HARDING LOEVNER FUNDS INC, 497, 2000-01-24

HARDING LOEVNER FUNDS INC
497, 2000-01-24

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<PAGE>

HARDING, LOEVNER FUNDS, INC.

[LOGO OF HARDING-LOEVNER]

Prospectus

January 21, 2000

Portfolios managed by
Harding, Loevner Management, L.P.

International Equity Portfolio

Global Equity Portfolio

Multi-Asset Global Portfolio

Emerging Markets Portfolio

P.O. Box 9130
Boston, MA 02117-9130
Telephone: 877-435-8105
Fax: 617-927-8400

As with all mutual funds, the Securities and Exchange
Commission has not determined that the information in this
prospectus is truthful or complete, nor has it judged the
investment merit of the securities offered. It is a
criminal offense to state otherwise.

<PAGE>

Table of Contents

<TABLE>
<S> <C>
Page
International Equity Portfolio............................................. 2
Global Equity Portfolio.................................................... 5
Multi-Asset Global Portfolio............................................... 8
Emerging Markets Portfolio................................................. 11
Principal Investment Strategies and Risks.................................. 14
Management of the Fund..................................................... 19
Shareholder Information.................................................... 20
Distribution of Fund Shares................................................ 23
Performance of Similarly Managed Accounts.................................. 24
Financial Highlights....................................................... 25
Availability of Additional Information about the Fund...................... 29
</TABLE>
<PAGE>

International Equity Portfolio

.Investment Goal

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

.Principal Investment Strategy

The International Equity Portfolio comprises equity securities of companies
based outside the U.S. in developed markets as well as established companies
in emerging markets. Harding, Loevner Management, L.P. ("Harding Loevner")
seeks to compose a portfolio of companies it deems to be well managed, fi-
nancially strong, growing, competitive and under-priced relative to each
company's intrinsic value. These fundamental attributes are the foundation
of Harding Loevner's stock selection criteria. The International Equity
Portfolio invests in the common stock of companies based in at least three
countries. Harding Loevner attempts to manage risk through prudent diversi-
fication across dimensions of geography, industry sector, currency and size.
The International Equity Portfolio usually holds 35-75 investments in 15-25
markets. An investment is sold, in whole or in part, when fundamentals dete-
riorate or the International Equity Portfolio can be improved.

.Principal Risks

As with any mutual fund, you could lose money on your investment in the In-
ternational Equity Portfolio. Your investment is subject to the following
principal risks:

. Market Risk: Investments in the International Equity Portfolio may
lose value due to a downturn in the stock market as a whole.

. Foreign Investment Risk: Securities issued by foreign entities in-
volve added risks not associated with U.S. investments. These risks
include the possibility of changes in foreign currency exchange
rates, additional taxation and political, economic, social, or diplo-
matic instability. There may also be less publicly available informa-
tion about a foreign issuer.

. Emerging Market Risk: Emerging market securities involve unique
risks, such as exposure to economies less diverse and mature than
that of the U.S. or more established foreign markets. Economic or po-
litical instability may cause larger price changes in emerging market
securities than other foreign securities.

2
<PAGE>

.Portfolio Performance

The bar chart and table below show how the International Equity Portfolio
(the "Portfolio") has performed in the past and provide an indication of the
risks of investing in the Portfolio. Both assume that all dividends and dis-
tributions will be reinvested in the Portfolio. How the Portfolio has per-
formed in the past does not necessarily show how it will perform in the fu-
ture.

International Equity Portfolio

[BAR GRAPH]

1995 1996 1997 1998 1999
------ ------ ------ ------ ------

11.99% 15.41% -4.22% 10.20% 49.80%

The best calendar quarter return during the period shown above was 25.32% in
the 4th quarter of 1999; the worst was (16.51)% in the 3rd quarter of 1998.

Average Annual Total Return
(for the periods ended December 31, 1999)

<TABLE>
<CAPTION>
One Year Five Years Since Portfolio's Inception+
------------------------------------------------------------------------------
<S> <C> <C> <C>
International Equity
Portfolio 49.80% 15.36% 12.99%
------------------------------------------------------------------------------
MSCI All Country World ex-
U.S. Index 31.81 12.09 11.00
------------------------------------------------------------------------------
Lipper International
Equity Fund Index 37.83 15.95 13.55
</TABLE>

+Includes predecessor fund performance (Inception Date: May 11, 1994). On
October 31, 1996, the Portfolio received the net assets of the AMT Capital
Fund, Inc.--Harding Loevner International Equity Portfolio pursuant to an
agreement and plan of reorganization dated October 14, 1996.

In the table above, the Portfolio's average annual total return for the pe-
riods shown is compared to the MSCI All Country World ex-U.S. Index, an in-
dex of equity securities issued outside the United States compiled by Morgan
Stanley Capital International and calculated by applying full market capi-
talization weights (price multiplied by the number of shares outstanding)
for the constituent securities, and the Lipper International Equity Fund In-
dex, an index of international equity mutual funds compiled by Lipper Ana-
lytical Services, Inc.

3
<PAGE>

.Portfolio Fees and Expenses:

These tables describe the fees and expenses that you may pay if you buy and
hold shares of the Portfolio.

Shareholder Transaction Expenses (fees that you pay directly from your
investment):

Except as set forth in the table below, there are no fees or sales loads
charged to your account when you buy or sell Portfolio shares.

<TABLE>
<C> <S>
Redemption Fee
(as a percentage
of amount redeemed) 2.00%/1/
</TABLE>

/1/The redemption fee is assessed only on shares that are redeemed 90 days
or less from the date they were purchased.

Annual Fund Operating Expenses (expenses that are deducted from Portfolio
assets):

<TABLE>
<C> <S>
Management Fee 0.75%
---------------------------------------------
Distribution (12b-1) Fee None
---------------------------------------------
Other Expenses 0.29%
---------------------------------------------
Total Annual Fund
Operating Expenses 1.04%*
</TABLE>

*Until further notice to shareholders, Harding Loevner has voluntarily
agreed to cap the total annual fund operating expenses at 1.00% (on an
annualized basis) of the average daily net assets of the Portfolio.

.Example

This example is intended to help you compare the cost of investing in the
Portfolio with the cost of investing in other mutual funds. The example
assumes that you invest $10,000 in the Portfolio for the time periods
indicated and then redeem all of your shares at the end of those periods.
The example also assumes that your investment has a 5% return each year and
that the Portfolio's operating expenses remain the same. Although your
actual costs may be higher or lower, based on these assumptions your costs
would be:

<TABLE>
<CAPTION>
1 year 3 years 5 years 10 years
<S> <C> <C> <C>
$106 $331 $574 $1,271
</TABLE>

4
<PAGE>

Global Equity Portfolio

.Investment Goal

The Global Equity Portfolio seeks long-term capital appreciation through in-
vestments in equity securities of companies based both inside and outside
the United States.

.Principal Investment Strategy

The Global Equity Portfolio comprises equity securities of companies based
in the U.S. and other developed markets, as well as established companies in
emerging markets. Harding Loevner seeks to compose a portfolio of companies
it deems to be well managed, financially strong, growing, competitive and
under-priced relative to each company's intrinsic value. These fundamental
attributes are the foundation of Harding Loevner's stock selection criteria.
The Global Equity Portfolio invests in the common stock of companies based
in at least three countries (one of which may be the United States). Harding
Loevner attempts to manage risk through prudent diversification across di-
mensions of geography, industry sector, currency and size. The Global Equity
Portfolio usually holds 35-75 investments in 15-25 markets. An investment is
sold, in whole or in part, when fundamentals deteriorate or the Global Eq-
uity Portfolio can be improved.

.Principal Risks

As with any mutual fund, you could lose money on your investment in the
Global Equity Portfolio. Your investment is subject to the following princi-
pal risks:

. Market Risk: Investments in the Global Equity Portfolio may lose
value due to a downturn in the stock market as a whole.

5
<PAGE>

.Portfolio Performance

The bar chart and table below show how the Global Equity Portfolio (the
"Portfolio") has performed in the past and provide an indication of the
risks of investing in the Portfolio. Both assume that all dividends and dis-
tributions will be reinvested in the Portfolio. How the Portfolio has per-
formed in the past does not necessarily show how it will perform in the fu-
ture.

Global Equity Portfolio

[BAR GRAPH]

1997 1998 1999
------ ------ ------

9.34% 2.00% 37.13%

The best calendar quarter return during the period shown above was 24.82% in
the 4th quarter of 1999; the worst was (17.70)% in the 3rd quarter of 1998.

Average Annual Total Return
(for the periods ended December 31, 1999)

<TABLE>
<CAPTION>
One Year Since Portfolio's Inception+
--------------------------------------------------------------------------------
<S> <C> <C>
Global Equity Portfolio 37.13% 14.73%
--------------------------------------------------------------------------------
MSCI All Country World Index 27.32 20.10
--------------------------------------------------------------------------------
Lipper Global Equity Fund Index 33.69 19.87
</TABLE>

+ The Portfolio commenced operations on December 1, 1996, following a tax-
free merger with Harding Loevner Global Equity LP.

In the table above, the Portfolio's average annual total return for the pe-
riods shown is compared to the MSCI All Country World Index, an index of
global equity securities compiled by Morgan Stanley Capital International
and calculated by applying full market capitalization weights (price multi-
plied by the number of shares outstanding) for the constituent securities,
and the Lipper Global Equity Fund Index, an index of global equity mutual
funds compiled by Lipper Analytical Services, Inc.

6
<PAGE>

.Portfolio Fees and Expenses:

These tables describe the fees and expenses that you may pay if you buy and
hold shares of the Portfolio.

Shareholder Transaction Expenses (fees that you pay directly from your
investment):

Except as set forth in the table below, there are no fees or sales loads
charged to your account when you buy or sell Portfolio shares.

<TABLE>
<S> <C>
Redemption Fee
(as a percentage of
amount redeemed) 2.00%/1/

/1/The redemption fee is assessed only on shares that are redeemed 90 days
or less from the date they were purchased.

