<PAGE>
----------------------
Prospectus GE Institutional Funds
January 28, 1999
- --------------------------------------------------------------------------------
Equity Funds
U.S. Equity Fund
S&P 500 Index
Mid-Cap Growth Fund
Mid-Cap Value Equity Fund
Small-Cap Value Equity Fund
International Equity Fund
Emerging Markets Fund
Premier Growth Equity Fund
Value Equity Fund
Europe Equity 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.
[LOGO] We bring good things to life.
<PAGE>
<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 26
Money Market Funds 28
Money Market Fund 30
Fund Expenses 32
More on Strategies and Risks 36
More on Risks 36
Other Risk Considerations 40
More on Investment Strategies 41
About the Investment Adviser 46
Investment Adviser and Administrator 46
About the Funds' Portfolio Managers 47
About the Sub-Advisers 48
Prior Performance Information 52
How to Invest 54
Investor Advantages 54
Opening an Account 54
How to Buy Shares 54
Eligible Investors 55
How to Redeem Shares 56
How to Exchange Shares 57
Shareholder Servicing and
Distribution Plan 57
Dividends, Capital Gains and Other
Tax Information 58
Calculating Share Value 59
Appendix: Financial Highlights 60
Additional information regarding GE Institutional Funds is contained in the
Statement of Additional Information dated January 28, 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. Investment in the Equity Funds is subject to risk, including
possible loss of principal invested.
Equity funds generally invest in equity securities. Equity securities may
include common stocks, preferred stocks, depositary receipts, convertible
preferred stocks, convertible bonds, convertible debentures, convertible notes,
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
- --------------------------------------------------------------------------------
The following are important definitions that may be unfamiliar to an investor
reading about the Equity Funds:
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.
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.
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.
Convertible securities may be debt or equity securities that pay interest or
dividends and that may be converted on specified terms into the stock of the
issuer.
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.
Types of investment styles the Equity Funds may use
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 value stocks and the market averages.
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 growth stocks.
The above definitions should be read together with the fund summaries on the
following pages to the extent applicable.
<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(Registered) 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. 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, 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 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 (Registered). 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*
[BAR CHART]
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(Registered)).* The portfolio manager seeks to replicate the return of
the S&P 500 Index while holding transaction costs low and minimizing portfolio
turnover. The portfolio manager uses a passive management approach to select 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 securities that are not in the
S&P 500 Index, 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 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, please refer to "More on Strategies and Risks" later in
this Prospectus.
* Standard & Poor's(Registered), S&P(Registered), and S&P 500(Registered) 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 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(Registered)). 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*
[BAR CHART]
1998
----
29%
Average Annual Total Return
(as of December 31, 1998)
Since
1 Year Inception**
------ -----------
S&P 500 Index Funds
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 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. 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, please refer to "More on Strategies and Risks" later in
this Prospectus.
Fund Background
No performance figures are shown because the Fund lacks an operating history
as of the date of 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 higher-than-average dividend yields
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. 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, please refer to "More on Strategies and Risks" later in
this Prospectus.
Fund Background
No performance figures are shown because the Fund lacks an operating history
as of the date of 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 January 6, 1999, the
market capitalization of companies in the index ranged from $271 million to
$11.4 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 reasonable valuation
o attractive products or services
o financial strength
o strong competitive positions within their industries
o high quality management focused on generating shareholder value
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. 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, 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 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*
[BAR CHART]
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 18.78% 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 $1.3 and
$8.4 billion as of December 31, 1998. 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. 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 risks associated with
this Fund, please refer to "More on Strategies and Risks" later in this
Prospectus.
- --------------------
Fund Background
The Fund does not have any performance history as of the date of this
Prospectus. Performance information will be included in the Fund's next
available annual or semi-annual report.
Prior performance information of Jon Bosse, the Fund's portfolio manager, can
be found under "Prior Performance Information" beginning on page 52.
<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 December 31, 1998, the
market capitalization of companies in the index ranged from $4.4 million to
$3.4 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. 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, please refer to "More on Strategies and Risks" later in this
Prospectus.
- ----------
Fund Background
Because the Fund recently commenced operations, no performance figures are
shown. Performance information will be included in the Fund's next available
annual or semi-annual report.
