<PAGE>
Filed Pursuant to Rule 497(c)
Registration File No.: 333-17217
EQ Advisors Trust
PROSPECTUS DATED AUGUST 30, 1999
--------
1
- --------------------------------------------------------------------------------
This Prospectus describes the seven (7) Portfolios offered by EQ Advisors Trust
that you can choose as investment alternatives. Each Portfolio has its own
investment objective and strategies that are designed to meet different
investment goals. This Prospectus contains information you should know before
investing. Please read this Prospectus carefully before investing and keep it
for future reference.
DOMESTIC EQUITY PORTFOLIOS
--------------------------
Calvert Socially Responsible
Capital Guardian Research
Capital Guardian U.S. Equity
EQ/Alliance Premier Growth
MFS Growth with Income
AGGRESSIVE EQUITY PORTFOLIO ASSET ALLOCATION PORTFOLIO
- --------------------------- --------------------------
EQ/Evergreen EQ/Evergreen Foundation
See Prospectus dated May 1, 1999 for additional investment alternatives.
- -------------------------------------------------------------------------------
YOU SHOULD BE AWARE THAT THE SECURITIES AND EXCHANGE COMMISSION HAS NOT
APPROVED OR DISAPPROVED OF THE INVESTMENT MERIT OF THESE PORTFOLIOS OR
DETERMINED IF THIS PROSPECTUS IS ACCURATE OR COMPLETE. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
Version 19 (Supp)
<PAGE>
Overview
- --------
2
- --------------------------------------------------------------------------------
EQ ADVISORS TRUST
This Prospectus tells you about the seven (7) current Portfolios of the EQ
Advisors Trust ("Trust") and the Class IB shares offered by the Trust on behalf
of each Portfolio. The Trust is an open-end management investment company. Each
Portfolio is a separate series of the Trust with its own investment objective,
investment strategies and risks, which are described in this Prospectus. Each of
the current Portfolios of the Trust are diversified for purposes of the
Investment Company Act of 1940, as amended ("1940 Act").
The Trust's shares are currently sold only to insurance company separate
accounts in connection with variable life insurance contracts and variable
annuity certificates and contracts (the "Contract" or collectively, the
"Contracts") issued by The Equitable Life Assurance Society of the United States
("Equitable") and Equitable of Colorado, Inc. ("EOC") as well as insurance
companies that are not affiliated with Equitable or EOC ("non-affiliated
insurance companies") and to The Equitable Investment Plan for Employees,
Managers and Agents ("Equitable Plan"). The prospectus is designed to help you
make informed decisions about the Portfolios that are available under your
Contract or under the Equitable Plan. You will find information about your
Contract and how it works in the accompanying prospectus for the Contracts if
you are a Contractholder or participant under a Contract.
EQ Financial Consultants, Inc. ("EQFC") currently serves as the Manager of the
Trust. In such capacity, EQFC currently has overall responsibility for the
general management and administration of the Trust. The Board of Trustees of the
Trust have approved a transfer to Equitable, the indirect corporate parent of
EQFC, of the Trust's Investment Management Agreement with EQFC. This transfer is
expected to be completed in September 1999. Upon completion of the transfer,
Equitable will serve as the Manager of the Trust. However, until completion of
the transfer, EQFC will continue to serve in that capacity.
Each of the Portfolios has its own investment adviser ("Adviser"). The Calvert
Socially Responsible Portfolio ("Calvert Portfolio") has two Advisers, Calvert
Asset Management Company, Inc. ("Calvert") and Brown Capital Management, Inc.
("Brown Capital"). Information about the Adviser(s) for each Portfolio is
contained in the description concerning that Portfolio in the section entitled
"About the Investment Portfolios." The Manager has the ultimate responsibility
to oversee each of the Advisers and to recommend their hiring, termination and
replacement. Subject to approval by the Board of Trustees, the Manager may
without obtaining shareholder approval: (i) select Advisers for each of the
Trust's Portfolios; (ii) enter into and materially modify existing investment
advisory agreements; and (iii) terminate and replace the Advisers.
<PAGE>
Table of contents
--------
3
- --------------------------------------------------------------------------------
- ---------------------------------------------------------------
1 SUMMARY INFORMATION CONCERNING EQ ADVISORS TRUST 4
- ---------------------------------------------------------------
- ---------------------------------------------------------------
2 ABOUT THE INVESTMENT PORTFOLIOS 8
- ---------------------------------------------------------------
DOMESTIC EQUITY PORTFOLIOS 10
Calvert Socially Responsible Portfolio 10
Capital Guardian Research Portfolio 13
Capital Guardian U.S. Equity Portfolio 15
EQ/Alliance Premier Growth Portfolio 17
MFS Growth with Income Portfolio 19
AGGRESSIVE EQUITY PORTFOLIO 21
EQ/Evergreen Portfolio 21
ASSET ALLOCATION PORTFOLIO 23
EQ/Evergreen Foundation Portfolio 23
- ---------------------------------------------------------------
3 MORE INFORMATION ON PRINCIPAL RISKS 25
- ---------------------------------------------------------------
- ---------------------------------------------------------------
4 MANAGEMENT OF THE TRUST 31
- ---------------------------------------------------------------
The Trust 31
The Manager 31
Expense Limitation Agreement 31
The Advisers 32
The Administrator 32
The Transfer Agent 33
Brokerage Practices 33
Brokerage Transactions with Affiliates 33
- ---------------------------------------------------------------
5 FUND DISTRIBUTION ARRANGEMENTS 34
- ---------------------------------------------------------------
- ---------------------------------------------------------------
6 PURCHASE AND REDEMPTION 35
- ---------------------------------------------------------------
- ---------------------------------------------------------------
7 HOW ASSETS ARE VALUED 36
- ---------------------------------------------------------------
- ---------------------------------------------------------------
8 TAX INFORMATION 37
- ---------------------------------------------------------------
- ---------------------------------------------------------------
9 PRIOR PERFORMANCE OF EACH ADVISER 38
- ---------------------------------------------------------------
- ---------------------------------------------------------------
10 FINANCIAL HIGHLIGHTS 40
- ---------------------------------------------------------------
_____________________________ EQ Advisors Trust
<PAGE>
1 Summary information concerning EQ Advisors Trust
- --------
4
- --------------------------------------------------------------------------------
The following chart highlights the seven (7) Portfolios described in this
Prospectus that you can choose as investment alternatives under your Contracts
offered by Equitable or EOC. The chart and accompanying information identify
each Portfolio's investment objective(s), principal investment strategies, and
principal risks. "More Information on Principal Risks", which more fully
describes each of the principal risks, is provided beginning on page 25.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
EQ ADVISORS TRUST DOMESTIC EQUITY PORTFOLIOS
- -------------------------------------------------------------------------------------------------------------------
PORTFOLIO INVESTMENT OBJECTIVE(S)
<S> <C>
- -------------------------------------------------------------------------------------------------------------------
CALVERT SOCIALLY RESPONSIBLE Seeks long-term capital appreciation.
- -------------------------------------------------------------------------------------------------------------------
CAPITAL GUARDIAN RESEARCH Seeks long-term growth of capital
- -------------------------------------------------------------------------------------------------------------------
CAPITAL GUARDIAN U.S. EQUITY Seeks long-term growth of capital
- -------------------------------------------------------------------------------------------------------------------
EQ/ALLIANCE PREMIER GROWTH Seeks long-term growth of capital by primarily investing in
equity securities of a limited number of large, carefully
selected, high quality United States companies that are
judged, by the Adviser, likely to achieve superior earnings
growth
- -------------------------------------------------------------------------------------------------------------------
MFS GROWTH WITH INCOME Seeks to provide reasonable current income and long-term
growth of capital and income
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
--------
5
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
PRINCIPAL INVESTMENT STRATEGIES PRINCIPAL RISKS
<S> <C>
- -----------------------------------------------------------------------------------------------------------------------------
Common stocks of medium to large U.S. companies that General investment, growth investing, mid-cap company,
meet both investment and social criteria liquidity, and derivatives risks
- -----------------------------------------------------------------------------------------------------------------------------
Equity securities primarily of United States issuers and General investment, growth investing, convertible
securities whose principal markets are in the United States securities, and foreign securities risks
- -----------------------------------------------------------------------------------------------------------------------------
Equity securities primarily of United States companies with General investment, growth investing, convertible
market capitalization greater than $1 billion at the time of securities, and foreign securities risks
purchase
- -----------------------------------------------------------------------------------------------------------------------------
Equity securities of a limited number of large, high-quality General investment, focused portfolio, growth investing,
companies that are likely to offer superior earnings growth convertible securities, derivatives, and foreign securities
risks
- -----------------------------------------------------------------------------------------------------------------------------
Equity securities (common stock, preferred stock, General investment, mid-cap company, foreign securities,
convertible securities, warrants and depositary receipts) fixed income, and growth investing risks
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
_____________________________ EQ Advisors Trust
<PAGE>
- --------
6
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
EQ ADVISORS TRUST AGGRESSIVE EQUITY PORTFOLIO
- --------------------------------------------------------------------------------------------------------------------
PORTFOLIO INVESTMENT OBJECTIVE(S)
<S> <C>
- --------------------------------------------------------------------------------------------------------------------
EQ/EVERGREEN Seeks capital appreciation
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
EQ ADVISORS TRUST ASSET ALLOCATION PORTFOLIO
- --------------------------------------------------------------------------------------------------------------------
PORTFOLIO INVESTMENT OBJECTIVE(S)
- --------------------------------------------------------------------------------------------------------------------
EQ/EVERGREEN FOUNDATION Seeks to provide, in order of priority, reasonable income,
conservation of capital and capital appreciation
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
--------
7
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
<S> <C>
PRINCIPAL INVESTMENT STRATEGIES PRINCIPAL RISKS
- --------------------------------------------------------------------------------------------------------------------
Common stocks offering potential for capital growth (plus General investment, fixed income, small-cap and mid-cap
common stocks offering potential for current income, company, and value investing risks
corporate bonds, notes and debentures, preferred stocks
and convertible securities)
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Common stocks, preferred stocks, securities convertible General investment and fixed income risks
into or exchangeable for common stocks, corporate debt
obligations, U.S. Government securities and short-term
debt instruments
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
_____________________________ EQ Advisors Trust
<PAGE>
2 About the investment portfolios
- --------
8
- --------------------------------------------------------------------------------
This section of the Prospectus provides a more complete description of the
principal investment objectives, strategies, and risks of each of the
Portfolios. Of course, there can be no assurance that any Portfolio will achieve
its investment objective.
Please note that:
o A fuller description of each of the principal risks is included in the
section "More Information on Principal Risks," which follows the description
of each Portfolio in this section of the Prospectus.
o Additional information concerning each Portfolio's strategies, investments,
and risks can also be found in the Trust's Statement of Additional
Information.
GENERAL INVESTMENT RISKS
Each of the Portfolios is subject to the following risks:
ASSET CLASS RISK: The returns from the types of securities in which a Portfolio
invests may underperform returns from the various general securities markets or
different asset classes.
