GE INSTITUTIONAL FUNDS
485APOS, 2000-11-30
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<PAGE>

                                                  File Nos. 333-29337, 811-08257

    As filed with the Securities and Exchange Commission on November 30, 2000


                     U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM N-1A

           REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933   / /


                         Pre-Effective Amendment No.                / /

                      Post-Effective Amendment No. 12               /X/

                                       and

                          REGISTRATION STATEMENT UNDER
                     THE INVESTMENT COMPANY ACT OF 1940             / /


                             Amendment No. 14                       /X/


                        (Check appropriate box or boxes)

                             GE INSTITUTIONAL FUNDS
                               3003 Summer Street
                           Stamford, Connecticut 06905
                                 (203) 326-4040
             (Registrant"s Exact Name, Address and Telephone Number)

                            Matthew J. Simpson, Esq.
         Vice President, Associate General Counsel & Assistant Secretary
                        GE Asset Management Incorporated
                               3003 Summer Street
                           Stamford, Connecticut 06905
                     (Name and Address of Agent for Service)

                                    Copy to:
                            David S. Goldstein, Esq.
                         Sutherland Asbill & Brennan LLP
                         1275 Pennsylvania Avenue, N.W.
                            Washington, DC 20004-2404

Approximate Date of Proposed Public Offering:      As soon as practicable after
                                                   the effective date of this
                                                   Registration Statement.

It Is Proposed That this Filing Will Become Effective (check appropriate box)
[ ] Immediately upon Filing Pursuant to Paragraph (b) of Rule 485
[ ] on (date)Pursuant to Paragraph (b) of Rule 485
[ ] 60 Days after Filing Pursuant to Paragraph (a)(1) of Rule 485
[X] on January 29, 2001 Pursuant to Paragraph (a)(1) of Rule 485
[ ] 75 Days after Filing Pursuant to Paragraph (a)(2) of Rule 485
[ ] on (Date) Pursuant to Paragraph (a)(2) of Rule 485

If appropriate, check the following box:
[ ] This post-effective amendment designates a new effective date for a
    previously filed post-effective amendment.

<PAGE>

This post-effective amendment includes updated prospectuses only for those
series of Registrant (the shares of) which are currently offered to the public.
The Small-Cap Growth Equity Fund and the High Yield Fund, each a series of
Registrant (the shares of) which are not currently being offered to the public,
remain registered and unaffected by this post-effective amendment.

<PAGE>

                                                          ----------------------
Prospectus                                                GE Institutional Funds


January __, 2001


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Equity Funds
U.S. Equity Fund
S&P 500 Index 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
Premier Funds
      Premier Growth Equity Fund
      Premier Research Equity Fund
      Premier International Equity Fund

--------------------------------------------------------------------------------
Income Funds
Income Fund

--------------------------------------------------------------------------------
Asset Allocation Funds
Strategic Investment Fund

--------------------------------------------------------------------------------
Money Market Funds
Money Market Fund

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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.

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<PAGE>

<PAGE>
                                               ---------------------------------
                                               Contents


--------------------------------------------------------------------------------
GE Institutional
Funds Prospectus

Equity Funds                                                                   3
--------------------------------------------------------------------------------
U.S. Equity Fund                                                               4
S&P 500 Index Fund                                                             6
Value Equity Fund                                                              8
Mid-Cap Growth Fund                                                           10
Mid-Cap Value Equity Fund                                                     12
Small-Cap Value Equity Fund                                                   14
International Equity Fund                                                     16
Europe Equity Fund                                                            18
Emerging Markets Fund                                                         20
Premier Growth Equity Fund                                                    22
Premier Research Equity Fund                                                  23
Premier International Equity Fund                                             24

Income Funds                                                                  25
--------------------------------------------------------------------------------
Income Fund                                                                   26

Asset Allocation Funds                                                        28
--------------------------------------------------------------------------------
Strategic Investment Fund                                                     29

Money Market Funds                                                            31
--------------------------------------------------------------------------------
Money Market Fund                                                             32

Fund Expenses                                                                 34
--------------------------------------------------------------------------------

More on Strategies and Risks                                                  38
--------------------------------------------------------------------------------
Important Definitions                                                         38
More on Investment Strategies                                                 41
More on Risks                                                                 46
Other Risk Considerations                                                     49

About the Investment Adviser                                                  50
--------------------------------------------------------------------------------
Investment Adviser
   and Administrator                                                          50
About the Funds' Portfolio Managers                                           51
About the Sub-Advisers                                                        54
Prior Performance Information                                                 56

How to Invest                                                                 68
--------------------------------------------------------------------------------
Investment Choices                                                            68
Opening an Account                                                            68
How to Buy Shares                                                             68
Eligible Investors                                                            69
Eligibility Requirements                                                      69
How to Redeem Shares                                                          70
How to Exchange Shares                                                        71
Signature Guarantees                                                          71
Distribution and Shareholder
   Service Fees                                                               71

Dividends, Capital Gains and
   Other Tax Information                                                      74
--------------------------------------------------------------------------------

Calculating Share Value                                                       76
--------------------------------------------------------------------------------

Financial Highlights                                                          77
--------------------------------------------------------------------------------


Additional information regarding GE Institutional Funds is contained in the
Statement of Additional Information dated January __, 2001, which is
incorporated by reference into (legally forms a part of) this Prospectus.


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2


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<PAGE>
                                  ---------------------------------------------
                                  Equity Funds              GE Institutional  3
                                                            Funds Prospectus


--------------------------------------------------------------------------------


An investment in an Equity Fund is not a deposit of any bank and is not insured
or guaranteed by the Federal Deposit Insurance Corporation or any other
government agency. An investment in an Equity Fund is subject to risk, including
possible loss of principal invested.

Equity funds generally invest in equity securities. Equity securities may
include common stocks, preferred securities, depositary receipts, convertible
securities and rights and warrants of U.S. and foreign companies. Stocks
represent an ownership interest in a corporation. Equity funds have more
potential for capital growth than other funds, but they have greater risk.

--------------------------------------------------------------------------------
<PAGE>
-------------------
4  GE Institutional
   Funds Prospectus
   Equity Funds

--------------------------------------------------------------------------------
U.S. Equity
Fund

----------
Investment
Objective:
Long-term
growth of
capital.

The Strategy

The U.S. Equity Fund invests primarily in equity securities of U.S. companies.
The portfolio managers use a Multi-Style(R) investment strategy that combines
growth and value investment management styles. As a result, the portfolio has
characteristics similar to the Standard & Poor's 500 Composite Stock Index,
including capital appreciation and income. Stock selection is key to the
performance of the Fund.

Through fundamental company research, the portfolio managers seek to identify
securities of large companies with characteristics such as:

o attractive valuations
o financial strength
o high quality management focused on generating shareholder value

The Fund also may invest to a lesser extent in foreign securities and debt
securities. The 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 the Fund are stock market risk and style
risk (mid-cap company risk). To the extent that the portfolio managers invest in
foreign securities or debt securities, the Fund would be subject to foreign
exposure risk, interest rate risk and credit risk.

If you would like additional information regarding the Fund's investment
strategies and risks, including a description of the terms in bold type, please
refer to "More on Strategies and Risks" later in this Prospectus.

--------------------------------------------------------------------------------
<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 periods 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(R)). The table reflects the impact of the
Fund's expenses and assumes that you sold your shares at the end of each period.

--------------------------------------------------------------------------------
Prior Performance Information

Prior performance information of GE Asset Management, the Fund's investment
adviser, can be found under "Prior Performance Information" later in this
Prospectus.

--------------------------------------------------------------------------------
Calendar Year Total Returns
Investment Class Shares*

                                  [BAR CHART]

1998                24%
1999                20%
2000

--------------------------------------------------------------------------------

Average Annual Total Return
(as of December 31, 1999)

                                                            Since
                                             1 Year       Inception**
--------------------------------------------------------------------------------
U.S. Equity Fund
--------------------------------------------------------------------------------
 Investment Class                            19.78%        22.30%
--------------------------------------------------------------------------------
S&P 500 Index                                21.07%        24.73%
--------------------------------------------------------------------------------

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 and Class X 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
and Service Class and Class X shares may have other expenses that are higher
than those of Investment Class shares, which would lower their returns.


Inception date (commencement of operations) of the Fund: November 25, 1997; S&P
500 Index returns are not available from the Fund's Inception date and therefore
are calculated from the month end nearest the Fund's Inception date, which in
this case is December 1, 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: Growth of capital and accumulation of income that
corresponds to the investment return of the Standard & Poor's 500 Composite
Stock Index.

The Strategy

The S&P 500 Index Fund invests primarily in equity securities of companies
contained in the Standard & Poor's 500 Composite Stock Index (S&P 500
Index(R)).* The portfolio manager seeks to replicate the return of the S&P 500
Index while holding transaction costs low and minimizing portfolio turnover. The
portfolio manager attempts to achieve a correlation between its total return and
that of the S&P 500 Index of at least .95, without taking expenses into account.

The portfolio manager uses a passive management approach to 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 debt securities, foreign
securities and other securities that are not in the S&P 500 Index. Except for
debt securities, which are used to manage cash flows, all securities held by the
Fund are acquired to fulfill its investment objective. The 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 the Fund are stock market risk and the risk
that the Fund's return may not correlate exactly with that of the S&P 500 Index.
To the extent that the portfolio managers invest in foreign securities and debt
securities, the Fund would be subject to foreign exposure risk, interest rate
risk and credit risk.

If you would like additional information regarding the Fund's investment
strategies and risks, including a description of the terms in bold type, please
refer to "More on Strategies and Risks" later in this Prospectus.

* "Standard & Poor's(R)," "S&P(R)," "S&P 500(R)," "Standard & Poor's 500" and
"500" are trademarks of the The McGraw-Hill Companies, Inc. and have been
licensed for use by GE Asset Management Incorporated. The S&P 500 Index Fund is
not sponsored, endorsed, sold or promoted by Standard & Poor's, and Standard &
Poor's makes no representation regarding the advisability of investing in the
Fund. 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 periods 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 S&P 500 Index(R). The
table reflects the impact of the Fund's expenses and assumes that you sold your
shares at the end of each period.

--------------------------------------------------------------------------------
Calendar Year Total Returns
Investment Class Shares*

                                  [BAR CHART]

1998                29%
1999                21%
2000

--------------------------------------------------------------------------------

Average Annual Total Return
(as of December 31, 1999)

                                                  Since
                                   1 Year      Inception**
                                   ------      -----------
S&P 500 Index Fund
 Investment Class                  21.18%         25.04%

S&P 500 Index                      21.07%         24.73%

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 and Class X 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
and Service Class and Class X shares may have other expenses that are higher
than those of Investment Class shares, which would lower their returns.


** Inception date (commencement of operations) of the Fund: November 25, 1997:
S&P 500 Index returns are not available from the Fund's Inception date and
therefore are calculated from the month end nearest the Fund's Inception date,
which in this case is December 1, 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


--------------------------------------------------------------------------------
Value Equity Fund

-------------------
Investment Objective: 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 the portfolio manager believes 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 n above-average dividend yields
o expectation of income in future periods
o strong management
o financial strength
o attractive upside potential and limited downside risk

The Fund also may invest to a lesser extent in foreign securities and debt
securities. The 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 the Fund are stock market risk and style
risk (value investing risk). To the extent that the portfolio manager invests in
foreign securities or debt securities, the Fund would be subject to foreign
exposure risk, interest rate risk and credit risk.

If you would like additional information regarding the Fund's investment
strategies and risks, including a description of the terms in bold type, please
refer to "More on Strategies and Risks" later in this Prospectus.

--------------------------------------------------------------------------------
Fund Background


Because the Fund recently commenced investment operations, performance
information is included in the Fund's Annual Report dated September 30, 2000.


--------------------------------------------------------------------------------
Prior Performance Information

Prior performance information of GE Asset Management, the Fund's investment
adviser, can be found under "Prior Performance Information" later in this
Prospectus.

--------------------------------------------------------------------------------
<PAGE>
                                                                     -----------
                                                                               9


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                     [This page intentionally left blank.]

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<PAGE>
-------------------
10




--------------------------------------------------------------------------------
Mid-Cap Growth Fund

-------------------
Investment Objective: Long-term growth of capital.
The Strategy


The Mid-Cap Growth Fund invests primarily in equity securities of mid-cap
companies that the portfolio manager believes have 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 December 31, 2000, the market capitalization of companies
in the index ranged from $___ million to $__ billion. The portfolio manager will
not sell a stock merely because the market capitalization of a company in the
portfolio moves above or below the maximum or minimum capitalization of the
index. Stock selection is key to the performance of the Fund.