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" beginning on page 50.
<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 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 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. 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 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 investment strategies
and risks associated with this Fund, 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 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.
Calendar Year Total Returns
Investment Class Shares*
[BAR CHART]
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 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 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 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. 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 risks associated with
this Fund, please refer to "More on Strategies and Risks" later in this
Prospectus.
Fund Background
Because the Fund is new, it does not have any performance history. Performance
information will be included in the Fund's next available annual or
semi-annual report.
<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 markets. 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 growth. Under normal circumstances, the
Fund's assets are invested 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. 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 risks associated with
this Fund, 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 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.
Calendar Year Total Returns
Investment Class Shares*
[BAR CHART]
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 the 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. Investment in the 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. Income funds provide regular
income and some provide federally tax-exempt income.
The following are important definitions that may be unfamiliar to an investor
reading about the Income Fund:
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.
Cash and cash equivalents are highly liquid and highly rated instruments such
as commercial paper and bank deposits.
Corporate bonds are debt securities issued by companies.
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>
----------
21
- --------------------------------------------------------------------------------
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 are 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.
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 ("CMOs") which are derivative securities
that are fully collateralized by a portfolio of mortgages.
Money market securities are short-term debt securities of the U.S. government,
banks and corporations. The Fund 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 securities are debt obligations of local, state or regional
governments. Municipal securities generally include both municipal bonds
(securities with maturities of more than one year) and municipal notes
(typically, securities with maturities of one year or less). They may be a
general obligation of the municipality that issued them or they may be secured
by the revenues of a special project or facility. Income derived from
investments in municipal securities is typically exempt from Federal income
tax, however, capital gains are subject to Federal tax.
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.
U.S. Government securities are issued or guaranteed by the U.S. Government or
one of its agencies or instrumentalities. Some U.S. Government securities are
backed by the full faith and credit of the federal government. Other U.S
Government securities are backed by the issuer's right to borrow from the U.S.
Treasury and some are backed only by the credit of the issuing organization.
All U.S. Government securities are considered highly creditworthy.
Derivative Securities (securities whose values are based on other securities,
currencies or indices) 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 CMOs, and structured securities.
Maturity -- the date on which a debt security matures or when the issuer must
pay back the principal amount of the security.
Weighted average maturity -- 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.
Duration -- a mathematical calculation of the average life of a bond (or
portfolio of bonds) 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.
The above definitions should be read together with the fund summary on the
following pages to the extent applicable.
<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 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 risks associated with
this Fund, 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 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.
Calendar Year Total Returns
Investment Class Shares*
[BAR CHART]
1998
- ----
8.46%
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 the 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. Investment in the 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, the Strategic Investment Fund presents a
diversification alternative within one fund.
<PAGE>
----------
25
- --------------------------------------------------------------------------------
The following are important definitions that may be unfamiliar to an investor
reading about the Strategic Investment Fund:
Debt securities are bonds and other securities that are used by issuers to
borrow money from investors. Typically, the 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.
Equity securities may include common stocks, preferred stocks, depositary
receipts, convertible preferred stocks, convertible bonds, convertible
debentures, convertible notes, and rights and warrants of U.S. and foreign
companies. Stocks represent an ownership interest in a corporation.
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. 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.
The above definitions should be read together with the fund summary on the
following page.
<PAGE>
- -----------------------------
26 GE Institutional
Funds Prospectus
Asset Allocation Funds
- --------------------------------------------------------------------------------
Strategic Investment Fund
Investment Objective:
Seeks to maximize total return, consisting of capital appreciation and current
income.
The Strategy
The Strategic Investment Fund invests in both equity securities and 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. It is likely that the Fund will
maintain a weighting in 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 apresence 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 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. 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, please refer to "More on Strategies and Risks" later in
this Prospectus.
Fund Background
No performance figures are shown because the Fund lacks an operating history
as of the date of this Prospectus.
<PAGE>
----------
27
- --------------------------------------------------------------------------------
[This page intentionally left blank.]
