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Filed pursuant to Rule 497(e)
Securities Act File No. 333-7905
Investment Company Act File No. 811-7701
[GE LOGO]
GE LifeStyle Funds
GE LifeStyle Funds
Prospectus
October 30, 1998
GE Conservative Allocation Fund
GE Moderate Allocation Fund
GE Aggressive Allocation Fund
Prospectus begins on page 1.
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[GE LOGO] GE LIFESTYLE FUNDS
- ---------------------------------------------------------------
GE LifeStyle Funds ("LifeStyle Funds" or the "Trust") is an open-end
management investment company that offers a selection of asset allocation
investment funds (each a "Fund" and collectively the "Funds"). Each Fund seeks
to achieve its objective by investing in certain portfolios of GE Funds
("Underlying GE Funds"). The Trust is currently comprised of six series, three
of which are offered by a separate prospectus. This Prospectus describes the
following three Funds currently offered by the Trust:
o GE Conservative Allocation Fund's investment objective is
income and long-term growth of capital. The Fund seeks to achieve its
objective through investment in a mix of equity-oriented funds and fixed
income-oriented funds, with a bias towards equity oriented or fixed
income-oriented funds to be determined by then current market forces.
o GE Moderate Allocation Fund's investment objective is
long-term growth of capital with a moderate level of current income. The Fund
seeks to achieve its objective through investment in various equity-oriented
funds and fixed income-oriented funds, with the bias toward equity-oriented
funds for enhanced growth potential.
o GE Aggressive Allocation Fund's investment objective is
capital appreciation. The Fund seeks to achieve its objective through
investment in a selection of equity-oriented funds and fixed income-oriented
funds, typically with a strong bias under normal market conditions toward
equity-oriented funds for substantial growth potential.
Shares of the Funds offered by this Prospectus are currently available only to
defined benefit or contributions plans (including plans meeting the
requirements of Section 401(k) of the Internal Revenue Code of 1986, as
amended (the "Code")), retirement plans established under section 403(b) of
the Code, eligible deferred compensation plans meeting the requirements of
Section 457(b) of the Code and tax-exempt organizations enumerated in Section
501(c)(3) of the Code, that do not seek additional services provided or paid
by GE Investment Management Incorporated, the Trust's investment adviser, or
its affiliates in connection with their investment in the Funds.
Shares of the Funds are not deposits with or obligations of any financial
institution, are not guaranteed or endorsed by any financial institution or
its affiliates, and are not insured by the Federal Deposit Insurance
Corporation, the Federal Reserve Board or any other government agency.
This Prospectus sets forth certain information about the Funds and the Trust
that prospective investors will find helpful in making an investment decision.
Investors are encouraged to read this Prospectus carefully and retain it for
future reference.
Additional information about the Funds and the Trust, contained in a Statement
of Additional Information (the "SAI") dated December 30, 1997, has been filed
with the Securities and Exchange Commission (the "SEC"). The SEC maintains a
Web site (http://www.sec.gov) that contains the SAI, material incorporated by
reference and other information regarding the Funds and the Trust. The SAI is
also available upon request and without charge by calling the Trust at the
telephone number listed below or by contacting the Trust at the address listed
below. The SAI is incorporated in its entirety by reference into this
Prospectus.
GE INVESTMENT MANAGEMENT INCORPORATED
Investment Adviser and Administrator
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
October 30, 1998
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<TABLE>
<CAPTION>
TABLE OF CONTENTS
<S> <C>
Expense Information.......................................................... 3
LifeStyle Funds.............................................................. 6
Investment Objectives and Management Policies................................ 7
Risk Factors and Special Considerations of LifeStyle Funds................... 9
Portfolio Turnover........................................................... 11
Description of the Underlying GE Funds....................................... 12
Management of the Trust...................................................... 25
Retirement Plans............................................................. 28
Purchase of Shares........................................................... 28
Redemption of Shares......................................................... 29
Exchange Privilege........................................................... 29
Net Asset Value.............................................................. 30
Dividends, Distributions and Taxes........................................... 30
Custodian and Transfer Agent................................................. 32
Distributor.................................................................. 32
The Funds' Performance....................................................... 33
Additional Matters........................................................... 34
Appendix - Further Information: Additional Investments
and Certain Investment Techniques and
Strategies Used by the Underlying GE Funds.................. A-1
</TABLE>
3003 Summer Street
Stamford, Connecticut 06905
(800) 242-0134
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EXPENSE INFORMATION
The purpose of the following table is to assist an investor in understanding
the expenses that an investor in the Funds offered by this Prospectus will
bear directly in connection with an investment in each Fund's shares ("Direct
Expenses"). In addition to these Direct Expenses, Fund shares will indirectly
bear their pro rata share of the expenses of the Underlying GE Funds
("Indirect Expenses").
Fee Table
<TABLE>
<CAPTION>
GE Conservative GE Moderate GE Aggressive
Allocation Allocation Fund Allocation
Shareholder Transaction Expenses Fund Fund Fund
---- ---- ----
<S> <C> <C> <C>
Maximum Sales Load Imposed on
Purchases of Shares (as a percentage
of offering price): None None None
Maximum Sales Load Imposed on
Reinvested Dividends (as a percentage
of offering price): None None None
Maximum Contingent Deferred Sales
Load (as a percentage of redemption
proceeds): None None None
Redemption Fees (as a percentage of
amount redeemed): None None None
Maximum Exchange Fee: None None None
Annual Fund Operating Expenses
(Direct Expenses) (as a percentage of
average net assets):
Advisory and Administration fees: .20% .20% .20%
12b-1 fees: None None None
Other expenses (after reimbursement): .00% .00% .00%
Total Operating Expenses
(after reimbursement):+ .20% .20% .20%
</TABLE>
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+ See the "+" footnote to "Example" on page 6.
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Total Combined Expense Ratios (Including Indirect Expenses)
(as a percentage of average net assets)
Based on the expense ratios of the Underlying GE Funds plus those of each
LifeStyle Fund, assuming each Fund's target investment in each Underlying GE
Fund is maintained, the total average weighted combined operating expenses for
shares of the Funds offered by this Prospectus are estimated to be as follows:
Total Combined
Expense Estimates
-----------------
GE Conservative Allocation Fund .89%
GE Moderate Allocation Fund .96%
GE Aggressive Allocation Fund 1.02%
Expenses are estimated based upon the target asset allocations for each
LifeStyle Fund as set forth below under "Investment Objectives and Management
Policies."
The nature of the services provided to, and the advisory and administration
fees paid by, each Fund are described under "Management of the Trust." Under
the agreements governing the advisory and administration services to be
furnished to the Funds by GE Investment Management Incorporated ("GEIM"), the
Trust's investment adviser, GEIM bears expenses of each Fund including, but
not limited to, custodial fees, legal and accounting fees, printing costs and
registration fees, the costs of regulatory compliance, the costs associated
with maintaining the Trust's legal existence and the costs involved in
communicating with shareholders of the Funds, but excluding brokerage fees and
commissions, interest, advisory and administration fees, fees and expenses of
the Trust's Board of Trustees who are not affiliated with GEIM or its
affiliates (including counsel fees), taxes payable by the Trust, transfer
agency costs (some of which may be borne by the Underlying GE Funds as
sub-transfer agency expenses of those Funds) and any extraordinary expenses.
The Funds offered by this Prospectus will invest only in Class D shares of the
Underlying GE Funds, which are currently offered with no initial sales charge,
redemption fee or shareholder servicing and distribution fees. The Funds
offered by this Prospectus will indirectly bear their pro rata share of fees
and expenses, including investment management fees, incurred by the Underlying
GE Funds that are applicable to Class D shareholders. The investment returns
of each Fund, therefore, will be net of the expenses of the Underlying GE
Funds in which it is invested. The following chart shows the expense ratios
applicable to Class D shares of each Underlying GE Fund held by a Fund, based
upon estimated operating expenses for the fiscal year ended September 30,
1998.
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Indirect Expenses
Underlying GE Fund Expense Ratio*
- ------------------ --------------
GE Premier Growth Equity Fund.................................... .90%
GE U.S. Equity Fund.............................................. .50%
GE Mid-Cap Growth Fund........................................... .90%
GE Value Equity Fund............................................. .85%
GE International Equity Fund..................................... 1.10%
GE Fixed Income Fund............................................. .55%
GE Short-Term Government Fund.................................... .45%
GE Money Market Fund............................................. .50%
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* The expense ratios of the Class D shares of the Underlying GE Funds may
reflect fee waivers and expense reimbursements. Absent these fee waivers
on the Class D shares of the Underlying GE Funds, these expense ratios
would be as follows: GE Premier Growth Equity Fund -- .93%, GE U.S.
Equity Fund -- .62%; GE Mid-Cap Growth Fund -- .90%; GE Value Equity Fund
-- .85%; GE International Equity Fund -- 1.10%; GE Fixed Income Fund --
.60%; and GE Short-Term Government Fund -- .68%.
Example+
The following example demonstrates the projected dollar amount of total
cumulative expenses that would be incurred over a one-year and three-year
period with respect to a hypothetical investment in each Fund. These amounts
are based upon (1) direct payment by the Fund of operating expenses at the
levels set out above; (2) indirect payment by the Fund of its pro rata share
of the Class D share expenses of the Underlying GE Funds (also set out above)
in which a Fund is expected to invest at the commencement of investment
operations; and (3) the specific assumptions stated below.
A shareholder would pay the following expenses on a $1,000 investment,
assuming (1) a 5% annual return and (2) redemption at the end of the time
periods shown:
1 Year 3 Years
------ -------
GE Conservative
Allocation Fund: $9 $29
GE Moderate
Allocation Fund: $10 $31
GE Aggressive
Allocation Fund: $11 $33
The above example is intended to assist an investor in understanding various
costs and expenses that an investor in a Fund will bear directly or
indirectly. Although the table assumes a 5% annual return, a Fund's actual
performance will vary and may result in an actual return that is greater or
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less than 5%. The example should not be considered to be a representation of
past or future expenses of a Fund; actual expenses may be greater or less than
those shown.
- ---------
+ The fee table and the example of expenses reflect a determination by the
Fund's investment adviser to voluntarily reduce or otherwise limit "Other
Expenses" on an annualized basis. In the absence of this determination,
it is estimated that each Fund's "Total Operating Expenses" would be
equal to .60% of the Fund's average net assets.
LIFESTYLE FUNDS
Advantages of Investing in the Trust
The proliferation of mutual funds over the last several years has left many
investors in search of a simple means to manage their long-term investments.
With new investment categories emerging each year and with each mutual fund
reacting differently to political, economic and business events, many
investors are forced to make complex investment decisions in the face of
limited experience, time and personal resources. The Funds are designed to
meet the needs of investors who prefer to have their asset allocation
decisions made by professional money managers, are looking for an appropriate
core investment portfolio and appreciate the advantages of broad
diversification.
Although an investor could achieve portfolio diversification by investing
directly in a variety of GE Funds, participating in the LifeStyle Funds offers
two significant advantages: (1) simplified investment decision making; and (2)
periodic portfolio rebalancing to ensure Fund allocations remain consistent
with original risk/return objectives.
Asset Allocation Process
The Funds are managed so that each Fund can serve as a complete investment
program or as a core part of a larger portfolio. Each of the Funds invests in
a select group of Underlying GE Funds suited to the Fund's particular
investment objective. Subject to the supervision of the Trust's Board of
Trustees, GEIM, after receipt of recommendations from any investment
consultant retained by the Board (the "Investment Consultant"), will determine
the extent to which each Fund may invest in the Underlying GE Funds (the
"Asset Allocation Ranges") and target investment percentages ("Targets"). On
an ongoing basis, GEIM will monitor each Fund's assets allocated to the
Underlying GE Funds within the Asset Allocation Ranges approved by the Board
of Trustees from time to time and will reallocate assets as necessary to the
extent a particular Fund deviates significantly from its Target. The Asset
Allocation Ranges and Targets are described below under "Investment Objectives
and Management Policies."
Before adding or eliminating any Underlying GE Funds in which a Fund may
invest, the Board of Trustees will consult with GEIM and the Investment
Consultant and disclose any such change to shareholders of the affected Funds.
However, subject to the supervision of the Board of Trustees, GEIM may, in
conjunction with the Investment Consultant, change the Asset Allocation Ranges
or Targets without prior notice to Fund shareholders. Because the assets will
be adjusted only periodically and generally only within predetermined
parameters that will attempt to ensure broad diversification, there should not
be under normal conditions any sudden large-scale changes in the
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allocation of a Fund's investments among Underlying GE Funds except to the
extent Asset Allocation Ranges or Targets are changed or Underlying GE Funds
are added or eliminated from a Fund's investment allocations. LifeStyle Funds
are not designed as a market timing vehicle, but rather as a conservative or
strategic approach to helping investors meet long-term goals.
INVESTMENT OBJECTIVES AND MANAGEMENT POLICIES
The Trust is an open-end management investment company that currently offers
six non-diversified asset allocation investment portfolios, three of which are
offered by this Prospectus. Each Fund seeks to achieve its investment
objective by investing strategically within specified ranges among Underlying
GE Funds. Initially, each Fund will invest in the following seven Underlying
GE Funds: GE Premier Growth Equity Fund (the "Premier Fund"), GE U.S. Equity
Fund (the "U.S. Equity Fund"), GE Mid-Cap Growth Fund (the "Mid-Cap Fund"), GE
Value Equity Fund (the "Value Fund"), GE International Equity Fund (the
"International Fund"), GE Fixed Income Fund (the "Income Fund") and GE
Short-Term Government Fund (the "Government Fund"). The Funds will not invest
in securities other than shares of the Underlying GE Funds (or other
affiliated funds that may be approved by the Board of Trustees from time to
time) and money market instruments of the types described under "Money Market
Instruments" in the Appendix to this Prospectus (including GE Money Market
Fund (the "Money Market Fund")).
GEIM, in conjunction with the Investment Consultant, will evaluate the
Underlying GE Funds for purposes of establishing Targets for each Fund's
assets within the Asset Allocation Ranges, which designate minimum and maximum
limits for investment in each of the Underlying GE Funds. These Targets will
be determined based on an evaluation of the following factors: outlook for the
economy; financial markets; and the relative performance, volatility and
covariance of the Underlying GE Funds.
On an ongoing basis, GEIM will conduct a Target variance analysis for each
Fund and will consider, in its discretion, whether to reallocate a Fund's
assets within the Asset Allocation Ranges to the extent that a Fund's
investment in an Underlying GE Fund deviates significantly from its Target as
a result of appreciation or depreciation. With respect to Targets that are 10%
or more, GEIM will generally consider a variance of five percentage points or
more in either direction to be significant. With respect to Targets that are
less than 10%, GEIM will generally consider a deviation to be significant if
it varies by two percentage points or more. In each case, after consideration
of existing market conditions and impact on the Fund, GEIM will typically
attempt to rebalance each Fund's investments in the Underlying GE Funds to
meet its intended Targets. However, if GEIM believes it to be in the best
interests of a Fund, or if such rebalancing would result in the Fund violating
certain regulatory limitations, it may limit the degree of rebalancing or may
avoid rebalancing altogether pending further analysis of market conditions and
impact on the Fund.
The investment objective of GE Conservative Allocation Fund (the "Conservative
Fund") is income and long-term growth of capital. The investment objective of
GE Moderate Allocation Fund (the "Moderate Fund") is long-term growth of
capital with a moderate level of current income. The investment objective of
GE Aggressive Allocation Fund (the "Aggressive Fund") is
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capital appreciation. Each Fund's investment objective is fundamental and may
be changed only with the approval of a majority of the Fund's outstanding
securities as defined in the Investment Company Act of 1940, as amended (the
"1940 Act"). There can be no assurance that any Fund's investment objective
will be achieved.
