SUPPLEMENT TO PROSPECTUS OF PORTFOLIO PARTNERS, INC.
This Supplement is dated March 5, 1999
The following information replaces certain information contained in the
Prospectus of Portfolio Partners, Inc. (the "Fund"), dated May 1, 1998, and
should be read in conjunction with that Prospectus.
The following updates and replaces a similar supplement dated March 4, 1999:
The last two sentences of the "MFS Emerging Equities, MFS Research Growth and
MFS Value Equity" paragraph under the section of the Prospectus entitled
"Subadvisers" found on page 10 is hereby replaced with the following:
Effective February 24, 1999, Maura A. Shaughnessy, a Senior Vice President of
MFS, became portfolio manager of MFS Value Equity. Ms. Shaughnessy has been
employed by MFS since 1991, first as an equity analyst and then as a portfolio
manager.
The following updates and replaces a similar supplement dated October 30, 1998:
The section of the Prospectus entitled "PERFORMANCE - PERFORMANCE OF SIMILARLY
MANAGED MUTUAL FUNDS" found on page 13, is hereby replaced with the following:
Each Portfolio is recently organized and has only a short-term performance
record. Each Portfolio, however, has substantially the same investment
objective, policies and strategies as one or more existing mutual funds
("Comparable Funds") that are either sold directly to the public or through
variable products, advised by MFS, Scudder Kemper or T. Rowe Price, as the case
may be.
The historical performance of the Comparable Funds is presented below.
Investors should not consider the performance of the Comparable Funds as an
indication of the future performance of a Portfolio. The performance figures
shown below reflect the deduction of the historical fees and expenses paid by
each Comparable Fund, and not those to be paid by the Portfolio. The figures do
not reflect the deduction of any insurance fees or charges that are imposed by
the insurance company in connection with its sale of the VA Contracts and VLI
Policies. Investors should refer to the separate account prospectuses
describing the VA Contracts and VLI Policies for information pertaining to
these insurance fees and charges. The insurance separate account fees will have
a detrimental effect on the performance of the Portfolios. The results shown
below reflect the reinvestment of dividends and distributions, and were
calculated in the same manner that will be used by each Portfolio to calculate
its own performance.
The following table shows average annual total returns of the Comparable Funds
for the stated periods ending December 31, 1998, as well as a comparison with
the performance of the applicable benchmark.(1)
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<S> <C> <C> <C> <C>
One Year Three Years Five Years Ten Years
MFS Emerging Growth
Fund (Class I)(2)
(Model for MFS
Emerging Equities)(3) 24.82% 19.78% 20.14% 23.19%
Russell 2000 (2.55) 11.58 11.87 12.92
Lipper Mid Cap Fund
Index 13.92 15.89 15.20 17.00
MFS Research Fund
(Class I)(2)
(Model for MFS
Research Growth)(3) 23.32 22.92 20.81 18.53
Lipper Growth Fund
Index 25.69 23.67 19.82 17.21
S&P 500 28.72 28.28 24.09 19.22
MFS Capital
Opportunities Fund
(formerly MFS Value
Fund) (Class I)(2)
(Model for MFS Value
Equity)(3) 27.44 23.53 21.53 18.02
Lipper Capital
Appreciation Fund
Index 19.98 18.28 16.26 15.71
S&P 500 28.72 28.28 24.09 19.22
Scudder VLIF
International Portfolio
(Model for Scudder
International Growth) 18.49 14.05 10.32 11.96
MSCI EAFE 20.00 9.00 9.19 5.54
Scudder International
Fund
(Model for Scudder
International Growth) 18.62 13.63 9.82 10.63
MSCI EAFE 20.00 9.00 9.19 5.54
T. Rowe Price Growth
Stock Fund
(Model for T. Rowe
Price Growth Equity) 27.41 25.20 20.99 17.70
Lipper Growth Fund
Index 25.69 23.67 19.82 17.21
S&P 500 28.72 28.28 24.09 19.22
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(1)The S&P 500 (Standard & Poor's 500) Index is a value-weighted, unmanaged
index of 500 widely held stocks considered to be representative of the stock
market in general. The Russell 2000 Index is a value-weighted, unmanaged index
of small capitalization stocks. The Lipper Mutual Fund Indices are unmanaged,
net-asset-value-weighted indices of the largest qualifying mutual funds within
their respective investment objectives. The Morgan Stanley Capital
International-Europe, Australia, Far East (MSCI EAFE) Index is an unmanaged,
market value-weighted average of the performance of more than 900 securities
listed on the stock exchanges of countries in Europe, Australia and the Far
East. All indices assume reinvestment of all dividends. It is not possible to
invest directly in an index.
(2)MFS Emerging Growth Fund and MFS Research Fund commenced offering Class I
shares on January 2, 1997; MFS Capital Opportunities Fund commenced offering
Class I shares on January 3, 1997. For periods preceding those dates, Class I
performance was calculated by using the performance of the oldest class of
shares for each Comparable Fund (Class B for MFS Emerging Growth Fund and Class
A for MFS Research and MFS Capital Opportunities Fund), adjusted to reflect
that Class I shares have no front-end load or contingent deferred sales charge.
No adjustment was made for differences in the internal expenses among classes.
(3)MFS also manages three series of the MFS Variable Insurance Trust (VIT) with
substantially similar investment objectives, policies and strategies as the
comparable Portfolio Partners Portfolios. The performance of these funds was
not included in the chart because each has a relatively short track record. The
one-year, three-year and since inception performance (as of December 31, 1998)
of the VIT-Emerging Growth Series and VIT-Research Series funds is as follows:
VIT-Emerging Growth Series: 34.16%, 24.16% and 26.55%, respectively (inception
July 24, 1995); VIT-Research Series: 23.39%, 21.99% and 22.52%, respectively
(inception July 26, 1995). The one-year and since inception performance (as of
December 31, 1998) of the VIT-Value Series is 26.80% and 26.33%, respectively
(inception August 14, 1996).
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