<PAGE>
- -------------------------------------------
28 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>
----------
29
- --------------------------------------------------------------------------------
The following are important definitions that may be unfamiliar to an investor
reading about the Money Market Fund:
U.S. Government securities are issued or guaranteed by the U.S. Government or
one of its agencies or instrumentalities. Some U.S, Government securities are
backed by the full faith and credit of the federal government. Other U.S.
Government securities are backed by the issuer's right to borrow from the U.S.
Treasury and some are backed only by the credit of the issuing organization.
All U.S. Government securities are considered highly creditworthy.
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.
Certificates of Deposit include short-term debt securities issued by banks.
Eurodollar Deposits are deposits issued in U.S. dollars by foreign banks and
foreign branches of U.S. banks.
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.
Commercial paper includes short-term debt securities issued by banks,
corporations and other borrowers.
Repurchase Agreements (repos) are transactions in which a security (usually a
government security) is purchased with a simultaneous commitment to sell it
back to the seller (a commercial bank or recognized securities dealer) at an
agreed upon price on an agreed upon date -- usually the next day.
Foreign debt securities are issued by foreign corporations and 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 and 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.
The above definitions should be read together with the fund summary on the
following pages.
<PAGE>
30 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 government
securities, repurchase agreements, commercial paper, variable rate securities,
foreign securities and deposits of domestic and foreign banks. 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 invests consistent with regulatory standards governing security
quality, maturity and portfolio diversification. 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 preserve the value of your
investment at $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 investment strategies
and risks associated with this Fund, please refer to "More on Strategies and
Risks" later in this Prospectus
<PAGE>
-----------
31
- --------------------------------------------------------------------------------
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.
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.
Calendar Year Total Returns
Investment Class Shares*
[BAR CHART]
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>
- -----------------------------------------------------
32 GE Institutional Fund Expenses
Funds Prospectus
- --------------------------------------------------------------------------------
Shareholder Transaction Expenses
The Funds impose no sales charge (load) on purchases or reinvested dividends,
contingent deferred sales charge, redemption fee or exchange fee.
This following table shows what it will cost you directly or indirectly to
invest in 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>
Advisory and Administration 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 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 asset increase as
described under "About the Investment Adviser."
** The .25% shareholder servicing and distribution fee is intended to
compensate GE Investment Management, the Trust's investment adviser and
administrator, 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 1997, "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>
----------
33
- ------------------------------------------------------------------------------
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.
International Europe Emerging Strategic Money
Equity Equity Markets Income Investment Market
Fund Fund Fund Fund Fund Fund
.75%* .75%* 1.05%* .35%* .45%* .25%*
.25% .25% .25% .25% .25% .25%
None None None None None None
.75% .75% 1.05% .35% .45% .25%
1.00% 1.00% 1.30% .60% .70% .50%
<PAGE>
- -----------------------------------------------------
34 GE Institutional Fund Expenses
Funds Prospectus
- --------------------------------------------------------------------------------
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.
The example should not be considered to be a representation of past or future
expenses of a Fund. Actual expenses may be greater or less than those shown.
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 $1108
Small-Cap Value Equity Fund:
Investment Class $72 $224 $390 $871
Service Class $97 $303 $525 $1166
International Equity Fund:
Investment Class $77 $240 $417 $930
Service Class $102 $318 $552 $1225
Europe Equity Fund:
Investment Class $77 $240 $417 $930
Service Class $102 $318 $552 $1225
Emerging Markets Fund:
Investment Class $107 $334 $579 $1283
Service Class $132 $412 $713 $1568
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>
----------
35
- ------------------------------------------------------------------------------
[This page intentionally left blank]
<PAGE>
- ------------------------------------------------
36 GE Institutional More on
Funds Prospectus 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.
For more information about the risks associated with the Funds, please see the
Statement of Additional Information (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.
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.
Emerging Markets Risk: Emerging markets 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 markets countries are less diverse and
mature than those in developed countries, and their political systems are less
stable. Investments in emerging markets countries may be affected by national
policies that restrict foreign investment. Emerging markets countries may have
less developed legal structures, and the small size of their securities markets
and low trading volumes can make investments illiquid and more volatile than
investments in developed countries. As a result, a Fund investing in emerging
markets countries may be required to establish special custody or other
arrangements before investing.
