<PAGE>
Filed Pursuant to Rule 497(c)
Registration File No.: 333-17217
1
EQ Advisors Trust (SM)
SUPPLEMENT DATED SEPTEMBER 1, 2000
TO THE PROSPECTUS DATED MAY 1, 2000
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This Supplement updates certain information contained in the above-dated
Prospectus. Unless indicated otherwise, this Supplement does not supersede the
Prospectus dated May 1, 2000 or any prior supplements. This Supplement
describes four (4) Portfolios offered by EQ Advisors Trust and the Class IA
shares offered by the Trust on behalf of each Portfolio 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
Supplement contains information you should know before investing. Please read
this Supplement and the Prospectus carefully before investing and keep it for
future reference.
DOMESTIC PORTFOLIOS
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EQ/AXP New Dimensions Portfolio
EQ/AXP Strategy Aggressive Portfolio
EQ/Janus Large Cap Growth Portfolio
FI Mid Cap Portfolio
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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 SUPPLEMENT IS ACCURATE OR COMPLETE. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
Supplement-Class A
<PAGE>
Overview
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EQ ADVISORS TRUST
This Supplement tells you about four (4) current Portfolios of EQ Advisors Trust
("Trust") and the Class IA 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 Supplement. Each of
the current Portfolios of the Trust described in this Supplement 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 Supplement is designed to help you
make informed decisions about the Portfolios that are available under your
Contract or under the Equitable Plan and should be read in conjunction with the
Prospectus. 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.
Equitable currently serves as the Manager of the Trust. In such capacity,
Equitable currently has overall responsibility for the general management and
administration of the Trust.
Information about the Advisers 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 has been granted
relief by the Securities and Exchange Commission ("SEC") ("Multi-Manager Order")
that enables the Manager without obtaining shareholder approval to: (i) select
new or additional Advisers for each of the Trust's Portfolios; (ii) enter into
new investment advisory agreements and materially modify existing investment
advisory agreements; and (iii) terminate and replace the Advisers.
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Table of contents
3
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1 SUMMARY INFORMATION CONCERNING EQ ADVISORS TRUST 4
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2 ABOUT THE INVESTMENT PORTFOLIOS 6
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DOMESTIC PORTFOLIOS 8
EQ/AXP New Dimensions Portfolio 8
EQ/AXP Strategy Aggressive Portfolio 10
EQ/Janus Large Cap Growth Portfolio 12
FI Mid Cap Portfolio 14
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3 MORE INFORMATION ON PRINCIPAL RISKS 16
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4 MANAGEMENT OF THE TRUST 20
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The Trust 20
The Manager 20
Expense Limitation Agreement 21
The Advisers 21
The Administrator 22
The Transfer Agent 22
Brokerage Practices 22
Brokerage Transactions with Affiliates 22
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5 FUND DISTRIBUTION ARRANGEMENTS 24
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6 PURCHASE AND REDEMPTION 25
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7 HOW ASSETS ARE VALUED 25
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8 TAX INFORMATION 25
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9 PRIOR PERFORMANCE OF EACH ADVISER 26
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1 SUMMARY INFORMATION CONCERNING EQ ADVISORS TRUST
4
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The following chart highlights the four (4) Portfolios described in this
Supplement 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 16.
<TABLE>
<CAPTION>
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EQ ADVISORS TRUST DOMESTIC PORTFOLIOS
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PORTFOLIO INVESTMENT OBJECTIVE(S)
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<S> <C>
EQ/AXP NEW DIMENSIONS PORTFOLIO Seeks long-term growth of capital.
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EQ/AXP STRATEGY AGGRESSIVE PORTFOLIO Seeks long-term growth of capital.
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EQ/JANUS LARGE CAP GROWTH PORTFOLIO Seeks long-term growth of capital in a manner consistent
with preservation of capital.
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FI MID CAP PORTFOLIO Seeks long-term growth of capital.
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</TABLE>
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<TABLE>
<CAPTION>
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PRINCIPAL INVESTMENT STRATEGIES PRINCIPAL RISKS
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<S> <C>
Common stocks of companies showing the potential for General investment, growth investing and foreign securities
significant growth (often including securities of companies risks.
operating in areas with dynamic economic and
technological changes occurring and foreign markets).
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Equity securities of growth companies the Adviser chooses General investment, growth investing, small-cap and
based on: (i) considering opportunities and risks within mid-cap company and foreign securities risks.
growing industries and new technologies; (ii) aggressive
growth prospects; and (iii) identification of small and
medium capitalization companies with effective
management, financial strength and competitive market
positions.
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Common stocks of growth companies with a large market General investment, focused portfolio, growth investing,
capitalization. fixed income, junk bond, foreign securities, derivatives and
portfolio turnover risks.
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Common stocks of companies with medium market General investment, mid-cap company, growth investing,
capitalizations (similar to companies in the S&P MidCap value investing, foreign securities, sector and portfolio
400), but also in companies with smaller or larger market turnover risks.
capitalizations. Investments may include growth or value
stocks both.
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</TABLE>
------------------------- EQ Advisors Trust
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2 ABOUT THE INVESTMENT PORTFOLIOS
6
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This section of the Supplement 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 Supplement.
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.
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
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. Certain benchmarks are included because they are widely known
and may help you to understand the universe of securities from which certain of
the Portfolios, as described in this Supplement, are likely to select their
holdings.
THE RUSSELL MIDCAP GROWTH INDEX is an unmanaged list of common stocks that
measures the performance of the 800 smallest companies in the Russell 1000 Index
representing approximately 35% of the total market capitalization of the Russell
1000 Index. (The Russell 1000 Index measures the performance of the 1,000
largest companies based on total market capitalization.) The Russell MidCap
Growth Index measures the performance of those companies with higher
price-to-book ratios and higher forecasted growth values. It is compiled by the
Frank Russell Company.
THE RUSSELL 1000 GROWTH INDEX is an unmanaged list of common stocks that
measures the performance of Russell 1000 Index companies with higher
price-to-book ratios and higher forecasted growth values. (The Russell 1000
Index measures the performance of the 1,000 largest companies in the Russell
3000 Index, which represents approximately 92% of the total market
capitalization of the Russell 3000 Index. The Russell 3000 Index measures the
performance of the 3,000 largest U.S. companies based on total market
capitalization, which represents approximately 98% of the investable U.S. equity
market). The Russell 1000 Growth Index is compiled by the Frank Russell Company.
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THE STANDARD & POOR'S 500 COMPOSITE STOCK PRICE INDEX ("S&P 500") is an
unmanaged weighted 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 returns reflect the reinvestment of dividends, if any, but
do not reflect fees, brokerage commissions or other expenses of investing.
THE STANDARD & POOR'S MIDCAP 400 INDEX ("S&P MidCap 400") is an unmanaged
weighted index of 400 domestic stocks chosen for market size (median market
capitalization as of June 30, 2000 of about $1.6 billion), liquidity, and
industry group representation. The S&P MidCap 400 returns reflect the
reinvestment of dividends, if any, but do not reflect fees, brokerage
commissions or other expenses of investing.
----------------------------- EQ Advisors Trust
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DOMESTIC PORTFOLIOS
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EQ/AXP NEW DIMENSIONS PORTFOLIO
INVESTMENT OBJECTIVE: Seeks long-term growth of capital.
THE INVESTMENT STRATEGY
The Portfolio primarily invests in common stocks of companies showing the
potential for significant growth. These companies often operate in areas where
dynamic economic and technological changes are occurring. The Portfolio may also
invest up to 30% of its total assets in foreign securities.
The Portfolio's Adviser selects investments by:
o identifying companies the Adviser believes have above-average long-term
growth potential based on: effective management; financial strength; and
competitive market position.
o considering opportunities and risks with respect to interest rate and
economic forecasts both domestically and abroad.
In evaluating whether to sell a security, the Adviser considers, among other
factors, whether:
o the security is overvalued relative to alternative investments;
o the company has met the Adviser's earnings and/or growth expectations;
o political, economic, or other events could affect the company's performance;
o the Adviser wishes to minimize potential losses (i.e., in a market
down-turn); and
o the Adviser identifies a more attractive opportunity.
Although not a primary investment strategy, the Portfolio also may invest in
other instruments, such as money market securities, preferred stocks, debt
obligations (of any rating), and convertible securities. Additionally, the
Portfolio may utilize derivative instruments (such as options and futures
contracts) to produce incremental earnings, hedge existing positions and
increase flexibility.
When market or financial conditions warrant, the Portfolio may invest more of
its assets in money market securities for temporary or defensive purposes.
During these times, the Portfolio may make frequent securities trades that could
cause the Portfolio to incur additional transaction costs that could be passed
through to shareholders. Such investment strategies 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: The Portfolio may use 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.
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; expropriation or nationalization; adverse changes in foreign economic and
tax policies; and foreign government instability, war or other adverse political
or economic actions.
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PORTFOLIO PERFORMANCE
The inception date for this Portfolio is September 1, 2000. Therefore, no prior
performance information is available.
WHO MANAGES THE PORTFOLIO
AMERICAN EXPRESS FINANCIAL CORPORATION ("AEFC"), 200 AXP Financial Center,
Minneapolis, MN 55474. AEFC has been the Adviser to the Portfolio since the
Portfolio commenced operations. AEFC is a wholly-owned subsidiary of American
Express Company, a financial services company with headquarters at American
Express Tower, World Financial Center, New York, NY 10285. AEFC has provided
financial services since 1894. In addition to offering mutual funds, its family
of companies also offers insurance, annuities, investment certificates and a
broad range of financial management services.
GORDON FINES is principally responsible for the day-to-day management of the
Portfolio. Mr. Fines, a Vice President and senior portfolio manager of AEFC, has
been associated with AEFC since 1981. Doug Guffy and Anne Obermeyer serve as
portfolio managers and have been associated with AEFC since 1994 and 1984,
respectively.
----------------------------- EQ Advisors Trust
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DOMESTIC PORTFOLIOS (CONTINUED)
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EQ/AXP STRATEGY AGGRESSIVE PORTFOLIO
INVESTMENT OBJECTIVE: Seeks long-term growth of capital.
THE INVESTMENT STRATEGY
The Portfolio primarily invests in securities of growth companies. Under normal
market conditions, at least 65% of the Portfolio's total assets are invested in
equity securities. The selection of common stocks is the primary decision in
building the investment portfolio.
In pursuit of the Portfolio's goal, the Adviser chooses equity investments by:
o considering opportunities and risks within growing industries and new
technologies;
o selecting companies that the Adviser believes have aggressive growth
prospects; and
o identifying small and medium capitalization companies with: effective
management, financial strength, and competitive market position. Small and
medium capitalization companies are those whose market capitalization is
similar to the market capitalization of companies in the Russell MidCap
Growth Index.
In evaluating whether to sell a security, the Adviser considers, among other
factors, whether:
o the security is overvalued relative to other potential investments;
o the security has reached the Adviser's price objective;
o the company's characteristics change;
o the company has met the Adviser's earnings and/or growth expectations;
o political, economic, or other events could affect the company's performance;
o the Adviser wishes to minimize potential losses (i.e., in a market
down-turn);
o the Adviser wishes to lock in profits;
o the Adviser identifies a more attractive investment opportunity; and
o the company or the security continue to meet the other standards described
above.
Although not a primary investment strategy, the Portfolio also may invest in
foreign securities, money market securities, debt obligations (rated B or
higher), derivative instruments (such as options and futures contracts), and
convertible securities.