The portfolio manager seeks to identify securities of growth companies with
characteristics such as:
o above-average revenue and earnings growth
o attractive products or services
o financial strength
o strong competitive positions within their industries
o high quality management focused on generating shareholder value
o reasonable valuation

The Fund also may invest to a lesser extent in securities with capitalizations
outside the mid-cap range, foreign securities and debt securities. The portfolio
manager may use various investment techniques to adjust the Fund's investment
exposure, but there is no guarantee that these techniques will work.

The Risks

The principal risks of investing in the Fund are stock market risk and style
risk (growth investing risk and mid-cap company risk). To the extent that the
portfolio manager invests in foreign securities or debt securities, the Fund
would be subject to foreign exposure risk, interest rate risk and credit risk.

If you would like additional information regarding the Fund's investment
strategies and risks, including a description of the terms in bold type, please
refer to "More on Strategies and Risks" later in this Prospectus.

--------------------------------------------------------------------------------
<PAGE>
                                                                      ----------
                                                                              11


--------------------------------------------------------------------------------
Fund Performance

The bar chart and table opposite illustrate the short-term variability in the
Fund's performance and the Fund's returns relative to a common measure of
performance.


The bar chart illustrates how the Fund's performance varies from year to year
over the periods shown. During the periods presented in the bar chart, the
Fund's highest return for a quarter was 22.79% for the quarter ended December
31,1999. 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%
1999                18%
2000

--------------------------------------------------------------------------------

Average Annual Total Return
(as of December 31, 1999)

                                                   Since
                                     1 Year      Inception**
                                     ------      -----------
Mid-Cap Growth Fund
 Investment Class                    18.36%         11.43%

S&P MidCap Index                     14.77%         18.23%

Both the bar chart and table assume reinvestment of dividends and distributions.
During the periods presented, GE Asset Management retained a sub-adviser. As of
October 1, 2000, GE Asset Management no longer retains the sub-adviser. As with
all mutual funds, past performance is not an indication of future performance.


* As of the date of this Prospectus, Service Class and Class X 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
and Service Class and Class X shares may have other expenses that are higher
than those of Investment Class shares, which would lower their returns.


** Inception date (commencement of operations) of the Fund: November 25, 1997:
S&P MidCap Index returns are not available from the Fund's Inception date and
therefore are calculated from the month end nearest the Fund's Inception date,
which in this case is December 1, 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: 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 Fund defines mid-cap companies to mean
companies with capitalizations in the range included in the S&P MidCap Index,
$___ million to $____ billion as of December 31, 2000. The portfolio manager
also invests in companies that are considered "special situation companies"
where due to management turnaround, corporate or asset restructuring or
significantly undervalued assets, their securities may not have performed well
in the recent past but appear to have potential for significant future earnings
growth. 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, initial
public offerings 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 the Fund are stock market risk and style
risk (value investing risk and small-cap company risk). To the extent that the
portfolio managers invests in foreign securities or debt securities, the Fund
would be subject to foreign exposure risk, interest rate risk and credit risk.

If you would like additional information regarding the Fund's investment
strategies and risks, including a description of the terms in bold type, please
refer to "More on Strategies and Risks" later in this Prospectus.

--------------------------------------------------------------------------------
<PAGE>
                                                                       ---------
                                                                              13


--------------------------------------------------------------------------------
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 14.13% for the quarter ended June 30, 1999. The
Fund's lowest return for a quarter was -9.99% for the quarter ended September
30, 1999.



The table opposite illustrates how the Fund's average annual returns for
different calendar periods compare to the returns of the Standard & Poor's
MidCap 400 Stock Index (S&P MidCap Index). The table reflects the impact of the
Fund's expenses and assumes that you sold your shares at the end of each period.


--------------------------------------------------------------------------------
Calendar Year Total Returns
Investment Class Shares*
                                  [BAR CHART]

1999                10%
2000

--------------------------------------------------------------------------------

Average Annual Total Return
(as of December 31, 1999)

                                                  Since
                                   1 Year      Inception**
                                   ------      -----------
Mid-Cap Value Equity
 Investment Class                   9.57%         9.54%

S&P MidCap Index                   14.77%        14.77%


Both the bar chart and table assume reinvestment of dividends and distributions.
During the periods presented, GE Asset Management retained a sub-adviser. As of
October 1, 2000, GE Asset Management no longer retains the sub-adviser. As with
all mutual funds, past performance is not an indication of future performance.



* As of the date of this Prospectus, Service Class and Class X 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
and Service Class and Class X shares may have other expenses that are higher
than those of Investment Class shares, which would lower their returns.


** Inception date (commencement of operations) of the Fund: December 31, 1998.

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>
-------------------
14  GE Institutional
    Funds Prospectus
    Equity Funds


--------------------------------------------------------------------------------
Small-Cap Value Equity Fund

-------------------
Investment Objective: Long-term growth of capital.

The Strategy


The Small-Cap Value Equity Fund invests primarily in equity securities of
small-cap companies that the portfolio managers believe 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, 2000 the
market capitalization of companies in the index ranged from $__ million to $___
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
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 the Fund are stock market risk and style
risk (value investing risk and small-cap company risk). To the extent that the
portfolio managers invest in foreign securities or debt securities, the Fund
would be subject to foreign exposure risk, interest rate risk and credit risk.

If you would like additional information regarding the Fund's investment
strategies and risks, including a description of the terms in bold type, please
refer to "More on Strategies and Risks" later in this Prospectus.

--------------------------------------------------------------------------------
<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 22.66% for the quarter ended June 30, 1999. The
Fund's lowest return for a quarter was -15.86% for the quarter ended March 31,
1999.


The table opposite illustrates how the Fund's average annual returns for
different calendar periods compare to the returns of the Russell 2000 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]

1999                17%
2000

--------------------------------------------------------------------------------

Average Annual Total Return
(as of December 31, 1999)

                                                        Since
                                         1 Year      Inception**
                                         ------      -----------
Small-Cap Value Equity
 Investment Class                        16.69%         14.02%

Russell 2000 Index                       21.09%         15.32%

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 and Class X 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
and Service Class and Class X shares may have other expenses that are higher
than those of Investment Class shares, which would lower their returns.


** Inception date (commencement of operations) of the Fund: August 1, 1998:
Russell 2000 Index returns are not available from the Fund's Inception date and
therefore are calculated from the month end nearest the Fund's Inception date,
which in this case is August 1, 1998.

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


--------------------------------------------------------------------------------
International Equity Fund

-------------------
Investment Objective: Long-term growth of capital.

The Strategy

The International Equity Fund invests primarily in equity securities of
companies located in developed and developing countries other than the United
States. The portfolio managers focus on companies that they expect will grow
faster than relevant markets and whose security price does not fully reflect
their potential for growth. Under normal circumstances, the Fund's assets are
invested in foreign securities of companies representing at least three
different countries. 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 Fund may
invest in securities of companies located in the United States. The portfolio
managers may use various investment techniques to adjust the Fund's investment
exposure, but there is no guarantee that these techniques will work.

The Risks

The principal risks of investing in the Fund are stock market risk, foreign
exposure risk, style risk (growth investing risk) and emerging markets risk. To
the extent that the portfolio managers invest in debt securities, the Fund would
be subject to interest rate risk and credit risk.

If you would like additional information regarding the Fund's investment
strategies and risks, including a description of the terms in bold type, please
refer to "More on Strategies and Risks" later in this Prospectus.

--------------------------------------------------------------------------------
<PAGE>
                                                                      ----------
                                                                              17


--------------------------------------------------------------------------------
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  periods presented in the bar chart, the
Fund's highest return for a quarter was 21.83% for the quarter ended December
31, 1999. 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.

--------------------------------------------------------------------------------
Prior Performance Information

Prior performance information of GE Asset Management, the Fund's investment
adviser, can be found under "Prior Performance Information" later in this
Prospectus.

--------------------------------------------------------------------------------
Calendar Year Total Returns
Investment Class Shares*

                                  [BAR CHART]

1998                17%
1999                32%
2000

--------------------------------------------------------------------------------

Average Annual Total Return
(as of December 31, 1999)

                                               Since
                                1 Year      Inception**
                                ------      -----------
International Equity Fund
  Investment Class              31.85%         24.62%

MSCI EAFE Index                 26.96%         22.92%

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 and Class X 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
and Service Class and Class X shares may have other expenses that are higher
than those of Investment Class shares, which would lower their returns.


** Inception date (commencement of operations) of the Fund: November 25, 1997;
MSCI EAFE Index returns are not available from the Fund's Inception date and
therefore are calculated from the month end nearest the Fund's Inception date,
which in this case is December 1, 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>
-------------------
18 GE Institutional
   Funds Prospectus
   Equity Funds


--------------------------------------------------------------------------------
Europe Equity Fund

-------------------
Investment Objective: 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 Emerging Markets Fund invests primarily in equity securities of issuers
located in emerging market countries. The portfolio managers focus on companies
that are expected to grow faster than relevant markets and whose security price
does not fully reflect their potential for growth. Under normal circumstances,
the Fund's assets are invested in foreign securities of companies representing
at least three different countries. 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 currently 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 the Fund are stock market risk, foreign
exposure risk and style risk (mid-cap company risk and growth investing risk).
To the extent that the portfolio managers invest in securities of emerging
market countries and debt securities, the Fund would be subject to emerging
markets risk, interest rate risk and credit risk.

Because the Fund targets a single region, investors should expect the Fund to be
more volatile than a more geographically diversified equity fund. Fund
performance is closely tied to economic and political conditions within Europe.


If you would like additional information regarding the Fund's investment
strategies and risks, including a description of the terms in bold type, please
refer to "More on Strategies and Risks" later in this Prospectus.


--------------------------------------------------------------------------------
<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 periods presented in the bar chart, the
Fund's highest return for a quarter was ____% for the quarter ended _____ __,
2000. The Fund's lowest return for a quarter was ___% for the quarter ended
_____ __, 2000.



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 Index (MSCI Europe 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]

2000                 __%

--------------------------------------------------------------------------------

Average Annual Total Return
(as of December 31, 1999)

                                                     Since
                                     1 Year       Inception**
                                     ------       -----------

Europe Equity Fund
 Investment Class                    ______%         _____%

MSCI Europe Index                     _____%         _____%


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 and Class X 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
and Service Class and Class X shares may have other expenses that are higher
than those of Investment Class shares, which would lower their returns.



** Inception date (commencement of operations) of the Fund: January 29, 1999;
MSCI Europe Index returns are not available from the Fund's Inception date and
therefore are calculated from the month end nearest the Fund's Inception date,
which in this case is February 1, 1999.


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
   Funds Prospectus
   Equity Funds


--------------------------------------------------------------------------------
Emerging Markets Fund

-------------------
Investment Objective: Long-term growth of capital.

The Emerging Markets Fund invests primarily in equity securities of issuers
located in emerging market countries. The portfolio managers focus on companies
that are expected to grow faster than relevant markets and whose security price
does not fully reflect their potential for growth. Under normal circumstances,
the Fund's assets are invested in foreign securities of companies representing
at least 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 n 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 the Fund are stock market risk, foreign
exposure risk, emerging markets risk and style risk (growth investing risk and
small-cap company risk). To the extent that the portfolio managers invest in
debt securities, the Fund would be subject to interest rate risk, and credit
risk.

If you would like additional information regarding the Fund's investments
strategies and risks, including a description of the terms in bold type, please
refer to "More on Strategies and Risks" later in this Prospectus.

--------------------------------------------------------------------------------
<PAGE>
                                                                       ---------
                                                                              21


--------------------------------------------------------------------------------
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 periods presented in the bar chart, the
Fund's highest return for a quarter was 47.27% for the quarter ended December
31, 1999. 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.

--------------------------------------------------------------------------------
Prior Performance Information

Prior performance information of GE Asset Management, the Fund's investment
adviser, can be found under "Prior Performance Information" later in this
Prospectus.

--------------------------------------------------------------------------------
Calendar Year Total Returns
Investment Class Shares*

                                  [BAR CHART]

1998                -20%
1999                108%
2000

--------------------------------------------------------------------------------

Average Annual Total Return
(as of December 31, 1999)

                                                     Since
                                     1 Year       Inception**
                                     ------       -----------
Emerging Markets Fund
 Investment Class                    108.29%         28.71%

MSCI EMF Index                        66.41%         12.26%

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 and Class X 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
and Service Class and Class X shares may have other expenses that are higher
than those of Investment Class shares, which would lower their returns.


