for Longwood Gardens
Wilmington, DE 19890-0001

Common Stock, The National Gallery of Art Direct Ownership 7.69%
$.001 per Share Sixth and Constitution Ave.
Washington, DC 20565

Common Stock Children's Hospital of Direct Ownership 7.46%
$.001 per Share Philadelphia, 34th and
Civic Center Blvd.,
Philadelphia, PA 19104

Common Stock, The Bank of New York Direct Ownership 7.08%
$.001 per Share (nominee) Mutual Fund/
Reorg. Dept., P.O. Box
1066, Wall Street Station,
New York, NY 10268

Common Stock Charles Schwab & Company, Inc. Direct Ownership 5.12%
$.001 per Share Custody Account for the Exclusive
Benefit of Customers
101 Montgomery Street
San Francisco, CA 94111
</TABLE>

As of June 19, 1998, the following persons held 5
percent or more of the outstanding shares of the Global
Equity Portfolio:
<TABLE>
<S> <C> <C> <C>

Name and Address of Amount and Nature of Percent
Title of Class Beneficial Owner Beneficial Ownership of Portfolio

Common Stock Summit Bank Direct Ownership 47.42%
$.001 per share (nominee)
P O Box 821
Hackensack, NJ 07602

Common Stock James C. Brady Jr., Gordon O. Direct Ownership 7.06%
$.001 per share Danser & Sara P. Peacock
(As Trustees)
c/o Gordon O. Danser
Five Independence Way
Princeton, NJ 08540

Common Stock Bowes Family Partnership Direct Ownership 6.64%
$.001 per share One Maritime Plaza
San Francisco, CA 94111

Common Stock Edward & Darlene Lowe Direct Ownership 6.59%
$.001 per share Charitable Remainder Unitrust
P.O. Box 385
Cassopolis, MI 49031

</TABLE>

As of June 19, 1998, the following persons held 5
percent or more of the outstanding shares of the
Multi-Asset Global Portfolio:

Name and Address of Amount and Nature of Percent
Title of Class Beneficial Owner Beneficial Ownership of Portfolio

Common Stock Edgmont Consultants Direct Ownership 47.52 %
$.001 per share (Defined Benefit Plan and
Money Purchase Plan)
308 French Road
Newtown Square, PA 19073

Common Stock Harding, Loevner Management, L.P. Direct Ownership 38.48%
$.001 per share (Profit Sharing Thrift Plan
and Investment Adviser's Account)
50 Division Street, Suite 401
Somerville, NJ 08876

</TABLE>

SUPPLEMENTAL DESCRIPTIONS OF INVESTMENTS

The different types of securities in which the Portfolios
may invest, subject to their respective investment
objective, policies and restrictions, are described in the
Prospectus under "Descriptions of Investments." Additional
information concerning the characteristics of certain of the
Portfolios' investments are set forth below.

Bank Obligations. The Fund limits its investments in U.S.
(domestic) bank obligations to obligations of U.S. banks
that in HLM's opinion meet sufficient creditworthiness
criteria. Domestic bank obligations are defined as
instruments: issued by U.S. (domestic) banks; U.S. branches
of foreign banks, if such branches are subject to the same
regulation as U.S. banks; and foreign branches of U.S.
banks. However, HLM must determine that the investment risk
associated with investing in instruments issued by such
branches is the same as that of investing in instruments
issued by the U.S. parent bank, in that the U.S. parent bank
would be unconditionally liable in the event that the
foreign branch failed to pay on its instruments. The Fund
limits its investments in foreign bank obligations to
obligations of foreign banks (including U.S. branches of
foreign banks) that, in the opinion of HLM, are of an
investment quality comparable to obligations of U.S. banks
in which each Portfolio may invest. Each Portfolio may
invest in obligations of domestic and foreign banks,
including time deposits, certificates of deposit, bankers'
acceptances, letters of credit, bank notes, deposit notes,
Eurodollar or Yankeedollar time deposits, Eurodollar or
Yankeedollar certificates of deposit, variable rate notes,
loan participations, variable amount master demand notes and
custodial receipts. Other than the allowable 20% of a
Portfolio's total assets invested in below-investment grade
convertible and other debt securities, all investments in
bank obligations will be rated at least "B" by Thomson
Bankwatch or similarly rated by IBCA Ltd., or of comparable
quality as determined by HLM.

Brady Bonds. Each Portfolio, subject to limitations, may
invest in "Brady Bonds," which are debt securities issued or
guaranteed by foreign governments in exchange for existing
external commercial bank indebtedness under a plan announced
by former U.S. Treasury Secretary Nicholas F. Brady in
1989. To date, over $154 billion (face amount) of Brady
Bonds have been issued by the governments of 13 countries,
the largest proportion having been issued by Argentina,
Brazil, Mexico and Venezuela. Brady Bonds have been issued
only recently, and accordingly, they do not have a long
payment history. Brady Bonds may be collateralized or
uncollateralized, are issued in various currencies
(primarily the U.S. dollar) and are actively traded in the
over-the-counter secondary market.

Each Portfolio may invest in either collateralized or
uncollateralized Brady Bonds. U.S. dollar-denominated,
collateralized Brady Bonds, which may be fixed rate par
bonds or floating rate discount bonds, are collateralized in
full as to principal by U.S. Treasury zero coupon bonds
having the same maturity as the bonds. Interest payments on
such bonds generally are collateralized by cash or
securities in an amount that, in the case of fixed rate
bonds, is equal to at least one year of rolling interest
payments or, in the case of floating rate bonds, initially
is equal to at least one year's rolling interest payments
based on the applicable interest rate at the time and is
adjusted at regular intervals thereafter. Brady Bonds which
have been issued to date are rated BB or B by S&P or Ba or B
by Moody's or, in cases in which a rating by S&P or Moody's
has not been assigned, are generally considered by the
Adviser to be of comparable quality.

Corporate Debt Instruments. Corporate debt securities of
domestic and foreign issuers include such instruments as
corporate bonds, debentures, notes, commercial paper,
medium-term notes, variable rate notes and other similar
corporate debt instruments.

Derivatives. The Portfolios are authorized to use various
hedging and investment strategies described below to hedge
broad or specific market movements, or to seek to increase
the Portfolios' income or gains. The Portfolios may purchase
and sell (or write) exchange-listed and over-the-counter put
and call options on securities, financial futures contracts,
equity indices and other financial instruments and enter
into financial futures contracts (collectively, these
transactions are referred to in this Statement of Additional
Information as "Derivatives").

Derivatives may be used to attempt to protect against
possible changes in the market value of securities held or
to be purchased by a Portfolio resulting from securities
market movements to protect the Portfolio's unrealized gains
in the value of its securities, to facilitate the sale of
those securities for investment purposes, to establish a
position in the derivatives markets as a temporary
substitute for purchasing or selling particular securities
or to seek to enhance the Portfolio's income or gain. The
Portfolios may use any or all types of Derivatives at any
time; no particular strategy will dictate the use of one
type of transaction rather than another, as use of any
Derivatives will be a function of numerous variables,
including market conditions. The ability of a Portfolio to
utilize Derivatives successfully will depend on, in addition
to the factors described above, HLM's ability to predict
pertinent market movements, which cannot be assured. These
skills are different from those needed to select the
Portfolio's securities. The Portfolios are not "commodity
pools" (i.e., pooled investment vehicles which trade in
commodity futures contracts and options thereon and the
operator of which is registered with the Commodity Futures
Trading Commission (the "CFTC")) and Derivatives involving
futures contracts and options on futures contracts will be
purchased, sold or entered into only for bona fide hedging
purposes, provided that a Portfolio may enter into such
transactions for purposes other than bona fide hedging if,
immediately thereafter, the sum of the amount of its initial
margin and premiums on open contracts and options would not
exceed 5% of the liquidation value of the Portfolio's
portfolio, provided, further, that, in the case of an option
that is in-the-money, the in-the-money amount may be
excluded in calculating the 5% limitation. The use of
certain Derivatives will require that the Portfolio
segregate cash, liquid high grade debt obligations or other
assets to the extent the Portfolio's obligations are not
otherwise "covered" through ownership of the underlying
security or financial instrument.

Futures Contracts. The Portfolios may use stock index
futures contracts ("futures contracts") as a hedge against
the effects of changes in the market value of the stocks
comprising the relevant index. In managing its cash flows,
a Portfolio may also use futures contracts as a substitute
for holding the designated securities underlying the futures
contract. A futures contract is an agreement to purchase or
sell a specified amount of designated securities for a set
price at a specified future time. At the time the Portfolio
enters into a futures transaction, it is required to make a
performance deposit ("initial margin") of cash or liquid
securities in a segregated account in the name of the
futures broker. Subsequent payments of "variation margin"
are then made on a daily basis, depending on the value of
the futures position which is continually marked to market.
The Portfolios will segregate cash, U.S. Government
securities or other high grade debt obligations in an amount
sufficient to meet its obligations under these transactions.