Annual Fund Operating Expenses (expenses that are deducted from Portfolio
assets):

Management Fee 1.00%
--------------------------------------------------------------
Distribution (12b-1) Fee None
--------------------------------------------------------------
Other Expenses 0.57%
--------------------------------------------------------------
Total Annual Fund
Operating Expenses 1.57%*
</TABLE>

* Until further notice to shareholders, Harding Loevner has voluntarily
agreed to cap the total annual fund operating expenses at 1.25% (on an
annualized basis) of the average daily net assets of the Portfolio.

.Example

This example is intended to help you compare the cost of investing in the
Portfolio with the cost of investing in other mutual funds. The example as-
sumes that you invest $10,000 in the Portfolio for the time periods indi-
cated and then redeem all of your shares at the end of those periods. The
example also assumes that your investment has a 5% return each year and that
the Portfolio's operating expenses remain the same. Although your actual
costs may be higher or lower, based on these assumptions your costs would
be:

<TABLE>
<CAPTION>
1 year 3 years 5 years 10 years
<S> <C> <C> <C>
$160 $496 $856 $1,868
</TABLE>

7
<PAGE>

Multi-Asset Global Portfolio

.Investment Goal

The Multi-Asset Global Portfolio seeks long-term capital appreciation and a
growing stream of current income through investments in equity and debt se-
curities of companies based both inside and outside the United States and
debt securities of the United States and foreign governments and their agen-
cies and instrumentalities.

.Principal Investment Strategy

The Multi-Asset Global Portfolio combines global fixed income and equity se-
curities in an attempt to achieve higher current income and greater stabil-
ity of principal than may be achieved with equity securities alone. Harding
Loevner seeks to compose a portfolio of companies it deems to be well man-
aged, financially strong, growing, competitive and under-priced relative to
each company's intrinsic value. These fundamental attributes are the founda-
tion of Harding Loevner's stock selection criteria. The Multi-Asset Global
Portfolio invests in equity and debt securities of companies and debt secu-
rities of governments based in at least three countries (one of which may be
the United States), including debt securities rated below investment grade.
The maturity of the Multi-Asset Global Portfolio's debt securities will not
be fixed, but will be determined based on Harding Loevner's outlook regard-
ing the overall capital market and regarding foreign currency exchange
rates. Harding Loevner attempts to manage risk through prudent diversifica-
tion across dimensions of geography, industry sector, currency and size. The
Multi-Asset Global Portfolio usually holds 35-75 investments in 15-25 mar-
kets. An investment is sold, in whole or in part, when fundamentals deterio-
rate or the Multi-Asset Global Portfolio can be improved.

.Principal Risks

As with any mutual fund, you could lose money on your investment in the Mul-
ti-Asset Global Portfolio. Your investment is subject to the following prin-
cipal risks:

. Market Risk: Investments in the Multi-Asset Global Portfolio may lose
value due to a downturn in the stock market as a whole.

. Debt Securities Risk: Debt securities may lose value due to unfavor-
able fluctuations in the level of interest rates or due to a decline
in the creditworthiness of the issuer. As interest rates rise, the
value of debt securities declines. This risk is generally greater for
debt securities with longer maturities and portfolios with longer du-
rations.

. High Risk/High Yield Securities: Investments in high risk/high yield
securities, such as debt securities rated below investment grade,
carry the risk that the issuers may default on the payment of princi-
pal and interest. These securities either have speculative elements
or are predominantly speculative investments.

8
<PAGE>

.Portfolio Performance

The bar chart and table below show how the Multi-Asset Global Portfolio (the
"Portfolio") has performed in the past and provide an indication of the
risks of investing in the Portfolio. Both assume that all dividends and
distributions will be reinvested in the Portfolio. How the Portfolio has
performed in the past does not necessarily show how it will perform in the
future.

Multi-Asset Global Portfolio

[BAR GRAPH]

1997 1998 1999
------ ------ ------

11.89% 6.63% 17.93%

The best calendar quarter return during the period shown above was 11.39% in
the 4th quarter of 1999; the worst was (7.52)% in the 3rd quarter of 1998.

Average Annual Total Return
(for the periods ended December 31, 1999)

<TABLE>
<CAPTION>
One Year Since Portfolio's Inception+
--------------------------------------------------------------------------------
<S> <C> <C>
Multi-Asset Global Portfolio 17.93% 12.70%
--------------------------------------------------------------------------------
MSCI All Country World Index 27.32 21.30
--------------------------------------------------------------------------------
Salomon World Government Bond Index (4.27) 11.19
--------------------------------------------------------------------------------
Old Constructed Global Balanced
Index 13.16 14.47
--------------------------------------------------------------------------------
New Constructed Global Balanced
Index 13.89 14.22
</TABLE>

+ The Portfolio commenced operations on November 1, 1996.

In the table above, the Portfolio's average annual total return for the pe-
riods shown is compared to (i) the MSCI All Country World Index, an index of
global equity securities compiled by Morgan Stanley Capital International
and calculated by applying full market capitalization weights (price multi-
plied by the number of shares outstanding) for the constituent securities,
(ii) the Salomon World Government Bond Index, an index of government debt
securities compiled by Salomon Brothers, Inc, (iii) the Old Constructed
Global Balanced Index, which is comprised of the weighted sum of 60% Finan-
cial Times World Equity Index, an index of global equity mutual funds com-
piled by Financial Times, and 40% Salomon World Government Bond Index and
(iv) the New Constructed Global Balanced Index, which is comprised of the
weighted sum of 60% MSCI All Country World Index and 40% Salomon World Gov-
ernment Bond Index. Harding Loevner no longer uses the Old Constructed
Global Balanced Index as a benchmark for the Portfolio.

9
<PAGE>

.Portfolio Fees and Expenses:

These tables describe the fees and expenses that you may pay if you buy and
hold shares of the Portfolio.

Shareholder Transaction Expenses (fees that you pay directly from your
investment):

Except as set forth in the table below, there are no fees or sales loads
charged to your account when you buy or sell Portfolio shares.

<TABLE>
<S> <C>
Redemption Fee
(as a percentage of
amount redeemed) 2.00%/1/
</TABLE>

/1/The redemption fee is assessed only on shares that are redeemed 90 days
or less from the date they were purchased.

Annual Fund Operating Expenses (expenses that are deducted from Portfolio
assets):

<TABLE>
<S> <C>
Management Fee 1.00%
----------------------------------------------
Distribution (12b-1) Fee None
----------------------------------------------
Other Expenses 1.16%
----------------------------------------------
Total Annual Fund
Operating Expenses 2.16%*
</TABLE>

.Example

<TABLE>
<CAPTION>
1 year 3 years 5 years 10 years
<S> <C> <C> <C>
$219 $676 $1,159 $2,493
</TABLE>

10
<PAGE>

Emerging Markets Portfolio

.Investment Goal

The Emerging Markets Portfolio seeks long-term capital appreciation through
investments in equity securities of companies based in emerging markets out-
side the United States.

.Principal Investment Strategy

The Emerging Markets Portfolio comprises equity securities of companies that
are based in emerging, or recently emerged, markets. Harding Loevner seeks
to compose a portfolio of companies it deems to be well managed, financially
strong, growing, competitive and under-priced relative to each company's
intrinsic value. These fundamental attributes are the foundation of Harding
Loevner's stock selection criteria. Emerging markets offer investment
opportunities that may benefit from long-term trends in demographics,
deregulation, outsourcing and relocation in developing countries. The
Emerging Markets Portfolio invests in the common stock of companies based in
at least three emerging markets countries. The maturity of the Emerging
Markets Portfolio's debt securities will not be fixed, but will be
determined based on Harding Loevner's outlook regarding the overall capital
market and regarding foreign currency exchange rates. Harding Loevner
attempts to manage risk through prudent diversification across dimensions of
geography, industry sector, currency and size. An investment is sold, in
whole or in part, when fundamentals deteriorate or the Emerging Markets
Portfolio can be improved.

.Principal Risks

As with any mutual fund, you could lose money on your investment in the
Emerging Markets Portfolio. Your investment is subject to the following
principal risks:

. Market Risk: Investments in the Emerging Markets Portfolio may lose
value due to a downturn in the stock market as a whole.

. Debt Securities Risk: Debt securities may lose value due to unfavor-
able fluctuations in the level of interest rates or due to a decline
in the creditworthiness of the issuer. As interest rates rise, the
value of debt securities declines. This risk is greater for debt se-
curities with longer maturities and portfolios with longer durations.

. High Risk/High Yield Securities: Investments in high risk/high yield
securities, such as debt securities rated below investment grade,
carry the risk that the issuers may default on the payment of
principal and interest. These securities either have speculative
elements or are predominantly speculative investments.

11
<PAGE>

.Portfolio Performance

The bar chart and table below show how the Emerging Markets Portfolio (the
"Portfolio") has performed in the past and provide an indication of the
risks of investing in the Portfolio. Both assume that all dividends and dis-
tributions will be reinvested in the Portfolio. How the Portfolio has per-
formed in the past does not necessarily show how it will perform in the fu-
ture.

Emerging Markets Portfolio

[BAR GRAPH]

1999
------

76.71%

The best calendar quarter return during the period was 34.89% in the 4th
quarter of 1999; the worst was (0.30)% in the 3rd quarter of 1999.

Average Annual Total Return
(for the periods ended December 31, 1999)

<TABLE>
<CAPTION>
One Year Since Portfolio's Inception+
--------------------------------------------------------------------------------
<S> <C> <C>
Emerging Markets Portfolio 76.71% 66.70%
--------------------------------------------------------------------------------
MSCI Emerging Markets Free Index 66.43 56.76
--------------------------------------------------------------------------------
Lipper Emerging Markets Fund Index 68.95 58.08
</TABLE>

+ The Portfolio commenced operations on November 9, 1998.

In the table, the Portfolio's average annual total return for the periods
shown is compared to the MSCI Emerging Markets Free Index, an index of eq-
uity securities spanning 28 emerging markets compiled by Morgan Stanley Cap-
ital International and calculated by applying full market capitalization
weights (price multiplied by the number of shares outstanding) for the con-
stituent securities, and the Lipper Emerging Markets Fund Index, an index of
emerging market equity mutual funds compiled by Lipper Analytical Services,
Inc.