** Inception date (commencement of operations) of the Fund: November 25, 1997;
MSCI EMF Index returns are not available from the Fund's Inception date and
therefore are calculated from the month end nearest the Fund's Inception date,
which in this case is December 1, 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>
-------------------
22 GE Institutional
   Funds Prospectus
   Equity Funds


--------------------------------------------------------------------------------
Premier Growth Equity Fund

-------------------
Investment Objective: 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 that the portfolio manager
believes have 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 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 the Fund are stock market risk,
diversification risk and style risk (growth investing risk and mid-cap company
risk). To the extent that the portfolio managers invest in foreign securities or
debt securities, the Fund would be subject to foreign exposure risk, interest
rate risk and credit risk.

If you would like additional information regarding the Fund's investment
strategies and risks, including a description of the terms in bold type, please
refer to "More on Strategies and Risks" later in this Prospectus.

--------------------------------------------------------------------------------
Fund Background


Because the Fund recently commenced investment operations, performance
information is included in the Fund's Annual Report dated September 30, 2000.


--------------------------------------------------------------------------------
Prior Performance Information

Prior performance information of GE Asset Management, the Fund's investment
adviser, can be found under "Prior Performance Information" later in this
Prospectus.

--------------------------------------------------------------------------------
<PAGE>
                                                                       ---------
                                                                              23


--------------------------------------------------------------------------------
Premier Research Equity Fund

-------------------
Investment Objective:  Long-term growth of capital and future income.

The Strategy

The Premier Research Equity Fund invests primarily in a limited number of equity
securities of large- and medium-sized companies located in the United States.
The portfolio managers select equity securities based on the recommendations of
a team of analysts. Each analyst is dedicated to particular industries. The
portfolio managers select securities from the industry analyst's recommendations
while keeping the Fund's sector weighting consistent with that of the S&P 500
Index. Stock selection is key to the performance of the Fund.

The portfolio managers seek to identify stocks of companies with characteristics
such as:

o above-average annual growth rates
o financial strength
o attractive valuations
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 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 the Fund are stock market risk,
diversification risk and style risk (mid-cap company risk). To the extent that
the portfolio managers invest in foreign securities or debt securities, the Fund
would be subject to foreign exposure risk or interest rate risk and credit risk.

If you would like additional information regarding the Fund's investment
strategies and risks, including a description of the terms in bold type, please
refer to "More on Strategies and Risks" later in this Prospectus.

--------------------------------------------------------------------------------
Fund Background


Because the Fund recently commenced investment operations, performance
information is included in the Fund's Annual Report dated September 30, 2000.


--------------------------------------------------------------------------------
Prior Performance

Prior performance information of GE Asset Management, the Fund's investment
adviser, can be found under "Prior Performance Information" later in this
Prospectus.

--------------------------------------------------------------------------------
<PAGE>
-------------------
24 GE Institutional
   Funds Prospectus
   Equity Funds

--------------------------------------------------------------------------------
Premier International Equity Fund

-------------------
Investment Objective: Long-term growth of capital.

The Strategy

The Premier International Equity Fund invests primarily in a limited number of
equity securities of companies located in developed and developing countries
other than the United States. The portfolio manager focuses on companies that he
expects will grow faster than relevant markets and whose security price does not
fully reflect their potential for growth. Under normal circumstances, the Fund's
assets are invested in foreign securities of companies representing at least
three different countries. 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 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 Fund may
invest in securities of companies located in the United States. 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 the Fund are stock market risk, foreign
exposure risk, style risk (mid-cap company risk and growth investing risk),
diversification risk and emerging markets risk. To the extent that the portfolio
manager invests 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, including a description of the terms in bold type, associated with this
Fund, please refer to "More on Strategies and Risks" later in this Prospectus.

--------------------------------------------------------------------------------
Fund Background


Because the Fund recently commenced investment operations, performance
information is included in the Fund's Annual Report dated September 30, 2000.


--------------------------------------------------------------------------------
Prior Performance

Prior performance information of GE Asset Management, the Fund's investment
adviser, can be found under "Prior Performance Information" later in this
Prospectus.

--------------------------------------------------------------------------------
<PAGE>
                                                        ------------------------
                                                        Income Funds          25


--------------------------------------------------------------------------------

An investment in an Income Fund is not a deposit of any bank and is not insured
or guaranteed by the Federal Deposit Insurance Corporation or any other
government agency. An investment in an Income Fund is subject to risk, including
possible loss of principal invested.

Income funds generally invest in debt securities. Debt securities are bonds and
other securities that are used by issuers to borrow money from investors.
Holders of debt securities have a higher priority claim to assets than do equity
holders. Typically, the debt issuer pays the investor a fixed, variable or
floating rate of interest and must repay the borrowed amount at maturity. Some
debt securities, such as zero coupon bonds, are sold at a discount from their
face values instead of paying interest.

--------------------------------------------------------------------------------
<PAGE>
-------------------
26  GE Institutional
    Funds Prospectus
    Income Fund


--------------------------------------------------------------------------------
Income Fund

-------------------
Investment Objective: Maximum income consistent with prudent investment
management and the preservation of capital.

The Strategy

The Income Fund invests primarily in a variety of investment-grade debt
securities, such as mortgage-backed securities, corporate bonds, U.S. Government
securities, and money market instruments. The Fund normally has a weighted
average maturity of approximately five to ten years.

The portfolio managers seek to identify debt securities with characteristics
such as:

o attractive yields and prices
o the potential for capital appreciation
o reasonable credit quality

The Fund also may invest to a lesser extent in asset-backed securities and
foreign securities. The portfolio managers may use various investment techniques
to adjust the Fund's investment exposure, but there is no guarantee that these
techniques will work.

The Fund's investment strategy may result in a high portfolio turnover rate,
which may cause the Fund to experience increased transaction costs and
shareholders to incur increased taxes on their investment in the Fund.

The Risks

The principal risks of investing in the Fund are interest rate risk, credit risk
and prepayment risk. To the extent that the portfolio managers invest in foreign
securities, the Fund would be subject to foreign exposure risk. Certain
portfolio securities are derivative securities that carry derivative securities
risk.

If you would like additional information regarding the Fund's investment
strategies and risks, including a description of the terms in bold type, please
refer to "More on Strategies and Risks" later in this Prospectus.

--------------------------------------------------------------------------------
<PAGE>
                                                                       ---------
                                                                              27


--------------------------------------------------------------------------------
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 periods 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 -1.11% for the quarter
ended June 30, 1999.


The table opposite illustrates how the Fund's average annual returns for
different calendar periods compare to the returns of the Lehman Brothers
Aggregate Bond Index (LB Aggregate Bond Index). The table reflects the impact of
the Fund's expenses and assumes that you sold your shares at the end of each
period.

--------------------------------------------------------------------------------
Prior Performance Information

Prior performance information of GE Asset Management, the Fund's investment
adviser, can be found under "Prior Performance Information" later in this
Prospectus.

--------------------------------------------------------------------------------
Calendar Year Total Returns
Investment Class Shares*

                                  [BAR CHART]

1998                   8%
1999                  -1%
2000

--------------------------------------------------------------------------------

Average Annual Total Return

(as of December 31, 1999)


                                                       Since
                                        1 Year      Inception**
                                        ------      -----------
Income Fund
 Investment Class                       -1.29%         3.83%

LB Aggregate Bond Index                 -0.83%         4.16%

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 and Class X 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
and Service Class and Class X shares may have other expenses that are higher
than those of Investment Class shares, which would lower their returns.


** Inception date (commencement of operations) of the Fund: November 21, 1997;
LB Aggregate Bond Index returns are not available from the Fund's Inception date
and therefore are calculated from the month end nearest the Fund's Inception
date, which in this case is December 1, 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>
-----------------------------------------------
28 GE Institutional      Asset Allocation Funds
   Funds Prospectus


--------------------------------------------------------------------------------

An investment in an Asset Allocation Fund is not a deposit of any bank and is
not insured or guaranteed by the Federal Deposit Insurance Corporation or any
other agency. An investment in an Asset Allocation Fund is subject to risk,
including possible loss of principal invested.

Asset allocation funds are designed to meet the needs of investors who prefer to
have their asset allocation decisions made by professional money managers. They
provide an investor with a means to diversify by investing in a core portfolio
that typically holds both equity securities and debt securities. Although an
investor may achieve the same level of diversification by buying individual
Equity or Income Funds, an asset allocation fund presents a diversification
alternative within one fund. An investor should not expect capital appreciation
or current income levels comparable to funds for which either capital
appreciation or current income is their sole objective.

--------------------------------------------------------------------------------
<PAGE>
                                                                    ------------
                                                                              29


--------------------------------------------------------------------------------
Strategic Investment Fund The Strategy

--------------------
Investment Objective: Maximum total return.

The Strategy

The Strategic Investment Fund invests primarily in a combination of equity
securities and investment-grade debt securities. The portfolio managers follow
an asset allocation process established by GE Asset Management's Asset
Allocation Committee to diversify holdings across asset classes. The Fund
adjusts its weightings among U.S. equity securities, debt securities and foreign
securities based on the relative attractiveness of the asset classes. The Fund
invests in equity securities principally for their capital appreciation
potential and debt securities principally for their income potential. Within
each asset class, the portfolio managers use active security selection to choose
securities based on the merits of individual issuers.

The portfolio managers seek to identify equity securities of companies with
characteristics such as:

o strong earnings growth
o attractive prices
o a presence in successful industries
o high quality management

The portfolio managers seek to identify debt securities with characteristics
such as:

o attractive yields and prices
o the potential for capital appreciation
o reasonable credit quality

The portion of the Fund invested in debt securities normally has a weighted
average maturity of approximately five to ten years.

The portfolio managers may use various investment techniques to adjust the
Fund's investment exposure, but there is no guarantee that these techniques will
work.

The Fund's asset allocation process may result in a high portfolio turnover
rate, which may cause the Fund to experience increased transaction costs and
shareholders to incur increased taxes on their investment in the Fund.

The Risks

The principal risks of investing in the Fund are stock market risk, foreign
exposure risk, interest rate risk, credit risk and prepayment risk. To the
extent the portfolio manager invests in high yield securities, the Fund would be
subject to high yield securities risk. Certain portfolio securities are
derivative securities that carry derivative securities risk.


If you would like additional information regarding the Fund's investment
strategies and risks, including a description of the terms in bold type, please
refer to "More on Strategies and Risks" later in this Prospectus.


--------------------------------------------------------------------------------
<PAGE>
--------------------
30  GE Institutional
    Funds Prospectus


--------------------------------------------------------------------------------
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 periods presented in the bar chart, the
Fund's highest return for a quarter was ____% for the quarter ended ______ __,
2000. The Fund's lowest return for a quarter was ____% for the quarter ended
______ __, 2000.



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) and the return of the Lehman Brothers
Aggregate Bond Index (LB Aggregate Bond Index). The table reflects the impact of
the Fund's expenses and assumes that you sold your shares at the end of each
period.


--------------------------------------------------------------------------------
Prior Performance Information

Prior performance information of GE Asset Management, the Fund's investment
adviser, can be found under "Prior Performance Information" later in this
Prospectus.

--------------------------------------------------------------------------------
Calendar Year Total Returns
Investment Class Shares*

                                  [BAR CHART]

2000                  __%

--------------------------------------------------------------------------------

Average Annual Total Return

(as of December 31, 1999)


                                                       Since
                                        1 Year      Inception**
                                        ------      -----------

Strategic Investment Fund
  Investment Class                       ____%         ____%

S&P 500 Index                            ____%         ____%

LB Aggregate Bond Index                  ____%         ____%

S&P 500 Index &
LB Aggregate Bond Index+                 ____%         ____%


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 and Class X 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
and Service Class and Class X shares may have other expenses that are higher
than those of Investment Class shares, which would lower their returns.



** Inception date (commencement of operations) of the Fund: October 31, 1999;
S&P 500 Index and LB Aggregate Bond Index returns are not available from the
Fund's Inception date and therefore are calculated from the month end nearest
the Fund's Inception date, which in this case is November 1, 1999.



+ The S&P 500 Index and the LB Aggregate Bond Index simulates a blended return
which is representative of the approximate asset allocation mix of the GE
Strategic Investment Fund for the periods presented (composed of 60% S&P 500
Index, 40% LB Aggregate Bond Index). The actual asset allocation mix of the Fund
may have varied from time to time.


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>
                                               Money                          31
                                               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>
--------------------
32  GE Institutional
    Funds Prospectus
    Money
    Market Funds


--------------------------------------------------------------------------------
Money Market Fund

--------------------
Investment Objective: High level of current income consistent with the
preservation of capital and maintenance of liquidity.