If the Portfolio enters into a short position in a futures
contract as a hedge against anticipated adverse market
movements and the market then rises, the increase in the
value of the hedged securities will be offset in whole or in
part, by a loss on the futures contract. If instead the
Portfolio purchases a futures contract as a substitute for
investing in the designated underlying securities, the
Portfolio will experience gains or losses that correspond
generally to gains or losses in the underlying securities.
The latter type of futures contract transactions permits the
Portfolio to experience the results of being fully invested
in a particular asset class, while maintaining the liquidity
needed to manage cash flows into or out of the Portfolio
(e.g., purchases and redemptions of Portfolio shares).
Under normal market conditions, futures contracts positions
may be closed out on a daily basis.

Stock Index Options. The Portfolios may purchase or sell
options on stock indices on U.S. and foreign exchanges or in
the over-the-counter markets. An option on a stock index
permits the purchaser of the option, in return for the
premium paid, the right to receive from the seller cash
equal to the difference between the closing price of the
index and the exercise price of the option. The Portfolios
will segregate cash, U.S. Government securities or other
high grade debt obligations in an amount sufficient to meet
its obligations under these transactions.

Options on Futures Contracts. The Portfolios may purchase
or sell options on futures contracts as an alternative to
buying or selling futures contracts. Options on futures
contracts are similar to options on the security underlying
the futures contracts except that options on stock index
futures contracts give the purchaser the right to assume a
position at a specified price in a stock index futures
contract at any time during the life of the option. The
Portfolios will segregate cash, U.S. Government securities
or other high grade debt obligations in an amount sufficient
to meet its obligations under these transactions.

Repurchase Agreements. When participating in repurchase
agreements, a Portfolio buys securities from a vendor (e.g.,
a bank or securities firm) with the agreement that the
vendor will repurchase the securities at the same price plus
interest at a later date. Repurchase agreements may be
characterized as loans secured by the underlying
securities. Such transactions afford an opportunity for the
Portfolio to earn a return on available cash at minimal
market risk, although the Portfolio may be subject to
various delays and risks of loss if the vendor becomes
subject to a proceeding under the U.S. Bankruptcy Code or is
otherwise unable to meet its obligation to repurchase. The
securities underlying a repurchase agreement will be marked
to market every business day so that the value of such
securities is at least equal to the value of the repurchase
price thereof, including the accrued interest thereon.

Reverse Repurchase Agreements. Each Portfolio may enter into
reverse repurchase agreements under which a primary or
reporting dealer in U.S. Government securities purchases
U.S. Government Securities from a Portfolio and the
Portfolio agrees to repurchase the securities at an
agreed-upon price and date. The difference between the amount
the Portfolio receives for the securities and the amount it
pays on repurchase is deemed to be a payment of interest.
Commission rules require either that securities sold by a
Portfolio under a reverse repurchase agreement be segregated
pending repurchase or that the proceeds be segregated on
that Portfolio's books and records pending repurchase. The
Fund will maintain for each Portfolio a segregated custodial
account containing cash, U.S. Government Securities or other
appropriate liquid, unencumbered securities having an
aggregate value at least equal to the amount of such
commitments to repurchase, including accrued interest, and
will subsequently monitor the account to ensure such
equivalent value is maintained until payment is made.
Reverse repurchase agreements will generally be restricted
to those that mature within seven days. The Portfolios will
engage in such transactions with parties selected on the
basis of such party's creditworthiness. Reverse repurchase
agreements involve the risk that the market value of the
portfolio securities sold by a Portfolio may decline below
the price of the securities the Portfolio is obligated to
repurchase. Reverse repurchase agreements create leverage,
a speculative factor, and will be considered as borrowings
for the purposes of limitations on borrowings.

U.S. Treasury and U.S. Government Agency Securities. U.S.
Government Securities include instruments issued by the U.S.
Treasury, including bills, notes and bonds. These
instruments are direct obligations of the U.S. Government
and, as such, are backed by the full faith and credit of the
United States. They differ primarily in their interest
rates, the lengths of their maturities and the dates of
their issuances. In addition, U.S. Government Securities
include securities issued by instrumentalities of the U.S.
Government, such as the Government National Mortgage
Association ("GNMA"), which are also backed by the full
faith and credit of the United States. U.S. Government
Agency Securities include instruments issued by
instrumentalities established or sponsored by the U.S.
Government, such as the Student Loan Marketing Association
("SLMA"), the Federal National Mortgage Association ("FNMA")
and the Federal Home Loan Mortgage Corporation ("FHLMC").
While these securities are issued, in general, under the
authority of an Act of Congress, the U.S. Government is not
obligated to provide financial support to the issuing
instrumentalities.

Warrants. The Portfolios may invest up to 10% of the value
of their total assets (valued at the lower of cost or
market) in warrants for equity securities, which are
securities permitting, but not obligating, their holder to
subscribe for other equity securities. Warrants do not carry
with them the right to dividends or voting rights with
respect to the securities that they entitle their holder to
purchase, and they do not represent any rights in the assets
of the issuer. As a result, an investment in warrants may be
considered more speculative than certain other types of
investments. In addition, the value of a warrant does not
necessarily change with the value of the underlying
securities and a warrant ceases to have value if it is not
exercised prior to its expiration date.

When-Issued Securities. The Portfolios may purchase
securities on a firm commitment basis, including when-issued
securities. Securities purchased on a firm commitment basis
are purchased for delivery beyond the normal settlement date
at a stated price and yield. Such securities are recorded as
an asset and are subject to changes in value based upon
changes in the general level of interest rates. The
Portfolios will only make commitments to purchase securities
on a firm commitment basis with the intention of actually
acquiring the securities but may sell them before the
settlement date if it is deemed advisable.
When a Portfolio purchases securities on a when-issued or
forward commitment basis, the Portfolio's custodian will
maintain in a segregated account cash and liquid,
unencumbered securities having a value (determined daily) at
least equal to the amount of the Portfolio's purchase
commitments. In the case of a forward commitment to sell
portfolio securities, the custodian will hold the portfolio
securities themselves in a segregated account while the
commitment is outstanding. These procedures are designed to
ensure that the Portfolio will maintain sufficient assets at
all times to cover its obligations under when-issued
purchases and forward commitments.

SUPPLEMENTAL INVESTMENT TECHNIQUES

Borrowing. Each Portfolio may borrow money temporarily from
banks when (i) it is advantageous to do so in order to meet
redemption requests, (ii) a Portfolio fails to receive
transmitted funds from a shareholder on a timely basis,
(iii) the custodian of the Fund fails to complete delivery
of securities sold or (iv) a Portfolio needs cash to
facilitate the settlement of trades made by the Portfolio.
In addition, each Portfolio may, in effect, lend securities
by engaging in reverse repurchase agreements and may, in
effect, borrow money by doing so. Securities may be
borrowed by engaging in repurchase agreements. See
"Investment Restrictions" and "Supplemental Descriptions of
Investments."

Securities Lending. Although, the Fund has no current plans
to do so, each Portfolio is authorized to lend securities
from its investment portfolios, with a value not exceeding
33 1/3% of its total assets, to banks, brokers and other
financial institutions if it receives collateral in cash,
U.S. Government Securities or other high grade liquid
investments which will be maintained at all times in an
amount equal to at least 102% of the current market value of
the loaned securities. The loans will be terminable at any
time by the Fund and the relevant Portfolio will then
receive the loaned securities within five days. During the
period of such a loan, the Portfolio receives the income on
the loaned securities and a loan fee and may thereby
increase its total return. A Portfolio continues to receive
interest or dividends on the securities loaned and
simultaneously earns either interest on the investment of
the cash collateral or fee income if the loan is otherwise
collateralized. However, a Portfolio normally pays lending
fees and related expenses from the interest or dividends
earned on invested collateral. Should the borrower of the
securities fail financially, there is a risk of delay in
recovery of the securities or loss of rights in the
collateral. However, loans are made only to borrowers which
are approved by the Board of Directors and are deemed by HLM
to be of good financial standing. A Portfolio may invest
cash collateral it receives in connection with a loan of
securities in securities of the U.S. Government and its
agencies and other high quality short-term debt
instruments. For purposes of complying with each
Portfolio's investment policies and restrictions, collateral
received in connection with securities loans will not be
deemed an asset of a Portfolio unless otherwise required by
law.