12
<PAGE>

.Portfolio Fees and Expenses:

These tables describe the fees and expenses that you may pay if you buy and
hold shares of the Portfolio.

Shareholder Transaction Expenses (fees that you pay directly from your
investment):

Except as set forth in the table below, there are no fees or sales loads
charged to your account when you buy or sell Portfolio shares.

<TABLE>
<S> <C>
Redemption Fee
(as a percentage of
amount redeemed) 2.00%/1/

/1/The redemption fee is assessed only on shares that are redeemed 90 days
or less from the date they were purchased.

Annual Fund Operating Expenses (expenses that are deducted from Portfolio
assets):

Management Fee 1.25%
--------------------------------------------------------------
Distribution (12b-1) Fee None
--------------------------------------------------------------
Other Expenses 4.64%
--------------------------------------------------------------
Total Annual Fund
Operating Expenses 5.89%*
</TABLE>

* Until further notice to shareholders, Harding Loevner has voluntarily
agreed to cap the total annual fund operating expenses at 1.75% (on an
annualized basis) of the average daily net assets of the Portfolio.

.Example

<TABLE>
<CAPTION>
1 year 3 years 5 years 10 years
<S> <C> <C> <C>
$586 $1,743 $2,880 $5,635
</TABLE>

13
<PAGE>

Principal Investment Strategies and Risks

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

Investment Process

Harding Loevner's investment process for each of the Portfolios is designed to
identify quality companies as a first step before progressing to test whether
the share price offers an investment opportunity. Harding Loevner reviews a
broad universe of companies to determine whether they meet their five fundamen-
tal business criteria. Companies must be determined by Harding Loevner to (1)
be well-managed, (2) be financially strong, (3) be experiencing growth, (4)
possess competitive advantages and (5) be under-priced relative to their in-
trinsic value. Harding Loevner believes that insights gained through the care-
ful study of individual companies are more valuable than forecasts of aggregate
stock market direction.

Harding Loevner devotes incrementally more resources as it goes deeper into the
process of researching promising candidates. Harding Loevner's proprietary "QQ"
is a system for evaluating 10 competitive and financial company characteris-
tics. This framework facilitates comparisons across geographic and industry
sectors and, together with management interviews, provides insight into a
company's prospects and risk profile.

Once convinced of the quality of a company, Harding Loevner raises the inten-
sity of monitoring and introduces valuation tests, which serve as aids to judg-
ment rather than rigid decision-making tools. Harding Loevner's investment pro-
fessionals, all experienced analysts with an average of 18 years of global in-
dustrial sector responsibilities, participate as a team in portfolio purchase
decisions.

The investment objective, policies and risks of each Portfolio are detailed be-
low. Except as otherwise indicated, the Fund's Board of Directors may change
the investment policies at any time to the extent that such changes are consis-
tent 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 repre-
sented 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 appli-
cable Portfolio (a "majority vote").

International Equity Portfolio

The International Equity Portfolio's investment objective is to seek long-term
capital appreciation through investments in equity securities of companies
based outside the United States.

The Portfolio invests at least 65% of its total assets in common stocks, secu-
rities convertible into such common stocks (including American Depositary Re-
ceipts ("ADRs") and European Depositary Receipts ("EDRs")), closed-end invest-
ment companies, and rights and warrants issued by companies that are based out-
side the United States. 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 circum-
stances not more than 15% of the Portfolio's total assets will be invested in
securities of U.S. companies.

14
<PAGE>

Norway, Singapore, Spain, Sweden, Switzerland, the United Kingdom, and the
United States. At least 65% of total assets will be denominated in at least
three currencies other than the U.S. dollar. For purposes of compliance with
this restriction, ADRs will be considered to be denominated in the currency of
the country where the securities underlying the ADRs are traded.

Portfolio Turnover. Portfolio turnover will depend on factors such as volatil-
ity in the markets that the Portfolio invests in, or the variability of cash
flows into and out of the Portfolio. Portfolio turnover has averaged around
30% since inception.

Global Equity Portfolio

The Global Equity Portfolio's investment objective is to seek long-term capi-
tal appreciation through investments in equity securities of companies based
both inside and outside the United States.

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, Switzer-
land, and the United Kingdom; (2) the Pacific Rim, including Australia, Hong
Kong, Japan, Malaysia, New Zealand, and Singapore; (3) the United States and
Canada; and (4) countries with "emerging markets," generally considered under
the Morgan Stanley Capital International definition to include all markets ex-
cept Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany,
Hong Kong, Ireland, Italy, Japan, the Netherlands, New Zealand, Norway, Singa-
pore, Spain, Sweden, Switzerland, the United Kingdom, and the United States.
At least 65% of total assets will be denominated in at least three currencies
including the U.S. dollar. For purposes of compliance with this restriction,
ADRs will be considered to be denominated in the currency of the country where
the securities underlying the ADRs are traded.

Multi-Asset Global Portfolio

The Multi-Asset Global Portfolio seeks 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.

The Multi-Asset Global Portfolio invests in common stocks, securities convert-
ible 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 instrumental-
ities. The Portfolio may invest in forward foreign currency exchange con-
tracts, equity derivative securities such as options on common stocks and op-
tions, futures and options on futures on foreign common stock indices. The
Portfolio's investments in debt securities may include such instruments as
corporate bonds, debentures, notes, commercial paper, short-term notes, medi-
um-term notes and variable rate notes.

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

15
<PAGE>

The Portfolio will invest broadly in the available universe of equity and debt
securities of companies and debt securities of governments and their agencies
and instrumentalities domiciled in at least three countries, including the
United States. While the Portfolio will generally emphasize equity invest-
ments, the allocation of the Portfolio among equity, fixed income and cash
equivalent investments may range widely, and will vary over time according to
Harding Loevner'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. For purposes of com-
pliance with this restriction, ADRs will be considered to be denominated in
the currency of the country where the securities underlying the ADRs are trad-
ed.

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

Emerging Markets Portfolio

The Emerging Market Portfolio's investment objective is to seek long-term cap-
ital appreciation through investments in equity securities of companies based
in emerging markets outside the United States.

The Portfolio invests at least 65% of its total assets in common stocks, secu-
rities convertible into such common stocks (including ADRs and EDRs), closed-
end investment companies, and rights and warrants issued by companies that are
based in emerging 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 por-
tion of their revenues from their foreign operations, although under normal
circumstances not more than 15% of the Portfolio's total assets will be in-
vested in securities of U.S. companies. The Portfolio also may invest up to
35% of its total assets in debt securities of domestic and foreign issuers,
including such instruments as corporate bonds, debentures, notes, commercial
paper, short-term notes, medium-term notes and variable rate notes.

The Portfolio may invest up to 20% of its total assets in convertible securi-
ties and debt securities that are rated below investment-grade, that is, rated
below Baa by Moody's or below BBB by Standard & Poor's, and in unrated securi-
ties judged to be of equivalent quality as determined by Harding Loevner.

The Portfolio will invest broadly in the available universe of common stocks
of companies domiciled in one of at least three countries with "emerging mar-
kets," generally considered under the Morgan Stanley Capital International
definition to include all markets except Australia, Austria, Belgium, Canada,
Denmark, Finland, France, Germany, Hong Kong, Ireland, Italy, Japan, the Neth-
erlands, New Zealand, Norway, Singapore, Spain, Sweden, Switzerland, the
United Kingdom, and the United States. At least 65% of total assets will be
denominated in at least three currencies other than the U.S. dollar. For pur-
poses of compliance with this restriction, ADRs will be considered to be de-
nominated in the currency of the country where the securities underlying the
ADRs are traded.

16
<PAGE>

Other Investment Strategies

The International Equity Portfolio and the Global Equity Portfolio may each in-
vest up to 35% of their assets in debt securities of domestic and foreign is-
suers, including such instruments as corporate bonds, debentures, notes, com-
mercial paper, short-term notes, medium-term notes and variable rate notes and
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 International Equity Portfolio and the Global Equity Portfolio also may
each invest up to 20% of their total assets in convertible securities and debt
securities which are rated below investment grade, that is, rated below Baa by
Moody's or below BBB by S&P, and in unrated securities judged to be of equiva-
lent quality as determined by Harding Loevner.

Risks Associated With The Portfolios' Investment Policies And Techniques

The principal risks of investing in each of the Portfolios and the circum-
stances reasonably likely to cause the value of your investment to decline are
described below. The share price of a Portfolio will change daily based on
changes in the value of the securities that a Portfolio holds. Please note that
there are other circumstances that are not described here which could cause the
value of your investment to decline, and which could prevent the Portfolio from
achieving its investment objective.

Foreign Investments. Securities issued by foreign governments, foreign corpora-
tions, international agencies and obligations of foreign banks involve risks
not associated with securities issued by U.S. entities. Changes in foreign cur-
rency 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 diplo-
matic 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 com-
parable to those of United States entities. A Portfolio could encounter diffi-
culties in obtaining or enforcing a judgment against the issuer in certain for-
eign countries. In addition, certain foreign investments may be subject to for-
eign 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 Portfo-
lio to financial or other reports from the issuer to which it would be entitled
as the owner of sponsored ADRs. See also "Shareholder Information--Tax Consid-
erations" below.

Emerging Markets Securities. The risks of investing in foreign securities may
be intensified in the case of investments in issuers domiciled or doing sub-
stantial business in emerging markets or countries with limited or developing
capital markets. Security prices and currency valuations 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 owner-
ship, 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 debt burdens or volatile inflation rates. Local securities
markets may trade a small number of securities and may be unable to respond ef-
fectively to increases in trading volume, potentially making prompt liquidation
of substantial holdings difficult or impossible at times. Transaction settle-
ment and dividend collection procedures may be less reliable in emerging mar-
kets 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.

17
<PAGE>

Derivatives and Hedging. The Portfolios may engage in hedging and other strate-
gic transactions and certain other investment practices that may entail certain
risks.