By investing in Underlying GE Funds, the Funds seek to maintain different
allocations among the Underlying GE Funds depending on a Fund's investment
objective. Allocating investments among the Underlying GE Funds permits each
Fund to attempt to optimize performance consistent with its investment
objective. The tables below illustrate the initial Asset Allocation Ranges and
Targets as a percentage of each Fund's net assets:
Conservative Fund
Underlying GE Fund Target Range
- ------------------ ------ -----
Premier Fund 4% 1%-7%
U.S. Equity Fund 10% 5%-15%
Mid-Cap Fund 3% 1%-6%
Value Fund 9% 5%-15%
International Fund 18% 12%-24%
Income Fund 51% 45%-57%
Government Fund 5% 2%-8%
Moderate Fund
Underlying GE Fund Target Range
- ------------------ ------ -----
Premier Fund 8% 5%-11%
U.S. Equity Fund 13% 8%-19%
Mid-Cap Fund 4% 1%-7%
Value Fund 13% 8%-19%
International Fund 25% 19%-31%
Income Fund 32% 26%-38%
Government Fund 5% 2%-8%
Aggressive Fund
Underlying GE Fund Target Range
- ------------------ ------ -----
Premier Fund 10% 4%-16%
U.S. Equity Fund 17% 10%-22%
Mid-Cap Fund 6% 3%-9%
Value Fund 16% 10%-22%
International Fund 32% 26%-38%
Income Fund 14% 8%-20%
Government Fund 5% 2%-8%
The Underlying GE Funds have been selected to represent a reasonable spectrum
of investment options for the Funds. The Asset Allocation Ranges are based on
the degree to which the
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Underlying GE Funds selected are expected in combination to be appropriate for
a Fund's particular investment objective. The particular Underlying GE Funds
in which each Fund may invest and the Asset Allocation Ranges and Targets
applicable to each Underlying GE Fund may be changed from time to time by
GEIM, in consultation with the Investment Consultant, subject to the
supervision of the Trust's Board of Trustees without the approval of the
Fund's shareholders. The Trust will provide prior notice to shareholders
before adding or eliminating any Underlying GE Funds, but not prior to changes
in the Asset Allocation Ranges or Targets.
Each Fund can invest a certain portion of its cash reserves, if any, in GE
Money Market Fund or directly in money market instruments. A reserve position
provides flexibility, for example, in meeting redemptions, expenses and the
timing of new investments, and serves as a short-term defense during periods
of unusual volatility.
For information about the investment objectives of each of the Underlying GE
Funds and the investment techniques and the risks involved in the Underlying
GE Funds, please refer to "Description of the Underlying GE Funds," the
Appendix to this Prospectus, the SAI and the prospectus and statement of
additional information for GE Funds which is available from the Trust upon
request.
RISK FACTORS AND SPECIAL CONSIDERATIONS OF LIFESTYLE FUNDS
Non-Diversified Investment Company. Each Fund is a "non-diversified"
investment portfolio for purposes of the 1940 Act, because it invests in the
securities of a limited number of mutual funds. However, the Underlying GE
Funds themselves are diversified investment portfolios. The Trust intends to
comply with the diversification requirements of Subchapter M of the Internal
Revenue Code of 1986, as amended (the "Code").
Investing in Underlying GE Funds. The investments of each Fund are
concentrated in the Underlying GE Funds, so each Fund's investment performance
is directly related to the investment performance of the Underlying GE Funds
held by it. The ability of each Fund to meet its investment objective is
directly related to the ability of the Underlying GE Funds to meet their
objectives as well as the allocation among those Underlying GE Funds by GEIM.
There can be no assurance that the investment objective of any Fund or any
Underlying GE Fund will be achieved.
Investing through the Funds in the Underlying GE Funds involves certain
additional expenses and tax results that would not be present in a direct
investment in the Underlying GE Funds. See "Risk Factors and Special
Considerations of LifeStyle Funds -- Additional Expense Information Concerning
the Funds," "Management of the Trust" and "Dividends, Distributions and
Taxes."
Under certain circumstances, an Underlying GE Fund may determine to make
payment of a redemption request by a Fund wholly or partly by a distribution
in kind of securities from its portfolio, instead of cash, in accordance with
the rules of the SEC. In such cases, the Funds may hold securities distributed
by an Underlying GE Fund until GEIM determines that it is appropriate to
dispose of such securities.
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Affiliated Persons. GEIM, the investment adviser and administrator of the
Funds, and the officers and Trustees of the Trust presently serve as
investment adviser and administrator, officers and trustees, respectively, of
the Underlying GE Funds. Therefore, conflicts may arise as these persons
fulfill their fiduciary responsibilities to the Funds and the Underlying GE
Funds. See "Management of the Trust" for a more detailed explanation of the
potential conflicts of interest that may arise because of the "fund of funds"
structure of the Trust. In addition, GEIM's principal officers, directors and
portfolio managers serve in similar capacities with respect to General
Electric Investment Corporation ("GEIC"), which like GEIM is a wholly-owned
subsidiary of General Electric Company ("GE"). GEIM and GEIC collectively
provide investment management services to various institutional accounts with
total assets, as of September 30, 1998, in excess of $71.4 billion, of which
more than $14.5 billion is invested in mutual funds.
Investment Practices of Underlying GE Funds. Certain Underlying GE Funds may
invest a portion of their assets in low-rated securities (as defined below)
and foreign securities; enter into forward currency transactions; lend their
portfolio securities; enter into stock or bond index, interest rate and
currency futures contracts, and options on such contracts; engage in options
transactions; make short sales; purchase zero coupon obligations; purchase
non-publicly traded and illiquid securities; enter into mortgage roll
transactions; purchase securities on a when-issued or delayed delivery basis;
enter into repurchase agreements; borrow money; and engage in various other
investment practices. See "Description of the Underlying GE Funds."
Market and Economic Factors. The Funds' share prices and yields will fluctuate
in response to various market and economic factors related to both the stock
and bond markets. All Funds may invest in mutual funds that in turn invest in
international securities and thus are subject to additional risks of these
investments, including changes in foreign currency exchange rates and
political risk.
Additional Expense Information Concerning the Funds
Investors in the Funds should recognize that they may invest directly in the
GE Funds and that, by investing in Underlying GE Funds indirectly through the
Funds, they will bear not only their proportionate share of the expenses of
the Funds (including operating costs and investment advisory and
administrative fees to the extent GEIM has not elected to limit such
expenses), but will also indirectly bear similar expenses of the Underlying GE
Funds.
Investment Restrictions of the Funds
The Trust has adopted certain fundamental investment restrictions with respect
to each Fund that may not be changed without approval of a majority of the
Fund's outstanding voting securities (as defined in the 1940 Act).
Included among those fundamental restrictions are those listed below.
1. No Fund may borrow money or issue senior securities, except that each
Fund may borrow from banks for temporary or emergency (not leveraging)
purposes, including the meeting of redemption requests and cash
payments of dividends and distributions that might otherwise require
the untimely disposition of securities, in an amount not to exceed
33-1/3% of the
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value of the Fund's total assets (including the amount borrowed)
valued at market less liabilities (not including the amount borrowed)
at the time the borrowing is made. Whenever borrowings of 5% or more
of a Fund's total assets are outstanding, the Fund will not make any
additional investments.
2. No Fund may lend its assets or money to other persons, except through
(a) purchasing debt obligations, (b) lending portfolio securities in an
amount not to exceed 30% of the Fund's assets taken at market value and
(c) entering into repurchase agreements.
Certain other investment restrictions adopted by the Trust with respect to the
Funds are described in the SAI. Investment restrictions of the Underlying GE
Funds in which the Funds invest may be more or less restrictive than those
adopted by the Trust.
PORTFOLIO TURNOVER
Each Fund's turnover rate (i.e., the rate at which the Fund buys and sells
shares of the Underlying GE Funds) is not expected to exceed 25% annually. A
Fund may purchase or sell securities to: (a) accommodate purchases and sales
of its shares; (b) change the percentages of its assets invested in each of
the Underlying GE Funds in response to market conditions; and (c) maintain or
modify the allocation of its assets among the Underlying GE Funds within the
Asset Allocation Ranges described above or as altered by the Trust's Board of
Trustees from time to time.
GEIM cannot predict precisely the turnover rate for any Underlying GE Fund,
but expects that the annual turnover rate will not exceed 30% for the Value
Fund, 50% for each of the Premier Fund, U.S. Equity Fund and International
Fund, 200% for the Mid-Cap Fund and 300% for each of the Income Fund and
Government Fund. The portfolio turnover rate for GE Money Market Fund is
expected to be zero for regulatory purposes. There can be no assurance that
the turnover rates of these Underlying GE Funds will not exceed these limits.
Higher turnover rates (more than 100%) may result in higher transaction
expenses being incurred by certain Underlying GE Funds and shareholders that
invest in those Underlying GE Funds will indirectly bear their proportionate
share of such expenses. For the fiscal year ended September 30, 1998, the
actual portfolio turnover rates of the Underlying GE Funds were: Premier Fund
- - 35%; U.S. Equity Fund - 29%; Mid-Cap Fund - 13%; Value Fund - 40%;
International Fund - 93%; Income Fund - 219%; and Government Fund - 185%.
DESCRIPTION OF THE UNDERLYING GE FUNDS
Investment Objectives and Management Policies
Set forth below is a description of the investment objective and policies of
each Underlying GE Fund. The investment objective of an Underlying GE Fund may
not be changed without the approval of the holders of a majority of the
Underlying GE Fund's outstanding voting securities as defined in the 1940 Act.
No assurance can be given that an Underlying GE Fund will be able to achieve
its investment objective. No offer is made in this Prospectus of any of the
Underlying GE Funds. Because each Fund invests in Underlying GE Funds,
shareholders of each Fund will
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be affected by these investment policies in direct proportion to the amount of
assets each Fund allocates to the Underlying GE Funds pursuing such policies.
GE Premier Growth Equity Fund
The investment objective of the Premier Fund is long-term growth of capital
and future income rather than current income. The Fund seeks to achieve this
objective through investment primarily in growth-oriented equity securities
which, under normal market conditions, will represent at least 65% of the
Fund's assets. In pursuing its objectives, the Fund, under normal conditions,
may invest in common stocks, preferred stocks, convertible bonds, convertible
debentures, convertible notes, convertible preferred stocks and warrants or
rights issued by U.S. and foreign companies.
In attempting to achieve its objective, the Premier Fund will seek to identify
and invest in companies it believes will offer potential for long-term growth
of capital. These companies typically would possess one or more of a variety
of characteristics, including high quality products and/or services, strong
balance sheets, sustainable internal growth, superior financial returns,
competitive position in the issuer's economic sector and shareholder-oriented
management. While the Fund may invest in companies of varying sizes as
measured by assets, sales or capitalization, a majority of its assets will,
under normal market conditions, be comprised of companies with relatively
large capitalizations. In addition, the Fund will normally be invested in
companies that have above-average growth prospects and which are typically
leaders in their fields. The Fund will generally be diversified over a cross
section of industries.
Up to 25% of the Premier Fund's total assets may be invested in foreign
securities, excluding, for purposes of this limitation American Depositary
Receipts (i.e., U.S. dollar-denominated receipts typically issued by domestic
banks or trust companies that represent the deposit with those entities of
securities of a foreign issuer, "ADRs") and securities of a foreign issuer
with a class of securities registered with the SEC and listed on a U.S.
national securities exchange ("U.S. Listed Securities") or traded on the
Nasdaq National Market or the Nasdaq Small Cap Market (collectively, "Nasdaq
Traded Securities"). The Fund may, under normal market conditions, invest up
to 35% of its assets in notes, bonds and debentures. The Fund's investments in
debt securities are limited to those that are rated investment grade, except
that up to 5% of the Fund's assets may be invested in securities rated lower
than investment grade. A security is considered investment grade if it is
rated at the time of purchase within the four highest grades assigned by
Standard & Poor's Rating Services, a Division of The McGraw-Hill Companies,
Inc. ("S&P"), or by Moody's Investors Service, Inc. ("Moody's") or has
received an equivalent rating from another nationally recognized statistical
rating organization ("NRSRO") or, if unrated, is deemed by GEIM to be of
comparable quality.
GE U.S. Equity Fund
The investment objective of the U.S. Equity Fund is long-term growth of
capital, which objective the Fund seeks to achieve through investment
primarily in equity securities of U.S. companies. In pursuing its objective,
the Fund, under normal conditions, invests at least 65% of its assets in
equity securities, including common stocks and preferred stocks, and
securities convertible into
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common stocks, consisting of convertible bonds, convertible debentures,
convertible notes, convertible preferred stocks and warrants or rights. Up to
15% of the Fund's assets may be invested in foreign securities. ADRs, U.S.
Listed Securities, and Nasdaq Traded Securities will be included for purposes
of the Fund's 65% minimum described above, and excluded for purposes of the
Fund's 15% maximum in investments in foreign securities.
In managing the assets of the U.S. Equity Fund, GEIM uses a combination of
"value-oriented" and "growth-oriented" investing. Value-oriented investing
involves seeking securities that may have low price-to-earnings ratios, or
high yields, or that sell for less than intrinsic value as determined by GEIM,
or that appear attractive on a dividend discount model. These securities
generally are sold from the Fund's portfolio when their prices approach
targeted levels. Growth-oriented investing generally involves buying
securities with above average earnings growth rates at reasonable prices. The
Fund holds these securities until GEIM determines that their growth prospects
diminish or that they have become overvalued when compared with alternative
investments.
In investing on behalf of the U.S. Equity Fund, GEIM seeks to produce a
portfolio that GEIM believes will have similar characteristics to the Standard
& Poor's 500 Composite Stock Price Index (the "S&P 500 Index"), by virtue of
blending investments in both "value" and "growth" securities. Since the Fund's
strategy seeks to combine these basic elements, but is designed to select
investments deemed to be the most attractive within each category, GEIM
believes that the strategy should be capable of outperforming the U.S. equity
market as reflected by the S&P 500 Index on a total return basis.
The U.S. Equity Fund may, under normal market conditions, invest up to 35% of
its assets in notes, bonds and debentures issued by corporate or governmental
entities when GEIM determines that investing in these kinds of debt securities
is consistent with the Fund's investment objective of long-term growth of
capital. The Fund's investments in debt securities are limited to those that
are rated investment grade, except that up to 5% of the Fund's assets may be
invested in securities rated lower than investment grade.
GE Mid-Cap Growth Fund
The investment objective of the Mid-Cap Fund is long-term growth of capital.
The Fund seeks to achieve this objective by investing primarily in the equity
securities of companies with medium-sized market capitalizations ("mid-cap")
that have the potential for above-average growth. The Fund, under normal
market conditions, invests at least 65% of its total assets in a portfolio of
equity securities of mid-cap companies traded on U.S. securities exchanges or
in the U.S. over-the-counter market, including common stocks, preferred
stocks, convertible preferred stocks, convertible bonds, convertible
debentures, convertible notes, ADRs and warrants or rights issued by U.S. and
foreign companies. The Fund defines a mid-cap company as one whose securities
are within the market capitalization range of stocks listed on the S&P MidCap
400 Index. (As of June 30, 1998, the S&P MidCap 400 Index included companies
with market capitalizations between $330 million and $22.9 billion.)
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Mid-cap growth companies are often still in the early phase of their life
cycle. Accordingly, investing in mid-cap companies generally entails greater
risk exposure and volatility (meaning upward or downward price swings) than
investing in large, well-established companies. However, GEIM believes that
mid-cap companies may offer the potential for more rapid growth.