When market or financial conditions warrant, the Portfolio may invest without
limitation in money market instruments or investment grade debt obligations
(rated BBB or higher) for temporary or defensive purposes. During these times,
the Portfolio may make frequent securities trades that could cause the Portfolio
to incur additional transaction costs that could be passed through to
shareholders. Such investments strategies 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: The Portfolio may use 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.
SMALL-CAP AND MID-CAP COMPANY RISK: The Portfolio's investments in new or
unseasoned 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
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11
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technologies of such companies may be at a relatively early stage of development
or not fully tested.
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; expropriation or nationalization; 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 September 1, 2000. Therefore, no prior
performance information is available.
WHO MANAGES THE PORTFOLIO
AMERICAN EXPRESS FINANCIAL CORPORATION ("AEFC"), 200 AXP Financial Center,
Minneapolis, MN 55474. AEFC has been the Adviser to the Portfolio since the
Portfolio commenced operations. AEFC is a wholly-owned subsidiary of American
Express Company, a financial services company with headquarters at American
Express Tower, World Financial Center, New York, NY 10285. AEFC has provided
financial services since 1894. In addition to offering mutual funds, its family
of companies also offers insurance, annuities, investment certificates and a
broad range of financial management services.
LOUIS GIGLIO and SCOTT MULLINIX are principally responsible for the day-to-day
management of the Portfolio. Mr. Giglio, portfolio manager, has been associated
with AEFC since January 1994 as a senior equity analyst. Mr. Mullinix, associate
portfolio manager, has been associated with AEFC since 1987.
----------------------------- EQ Advisors Trust
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DOMESTIC PORTFOLIOS (CONTINUED)
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EQ/JANUS LARGE CAP GROWTH PORTFOLIO
INVESTMENT OBJECTIVE: Seeks long-term growth of capital in a manner consistent
with the preservation of capital.
THE INVESTMENT STRATEGY
The Portfolio invests in securities of growth-oriented companies. Under normal
market conditions, the Portfolio will invest at least 65% of its total assets in
common stocks of growth companies with a large market capitalization.
The Adviser may invest substantially all of the Portfolio's assets in common
stocks if the Adviser believes common stocks will appreciate in value. The
Portfolio is diversified for purposes of the 1940 Act, however, it is invested
in a limited number of companies.
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For purposes of this Portfolio, generally companies having a market
capitalization greater than $10 billion are considered large companies.
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The Adviser applies a "bottom-up" approach in choosing investments, focusing on
the financial condition and competitiveness of individual companies. The Adviser
seeks to identify companies with earnings growth potential that may not be
recognized by the market at large. Although themes may emerge in the Portfolio,
securities are generally selected without regard to any defined industry sector
or other similarly defined selection procedure. If the Adviser is unable to find
investments with earnings growth potential, a significant portfolio of the
Portfolio's assets may be in cash or similar investments.
The Portfolio may also invest without limit in foreign securities either
indirectly (e.g., depositary receipts) or directly in foreign markets. The
Adviser will seek companies that meet its selection criteria, regardless of
where a company is located. Foreign securities are generally selected on a
stock-by-stock basis without regard to any defined allocation among countries or
geographic regions. In addition, the Portfolio may invest in
high-yield/high-risk bonds (less than 35% of the Portfolio's total assets) and
other debt securities, options, futures, forwards, swaps and other types of
derivatives for hedging purposes, or for non-hedging purposes, such as seeking
to enhance return, and securities purchased on a when-issued, delayed delivery
or forward commitment basis.
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.
JUNK BOND RISK: The Portfolio may invest up to 35% of its total assets in "junk
bonds" or lower-rated securities rated BB or lower by S&P or an equivalent
rating by any other NRSRO or unrated securities of similar quality. Therefore,
credit risk is particularly significant for this Portfolio. Junk bonds have
speculative elements or are predominantly speculative credit risks. This
Portfolio may also be subject to greater credit risk because it 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.
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.
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FIXED INCOME RISK: 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 if it invested in higher-rated
obligations because BBB-rated 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.
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. 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; expropriation or nationalization; adverse changes in foreign economic and
tax policies; and foreign government instability, war or other adverse political
or economic actions.
PORTFOLIO TURNOVER RISK: The Portfolio's turnover rate is likely to exceed 100%
per year. Higher portfolio turnover (e.g., over 100% per year) will cause the
Portfolio to incur additional transaction costs that could be passed through to
shareholders.
PORTFOLIO PERFORMANCE
The inception date for this Portfolio is September 1, 2000. Therefore, no prior
performance information is available.
WHO MANAGES THE PORTFOLIO
JANUS CAPITAL CORPORATION ("Janus"), 100 Fillmore Street, Denver, Colorado
80206-4928. Janus has been the Adviser to the Portfolio since it commenced
operations. Janus manages investment companies, private-label mutual funds and
provides separate account advisory services for institutional accounts. Stilwell
Financial, Inc. ("Stilwell") owns approximately 81.5% of the outstanding voting
stock of Janus. Stilwell is a publicly traded company whose subsidiaries are
engaged in financial services.
MARC PINTO is the Portfolio Manager responsible for the day-to-day management of
the Portfolio. Mr. Pinto manages institutional separate accounts in the Large
Cap Growth discipline and has also served as Assistant Portfolio Manager for
certain Janus funds since joining Janus in 1994.
----------------------------- EQ Advisors Trust
<PAGE>
DOMESTIC PORTFOLIOS (CONTINUED)
14
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FI MID CAP PORTFOLIO
INVESTMENT OBJECTIVE: Seeks long-term growth of capital.
THE INVESTMENT STRATEGY
The Adviser's principal investment strategies include:
o Normally investing at least 65% of its total assets in common stocks of
companies with medium market capitalizations. Medium market capitalization
companies are those whose market capitalization is similar to the market
capitalization of companies in the S&P MidCap 400 at the time of the
Portfolio's investment. Companies whose capitalization no longer meets this
definition after purchase continue to be considered to have a medium market
capitalization for purposes of the 65% policy.
o Potentially investing up to 35% of its total assets in companies with market
capitalizations that are smaller or larger than those in the S&P MidCap 400.
o Investing in domestic and foreign issuers.
o Investing in either "growth" stocks or "value" stocks or both. The Adviser
is not constrained by any particular investment style. At any given time,
the Adviser may tend to buy "growth" stocks or "value" stocks, or a
combination of both types.
o In buying and selling securities for the Portfolio, the Adviser relies on
fundamental analysis of each issuer and its potential for success in light
of its current financial condition, its industry position, and economic and
market conditions. Factors considered include growth potential, earning
estimates and management.
The Adviser may use various techniques, such as buying and selling futures
contracts, to increase or decrease the Portfolio's exposure to changing security
prices or other factors that affect security values. If the Adviser's strategies
do not work as intended, the Portfolio may not achieve its objective.
In response to market, economic, political or other conditions, the Adviser may
temporarily use a different investment strategy such as preferred stock or
investment grade instruments for defensive purposes. If the Adviser does so,
different factors could affect the Portfolio's performance and the Portfolio may
not achieve 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:
MID-CAP COMPANY RISK: The Portfolio's investments in new or unseasoned 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.
GROWTH INVESTING RISK: The Portfolio may use 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.
VALUE INVESTING: The Portfolio may also use 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.
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
<PAGE>
15
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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; expropriation or nationalization; adverse changes in foreign economic and
tax policies; and foreign government instability, war or other adverse political
or economic actions.
PORTFOLIO TURNOVER RISK: The Portfolio's turnover rate is likely to be over 100%
per year. Higher portfolio turnover (e.g., over 100% per year) will cause the
Portfolio to incur additional transaction costs that could be passed through to
shareholders.
SECTOR RISK: Market or economic factors affecting certain companies or
industries in a particular industry sector could have a major effect on the
value of a Portfolio's investments. Many technology stocks, especially those of
smaller less-seasoned companies, tend to be more volatile than the overall
market.
PORTFOLIO PERFORMANCE
The inception date for this Portfolio is September 1, 2000. Therefore, no prior
performance information is available.
WHO MANAGES THE PORTFOLIO
FIDELITY MANAGEMENT & RESEARCH COMPANY ("Fidelity"), 82 Devonshire Street,
Boston, MA 02109. Fidelity has been the Adviser to the Portfolio since the
Portfolio commenced operations. FMR Corp., organized in 1972, is the ultimate
parent company of Fidelity. As of March 31, 2000, FMR Corp., including its
affiliates, had approximately $995 billion in total assets under management.
DAVID FELMAN is principally responsible for the day-to-day management of the
Portfolio. Mr. Felman, a Vice President and portfolio manager, has been
associated with Fidelity since 1993.
----------------------------- EQ Advisors Trust
<PAGE>
3 MORE INFORMATION ON PRINCIPAL RISKS
16
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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 Adviser(s) for each Portfolio rely on the insights
of different specialists in making investment decisions based on the 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.
As indicated in "Summary Information Concerning EQ Advisors Trust" and "About
the Investment Portfolios," a particular Portfolio, as described in this
Supplement, may also be subject to the following risks:
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 of
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 RISK: To the extent that the Portfolio invests a substantial amount
of its assets in fixed income securities, the 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. These debt securities and similar unrated
securities have speculative elements or are predominantly speculative credit
risks.
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
<PAGE>
17
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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 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.
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.
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.
FOCUSED PORTFOLIO RISK: Certain Portfolios may invest in the securities of a
limited number of companies. Consequently, these Portfolios 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.
FOREIGN SECURITIES RISK: 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 market 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 markets countries may be affected by national
policies that restrict foreign investment in certain issuers or industries.
The 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 market countries
may be required to establish special custody or other arrangements before
investing.
----------------------------- EQ Advisors Trust
<PAGE>
18
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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 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.
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 that could be passed
through to shareholders.
SECTOR RISK: Market or economic factors affecting certain companies or
industries in a particular industry sector could have a major effect on the
value of a Portfolio's investments. Many technology stocks, especially those of
smaller less-seasoned companies, tend to be more volatile than the overall
market.
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
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.
<PAGE>
19
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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.
----------------------------- EQ Advisors Trust
<PAGE>
4 MANAGEMENT OF THE TRUST
20
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This section gives you information on the Trust, the Manager and the Advisers
for each of the Portfolios described in the Supplement. 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-five (45) 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 Supplement or
the Prospectus.
THE MANAGER
The Equitable Life Assurance Society of the United States ("Equitable"), 1290
Avenue of the Americas, New York, New York 10104, currently serves as the
Manager of the Trust. EQ Financial Consultants, Inc. ("EQFC") previously served
as the Manager of the Trust, until September 17, 1999 when the Trust's
Investment Management Agreement was transferred to Equitable. Equitable is an
investment adviser registered under the Investment Advisers Act of 1940, as
amended, and a wholly-owned subsidiary of AXA Financial, Inc. ("AXA Financial"),
a subsidiary of AXA, a French insurance holding company.
Subject to the supervision and direction of the Board of Trustees, the Manager
has overall responsibility for the general management of the Trust. In the
exercise of that responsibility and under the Multi-Manager Order, the Manager,
without obtaining shareholder approval but subject to the review and approval by
the Board of Trustees, may: (i) select new or additional Advisers for the
Portfolios; (ii) enter into new investment advisory agreements 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, 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.