<PAGE>
----------
37
- --------------------------------------------------------------------------------
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. Less information may be available about
foreign entities. 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.
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 stock may not realized their perceived value
for extended periods of time. 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 the value of stock shares could decline significantly.
<PAGE>
- ------------------------------------------------
38 GE Institutional
Funds Prospectus
More on
Strategies
and Risks
- --------------------------------------------------------------------------------
Derivative Securities Risk: Derivative securities (securities whose values are
based on other securities, currencies or indices) include options (on stocks,
indices, currencies, futures contracts or bonds), forward currency exchange
contracts, futures contracts, swaps and structured securities. Derivative
securities 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 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.
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 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.
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.
Municipal Securities Risk: Municipal securities are backed by the entities that
issue them and/or other revenue streams. Like other debt securities, prices of
municipal debt securities are affected inversely by changes in interest rates
and by changes in the credit rating or financial condition of the issuer. Income
derived from investments in municipal securities typically is exempt from
Federal income tax, however capital gains are subject to Federal tax. Some
municipal securities are insured and guarantee the timely payment of interest
and repayment of principal.
<PAGE>
----------
39
- --------------------------------------------------------------------------------
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 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 may be subject to legal
restraints 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.
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
withdrawal by a large investor also may result insignificant portfolio
liquidation expenses that are borne by remaining shareholders.
<PAGE>
- ------------------------------------------------
40 GE Institutional
Funds Prospectus
More on
Strategies
and Risks
- --------------------------------------------------------------------------------
Other Risk Considerations
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 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 the issue. 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>
----------
41
- --------------------------------------------------------------------------------
More on Investment Strategies
A Fund is permitted to use other securities and investment strategies in pursuit
of its investment objective, subject to limits established by the Funds' Board
of Trustees. No Fund is under any obligation to use any of the 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 in the Funds' 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 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 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.
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 securities and 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. To the extent
that a Fund employs these techniques, the Fund would be subject to derivative
securities risk.
The following tables summarize each Fund's investment policies and limitations.
Percentage figures refer to the percentage of a Fund's assets that may be
invested in accordance with the indicated policy.
<PAGE>
- -------------------------
42 GE Institutional
Funds Prospectus
More on Strategies
and Risks
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Non-Publicly Purchasing and Purchasing and
Reverse Traded and Structured and Writing Writing
Repurchase Repurchase Illiquid Indexed Securities Securities
Agreements Agreements Securities Securities Options Index Options
<S> <C> <C> <C> <C> <C> <C>
U.S. Equity Fund Yes Yes Yes No Yes Yes
S & P 500 Index Fund Yes Yes Yes No Yes Yes
Premier Growth Equity Fund Yes Yes Yes No Yes Yes
Value Equity Fund Yes Yes Yes No Yes Yes
Mid-Cap Growth Fund Yes Yes Yes No Yes Yes
Mid-Cap Value Equity Fund Yes Yes Yes Yes Yes Yes
Small-Cap Value Equity Fund Yes Yes Yes No Yes Yes
International Equity Fund Yes Yes Yes No Yes Yes
Europe Equity Fund Yes Yes Yes Yes Yes Yes
Emerging Markets Fund Yes Yes Yes No Yes Yes
Income Fund Yes Yes Yes Yes Yes Yes
Strategic Investment Fund Yes Yes Yes Yes Yes Yes
Money Market Fund Yes Yes No No No No
</TABLE>
<PAGE>
-----------
43
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Maximum
Investment in Maximum When-Issued
Futures and Forward Options Maximum Below-Investment Investment in and Delayed
Options on Currency on Foreign Investment in Grade Debt Foreign Delivery
Futures Transactions Currencies Debt Securities Securities Securities Securities
<S> <C> <C> <C> <C> <C> <C> <C>
U.S. Equity Fund Yes Yes Yes 35% 5% 15%* Yes
S&P 500 Index Fund Yes Yes Yes 35% 5% 35%* Yes
Premier Growth
Equity Fund Yes Yes No 35% 5% 25%* Yes
Value Equity Fund Yes Yes Yes 35% 5% 25%* Yes
Mid-Cap Growth
Fund Yes Yes Yes 35% (maximum 10% in BB or 35%* Yes
of 25% in B by S&P or