GEIM relies on its proprietary research to identify mid-cap companies with
potentially attractive growth prospects. These companies typically have one or
more of a variety of characteristics, including attractive products or
services, above average earnings growth potential, superior financial returns,
strong competitive position, shareholder focused management and sound balance
sheets. There is, of course, no guarantee that GEIM will be able to identify
such companies or that the Fund's investment in them will be successful.
The Mid-Cap Fund may invest up to 35% of its assets in (i) securities of
companies outside the capitalization range of the S&P MidCap 400 Index; (ii)
foreign securities, excluding, for purposes of this limitation, ADRs and U.S.
Listed Securities and Nasdaq Traded Securities; and (iii) bonds, notes and
debentures. The debt instruments in which the Fund may invest must be rated
within the six highest categories by S&P, Moody's or another NRSRO, or if
unrated deemed by GEIM to be of comparable quality. The Fund will not purchase
a debt security, if as a result of the purchase, more than 25% of the Fund's
total assets would be invested in securities rated BBB by S&P or Baa by
Moody's or, if unrated, deemed by GEIM to be of comparable quality. In
addition, the Fund will not purchase any obligation rated BB or B by S&P or Ba
or B by Moody's if, as a result of the purchase, more than 10% of the Fund's
total assets would be invested in obligations rated in those categories or, if
unrated, in obligations deemed by GEIM to be of comparable quality.
GE Value Equity Fund
The investment object of the Value Fund is long-term growth of capital and
future income. The Fund seeks to achieve its objective by investing primarily
in equity securities of companies with large sized market capitalizations that
GEIM considers to be undervalued by the market. Undervalued securities are
those selling for low prices given the fundamental characteristics of their
issuers. During normal market conditions, the Fund invests at least 65% of its
assets in common stocks, preferred stocks, convertible bonds, convertible
debentures, convertible notes, convertible preferred stocks and warrants or
rights issued by U.S. and foreign companies.
The Value Fund's investment philosophy is that the market tends to overreact
to both good and bad news about issuers. Companies experiencing faster than
expected growth tend to be overvalued as the market extrapolates current good
news well beyond a sustainable time-frame and correspondingly overforecasts
the period and magnitude of decline of companies experiencing near term
difficulties. These difficulties can be driven by factors both internal and
external to the company. Internal factors may include operational
mismanagement or strategic mistakes. External factors may include a change in
the economic environment or a shift in the competitive dynamics of an
industry. The Fund attempts to identify firms that are out of favor for a
variety of reasons and select those which GEIM believes to be undervalued
relative to their true business prospects.
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In accordance with this premise, GEIM will identify and select securities that
it believes are undervalued, using factors it considers indicative of
fundamental investment value including: (i) low price/earnings ratio relative
to a normalized growth rate and/or the S&P 500 Index; (ii) the potential for
free cash flow generation and prospects for dividend growth; (iii) a strong
balance sheet with low financial leverage; (iv) sustainable competitive
advantages such as a franchise brand name or dominant market position; (v) an
experienced and capable management team; (vi) improving returns on invested
capital; and (vii) net asset values in a restructuring/breakup analysis
framework.
GEIM believes that such investments will position the Value Fund to benefit
from a positive change in business prospects from an issuing company that
adopts a turnaround strategy to increase/restore the earning power of the
company.
The Value Fund may, under normal market conditions, invest (i) up to 35% of
its assets in bonds, notes and debentures and (ii) up to 25% of its assets in
foreign securities excluding, for purposes of this limitation, ADRs and U.S.
Listed Securities and Nasdaq Traded Securities. The Fund's investments in debt
obligations are limited to those that are investment grade, except that up to
5% of the Fund's assets may be invested in securities rated lower than
investment grade.
GE International Equity Fund
The investment objective of the International Fund is long-term growth of
capital, which the Fund seeks to achieve by investing primarily in foreign
equity securities. The Fund may invest in securities of companies and
governments located in developed and developing countries outside the United
States. The Fund may also invest in securities of foreign issuers in the form
of depositary receipts. Investing in securities issued by foreign companies
and governments involves considerations and potential risks not typically
associated with investing in securities issued by the U.S. Government and U.S.
corporations. The Fund intends to position itself broadly among countries and
under normal circumstances, at least 65% of the Fund's assets will be invested
in securities of issuers collectively in no fewer than three different
countries other than the United States. The percentage of the Fund's assets
invested in particular countries or regions of the world will vary depending
on political and economic conditions. The determination of where an issuer is
located will be made by reference to the country in which the issuer (a) is
organized, (b) derives at least 50% of its revenues or profits from goods
produced or sold, investments made or services performed, (c) has at least 50%
of its assets situated or (d) has the principal trading market for its
securities.
In selecting investments on behalf of the International Fund, GEIM seeks
companies that are expected to grow faster than relevant markets and whose
securities are available at a price that does not fully reflect the potential
growth of those companies. GEIM typically focuses on companies that possess
one or more of a variety of characteristics, including strong earnings growth
relative to price-to-earnings and price-to-cash earnings ratios, low
price-to-book value, strong cash flow, presence in an industry experiencing
strong growth and high quality management.
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The International Fund, under normal conditions, invests at least 65% of its
assets in common stocks, preferred stocks, convertible debentures, convertible
notes, convertible preferred stocks and warrants or rights issued by companies
believed by GEIM to have a potential for superior growth in sales and
earnings. The Fund will emphasize established companies, although it may
invest in companies of varying sizes as measured by assets, sales or
capitalization.
The International Fund may, under normal market conditions, invest up to 35%
of its assets in notes, bonds and debentures issued by corporate or
governmental entities when GEIM determines that investing in those kinds of
debt securities is consistent with the Fund's investment objective of
long-term growth of capital. The Fund's investments in debt securities are
limited to those that are rated investment grade, except that up to 5% of the
Fund's assets may be invested in securities rated lower than investment grade.
GE Fixed Income Fund
The investment objective of the Income Fund is to seek maximum income
consistent with prudent investment management and the preservation of capital.
Capital appreciation with respect to the Fund's portfolio securities may occur
but is not an objective of the Fund. In seeking to achieve its investment
objective, the Fund invests in the following types of fixed income
instruments: securities issued or guaranteed by the U.S. Government or one of
its agencies or instrumentalities ("Government Securities"); obligations of
foreign governments or their agencies or instrumentalities; bonds, debentures,
notes and non-convertible preferred stocks issued by U.S. and foreign
companies; mortgage related securities, adjustable rate mortgage related
securities ("ARMs"), collateralized mortgage related securities ("CMOs") and
government stripped mortgage related securities; asset-backed and
receivable-backed securities; zero coupon obligations; floating and variable
rate instruments and money market instruments. The Fund may also invest in
depositary receipts and structured and indexed securities, the value of which
is linked to currencies, interest rates, commodities, indexes or other
financial indicators.
The Income Fund is subject to no limitation with respect to the maturities of
the instruments in which it may invest; the weighted average maturity of the
Fund's portfolio securities is anticipated to be approximately five to ten
years. The Fund's investments in bonds are limited to those that are rated
within the six highest categories by S&P, Moody's or another NRSRO, or if
unrated, are deemed by GEIM to be of comparable quality.
The Income Fund will not purchase any obligation rated BBB by S&P or Baa by
Moody's if, as a result of the purchase, more than 25% of the Fund's total
assets would be invested in obligations rated in those categories or in
unrated obligations that are deemed by GEIM to be of comparable quality. In
addition, no obligation will be purchased by the Fund if, as a result of the
purchase, more than 10% of the Fund's total assets would be invested in
obligations rated BB or B by S&P or Ba or B by Moody's or in unrated
obligations that GEIM deems to be of comparable quality.
GE Short-Term Government Fund
The investment objective of the Government Fund is to seek a high level of
income consistent with prudent investment management and the preservation of
capital. In seeking to achieve its
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investment objective, the Fund will invest at least 65% of its total assets in
Government Securities including repurchase agreements secured by Government
Securities.
The Government Fund may invest the remainder of its assets in bonds,
convertible bonds, debentures, notes and non-convertible preferred stocks
issued by U.S. and foreign companies; obligations of foreign governments or
their agencies or instrumentalities; mortgage related securities, ARMs, CMOs
and government stripped mortgage related securities and asset-backed and
receivable-backed securities; zero coupon obligations (including zero coupon
municipal obligations); floating and variable rate instruments; and money
market instruments. The Fund may also invest in depositary receipts and
structured and indexed securities, the value of which is linked to currencies,
interest rates, commodities, indexes or other financial indicators. Mortgage
related securities, ARMs, CMOs, government stripped mortgage related
securities and asset-backed and receivable-backed securities are subject to
several risks, including the prepayment of principal. The debt securities in
which the Fund invests will only be purchased if, in the case of long-term
securities, they are rated investment grade by S&P or Moody's (or the
equivalent from another NRSRO) and short-term securities will only be
purchased if they are rated A-1 by S&P or Prime-1 by Moody's (or the
equivalent from another NRSRO) or, for both short- and long-term securities,
if unrated, deemed to be of equivalent quality by GEIM.
The dollar-weighted average maturity of the Government Fund's portfolio
securities is anticipated to be not more than three years. Within this
limitation the Fund may purchase individual securities with effective
maturities greater than three years as long as its average maturity remains
within this limit.
GEIM will seek to stabilize share price fluctuation by investing in securities
that are not highly sensitive to interest rate changes. In selecting
securities for the Government Fund, GEIM will attempt to maintain the Fund's
overall sensitivity to interest rates in a range similar to the average for
short- to intermediate-term government bonds with maturities of one to four
years.
GE Money Market Fund
The investment objective of the Money Market Fund is to seek a high level of
current income consistent with the preservation of capital and the maintenance
of liquidity. In seeking its objective, the Fund invests in the following U.S.
dollar denominated, short-term money market instruments: (1) Government
Securities; (2) debt obligations of banks, savings and loan institutions,
insurance companies and mortgage bankers; (3) commercial paper and notes,
including those with floating or variable rates of interest; (4) debt
obligations of foreign branches of U.S. banks, U.S. branches of foreign banks
and foreign branches of foreign banks; (5) debt obligations issued or
guaranteed by one or more foreign governments or any of their political
subdivisions, agencies or instrumentalities, including obligations of
supranational entities; (6) debt securities issued by foreign issuers; and (7)
repurchase agreements and reverse repurchase agreements.
The Money Market Fund limits its portfolio investments to securities that GE
Funds' Board of Trustees determines present minimal credit risk and that are
"Eligible Securities" at the time of acquisition by the Fund. "Eligible
Securities" as used in this Prospectus means securities rated by
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the "Requisite NRSROs" in one of the two highest short-term rating categories,
consisting of issuers that have received these ratings with respect to other
short-term debt securities and comparable unrated securities. "Requisite
NRSROs" means (1) any two NRSROs that have issued ratings with respect to a
security or class of debt obligations of an issuer or (2) one NRSRO, if only
one NRSRO has issued such a rating at the time that the Fund acquires the
security. Currently, five organizations are NRSROs: S&P, Moody's, Fitch
Investors Service, Inc., Duff and Phelps, Inc. and Thomson BankWatch Inc. By
limiting its investments to Eligible Securities, the Fund may not achieve as
high a level of current income as a fund investing in lower-rated securities.
The Money Market Fund may not invest more than 5% of its total assets in the
securities of any one issuer, except for Government Securities and except to
the extent permitted under rules adopted by the SEC under the 1940 Act. In
addition, the Fund may not invest more than 5% of its total assets in Eligible
Securities that have not received the highest short-term rating for debt
obligations and comparable unrated securities ("Second Tier Securities"), and
may not invest more than the greater of $1,000,000 or 1% of its total assets
in the Second Tier Securities of any one issuer. The Fund may invest more than
5% (but not more than 25%) of the then-current value of the Fund's total
assets in the securities of a single issuer for a period of up to three
business days, so long as (1) the securities either are rated by the Requisite
NRSROs in the highest short-term rating category or are securities of issuers
that have received such ratings with respect to other short-term debt
securities or are comparable unrated securities and (2) the Fund does not make
more than one such investment at any one time. Determinations of comparable
quality for purchases of unrated securities are made by GEIM in accordance
with procedures established by the GE Funds' Board of Trustees. The Fund
invests only in instruments that have (or, pursuant to regulations adopted by
the SEC, are deemed to have) remaining maturities of 13 months or less at the
date of purchase (except securities subject to repurchase agreements),
determined in accordance with a rule promulgated by the SEC. The Fund will
maintain a dollar-weighted average portfolio maturity of 90 days or less.
The assets of the Fund are valued on the basis of amortized cost.
Cash Management Policies
In addition to investing as described above, during normal market conditions,
each of the Underlying GE Funds (other than the Money Market Fund which
invests primarily in money market instruments as described above) may invest a
portion of its total assets in cash and/or money market instruments of the
types described in the Appendix to this Prospectus for cash management
purposes, pending investment in accordance with the Underlying GE Fund's
investment objective and policies and to meet operating expenses. Under normal
market conditions, each of the Income Fund and the Government Fund may hold a
substantial portion of its assets in money market instruments, including in
the case of the Government Fund short-term instruments with remaining
maturities of one year or less, if such investment is deemed by GEIM to be
consistent with the Underlying GE Fund's investment objective. During periods
in which GEIM believes that economic, political, currency or market conditions
domestically or abroad warrant, GEIM may assume, on behalf of an Underlying GE
Fund, a temporary defensive posture and (i) without limitation hold cash
and/or invest in money market instruments of the types described in the
Appendix to this Prospectus or (ii) restrict the securities markets in which
the
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Underlying GE Fund's assets will be invested by investing those assets in
securities markets deemed by GEIM to be conservative in light of the
Underlying GE Fund's investment objective and policies and to meet operating
expenses. To the extent that it holds cash or invests in money market
instruments, an Underlying GE Fund may not achieve its stated investment
objective.
Additional Investments of the Underlying GE Funds
The Underlying GE Funds, in addition to investing as described above, may hold
one or more of the following types of instruments: repurchase agreements,
reverse repurchase agreements, non-publicly traded securities, illiquid
securities, securities that are not registered under the Securities Act of
1933, as amended (the "1933 Act"), but that can be sold to "qualified
institutional buyers" in accordance with Rule 144A under the 1933 Act (each, a
"Rule 144A Security" and collectively, "Rule 144A Securities"), securities of
supranational agencies and securities of other investment funds. In addition,
the Underlying GE Funds may engage in the following types of investment
techniques and strategies: purchasing put and call options on securities,
writing put and call options on securities, purchasing put and call options on
securities indexes, writing put and call options on securities indexes,
entering into interest rate, financial and stock or bond index futures
contracts or related options that are traded on a U.S. or foreign exchange or
board of trade or in the over-the-counter market, engaging in forward currency
transactions, purchasing and writing put and call options on foreign
currencies, entering into securities transactions on a when-issued or
delayed-delivery basis, lending portfolio securities, entering into mortgage
dollar rolls and selling securities short against the box.
These other instruments, investment techniques and strategies have risks and
special considerations associated with them that are described below under
"Risk Factors and Special Considerations of the Underlying GE Funds." For
additional information regarding the permitted investments, techniques and
strategies of the Underlying GE Funds, see "Further Information: Additional
Investments and Certain Investment Techniques and Strategies Used by the
Underlying GE Funds" in the Appendix to this Prospectus, the Trust's SAI and
the prospectus and statement of additional information for GE Funds.
Risk Factors and Special Considerations of the Underlying GE Funds
General. From time to time, the Underlying GE Funds may experience relatively
large purchases or redemptions due to asset allocation decisions made by GEIM
for its clients, including the Trust. These transactions may have a material
effect on the Underlying GE Funds, since Underlying GE Funds that experience
redemptions as a result of reallocations may have to sell portfolio securities
and because Underlying GE Funds that receive additional cash will have to
invest it. While it is impossible to predict the overall impact of these
transactions over time, there could be adverse effects on the Underlying GE
Funds to the extent that they may be required to sell securities at times when
they would not otherwise do so or receive cash that cannot be invested in an
expeditious manner. There may be tax consequences associated with purchases
and sales of securities, and such sales may also increase transaction costs.