<PAGE>
21
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The contractual management fee rates payable by the Trust are at the following
annual percentages of the value of each Portfolio's average daily net assets:
CONTRACTUAL FEE UNDER MANAGEMENT AGREEMENT
(AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS)
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------
FIRST NEXT NEXT NEXT
EQUITY PORTFOLIOS $1 BILLION $1 BILLION $3 BILLION $5 BILLION THEREAFTER
-------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
EQ/AXP New Dimensions 0.650% 0.600% 0.575% 0.550% 0.525%
EQ/AXP Strategy Aggressive 0.700% 0.650% 0.625% 0.600% 0.575%
EQ/Janus Large Cap Growth 0.900% 0.850% 0.825% 0.800% 0.775%
FI Mid Cap 0.700% 0.650% 0.625% 0.600% 0.575%
-------------------------------------------------------------------------------------------------------
</TABLE>
EXPENSE LIMITATION AGREEMENT
In the interest of limiting until April 30, 2001 the expenses of each Portfolio,
the Manager has entered into an amended and restated expense limitation
agreement with the Trust with respect to the Portfolios ("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 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 respective expense ratios:
EXPENSE LIMITATION PROVISIONS
<TABLE>
<CAPTION>
--------------------------------------------------
TOTAL EXPENSES
LIMITED TO (% OF
PORTFOLIOS DAILY NET ASSETS)
--------------------------------------------------
<S> <C>
EQ/AXP New Dimensions 0.70%
EQ/AXP Strategy Aggressive 0.75%
EQ/Janus Large Cap Growth 0.90%
FI Mid Cap 0.75%
--------------------------------------------------
</TABLE>
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 three (3) 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
Each Portfolio has 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
----------------------------- EQ Advisors Trust
<PAGE>
22
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orders for the purchase and sale of investments for the Portfolio's account with
brokers or dealers selected by such Adviser or the Manager 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 additional Advisers for any
Portfolio; (b) enter into new investment advisory agreements and materially
modify existing investment advisory agreements; and (c) terminate and replace
the Advisers without obtaining approval of the relevant Portfolio' s
shareholders. However, the Manager may not enter into an investment advisory
agreement with an "affiliated person" of the Manager (as that term is defined in
Section 2(a)(3) of the 1940 Act) ("Affiliated Adviser"), unless the investment
advisory agreement with the Affiliated Adviser, including compensation, is
approved by the affected Portfolio's shareholders, including, in instances in
which the investment advisory agreement pertains to a newly formed Portfolio,
the Portfolio's initial shareholder. In such circumstances, shareholders would
receive notice of such action, including the information concerning the Adviser
that normally is provided in an information statement under Schedule 14C under
the Securities Exchange Act of 1934 ("1934 Act").
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, Equitable currently serves as the Administrator to the
Trust. As Administrator, Equitable provides the Trust with necessary
administrative, fund accounting and compliance services, and makes available the
office space, equipment, personnel and facilities required to provide such
services to the Trust.
Equitable may carry out its responsibilities either directly or through
sub-contracting with third party service providers. For these services, the
Trust pays Equitable $30,000 for each Portfolio, and a monthly fee at the annual
rate of 0.04 of 1% of the first $3 billion of total Trust assets, 0.03 of 1% of
the next $3 billion of the total Trust assets; 0.025 of 1% of the next $4
billion of the total Trust assets; and 0.0225% of 1% of the total Trust assets
in excess of $10 billion.
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, in accordance with Section 28(e) of the 1934
Act, the Manager and each Adviser may consider research and brokerage services
received by the Manager, the Advisers, the Trust or any Portfolio. 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. Finally, at the discretion of the Board, the
Trust may direct the Manager to cause Advisers to effect securities transactions
through broker-dealers in a manner that would help to generate resources to (i)
pay the cost of certain expenses which the Trust is required to pay or for which
the Trust is required to arrange payment or (ii) finance activities that are
primarily intended to result in the sale of Trust shares.
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 the Advisers unless
pursuant to an exemptive order from the
<PAGE>
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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 an Adviser to
another Portfolio for which such Adviser does not provide investment advice in
whole or in part. 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
24
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The Trust offers two classes of shares on behalf of each Portfolio: Class IA
shares and Class IB shares. AXA Advisors, LLC ("AXA Advisors") serves as one of
the distributors for the Class IA shares of the Trust offered by this Supplement
and the Prospectus as well as one of the distributors for the Class IB shares.
Equitable Distributors, Inc. ("EDI") serves as the other distributor for the
Class IA shares of the Trust as well as the Class IB shares. Both classes of
shares are offered and redeemed at their net asset value without any sales load.
AXA Advisors and EDI are affiliates of Equitable. Both AXA Advisors and EDI are
registered as broker-dealers under the 1934 Act and are members of the National
Association of Securities Dealers, Inc.
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
25
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For information on purchases and redemptions, please see "Purchases and
redemptions" in the Prospectus.
7 HOW ASSETS ARE VALUED
--------------------------------------------------------------------------------
For information on how assets are valued, please see "How assets are valued" in
the Prospectus.
8 TAX INFORMATION
--------------------------------------------------------------------------------
For information on taxes, please see "Tax information" in the Prospectus.
<PAGE>
9 PRIOR PERFORMANCE OF EACH ADVISER
26
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The following table provides information concerning the historical performance
of another registered investment company (or series), or composite of other
institutional private accounts and registered investment companies managed by
the Advisers to three of the Portfolios described in this Supplement which 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 that has at
least one full year of operations 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 as well as registered investment companies
managed by Janus was calculated on a total return basis and includes all losses.
The total returns for the Janus Large Cap Growth Composite reflect the deduction
of all fees paid by the private accounts and investment companies. The composite
includes all accounts with assets above $5 million for which Janus has
discretionary authority, including mutual funds. Accounts enter the Janus Large
Cap Growth Composite upon the first full quarter under management in which
assets exceed the stated minimum. Prior to 1995, all discretionary accounts were
included in the appropriate composite, regardless of asset size, and there has
been no restatement of pre-1995 performance. As of March 31, 2000 the Janus
Large Cap Growth Composite included 57 accounts and assets of $5,129.5 million,
which represented 1.62% of total assets under management. 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 Janus Large Cap Growth
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 Janus Large Cap Growth Composite could have been adversely
affected if the institutional private accounts included in the LargeCap Growth
Composite 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 reflect
all fees and charges applicable to the registered investment company in question
and the total return calculation for the Composite reflects only those fees and
charges described in the paragraph directly above.
The performance results for the registered investment companies or Janus Large
Cap Growth Composite presented below are generally 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 Contracts. The performance results
<PAGE>
27
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presented below do not reflect any insurance related expenses and would be
reduced if such charges were reflected.
The investment results presented below are unaudited. For more information on
the specified market indices used below, see the relevant footnotes. The name of
the other fund or composite 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.
ANNUAL RATES OF RETURN OF OTHER FUNDS OR ACCOUNTS
MANAGED BY ADVISERS AS OF 6/30/00
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------
1 5 10 SINCE INCEPTION
YEAR YEARS YEARS INCEPTION DATE
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
OTHER FUND OR ACCOUNT MANAGED BY ADVISER-NAME OF ADVISER
(EQAT Portfolio)
-------------------------------------------------------------------------------------------------------------------
Benchmark
-------------------------------------------------------------------------------------------------------------------
AXP NEW DIMENSIONS FUND(4),(6)-AEFC 20.58% 25.09% 19.80% 14.14% 7/30/68
(EQ/AXP New Dimensions Portfolio)
-------------------------------------------------------------------------------------------------------------------
S&P 500 Index(2) 5.97% 21.71% 15.05% 8.82%
-------------------------------------------------------------------------------------------------------------------
AXP STRATEGY AGGRESSIVE FUND(5),(6)-AEFC 58.01% 27.81% N/A 28.32% 3/20/95
(EQ/AXP Strategy Aggressive Portfolio)
-------------------------------------------------------------------------------------------------------------------
Russell MidCap Growth Index(3) 48.58% 26.36% N/A 26.82%
-------------------------------------------------------------------------------------------------------------------
JANUS LARGE CAP GROWTH COMPOSITE(4)-JANUS 35.49% 34.55% 23.80% 24.88% 1/1/88
(EQ/Janus Large Cap Growth Portfolio)
-------------------------------------------------------------------------------------------------------------------
Russell 1000 Growth Index(1) 25.67% 28.67% 20.11% 20.25%
-------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The Russell 1000 Growth Index is an unmanaged list of common stocks that
measures the performance of Russell 1000 Index companies with higher
price-to-book ratios and higher forecasted growth values. (The Russell 1000
Index measures the performance of the 1,000 largest companies in the Russell
3000 Index, which represents approximately 92% of the total market
capitalization of the Russell 3000 Index. The Russell 3000 Index measures
the performance of the 3,000 largest U.S. companies based on total market
capitalization, which represents approximately 98% of the investable U.S.
equity market). The Russell 1000 Growth Index does not include fees or
operating expenses and is not available for actual investment. It is
compiled by the Frank Russell Company.
(2) The S&P 500 Index ("S&P 500") is an unmanaged weighted 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 returns reflect the
reinvestment of dividends, if any, but do not reflect fees, brokerage
commissions, or other expenses of investing.
(3) The Russell MidCap Growth Index is an unmanaged index (with no defined
investment objective) measuring the performance of those Russell MidCap
Index companies with higher price-to-book ratios and higher forecasted
growth values. The Russell MidCap Index measures the performance of the 800
smallest companies in the Russell 1000 Index, which represent approximately
26% of the total market capitalization of the Russell 1000 Index. The index
does not include fees or operating expenses and is not available for actual
investment. It is compiled by the Frank Russell Company.
(4) The annual fees and expenses of the similar registered investment company
(or series thereof) (or composite) whose prior performance is shown in the
table above were less than those of the relevant Trust's Portfolio.
Consequently, if the Trust Portfolio's annual fees and expenses were used in
the calculation of the performance of the similar registered investment
company (or composite) that performance would be reduced.
(5) The annual fees and expenses of the similar registered investment company
(or series thereof) (or composite) whose prior performance is shown in the
table above were higher than those of the relevant Trust's Portfolio.
Consequently, if the Trust Portfolio's annual fees and expenses were used in
the calculation of the performance of the similar registered investment
company (or composite) that performance would be increased.
(6) Performance for the Class A shares. The Class A shares are in many instances
subject to a front-end sales charge. Other share classes have different
expenses and their performance will vary.performance is shown in the table
above were higher than those of the relevant Trust's Portfolio.
Consequently, if the Trust Portfolio's annual fees and expenses were used in
the calculation of the performance of the similar registered investment
company (or composite) that performance would be increased.
----------------------------- EQ Advisors Trust
<PAGE>
EQ Advisors Trust (SM)
SUPPLEMENT DATED SEPTEMBER 1, 2000
TO THE PROSPECTUS DATED MAY 1, 2000
1
--------------------------------------------------------------------------------
This Supplement updates certain information contained in the above-dated
Prospectus. Unless indicated otherwise, this Supplement does not supersede the
Prospectus dated May 1, 2000 or any prior supplements. This Supplement
describes four (4) Portfolios offered by EQ Advisors Trust and the Class IB
shares offered by the Trust on behalf of each Portfolio 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
Supplement contains information you should know before investing. Please read
this Supplement and the Prospectus carefully before investing and keep it for
future reference.