BBB by S&P, Ba or B by
Baa by Moody's Moody's or
or equivalent) equivalent
Mid-Cap Value
Equity Fund Yes Yes Yes 35% 15% in 15%* Yes
securities
rated BBB or
below by S&P
or Baa or
below by
Moody's or
equivalent
Small-Cap Value
Equity Fund No No No 35% 10% 10%* Yes
International
Equity Fund Yes Yes Yes 35% 5% 100% Yes
Europe Equity Fund Yes Yes Yes 35% 15% 100% Yes
Emerging Markets
Fund Yes Yes Yes 35% (maximum 10% in BB or 100% Yes
of 25% in B by S&P or
BBB by S&P, Ba or B by
Baa by Moody's Moody's or
or equivalent) equivalent
Income Fund Yes Yes Yes 100% (maximum 10% in BB or
of 25% B by S&P or 35%* Yes
BBB by S&P or Ba or B by
Baa by Moody's Moody's or
or equivalent) equivalent)
Strategic
Investment Fund Yes Yes Yes 100% (maximum 10% in BB or 30%* Yes
of 25% B by S&P or
BBB by S&P, or Ba or B by
Baa by Moody's Moody's or
or equivalent) equivalent
Money Market
Fund No No No 100% None 25%* Yes
</TABLE>
* This limitation excludes ADRs, and securities of a foreign issuer with a
class of securities registered with the Securities and Exchange Commission and
listed on a U.S. national securities exchange or trade on the Nasdaq National
Market or the Nasdaq Small-Cap Market.
<PAGE>
- -------------------------
44 GE Institutional
Funds Prospectus
More on Strategies
and Risks
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Debt Securities Participation
Lending Obligations of of Other Floating and Interests
Portfolio Rule 144A Supranational Depositary Investment Municipal Variable Rate in 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>
* Exludes commercial paper and notes with variable and floating rates of
interest
<PAGE>
-----------
45
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Mortgage Government Asset Backed
Custodial Related Stripped Securities and Short
Zero Municipal Receipts on Securities, Mortgage Receivable- Mortgage Sales
Coupon Obligations Municipal including Related Backed Dollar Against
Obligation 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>
- ------------------------------------------------
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.
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. As of December 31, 1998, GE's investment advisers manage
roughly $78 billion in individual and institutional assets, with over $15
billion in mutual funds alone.
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.
Investment Management and Administration Fees Payable to GE Investment
Management:
Average Daily Net Assets of Fund
Name of Fund Annual Rate 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%
Next $50 million 0.65%
Over $75 million 0.55%
Europe Equity Fund First $25 million 0.75%
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, GEIM 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. Carlson 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. Since joining GE Investment
Management in 1982, Mr. Carlson has held several positions.
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 has held several positions since joining GE Investment
Management in 1985.
Ralph R. Layman is a Director and Executive Vice President of 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 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.
Ralph E. Whitman is a 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 and has held positions with GE Investments since 1987.
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 commencement. He has held several positions since joining GE Investment
Management in 1990.
<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
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 $441 billion in assets as of September 30,
1998. 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 December 31, 1998. 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 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 December 31, 1998, NWQ had in excess of $8.13 billion of
assets under management.
Jon D. Bosse is the Fund's portfolio manager 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, 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
Senior Investment Committee
of Palisade Capital Management,
L.L.C. (Sub-adviser to the Small-
Cap Value Equity Fund)
This performance information includes a composite of the performance 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.
<PAGE>
----------
51
- ------------------------------------------------------------------------------
Unlike management of the Accounts, the Senior Investment Committee's
management of the Small-Cap 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 Accounts. The Fund also will incur
certain operating expenses that were not borne by the Accounts. In addition,
the Fund will likely experience cash flows 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.
Calendar Year Total Return
Investment Committee Performance Composite
[BAR CHART]
Composite Russell 2000 Index
1993* 10% 12%
1994 4% -2%
1995 32% 28%
1996 23% 16%
1997 26% 22%
1998 -3% -5%
* Represents performance from 7/1/93 through 12/31/93
Average Annual Total Return
(as of December 31, 1998)
Russell
Period Composite 2000 Index
1 Year -2.55% -4.96%
3 Years 13.91% 11.58%
5 Years 15.12% 11.86%
Since 7/1/93 15.65% 12.96%
Note A -- Performance Results. 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, performance results reflect the performance of the
Accounts managed by the Senior Investment Committee while at Palisade.