Derivatives involve special risks, including possible default by the other
party to the transaction, illiquidity and, to the extent Harding Loevner's view
as to certain market movements is incorrect, the risk that the use of Deriva-
tives 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 po-
sition of a Portfolio could create the possibility that losses on the Deriva-
tive will be greater than gains in the value of the Portfolio's position. The
loss from investing in futures transactions that are unhedged or uncovered, is
potentially unlimited. In addition, futures and options markets could be illiq-
uid 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 require-
ments for futures contracts create a greater ongoing potential financial risk
than would the purchase 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 possi-
bly income, and the losses may be greater than if Derivatives had not been
used. Additional information regarding the risks and special considerations as-
sociated with Derivatives appears in the Statement of Additional Information
(the "SAI"), available by following the instructions at the back of this Pro-
spectus.

Other Risks

High Yield/High Risk Securities. Each Portfolio may invest up to 20% of its to-
tal 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 Harding
Loevner (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 may invest up to 10% of its total assets in securities rated B
or lower by Moody's or S&P, or of equivalent quality, but may not invest in se-
curities rated C by Moody's or D by S&P, or the equivalent, which may be in de-
fault with respect to payment of principal or interest.

Illiquid and Restricted Securities. Each Portfolio may invest up to 15% of the
value of its net assets in illiquid securities. Illiquid securities are securi-
ties 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 se-
curities and may limit a Portfolio's ability to obtain accurate market quota-
tions 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 Port-
folio) or (ii) lose all or part of the income, proceeds or rights in the secu-
rities to which the Portfolio would otherwise be entitled.

18
<PAGE>

Management of the Fund

Investment Adviser

Harding Loevner serves as investment adviser to the Fund. Subject to the direc-
tion and authority of the Fund's Board of Directors, Harding Loevner provides
investment advisory services to each Portfolio pursuant to Investment Advisory
Agreements, each dated October 14, 1996. Under the Investment Advisory Agree-
ments, Harding Loevner is responsible for providing investment research and ad-
vice, determining which portfolio securities shall be purchased or sold by each
Portfolio of the Fund, purchasing and selling securities on behalf of the Port-
folios and determining how voting and other rights with respect to the portfo-
lio securities of the Portfolios are exercised in accordance with each Portfo-
lio's investment objective, policies, and restrictions. Harding Loevner also
provides office space, equipment and personnel necessary to manage the Portfo-
lios.

Harding Loevner, established in 1989, is a registered investment adviser that
specializes in global investment management for private investors and institu-
tions. As of December 31, 1999, Harding Loevner had approximately $1.41 billion
in assets under management. Harding Loevner is located at 50 Division Street,
Suite 401, Somerville, NJ 08876. Harding Loevner manages assets for several
other registered investment companies.

Harding Loevner bears the expense of providing the above services to the Fund.
For its services, Harding Loevner receives an advisory fee from each of the
Portfolios, as set forth in the table below.

<TABLE>
<CAPTION>
Portfolio Fee (as a % of average daily net assets)

-------------------------------------------------------------
<C> <S>
International Equity Portfolio 0.75%
-------------------------------------------------------------
Global Equity Portfolio 1.00%
-------------------------------------------------------------
Multi-Asset Global Portfolio 1.00%
-------------------------------------------------------------
Emerging Markets Portfolio 1.25%
</TABLE>

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 and multi-
asset global portfolio management), co-founder of Harding Loevner and a direc-
tor of its general partner, is the firm's chief investment officer, with over-
all responsibility for investment policy. Dan served for twelve years as a se-
nior investment manager with Rockefeller & Co., investment adviser to the Rock-
efeller 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 busi-
nesses. In this capacity he also spearheaded the diversification of the firm's
investments into overseas markets. Dan is a Chartered Financial Analyst and a
Chartered Investment Counselor.

Simon Hallett, CFA, (responsible for international portfolio management), is a
director of the firm's general partner, chairman of the investment committee
and a senior portfolio manager. Simon has managed global portfolios for indi-
viduals and institutions since 1979. In 1984 Simon joined Jardine Fleming In-
vestment Management, one of Asia's largest and most respected investment man-
agement 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 Har-
ding Loevner in 1991.

G. "Rusty" Johnson III, CFA, (responsible for emerging markets portfolio man-
agement), a principal of the firm, is the research manager and a member of the
investment committee. In 1987 he joined Jardine Fleming

19
<PAGE>

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 Secu-
rities before joining Harding Loevner in 1994.

Shareholder Information

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, (a
"Business Day"). Each Portfolio determines its net asset value per share by
subtracting that Portfolio's liabilities (including accrued expenses and divi-
dends payable) from the total value of the Portfolio's investments and other
assets and dividing the result by the total outstanding shares of the Portfo-
lio.

The foreign securities in the Portfolios may trade in their primary markets on
weekends or other days when the Portfolios do not price their shares. There-
fore, the value of a Portfolio may change on days when shareholders will not be
able to buy or sell their shares.

For purposes of calculating each Portfolio's net asset value, securities are
valued as follows:

. 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;

. deposits and repurchase agreements are valued at their cost plus ac-
crued interest unless Harding Loevner 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;

. 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;

. 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 avail-
able on that exchange;

. securities that are traded both in the OTC market and on a stock ex-
change will be valued according to the broadest and most representa-
tive market;

. 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 instru-
ment at its original cost to the Portfolio and thereafter assuming a
constant amortization to maturity of any discount or premium, regard-
less of the impact of fluctuating interest rates on the market value
of the instrument; and

. the value of other assets for which market quotations are not readily
available will be determined in good faith by Harding Loevner at fair
value under procedures established by and under the general supervi-
sion of the Fund's Board of Directors. Securities mainly traded on a
foreign exchange are generally valued according to the preceding
closing values on that exchange. However, if an event that may change
the value of a security occurs after the time the value was deter-
mined, the Board of Directors may adjust the fair market value. Quo-
tations 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.

20
<PAGE>

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. Institutions may satisfy the minimum invest-
ment by aggregating their fiduciary accounts. Each Portfolio reserves the right
to waive the minimum initial investment. When a shareholder's account balance
falls below $100,000 due to redemption, a Portfolio may close the account. Such
shareholders will be notified if the minimum account balance is not being main-
tained and will be allowed 60 days to make additional investments before the
account is closed.

The Fund has authorized one or more brokers to receive purchase orders on its
behalf. Such brokers are authorized to designate other intermediaries to accept
purchase orders on a Portfolio's behalf. A Portfolio will be deemed to have re-
ceived a purchase order when an authorized broker or, if applicable, a broker's
authorized agent receives the order in proper form. Share purchase orders
placed through an authorized broker or the broker's authorized designee will be
priced at the Net Asset Value next computed after they are accepted by an au-
thorized broker or the broker's authorized designee. With respect to purchases
of Portfolio 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 a Portfolio.

The offering of shares of a Portfolio is continuous and purchases of shares of
a Portfolio may be made on any Business Day. The Portfolios offer shares at a
public offering price equal to the net asset value next determined after re-
ceipt of a purchase order.

Purchases of shares must be made by wire transfer of Federal funds. First Fund
Distributors, Inc. ("First Fund") serves as exclusive distributor of shares of
the Fund's Portfolios. Share purchase orders are effective on the date when
First Fund receives a completed Account Application Form (and other required
documents) and Federal funds become available to the Fund in the Fund's account
with Investors Bank & Trust Company (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: HLF--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
the Transfer Agent at 1-877-435-8105 as soon as possible, but no later than
4:00 p.m. Eastern Standard Time, to inform the Fund of the incoming wire trans-
fer 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 the Transfer Agent does not receive Federal funds, such purchase
order shall be executed as of the date that Federal funds are received.

The Fund reserves the right in its sole discretion (i) to suspend or modify the
offering of a Portfolio's shares, (ii) to reject purchase orders, and (iii) to
modify or eliminate the minimum initial investment in Portfolio shares. Pur-
chase orders may be refused if, for example, they are of a size that could dis-
rupt management of a Portfolio.

Redemptions. The Fund will redeem all full and fractional shares of a Portfolio
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 the Transfer Agent receives such notice by
the close of business (normally 4:00 p.m. Eastern Standard Time) on any Busi-
ness Day, the redemption will be effective on the date of receipt. Payment will
be made by wire within one to seven days from the date of receipt. If the no-
tice is received on a day that is not a Business Day or after the above-men-
tioned cut-off times, the redemption notice will be deemed received as of the
next Business Day.

21
<PAGE>

The Fund has authorized one or more brokers to receive, on its behalf,
redemption orders. Such brokers are authorized to designate other
intermediaries to receive redemption orders on the Fund's behalf. A Portfolio
will be deemed to have received a redemption order when an authorized broker
or, if applicable, a broker's authorized agent receives the order in proper
form. Share redemption orders placed through an authorized broker or the
broker's authorized designee will be priced at the Portfolio's Net Asset Value
next computed after they are received in good order by an authorized broker or
the broker's authorized designee.

A redemption fee of 2% of the value of the shares redeemed will be imposed on
shares in a Portfolio redeemed 90 days or less after their date of purchase.
The redemption fee is intended to limit short-term trading in the Portfolios
or, to the extent that short-term trading persists, to impose the costs of that
type of activity on the shareholders who engage in it. The redemption fee will
be paid to the appropriate Portfolio. The Fund reserves the right, at its dis-
cretion, to waive the redemption fee.

Other than the redemption fee assessed on short-term trading, as described
above, 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 share-
holder 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 that are redeemed prior to the record
date do not receive dividends.

A shareholder may change its authorized agent, the address of record or the ac-
count designated to receive redemption proceeds at any time by writing to In-
vestors Bank with a signature guaranteed by a national bank which is a member
firm of any national or regional securities exchange (a "Signature Guarantee").
If the guarantor institution belongs to a Medallion Signature Program, it must
use the specific Medallion "Guaranteed" stamp. Notarized signatures are not
sufficient. Further documentation may be required when Investors Bank deems it
appropriate.

A shareholder may request redemption by calling the Transfer Agent at 1-877-
435-8105. 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 proce-
dures, it may be liable for losses due to unauthorized or fraudulent instruc-
tions. 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 an-
other 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 (on which any taxable gain or loss may be realized) fol-
lowed by a purchase. Investors who wish to make exchange requests should tele-
phone the Transfer Agent 1-877-435-8105.