DOMESTIC PORTFOLIOS
-------------------
EQ/AXP New Dimensions Portfolio
EQ/AXP Strategy Aggressive Portfolio
EQ/Janus Large Cap Growth Portfolio
FI Mid Cap Portfolio
-------------------------------------------------------------------------------
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 SUPPLEMENT IS ACCURATE OR COMPLETE. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
Supplement-Class B
<PAGE>
Overview
2
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EQ ADVISORS TRUST
This Supplement tells you about four (4) current Portfolios of 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 Supplement. Each of
the current Portfolios of the Trust described in this Supplement 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 Supplement is designed to help you
make informed decisions about the Portfolios that are available under your
Contract or under the Equitable Plan and should be read in conjunction with the
Prospectus. 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.
Equitable currently serves as the Manager of the Trust. In such capacity,
Equitable currently has overall responsibility for the general management and
administration of the Trust.
Information about the Advisers 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 has been granted
relief by the Securities and Exchange Commission ("SEC") ("Multi-Manager Order")
that enables the Manager without obtaining shareholder approval to: (i) select
new or additional Advisers for each of the Trust's Portfolios; (ii) enter into
new investment advisory agreements and materially modify existing investment
advisory agreements; and (iii) terminate and replace the Advisers.
<PAGE>
Table of contents
3
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1 SUMMARY INFORMATION CONCERNING EQ ADVISORS TRUST 4
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2 ABOUT THE INVESTMENT PORTFOLIOS 6
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DOMESTIC PORTFOLIOS 8
EQ/AXP New Dimensions Portfolio 8
EQ/AXP Strategy Aggressive Portfolio 10
EQ/Janus Large Cap Growth Portfolio 12
FI Mid Cap Portfolio 14
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3 MORE INFORMATION ON PRINCIPAL RISKS 16
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4 MANAGEMENT OF THE TRUST 20
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The Trust 20
The Manager 20
Expense Limitation Agreement 21
The Advisers 21
The Administrator 22
The Transfer Agent 22
Brokerage Practices 22
Brokerage Transactions with Affiliates 22
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5 FUND DISTRIBUTION ARRANGEMENTS 24
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6 PURCHASE AND REDEMPTION 25
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7 HOW ASSETS ARE VALUED 25
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8 TAX INFORMATION 25
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9 PRIOR PERFORMANCE OF EACH ADVISER 26
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<PAGE>
1 SUMMARY INFORMATION CONCERNING EQ ADVISORS TRUST
4
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The following chart highlights the four (4) Portfolios described in this
Supplement 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 16.
<TABLE>
<CAPTION>
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EQ ADVISORS TRUST DOMESTIC PORTFOLIOS
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PORTFOLIO INVESTMENT OBJECTIVE(S)
-------------------------------------------------------------------------------------------------
<S> <C>
EQ/AXP NEW DIMENSIONS PORTFOLIO Seeks long-term growth of capital.
-------------------------------------------------------------------------------------------------
EQ/AXP STRATEGY AGGRESSIVE PORTFOLIO Seeks long-term growth of capital.
-------------------------------------------------------------------------------------------------
EQ/JANUS LARGE CAP GROWTH PORTFOLIO Seeks long-term growth of capital in a manner consistent
with preservation of capital.
-------------------------------------------------------------------------------------------------
FI MID CAP PORTFOLIO Seeks long-term growth of capital.
-------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
5
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<TABLE>
<CAPTION>
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PRINCIPAL INVESTMENT STRATEGIES PRINCIPAL RISKS
-----------------------------------------------------------------------------------------------------------------------------
<S> <C>
Common stocks of companies showing the potential for General investment, growth investing and foreign securities
significant growth (often including securities of companies risks.
operating in areas with dynamic economic and
technological changes occurring and foreign markets).
-----------------------------------------------------------------------------------------------------------------------------
Equity securities of growth companies the Adviser chooses General investment, growth investing, small-cap and
based on: (i) considering opportunities and risks within mid-cap company and foreign securities risks.
growing industries and new technologies; (ii) aggressive
growth prospects; and (iii) identification of small and
medium capitalization companies with effective
management, financial strength and competitive market
positions.
-----------------------------------------------------------------------------------------------------------------------------
Common stocks of growth companies with a large market General investment, focused portfolio, growth investing,
capitalization. fixed income, junk bond, foreign securities, derivatives and
portfolio turnover risks.
-----------------------------------------------------------------------------------------------------------------------------
Common stocks of companies with medium market General investment, mid-cap company, growth investing,
capitalizations (similar to companies in the S&P MidCap value investing, foreign securities, sector and portfolio
400), but also in companies with smaller or larger market turnover risks.
capitalizations. Investments may include growth or value
stocks or a combination of both.
-----------------------------------------------------------------------------------------------------------------------------
</TABLE>
----------------------------- EQ Advisors Trust
<PAGE>
2 ABOUT THE INVESTMENT PORTFOLIOS
6
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This section of the Supplement 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 Supplement.
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.
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
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. Certain benchmarks are included because they are widely known
and may help you to understand the universe of securities from which certain of
the Portfolios, as described in this Supplement are likely to select their
holdings.
THE RUSSELL MIDCAP GROWTH INDEX is an unmanaged list of common stocks that
measures the performance of the 800 smallest companies in the Russell 1000 Index
representing approximately 35% of the total market capitalization of the Russell
1000 Index. (The Russell 1000 Index measures the performance of the 1,000
largest companies based on total market capitalization.) The Russell MidCap
Growth Index measures the performance of those companies with higher
price-to-book ratios and higher forecasted growth values. It is compiled by the
Frank Russell Company.
THE RUSSELL 1000 GROWTH INDEX is an unmanaged list of common stocks that
measures the performance of Russell 1000 Index companies with higher
price-to-book ratios and higher forecasted growth values. (The Russell 1000
Index measures the performance of the 1,000 largest companies in the Russell
3000 Index, which represents approximately 92% of the total market
capitalization of the Russell 3000 Index. The Russell 3000 Index measures the
performance of the 3,000 largest U.S. companies based on total market
capitalization, which represents approximately 98% of the investable U.S. equity
market). The Russell 1000 Growth Index is compiled by the Frank Russell Company.
THE STANDARD & POOR'S MIDCAP 400 INDEX ("S&P MidCap 400") is an unmanaged
weighted index of 400
<PAGE>
7
--------------------------------------------------------------------------------
domestic stocks chosen for market size (median market capitalization as of June
30, 2000 of about $1.6 billion), liquidity, and industry group representation.
The S&P MidCap 400 returns reflect the reinvestment of dividends, if any, but do
not reflect fees, brokerage commissions or other expenses of investing.
THE STANDARD & POOR'S 500 COMPOSITE STOCK PRICE INDEX ("S&P 500") is an
unmanaged weighted 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 returns reflect the reinvestment of dividends, if any, but
do not reflect fees, brokerage commissions or other expenses of investing.
----------------------------- EQ Advisors Trust
<PAGE>
DOMESTIC PORTFOLIOS
8
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EQ/AXP NEW DIMENSIONS PORTFOLIO
INVESTMENT OBJECTIVE: Seeks long-term growth of capital.
THE INVESTMENT STRATEGY
The Portfolio primarily invests in common stocks of companies showing the
potential for significant growth. These companies often operate in areas where
dynamic economic and technological changes are occurring. The Portfolio may also
invest up to 30% of its total assets in foreign securities.
The Portfolio's Adviser selects investments by:
o identifying companies the Adviser believes have above-average long-term
growth potential based on: effective management; financial strength; and
competitive market position.
o considering opportunities and risks with respect to interest rate and
economic forecasts both domestically and abroad.
In evaluating whether to sell a security, the Adviser considers, among other
factors, whether:
o the security is overvalued relative to alternative investments;
o the company has met the Adviser's earnings and/or growth expectations;
o political, economic, or other events could affect the company's performance;
o the Adviser wishes to minimize potential losses (i.e., in a market
down-turn); and
o the Adviser identifies a more attractive opportunity.
Although not a primary investment strategy, the Portfolio also may invest in
other instruments, such as money market securities, preferred stocks, debt
obligations (of any rating), and convertible securities. Additionally, the
Portfolio may utilize derivative instruments (such as options and futures
contracts) to produce incremental earnings, hedge existing positions and
increase flexibility.
When market or financial conditions warrant, the Portfolio may invest more of
its assets in money market securities for temporary or defensive purposes.
During these times, the Portfolio may make frequent securities trades that could
cause the Portfolio to incur additional transaction costs that could be passed
through to shareholders. Such investment strategies 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: The Portfolio may use 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.
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; expropriation or nationalization; adverse changes in foreign economic and
tax policies; and foreign government instability, war or other adverse political
or economic actions.
<PAGE>
9
--------------------------------------------------------------------------------
PORTFOLIO PERFORMANCE
The inception date for this Portfolio is September 1, 2000. Therefore, no prior
performance information is available.
WHO MANAGES THE PORTFOLIO
AMERICAN EXPRESS FINANCIAL CORPORATION ("AEFC"), 200 AXP Financial Center,
Minneapolis, MN 55474. AEFC has been the Adviser to the Portfolio since the
Portfolio commenced operations. AEFC is a wholly-owned subsidiary of American
Express Company, a financial services company with headquarters at American
Express Tower, World Financial Center, New York, NY 10285. AEFC has provided
financial services since 1894. In addition to offering mutual funds, its family
of companies also offers insurance, annuities, investment certificates and a
broad range of financial management services.
GORDON FINES is principally responsible for the day-to-day management of the
Portfolio. Mr. Fines, a Vice President and senior portfolio manager of AEFC, has
been associated with AEFC since 1981. Doug Guffy and Anne Obermeyer serve as
portfolio managers and have been associated with AEFL since 1994 and 1984,
respectively.
----------------------------- EQ Advisors Trust
<PAGE>
DOMESTIC PORTFOLIOS (CONTINUED)
10
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EQ/AXP STRATEGY AGGRESSIVE PORTFOLIO
INVESTMENT OBJECTIVE: Seeks long-term growth of capital.
THE INVESTMENT STRATEGY
The Portfolio primarily invests in securities of growth companies. Under normal
market conditions, at least 65% of the Portfolio's total assets are invested in
equity securities. The selection of common stocks is the primary decision in
building the investment portfolio.
In pursuit of the Portfolio's goal, the Adviser chooses equity investments by:
o considering opportunities and risks within growing industries and new
technologies;
o selecting companies that the Adviser believes have aggressive growth
prospects; and
o identifying small and medium capitalization companies with: effective
management, financial strength, and competitive market position. Small and
medium capitalization companies are those whose market capitalization is
similar to the market capitalization of companies in the Russell MidCap
Growth Index.
In evaluating whether to sell a security, the Adviser considers, among other
factors, whether:
o the security is overvalued relative to other potential investments;
o the security has reached the Adviser's price objective;
o the company's characteristics change;
o the company has met the Adviser's earnings and/or growth expectations;
o political, economic, or other events could affect the company's performance;
o the Adviser wishes to minimize potential losses (i.e., in a market
down-turn);
o the Adviser wishes to lock in profits;
o the Adviser identifies a more attractive investment opportunity; and
o the company or the security continue to meet the other standards described
above.
Although not a primary investment strategy, the Portfolio also may invest in
foreign securities, money market securities, debt obligations (rated B or
higher), derivative instruments (such as options and futures contracts), and
convertible securities.