Foreign Currency Hedging. The Portfolios may enter into
forward foreign currency contracts (a "forward contract")
and may purchase and write (on a covered basis)
exchange-traded or over-the-counter ("OTC") options on
currencies, foreign currency futures contracts, and options
on foreign currency futures contracts primarily to protect
against a decrease in the U.S. dollar equivalent value of
its foreign currency portfolio securities or the payments
thereon that may result from an adverse change in foreign
currency exchange rates. The Portfolios may at times hedge
all or some portion of their currency exchange risk.
Conditions in the securities, futures, options, and foreign
currency markets will determine whether and under what
circumstances a Portfolio will employ any of the techniques
or strategies described below and in the section of the
Prospectus entitled "Descriptions of Investments." A
Portfolio's ability to pursue certain of these strategies
may be limited by applicable regulations of the Commodity
Futures Trading Commission ("CFTC") and the federal tax
requirements applicable to regulated investment companies
(see "Tax Considerations").

Forward Contracts. Sale of currency for dollars under such
a contract establishes a price for the currency in dollars.
Such a sale insulates returns from securities denominated in
that currency from exchange rate fluctuations to the extent
of the contract while the contract is in effect. A sale
contract will be advantageous if the currency falls in value
against the dollar and disadvantageous if it increases in
value against the dollar. A purchase contract will be
advantageous if the currency increases in value against the
dollar and disadvantageous if it falls in value against the
dollar.

The Portfolios may use forward contracts to insulate
existing security positions against exchange rate movement
("position hedges") or to insulate proposed transactions
against such movement ("transaction hedges"). For example,
to establish a position hedge, a forward contract on a
foreign currency might be sold to protect against the
decline in the value of that currency against the dollar.
To establish a transaction hedge, a foreign currency might
be purchased on a forward basis to protect against an
anticipated increase in the value of that currency against
the dollar.

Futures Contracts. U.S. futures contracts have been
designed by exchanges which have been designated as
"contracts markets" by the CFTC, and must be executed
through a futures commission merchant, or brokerage firm,
that is a member of the relevant contract market. Futures
contracts trade on a number of exchange markets and, through
their clearing corporations, the exchanges guarantee
performance of the contracts as between the clearing members
of the exchange. The Portfolios may also enter into futures
contracts that are based on securities that would be
eligible investments for the Portfolios. The Portfolios may
enter into contracts that are denominated in currencies
other than the U.S. dollar.

Although futures contracts by their terms call for the
actual delivery or acquisition of securities or currency, in
most cases the contractual obligation is fulfilled before
the date of the contract without having to make or take
delivery of the securities or currency. The offsetting of a
contractual obligation is accomplished by buying (or
selling, as the case may be) on a commodities exchange an
identical futures contract calling for delivery in the same
month. Such a transaction, which is effected through a
member of an exchange, cancels the obligation to make or
take delivery of the securities or currency. Since all
transactions in the futures market are made, offset, or
fulfilled through a clearinghouse associated with the
exchange on which the contracts are traded, a Portfolio will
incur brokerage fees when it purchases or sells futures
contracts.

At the time a futures contract is purchased or sold, a
Portfolio must allocate in cash or securities, an initial margin.
Initial margin on U.S. exchanges may range from
approximately 3% to approximately 15% of the value of the
securities or commodities underlying the contract. Under
certain circumstances, however, such as periods of high
volatility, the Portfolio may be required by an exchange to
increase the level of its initial margin payment.
Additionally, initial margin requirements may be increased
generally in the future by regulatory action. An outstanding
futures contract is valued daily and the payment in cash of
a "variation margin" generally will be required, a process
known as "marking to the market." Each day the Portfolio
will be required to provide (or will be entitled to receive)
variation margin in an amount equal to any decline (in the
case of a long futures position) or increase (in the case of
a short futures position) in the contract's value from the
preceding day.

Options on Foreign Currencies. The Portfolios may purchase
and sell (or write) put and call options on foreign
currencies to protect against a decline in the U.S.
dollar-equivalent value of their portfolio securities or
payments due thereon or a rise in the U.S. dollar-equivalent
cost of securities that they intend to purchase. A foreign
currency put option grants the holder the right, but not the
obligation, at a future date to sell a specified amount of a
foreign currency to its counterparty at a predetermined
price. Conversely, a foreign currency call option grants
the holder the right, but not the obligation, to purchase at
a future date a specified amount of a foreign currency at a
predetermined price.

Options on Futures Contracts. The purchase of a call option
on a futures contract is similar in some respects to the
purchase of a call option on an individual security or
currency. Depending on the pricing of the option compared
to either the price of the futures contract upon which it is
based or the price of the underlying securities or currency,
it may or may not be less risky than ownership of the
futures contract or the underlying securities or currency.
As with the purchase of futures contracts, when a Portfolio
is not fully invested it may purchase a call option on a
futures contract to hedge against a market advance due to
declining interest rates or a change in foreign exchange
rates.

The writing of a call option on a futures contract
constitutes a partial hedge against declining prices of the
security or foreign currency which is deliverable upon
exercise of the futures contract. If the futures price at
expiration of the option is below the exercise price, the
Portfolio will retain the full amount of the option premium
which provides a partial hedge against any decline that may
have occurred in the Portfolio's portfolio holdings. The
writing of a put option on a futures contract constitutes a
partial hedge against increasing prices of the security or
foreign currency which is deliverable upon exercise of the
futures contract. If the futures price at expiration of the
option is higher than the exercise price, the Portfolio will
retain the full amount of the option premium which provides
a partial hedge against any increase in the price of
securities which the Portfolio intends to purchase. If a
put or call option the Portfolio has written is exercised,
the Portfolio will incur a loss that will be reduced by the
amount of the premium it receives. Depending on the degree
of correlation between changes in the value of its portfolio
securities and changes in the value of its futures
positions, the Portfolio's losses from existing options on
futures may to some extent be reduced or increased by
changes in the value of portfolio securities.

The purchase of a put option on a futures contract is
similar in some respects to the purchase of protective put
options on portfolio securities.

Restrictions on the Use of Futures Contracts and Options on
Futures Contracts. Regulations of the CFTC applicable to
the Portfolios require that all of the Portfolios' futures
and options on futures transactions constitute bona fide
hedging transactions, except that a transaction may not
constitute a bona fide hedging transaction entered into for
other purposes if, immediately thereafter, the sum of the
amount of initial margin deposits on a Portfolio's existing
futures positions and premiums paid for related options
would not exceed 5% of the value of the Portfolio's total
assets.

Illiquid Securities. Although each of the Portfolios may
invest up to 15% of the value of its net assets in illiquid
assets, it is not expected that any Portfolio will invest a
significant portion of its assets in illiquid securities.
All repurchase agreements and time deposits maturing in more
than seven days are treated as illiquid assets. A Portfolio
also may purchase securities that are not registered under
the Securities Act of 1933, as amended (the "1933 Act"), but
which can be sold to qualified institutional buyers in
accordance with Rule 144A under that Act ("Rule 144A
securities"). Rule 144A securities generally must be sold to
other qualified institutional buyers. A Portfolio also may
invest in commercial obligations issued in reliance on the
so-called "private placement" exemption from registration
afforded by Section 4(2) of the 1933 Act ("Section 4(2)
paper"). Section 4(2) paper is restricted as to disposition
under the federal securities laws, and generally is sold to
institutional investors such as the Portfolio who agree that
they are purchasing the paper for investment and not with a
view to public distribution. Any resale by the purchaser
must be in an exempt transaction. Section 4(2) paper
normally is resold to other institutional investors like the
Portfolio through or with the assistance of the issuer or
investment dealers who make a market in the Section 4(2)
paper, thus providing liquidity. If a particular investment
in Rule 144A securities, Section 4(2) paper or private
placement securities is not determined to be liquid, that
investment will be included within the 15% limitation on
investment in illiquid securities. Not all Rule 144A
securities can be deemed liquid; HLM will monitor the
liquidity of such restricted securities under the
supervision of the Board of Directors.

SUPPLEMENTAL DISCUSSION OF RISKS
ASSOCIATED WITH THE FUND'S INVESTMENT
POLICIES AND INVESTMENT TECHNIQUES

Additional information concerning risks associated with
certain of the Portfolios' investments is set forth below.

Creditworthiness. In general, certain obligations which the
Portfolios may invest in are subject to credit risks such as
the loss of credit ratings or possible default. After
purchase by a Portfolio of the Fund, a security may cease to
be rated or its rating may be reduced below the minimum
required for purchase by the Fund. Neither event will
require a sale of such security by the Portfolio. However,
HLM will consider such event in its determination of whether
a Portfolio should hold the security. To the extent that the
ratings given by S&P or Moody's may change as a result of
changes in such organizations or their rating systems, the
Fund will attempt to use comparable ratings as standards for
investments in accordance with the investment policies
contained in the Prospectus and in this Statement of
Additional Information.

