<PAGE>
[GRAPHIC OMITTED]
Prospectus ----------------------
GE Institutional Funds
September 30, 1999
- --------------------------------------------------------------------------------
Equity Funds
U.S. Equity Fund
S&P 500 Index Fund
Premier Growth Equity Fund
Value Equity Fund
Mid-Cap Growth Fund
Mid-Cap Value Equity Fund
Small-Cap Value Equity Fund
International Equity Fund
Europe Equity Fund
Emerging Markets Fund
- --------------------------------------------------------------------------------
Income Funds
Income Fund
- --------------------------------------------------------------------------------
Asset Allocation Funds
Strategic Investment Fund
- --------------------------------------------------------------------------------
Money Market Funds
Money Market Fund
- --------------------------------------------------------------------------------
Like all mutual funds, the Funds' shares have not been approved or disapproved
by the Securities and Exchange Commission, nor has the Securities and Exchange
Commission passed upon the accuracy or adequacy of this Prospectus. Any
representation to the contrary is a criminal offense.
- --------------------------------------------------------------------------------
[GE LOGO]
- ------------------
We bring good things to life.
- --------------------------------------------------------------------------------
<PAGE>
[This page intentionally left blank]
<PAGE>
------------------------------------------
Contents
- --------------------------------------------------------------------------------
GE Institutional
Funds Prospectus Equity Funds 2
------------------------------------------
U.S. Equity Fund 4
S&P 500 Index Fund 6
Premier Growth Equity Fund 8
Value Equity Fund 9
Mid-Cap Growth Fund 10
Mid-Cap Value Equity Fund 12
Small-Cap Value Equity Fund 13
International Equity Fund 14
Europe Equity Fund 16
Emerging Markets Fund 18
Income Funds 20
------------------------------------------
Income Fund 22
Asset Allocation Funds 24
------------------------------------------
Strategic Investment Fund 25
Money Market Funds 26
------------------------------------------
Money Market Fund 28
Fund Expenses 30
------------------------------------------
More on Strategies and Risks 34
------------------------------------------
Important Definitions 34
More on Investment Strategies 36
More on Risks 42
Other Risk Considerations 45
About the Investment Adviser 46
------------------------------------------
Investment Adviser
and Administrator 46
About the Funds' Portfolio Managers 47
About the Sub-Advisers 48
Prior Performance Information 50
How to Invest 62
------------------------------------------
Investment Choices 62
Opening an Account 62
How to Buy Shares 62
Eligible Investors 63
Minimum Investment
Requirements 63
How to Redeem Shares 64
How to Exchange Shares 65
Signature Guarantees 65
Shareholder Servicing
and Distribution Plan 65
Dividends, Capital Gains and Other
Tax Information 66
------------------------------------------
Calculating Share Value 68
------------------------------------------
Financial Highlights 69
------------------------------------------
Additional information regarding GE Institutional Funds is contained in the
Statement of Additional Information dated September 30, 1999, which is
incorporated by reference into (legally forms a part of) this Prospectus.
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------
2 GE Institutional Equity Funds
Funds Prospectus
- --------------------------------------------------------------------------------
An investment in an Equity Fund is not a deposit of any bank and is not insured
or guaranteed by the Federal Deposit Insurance Corporation or any other
government agency. An investment in an Equity Fund is subject to risk, including
possible loss of principal invested.
Equity funds generally invest in equity securities. Equity securities may
include common stocks, preferred securities, depositary receipts, convertible
securities and rights and warrants of U.S. and foreign companies. Stocks
represent an ownership interest in a corporation. Equity funds have more
potential for capital growth than other funds, but they have greater risk.
- --------------------------------------------------------------------------------
<PAGE>
----------
3
- --------------------------------------------------------------------------------
[This page intentionally left blank.]
- --------------------------------------------------------------------------------
<PAGE>
- -------------------
4 GE Institutional
Funds Prospectus
Equity Funds
- --------------------------------------------------------------------------------
U.S. Equity Fund
- -------------------
Investment Objective: Seeks long-term growth of capital.
The Strategy
The U.S. Equity Fund invests primarily in equity securities of U.S. companies.
The portfolio managers use a Multi-Style(R) investment strategy that combines
growth and value investment management styles. As a result, the portfolio has
characteristics similar to the Standard & Poor's 500 Composite Stock Index,
including capital appreciation and income. Stock selection is key to the
performance of the Fund.
Through fundamental company research, the portfolio managers seek to identify
securities of large companies with characteristics such as:
o attractive valuations
o financial strength
o high quality management focused on generating shareholder value
The Fund also may invest to a lesser extent in foreign securities and debt
securities. The Fund generally intends to hold its investments for a long time,
which results in a relatively low portfolio turnover rate. The portfolio
managers may use various investment techniques to adjust the Fund's investment
exposure, but there is no guarantee that these techniques will work.
The Risks
The principal risks of investing in this Fund are stock market risk and style
risk (growth investing risk and value investing risk). To the extent that the
portfolio managers invest in foreign securities or debt securities, the Fund
would be subject to foreign exposure risk, interest rate risk and credit risk.
If you would like additional information regarding the Fund's investment
strategies and risks, including a description of the terms in bold type, please
refer to "More on Strategies and Risks" later in this Prospectus.
- --------------------------------------------------------------------------------
<PAGE>
----------
5
- --------------------------------------------------------------------------------
Fund Performance
The bar chart and table opposite illustrate the short-term variability in the
Fund's performance and the Fund's returns relative to a common measure of
performance.
The bar chart illustrates how the Fund's performance varies from year to year
over the periods shown. During the period presented in the bar chart, the Fund's
highest return for a quarter was 19.90% for the quarter ended December 31, 1998.
The Fund's lowest return for a quarter was -10.08% for the quarter ended
September 30, 1998. The Fund's year-to-date return was 14.27% as of June 30,
1999.
The table opposite illustrates how the Fund's average annual returns for
different calendar periods compare to the returns of the Standard & Poor's 500
Composite Stock Index (S&P 500 Index(R)). The table reflects the impact of the
Fund's expenses and assumes that you sold your shares at the end of each period.
Prior Performance Information
Prior performance information of GE Investment Management, the Fund's investment
adviser, can be found under "Prior Performance Information" later in this
Prospectus.
- --------------------------------------------------------------------------------
Calendar Year Total Returns
Investment Class Shares*
[The following table was depicted as a bar chart in the printed material.]
1998........................ 24%
- --------------------------------------------------------------------------------
Average Annual Total Return
(as of December 31, 1998)
Since
1 Year Inception**
------ -----------
U.S. Equity Fund
Investment Class 23.75% 24.62%
S&P 500 Index 28.70% 28.36%
Both the bar chart and table assume reinvestment of dividends and distributions.
As with all mutual funds, past performance is not an indication of future
performance.
* As of the date of this Prospectus, Service Class shares have no operating
history and therefore performance information is not available. Service Class
shares of the Fund pay a shareholder service and distribution fee, which would
lower their returns.
** Inception date (commencement of operations): November 25, 1997
All mutual funds use a standard formula to calculate total return. Total return
measures the price change in a share assuming the reinvestment of all dividend
income and capital gain distributions.
- --------------------------------------------------------------------------------
<PAGE>
- -------------------
6 GE Institutional
Funds Prospectus
Equity Funds
- --------------------------------------------------------------------------------
S&P 500 Index Fund
- -------------------
Investment Objective: Seeks growth of capital and accumulation of income that
corresponds to the investment return of the Standard & Poor's 500 Composite
Stock Index.
The Strategy
The S&P 500 Index Fund invests primarily in equity securities of companies
contained in the Standard & Poor's 500 Composite Stock Index (S&P 500
Index(R)).* The portfolio manager seeks to replicate the return of the S&P 500
Index while holding transaction costs low and minimizing portfolio turnover and
attempts to achieve a correlation between its total return and that of the S&P
500 Index of at least .95, without taking expenses into account. The portfolio
manager uses a passive management approach to selec t a representative group of
stocks within the S&P 500 Index. The portfolio manager also may use statistical
selection to determine which securities within the Index to purchase or sell for
the Fund. The Fund generally will not hold all the securities that comprise the
Index and, in some cases, the Fund's weightings in particular industry segments
represented in the Index may differ significantly from those of the Index.
The Fund also may invest to a lesser extent in debt securities, foreign
securities and other securities that are not in the S&P 500 Index. Except for
debt securities, which are used to manage cash flows, all securities held by the
Fund are acquired to fulfill its investment objective. The Fund generally
intends to hold its investments for a long time, which results in a relatively
low portfolio turnover rate. The portfolio managers may use various investment
techniques to adjust the Fund's investment exposure, but there is no guarantee
that these techniques will work. The Fund will not adopt a temporary defensive
strategy in times of declining stock prices and therefore you will bear the risk
of such declines.
The Risks
The principal risks of investing in this Fund are stock market risk and the risk
that the Fund's return may not correlate exactly with that of the S&P 500 Index.
To the extent that the portfolio managers invest in foreign securities and debt
securities, the Fund would be subject to foreign exposure risk, interest rate
risk and credit risk.
If you would like additional information regarding the Fund's investment
strategies and risks, including a description of the terms in bold type, please
refer to "More on Strategies and Risks" later in this Prospectus.
* Standard & Poor's(R), S&P(R), and S&P 500(R) are trademarks of the The
McGraw-Hill Companies, Inc. and have been licensed for use. The S&P 500 Index
Fund is not sponsored, endorsed, sold or promoted by Standard & Poor's, and
Standard & Poor's makes no representation or warranty, express or implied, to
the investors of the Fund or any member of the public regarding the advisability
of investing in securities generally or in this Fund particularly or the ability
of the S&P 500 Index to track general stock market performance. Please see the
statement of additional information for additional disclaimers and liabilities
regarding Standard & Poor's.
- --------------------------------------------------------------------------------
<PAGE>
----------
7
- --------------------------------------------------------------------------------
Fund Performance
The bar chart and table opposite illustrate the short-term variability in the
Fund's performance and the Fund's returns relative to a common measure of
performance.
The bar chart illustrates how the Fund's performance varies from year to year
over the periods shown. During the period presented in the bar chart, the Fund's
highest return for a quarter was 21.50% for the quarter ended December 31, 1998.
The Fund's lowest return for a quarter was -9.81% for the quarter ended
September 30, 1998. The Fund's year-to-date return was 12.06% as of June 30,
1999.
The table opposite illustrates how the Fund's average annual returns for
different calendar periods compare to the returns of the Standard & Poor's 500
Composite Stock Index (S&P 500 Index(R)). The table reflects the impact of the
Fund's expenses and assumes that you sold your shares at the end of each period.
- --------------------------------------------------------------------------------
Calendar Year Total Returns
Investment Class Shares*
[The following table was depicted as a bar chart in the printed material.]
1998 .................... 29%
- --------------------------------------------------------------------------------
Average Annual Total Return
(as of December 31, 1998)
Since
1 Year Inception**
------ -----------
S&P 500 Index Fund
Investment Class 29.24% 28.65%
S&P 500 Index 28.70% 28.36%
Both the bar chart and table assume reinvestment of dividends and distributions.
As with all mutual funds, past performance is not an indication of future
performance.
* As of the date of this Prospectus, Service Class shares have no operating
history and therefore performance information is not available. Service Class
shares of the Fund pay a shareholder service and distribution fee, which would
lower their returns.
** Inception date (commencement of operations): November 25, 1997
All mutual funds use a standard formula to calculate total return. Total return
measures the price change in a share assuming the reinvestment of all dividend
income and capital gain distributions.
- --------------------------------------------------------------------------------
<PAGE>
- -------------------
8 GE Institutional
Funds Prospectus
Equity Funds
- --------------------------------------------------------------------------------
Premier Growth Equity Fund
- -------------------
Investment Objective: Seeks long-term growth of capital and future income.
The Strategy
The Premier Growth Equity Fund invests primarily in a limited number of equity
securities of large- and medium-sized companies with above-average growth
histories and/or growth potential. The portfolio manager chooses equity
securities from a number of industries based on the merits of individual
companies. Stock selection is key to the performance of the Fund.
The portfolio manager seeks to identify stocks of growth companies with
characteristics such as:
o above-average annual growth rates
o expectation of income in future periods
o financial strength
o leadership in their respective industries
o high quality management focused on generating shareholder value
The Fund also may invest to a lesser extent in foreign securities and debt
securities. The Fund generally intends to hold its investments for a long time,
which results in a relatively low portfolio turnover rate. The portfolio manager
may use various investment techniques to adjust the Fund's investment exposure,
but there is no guarantee that these techniques will work.
The Risks
The principal risks of investing in this Fund are stock market risk and style
risk (growth investing risk). To the extent that the portfolio manager invests
in foreign securities or debt securities, the Fund would be subject to foreign
exposure risk, interest rate risk and credit risk.
If you would like additional information regarding the Fund's investment
strategies and risks, including a description of the terms in bold type, please
refer to "More on Strategies and Risks" later in this Prospectus.
- --------------------------------------------------------------------------------
Fund Background
No performance figures are shown because the Fund has no operating history as of
the date of this Prospectus.
- --------------------------------------------------------------------------------
Prior Performance Information
Prior performance information of GE Investment Management, the Fund's investment
adviser, can be found under "Prior Performance Information" later in this
Prospectus.
- --------------------------------------------------------------------------------
<PAGE>
----------
9
- --------------------------------------------------------------------------------
Value Equity Fund
- -------------------
Investment Objective: Seeks long-term growth of capital and future income.
The Strategy
The Value Equity Fund invests primarily in equity securities of large U.S.
companies that are undervalued by the market but have solid growth prospects. A
company may be undervalued for reasons such as market overreaction to recent
company, industry or economic problems. Stock selection is key to the
performance of the Fund.
The portfolio manager seeks to identify securities of companies with
characteristics such as:
o low prices in relation to their peers and the overall market
o the potential for long-term earnings growth
o above-average dividend yields
o expectation of income in future periods
o strong management
o financial strength
o attractive upside potential and limited downside risk
The Fund also may invest to a lesser extent in foreign securities and debt
securities. The Fund generally intends to hold its investments for a long time,
which results in a relatively low portfolio turnover rate. The portfolio manager
may use various investment techniques to adjust the Fund's investment exposure,
but there is no guarantee that these techniques will work.
The Risks
The principal risks of investing in this Fund are stock market risk and style
risk (value investing risk). To the extent that the portfolio manager invests in
foreign securities or debt securities, the Fund would be subject to foreign
exposure risk, interest rate risk and credit risk.
If you would like additional information regarding the Fund's investment
strategies and risks, including a description of the terms in bold type, please
refer to "More on Strategies and Risks" later in this Prospectus.
- --------------------------------------------------------------------------------
Fund Background
No performance figures are shown because the Fund has no operating history as
of the date of this Prospectus.
- --------------------------------------------------------------------------------
Prior Performance Information
Prior performance information of GE Investment Management, the Fund's investment
adviser, can be found under "Prior Performance Information" later in this
Prospectus.
- --------------------------------------------------------------------------------
<PAGE>
- --------------------
10 GE Institutional
Funds Prospectus
Equity Funds
- --------------------------------------------------------------------------------
Mid-Cap Growth Fund
- --------------------
Investment Objective: Seeks long-term growth of capital.
The Strategy
The Mid-Cap Growth Fund invests primarily in equity securities of mid-cap
companies with above-average growth potential. The Fund defines a mid-cap
company as one with a market capitalization within the capitalization range of
the Standard & Poor's MidCap 400 Stock Index. As of June 30, 1999, the market
capitalization of companies in the index ranged from $244 million to $21.6
billion. The portfolio manager will not sell a stock merely because the market
capitalization of a company in the portfolio moves above or below the maximum
or minimum capitalization of the index. Stock selection is key to the
performance of the Fund.
The portfolio manager seeks to identify securities of growth companies with
characteristics such as:
o above-average revenue and earnings growth
o attractive products or services
o financial strength
o strong competitive positions within their industries
o high quality management focused on generating shareholder value
o reasonable valuation
The Fund also may invest to a lesser extent in securities with capitalizations
outside the mid-cap range, foreign securities and debt securities. The portfolio
manager may use various investment techniques to adjust the Fund's investment
exposure, but there is no guarantee that these techniques will work.
The Risks
The principal risks of investing in this Fund are stock market risk and style
risk (growth investing risk and mid-cap company risk). To the extent that the
portfolio manager invests in foreign securities or debt securities, the Fund
would be subject to foreign exposure risk, interest rate risk and credit risk.
If you would like additional information regarding the Fund's investment
strategies and risks, including a description of the terms in bold type, please
refer to "More on Strategies and Risks" later in this Prospectus.
- --------------------------------------------------------------------------------
<PAGE>
----------
11
- --------------------------------------------------------------------------------
Fund Performance
The bar chart and table opposite illustrate the short-term variability in the
Fund's performance and the Fund's returns relative to a common measure of
performance.
The bar chart illustrates how the Fund's performance varies from year to year
over the periods shown. During the period presented in the bar chart, the Fund's
highest return for a quarter was 19.50% for the quarter ended December 31, 1998.
The Fund's lowest return for a quarter was -18.25% for the quarter ended
September 30, 1998. The Fund's year-to-date return was 8.73% as of June 30,
1999.
The table opposite illustrates how the Fund's average annual returns for
different calendar periods compare to the returns of the Standard & Poor's
MidCap 400 Stock Index (S&P MidCap Index). The table reflects the impact of the
Fund's expenses and assumes that you sold your shares at the end of each period.
- --------------------------------------------------------------------------------
Calendar Year Total Returns
Investment Class Shares*
[The following table was depicted as a bar chart in the printed material.]
1998...................... 5%
- --------------------------------------------------------------------------------
Average Annual Total Return
(as of December 31, 1998)
Since
1 Year Inception**
------ -----------
Mid-Cap Growth Fund
Investment Class 4.64% 5.49%
S&P MidCap Index 18.66% 21.59%
Both the bar chart and table assume reinvestment of dividends and distributions.
As with all mutual funds, past performance is not an indication of future
performance.
* As of the date of this Prospectus, Service Class shares have no operating
history and therefore performance information is not available. Service Class
shares of the Fund pay a shareholder service and distribution fee, which would
lower their returns.
** Inception date (commencement of operations): November 25, 1997
All mutual funds use a standard formula to calculate total return. Total return
measures the price change in a share assuming the reinvestment of all dividend
income and capital gain distributions.
- --------------------------------------------------------------------------------
<PAGE>
- --------------------
12 GE Institutional
Funds Prospectus
Equity Funds
- --------------------------------------------------------------------------------
Mid-Cap Value Equity Fund
- --------------------
Investment Objective: Seeks long-term growth of capital.
The Strategy
The Mid-Cap Value Equity Fund invests primarily in equity securities of mid-cap
companies that the portfolio manager believes are undervalued by the market and
have above-average growth potential. The dollar-weighted median market
capitalization of the companies in the Fund's portfolio will fall within the
mid-cap range defined by the Morningstar rating agency, between $1.49 and $9.64
billion as of June 30, 1999. Stock selection is key to the performance of the
Fund.
The Fund is value oriented and seeks to identify undervalued companies where a
catalyst exists to recognize value or improve a company's profitability.
Examples of these catalysts are:
o new management
o industry consolidation
o company restructuring
o change in the company's fundamentals
The Fund also may invest to a lesser extent in foreign securities and debt
securities. The portfolio manager may use various investment techniques to
adjust the Fund's investment exposure, but there is no guarantee that these
techniques will work.
The Risks
The principal risks of investing in this Fund are stock market risk and style
risk (value investing risk and mid-cap company risk). To the extent that the
portfolio manager invests in foreign securities or debt securities, the Fund
would be subject to foreign exposure risk, interest rate risk and credit risk.
If you would like additional information regarding the Fund's investment
strategies and risks, including a description of the terms in bold type, please
refer to "More on Strategies and Risks" later in this Prospectus.
- --------------------------------------------------------------------------------
Fund Background
Because the Fund recently commenced investment operations, please refer to
"Financial Highlights" later in this Prospectus or the Fund's semi-annual report
for performance information.
- --------------------------------------------------------------------------------
Prior Performance Information
Prior performance information of Jon Bosse, the Fund's portfolio manager, can be
found under "Prior Performance Information" later in this Prospectus.
- --------------------------------------------------------------------------------
<PAGE>
----------
13
- --------------------------------------------------------------------------------
Small-Cap Value Equity Fund
- --------------------
Investment Objective: Seeks long-term growth of capital.
The Strategy
The Small-Cap Value Equity Fund invests primarily in equity securities of
small-cap companies that are undervalued by the market but have solid growth
prospects. A company may be undervalued for reasons such as market overreaction
to recent company, industry or economic problems. The Fund defines a small-cap
company as one with a market capitalization within the capitalization range of
the Russell 2000 Index. As of June 30, 1999 the market capitalization of
companies in the index ranged from $83 million to $2.59 billion. The portfolio
managers will not sell a stock merely because the market capitalization of a
company in the portfolio moves above or below the maximum or minimum
capitalization of the index. Stock selection is key to the performance of the
Fund.