When market or financial conditions warrant, the Portfolio may invest without
limitation in money market instruments or investment grade debt obligations
(rated BBB or higher) for temporary or defensive purposes. During these times,
the Portfolio may make frequent securities trades that could cause the Portfolio
to incur additional transaction costs that could be passed through to
shareholders. Such investments strategies 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: The Portfolio may use 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.
SMALL-CAP AND MID-CAP COMPANY RISK: The Portfolio's investments in new or
unseasoned 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
<PAGE>
11
--------------------------------------------------------------------------------
technologies of such companies may be at a relatively early stage of development
or not fully tested.
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; expropriation or nationalization; 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 September 1, 2000. Therefore, no prior
performance information is available.
WHO MANAGES THE PORTFOLIO
AMERICAN EXPRESS FINANCIAL CORPORATION ("AEFC"), 200 AXP Financial Center,
Minneapolis, MN 55474. AEFC has been the Adviser to the Portfolio since the
Portfolio commenced operations. AEFC is a wholly-owned subsidiary of American
Express Company, a financial services company with headquarters at American
Express Tower, World Financial Center, New York, NY 10285. AEFC has provided
financial services since 1894. In addition to offering mutual funds, its family
of companies also offers insurance, annuities, investment certificates and a
broad range of financial management services.
LOUIS GIGLIO and SCOTT MULLINIX are principally responsible for the day-to-day
management of the Portfolio. Mr. Giglio, portfolio manager, has been associated
with AEFC since January 1994 as a senior equity analyst. Mr. Mullinix, associate
portfolio manager, has been associated with AEFC since 1987.
----------------------------- EQ Advisors Trust
<PAGE>
DOMESTIC PORTFOLIOS (CONTINUED)
12
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EQ/JANUS LARGE CAP GROWTH PORTFOLIO
INVESTMENT OBJECTIVE: Seeks long-term growth of capital in a manner consistent
with the preservation of capital.
THE INVESTMENT STRATEGY
The Portfolio invests in securities of growth-oriented companies. Under normal
market conditions, the Portfolio will invest at least 65% of its total assets in
common stocks of growth companies with a large market capitalization.
The Adviser may invest substantially all of the Portfolio's assets in common
stocks if the Adviser believes common stocks will appreciate in value. The
Portfolio is diversified for purposes of the 1940 Act, however, it is invested
in a limited number of companies.
--------------------------------------------------------------------------------
For purposes of this Portfolio, generally companies having a market
capitalization greater than $10 billion are considered large companies.
--------------------------------------------------------------------------------
The Adviser applies a "bottom-up" approach in choosing investments, focusing on
the financial condition and competitiveness of individual companies. The Adviser
seeks to identify companies with earnings growth potential that may not be
recognized by the market at large. Although themes may emerge in the Portfolio,
securities are generally selected without regard to any defined industry sector
or other similarly defined selection procedure. If the Adviser is unable to find
investments with earnings growth potential, a significant portfolio of the
Portfolio's assets may be in cash or similar investments.
The Portfolio may also invest without limit in foreign securities either
indirectly (e.g., depositary receipts) or directly in foreign markets. The
Adviser will seek companies that meet its selection criteria, regardless of
where a company is located. Foreign securities are generally selected on a
stock-by-stock basis without regard to any defined allocation among countries or
geographic regions. In addition, the Portfolio may invest in
high-yield/high-risk bonds (less than 35% of the Portfolio's total assets) and
other debt securities, options, futures, forwards, swaps and other types of
derivatives for hedging purposes, or for non-hedging purposes, such as seeking
to enhance return, and securities purchased on a when-issued, delayed delivery
or forward commitment basis.
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:
JUNK BOND RISK: The Portfolio may invest up to 35% of its total assets in "junk
bonds" or lower-rated securities rated BB or lower by S&P or an equivalent
rating by any other NRSRO or unrated securities of similar quality. Therefore,
credit risk is particularly significant for this Portfolio. Junk bonds have
speculative elements or are predominantly speculative credit risks. This
Portfolio may also be subject to greater credit risk because it 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.
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.
<PAGE>
13
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FIXED INCOME RISK: 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 if it invested in higher-rated
obligations because BBB-rated 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.
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. 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; expropriation or nationalization; adverse changes in foreign economic and
tax policies; and foreign government instability, war or other adverse political
or economic actions.
PORTFOLIO TURNOVER RISK: The Portfolio's turnover rate is likely to exceed 100%
per year. Higher portfolio turnover (e.g., over 100% per year) will cause the
Portfolio to incur additional transaction costs that could be passed through to
shareholders.
PORTFOLIO PERFORMANCE
The inception date for this Portfolio is September 1, 2000. Therefore, no prior
performance information is available.
WHO MANAGES THE PORTFOLIO
JANUS CAPITAL CORPORATION ("Janus"), 100 Fillmore Street, Denver, Colorado
80206-4928. Janus has been the Adviser to the Portfolio since it commenced
operations. Janus manages investment companies, private-label mutual funds and
provides separate account advisory services for institutional accounts. Stilwell
Financial, Inc. ("Stilwell") owns approximately 81.5% of the outstanding voting
stock of Janus. Stilwell is a publicly traded company whose subsidiaries are
engaged in financial services.
MARC PINTO is the Portfolio Manager responsible for the day-to-day management of
the Portfolio. Mr. Pinto manages institutional separate accounts in the Large
Cap Growth discipline and has also served as Assistant Portfolio Manager for
certain Janus funds since joining Janus in 1994.
----------------------------- EQ Advisors Trust
<PAGE>
DOMESTIC PORTFOLIOS (CONTINUED)
14
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FI MID CAP PORTFOLIO
INVESTMENT OBJECTIVE: Seeks long-term growth of capital.
THE INVESTMENT STRATEGY
The Adviser's principal investment strategies include:
o Normally investing at least 65% of its total assets in common stocks of
companies with medium market capitalizations. Medium market capitalization
companies are those whose market capitalization is similar to the market
capitalization of companies in the S&P MidCap 400 at the time of the
Portfolio's investment. Companies whose capitalization no longer meets this
definition after purchase continue to be considered to have a medium market
capitalization for purposes of the 65% policy.
o Potentially investing up to 35% of its total assets in companies with market
capitalizations that are smaller or larger than those in the S&P MidCap 400.
o Investing in domestic and foreign issuers.
o Investing in either "growth" stocks or "value" stocks or both. The Adviser
is not constrained by any particular investment style. At any given time,
the Adviser may tend to buy "growth" stocks or "value" stocks, or a
combination of both types.
o In buying and selling securities for the Portfolio, the Adviser relies on
fundamental analysis of each issuer and its potential for success in light
of its current financial condition, its industry position, and economic
and market conditions. Factors considered include growth potential,
earning estimates and management.
The Adviser may use various techniques, such as buying and selling futures
contracts, to increase or decrease the Portfolio's exposure to changing security
prices or other factors that affect security values. If the Adviser's strategies
do not work as intended, the Portfolio may not achieve its objective.
In response to market, economic, political or other conditions, the Adviser may
temporarily use a different investment strategy such as preferred stock or
investment grade instruments for defensive purposes. If the Adviser does so,
different factors could affect the Portfolio's performance and the Portfolio may
not achieve 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:
MID-CAP COMPANY RISK: The Portfolio's investments in new or unseasoned 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.
GROWTH INVESTING RISK: The Portfolio may use 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.
VALUE INVESTING: The Portfolio may also use 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.
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
<PAGE>
15
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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; expropriation or nationalization; adverse changes in foreign economic and
tax policies; and foreign government instability, war or other adverse political
or economic actions.
SECTOR RISK: Market or economic factors affecting certain companies or
industries in a particular industry sector could have a major effect on the
value of a Portfolio's investments. Many technology stocks, especially those of
smaller less-seasoned companies, tend to be more volatile than the overall
market.
PORTFOLIO TURNOVER RISK: The Portfolio's turnover rate is likely to be over 100%
per year. Higher portfolio turnover (e.g., over 100% per year) will cause the
Portfolio to incur additional transaction costs that could be passed through to
shareholders.
PORTFOLIO PERFORMANCE
The inception date for this Portfolio is September 1, 2000. Therefore, no prior
performance information is available.
WHO MANAGES THE PORTFOLIO
FIDELITY MANAGEMENT & RESEARCH COMPANY ("Fidelity"), 82 Devonshire Street,
Boston, MA 02109. Fidelity has been the Adviser to the Portfolio since the
Portfolio commenced operations. FMR Corp., organized in 1972, is the ultimate
parent company of Fidelity. As of March 31, 2000, FMR Corp., including its
affiliates, had approximately $995 billion in total assets under management.
DAVID FELMAN is principally responsible for the day-to-day management of the
Portfolio. Mr. Felman, a Vice President and portfolio manager, has been
associated with Fidelity since 1993.
----------------------------- EQ Advisors Trust
<PAGE>
3 MORE INFORMATION ON PRINCIPAL RISKS
16
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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 Adviser(s) for each Portfolio rely on the insights
of different specialists in making investment decisions based on the 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.
As indicated in "Summary Information Concerning EQ Advisors Trust" and "About
the Investment Portfolios," a particular Portfolio, as described in this
Supplement, may also be subject to the following risks:
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 of
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 RISK: To the extent that the Portfolio invests a substantial amount
of its assets in fixed income securities, the 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. These debt securities and similar unrated
securities have speculative elements or are predominantly speculative credit
risks.
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
<PAGE>
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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 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.
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.
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 RISK: 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 market 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 markets countries may be affected by national
policies that restrict foreign investment in certain issuers or industries.
The 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 market countries
may be required to establish special custody or other arrangements before
investing.
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.
----------------------------- EQ Advisors Trust
<PAGE>
18
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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.
FOCUSED PORTFOLIO RISK: Certain Portfolios invest in the securities of a limited
number of companies. Consequently, these Portfolios 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: 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 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.
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 that could be passed
through to shareholders.
SECTOR RISK: Market or economic factors affecting certain companies or
industries in a particular industry sector could have a major effect on the
value of a Portfolio's investments. Many technology stocks, especially those of
smaller less-seasoned companies, tend to be more volatile than the overall
market.
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
addition, there is the risk that a stock judged to be undervalued may actually
be appropriately priced. Value
<PAGE>
19
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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.
----------------------------- EQ Advisors Trust
<PAGE>
4 MANAGEMENT OF THE TRUST
20
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This section gives you information on the Trust, the Manager and the Advisers
for each of the Portfolios described in this Supplement. 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-five (45) 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 Supplement or
the Prospectus.
THE MANAGER
The Equitable Life Assurance Society of the United States ("Equitable"), 1290
Avenue of the Americas, New York, New York 10104, currently serves as the
Manager of the Trust. EQ Financial Consultants, Inc. ("EQFC") previously served
as the Manager of the Trust, until September 17, 1999 when the Trust's
Investment Management Agreement was transferred to Equitable. Equitable is an
investment adviser registered under the Investment Advisers Act of 1940, as
amended, and a wholly-owned subsidiary of AXA Financial, Inc. ("AXA Financial"),
a subsidiary of AXA, a French insurance holding company.
Subject to the supervision and direction of the Board of Trustees, the Manager
has overall responsibility for the general management of the Trust. In the
exercise of that responsibility and under the Multi-Manager Order, the Manager,
without obtaining shareholder approval but subject to the review and approval by
the Board of Trustees, may: (i) select new or additional Advisers for the
Portfolios; (ii) enter into new investment advisory agreements 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, 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.