Foreign Bank Obligations. Obligations of foreign banks
involve somewhat different investment risks than those
affecting obligations of United States banks, including the
possibilities that their liquidity could be impaired because
of future political and economic developments, that their
obligations may be less marketable than comparable
obligations of United States banks, that a foreign
jurisdiction might impose withholding taxes on interest
income payable on those obligations, that foreign deposits
may be seized or nationalized, that foreign governmental
restrictions such as exchange controls may be adopted that
might adversely affect the payment of principal and interest
on those obligations and that the selection of those
obligations may be more difficult because there may be less
publicly available information concerning foreign banks or
the accounting, auditing and financial reporting standards,
practices and requirements applicable to foreign banks may
differ from those applicable to United States banks.
Foreign banks generally are not subject to examination by
any United States government agency or instrumentality.
Also, investments in commercial banks located in several
foreign countries are subject to additional risks due to the
combination in such banks of commercial banking and
diversified securities activities.

High Yield/High Risk Debt Securities. Each Portfolio may
invest up to 20% of its assets in convertible securities and
debt securities which are rated below investment-grade.
Below investment grade securities carry a high degree of
risk (including the possibility of default or bankruptcy of
the issuers of such securities), generally involve greater
volatility of price and risk of principal and income, and
may be less liquid, than securities in the higher rating
categories and are considered speculative. The lower the
ratings of such debt securities, the greater their risks
render them like equity securities. See "Ratings
Descriptions" in this Statement of Additional Information
for a more complete description of the ratings assigned by
ratings organizations and their respective characteristics.

Economic downturns have disrupted in the past, and could
disrupt in the future, the high yield market and have
impaired the ability of issuers to repay principal and
interest. Also, an increase in interest rates would have a
greater adverse impact on the value of such obligations than
on comparable higher quality debt securities. During an
economic downturn or period of rising interest rates, highly
leveraged issues may experience financial stress which would
adversely affect their ability to service their principal
and interest payment obligations. Prices and yields of high
yield securities will fluctuate over time and, during
periods of economic uncertainty, volatility of high yield
securities may adversely affect a Portfolio's net asset
value. In addition, investments in high yield zero coupon
or pay-in-kind bonds, rather than income-bearing high yield
securities, may be more speculative and may be subject to
greater fluctuations in value due to changes in interest
rates.

The trading market for high yield securities may be thin to
the extent that there is no established retail secondary
market or because of a decline in the value of such
securities. A thin trading market may limit the ability of
a Portfolio to accurately value high yield securities in its
portfolio and to dispose of those securities. Adverse
publicity and investor perceptions may decrease the values
and liquidity of high yield securities. These securities
also may involve special registration responsibilities,
liabilities and costs.

Credit quality in the high yield securities market can
change suddenly and unexpectedly, and even recently issued
credit ratings may not fully reflect the actual risks posed
by a particular high-yield security. For these reasons, it
is the policy of HLM not to rely exclusively on ratings
issued by established credit rating agencies, but to
supplement such ratings with its own independent and
on-going review of credit quality. The achievement of a
Portfolio's investment objective by investment in such
securities may be more dependent on HLM's credit analysis
than is the case for higher quality bonds. Should the
rating of a portfolio security be downgraded, HLM will
determine whether it is in the best interest of the
Portfolio to retain or dispose of such security.

Prices for below investment-grade securities may be affected
by legislative and regulatory developments.

Foreign Securities. Foreign financial markets, while
growing in volume, have, for the most part, substantially
less volume than United States markets, and securities of
many foreign companies are less liquid and their prices more
volatile than securities of comparable domestic companies.
The foreign markets also have different clearance and
settlement procedures, and in certain markets there have
been times when settlements have been unable to keep pace
with the volume of securities transactions, making it
difficult to conduct such transactions. Delivery of
securities may not occur at the same time as payment in some
foreign markets. Delays in settlement could result in
temporary periods when a portion of the assets of a
Portfolio is uninvested and no return is earned thereon.
The inability of a Portfolio to make intended security
purchases due to settlement problems could cause the
Portfolio to miss attractive investment opportunities.
Inability to dispose of portfolio securities due to
settlement problems could result either in losses to a
Portfolio due to subsequent declines in value of the
portfolio security or, if the Portfolio has entered into a
contract to sell the security, could result in possible
liability to the purchaser.

Although HLM will use reasonable efforts to obtain the best
available price and the most favorable execution with
respect to all transactions, HLM will consider the full
range and quality of services offered by the executing
broker or dealer when making these determinations. Fixed
commissions on many foreign stock exchanges are generally
higher than negotiated commissions on U.S. exchanges.
Certain foreign governments levy withholding taxes against
dividend and interest income. Although in some countries a
portion of these taxes are recoverable, the non-recovered
portion of foreign withholding taxes will reduce the income
received by the Portfolios on these investments. However,
these foreign withholding taxes are not expected to have a
significant impact on the Portfolios, since each Portfolio's
investment objective is to seek long-term capital
appreciation and any income should be considered incidental.

Foreign Currency Hedging. The success of currency hedging
will depend on the ability of HLM to predict exchange rate
fluctuations. Predicting such fluctuations is extremely
difficult and thus the successful execution of a hedging
strategy is highly uncertain. An incorrect prediction will
cause poorer Portfolio performance than would otherwise be
the case. Forward contracts that protect against
anticipated losses have the corresponding effect of
canceling possible gains if the currency movement prediction
is incorrect.

Precise matching of forward contract amounts and the value
of portfolio securities is generally not possible because
the market value of the protected securities will fluctuate
while forward contracts are in effect. Adjustment
transactions are theoretically possible but time consuming
and expensive, so contract positions are likely to be
approximate hedges, not perfect.

The cost to a Portfolio of engaging in foreign currency
forward contracts will vary with factors such as the foreign
currency involved, the length of the contract period, and
the market conditions then prevailing, including general
market expectations as to the direction of the movement of
various foreign currencies against the U.S. dollar.
Furthermore, HLM may not be able to purchase forward
contracts with respect to all of the foreign currencies in
which a Portfolio's securities may be denominated. In those
circumstances the correlation between the movements in the
exchange rates of the subject currency and the currency in
which the portfolio security is denominated may not be
precise. Moreover, if the forward contract is entered into
in an over-the-counter transaction, as will usually be the
case, the Portfolio generally will be exposed to the credit
risk of its counterparty. If the Portfolio enters into such
contracts on a foreign exchange, the contract will be
subject to the rules of that foreign exchange. Foreign
exchanges may impose significant restrictions on the
purchase, sale, or trading of such contracts, including the
imposition of limits on price moves. Such limits may
significantly affect the ability to trade such a contract or
otherwise to close out the position and could create
potentially significant discrepancies between the cash and
market value of the position in the forward contract.
Finally, the cost of purchasing forward contracts in a
particular currency will reflect, in part, the rate of
return available on instruments denominated in that
currency. The cost of purchasing forward contracts to hedge
portfolio securities that are denominated in currencies that
in general yield high rates of return may thus tend to
reduce that rate of return toward the rate of return that
would be earned on assets denominated in U.S. dollars.

Futures Contracts. Futures contracts entail special risks.
Among other things, the ordinary spreads between values in
the cash and futures markets, due to differences in the
character of these markets, are subject to distortions
relating to: (1) investors' obligations to meet additional
variation margin requirements; (2) decisions to make or take
delivery, rather than entering into offsetting transactions;
and (3) the difference between margin requirements in the
securities markets and margin deposit requirements in the
futures market. The possibility of such distortion means
that a correct forecast of general market or foreign
exchange rate trends still may not result in a successful
transaction.

Although the Fund believes that the use of such contracts
and options thereon will benefit the Portfolios, if
predictions about the general direction of securities market
movements or foreign exchange rates are incorrect, a
Portfolio's overall performance would be poorer than if it
had not entered into any such contracts or purchased or
written options thereon.

A Portfolio's ability to establish and close out positions
in futures contracts and options on futures contracts will
be subject to the development and maintenance of a liquid
market. Although a Portfolio generally will purchase or
sell only those futures contracts and options thereon for
which there appears to be a liquid market, there is no
assurance that a liquid market on an exchange will exist for
any particular futures contract or option thereon at any
particular time. Where it is not possible to effect a
closing transaction in a contract to do so at a satisfactory
price, the Portfolio would have to make or take delivery
under the futures contract or, in the case of a purchased
option, exercise the option. In the case of a futures
contract that a Portfolio has sold and is unable to close
out, the Portfolio would be required to maintain margin
deposits on the futures contract and to make variation
margin payments until the contract is closed.