Dividends

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

22
<PAGE>

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 in-
vestment in a Portfolio, including the status of distributions from each Port-
folio under applicable state or local law.

Federal Income Taxes. 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 share-
holder 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 ad-
ditional shares on the date of such a distribution.

Dividends paid by a Portfolio from its investment company taxable income (in-
cluding 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 capital gains rates, regardless of how long they have held
their Portfolio shares. If a portion of a Portfolio's income consists of divi-
dends paid by U.S. corporations, a portion of the dividends paid by the Portfo-
lio may be eligible for the corporate dividends-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 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 cal-
endar 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. 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 in-
tended as a substitute for careful tax planning. Accordingly, potential invest-
ors 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. Gov-
ernment and certain of its agencies, authorities and instrumentalities may be
exempt from state and local taxes in certain states. Shareholders should con-
sult their own tax advisers regarding the particular tax consequences of an in-
vestment in a Portfolio.

Shareholder Inquiries

Inquiries concerning the Fund may be made by writing to Harding, Loevner Funds,
Inc., c/o Investors Bank & Trust, 200 Clarendon Street, OPS 22, Boston, Massa-
chusetts 02117-9130 or by calling the Fund (toll-free) at 1-877-435-8105.

Distribution of Fund Shares

Shares of the Fund are distributed by First Fund pursuant to a Distribution
Agreement (the "Distribution Agreement") effective as of January 15, 2000 be-
tween the Fund and First Fund. No fees are payable by the Fund pursuant to the
Distribution Agreement.

23
<PAGE>

Performance of Similarly Managed Accounts

Each of the International Equity Portfolio, Global Equity Portfolio and Multi-
Asset Global Portfolio have the same investment objective, policies and strate-
gies as existing private accounts that are managed by Harding Loevner ("Managed
Accounts").

The historical performance of the Managed Accounts is presented below. The Man-
aged Accounts were not subject to certain investment limitations, diversifica-
tion requirements and other restrictions under the Investment Company Act of
1940 and the Internal Revenue Code, which if applicable may have adversely af-
fected the performance results for the Managed Accounts. Investors should not
consider the performance of the Managed Accounts as an indication of the future
performance of a Portfolio. The performance figures shown below reflect the de-
duction of the historical fees and expenses paid by each Managed Account, and
not those paid by the Portfolio. Each Portfolio's fees and expenses are higher
than those of the Managed Accounts, therefore if the Portfolio's fees and ex-
penses were taken into consideration, the performance of the Managed Accounts
would be lower than stated below. The returns shown below reflect the reinvest-
ment of dividends and distributions, and were calculated in the same manner
that is used by each Portfolio to calculate its own performance./1/ The follow-
ing table shows average annual total returns of the Managed Accounts for the
stated periods ending December 31, 1999, as well as a comparison with the per-
formance of applicable benchmark(s)./2/

International Equity Performance Summary

<TABLE>
<CAPTION>
Average Annual Total Return (%)
---------------------------------------
One Year Five Years Ten Years
---------- ----------- ----------
<S> <C> <C> <C>
International Equity............ 50.5% 15.9% 13.3%
MSCI All Country World ex-US
Index.......................... 31.8 12.1 7.2
MSCI EAFE Index................. 27.3 13.2 18.1
</TABLE>

Global Equity Performance Summary

<TABLE>
<CAPTION>
Average Annual Total Return (%)
---------------------------------------
One Year Five Years Ten Years
---------- ----------- ----------
<S> <C> <C> <C>
Global Equity................... 38.3% 16.3% 14.4%
MSCI All Country World Index.... 27.3 18.9 11.5
</TABLE>

Multi-Asset Global Performance Summary

<TABLE>
<CAPTION>
Average Annual Total Return (%)
---------------------------------------
One Year Five Years Ten Years
---------- ----------- ----------
<S> <C> <C> <C>
Multi-Asset Global Equity....... 17.6% 14.5% 13.0%
MSCI All Country World Index.... 27.3 18.9 11.5
Salomon World Government Bond
Index.......................... (4.3) 6.4 8.0
Constructed Global Balanced
Index.......................... 13.9 14.0 10.4
</TABLE>

/1/ Returns shown are in US$ and include the effect of foreign currency ex-
change rates. Returns are presented after reduction due to brokerage commis-
sions and actual management fees paid but before reduction due to custodial
charges and foreign withholding taxes.
/2/ MSCI All Country World ex-US Index is an unmanaged index of equity securi-
ties issued outside the United States compiled by Morgan Stanley Capital Inter-
national (MSCI) and calculated by applying full market capitalization weights
for the constituent securities. MSCI EAFE Index is an unmanaged index of more
than 900 securities listed on the stock exchanges of countries in Europe, Aus-
tralia and the Far East compiled by MSCI. MSCI All Country World Index is an
unmanaged index of global equity securities compiled by MSCI and calculated by
applying full market capitalization weights for the constituent securities.
Constructed Global Balanced Index is an unmanaged index comprised of the
weighted sum of 60% MSCI All Country World Index (described above) and 40% Sal-
omon World Government Bond Index, which is an unmanaged index of global fixed
income securities compiled by Salomon Brothers and calculated by applying full
market capitalization weights for the constituent securities.

24
<PAGE>

Financial Highlights

The financial highlights table is intended to help you understand the Fund's
financial performance for the past five years, or, if shorter, the period of a
Portfolio's operations. Certain information reflects financial results for a
single share of a Portfolio. The total returns in the table represent the rate
that an investor would have earned or lost on an investment in a Portfolio (as-
suming reinvestment of all dividends and distributions.) This information has
been audited by Ernst & Young LLP, whose report, along with the Fund's finan-
cial statements, are included in the annual report, which is incorporated by
reference in this Prospectus and the SAI. The audited semi-annual and annual
reports are available by following the instructions on the back cover of this
Prospectus.
<TABLE>
<CAPTION>
International Equity Portfolio
-----------------------------------------------------------------------
For For For For the For
the Year the Year the Year Ten Months the Year
Ended Ended Ended Ended* Ended
Oct. 31, 1999 Oct. 31, 1998 Oct. 31, 1997 Oct. 31, 1996 Dec. 31, 1995
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Per Share Data
Net asset value,
beginning of period.... $ 11.62 $ 11.79 $ 11.61 $ 10.77 $ 9.71
-------- -------- -------- -------- -------
Increase (Decrease) in
Net Assets from
Operations
Investment income, net.. 0.10 0.14 0.13 0.08 0.10
Net realized and
unrealized gain (loss)
on investments and
foreign currency-
related transactions... 3.97 (0.13) 0.05(a) 0.97 1.06
-------- -------- -------- -------- -------
Net increase from
investment operations 4.07 0.01 0.18 1.05 1.16
-------- -------- -------- -------- -------
Distributions to
Shareholders from:
Investment income, net.. 0.18 0.11 0.00(b) 0.08 0.10
Excess of investment
income, net............ -- -- -- 0.03 --
Net realized gain from
investments and foreign
currency-related
transactions........... 0.01 0.03 -- 0.10 --
Excess of net realized
gain on investments and
foreign currency-
related transactions... -- 0.04 -- -- --
-------- -------- -------- -------- -------
Total distributions... 0.19 0.18 -- 0.21 0.10
-------- -------- -------- -------- -------
Net asset value, end of
period................. $ 15.50 $ 11.62 $ 11.79 $ 11.61 $ 10.77
======== ======== ======== ======== =======
Total Return............ 35.46% 0.06% 1.57% 9.81%(c) 11.99%

Ratios/Supplemental Data
Net assets, end of pe-
riod (000's)........... $328,473 $326,056 $387,304 $241,357 $67,727
Ratio of net operating
expenses to average net
assets................. 1.00% 1.00% 1.00% 1.00%(d) 0.99%
Ratio of investment
income, net to average
net assets............. 0.75% 1.14% 1.07% 1.29%(d) 1.30%
Decrease reflected in
above expense ratios
due to waiver of
investment advisory and
administration fees,
and reimbursement of
other expenses......... 0.04% 0.04% 0.06% 0.14%(d) 0.54%
Portfolio turnover rate. 35% 33% 31% 17%(c) 28%
</TABLE>

(a) Includes the effect of net realized gains prior to a significant increase
in shares outstanding.
(b) Rounds to less than $0.01 per share.
(c) Not annualized.
(d) Annualized.
* During the period, the Portfolio changed its fiscal year end from December
31 to October 31.

25
<PAGE>

<TABLE>
<CAPTION>
Global Equity Portfolio
------------------------------------------
For For For
the Year the Year the Year
Ended Ended Ended
Oct. 31, 1999 Oct. 31, 1998 Oct. 31, 1997*
------------- ------------- --------------
<S> <C> <C> <C>
Per Share Data
Net asset value, beginning of
period............................. $ 16.16 $ 18.70 $ 17.58(a)
------- ------- -------
Increase (Decrease) in Net Assets
from Operations
Investment income, net.............. 0.05 0.20 0.19
Net realized and unrealized gain
(loss) on investments and foreign
currency-related transactions...... 3.79 (0.55) 0.94
------- ------- -------
Net increase (decrease) from
investment operations.............. 3.84 (0.35) 1.13
------- ------- -------
Distributions to Shareholders from:
Investment income, net.............. -- 0.25 0.01
Net realized gain from investments
and foreign currency-related
transactions....................... -- 1.94 --
------- ------- -------
Total distributions............... -- 2.19 0.01
------- ------- -------
Net asset value, end of period...... $ 20.00 $ 16.16 $ 18.70
======= ======= =======
Total Return........................ 23.76% (2.46)% 6.45%(b)

Ratios/Supplemental Data
Net assets, end of period (000's)... $21,087 $30,763 $64,882
Ratio of net operating expenses to
average net assets................. 1.25% 1.25% 1.25%(c)
Ratio of investment income, net to
average net assets................. 0.65% 0.86% 1.05%(c)
Decrease reflected in above expense
ratios due to waiver of investment
advisory and administration fees,
and reimbursement of other ex-
penses............................. 0.32% 0.11% 0.12%(c)
Portfolio turnover rate............. 44% 67% 39%(b)
</TABLE>

* Commencement of Operations was December 1, 1996 following a tax free merger
with GELP which was formed on September 27, 1991.
(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 Har-
ding, Loevner Management, L.P.'s--Global Equity Limited Partnership
("GELP") as of November 30, 1996.
(b) Not annualized.
(c) Annualized.