The portfolio managers seek to identify securities of companies with
characteristics such as:
o high quality management
o attractive products or services
o appropriate capital structure
o strong competitive positions in their industries
o management focused on generating shareholder value
The Fund also may invest to a lesser extent in securities with capitalizations
outside the small-cap range, debt securities and foreign securities. The Fund
generally intends to hold its investments for a long time, which results in a
relatively low portfolio turnover rate. The portfolio managers may use various
investment techniques to adjust the Fund's investment exposure, but there is no
guarantee that these techniques will work.
The Risks
The principal risks of investing in this Fund are stock market risk and style
risk (value investing risk and small-cap company risk). To the extent that the
portfolio managers invest in foreign securities or debt securities, the Fund
would be subject to foreign exposure risk, interest rate risk and credit risk.
If you would like additional information regarding the Fund's investment
strategies and risks, including a description of the terms in bold type, please
refer to "More on Strategies and Risks" later in this Prospectus.
- --------------------------------------------------------------------------------
Fund Background
Because the Fund recently commenced investment operations, please refer to
"Financial Highlights" later in this Prospectus or the Fund's semi-annual report
for performance information.
- --------------------------------------------------------------------------------
Prior Performance Information
Prior Performance information of the Senior Investment Commitee of Palisade
Capital Management, L.L.C., the Fund's sub-adviser, can be found under "Prior
Performance Information" later in this Prospectus.
- --------------------------------------------------------------------------------
<PAGE>
- --------------------
14 GE Institutional
Funds Prospectus
Equity Funds
- --------------------------------------------------------------------------------
International Equity Fund
- --------------------
Investment Objective: Seeks long-term growth of capital.
The Strategy
The International Equity Fund invests primarily in equity securities of
companies located in developed and developing countries other than the United
States. The portfolio managers focus on companies that they expect will grow
faster than relevant markets and whose security price does not fully reflect
their potential for growth. Under normal circumstances, the Fund's assets are
invested in no fewer than three different countries. The portfolio managers
consider the following factors in determining where an issuer is located:
country of organization, primary securities trading market, location of assets,
or country where the issuer derives at least half of its revenues and profits.
Stock selection is key to the performance of the Fund.
The portfolio managers seek to identify securities of growth companies with
characteristics such as:
o low prices relative to their long-term cash earnings potential
o potential for significant improvement in the company's business
o financial strength
o sufficient liquidity
The Fund also may invest to a lesser extent in debt securities. Under certain
circumstances, the Fund may invest in securities of companies located in the
United States. The portfolio managers may use various investment techniques to
adjust the Fund's investment exposure, but there is no guarantee that these
techniques will work.
The Risks
The principal risks of investing in this Fund are stock market risk, foreign
exposure risk, style risk (growth investing risk) and emerging markets risk To
the extent that the portfolio managers invest in debt securities, the Fund would
be subject to interest rate risk and credit risk.
If you would like additional information regarding the Fund's investment
strategies and risks, including a description of the terms in bold type, please
refer to "More on Strategies and Risks" later in this Prospectus.
- --------------------------------------------------------------------------------
<PAGE>
----------
15
- --------------------------------------------------------------------------------
Fund Performance
The bar chart and table opposite illustrate the short-term variability in the
Fund's performance and the Fund's returns relative to a common measure of
performance.
The bar chart illustrates how the Fund's performance varies from year to year
over the periods shown. During the period presented in the bar chart, the Fund's
highest return for a quarter was 19.65% for the quarter ended December 31, 1998.
The Fund's lowest return for a quarter was -17.74% for the quarter ended
September 30, 1998. The Fund's year-to-date return was 6.67% as of June 30,
1999.
The table opposite illustrates how the Fund's average annual returns for
different calendar periods compare to the returns of the Morgan Stanley Capital
International Europe Australasia Far East Index (MSCI EAFE Index). The table
reflects the impact of the Fund's expenses and assumes that you sold your shares
at the end of each period.
- --------------------------------------------------------------------------------
Prior Performance Information
Prior performance information of GE Investment Management, the Fund's investment
adviser, can be found under "Prior Performance Information" later in this
Prospectus.
- --------------------------------------------------------------------------------
Calendar Year Total Returns
Investment Class Shares*
[The following table was depicted as a bar chart in the printed material.]
1998 ..................... 17%
- --------------------------------------------------------------------------------
Average Annual Total Return
(as of December 31, 1998)
Since
1 Year Inception**
------ -----------
International Equity Fund
Investment Class 17.32% 18.40%
MSCI EAFE Index 20.00% 20.28%
Both the bar chart and table assume reinvestment of dividends and distributions.
As with all mutual funds, past performance is not an indication of future
performance.
* As of the date of this Prospectus, Service Class shares have no operating
history and therefore performance information is not available. Service Class
shares of the Fund pay a shareholder service and distribution fee, which would
lower their returns.
** Inception date (commencement of operations): November 25, 1997
All mutual funds use a standard formula to calculate total return. Total return
measures the price change in a share assuming the reinvestment of all dividend
income and capital gain distributions.
- --------------------------------------------------------------------------------
<PAGE>
- --------------------
16 GE Institutional
Funds Prospectus
Equity Funds
- --------------------------------------------------------------------------------
Europe Equity Fund
- --------------------
Investment Objective: Seeks long-term growth of capital.
Developed European countries currently include:
Austria
Belgium
Denmark
Finland
France
Germany
Greece
Ireland
Italy
Luxembourg
The Netherlands
Norway
Portugal
Spain
Sweden
Switzerland
United Kingdom
The Strategy
The Europe Equity Fund invests primarily in equity securities of issuers located
in developed European countries. The portfolio managers focus on countries that
are expected to grow faster than relevant markets and whose security price does
not fully reflect their potential for growth. Under normal circumstances, the
Fund's assets are invested in no fewer than three different countries. The
portfolio managers consider the following factors in determining whether a
company is located in Europe: country of organization, primary securities
trading market, location of assets, or country where the issuer derives at least
half of its revenue and profits. Stock selection is key to the performance of
the Fund.
The portfolio managers seek to identify securities of growth companies with
characteristics such as:
o low prices relative to their long-term cash earnings potential
o potential for significant improvement in the company's business
o financial strength
o sufficient liquidity
The Fund may also invest to a lesser extent in securities of companies
representing European emerging market countries, developed or emerging countries
outside of Europe (including the United States), and debt securities. European
emerging market countries include the Czech Republic, Poland, Hungary, Turkey,
Russia and other former republics of the Soviet Union. The portfolio managers
may use various investment techniques to adjust the Fund's investment exposure,
but there is no guarantee that these techniques will work.
The Risks
The principal risks of investing in this Fund are stock market risk, foreign
exposure risk and style risk (growth investing risk). To the extent that the
portfolio managers invest in securities of emerging market countries and debt
securities, the Fund would be subject to emerging markets risk, interest rate
risk and credit risk.
Because the Fund targets a single region, investors should expect the Fund to be
more volatile than a more geographically diversified equity fund. Fund
performance is closely tied to economic and political conditions within Europe.
If you would like additional information regarding the Fund's investment
strategies and risks, including a description of the terms in bold type, please
refer to "More on Strategies and Risks" later in this Prospectus.
- --------------------------------------------------------------------------------
Fund Background
Because the Fund recently commenced investment operations, please refer to
"Financial Highlights" later in the Prospectus or the Fund's semi-annual report
for performance information.
- --------------------------------------------------------------------------------
<PAGE>
----------
17
- --------------------------------------------------------------------------------
[This page intentionally left blank.]
- --------------------------------------------------------------------------------
<PAGE>
- --------------------
18 GE Institutional
Funds Prospectus
Equity Funds
- --------------------------------------------------------------------------------
Emerging Markets Fund
- --------------------
Investment Objective: Seeks long-term growth of capital.
The Strategy
The Emerging Markets Fund invests primarily in equity securities of issuers
located in emerging market countries. The portfolio managers focus on companies
that are expected to grow faster than relevant markets and whose security price
does not fully reflect their potential for growth. Under normal circumstances,
the Fund's assets are invested in issuers located in no fewer than three
different countries. The portfolio managers consider which emerging market
countries in which to invest based on certain factors, including investment
restrictions, tax barriers, local market cycles, economic outlook for growth,
currency exchange rates and the political environment. The portfolio managers
consider the following factors in determining whether an issuer is located in an
emerging market country: country of organization, primary securities trading
market, location of assets, or country where the issuer derives at least half of
its revenues and profits.
An emerging market country is any country having an economy and market that are
(or would be) considered by the World Bank to be emerging or developing, or
listed in the Morgan Stanley Capital International Emerging Markets Index.
Emerging market countries are located in regions such as Asia, Latin America,
the Middle East, Southern Europe, Eastern Europe (including the former republics
of the Soviet Union and the Eastern Bloc) and Africa.
The portfolio managers seek to identify securities of growth companies with
characteristics such as:
o low prices relative to their long-term cash earnings potential
o potential for significant improvement in the company's business
o financial strength
o sufficient liquidity
The Fund may also invest to a lesser extent in securities of companies located
in countries other than emerging market countries (including the United States)
and debt securities. The portfolio managers may use various investment
techniques to adjust the Fund's investment exposure, but there is no guarantee
that these techniques will work.
The Risks
The principal risks of investing in this Fund are stock market risk, foreign
exposure risk, emerging markets risk and style risk (growth investing risk). To
the extent that the portfolio managers invest in debt securities, the Fund would
be subject to interest rate risk and credit risk.
If you would like additional information regarding the Fund's investments
strategies and risks, including a description of the terms in bold type, please
refer to "More on Strategies and Risks" later in this Prospectus.
- --------------------------------------------------------------------------------
<PAGE>
----------
19
- --------------------------------------------------------------------------------
Fund Performance
The bar chart and table opposite illustrate the short-term variability in the
Fund's performance and the Fund's returns relative to a common measure of
performance.
The bar chart illustrates how the Fund's performance varies from year to year
over the periods shown. During the period presented in the bar chart, the Fund's
highest return for a quarter was 19.93% for the quarter ended December 31, 1998.
The Fund's lowest return for a quarter was -27.56% for the quarter ended
September 30, 1998. The Fund's year-to-date return was 37.98% as of June 30,
1999.
The table opposite illustrates how the Fund's average annual returns for
different calendar periods compare to the returns of the Morgan Stanley Emerging
Markets Free Index (MSCI EMF Index). The table reflects the impact of the Fund's
expenses and assumes that you sold your shares at the end of each period.
- --------------------------------------------------------------------------------
Prior Performance Information
Prior performance information of GE Investment Management, the Fund's investment
adviser, can be found under "Prior Performance Information" later in this
Prospectus.
- --------------------------------------------------------------------------------
Calendar Year Total Returns
Investment Class Shares*
[The following table was depicted as a bar chart in the printed material.]
1998...................... -20%
- --------------------------------------------------------------------------------
Average Annual Total Return
(as of December 31, 1998)
Since
1 Year Inception**
------ -----------
Emerging Markets Fund
Investment Class -20.13% -16.86%
MSCI EMF Index -25.34% -20.84%
Both the bar chart and table assume reinvestment of dividends and distributions.
As with all mutual funds, past performance is not an indication of future
performance.
* As of the date of this Prospectus, Service Class shares have no operating
history and therefore performance information is not available. Service Class
shares of the Fund pay a shareholder service and distribution fee, which would
lower their returns.
** Inception date (commencement of operations): November 25, 1997
All mutual funds use a standard formula to calculate total return. Total return
measures the price change in a share assuming the reinvestment of all dividend
income and capital gain distributions.
- --------------------------------------------------------------------------------
<PAGE>
- -----------------------------------------------
20 GE Institutional Income Funds
Funds Prospectus
- --------------------------------------------------------------------------------
An investment in an Income Fund is not a deposit of any bank and is not insured
or guaranteed by the Federal Deposit Insurance Corporation or any other
government agency. An investment in an Income Fund is subject to risk, including
possible loss of principal invested.
Income funds generally invest in debt securities. Debt securities are bonds and
other securities that are used by issuers to borrow money from investors.
Holders of debt securities have a higher priority claim to assets than do equity
holders. Typically, the debt issuer pays the investor a fixed, variable or
floating rate of interest and must repay the borrowed amount at maturity. Some
debt securities, such as zero coupon bonds, are sold at a discount from their
face values instead of paying interest.
- --------------------------------------------------------------------------------
<PAGE>
----------
21
- --------------------------------------------------------------------------------
[This page intentionally left blank.]
- --------------------------------------------------------------------------------
<PAGE>
- --------------------
22 GE Institutional
Funds Prospectus
Income Funds
- --------------------------------------------------------------------------------
Income Fund
- --------------------
Investment Objective: Seeks maximum income consistent with prudent investment
management and the preservation of capital.
The Strategy
The Income Fund invests primarily in a variety of investment-grade debt
securities, such as mortgage-backed securities, corporate bonds, U.S. Government
securities, and money market instruments. The Fund normally has a weighted
average maturity of approximately five to ten years.
The portfolio managers seek to identify debt securities with characteristics
such as:
o attractive yields and prices
o the potential for capital appreciation
o reasonable credit quality
The Fund also may invest to a lesser extent in asset-backed securities and
foreign securities. The portfolio managers may use various investment techniques
to adjust the Fund's investment exposure, but there is no guarantee that these
techniques will work.
The Fund's investment strategy may result in a high portfolio turnover rate,
which may cause the Fund to experience increased transaction costs and
shareholders to incur increased taxes on their investment in the Fund.
The Risks
The principal risks of investing in this Fund are interest rate risk, credit
risk and prepayment risk. To the extent that the portfolio managers invest in
foreign securities, the Fund would be subject to foreign exposure risk. Certain
portfolio securities are derivative securities that carry derivative securities
risk.
If you would like additional information regarding the Fund's investment
strategies and risks, including a description of the terms in bold type, please
refer to "More on Strategies and Risks" later in this Prospectus.
- --------------------------------------------------------------------------------
<PAGE>
----------
23
- --------------------------------------------------------------------------------
Fund Performance
The bar chart and table opposite illustrate the short-term variability in the
Fund's performance and the Fund's returns relative to a common measure of
performance.
The bar chart illustrates how the Fund's performance varies from year to year
over the periods shown. During the period presented in the bar chart, the Fund's
highest return for a quarter was 3.57% for the quarter ended September 30, 1998.
The Fund's lowest return for a quarter was 0.43% for the quarter ended December
31, 1998. The Fund's year-to-date return was -1.68% as of June 30, 1999.
The table opposite illustrates how the Fund's average annual returns for
different calendar periods compare to the returns of the Lehman Brothers
Aggregate Bond Index (LB Aggregate Bond Index). The table reflects the impact of
the Fund's expenses and assumes that you sold your shares at the end of each
period.
- --------------------------------------------------------------------------------
Prior Performance Information
Prior performance information of GE Investment Management, the Fund's investment
adviser, can be found under "Prior Performance Information" later in this
Prospectus.
- --------------------------------------------------------------------------------
Calendar Year Total Returns
Investment Class Shares*
[The following table was depicted as a bar chart in the printed material.]
1998................... 8%
- --------------------------------------------------------------------------------
Average Annual Total Return
(as of December 31, 1998)
Since
1 Year Inception**
------ -----------
Income Fund
Investment Class 8.46% 8.66%
LB Aggregate Bond Index 8.67% 8.97%
Both the bar chart and table assume reinvestment of dividends and distributions.
As with all mutual funds, past performance is not an indication of future
performance.
* As of the date of this Prospectus, Service Class shares have no operating
history and therefore performance information is not available. Service Class
shares of the Fund pay a shareholder service and distribution fee, which would
lower their returns.
** Inception date (commencement of operations): November 21,1997
All mutual funds use a standard formula to calculate total return. Total return
measures the price change in a share assuming the reinvestment of all dividend
income and capital gain distributions.
- --------------------------------------------------------------------------------
<PAGE>
- -------------------------------------------------
24 GE Institutional Asset
Funds Prospectus Allocation
Funds
- --------------------------------------------------------------------------------
An investment in an Asset Allocation Fund is not a deposit of any bank and is
not insured or guaranteed by the Federal Deposit Insurance Corporation or any
other agency. An investment in an Asset Allocation Fund is subject to risk,
including possible loss of principal invested.
Asset allocation funds are designed to meet the needs of investors who prefer to
have their asset allocation decisions made by professional money managers. They
provide an investor with a means to diversify by investing in a core portfolio
that typically holds both equity securities and debt securities. Although an
investor may achieve the same level of diversification by buying individual
Equity or Income Funds, an asset allocation fund presents a diversification
alternative within one fund. An investor should not expect capital appreciation
or current income levels comparable to funds for which either capital
appreciation or current income is their sole objective.
- --------------------------------------------------------------------------------
<PAGE>
------------
25
- --------------------------------------------------------------------------------
Strategic Investment Fund
- --------------------
Investment Objective: Seeks to maximize total return.
The Strategy
The Strategic Investment Fund invests primarily in a combination of equity
securities and investment-grade debt securities. The portfolio managers follow
an asset allocation process established by GE Investment Management's Asset
Allocation Committee to diversify holdings across asset classes. The Fund
adjusts its weightings among U.S. equity securities, debt securities and foreign
securities based on the relative attractiveness of the asset classes. The Fund
invests in equity securities principally for their capital appreciation
potential and debt securities principally for their income potential. Within
each asset class, the portfolio managers use active security selection to choose
securities based on the merits of individual issuers.
The portfolio managers seek to identify equity securities of companies with
characteristics such as:
o strong earnings growth
o attractive prices
o a presence in successful industries
o high quality management
The portfolio managers seek to identify debt securities with characteristics
such as:
o attractive yields and prices
o the potential for capital appreciation
o reasonable credit quality
The portion of the Fund invested in debt securities normally has a weighted
average maturity of approximately five to ten years.
The portfolio managers may use various investment techniques to adjust the
Fund's investment exposure, but there is no guarantee that these techniques will
work.
The Fund's asset allocation process may result in a high portfolio turnover
rate, which may cause the Fund to experience increased transaction costs and
shareholders to incur increased taxes on their investment in the Fund.
The Risks
The principal risks of investing in this Fund are stock market risk, foreign
exposure risk, interest rate risk, credit risk and prepayment risk. To the
extent the portfolio manager invests in high yield securities, the Fund would be
subject to high yield securities risk. Certain portfolio securities are
derivative securities that carry derivative securities risk.
If you would like additional information regarding the Fund's investment
strategies and risks, including a description of the terms in bold type, please
refer to "More on Strategies and Risks" later in this Prospectus.
- --------------------------------------------------------------------------------
Fund Background
No performance figures are shown because the Fund has no operating history as
of the date of this Prospectus.
- --------------------------------------------------------------------------------
Prior Performance Information
Prior performance information of GE Investment Management, the Fund's investment
adviser, can be found under "Prior Performance Information" later in this
Prospectus.
- --------------------------------------------------------------------------------
<PAGE>
- -------------------------------------------------------
26 GE Institutional Money
Funds Prospectus Market
Funds
- --------------------------------------------------------------------------------
Money market funds invest in short-term, high-quality debt securities. They seek
to provide stability of principal and regular income. The income provided by a
money market fund varies with interest rate movements.
- --------------------------------------------------------------------------------
<PAGE>
------------
27
- --------------------------------------------------------------------------------
[This page intentionally left blank.]
- --------------------------------------------------------------------------------
<PAGE>
- --------------------
28 GE Institutional
Funds Prospectus
Money
Market Funds
- --------------------------------------------------------------------------------
Money Market Fund
- --------------------
Investment Objective: Seeks a high level of current income consistent with the
preservation of capital and maintenance of liquidity.
The Strategy
The Money Market Fund invests primarily in short-term, U.S. dollar-denominated
money market instruments. The Fund's investments may include U.S. government
securities, repurchase agreements, commercial paper, variable rate securities,
foreign securities and domestic and foreign bank deposits.
The Fund invests consistent with regulatory standards governing security
quality, maturity and portfolio diversification. For example, the portfolio
manager limits investments to high quality securities with maturities of up to
13 months and limits the average maturity to 90 days. The Fund may invest more
than 25% of its total assets in the banking services industry. Changes in
banking regulations or the economy can have a significant negative impact on the
banking industry.
All of the Fund's assets are rated in the two highest short-term rating
categories (or their unrated equivalents), and 95% of its assets are rated in
the highest rating category (or its unrated equivalent) by a nationally
recognized statistical rating organization. Additional information about the
money market securities in which the Fund may invest, including rating
categories, is contained in the statement of additional information.
The Risk
The principal risks of investing in this Fund are interest rate risk, credit
risk and foreign exposure risk.
An investment in the Fund is not a bank deposit and is not insured or guaranteed
by the Federal Deposit Insurance Corporation (FDIC) or any other government
agency. Although the Fund seeks to maintain a net asset value of $1.00 per
share, it is possible to lose money by investing in the Fund.
The Fund's yield will change due to movements in current short-term interest
rates and market conditions. A change in interest rates or default on the Fund's
investments could cause the Fund's share price to decline below $1.00.