<PAGE>
21
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The contractual management fee rates payable by the Trust are at the following
annual percentages of the value of each Portfolio's average daily net assets:
CONTRACTUAL FEE UNDER MANAGEMENT AGREEMENT
(AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS)
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------
FIRST NEXT NEXT NEXT
EQUITY PORTFOLIOS $1 BILLION $1 BILLION $3 BILLION $5 BILLION THEREAFTER
------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
EQ/AXP New Dimensions 0.650% 0.600% 0.575% 0.550% 0.525%
EQ/AXP Strategy Aggressive 0.700% 0.650% 0.625% 0.600% 0.575%
EQ/Janus Large Cap Growth 0.900% 0.850% 0.825% 0.800% 0.775%
FI Mid Cap 0.700% 0.650% 0.625% 0.600% 0.575%
------------------------------------------------------------------------------------------------------
</TABLE>
EXPENSE LIMITATION AGREEMENT
In the interest of limiting until April 30, 2001 the expenses of each Portfolio,
the Manager has entered into an amended and restated expense limitation
agreement with the Trust with respect to the Portfolios ("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 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 respective expense ratios:
EXPENSE LIMITATION PROVISIONS
<TABLE>
<CAPTION>
--------------------------------------------------
TOTAL EXPENSES
LIMITED TO (% OF
PORTFOLIOS DAILY NET ASSETS)
--------------------------------------------------
<S> <C>
EQ/AXP New Dimensions 0.70%
EQ/AXP Strategy Aggressive 0.75%
EQ/Janus Large Cap Growth 0.90%
FI Mid Cap 0.75%
--------------------------------------------------
</TABLE>
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 three (3) 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
Each Portfolio has 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
----------------------------- EQ Advisors Trust
<PAGE>
22
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orders for the purchase and sale of investments for the Portfolio's account with
brokers or dealers selected by such Adviser or the Manager 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 additional Advisers for any
Portfolio; (b) enter into new investment advisory agreements and materially
modify existing investment advisory agreements; and (c) terminate and replace
the Advisers without obtaining approval of the relevant Portfolio' s
shareholders. However, the Manager may not enter into an investment advisory
agreement with an "affiliated person" of the Manager (as that term is defined in
Section 2(a)(3) of the 1940 Act) ("Affiliated Adviser"), unless the investment
advisory agreement with the Affiliated Adviser, including compensation, is
approved by the affected Portfolio's shareholders, including, in instances in
which the investment advisory agreement pertains to a newly formed Portfolio,
the Portfolio's initial shareholder. In such circumstances, shareholders would
receive notice of such action, including the information concerning the Adviser
that normally is provided in an information statement under Schedule 14C under
the Securities Exchange Act of 1934 ("1934 Act").
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, Equitable currently serves as the Administrator to the
Trust. As Administrator, Equitable provides the Trust with necessary
administrative, fund accounting and compliance services, and makes available the
office space, equipment, personnel and facilities required to provide such
services to the Trust.
Equitable may carry out its responsibilities either directly or through
sub-contracting with third party service providers. For these services, the
Trust pays Equitable $30,000 for each Portfolio, and a monthly fee at the annual
rate of 0.04 of 1% of the first $3 billion of total Trust assets, 0.03 of 1% of
the next $3 billion of the total Trust assets; 0.025 of 1% of the next $4
billion of the total Trust assets; and 0.0225% of 1% of the total Trust assets
in excess of $10 billion.
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, in accordance with Section 28(e) of the 1934
Act, the Manager and each Adviser may consider research and brokerage services
received by the Manager, the Advisers, the Trust or any Portfolio. 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. Finally, at the discretion of the Board, the
Trust may direct the Manager to cause Advisers to effect securities transactions
through broker-dealers in a manner that would help to generate resources to (i)
pay the cost of certain expenses which the Trust is required to pay or for which
the Trust is required to arrange payment or (ii) finance activities that are
primarily intended to result in the sale of Trust shares.
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 the Advisers unless
pursuant to an exemptive order from the
<PAGE>
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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 an Adviser to
another Portfolio for which such Adviser does not provide investment advice in
whole or in part. 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
24
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The Trust offers two classes of shares on behalf of each Portfolio: Class IA
shares and Class IB shares. AXA Advisors, LLC ("AXA Advisors") serves as one of
the distributors for the Class IB shares of the Trust offered by this Supplement
and the 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.
AXA Advisors and EDI are affiliates of Equitable. Both AXA Advisors and EDI are
registered as broker-dealers under the 1934 Act and are members of the National
Association of Securities Dealers, Inc.
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
25
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For information on purchases and redemptions, please see "Purchase and
redemption" in the Prospectus.
7 HOW ASSETS ARE VALUED
--------------------------------------------------------------------------------
For information on how assets are valued, please see "How assets are valued" in
the Prospectus.
8 TAX INFORMATION
--------------------------------------------------------------------------------
For information on taxes, please see "Tax information" in the Prospectus.
<PAGE>
9 PRIOR PERFORMANCE OF EACH ADVISER
26
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The following table provides information concerning the historical performance
of another registered investment company (or series) or composite of other
institutional private accounts and registered investment companies managed by
the Advisers to three of the Portfolios described in this Supplement which 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 that has at
least one full year of operations 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 as well as registered investment companies
managed by Janus was calculated on a total return basis and includes all losses.
The total returns for the Janus Large Cap Growth Composite reflect the deduction
of all fees paid by the private accounts and investment companies. The Composite
includes all accounts with assets above $5 million for which Janus has
discretionary authority, including mutual funds. Accounts enter the Janus Large
Cap Growth Composite upon the first full quarter under management in which
assets exceed the stated minimum. Prior to 1995, all discretionary accounts were
included in the appropriate composite, regardless of asset size, and there has
been no restatement of pre-1995 performance. As of March 31, 2000 the Janus
Large Cap Growth Composite included 57 accounts and assets of $5,129.5 million,
which represented 1.62% of total assets under management. 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 Janus Large Cap Growth
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 Janus Large Cap Growth Composite could have been adversely
affected if the institutional private accounts included in the Large Cap Growth
Composite 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 reflect
all fees and charges applicable to the registered investment company in question
and the total return calculation for the Composite reflects only those fees and
charges described in the paragraph directly above.
The performance results for the registered investment companies or Janus Large
Cap Growth Composite presented below are generally 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 Contracts. The performance results
<PAGE>
27
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presented below do not reflect any insurance related expenses and would be
reduced if such charges were reflected.
The investment results presented below are unaudited. For more information on
the specified market indices used below, see the relevant footnote. The name of
the other fund or composite 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.
----------------------------- EQ Advisors Trust
<PAGE>
28
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ANNUAL RATES OF RETURN OF OTHER FUNDS OR ACCOUNTS
MANAGED BY ADVISERS AS OF 6/30/00
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------
1 5 10 SINCE INCEPTION
YEAR YEARS YEARS INCEPTION DATE
------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
OTHER FUND OR ACCOUNT MANAGED BY ADVISER-
NAME OF ADVISER
(EQAT Portfolio)
------------------------------------------------------------------------------------------------------
Benchmark
------------------------------------------------------------------------------------------------------
AXP NEW DIMENSIONS FUND(4),(6)-AEFC 20.58% 25.09% 19.80% 14.14% 7/30/68
(EQ/AXP New Dimensions Portfolio)
------------------------------------------------------------------------------------------------------
S&P 500 Index(2) 5.97% 21.71% 15.05% 8.82%
------------------------------------------------------------------------------------------------------
AXP STRATEGY AGGRESSIVE FUND(5),(6)-AEFC 58.01% 27.81% N/A 28.32% 3/20/95
(EQ/AXP Strategy Aggressive Portfolio)
------------------------------------------------------------------------------------------------------
Russell MidCap Growth Index(3) 48.58% 26.36% N/A 26.82%
------------------------------------------------------------------------------------------------------
JANUS LARGE CAP GROWTH COMPOSITE(4)-JANUS 35.49% 34.55% 23.80% 24.88% 1/1/88
(EQ/Janus Large Cap Growth Portfolio)
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Russell 1000 Growth Index(1) 25.67% 28.67% 20.11% 20.25%
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</TABLE>
(1) The Russell 1000 Growth Index is an unmanaged list of common stocks that
measures the performance of Russell 1000 Index companies with higher
price-to-book ratios and higher forecasted growth values. (The Russell 1000
Index measures the performance of the 1,000 largest companies in the Russell
3000 Index, which represents approximately 92% of the total market
capitalization of the Russell 3000 Index. The Russell 3000 Index measures
the performance of the 3,000 largest U.S. companies based on total market
capitalization, which represents approximately 98% of the investable U.S.
equity market). The Russell 1000 Growth Index does not include fees or
operating expenses and is not available for actual investment. It is
compiled by the Frank Russell Company.
(2) The S&P 500 Index ("S&P 500") is an unmanaged weighted 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 returns reflect the
reinvestment of dividends, if any, but do not reflect fees, brokerage
commissions, or other expenses of investing.
(3) The Russell MidCap Growth Index is an unmanaged index (with no defined
investment objective) measuring the performance of those Russell MidCap
Index companies with higher price-to-book ratios and higher forecasted
growth values. The Russell MidCap Index measures the performance of the 800
smallest companies in the Russell 1000 Index, which represent approximately
26% of the total market capitalization of the Russell 1000 Index. The index
does not include fees or operating expenses and is not available for actual
investment. It is compiled by the Frank Russell Company.
(4) The annual fees and expenses of the similar registered investment company
(or series thereof) (or composite) whose prior performance is shown in the
table above were less than those of the relevant Trust's Portfolio.
Consequently, if the Trust Portfolio's annual fees and expenses were used in
the calculation of the performance of the similar registered investment
company (or composite) that performance would be reduced.
(5) The annual fees and expenses of the similar registered investment company
(or series thereof) (or composite) whose prior performance is shown in the
table above were higher than those of the relevant Trust's Portfolio.
Consequently, if the Trust Portfolio's annual fees and expenses were used in
the calculation of the performance of the similar registered investment
company (or composite) that performance would be increased.
(6) Performance for the Class A shares. The Class A shares are in many instances
subject to a front-end sales charge. Other share classes have different
expenses and their performance will vary.
<PAGE>
EQ Advisors Trust (SM)
SUPPLEMENT DATED SEPTEMBER 1, 2000
TO THE PROSPECTUS DATED MAY 1, 2000
1
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This Supplement updates certain information contained in the above-dated
Prospectus. Unless indicated otherwise, this Supplement does not supersede the
Prospectus dated May 1, 2000 or any prior supplements. This Supplement
describes two (2) Portfolios offered by EQ Advisors Trust and the Class IB
shares offered by the Trust on behalf of each Portfolio 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
Supplement contains information you should know before investing. Please read
this Supplement and the Prospectus carefully before investing and keep it for
future reference.
DOMESTIC PORTFOLIOS
-------------------
EQ/Janus Large Cap Growth Portfolio
FI Mid Cap Portfolio
-------------------------------------------------------------------------------
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 SUPPLEMENT IS ACCURATE OR COMPLETE. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
Supplement 2-Class B
<PAGE>
Overview
2
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EQ ADVISORS TRUST
This Supplement tells you about two (2) current Portfolios of 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 Supplement. Each of
the current Portfolios of the Trust described in this Supplement 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 Supplement is designed to help you
make informed decisions about the Portfolios that are available under your
Contract or under the Equitable Plan and should be read in conjunction with the
Prospectus. 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.