MARKET RISK: You could lose money over short periods due to fluctuation in a
Portfolio's share price in reaction to stock or bond market movements, and over
longer periods during extended market downturns.
SECURITY SELECTION RISK: There is the possibility that the specific securities
selected by a Portfolio's Adviser will underperform other funds in the same
asset class or benchmarks that are representative of the general performance of
the asset class.
YEAR 2000 RISK: A Portfolio could be adversely affected if the computer systems
used by the Trust, Adviser, other service providers, or persons with whom they
deal, do not properly process and calculate date-related information and data
dated on and after January 1, 2000 ("Year 2000 Problem"). The extent of such
impact cannot be predicted and there can be no assurances that the Year 2000
Problem will not have an adverse effect on the issuers whose securities are held
by a Portfolio. This risk is greater for Portfolios that make foreign
investments, particularly in emerging market countries.
The Trust's Portfolios are not insured by the FDIC or any other government
agency. Each Portfolio is not a deposit or other obligation of any financial
institution or bank and is not guaranteed. Each Portfolio is subject to
investment risks and possible loss of principal invested.
THE BENCHMARKS
The performance of each of the Trust's Portfolios as shown on the following
pages compares each Portfolio's performance to that of a broad-based securities
market index, an index of funds with similar investment objectives and/or a
blended index. The performance shown below is from each Portfolio's predecessor
registered investment company managed by the Adviser using the same investment
objectives and strategies as the Portfolio. Each of the Portfolios' annualized
rates of return are net of: (i) its investment management fees; and (ii) its
other expenses. These rates are not representative of the actual return you
would receive under your Equitable Contract.
Broad-based securities indices are unmanaged and are not subject to fees and
expenses typically associated with managed investment company portfolios.
Broad-based securities indices are also not subject to contract and
insurance-related expenses and charges. Investments cannot be made directly in a
broad-based securities index. Comparisons with these benchmarks, therefore, are
of limited use. They are included because they are widely known and may help you
to understand the universe of securities from which each Portfolio is likely to
select its holdings. "Blended" performance numbers (e.g., 50% S&P 400/50%
Russell 2000 or 60% S&P 500/40% Lehman Gov't/Corp) assume a static mix of the
two indices.
THE STANDARD & POOR'S 500 COMPOSITE STOCK PRICE INDEX ("S&P 500") is an
unmanaged index containing common stock of 500 industrial, transportation,
utility and
<PAGE>
--------
9
- --------------------------------------------------------------------------------
financial companies, regarded as generally representative of the larger
capitalization portion of the United States stock market. The S&P 500 returns
reflect the reinvestment of dividends, if any, but do not reflect fees,
brokerage commissions or other expenses of investing.
THE RUSSELL 2000 INDEX ("Russell 2000") is an unmanaged index (with no defined
investment objective) of 2000 small-cap stocks and reflects reinvestment of
dividends. It is compiled by the Frank Russell Company.
_____________________________ EQ Advisors Trust
<PAGE>
DOMESTIC EQUITY PORTFOLIOS
- --------
10
- --------------------------------------------------------------------------------
CALVERT SOCIALLY RESPONSIBLE PORTFOLIO
INVESTMENT OBJECTIVE: Seeks long-term capital appreciation.
THE INVESTMENT STRATEGY
The Portfolio invests primarily in common stocks of medium to large U.S.
companies that meet both investment and social criteria. Brown Capital and
Calvert use a tandem investment process to select potential investments for the
Portfolio. Brown Capital creates a universe of potential investments from which
it and Calvert will ultimately select portfolio securities. Once Brown Capital
identifies a potential investment, Calvert promptly socially screens each
potential investment to assure that it meets Calvert's social criteria. During
that process, Brown Capital continues to evaluate each potential investment
based on whether that investment will satisfy Brown Capital's investment
criteria. The criteria of both Brown Capital and Calvert must be satisfied
before a security will be purchased for the Portfolio.
-----------------------------------------------------------------------
For purposes of this Portfolio, companies having market
capitalizations greater than $1 billion are considered medium to large
companies.
-----------------------------------------------------------------------
INVESTMENT CRITERIA: Brown Capital's investment process balances the growth
potential of investments with the price or value of the investment in order to
identify stocks that offer above average growth potential at reasonable prices.
Brown Capital evaluates each stock in terms of its growth potential, the return
on risk-free investments, and the specific risk features of the company to
determine the reasonable price for the stock.
The Portfolio may invest up to 15% of its net assets in illiquid securities,
which are securities that cannot be readily sold because there is no active
market for them.
The Portfolio may invest in derivative instruments, such as foreign currency
contracts (up to 5% of its total assets), options on securities and indices (up
to 5% of its total assets), and futures contracts (up to 5% of its net assets).
When market or financial conditions warrant, the Portfolio may invest a
substantial portion of its assets in short-term obligations for temporary or
defensive purposes. If such action is taken, it will detract from achievement of
the Portfolio's investment objective during such periods.
SOCIAL CRITERIA: Calvert analyzes investments from a social activist
perspective. Calvert's philosophy is that long-term rewards to investors will
come from those organizations whose products, services and methods enhance the
human condition and the traditional American values of individual initiative,
equality of opportunity and cooperative effort. These criteria represent
standards of behavior which few, if any, organizations totally satisfy. As a
matter of practice, evaluation of a particular organization in the context of
these criteria will involve subjective judgment by Calvert.
The Portfolio seeks to invest in companies that:
o deliver safe products and services in ways that sustain our natural
environment. For example, the Portfolio looks for companies that produce
energy from renewable resources, while avoiding consistent polluters;
o manage with participation throughout the organization in defining and
achieving objectives. For example, the Portfolio looks for companies that
offer employee stock ownership or profit-sharing plans;
o negotiate fairly with their workers, provide an environment supportive of
their wellness, do not discriminate on the basis of race, gender,
religion, age, disability, ethnic origin, or sexual orientation, do not
consistently violate regulations of the U.S. Equal Employment Opportunity
Commission, and provide opportunities for women, disadvantaged minorities,
and others for whom equal opportunities have often been denied. For
example, the Portfolio considers both unionized and non-union firms with
good labor relations; and
<PAGE>
--------
11
- --------------------------------------------------------------------------------
o foster awareness of a commitment to human goals, such as creativity,
productivity, self-respect and responsibility, within the organization and
the world, and continually recreates a context within which these goals
can be realized. For example, the Portfolio looks for companies with an
above average commitment to community affairs and charitable giving.
The Portfolio will not invest in companies that Calvert determines to be
significantly engaged in:
o production of or the manufacture of equipment to produce, nuclear energy;
o business activities in support of repressive regimes;
o manufacture of weapon systems;
o manufacture of alcoholic beverages or tobacco products; or
o operation of gambling casinos.
THE PRINCIPAL RISKS
This Portfolio invests in common stocks, therefore, its performance may go up or
down depending on general market conditions. Other principal risks include:
GROWTH INVESTING RISK: As noted above, this Portfolio uses a growth oriented
approach to stock selection. The price of growth stocks may be more sensitive to
changes in current or expected earnings than the prices of other stocks. The
price of growth stocks is also subject to the risk that the stock price of one
or more companies will fall or will fail to appreciate as anticipated by the
Adviser, regardless of movements in the securities markets.
MID-CAP COMPANY RISK: The Portfolio's investments in mid-cap companies may be
subject to more abrupt or erratic movements in price than are those of larger,
more established companies because: the securities of such companies are less
well-known and may trade less frequently and in lower volume; such companies are
more likely to experience greater or more unexpected changes in their earnings
and growth prospects; and the products of technologies of such companies may be
at a relatively early stage of development or not fully tested.
LIQUIDITY RISK: Certain securities held by the Portfolio may be difficult (or
impossible) to sell at the time and at the price the seller would like which may
cause the Portfolio to lose money or be prevented from earning capital gains.
DERIVATIVES RISK: The Portfolio's investments in derivatives can significantly
increase the Portfolio's exposure to market risk or credit risk of the
counterparty. Derivatives also involve the risk of mispricing or improper
valuation and the risk that changes in value of the derivative may not correlate
perfectly with the relevant assets, rates and indices.
PORTFOLIO PERFORMANCE
The inception date for this Portfolio is August 30, 1999. Therefore, no prior
performance information is available.
WHO MANAGES THE PORTFOLIO
CALVERT ASSET MANAGEMENT COMPANY, INC. ("Calvert"), 4550 Montgomery Avenue,
Suite 1000N, Bethesda, Maryland 20814, a subsidiary of Calvert Group Ltd., which
is a subsidiary of Acacia Mutual Life Insurance Company of Washington, DC
("Acacia Mutual"). On January 1, 1999, Acacia Mutual merged with and became a
controlled subsidiary of Ameritas Acacia Mutual Holding Company. Calvert has
been the Adviser to the Portfolio since it commenced operations. It has been
managing mutual funds since 1976. Calvert is the investment adviser for over 25
mutual funds, including the first and largest family of socially screened funds.
Calvert provides the social investment research and screening of the Portfolio's
investments. As of December 31, 1998, Calvert had $6 billion in assets under
management.
BROWN CAPITAL MANAGEMENT, INC. ("Brown Capital"), 809 Cathedral Street,
Baltimore, Maryland 21201. Brown
_____________________________ EQ Advisors Trust
<PAGE>
DOMESTIC EQUITY PORTFOLIOS (CONTINUED)
- --------
12
- --------------------------------------------------------------------------------
Capital initially identifies potential investments for the Portfolio, which are
then promptly screened by Calvert using the Portfolio's social criteria.
EDDIE C. BROWN, founder and President of Brown Capital, heads the management
team for the Portfolio. He has over 24 years of investment management
experience, and has held positions with T. Rowe Price and Irwing Management
Company. Mr. Brown is a frequent panelist on "Wall Street Week with Louis
Rukeyser" and is a member of the Wall Street Week Hall of Fame.
<PAGE>
--------
13
- --------------------------------------------------------------------------------
CAPITAL GUARDIAN RESEARCH PORTFOLIO
INVESTMENT OBJECTIVE: To achieve long-term growth of capital.
THE INVESTMENT STRATEGY
The Portfolio invests primarily in equity securities of United States issuers
and securities whose principal markets are in the United States, including
American Depositary Receipts and other United States registered foreign
securities. The Portfolio invests primarily in common stocks (or securities
convertible or exchangeable into common stocks) of companies with market
capitalization greater than $1 billion at the time of purchase.
The Portfolio may invest up to 10% of its total assets, at the time of purchase,
in securities of issuers domiciled outside the United States and not included in
the S&P 500 (i.e., foreign securities).
When market or financial conditions warrant, the Portfolio may invest a
substantial portion of its assets in high-quality debt securities, including
short-term obligations for temporary or defensive purposes. If such action is
taken, it will detract from achievement of the Portfolio's investment objective
during such periods.