GEIM is committed to minimizing the impact of these transactions on the
Underlying GE Funds to the extent it is consistent with pursuing the Funds'
investment objectives and will monitor the impact of the Funds' asset
allocation decisions on the Underlying GE Funds. GEIM will nevertheless face
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conflicts in fulfilling its responsibilities because of the possible
differences between interests of the Funds and the interests of the Underlying
GE Funds.
Debt Instruments. A debt instrument held by an Underlying GE Fund will be
affected by general changes in interest rates that will in turn result in
increases or decreases in the market value of those obligations. The market
value of debt instruments in an Underlying GE Fund's portfolio can be expected
to vary inversely to changes in prevailing interest rates. In periods of
declining interest rates, the yield of an Underlying GE Fund holding a
significant amount of debt instruments will tend to be somewhat higher than
prevailing market rates, and in periods of rising interest rates, the
Underlying GE Fund's yield will tend to be somewhat lower. In addition, when
interest rates are falling, money received by such an Underlying GE Fund from
the continuous sale of its shares will likely be invested in portfolio
instruments producing lower yields than the balance of its portfolio, thereby
reducing the Fund's current yield. In periods of rising interest rates, the
opposite result can be expected to occur.
Certain Investment Grade Obligations. Although obligations rated BBB by S&P or
Baa by Moody's are considered investment grade, they may be viewed as being
subject to greater risks than other investment grade obligations. Obligations
rated BBB by S&P are regarded as having only an adequate capacity to pay
principal and interest and those rated Baa by Moody's are considered
medium-grade obligations that lack outstanding investment characteristics and
have speculative characteristics as well. A description of S&P and Moody's
ratings relevant to Underlying GE Funds' investments is included as an
Appendix to the Trust's SAI.
Low-rated Securities. Certain Underlying GE Funds are authorized to invest in
securities rated lower than investment grade (sometimes referred to as "junk
bonds"). Low-rated and comparable unrated securities (collectively referred to
as "low-rated" securities) likely have quality and protective characteristics
that, in the judgment of a rating organization, are outweighed by large
uncertainties or major risk exposures to adverse conditions, and are
predominantly speculative with respect to the issuer's capacity to pay
interest and repay principal in accordance with the terms of the obligation.
Securities in the lowest rating categories may be in default or may present
substantial risks of default.
The market values of certain low-rated securities tend to be more sensitive to
individual corporate developments and changes in economic conditions than
higher-rated securities. In addition, low-rated securities generally present a
higher degree of credit risk. Issuers of low-rated securities are often highly
leveraged and may not have more traditional methods of financing available to
them, so that their ability to service their debt obligations during an
economic downturn or during sustained periods of rising interest rates may be
impaired. The risk of loss due to default by these issuers is significantly
greater because low-rated securities generally are unsecured and frequently
are subordinated to the prior payment of senior indebtedness. An Underlying GE
Fund may incur additional expenses to the extent that it is required to seek
recovery upon a default in the payment of principal or interest on its
portfolio holdings. The existence of limited markets for low-rated securities
may diminish GEIM's ability to obtain accurate market quotations for purposes
of valuing the securities held by an Underlying GE Fund and calculating the
Fund's net asset value.
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Non-publicly Traded and Illiquid Securities. Non-publicly traded securities
may be less liquid than publicly traded securities. Although these securities
may be resold in privately negotiated transactions, the prices realized from
these sales could be less than those originally paid by an Underlying GE Fund.
In addition, companies whose securities are not publicly traded are not
subject to the disclosure and other investor protection requirements that may
be applicable if their securities were publicly traded. An Underlying GE
Fund's investments in illiquid securities are subject to the risk that should
the Fund desire to sell any of these securities when a ready buyer is not
available at a price that GEIM deems representative of their value, the value
of the Fund's net assets could be adversely affected.
Repurchase and Reverse Repurchase Agreements. A Fund or an Underlying GE Fund
entering into a repurchase agreement will bear a risk of loss in the event
that the other party to the transaction defaults on its obligations and the
Fund or the Underlying GE Fund is delayed or prevented from exercising its
rights to dispose of the underlying securities. The Fund or the Underlying GE
Fund will be, in particular, subject to the risk of a possible decline in the
value of the underlying securities during the period in which a Fund or an
underlying GE Fund seeks to assert its right to them, the risk of incurring
expenses associated with asserting those rights and the risk of losing all or
a part of the income from the agreement.
A reverse repurchase agreement involves the risk that the market value of the
securities retained by an Underlying GE Fund may decline below the price of
the securities the Fund has sold but is obligated to repurchase under the
agreement. In the event the buyer of the securities under a reverse repurchase
agreement files for bankruptcy or becomes insolvent, an Underlying GE Fund's
use of the proceeds of the agreement may be restricted pending a determination
by the party, or its trustee or receiver, whether to enforce the Underlying GE
Fund's obligation to repurchase the securities.
Warrants. Because a warrant, which is a security permitting, but not
obligating, its holder to subscribe for another security, does not carry with
it the right to dividends or voting rights with respect to the securities that
the warrant holder is entitled to purchase, and because a warrant does not
represent any rights to the assets of the issuer, a warrant 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 security and a warrant ceases to have value if it is not exercised
prior to its expiration date. The investment by an Underlying GE Fund in
warrants valued at the lower of cost or market, may not exceed 5% of the value
of the Underlying GE Fund's net assets. Warrants acquired by an Underlying GE
Fund in units or attached to securities may be deemed to be without value.
Smaller Companies. Smaller companies in which the Premier Fund and Mid-Cap
Fund may invest may involve greater risks than large, established issuers.
Such smaller companies may have limited product lines, markets or financial
resources and their securities may trade less frequently and in more limited
volume than the securities of larger or more established companies. As a
result, the prices of smaller companies may fluctuate to a greater degree than
the prices of securities of other issuers.
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Investment in Foreign Securities. Investing in securities issued by foreign
companies and governments, including securities issued in the form of
depositary receipts, involves considerations and potential risks not typically
associated with investing in obligations issued by the U.S. Government and
U.S. corporations. Less information may be available about foreign companies
than about U.S. companies, and foreign companies generally are not subject to
uniform accounting, auditing and financial reporting standards or to other
regulatory practices and requirements comparable to those applicable to U.S.
companies. The values of foreign investments are affected by changes in
currency rates or exchange control regulations, restrictions or prohibitions
on the repatriation of foreign currencies, application of foreign tax laws,
including withholding taxes, changes in governmental administration or
economic or monetary policy (in the United States or abroad) or changed
circumstances in dealings between nations. Costs are also incurred in
connection with conversions between various currencies. In addition, foreign
brokerage commissions are generally higher than those charged in the United
States and foreign securities markets may be less liquid, more volatile and
less subject to governmental supervision than in the United States.
Investments in foreign countries could be affected by other factors not
present in the United States, including expropriation, confiscatory taxation,
lack of uniform accounting and auditing standards, limitations on the use or
removal of funds or other assets (including the withholding of dividends), and
potential difficulties in enforcing contractual obligations, and could be
subject to extended clearance and settlement periods.
Currency Exchange Rates. An Underlying GE Fund's share value may change
significantly when the currencies, other than the U.S. dollar, in which the
Fund's portfolio investments are denominated, strengthen or weaken against the
U.S. dollar. Currency exchange rates generally are determined by the forces of
supply and demand in the foreign exchange markets and the relative merits of
investments in different countries as seen from an international perspective.
Currency exchange rates can also be affected unpredictably by intervention by
U.S. or foreign governments or central banks or by currency controls or
political developments in the United States or abroad.
Investing in Developing Countries. Investing in securities issued by companies
located in developing countries involves not only the risks described above
with respect to investing in foreign securities, but also other risks,
including exposure to economic structures that are generally less diverse and
mature than, and to political systems that can be expected to have less
stability than, those of developed countries. Other characteristics of
developing countries that may affect investment in their markets include
certain national policies that may restrict investment by foreigners in
issuers or industries deemed sensitive to relevant national interests and the
absence of developed legal structures governing private and foreign
investments and private property. The typically small size of the markets for
securities issued by companies located in developing countries and the
possibility of a low or nonexistent volume of trading in those securities may
also result in a lack of liquidity and in price volatility of those
securities.
Covered Option Writing. Upon the exercise of a put option written by an
Underlying GE Fund, the Underlying GE Fund may suffer a loss equal to the
difference between the price at which the Underlying GE Fund is required to
purchase the underlying security and its market value at the time of the
option exercise, less the premium received for writing the option. Upon the
exercise of a call option written by an Underlying GE Fund, the Underlying GE
Fund may suffer a loss
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equal to the excess of the security's market value at the time of the option's
exercise over the Underlying GE Fund's acquisition cost of the security, less
the premium received for writing the option. In addition, no assurance can be
given that an Underlying GE Fund will be able to effect closing purchase
transactions at a desired time. The ability of an Underlying GE Fund to engage
in closing transactions with respect to options depends on the existence of a
liquid secondary market. Although an Underlying GE Fund will generally
purchase or write securities options only if a liquid secondary market appears
to exist for the option purchased or sold, no such secondary market may exist
or the market may cease to exist.
An Underlying GE Fund will engage in hedging transactions only when deemed
advisable by GEIM. Successful use by an Underlying GE Fund of options will
depend on GEIM's ability to predict correctly movements in the direction of
the securities underlying the option used as a hedge. Losses incurred in
hedging transactions and the costs of these transactions will affect an
Underlying GE Fund's performance.
Securities Index Options. Securities index options are subject to position and
exercise limits and other regulations imposed by the exchange on which they
are traded. The ability of an Underlying GE Fund to engage in closing purchase
transactions with respect to securities index options depends on the existence
of a liquid secondary market. Although an Underlying GE Fund will generally
purchase or write securities index options only if a liquid secondary market
for the options purchased or sold appears to exist, no such secondary market
may exist, or the market may cease to exist at some future date, for some
options. No assurance can be given that a closing purchase transaction can be
effected when GEIM desires that an Underlying GE Fund engage in such a
transaction.
Futures and Options on Futures. The use of futures contracts and options on
futures contracts as a hedging device involves several risks. No assurance can
be given that a correlation will exist between price movements in the
underlying securities or index and price movements in the securities that are
the subject of the hedge. Positions in futures contracts and options on
futures contracts may be closed out only on the exchange or board of trade on
which they were entered, and no assurance can be given that an active market
will exist for a particular contract or option at any particular time. Losses
incurred in hedging transactions and the costs of these transactions will
affect an Underlying GE Fund's performance.
Forward Currency Transactions. In entering into forward currency contracts, an
Underlying GE Fund will be subject to a number of risks and special
considerations. The market for forward currency contracts, for example, may be
limited with respect to certain currencies. The existence of a limited market
may in turn restrict the Underlying GE Fund's ability to hedge against the
risk of devaluation of currencies in which the Underlying GE Fund holds a
substantial quantity of securities. The successful use of forward currency
contracts as a hedging technique draws upon GEIM's special skills and
experience with respect to those instruments and will usually depend upon
GEIM's ability to forecast interest rate and currency exchange rate movements
correctly. Should interest or exchange rates move in an unexpected manner, an
Underlying GE Fund may not achieve the anticipated benefits of forward
currency contracts or may realize losses and thus be in a less advantageous
position than if those strategies had not been used. Many forward currency
contracts are subject to no daily price fluctuation limits so that adverse
market
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movements could continue with respect to those contracts to an unlimited
extent over a period of time. In addition, the correlation between movements
in the prices of those contracts and movements in the prices of the currencies
hedged or used for cover will not be perfect.
GEIM's ability to dispose of an Underlying GE Fund's positions in forward
currency contracts depends on the availability of active markets in those
instruments, and GEIM cannot now predict the amount of trading interest that
may exist in the future in forward currency contracts. Forward currency
contracts may be closed out only by the parties entering into an offsetting
contract. As a result, no assurance can be given that an Underlying GE Fund
will be able to utilize these contracts effectively for the intended purposes.
Options on Foreign Currencies. Like the writing of other kinds of options, the
writing of an option on a foreign currency constitutes only a partial hedge,
up to the amount of the premium received; an Underlying GE Fund could also be
required, with respect to any option it has written, to purchase or sell
foreign currencies at disadvantageous exchange rates, thereby incurring
losses. The purchase of an option on a foreign currency may constitute an
effective hedge against fluctuation in exchange rates, although in the event
of rate movements adverse to an Underlying GE Fund's position, the Underlying
GE Fund could forfeit the entire amount of the premium plus related
transaction costs.
Instruments and Strategies Involving Special Risks. Certain instruments in
which the Underlying GE Funds can invest and certain investment strategies
that the Funds may employ could expose the Funds to various risks and special
considerations. The instruments presenting risks to an Underlying GE Fund that
holds the instruments are: Rule 144A Securities, depositary receipts, debt
obligations of supranational agencies, securities of other investment funds,
floating and variable rate instruments, zero coupon obligations, mortgage
related securities, government stripped mortgage related securities, and
asset-backed and receivable-backed securities. Among the risks that some but
not all of these instruments involve are lack of liquid secondary markets and
the risk of prepayment of principal. The investment strategies involving
special risks to some or all of the Underlying GE Funds are: engaging in
when-issued or delayed-delivery securities transactions, lending portfolio
securities and selling securities short against the box. Among the risks that
some but not all of these strategies involve are increased exposure to
fluctuations in market value of the securities and certain credit risks. See
the Appendix to this Prospectus for a more complete description of these
instruments and strategies.
MANAGEMENT OF THE TRUST
Board of Trustees
Overall responsibility for management and supervision of the Funds rests with
the Trust's Board of Trustees. The Trustees review and approve the Asset
Allocation Ranges determined by GEIM and the Investment Consultant, which
designate the minimum and maximum percentages for investment among the
Underlying GE Funds and which define Target investment percentages applicable
to each Underlying GE Fund. In addition, the Trustees approve all significant
agreements between the Trust and the persons and companies that furnish
services to the Funds,
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including agreements with the Funds' investment adviser and administrator,
distributor, custodian and transfer agent. The day-to-day operations of the
Funds have been delegated to GEIM.
A majority of the Trustees are non-interested persons of the Trust as defined
in Section 2(a)(19) of the 1940 Act. However, the Trustees and officers of the
Trust also serve in similar positions with the GE Funds. Thus, if the
interests of a Fund and the Underlying GE Funds were ever to become divergent,
it is possible that a conflict of interest could arise and affect how the
Trustees and officers of the Trust fulfill their fiduciary duties to that Fund
and the Underlying GE Funds. The Trustees of the Trust believe they have
structured each Fund to avoid these concerns. However, conceivably a situation
could occur where proper action for the Trust or a Fund separately could be
adverse to the interests of an Underlying GE Fund, or the reverse could occur.
If such a possibility arises, the Trustees and officers of the Trust, GE Funds
and GEIM will carefully analyze the situation and take all steps they believe
reasonable to minimize and, where possible, eliminate the potential conflict.
Investment Adviser and Administrator
GEIM, located at 3003 Summer Street, P.O. Box 7900, Stamford, Connecticut
06904, serves as the investment adviser and administrator of each Fund. GEIM,
which was formed under the laws of Delaware in 1988, is a wholly-owned
subsidiary of GE and is a registered investment adviser under the Investment
Advisers Act of 1940, as amended. In addition to its administrative
responsibilities, GEIM, in conjunction with the Investment Consultant and
subject to the supervision of the Trust's Board of Trustees, determines the
Asset Allocation Ranges and Target investment percentages applicable to each
Underlying GE Fund. GEIM then periodically allocates and reallocates according
to market conditions and outlook each Fund's assets to the Underlying GE
Funds' Targets within the Asset Allocation Ranges approved by the Board of
Trustees from time to time.