Under certain circumstances, exchanges may establish daily
limits in the amount that the price of a futures contract or
related option contract may vary either up or down from the
previous day's settlement price. Once the daily limit has
been reached in a particular contract, no trades may be made
that day at a price beyond that limit. The daily limit
governs only price movements during a particular trading day
and therefore does not limit potential losses because the
limit may prevent the liquidation of unfavorable positions.
Futures or options contract prices could move to the daily
limit for several consecutive trading days with little or no
trading and thereby prevent prompt liquidation of positions
and subject some traders to substantial losses.

Buyers and sellers of foreign currency futures contracts are
subject to the same risks that apply to the use of futures
generally. In addition, there are risks associated with
foreign currency futures contracts and their use as hedging
devices similar to those associated with forward contracts
on foreign currencies. Further, settlement of a foreign
currency futures contract must occur within the country
issuing the underlying currency. Thus, a Portfolio must
accept or make delivery of the underlying foreign currency
in accordance with any U.S. or foreign restrictions or
regulations regarding the maintenance of foreign banking
arrangements by U.S. residents and may be required to pay
any fees, taxes or charges associated with such delivery
that are assessed in the country of the underlying currency.

Options on Foreign Currency. As in the case of other types
of options, the benefit to a Portfolio deriving from the
purchase of foreign currency options will be reduced by the
amount of the premium and related transaction costs. In
addition, where currency exchange rates do not move in the
direction or to the extent anticipated, the Portfolio could
sustain losses on transactions in foreign currency options
that would require them to forego a portion or all of the
benefits of advantageous changes in such rates.

A Portfolio may write options on foreign currencies for
hedging purposes. For example, where the Portfolio
anticipates a decline in the dollar value of foreign
currency denominated securities due to adverse fluctuations
in exchange rates it could, instead of purchasing a put
option, write a call option on the relevant currency. If
the expected decline occurs, the option will most likely not
be exercised, and the decrease in value of portfolio
securities will be offset by the amount of the premium
received.

Similarly, instead of purchasing a call option to hedge
against an anticipated increase in the dollar costs of
securities to be acquired, a Portfolio could write a put
option on the relevant currency which, if rates move in the
manner projected, will expire unexercised and allow the
Portfolio to hedge such increased costs up to the amount of
the premium. As in the case of other types of options,
however, the writing of a foreign currency option will
constitute only a partial hedge up to the amount of the
premium, and only if rates move in the expected direction.
If this movement does not occur, the option may be exercised
and the Portfolio would be required to purchase or sell the
underlying currency at a loss which may not be fully offset
by the amount of the premium. Through the writing of
options on foreign currencies, the Portfolio also may be
required to forego all or a portion of the benefits that
might otherwise have been obtained from favorable movements
in exchange rates.

Options on Futures Contracts. The amount of risk a
Portfolio assumes when it purchases an option on a futures
contract is the premium paid for the option plus related
transaction costs. In addition to the correlation risks
discussed above, the purchase of an option also entails the
risk that changes in the value of the underlying futures
contract will not be fully reflected in the value of the
option purchased. Options on foreign currency futures
contracts may involve certain additional risks. Trading
options on foreign currency futures contracts is relatively
new. The ability to establish and close out positions in
such options is subject to the maintenance of a liquid
secondary market. To mitigate this problem, a Portfolio
will not purchase or write options on foreign currency
futures contracts unless and until, in HLM's opinion, the
market for such options has developed sufficiently that the
risks in connection with such options are not greater than
the risks in connection with transactions in the underlying
foreign currency futures contracts. Compared to the
purchase or sale of foreign currency futures contracts, the
purchase of call or put options thereon involves less
potential risk to the Portfolio because the maximum amount
at risk is the premium paid for the option (plus transaction
costs). However, there may be circumstances when the
purchase of a call or put option on a foreign currency
futures contract would result in a loss, such as when there
is no movement in the price of the underlying currency or
futures contract, when use of the underlying futures
contract would not result in a loss.

Lower-Rated Debt Securities ("Junk Bonds"). The market
value of lower-rated debt securities tend to reflect
individual corporate developments to a greater extent than
do higher-rated securities, which react primarily to
fluctuations in the general level of interest rates.
Lower-rated debt securities also tend to be more sensitive
to general economic conditions than are higher-rated debt
securities.

INVESTMENT RESTRICTIONS

In addition to the fundamental investment
restrictions noted in the Prospectus, the Fund has adopted
the investment restrictions listed below relating to the
investment of each Portfolio's assets and its activities.
These also are fundamental policies that may not be changed
without the approval of the holders of a majority of the
outstanding voting securities of a Portfolio (which for this
purpose and under the 1940 Act means the lesser of (i) 67%
of the shares represented at a meeting at which more than
50% of the outstanding shares are represented or (ii) more
than 50% of the outstanding shares). None of the Portfolios
may:
(1) issue senior securities (other than with respect to
borrowing through the use of reverse repurchase agreements or
from a bank for temporary or emergency purposes as set forth
in the Prospectus under "Investment Restrictions."):

(2) make loans, except (a) through the purchase of all or a
portion of an issue of debt securities in accordance with
its investment objective, policies and limitations, or (b)
by engaging in repurchase agreements with respect to
portfolio securities, or (c) by lending securities to other
parties, provided that no securities loan may be made, if,
as a result, more than 33 1/3% of the value of its total
assets would be lent to other parties;

(3) underwrite securities of other issuers;

(4) invest in companies for the purpose of exercising
control or management;

(5) purchase or sell physical commodities or related
commodity contracts;

(6) invest directly in interests in oil, gas or other
mineral exploration or development programs or mineral
leases; or

(7) invest more than 10% of its total assets in warrants.

Whenever an investment policy or limitation states a maximum
percentage of a Portfolio's assets that may be invested in
any security or other asset or sets forth a policy regarding
quality standards, such standard or percentage limitation
shall be determined immediately after and as a result of the
Portfolio's acquisition of such security or other asset.
Accordingly, any later increase or decrease in a percentage
resulting from a change in values, net assets or other
circumstances will not be considered when determining
whether that investment complies with the Portfolio's
investment policies and limitations.

Each Portfolio's investment objectives and other investment
policies not designated as fundamental in this Statement of
Additional Information are non-fundamental and may be
changed at any time by action of the Board of Directors.
Although a non-fundamental policy, each Portfolio may not
purchase securities on margin or make short sales, unless,
by virtue of its ownership of other securities, it has the
right to obtain securities equivalent in kind and amount to
the securities sold and, if the right is conditional, the
sale is made upon the same conditions, except that the Fund
may obtain such short-term credits as may be necessary for
the clearance of purchases and sales of securities.

PORTFOLIO TRANSACTIONS

The Advisory Agreements authorize HLM to select the brokers
or dealers that will execute the purchases and sales of
investment securities for each of the Fund's Portfolios and
HLM to use reasonable efforts to obtain the best available
price and the most favorable execution with respect to all
transactions for the Portfolios. HLM will consider the full
range and quality of services offered by the executing
broker or dealer when making these determinations. Neither HLM
nor any of its officers, affiliates, or employees will act as
principal or receive any compensation from the Portfolios in
connection with the purchase or sale of investments for the
Portfolios.

Some securities considered for investment by the Fund's
Portfolios also may be appropriate for other clients advised
by HLM. If the purchase or sale of securities consistent
with the investment policies of a Portfolio and one or more
of these other clients advised by HLM is considered at or
about the same time, transactions in such securities will be
allocated among the Portfolio and clients in a manner deemed
fair and reasonable by HLM, as the case may be. Although
there is no specified formula for allocating such
transactions, the various allocation methods used by HLM,
and the results of such allocations, are subject to periodic
review by the Board of Directors.

Brokers are selected on a basis of their overall assistance
in terms of execution capabilities and research services,
provided that their commission schedules are competitive
with other firms providing similar services.

No trades will be executed with HLM, its affiliates,
officers or employees acting as principal or agent for
others, although such entities and persons may be trading
contemporaneously in the same or similar securities.

Periods Ended Period Ended Year Ended
Portfolio October 31, 1997 October 31, 1996 December 31, 1995

International Equity
Portfolio $794,431 $690,589 $242,975

Global Equity
Portfolio (1) 82,629 N/A N/A

Multi-Asset Global
Portfolio (2) 6,256 N/A N/A

(1) Commencement of Operations was December 1, 1996.
(2) Commencement of Operations was November 1, 1996.

NET ASSET VALUE

As used in the Prospectus, "Business Day" refers to those
days when the New York Stock Exchange is open for business,
which is Monday through Friday except for holidays. As of
the date of this Statement of Additional Information, such
holidays are: New Year's Day, Martin Luther King Jr.'s
Birthday, Presidents' Day, Good Friday, Memorial Day, Independence
Day, Labor Day, Thanksgiving and Christmas Day.