THE PRINCIPAL RISKS
This Portfolio invests in common stocks, therefore, its performance may go up or
down depending on general market conditions. Other principal risks include:
GROWTH INVESTING RISK: As noted above, this Portfolio uses a growth oriented
approach to stock selection. The price of growth stocks may be more sensitive to
changes in current or expected earnings than the prices of other stocks. The
price of growth stocks is also subject to the risk that the stock price of one
or more companies will fall or will fail to appreciate as anticipated by the
Adviser, regardless of movements in the securities markets.
CONVERTIBLE SECURITIES RISK: Convertible securities enable the Portfolio to
benefit from increases in the market price of the underlying common stock and
provide higher yields than the underlying common stocks, but generally offer
lower yields than nonconvertible securities of similar quality. The value of
convertible securities fluctuates both in relation to changes in interest rates
and changes in the value of the underlying common stock.
FOREIGN SECURITIES RISK: The Portfolio's investments in foreign securities
involve risks not associated with investing in U.S. securities, which can
adversely affect the Portfolio's performance. Foreign markets, particularly
emerging markets, may be less liquid, more volatile, and subject to less
government supervision than domestic markets. There may be difficulties
enforcing contractual obligations, and it may take more time for trades to clear
and settle. In addition, the value of foreign investments can be adversely
affected by: unfavorable currency exchange rates (relative to the U.S. dollar
for securities denominated in foreign currencies); inadequate or inaccurate
information about foreign companies; higher transaction, brokerage and custody
costs; adverse changes in foreign economic and tax policies; and foreign
government instability, war or other adverse political or economic actions.
PORTFOLIO PERFORMANCE
The inception date for this Portfolio is April 30, 1999. Therefore, no prior
performance is available.
WHO MANAGES THE PORTFOLIO
CAPITAL GUARDIAN TRUST COMPANY: ("Capital Guardian"), 333 South Hope Street, Los
Angeles, CA 90071. Capital Guardian is a wholly-owned subsidiary of Capital
Group International, Inc., which itself is a wholly owned subsidiary of The
Capital Group Companies, Inc. Capital Guardian has been providing investment
management services since 1968 and manages approximately $80 billion as of
December 31, 1998.
_____________________________ EQ Advisors Trust
<PAGE>
DOMESTIC EQUITY PORTFOLIOS (CONTINUED)
- --------
14
- --------------------------------------------------------------------------------
The Portfolio is managed by a group of investment research professionals, led by
the Research Portfolio Coordinator, each of whom has investment discretion over
a segment of the total Portfolio. The size of each segment will vary over time
and may be based upon: (1) the level of conviction of specific research
professionals as to their designated sectors; (2) industry weights within the
relevant benchmark for the Portfolio; and (3) the judgment of the Research
Portfolio Coordinator in assessing the level of conviction of research
professionals compared to industry weights within the relevant benchmark.
Sectors may be overweighted relative to their benchmark weighting if there is a
substantial number of stocks that are judged to be attractive based on the
research professionals research in that sector, or may be underweighted if there
are relatively fewer stocks viewed to be attractive in the sector. The Research
Portfolio Coordinator also coordinates the cash holdings of the Portfolio.
<PAGE>
--------
15
- --------------------------------------------------------------------------------
CAPITAL GUARDIAN U.S. EQUITY PORTFOLIO
INVESTMENT OBJECTIVE: To achieve long-term growth of capital.
THE INVESTMENT STRATEGY
The Portfolio strives to accomplish its investment objectives through constant
supervision, careful securities selection and broad diversification.
The Portfolio invests primarily in equity securities of United States companies
with market capitalization greater than $1 billion at the time of purchase. In
selecting securities for investment, the Adviser focuses primarily on the
potential of capital appreciation.
The Portfolio may invest up to 10% of its total assets in securities of issuers
domiciled outside the United States and not included in the S&P 500 (i.e.,
foreign securities). These securities may include American Depositary Receipts.
When market or financial conditions warrant, the Portfolio may invest a
substantial portion of its assets in high-quality debt securities, including
short-term obligations for temporary or defensive purposes. If such action is
taken, it will detract from achievement of the Portfolio's investment objective
during such periods.
THE PRINCIPAL RISKS
This Portfolio invests in common stocks, therefore, its performance may go up or
down depending on general market conditions. Other principal risks include:
GROWTH INVESTING RISK: As noted above, this Portfolio uses a growth oriented
approach to stock selection. The price of growth stocks may be more sensitive to
changes in current or expected earnings than the prices of other stocks. The
price of growth stocks is also subject to the risk that the stock price of one
or more companies will fall or will fail to appreciate as anticipated by the
Adviser, regardless of movements in the securities markets.
CONVERTIBLE SECURITIES RISK: Convertible securities enable the Portfolio to
benefit from increases in the market price of the underlying common stock and
provide higher yields than the underlying common stocks, but generally offer
lower yields than nonconvertible securities of similar quality. The value of
convertible securities fluctuates both in relation to changes in interest rates
and changes in the value of the underlying common stock.
FOREIGN SECURITIES RISK: The Portfolio's investments in foreign securities
involve risks not associated with investing in U.S. securities, which can
adversely affect the Portfolio's performance. Foreign markets, particularly
emerging markets, may be less liquid, more volatile, and subject to less
government supervision than domestic markets. There may be difficulties
enforcing contractual obligations, and it may take more time for trades to clear
and settle. In addition, the value of foreign investments can be adversely
affected by: unfavorable currency exchange rates (relative to the U.S. dollar
for securities denominated in foreign currencies); inadequate or inaccurate
information about foreign companies; higher transaction, brokerage and custody
costs; adverse changes in foreign economic and tax policies; and foreign
government instability, war or other adverse political or economic actions.
PORTFOLIO PERFORMANCE
The inception date for this Portfolio is April 30, 1999. Therefore, no prior
performance is available.
WHO MANAGES THE PORTFOLIO
CAPITAL GUARDIAN TRUST COMPANY: ("Capital Guardian"), 333 South Hope Street, Los
Angeles, CA 90071. Capital Guardian is a wholly-owned subsidiary of Capital
Group International, Inc., which itself is a wholly owned subsidiary of The
Capital Group Companies, Inc. Capital Guardian has been providing investment
management services since 1968 and manages approximately $80 billion as of
December 31, 1998.
_____________________________ EQ Advisors Trust
<PAGE>
DOMESTIC EQUITY PORTFOLIOS (CONTINUED)
- --------
16
- --------------------------------------------------------------------------------
Capital Guardian uses a multiple portfolio manager system under which the
Portfolio is divided into several segments. Each segment is individually managed
with the portfolio manager free to decide on company and industry selections as
well as valuation and transaction assessment. An additional portion of the
Portfolio is managed by a group of investment research analysts.
The individual portfolio managers of each segment of the Portfolio, other than
that managed by the group of research analysts, are as follows:
Donnalisa P. Barnum. Donnalisa Barnum is a Senior Vice President and a portfolio
manager for Capital Guardian. She joined the Capital Guardian organization in
1986.
Michael R. Erickson. Michael Erickson is a Senior Vice President and portfolio
manager for Capital Guardian and a Senior Vice President and Director for
Capital International Limited. He joined the Capital Guardian organization in
1987.
David I. Fisher. David Fisher is Chairman of the Board of Capital Group
International, Inc. and Capital Guardian. He joined the Capital Guardian
organization in 1969.
Theodore R. Samuels. Theodore Samuels is a Senior Vice President and a Director
for Capital Guardian, as well as a Director of Capital International Research,
Inc. He joined the Capital Guardian organization in 1981.
Eugene P. Stein. Eugene Stein is Executive Vice President, a Director, a
portfolio manager, and Chairman of the Investment Committee for Capital
Guardian. He joined the Capital Guardian organization in 1972.
<PAGE>
--------
17
- --------------------------------------------------------------------------------
EQ/ALLIANCE PREMIER GROWTH PORTFOLIO
INVESTMENT OBJECTIVE: To achieve long-term growth of capital by primarily
investing in equity securities of a limited number of large, carefully selected,
high-quality United States companies that are judged, by the Adviser, likely to
achieve superior earnings growth.
THE INVESTMENT STRATEGY
The Portfolio invests primarily (at least 85% of its total assets) in equity
securities of United States companies. The Portfolio is diversified for purposes
of the 1940 Act, however it is still highly concentrated. The Portfolio focuses
on a relatively small number of intensively researched companies. The Adviser
selects the Portfolio's investments from a research universe of more than 600
companies that have strong management, superior industry positions, excellent
balance sheets and superior earnings growth prospects. An emphasis is placed on
identifying securities of companies whose substantially above-average
prospective earnings growth is not fully reflected in current market valuations.
Normally, the Portfolio invests in about 40-50 companies, with the 25 most
highly regarded of these companies usually constituting approximately 70% of the
Portfolio's net assets. In managing the Portfolio, the Adviser seeks to
capitalize on apparently unwarranted price fluctuations both to purchase or
increase positions on weakness and to sell or reduce overpriced holdings. The
Portfolio normally remains nearly fully invested and does not take significant
cash positions for market timing purposes. During market declines, while adding
to positions in favored stocks, the Portfolio becomes somewhat more aggressive,
gradually reducing the number of companies represented in its holdings.
Conversely, in rising markets, while reducing or eliminating fully valued
positions, the Portfolio becomes somewhat more conservative, gradually
increasing the number of companies represented in its holdings. Through this
approach, the Adviser seeks to gain positive returns in good markets while
providing some measure of protection in poor markets.
The Adviser expects the average market capitalization of companies represented
in the Portfolio normally to be in the range, or in excess, of the average
market capitalization of companies included in the S&P 500.
The Portfolio may invest up to 20% of its net assets in convertible securities
and 15% of its total assets in securities of foreign issuers.
The Portfolio may write covered exchange-traded call options on its securities
of up to 15% of its total assets, and purchase and sell exchange-traded call and
put options on common stocks written by others of up to, for all options, 10% of
its total assets.
THE PRINCIPAL RISKS
This Portfolio invests in common stocks, therefore, its performance may go up or
down depending on general market conditions. Other principal risks include:
FOCUSED PORTFOLIO RISK: The Portfolio invests in the securities of a limited
number of companies. Consequently, the Portfolio may incur more risk because
changes in the value of a single security may have a more significant effect,
either positive or negative, on the Portfolio's net asset value.
GROWTH INVESTING RISK: As noted above, this Portfolio uses a growth oriented
approach to stock selection. The price of growth stocks may be more sensitive to
changes in current or expected earnings than the prices of other stocks. The
price of growth stocks is also subject to the risk that the stock price of one
or more companies will fall or will fail to appreciate as anticipated by the
Adviser, regardless of movements in the securities markets.
CONVERTIBLE SECURITIES RISK: Convertible securities enable the Portfolio to
benefit from increases in the market price of the underlying common stock and
provide higher yields than the underlying common stocks, but generally offer
lower yields than nonconvertible securities of similar quality. The value of
convertible securities fluctuates both in
_____________________________ EQ Advisors Trust
<PAGE>
DOMESTIC EQUITY PORTFOLIOS (CONTINUED)
- --------
18
- --------------------------------------------------------------------------------
relation to changes in interest rates and changes in the value of the underlying
common stock.