If you would like additional information regarding the Fund's investment
strategies and risks, including a description of the terms in bold type, please
refer to "More on Strategies and Risks" later in this Prospectus.
- --------------------------------------------------------------------------------
<PAGE>
------------
29
- --------------------------------------------------------------------------------
Fund Performance
The bar chart and table opposite illustrate the short-term variability in the
Fund's performance and the Fund's returns relative to a common measure of
performance.
The bar chart illustrates how the Fund's performance varies from year to year
over the periods shown. During the period presented in the bar chart, the Fund's
highest return for a quarter was 1.35% for the quarter ended September 30, 1998.
The Fund's lowest return for a quarter was 1.26% for the quarter ended December
31, 1998. The Fund's seven day yield was 4.93% and the effective seven day yield
was 5.06% as of December 31, 1998. "Effective yield" reflects the compounding
effect of earnings on reinvested dividends. The Fund's year-to-date return was
2.35% as of June 30, 1999.
The table opposite illustrates how the Fund's average annual returns for
different calendar periods compare to the return of the 90 Day Treasury Bill
Rate (90 Day T-Bill). The table reflects the impact of the Fund's expenses. It
assumes that you sold your shares at the end of each period.
- --------------------------------------------------------------------------------
Prior Performance Information
Prior performance information of GE Investment Management, the Fund's investment
adviser, can be found under "Prior Performance Information" later in this
Prospectus.
- --------------------------------------------------------------------------------
Calendar Year Total Returns
Investment Class Shares*
[The following table was depicted as a bar chart in the printed material.]
1998 ................... 5%
- --------------------------------------------------------------------------------
Average Annual Total Return
(as of December 31, 1998)
Since
1 year Inception**
------ -----------
Money Market Fund
Investment Class 5.38% 5.40%
90 Day T-Bill 4.88% 4.92%
Both the bar chart and table assume reinvestment of dividends and distributions.
As with all mutual funds, past performance is not an indication of future
performance.
* As of the date of this Prospectus, Service Class shares have no operating
history and therefore performance information is not available. Service Class
shares of the Fund pay a shareholder service and distribution fee, which would
lower their returns.
** Inception Date (commencement of operations): December 2, 1997
All mutual Funds must use the same formula to calculate total return. Total
return measures the price change in a share assuming the reinvestment of all
dividend income and capital gain distributions.
- --------------------------------------------------------------------------------
<PAGE>
- -------------------------------------------------------
30 GE Institutional Fund Expenses
Funds Prospectus
- --------------------------------------------------------------------------------
Shareholder Fees
The Funds impose no sales charge (load) on purchases or reinvested dividends,
contingent deferred sales charge, redemption fee or exchange fee.
The following table describes the fees and expenses that you may pay if you buy
and hold shares of a Fund. Annual fund operating expenses come out of a Fund's
assets and are reflected in the Fund's share price and dividends.
- --------------------------------------------------------------------------------
Annual Fund Operating Expenses
(as a percentage of average net assets)
<TABLE>
<CAPTION>
Premier Mid-Cap Small-Cap
U.S. S&P 500 Growth Value Mid-Cap Value Value
Equity Index Equity Equity Growth Equity Equity
Fund Fund Fund Fund Fund Fund Fund
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Management Fees
Investment and Service Class .55%* .15% .55%* .55%* .55%* .65%* .70%*
- ---------------------------------------------------------------------------------------------------------------
Distribution and Service (12b-1) fees:
Service Class** .25% .25% .25% .25% .25% .25% .25%
- ---------------------------------------------------------------------------------------------------------------
Other Expenses
Investment and Service Class None None None None None None None
- ---------------------------------------------------------------------------------------------------------------
Total Annual Fund Operating Expenses
Investment Class .55% .15% .55% .55% .55% .65% .70%
Service Class .80% .40% .80% .80% .80% .90% .95%
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
* The advisory and administration fee shown is the maximum payable by the
Fund; this fee declines incrementally as the Fund's assets increase as
described under "About the Investment Adviser."
** The .25% shareholder servicing and distribution fee is intended to
compensate GE Investment Management,or enable GE Investment Management to
compensate other persons, for expenditures made on behalf of each Fund.
The nature of the services provided to, and the advisory and administration fee
paid by, each Fund are described under "About the Investment Adviser." A Fund's
advisory and administration fee is intended to be a "unitary" fee that includes
any other operating expenses payable by a Fund, except for fees paid to GE
Institutional Funds' independent Trustees, shareholder servicing and
distribution fees, brokerage fees, and expenses that are not normal operating
expenses of the Funds (such as extraordinary expenses, interest and taxes). The
amount shown as the advisory and administration fee for a Fund reflects the
highest fee payable, and does not reflect that the fee decreases incrementally
as Fund assets increase. For the Funds that did not commence operations in 1998,
"Other Expenses" are based on estimated amounts for the current fiscal year.
"Other Expenses" include only Trustees' fees payable to GE Institutional Funds'
independent Trustees, brokerage fees, and expenses that are not normal operating
expenses of the Funds. This amount is less than .01%; therefore "Other Expenses"
are reflected as "None." Long-term shareholders of the Service Class shares may
pay more than the economic equivalent of the maximum front-end sales charge
currently permitted by the rules of the National Association of Securities
Dealers, Inc. governing investment company sales charges.
- --------------------------------------------------------------------------------
<PAGE>
------------
31
- --------------------------------------------------------------------------------
Shareholder transaction expenses, if any, are paid directly from your account
and are not reflected in the share price. The figures below show actual expenses
during the fiscal periods ended September 30, 1998 for those Funds that
commenced operations in 1997 and are calculated as a percentage of average net
assets.
<TABLE>
<CAPTION>
International Europe Emerging Strategic Money
Equity Equity Markets Income Investment Market
Fund Fund Fund Fund Fund Fund
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Management Fees
Investment and Service Class .75%* .75%* 1.05%* .35%* .45%* .25%*
- ------------------------------------------------------------------------------------------------------------
Distribution and Service (12b-1) fees:
Service Class** .25% .25% .25% .25% .25% .25%
- ------------------------------------------------------------------------------------------------------------
Other Expenses
Investment and Service Class None None None None None None
- ------------------------------------------------------------------------------------------------------------
Total Annual Fund Operating Expenses
Investment Class .75% .75% 1.05% .35% .45% .25%
Service Class 1.00% 1.00% 1.30% .60% .70% .50%
- ------------------------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
<PAGE>
- --------------------
32 GE Institutional
Funds Prospectus
Fund Expenses
- --------------------------------------------------------------------------------
The Impact of Fund Expenses
This example is intended to help you compare the cost of investing in a Fund
with the cost of investing in other mutual funds. Although actual costs may be
higher or lower, you would pay the following expenses on a $10,000 investment,
assuming a 5% annual return and that the Fund's operating expenses remain the
same. This example also assumes the maximum advisory and administration fee
payable by a Fund. This fee declines incrementally as the Fund's assets
increase.
- --------------------------------------------------------------------------------
Example
You would pay the following
expenses on a $10,000 investment,
assuming redemption:
1 Year 3 Years 5 Years 10 Years
- --------------------------------------------------------------------------------
U.S. Equity Fund:
Investment Class $56 $176 $307 $689
Service Class $82 $255 $444 $990
- --------------------------------------------------------------------------------
S&P 500 Index Fund:
Investment Class $15 $48 $85 $192
Service Class $41 $128 $224 $505
- --------------------------------------------------------------------------------
Premier Growth Equity Fund:
Investment Class $56 $176 $307 $689
Service Class $82 $255 $444 $990
- --------------------------------------------------------------------------------
Value Equity Fund:
Investment Class $56 $176 $307 $689
Service Class $82 $255 $444 $990
- --------------------------------------------------------------------------------
Mid-Cap Growth Fund:
Investment Class $56 $176 $307 $689
Service Class $82 $255 $444 $990
- --------------------------------------------------------------------------------
Mid-Cap Value Equity Fund:
Investment Class $66 $208 $362 $810
Service Class $92 $287 $498 $1,108
- --------------------------------------------------------------------------------
Small-Cap Value Equity Fund:
Investment Class $72 $224 $390 $871
Service Class $97 $303 $525 $1,166
- --------------------------------------------------------------------------------
International Equity Fund:
Investment Class $77 $240 $417 $930
Service Class $102 $318 $552 $1,225
- --------------------------------------------------------------------------------
Europe Equity Fund:
Investment Class $77 $240 $417 $930
Service Class $102 $318 $552 $1,225
- --------------------------------------------------------------------------------
Emerging Markets Fund:
Investment Class $107 $334 $579 $1,283
Service Class $132 $412 $713 $1,568
- --------------------------------------------------------------------------------
Income Fund:
Investment Class $36 $113 $197 $443
Service Class $61 $192 $335 $750
- --------------------------------------------------------------------------------
Strategic Investment Fund:
Investment Class $46 $144 $252 $567
Service Class $72 $224 $390 $871
- --------------------------------------------------------------------------------
Money Market Fund:
Investment Class $26 $80 $141 $318
Service Class $51 $160 $280 $628
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
------------
33
- --------------------------------------------------------------------------------
[This page intentionally left blank.]
- --------------------------------------------------------------------------------
<PAGE>
- ----------------------------------------------------
34 GE Institutional More on
Funds Prospectus Strategies
and Risks
- --------------------------------------------------------------------------------
Important Definitions
This section defines important terms that may be unfamiliar to an investor
reading about the Funds:
Asset-backed securities represent a participation in, or are secured by and
payable from, a stream of payments generated by particular assets, such as
credit card receivables or auto loans.
Bank Deposits are cash, check or drafts deposited in a financial institution for
credit to a customer's account. Banks differentiate between demand deposits
(checking accounts on which the customer may draw) and time deposits, which pay
interest and have a specified maturity or require 30 days' notice before
withdrawal.
Cash and cash equivalents are highly liquid and highly rated instruments such as
commercial paper and bank deposits.
Certificates of Deposit include short-term debt securities issued by banks.
Commercial paper includes short-term debt securities issued by banks,
corporations and other borrowers.
Corporate bonds are debt securities issued by companies.
Convertible securities may be debt or equity securities that pay interest or
dividends or are sold at a discount and that may be converted on specified terms
into the stock of the issuer.
Debt Obligations of Supranational Agencies are obligations of
multi-jurisdictional agencies that operate across national borders (e.g., the
World Bank).
Debt securities are bonds and other securities that are used by issuers to
borrow money from investors. Holders of debt securities have a higher priority
claim to assets than do equity holders. Typically, the debt issuer pays the
investor a fixed, variable or floating rate of interest and must repay the
borrowed amount at maturity. Some debt securities, such as zero coupon bonds,
are sold at a discount from their face values instead of paying interest.
Depositary receipts represent interests in an account at a bank or trust company
which holds equity securities. These interests may include American Depositary
Receipts (held at U.S. banks and traded in the United States), European
Depositary Receipts, Global Depositary Receipts or other similar instruments.
Derivative Securities are securities whose values are based on other securities,
currencies or indices, and include options (on stocks, indices, currencies,
futures contracts or bonds), forward currency exchange contracts, futures
contracts, swaps, interest-only and principal-only debt securities, certain
mortgage-backed securities like collateralized mortgage obligations (CMOs), and
structured securities.
Duration represents a mathematical calculation of the average life of a bond (or
portfolio of bonds) based on cash flows that serves as a useful measure of the
security's sensitivity to changes in interest rates. Each year of duration
approximates an expected one percent change in the bond's price for every one
percent change in the interest rate.
Equity securities may include common stocks, preferred securities, depositary
receipts, convertible securities, and rights and warrants of U.S. and foreign
companies. Stocks represent an ownership interest in a corporation.
Eurodollar Deposits are deposits issued in U.S. dollars by foreign banks and
foreign branches of U.S. banks.
Floating and Variable Rate Instruments are securities with floating or variable
rates of interest or dividend payments.
Foreign debt securities are issued by foreign corporations or governments. They
may include the following:
o Eurodollar Bonds, which are dollar-denominated securities issued outside the
U.S. by foreign corporations and financial institutions or by foreign branches
of U.S. corporations and financial institutions
o Yankee Bonds, which are dollar-denominated securities issued by foreign
issuers in the U.S.
o Securities denominated in currencies other than U.S. dollars.
- --------------------------------------------------------------------------------
<PAGE>
------------
35
- --------------------------------------------------------------------------------
Foreign securities include interests in or obligations of entities located
outside of the United States. The determination of where an issuer of a security
is located will be made by reference to the country in which the issuer (a) is
organized, (b) derives at least 50% of its revenues or profits from goods
produced or sold, investments made or services performed, (c) has at least 50%
of its assets situated or (d) has the principal trading market for its
securities. Foreign securities may be denominated in non-U.S. currencies and
traded outside the United States or may be in the form of depositary receipts.
Forward Currency Transactions involve agreements to exchange one currency for
another at a future date.
Futures are agreements to buy or sell a specific amount of a commodity,
financial instrument or index at a particular price and future date. Options on
Futures give the purchaser the right, in return for the premium paid, to assume
a position in a futures contract at a specified exercise price at any time prior
to the expiration date of the option.
Growth investing involves buying stocks with above-average growth rates.
Typically, growth stocks are the stocks of faster growing companies in more
rapidly growing sectors of the economy. Generally, growth stock valuation levels
will be higher than those of value stocks and the market averages.
High yield securities are debt securities of corporations, preferred stock and
convertible bonds and convertible preferred stock rated Ba through C by Moody's
or BB through D by S&P (or comparably rated by another nationally recognized
statistical rating organization) or, if not rated by Moody's or S&P, are
considered by portfolio management to be of equivalent quality. High yield
securities include bonds rated below investment grade, sometimes called "junk
bonds," and are considered speculative by the major credit rating agencies.
Investment grade securities are rated Baa or better by Moody's and BBB or better
by S&P (or comparably rated by another nationally recognized statistical rating
organization), or, if not rated, are of similar quality to such securities.
Securities rated in the fourth highest grade have some speculative elements.
Maturity represents the date on which a debt security matures or when the issuer
must pay back the principal amount of the security.
Mortgage-backed securities include securities issued by the Government National
Mortgage Association (Ginnie Mae), the Federal National Mortgage Association
(Fannie Mae), the Federal Home Loan Mortgage Corporation (Freddie Mac) and other
government agencies and private issuers. They may also include collateralized
mortgage obligations which are derivative securities that are fully
collateralized by a portfolio of mortgages. Government Stripped Mortgage-related
Securities are mortgage-backed securities that have been stripped into their
interest and principal components. They represent interests in distributions of
interest on or principal underlying mortgage-backed certificates. Mortgage
Dollar Rolls are transactions involving the sale of a mortgage-backed security
with a simultaneous contract (with the purchaser) to buy similar, but not
identical, securities at a future date.
Money market securities are short-term debt securities of the U.S. government,
banks and corporations. Certain Funds may invest in money market securities
through investments in the GEI Short-Term Investment Fund (Investment Fund). The
Investment Fund is advised by GE Investment Management, which charges no
advisory fee for such services.
Municipal Obligations are debt obligations issued by or on behalf of states,
territories and possessions of the United States and the District of Columbia
and their political subdivisions, agencies and instrumentalities, or multi-state
agencies or authorities. They include: (i) Municipal Leases, which pay interest
that is exempt from federal, and in certain cases, state, income tax; (ii)
Participation Interests in Municipal Obligations, which are proportionate,
undivided interests in Municipal Obligations; (iii) Municipal Obligation
Components,
- --------------------------------------------------------------------------------
<PAGE>
- --------------------
36 GE Institutional
Funds Prospectus
More on Strategies
and Risks
- --------------------------------------------------------------------------------
More on Investment Strategies
which are Municipal Obligations that have been divided into two components (one
component pays interest at a rate adjusted periodically through an auction
process, the second pays the residual rate after the auction rate is deducted
from total interest payable); and (iv) Custodial Receipts on Municipal
Obligations, which evidence ownership of future interest payments, principal
payments, or both, on certain Municipal Obligations.
Preferred securities are classes of stock that pay dividends at a specified
rate. Dividends are paid on preferred stocks before they are paid on common
stocks. In addition, preferred stockholders have priority over common
stockholders as to the proceeds from the liquidation of a company's assets.
Purchasing and Writing Options are permitted investment strategies for certain
Funds. An option is the right to buy (i.e., a "call") or sell (i.e., a "put")
securities or other interests for a predetermined price on or before a fixed
date. An option on a securities index represents the option holder's right to
obtain from the seller, in cash, a fixed multiple of the amount by which the
exercise price exceeds (in the case of a call) or is less than (in the case of a
put) the closing value of the securities index on the exercise date. An option
on a foreign currency represents the right to buy or sell a particular amount of
that currency for a predetermined price on or before a fixed date.
Repurchase agreements (repos) are used to invest cash on a short-term basis. A
seller (bank or broker-dealer) sells securities, usually government securities,
to the Fund, agreeing to buy them back at a designated price and time -- usually
the next day.
Restricted Securities (which include Rule 144A Securities) may have contractual
restrictions on resale, or cannot be resold publicly until registered. Illiquid
Securities may be difficult or impossible to sell when a Fund wants to sell them
at a price at which the Fund values them. Certain restricted securities may be
illiquid. Rule 144A Securities are restricted securities that may be sold to
certain institutional purchasers under Rule 144A.
Reverse Repurchase Agreements involve selling securities held and concurrently
agreeing to repurchase the same securities at a specified price and future date.
Rights represent a preemptive right of stockholders to purchase additional
shares of a stock at the time of a new issuance, before the stock is offered to
the general public, allowing the stockholder to retain the same ownership
percentage after the new stock offering.
Short Sales Against the Box involve selling short securities actually owned or
otherwise covered at all times during the period the short position is open.
Structured and Indexed Securities are securities whose prinicpal and/or interest
rate is determined by reference to changes in the value of one or more specific
currencies, interest rates, commodities, indices or other financial indicators.
Value investing involves buying stocks that are out of favor and/or undervalued
in comparison to their peers and/or their prospects for growth. Generally, value
stock valuation levels are lower than those of growth stocks.
Variable Rate Securities carry interest rates that may be adjusted periodically
to market rates. Interest rate adjustments could increase or decrease the income
generated by the securities.
Various investment techniques are utilized by a Fund to increase or decrease its
exposure to changing security prices, interest rates, currency exchange rates,
commodity prices or other factors that affect security values. For certain
Funds, these techniques may involve derivative transactions such as buying and
selling options and futures contracts, entering into currency exchange contracts
or swap agreements and purchasing indexed securities. These techniques are
designed to adjust the risk and return characteristics of a Fund's portfolio of
investments and are not used for leverage. No Fund is under any obligation to
use any of these techniques at any given time or under any particular economic
condition. To the
- --------------------------------------------------------------------------------
<PAGE>
------------
37
- --------------------------------------------------------------------------------
extent that a Fund employs these techniques, the Fund would be subject to
derivative securities risk.
Weighted average maturity represents the length of time in days or years until
the average security in a money market or bond fund will mature or be redeemed
by its issuer. The average maturity is weighted according to the dollar amounts
invested in the various securities in the fund. This measure indicates an income
fund's sensitivity to changes in interest rates. In general, the longer a fund's
average weighted maturity, the more its share price will fluctuate in response
to changing interest rates.
Warrants are securities that are usually issued together with a bond or
preferred stock, that permit the holder to buy a proportionate amount of common
stock at a specified price that is usually higher than the stock price at the
time of issue.
When-Issued and Delayed Delivery Securities are securities that are purchased or
sold for delivery and payment at a future date, i.e., beyond normal settlement
date.
Zero Coupon Obligations pay no interest to their holders prior to maturity.
Instead, interest is paid in a lump sum at maturity. They are purchased at a
deep discount from par value, and generally are more volatile than other fixed
income securities.
In addition to each Fund's principal investment strategies described earlier in
this Prospectus, a Fund is permitted to use other securities and investment
strategies in pursuit of its investment objective, No Fund is under any
obligation to use any of these techniques or strategies at any given time or
under any particular economic condition. Certain instruments and investment
strategies may expose the Funds to other risks and considerations, which are
discussed later in this Prospectus or in the Funds' Statement of Additional
Information (SAI).
Holding Cash and Temporary Defensive Positions: Under normal circumstances, each
Fund may hold cash and/or money market instruments (i) pending investment, (ii)
for cash management purposes, and (iii) to meet operating expenses. A Fund
(other than the S&P 500 Index Fund) may from time to time take temporary
defensive positions when the portfolio manager believes that adverse market,
economic, political or other conditions exist. In these circumstances, the
portfolio manager may (i) without limit hold cash and/or invest in money market
instruments, or (ii) restrict the securities markets in which a Fund's assets
are invested by investing those assets in securities markets deemed to be
conservative in light of the Fund's investment objective and strategies. The
Funds, other than the Money Market Fund, may invest in money market instruments
directly or indirectly through investment in the GEI Short-Term Investment Fund
(Investment Fund). The Investment Fund is advised by GE Investment Management,
which charges no advisory fee to the Investment Fund. To the extent that a Fund,
other than the Money Market Fund, holds cash or invests in money market
instruments, it may not achieve its investment objective.