The Strategy

The Money Market Fund invests primarily in short-term, U.S. dollar-denominated
money market instruments. The Fund's investments may include U.S. government
securities, repurchase agreements, commercial paper, variable rate securities,
foreign securities and domestic and foreign bank deposits.

The Fund invests consistent with regulatory standards governing security
quality, maturity and portfolio diversification. For example, the portfolio
manager limits investments to high quality securities with maturities of up to
13 months and limits the average maturity to 90 days. The Fund may invest more
than 25% of its total assets in the banking services industry. Changes in
banking regulations or the economy can have a significant negative impact on the
banking industry.

All of the Fund's assets are rated in the two highest short-term rating
categories (or their unrated equivalents), and 95% of its assets are rated in
the highest rating category (or its unrated equivalent), by a nationally
recognized statistical rating organization. Additional information about the
money market securities in which the Fund may invest, including rating
categories, is contained in the statement of additional information.

The Risk

The principal risks of investing in the Fund are interest rate risk, credit risk
and foreign exposure risk.

An investment in the Fund is not a bank deposit and is not insured or guaranteed
by the Federal Deposit Insurance Corporation (FDIC) or any other government
agency. Although the Fund seeks to maintain a net asset value of $1.00 per
share, it is possible to lose money by investing in the Fund.

The Fund's yield will change due to movements in current short-term interest
rates and market conditions. A change in interest rates or default on the Fund's
investments could cause the Fund's share price to decline below $1.00.

If you would like additional information regarding the Fund's investment
strategies and risks, including a description of the terms in bold type, please
refer to "More on Strategies and Risks" later in this Prospectus.

--------------------------------------------------------------------------------
<PAGE>
                                                                      ----------
                                                                              33


--------------------------------------------------------------------------------
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 periods presented in the bar chart, the
Fund's highest return for a quarter was 1.36% for the quarter ended December 31,
1999. The Fund's lowest return for a quarter was 1.16% for the quarter ended
June 30, 1999. The Fund's seven day yield was 5.65% and the effective seven day
yield was 5.81% as of December 31, 1999. "Effective yield" reflects the
compounding effect of earnings on reinvested dividends.


The table opposite illustrates how the Fund's average annual returns for
different calendar periods compare to the return of the 90 Day Treasury Bill
Rate (90 Day T-Bill). The table reflects the impact of the Fund's expenses. It
assumes that you sold your shares at the end of each period.

--------------------------------------------------------------------------------
Prior Performance Information

Prior performance information of GE Asset Management, the Fund's investment
adviser, can be found under "Prior Performance Information" later in this
Prospectus.

--------------------------------------------------------------------------------
Calendar Year Total Returns
Investment Class Shares*

                                   [BAR CHART]

1998                   5%
1999                   5%
2000

--------------------------------------------------------------------------------

Average Annual Total Return

(as of December 31, 1999)


                                                          Since
                                       1 year           Inception**
                                       ------           -----------
Money Market Fund
  Investment Class                      5.02%              5.22%

90 Day T-Bill                           4.83%              4.88%

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 and Class X 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
and Service Class and Class X shares may have other expenses that are higher
than those of Investment Class shares, which would lower their returns.


** Inception Date (commencement of operations) of the Fund: December 2, 1997; 90
Day T-Bill returns are not available from the Fund's Inception date and
therefore are calculated from the month end nearest the Fund's Inception date,
which in this case is December 1, 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>
-------------------------------------------------------
34  GE Institutional                     Fund Expenses
    Funds Prospectus


--------------------------------------------------------------------------------
Shareholder Fees

The Funds impose no sales charge (load) on purchases or reinvested dividends,
contingent deferred sales charge, redemption fee or exchange fee.

The following table shows what it would cost you 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>
                                                                                    Mid-Cap   Small-Cap
                                            U.S.    S&P 500      Value    Mid-Cap    Value      Value
                                           Equity    Index       Equity    Growth    Equity     Equity
                                            Fund      Fund        Fund      Fund      Fund       Fund
-------------------------------------------------------------------------------------------------------
<S>                                         <C>       <C>       <C>        <C>       <C>        <C>


Management Fees**
   All Classes                             .55%*      .15%      .55%*      .55%*     .65%*      .70%*

-------------------------------------------------------------------------------------------------------

Distribution and Service (12b-1) Fees
   Investment Class & Class X               None      None       None       None      None       None
   Service Class***                         .25%      .25%       .25%       .25%      .25%       .25%

-------------------------------------------------------------------------------------------------------

Other Expenses****
   Investment Class                         .02%      .02%       .02%       .02%      .02%       .02%
    Service Class & Class X                 .17%      .12%       .17%       .17%      .17%       .11%

-------------------------------------------------------------------------------------------------------

Total Annual Fund Operating Expenses
   Investment Class                         .57%      .17%       .57%       .57%      .67%       .72%
   Service Class                            .97%      .52%       .97%       .97%     1.07%      1.06%
   Class X                                  .72%      .27%       .72%       .72%      .82%       .81%

-------------------------------------------------------------------------------------------------------

Waiver and/or Reimbursment
   All Classes                              None      None       None       None      None       None

-------------------------------------------------------------------------------------------------------

Net Annual Fund Operating Expenses
   Investment Class                         .57%      .17%       .57%       .57%      .67%       .72%
   Service Class                            .97%      .52%       .97%       .97%     1.07%      1.06%
   Class X                                  .72%      .27%       .72%       .72%      .82%       .81%

-------------------------------------------------------------------------------------------------------
</TABLE>


      *     The advisory and administration fee shown is the maximum payable by
            the Fund; this fee declines incrementally as the Fund's assets
            increase as described under "About the Investment Adviser."


      **    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 and costs associated with the GE
            Institutional Funds' independent Trustees, shareholder servicing and
            distribution fees, brokerage fees, transfer agent (and sub-transfer
            agent) fees and expenses that are not normal operating expenses of
            the Funds (such as extraordinary expenses, interest and taxes). The
            nature of the services provided to, and the advisory and
            administration fee paid by, each Fund are described in more detail
            under "About the Investment Adviser".


      ***   The .25% shareholder servicing and distribution fee is intended to
            compensate GE Asset Management, or enable GE Asset Management to
            compensate other persons, for expenditures made on behalf of each
            Fund. 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.


      ****  "Other Expenses" include fees beyond those borne by GE Asset
            Management pursuant to each Fund's Advisory and Administration
            Agreement. These expenses which are not included in the management
            fees include only fees and costs associated with the GE
            Institutional Funds' independent Trustees, brokerage fees, transfer
            agent (and sub-transfer agent) fees and expenses that are not normal
            operating expenses of the Funds (such as extraordinary expenses,
            interest and taxes). For Service Class and Class X shares this
            amount may be higher due to higher sub-transfer agent expenses.
            "Other Expenses" for Service Class and Class X shares are based upon
            estimated amounts to be charged in the first year of operations,
            assuming an average shareholder account size of $10,000. Actual
            expenses may be different from that shown above. The Fund does not
            incur sub-transfer agent expenses in excess of the expense
            limitations set forth in the Expense Limitation Agreement with GE
            Asset Management. This Agreement is in place through January 2004.


--------------------------------------------------------------------------------
<PAGE>
                                                                    ------------
                                                                              35


--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                        Premier  Premier      Premier
                                       International  Europe  Emerging   Growth  Research  International           Strategic  Money
                                          Equity      Equity  Markets    Equity   Equity       Equity     Income  Investment  Market
                                           Fund        Fund     Fund      Fund     Fund         Fund       Fund      Fund      Fund
------------------------------------------------------------------------------------------------------------------------------------
<S>                                       <C>         <C>       <C>       <C>      <C>         <C>         <C>       <C>       <C>

Management Fees**
   All Classes                            .75%*       .75%*    1.05%*     .55%*    .55%*        .75%*      .35%*     .45%*     .25%*

------------------------------------------------------------------------------------------------------------------------------------

Distribution and Service (12b-1) Fees
   Investment Class & Class X              None        None      None      None     None         None       None      None      None
   Service Class***                        .25%        .25%      .25%      .25%     .25%         .25%       .25%      .25%      .25%

------------------------------------------------------------------------------------------------------------------------------------

Other Expenses****
   Investment Class                        .02%        .02%      .02%      .02%     .02%         .02%       .02%      .02%      .02%
    Service Class & Class X                .17%        .17%      .17%      .17%     .17%         .17%       .16%      .14%      .02%

------------------------------------------------------------------------------------------------------------------------------------

Total Annual Fund Operating Expenses
   Investment Class                        .77%        .77%     1.07%      .57%     .57%         .77%       .37%      .47%      .27%
   Service Class                          1.17%       1.17%     1.48%      .97%     .97%        1.17%       .76%      .84%      .52%
   Class X                                 .92%        .92%     1.22%      .72%     .72%         .92%       .51%      .59%      .27%

------------------------------------------------------------------------------------------------------------------------------------

Waiver and/or Reimbursment
   All Classes                             None        None      None      None     None         None       None      None      .02%

------------------------------------------------------------------------------------------------------------------------------------

Net Annual Fund Operating Expenses
   Investment Class                        .77%        .77%     1.07%      .57%     .57%         .77%       .37%      .47%      .25%
   Service Class                          1.17%       1.17%     1.47%      .97%     .97%        1.17%       .76%      .84%      .50%
   Class X                                 .92%        .92%     1.22%      .72%     .72%         .92%       .51%      .59%      .25%


------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

--------------------------------------------------------------------------------
<PAGE>
--------------------
36  GE Institutional
    Funds Prospectus
    Fund Expenses


--------------------------------------------------------------------------------
The Impact of Fund Expenses

This example is intended to help you compare the cost of investing in a Fund
with the cost of investing in other mutual funds. Although actual costs may be
higher or lower, you would pay the following expenses on a $10,000 investment,
assuming a 5% annual return and that the Fund's operating expenses remain the
same. This example also assumes the maximum advisory and administration fee
payable by a Fund. This fee for each Fund, except the S&P 500 Index Fund,
declines incrementally as the Fund's assets increase.

--------------------------------------------------------------------------------
Example

                                                     You would pay the following
                                               expenses on a $10,000 investment:

                                            1 Year   3 Years   5 Years  10 Years
--------------------------------------------------------------------------------
U.S. Equity Fund:

         Investment Class                      ___       ___       ___       ___
         Service Class                         ___       ___       ___       ___
         Class X                               $__       $__       $__       $__

--------------------------------------------------------------------------------
S&P 500 Index Fund:

         Investment Class                      ___       ___       ___       ___
         Service Class                         ___       ___       ___       ___
         Class X                               $__       $__       $__       $__

--------------------------------------------------------------------------------
Value Equity Fund:

         Investment Class                      ___       ___       ___       ___
         Service Class                         ___       ___       ___       ___
         Class X                               $__       $__       $__       $__

--------------------------------------------------------------------------------
Mid-Cap Growth Fund:

         Investment Class                      ___       ___       ___       ___
         Service Class                         ___       ___       ___       ___
         Class X                               $__       $__       $__       $__

--------------------------------------------------------------------------------
Mid-Cap Value Equity Fund:

         Investment Class                      ___       ___       ___       ___
         Service Class                         ___       ___       ___       ___
         Class X                               $__       $__       $__       $__

--------------------------------------------------------------------------------
Small-Cap Value Equity Fund:

         Investment Class                      ___       ___       ___       ___
         Service Class                         ___       ___       ___       ___
         Class X                               $__       $__       $__       $__

--------------------------------------------------------------------------------
International Equity Fund:

         Investment Class                      ___       ___       ___       ___
         Service Class                         ___       ___       ___       ___
         Class X                               $__       $__       $__       $__

--------------------------------------------------------------------------------
Europe Equity Fund:

         Investment Class                      ___       ___       ___       ___
         Service Class                         ___       ___       ___       ___
         Class X                               $__       $__       $__       $__

--------------------------------------------------------------------------------
Emerging Markets Fund:

         Investment Class                      ___       ___       ___       ___
         Service Class                         ___       ___       ___       ___
         Class X                               $__       $__       $__       $__

--------------------------------------------------------------------------------
Premier Growth Equity Fund:

         Investment Class                      ___       ___       ___       ___
         Service Class                         ___       ___       ___       ___
         Class X                               $__       $__       $__       $__

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
<PAGE>
                                                                    ------------
                                                                              37


--------------------------------------------------------------------------------
Example

                                                     You would pay the following
                                               expenses on a $10,000 investment:

                                          1 Year    3 Years    5 Years  10 Years
--------------------------------------------------------------------------------
Premier Research Equity Fund:

         Investment Class                      ___       ___       ___       ___
         Service Class                         ___       ___       ___       ___
         Class X                               $__       $__       $__       $__

--------------------------------------------------------------------------------
Premier International Equity Fund:

         Investment Class                      ___       ___       ___       ___
         Service Class                         ___       ___       ___       ___
         Class X                               $__       $__       $__       $__

--------------------------------------------------------------------------------
Income Fund:

         Investment Class                      ___       ___       ___       ___
         Service Class                         ___       ___       ___       ___
         Class X                               $__       $__       $__       $__

--------------------------------------------------------------------------------
Strategic  Investment Fund:

         Investment Class                      ___       ___       ___       ___
         Service Class                         ___       ___       ___       ___
         Class X                               $__       $__       $__       $__

--------------------------------------------------------------------------------
Money Market Fund:

         Investment Class                      ___       ___       ___       ___
         Service Class                         ___       ___       ___       ___
         Class X                               $__       $__       $__       $__

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
<PAGE>
--------------------------------------------------------
38  GE Institutional                          More on
    Funds Prospectus                          Strategies
                                              and Risks

--------------------------------------------------------------------------------
Important Definitions

This section defines important terms that may be unfamiliar to an investor
reading about the Funds:

Asset-backed securities represent a participation in, or are secured by and
payable from, a stream of payments generated by particular assets, such as
credit card receivables or auto loans.