DERIVATIVES RISK: The Portfolio's investments in derivatives can significantly
increase the Portfolio's exposure to market risk or credit risk of the
counterparty. Derivatives also involve the risk of mispricing or improper
valuation and the risk that changes in value of the derivative may not correlate
perfectly with the relevant assets, rates and indices.
FOREIGN SECURITIES RISK: The Portfolio's investments in foreign securities
involve risks not associated with investing in U.S. securities, which can
adversely affect the Portfolio's performance. Foreign markets, particularly
emerging markets, may be less liquid, more volatile, and subject to less
government supervision than domestic markets. There may be difficulties
enforcing contractual obligations, and it may take more time for trades to clear
and settle. In addition, the value of foreign investments can be adversely
affected by: unfavorable currency exchange rates (relative to the U.S. dollar
for securities denominated in foreign currencies); inadequate or inaccurate
information about foreign companies; higher transaction, brokerage and custody
costs; adverse changes in foreign economic and tax policies; and foreign
government instability, war or other adverse political or economic actions.
PORTFOLIO PERFORMANCE
The inception date for this Portfolio is April 30, 1999. Therefore, no prior
performance is available.
WHO MANAGES THE PORTFOLIO
ALLIANCE CAPITAL MANAGEMENT L.P.: ("Alliance"), 1345 Avenue of the Americas, New
York, New York 10105. Alliance's sole general partner is Alliance Capital
Management Corporation, which is an indirect wholly-owned subsidiary of
Equitable, one of the largest life insurance companies in the United States and
a wholly-owned subsidiary of The Equitable Companies Incorporated. Therefore,
the Manager and Alliance are affiliates of each other. Alliance, a Delaware
limited partnership, is a leading international investment manager.
ALFRED HARRISON is the Portfolio Manager and has been responsible for the
day-to-day management of the Portfolio since its inception. Mr. Harrison is Vice
Chairman of Alliance Capital Management Corporation and has been with Alliance
since 1978. Prior to 1978, Mr. Harrison was co-founder, President, and Chief
Executive Officer of IDS Advisory Corporation, the pension fund investment
management subsidiary of Investors Diversified Services, Inc.
<PAGE>
--------
19
- --------------------------------------------------------------------------------
MFS GROWTH WITH INCOME PORTFOLIO
INVESTMENT OBJECTIVE: Seeks to provide reasonable current income and long-term
growth of capital and income.
-----------------------------------------------------------------------
For purposes of this Portfolio, the words "reasonable current income"
mean moderate income.
-----------------------------------------------------------------------
THE INVESTMENT STRATEGY
The Portfolio invests, under normal market conditions, primarily (at least 65%
of its total assets) in equity securities, including common stocks, preferred
stocks, convertible securities, warrants and depositary receipts for those
securities. Equity securities may be listed on a securities exchange or traded
in the over-the-counter markets. While the Portfolio may invest in companies of
any size, the Portfolio generally focuses on companies with larger market
capitalizations that the Adviser believes have sustainable growth prospects and
attractive valuations based on current and expected earnings or cash flow.
The Adviser uses a "bottom-up" investment style in managing the Portfolio. This
means that securities are selected based upon fundamental analysis performed by
the Adviser's large group of equity research analysts.
The Portfolio may invest in foreign securities and may have exposure to foreign
currencies through its investment in these securities, its direct holdings of
foreign currencies or through its use of forward foreign currency exchange
contracts for the purchase or sale of a fixed quantity of foreign currency at a
future date.
When adverse market, financial or political conditions warrant, the Portfolio
may depart from its principal strategies for temporary or defensive purposes.
Such investment strategies are inconsistent with the Portfolio's investment
objective and could result in the Portfolio not achieving its investment
objective.
THE PRINCIPAL RISKS
This Portfolio invests in common stocks, therefore, its performance may go up or
down depending on general market conditions. Other principal risks include:
GROWTH INVESTING RISK: As noted above, this Portfolio uses a growth oriented
approach to stock selection. The price of growth stocks may be more sensitive to
changes in current or expected earnings than the prices of other stocks. The
price of growth stocks is also subject to the risk that the stock price of one
or more companies will fall or will fail to appreciate as anticipated by the
Adviser, regardless of movements in the securities market.
MID-CAP COMPANY RISK: The Portfolio's investments in mid-cap companies may be
subject to more abrupt or erratic movements in price than are those of larger,
more established companies because: the securities of such companies are less
well-known and may trade less frequently and in lower volume; such companies
are more likely to experience greater or more unexpected changes in their
earnings and growth prospects; and the products of technologies of such
companies may be at a relatively early stage of development or not fully
tested.
FOREIGN SECURITIES RISKS: The Portfolio's investments in foreign securities
involve risks not associated with investing in U.S. securities, which can
adversely affect the Portfolio's performance. Foreign markets, particularly
emerging markets, may be less liquid, more volatile, and subject to less
government supervision than domestic markets. There may be difficulties
enforcing contractual obligations, and it may take more time for trades to
clear and settle. In addition, the value of foreign investments can be
adversely affected by: unfavorable currency exchange rates (relative to the
U.S. dollar for securities denominated in foreign currencies); inadequate or
inaccurate information about foreign companies; higher transaction, brokerage
and custody costs; adverse changes in foreign economic and tax policies; and
foreign government instability, war or other adverse political or economic
actions.
_____________________________ EQ Advisors Trust
<PAGE>
DOMESTIC EQUITY PORTFOLIOS (CONTINUED)
- --------
20
- --------------------------------------------------------------------------------
PORTFOLIO PERFORMANCE
The inception date for this Portfolio is December 31, 1998. Therefore, no prior
performance information is available.
WHO MANAGES THE PORTFOLIO
MASSACHUSETTS FINANCIAL SERVICES COMPANY ("MFS"), 500 Boylston Street, Boston,
MA 02116. MFS has been the Adviser to the Portfolio since it commenced
operations. MFS is America's oldest mutual fund organization. MFS and its
predecessor organizations have a history of money management dating from 1924
and the founding of the first mutual fund in the United States, Massachusetts
Investors Trust. MFS is a subsidiary of Sun Life of Canada (United States)
Financial Services Holdings Inc., which, in turn, is an indirect wholly-owned
subsidiary of Sun Life Assurance Company of Canada.
The Portfolio Managers are JOHN D. LAUPHEIMER, JR., Senior Vice President of
MFS, who has been employed as a portfolio manager by MFS since 1986; and
MITCHELL D. DYNAN, a Vice President of MFS, who has been employed as a portfolio
manager by MFS since 1981.
<PAGE>
--------
21
- --------------------------------------------------------------------------------
EQ/EVERGREEN PORTFOLIO
INVESTMENT OBJECTIVE: Seeks capital appreciation.
THE INVESTMENT STRATEGY
The Evergreen Portfolio invests primarily in common stocks and convertible
securities of companies that are relatively small or little-known or represent
special situations which the Adviser believes offer potential for capital
appreciation. In addition, the Portfolio may invest in relatively well-known,
large company securities that have the potential for capital appreciation.
Securities are selected based on a combination of comparative undervaluation
relative to growth potential and/or merger/acquisition price.
------------------------------------------------------------------------
For purposes of this Portfolio, a "little-known" company is one whose
business is limited to a regional market or whose securities are
mainly privately held. A "relatively small" company is one that has a
small share of the market for its products or services in comparison
with other companies in its field or that provides goods or services
for a limited market. A "special situation" company is one which
offers potential for capital appreciation because of a recent or
anticipated change in structure, management, products or services.
------------------------------------------------------------------------
The Portfolio also may invest to a lesser extent in non-convertible debt
securities and preferred stocks that offer an opportunity for capital
appreciation.
When market or financial conditions warrant, the Portfolio may invest up to 100%
of its assets in short-term obligations for temporary or defensive purposes.
Such investment strategies are inconsistent with the Portfolio's investment
objectives and could result in the Portfolio not achieving its investment
objective.
THE PRINCIPAL RISKS
This Portfolio invests in common stocks, therefore, its performance may go up or
down depending on general market conditions. Other principal risks include:
SMALL-CAP AND MID-CAP COMPANY RISK: The Portfolio's investments in small-cap and
mid-cap companies may be subject to more abrupt or erratic movements in price
than are those of larger, more established companies because: the securities of
such companies are less well-known and may trade less frequently and in lower
volume; such companies are more likely to experience greater or more unexpected
changes in their earnings and growth prospects; and the products or technologies
of such companies may be at a relatively early stage of development or not fully
tested.
VALUE INVESTING RISK: As noted above, the Portfolio uses a value-oriented
approach to stock selection. Value investing is subject to the risk that a value
stock's intrinsic value may never be fully recognized or realized by the market,
or its price may go down. There is also the risk that a stock judged to be
undervalued may actually be appropriately priced.
FIXED INCOME RISKS: To the extent that a substantial amount of the Portfolio's
assets are invested in fixed income securities, that portion of the Portfolio's
performance will be affected by changes in interest rates, the credit risk of
the issuer, the duration or maturity of the Portfolio's fixed income holdings,
and adverse market or economic conditions. When interest rates rise, the value
of the Portfolio's fixed income securities, particularly those with longer
durations or maturities, will go down. When interest rates fall, the reverse is
true. In addition, to the extent that the Portfolio invests in investment grade
securities which are rated BBB by S&P or an equivalent rating by any other
NRSRO, it will be exposed to greater risk than higher-rated obligations because
BBB rated investment grade securities are regarded as having only an adequate
capacity to pay principal and interest, are considered to lack outstanding
investment characteristics, and may be speculative.
_____________________________ EQ Advisors Trust
<PAGE>
AGGRESSIVE EQUITY PORTFOLIO
- ----------
22
- --------------------------------------------------------------------------------
PORTFOLIO PERFORMANCE
The inception date for this Portfolio is December 31, 1998. Therefore, no prior
performance information is available.
WHO MANAGES THE PORTFOLIO
EVERGREEN ASSET MANAGEMENT CORP.: ("Evergreen"), 2500 Westchester Avenue,
Purchase, New York 10577. Evergreen has been the Adviser to the Portfolio since
it commenced operations. Evergreen is a registered investment adviser and a
wholly-owned subsidiary of First Union Corporation. Evergreen offers a broad
range of financial services to individuals and businesses throughout the United
States.
JEAN LEDFORD and RICHARD WELSH became co-managers of the Portfolio in August
1999. Jean Ledford, CFA, became President and Chief Executive Officer of
Evergreen in August 1999. From February 1997 until she joined Evergreen, Ms.
Ledford worked as a portfolio manager at American Century Investments ("American
Century"). From 1980 until she joined American Century, Ms. Ledford was the
investment director at the State of Wisconsin Investment Board.
Mr. Welsh joined Evergreen as Senior Vice President and portfolio manager in
August 1999. Prior to joining Evergreen, he worked for five years as a portfolio
manager and analyst at American Century.
<PAGE>
--------
23
- --------------------------------------------------------------------------------
EQ/EVERGREEN FOUNDATION PORTFOLIO
INVESTMENT OBJECTIVE: Seeks to provide, in order of priority, reasonable
income, conservation of capital and capital appreciation.