The following tables summarize the investment techniques that may be employed by
a Fund. Certain techniques and limitations may be changed at the discretion of
GE Investment Management. Percentage figures refer to the percentage of a Fund's
assets that may be invested in accordance with the indicated technique.
- --------------------------------------------------------------------------------
<PAGE>
- --------------------
38 GE Institutional
Funds Prospectus
More on Strategies
and Risks
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------------
Purchasing Purchasing
Reverse Restricted Structured and Writing and Writing
Repurchase Repurchase and Illiquid and Indexed Securities Securities
Borrowing Agreements Agreements Securities Securities Options Index Options
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
U.S. Equity Fund 33 1/3% Yes Yes Yes No Yes Yes
- --------------------------------------------------------------------------------------------------------------------------------
S & P 500 Index Fund 33 1/3% Yes Yes Yes No Yes Yes
- --------------------------------------------------------------------------------------------------------------------------------
Premier Growth Equity Fund 33 1/3% Yes Yes Yes No Yes Yes
- --------------------------------------------------------------------------------------------------------------------------------
Value Equity Fund 33 1/3% Yes Yes Yes No Yes Yes
- --------------------------------------------------------------------------------------------------------------------------------
Mid-Cap Growth Fund 33 1/3% Yes Yes Yes No Yes Yes
- --------------------------------------------------------------------------------------------------------------------------------
Mid-Cap Value Equity Fund 33 1/3% Yes Yes Yes Yes Yes Yes
- --------------------------------------------------------------------------------------------------------------------------------
Small-Cap Value Equity Fund 33 1/3% Yes Yes Yes No Yes Yes
- --------------------------------------------------------------------------------------------------------------------------------
International Equity Fund 33 1/3% Yes Yes Yes No Yes Yes
- --------------------------------------------------------------------------------------------------------------------------------
Europe Equity Fund 33 1/3% Yes Yes Yes Yes Yes Yes
- --------------------------------------------------------------------------------------------------------------------------------
Emerging Markets Fund 33 1/3% Yes Yes Yes No Yes Yes
- --------------------------------------------------------------------------------------------------------------------------------
Income Fund 33 1/3% Yes Yes Yes Yes Yes Yes
- --------------------------------------------------------------------------------------------------------------------------------
Strategic Investment Fund 33 1/3% Yes Yes Yes Yes Yes Yes
- --------------------------------------------------------------------------------------------------------------------------------
Money Market Fund 33 1/3% Yes Yes No No No No
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
<PAGE>
------------
39
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------
Maximum
Futures and Forward Options Investment
Options on Currency on Foreign in Debt
Futures Transactions Currencies Securities
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
U.S. Equity Fund Yes Yes Yes 35%
- ----------------------------------------------------------------------------------------------------
S&P 500 Index Fund Yes Yes Yes 35%
- ----------------------------------------------------------------------------------------------------
Premier Growth Equity Fund Yes Yes No 35%
- ----------------------------------------------------------------------------------------------------
Value Equity Fund Yes Yes Yes 35%
- ----------------------------------------------------------------------------------------------------
Mid-Cap Growth Fund Yes Yes Yes 35% (maximum of
25% in BBB by S&P,
Baa by Moody's or
equivalent)
- ----------------------------------------------------------------------------------------------------
Mid-Cap Value Equity Fund Yes Yes Yes 35%
- ----------------------------------------------------------------------------------------------------
Small-Cap Value Equity Fund No No No 35%
- ----------------------------------------------------------------------------------------------------
International Equity Fund Yes Yes Yes 35%
- ----------------------------------------------------------------------------------------------------
Europe Equity Fund Yes Yes Yes 35%
- ----------------------------------------------------------------------------------------------------
Emerging Markets Fund Yes Yes Yes 35% (maximum of
25% in BBB by S&P,
Baa by Moody's or
equivalent)
- ----------------------------------------------------------------------------------------------------
Income Fund Yes Yes Yes 100% (maximum of
25% in BBB by S&P
or Baa by Moody's or
equivalent)
- ----------------------------------------------------------------------------------------------------
Strategic Investment Fund Yes Yes Yes 100% (maximum of
25% in BBB by S&P
or Baa by Moody's or
equivalent)
- ----------------------------------------------------------------------------------------------------
Money Market Fund No No No 100%
- ----------------------------------------------------------------------------------------------------
<CAPTION>
- ------------------------------------------------------------------------------------
Maximum
Investment in Maximum When-Issued
Below-Investment Investment and Delayed
Grade Debt in Foreign Delivery
Securities Securities Securities
- ------------------------------------------------------------------------------------
<S> <C> <C> <C>
U.S. Equity Fund 5% 15%* Yes
- -------------------------------------------------------------------------------------
S&P 500 Index Fund 5% 35%* Yes
- -------------------------------------------------------------------------------------
Premier Growth Equity Fund 5% 25%* Yes
- -------------------------------------------------------------------------------------
Value Equity Fund 5% 25%* Yes
- -------------------------------------------------------------------------------------
Mid-Cap Growth Fund 10% in BB or B by 35%* Yes
S&P or Ba or B by
Moody's or equivalent
- -------------------------------------------------------------------------------------
Mid-Cap Value Equity Fund 15% in securities 15%* Yes
rated BBB or below
by S&P or Baa or
below by Moody's or
equivalent
- -------------------------------------------------------------------------------------
Small-Cap Value Equity Fund 10% 10%* Yes
- -------------------------------------------------------------------------------------
International Equity Fund 5% 100% Yes
- -------------------------------------------------------------------------------------
Europe Equity Fund 15% 100% Yes
- -------------------------------------------------------------------------------------
Emerging Markets Fund 10% in BB or B by 100% Yes
S&P or Ba or B by
Moody's or equivalent
- -------------------------------------------------------------------------------------
Income Fund 10% in BB or B by
S&P or Ba or B by 35%* Yes
Moody's or equivalent
- -------------------------------------------------------------------------------------
Strategic Investment Fund 10% in BB or B by 30%* Yes
S&P or Ba or B by
Moody's or equivalent
- -------------------------------------------------------------------------------------
Money Market Fund None 25%* Yes
- -------------------------------------------------------------------------------------
</TABLE>
* This limitation excludes ADRs, and securities of a foreign issuer with a class
of securities reqistered with the Securities and Exchange Commission and listed
on a U.S. national securities exchange or traded on the Nasdaq National Market
or the Nasdaq Small-Cap Market.
- --------------------------------------------------------------------------------
<PAGE>
- --------------------
40 GE Institutional
Funds Prospectus
More on Strategies
and Risks
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Debt Securities Participation
Lending Obligations of of Other Floating and Interests in
Portfolio Rule 144A Supranational Depositary Investment Municipal Variable Rate Municipal
Securities Securities Agencies Receipts Funds Leases Instruments Obligations
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
U.S. Equity Fund Yes Yes Yes Yes No No No* No
- ------------------------------------------------------------------------------------------------------------------------------------
S&P 500 Index Fund Yes Yes Yes Yes Yes No No* No
- ------------------------------------------------------------------------------------------------------------------------------------
Premier Growth Equity Fund Yes Yes Yes Yes Yes No No* No
- ------------------------------------------------------------------------------------------------------------------------------------
Value Equity Fund Yes Yes Yes Yes Yes No No* No
- ------------------------------------------------------------------------------------------------------------------------------------
Mid-Cap Growth Fund Yes Yes Yes Yes Yes No No* No
- ------------------------------------------------------------------------------------------------------------------------------------
Mid-Cap Value Equity Fund Yes Yes Yes Yes Yes No No* No
- ------------------------------------------------------------------------------------------------------------------------------------
Small-Cap Value Equity Fund Yes Yes Yes Yes Yes No No* No
- ------------------------------------------------------------------------------------------------------------------------------------
International Equity Fund Yes Yes Yes Yes Yes No No* No
- ------------------------------------------------------------------------------------------------------------------------------------
Europe Equity Fund Yes Yes Yes Yes Yes No Yes No
- ------------------------------------------------------------------------------------------------------------------------------------
Emerging Markets Fund Yes Yes Yes Yes Yes No No* No
- ------------------------------------------------------------------------------------------------------------------------------------
Income Fund Yes Yes Yes Yes Yes No Yes No
- ------------------------------------------------------------------------------------------------------------------------------------
Strategic Investment Fund Yes Yes Yes Yes Yes Yes Yes Yes
- ------------------------------------------------------------------------------------------------------------------------------------
Money Market Fund Yes Yes Yes No No No Yes No
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Excludes commercial paper and notes with variable and floating rates of
interest.
- --------------------------------------------------------------------------------
<PAGE>
------------
41
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Mortgage Government
Custodial Related Stripped Asset Backed Short
Zero Municipal Receipts on Securities, Mortgage Securities and Mortgage Sales
Coupon Obligations Municipal including Related Receivable-Backed Dollar Against
Obligations Components Obligations CMOs Securities Securities Rolls the Box
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
U.S. Equity Fund Yes No No No No No No No
- ------------------------------------------------------------------------------------------------------------------------------------
S&P 500 Index Fund No No No No No No No No
- ------------------------------------------------------------------------------------------------------------------------------------
Premier Growth Equity Fund No No No No No No No No
- ------------------------------------------------------------------------------------------------------------------------------------
Value Equity Fund No No No No No No No Yes
- ------------------------------------------------------------------------------------------------------------------------------------
Mid-Cap Growth Fund No No No No No No No Yes
- ------------------------------------------------------------------------------------------------------------------------------------
Mid-Cap Value Equity Fund Yes No No No No No No Yes
- ------------------------------------------------------------------------------------------------------------------------------------
Small-Cap Value Equity Fund No No No No No No No Yes
- ------------------------------------------------------------------------------------------------------------------------------------
International Equity Fund No No No No No No No Yes
- ------------------------------------------------------------------------------------------------------------------------------------
Europe Equity Fund No No No No No No No Yes
- ------------------------------------------------------------------------------------------------------------------------------------
Emerging Markets Fund No No No No No No No Yes
- ------------------------------------------------------------------------------------------------------------------------------------
Income Fund Yes No No Yes Yes Yes Yes No
- ------------------------------------------------------------------------------------------------------------------------------------
Strategic Investment Fund Yes Yes Yes Yes Yes Yes Yes No
- ------------------------------------------------------------------------------------------------------------------------------------
Money Market Fund No No No No No No No No
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
<PAGE>
- -------------------------------------------------------
42 GE Institutional
Funds Prospectus
More on Strategies
and Risks
- --------------------------------------------------------------------------------
More On Risks
Like all mutual funds, investing in the GE Institutional Funds involves risk
factors and special considerations. A Fund's risk is defined primarily by its
principal investment strategies, which are described earlier in this Prospectus.
Investments in a Fund are not insured against loss of principal. As with any
mutual fund, there can be no assurance that a Fund will achieve its investment
objective. Investing in shares of a Fund should not be considered a complete
investment program. The share value of the Equity Funds, the Income Fund and the
Asset Allocation Fund will rise and fall. Although the Money Market Fund seeks
to preserve the value of your investment at $1.00 per share, it is possible to
lose money by investing in the Fund.
One of your most important investment considerations should be balancing risk
and return. Different types of investments tend to respond differently to shifts
in the economic and financial environment. So, diversifying your investments
among different asset classes -- such as stocks, bonds and cash -- and within an
asset class -- such as small-cap and large-cap stocks -- can help you manage
risk and achieve the results you need to comfortably reach your financial goals.
The primary risks of particular investments are summarized below. For more
information about the risks associated with the Funds, please see the SAI, which
is incorporated by reference into this Prospectus.
Credit Risk: The price of a bond is affected by the issuer's or counterparty's
credit quality. Changes in financial condition and general economic conditions
can affect the ability to honor financial obligations and therefore lower credit
quality. Lower quality bonds are generally more sensitive to these changes than
higher quality bonds. Even within securities considered investment grade,
differences exist in credit quality and some investment grade debt securities
may have speculative characteristics. A security's price may be adversely
affected by the market's opinion of the security's credit quality level even if
the issuer or counterparty has suffered no degradation in ability to honor the
obligation.
Derivative Securities Risk: A Fund's use of various investment techniques to
increase or decrease its exposure to changing security prices, interest rates,
currency exchange rates, commodity prices, or other factors that affect security
values may involve derivative securities and contracts. Derivative securities
and contracts (securities and contracts whose values are based on other
securities, currencies or indices) include option contracts (on stocks, indices,
currencies, futures contracts or bonds), forward currency exchange contracts,
futures contracts, currency and interest rate swap contracts and structured
securities. Derivative securities and contracts may be used as a direct
investment or as a hedge for a Fund's portfolio or a portion of a portfolio.
Hedging involves using a security or contract to offset investment risk. Hedging
may include reducing the risk of a position held in a portfolio. Hedging and
other investment techniques also may be used to increase a Fund's exposure to a
particular investment strategy. If the portfolio manager's judgment of market
conditions proves incorrect or the strategy does not correlate well with a
Fund's investments, the use of derivatives could result in a loss regardless of
whether the intent was to reduce risk or increase return and may increase a
Fund's volatility. In addition, in the event that non-exchange traded
derivatives are used, these derivatives could result in a loss if the
counterparty to the transaction does not perform as promised. A Fund is not
obligated to pursue any hedging strategy. In addition, hedging techniques may
not be available, may be too costly to be used effectivily or may be unable to
be used for other reasons. These investments may be considered speculative.
Emerging Markets Risk: Emerging market securities bear most foreign exposure
risks discussed below. In addition, there are greater risks involved in
investing in emerging markets than in developed foreign markets. Specifically,
the economic structures in emerging market countries are less diverse and mature
than those in developed countries, and their political systems are less stable.
Investments in emerging market countries may be affected by national policies
that restrict foreign investment. Emerging market countries may have less
developed legal structures, and the small size of their securities markets and
low trading volumes can make
- --------------------------------------------------------------------------------
<PAGE>
------------
43
- --------------------------------------------------------------------------------
investments illiquid and more volatile than investments in developed countries.
As a result, a Fund investing in emerging market countries may be required to
establish special custody or other arrangements before investing.
Foreign Exposure Risk: Investing in foreign securities, including depositary
receipts, or securities of U.S. entities with significant foreign operations,
involves additional risks which can affect a Fund's performance. Foreign
markets, particularly emerging markets, may be less liquid, more volatile and
subject to less government supervision than U.S. markets. There may be
difficulties enforcing contractual obligations, and it may take more time for
transactions to clear and settle in foreign countries than in the U.S. Less
information may be available about foreign issuers. The costs of buying and
selling foreign securities, including tax, brokerage and custody costs,
generally are higher than those involving domestic transactions. The specific
risks of investing in foreign securities include:
o Currency Risk: The values of foreign investments may be affected by changes in
currency rates or exchange control regulations. If the local currency gains
strength against the U.S. dollar, the value of the foreign security increases in
U.S. dollar terms. Conversely, if the local currency weakens against the U.S.
dollar, the value of the foreign security declines in U.S. dollar terms. U.S.
dollar-denominated securities of foreign issuers, including depositary receipts,
also are subject to currency risk based on their related investments.
o Political/Economic Risk: Changes in economic, tax or foreign investment
policies, government stability, war or other political or economic actions may
have an adverse effect on a Fund's foreign investments.
o Regulatory Risk: Foreign companies often are not subject to uniform
accounting, auditing and financial reporting standards or to other regulatory
practices and requirements common to U.S. companies.
High Yield Securities Risk: Below investment-grade securities, sometimes called
"junk bonds," are considered speculative. These securities have greater risk of
default than higher rated securities. The market value of below investment-grade
securities is more sensitive to individual corporate developments and economic
changes than higher rated securities. The market for below investment-grade
securities may be less active than for higher rated securities, which can
adversely affect the price at which these securities may be sold. Less active
markets may diminish a Fund's ability to obtain accurate market quotations when
valuing the portfolio securities and calculating a Fund's net asset value. In
addition, a Fund may incur additional expenses if a holding defaults and a Fund
has to seek recovery of its principal investment.
Below investment-grade securities may also present risks based on payment
expectations. For example, these securities may contain redemption or call
provisions. If an issuer exercises these provisions in a declining interest rate
market the Fund would have to replace the security with a lower yielding
security resulting in a decreased return for investors.
Illiquid Securities Risk: Illiquid securities may be difficult to resell at
approximately the price they were valued in the ordinary course of business in
seven days or less. When investments cannot be sold readily at the desired time
or price, a Fund may have to accept a lower price or may not be able to sell the
security at all, or forego other investment opportunities, all of which may have
an impact on the Fund.
Interest Rate Risk: Bond prices generally rise when interest rates decline and
decline when interest rates rise. The longer the duration of a bond, the more a
change in interest rates affects the bond's price. Short-term and long-term
interest rates may not move the same amount and may not move in the same
direction.
Prepayment Risk: Prices and yields of mortgage-backed securities assume the
securities will be redeemed at a given time. When interest rates decline,
mortgage-backed securities experience higher prepayments because the underlying
mortgages are repaid earlier than expected. A Fund's portfolio manager may be
forced to invest the proceeds from prepaid mortgage-backed securities at lower
rates, which results in a lower return for the
- --------------------------------------------------------------------------------
<PAGE>
- --------------------
44 GE Institutional
Funds Prospectus
More on Strategies
and Risks
- --------------------------------------------------------------------------------
Fund. When interest rates increase, mortgage-backed securities experience lower
prepayments because the underlying mortgages may be repaid later than expected.
This typically reduces the value of the underlying securities.
Repurchase and Reverse Repurchase Agreements Risk: A Fund entering into a
repurchase agreement may suffer a loss if the other party to the transaction
defaults on its obligations and could be delayed or prevented from exercising
its rights to dispose of the underlying securities. The value of the underlying
securities might decline while the Fund seeks to assert its rights. The Fund
could incur additional expenses in asserting its rights or may lose all or part
of the income from the agreement. A reverse repurchase agreement involves the
risk that the market value of the securities retained by a Fund may decline
below the price of the securities the Fund has sold but is obligated to
repurchase at a higher price under the agreement.
Restricted Securities Risk: Restricted securities (including Rule 144A
securities) may be subject to legal restraints on resale and, therefore, are
typically less liquid than other securities. The prices received from reselling
restricted securities in privately negotiated transactions may be less than
those originally paid by a Fund. Companies whose securities are restricted are
not subject to the same investor protection requirements as publicly traded
securities.
Stock Market Risk: A Fund's share price will move up and down in reaction to
stock market movements. Stock prices change daily in response to company
activity and general economic and market conditions. A Fund's investments in
common stocks and other equity securities are subject to stock market risk,
which is the risk that the value of equity securities may decline. Also, equity
securities are subject to the risk that a particular issuer's securities may
decline in value, even during periods when equity securities in general are
rising. Additional stock market risks may be introduced when a particular equity
security is traded on a foreign market. For more detail on the related risks
involved in foreign markets, see Foreign Exposure Risk.
Style Risk: Securities with different characteristics tend to shift in and out
of favor depending upon market and economic conditions as well as investor
sentiment. A Fund may underperform other funds that employ a different style. A
Fund also may employ a combination of styles that impact its risk
characteristics. Examples of different styles include growth and value
investing, as well as those focusing on large, medium, or small company
securities.
o Growth Investing Risk: Growth stocks may be more volatile than other stocks
because they are more sensitive to investor perceptions of the issuing company's
growth potential. Growth oriented funds will typically underperform when value
investing is in favor.
o Value Investing Risk: Undervalued stocks may not realize their perceived value
for extended periods of time or may never realize their perceived value. Value
stocks may respond differently to market and other developments than other types
of stocks. Value oriented funds will typically underperform when growth
investing is in favor.
o Mid-Cap Company Risk: Investments in securities of mid-cap companies entail
greater risks than investments in larger, more established companies. Mid-cap
companies tend to have more narrow product lines, more limited financial
resources and a more limited trading market for their stocks, as compared with
larger companies. As a result, their stock prices may decline significantly as
market conditions change.
o Small-Cap Company Risk: Investing in securities of small-cap companies may
involve greater risks than investing in larger, more established issuers.
Smaller companies may have limited product lines, markets or financial
resources. Their securities may trade less frequently and in more limited volume
than the securities of larger, more established companies. In addition, smaller
companies are typically subject to a greater changes in earnings and business
prospects than are larger companies. Consequently, the prices of small company
stocks tend to rise and fall in value more than other stocks. Although investing
in small-cap companies offers potential for above-average returns, the companies
may not succeed and their stock prices could decline significantly.
- --------------------------------------------------------------------------------
<PAGE>
---------
45
- --------------------------------------------------------------------------------
Other Risk Considerations
Institutional Investor Risk: Investors may be materially affected by the actions
of other large institutional investors. For example, if a large institutional
investor withdraws an investment in a Fund, the Fund could diminish in size by a
substantial amount causing the remaining investors to experience higher pro rata
operating expenses, resulting in lower returns for such investors. The purchase
or withdrawal by a large investor may result in significant portfolio trading
expenses that are borne by other shareholders.