In addition to serving as investment adviser to the GE Funds since their
inception in 1993, GEIM has served as the investment adviser of the investment
portfolios of GE Investments Funds, Inc., which are offered only to insurance
company separate accounts that fund certain variable contracts, since May
1997, and the U.S. Government Money Market Fund and U.S. Treasury Money Market
Fund of Financial Investors Trust since March 1997. GEIM has also served as
the investment adviser to the GE Institutional Funds, which are offered to
institutional investors, since their inception in November 1997. GEIM has
served as sub-investment adviser to PaineWebber Global Equity Fund of
PaineWebber Investment Trust since its inception in 1991, the Global Growth
Portfolio of PaineWebber Series Trust and the Global Small Cap Fund Inc. since
March 1995, the International Equity and the U.S. Equity Portfolios of WRL
Series Fund, Inc. since January 1997 and the International Equity Portfolio of
IDEX Series Fund since February 1997. GEIM's principal officers and directors
serve in similar capacities with respect to GEIC, which like GEIM is a
wholly-owned subsidiary of GE, and which currently acts as the investment
adviser of Elfun Global Fund, Elfun Trusts, Elfun Income Fund, Elfun Money
Market Fund, Elfun Tax-Exempt Income Fund and Elfun Diversified Fund
(collectively, the "Elfun Funds"). The first Elfun Fund, Elfun Trusts, was
established in 1935. Investment in the Elfun Funds is generally limited to
regular and senior members of the Elfun Society, whose regular members are
selected from active employees of GE and/or its majority-owned subsidiaries,
and whose senior Society
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members are former members who have retired from those companies. In addition,
under the General Electric Savings and Security Program, GEIC serves as
investment adviser to the GE S&S Program Mutual Fund and GE S&S Long Term
Interest Fund. GEIC also serves as the investment adviser to the General
Electric Pension Trust and other GE benefit plans. Through GEIM and GEIC and
their predecessors, GE has over 70 years of investment management experience.
GEIM and GEIC collectively provide investment management services to various
institutional accounts with total assets, as of September 30, 1998, in excess
of $71.4 billion, of which more than $14.5 billion is invested in mutual
funds.
As a Fund's investment adviser, GEIM, subject to the supervision and direction
of the Trust's Board of Trustees, will determine how each Fund's assets will
be invested in the Underlying GE Funds and in money market instruments
pursuant to the investment objective and policies of each Fund and, in
conjunction with the Investment Consultant, will make recommendations to the
Board of Trustees concerning changes to (a) the Underlying GE Funds in which
the Funds may invest and (b) the Asset Allocation Ranges and Targets. The
Trustees of the Trust will periodically monitor the allocations made and the
basis upon which such allocations were made or maintained and will be
responsible for supervising compliance with each Fund's investment objective
and policies. As a Fund's administrator, GEIM furnishes the Trust with
statistical and research data, clerical help and accounting, data processing,
bookkeeping, internal auditing services and certain other services required by
the Trust; prepares reports to the shareholders of the Fund; and assists in
the preparation of tax returns and reports to and filings with the SEC and
state securities law authorities. GEIM also pays the salaries of all personnel
employed by both it and the Trust.
Under the agreements governing the advisory and administration services to be
furnished to the Funds, GEIM has agreed to bear expenses of the LifeStyle
Funds other than brokerage fees and commissions, interest, advisory and
administration fees, fees and expenses of the Trust's Board of Trustees who
are not affiliated with GEIM or its affiliates (including counsel fees), taxes
payable by the Trust, transfer agency costs (some of which may be borne by the
Underlying GE Funds as sub-transfer agency expenses of those Funds) and any
extraordinary expenses. For services rendered and expenses borne, each Fund
pays GEIM fees for advisory and administration services provided by GEIM to
the Fund that are accrued daily and paid monthly at the annual rate of .20% of
the value of the Fund's average daily net assets. Each Fund, as a shareholder
in the Underlying GE Funds, will indirectly bear its proportionate share of
any investment advisory and administration fees and other expenses paid by the
Underlying GE Funds. The effective advisory and administration fee of each of
the Underlying GE Funds in which the Funds may invest is paid at the following
annual rates in each case of the value of the Underlying GE Fund's average
daily net assets: the Premier Fund - .60%, the U.S. Equity Fund - .40%, the
Mid-Cap Fund - .60%, the Value Fund - .55%, the International Fund - .80%, the
Income Fund - .35%, the Government Fund - .30% and the Money Market Fund -
.25%. When combined with the fees payable by each Underlying GE Fund in which
a Fund invests, the advisory and administration fee for each Fund may be
higher than that paid by most mutual funds.
The agreements governing the advisory and administration services furnished to
the Trust by GEIM provide that, if GEIM ceases to act as the investment
adviser to the Trust, at GEIM's
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request, the Trust's license to use the initials "GE" will terminate and the
Trust will change the name of the Trust and the Funds to a name not including
the initials "GE."
Investment Consultant
The Trust and GEIM have entered into an Investment Consulting Agreement with
DiMeo Schneider & Associates, L.L.C. ("DS&A"), an Illinois limited liability
company and investment advisory firm which will initially act as the
Investment Consultant to the Trust's Board of Trustees. The Investment
Consultant will review and analyze the Underlying GE Funds and asset
allocation of the Funds among the Underlying GE Funds taking into account each
Fund's stated investment objective. The Investment Consultant, in conjunction
with GEIM, will determine, subject to the supervision of the Board, changes to
(1) the Underlying GE Funds in which the Funds may invest and (2) the Asset
Allocation Ranges and Targets. Out of its advisory and administration fee,
GEIM will pay the Investment Consultant fees for investment consulting
services provided by the Investment Consultant to the Board of Trustees and
GEIM. These fees paid to the Investment Consultant are paid by GEIM directly
and no additional cost is borne by the Funds. If there is no Investment
Consultant, GEIM will perform these services and incur related expenses
directly.
DS&A, founded on May 1, 1995, is a mid-sized independent consulting firm which
offers the Funds the capabilities of much larger consulting firms through
several strategic alliances with providers of research, technology and other
resources. The seven founding members of DS&A previously worked as a team at
Kidder, Peabody & Co., Inc.
in Chicago.
Portfolio Management
Eugene K. Bolton is the Portfolio Manager of the Funds. Mr. Bolton is
responsible for the overall management of the domestic equity investment
process at GEIM and GEIC (GEIM, GEIC and their predecessors are collectively
referred to as "GE Investments"). In that capacity, Mr. Bolton also leads a
team of portfolio managers for the U.S. Equity Fund. Mr. Bolton has more than
13 years of investment experience and has held positions with GE Investments
since 1984. He is currently a Director and Executive Vice President of GE
Investments.
GEIM investment personnel may engage in securities transactions for their own
accounts pursuant to a code of ethics that establishes procedures for personal
investing and restricts certain transactions.
RETIREMENT PLANS
Shares of the Funds offered by this Prospectus are currently available only to
defined benefit or contribution plans (including plans meeting the
requirements of Section 401(k) of the Code ("401(k) Plans")), retirement plans
established under Section 403(b) of the Code, eligible deferred compensation
plans meeting the requirements of Section 457(b) of the Code and tax-exempt
organizations enumerated in Section 501(c)(3) of the Code, that do not seek
additional services provided or paid by GEIM or its affiliates in connection
with their investment in the Funds ("Retirement Plans"). Retirement Plan
participants may invest in shares of a Fund through their
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Plan by directing the Plan fiduciary to purchase shares for their account.
Participants should contact their Plan sponsor for information concerning the
appropriate procedure for investing in the Fund. See "PURCHASE OF SHARES"
below.
GE Funds will offer Class D shares of the Underlying GE Funds, other than the
Money Market Fund which offers only one class of shares, to the Funds
described in this Prospectus. No sales charge will be imposed on Class D
shares purchased by the Funds and Class D shares will not be subject to
service fees or distribution fees. Class D shares of the Underlying GE Funds
are not sold to the general public; but rather are offered exclusively to:
banks, insurance companies and industrial corporations (as defined in GE
Funds' prospectus) each purchasing shares for their own account; financial
institutions investing in their fiduciary capacity on behalf of clients or
customers; tax-exempt investors, including defined benefit or contribution
plans (including 401(k) Plans), plans established under Section 403(b) of the
Code, trusts established under Section 501(c)(9) of the Code to fund the
payment of certain welfare benefits, charitable, religious and educational
institutions, and foundations and endowments of those investors; investment
companies not managed or sponsored by GEIM or any affiliate of GEIM and
Financial Intermediaries (as defined in the GE Funds prospectus) that have an
agreement with GE Funds, GEIM or the Distributor which does not require GE
Funds, GEIM or the Distributor to compensate the Financial Intermediary for
its services for initial purchases by their clients or customers equal to or
exceeding $250,000 per participant GE Fund (the "Minimum Purchase
Requirement") and any subsequent purchases by such clients or customers who
have already met the Minimum Purchase Requirement. Under no circumstances are
regular IRAs, simplified employee pension IRAs ("SEP-IRAs"), salary reduction
SEP-IRAs and Keogh plans eligible to purchase Class D shares of the Underlying
GE Funds directly.
PURCHASE OF SHARES
General
Shares of the Funds are currently offered only to Retirement Plans. See
"RETIREMENT PLANS" above. The shares are sold on a continuous basis by the
Distributor and may be purchased without any sales charge at net asset value.
Purchase orders are submitted to the Funds based on plan fiduciary
instructions properly furnished to the Funds and, in the case of defined
contribution plans (e.g. 401(k) Plans), based on the periodic contribution and
exchange of assets to plan participant accounts in accordance with elections
properly made by participants under their particular plans. A purchase order
will be processed at the net asset value next determined with respect to the
shares of the Fund being purchased after your purchase order has been received
and accepted by State Street Bank and Trust Company ("State Street"), the
Trust's custodian and transfer agent. For a description of the manner of
calculating a Fund's net asset value, see "Net Asset Value."
Purchase orders for shares of a Fund will be accepted by the Trust only on a
day on which the Fund's net asset value is calculated. See "Net Asset Value"
below. The Trust may in its discretion reject any order for the purchase of
shares of a Fund. For the convenience of shareholders and in the interest of
economy, the Trust will not issue physical certificates representing shares in
any Fund.
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REDEMPTION OF SHARES
Redemptions in General
Shares of each Fund may be redeemed without charge on any day on which the
Fund's net asset value is calculated as described below under "Net Asset
Value." Redemption requests received in proper form prior to the close of
regular trading on the NYSE will be effected at the net asset value per share
determined on that day. Redemption requests received after the close of
regular trading on the NYSE will be effected at the net asset value as next
determined. The Trust normally transmits redemption proceeds within seven days
after receipt of a redemption request.
Distributions in Kind
If the Trust's Board of Trustees determines that it would be detrimental to
the best interests of a Fund's shareholders to make a redemption payment
wholly in cash, the Trust may pay, in accordance with rules adopted by the
SEC, any portion of a redemption in excess of the lesser of $250,000 or 1% of
the Fund's net assets by a distribution in kind of portfolio securities in
lieu of cash. Redemptions failing to meet this threshold must be made in cash.
Portfolio securities issued in a distribution in kind will be deemed by GEIM
to be readily marketable. Shareholders receiving distributions in kind of
portfolio securities may incur brokerage commissions when subsequently
disposing of those securities.
EXCHANGE PRIVILEGE
Under an exchange privilege offered by the Trust, shares of a Fund offered by
this Prospectus may be exchanged for shares of any other Fund offered by this
Prospectus at their respective net asset values. The privilege is available to
investors residing in any state in which shares of the applicable Fund or GE
Fund being acquired may legally be sold. An exchange of shares is treated for
Federal income tax purposes as a redemption (that is, a sale) of shares given
in exchange by the investor, and an exchanging investor may, therefore,
realize a taxable gain or loss in connection with the exchange. The Trust may,
upon 60 days prior written notice, materially modify or terminate the exchange
privilege with respect to the Fund or impose a charge of up to $5 for
exchanges of shares of the Fund.
Investors exercising the exchange privilege should review the prospectus
disclosure for the Fund they are considering investing in carefully prior to
making an exchange. The Trust reserves the right to reject any exchange
request.
NET ASSET VALUE
Each Fund's net asset value per share is calculated on each day, Monday
through Friday, except on days on which the NYSE is closed. The NYSE is
currently scheduled to be closed on New Year's Day, Dr. Martin Luther King,
Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor
Day, Thanksgiving and Christmas, and on the preceding Friday or subsequent
Monday when one of these holidays falls on a Saturday or Sunday, respectively.
Each Fund's net asset value per share is determined as of the close of regular
trading on the NYSE (currently 4:00 p.m., New York time). Net asset value per
share of a Fund is computed by
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dividing the value of the Fund's net assets attributable to that Fund by the
total number of shares outstanding. The assets of each Fund consist primarily
of the Underlying GE Funds, which are valued at their respective net asset
values at the time of computation. Redemptions in kind will be valued on the
effective date of the exchange at the net asset value of the Underlying GE
Funds. In general, the Underlying GE Funds value their portfolio securities at
market value or, in the absence of market value, at fair value as determined
by or under the direction of the GE Funds' Board of Trustees.
Any short-term investments of the Funds that mature in 60 days or less, will
be valued on the basis of amortized cost (which involves valuing an investment
at its cost and, thereafter, assuming a constant amortization to maturity of
any discount or premium, regardless of the effect of fluctuating interest
rates on the market value of the investment) when the Trust's Board of
Trustees determines that amortized cost is fair value.
DIVIDENDS, DISTRIBUTIONS AND TAXES
Dividends and Distributions
Net investment income (that is, income other than long- and short-term capital
gains) and net realized long- and short-term capital gains will be determined
separately for each Fund. Dividends of a Fund which are derived from net
investment income and distributions of net realized long- and short-term
capital gains paid by a Fund to a shareholder will be automatically reinvested
in additional shares of the Fund and deposited in the shareholder's account,
unless the shareholder instructs the Trust, in writing, to pay all dividends
and distributions in cash. Shareholders may contact the Trust for details
concerning this election. However, if it is determined that the U.S. Postal
Service cannot properly deliver Fund mailings to a shareholder, the Fund may
terminate the shareholder's election to receive dividends and other
distributions in cash. Thereafter, the shareholder's subsequent dividends and
other distributions will be automatically reinvested in additional shares of
the Fund until the shareholder notifies the Fund in writing of his or her
correct address and requests in writing that the election to receive dividends
and other distributions in cash be reinstated. No interest will accrue on
amounts represented by uncashed dividend, distribution or redemption checks.
Dividends attributable to net investment income are declared and paid
annually. Written confirmations relating to the automatic reinvestment of
dividends will be sent to shareholders within five days following the end of
each fiscal year. Distributions of any net realized long-term and short-term
capital gains earned by a Fund will be made annually. These dividends and
distributions are determined in accordance with income tax regulations which
may differ from generally accepted accounting principles. All expenses of the
Funds are accrued daily and deducted from net asset value before declaration
of dividends to shareholders.
Each Fund is subject to a 4% non-deductible excise tax measured with respect
to certain undistributed amounts of net investment income and capital gains.
If necessary to avoid the imposition of this tax, and if in the best interests
of the Fund's shareholders, the Trust will declare and pay dividends of the
Fund's net investment income and distributions of the Fund's net capital gains
more frequently than stated above.