Bank deposits are cash, checks or drafts deposited in a financial institution
for credit to a customer's account. Banks differentiate between demand deposits
(checking accounts on which the customer may draw) and time deposits, which pay
interest and have a specified maturity or require 30 days' notice before
withdrawal.

Cash and cash equivalents are highly liquid and highly rated instruments such as
commercial paper and bank deposits.

Certificates of deposit include short-term debt securities issued by banks.

Commercial paper includes short-term debt securities issued by banks,
corporations and other borrowers.

Corporate bonds are debt securities issued by companies.

Convertible securities may be debt or equity securities that pay interest or
dividends or are sold at a discount and that may be converted on specified terms
into the stock of the issuer.

Debt obligations of supranational agencies are obligations of
multi-jurisdictional agencies that operate across national borders (e.g., the
World Bank).

Debt securities are bonds and other securities that are used by issuers to
borrow money from investors. Holders of debt securities have a higher priority
claim to assets than do equity holders. Typically, the debt issuer pays the
investor a fixed, variable or floating rate of interest and must repay the
borrowed amount at maturity. Some debt securities, such as zero coupon bonds,
are sold at a discount from their face values instead of paying interest.

Depositary receipts represent interests in an account at a bank or trust company
which holds equity securities. These interests may include American Depositary
Receipts (held at U.S. banks and traded in the United States), European
Depositary Receipts, Global Depositary Receipts or other similar instruments.

Derivative securities are securities whose values are based on other securities,
currencies or indices and include options (on stocks, indices, currencies,
futures contracts or bonds), forward currency exchange contracts, futures
contracts, swaps, interest-only and principal-only debt securities, certain
mortgage-backed securities like collateralized mortgage obligations (CMOs), and
structured securities.

Duration represents a mathematical calculation of the average life of a bond (or
portfolio of bonds) based on cash flows that serves as a useful measure of the
security's sensitivity to changes in interest rates. Each year of duration
approximates an expected one percent change in the bond's price for every one
percent change in the interest rate.

Equity securities may include common stocks, preferred securities, depositary
receipts, convertible securities, and rights and warrants of U.S. and foreign
companies. Stocks represent an ownership interest in a corporation.

Eurodollar deposits are deposits issued in U.S. dollars by foreign banks and
foreign branches of U.S. banks.

Floating and variable rate instruments are securities with floating or variable
rates of interest or dividend payments.

Foreign debt securities are issued by foreign corporations or governments. They
may include the following:

o Eurodollar Bonds, which are dollar-denominated securities issued outside the
U.S. by foreign corporations and financial institutions or by foreign branches
of U.S. corporations and financial institutions.
o Yankee Bonds, which are dollar-denominated securities issued by foreign
issuers in the U.S.
o Securities denominated in currencies other than U.S. dollars.

--------------------------------------------------------------------------------
<PAGE>
                                                                    ------------
                                                                              39


--------------------------------------------------------------------------------

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 (i) is
organized, (ii) derives at least 50% of its revenues or profits from goods
produced or sold, investments made or services performed, (iii) has at least 50%
of its assets situated or (iv) has the principal trading market for its
securities. Foreign securities may be denominated in non-U.S. currencies and
traded outside the United States or may be in the form of depositary receipts.

Forward currency transactions involve agreements to exchange one currency for
another at a future date.

Futures are agreements to buy or sell a specific amount of a commodity,
financial instrument or index at a particular price and future date. Options on
Futures give the purchaser the right, in return for the premium paid, to assume
a position in a futures contract at a specified exercise price at any time prior
to the expiration date of the option.

Growth investing involves buying stocks with above-average growth rates.
Typically, growth stocks are the stocks of faster growing companies in more
rapidly growing sectors of the economy. Generally, growth stock valuation levels
will be higher than those of value stocks and the market averages.

High yield securities are debt securities of corporations, preferred stock and
convertible bonds and convertible preferred stock rated Ba through C by Moody's
or BB through D by S&P (or comparably rated by another nationally recognized
statistical rating organization) or, if not rated, are considered by portfolio
management to be of equivalent quality. High yield securities include bonds
rated below investment grade, sometimes called "junk bonds," and are considered
speculative by the major credit rating agencies.

Investment grade securities are rated Baa or better by Moody's and BBB or better
by S&P (or comparably rated by another nationally recognized statistical rating
organization), or, if not rated, are of similar quality to such securities.
Securities rated in the fourth highest grade have some speculative elements.

Maturity represents the date on which a debt security matures or when the issuer
must pay back the principal amount of the security.

Money market securities are short-term debt securities of the U.S. government,
banks and corporations. Certain Funds may invest in money market securities
through investments in the GEI Short-Term Investment Fund (Investment Fund). The
Investment Fund is advised by GE Asset Management, which charges no advisory fee
for such services.

Mortgage-backed securities include securities issued by the Government National
Mortgage Association (Ginnie Mae), the Federal National Mortgage Association
(Fannie Mae), the Federal Home Loan Mortgage Corporation (Freddie Mac) and other
government agencies and private issuers. They may also include collateralized
mortgage obligations which are derivative securities that are fully
collateralized by a portfolio of mortgages. Government stripped mortgage-related
securities are mortgage-backed securities that have been stripped into their
interest and principal components. They represent interests in distributions of
interest on or principal underlying mortgage-backed certificates. Mortgage
dollar rolls are transactions involving the sale of a mortgage-backed security
with a simultaneous contract (with the purchaser) to buy similar, but not
identical, securities at a future date.

Municipal obligations are debt obligations issued by or on behalf of states,
territories and possessions of the United States and the District of Columbia
and their political subdivisions, agencies and instrumentalities, or multi-state
agencies or authorities. They include: (i) municipal leases, which pay interest
that is exempt from federal, and in certain cases, state, income tax; (ii)
participation interests in municipal obligations, which are proportionate,
undivided interests in municipal obligations; (iii) municipal obligation
components,

--------------------------------------------------------------------------------
<PAGE>
--------------------
40  GE Institutional
    Funds Prospectus
    More on Strategies
    and Risks


--------------------------------------------------------------------------------

which are municipal obligations that have been divided into two components (one
component pays interest at a rate adjusted periodically through an auction
process, the second pays the residual rate after the auction rate is deducted
from total interest payable); and (iv) custodial receipts on muni- cipal
obligations, which evidence ownership of future interest payments, principal
payments, or both, on certain municipal obligations.

Preferred securities are classes of stock that pay dividends at a specified
rate. Dividends are paid on preferred stocks before they are paid on common
stocks. In addition, preferred stockholders have priority over common
stockholders as to the proceeds from the liquidation of a company's assets.

Purchasing and writing options are permitted investment strategies for certain
Funds. An option is the right to buy (i.e., a "call") or sell (i.e., a "put")
securities or other interests for a predetermined price on or before a fixed
date. An option on a securities index represents the option holder's right to
obtain from the seller, in cash, a fixed multiple of the amount by which the
exercise price exceeds (in the case of a call) or is less than (in the case of a
put) the closing value of the securities index on the exercise date. An option
on a foreign currency represents the right to buy or sell a particular amount of
that currency for a predetermined price on or before a fixed date.

Repurchase agreements (repos) are used to invest cash on a short-term basis. A
seller (bank or broker-dealer) sells securities, usually government securities,
to the Fund, agreeing to buy them back at a designated price and time -- usually
the next day.

Restricted securities (which include Rule 144A Securities) may have contractual
restrictions on resale, or cannot be resold publicly until registered. Illiquid
Securities may be difficult or impossible to sell when a Fund wants to sell them
at a price at which the Fund values them. Certain restricted securities may be
illiquid. Rule 144A Securities are restricted securities that may be sold to
certain institutional purchasers under Rule 144A.

Reverse repurchase agreements involve selling securities held and concurrently
agreeing to repurchase the same securities at a specified price and future date.

Rights represent a preemptive right of stockholders to purchase additional
shares of a stock at the time of a new issuance, before the stock is offered to
the general public, allowing the stock-holder to retain the same ownership
percentage after the new stock offering.

Short sales against the box involve selling short securities actually owned or
otherwise covered at all times during the period the short position is open.

Structured and indexed securities are securities whose principal and/or interest
rate is determined by reference to changes in the value of one or more specific
currencies, interest rates, commodities, indices or other financial indicators.

U.S. Government securities are issued or guaranteed as to principal or interest
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.

Value investing involves buying stocks that are out of favor and/or undervalued
in comparison to their peers and/or their prospects for growth. Generally, value
stock valuation levels are lower than those of growth stocks.

Variable Rate Securities carry interest rates that may be adjusted periodically
to market rates. Interest rate adjustments could increase or decrease the income
generated by the securities.

Various investment techniques are utilized by a Fund to increase or decrease its
exposure to changing security prices, interest rates, currency exchange rates,
commodity prices or other factors that affect security values.

--------------------------------------------------------------------------------
<PAGE>
                                                                    ------------
                                                                              41


--------------------------------------------------------------------------------

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. No Fund is under any obligation to use any of these techniques at any
given time or under any particular economic condition. To the extent that a Fund
employs these techniques, the Fund would be subject to derivative securities
risk.

Weighted average maturity represents the length of time in days or years until
the average security in a money market or bond fund will mature or be redeemed
by its issuer. The average maturity is weighted according to the dollar amounts
invested in the various securities in the fund. This measure indicates a fund's
sensitivity to changes in interest rates. In general, the longer a fund's
average weighted maturity, the more its share price will fluctuate in response
to changing interest rates.

Warrants are securities that are usually issued together with a bond or
preferred stock, that permit the holder to buy a proportionate amount of common
stock at a specified price that is usually higher than the stock price at the
time of issue.

When-issued and delayed delivery Securities are securities that are purchased or
sold for delivery and payment at a future date, i.e., beyond normal settlement
date.

Zero coupon obligations pay no interest to their holders prior to maturity.
Instead, interest is paid in a lump sum at maturity. They are purchased at a
discount from par value, and generally are more volatile than other fixed income
securities.

--------------------------------------------------------------------------------
More on Investment Strategies

In addition to each Fund's principal investment strategies described earlier in
this Prospectus, a Fund is permitted to use other securities and investment
strategies in pursuit of its investment objective. No Fund is under any
obligation to use any of these techniques or strategies at any given time or
under any particular economic condition. Certain instruments and investment
strategies may expose the Funds to other risks and considerations, which are
discussed later in this Prospectus or in the Funds' Statement of Additional
Information (SAI).

Holding Cash and Temporary Defensive Positions: Under normal circumstances, each
Fund may hold cash and/or money market securities (i) pending investment, (ii)
for cash management purposes, and (iii) to meet operating expenses. A Fund
(other than the S&P 500 Index Fund) may from time to time take temporary
defensive positions when the portfolio manager believes that adverse market,
economic, political or other conditions exist. In these circumstances, the
portfolio manager may (i) without limit hold cash and/or invest in money market
instruments, or (ii) restrict the securities markets in which a Fund's assets
are invested by investing those assets in securi-ties 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 Asset Management, which
charges no advisory fee to the Investment Fund. To the extent that a Fund, other
than the Money Market Fund, holds cash or invests in money market instruments,
it may not achieve its investment objective.