EURO Conversion: On January 1, 1999, eleven of the fifteen member countries of
the European Economic and Monetary Union (Participating Countries) established
fixed conversion rates between their existing sovereign currencies and the EURO,
a new common currency in Europe. The introduction of the EURO may result in
uncertainties for securities of European companies, European markets and the
operation of the Funds. The redenomination of certain European debt and equity
securities over a period of time may result in differences in various
accounting, tax and/or legal treatments that would not otherwise occur. Market
disruptions may occur that could adversely affect the value of European
securities and currencies held by the Funds. Other risks relate to the ability
of financial institution systems to process EURO transactions.
GE Investment Management has addressed ongoing EURO conversion issues in a broad
range of areas, including internal business applications, trading systems and
accounting systems. In addition, GE Investment Management has worked closely
with the Funds' major service providers to address Euro conversion issues. It is
possible, however, that the markets for securities in which certain Funds invest
may be adversely affected by the conversion to the EURO. Furthermore, individual
issuers may suffer increased costs and decreased earnings due to the long-term
impact of EURO conversion.
Year 2000: Like other business organizations and individuals around the world,
each of the Funds could be adversely affected if the computer systems used by
its investment managers and external service providers do not properly process
and calculate date-related information from and after January 1, 2000. This is
commonly known as the "Year 2000 Problem." GE Investment Management is engaged
in a multi-year effort to address the Year 2000 Problem in a broad range of
areas, including internal business applications, process-enabling systems and
facilities. In addition, efforts are underway to track each of the Funds' major
service providers to see what they have completed, or have undertaken to address
the Year 2000 Problem. At this time, however, there can be no assurance that
these steps will be sufficient to avoid any adverse impact on the Funds.
Furthermore, it is possible that the markets for securities in which the Funds
invest may be detrimentally affected by computer failures throughout the
financial services industry beginning January 1, 2000. Corporate and
governmental data processing errors may result in production problems for
individual companies and overall economic uncertainties. Earnings of individual
issuers may be affected by remediation costs. In addition, it has been reported
that foreign institutions have made less progress in addressing the Year 2000
Problem than major U.S. entities, which could have a greater impact on certain
GE Institutional Funds' investments that are more sensitive to these risks.
- --------------------------------------------------------------------------------
<PAGE>
- ------------------------------------------------
46 GE Institutional About the
Funds Prospectus Investment
Adviser
- --------------------------------------------------------------------------------
Investment Adviser and Administrator
GE Investment Management Incorporated, located at 3003 Summer Street, P.O. Box
7900, Stamford, Connecticut 06904, is the investment adviser and administrator
of each Fund. GE Investment Management is a wholly-owned subsidiary of General
Electric Company (GE) and a registered investment adviser. GE Investment
Management's principal officers, directors and portfolio managers hold similar
positions with General Electric Investment Corporation (GEIC), a wholly-owned
subsidiary of GE. As of June 30, 1999, GE's investment advisers managed roughly
$82 billion in individual and institutional assets, with over $17 billion in
mutual funds alone.
For many years, GE's tradition of ingenuity and customer focus has included
financial services. In the late 1920s, through a desire to promote the financial
well-being of its employees, GE began managing assets for its employee pension
plan. By the mid-1930s, GE pioneered some of the nation's earliest mutual funds,
the Elfun Funds -- to be followed years later by the GE Savings and Security
Program Funds. The success of these funds spurred growth; eventually GE expanded
its mutual fund offerings to include a wide variety of investment products
called the GE Family of Funds, created specifically for the general public.
GE Investment Management bases its investment philosophy on two enduring
principles. First, GE Investment Management believes that a disciplined,
consistent approach to investing can add value to an investment portfolio over
the long term. Its commitment to in-depth research, sound judgment and hard work
provides investors with an opportunity to take advantage of attractive
investments around the world. Second, GE Investment Management follows the same
principles of integrity and quality that have guided GE over the past century
and have made it the world-class company that it is today.
Each Fund pays GE Investment Management a combined fee for advisory and
administrative services that is accrued daily and paid monthly. The advisory and
administration fee for each Fund, except the S&P 500 Index Fund, declines
incrementally as Fund assets increase. This means that investors pay a reduced
fee with respect to Fund assets over a certain level, or "breakpoint." The
advisory and administration fee or fees for each Fund, and the relevant
breakpoints, are stated in the schedule opposite (fees are expressed as an
annual rate) up to the maximum annual fee for investment management services.
For their services, GE Investment Management pays (out of the advisory fee that
it receives) SSGA, Palisade and NWQ monthly compensation in the form of an
investment sub-advisory fee. The fee is paid by GE Investment Management monthly
and is based upon the average daily net assets of the Fund that each sub-adviser
manages.
- --------------------------------------------------------------------------------
Investment Management and Administration Fees:
Each Fund pays GE Investment Management an investment management fee. The fee is
accrued daily and paid monthly at the following rates:
Annual Rate
Name of Fund Average Daily Net Assets of Fund Percentage
- --------------------------------------------------------------------------------
U.S. Equity Fund First $25 million 0.55%
Premier Growth Equity Fund Next $25 million 0.45%
Value Equity Fund Over $50 million 0.35%
Mid-Cap Growth Fund
- --------------------------------------------------------------------------------
S&P 500 Index Fund All Assets 0.15%
- --------------------------------------------------------------------------------
Mid-Cap Value Equity Fund First $25 million 0.65%
Next $25 million 0.60%
Over $50 million 0.55%
- --------------------------------------------------------------------------------
Small-Cap Value Equity Fund First $25 million 0.70%
Next $25 million 0.65%
Over $50 million 0.60%
- --------------------------------------------------------------------------------
International Equity Fund First $25 million 0.75%
Europe Equity Fund Next $50 million 0.65%
Over $75 million 0.55%
- --------------------------------------------------------------------------------
Emerging Markets Fund First $50 million 1.05%
Over $50 million 0.95%
- --------------------------------------------------------------------------------
Income Fund First $25 million 0.35%
Next $25 million 0.30%
Next $50 million 0.25%
Over $100 million 0.20%
- --------------------------------------------------------------------------------
Strategic Investment Fund First $25 million 0.45%
Next $25 million 0.40%
Over $50 million 0.35%
- --------------------------------------------------------------------------------
Money Market Fund First $25 million 0.25%
Next $25 million 0.20%
Next $50 million 0.15%
Over $100 million 0.10%
- --------------------------------------------------------------------------------
From time to time, GE Investment Management may waive or reimburse advisory or
administrative fees paid by a Fund.
- --------------------------------------------------------------------------------
<PAGE>
---------
47
- --------------------------------------------------------------------------------
About the Funds' Portfolio Managers
Eugene Bolton is a Director and Executive Vice President of GE Investment
Management. He manages the overall U.S. equity investments for GE Investment
Management. He leads a team of portfolio managers for the U.S. Equity Fund. He
has served in this capacity since commencement. Mr. Bolton joined GE Investment
Management in 1984 as Chief Financial Officer and has been a portfolio manager
since 1986.
David B. Carl son is a Senior Vice President of GE Investment Management. He is
portfolio manager for the Premier Growth Equity Fund and manages equity
investments for the Strategic Investment Fund. He has served in those capacities
since each Fund's commencement. Mr. Carlson joined GE Investment Management in
1982 as a Securities Analyst for Investment Operations. He became a Vice
President for Mutual Fund Portfolios in 1987 and a Senior Vice President in
1989.
Peter J. Hathaway is a Senior Vice President of GE Investment Management and
portfolio manager for the Value Equity Fund. Mr. Hathaway has served in that
capacity since the Fund's commencement and has over 36 years of investment
experience. He joined GE Investment Management in 1985 as a Vice President for
Pension Fund Portfolios. He became a Senior Vice President in 1987.
Ralph R. Layman is a Director and Executive Vice President of GE Investment
Management. He manages the overall international equity investments for GE
Investment Management. Mr. Layman leads a team of portfolio managers for the
International Equity Fund and the Emerging Markets Fund. He manages the
international equity investments for the Strategic Investment Fund. He has
served in those capacities since each Fund's commencement. Mr. Layman joined GE
Investment Management in 1991 as Executive Vice President for International
Investments.
Robert A. MacDougall is a Director and Executive Vice President of GE Investment
Management. He manages the overall fixed income investments for GE Investment
Management. He leads a team of portfolio managers for the Income Fund and the
Money Market Fund. Mr. MacDougall also manages fixed income investments for the
Strategic Investment Fund. He has served in those capacities since each Fund's
commencement. Mr. MacDougall joined GE Investment Management in 1986 as Vice
President. He became a Senior Vice President of Fixed Income in 1993, a director
and Executive Vice President of Fixed Income in 1997.
Ralph E. Whitman is a Senior Vice President of GE Investment Management and
Portfolio Manager of the Mid-Cap Growth Fund. He has served in that capacity
since December 1998. Mr. Whitman has more than 11 years of investment
experience. He joined GE Investment Management in 1987 as an Equity Analyst. He
became a Vice President for U.S. Equity Investments in 1995 and a Senior Vice
President for U.S. Equity Portfolios in 1998.
Michael J. Solecki is a Vice President of GE Investment Management and portfolio
manager of the Europe Equity Fund. He has served in that capacity since the
Fund's commencement. Mr Solecki joined GE Investment Management in 1990 as an
International Equity Analyst. He became a Vice President for International
Equity Portfolios in 1996.
- --------------------------------------------------------------------------------
<PAGE>
- --------------------
48 GE Institutional
Funds Prospectus
About the Investment
Adviser
- --------------------------------------------------------------------------------
About the Sub-Advisers
GE Investment Management believes that it has the responsibility to make the
best managers available to Fund shareholders at all times, whether that means
accessing GE Investment Management's wealth of internal talent or using external
talent (Sub-Advisers). When GE Investment Management feels the need to access
specialists outside, it carefully investigates and engages Sub-Advisers with
strong performance records and styles that match the investment objectives of
the Funds. GE Investment Management is proud to engage the following
Sub-Advisers to conduct the investment programs for the following Funds.
S&P 500 Index Fund
State Street Global Advisors (SSGA)
Two International Place
Boston, MA 02110
SSGA has served as the sub-adviser of S&P 500 Index Fund since its inception.
SSGA, a division of State Street Bank and Trust Company, is a wholly-owned
subsidiary of State Street Corporation, a publicly held bank holding company.
State Street managed more than $574.7 billion in assets as of June 30, 1999.
State Street provides complete global investment management services from
offices in the United States, London, Sydney, Hong Kong, Tokyo, Toronto,
Montreal, Luxembourg, Melbourne, Paris, Dubai, Munich and Brussels.
The Fund is managed by a team of portfolio managers led by James B. May. Mr. May
has been an investment officer and portfolio manager in the U.S. Structured
Products Group of State Street since 1994.
- --------------------------------------------------------------------------------
Small-Cap Value Equity Fund
Palisade Capital Management, L.L.C. (Palisade)
One Bridge Plaza
Fort Lee, NJ 07024
Palisade has a history of managing small-cap equity portfolios and for several
years has provided pension fund services to GE. The company has managed various
institutional and private accounts with total assets in excess of $2.7 billion
as of June 30, 1999. Palisade has managed the Small-Cap Value Equity Fund since
inception. Although Palisade has no previous experience managing mutual fund
portfolios, Palisade translates its experience from various institutional and
private accounts to mutual funds.
The Fund is managed by an investment advisory committee (Senior Investment
Committee) composed of the following members: Jack Feiler, Martin L. Berman,
Steven E. Berman and Richard Meisenberg. Mr. Feiler, Chief Investment Officer at
Palisade, has day-to-day responsibility for managing the Fund and works with the
Senior Investment Committee in developing and executing the Fund's investment
program. Mr. Feiler has more than 30 years of investment experience and has
served as the principal small-cap portfolio manager at Palisade since the
commencement of Palisade's operations in April 1995. Prior to joining Palisade,
Mr. Feiler was a Senior Vice President-Investments at Smith Barney from 1990 to
1995.
- --------------------------------------------------------------------------------
<PAGE>
---------
49
- --------------------------------------------------------------------------------
Mid-Cap Value Equity Fund
NWQ Investment Management Company (NWQ)
2049 Century Park East - 4th Floor
Los Angeles, CA 90067
NWQ is a wholly-owned subsidiary of United Asset Management Corporation, a
company whose principal business is managing investments for institutional
clients through 50 operating subsidiaries and acquiring investment management
firms. NWQ is a manager of domestic investment portfolios for individual, union,
corporate, municipal, endowment and foundation clients with 17 years of
experience. As of June 30, 1999, NWQ had in excess of $7.3 billion of assets
under management.
Jon D. Bosse is the portfolio manager of the GE Mid-Cap Value Equity Fund and
has served in that capacity since the Fund's inception. Mr. Bosse has more than
12 years of investment experience and has held the position of Director of
Equity Research and Managing Director at NWQ since 1996. Prior to his joining
NWQ in 1996, he spent ten years with ARCO Investment Management Company where he
was director of equity research and managed a value-oriented portfolio. Previous
to this, he spent four years in the corporate finance department of ARCO. Mr.
Bosse is a Chartered Financial Analyst and a member of the Association for
Investment Management and Research and the Los Angeles Society of Financial
Analysts.
- --------------------------------------------------------------------------------
<PAGE>
- --------------------
50 GE Institutional
Funds Prospectus
About the Investment
Adviser
- --------------------------------------------------------------------------------
Prior Performance Information of GE Investment Management Incorporated
(Investment Adviser to the U.S. Equity Fund)
The bar chart and table opposite illustrate the performance of a composite of
certain private and mutual fund accounts ("Accounts") managed by GE Investment
Management, the investment adviser to the U.S. Equity Fund and GEIC, its sister
company having the same investment personnel. See "About the Investment
Adviser." Each of the Accounts included in the composite has objectives,
policies and strategies substantially similar to those of the Fund.
Unlike management of the private accounts included in the composite, GE
Investment Management's management of the U.S. Equity Fund is subject to certain
regulatory restrictions (e.g., limits on percentage of assets invested in a
single issuer and industry and requirements on distributing income to
shareholders) that do not apply to the private accounts. In addition, the Fund
generally experiences cash flows that are different from those of the private
accounts. All of these factors may adversely affect the performance of the Fund
and cause it to differ from that of the composite described opposite.
GE Investment Management composite results represent the performance of the
Accounts, net of the annual rate of total operating expenses of the U.S. Equity
Fund; the composite results do not represent the performance of the U.S. Equity
Fund, and should not be considered an indication of future performance of the
Fund.
- --------------------------------------------------------------------------------
Calendar Year Total Return
[The following table was represented as a bar chart in the printed material.]
Composite(2) US Equity Fund(3) S&P 500 Index
------------ ----------------- -------------
1992 9% 8%
1993 11% 10%
1994 -2% 1%
1995 36% 37%
1996 22% 23%
1997 33% 33%
1998 23% 24% 29%
1999(1) 14% 14% 12%
- --------------------------------------------------------------------------------
Average Annual Total Return
(as of June 30, 1999)
Composite -- Composite -- U.S. Equity S&P 500
Period Investment Class(4) Service Class(2) Fund(3) Index
------------------- ---------------- ----------- -------
Year-to-Date 13.94% 13.80% 14.27% 12.26%
1 Year 22.93% 22.63% 23.21% 22.71%
3 Years 27.76% 27.45% -- 29.10%
5 Years 26.24% 25.93% -- 27.87%
Since 1/1/92 19.07% 18.78% -- 19.95%
(1) Represents performance from 1/1/99 through 6/30/99.
(2) The composite performance results shown reflect the deduction of the
annual rate of total operating expenses of the Fund - Service Class
shares.
(3) Represents the performance of U.S. Equity Fund - Investment Class shares.
As of the date of this Prospectus, Service Class shares have no operating
history and therefore performance information is not available. Service
Class shares of the Fund pay a shareholder service and distribution fee,
which would lower their returns.The Fund's Investment Class commenced
operations 11/25/97. Fund performance information is shown in the Calendar
Year Total Return Chart from January 1st of the year following its
inception. The Fund performance information is net of applicable fees and
other expenses. As with all mutual funds, past performance is not an
indication of future performance.
(4) The composite performance results shown reflect the deduction of the
annual rate of total operating expenses of the Fund - Investment Class
shares.
Note A. GE stock has been held in substantially all of the private accounts in
the composite since October 1996. GE stock is not actively traded by the private
accounts and is held at a weight substantially approximating the weight of GE in
the S&P 500 Index, with quarterly rebalancing. GE stock is not held by any
mutual fund. Private accounts that do not hold GE stock and mutual funds in the
composite typically hold a GE substitute (a basket of securities that are
intended to represent, on a collective basis, the principal industries in which
GE conducts business).
Note B. The composite performance results shown reflect the deduction of the
annual rate of total operating expenses, including the maximum advisory and
administration fee, of the Fund; actual expenses of the Accounts may have been
more or less than those of the Fund. As of June 30, 1999, the total assets in
the composite was $13.45 billion. The composite performance is compared to the
performance of the S&P 500 Index, which is a composite of the price and dividend
performance of 500 widely held U.S. stocks recognized by many investors to be
representative of the stock market in general. The information provided above
for the composite, the Fund and the Index reflects the reinvestment of dividends
and distributions.
- --------------------------------------------------------------------------------
<PAGE>
---------
51
- --------------------------------------------------------------------------------
Prior Performance Information of GE Investment Management Incorporated
(Investment Adviser to the Premier Growth Equity Fund)
The bar chart and table opposite illustrate the performance of a composite of
certain private and mutual fund accounts ("Accounts") managed by GE Investment
Management, the investment adviser to the Premier Growth Equity Fund and GEIC,
its sister company having the same investment personnel. See "About the
Investment Adviser." Each of the Accounts included in the composite has
objectives, policies and strategies substantially similar to those of the Fund.
Unlike management of the private accounts included in the composite, GE
Investment Management's management of the Premier Growth Equity Fund will be
subject to certain regulatory restrictions (e.g., limits on percentage of assets
invested in a single issuer and industry and requirements on distributing income
to shareholders) that did not apply to the private accounts. In addition, the
Fund will likely experience cash flows different from those of the private
accounts. All of these factors may adversely affect the performance of the Fund
and cause it to differ from that of the composite described opposite.
GE Investment Management composite results represent the performance of the
Accounts, net of the annual rate of total operating expenses of the Premier
Growth Equity Fund; the composite results do not represent the performance of
the Premier Growth Equity Fund, and should not be considered an indication of
future performance of the Fund.
- --------------------------------------------------------------------------------
Calendar Year Total Return(1)
[The following table was represented as a bar chart in the printed material.]
Composite(3) S&P 500 Index
------------ -------------
1997 27% 33%
1998 36% 29%
1999(2) 19% 12%
- --------------------------------------------------------------------------------
Average Annual Total Return(1)
(as of June 30, 1999)
Composite -- Composite -- S&P 500
Period Investment Class(4) Service Class(3) Index
------------------- ---------------- -------
Year-to-Date 19.62% 19.47% 12.26%
1 Year 38.40% 38.07% 22.71%
Since 1/1/97 33.91% 33.58% 30.03%
(1) No performance figures are shown for the Premier Growth Equity Fund
because the Fund has no operating history as of the date of this
Prospectus.
(2) Represents performance from 1/1/99 through 6/30/99.
(3) The composite performance results shown reflect the deduction of the
annual rate of total operating expenses of the Fund - Service Class
shares.
(4) The composite performance results shown reflect the deduction of the
annual rate of total operating expenses of the Fund - Investment Class
shares.
Note A. The composite performance results shown reflect the deduction of the
annual rate of total operating expenses, including the maximum advisory and
administration fee, of the Fund; actual expenses of the Accounts may have been
more or less than those of the Fund. As of June 30, 1999, the total assets in
the composite was $158 million. The composite performance is compared to the
performance of the S&P 500 Index, which is a composite of the price and dividend
performance of 500 widely held U.S. stocks recognized by many investors to be
representative of the stock market in general. The information provided above
for the composite and the Index reflects the reinvestment of dividends and
distributions.
- --------------------------------------------------------------------------------
<PAGE>
- --------------------
52 GE Institutional
Funds Prospectus
About the Investment
Adviser
- --------------------------------------------------------------------------------
Prior Performance Information of GE Investment Management Incorporated
(Investment Adviser to the Value Equity Fund)
The bar chart and table opposite illustrate the performance of a composite of
certain private and mutual fund accounts ("Accounts") managed by GE Investment
Management, the investment adviser to the Value Equity Fund and GEIC, its sister
company having the same investment personnel. See "About the Investment
Adviser." Each of the Accounts included in the composite has objectives,
policies and strategies substantially similar to those of the Fund.
Unlike management of the private accounts included in the composite, GE
Investment Management's management of the Value Equity Fund will be subject to
certain regulatory restrictions (e.g., limits on percentage of assets invested
in a single issuer and industry and requirements on distributing income to
shareholders) that did not apply to the private accounts. In addition, the Fund
will likely experience cash flows different from those of the private accounts.