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Taxes
Each Fund is treated as a separate entity for Federal income tax purposes. As
a result, the amounts of net investment income and net realized capital gains
subject to tax are determined separately for each Fund (rather than on a
Trust-wide basis).
The Trust intends that each Fund qualify each year as a regulated investment
company under the Code. Dividends paid from a Fund's net investment income and
distributions of a Fund's net realized short-term capital gains will be
treated as ordinary income taxable to shareholders (other than tax-exempt
retirement plans and other tax-exempt investors), and distributions of a
Fund's net realized long-term capital gains will be taxable to shareholders as
long-term capital gains, in each case regardless of how long shareholders have
held their shares of the Fund and whether the dividends or distributions are
received in cash or are reinvested in additional shares of the Fund. As a
general rule, a shareholder's gain or loss on a sale or redemption (including
a redemption in kind) of shares of a Fund will be a long-term capital gain or
loss if the shareholder has held the shares for more than one year and will be
a short-term capital gain or loss if the shareholder has held the shares for
one year or less. Further, any loss realized upon the sale or redemption of
any Fund shares within six months from the date of their purchase will be
treated as a long-term capital loss to the extent of any amounts treated as
distributions of long-term capital gain during such six-month period with
respect to such shares.
Dividends paid by the Funds will qualify for the dividends-received deduction
for corporations to the extent derived from dividends paid by Underlying GE
Funds that qualify for such deduction.
Net investment income or capital gains earned by the Underlying GE Funds
investing in foreign securities may be subject to foreign income taxes
withheld at the source. The United States has entered into tax treaties with
many foreign countries that entitle the Underlying GE Funds to a reduced rate
of tax or exemption from tax on this related income and gains. The effective
rate of foreign tax cannot be determined at this time since the amount of the
Underlying GE Funds' assets to be invested within various countries is not now
known. GE Funds expects that the Underlying GE Funds seek to operate so as to
qualify for treaty-reduced rates of tax when applicable.
If more than 50% in value of an Underlying GE Fund's assets at the close of
any taxable year consists of stocks or securities of foreign corporations,
that Underlying GE Fund may elect to treat certain foreign taxes paid by it as
paid by its shareholders. The shareholders would then be required to include
their proportionate portion of the electing fund's foreign income and related
foreign taxes in income even if the shareholder does not receive the amount
representing foreign taxes. Shareholders itemizing deductions could then
deduct the foreign taxes or, subject to certain limitations, claim a direct
dollar for dollar tax credit against their U.S. federal income tax liability
attributable to foreign income. In many cases, a foreign tax credit will be
more advantageous than a deduction for foreign taxes. Each Fund may invest in
the International Fund, which expects to be eligible to make the
above-described election. While each Fund will be able to deduct the foreign
taxes that it will be treated as receiving if the election is made by the
International Fund, the Fund will not itself be able to elect to treat its
foreign taxes as paid by its shareholders. Accordingly, the shareholders of
the Funds will not have an option of claiming a
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foreign tax credit for foreign taxes paid by the Underlying GE Funds, while
persons who invest directly in such Underlying GE Funds may have that option.
The Funds may be required to withhold for U.S. federal income tax purposes 31%
of all distributions payable to shareholders who fail to provide the Funds
with their correct taxpayer identification number or to make required
certifications, or who have been notified by the U.S. Internal Revenue Service
that they are subject to backup withholding.
Statements as to the tax status of each shareholder's dividends and
distributions are mailed annually. Shareholders will also receive, as
appropriate, various written notices after the close of their Fund's taxable
year regarding the tax status of certain dividends and distributions that were
paid (or that are treated as having been paid) by the Fund to its shareholders
during the preceding taxable year, including the amount of dividends that
represents interest derived from Government Securities. Shareholders should
consult with their own tax advisors with specific reference to their own tax
situations.
CUSTODIAN AND TRANSFER AGENT
State Street, located at 225 Franklin Street, Boston, Massachusetts 02101,
serves as the Trust's custodian and transfer agent, and is responsible for
receiving acceptance orders for the purchase of shares and processing
redemption requests.
DISTRIBUTOR
GE Investment Distributors, Inc., located at 777 Long Ridge Road, Building B,
Stamford, Connecticut, 06927, serves as distributor of the Funds' shares. The
Distributor, an indirect wholly-owned subsidiary of GE, also serves as
Distributor for the GE Funds, GE Institutional Funds, GE Investments Funds,
Inc. and the Elfun Funds. GEIM or its affiliates, at their own expense, may
allocate portions of their revenues or other resources to assist the
Distributor in distributing shares of the Funds, by providing additional
promotional incentives to dealers. In some instances, these incentives may be
limited to certain dealers who have sold or may sell significant numbers of
shares of the Funds. The Distributor routinely offers dealers in Fund shares
the opportunity to participate in contests for which prizes include tickets to
theater and sporting events, dining, travel to meetings and conferences held
in locations remote from their offices and other items.
THE FUNDS' PERFORMANCE
Certain information about the Funds' performance is set out below.
Yield
The Trust may, from time to time, advertise a 30-day "yield" for each Fund.
The yield of a Fund refers to the income generated by an investment in a Fund
over the 30-day period identified in the advertisement and is computed by
dividing the net investment income per share earned by a Fund during the
period by the net asset value per share for that Fund on the last day of the
period. This income is "annualized" by assuming that the amount of income is
generated each month over a
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one-year period and is compounded semi-annually. The annualized income is then
shown as a percentage of the Fund's net asset value.
Total Return
From time to time, the Trust may advertise an "average annual total return"
over various periods of time for each Fund. This total return figure shows an
average percentage change in value of an investment in the Fund from the
beginning date of the measuring period to the ending date of the period. The
figure reflects changes in the price of a Fund's shares and assumes that any
income, dividends and/or capital gains distributions made by the Fund during
the period are reinvested in shares of the same Fund. Figures will be given
for recent one-, five-and 10-year periods (if applicable), and may be given
for other periods as well (such as from commencement of a Fund's operations,
or on a year-by-year basis). When considering average annual total return
figures for periods longer than one year, investors should note that a Fund's
annual total return for any one year in the period might have been greater or
less than the average for the entire period.
The Trust may use "aggregate total return" figures for various periods,
representing the cumulative change in value of an investment in a Fund, for
the specific period (again reflecting changes in the Fund's share price and
assuming reinvestment of dividends and distributions). Aggregate total return
may be shown by means of schedules, charts or graphs, and may indicate
subtotals of the various components of total return (that is, the change in
value of initial investment, income dividends and capital gains
distributions). Reflecting compounding over a longer period of time, aggregate
total return data generally will be higher than average annual total return
data.
The Trust may, in addition to quoting a Fund's average annual and aggregate
total returns, advertise the actual annual and annualized total return
performance data for various periods of time. Actual annual and annualized
total returns may be shown by means of schedules, charts or graphs. Actual
annual or annualized total return data generally will be lower than average
annual total return data, which reflects compounding of return.
Yield and total return figures are based on historical earnings and are thus
not intended to indicate future performance. The SAI describes the method used
to determine a Fund's yield and total return.
Comparative Performance Information
In reports or other communications to shareholders of a Fund or in advertising
materials, the Trust may compare the Fund's performance with (1) the
performance of other mutual funds as listed in the rankings prepared by Lipper
Analytical Services, Inc. or similar independent services that monitor the
performance of mutual funds, (2) various unmanaged indexes, including the
Russell Index, S&P Index, and the Dow Jones Industrial Average or (3) other
appropriate indexes of investment securities or with data developed by GEIM
derived from those indexes. The performance information may also include
evaluations of a Fund published by nationally recognized ranking services and
by financial publications that are nationally recognized, such as Barron's,
Business Week, Forbes, Fortune, Institutional Investor, Kiplinger's Personal
Finance,
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Money, Morningstar Mutual Fund Values, The New York Times, The Wall Street
Journal and USA Today. These ranking services or publications may compare a
Fund's performance to, or rank it within, a universe of mutual funds with
investment objectives and policies similar, but not necessarily identical to,
the Fund's. Such comparisons or rankings are made on the basis of several
factors, including objectives and policies, management style and strategy, and
portfolio composition, and may change over time if any of those factors
change.
ADDITIONAL MATTERS
The Trust was formed as a business trust pursuant to a Declaration of Trust,
as amended from time to time (the "Declaration"), under the laws of The
Commonwealth of Massachusetts on June 21, 1996. The Declaration authorizes the
Trust's Board of Trustees to create separate series, and within each series
separate classes, of an unlimited number of shares of beneficial interest, par
value $.001 per share. As of the date of this Prospectus, the Trustees have
established six such series, each offering a single class of shares. The other
three series of the Trust are currently being offered by a separate
prospectus.
When issued, shares of a Fund will be fully paid and non-assessable. Shares
are freely transferable and have no preemptive, subscription or conversion
rights. Certain aspects of the shares may be changed, upon notice to Fund
shareholders, to satisfy certain tax regulatory requirements, if the change is
deemed necessary by the Trust's Board of Trustees.
When matters are submitted for shareholder vote, each shareholder of each Fund
will have one vote for each full share held and proportionate, fractional
votes for fractional shares held. In general, shares of all Funds vote as a
single class on all matters except (1) a matter affecting the interests of one
or more of the Funds, in which case only shares of the affected Funds would be
entitled to vote or (2) when the 1940 Act or a separate agreement applicable
to a Fund requires that shares of the Funds be voted by individual Fund.
Normally, no meetings of shareholders of the Funds will be held for the
purpose of electing Trustees of the Trust unless and until such time as less
than a majority of the Trustees holding office have been elected by
shareholders of the Trust, at which time the Trustees then in office will call
a shareholders' meeting for the election of Trustees. Shareholders of record
of no less than a majority of the outstanding shares of the Trust may remove a
Trustee for cause through a declaration in writing or by vote cast in person
or by proxy at a meeting called for that purpose. A meeting will be called for
the purpose of voting on the removal of a Trustee at the written request of
holders of 10% of the Trust's outstanding shares. Shareholders who satisfy
certain criteria will be assisted by the Trust in communicating with other
shareholders in seeking the holding of the meeting.
Each Fund will vote its Underlying GE Fund shares in proportion to the votes
of all other shareholders in each respective Underlying GE Fund.
The Trust will send to each shareholder of each Fund a semiannual report and
an audited annual report, each of which includes a list of the investment
securities held by each Fund. Only one report each will be mailed to a single
address at which more than one shareholder with the same last name had
indicated mail is to be delivered. Shareholders may request additional copies
of any
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report by calling the toll free numbers listed on the back cover page of the
Prospectus or by writing to the Trust at the address set forth on the front
cover page of the Prospectus.
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APPENDIX
FURTHER INFORMATION: ADDITIONAL INVESTMENTS AND CERTAIN INVESTMENT TECHNIQUES
AND STRATEGIES USED BY THE UNDERLYING GE FUNDS
The Underlying GE Funds may engage in a number of investment techniques and
strategies, including those described below. No Underlying GE Fund is under
any obligation to use any of the techniques and strategies at any given time
or under any particular economic condition. In addition, no assurance can be
given that the use of any practice will have its intended result or that the
use of any practice is, or will be, available to any Underlying GE Fund.
Money Market Instruments. Each Fund and each Underlying GE Fund, other than
the Money Market Fund, may invest only in the following types of money market
instruments: (i) securities issued or guaranteed by the U.S. Government or one
of its agencies or instrumentalities, (ii) debt obligations of banks, savings
and loan institutions, insurance companies and mortgage bankers, (iii)
commercial paper and notes, including those with variable and floating rates
of interest, (iv) debt obligations of foreign branches of U.S. banks, U.S.
branches of foreign banks and foreign branches of foreign banks, (v) debt
obligations issued or guaranteed by one or more foreign governments or any of
their political subdivisions, agencies or instrumentalities, including
obligations of supranational entities, (vi) debt securities issued by foreign
issuers and (vii) repurchase agreements. In addition to the foregoing money
market instruments, each Fund and each Underlying GE Fund, other than the U.S.
Equity Fund and the Money Market Fund, may invest in shares of money market
mutual funds, including, in the case of the Funds, the Money Market Fund. See
"Investment in Other Investment Funds" below.
Each Fund and each Underlying GE Fund, other than the Money Market Fund, may
also invest up to 25% of its assets in GEI Short-Term Investment Fund (the
"Investment Fund"), a fund created specifically to serve as a vehicle for the
collective investment of cash balances of the Funds and the Underlying GE
Funds (other than the Money Market Fund) and other accounts advised by GEIM
and GEIC. The Investment Fund invests exclusively in the money market
instruments described in (i) through (vii) above. The Investment Fund is
advised by GEIM. No advisory fee is charged by the Investment Fund, nor will
the Funds or the Underlying GE Funds incur any sales charge, redemption fee,
distribution fee or service fee in connection with their investments in the
Investment Fund.
Repurchase Agreements and Reserve Repurchase Agreements. Each Fund and each
Underlying GE Fund may engage in repurchase agreement transactions with
respect to instruments in which the Fund is authorized to invest. The Funds
and Underlying GE Funds may engage in repurchase agreement transactions with
certain member banks of the Federal Reserve System and with certain dealers
listed on the Federal Reserve Bank of New York's list of reporting dealers.
Under the terms of a typical repurchase agreement, which is deemed a loan for
purposes of the 1940 Act, a Fund or an Underlying GE Fund would acquire an
underlying obligation for a relatively short period (usually from one to seven
days) subject to an obligation of the seller to repurchase, and the Fund to
resell, the obligation at an agreed-upon price and time, thereby determining
the yield during the Fund's holding period. This arrangement results in a
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fixed rate of return that is not subject to market fluctuations during the
Fund's holding period. The value of the securities underlying a repurchase
agreement are monitored on an ongoing basis by GEIM to ensure that the value
is at least equal at all times to the total amount of the repurchase
obligation, including interest. GEIM also monitors, on an ongoing basis to
evaluate potential risks, the creditworthiness of those banks and dealers with
which the Funds or Underlying GE Funds enter into repurchase agreements.
The Money Market Fund and the Value Fund may engage in reverse repurchase
agreements, subject to their investment restrictions. A reverse repurchase
agreement, which is considered a borrowing by a Fund, involves a sale by the
Fund of securities that it holds concurrently with an agreement by the Fund to
repurchase the same securities at an agreed upon price and date. The Fund uses
the proceeds of reverse repurchase agreements to provide liquidity to meet
redemption requests and to make cash payments of dividends and distributions
when the sale of the Fund's securities is considered to be disadvantageous.
Cash or other liquid assets equal in value to a Fund's obligations with
respect to reverse repurchase agreements are segregated and maintained with GE
Funds' custodian or designated sub-custodian.
Non-publicly Traded and Illiquid Securities. Each Underlying GE Fund, other
than the Money Market Fund, may invest up to 10% of its assets in non-publicly
traded securities. Non-publicly traded securities are securities that are
subject to contractual or legal restrictions on transfer, excluding for
purposes of this restriction, Rule 144A Securities that have been determined
to be liquid by the GE Funds' Board of Trustees based upon the trading markets
for the securities. In addition, each Underlying GE Fund, other than the Money
Market Fund, may invest up to 15% of its assets in "illiquid securities"; the
Money Market Fund may not, under any circumstance, invest in illiquid
securities. Illiquid securities are securities that cannot be disposed of by
an Underlying GE Fund within seven days in the ordinary course of business at
approximately the amount at which the Fund has valued the securities. Illiquid
securities that are held by an Underlying GE Fund may take the form of options
traded over-the-counter, repurchase agreements maturing in more than seven
days, certain mortgage related securities and securities subject to
restrictions on resale that GEIM has determined are not liquid under
guidelines established by the GE Funds' Board of Trustees.