TAX CONSIDERATIONS

The following summary of tax consequences, which does not
purport to be complete, is based on U.S. federal tax laws
and regulations in effect on the date of this Statement of
Additional Information, which are subject to change by
legislative or administrative action.

Qualification as a Regulated Investment Company. Each
active Portfolio has qualified and intends to continue to
qualify to be treated as a regulated investment company
("RIC") under the Internal Revenue Code of 1986, as amended
(the "Code"). Each of the active Portfolios qualified as a
RIC for the periods ended October 31, 1997. To qualify as a
RIC, a Portfolio must, among other things, (a) derive at
least 90% of its gross income each taxable year from
dividends, interest, payments with respect to securities
loans and gains from the sale or other disposition of
securities or foreign currencies, or other income derived
from its business of investing in securities (the
"Qualifying Income Requirement"); (b) diversify its holdings
so that, at the end of each quarter of the Portfolio's
taxable year, (i) at least 50% of the market value of the
Portfolio's assets is represented by cash and cash items
(including receivables), U.S. Government securities,
securities of other RICs and other securities, with such
other securities of any one issuer limited for the purposes
of this calculation to an amount not greater than 5% of the
value of the Portfolio's total assets and not greater
than 10% of the outstanding voting securities of such
issuer and (ii) not more than 25% of the
value of the Portfolio's total assets is invested in the
securities of any one issuer (other than U.S. Government
securities or the securities of other RICs); and (c)
distribute at least 90% of its investment company taxable
income (which includes, among other items, dividends, interest
and net short-term capital gains in excess of net long-term
capital losses) each taxable year.

If for any taxable year a Portfolio does not qualify as a
RIC, all of its taxable income will be taxed to the
Portfolio at corporate rates. For each taxable year that
the Portfolio qualifies as a RIC, it will not be subject to
federal income tax on that part of its investment company
taxable income and net capital gains (the excess of net
long-term capital gain over net short-term capital loss)
that it distributes to its shareholders. In addition, to
avoid a nondeductible 4% federal excise tax, the Portfolio
must distribute during each calendar year an amount equal to
at least the sum of 98% of its ordinary income (not taking
into account any capital gains or losses) determined on a
calendar year basis, 98% of its capital gains in excess of
capital losses determined in general on an October 31
year-end basis, and any undistributed amounts from previous
years.

Distributions. Each Portfolio's automatic reinvestment of
its taxable investment income, net short-term capital gains
and net long-term capital gains in additional shares of the
Portfolio and distribution of such shares to shareholders
will be taxable to the Portfolio's shareholders. In
general, such shareholders will be treated as if such income
and gains had been distributed to them by the Portfolio and
then reinvested by them in shares of the Portfolio, even
though no cash distributions have been made to
shareholders. The automatic reinvestment of taxable
investment income and net realized short-term capital gains
of the Portfolio will be taxable to the Portfolio's
shareholders as ordinary income. If a portion of a Portfolio's
income consists of dividends paid by U.S. corporations, a
portion of the dividend paid by the Portfolio may be eligible for
the corporate dividend received deduction. A distribution will
be treated as paid on December 31 of the current calendar year if
it is declared by a Portfolio in October, November or December
with a record date in such a month and paid the Portfolio during
January of the following calendar year. Such distributions will
be taxable to the shareholders in the calendar year in which the
distributions are declared, rather than in the year in which the
distributions are received. Each Portfolio will inform
shareholders of the amount and tax status of all amounts treated
as distributed to them not later than 60 days after the close of
each calendar year.

Sale of Shares. Upon the sale or other disposition of
shares of a Portfolio, or upon receipt of a distribution in
complete liquidation of a Portfolio, a shareholder generally
will realize a capital gain or loss which will be long-term,
or short-term, generally depending upon the
shareholder's holding period for the shares. Any loss
realized on the sale or exchange will be disallowed to the
extent the shares disposed of are replaced (including shares
acquired pursuant to a dividend reinvestment plan) within a
period of 61 days beginning 30 days before and ending 30
days after disposition of the shares. In such a case, the
basis of the shares acquired will be adjusted to reflect the
disallowed loss. Any loss realized by the shareholder on a
disposition of Portfolio shares held by the shareholder for
six months or less will be treated as a long-term capital
loss to the extent of any distributions of net capital gains
deemed received by the shareholder with respect to such
shares.

Zero Coupon Securities. Investments by a Portfolio in zero
coupon securities (other than tax-exempt zero coupon
securities) will result in income to the Portfolio equal to
a portion of the excess of the face value of the securities
over their issue price (the "original issue discount") each
year that the securities are held, even though the Portfolio
receives no cash interest payments. This income is included
in determining the amount of income which the Portfolio must
distribute to maintain its status as a RIC and to avoid the
payment of federal income tax and the 4% excise tax.

Backup Withholding. A Portfolio may be required to withhold
U.S. federal income tax at the rate of 31% of all amounts
deemed to be distributed as a result of the automatic
reinvestment by the Portfolio of its income and gains in
additional shares of the Portfolio and, all redemption
payments made to shareholders who fail to provide the
Portfolio with their correct taxpayer identification number
or to make required certifications, or who have been
notified by the Internal Revenue Service that they are
subject to backup withholding. Backup withholding is not an
additional tax. Any amounts withheld will be credited
against a shareholder's U.S. federal income tax liability.
Corporate shareholders and certain other shareholders are
exempt from such backup withholding.

Tax Treatment of Hedging Transactions. The taxation of
equity options and over-the-counter options on debt
securities is governed by the Code section 1234. Pursuant
to Code section 1234, the premium received by a Portfolio
for selling a put or call option is not included in income
at the time of receipt. If the option expires, the premium
is short-term capital gain to the Portfolio. If the
Portfolio enters into a closing transaction, the difference
between the amount paid to close out its position and the
premium received is short-term capital gain or loss. If a
call option written by the Portfolio is exercised, thereby
requiring the Portfolio to sell the underlying security, the
premium will increase the amount realized upon the sale of
such security and any resulting gain or loss will be a
capital gain or loss, and will be long-term or short-term
depending upon the holding period of the security. With
respect to a put or call option that is purchased by a
Portfolio, if the option is sold, any resulting gain or loss
will be a capital gain or loss, and will be long-term or
short-term, depending upon the holding period of the
option. If the option expires, the resulting loss is a
capital loss and is long-term or short-term, depending upon
the holding period of the option. If the option is
exercised, the cost of the option, in the case of a call
option, is added to the basis of the purchased security and,
in the case of a put option, reduces the amount realized on
the underlying security in determining gain or loss.

Certain options, futures, and forward contracts in which a
Portfolio may invest are "section 1256 contracts." Gains
and losses on section 1256 contracts generally are treated
as 60% long-term (taxed at the 20% long-term capital gains
rate) and 40% short-term capital gains or losses ("60/40
treatment"), regardless of the Portfolio's actual holding
period for the contract. Also, a section 1256 contract held
by the Portfolio at the end of each taxable year (and
generally, for the purposes of the 4% excise tax, on October
31 of each year) must be treated as if the contract had been
sold at its fair market value on that day ("mark to market
treatment"), resulting in unrealized gains and losses being
treated as though they were realized. Foreign currency gain
or loss (discussed below) arising from section 1256 contracts
may, however, be treated as ordinary income or loss.

Generally, hedging transactions undertaken by a Portfolio may
result in "straddles" for federal income tax purposes. The
straddle rules may affect the character of gains or losses
realized by the Portfolio. In addition, losses realized by
the Portfolio on positions that are part of a straddle may
be deferred under the straddle rules rather than being taken
into account in calculating the taxable income for the
taxable year in which such losses are realized. Further,
the Portfolio may be required to capitalize, rather than
deduct currently, any interest expense on indebtedness
incurred or continued to purchase or carry any positions
that are part of a straddle. Because only a few regulations
implementing the straddle rules have been promulgated, the
tax consequences to the Portfolio of engaging in hedging
transactions are not entirely clear. Hedging transactions
may increase the amount of short-term capital gain realized
by a Portfolio which is taxed as ordinary income when
distributed to shareholders.

The Portfolio may make one or more of the elections
available under the Code that are applicable to straddles.
If the Portfolio makes any of the elections, the amount,
character, and timing of the recognition of gains or losses
from the affected straddle positions will be determined
under rules that vary according to the election(s) made.
The rules applicable under certain of the elections may
accelerate the recognition of gains or losses from the
affected straddle positions.

Because the straddle rules may affect the amount, character,
and timing of gains or losses from the positions that are
part of a straddle, the amount of Portfolio income that is
distributed to members and that is taxed to them as ordinary
income or long-term capital gain may be increased or
decreased as compared to a fund that did not engage in such
hedging transactions.