-----------------------------------------------------------------------
For purposes of this Portfolio, the words "reasonable income" mean
moderate income.
-----------------------------------------------------------------------
THE INVESTMENT STRATEGY
The Portfolio invests primarily in a combination of common stocks, preferred
stocks, securities that are convertible into or exchangeable for common stocks,
investment grade corporate debt securities, securities of or guaranteed by the
U.S. Government, its agencies or instrumentalities, and short-term debt
instruments, such as high quality commercial paper, and obligations of
FDIC-member banks. Investments in common stocks focus on those that pay
dividends and have the potential for capital appreciation. Common stocks are
selected based on a combination of financial strength and estimated growth
potential. Bonds are selected based on the Adviser's projections of interest
rates, varying amounts and maturities in order to achieve capital protection
and, when possible, capital appreciation. The asset allocation of the Portfolio
will vary in accordance with changing economic and market conditions.
Under normal market conditions, at least 25% of the Portfolio's net assets will
be invested in fixed income securities. In selecting debt securities, the
Adviser will emphasize securities that the Adviser believes will not be subject
to significant fluctuations in value. The corporate debt obligations purchased
by the Portfolio will be rated A or higher by S&P and Moody's. The Fund is not
managed with a targeted maturity.
When market or financial conditions warrant, the Portfolio may invest 100% of
its assets in short-term obligations for temporary or defensive purposes. Such
investment strategies are inconsistent with the Portfolio's investment
objectives and could result in the Portfolio not achieving its investment
objective.
THE PRINCIPAL RISKS
This Portfolio invests in common stocks, therefore, its performance may go up or
down depending on general market conditions. Other principal risks include:
CONVERTIBLE SECURITIES RISK: Convertible securities generally enable the
Portfolio to benefit from increases in the market price of the underlying common
stocks, but generally offer lower yields than unconvertible securities of
similar quality. Convertible securities fluctuate both in relation to changes in
interest rates and changes in the value of the underlying common stock.
FIXED INCOME RISKS: To the extent that a substantial amount of the Portfolio's
assets are invested in fixed income securities, that portion of the Portfolio's
performance will be affected by changes in interest rates, the credit risk of
the issuer, the duration or maturity of the Portfolio's fixed income holdings,
and adverse market or economic conditions. When interest rates rise, the value
of the Portfolio's fixed income securities, particularly those with longer
durations or maturities, will go down. When interest rates fall, the reverse is
true. In addition, to the extent that the Portfolio invests in investment grade
securities which are rated BBB by S&P or an equivalent rating by any other
NRSRO, it will be exposed to greater risk than higher-rated obligations because
BBB rated investment grade securities are regarded as having only an adequate
capacity to pay principal and interest, are considered to lack outstanding
investment characteristics, and may be speculative.
PORTFOLIO PERFORMANCE
The inception date for this Portfolio is December 31, 1998. Therefore, no
performance information is available.
WHO MANAGES THE PORTFOLIO
EVERGREEN ASSET MANAGEMENT CORP. ("Evergreen"), 2500 Westchester Avenue,
Purchase, New York 10577.
_____________________________ EQ Advisors Trust
<PAGE>
ASSET ALLOCATION PORTFOLIO
- --------
24
- --------------------------------------------------------------------------------
Evergreen has been the Adviser to the Portfolio since it commenced operations.
Evergreen is a registered investment adviser and a wholly-owned subsidiary of
First Union Corporation. Evergreen offers a broad range of financial services to
individuals and businesses throughout the United States.
JEAN LEDFORD and RICHARD WELSH became co-managers of the Portfolio in August
1999. Jean Ledford, CFA, became President and Chief Executive Officer of
Evergreen in August 1999. From February 1997 until she joined Evergreen, Ms.
Ledford worked as a portfolio manager at American Century Investments ("American
Century"). From 1980 until she joined American Century, Ms. Ledford was the
investment director at the State of Wisconsin Investment Board.
Mr. Welsh joined Evergreen as Senior Vice President and portfolio manager in
August 1999. Prior to joining Evergreen, he worked for five years as a portfolio
manager and analyst at American Century.
<PAGE>
3 More information on principal risks
--------
25
- --------------------------------------------------------------------------------
Risk is the chance that you will lose money on your investment or that it will
not earn as much as you expect. In general, the greater the risk, the more money
your investment can earn for you and the more you can lose. Like other
investment companies, the value of each Portfolio's shares may be affected by
the Portfolio's investment objective(s), principal investment strategies and
particular risk factors. Consequently, each Portfolio may be subject to
different principal risks. Some of the principal risks of investing in the
Portfolios are discussed below. However, other factors may also affect each
Portfolio's net asset value.
There is no guarantee that a Portfolio will achieve its investment objective(s)
or that it will not lose principal value.
GENERAL INVESTMENT RISKS: Each Portfolio is subject to the following risks:
ASSET CLASS RISK: There is the possibility that the returns from the types of
securities in which a Portfolio invests will underperform returns from the
various general securities markets or different asset classes. Different types
of securities tend to go through cycles of outperformance and underperformance
in comparison to the general securities markets.
MARKET RISK: Each Portfolio's share price moves up and down over the short term
in reaction to stock or bond market movements. This means that you could lose
money over short periods, and perhaps over longer periods during extended market
downturns.
SECURITY SELECTION RISK: The Advisers for each Portfolio rely on the insights of
different specialists in making investment decisions based on each Portfolio's
particular investment objective(s) and investment strategies. There is the
possibility that the specific securities held by a Portfolio will underperform
other funds in the same asset class or benchmarks that are representative of the
general performance of the asset class because of the Adviser's choice of
portfolio securities.
YEAR 2000 RISK: Like other mutual funds, financial and business organizations
and individuals around the world, the Trust and its Portfolios could be
adversely affected if the computer systems used by the Advisers, other service
providers, or persons with whom they deal, do not properly process and calculate
date-related information and data dated on and after January 1, 2000. This
possibility is commonly known as the "Year 2000 Problem." Virtually all
operations of the Trust and its Portfolios are computer reliant. The Manager,
Advisers, administrator, transfer agent, distributors and custodian have
informed the Trust that they are actively taking steps to address the Year 2000
Problem with regard to their respective computer systems and the interfaces
between their respective computer systems. The Trust is also taking measures to
obtain assurances from necessary persons that comparable steps are being taken
by the key service providers to the Trust's Advisers, administrator, transfer
agent, distributors, and custodian. There can be no assurance that the Trust and
the Portfolios' key service providers will be Year 2000 compliant. If not
adequately addressed, the Year 2000 Problem could result in the inability of the
Trust to perform its mission critical functions, including trading and settling
trades of Portfolio securities, pricing of portfolio securities and processing
shareholder transactions, and the net asset value of its Portfolios' shares may
be materially affected.
In addition, because the Year 2000 Problem affects virtually all issuers, the
companies or entities in which the Portfolios may invest also could be adversely
impacted by the Year 2000 Problem. For example, issuers may incur substantial
costs to address the Year 2000 problem. The extent of such impact cannot be
predicted and there can be no assurances that the Year 2000 Problem will not
have an adverse effect on the issuers whose securities are held by the
Portfolios. The Advisers have assured the Trust that they consider such issues
in making investment decisions for the Portfolios. Furthermore, certain of the
Portfolios make international investments thereby exposing these Portfolios to
operations, custody and settlement processes outside the United States.
_____________________________ EQ Advisors Trust
<PAGE>
- --------
26
- --------------------------------------------------------------------------------
In many countries outside the United States the Year 2000 Problem has not been
adequately addressed and concerns have been raised that capital flight, among
other issues, may be triggered by full disclosure of the Year 2000 Problem on
countries outside the United States. Additional information on the impact of the
Year 2000 Problem on emerging market countries is provided in this section,
under "FOREIGN SECURITIES RISKS - EMERGING MARKET RISK."
As indicated in "Summary Information Concerning EQ Advisors Trust" and "About
the Investment Portfolios," a particular Portfolio may also be subject to the
following risks:
CONVERTIBLE SECURITIES RISK: Convertible securities may include both convertible
debt and convertible preferred stock. Such securities may be converted into
shares of the underlying common stock at either a stated price or stated rate.
Therefore, convertible securities enable you to benefit from increases in the
market price of the underlying common stock. Convertible securities provide
higher yields than the underlying common stocks, but generally offer lower
yields than nonconvertible securities of similar quality. The value of
convertible securities fluctuates in relation to changes in interest rates and,
in addition, fluctuates in relation to the underlying common stock. Subsequent
to purchase by a Portfolio, convertible securities may cease to be rated or a
rating may be reduced below the minimum required for purchase by that Portfolio.
Each Adviser will consider such event in its determination of whether a
Portfolio should continue to hold the securities.
DERIVATIVES RISK: Derivatives are financial contracts whose value depends on, or
is derived from the value of an underlying asset, reference rate or index.
Derivatives include stock options, securities index options, currency options,
forward currency exchange contracts, futures contracts, swaps and options on
futures contracts. Certain Portfolios can use derivatives involving the U.S.
Government and foreign government securities and currencies. Investments in
derivatives can significantly increase your exposure to market risk, or credit
risk of the counterparty. Derivatives also involve the risk of mispricing or
improper valuation and the risk that changes in value of the derivative may not
correlate perfectly with the relevant assets, rates and indices.
FIXED INCOME RISKS: To the extent that any of the Portfolios invest a
substantial amount of its assets in fixed income securities, a Portfolio may be
subject to the following risks:
CREDIT RISK: Credit risk is the risk that the issuer or guarantor of a debt
security or counterparty to a Portfolio's transactions will be unable or
unwilling to make timely principal and/or interest payments, or otherwise
will be unable or unwilling to honor its financial obligations. Each of the
Portfolios may be subject to credit risk to the extent that it invests in
debt securities or engages in transactions, such as securities loans or
repurchase agreements, which involve a promise by a third party to honor an
obligation to the Portfolio.
Credit risk is particularly significant for the Portfolios that invest a
material portion of their assets in "junk bonds" or lower-rated securities
(i.e., rated BB or lower by S&P or an equivalent rating by any other NRSRO
or unrated securities or similar quality. These debt securities and similar
unrated securities have speculative elements or are predominately
speculative. These Portfolios may also be subject to greater credit risk
because they may invest in debt securities issued in connection with
corporate restructurings by highly leveraged issuers or in debt securities
not current in the payment of interest or principal, or in default.
INTEREST RATE RISK: The price of a bond or a fixed income security is
dependent upon interest rates. Therefore, the share price and total return
of a Portfolio investing a significant portion of its assets in bonds or
fixed income securities will vary in response to changes in interest rates.
A rise in interest rates causes the value of a bond to decrease, and vice
versa. There is
<PAGE>
--------
27
- --------------------------------------------------------------------------------
the possibility that the value of a Portfolio's investment in bonds or
fixed income securities may fall because bonds or fixed income securities
generally fall in value when interest rates rise. The longer the term of a
bond or fixed income instrument, the more sensitive it will be to
fluctuations in value from interest rate changes. Changes in interest rates
may have a significant effect on Portfolios holding a significant portion
of their assets in fixed income securities with long term maturities.