Structured and Indexed Securities. The Income Fund and the Government Fund may
also invest in structured and indexed securities, the value of which is linked
to currencies, interest rates, commodities, indexes or other financial
indicators ("reference instruments"). The interest rate or the principal
amount payable at maturity or redemption may be increased or decreased,
depending on changes in the value of the reference instrument. Structured and
indexed securities may be positively or negatively indexed, so that
appreciation of the reference instrument may produce an increase or a decrease
in interest rate or value at maturity of the security. In addition, the change
in the interest rate or value at maturity of the security may be some multiple
of the change in value of the reference instrument. Thus, in addition to the
credit risk of the security's issuer, the Income Fund and the Government Fund
will bear the market risk of the reference instrument.
Purchasing Put and Call Options on Securities. Each Underlying GE Fund, other
than the Money Market Fund, may purchase put and call options that are traded
on a U.S. or foreign
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securities exchange or in the over-the-counter market. An Underlying GE Fund
may utilize up to 10% of its assets to purchase put options on portfolio
securities and may do so at or about the same time that it purchases the
underlying security or at a later time. By buying a put, an Underlying GE Fund
will seek to limit its risk of loss from a decline in the market value of the
security until the put expires. Any appreciation in the value of the
underlying security, however, will be partially offset by the amount of the
premium paid for the put option and any related transaction costs. A Fund may
utilize up to 10% of its assets to purchase call options on portfolio
securities. Call options may be purchased by an Underlying GE Fund in order to
acquire the underlying securities for a price that avoids any additional cost
that would result from a substantial increase in the market value of a
security. An Underlying GE Fund may also purchase call options to increase its
return at a time when the call is expected to increase in value due to
anticipated appreciation of the underlying security. Prior to their
expirations, put and call options may be sold by an Underlying GE Fund in
closing sale transactions, which are sales by the Fund, prior to the exercise
of options that it has purchased, of options of the same series. Profit or
loss from the sale will depend on whether the amount received is more or less
than the premium paid for the option plus the related transaction costs. The
aggregate value of the securities underlying the calls or obligations
underlying the puts, determined as of the date the options are sold, shall not
exceed 25% of the net assets of an Underlying GE Fund. In addition, the
premiums paid by an Underlying GE Fund in purchasing options on securities,
options on securities indexes, options on foreign currencies and options on
futures contracts will not exceed 20% of the Fund's net assets.
Covered Option Writing. Each Underlying GE Fund, other than the Money Market
Fund, may write covered put and call options on securities. An Underlying GE
Fund will realize fees (referred to as "premiums") for granting the rights
evidenced by the options. A put option embodies the right of its purchaser to
compel the writer of the option to purchase from the option holder an
underlying security at a specified price at any time during the option period.
In contrast, a call option embodies the right of its purchaser to compel the
writer of the option to sell to the option holder an underlying security at a
specified price at any time during the option period.
The Underlying GE Funds with option-writing authority write only covered
options. A put or call option written by an Underlying GE Fund will be deemed
covered in any manner permitted under the 1940 Act or the rules and
regulations thereunder or any other method determined by the SEC to be
permissible. See "Strategies Available to Some But Not All Underlying GE Funds
- -- Covered Option Writing" in the SAI for specific situations where put and
call options will be deemed to be covered by an Underlying GE Fund.
An Underlying GE Fund may engage in a closing purchase transaction to realize
a profit, to prevent an underlying security from being called or put or, in
the case of a call option, to unfreeze an underlying security (thereby
permitting its sale or the writing of a new option on the security prior to
the outstanding option's expiration). To effect a closing purchase
transaction, an Underlying GE Fund would purchase, prior to the holder's
exercise of an option that the Fund has written, an option of the same series
as that on which the Fund desires to terminate its obligation. The obligation
of an Underlying GE Fund under an option that it has written would be
terminated by a closing purchase transaction, but the Fund would not be deemed
to own an option as the
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result of the transaction. To facilitate closing purchase transactions, the
Underlying GE Funds with option-writing authority will ordinarily write
options only if a secondary market for the options exists on a U.S. or foreign
securities exchange or in the over-the-counter market.
Option writing for an Underlying GE Fund may be limited by position and
exercise limits established by U.S. securities exchanges and the National
Association of Securities Dealers, Inc. for qualification as a regulated
investment company. In addition to writing covered put and call options to
generate current income, an Underlying GE Fund may enter into options
transactions as hedges to reduce investment risk, generally by making an
investment expected to move in the opposite direction of a portfolio position.
A hedge is designed to offset a loss on a portfolio position with a gain on
the hedge position; at the same time, however, a properly correlated hedge
will result in a gain on the portfolio position's being offset by a loss on
the hedge position.
Securities Index Options. In seeking to hedge all or a portion of its
investments, an Underlying GE Fund, other than the Money Market Fund, may
purchase and write put and call options on securities indexes listed on U.S.
or foreign securities exchanges or traded in the over-the-counter market,
which indexes include securities held in the Underlying GE Fund's portfolio.
The Underlying GE Funds with such option writing authority may write only
covered options. An Underlying GE Fund may also use securities index options
as a means of participating in a securities market without making direct
purchases of securities.
A securities index measures the movement of a certain group of securities by
assigning relative values to the securities included in the index. Options on
securities indexes are generally similar to options on specific securities.
Unlike options on securities, however, options on securities indexes do not
involve the delivery of an underlying security; the option in the case of an
option on a securities index represents the holder's right to obtain from the
writer in cash a fixed multiple of the amount by which the exercise price
exceeds (in the case of a call) or is less than (in the case of a put) the
closing value of the underlying securities index on the exercise date.
A securities index option written by an Underlying GE Fund will be deemed
covered in any manner permitted under the 1940 Act or the rules and
regulations thereunder or any other method determined by the SEC to be
permissible. See "Strategies Available to Some But Not All Underlying GE
Funds--Covered Option Writing" in the SAI for specific situations where
securities index options will be deemed to be covered by an Underlying GE
Fund. If the Underlying GE Fund has written a securities index option, it may
terminate its obligation by effecting a closing purchase transaction, which is
accomplished by purchasing an option of the same series as the option
previously written.
Futures and Options on Futures. Each Underlying GE Fund, other than the Money
Market Fund, may enter into interest rate, financial and stock or bond index
futures contracts or related options that are traded on a U.S. or foreign
exchange or board of trade approved by the Commodity Futures Trading
Commission or in the over-the-counter market. If entered into, these
transactions will be made solely for the purpose of hedging against the
effects of changes in the value of portfolio securities due to anticipated
changes in interest rates and/or market conditions, to gain market exposure
for accumulating and residual cash positions, for duration management, or when
the transactions are economically appropriate to the reduction of risks
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inherent in the management of the Fund involved. No Underlying GE Fund will
enter into a transaction involving futures and options on futures for
speculative purposes.
An Underlying GE Fund may not enter into futures and options contracts for
which aggregate initial margin deposits and premiums paid for unexpired
options exceed 5% of the fair market value of the Fund's total assets, after
taking into account unrealized losses or profits on futures contracts or
options on futures contracts into which it has entered. The current view of
the SEC staff is that a Fund's long and short positions in futures contracts
as well as put and call options on futures written by it must be
collateralized with cash or other liquid assets and segregated with the
Trust's custodian, or a designated sub-custodian, or "covered" in a manner
similar to that for covered options on securities (see "Strategies Available
to Some But Not All Underlying GE Funds--Covered Option Writing" in the SAI)
and designed to eliminate any potential leveraging.
An interest rate futures contract provides for the future sale by one party
and the purchase by the other party of a specified amount of a particular
financial instrument (debt security) at a specified price, date, time and
place. Financial futures contracts are contracts that obligate the holder to
deliver (in the case of a futures contract that is sold) or receive (in the
case of a futures contract that is purchased) at a future date a specified
quantity of a financial instrument, specified securities, or the cash value of
a securities index. A municipal bond index futures contract is based on an
index of long-term, tax-exempt municipal bonds and a corporate bond index
futures contract is based on an index of corporate bonds. Stock index futures
contracts are based on indexes that reflect the market value of common stock
of the companies included in the indexes. An index futures contract is an
agreement pursuant to which two parties agree to take or make delivery of an
amount of cash equal to the difference between the value of the index at the
close of the last trading day of the contract and the price at which the index
contract was originally written. An option on an interest rate or index
futures contract generally gives the purchaser the right, in return for the
premium paid, to assume a position in a futures contract at a specified
exercise price at any time prior to the expiration date of the option.
Forward Currency Transactions. Each Underlying GE Fund, other than the Money
Market Fund, may hold currencies to meet settlement requirements for foreign
securities and each Underlying GE Fund, other than the Premier Fund and the
Money Market Fund, may engage in currency exchange transactions to protect
against uncertainty in the level of future exchange rates between a particular
foreign currency and the U.S. dollar or between foreign currencies in which
the Fund's securities are or may be denominated. No Underlying GE Fund will
enter into forward currency transactions for speculative purposes. Forward
currency contracts are agreements to exchange one currency for another at a
future date. The date (which may be any agreed-upon fixed number of days in
the future), the amount of currency to be exchanged and the price at which the
exchange will take place will be negotiated and fixed for the term of the
contract at the time that an Underlying GE Fund enters into the contract.
Forward currency contracts (1) are traded in a market conducted directly
between currency traders (typically, commercial banks or other financial
institutions) and their customers, (2) generally have no deposit requirements
and (3) are typically consummated without payment of any commissions. An
Underlying GE Fund, however, may enter into forward currency contracts
requiring deposits or involving the payment of commissions. To assure that an
Underlying GE Fund's forward currency contracts are not used to achieve
investment leverage, cash or other liquid assets will be segregated with GE
Funds'
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custodian, or a designated sub-custodian, in an amount at all times equal to
or exceeding the Fund's commitment with respect to the contracts.
Upon maturity of a forward currency contract, an Underlying GE Fund may (1)
pay for and receive the underlying currency, (2) negotiate with the dealer to
roll over the contract into a new forward currency contract with a new future
settlement date or (3) negotiate with the dealer to terminate the forward
contract into an offset with the currency trader providing for the Fund's
paying or receiving the difference between the exchange rate fixed in the
contract and the then current exchange rate. GE Funds may also be able to
negotiate such an offset on behalf of an Underlying GE Fund prior to maturity
of the original forward contract. No assurance can be given that new forward
contracts or offsets will always be available to an Underlying GE Fund.
In hedging a specific portfolio position, an Underlying GE Fund may enter into
a forward contract with respect to either the currency in which the position
is denominated or another currency deemed appropriate by GEIM. An Underlying
GE Fund's exposure with respect to forward currency contracts is limited to
the amount of the Fund's aggregate investments in instruments denominated in
foreign currencies.
Options on Foreign Currencies. Each Underlying GE Fund, other than the Premier
Fund and the Money Market Fund, may purchase and write put and call options on
foreign currencies for the purpose of hedging against declines in the U.S.
dollar value of foreign currency denominated securities and against increases
in the U.S. dollar cost of securities to be acquired by the Fund. The
Underlying GE Funds with such option writing authority may write only covered
options. No Underlying GE Fund will enter into a transaction involving options
on foreign currencies for speculative purposes. Options on foreign currencies
to be written or purchased by an Underlying GE Fund are traded on U.S. or
foreign exchanges or in the over-the-counter market. GE Funds will limit the
premiums paid on an Underlying GE Fund's options on foreign currencies to 5%
of the value of the Underlying GE Fund's total assets.
When-Issued and Delayed-Delivery Securities. To secure prices or yields deemed
advantageous at a particular time, an Underlying GE Fund may purchase
securities on a when-issued or delayed-delivery basis, in which case, delivery
of the securities occurs beyond the normal settlement period; no payment for
or delivery of the securities is made by, and no income accrues to, the
Underlying GE Fund, however, prior to the actual delivery or payment by the
other party to the transaction. Each Underlying GE Fund will enter into
when-issued or delayed-delivery transactions for the purpose of acquiring
securities and not for the purpose of leverage. When-issued securities
purchased by an Underlying GE Fund may include securities purchased on a
"when, as and if issued" basis under which the issuance of the securities
depends on the occurrence of a subsequent event, such as approval of a merger,
corporate reorganization or debt restructuring. Cash or other liquid assets in
an amount equal to the amount of each Underlying GE Fund's when-issued or
delayed-delivery purchase commitments will be segregated with the GE Funds'
custodian, or with a designated subcustodian, in order to avoid or limit any
leveraging effect that may arise in the purchase of a security pursuant to
such a commitment.
Securities purchased on a when-issued or delayed-delivery basis may expose an
Underlying GE Fund to risk because the securities may experience fluctuations
in value prior to their delivery.
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Purchasing securities on a when-issued or delayed-delivery basis can involve
the additional risk that the return available in the market when the delivery
takes place may be higher than that applicable at the time of the purchase.
This characteristic of when-issued and delayed-delivery securities could
result in exaggerated movements in an Underlying GE Fund's net asset value.
Lending Portfolio Securities. Each Underlying GE Fund is authorized to lend
its portfolio securities to well-known and recognized U.S. and foreign
brokers, dealers and banks. These loans, if and when made, may not exceed 30%
of an Underlying GE Fund's assets taken at value. The Underlying GE Fund's
loans of securities will be collateralized by cash, letters of credit or
Government Securities. Cash or instruments collateralizing an Underlying GE
Fund's loans of securities are segregated and maintained at all times with the
GE Funds' custodian or with a designated sub-custodian in an amount at least
equal to the current market value of the loaned securities. In lending
securities, an Underlying GE Fund will be subject to risks, which, like those
associated with other extensions of credit, include possible loss of rights in
the collateral should the borrower fail financially.
Rule 144A Securities. Each of the Underlying GE Funds may purchase Rule 144A
Securities. Certain Rule 144A Securities may be considered illiquid and
therefore subject to an Underlying GE Fund's limitation on the purchase of
illiquid securities, unless the GE Funds' Board of Trustees determines on an
ongoing basis that an adequate trading market exists for the Rule 144A
Securities. An Underlying GE Fund's purchase of Rule 144A Securities could
have the effect of increasing the level of illiquidity in the Fund to the
extent that qualified institutional buyers become uninterested for a time in
purchasing Rule 144A Securities held by the Fund. The GE Funds' Board of
Trustees has established standards and procedures for determining the
liquidity of a Rule 144A Security and monitors GEIM's implementation of the
standards and procedures. The ability to sell to qualified institutional
buyers under Rule 144A is a recent development and GEIM cannot predict how
this market will develop.
Depositary Receipts. Each Underlying GE Fund, other than the Money Market
Fund, may each invest in securities of foreign issuers in the form of ADRs and
European Depositary Receipts ("EDRs"), which are sometimes referred to as
Continental Depositary Receipts ("CDRs"). ADRs are publicly traded on
exchanges or over-the-counter in the United States and are issued through
"sponsored" or "unsponsored" arrangements. In a sponsored ADR arrangement, the
foreign issuer assumes the obligation to pay some or all of the depositary's
transaction fees, whereas under an unsponsored arrangement, the foreign issuer
assumes no obligations and the depositary's transaction fees are paid directly
by the ADR holders. In addition, less information is available in the United
States about an unsponsored ADR than about a sponsored ADR. Each Underlying GE
Fund, other than the Money Market Fund, may invest in ADRs through both
sponsored and unsponsored arrangements. EDRs and CDRs are generally issued by
foreign banks and evidence ownership of either foreign or domestic securities.