The following tables summarize some of the investment techniques that may be
employed by a Fund. Certain techniques and limitations may be changed at the
discretion of GE Asset Management. Percentage figures refer to the percentage of
a Fund's assets that may be invested in accordance with the indicated technique.

--------------------------------------------------------------------------------
<PAGE>
--------------------
42  GE Institutional
    Funds Prospectus
    More on Strategies
    and Risks


<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------------------
                                                                                                      Purchasing   Purchasing
                                                              Reverse      Restricted    Structured   and Writing  and Writing
                                                 Repurchase   Repurchase   and Illiquid  and Indexed  Securities   Securities
                                  Borrowing      Agreements   Agreements   Securities    Securities   Options      Index Options
--------------------------------------------------------------------------------------------------------------------------------
<S>                                <C>              <C>          <C>           <C>          <C>          <C>           <C>
U.S. Equity Fund                   33 1/3%          Yes          Yes           Yes           No          Yes           Yes
--------------------------------------------------------------------------------------------------------------------------------
S&P 500 Index Fund                 33 1/3%          Yes          Yes           Yes           No          Yes           Yes
--------------------------------------------------------------------------------------------------------------------------------
Value Equity Fund                  33 1/3%          Yes          Yes           Yes           No          Yes           Yes
--------------------------------------------------------------------------------------------------------------------------------
Mid-Cap Growth Fund                33 1/3%          Yes          Yes           Yes           No          Yes           Yes
--------------------------------------------------------------------------------------------------------------------------------
Mid-Cap Value Equity Fund          33 1/3%          Yes          Yes           Yes          Yes          Yes           Yes
--------------------------------------------------------------------------------------------------------------------------------
Small-Cap Value Equity Fund        33 1/3%          Yes          Yes           Yes           No          Yes           Yes
--------------------------------------------------------------------------------------------------------------------------------
International Equity Fund          33 1/3%          Yes          Yes           Yes           No          Yes           Yes
--------------------------------------------------------------------------------------------------------------------------------
Europe Equity Fund                 33 1/3%          Yes          Yes           Yes          Yes          Yes           Yes
--------------------------------------------------------------------------------------------------------------------------------
Emerging Markets Fund              33 1/3%          Yes          Yes           Yes           No          Yes           Yes
--------------------------------------------------------------------------------------------------------------------------------
Premier Growth Equity Fund         33 1/3%          Yes          Yes           Yes           No          Yes           Yes
--------------------------------------------------------------------------------------------------------------------------------
Premier Research Equity Fund       33 1/3%          Yes          Yes           Yes           No          Yes           Yes
--------------------------------------------------------------------------------------------------------------------------------
Premier International Equity Fund  33 1/3%          Yes          Yes           Yes           No          Yes           Yes
--------------------------------------------------------------------------------------------------------------------------------
Income Fund                        33 1/3%          Yes          Yes           Yes          Yes          Yes           Yes
--------------------------------------------------------------------------------------------------------------------------------
Strategic Investment Fund          33 1/3%          Yes          Yes           Yes          Yes          Yes           Yes
--------------------------------------------------------------------------------------------------------------------------------
Money Market Fund                  33 1/3%          Yes          Yes            No           No           No            No
--------------------------------------------------------------------------------------------------------------------------------
</TABLE>

-------------------------------------------------------------------------------
<PAGE>
                                                                    ------------
                                                                              43


<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------
                                                                                     Maximum
                                 Futures and     Forward         Options             Investment
                                 Options on      Currency        on Foreign          in Debt
                                 Futures         Transactions    Currencies          Securities
----------------------------------------------------------------------------------------------------
<S>                                  <C>             <C>             <C>        <C>
U.S. Equity Fund                     Yes             Yes             Yes                         35%
----------------------------------------------------------------------------------------------------
S&P 500 Index Fund                   Yes             Yes             Yes                         35%
----------------------------------------------------------------------------------------------------
Value Equity Fund                    Yes             Yes             Yes                         35%
----------------------------------------------------------------------------------------------------
Mid-Cap Growth Fund                  Yes             Yes             Yes             35% (maximum of
                                                                                  25% in BBB by S&P,
                                                                                   Baa by Moody's or
                                                                                         equivalent)
----------------------------------------------------------------------------------------------------
Mid-Cap Value Equity Fund            Yes             Yes             Yes                         35%




----------------------------------------------------------------------------------------------------
Small-Cap Value Equity Fund           No              No              No                         35%
----------------------------------------------------------------------------------------------------
International Equity Fund            Yes             Yes             Yes                         35%
----------------------------------------------------------------------------------------------------
Europe Equity Fund                   Yes             Yes             Yes                         35%
----------------------------------------------------------------------------------------------------
Emerging Markets Fund                Yes             Yes             Yes             35% (maximum of
                                                                                  25% in BBB by S&P,
                                                                                   Baa by Moody's or
                                                                                         equivalent)
----------------------------------------------------------------------------------------------------
Premier Growth Equity Fund           Yes             Yes              No                         35%
----------------------------------------------------------------------------------------------------
Premier Reseach Equity Fund          Yes             Yes              No                         35%
----------------------------------------------------------------------------------------------------
Premier International Equity Fund    Yes             Yes             Yes                         35%
----------------------------------------------------------------------------------------------------
Income Fund                          Yes             Yes             Yes            100% (maximum of
                                                                                   25% in BBB by S&P
                                                                                or Baa by Moody's or
                                                                                         equivalent)
----------------------------------------------------------------------------------------------------
Strategic Investment Fund            Yes             Yes             Yes            100% (maximum of
                                                                                   25% in BBB by S&P
                                                                                or Baa by Moody's or
                                                                                         equivalent)
----------------------------------------------------------------------------------------------------
Money Market Fund                     No              No              No                        100%
----------------------------------------------------------------------------------------------------

<CAPTION>
-----------------------------------------------------------------------------------------
                                        Maximum
                                        Investment in          Maximum        When-Issued
                                        Below-Investment       Investment     and Delayed
                                        Grade Debt             in Foreign     Delivery
                                        Securities             Securities     Securities
-----------------------------------------------------------------------------------------
<S>                                 <C>                            <C>            <C>
U.S. Equity Fund                                       5%          15%*           Yes
-----------------------------------------------------------------------------------------
S&P 500 Index Fund                                     5%          35%*           Yes
-----------------------------------------------------------------------------------------
Value Equity Fund                                      5%          25%*           Yes
-----------------------------------------------------------------------------------------
Mid-Cap Growth Fund                     10% in BB or B by          35%*           Yes
                                        S&P or Ba or B by
                                    Moody's or equivalent
-----------------------------------------------------------------------------------------
Mid-Cap Value Equity Fund               15% in securities          15%*           Yes
                                       rated BBB or below
                                         by S&P or Baa or
                                      below by Moody's or
                                               equivalent
-----------------------------------------------------------------------------------------
Small-Cap Value Equity Fund                           10%          10%*           Yes
-----------------------------------------------------------------------------------------
International Equity Fund                              5%          100%           Yes
-----------------------------------------------------------------------------------------
Europe Equity Fund                                    15%          100%           Yes
-----------------------------------------------------------------------------------------
Emerging Markets Fund                   10% in BB or B by          100%           Yes
                                        S&P or Ba or B by
                                    Moody's or equivalent
-----------------------------------------------------------------------------------------
Premier Growth Equity Fund                             5%          25%*           Yes
-----------------------------------------------------------------------------------------
Premier Reseach Equity Fund                            5%          25%*           Yes
-----------------------------------------------------------------------------------------
Premier International Equity Fund                      5%          100%           Yes
-----------------------------------------------------------------------------------------
Income Fund                             10% in BB or B by
                                        S&P or Ba or B by          35%*           Yes
                                    Moody's or equivalent
-----------------------------------------------------------------------------------------
Strategic Investment Fund               10% in BB or B by          30%*           Yes
                                        S&P or Ba or B by
                                    Moody's or equivalent
-----------------------------------------------------------------------------------------
Money Market Fund                                    None          25%*           Yes
-----------------------------------------------------------------------------------------
</TABLE>

* This limitation excludes ADRs, and securities of a foreign issuer with a class
of securities reqistered with the Securities and Exchange Commission and listed
on a U.S. national securities exchange or traded on the Nasdaq National Market
or the Nasdaq Small-Cap Market.

--------------------------------------------------------------------------------
<PAGE>
----------------------
44  GE Institutional
    Funds Prospectus
    More on Strategies
    and Risks
--------------------------------------------------------------------------------


<TABLE>
<CAPTION>
                                                     Debt                       Securities               Floating and  Participation
                             Lending                 Obligations of             of Other                 Variable      Interests in
                             Portfolio   Rule 144A   Supranational  Depositary  Investment    Municipal  Rate          Municipal
                             Securities  Securities  Agencies       Receipts    Funds         Leases     Instruments   Obligations
------------------------------------------------------------------------------------------------------------------------------------
<S>                             <C>          <C>         <C>           <C>          <C>          <C>         <C>            <C>
U.S. Equity Fund                Yes          Yes         Yes           Yes           No           No         No*             No
------------------------------------------------------------------------------------------------------------------------------------
S&P 500 Index Fund              Yes          Yes         Yes           Yes          Yes           No         No*             No
------------------------------------------------------------------------------------------------------------------------------------
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
------------------------------------------------------------------------------------------------------------------------------------
Premier Growth Equity Fund      Yes          Yes         Yes           Yes          Yes           No         No*             No
------------------------------------------------------------------------------------------------------------------------------------
Premier Research Equity Fund    Yes          Yes         Yes           Yes          Yes           No         No*             No
------------------------------------------------------------------------------------------------------------------------------------
Premier International
  Equity 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>

* This limitation excludes commercial paper and notes with variable and floating
rates of interest.

--------------------------------------------------------------------------------
<PAGE>
                                                                    ------------
                                                                              45


<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
                                                                       Mortgage     Government
                                                        Custodial      Related      Stripped    Asset Backed                 Short
                              Zero         Municipal    Receipts on    Securities,  Mortgage    Securities and     Mortgage  Sales
                              Coupon       Obligations  Municipal      including    Related     Receivable-Backed  Dollar    Against
                              Obligations  Components   Obligations    CMOs         Securities  Securities         Rolls     the Box
------------------------------------------------------------------------------------------------------------------------------------
<S>                               <C>          <C>          <C>           <C>          <C>             <C>           <C>       <C>
U.S. Equity Fund                  Yes           No           No            No           No              No            No        No
------------------------------------------------------------------------------------------------------------------------------------
S&P 500 Index Fund                 No           No           No            No           No              No            No        No
------------------------------------------------------------------------------------------------------------------------------------
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
------------------------------------------------------------------------------------------------------------------------------------
Premier Growth Equity Fund         No           No           No            No           No              No            No        No
------------------------------------------------------------------------------------------------------------------------------------
Premier Research Equity Fund       No           No           No            No           No              No            No        No
------------------------------------------------------------------------------------------------------------------------------------
Premier International
  Equity 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
    Funds Prospectus
    More on Strategies
    and Risks


--------------------------------------------------------------------------------
More on Risks

Like all mutual funds, investing in the GE Institutional Funds involves risk
factors and special considerations. A Fund's risk is defined primarily by its
principal investment strategies, which are described earlier in this Prospectus.
Investments in a Fund are not insured against loss of principal. As with any
mutual fund, there can be no assurance that a Fund will achieve its investment
objective. Investing in shares of a Fund should not be considered a complete
investment program. The share value of the Equity Funds, the Income Fund and the
Asset Allocation Fund will rise and fall. Although the Money Market Fund seeks
to preserve the value of your investment at $1.00 per share, it is possible to
lose money by investing in the Fund.

One of your most important investment considerations should be balancing risk
and return. Different types of investments tend to respond differently to shifts
in the economic and financial environment. So, diversifying your investments
among different asset classes -- such as stocks, bonds and cash -- and within an
asset class -- such as small-cap and large-cap stocks -- can help you manage
risk and achieve the results you need to comfortably reach your financial goals.

The primary risks of particular investments are summarized below. For more
information about the risks associated with the Funds, please see the SAI, which
is incorporated by reference into this Prospectus.

Credit Risk: The price of a bond is affected by the issuer's or counterparty's
credit quality. Changes in financial condition and general economic conditions
can affect the ability to honor financial obligations and therefore lower credit
quality. Lower quality bonds are generally more sensitive to these changes than
higher quality bonds. Even within securities considered investment grade,
differences exist in credit quality and some investment grade debt securities
may have speculative characteristics. A security's price may be adversely
affected by the market's opinion of the security's credit quality level even if
the issuer or counterparty has suffered no degradation in ability to honor the
obligation.