26
<PAGE>

<TABLE>
<CAPTION>
Multi-Asset Global Portfolio
------------------------------------------
For the For the For the
Year Ended Year Ended Period Ended
Oct. 31, 1999 Oct. 31, 1998 Oct. 31, 1997*
------------- ------------- --------------
<S> <C> <C> <C>
Per Share Data
Net asset value, beginning of
period............................. $11.41 $11.26 $10.00
------ ------ ------
Increase in Net Assets from
Operations
Investment income, net.............. 0.28 0.52 0.25
Net realized and unrealized gain on
investments and foreign currency-
related transactions............... 1.04 0.09 1.04
------ ------ ------
Net increase from investment
operations......................... 1.32 0.61 1.29
------ ------ ------
Distributions to Shareholders from:
Investment income, net.............. 0.30 0.26 0.03
Net realized gain from investments
and foreign currency-related
transactions....................... 0.15 0.20 --
------ ------ ------
Total distributions................. 0.45 0.46 0.03
------ ------ ------
Net asset value, end of period...... $12.28 $11.41 $11.26
====== ====== ======
Total Return........................ 11.84% 5.53% 12.92%
Ratios/Supplemental Data
Net assets, end of period (000's)... $6,599 $6,327 $5,175
Ratio of net operating expenses to
average net assets................. 1.25% 1.25% 1.25%
Ratio of investment income, net to
average net assets................. 2.32% 2.58% 2.50%
Decrease reflected in above expense
ratios due to waiver of investment
advisory and administration fees,
and reimbursement of other
expenses........................... 0.91% 0.71% 0.92%
Portfolio turnover rate............. 31% 29% 36%
</TABLE>

*Commencement of Operations was November 1, 1996.

27
<PAGE>

<TABLE>
<CAPTION>
Emerging Markets Portfolio
--------------------------
For the
Period Ended
Oct. 31, 1999 *
--------------------------
<S> <C>
Per Share Data
Net asset value, beginning of period................ $10.00
------

Increase in Net Assets from Operations
Investment income, net.............................. 0.03
Net realized and unrealized gain on investments and
foreign-currency related transactions.............. 3.65
------
Net increase from investment operations............. 3.68
------
Net asset value, end of period...................... $13.68
======
Total Return 36.80%(a)

Ratios/Supplemental Data
Net assets, end of period (000's)................... $1,534
Ratio of net operating expenses to average net
assets............................................. 1.75%(b)
Ratio of investment income, net to average net
assets............................................. 0.24%(b)
Decrease reflected in above expense ratios due to
waiver of investment advisory and administration
fees, and reimbursement of other expenses.......... 4.14%(b)
Portfolio turnover rate............................. 53%(a)
</TABLE>

*Commencement of Operations was November 9, 1998.
(a)Not annualized.
(b)Annualized.

28
<PAGE>

Availability of Additional Information About the Fund

The SAI, dated January 18, 2000, containing additional information about the
Fund, has been filed with the Securities and Exchange Commission (the "Commis-
sion") and is incorporated by reference into this Prospectus. In the Fund's an-
nual report, you will find a discussion of the market conditions and investment
strategies that significantly affected the Fund's performance during its last
fiscal year.

The SAI and the Fund's annual report are available upon request, free of
charge, by calling 1-877-435-8105, or by writing to the following address:

Harding, Loevner Funds, Inc.
c/o Investors Bank & Trust
200 Clarendon Street, OPS 22
Boston, MA 02116

The SAI is also available on Harding Loevner's Internet site at
http://www.hardingloevner.com.

Information about the Fund (including the SAI and the Fund's annual report) can
be reviewed and copied at the Commission's Public Reference Room in Washington,
D.C. Information on the operation of the Public Reference Room may be obtained
by calling the Commission at 1-202-942-8090. Reports and other information
about the Fund are also available on the Commission's Internet site at
http://www.sec.gov or by writing the Public Reference Section of the Commis-
sion, Washington, D.C. 20549-0102 or by electronic request at the following E-
mail address: [email protected]. A duplication fee will be applied to written
requests and needs to be paid at the time your request is submitted.

Investment Company Act
File number 811-7739

29
<PAGE>

STATEMENT OF ADDITIONAL INFORMATION

Harding, Loevner Funds, Inc.

International Equity Portfolio
Global Equity Portfolio
Multi-Asset Global Portfolio
Emerging Markets Portfolio

This Statement of Additional Information is not a prospectus and should be read
in conjunction with the prospectus of the Fund, dated January 21, 2000, (the
"Prospectus"), which has been filed with the Securities and Exchange Commission
(the "SEC") and can be obtained, without charge, by writing to Harding, Loevner
Funds, Inc. at 200 Clarendon Street, OPS 22, Boston, Massachusetts 02116, or by
calling the Fund toll-free at 1-877-435-8105. This Statement of Additional
Information incorporates by reference the Prospectus.

January 21, 2000
<PAGE>

TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
----
<S> <C>
Organization of the Fund............................... 3

Supplemental Investment Techniques..................... 3

Discussion of Supplemental Risks....................... 10

Investment Restrictions................................ 13

Management of the Fund................................. 14

Control Persons and Principal Holders of Securities.... 16

Investment Adviser..................................... 19

Distribution of Fund Shares............................ 20

Administrator.......................................... 21

Portfolio Transactions................................. 21

Capital Stock Information.............................. 22

Net Asset Value........................................ 22

Tax Considerations..................................... 22

Shareholder Information................................ 27

Calculation of Performance Data........................ 28

Transfer Agent......................................... 28

Custodian.............................................. 29

Independent Auditors................................... 29

Counsel................................................ 29

Financial Statements................................... 29

Appendix - Ratings Descriptions........................ 30
</TABLE>

2
<PAGE>

ORGANIZATION OF THE FUND

Harding, Loevner Funds, Inc. (the "Fund") is a no-load, open-end management
investment company established as a Maryland corporation on July 31, 1996.
Harding, Loevner Management, L.P. (Harding Loevner) serves as investment adviser
to the Fund. The Fund currently has four separate diversified portfolios, 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
First Fund Distributors, Inc. ("First Fund"), the Fund's distributor. The
minimum initial investment in any Portfolio is $100,000. Additional investments
or redemptions may be of any amount.

SUPPLEMENTAL INVESTMENT TECHNIQUES

Information concerning the Portfolios' supplemental investment techniques is set
forth below.

Zero Coupon and Discount Debt Securities. 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 such securities only 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 Harding Loevner 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

3
<PAGE>

increase. Each Portfolio will segregate cash or liquid portfolio securities 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). 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.

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 "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 Standard & Poor's Rating Service ("S&P"), "Baa" or "P-1"
(in the case of commercial paper) by Moody's Investors Service, Inc.
("Moody's"), or of comparable quality as determined by Harding Loevner.

Bank Obligations. The Fund limits its investments in U.S. (domestic) bank
- ----------------
obligations to obligations of U.S. banks that in Harding Loevner'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, Harding Loevner 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 Harding
Loevner, 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 "A" by Thomson
Bankwatch or similarly rated by Fitch IBCA, Inc., or of comparable quality as
determined by Harding Loevner.

4
<PAGE>

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. 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 Harding Loevner to be of comparable
quality.

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
("OTC") 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, Harding Loevner'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

5
<PAGE>

futures position which is continually marked to market. The Portfolios will
segregate cash, U.S. Government securities or other liquid 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.

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.

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 or other liquid portfolio securities in an amount
sufficient to meet its obligations under these transactions.

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. The Portfolios will engage in such
transactions with

6
<PAGE>

parties selected on the basis of such party's creditworthiness and will enter
into repurchase agreements only with financial institutions which are deemed by
Harding Loevner to be in good financial standing. 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. The
Fund will maintain for each Portfolio a segregated custodial account containing
cash 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 at which the Portfolio is
obligated to repurchase them. Reverse repurchase agreements create leverage, a
speculative factor, and will be considered as borrowings for the purposes of
limitations on borrowings.

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 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 Portfolio 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.

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

7
<PAGE>

reverse repurchase agreements and may, in effect, borrow money by doing so.
Securities may be borrowed by engaging in repurchase agreements. See "Investment
Restrictions."

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 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 Harding Loevner 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 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 CFTC and the federal tax requirements applicable to regulated investment
companies (see "Tax Considerations").

Forward Contracts. Sale of currency for dollars under a forward 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.

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.

8
<PAGE>

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 liquid
obligations in an amount sufficient to meet its obligations under these
transactions.

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 need 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 the 1933 Act ("Rule 144A securities"). Rule 144A
securities generally must be sold to other qualified institutional buyers. A
Portfolio also may invest in commercial paper 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; Harding Loevner will monitor the liquidity of such
restricted securities under the supervision of the Board of Directors.

9
<PAGE>

DISCUSSION OF SUPPLEMENTAL RISKS

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, Harding Loevner 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. The
market value of lower-rated debt securities tends 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. 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

10
<PAGE>

perceptions may decrease the values and liquidity of high yield securities.
These securities also may involve special registration responsibilities,
liabilities and costs. Prices for below investment-grade securities may also be
affected by legislative and regulatory developments.

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 Harding Loevner 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 Harding Loevner's credit analysis than is the case for higher
quality bonds. Should the rating of a portfolio security be downgraded, Harding
Loevner will determine whether it is in the best interest of the Portfolio to
retain or dispose of such security.

Foreign Currency Hedging. The success of currency hedging will depend on the
- ------------------------
ability of Harding Loevner 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, rather than perfect
hedges.

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, Harding Loevner 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.

11
<PAGE>

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.

12
<PAGE>

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 Harding Loevner'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.

INVESTMENT RESTRICTIONS

Fundamental. 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 (which for this purpose and
under the Investment Company Act of 1940, as amended (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). 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 number (1) below 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.

13
<PAGE>

Supplemental. In addition, 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) invest directly in interests in oil, gas or other mineral exploration or
development programs or mineral leases; or

(6) 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.