MORTGAGE-BACKED SECURITIES RISK: In the case of mortgage-backed securities,
rising interest rates tend to extend the term to maturity of the securities,
making them even more susceptible to interest rate changes. When interest rates
drop, not only can the value of fixed income securities drop, but the yield can
drop, particularly where the yield on the fixed income securities is tied to
changes in interest rates, such as adjustable mortgages. Also when interest
rates drop, the holdings of mortgage-backed securities by a Portfolio can reduce
returns if the owners of the underlying mortgages pay off their mortgages sooner
than anticipated since the funds prepaid will have to be reinvested at the then
lower prevailing rates. This is known as prepayment risk. When interest rates
rise, the holdings of mortgage-backed securities by a Portfolio can reduce
returns if the owners of the underlying mortgages pay off their mortgages later
than anticipated. This is known as extension risk.
INVESTMENT GRADE SECURITIES RISK: Debt securities are rated by national bond
ratings agencies. Securities rated BBB by S&P or Baa by Moody's are considered
investment grade securities, but are somewhat riskier than higher rated
obligations because they are regarded as having only an adequate capacity to pay
principal and interest, and are considered to lack outstanding investment
characteristics and may be speculative.
JUNK BONDS OR LOWER RATED SECURITIES RISK: Bonds rated below investment grade by
S&P and Moody's are speculative in nature, may be subject to certain risks with
respect to the issuing entity and to greater market fluctuations than higher
rated fixed income securities. They are usually issued by companies without long
track records of sales and earnings, or by those companies with questionable
credit strength. These bonds are considered "below investment grade." The retail
secondary market for these "junk bonds" may be less liquid than that of higher
rated securities and adverse conditions could make it difficult at times to sell
certain securities or could result in lower prices than those used in
calculating the Portfolio's net asset value.
FOREIGN SECURITIES RISKS: A Portfolio's investments in foreign securities,
including depositary receipts, involve risks not associated with investing in
U.S. securities and can affect a Portfolio's performance. Foreign markets,
particularly emerging markets, may be less liquid, more volatile and subject to
less government supervision than domestic markets. There may be difficulties
enforcing contractual obligations, and it may take more time for trades to clear
and settle. The specific risks of investing in foreign securities, among others,
include:
CURRENCY RISK: The risk that changes in currency exchange rates will
negatively affect securities denominated in, and/or receiving revenues in,
foreign currencies. Adverse changes in currency exchange rates (relative to
the U.S. dollar) may erode or reverse any potential gains from a
Portfolio's investment in securities denominated in a foreign currency or
may widen existing losses.
EMERGING MARKET RISK: There are greater risks involved in investing in
emerging markets countries and/or their securities markets. Generally,
economic structures in these countries are less diverse and mature than
those in developed countries, and their political systems are less stable.
Investments in emerging market countries may be affected by national
policies that restrict foreign investment in certain issuers or industries.
The
_____________________________ EQ Advisors Trust
<PAGE>
- ----------
28
- --------------------------------------------------------------------------------
small size of their securities markets and low trading volumes can make
investments illiquid and more volatile than investments in developed
countries and such securities may be subject to abrupt and severe price
declines. As a result, a Portfolio investing in emerging markets countries
may be required to establish special custody or other arrangements before
investing.
The YEAR 2000 PROBLEM may also be especially acute in emerging market
countries. Many emerging market countries are currently lagging behind more
developed countries in their Year 2000 preparedness because they lack the
financial resources to undertake the necessary remedial actions. A lack of
Year 2000 preparedness may adversely affect the health, security and
economic well-being of emerging market countries and could, obviously,
adversely affect the value of a Portfolio's investments in emerging market
countries. More information on the Year 2000 Problem is provided in this
section, under "GENERAL INVESTMENT RISKS YEAR 2000 RISK."
EURO RISK: Certain of the Portfolios invest in securities issued by
European issuers. On January 1, 1999, 11 of the 15 member states of the
European Monetary Union ("EMU") introduced the "Euro" as a common currency.
During a three-year transitional period, the Euro will coexist with each
participating state's currency and, on July 1, 2002, the Euro is expected
to become the sole currency of the participating states. The introduction
of the Euro will result in the redenomination of European debt and equity
securities over a period of time, which may result in various legal and
accounting differences and/or tax treatments that otherwise would not
likely occur. During this period, the creation and implementation of
suitable clearing and settlement systems and other operational problems may
cause market disruptions that could adversely affect investments quoted in
the Euro.
The consequences of the Euro conversion for foreign exchange rates,
interest rates and the value of European securities eligible for purchase
by the Portfolios are presently unclear and it is not possible to predict
the eventual impact of the Euro implementation plan on the Portfolios.
There are a number of significant risks associated with EMU. Monetary and
economic union on this scale has never been attempted before. There is a
significant degree of uncertainty as to whether participating countries
will remain committed to EMU in the face of changing economic conditions.
The conversion may adversely affect a Portfolio if the Euro does not take
effect as planned or if a participating state withdraws from the EMU. Such
actions may adversely affect the value and/or increase the volatility of
securities held by the Portfolios.
POLITICAL/ECONOMIC RISK: Changes in economic and tax policies, government
instability, war or other political or economic actions or factors may have
an adverse effect on a Portfolio's foreign investments.
REGULATORY RISK: Less information may be available about foreign companies.
In general, foreign companies are not subject to uniform accounting,
auditing and financial reporting standards or to other regulatory practices
and requirements as are U.S. companies.
TRANSACTION COSTS RISK: The costs of buying and selling foreign securities,
including tax, brokerage and custody costs, generally are higher than those
involving domestic transactions.
GROWTH INVESTING RISK: Growth investing generally focuses on companies that, due
to their strong earnings and revenue potential, offer above-average prospects
for capital growth, with less emphasis on dividend income. Earnings
predictability and confidence in earnings forecasts are an important part of the
selection process. As a result, the price of growth stocks may be more sensitive
to changes in current or expected earnings than the prices of other stocks.
Advisers using this approach generally seek out companies experiencing some or
all of the following: high sales growth, high unit growth, high or improving
returns on
<PAGE>
--------
29
- --------------------------------------------------------------------------------
assets and equity, and a strong balance sheet. Such Advisers also prefer
companies with a competitive advantage such as unique management, marketing or
research and development. Growth investing is also subject to the risk that the
stock price of one or more companies will fall or will fail to appreciate as
anticipated by the Advisers, regardless of movements in the securities market.
LEVERAGING RISK: When a Portfolio borrows money or otherwise leverages its
portfolio, the value of an investment in that Portfolio will be more volatile
and all other risks will tend to be compounded. All of the Portfolios may take
on leveraging risk by investing in collateral from securities loans and by
borrowing money to meet redemption requests.
LIQUIDITY RISK: Certain securities held by a Portfolio may be difficult (or
impossible) to sell at the time and at the price the seller would like. A
Portfolio may have to hold these securities longer than it would like and may
forego other investment opportunities. There is the possibility that a Portfolio
may lose money or be prevented from earning capital gains if it can not sell a
security at the time and price that is most beneficial to the Portfolio.
Portfolios that invest in privately-placed securities, high-yield bonds,
mortgage-backed securities or foreign or emerging markets securities, which have
all experienced periods of illiquidity, are subject to liquidity risks. A
particular Portfolio may be more susceptible to some of these risks than others,
as noted in the description of each Portfolio.
PORTFOLIO TURNOVER RISK: Consistent with their investment policies, the
Portfolios also will purchase and sell securities without regard to the effect
on portfolio turnover. Higher portfolio turnover (e.g., over 100% per year) will
cause a Portfolio to incur additional transaction costs and may result in
taxable gains being passed through to shareholders.
SECURITIES LENDING RISK: For purposes of realizing additional income, each
Portfolio may lend secirities to broker-dealers approved by the Board of
Trustees. Any such loan of portfolio securities will be continuously secured by
collateral at least equal to the value of the security loaned. Such collateral
will be in the form of cash, marketable securities issued or guaranteed by the
U.S. Government or its agencies, or a standby letter of credit issued by
qualified banks. The risks in lending portfolio securities, as with other
extensions of secured credit, consist of possibly delay in receiving additional
collateral or in the recovery of the securities or possible loss of rights in
the collateral should the borrower fail financially. Loans will only be made to
firms deemed by the Adviser to be of good standing and will not be made unless,
in the judgement of the Adviser, the consideration to be earned from such loans
would justify the risk.
SMALL-CAP AND MID-CAP COMPANY RISK: A Portfolio's investments in small-cap and
mid-cap companies may involve greater risks than investments in larger, more
established issuers. Smaller companies may have narrower product lines, more
limited financial resources and more limited trading markets for their stock, as
compared with larger companies. Their securities may be less well-known and
trade less frequently and in more limited volume than the securities of larger,
more established companies. In addition, small-cap and mid-cap companies are
typically subject to greater changes in earnings and business prospects than
larger companies. Consequently, the prices of small company stocks tend to rise
and fall in value more frequently than the stocks of larger companies. Although
investing in small-cap and mid-cap companies offers potential for above-average
returns, the companies may not succeed and the value of their stock could
decline significantly.
VALUE INVESTING RISK: Value investing attempts to identify strong companies
selling at a discount from their perceived true worth. Advisers using this
approach generally select stocks at prices, in their view, that are temporarily
low relative to the company's earnings, assets, cash flow and dividends. Value
investing is subject to the risk that the stocks' intrinsic value may never be
fully recognized or realized by the market, or their prices may go down. In
_____________________________ EQ Advisors Trust
<PAGE>
- --------
30
- --------------------------------------------------------------------------------
addition, there is the risk that a stock judged to be undervalued may actually
be appropriately priced. Value investing generally emphasizes companies that,
considering their assets and earnings history, are attractively priced and may
provide dividend income.
The Trust's Portfolios are not insured by the FDIC or any other government
agency. Each Portfolio is not a deposit or other obligation of any financial
institution or bank and is not guaranteed. Each Portfolio is subject to
investment risks and possible loss of principal invested.
<PAGE>
4 Management of the Trust
--------
31
- --------------------------------------------------------------------------------
This section gives you information on the Trust, the Manager and the Advisers
for the Portfolios. More detailed information concerning each of the Advisers
and portfolio managers is included in the description for each Portfolio in the
section "About The Investment Portfolios."
THE TRUST
The Trust is organized as a Delaware business trust and is registered with the
Securities and Exchange Commission ("SEC") as an open-end management investment
company. The Trust issues shares of beneficial interest that are currently
divided among forty Portfolios, each of which has authorized Class IA and Class
IB shares. Each Portfolio has its own objectives, investment strategies and
risks, which have been previously described in this prospectus.
THE MANAGER
EQ Financial Consultants, Inc. ("EQFC"), 1290 Avenue of the Americas, New York,
New York 10104, currently serves as the Manager of the Trust. The Board of
Trustees of the Trust has approved a transfer to Equitable of the Trust's
Investment Management Agreement with EQFC. This transfer is expected to be
completed in September 1999. Upon completion of the transfer, Equitable will
serve as the Manager of the Trust. However, until completion of the transfer,
EQFC will continue to serve in that capacity. Equitable, 1290 Avenue of the
Americas, New York, New York 10104, is the indirect corporate parent of EQFC.