Note B -- Composite. 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 $4.4 million and $3.21 billion as of December 31, 1998.
The information provided above for both the composite 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 Performance Composite represents 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>
- ------------------------------------------------
52 GE Institutional
Funds Prospectus
About the Investment
Adviser
- -------------------------------------------------------------------------------
Prior Performance Information
Jon Bosse
(Portfolio Manager of the
Mid-Cap Value Equity Fund)
This performance information includes a composite of the performance of
certain private accounts and mutual funds ("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.
<PAGE>
----------
53
- ------------------------------------------------------------------------------
Unlike management of the private accounts included in the composite, Mr.
Bosse's management of the Mid-Cap 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. The Fund also will
incur certain operating expenses that were not borne by 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.
Calendar Year Total Return
Portfolio Manager Performance Composite
[BAR CHART]
Composite S&P MidCap 400 Index
1990 1% -5%
1991 54% 50%
1992 30% 12%
1993 20% 14%
1994 9% -4%
1995 39% 31%
1996 30% 19%
1997 35% 32%
1998 9% 19%
Average Annual Total Return
(as of December 31, 1998)
S&P MidCap
Period Composite 400 Index
1 Year 8.34% 19.1%
3 Years 23.43% 23.4%
5 Years 23.12% 18.8%
Since 1/1/90 23.79% 17.6%
Note A -- Performance Results. 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 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. 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.
Note B -- Composite. 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. 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 both the composite 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 Performance Composite represents 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>
- --------------------------------------------------
54 GE Institutional How to Invest
Funds Prospectus
- --------------------------------------------------------------------------------
Investor Advantages
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>
----------
55
- --------------------------------------------------------------------------------
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 457of 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 Requirement
The minimum initial investment in each Fund is $35 million for each investor or
group of related investors. Related investors are investors that are affiliated
persons of each other within the meaning of the 1940 Act except that a defined
contribution plan that seeks recordkeeping, administration, investment education
and communication services provided or paid by GE Financial Assurance Holdings,
Inc. directly or indirectly through its wholly-owned subsidiary (a "full-service
defined contribution plan") will not be considered a related investor of any
other investor in GE Institutional Funds. That is, a full-service defined
contribution plan must individually meet the minimum investment requirement.
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.
There is no minimum investment requirement for subsequent purchases. If the
value of an investor's, or group of related investors', investment in a Fund
falls below $35 million for more than 120 days because of redemptions (and not
because of market fluctuations or exchanges), the Distributor may, in its sole
discretion, refuse to sell additional Fund shares to such investor (other than
reinvestment of dividends and capital gains distributions). 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 (i) $100 million in one or
more investment portfolios or accounts that are advised by GE Investment
Management and/or GEIC and at least $35 million of this $100 million amount is
invested in GE Institutional Funds or (ii) $5 billion in one or more investment
portfolio or accounts that are advised by GE Investment Management and/or GEIC.
If the value of such investor's, or group of related investors', investment
portfolios and accounts that are advised by GE Investment Management and /or
GEIC or investment in GE Institutional Funds falls below the required amount for
more than 120 days because of redemptions (and not because of market
fluctuations or exchanges), the Distributor may, in its sole discretion, refuse
to sell additional Fund shares to such investor (other than reinvestment of
dividends and capital gains distributions). 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
<PAGE>
- --------------------------------------------------
56 GE Institutional
Funds Prospectus
How to Invest
- --------------------------------------------------------------------------------
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. If such an investor does not have the applicable
amount of investment assets within the six-month period, the Distributor may, in
its sole discretion, refuse to sell additional Fund shares to such investor
(other than reinvestment of dividends and capital gains distributions). Even if
the investor has the applicable amount of investment assets within the six-month
period, 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.
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.
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>
----------
57
- --------------------------------------------------------------------------------
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
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 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.
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.
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>
- --------------------------------------------------------------
58 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. Unless you instruct a Fund to mail dividends
from net investment income and net capital gains to you, they will be 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.