All of these factors may adversely affect the performance of the Fund and cause
it to differ from that of the composite described opposite.
GE Investment Management composite results represent the performance of the
Accounts, net of the annual rate of total operating expenses of the Value Equity
Fund; the composite results do not represent the performance of the Value Equity
Fund, and should not be considered an indication of future performance of the
Fund.
- --------------------------------------------------------------------------------
Calendar Year Total Return(1)
[The following table was represented as a bar chart in the printed material.]
Composite(3) S&P 500/Barra Value Index
--------- -------------------------
1992 10% 8%
1993 14% 10%
1994 -1% 1%
1995 37% 37%
1996 22% 23%
1997 34% 33%
1998 26% 29%
1999(2) 13% 14%
- --------------------------------------------------------------------------------
Average Annual Total Return(1)
(as of June 30, 1999)
Composite -- Composite -- S&P 500/Barra
Period Investment Class(4) Service Class(3) Value Index
------------------- ---------------- -------------
Year-to-Date 12.94% 12.80% 13.95%
1 Year 22.35% 22.05% 16.54%
3 Years 28.57% 28.26% 24.04%
5 Years 26.86% 26.55% 23.64%
Since 1/1/92 20.24% 19.94% 19.04%
(1) No performance figures are shown for the Value Equity Fund because the
Fund has no operating history as of the date of this Prospectus.
(2) Represents performance from 1/1/99 through 6/30/99.
(3) The composite performance results shown reflect the deduction of the
annual rate of total operating expenses of the Fund - Service Class
shares.
(4) The composite performance results shown reflect the deduction of the
annual rate of total operating expenses of the Fund - Investment Class
shares.
Note A. Performance results provided in the composite for the period from
January 1, 1992 to September 30, 1997 reflect the performance of a single
private account consisting only of General Electric Pension Trust assets. GE
stock has been held in substantially all of the private accounts in the
composite since October 1996. GE stock is not actively traded by the private
accounts and is held at a weight substantially approximating the weight of GE in
the S&P 500 Index, with quarterly rebalancing. GE stock is not held by any
mutual fund. Private accounts that do not hold GE stock and mutual funds in the
composite typically hold a GE substitute (a basket of securities that are
intended to represent, on a collective basis, the principal industries in which
GE conducts business).
Note B. The composite performance results shown reflect the deduction of the
annual rate of total operating expenses, including the maximum advisory and
administration fee, of the Fund; actual expenses of the Accounts may have been
more or less than those of the Fund. As of June 30, 1999, the total assets in
the composite was $4.41 billion. The composite performance is compared to the
performance of the S&P 500/Barra Value Index, which is a capitalization-weighted
index of all of the stocks in the S&P 500 that have low price-to-book ratios.
The information provided above for the composite and the Index reflects the
reinvestment of dividends and distributions.
- --------------------------------------------------------------------------------
<PAGE>
---------
53
- --------------------------------------------------------------------------------
Prior Performance Information of GE Investment Management Incorporated
(Investment Adviser to the International Equity Fund)
The bar chart and table opposite illustrate the performance of a composite of
certain private and mutual fund accounts ("Accounts") managed by GE Investment
Management, the investment adviser to the International Equity Fund and GEIC,
its sister company having the same investment personnel. See "About the
Investment Adviser." Each of the Accounts included in the composite has
objectives, policies and strategies substantially similar to those of the Fund.
Unlike management of the private accounts included in the composite, GE
Investment Management's management of the International Equity Fund is subject
to certain regulatory restrictions (e.g., limits on percentage of assets
invested in a single issuer and industry and requirements on distributing income
to shareholders) that do not apply to the private accounts. In addition, the
Fund generally experiences cash flows that are different from those of the
private accounts. All of these factors may adversely affect the performance of
the Fund and cause it to differ from that of the composite described opposite.
GE Investment Management composite results represent the performance of the
Accounts, net of the annual rate of total operating expenses of the
International Equity Fund; the composite results do not represent the
performance of the International Equity Fund, and should not be considered an
indication of future performance of the Fund.
- --------------------------------------------------------------------------------
Calendar Year Total Return
[The following table was represented as a bar chart in the printed material.]
Composite(2) International Equity Fund(3) MSCI EAFE Index
------------ ---------------------------- ---------------
1989 16% 11%
1990 -16% -23%
1991 8% 12%
1992 -5% -12%
1993 39% 33%
1994 0% 8%
1995 12% 11%
1996 14% 6%
1997 7% 2%
1998 17% 17% 20%
1999(1) 7% 7% 4%
- --------------------------------------------------------------------------------
Average Annual Total Return
(as of June 30, 1999)
Composite -- Composite -- International MSCI EAFE
Period Investment Class(4) Service Class(2) Equity Fund(3) Index
------------------- ---------------- -------------- ---------
Year-to-Date 6.81% 6.67% 6.67% 3.97%
1 Year 4.97% 4.71% 4.99% 7.62%
3 Years 12.50% 12.22% -- 8.81%
5 Years 11.61% 11.34% -- 8.21%
10 Years 9.63% 9.36% -- 6.60%
Since 1/1/89 17.53% 17.16% -- 16.18%
(1) Represents performance from 1/1/99 through 6/30/99.
(2) The composite performance results shown reflect the deduction of the
annual rate of total operating expenses of the Fund - Service Class
shares.
(3) Represents the performance of International Equity Fund- Investment Class
shares. As of the date of this Prospectus, Service Class shares have no
operating history and therefore performance information is not available.
Service Class shares of the Fund pay a shareholder service and
distribution fee, which would lower their returns. The Fund's Investment
Class commenced operations 11/25/97. Fund performance information is shown
in the Calendar Year Total Return Chart from January 1st of the year
following its inception. The Fund performance information is net of
applicable fees and other expenses. As with all mutual funds, past
performance is not an indication of future performance.
(4) The composite performance results shown reflect the deduction of the
annual rate of total operating expenses of the Fund - Investment Class
shares.
Note A. The composite performance results shown reflect the deduction of the
annual rate of total operating expenses, including the maximum advisory and
administration fee, of the Fund; actual expenses of the Accounts may have been
more or less than those of the Fund. As of June 30, 1999, the total assets in
the composite was $7.44 billion. The composite performance is compared to the
performance of the MSCI EAFE Index, which is a composite of foreign securities
traded in 22 developed markets in Europe, Australasia, and Far East. The
information provided above for the composite, the Fund and the Index reflects
the reinvestment of dividends and distributions.
- --------------------------------------------------------------------------------
<PAGE>
- --------------------
54 GE Institutional
Funds Prospectus
About the Investment
Adviser
- --------------------------------------------------------------------------------
Prior Performance Information of GE Investment Management Incorporated
(Investment Adviser to the Emerging Markets Fund)
The bar chart and table opposite illustrate the performance of a composite of
certain private and mutual fund accounts ("Accounts") managed by GE Investment
Management, the investment adviser to the Emerging Markets Fund and GEIC, its
sister company having the same investment personnel. See "About the Investment
Adviser." Each of the Accounts included in the composite has objectives,
policies and strategies substantially similar to those of the Fund.
Unlike management of the private accounts included in the composite, GE
Investment Management's management of the Emerging Markets Fund is subject to
certain regulatory restrictions (e.g., limits on percentage of assets invested
in a single issuer and industry and requirements on distributing income to
shareholders) that do not apply to the private accounts. In addition, the Fund
generally experiences cash flows that are different from those of the private
accounts. All of these factors may adversely affect the performance of the Fund
and cause it to differ from that of the composite described opposite.
GE Investment Management composite results represent the performance of the
Accounts, net of the annual rate of total operating expenses of the Emerging
Markets Fund; the composite results do not represent the performance of the
Emerging Markets Fund, and should not be considered an indication of future
performance of the Fund.
- --------------------------------------------------------------------------------
Calendar Year Total Return
[The following table was represented as a bar chart in the printed material.]
Composite(3) Emerging Markets Fund(4) MSCI EMF Index
------------ ------------------------ --------------
1996(1) -1% -4%
1997 -13% -12%
1998 -20% -20% -25%
1999(2) 36% 38% 40%
- --------------------------------------------------------------------------------
Average Annual Total Return
(as of June 30, 1999)
Composite -- Composite -- Emerging MSCI
Period Investment Class(5) Services Class(3) Markets Fund(4) EMF Index
------------------- ----------------- --------------- ---------
Year-to-Date 36.37% 36.20% 37.98% 39.87%
1 Year 16.01% 15.72% 19.86% 28.71%
Since 7/1/96 -1.92% -2.16% -- -4.00%
(1) Represents performance from 7/1/96 through 12/31/96.
(2) Represents performance from 1/1/99 through 6/30/99.
(3) The composite performance results shown reflect the deduction of the
annual rate of total operating expenses of the Fund - Service Class
shares.
(4) Represents the performance of Emerging Markets Fund-Investment Class
shares. As of the date of this Prospectus, Service Class shares have no
operating history and therefore performance information is not available.
Service Class shares of the Fund pay a shareholder service and
distribution fee, which would lower their returns. The Fund's Investment
Class commenced operations 11/25/97. Fund performance information is shown
in the Calendar Year Total Return Chart from January 1st of the year
following its inception. The Fund performance information is net of
applicable fees and other expenses. As with all mutual funds, past
performance is not an indication of future performance.
(5) The composite performance results shown reflect the deduction of the
annual rate of total operating expenses of the Fund - Investment Class
shares.
Note A. The composite performance results shown reflect the deduction of the
annual rate of total operating expenses, including the maximum advisory and
administration fee, of the Fund; actual expenses of the Accounts may have been
more or less than those of the Fund. As of June 30, 1999, the total assets in
the composite was $683.9 million. The composite performance is compared to the
performance of the MSCI Emerging Markets Free Index, which is a composite of
securities available to non-domestic investors traded in 25 emerging markets.
The information provided above for the composite, the Fund and the Index
reflects the reinvestment of dividends and distributions.
- --------------------------------------------------------------------------------
<PAGE>
---------
55
- --------------------------------------------------------------------------------
Prior Performance Information of GE Investment Management Incorporated
(Investment Adviser to the Income Fund)
The bar chart and table opposite illustrate the performance of a composite of
certain private and mutual fund accounts ("Accounts") managed by GE Investment
Management, the investment adviser to the Income Fund and GEIC, its sister
company having the same investment personnel. See "About the Investment
Adviser." Each of the Accounts included in the composite has objectives,
policies and strategies substantially similar to those of the Fund.
Unlike management of the private accounts included in the composite, GE
Investment Management's management of the Income Fund is subject to certain
regulatory restrictions (e.g., limits on percentage of assets invested in a
single issuer and industry and requirements on distributing income to
shareholders) that do not apply to the private accounts. In addition, the Fund
generally experiences cash flows that are different from those of the private
accounts. All of these factors may adversely affect the performance of the Fund
and cause it to differ from that of the composite described opposite.
GE Investment Management composite results represent the performance of the
Accounts, net of the annual rate of total operating expenses of the Income Fund;
the composite results do not represent the performance of the Income Fund, and
should not be considered an indication of future performance of the Fund.
- --------------------------------------------------------------------------------
Calendar Year Total Return
[The following table was represented as a bar chart in the printed material.]
Lehman Brothers
Composite(2) Income Fund(3) Aggregate Bond Index
------------ -------------- --------------------
1992 6% 7%
1993 9% 10%
1994 -3% -3%
1995 18% 18%
1996 4% 4%
1997 9% 10%
1998 8% 8% 9%
1999(1) -2% -2% -1%
- --------------------------------------------------------------------------------
Average Annual Total Return
(as of June 30, 1999)
Lehman
Brothers
Composite -- Composite -- Aggregate
Period Investment Class(4) Service Class(2) Income fund(3) Bond Index
------------------- ---------------- -------------- ----------
Year-to-Date -1.57% -1.70% -1.68% -1.38%
1 Year 2.36% 2.11% 2.27% 3.13%
3 Years 7.10% 6.83% -- 7.23%
5 Years 7.66% 7.39% -- 7.82%
Since 1/1/92 6.71% 6.45% -- 6.91%
(1) Represents performance from 1/1/99 through 6/30/99.
(2) The composite performance results shown reflect the deduction of the
annual rate of total operating expenses of the Fund - Service Class
shares.
(3) Represents the performance of Income Fund-Investment Class shares. As of
the date of this Prospectus, Service Class shares have no operating
history and therefore performance information is not available. Service
Class shares of the Fund pay a shareholder service and distribution fee,
which would lower their returns. The Fund's Investment Class commenced
operations 11/21/97. Fund performance information is shown in the Calendar
Year Total Return Chart from January 1st of the year following its
inception. The Fund performance information is net of applicable fees and
other expenses. As with all mutual funds, past performance is not an
indication of future performance.
(4) The composite performance results shown reflect the deduction of the
annual rate of total operating expenses of the Fund - Investment Class
shares.
Note A. The composite performance results shown reflect the deduction of the
annual rate of total operating expenses, including the maximum advisory and
administration fee, of the Fund; actual expenses of the Accounts may have been
more or less than those of the Fund. As of June 30, 1999, the total assets in
the composite was $12.56 billion. The composite performance is compared to the
performance of the Lehman Brothers Aggregate Bond Index, which is a composite of
short-, medium-, and long-term bond performance and is widely recognized as a
barometer of the bond market in general. The information provided above for the
composite, the Fund and the Index reflects the reinvestment of dividends and
distributions.
- --------------------------------------------------------------------------------
<PAGE>
- --------------------
56 GE Institutional
Funds Prospectus
About the Investment
Adviser
- --------------------------------------------------------------------------------
Prior Performance Information of GE Investment Management Incorporated
(Investment Adviser to the Strategic Investment Fund)
The bar chart and table opposite illustrate the performance of a composite of
certain mutual fund accounts ("Accounts") managed by GE Investment Management,
the investment adviser to the Strategic Investment Fund and GEIC, its sister
company having the same investment personnel. See "About the Investment
Adviser." Each of the Accounts included in the composite has objectives,
policies and strategies substantially similar to those of the Fund.
GE Investment Management composite results represent the performance of the
Accounts, net of the annual rate of total operating expenses of the Strategic
Investment Fund; the composite results do not represent the performance of the
Strategic Investment Fund, and should not be considered an indication of future
performance of the Fund.
- --------------------------------------------------------------------------------
Calendar Year Total Return(1)
[The following table was represented as a bar chart in the printed material.]
Composite(3) Composite Index(4)
------------ ------------------
1989 22% 25%
1990 5% 2%
1991 18% 25%
1992 9% 8%
1993 9% 10%
1994 -1% 0%
1995 27% 30%
1996 14% 15%
1997 18% 24%
1998 17% 21%
1999(2) 7% 7%
- --------------------------------------------------------------------------------
Average Annual Total Return(1)
(as of June 30, 1999)
Lehman Brothers
Composite -- Composite -- S&P 500 Aggregate
Period Investment Class(5) Service Class(3) Index Bond Index
------------------- ---------------- ------- ---------------
Year-to-Date 7.00% 6.87% 12.26% -1.38%
1 Year 12.82% 12.54% 22.71% 3.13%
3 Years 17.00% 16.71% 29.10% 7.23%
5 Years 17.26% 16.97% 27.87% 7.82%
10 Years 13.12% 12.84% 18.77% 8.15%
Since 1/1/88 13.19% 12.91% 19.27% 8.58%
(1) No performance figures are shown for the Strategic Investment Fund because
the Fund has no operating history as of the date of this Prospectus.
(2) Represents performance from 1/1/99 through 6/30/99.
(3) The composite performance results shown reflect the deduction of the
annual rate of total operating expenses of the Fund - Service Class
shares.
(4) The Composite Index return is a blended return composed of 60% S&P 500
Index and 40% Lehman Brothers Aggregate Bond Index.
(5) The composite performance results shown reflect the deduction of the
annual rate of total operating expenses of the Fund - Investment Class
shares.
Note A. The composite performance results shown reflect the deduction of the
annual rate of total operating expenses, including the maximum advisory and
administration fee, of the Fund; actual expenses of the Accounts may have been
more or less than those of the Fund. As of June 30, 1999, the toal assets in the
composite was $473 million. The composite performance is compared to the
performance of the S&P 500 Index and the Lehman Brothers Aggregate Bond Index,
S&P 500 Index is a composite of the price and dividend performace of 500 widely
held U.S. stocks recognized by many investors to be representative of the stock
market in general. Lehman Brothers Aggregate Bond Index is a composite of
short-, medium- and long-term bond performance and is widely recognized as a
barometer of the bond market in general. The information provided above for the
composite and the Index reflects the reinvestment of dividends and
distributions.
- --------------------------------------------------------------------------------
<PAGE>
---------
57
- --------------------------------------------------------------------------------
Prior Performance Information of GE Investment Management Incorporated
(Investment Adviser to the Money Market Fund)
The bar chart and table opposite illustrate the performance of a composite of
certain private and mutual fund accounts ("Accounts") managed by GE Investment
Management, the investment adviser to the Money Market Fund and GEIC, its sister
company having the same investment personnel. See "About the Investment
Adviser." Each of the Accounts included in the composite has objectives,
policies and strategies substantially similar to those of the Fund.
Unlike management of the private accounts included in the composite, GE
Investment Management's management of the Money Market Fund is subject to
certain regulatory restrictions (e.g., limits on percentage of assets invested
in a single issuer and industry and requirements on distributing income to
shareholders) that do not apply to the private accounts. In addition, the Fund
generally experiences cash flows that are different from those of the private
accounts. All of these factors may adversely affect the performance of the Fund
and cause it to differ from that of the composite described opposite.
GE Investment Management composite results represent the performance of the
Accounts, net of the annual rate of total operating expenses of the Money Market
Fund; the composite results do not represent the performance of the Money Market
Fund, and should not be considered an indication of future performance of the
Fund.
- --------------------------------------------------------------------------------
Calendar Year Total Return
[The following table was represented as a bar chart in the printed material.]
Composite(2) Money Market Fund(3) 90-day Treasury Bill
------------ -------------------- --------------------
1990 8% 8%
1991 6% 6%
1992 3% 4%
1993 3% 3%
1994 4% 4%
1995 6% 6%
1996 5% 5%
1997 5% 5%
1998 5% 5% 5%
1999(1) 2% 2% 2%
- --------------------------------------------------------------------------------
Average Annual Total Return
(as of June 30, 1999)
90-day
Composite -- Composite -- Money Treasury
Period Investment Class(4) Service Class(2) Market Fund(3) Bill
------------------- ---------------- -------------- --------
Year-to-Date 2.36% 2.23% 2.35% 2.28%
1 Year 5.02% 4.76% 5.04% 4.62%
3 Years 5.27% 5.01% -- 4.99%
5 Years 5.34% 5.08% -- 5.14%
Since 1/1/90 5.22% 4.96% -- 4.98%
(1) Represents performance from 1/1/99 through 6/30/99.
(2) The composite performance results shown reflect the deduction of the
annual rate of total operating expenses of the Fund - Service Class
shares.
(3) Represents the performance of Money Market Fund-Investment Class shares.
As of the date of this Prospectus, Service Class shares have no operating
history and therefore performance information is not available. Service
Class shares of the Fund pay a shareholder service and distribution fee,
which would lower their returns. The Fund's Investment Class commenced
operations 12/2/97. Fund performance information is shown in the Calendar
Year Total Return Chart from January 1st of the year following its
inception. The Fund performance information is net of applicable fees and
other expenses. As with all mutual funds, past performance is not an
indication of future performance. Although the Money Market Fund attempts
to maintain a stable $1.00 per share value, there is no guarantee it will
be able to do so. It is possible to lose money investing in the Money
Market Fund. Shares of the Money Market Fund are not FDIC insured.
(4) The composite performance results shown reflect the deduction of the
annual rate of total operating expenses of the Fund - Investment Class
shares.
Note A. The composite performance results shown reflect the deduction of the
annual rate of total operating expenses, including the maximum advisory and
administration fee, of the Fund; actual expenses of the Accounts may have been
more or less than those of the Fund. As of June 30, 1999, the total assets in
the composite was $2.26 billion. The composite performance is compared to the
performance of the 90-day Treasury Bill which is the average return on three
month U.S. Treasury Bills. The information provided above for the composite, the
Fund and the Index reflects the reinvestment of dividends and distributions.
- --------------------------------------------------------------------------------
<PAGE>
- --------------------
58 Institutional
Funds Prospectus
About the Investment
Adviser
- --------------------------------------------------------------------------------
Prior Performance Information of the Senior Investment Committee of Palisade
Capital Management, L.L.C.
(Sub-Adviser to the Small-Cap Value Equity Fund)
The bar chart and table opposite illustrate the performance of a composite of
certain private accounts ("Accounts") managed by the Senior Investment Committee
of Palisade Capital Management, L.L.C. ("Palisade"), the sub-adviser of the
Small-Cap Value Equity Fund.
Each of the Accounts included in the composite has objectives, policies and
strategies substantially similar to those of the Fund. The Accounts were managed
by the Senior Investment Committee while at Palisade and during its previous
employment with Smith Barney, Inc.