Both EQFC and Equitable are investment advisers registered under the Investment
Advisers Act of 1940, as amended, and EQFC is a broker-dealer registered under
the Securities Exchange Act of 1934, as amended.
Subject to the supervision and direction of the Board of Trustees, the Manager
has overall responsibility for the general management and administration of the
Trust. In the exercise of that responsibility, the Manager, without obtaining
shareholder approval but subject to the review and approval by the Board of
Trustees, may: (i) select the Advisers for the Portfolios; (ii) enter into and
materially modify existing investment advisory agreements; and (iii) terminate
and replace the Advisers. The Manager also monitors each Adviser's investment
program and results, reviews brokerage matters, oversees compliance by the Trust
with various federal and state statutes, and carries out the directives of the
Board of Trustees. The Manager also supervises the provision of services by
third parties such as the Trust's custodian and administrator.
The seven (7) Portfolios listed in the table below did not commence operations
during 1998. The table below shows the annual rate of the management fees (as a
percentage of each Portfolio's average daily net assets) that the Manager is
entitled to receive in 1999 for managing each of these Portfolios.
ANNUAL RATE OF MANAGEMENT FEES
- --------------------------------------------------------
PORTFOLIOS ANNUAL RATE
- --------------------------------------------------------
Calvert Socially Responsible 0.65%
Capital Guardian Research 0.65%
Capital Guardian U.S. Equity 0.65%
EQ/Alliance Premier Growth 0.90%
EQ/Evergreen 0.75%
EQ/Evergreen Foundation 0.63%
MFS Growth with Income 0.55%
- --------------------------------------------------------
EXPENSE LIMITATION AGREEMENT
In the interest of limiting expenses of each Portfolio, the Manager has entered
into an expense limitation agreement with the Trust with respect to each
Portfolio ("Expense Limitation Agreement"). Pursuant to that Expense Limitation
Agreement, the Manager has agreed to waive or limit its fees and to assume other
expenses so that the total annual operating expenses of each Portfolio other
than interest, taxes, brokerage commissions, other expenditures which are
capitalized in accordance with generally accepted accounting principles, other
extraordinary expenses not incurred in the
_____________________________ EQ Advisors Trust
<PAGE>
- ----------
32
- --------------------------------------------------------------------------------
ordinary course of each Portfolio's business and amounts payable pursuant to a
plan adopted in accordance with Rule 12b-1 under the 1940 Act, are limited to
the following fees:
EXPENSE LIMITATION RATES
- --------------------------------------------------------------
AMOUNT EXPENSES
LIMITED TO (% OF
PORTFOLIOS DAILY NET ASSETS)
- --------------------------------------------------------------
Calvert Socially Responsbie 0.80%
Capital Guardian Research 0.70%
Capital Guardian U.S. Equity 0.70%
EQ/Alliance Premier Growth 0.90%
EQ/Evergreen 0.80%
EQ/Evergreen Foundation 0.70%
MFS Growth with Income 0.60%
- --------------------------------------------------------------
Each Portfolio may at a later date reimburse to the Manager the management fees
waived or limited and other expenses assumed and paid by the Manager pursuant to
the Expense Limitation Agreement provided such Portfolio has reached a
sufficient asset size to permit such reimbursement to be made without causing
the total annual expense ratio of each Portfolio to exceed the percentage limits
stated above. Consequently, no reimbursement by a Portfolio will be made unless:
(i) the Portfolio's assets exceed $100 million; (ii) the Portfolio's total
annual expense ratio is less than the respective percentages stated above; and
(iii) the payment of such reimbursement has been approved by the Trust's Board
of Trustees on a quarterly basis.
The total amount of reimbursement to which the Manager may be entitled will
equal, at any time, the sum of (i) all investment management fees previously
waived or reduced by the Manager and (ii) all other payments previously remitted
by the Manager to the Portfolio during any of the previous five (5) fiscal
years, less any reimbursement that the Portfolio has previously paid to the
Manager with respect to (a) such investment management fees previously waived or
reduced and (b) such other payments previously remitted by the Manager to the
Portfolio.
THE ADVISERS
The Calvert Portfolio has two Advisers and all other Portfolios have an Adviser
that furnishes an investment program for the Portfolio pursuant to an investment
advisory agreement with the Manager. Each Adviser makes investment decisions on
behalf of the Portfolio, places all orders for the purchase and sale of
investments for the Portfolio's account with brokers or dealers selected by such
Adviser and may perform certain limited related administrative functions in
connection therewith.
The Manager has received an exemptive order, the Multi-Manager Order, from the
SEC that permits the Manager, subject to board approval and without the approval
of shareholders to: (a) employ a new Adviser or Advisers for any Portfolio
pursuant to the terms of a new Advisory Agreement, in each case either as a
replacement for an existing Adviser or as an additional Adviser; (b) change the
terms of any Advisory Agreement; and (c) continue the employment of an existing
Adviser on the same advisory contract terms where a contract has been assigned
because of a change in control of the Adviser. In such circumstances,
shareholders would receive notice of such action, including the information
concerning the Adviser that normally is provided in the Prospectus.
The Manager pays each Adviser a fee based on the Portfolio's average daily net
assets. No Portfolio is responsible for the fees paid to each of the Advisers.
THE ADMINISTRATOR
Pursuant to an agreement, Chase Global Funds Services Company ("Administrator")
assists the Manager in the performance of its administrative responsibilities to
the Trust and provides the Trust with other necessary administrative, fund
accounting and compliance services. In addition, the Administrator makes
available the office space, equipment, personnel and facilities required to
provide such services to the Trust. For these services, the Trust pays the
Administrator a monthly fee at the annual rate of .0525 of 1% of the total
<PAGE>
--------
33
- --------------------------------------------------------------------------------
Trust assets, plus $25,000 for each Portfolio, until the total Trust assets
reach $2.0 billion, and when the total Trust assets exceed $2.0 billion: .0425
of 1% of the next $0.5 billion of the total Trust assets; .035 of 1% of the next
$2.0 billion of the total Trust assets; .025 of 1% of the next $1.0 billion of
the total Trust assets; .015 of 1% of the next $2.5 billion of the total Trust
assets; .01 of 1% of the total Trust assets in excess of $8.0 billion; provided,
however, that the annual fee payable to Chase with respect to any Portfolio
which commenced operations after July 1, 1997 and whose assets do not exceed
$200 million shall be computed at the annual rate of .0525% of 1% of the
Portfolio's total assets plus $25,000.
THE TRANSFER AGENT
Equitable serves as the transfer agent and dividend disbursing agent of the
Trust and receives no compensation for serving in such capacity.
BROKERAGE PRACTICES
In selecting brokers and dealers, the Manager and each Adviser may consider
research and brokerage services furnished to either company and their
affiliates. Subject to seeking the most favorable net price and execution
available, the Manager and each Adviser may also consider sales of shares of the
Trust as a factor in the selection of brokers and dealers.
BROKERAGE TRANSACTIONS WITH AFFILIATES
To the extent permitted by law, the Trust may engage in securities and other
transactions with entities that may be affiliated with the Manager or the
Advisers. The 1940 Act generally prohibits the Trust from engaging in principal
securities transactions with an affiliate of the Manager or Advisers unless
pursuant to an exemptive order from the SEC. For these purposes, however, the
Trust has considered this issue and believes, based upon advice of counsel, that
a broker-dealer affiliate of an Adviser to one Portfolio should not be treated
as an affiliate of the Adviser to another Portfolio for which such Adviser does
not provide investment advice. The Trust has adopted procedures that are
reasonably designed to provide that any commission it pays to affiliates of the
Manager or Advisers does not exceed the usual and customary broker's commission.
The Trust has also adopted procedures permitting it to purchase securities,
under certain restrictions prescribed by a rule under the 1940 Act, in a public
offering in which an affiliate of the Manager or Advisers is an underwriter.
_____________________________ EQ Advisors Trust
<PAGE>
5 Fund distribution arrangements
- --------
34
- --------------------------------------------------------------------------------
The Trust offers two classes of shares on behalf of each Portfolio: Class IA
shares and Class IB shares. EQ Financial Consultants, Inc. ("EQFC"), serves as
one of the distributors for the Class IB shares of the Trust offered by this
Prospectus as well as one of the distributors for the Class IA shares. Equitable
Distributors, Inc. ("EDI") serves as the other distributor for the Class IB
shares of the Trust as well as the Class IA shares. Both classes of shares are
offered and redeemed at their net asset value without any sales load. EQFC and
EDI are affiliates of Equitable. Both EQFC and EDI are registered as
broker-dealers under the Securities Exchange Act of 1934 and are members of the
National Association of Securities Dealers.
The Trust has adopted a Distribution Plan under Rule 12b-1 under the 1940 Act
for the Trust's Class IB shares. Under the Class IB Distribution Plan the Class
IB shares of the Trust pay each of the distributors an annual fee to compensate
them for promoting, selling and servicing shares of the Portfolios. The annual
fees equal 0.25% of each Portfolio's average daily net assets. Over time, the
fees will increase your cost of investing and may cost you more than other types
of charges.
<PAGE>
6 Purchase and redemption
--------
35
- --------------------------------------------------------------------------------
The price at which a purchase or redemption is effected is based on the next
calculation of net asset value after an order is placed by an insurance company
or qualified retirement plan investing in or redeeming from the Trust.
Net asset value per share is calculated for purchases and redemption of shares
of each Portfolio by dividing the value of total Portfolio assets, less
liabilities (including Trust expenses and class related expenses, which are
accrued daily), by the total number of outstanding shares of that Portfolio. The
net asset value per share of each Portfolio is determined each business day at
4:00 p.m. Eastern time. Net asset value per share is not calculated on days on
which the New York Stock Exchange ("NYSE") is closed for trading.
Portfolios that invest a significant portion of their assets in foreign
securities, may experience changes in their net asset value on days when a
shareholder may not purchase or redeem shares of that Portfolio because foreign
securities (other than depositary receipts) are valued at the close of business
in the applicable foreign country.
All shares are purchased and redeemed in accordance with the Trust's Amended and
Restated Declaration of Trust and By-Laws. Sales and redemptions of shares of
the same class by the same shareholder on the same day will be netted for each
Portfolio. All redemption requests will be processed and payment with respect
thereto will normally be made within seven days after tenders.
The Trust may suspend redemption, if permitted by the 1940 Act, for any period
during which the New York Stock Exchange is closed or during which trading is
restricted by the SEC or the SEC declares that an emergency exists. Redemption
may also be suspended during other periods permitted by the SEC for the
protection of the Trust's shareholders. If the Board of Trustees determines that
it would be detrimental to the best interest of the Trust's remaining
shareholders to make payment in cash, the Trust may pay redemption proceeds in
whole or in part by a distribution-in-kind of readily marketable securities.