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, 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,
whether you reinvest your dividends or distributions or have it paid to you.
Distributions are taxable at different rates depending on the length of time a
Fund holds its investments. Distributions will be taxed, regardless of whether
they are received in cash or reinvested.
Fund Distribution Schedule
- ----------------------------------------------------------------------------
U.S. Equity Fund o Dividends are declared and paid annually.
S&P 500 Index Fund o Short-term and long-term capital gains,
if any, are declared and paid annually.
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
Strategic Investment Fund
- --------------------------------------------------------------------------------
Income Fund o Dividends are declared daily and paid-
monthly.
Money Market Fund o Short-term and long-term capital gains, if
any, are declared and paid annually.
<PAGE>
----------
59
- --------------------------------------------------------------------------------
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.
Calculating Share Value
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. A Fund's NAV 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>
- -----------------------------------------------
60 GE Institutional Financial
Funds Prospectus Highlights
Appendix
- -------------------------------------------------------------------------------
The financial highlights tables that follow are intended to help you
understand a Fund's financial performance for the period of the Fund's
operations. Certain information reflects financial results for a single Fund
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). This information has been audited by
PricewaterhouseCoopers LLP, whose report, along with the Funds' financial
statements, are included in the Funds' Annual Report, which is available upon
request.
U.S. Equity Fund
9/30/98*
Inception date 11/25/97
Net Asset Value, Beginning of Period $10.00
Income from Investment Operations:
Net Investment Income (Loss) 0.11
Net Gains (Losses) on Investments (both realized and unrealized) 0.52
Total Income (Loss) From Investment Operations 0.63
Less Distributions:
Dividends (from net investment income) 0.01
Total Distributions 0.01
Net Asset Value, End of Period $10.62
Total Return (a) 6.28%
Ratio/Supplemental Data:
Net Assets, End of Period (in thousands) $114,553
Ratio of Net Expenses to Average Net Assets** 0.42%
Ratio of Net Investment Income to Average Net Assets** 1.21%
Portfolio Turnover Rate 29%
<PAGE>
----------
61
- ------------------------------------------------------------------------------
S&P 500 Index
Fund
9/30/98*
Inception date 11/25/97
Net Asset Value, Beginning of Period $10.00
Income from Investment Operations:
Net Investment Income (Loss) 0.14
Net Gains (Losses) on Investments (both realized and unrealized) 0.72
Total Income (Loss) From Investment Operations 0.86
Less Distributions:
Dividends (from net investment income) 0.01
Total Distributions 0.01
Net Asset Value, End of Period $10.85
Total Return (a) 8.63%
Ratio/Supplemental Data:
Net Assets, End of Period (in thousands) $20,186
Ratio of Net Expenses to Average Net Assets** 0.15%
Ratio of Net Investment Income to Average Net Assets** 1.57%
Portfolio Turnover Rate 1%
Mid-Cap
Growth Fund
9/30/98*
Inception date 11/25/97
Net Asset Value, Beginning of Period $10.00
Income from Investment Operations:
Net Investment Income (Loss) 0.04
Net Gains (Losses) on Investments (both realized and unrealized) (1.16)
Total Income (Loss) From Investment Operations: (1.12)
Less Distributions
Dividends (from net investment income) 0.01
Total Distributions 0.01
Net Asset Value, End of Period $8.87
Total Return (a) (11.25%)
Ratio/Supplemental Data:
Net Assets, End of Period (in thousands) $13,208
Ratio of Net Expenses to Average Net Assets** 0.55%
Ratio of Net Investment Income to Average Net Assets** 0.53%
Portfolio Turnover Rate 14%
<PAGE>
- -----------------------------------------------
62 GE Institutional Financial
Funds Prospectus Highlights
Appendix
- -------------------------------------------------------------------------------
Small-Cap
Value Equity Fund
9/30/98*