Derivative Securities Risk: A Fund's use of various investment techniques to
increase or decrease its exposure to changing security prices, interest rates,
currency exchange rates, commodity prices, or other factors that affect security
values may involve derivative securities and contracts. Derivative securities
and contracts (securities and contracts whose values are based on other
securities, currencies or indices) include option contracts (on stocks, indices,
currencies, futures contracts or bonds), forward currency exchange contracts,
futures contracts, currency and interest rate swap contracts and structured
securities. Derivative securities and contracts may be used as a direct
investment or as a hedge for a Fund's portfolio or a portion of a portfolio.
Hedging involves using a security or contract to offset investment risk. Hedging
may include reducing the risk of a position held in a portfolio. Hedging and
other investment techniques also may be used to increase a Fund's exposure to a
particular investment strategy. If the portfolio manager's judgment of market
conditions proves incorrect or the strategy does not correlate well with a
Fund's investments, the use of derivatives could result in a loss regardless of
whether the intent was to reduce risk or increase return and may increase a
Fund's volatility. In addition, in the event that non-exchange traded
derivatives are used, these derivatives could result in a loss if the
counterparty to the transaction does not perform as promised. A Fund is not
obligated to pursue any hedging strategy. In addition, hedging techniques may
not be available, may be too costly to be used effectivily or may be unable to
be used for other reasons. These investments may be considered speculative.

Diversification Risk: The Premier Funds may invest in securities of a limited
number of issuers to achieve a potentially greater investment return than a Fund
that invests in a larger number of issuers. As a result, price movements of a
single issuer's securities will have a greater impact on such Fund's net asset
value causing it to fluctuate more than that of a more widely diversified fund.

Emerging Markets Risk: Emerging market securities bear most foreign exposure
risks discussed below. In addition, there are greater risks involved in
investing in emerging markets than in developed foreign markets. Specifically,

--------------------------------------------------------------------------------
<PAGE>
                                                                    ------------
                                                                              47


--------------------------------------------------------------------------------

the economic structures in emerging market countries are less diverse and mature
than those in developed countries, and their political systems are less stable.
Investments in emerging market countries may be affected by national policies
that restrict foreign investment. Emerging market countries may have less
developed legal structures, and the small size of their securities markets and
low trading volumes can make investments illiquid and more volatile than
investments in developed countries. As a result, a Fund investing in emerging
market countries may be required to establish special custody or other
arrangements before investing.

Foreign Exposure Risk: Investing in foreign securities, including depositary
receipts, or securities of U.S. entities with significant foreign operations,
involves additional risks which can affect a Fund's performance. Foreign
markets, particularly emerging markets, may be less liquid, more volatile and
subject to less government supervision than U.S. markets. There may be
difficulties enforcing contractual obligations, and it may take more time for
transactions to clear and settle in foreign countries than in the U.S. Less
information may be available about foreign issuers. The costs of buying and
selling foreign securities, including tax, brokerage and custody costs,
generally are higher than those involving domestic transactions. The specific
risks of investing in foreign securities include:

o Currency Risk: The values of foreign investments may be affected by changes in
currency rates or exchange control regulations. If the local currency gains
strength against the U.S. dollar, the value of the foreign security increases in
U.S. dollar terms. Conversely, if the local currency weakens against the U.S.
dollar, the value of the foreign security declines in U.S. dollar terms. U.S.
dollar-denominated securities of foreign issuers, including depositary receipts,
also are subject to currency risk based on their related investments.

o Political/Economic Risk: Changes in economic, tax or foreign investment
policies, government stability, war or other political or economic actions may
have an adverse effect on a Fund's foreign investments.

o Regulatory Risk: Foreign companies often are not subject to uniform
accounting, auditing and financial reporting standards or to other regulatory
practices and requirements common to U.S. companies.

High Yield Securities Risk: Below investment-grade securities, sometimes called
"junk bonds," are considered speculative. These securities have greater risk of
default than higher rated securities. The market value of below investment-grade
securities is more sensitive to individual corporate developments and economic
changes than higher rated securities. The market for below investment-grade
securities may be less active than for higher rated securities, which can
adversely affect the price at which these securities may be sold. Less active
markets may diminish a Fund's ability to obtain accurate market quotations when
valuing the portfolio securities and calculating a Fund's net asset value. In
addition, a Fund may incur additional expenses if a holding defaults and a Fund
has to seek recovery of its principal investment.

Below investment-grade securities may also present risks based on payment
expectations. For example, these securities may contain redemption or call
provisions. If an issuer exercises these provisions in a declining interest rate
market the Fund would have to replace the security with a lower yielding
security resulting in a decreased return for investors.

Illiquid Securities Risk: Illiquid securities may be difficult to resell at
approximately the price they were valued in the ordinary course of business in
seven days or less. When investments cannot be sold readily at the desired time
or price, a Fund may have to accept a lower price or may not be able to sell the
security at all, or forego other investment opportunities, all of which may have
an impact on the Fund.

Interest Rate Risk: Bond prices generally rise when interest rates decline and
decline when interest rates rise. The longer the duration of a bond, the more a
change in interest rates affects the bond's price. Short-term and long-term
interest rates may not move the same amount and may not move in the same
direction.

--------------------------------------------------------------------------------
<PAGE>
----------------------
48  GE Institutional
    Funds Prospectus
    More on Strategies
    and Risks


--------------------------------------------------------------------------------

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 (including Rule 144A
securities) may be subject to legal restraints on resale and, therefore, are
typically less liquid than other securities. The prices received from reselling
restricted securities in privately negotiated transactions may be less than
those originally paid by a Fund. Companies whose securities are restricted are
not subject to the same investor protection requirements as publicly traded
securities.

Stock Market Risk: Stock market risk is the risk that the value of equity
securities may decline. Stock prices change daily in response to company
activity and general economic and market conditions. Stock prices may decline in
value, even during periods when equity securities in general are rising, or may
not perform as well as the market in general. Additional stock market risks may
be introduced when a particular equity security is traded on a foreign market.
For more detail on the related risks involved in foreign markets, see Foreign
Exposure Risk.

Style Risk: Securities with different characteristics tend to shift in and out
of favor depending upon market and economic conditions as well as investor
sentiment. A Fund may underperform other funds that employ a different style. A
Fund also may employ a combination of styles that impact its risk
characteristics. Examples of different styles include growth and value
investing, as well as those focusing on large, medium, or small company
securities.

o Growth Investing Risk: Growth stocks may be more volatile than other stocks
because they are more sensitive to investor perceptions of the issuing company's
growth potential. Growth oriented funds will typically underperform when value
investing is in favor.

o Value Investing Risk: Undervalued stocks may not realize their perceived value
for extended periods of time or may never realize their perceived value. Value
stocks may respond differently to market and other developments than other types
of stocks. Value oriented funds will typically underperform when growth
investing is in favor.

o Mid-Cap Company Risk: Investments in securities of mid-cap companies entail
greater risks than investments in larger, more established companies. Mid-cap
companies tend to have more narrow product lines, more limited financial
resources and a more limited trading market for their stocks, as compared with
larger companies. As a result, their stock prices may decline significantly as
market conditions change.

o Small-Cap Company Risk: Investing in securities of small-cap companies may
involve greater risks than investing in larger, more established issuers.
Smaller companies may have limited product lines, markets or financial
resources. Their securities may trade less frequently and in more limited volume
than the securities of larger, more established companies. In addition, smaller
companies are typically subject to greater changes in earnings and business

--------------------------------------------------------------------------------
<PAGE>
                                                                    ------------
                                                                              49


--------------------------------------------------------------------------------

prospects than are larger companies. Consequently, the prices of small company
stocks tend to rise and fall in value more than other stocks. Although investing
in small-cap companies offers potential for above-average returns, the companies
may not succeed and their stock prices could decline significantly.

Other Risk Considerations

Institutional Investor Risk: Investors may be materially affected by the actions
of other large institutional investors. For example, if a large institutional
investor withdraws an investment in a Fund, the Fund could diminish in size by a
substantial amount causing the remaining investors to experience higher pro rata
operating expenses, resulting in lower returns for such investors. The purchase
or withdrawal by a large investor may result in significant portfolio trading
expenses that are borne by other shareholders.

EURO Conversion: The introduction of the EURO, a new common currency in Europe,
may result in uncertainties for European companies and markets. Individual
issuers may suffer increased costs and decreased earnings. Market disruptions
may occur that could adversely affect the value of European securities and
currencies.

--------------------------------------------------------------------------------
<PAGE>

-------------------------------------------------------
50  GE Institutional                         About the
    Funds Prospectus                         Investment
                                             Adviser


--------------------------------------------------------------------------------
Investment Adviser and Administrator


GE Asset Management Incorporated, located at 3003 Summer Street, P.O. Box 7900,
Stamford, Connecticut 06904, is the investment adviser and administrator of each
Fund. GE Asset Management is a wholly-owned subsidiary of General Electric
Company (GE) and a registered investment adviser. As of December 31, 2000, GE's
investment advisory firms oversaw $____ billion and managed individual and
institutional assets of $____ billion, of which more than $____ billion was
invested in mutual funds.


For many years, GE's tradition of ingenuity and customer focus has included
financial services. In the late 1920s, through a desire to promote the financial
well-being of its employees, GE began managing assets for its employee pension
plan. By the mid-1930s, GE pioneered some of the nation's earliest mutual funds,
the Elfun Funds -- to be followed years later by the GE Savings and Security
Program Funds. The success of these funds spurred growth; eventually GE expanded
its mutual fund offerings to include a wide variety of investment products
called the GE Family of Funds, created specifically for the general public.

GE Asset Management bases its investment philosophy on two enduring principles.
First, GE Asset 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 Asset 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 Asset Management a combined fee for advisory and
administrative services that is accrued daily and paid monthly. The advisory and
administration fee for each Fund, except the S&P 500 Index Fund, declines
incrementally as Fund assets increase. This means that investors pay a reduced
fee with respect to Fund assets over a certain level, or "breakpoint." The
advisory and administration fee or fees for each Fund, and the relevant
breakpoints, are stated in the schedule opposite (fees are expressed as an
annual rate) up to the maximum annual fee for investment management services.


For their services, GE Asset Management pays (out of the advisory fee that it
receives) SSGA and Palisade monthly compensation in the form of an investment
sub-advisory fee. The fee is paid by GE Asset Management monthly and is based
upon the average daily net assets of the Fund that each sub-adviser manages.


Investment Management and Administration Fees:

Each Fund pays GE Asset Management an investment management fee. The fee is
accrued daily and paid monthly at the following rates:

                                                                     Annual Rate
Name of Fund                      Average Daily Net Assets of Fund   Percentage
--------------------------------------------------------------------------------
U.S. Equity Fund                         First $25 million              0.55%
Value Equity Fund                        Next $25 million               0.45%
Mid-Cap Growth Fund                      Over $50 million               0.35%
Premier Growth Equity Fund
Premier Research Equity Fund
--------------------------------------------------------------------------------
S&P 500 Index Fund                       All Assets                     0.15%
--------------------------------------------------------------------------------
Mid-Cap Value Equity Fund                First $25 million              0.65%
                                         Next $25 million               0.60%
                                         Over $50 million               0.55%
--------------------------------------------------------------------------------
Small-Cap Value Equity Fund              First $25 million              0.70%
                                         Next $25 million               0.65%
                                         Over $50 million               0.60%
--------------------------------------------------------------------------------
International Equity Fund                First $25 million              0.75%
Europe Equity Fund                       Next $50 million               0.65%
Premier International Equity Fund        Over $75 million               0.55%
--------------------------------------------------------------------------------
Emerging Markets Fund                    First $50 million              1.05%
                                         Over $50 million               0.95%
--------------------------------------------------------------------------------
Income Fund                              First $25 million              0.35%
                                         Next $25 million               0.30%
                                         Next $50 million               0.25%
                                         Over $100 million              0.20%
--------------------------------------------------------------------------------
Strategic Investment Fund                First $25 million              0.45%
                                         Next $25 million               0.40%
                                         Over $50 million               0.35%
--------------------------------------------------------------------------------
Money Market Fund                        First $25 million              0.25%
                                         Next $25 million               0.20%
                                         Next $50 million               0.15%
                                         Over $100 million              0.10%
--------------------------------------------------------------------------------

From time to time, GE Asset Management may waive or reimburse advisory or
administrative fees paid by a Fund.