MANAGEMENT OF THE FUND

Overall responsibility for management and supervision of the Fund rests with the
Board of Directors. The Directors approve all significant agreements between
the Fund and the persons and companies that furnish services to the Fund.

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 1940 Act, by
virtue of his or her affiliation with the Fund or Harding Loevner.

14
<PAGE>

<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
Position with the Principal Occupation
Name, Address and Age Fund During Past Five Years
- --------------------- ---- ----------------------
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
R. Kelly Doherty Director Caymen Partners (private investment vehicle),
41 Post Road Director, 2/99 - present; Bankers Trust
Bernardsville, NJ 07924 Company, 1982 - 1/99, Vice Chairman,
Age, 41 1997-1/99.
- ---------------------------------------------------------------------------------------------------------------
Jane A. Freeman Director Rockefeller & Co., Investment Manager, 1988 -
c/o Scientific Learning 8/99; Scientific Learning (Neuroscience
1995 University Avenue Software), Treasurer and Vice President,
Berkeley, CA 94704 Finance & Business Development, 9/99 -
Age, 45 present.
- ---------------------------------------------------------------------------------------------------------------
Samuel R. Karetsky Director European Investors Inc., Managing Director,
European Investors Inc. 11/98 - present; Samuel R. Karetsky L.L.C.
667 Madison Avenue, 16th Floor (Consulting), 3/97 - 10/98; Morgan Stanley &
New York, NY 10021 Co., Managing Director, 6/95 - 3/97;
Age, 54 OFFITBANK, Managing Director, 4/90-6/95.
- ---------------------------------------------------------------------------------------------------------------
Carl W. Schafer Director The Atlantic Foundation (Oceanographic
66 Witherspoon Street Research), President, 1990-present.
Princeton, NJ 08542
Age, 63
- ---------------------------------------------------------------------------------------------------------------
David R. Loevner* Director, President Harding, Loevner Management, L.P., President
Harding, Loevner Management, L.P. and Chairman of the and CEO, 7/89 - present.
50 Division Street, Suite 401 Board
Somerville, NJ 08876
Age, 45
- ---------------------------------------------------------------------------------------------------------------
Susan C. Mosher Secretary Investors Bank & Trust Company, Director,
Investors Bank & Trust Company 1995 - present.
200 Clarendon Street
Boston, MA 02116
Age, 44
- ---------------------------------------------------------------------------------------------------------------
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, Associate Vice President,
Somerville, NJ 08876 4/91-4/96.
Age, 34
- ---------------------------------------------------------------------------------------------------------------
</TABLE>

15
<PAGE>

<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Timothy F. Osborne Treasurer Investors Bank & Trust Company, Director,
Investors Bank & Trust Company 1997 - present; Manager, 1995 -1997.
200 Clarendon Street
Boston, MA 02116
Age, 33
- ---------------------------------------------------------------------------------------------------------------
</TABLE>

No employee of Harding Loevner or Investors Bank & Trust Company ("Investors
Bank") 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 Harding Loevner, Investors Bank, 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 October 31, 1999.

By virtue of the responsibilities assumed by Harding Loevner, Investors Bank and
First Fund and their affiliates under their respective agreements with the Fund,
the Fund itself requires no employees in addition to its officers.

Director's Compensation Earned During Fiscal Year Ended October 31, 1999

<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
Director Aggregate Compensation Pension or Estimated Total Compensation
From Registrant Retirement Benefits Annual benefits From Registrant and
Accrued As Part of Upon Retirement Fund Complex Paid
Fund Expenses to Directors
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
David R. Loevner $ 0 $0 $0 $ 0
- -----------------------------------------------------------------------------------------------------------------------
R. Kelly Doherty /1/ $ 5,500 $0 $0 $ 5,500
- -----------------------------------------------------------------------------------------------------------------------
Jane A. Freeman $15,000 $0 $0 $15,000
- -----------------------------------------------------------------------------------------------------------------------
Samuel R. Karetsky $17,000 $0 $0 $17,000
- -----------------------------------------------------------------------------------------------------------------------
Carl W. Schafer $17,000 $0 $0 $17,000
- -----------------------------------------------------------------------------------------------------------------------
James C. Brady III /2/ $ 4,500 $0 $0 $ 4,500
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
1 This director was appointed on September 9, 1999.
2 This director's resignation was accepted by the Board on June 10, 1999.

CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES

The following shareholders may be deemed "control persons" of the Fund as such
term is defined in the 1940 Act in that they own more than 25% of the shares of
the Portfolios as indicated as of October 31, 1999:

16
<PAGE>

Multi-Asset Global Portfolio
<TABLE>
<CAPTION>
Amount and Nature of
-------------------- Percent of
Title of Class Name and Address of Beneficial Owner Beneficial Ownership Portfolio
- -------------- ------------------------------------ -------------------- ----------
<S> <C> <C> <C>
Common Stock, Edgmont Consultants (Defined Benefit Plan Direct Ownership 49.79%
$.001 per Share and Money Purchase Plan) 308 French Road,
Newtown Square, PA 19073

Common Stock, Harding, Loevner Management, L.P. (Profit Direct Ownership 33.82%
$.001 per Share Sharing Thrift Plan and Investment Adviser's
Account), 50 Division Street, Suite 401,
Somerville, NJ 08876

Emerging Markets Portfolio
<CAPTION>
Amount and Nature of Percent of
-------------------- ----------
Title of Class Name and Address of Beneficial Owner Beneficial Ownership Portfolio
- -------------- ------------------------------------ -------------------- ----------
<S> <C> <C> <C>
Common Stock, Harding, Loevner Management, L.P. (Profit Direct Ownership 48.18%
$.001 per Share Sharing Thrift Plan and Investment Adviser's
Account), 50 Division Street, Suite 401,
Somerville, NJ 08876

As of October 31, 1999, the following persons held 5 percent or more of the
outstanding shares of the Portfolios as indicated and may be deemed principal
holders of the Fund:

International Equity Portfolio
<CAPTION>
Amount and Nature of Percent of
-------------------- ----------
Title of Class Name and Address of Beneficial Owner Beneficial Ownership Portfolio
- -------------- ------------------------------------ -------------------- ---------
<S> <C> <C> <C>
Common Stock, Wilmington Trust Company Agent for Longwood Direct Ownership 12.17%
$.001 per Share Gardens, Inc., PO Box 8882, Wilmington, DE
19899

Common Stock, National Gallery of Art, Sixth and Direct Ownership 11.09%
$.001 per Share Constitution Ave., N.W., Washington, DC
20565

Common Stock, NationsBanc Montgomery Securities LLC Direct Ownership 8.44%
$.001 per Share Custody Account for the Exclusive Benefit of
Customers, 600 Montgomery Street, San
Francisco, CA 94111
</TABLE>

17
<PAGE>

<TABLE>
<CAPTION>
<S> <C> <C> <C>
Common Stock, Public Welfare Foundation, Inc., 2600 Direct Ownership 7.08%
$.001 per Share Virginia Avenue NW, Washington, DC 20037

Common Stock, Bankers Trust Co., FBO Principia Corp., 500 Direct Ownership 6.55%
$.001 per Share Washington Ave., Suite 1010, St. Louis, MO
63102

Global Equity Portfolio
<CAPTION>
Amount and Nature of Percent of
-------------------- ----------
Title of Class Name and Address of Beneficial Owner Beneficial Ownership Portfolio
- -------------- ------------------------------------ -------------------- ---------
<S> <C> <C> <C>
Common Stock, Edward & Darlene Lowe Charitable Remainder Direct Ownership 21.43%
$.001 per Share Unitrust, P.O. Box 385 Cassopolis, MI 49031

Common Stock, Katherine H. Olmstead, 158 Hobart Road Direct Ownership 14.57%
$.001 per Share Chesnut Hill, MA 02167

Common Stock, Ann S. Bowers Separate Property Trust c/o Direct Ownership 13.32%
$.001 per Share the Noyce Foundation, 450 Sheridan Avenue
Palo Alto, CA 94306

Common Stock, Peoples Two Ten c/o Summit Bank, PO Box 821, Direct Ownership 8.88%
$.001 per Share Hackensack, NJ 07602

Common Stock, Lois E. Loevner, 308 French Road, Newtown Direct Ownership 5.26%
$.001 per Share Square, PA 19073

Emerging Markets Portfolio
<CAPTION>
Amount and Nature of Percent of
-------------------- ----------
Title of Class Name and Address of Beneficial Owner Beneficial Ownership Portfolio
- -------------- ------------------------------------ -------------------- ---------
<S> <C> <C> <C>
Common Stock, Alan & Susan Rothenberg Revocable Trust 42 Direct Ownership 13.47%
$.001 per Share Seventh Avenue, San Francisco, CA 94118

Common Stock, David R. Loevner, 73 Westcott Road, Direct Ownership 8.92%
$.001 per Share Princeton, NJ 08540
</TABLE>

18
<PAGE>

<TABLE>
<CAPTION>
<S> <C> <C> <C>
Common Stock, McCurry Companies, 1779 Tribute Road, Suite Direct Ownership 8.92%
$.001 per Share C, PO Box 838, Sacramento,CA 95812

Common Stock, Jane Hallett, 207 Russell Road, Princeton, Direct Ownership 6.69%
$.001 per Share NJ 08540

Common Stock, Tucker Anthony Inc. Custodian FBO Winton Direct Ownership 6.69%
$.001 per Share Tolles IRA, 21 Lincoln Street, Glen Ridge,
NJ 07028
</TABLE>

INVESTMENT ADVISER

Harding Loevner 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 Harding Loevner obligate Harding Loevner to
provide investment advisory and portfolio management services to the Portfolios.
Harding Loevner is a registered investment adviser organized in 1989. Harding
Loevner provides investment advisory services to private investors and
institutions.

The Advisory Agreements are effective 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 Harding Loevner. Each of the Advisory
Agreements will terminate automatically in the event of its "assignment" (as
defined in the 1940 Act).