Tax Treatment of Foreign Currency-Related Transactions.
Gains or losses attributable to fluctuations in exchange
rates that occur between the time a Portfolio accrues
receivables or liabilities denominated in a foreign currency
and the time the Portfolio actually collects such
receivables, or pays such liabilities, generally are treated
as ordinary income or ordinary loss. Similarly, on
disposition of certain options, futures, and forward
contracts and on disposition of debt securities denominated
in a foreign currency, gains or losses attributable to
fluctuations in the value of foreign currency between the
date of acquisition of the security or contract and the date
of disposition also are treated as ordinary gain or loss.
These gains or losses, referred to under the Code as
"Section 988" gains or losses, may increase or decrease the
amount of the Portfolio's investment company taxable income
to be distributed to members as ordinary income.

Tax Treatment of Passive Foreign Investment Companies. Each
Portfolio may invest in the stock of "passive foreign
investment companies" ("PFICs") if such stock is a
permissible investment. A PFIC is a foreign corporation -
other than a "controlled foreign corporation" as to which a
Portfolio is a U.S. shareholder, that in general meets
either of the following tests: (1) at least 75% of its gross
income is passive or (2) an average of at least 50% of its
assets produce, or are held for the production of passive
income. If a Portfolio invests in stock of certain foreign
investment companies, the Portfolio may be subject to U.S.
federal income taxation on a portion of any "excess
distribution" with respect to, or gain from the disposition
of, such stock. The tax would be determined by allocating
on a pro rata basis such distribution or gain to each day of
the Portfolio's holding period for the stock. The
distribution or gain so allocated to any taxable year of the
Portfolio, other than the taxable year of the excess
distribution or disposition, would be taxed to the Portfolio
at the highest ordinary income rate in effect for such year,
and the tax would be further increased by an interest charge
to reflect the value of the tax deferral deemed to have
resulted from the ownership of the foreign company's stock.
Any amount of distribution or gain allocated to the taxable
year of the distribution or disposition would be included in
the Portfolio's investment company taxable income and,
accordingly, would not be taxable to the Portfolio to the
extent distributed by the Portfolio as a dividend to its
shareholders.

A Portfolio may be able to make an election, in lieu of
being taxable in the manner described above, to include
annually in income its pro rata share of the ordinary
earnings and net capital gain of any foreign investment
company in which it invests, regardless of whether it
actually received any distributions from the foreign
company. These amounts would be included in the Portfolio's
investment company taxable income and net capital gain
which, to the extent distributed by the Portfolio as
ordinary or capital gain dividends, as the case may be,
would not be taxable to the Portfolio. In order to make
this election, the Portfolio would be required to obtain
certain annual information from the foreign investment
companies in which it invests, which in many cases may be
difficult to obtain.

Alternatively, each Portfolio may elect to "mark-to-market"
its stock in any PFIC. "Marking to market," in this
context, means including in ordinary income each taxable
year, the excess, if any, of the fair market value of a
PFIC's stock over a Portfolio's adjusted basis therein as of
the end of that year. Pursuant to the election, a Portfolio
also would be allowed to deduct (as an ordinary, not
capital, loss) the excess, if any, of its adjusted basis in
PFIC stock over the fair market value thereof as of the
taxable year end, but only to the extent of any net
mark-to-market gains with respect to that stock included by
the Portfolio for prior taxable years. A Portfolio's
adjusted basis in each PFIC's stock with respect to which it
makes this election will be adjusted to reflect the amounts
of income included and deductions taken under the election.

Foreign Shareholders. U.S. taxation of a shareholder who,
as to the United States, is a non-resident alien individual,
a foreign trust or estate, foreign corporation, or foreign
partnership ("foreign shareholder") depends on whether the
income from the Portfolio is "effectively connected" with a
U.S. trade or business carried on by such shareholder.

If the income from a Portfolio is not "effectively
connected" with a U.S. trade or business carried on by the
foreign shareholder, deemed distributions by the Portfolio
of investment company taxable income will be subject to a
U.S. tax of 30% (or lower treaty rate), which tax is
generally withheld from such distributions. Deemed
distributions of capital gain dividends and any gain
realized upon redemption, sale or exchange of shares will
not be subject to U.S. tax at the rate of 30% (or lower
treaty rate) unless the foreign shareholder is a nonresident
alien individual who is physically present in the U.S. for
more than 182 days during the taxable year and meets certain
other requirements. However, this 30% tax on capital gains
of non-resident alien individuals who are physically present
in the United States for more than the 182-day period only
applies in exceptional cases because any individual present
in the United States for more than 182 days during the
taxable year is generally treated as a resident for U.S.
federal income tax purposes. In that case, such individual
would be subject to U.S. federal income tax on the
individual's worldwide income at the graduated rates
applicable to U.S. citizens, rather than the 30% U.S. tax.
In the case of a foreign shareholder who is a non-resident
alien individual, the Portfolio may be required to withhold
U.S. federal income tax at a rate of 31% of deemed
distributions of net capital gains and redemption payments
unless the foreign shareholder certifies his or her non-U.S.
status under penalties of perjury or otherwise establishes
an exemption. See "Backup Withholding" above.

If the income from a Portfolio is effectively connected with
a U.S. trade or business carried on by a foreign
shareholder, then deemed distributions of investment company
taxable income and capital gain dividends and any gain
realized upon the redemption, sale or exchange of shares of
the Portfolio will be subject to U.S. federal income tax at
the graduated rates applicable to U.S. citizens or domestic
corporations. Foreign corporate shareholders may also be
subject to the branch profits tax imposed by the Code.

The tax consequences to a foreign shareholder entitled to
claim the benefits of an applicable tax treaty may be
different from those described herein. Foreign shareholders
are advised to consult their own advisers with respect to
the particular tax consequences to them of an investment in
a Portfolio.

Foreign Withholding Taxes. Income received by a Portfolio
from sources within foreign countries may be subject to
withholding and other taxes imposed by such countries. Tax
conventions between certain countries and the United States
may reduce or eliminate such taxes. If more than 50% of the
value of a Portfolio's total assets at the close of its
taxable year consists of securities of foreign corporations,
the Portfolio will be eligible and may elect to "pass
through" to the Portfolio's shareholders the amount of
foreign taxes paid by the Portfolio. Pursuant to this
election, a shareholder will be required to include in gross
income (in addition to dividends actually received) its pro
rata share of the foreign taxes paid by the Portfolio, and
may be entitled either to deduct its pro rata share of the
foreign taxes in computing its taxable income or to use the
amount as a foreign tax credit against its U.S. federal
income tax liability, subject to limitations. Each
shareholder will be notified within 60 days after the close
of the Portfolio's taxable year whether the foreign taxes
paid by the Portfolio will "pass through" for that year. If
a Portfolio is not eligible to make the election to "pass
through" to its shareholders its foreign taxes, the foreign
taxes it pays will reduce its investment company taxable
income and distributions by the Portfolio will be treated as
U.S. source income.

Generally, a credit for foreign taxes is subject to the
limitation that it may not exceed the shareholder's U.S. tax
attributable to its foreign source taxable income. For this
purpose, if the pass-through election is made, the source of
the Portfolio's income flows through to its shareholders.
With respect to the Portfolios, gains from the sale of
securities will be treated as derived from U.S. sources and
certain currency fluctuation gains, including fluctuation
gains from foreign currency denominated debt securities,
receivables and payables, will be treated as ordinary income
derived from U.S. sources. The limitation on the foreign
tax credit is applied separately to foreign source passive
income (as defined for purposes of the foreign tax credit),
including the foreign source passive income passed through
by the Portfolios. Shareholders who are not liable for
federal income taxes will not be affected by any such "pass
through" of foreign tax credits.

Other Taxes A Portfolio may be subject to state, local or
foreign taxes in any jurisdiction in which the Portfolio may
be deemed to be doing business. In addition, shareholders
of a Portfolio may be subject to state, local or foreign
taxes on distributions from the Portfolio. In many states,
Portfolio distributions which are derived from interest on
certain U.S. Government obligations may be exempt from
taxation.

Shareholders are advised to consult their own tax advisers
with respect to the particular tax consequences to them of
an investment in a Portfolio.

SHAREHOLDER INFORMATION

Certificates representing shares of a particular Portfolio
will not be issued to shareholders. Investors Bank & Trust
Company, the Fund's Transfer Agent, will maintain an account
for each shareholder upon which the registration and
transfer of shares are recorded, and any transfers shall be
reflected by bookkeeping entry, without physical delivery.
Detailed confirmations of each purchase or redemption are
sent to each shareholder. Monthly statements of account are
sent which include shares purchased as a result of a
reinvestment of Portfolio distributions.