The Senior Investment Committee, which has operated together since July 1, 1993,
consists of Jack Feiler, Martin L. Berman, Steven E. Berman and Richard
Meisenberg. As is the case with the Small-Cap Value Equity Fund, Mr. Feiler was
primarily responsible for management of the Accounts and worked with the Senior
Investment Committee in developing and executing the Accounts' investment
programs. No person other than the members of the Senior Investment Committee
had a significant role in achieving the performance described.
Unlike management of the Accounts, the Senior Investment Committee's management
of the Small-Cap Value Equity Fund is subject to certain regulatory restrictions
(e.g., limits on percentage of assets invested in a single issuer and industry
and requirements on distributing income to shareholders) that do not apply to
the Accounts. The Fund also incurs certain operating expenses that are not borne
by the Accounts. In addition, the Fund generally experiences cash flows that are
different from those of the Accounts. All of these factors may adversely affect
the performance of the Fund and cause it to differ from that of the composite
described opposite.
- --------------------------------------------------------------------------------
<PAGE>
---------
59
- --------------------------------------------------------------------------------
Calendar Year Total Return
[The following table was represented as a bar chart in the printed material.]
Small-Cap
Composite Value Equity Fund(3) Russell 2000 Index
--------- -------------------- ------------------
1993(1) 10% 12%
1994 4% -2%
1995 32% 28%
1996 23% 16%
1997 26% 22%
1998 -3% -5%
1999(2) -2% 3% 9%
- --------------------------------------------------------------------------------
Average Annual Total Return
(as of June 30, 1999)
Small-Cap Value Russell
Period Composite Equity Fund(3) 2000 Index
--------- -------------- ----------
Year-to-Date -2.29% 3.21% 9.28%
1 Year -10.83% -- 1.50%
3 Years 8.69% -- 11.22%
5 Years 15.52% -- 15.40%
Since 7/1/93 13.82% -- 13.49%
(1) Represents performance from 7/1/93 through 12/31/93.
(2) Represents performance from 1/1/99 through 6/30/99.
(3) Represents the performance of Small-Cap Value Equity Fund-Investment Class
shares. As of the date of this Prospectus, Service Class shares have no
operating history and therefore performance information is not available.
Service Class shares of the Fund pay a shareholder service and
distribution fee, which would lower their returns. The Fund's Investment
Class commenced operations 8/3/98. Fund performance information is shown
in the Calendar Year Total Return Chart from January 1st of the year
following its inception. The Fund performance information is net of fees
and other expenses. As with all mutual funds, past performance is not an
indication of future performance.
Note A. The composite performance results provided above for the period from
July 1, 1993 to April 1, 1995 (commencement of Palisade's operations) reflect
the performance of the Accounts while the Senior Investment Committee was
employed as a separate operating group within Smith Barney Inc. Thereafter, the
composite performance results reflect the performance of the Accounts managed by
the Senior Investment Committee while at Palisade.
Note B. As of June 30,1999, the toal assets in the composite was $1.61 billion.
The composite performance is compared to the performance of the Russell 2000
Index, which is an unmanaged index of issuers with total market capitalizations
between $83 million and $2.59 billion as of June 30, 1999. The information
provided above for the composite, the Fund and the Index reflect the
reinvestment of dividends and distributions. Unlike the Index performance
information, however, the performance of the composite is net of fees and other
expenses applicable to the Accounts. Expenses of the Small-Cap Value Equity Fund
are expected to differ from those of the Accounts.
The Senior Investment Committee composite results represent the performance of
the Accounts, net of fees and other expenses, not the performance of the
Small-Cap Value Equity Fund, and should not be considered an indication of
future performance of the Fund.
- --------------------------------------------------------------------------------
<PAGE>
- --------------------
60 GE Institutional
Funds Prospectus
About the Investment
Adviser
- --------------------------------------------------------------------------------
Prior Performance Information of Jon Bosse
(Portfolio Manager of the Mid-Cap Value Equity Fund)
The bar chart and table opposite illustrate the performance of a composite of
certain private and mutual fund accounts ("Accounts") managed by Jon Bosse, the
portfolio manager primarily responsible for the day-to-day management of the
Mid-Cap Value Equity Fund.
Each of the Accounts included in the composite has objectives, policies and
strategies substantially similar to those of the Fund. The Accounts were managed
by Mr. Bosse while he was employed with NWQ Investment Management Company
("NWQ"), the sub-adviser of the Fund, since October 1996 and during his previous
employment with ARCO Investment Management Company ("ARCO") since January 1990.
As is the case with the Fund, Mr. Bosse was primarily responsible for management
of the Accounts and no other person had a significant role in achieving the
performance described.
Unlike management of the private accounts included in the composite, Mr. Bosse's
management of the Mid-Cap Value Equity Fund is subject to certain regulatory
restrictions (e.g., limits on percentage of assets invested in a single issuer
and industry and requirements on distributing income to shareholders) that do
not apply to the private accounts. The Fund also incurs certain operating
expenses that are not borne by the private accounts. In addition, the Fund
generally experiences cash flows that are different from those of the private
accounts. All of these factors may adversely affect the performance of the Fund
and cause it to differ from that of the composite described opposite.
- --------------------------------------------------------------------------------
<PAGE>
---------
61
- --------------------------------------------------------------------------------
Calendar Year Total Return
[The following table was represented as a bar chart in the printed material.]
Mid-Cap
Composite Value Equity Fund(2) S&P MidCap 400 Index
--------- -------------------- --------------------
1990 1% -5%
1991 54% 50%
1992 30% 12%
1993 20% 14%
1994 9% -4%
1995 39% 31%
1996 29% 19%
1997 35% 32%
1998 8% 19%
1999(1) 21% 16% 7%
- --------------------------------------------------------------------------------
Average Annual Total Return
(as of June 30, 1999)
Mid-Cap Value S&P MidCap
Period Composite Equity Fund(2) 400 Index
--------- -------------- ----------
Year-to-Date 21.38% 15.50% 6.87%
1 Year 14.39% -- 17.18%
3 Years 27.17% -- 22.48%
5 Years 27.29% -- 22.28%
Since 1/1/90 24.94% -- 17.43%
(1) Represents the performance from 1/1/99 through 6/30/99.
(2) Represents the performance of Mid-Cap Value Equity Fund--Investment Class
Shares. As of the date of this Prospectus, Service Class shares have no
operating history and therefore performance information is not available.
Service Class shares of the Fund pay a shareholder service and
distribution fee which would lower their returns. The Fund's Investment
Class commenced operations 12/31/98. Fund performance information is shown
in the Calendar Year Total Return Chart from January 1st of the year
following its inception. The Fund performance information is net of fees
and expenses. As with all mutual funds, past performance is not an
indication of future performance.
Note A. Performance results provided in the composite for the period from
January 1, 1990 to August 31, 1996 reflect the performance of a single private
account managed by Mr. Bosse ("ARCO Account") while he was employed as a
portfolio manager at ARCO. Performance results provided in the composite for the
month of September 1996 reflect the performance during that month of the
portfolio of securities held in the ARCO Account at August 31, 1996 (when Mr.
Bosse ceased managing the ARCO Account), assuming that no changes in the
portfolio were made through the end of the month and dividend income from the
portfolio securities was received. Because no actual portfolio of securities was
managed during this one month period, performance results for September 1996
should be considered hypothetical. Composite performance results from October 1,
1996 (when Mr. Bosse commenced employment at NWQ and purchased for an NWQ
private account substantially the same portfolio of securities held in the ARCO
Account at August 31, 1996), reflect the performance of Accounts managed by Mr.
Bosse while employed with NWQ. The performance results of the ARCO private
account, including the hypothetical performance for September 1996, have been
adjusted to reflect the maximum investment management fee of 1% per year that is
applicable to the NWQ private accounts.
Note B. As of June 30, 1999, the total assets in the composite was $476.5
million. The composite performance is compared to the performance of the S&P
MidCap 400 Index, which is an unmanaged index of 400 domestic stocks selected
for market size, liquidity and industry group representation. The information
provided above for the composite, the Fund and the Index reflect the
reinvestment of dividends and distributions. Unlike the Index performance
information, however, the performance of the composite is net of applicable fees
and other expenses. Expenses of the Mid-Cap Value Equity Fund are expected to
differ from those of the Accounts.
The Portfolio Manager composite results represent the performance of the
Accounts, net of fees and other expenses, not the performance of the Mid-Cap
Value Equity Fund, and should not be considered an indication of future
performance of the Fund.
- --------------------------------------------------------------------------------
<PAGE>
- ----------------------------------------------
62 GE Institutional How To Invest
Funds Prospectus
- --------------------------------------------------------------------------------
Investment Choices
The GE Institutional Funds are designed primarily for institutional investors,
such as corporations, foundations, endowments and trusts that manage various
types of employee benefit plans as well as charitable, religious and educational
institutions. The Funds offer two classes of shares - Service Class and
Investment Class.
The Service Class and the Investment Class are identical except that the Service
Class shares bear a 0.25% shareholder servicing and distribution fee under plan
adopted pursuant to Rule 12b-1 ("12b-1 fee"), which requires fees be paid out of
the assets of the class. The 12b-1 fee is intended to pay for the cost of
promoting the Service Class shares and servicing your shareholder account.
Opening an Account
Investors must open an account before purchasing Fund shares. Investors may open
an account by submitting an account application to the Distributor, the transfer
agent or a broker-dealer, financial institution or investment adviser that has
entered into a sales agreement with the Distributor ("Authorized Firms").
Investors may obtain an account application by calling the Funds at (800)
493-3042 or by writing to the Funds at:
GE Institutional Funds
P.O. Box 120065
Stamford, CT 06912-0065
For overnight package delivery, send to:
GE Institutional Funds
c/o National Financial Data Services Inc.
330 West 9th Street
Kansas City, MO 64105
How to Buy Shares
Once an account has been opened, an investor may purchase Fund shares from the
Distributor or through an Authorized Firm. The Authorized Firm will be
responsible for transmitting the investor's order to the transfer agent.
Investors should contact their Authorized Firm for instructions.
Investors also may purchase Service Class shares directly from the transfer
agent by wiring federal funds to: State Street Bank and Trust company (ABA
#0110-0002-8) For: GE Institutional Funds - [Name of Fund] Account of:
[Investor's name, address, and account number].
Requests received in good order will be executed at the net asset value next
calculated after receipt of an investment or transaction instructions. Purchase
and redemption orders are executed only on days when the NYSE is open for
trading. If the NYSE closes early, the deadlines for purchase and redemption
orders will be accelerated to the earlier closing time.
- --------------------------------------------------------------------------------
<PAGE>
---------
63
- --------------------------------------------------------------------------------
Eligible Investors
The Distributor offers Fund shares to certain investors that meet the minimum
investment requirements. The GE Institutional Funds are designed to appeal to
institutional investors such as corporations, foundations, endowments and trusts
established to fund employee benefit plans of various types as well as
charitable, religious and educational institutions. GE Institutional Funds
expects that most of the time each Fund will have relatively few shareholders
(as compared with most mutual funds) but that these shareholders will invest
substantial amounts in a Fund. Typical institutional investors may include
banks, insurance companies, broker-dealers, investment advisers, trusts that
fund qualified pension and profit-sharing plans (Section 401 of the Code),
trusts that fund government employer non-qualified deferred compensation
obligations (Section 457 of the Code), trusts that fund charitable, religious
and educational institutions (Section 501(c)(9) of the Code), non-government
employers seeking to fund non-qualified deferred compensation obligations, and
investment companies that are not affiliated persons of GE Institutional Funds
(or affiliated persons of such persons).
- --------------------------------------------------------------------------------
Minimum Investment Requirements
Full-Service Defined Contribution Plan Investors: A full-service defined
contribution plan may invest in the GE Institutional Funds so long as it has
invested at least $100 million in one or more investment portfolios or accounts
that are advised by GE Investment Management and/or GEIC. A full service defined
contribution plan is a defined contribution plan that receives recordkeeping,
administration, investment education and communication services provided or paid
by GE Financial Assurance Holdings, Inc. or its subsidiaries. A full-service
defined contribution plan generally must individually meet the minimum
investment requirements and will not be considered a related investor of any
other investor in GE Institutional Funds.
All Other Investors: The minimum initial investment in each Fund is $35 million
for each investor or group of related investors. There is no minimum investment
requirement for subsequent purchases.
The minimum investment requirement is waived for each investor or group of
related investors so long as such person or group has invested at least $100
million in one or more investment portfolios or accounts that are advised by GE
Investment Management and/or GEIC.
The minimum investment requirement is waived for up to three years from the date
of initial purchase of Fund shares for certain investors or groups of related
investors having (i) at least $100 million of investment assets within six
months from the date of the initial purchase of Fund shares, provided they
invest in only one Fund, (ii) at least $200 million of investment assets within
six months from the date of the initial purchase of Fund shares, provided they
invest in no more than two Funds, and (iii) at least $500 million of investment
assets within six months from the date of the initial purchase of Fund shares,
for which they may invest in any number of Funds.
For a bank, insurance company, broker-dealer, investment adviser or other
financial intermediary establishing an omnibus account for investment in the
Funds by its clients, the amount of investment assets is determined either by
(i) aggregating Client Assets (defined below) over which it has investment
discretion or (ii) aggregating Client Assets of any institution described under
"Eligible Investors" which are managed by it on a non-discretionary basis or for
which it (or its affiliates) provides recordkeeping, shareholder servicing or
other administrative services. "Client Assets" means the assets of any client of
a financial intermediary that has invested in the Trust.
Failure to Meet Minimum Investment Requirements: If the value of an investor's
(or a group of related investors') investment in a Fund or other investment
portfolios falls below the required amount for more than 120 days because of
redemptions (and not because of market fluctuations or exchanges) or if an
investor (or group of related investors) fail to meet the minimum investment
requirements within the specified time period, the Distributor may, in its sole
discretion, refuse to sell additional Fund shares to such investor (other than
reinvestment of
- --------------------------------------------------------------------------------
<PAGE>
- --------------------
64 GE Institutional
Funds Prospectus
How to Invest
- --------------------------------------------------------------------------------
dividends and capital gains distributions).
For those investors who intend to meet the minimum investment requirements
within three years of the date of initial purchase, the Distributor may refuse
to sell to such investor additional Fund shares (other than reinvestment of
dividends and capital gains distributions), if such investor has not satisfied
the $35 million minimum investment requirement within three years, even if the
investor had the applicable amount of investment assets within the initial
six-month period.
Related Investors: Related investors are investors that are affiliated persons
of each other within the meaning of the 1940 Act. Common trust funds and
collective trust funds of the same bank (or of affiliated banks) are considered
related investors of each other and their bank(s). Likewise, separate accounts
of the same insurance company (or of affiliated insurance companies) are related
investors of each other and their insurance company or companies and clients
whose assets are managed on a discretionary basis by the same bank, insurance
company, investment adviser or broker-dealer are related investors of their
manager. The Distributor also may treat institutional clients of a financial
intermediary whose assets are managed on a non-discretionary basis or who are
otherwise served by the intermediary (or its affiliate) as related investors of
their manager or service provider where Fund shares are held by that
intermediary in an omnibus account for its clients.
Purchases in-Kind: Investors may purchase shares in amounts of $5 million or
more with either cash or investment securities acceptable to the appropriate
Fund. The Funds' Distributor would inform you of the securities acceptable to
the Fund. The securities would be accepted by the Fund at their market value in
return for Fund shares of equal value. The Funds reserve the right to require
the Distributor to suspend the offering of shares of the Emerging Markets Fund
or International Equity Fund for cash in amounts greater than $5 million and of
the other non-money market Funds in amounts above $10 million.
- --------------------------------------------------------------------------------
How To Redeem Shares
An investor may redeem all or a portion of the shares on any day that the Fund
is open for business. Redemption requests received in good order on that day
will be effected at the net asset value next determined after the close of
regular trading on the NYSE. Redemption requests received in proper form after
the close of business of the NYSE will be effected at the net asset value as
next determined. Investors must specify the class of shares to be redeemed if
they hold both Service Class and Investment Class shares of a Fund.
If You Invested With an Investment Professional: Shares purchased with the
assistance of an investment professional may be redeemed either by the
investment professional or the shareholder of record. Please see your account
statement for the telephone number of your investment professional. Or call
Shareholder Services directly at (800) 493-3042.
Redemptions by Mail
If an investor is the shareholder of record, he or she may redeem shares by
written redemption request. Your written request should:
o state the Fund to be redeemed, share class, number of shares or specific
dollar amount
o state your account number
o be signed by an authorized person exactly as registered
o contain a signature guarantee for redemptions of more than $50,000 that are:
1. mailed to a different address from that on record
2. paid to someone other than the shareholder of record
3. to be wired to a financial institution or
4. to be mailed to an address that was changed within the past 30 days
- --------------------------------------------------------------------------------
<PAGE>
---------
65
- --------------------------------------------------------------------------------
Mail your request to the appropriate address:
GE Institutional Funds
P.O. Box 120065
Stamford, CT 06912-0065
For overnight package delivery, send to:
GE Institutional Funds
c/o National Financial Data Services Inc.
330 West 9th Street
Kansas City, MO 64105
Redemptions in Kind
Large redemptions that exceed $250,000 or 1% of a Fund's assets may be
considered detrimental to the Fund's existing shareholders. Therefore, the Fund
may require that you take a "distribution in kind" upon redemption and may give
you portfolio securities instead of cash proceeds. Such Fund portfolio
securities will have to be sold through a broker and you may incur transaction
costs when you sell them. The Funds will redeem shares in kind at your request.
How to Exchange Shares
You may exchange shares of one GE Institutional Fund for the same class of
another GE Institutional Fund or for a different class of the same or another GE
Institutional Fund. Exchanges are permitted provided that the acquired Fund is
an investment option available to the investor requesting the exchange and the
investor meets the minimum investment requirement. The Funds may terminate the
exchange privilege upon 60 days written notice to shareholders.
An exchange for the same class of another GE Institutional Fund is a sale and
purchase of shares for tax purposes. You may have a taxable gain or loss when
you exchange your shares. You may exchange shares by writing the Funds at the
appropriate address listed above.
- --------------------------------------------------------------------------------
Signature Guarantees
All signature guarantees must be executed by a commercial bank, trust company,
broker, dealer credit union, national securities exchange or registered
association, clearing agency or savings association. The Funds may require
additional information for redemptions made by corporations, executors,
administrators, trustees, guardians or persons utilizing a power of attorney. A
redemption request will not be deemed received in good order until GE
Institutional Funds has received all information typically required to assure
the security of a particular account.
Shareholder Servicing and Distribution Plan
GE Institutional Funds has adopted a Shareholder Servicing and Distribution Plan
(the "Plan") pursuant to Rule 12b-1 under the 1940 Act with respect to the
Service Class Shares of each Fund. Under the Plan, GE Institutional Funds will
pay GE Investment Management, with respect to the Service Class shares of a
Fund, fees for shareholder and distribution services provided to that class of
shares at an annual rate of .25% of the value of the average daily net assets of
such Fund attributable to the Service Class shares. Fees to be paid with respect
to the Funds under the Plan will be calculated daily and paid monthly. The
annual fees payable with respect to the Service Class shares of a Fund are
intended to compensate GE Investment Management, or enable GE Investment
Management to compensate other persons ("Service Providers"), for providing
ongoing service and/or maintenance of the accounts of shareholders of the Fund
("Shareholder Services") and to compensate GE Investment Management, or enable
GE Investment Management to compensate Service Providers, including any
distributor of shares of the Fund, for providing services that are primarily
intended to result in, or that are primarily attributable to, the sale of shares
of the Fund ("Selling Services"). Because these fees are paid out of a Fund's
assets on an on-going basis, over time, these fees will increase the cost of
your investment and may cost you more than paying other types of sales charges.
- --------------------------------------------------------------------------------
<PAGE>
- -------------------------------------------------------
66 GE Institutional Dividends, Capital Gains
Funds Prospectus and Other Tax Information
- --------------------------------------------------------------------------------
Most GE Institutional Funds pay dividends from net investment income and from
net capital gains once each year. Dividends and capital gain distributions will
be automatically reinvested in your account. There are no fees or charges to
reinvest dividends.
The Funds are subject to a 4% excise tax on undistributed net investment income
and net capital gains. To avoid this tax, the Funds may pay dividends from net
investment income and net capital gains more frequently.
As a result of the different service fees applicable to the Funds' classes,
dividends and distributions for each class will differ.
- --------------------------------------------------------------------------------
Fund Distribution Schedule
- --------------------------------------------------------------------------------
U.S. Equity Fund o Dividends are typically declared and paid
annually.
S&P 500 Index Fund
o Short-term and long-term capital gains, if
Premier Growth Equity Fund any, are typically declared and paid annually.