Equitable currently serves as the Manager of the Trust. In such capacity,
Equitable currently has overall responsibility for the general management and
administration of the Trust.
Information about the Advisers 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 has been granted
relief by the Securities and Exchange Commission ("SEC") ("Multi-Manager Order")
that enables the Manager without obtaining shareholder approval to: (i) select
new or additional Advisers for each of the Trust's Portfolios; (ii) enter into
new investment advisory agreements and materially modify existing investment
advisory agreements; and (iii) terminate and replace the Advisers.
<PAGE>
Table of contents
3
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1 SUMMARY INFORMATION CONCERNING EQ ADVISORS TRUST 4
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2 ABOUT THE INVESTMENT PORTFOLIOS 5
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DOMESTIC PORTFOLIOS 6
EQ/Janus Large Cap Growth Portfolio 6
FI Mid Cap Portfolio 8
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3 MORE INFORMATION ON PRINCIPAL RISKS 10
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4 MANAGEMENT OF THE TRUST 13
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The Trust 13
The Manager 13
Expense Limitation Agreement 14
The Advisers 14
The Administrator 15
The Transfer Agent 15
Brokerage Practices 15
Brokerage Transactions with Affiliates 15
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5 FUND DISTRIBUTION ARRANGEMENTS 17
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6 PURCHASE AND REDEMPTION 18
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7 HOW ASSETS ARE VALUED 18
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8 TAX INFORMATION 18
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9 PRIOR PERFORMANCE OF THE ADVISER 19
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<PAGE>
1 SUMMARY INFORMATION CONCERNING EQ ADVISORS TRUST
4
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The following chart highlights the two (2) Portfolios described in this
Supplement 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 10.
<TABLE>
<CAPTION>
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EQ ADVISORS TRUST DOMESTIC PORTFOLIOS
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PORTFOLIO INVESTMENT OBJECTIVE(S)
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<S> <C>
EQ/JANUS LARGE CAP GROWTH PORTFOLIO Seeks long-term growth of capital in a manner consistent
with preservation of capital.
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FI MID CAP PORTFOLIO Seeks long-term growth of capital.
--------------------------------------------------------------------------------------------------------------------------
PRINCIPAL INVESTMENTS STRATEGIES PRINCIPAL RISKS
--------------------------------------------------------------------------------------------------------------------------
Common stocks of growth companies with a large market General investment, focused portfolio, growth investing,
capitalization. fixed income, junk bond, foreign securities, derivatives and
portfolio turnover risks.
--------------------------------------------------------------------------------------------------------------------------
Common stocks of companies with medium market General investment, mid-cap company, growth investing,
capitalizations (similar to companies in the S&P MidCap value investing, foreign securities, sector and portfolio
400), but also in companies with smaller or larger market turnover risks.
capitalizations. Investments may include growth or value
stocks or a combination of both.
--------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
2 ABOUT THE INVESTMENT PORTFOLIOS
5
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This section of the Supplement 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 either Portfolio will
achieve its investment objective(s).
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 Supplement.
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 Portfolio 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.
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
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. Certain benchmarks are included because they are widely known
and may help you to understand the universe of securities from which certain of
the Portfolios, as described in this Supplement are likely to select their
holdings.
THE RUSSELL 1000 GROWTH INDEX is an unmanaged list of common stocks that
measures the performance of Russell 1000 Index companies with higher
price-to-book ratios and higher forecasted growth values. (The Russell 1000
Index measures the performance of the 1,000 largest companies in the Russell
3000 Index, which represents approximately 92% of the total market
capitalization of the Russell 3000 Index. The Russell 3000 Index measures the
performance of the 3,000 largest U.S. companies based on total market
capitalization, which represents approximately 98% of the investable U.S. equity
market). The Russell 1000 Growth Index is compiled by the Frank Russell Company.
THE STANDARD & POOR'S MIDCAP 400 INDEX ("S&P MidCap 400") is an unmanaged
weighted index of 400 domestic stocks chosen for market size (median market
capitalization as of June 30, 2000 of about $1.6 billion), liquidity, and
industry group representation. The S&P MidCap 400 returns reflect the
reinvestment of dividends, if any, but do not reflect fees, brokerage
commissions or other expenses of investing.
<PAGE>
DOMESTIC PORTFOLIOS
6
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EQ/JANUS LARGE CAP GROWTH PORTFOLIO
INVESTMENT OBJECTIVE: Seeks long-term growth of capital in a manner consistent
with the preservation of capital.
THE INVESTMENT STRATEGY
The Portfolio invests in securities of growth-oriented companies. Under normal
market conditions, the Portfolio will invest at least 65% of its total assets in
common stocks of growth companies with a large market capitalization.
The Adviser may invest substantially all of the Portfolio's assets in common
stocks if the Adviser believes common stocks will appreciate in value. The
Portfolio is diversified for purposes of the 1940 Act, however, it is invested
in a limited number of companies.
--------------------------------------------------------------------------------
For purposes of this Portfolio, generally companies having a market
capitalization greater than $10 billion are considered large companies.
--------------------------------------------------------------------------------
The Adviser applies a "bottom-up" approach in choosing investments, focusing on
the financial condition and competitiveness of individual companies. The Adviser
seeks to identify companies with earnings growth potential that may not be
recognized by the market at large. Although themes may emerge in the Portfolio,
securities are generally selected without regard to any defined industry sector
or other similarly defined selection procedure. If the Adviser is unable to find
investments with earnings growth potential, a significant portfolio of the
Portfolio's assets may be in cash or similar investments.
The Portfolio may also invest without limit in foreign securities either
indirectly (e.g., depositary receipts) or directly in foreign markets. The
Adviser will seek companies that meet its selection criteria, regardless of
where a company is located. Foreign securities are generally selected on a
stock-by-stock basis without regard to any defined allocation among countries or
geographic regions. In addition, the Portfolio may invest in
high-yield/high-risk bonds (less than 35% of the Portfolio's total assets) and
other debt securities, options, futures, forwards, swaps and other types of
derivatives for hedging purposes, or for non-hedging purposes, such as seeking
to enhance return, and securities purchased on a when-issued, delayed delivery
or forward commitment basis.
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:
JUNK BOND RISK: The Portfolio may invest up to 35% of its total assets in "junk
bonds" or lower-rated securities rated BB or lower by S&P or an equivalent
rating by any other NRSRO or unrated securities of similar quality. Therefore,
credit risk is particularly significant for this Portfolio. Junk bonds have
speculative elements or are predominantly speculative credit risks. This
Portfolio may also be subject to greater credit risk because it 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.
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.
<PAGE>
7
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FIXED INCOME RISK: 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 if it invested in higher-rated
obligations because BBB-rated 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.
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. 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; expropriation or nationalization; adverse changes in foreign economic and
tax policies; and foreign government instability, war or other adverse political
or economic actions.
PORTFOLIO TURNOVER RISK: The Portfolio's turnover rate is likely to exceed 100%
per year. Higher portfolio turnover (e.g., over 100% per year) will cause the
Portfolio to incur additional transaction costs that could be passed through to
shareholders.
PORTFOLIO PERFORMANCE
The inception date for this Portfolio is September 1, 2000. Therefore, no prior
performance information is available.
WHO MANAGES THE PORTFOLIO
JANUS CAPITAL CORPORATION ("Janus"), 100 Fillmore Street, Denver, Colorado
80206-4928. Janus has been the Adviser to the Portfolio since it commenced
operations. Janus manages investment companies, private-label mutual funds and
provides separate account advisory services for institutional accounts. Stilwell
Financial, Inc. ("Stilwell") owns approximately 81.5% of the outstanding voting
stock of Janus. Stilwell is a publicly traded company whose subsidiaries are
engaged in financial services.
MARC PINTO is the Portfolio Manager responsible for the day-to-day management of
the Portfolio. Mr. Pinto manages institutional separate accounts in the Large
Cap Growth discipline and has also served as Assistant Portfolio Manager for
certain Janus funds since joining Janus in 1994.
----------------------------- EQ Advisors Trust
<PAGE>
DOMESTIC PORTFOLIOS (CONTINUED)
8
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FI MID CAP PORTFOLIO
INVESTMENT OBJECTIVE: Seeks long-term growth of capital.
THE INVESTMENT STRATEGY
The Adviser's principal investment strategies include:
o Normally investing at least 65% of its total assets in common stocks of
companies with medium market capitalizations. Medium market capitalization
companies are those whose market capitalization is similar to the market
capitalization of companies in the S&P MidCap 400 at the time of the
Portfolio's investment. Companies whose capitalization no longer meets this
definition after purchase continue to be considered to have a medium market
capitalization for purposes of the 65% policy.
o Potentially investing up to 35% of its total assets in companies with market
capitalizations that are smaller or larger than those in the S&P MidCap 400.
o Investing in domestic and foreign issuers.
o Investing in either "growth" stocks or "value" stocks or both. The Adviser
is not constrained by any particular investment style. At any given time,
the Adviser may tend to buy "growth" stocks or "value" stocks, or a
combination of both types.
o In buying and selling securities for the Portfolio, the Adviser relies on
fundamental analysis of each issuer and its potential for success in light
of its current financial condition, its industry position, and economic and
market conditions. Factors considered include growth potential, earning
estimates and management.
The Adviser may use various techniques, such as buying and selling futures
contracts, to increase or decrease the Portfolio's exposure to changing security
prices or other factors that affect security values. If the Adviser's strategies
do not work as intended, the Portfolio may not achieve its objective.
In response to market, economic, political or other conditions, the Adviser may
temporarily use a different investment strategy such as preferred stock or
investment grade instruments for defensive purposes. If the Adviser does so,
different factors could affect the Portfolio's performance and the Portfolio may
not achieve 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:
MID-CAP COMPANY RISK: The Portfolio's investments in new or unseasoned 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.
GROWTH INVESTING RISK: The Portfolio may use 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.
VALUE INVESTING: The Portfolio may also use 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.
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
<PAGE>
9
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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; expropriation or nationalization; adverse changes in foreign economic and
tax policies; and foreign government instability, war or other adverse political
or economic actions.
SECTOR RISK: Market or economic factors affecting certain companies or
industries in a particular industry sector could have a major effect on the
value of a Portfolio's investments. Many technology stocks, especially those of
smaller less-seasoned companies, tend to be more volatile than the overall
market.
PORTFOLIO TURNOVER RISK: The Portfolio's turnover rate is likely to be over 100%
per year. Higher portfolio turnover (e.g., over 100% per year) will cause the
Portfolio to incur additional transaction costs that could be passed through to
shareholders.
PORTFOLIO PERFORMANCE
The inception date for this Portfolio is September 1, 2000. Therefore, no prior
performance information is available.
WHO MANAGES THE PORTFOLIO
FIDELITY MANAGEMENT & RESEARCH COMPANY ("Fidelity"), 82 Devonshire Street,
Boston, MA 02109. Fidelity has been the Adviser to the Portfolio since the
Portfolio commenced operations. FMR Corp., organized in 1972, is the ultimate
parent company of Fidelity. As of March 31, 2000, FMR Corp., including its
affiliates, had approximately $995 billion in total assets under management.
DAVID FELMAN is principally responsible for the day-to-day management of the
Portfolio. Mr. Felman, a Vice President and portfolio manager, has been
associated with Fidelity since 1993.