The Transfer Agent will require that a shareholder provide
requests in writing, accompanied by a valid signature
guarantee form, when changing certain information in an
account (i.e., wiring instructions, telephone privileges,
etc.).

Fund management reserves the right to waive the minimum
initial investment in any Portfolio.

The Fund reserves the right, if conditions exist which make
cash payments undesirable, to honor any request for
redemption or repurchase order with respect to shares of a
Portfolio by making payment in whole or in part in readily
marketable securities chosen by the Fund and valued as they
are for purposes of computing the Portfolio's net asset
value (redemption-in-kind). If payment is made in
securities, a shareholder may incur transaction expenses in
converting theses securities to cash. The Fund has elected,
however, to be governed by Rule 18f-1 under the 1940 Act as
a result of which the Fund is obligated to redeem shares
with respect to any one shareholder during any 90-day
period, solely in cash up to the lesser of $250,000 or 1% of
the net asset value of a Portfolio at the beginning of the
period.

CALCULATION OF PERFORMANCE DATA

The Portfolios may, from time to time, include the 30-day
yield in advertisements or reports to shareholders or
prospective investors. Quotations of yield will be
based on all investment income per share during a particular
30-day (or one month) period (including dividends and
interest), less expenses accrued during the period ("net
investment income"), and are computed by dividing net
investment income by the maximum offering price per share on
the last day of the period, according to the following
formula which is prescribed by the Commission:

YIELD = 2 x { [ ((a - b) / (c x d)) + 1]6 - 1 }

Where: a = dividends and interest earned during the period;
b = expenses accrued for the period (net of
reimbursements);
c = the average daily number of shares of a Portfolio
outstanding during the period that were entitled to
receive dividends; and
d = the maximum offering price per share on the last
day of the period.

Each of the Portfolios may, from time to time, include
"total return" in advertisements or reports to shareholders
or prospective investors. Quotations of average annual total
return will be expressed in terms of the average annual
compounded rate of return of a hypothetical investment in a
Portfolio of the Fund over periods of 1, 5 and 10 years (up
to the life of the Portfolio), calculated pursuant to the
following formula which is prescribed by the Commission:

P(1 + T)n = ERV

Where:
P = a hypothetical initial payment of $1,000,
T = the average annual total return,
n = the number of years, and
ERV = the ending redeemable value of a hypothetical $1,000
payment made at the beginning of the period.

All total return figures assume that all dividends are
reinvested when paid.

The total return as defined above for the Fund's Portfolios for the
period ended October 31, 1997, and since the commencement of
operations of each Portfolio (annualized) to October 31, 1997 are as
follows:

One Year Five Years Life of Portfolio Inception

International Equity
Portfolio 1.57% n/a 5.84%* 5/11/94

Global Equity
Portfolio n/a n/a 6.45% 12/1/96

Multi-Asset Global
Portfolio n/a n/a 12.92% 11/1/96

RATINGS DESCRIPTIONS

Standard & Poors Corporation

AAA. Bonds rated AAA are highest grade debt obligations.
This rating indicates an extremely strong capacity to pay
principal and interest.
AA. Bonds rated AA also qualify as high-quality
obligations. Capacity to pay principal and interest is very
strong, and in the majority of instances they differ from
AAA issues only in small degree.

A. Bonds rated A have a strong capacity to pay principal and
interest, although they are more susceptible to the adverse
effects of changes in circumstances and economic conditions.

BBB. Bonds rated BBB are regarded as having adequate
capacity to pay interest or principal. Although these bonds
normally exhibit adequate protection parameters, adverse
economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay interest and
principal.

BB and Lower. Bonds rated BB, B, CCC, CC, C and D are
regarded, on balance, as predominately speculative with
respect to the issuer's capacity to pay interest and
principal in accordance with the terms of the obligation.
BB indicates the lowest degree of speculation and D the
highest degree of speculation. While such bonds may have
some quality and protective characteristics, these are
outweighed by large uncertainties or major risk exposures to
adverse conditions.

The ratings AA to D may be modified by the addition of a
plus or minus sign to show relative standing within the
major rating categories.

A-1. Standard & Poors Commercial Paper ratings are current
assessments of the likelihood of timely payments of debts
having original maturity of no more than 365 days. The A-1
designation indicates the degree of safety regarding timely
payment is very strong.

A-2. Capacity for timely payment on issues with this
designation is strong. However, the relative degree of
safety is not as high as for issues designated A-1.

Moody's Investors Service, Inc.

Aaa. Bonds 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 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
fluctuations of protective elements may be of greater
amplitude or there may be other elements present which make
the long-term risks appear somewhat larger than the Aaa
securities.

A. Bonds which are rated A possess many favorable investment
attributes and may 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 sometime in the
future.

Baa. Baa rated bonds are considered medium-grade
obligations, i.e., they are neither highly protected nor
poorly secured. Interest payments and principal security
appear adequate for the present, but certain protective
elements may be lacking or may be characteristically
unreliable over any great length of time. Such bonds lack
outstanding investment characteristics and in fact have
speculative characteristics as well.

Ba. Bonds which are rated Ba are judged to have speculative
elements because their future cannot be considered as well
assured. Uncertainty of position characterizes bonds in
this class, because the protection of interest and principal
payments may be very moderate and not well safeguarded.

B and Lower. Bonds which are rated B generally lack
characteristics of a desirable investment. Assurance of
interest and principal payments or of maintenance of other
terms of the security over any long period of time may be
small. Bonds which are rated Caa are of poor standing.
Such securities may be in default of there may be present
elements of danger with respect to principal or interest.
Bonds which are rated Ca represent obligations which are
speculative in a high degree. Such issues are often in
default or have other marked shortcomings. Bonds which are
rated C are the lowest rated class of bonds and issues so
rated can be regarded as having extremely poor prospects of
ever attaining any real investment standing.

Moody's applies the numerical modifiers 1, 2, and 3 in each
generic rating classification from Aa through C in its
corporate bond rating system. The modifier 1 indicates that
the security ranks in the higher end of its generic rating
category; the modifier 2 indicates a mid-range ranking; and
the modifier 3 indicates that the issue ranks in the lower
end of its generic rating category.

Moody's ratings for state and municipal and other short-term
obligations will be designated Moody's Investment Grade
("MIG"). This distinction is in recognition of the
differences between short-term credit risk and long-term
risk. Factors affecting the liquidity of the borrower are
uppermost in importance in short-term borrowing, while
various factors of the first importance in long-term
borrowing risk are of lesser importance in the short run.

MIG-1. Notes bearing this designation are of the best
quality enjoying strong protection from established cash
flows of funds for their servicing or from established and
broad-based access to the market for refinancing, or both.

MIG-2. Notes bearing this designation are of favorable
quality, with all security elements accounted for, but
lacking the undeniable strength of the previous grade.
Market access for refinancing, in particular, is likely to
be less well established.

P-1. Moody's Commercial Paper ratings are opinions of the
ability of issuers to repay punctually promissory
obligations not having an original maturity in excess of
nine months. The designation "Prime-1" or "P-1" indicates
the highest quality repayment capacity of the rated issue.

P-2. Issuers have a strong capacity for repayment of
short-term promissory obligations.

Thomson BankWatch, Inc.

A. Company possess an exceptionally strong balance sheet and
earnings record, translating into an excellent reputation
and unquestioned access to its natural money markets. If
weakness or vulnerability exists in any aspect of the
company's business, it is entirely mitigated by the
strengths of the organization.

A/B. Company is financially very solid with a favorable
track record and no readily apparent weakness. Its overall
risk profile, while low, is not quite as favorable as
companies in the highest rating category.

IBCA Limited

A1. Short-term obligations rated A1 are supported by a very
strong capacity for timely repayment. A plus sign is added
to those issues determined to possess the highest capacity
for timely payment.

Fitch Investors Service, Inc.

F-1. The rating F-1 is the highest rating assigned by
Fitch. Among the factors considered by Fitch in assigning
this rating are: (1) the issuer's liquidity; (2) its
standing in the industry; (3) the size of its debt; (4) its
ability to service its debt; (5) its profitability; (6) its
return on equity; (7) its alternative sources of financing;
and (8) its ability to access the capital markets. Analysis
of the relative strength or weakness of these factors and
others determines whether an issuer's commercial paper is
rated F-1.

FINANCIAL STATEMENTS

The Fund's audited Financial Statements, including the
Financial Highlights, for the periods ended October 31, 1997
appearing in the Annual Report to Shareholders and the
report thereon of Ernst & Young LLP, independent auditors,
appearing therein are hereby incorporated by reference in
this Statement of Additional Information. The Annual Report
to Shareholders is delivered with this Statement of
Additional Information to shareholders requesting this
Statement of Additional Information.