Value Equity Fund
Mid-Cap Growth Fund
Mid-Cap Value Equity Fund
Small-Cap Value Equity Fund
International Equity Fund
Europe Equity Fund
Emerging Markets Fund
Strategic Investment Fund
- --------------------------------------------------------------------------------
Income Fund
Money Market Fund o Dividends are declared daily and paid monthly.
o Short-term and long-term capital gains, if
any, are typically declared and paid annually.
- --------------------------------------------------------------------------------
<PAGE>
---------
67
- --------------------------------------------------------------------------------
Taxes
Tax issues can be complicated. We suggest you see your investment professional
or tax advisor for any questions you may have.
Except for investments in tax-deferred accounts, you generally will owe taxes on
amounts distributed to you. Dividends and distributions from net investment
income and short-term capital gains are taxed as ordinary income. Long-term
capital gains are taxed at the long-term capital gains rate. Distributions
generally will be taxed in the same manner whether they are received in cash or
reinvested.
In addition, if you sell or redeem Fund shares, you generally will realize a
capital gain or loss, which will be long-term or short-term, depending upon how
long you held those shares. If you exchange shares for the same class of another
GE Institutional Fund, the exchange will be treated as a sale and purchase of
shares for tax purposes.
Tax Statement
You will receive an annual statement summarizing your dividend and capital gains
distributions. Please consult a tax advisor if you have questions about your
specific tax situation.
Backup Withholding
If you do not provide complete and certified taxpayer identification
information, each Fund is obligated by law to withhold 31% of Fund
distributions.
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------
68 GE Institutional Calculating Share Value
Funds Prospectus
- --------------------------------------------------------------------------------
Fund shares are sold at net asset value (NAV). The NAV of each share class is
calculated at the close of regular trading on the New York Stock Exchange
(NYSE), normally 4:00 p.m. Eastern time, each day the NYSE is open for trading.
The NAV per share class for Funds (other than the Money Market Fund) is
determined by adding the value of the Fund's investments, cash, and other assets
attributable to that class, subtracting its liabilities, and then dividing the
result by the number of that class' outstanding shares.
A Fund's portfolio securities are valued most often on the basis of market
quotations. Foreign securities are valued on the basis of quotations from the
primary market in which they are traded. Some debt securities are valued using
dealers and pricing services. Municipal bond valuations are based on prices
supplied by a qualified municipal pricing service. The prices are composed of
the mean average of the bid and ask prices on the secondary market. All
portfolio securities of the Money Market Fund and any short-term securities held
by any other Fund with remaining maturities of sixty days or less are valued on
the basis of amortized cost. A Fund's written or purchased options are valued at
the last sales price of the day. If no sales occurred, the options are valued at
the last traded bid price. The value of the portfolio securities held by each
Fund may change on days when shareholders will not be able to purchase or redeem
the Fund's shares.
If quotations are not readily available for any security, or if the value of a
security has been materially affected by events occurring after the closing of a
market, the security may be valued by using procedures approved by a Fund's
Board of Trustees that they believe accurately reflects "fair value."
- --------------------------------------------------------------------------------
<PAGE>
------------------------------------------------------------
Financial GE Institutional 69
Highlights Funds Prospectus
- --------------------------------------------------------------------------------
The financial highlights tables that follow are intended to help you understand
a Fund's financial performance for the fiscal years ended September 30, unless
otherwise noted. Certain information reflects financial results for a single
Fund Investment Class share.
The total returns in the table represent the rate that an investor would have
earned or lost on an investment in the Fund (assuming reinvestment of all
dividends and distributions). Fiscal year end information has been audited by
PricewaterhouseCoopers LLP, whose report, along with the Funds' financial
statements, are included in the Fund's Annual Report, which is available upon
request.
- --------------------------------------------------------------------------------
U.S. Equity Fund
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------
3/31/99 9/30/98*
- ------------------------------------------------------------------------------------------
<S> <C> <C>
Inception date 11/25/97
- ------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Period $10.62 $10.00
- ------------------------------------------------------------------------------------------
Income (Loss) from Investment Operations:
Net Investment Income (Loss) 0.05 0.11
- ------------------------------------------------------------------------------------------
Net Gains (Losses) on Investments (both realized and unrealized) 2.74 0.52
- ------------------------------------------------------------------------------------------
Total Income (Loss) From Investment Operations 2.79 0.63
- ------------------------------------------------------------------------------------------
Less Distributions:
Dividends (from net investment income) 0.13 0.01
- ------------------------------------------------------------------------------------------
Dividends (from net realized gains) 0.25 0.00
- ------------------------------------------------------------------------------------------
Total Distributions 0.38 0.01
- ------------------------------------------------------------------------------------------
Net Asset Value, End of Period $13.03 $10.62
- ------------------------------------------------------------------------------------------
Total Return (a) 26.71% 6.28%
- ------------------------------------------------------------------------------------------
Ratio/Supplemental Data:
Net Assets, End of Period (in thousands) $161,062 $114,553
- ------------------------------------------------------------------------------------------
Ratio of Net Expenses to Average Net Assets** 0.43% 0.42%
- ------------------------------------------------------------------------------------------
Ratio of Net Investment Income to Average Net Assets** 0.97% 1.21%
- ------------------------------------------------------------------------------------------
Portfolio Turnover Rate 28% 29%
- ------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
<PAGE>
- --------------------
70 GE Institutional
Funds Prospectus
Financial
Highlights
- --------------------------------------------------------------------------------
S&P 500 Index Fund
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------
3/31/99 9/30/98*
- ------------------------------------------------------------------------------------------
<S> <C> <C>
Inception date 11/25/97
- ------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Period $10.85 $10.00
- ------------------------------------------------------------------------------------------
Income (Loss) from Investment Operations:
Net Investment Income (Loss) 0.09 0.14
- ------------------------------------------------------------------------------------------
Net Gains (Losses) on Investments (both realized and unrealized) 2.91 0.72
- ------------------------------------------------------------------------------------------
Total Income (Loss) From Investment Operations 3.00 0.86
- ------------------------------------------------------------------------------------------
Less Distributions:
Dividends (from net investment income) 0.17 0.01
- ------------------------------------------------------------------------------------------
Total Distributions 0.17 0.01
- ------------------------------------------------------------------------------------------
Net Asset Value, End of Period $13.68 $10.85
- ------------------------------------------------------------------------------------------
Total Return (a) 27.85% 8.63%
- ------------------------------------------------------------------------------------------
Ratio/Supplemental Data:
Net Assets, End of Period (in thousands) $25,803 $20,186
- ------------------------------------------------------------------------------------------
Ratio of Net Expenses to Average Net Assets** 0.15% 0.15%
- ------------------------------------------------------------------------------------------
Ratio of Net Investment Income to Average Net Assets** 1.38% 1.57%
- ------------------------------------------------------------------------------------------
Portfolio Turnover Rate 2% 1%
- ------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
Mid-Cap Growth Fund
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------
3/31/99 9/30/98*
- ------------------------------------------------------------------------------------------
<S> <C> <C>
Inception date 11/25/97
- ------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Period $8.87 $10.00
- ------------------------------------------------------------------------------------------
Income (Loss) from Investment Operations:
Net Investment Income (Loss) 0.03 0.04
- ------------------------------------------------------------------------------------------
Net Gains (Losses) on Investments (both realized and unrealized) 1.68 (1.16)
- ------------------------------------------------------------------------------------------
Total Income (Loss) From Investment Operations: 1.71 (1.12)
- ------------------------------------------------------------------------------------------
Less Distributions:
Dividends (from net investment income) 0.05 0.01
- ------------------------------------------------------------------------------------------
Total Distributions 0.05 0.01
- ------------------------------------------------------------------------------------------
Net Asset Value, End of Period $10.53 $8.87
- ------------------------------------------------------------------------------------------
Total Return (a) 19.39% (11.25%)
- ------------------------------------------------------------------------------------------
Ratio/Supplemental Data:
Net Assets, End of Period (in thousands) $15,774 $13,208
- ------------------------------------------------------------------------------------------
Ratio of Net Expenses to Average Net Assets** 0.55% 0.55%
- ------------------------------------------------------------------------------------------
Ratio of Net Investment Income to Average Net Assets** 0.64% 0.53%
- ------------------------------------------------------------------------------------------
Portfolio Turnover Rate 44% 14%
- ------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
<PAGE>
---------
71
- --------------------------------------------------------------------------------
Mid-Cap Value
Equity Fund
- ----------------------------------------------------------------------------
3/31/99***
- ----------------------------------------------------------------------------
Inception date 12/31/98
- ----------------------------------------------------------------------------
Net Asset Value, Beginning of Period $10.00
- ----------------------------------------------------------------------------
Income (Loss) from Investment Operations:
Net Investment Income (Loss) 0.03
- ----------------------------------------------------------------------------
Net Gains (Losses) on Investments (both realized and unrealized) 0.09
- ----------------------------------------------------------------------------
Total Income (Loss) From Investment Operations 0.12
- ----------------------------------------------------------------------------
Less Distributions:
Dividends (from net investment income) 0.00
- ----------------------------------------------------------------------------
Total Distributions 0.00
- ----------------------------------------------------------------------------
Net Asset Value, End of Period $10.12
- ----------------------------------------------------------------------------
Total Return (a) 1.20%
- ----------------------------------------------------------------------------
Ratio/Supplemental Data:
Net Assets, End of Period (in thousands) $10,117
- ----------------------------------------------------------------------------
Ratio of Net Expenses to Average Net Assets** 0.65%
- ----------------------------------------------------------------------------
Ratio of Net Investment Income to Average Net Assets** 1.30%
- ----------------------------------------------------------------------------
Portfolio Turnover Rate 7%
- ----------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Small-Cap Value Equity Fund
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------
3/31/99 9/30/98*
- ------------------------------------------------------------------------------------------
<S> <C> <C>
Inception date 8/3/98
- ------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Period $8.91 $10.00
- ------------------------------------------------------------------------------------------
Income (Loss) from Investment Operations:
Net Investment Income (Loss) 0.01 0.02
- ------------------------------------------------------------------------------------------
Net Gains (Losses) on Investments (both realized and unrealized) (0.24) (1.11)
- ------------------------------------------------------------------------------------------
Total Income (Loss) From Investment Operations (0.23) (1.09)
- ------------------------------------------------------------------------------------------
Less Distributions:
Dividends (from net investment income) 0.03 0.00
- ------------------------------------------------------------------------------------------
Total Distributions 0.03 0.00
- ------------------------------------------------------------------------------------------
Net Asset Value, End of Period $8.65 $8.91
- ------------------------------------------------------------------------------------------
Total Return (a) (2.57%) (10.90%)
- ------------------------------------------------------------------------------------------
Ratio/Supplemental Data:
Net Assets, End of Period (in thousands) $8,806 $9,056
- ------------------------------------------------------------------------------------------
Ratio of Net Expenses to Average Net Assets** 0.70% 0.70%
- ------------------------------------------------------------------------------------------
Ratio of Net Investment Income to Average Net Assets** 0.23% 1.68%
- ------------------------------------------------------------------------------------------
Portfolio Turnover Rate 117% 19%
- ------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
<PAGE>
- --------------------
72 GE Institutional
Funds Prospectus
Financial
Highlights
- --------------------------------------------------------------------------------
International Equity Fund
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
3/31/99 9/30/98*
- ---------------------------------------------------------------------------------------------
<S> <C> <C>
Inception date 11/25/97
- ---------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Period $10.06 $10.00
- ---------------------------------------------------------------------------------------------
Income (Loss) from Investment Operations:
Net Investment Income (Loss) 0.02 0.14(b)
- ---------------------------------------------------------------------------------------------
Net Gains (Losses) on Investments (both realized and unrealized) 2.34 (0.07)(b)
- ---------------------------------------------------------------------------------------------
Total Income (Loss) From Investment Operations 2.36 0.07
- ---------------------------------------------------------------------------------------------
Less Distributions:
Dividends (from net investment income) 0.12 0.01
- ---------------------------------------------------------------------------------------------
Dividends (from net realized gains) 0.35 0.00
- ---------------------------------------------------------------------------------------------
Total Distributions 0.47 0.01
- ---------------------------------------------------------------------------------------------
Net Asset Value, End of Period $11.95 $10.06
- ---------------------------------------------------------------------------------------------
Total Return (a) 23.90% 0.66%
- ---------------------------------------------------------------------------------------------
Ratio/Supplemental Data:
Net Assets, End of Period (in thousands) $136,761 $114,414
- ---------------------------------------------------------------------------------------------
Ratio of Net Expenses to Average Net Assets** 0.63% 0.64%
- ---------------------------------------------------------------------------------------------
Ratio of Net Investment Income to Average Net Assets** 0.29% 1.72%
- ---------------------------------------------------------------------------------------------
Portfolio Turnover Rate 27% 53%
- ---------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
Europe Equity Fund
- ----------------------------------------------------------------------------
3/31/99***
- ----------------------------------------------------------------------------
Inception date 1/29/99
- ----------------------------------------------------------------------------
Net Asset Value, Beginning of Period $10.00
- ----------------------------------------------------------------------------
Income (Loss) from Investment Operations:
Net Investment Income 0.02
- ----------------------------------------------------------------------------
Net Gains (Losses) on Investments (both realized and unrealized) (0.40)
- ----------------------------------------------------------------------------
Total Income (Loss) From Investment Operations (0.38)
- ----------------------------------------------------------------------------
Less Distributions:
Dividends (from net investment income) 0.00
- ----------------------------------------------------------------------------
Total Distributions 0.00
- ----------------------------------------------------------------------------
Net Asset Value, End of Period $9.62
- ----------------------------------------------------------------------------
Total Return (a) (3.80%)
- ----------------------------------------------------------------------------
Ratio/Supplemental Data:
Net Assets, End of Period (in thousands) $9,619
- ----------------------------------------------------------------------------
Ratio of Net Expenses to Average Net Assets** 0.75%
- ----------------------------------------------------------------------------
Ratio of Net Investment Income to Average Net Assets** 1.33%
- ----------------------------------------------------------------------------
Portfolio Turnover Rate 19%
- ----------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
---------
73
- --------------------------------------------------------------------------------
Emerging Markets Fund
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------
3/31/99 9/30/98*
- -------------------------------------------------------------------------------------------
<S> <C> <C>
Inception date 11/25/97
- -------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Period $6.78 $10.00
- -------------------------------------------------------------------------------------------
Income (Loss) from Investment Operations:
Net Investment Income (Loss) 0.02 0.07
- -------------------------------------------------------------------------------------------
Net Gains (Losses) on Investments (both realized and unrealized) 2.63 (3.26)
- -------------------------------------------------------------------------------------------
Total Income (Loss) From Investment Operations 2.65 (3.19)
- -------------------------------------------------------------------------------------------
Less Distributions:
Dividends (from net investment income) 0.02 0.03
- -------------------------------------------------------------------------------------------
Total Distributions 0.02 0.03
- -------------------------------------------------------------------------------------------
Net Asset Value, End of Period $9.41 $6.78
- -------------------------------------------------------------------------------------------
Total Return (a) 39.15% (31.96%)
- -------------------------------------------------------------------------------------------
Ratio/Supplemental Data:
Net Assets, End of Period (in thousands) $7,049 $5,063
- -------------------------------------------------------------------------------------------
Ratio of Net Expenses to Average Net Assets** 1.05% 1.05%
- -------------------------------------------------------------------------------------------
Ratio of Net Investment Income to Average Net Assets** 0.56% 0.82%
- -------------------------------------------------------------------------------------------
Portfolio Turnover Rate 53% 77%
- -------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
Income Fund
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------
3/31/99 9/30/98*
- ------------------------------------------------------------------------------------------
<S> <C> <C>
Inception date 11/21/97
- ------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Period $10.39 $10.00
- ------------------------------------------------------------------------------------------
Income (Loss) from Investment Operations:
Net Investment Income (Loss) 0.28 0.51
- ------------------------------------------------------------------------------------------
Net Gains (Losses) on Investments (both realized and unrealized) (0.29) 0.39
- ------------------------------------------------------------------------------------------
Total Income (Loss) From Investment Operations (0.01) 0.90
- ------------------------------------------------------------------------------------------
Less Distributions:
Dividends (from net investment income) 0.29 0.51
- ------------------------------------------------------------------------------------------
Dividends (from net realized gains) 0.18 0.00
- ------------------------------------------------------------------------------------------
Total Distributions 0.47 0.51
- ------------------------------------------------------------------------------------------
Net Asset Value, End of Period $9.91 $10.39
- ------------------------------------------------------------------------------------------
Total Return (a) (0.15%) 9.21%
- ------------------------------------------------------------------------------------------
Ratio/Supplemental Data:
Net Assets, End of Period (in thousands) $71,322 $71,444
- ------------------------------------------------------------------------------------------
Ratio of Net Expenses to Average Net Assets** 0.31% 0.31%
- ------------------------------------------------------------------------------------------
Ratio of Net Investment Income to Average Net Assets** 5.69% 5.81%
- ------------------------------------------------------------------------------------------
Portfolio Turnover Rate 120% 323%
- ------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
<PAGE>
- --------------------
74 GE Institutional
Funds Prospectus
Financial
Highlights
- --------------------------------------------------------------------------------
Money Market Fund
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------
3/31/99 9/30/98*
- ------------------------------------------------------------------------------------------
<S> <C> <C>
Inception date 12/2/97
- ------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Period $1.00 $1.00
- ------------------------------------------------------------------------------------------
Income (Loss) from Investment Operations:
Net Investment Income (Loss) 0.02 0.04
- ------------------------------------------------------------------------------------------
Net Gains (Losses) on Investments (both realized and unrealized) 0.00 0.00
- ------------------------------------------------------------------------------------------
Total Income (Loss) From Investment Operations 0.02 0.04
- ------------------------------------------------------------------------------------------
Less Distributions:
Dividends (from net investment income) 0.02 0.04
- ------------------------------------------------------------------------------------------
Total Distributions 0.02 0.04
- ------------------------------------------------------------------------------------------
Net Asset Value, End of Period $1.00 $1.00
- ------------------------------------------------------------------------------------------
Total Return (a) 2.45% 4.53%
- ------------------------------------------------------------------------------------------
Ratio/Supplemental Data:
Net Assets, End of Period (in thousands)(a) $7,274 $7,102
- ------------------------------------------------------------------------------------------
Ratio of Net Expenses to Average Net Assets** 0.25% 0.25%
- ------------------------------------------------------------------------------------------
Ratio of Net Investment Income to Average Net Assets** 4.86% 5.33%
- ------------------------------------------------------------------------------------------
Portfolio Turnover Rate N/A N/A
- ------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
Notes to Financial Highlights
(a) Total returns are historical and assume changes in share price,
reinvestment of dividends and capital gains, and assume no sales charge.
Periods less than one year are not annualized.
(b) As a result of the timing of purchases and sales of Fund shares, per share
amounts do not accord with aggregate amounts appearing in the Statement of
Changes in the Funds' Annual Report.
* Information is for the period from Inception date through September 30,
1998.
** Annualized for periods less than one year.
*** Information is for the period from Inception date through March 31, 1999.
- --------------------------------------------------------------------------------
<PAGE>
---------
75
[This page intentionally left blank.]
- --------------------------------------------------------------------------------
<PAGE>
[This page intentionally left blank.]
- --------------------------------------------------------------------------------
<PAGE>
[This page intentionally left blank.]
- --------------------------------------------------------------------------------
<PAGE>
GE Institutional
Funds Prospectus
- --------------------------------------------------------------------------------
Investment Adviser
GE Investment Management Incorporated
P.O. Box 7900
3003 Summer Street
Stamford, CT 06904
- --------------------------------------------------------------------------------
Transfer Agent and Custodian
State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02101
- --------------------------------------------------------------------------------
Distributor
GE Investment Distributors, Inc.
777 Long Ridge Road, Building B
Stamford, CT 06927
- --------------------------------------------------------------------------------
If you wish to know more
You will find additional information about the GE Institutional Funds in the
following documents:
Annual/Semi-Annual Reports to Shareholders: These reports detail the Funds'
actual investments as of the report date. Reports include performance numbers
and a discussion of market conditions and investment strategies that
significantly affected Fund performance during the Funds' last fiscal year.
Statement of Additional Information (SAI): The SAI contains additional
information about the Funds and their investment strategies and policies and is
incorporated by reference (legally considered part of the prospectus). The SAI
is on file with the Securities and Exchange Commission (SEC).
You may visit the SEC's Internet Website (http://www.sec.gov) to view the SAI
and other information. Also, you can obtain copies of this information by
sending your request and duplicating fee to the SEC's Public Reference Section,
Washington, D.C. 20549-6009. You may review and copy information about the
Funds, including the SAI, at the SEC's Public Reference Room in Washington, D.C.
To find out more about the public reference room, call the SEC at
1-800-SEC-0330.
You may obtain a free copy of the SAI or the Funds' annual/semiannual report and
make shareholder inquiries by contacting:
GE Investment Distributors, Inc.
P.O. Box 7900
3003 Summer Street
Stamford, CT 06904
Telephone 1-800-493-3042
Website http://www.ge.com/mutualfunds
Investment Company Act file number: 811-08257
- --------------------------------------------------------------------------------
GE-INSTPRO-1