Inception date 8/3/98
Net Asset Value, Beginning of Period $10.00
Income from Investment Operations:
Net Investment Income (Loss) 0.02
Net Gains (Losses) on Investments (both realized and unrealized) (1.11)
Total Income (Loss) From Investment Operations (1.09)
Less Distributions:
Dividends (from net investment income) 0.00
Total Distributions 0.00
Net Asset Value, End of Period $8.91
Total Return (a) (10.90%)
Ratio/Supplemental Data:
Net Assets, End of Period (in thousands) $9,056
Ratio of Net Expenses to Average Net Assets** 0.70%
Ratio of Net Investment Income to Average Net Assets** 1.68%
Portfolio Turnover Rate 19%
International Equity Fund 9/30/98*
Inception date 11/25/97
Net Asset Value, Beginning of Period $10.00
Income from Investment Operations:
Net Investment Income (Loss) 0.14(b)
Net Gains (Losses) on Investments (both realized and unrealized) (0.07)(b)
Total Income (Loss) From Investment Operations 0.07
Less Distributions:
Dividends (from net investment income) 0.01
Total Distributions 0.01
Net Asset Value, End of Period $10.06
Total Return (a) 0.66%
Ratio/Supplemental Data:
Net Assets, End of Period (in thousands) $114,414
Ratio of Net Expenses to Average Net Assets** 0.64%
Ratio of Net Investment Income to Average Net Assets** 1.72%
Portfolio Turnover Rate 53%
<PAGE>
----------
63
- ------------------------------------------------------------------------------
Emerging Markets
Fund
9/30/98*
Inception date 11/25/97
Net Asset Value, Beginning of Period $10.00
Income from Investment Operations:
Net Investment Income (Loss) 0.07
Net Gains (Losses) on Investments (both realized and unrealized) (3.26)
Total Income (Loss) From Investment Operations (3.19)
Less Distributions:
Dividends (from net investment income) 0.03
Total Distributions 0.03
Net Asset Value, End of Period $6.78
Total Return (a) (31.96%)
Ratio/Supplemental Data:
Net Assets, End of Period (in thousands) $5,063
Ratio of Net Expenses to Average Net Assets** 0.82%
Ratio of Net Investment Income to Average Net Assets** 1.05%
Portfolio Turnover Rate 77%
Income Fund
9/30/98*
Inception date 11/21/97
Net Asset Value, Beginning of Period $10.00
Income from Investment Operations:
Net Investment Income (Loss) 0.51
Net Gains (Losses) on Investments (both realized and unrealized) 0.39
Total Income (Loss) From Investment Operations 0.90
Less Distributions:
Dividends (from net investment income) 0.51
Total Distributions 0.51
Net Asset Value, End of Period $10.39
Total Return (a) 9.21%
Ratio/Supplemental Data:
Net Assets, End of Period (in thousands) $71,444
Ratio of Net Expenses to Average Net Assets** 0.31%
Ratio of Net Investment Income to Average Net Assets** 5.81%
Portfolio Turnover Rate 323%
<PAGE>
- -----------------------------------------------
64 GE Institutional Financial
Funds Prospectus Highlights
Appendix
- -------------------------------------------------------------------------------
Money Market
Fund
9/30/98*
Inception date 12/2/97
Net Asset Value, Beginning of Period $1.00
Income from Investment Operations:
Net Investment Income (Loss) 0.04
Net Gains (Losses) on Investments (both realized and unrealized) 0.00
Total Income (Loss) From Investment Operations 0.04
Less Distributions:
Dividends (from net investment income) 0.04
Total Distributions 0.04
Net Asset Value, End of Period $1.00
Total Return(a) 4.53%
Ratio/Supplemental Data:
Net Assets, End of Period (in thousands) $7,102
Ratio of Net Expenses to Average Net Assets** 0.25%
Ratio of Net Investment Income to Average Net Assets** 5.33%
Portfolio Turnover Rate N/A
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.
<PAGE>
This page is intentionally left blank.
<PAGE>
- -----------------------------
GE Institutional Funds
Prospectus
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Investment Adviser GE Investment Management Incorporated
3003 Summer Street
P.O. Box 7900
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 usually include performance
numbers, a discussion of market conditions and
investment strategies that 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.
777 Long Ridge Road, Building B
Stamford, CT 06927
Telephone 1-800-493-3042
Website http://www.ge.com/mutualfunds
</TABLE>
Investment Company Act file number: 811-08257
GE INST-PRO-1