_____________________________ EQ Advisors Trust
<PAGE>
7 How assets are valued
- --------
36
- --------------------------------------------------------------------------------
Values are determined according to accepted practices and all laws and
regulations that apply. The assets of each Portfolio are generally valued as
follows:
o Stocks and debt securities which mature in more than 60 days are valued on
the basis of market quotations.
o Foreign securities not traded directly, or in America Depository Receipts or
similar form, in the United States are valued at representative quoted
prices in the currency in the country of origin. Foreign currency is
converted into United States dollars equivalents at current exchange rates.
Because foreign markets may open at different times than the NYSE, the value
of a Portfolio's shares may change on days when shareholders are not able to
buy or sell them. If events materially affecting the values of the
Portfolio's foreign investments occur between the close of foreign markets
and the close of regular trading on the NYSE, these investments may be
valued at their fair value.
o Short-term debt securities in the Portfolios which mature in 60 days or less
are valued at amortized cost, which approximates market value.
o Other securities and assets for which market quotations are not readily
available or for which valuation cannot be provided are valued in good faith
by the Valuation Committee of the Board of Trustees of the Trust using its
best judgment.
<PAGE>
8 Tax information
--------
37
- --------------------------------------------------------------------------------
Each Portfolio of the Trust is a separate regulated investment company for
federal income tax purposes. Regulated investment companies are usually not
taxed at the entity (Portfolio) level. They pass through their income and gains
to their shareholders by paying dividends. Their shareholders include this
income on their respective tax returns. A Portfolio will be treated as a
regulated investment company if it meets specified federal income tax rules,
including types of investments, limits on investments, calculation of income,
and dividend payment requirements. Although the Trust intends that it and each
Portfolio will be operated to have no federal tax liability, if they have any
federal tax liability, that could hurt the investment performance of the
Portfolio in question. Also, any Portfolio investing in foreign securities or
holding foreign currencies could be subject to foreign taxes which could reduce
the investment performance of the Portfolio.
It is important for each Portfolio to maintain its federal income tax regulated
investment company status because the shareholders of the Portfolio that are
insurance company separate accounts will then be able to use a favorable federal
income tax investment diversification testing rule in figuring out whether the
Contracts indirectly funded by the Portfolio meet tax qualification rules for
variable insurance contracts. If a Portfolio fails to meet specified investment
diversification requirements, owners of non-pension plan Contracts funded
through the Trust could be taxed immediately on the accumulated investment
earnings under their Contracts and could lose any benefit of tax deferral. The
Administrator and the Manager therefore carefully monitor compliance with all of
the regulated investment company rules and variable insurance contract
investment diversification rules.
_____________________________ EQ Advisors Trust
<PAGE>
9 Prior performance of each adviser
- --------
38
- --------------------------------------------------------------------------------
The following table provides information concerning the historical performance
of another registered investment company (or series) or other institutional
private accounts managed by each Adviser that has investment objectives,
policies, strategies and risks substantially similar to those of the respective
Portfolio(s) of the Trust for which it serves as Adviser. The data is provided
to illustrate the past performance of each Adviser in managing a substantially
similar investment vehicle as measured against specified market indices. This
data does not represent the past performance of any of the Portfolios or the
future performance of any Portfolio or its Adviser. Consequently, potential
investors should not consider this performance data as an indication of the
future performance of any Portfolio of the Trust or of its Adviser and should
not confuse this performance data with performance data for each of the Trust's
Portfolios, which is shown for each Portfolio under the caption "ABOUT THE
INVESTMENT PORTFOLIOS."
Each Adviser's performance data shown below for other registered investment
companies (or series thereof) was calculated in accordance with standards
prescribed by the SEC for the calculation of average annual total return
information for registered investment companies. Average annual total return
reflects changes in share prices and reinvestment of dividends and distributions
and is net of fund expenses. In each such instance, the share prices and
investment returns will fluctuate, reflecting market conditions as well as
changes in company-specific fundamentals of portfolio securities.
Composite performance data relating to the historical performance of
institutional private accounts managed by the relevant Advisers was calculated
on a total return basis and includes all losses. As specified below, this
composite performance data is provided for the Capital Guardian U.S. Equity
Research Portfolio-Diversified Composite, and the Capital Guardian U.S. Equity
Composite (collectively, the "Composites"). The total returns for each Composite
reflect the deduction of investment advisory fees, brokerage commissions and
execution costs paid by Capital Guardian's institutional private accounts,
without provision for federal or state income taxes. Custodial fees, if any,
were not included in the calculation. Each Composite includes all actual,
fee-paying, discretionary institutional private accounts managed by Capital
Guardian that have investment objectives, policies, strategies and risks
substantially similar to those of the relevant Portfolio. Securities
transactions are accounted for on the trade date and accrual accounting is
utilized. Cash and equivalents are included in performance returns. The
institutional private accounts that are included in the Composite are not
subject to the same types of expenses to which the relevant Portfolio is subject
or to the diversification requirements, specific tax restrictions and investment
limitations imposed on the Portfolio by the 1940 Act or Subchapter M of the
Internal Revenue Code. Consequently, the performance results for the Composites
could have been adversely affected if the institutional private accounts
included in the Composites had been regulated as investment companies under the
federal securities laws.
The major difference between the SEC prescribed calculation of average annual
total returns for registered investment companies or (series thereof) and total
returns for composite performance is that average annual total returns reflects
all fees and charges applicable to the registered investment company in question
and the total return calculation for the Composites reflects only those fees and
charges described in the paragraph directly above.
The performance results for the registered investment companies or Composites
presented below are subject to somewhat lower fees and expenses than the
relevant Portfolios although in most instances the fees and expenses are
substantially similar. In addition, holders of Contracts representing interests
in the Portfolios below will be subject to charges and expenses relating to such
insurance contracts. The performance results presented below do not reflect any
insurance related expenses and would be reduced if such charges were reflected.
<PAGE>
--------
39
- --------------------------------------------------------------------------------
The investment results presented below are unaudited. For more information on
the specified market indices used below, see the section "The Benchmarks."
ANNUAL RATES OF RETURN OF OTHER FUNDS OR ACCOUNTS MANAGED BY ADVISERS AS OF
12/31/98
The name of the other fund or account managed by the Adviser is shown in BOLD.
The name of the Trust Portfolio is shown in (parentheses). The name of the
benchmark is shown in italics.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
1 5 10 Since Inception
OTHER FUND OR ACCOUNT MANAGED BY ADVISER (EQAT Portfolio) Year Years Years Inception Date
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Benchmark
- ------------------------------------------------------------------------------------------------------------------------
ALLIANCE PREMIER GROWTH FUND, INC. - ADVISOR CLASS(9) (EQ/ALLIANCE PREMIER GROWTH PORTFOLIO)
49.85% N/A N/A 42.97% 10/1/96
- ------------------------------------------------------------------------------------------------------------------------
S&P 500 Index(1) 28.57% N/A N/A 21.60%
- ------------------------------------------------------------------------------------------------------------------------
CAPITAL GUARDIAN U.S. EQUITY COMPOSITE (CAPITAL GUARDIAN U.S. EQUITY PORTFOLIO)
22.76% 22.15% 17.95% 12/31/66
- ------------------------------------------------------------------------------------------------------------------------
S&P 500 Index(1) 28.57% 24.06% 19.21%
- ------------------------------------------------------------------------------------------------------------------------
CAPITAL GUARDIAN U.S. EQUITY RESEARCH PORTFOLIO - DIVERSIFIED COMPOSITE (CAPITAL GUARDIAN RESEARCH PORTFOLIO)
28.33% 24.41% N/A 21.62% 3/31/93
- ------------------------------------------------------------------------------------------------------------------------
S&P 500 Index(1) 28.57% 24.06% N/A 21.68%
- ------------------------------------------------------------------------------------------------------------------------
EVERGREEN FUND - CLASS Y SHARES (EQ/EVERGREEN PORTFOLIO)
7.23% 17.82% 14.72% 10/15/71
- ------------------------------------------------------------------------------------------------------------------------
Russell 2000 Index(2) (2.54)% 11.86% 12.94%
- ------------------------------------------------------------------------------------------------------------------------
EVERGREEN FOUNDATION FUND - CLASS Y SHARES (EQ/EVERGREEN FOUNDATION PORTFOLIO)
12.21% 15.06% N/A 16.89% 1/2/90
- ------------------------------------------------------------------------------------------------------------------------
S&P 500 Index(3) 28.57% 24.06% N/A 18.82%
- ------------------------------------------------------------------------------------------------------------------------
MASSACHUSETTS INVESTORS TRUST(2) (MFS GROWTH WITH INCOME PORTFOLIO)
22.95% 22.97% 19.15% 7/15/24
- ------------------------------------------------------------------------------------------------------------------------
S&P 500 Index(1) 28.57% 24.06% 19.21%
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The S&P 500 Index ("S&P 500") is an unmanaged index containing common
stocks of 500 industrial, transportation, utility and financial companies,
regarded as generally representative of the larger capitalization portion
of the United States stock market. The S&P 500 reflects the reinvestment of
income dividends and capital gain distributions, if any, but does not
reflect fees, brokerage commissions, or other expenses of investing.
(2) The Russell 2000 Index is an unmanaged index (with no defined investment
objective) composed of approximately 2,000 small-capitalization stocks and
includes reinvestments of dividends. The index does not include fees or
operating expenses and is not available for actual investment. It is
compiled by the Frank Russell Company.
_____________________________ EQ Advisors Trust
<PAGE>
10 Financial Highlights
- --------
40
- --------------------------------------------------------------------------------
No financial highlights are presented for EQ/Evergreen Foundation Portfolio,
EQ/Evergreen Portfolio and MFS Growth with Income Portfolio, each of which
received initial capital on December 31, 1998. In addition no financial
highlights are presented for Capital Guardian Research Portfolio, Capital
Guardian U.S. Equity Portfolio or EQ/Alliance Premier Growth Portfolio, each of
which received initial capital on April 30, 1999 or the Calvert Socially
Responsible Portfolio, which received initial capital on August 30, 1999.
<PAGE>
--------
41
- --------------------------------------------------------------------------------
If you wish to know more, you will find additional information about the Trust
and its Portfolios in the following documents:
ANNUAL REPORTS
The Annual Report includes more information about the Trust's performance and is
available upon request free of charge. The reports usually include performance
information, a discussion of market conditions and the investment strategies
that affected the Portfolios' performance during the last fiscal year.
STATEMENT OF ADDITIONAL INFORMATION (SAI)
The SAI, dated August 30, 1999, is incorporated into this Prospectus by
reference and is available upon request free of charge by calling our toll free
number at 1-800-789-7771.
You may visit the SEC's website at www.sec.gov to view the SAI and other
information about the Trust. You can also review and copy information about the
Trust, including the SAI, at the SEC's Public Reference Room in Washington, D.C.
You may have to pay a duplicating fee. To find out more about the Public
Reference Room, call the SEC at 800-SEC-0330.
Investment Company Act File Number: 811-07953
_____________________________ EQ Advisors Trust