----------------------------- EQ Advisors Trust
<PAGE>
3 MORE INFORMATION ON PRINCIPAL RISKS
10
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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 Adviser for each Portfolio rely on the insights of
different specialists in making investment decisions based on the 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.
As indicated in "Summary Information Concerning EQ Advisors Trust" and "About
the Investment Portfolios," a particular Portfolio, as described in this
Supplement, may also be subject to the following risks:
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 of
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 RISK: To the extent that the Portfolio invests a substantial amount
of its assets in fixed income securities, the 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. These debt securities and similar unrated
securities have speculative elements or are predominantly speculative credit
risks.
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
<PAGE>
11
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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 RISK: 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 market 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 markets countries may be affected by national
policies that restrict foreign investment in certain issuers or industries.
The 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 market countries
may be required to establish special custody or other arrangements before
investing.
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.
FOCUSED PORTFOLIO RISK: Certain Portfolios invest in the securities of a limited
number of companies. Consequently, these Portfolios 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: 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
----------------------------- EQ Advisors Trust
<PAGE>
12
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experiencing some or all of the following: high sales growth, high unit growth,
high or improving returns on 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.
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 that could be passed
through to shareholders.
SECTOR RISK: Market or economic factors affecting certain companies or
industries in a particular industry sector could have a major effect on the
value of a Portfolio's investments. Many technology stocks, especially those of
smaller less-seasoned companies, tend to be more volatile than the overall
market.
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
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
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This section gives you information on the Trust, the Manager and the Advisers
for each Portfolio described in this Supplement. 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-five (45) 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 Supplement or
the Prospectus.
THE MANAGER
The Equitable Life Assurance Society of the United States ("Equitable"), 1290
Avenue of the Americas, New York, New York 10104, currently serves as the
Manager of the Trust. EQ Financial Consultants, Inc. ("EQFC") previously served
as the Manager of the Trust, until September 17, 1999 when the Trust's
Investment Management Agreement was transferred to Equitable. Equitable is an
investment adviser registered under the Investment Advisers Act of 1940, as
amended, and a wholly-owned subsidiary of AXA Financial, Inc. ("AXA Financial"),
a subsidiary of AXA, a French insurance holding company.
Subject to the supervision and direction of the Board of Trustees, the Manager
has overall responsibility for the general management of the Trust. In the
exercise of that responsibility and under the Multi-Manager Order, the Manager,
without obtaining shareholder approval but subject to the review and approval by
the Board of Trustees, may: (i) select new or additional Advisers for the
Portfolios; (ii) enter into new investment advisory agreements 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, 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.
<PAGE>
14
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The contractual management fee rates payable by the Trust are at the following
annual percentages of the value of each Portfolio's average daily net assets:
CONTRACTUAL FEE UNDER MANAGEMENT AGREEMENT
(AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS)
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------
FIRST NEXT NEXT NEXT
EQUITY PORTFOLIOS $1 BILLION $1 BILLION $3 BILLION $5 BILLION THEREAFTER
-----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
EQ/Janus Large Cap Growth 0.900% 0.850% 0.825% 0.800% 0.775%
FI Mid Cap 0.700% 0.650% 0.625% 0.600% 0.575%
-----------------------------------------------------------------------------------------------------
</TABLE>
EXPENSE LIMITATION AGREEMENT
In the interest of limiting until April 30, 2001 the expenses of each Portfolio,
the Manager has entered into an amended and restated expense limitation
agreement with the Trust with respect to the Portfolios ("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 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 respective expense ratios:
EXPENSE LIMITATION PROVISIONS
<TABLE>
<CAPTION>
-------------------------------------------------
TOTAL EXPENSES
LIMITED TO (% OF
PORTFOLIOS DAILY NET ASSETS)
-------------------------------------------------
<S> <C>
EQ/Janus Large Cap Growth 0.90%
FI Mid Cap 0.75%
-------------------------------------------------
</TABLE>
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 three (3) 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
Each Portfolio has 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 or the Manager 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
<PAGE>
15
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Manager, subject to board approval and without the approval of shareholders to:
(a) employ a new Adviser or additional Advisers for any Portfolio; (b) enter
into new investment advisory agreements and materially modify existing
investment advisory agreements; and (c) terminate and replace the Advisers
without obtaining approval of the relevant Portfolio' s shareholders. However,
the Manager may not enter into an investment advisory agreement with an
"affiliated person" of the Manager (as that term is defined in Section 2(a)(3)
of the 1940 Act) ("Affiliated Adviser"), unless the investment advisory
agreement with the Affiliated Adviser, including compensation, is approved by
the affected Portfolio's shareholders, including, in instances in which the
investment advisory agreement pertains to a newly formed Portfolio, the
Portfolio's initial shareholder. In such circumstances, shareholders would
receive notice of such action, including the information concerning the Adviser
that normally is provided in an information statement under Schedule 14C under
the Securities Exchange Act of 1934 ("1934 Act").
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, Equitable currently serves as the Administrator to the
Trust. As Administrator, Equitable provides the Trust with necessary
administrative, fund accounting and compliance services, and makes available the
office space, equipment, personnel and facilities required to provide such
services to the Trust.
Equitable may carry out its responsibilities either directly or through
sub-contracting with third party service providers. For these services, the
Trust pays Equitable $30,000 for each Portfolio, and a monthly fee at the annual
rate of 0.04 of 1% of the first $3 billion of total Trust assets, 0.03 of 1% of
the next $3 billion of the total Trust assets; 0.025 of 1% of the next $4
billion of the total Trust assets; and 0.0225% of 1% of the total Trust assets
in excess of $10 billion.
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, in accordance with Section 28(e) of the 1934
Act, the Manager and each Adviser may consider research and brokerage services
received by the Manager, the Advisers, the Trust or any Portfolio. 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. Finally, at the discretion of the Board, the
Trust may direct the Manager to cause Advisers to effect securities transactions
through broker-dealers in a manner that would help to generate resources to (i)
pay the cost of certain expenses which the Trust is required to pay or for which
the Trust is required to arrange payment or (ii) finance activities that are
primarily intended to result in the sale of Trust shares.
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 the 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 an Adviser to another Portfolio for which such Adviser does
not provide investment advice in whole or in part. The Trust has adopted
procedures
----------------------------- EQ Advisors Trust
<PAGE>
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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.
<PAGE>
5 FUND DISTRIBUTION ARRANGEMENTS
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The Trust offers two classes of shares on behalf of each Portfolio: Class IA
shares and Class IB shares. AXA Advisors, LLC ("AXA Advisors") serves as one of
the distributors for the Class IB shares of the Trust offered by this Supplement
and the 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.
AXA Advisors and EDI are affiliates of Equitable. Both AXA Advisors and EDI are
registered as broker-dealers under the 1934 Act and are members of the National
Association of Securities Dealers, Inc.
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
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For information on purchases and redemptions, please see "Purchase and
redemption" in the Prospectus.
7 HOW ASSETS ARE VALUED
--------------------------------------------------------------------------------
For information on how assets are valued, please see "How assets are valued" in
the Prospectus.
8 TAX INFORMATION
--------------------------------------------------------------------------------
For information on taxes, please see "Tax information" in the Prospectus.
<PAGE>
9 PRIOR PERFORMANCE OF ADVISER
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The following table provides information concerning the historical performance
of a composite of other institutional private accounts and registered investment
companies managed by the Adviser to EQ/Janus Large Cap Growth Portfolio
("Portfolio"), which is described in this Supplement and has investment
objectives, policies, strategies and risks substantially similar to those of the
Portfolio of the Trust. The data is provided to illustrate the past performance
of the Adviser in managing a substantially similar investment vehicle as
measured against specified market indices. This data does not represent the past
performance of the Portfolio or the future performance of the Portfolio or its
Adviser. Consequently, potential investors should not consider this performance
data as an indication of the future performance of the Portfolio of the Trust or
of the Adviser and should not confuse this performance data with performance
data for each of the Trust's Portfolios, which is shown for each Portfolio that
has at least one full year of operations under the caption "ABOUT THE INVESTMENT
PORTFOLIOS."
Composite performance data relating to the historical performance of
institutional private accounts as well as registered investment companies
managed by Janus was calculated on a total return basis and includes all losses.
The total returns for the Janus Large Cap Growth Composite reflect the deduction
of all fees paid by the private accounts and investment companies. The composite
includes all accounts with assets above $5 million for which Janus has
discretionary authority, including mutual funds. Accounts enter the Janus Large
Cap Growth Composite upon the first full quarter under management in which
assets exceed the stated minimum. Prior to 1995, all discretionary accounts were
included in the appropriate composite, regardless of asset size, and there has
been no restatement of pre-1995 performance. As of March 31, 2000 the Janus
Large Cap Growth Composite included 57 accounts and assets of $5,129.5 million,
which represented 1.62% of total assets under management. 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 Janus Large Cap Growth
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 Janus Large Cap Growth Composite could have been adversely
affected if the institutional private accounts included in the Janus Large Cap
Growth Composite 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 reflect
all fees and charges applicable to the registered investment company in question
and the total return calculation for the Composite reflects only those fees and
charges described in the paragraph directly above.
The performance results for the Janus Large Cap Growth Composite presented below
are subject to somewhat lower fees and expenses than the relevant Portfolio
although in most instances the fees and expenses are substantially similar. In
addition, holders of Contracts representing interests in the Portfolio below
will be subject to charges and expenses relating to such Contracts. The
performance results presented below do not reflect any insurance related
expenses and would be reduced if such charges were reflected.
The investment results presented below are unaudited. For more information on
the market index used below, see the relevant footnote. The composite 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.
<PAGE>
20
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ANNUAL RATES OF RETURN OF OTHER FUNDS OR ACCOUNTS
MANAGED BY ADVISERS AS OF 6/30/00
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------
1 5 10 SINCE INCEPTION
YEAR YEARS YEARS INCEPTION DATE
-------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
OTHER FUND OR ACCOUNT MANAGED BY ADVISER-NAME OF
ADVISER
(EQAT Portfolio)
-------------------------------------------------------------------------------------------------------------
Benchmark
-------------------------------------------------------------------------------------------------------------
JANUS LARGE CAP GROWTH COMPOSITE(2)-JANUS 35.49% 34.55% 23.80% 24.88% 1/1/88
(EQ/Janus Large Cap Growth Portfolio)
-------------------------------------------------------------------------------------------------------------
Russell 1000 Growth Index(1) 25.67% 28.67% 20.11% 20.25%
-------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The Russell 1000 Growth Index is an unmanaged list of common stocks that
measures the performance of Russell 1000 Index companies with higher
price-to-book ratios and higher forecasted growth values. (The Russell 1000
Index measures the performance of the 1,000 largest companies in the Russell
3000 Index, which represents approximately 92% of the total market
capitalization of the Russell 3000 Index. The Russell 3000 Index measures
the performance of the 3,000 largest U.S. companies based on total market
capitalization, which represents approximately 98% of the investable U.S.
equity market). The Russell 1000 Growth Index does not include fees or
operating expenses and is not available for actual investment. It is
compiled by the Frank Russell Company.
(2) The annual fees and expenses of the similar registered investment company
(or series thereof) (or composite) whose prior performance is shown in the
table above were less than those of the relevant Trust's Portfolio.
Consequently, if the Trust Portfolio's annual fees and expenses were used in
the calculation of the performance of the similar registered investment
company (or composite) that performance would be reduced.