Supranational Agencies. Each Underlying GE Fund may invest up to 10% of its
assets in debt obligations of supra-national agencies such as: the
International Bank for Reconstruction and Development (commonly referred to as
the World Bank), which was chartered to finance development projects in
developing member countries; the European Community, which is a twelve-nation
organization engaged in cooperative economic activities; the European Coal and
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Steel Community, which is an economic union of various European nations' steel
and coal industries; and the Asian Development Bank, which is an international
development bank established to lend funds, promote investment and provide
technical assistance to member nations in the Asian and Pacific regions. Debt
obligations of supranational agencies are not considered Government Securities
and are not supported, directly or indirectly, by the U.S. Government.
Investments in Other Investment Funds. Each Underlying GE Fund, other than the
U.S. Equity Fund and Money Market Fund, may invest in investment funds that
invest principally in securities in which the Fund is authorized to invest. In
addition, each Fund and each Underlying GE Fund, other than the U.S. Equity
Fund and the Money Market Fund, may invest in shares of money market mutual
funds, which in the case of the Fund may include shares of GE Money Market
Fund. Under the 1940 Act and as a condition to the exemptive relief that was
granted to the Trust by the SEC, a Fund may invest a maximum of 10% of its
total assets in the securities of other investment companies. In addition,
under the 1940 Act and as a condition to the exemptive relief that was granted
to the Trust by the SEC, not more than 5% of a Fund's total assets may be
invested in the securities of any one investment company, and the Fund may not
own more than 3% of the securities of any investment company. Investments by
the Funds or the Underlying GE Funds (other than the Money Market Fund) in the
GEI Short-Term Investment Fund, a fund advised by GEIM and created
specifically to serve as a vehicle for the collective investment of cash
balances of the Funds and the Underlying GE Funds (other than the Money Market
Fund) and other accounts advised by either GEIM or GEIC, is not considered an
investment in another investment company for purposes of these restrictions.
To the extent an Underlying GE Fund invests in other investment companies, the
Fund's shareholders will incur certain duplicative fees and expenses,
including investment advisory fees.
Floating and Variable Rate Instruments. The Income Fund, the Government Fund
and the Money Market Fund may each invest in floating and variable rate
instruments. Income securities may provide for floating or variable rate
interest or dividend payments. The floating or variable rate may be determined
by reference to a known lending rate, such as a bank's prime rate, a
certificate of deposit rate or the London InterBank Offered Rate (LIBOR).
Alternatively, the rate may be determined through an auction or remarketing
process. The rate also may be indexed to changes in the values of interest
rate or securities indexes, currency exchange rate or other commodities. The
amount by which the rates paid on an income security may increase or decrease
may be subject to periodic or lifetime caps. Floating and variable rate income
securities include securities whose rates vary inversely with changes in
market rates of interest. Such securities may also pay a rate of interest
determined by applying a multiple to the variable rate. The extent of
increases and decreases in the value of securities whose rates vary inversely
with changes in market rates of interest generally will be larger than
comparable changes in the value of an equal principal amount of a fixed rate
security having similar credit quality, redemption provisions and maturity.
Zero Coupon Obligations. The U.S. Equity Fund, the Income Fund, the Government
Fund and the Money Market Fund may invest in zero coupon obligations. Zero
coupon securities generally pay no cash interest (or dividends in the case of
preferred stock) to their holders prior to maturity. Accordingly, such
securities usually are issued and traded at a deep discount from their face or
par value and generally are subject to greater fluctuations of market value in
response to changing
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interest rates than securities of comparable maturities and credit quality
that pay cash interest (or dividends in the case of preferred stock) on a
current basis. Although each of the U.S. Equity Fund, the Income Fund and the
Government Fund will receive no payments on its zero coupon securities prior
to their maturity or disposition, it will be required for federal income tax
purposes generally to include in its dividends each year an amount equal to
the annual income that accrues on its zero coupon securities. Such dividends
will be paid from the cash assets of the Fund, from borrowings or by
liquidation of portfolio securities, if necessary, at a time that the Fund
otherwise would not have done so. To the extent the U.S. Equity Fund, the
Income Fund and the Government Fund are required to liquidate thinly traded
securities, the Funds may be able to sell such securities only at prices lower
than if such securities were more widely traded. The risks associated with
holding securities that are not readily marketable may be accentuated at such
time. To the extent the proceeds from any such dispositions are used by the
U.S. Equity Fund, the Income Fund or the Government Fund to pay distributions,
each of those Funds will not be able to purchase additional income-producing
securities with such proceeds, and as a result its current income ultimately
may be reduced.
The Government Fund may invest up to 10% of its assets in zero coupon
Municipal Obligations. Zero coupon Municipal Obligations are generally divided
into two categories: "Pure Zero Obligations," which are those that pay no
interest for their entire life and "Zero/Fixed Obligations," which pay no
interest for some initial period and thereafter pay interest currently. In the
case of a Pure Zero Obligation, the failure to pay interest currently may
result from the obligation's having no stated interest rate, in which case the
obligation pays only principal at maturity and is sold at a discount from its
stated principal. A Pure Zero Obligation may, in the alternative, provide for
a stated interest rate, but provide that no interest is payable until
maturity, in which case accrued, unpaid interest on the obligation may be
capitalized as incremental principal. The value to the investor of a zero
coupon Municipal Obligation consists of the economic accretion either of the
difference between the purchase price and the nominal principal amount (if no
interest is stated to accrue) or of accrued, unpaid interest during the
Municipal Obligation's life or payment deferral period.
Mortgage Related Securities. The mortgage related securities in which the
Income Fund and the Government Fund will invest represent pools of mortgage
loans assembled for sale to investors by various governmental agencies, such
as GNMA, by government related organizations, such as FNMA and FHLMC, as well
as by private issuers, such as commercial banks, savings and loan
institutions, mortgage bankers and private mortgage insurance companies.
Several risks are associated with mortgage related securities generally. The
monthly cash inflow from the underlying loans, for example, may not be
sufficient to meet the monthly payment requirements of the mortgage related
security. Prepayment of principal by mortgagors or mortgage foreclosures will
shorten the term of the underlying mortgage pool for a mortgage related
security. Early returns of principal will affect the average life of the
mortgage related securities remaining in the Income Fund or the Government
Fund. The occurrence of mortgage prepayments is affected by factors including
the level of interest rates, general economic conditions, the location and age
of the mortgage and other social and demographic conditions. In periods of
rising interest rates, the rate of prepayment tends to decrease, thereby
lengthening the average life of a pool of mortgage related securities.
Conversely, in periods of falling interest rates the rate of prepayment tends
to increase, thereby shortening the average life of a pool.
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Reinvestment of prepayments may occur at higher or lower interest rates than
the original investment, thus affecting the yield of the Income Fund and the
Government Fund. Because prepayments of principal generally occur when
interest rates are declining, the Income Fund and the Government Fund will
likely have to reinvest the proceeds of prepayments at lower interest rates
than those at which its assets were previously invested, resulting in a
corresponding decline in the Fund's yield. Thus, mortgage related securities
may have less potential for capital appreciation in periods of falling
interest rates than other fixed income securities of comparable maturity,
although those other fixed income securities may have a comparable risk of
decline in market value in periods of rising interest rates. To the extent
that the Income Fund or the Government Fund purchases mortgage related
securities at a premium, unscheduled prepayments, which are made at par, will
result in a loss equal to any unamortized premium.
ARMs have interest rates that reset at periodic intervals, thereby allowing
the Income Fund and the Government Fund to participate in increases in
interest rates through periodic adjustments in the coupons of the underlying
mortgages, resulting in both higher current yields and lower price fluctuation
than would be the case with more traditional long-term debt securities.
Furthermore, if prepayments of principal are made on the underlying mortgages
during periods of rising interest rates, the Income Fund or the Government
Fund generally will be able to reinvest these amounts in securities with a
higher current rate of return. Neither the Income Fund nor the Government
Fund, however, will benefit from increases in interest rates to the extent
that interest rates rise to the point at which they cause the current yield of
ARMs to exceed the maximum allowable annual or lifetime reset limits (or
"caps") for a particular mortgage. In addition, fluctuations in interest rates
above these caps could cause ARMs to behave more like long-term fixed rate
securities in response to extreme movements in interest rates. As a result,
during periods of volatile interest rates, the Income Fund's and the
Government Fund's net asset values may fluctuate more than if they did not
purchase ARMs. Moreover, during periods of rising interest rates, changes in
the coupon of the adjustable rate mortgages will slightly lag changes in
market rates, creating the potential for some principal loss for shareholders
who redeem their shares of the Income Fund or the Government Fund before the
interest rates on the underlying mortgages are adjusted to reflect current
market rates.
CMOs are obligations fully collateralized by a portfolio of mortgages or
mortgage related securities. Payments of principal and interest on the
mortgages are passed through to the holders of the CMOs on the same schedule
as they are received, although certain classes of CMOs have priority over
others with respect to the receipt of prepayments on the mortgages. Therefore,
depending on the type of CMOs in which the Income Fund and the Government Fund
invest, the investment may be subject to a greater or lesser risk of
prepayment than other types of mortgage related securities.
Mortgage related securities may not be readily marketable. To the extent any
of these securities are not readily marketable in the judgment of GEIM, each
of the Income Fund and the Government Fund limit their investments in these
securities, together with other illiquid instruments, to not more than 15% of
the value of its net assets.
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Government Stripped Mortgage Related Securities. The Income Fund and the
Government Fund may invest in government stripped mortgage related securities
issued and guaranteed by GNMA, FNMA or FHLMC. These securities represent
beneficial ownership interests in either periodic principal distributions
("principal-only") or interest distributions ("interest-only") on mortgage
related certificates issued by GNMA, FNMA or FHLMC. The certificates
underlying the government stripped mortgage related securities represent all
or part of the beneficial interest in pools of mortgage loans. The Income Fund
and the Government Fund will invest in government stripped mortgage related
securities in order to enhance yield or to benefit from anticipated
appreciation in value of the securities at times when GEIM believes that
interest rates will remain stable or increase. In periods of rising interest
rates, the expected increase in the value of government stripped mortgage
related securities may offset all or a portion of any decline in value of the
securities held by the Income Fund or the Government Fund.
Investing in government stripped mortgage related securities involves risks
normally associated with investing in mortgage related securities issued by
government or government related entities. In addition, the yields on
government stripped mortgage related securities are extremely sensitive to the
prepayment experience on the mortgage loans underlying the certificates
collateralizing the securities. If a decline in the level of prevailing
interest rates results in a rate of principal prepayments higher than
anticipated, distributions of principal will be accelerated, thereby reducing
the yield to maturity on interest-only government stripped mortgage related
securities and increasing the yield to maturity on principal-only government
stripped mortgage related securities. Sufficiently high prepayment rates could
result in the Income Fund's or the Government Fund's not fully recovering its
initial investment in an interest-only government stripped mortgage related
security. Under current market conditions, the Income Fund and the Government
Fund expect that investments in government stripped mortgage related
securities will consist primarily of interest-only securities. The sensitivity
of an interest-only security that represents the interest portion of a
particular class, as opposed to the interest portion of an entire pool, to
interest rate fluctuations, may be increased because of the characteristics of
the principal portion to which they relate. Government stripped mortgage
related securities are currently traded in an over-the-counter market
maintained by several large investment banking firms. No assurance can be
given that the Income Fund or the Government Fund will be able to effect a
trade of a government stripped mortgage related security at a desired time.
The Income Fund and the Government Fund will acquire government stripped
mortgage related securities only if a secondary market for the securities
exists at the time of acquisition. Except for government stripped mortgage
related securities based on fixed rate FNMA and FHLMC mortgage certificates
that meet certain liquidity criteria established by the GE Funds' Board of
Trustees, the GE Funds treat government stripped mortgage related securities
as illiquid and will limit each of the Income Fund's and the Government Fund's
investments in these securities, together with other illiquid investments, to
not more than 15% of its net assets.
Asset-Backed and Receivable-Backed Securities. The Income Fund and the
Government Fund may invest in asset-backed and receivable-backed securities.
To date, several types of asset-backed and receivable-backed securities have
been offered to investors including "Certificates for Automobile Receivables"
("CARs(Service Mark)") and interests in pools of credit card receivables.
CARs(Service Mark) represent undivided fractional interests in a trust, the
assets of which consist of a pool of motor vehicle retail installment sales
contracts and security interests in the vehicles securing the
A-11
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contracts. Payments of principal and interest on CARssm are passed through
monthly to certificate holders and are guaranteed up to certain amounts and
for a certain time period by a letter of credit issued by a financial
institution unaffiliated with the trustee or originator of the trust.
An investor's return on CARssm may be affected by early prepayment of
principal on the underlying vehicle sales contracts. If the letter of credit
is exhausted, the Income Fund or the Government Fund may be prevented from
realizing the full amount due on a sales contract because of state law
requirements and restrictions relating to foreclosure sales of vehicles and
the availability of deficiency judgments following these sales, because of
depreciation, damage or loss of a vehicle, because of the application of
Federal and state bankruptcy and insolvency laws or other factors. As a
result, certificate holders may experience delays in payment if the letter of
credit is exhausted. Consistent with the Income Fund's and the Government
Fund's investment objective and policies and subject to the review and
approval of the GE Funds' Board of Trustees, the Income Fund and the
Government Fund may also invest in other types of asset-backed and
receivable-backed securities.
Mortgage Dollar Rolls. With respect to up to 25% of their total assets each of
the Income Fund and the Government Fund may, enter into mortgage "dollar
rolls" in which the Fund sells securities for delivery in the current month
and simultaneously contracts with the same counterpart to repurchase similar
(same type, coupon and maturity) but not identical securities on a specified
future date. The Underlying GE Fund loses the right to receive principal and
interest paid on the securities sold. However, the Underlying GE Fund would
benefit to the extent of any price received for the securities sold and the
lower forward price for the future purchase (often referred to as the "drop")
or fee income plus the interest earned on the cash proceeds of the securities
sold until the settlement date of the forward purchase. Unless such benefits
exceed the income, capital appreciation and gain or loss due to mortgage
repayments that would have been realized on the securities sold as part of the
mortgage dollar roll, the use of this technique will diminish the investment
performance of the Underlying GE Fund compared with what such performance
would have been without the use of mortgage dollar rolls. The Underlying GE
Fund will hold and maintain in a segregated account until the settlement date
cash or other liquid assets in an amount equal to the forward purchase price.
The benefits derived from the use of mortgage dollar rolls may depend upon
GEIM's ability to predict correctly mortgage prepayments and interest rates.
There is no assurance that mortgage dollar rolls can be successfully employed.
For financial reporting and tax purposes, each of the Income Fund and the
Government Fund propose to treat mortgage dollar rolls as two separate
transactions; one involving the purchase of a security and a separate
transaction involving a sale. The Funds do not currently intend to enter into
mortgage dollar rolls that are accounted for as a financing.
Short Sales Against the Box. The Mid-Cap Fund, the Value Fund, and the
International Fund may sell securities "short against the box." Whereas a
short sale is the sale of a security a Fund does not own, a short sale is
"against the box" if at all times during which the short position is open, the
Fund owns at least an equal amount of the securities or securities convertible
into, or exchangeable without further consideration for, securities of the
same issue as the securities sold short.
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GE LIFESTYLE FUNDS
o GE Conservative Allocation Fund
o GE Moderate Allocation Fund
o GE Aggressive Allocation Fund
For information contact your investment professional or
call the following toll free number: 1-800-242-0134
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NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS OR IN THE
STATEMENT OF ADDITIONAL INFORMATION INCORPORATED INTO THIS PROSPECTUS BY
REFERENCE IN CONNECTION WITH THE OFFERING OF SHARES OF LIFESTYLE FUNDS, AND IF
GIVEN OR MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY LIFESTYLE FUNDS. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER IN ANY STATE IN WHICH, OR TO ANY PERSON TO WHOM, AN OFFER
MAY NOT LAWFULLY BE MADE.
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