Harding Loevner pays all of its own expenses arising from the performance of its
obligations under the Advisory Agreements. Under its Advisory Agreements,
Harding Loevner also pays all executive salaries and expenses of the Directors
and Officers of the Fund who are employees of Harding Loevner or its affiliates,
and office rent of the Fund. Subject to the expense reimbursement provisions
described in the Prospectus for each Portfolio under "Portfolio Fees and
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 Harding
Loevner 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.

19
<PAGE>

For the last three fiscal years ended October 31, 1999, the amount of advisory
fees paid by each Portfolio was as follows:
<TABLE>
<CAPTION>
International Equity Fund Gross Waiver Net
<S> <C> <C> <C>
Year ended 10/31/97 $2,652,732 $(212,334) $2,440,398
Year ended 10/31/98 2,814,194 (151,856) 2,662,338
Year ended 10/31/99 2,435,796 (121,879) 2,313,917

Global Equity Portfolio Gross Waiver Net
Year ended 10/31/97 $639,251 $ (76,638) $562,613
Year ended 10/31/98 584,574 (66,988) 517,586
Year ended 10/31/99 256,828 (82,406) 174,422

Multi-Asset Global Portfolio Gross Waiver Net
Year ended 10/31/97 $45,226 $ (41,402) $3,824
Year ended 10/31/98 60,125 (42,875) 17,250
Year ended 10/31/99 66,181 (60,286) 5,895

Emerging Markets Portfolio* Gross Waiver Net
Year ended 10/31/97 N/A N/A N/A
Year ended 10/31/98 N/A N/A N/A
Year ended 10/31/99 $15,410 $(15,410) $0
</TABLE>

*Commencement of Operations was November 9, 1998

DISTRIBUTION OF FUND SHARES

Effective January 15, 2000, shares of the Fund are distributed by First Fund
pursuant to a Distribution Agreement (the "Distribution Agreement") between the
Fund and First Fund. The Distribution Agreement was approved by the Board of
Directors of the Fund on December 9, 1999. First Fund's address is First Fund
Distributors, Inc., 4455 E. Camelback Road, Suite 261-E, Phoenix, Arizona,
85018. The Fund and First Fund have agreed to indemnify one another against
certain liabilities. First Fund furnishes the services of its personnel to
carry out its obligations under the Distribution Agreement at its own expense
and without cost to the Fund. The Distribution Agreement will remain in effect
from year to year and 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 (as defined in the
1940 Act) of the outstanding voting securities of the Fund. Prior to January
15, 2000, shares of the Fund had been distributed by AMT Capital Securities,
L.L.C.

20
<PAGE>

ADMINISTRATOR

Pursuant to its terms, the administration agreement (the "Administration
Agreement") between the Fund and Investors Bank as Administrator requires
Investors Bank to provide certain accounting, clerical and bookkeeping services,
Blue Sky, corporate secretarial services and assistance in the preparation and
filing of tax returns and reports to shareholders and the SEC. The
Administration Agreement will remain in effect until June 2002 and will
automatically continue unless terminated on notice. The following chart sets
forth administrative fees paid by each Portfolio. Prior to June 10, 1999,
Investors Capital Services, Inc. served as Administrator to the Fund.

For the last three fiscal years ended October 31, 1999, the amount of
administration fees paid by each Portfolio was as follows:

<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------
Year Ended Year Ended Year Ended
Portfolio October 31, 1999 October 31, 1998 October 31, 1997
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
International Equity Portfolio $409,924 $562,839 $530,546
Global Equity Portfolio 44,414 87,686 95,888
Multi-Asset Global Portfolio 26,535 9,019 6,774
Emerging Markets Portfolio* 21,743 N/A N/A
</TABLE>
*Commencement of Operations was November 9, 1998

PORTFOLIO TRANSACTIONS

The Advisory Agreements authorize Harding Loevner to select the brokers or
dealers that will execute the purchases and sales of investment securities for
each of the Fund's Portfolios and Harding Loevner to use reasonable efforts to
obtain the best available price and the most favorable execution with respect to
all transactions for the Portfolios. Harding Loevner will consider the full
range and quality of services offered by the executing broker or dealer when
making these determinations. Neither Harding Loevner 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 Harding Loevner. 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 Harding Loevner 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 Harding
Loevner, as the case may be. Although there is no specified formula for
allocating such transactions, the various allocation methods used by Harding
Loevner, 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 Harding Loevner, 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,
except Harding Loevner may effect cross-trades provided that they are conducted
at market price and absent any commission.

21
<PAGE>

For the last three fiscal years ended October 31, 1999, the amount of brokerage
commissions paid by each Portfolio was as follows:

<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------
Year Ended Year Ended Year Ended
Portfolio October 31, 1999 October 31, 1998 October 31, 1997
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
International Equity Portfolio $903,216 $695,309 $794,431
Global Equity Portfolio 65,454 148,242 82,629
Multi-Asset Global Portfolio 6,707 5,196 6,256
Emerging Markets Portfolio* 7,869 N/A N/A
</TABLE>
*Commencement of Operations was November 9, 1998.

CAPITAL STOCK INFORMATION

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 be unable to elect any person or persons to the Board of
Directors.

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. Day, Presidents' Day,
Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day, 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.

22
<PAGE>

Qualification as a Regulated Investment Company. Each 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 Portfolios qualified as a RIC for the period ended October
31, 1999. 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 by 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.

23
<PAGE>

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

24
<PAGE>

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 Portfolio 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.

25
<PAGE>

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.

26
<PAGE>

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, 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.).

The Fund 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 these 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.

27
<PAGE>

CALCULATION OF PERFORMANCE DATA

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 SEC:

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 one and five
year period ended October 31, 1999 (as applicable), and since the commencement
of operations of each Portfolio (annualized) to October 31, 1999, are as
follows:

<TABLE>
<CAPTION>
One Year Five Years Life of Portfolio Inception
<S> <C> <C> <C> <C>
International Equity Portfolio 35.46% 9.83% 9.58% 5/11/94
Global Equity Portfolio 23.76 n/a 11.58 12/1/96
Multi-Asset Global Portfolio 11.84 n/a 10.05 11/1/96
Emerging Markets Portfolio n/a n/a 37.76 11/9/98
</TABLE>

TRANSFER AGENT

Investors Bank, 200 Clarendon Street, P.O. Box 9130, Boston, MA, 02117-9130,
serves as transfer agent, dividend disbursing agent and agent in connection with
any accumulation, open-account or similar plans provided to the shareholders of
the Fund.

28
<PAGE>

CUSTODIAN

Investors Bank, 200 Clarendon Street, P.O. Box 9130, Boston, MA, 02117-9130,
serves as the custodian of the Fund's Portfolio securities and cash.

INDEPENDENT AUDITORS

Ernst & Young LLP, independent auditors, 787 Seventh Avenue, New York, New York
10019, serve as auditors of the Fund and perform annual audits of the Fund's
financial statements.

COUNSEL

Dechert Price & Rhoads, 1775 Eye Street, N.W., Washington, DC 20006, serves as
counsel to the Fund.

FINANCIAL STATEMENTS

The Fund's audited Financial Statements, including the Financial Highlights, for
the period ended October 31, 1999, 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.

29
<PAGE>

APPENDIX - RATINGS DESCRIPTIONS

Standard & Poor's Rating Service

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.

30
<PAGE>

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.

31
<PAGE>

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.

Fitch IBCA, Inc.

Long-term ratings:
Investment Grade

AAA - Highest credit quality. `AAA' ratings denote the lowest expectation of
credit risk. They are assigned only in case of exceptionally strong capacity for
timely payment of financial commitments. This capacity is highly unlikely to be
adversely affected by foreseeable events.

AA - Very high credit quality. `AA' ratings denote a very low expectation of
credit risk. They indicate very strong capacity for timely payment of financial
commitments. This capacity is not significantly vulnerable to foreseeable
events.

A - High credit quality. `A' ratings denote a low expectation of credit risk.
The capacity for timely payment of financial commitments is considered strong.
This capacity may, nevertheless, be more vulnerable to changes in circumstances
or in economic conditions than is the case for higher ratings.

BBB - Good credit quality. `BBB' ratings indicate that there is currently a low
expectation of credit risk. The capacity for timely payment of financial
commitments is considered adequate, but adverse changes in circumstances and in
economic conditions are more likely to impair this capacity. This is the lowest
investment-grade category.

BB - Speculative. `BB' ratings indicate that there is a possibility of credit
risk developing, particularly as the result of adverse economic change over
time; however, business or financial alternatives may be available to allow
financial commitments to be met. Securities rated in this category are not
investment grade.

B - Highly speculative. `B' ratings indicate that significant credit risk is
present, but a limited margin of safety remains. Financial commitments are
currently being met; however, capacity for continued payment is contingent upon
a sustained, favorable business and economic environment.

CCC, CC, C - High default risk. Default is a real possibility. Capacity for
meeting financial commitments is solely reliant upon sustained, favorable
business or economic developments. A `CC' rating indicates that default of some
kind appears probable. `C' ratings signal imminent default.

DDD, DD, D - Default. The ratings of obligations in this category are based on
their prospects for achieving partial or full recovery in a reorganization or
liquidation of the obligor. While expected recovery values are highly
speculative and cannot be estimated with any precision, the following serve as
general guidelines. 'DDD' obligations

32
<PAGE>

have the highest potential for recovery, around 90%-100% of outstanding amounts
and accrued interest. 'DD' indicates potential recoveries in the range of 50%-
90%, and 'D' the lowest recovery potential, i.e., below 50%.

Short-term ratings:

F1 - Highest credit quality. Indicates the Best capacity for timely payment of
financial commitments; may have an added "+" to denote any exceptionally strong
credit feature.

F2 - Good credit quality. A satisfactory capacity for timely payment of
financial commitments, but the margin of safety is not as great as in the case
of the higher ratings.

F3 - Fair credit quality. The capacity for timely payment of financial
commitments is adequate; however, near-term adverse changes could result in a
reduction to non-investment grade.

B - Speculative. Minimal capacity for timely payment of financial commitments,
plus vulnerability to near-term adverse changes in financial and economic
conditions.

C - High default risk. Default is a real possibility. Capacity for meeting
financial commitments is solely reliant upon a sustained, favorable business and
economic environment.

D - Default. Denotes actual or imminent payment default.