--------------------------------------------------------------------------------
<PAGE>
                                                                    ------------
                                                                              51


--------------------------------------------------------------------------------
About the Funds' Portfolio Managers

Eugene K. Bolton is a Director and Executive Vice President of GE Asset
Management. He manages the overall U.S. equity investments for GE Asset
Management. He leads a team of portfolio managers for the U.S. Equity Fund. He
has served in this capacity since the Fund's commencement. Mr. Bolton joined GE
Asset Management in 1984 as Chief Financial Officer and has been a portfolio
manager since 1986.

Christopher D. Brown is a Senior Vice President of GE Asset Management and a
co-portfolio manager of GE Premier Research Equity Fund. He has served in that
capacity since the Fund's commencement. Mr. Brown joined GE Asset Management in
1985 as a Vice President and U.S. Equity Analyst and has been a portfolio
manager since 1992.

David B. Carlson is a Senior Vice President of GE Asset Management. He is
portfolio manager for the Premier Growth Equity Fund and manages equity
investments for the Strategic Investment Fund. He has served in those capacities
since each Fund's commencement. Mr. Carlson joined GE Asset Management in 1982
as a Securities Analyst for Investment Operations. He became a Vice President
for Mutual Fund Portfolios in 1987 and a Senior Vice President in 1989.

Peter J. Hathaway is a Senior Vice President of GE Asset Management and
portfolio manager for the Value Equity Fund. Mr. Hathaway has served in that
capacity since the Fund's commencement and has over 36 years of investment
experience. He joined GE Asset Management in 1985 as a Vice President for
Pension Fund Portfolios. He became a Senior Vice President in 1987.

Brian Hopkinson is a Senior Vice President of GE Asset Management and portfolio
manager of GE Premier International Equity Fund. He has served in that capacity
since the Fund's commencement. Mr. Hopkinson joined the International Equities
Team at GE Asset Management in 1996 as a portfolio manager. Prior to joining GE
Asset Management, Mr. Hopkinson was a portfolio manager with Fiduciary Trust
Company International.

Ralph R. Layman is a Director and Executive Vice President of GE Asset
Management. He manages the overall international equity investments for GE Asset
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 Asset Management in 1991 as
Executive Vice President for International Investments.

Robert A. MacDougall is a Director and Executive Vice President of GE Asset
Management. He manages the overall fixed income investments for GE Asset
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 Asset Management in 1986 as Vice
President. He became a Senior Vice President of Fixed Income in 1993, a director
and Executive Vice President of Fixed Income in 1997.

--------------------------------------------------------------------------------
<PAGE>
--------------------
52  GE Institutional
    Funds Prospectus


--------------------------------------------------------------------------------

Richard L. Sanderson is a Senior Vice President of GE Asset Management and a
co-portfolio manager of GE Premier Research Equity Fund. He has served in that
capacity since the Fund's commencement. Mr. Sanderson joined GE Asset Management
in 1995 as a Vice President and Equity Analyst and was appointed Director of
Investment Research Domestic Equities in 1997. Prior to that time, Mr. Sanderson
was a Senior Analyst with Alliance Capital Management.

Michael J. Solecki is a Senior Vice President of GE Asset Management and
portfolio manager of the "Europe Equity Fund. He has served in that capacity
since the Fund's commencement. Mr Solecki joined GE Asset Management in 1990 as
an International Equity Analyst. He became a Vice President for International
Equity Portfolios in 1996.


Ralph E. Whitman is a Senior Vice President of GE Asset Management and portfolio
manager of the Mid-Cap Growth Fund (since December 1998) and portfolio manager
of the GE Mid-Cap Value Equity Fund (beginning October 2000). He joined GE Asset
Management in 1987 as an Equity Analyst. He became Vice President for U.S.
Equity Investments in 1995 and Senior Vice President for U.S. Equity Portfolios
in 1998.


--------------------------------------------------------------------------------
<PAGE>
                                                                    ------------
                                                                              53


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<PAGE>
--------------------
54  GE Institutional
    Funds Prospectus
    About the Investment
    Adviser


--------------------------------------------------------------------------------
About the Sub-Advisers

GE Asset Management believes that it has the responsibility to make the best
managers available to Fund shareholders at all times, whether that means
accessing GE Asset Management's wealth of internal talent or using external
talent (Sub-Advisers). When GE Asset 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 Asset Management is proud to engage the following Sub-Advisers to
conduct the investment programs for the following Funds.

S&P 500 Index Fund

State Street Global Advisors (SSGA)
Two International Place
Boston, MA 02110

SSGA has served as the sub-adviser of S&P 500 Index Fund since its inception.
SSGA, a division of State Street Bank and Trust Company, is a wholly-owned
subsidiary of State Street Corporation, a publicly held bank holding company.
State Street managed more than $672.4 billion in assets as of December 31, 1999.
State Street provides complete global investment management services from
offices in the United States, London, Sydney, Hong Kong, Tokyo, Toronto,
Montreal, Luxembourg, Melbourne, Paris, Dubai, Munich and Brussels.

The Fund is managed by a team of portfolio managers led by James B. May, CFA.
Mr. May is a Principal of State Street Global Advisors and a Senior Portfolio
Manager in the U.S. Passive Equity Group. He joined the firm in 1991. Before
joining the U.S. Passive Equity Group, Mr. May worked in the firm's Passive U.S.
Equity Operations department as a Senior Analyst. He has been working in the
investment management field since 1989 when he joined State Street's Custody
operation.

Mr. May holds an MBA from Boston College and a BS in Finance from Bentley
College. He is a member of Boston Security Analysts Society and the Association
for Investment Management and Research (AIMR).

--------------------------------------------------------------------------------
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 $2.1 billion
as of December 31, 1999. Palisade has managed the Small-Cap Value Equity Fund
since inception. Although Palisade has no previous experience managing mutual
fund portfolios, Palisade translates its experience from various institutional
and private accounts to mutual funds.

The Fund is managed by an investment advisory committee (Senior Investment
Committee) composed of the following members: Jack Feiler, Martin L. Berman,

--------------------------------------------------------------------------------
<PAGE>
                                                                    ------------
                                                                              55


--------------------------------------------------------------------------------


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>
------------------------
56  GE Institutional
    Funds Prospectus
    About the Investment
    Adviser


--------------------------------------------------------------------------------
Prior Performance Information of GE Asset Management Incorporated

(Investment Adviser to the U.S. Equity Fund)

The bar chart and table opposite illustrate the performance of a composite of
certain private and mutual fund accounts ("Accounts") managed by GE Asset
Management, the investment adviser to the U.S. Equity Fund. For more information
about GE Asset Management, see "About the Investment Adviser." Each of the
Accounts included in the composite has objectives, policies and strategies
substantially similar to those of the Fund.

Unlike management of the private accounts included in the composite, GE Asset
Management's management of the U.S. Equity Fund is subject to certain regulatory
restrictions (e.g., limits on percentage of assets invested in a single issuer
and industry and requirements on distributing income to shareholders) that do
not apply to the private accounts. In addition, the Fund generally experiences
cash flows that are different from those of the private accounts. All of these
factors may adversely affect the performance of the Fund and cause it to differ
from that of the composite described opposite.

GE Asset Management composite results represent the performance of the Accounts,
net of the annual rate of total operating expenses of the U.S. Equity Fund; the
composite results do not represent the performance of the U.S. Equity Fund, and
should not be considered an indication of future performance of the Fund.

--------------------------------------------------------------------------------
Calendar Year Total Return

                                   [BAR CHART]


                    Composite(1)        US Equity Fund(2)   S&P 500 Index
                    ------------        -----------------   -------------
1992                    9%                                        8%
1993                   11%                                       10%
1994                   -2%                                        1%
1995                   36%                                       37%
1996                   22%                                       23%
1997                   33%                                       33%
1998                   23%                    24%                29%
1999                   20%                    20%                21%
2000                    _%                     _%                 _%


--------------------------------------------------------------------------------
Average Annual Total Return

(as of December 31, 2000)



<TABLE>
<CAPTION>
                      Composite--          Composite--      Composite--      US Equity    S&P 500
Period            Investment Class(3)    Service Class(1)    Class X(4)       Fund(2)      Index
                  -------------------    ----------------   -----------      ---------    -------
<S>                     <C>                   <C>               <C>            <C>         <C>
1 Year                  ____%                 ____%             ____%          ____%       ____%
3 Years                 ____%                 ____%             ____%          ____%       ____%
5 Years                 ____%                 ____%             ____%          ____%       ____%
Since 1/1/92            ____%                 ____%             ____%          ____%       ____%
</TABLE>



(1)   The composite performance results shown reflect the deduction of the
      annual rate of total operating expenses of the Fund - Service Class
      shares.



(2)   Represents the performance of U.S. Equity Fund - Investment Class shares.
      As of the date of this Prospectus, Service Class and Class X 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 and Service Class and Class X shares may have other
      expenses that are higher than those of Investment Class, which would lower
      their returns.The Fund's Investment Class commenced operations 11/25/97.
      Fund performance information is shown in the Calendar Year Total Return
      Chart from January 1st of the year following its inception. The Fund
      performance information is net of applicable fees and other expenses. As
      with all mutual funds, past performance is not an indication of future
      performance.



(3)   The composite performance results shown reflect the deduction of the
      annual rate of total operating expenses of the Fund - Investment Class
      shares.



(4)   The composite performance results shown reflect the deduction of the
      annual rate of total operating expenses of the Fund - Class X shares.


Note A. GE stock has been held in substantially all of the private accounts in
the composite since October 1996. GE stock is not actively traded by the private
accounts and is held at a weight substantially approximating the weight of GE in
the S&P 500 Index, with quarterly rebalancing. GE stock is not held by any
mutual fund. Private accounts that do not hold GE stock and mutual funds in the
composite typically hold a GE substitute (a basket of securities that are
intended to represent, on a collective basis, the principal industries in which
GE conducts business).


Note B. The composite performance results shown reflect the deduction of the
annual rate of total operating expenses, including the maximum advisory and
administration fee, of the Fund; actual expenses of the Accounts may have been
more or less than those of the Fund. The composite results are not required to
be, and were not, calculated in accordance with SEC mandated mutual fund
performance calculation methodology. The use of such methodology could yield a
different result. As of December 31, 2000, the total assets in the composite
were $___ billion. The composite performance is compared to the performance of
the S&P 500 Index, which is a composite of the price and dividend performance of
500 widely held U.S. stocks recognized by many investors to be representative of
the stock market in general. The information provided above for the composite,
the Fund and the Index reflects the reinvestment of dividends and distributions.


--------------------------------------------------------------------------------
<PAGE>
                                                                    ------------
                                                                              57


--------------------------------------------------------------------------------
Prior Performance Information of GE Asset Management Incorporated

(Investment Adviser to the Value Equity Fund)

The bar chart and table opposite illustrate the performance of a composite of
certain private and mutual fund accounts ("Accounts") managed by GE Asset
Management, the investment adviser to the Value Equity Fund. For more
information about GE Asset Management, see "About the Investment Adviser." Each
of the Accounts included in the composite has objectives, policies and
strategies substantially similar to those of the Fund.

Unlike management of the private accounts included in the composite, GE Asset
Management's management of the Value Equity Fund will be subject to certain
regulatory restrictions (e.g., limits on percentage of assets invested in a
single issuer and industry and requirements on distributing income to
shareholders) that did not apply to the private accounts. In addition, the Fund
will likely experience cash flows different from those of the private accounts.
All of these factors may adversely affect the performance of the Fund and cause
it to differ from that of the composite described opposite.

GE Asset Management composite results represent the performance of the Accounts,
net of the annual rate of total operating expenses of the Value Equity Fund; the
composite results do not represent the performance of the Value Equity Fund, and
should not be considered an indication of future performance of the Fund.

--------------------------------------------------------------------------------
Calendar Year Total Return(1)

                                   [BAR CHART]


               Composite(2)        S&P 500/Barra Value Index
               ------------        -------------------------
1992               10%                       11%
1993               14%                       19%
1994               -1%                       -1%
1995               37%                       37%
1996               22%                       22%
1997               34%                       30%
1998               26%                       15%
1999               20%                       13%
2000                _%                        _%


--------------------------------------------------------------------------------
Average Annual Total Return(1)

(as of December 31, 2000)



<TABLE>
<CAPTION>
                      Composite--            Composite--       Composite--        S&P 500/Barra
Period            Investment Class(3)     Service Class(2)      Class X(4)         Value Index
<S>                      <C>                    <C>                <C>                <C>
1 Year                   ____%                  ____%              ____%              ____%
3 Years                  ____%                  ____%              ____%              ____%
5 Years                  ____%                  ____%              ____%              ____%
Since 1/1/92             ____%                  ____%              ____%              ____%
</TABLE>


(1)   No performance figures are shown for the Value Equity Fund because the
      Fund commenced operations on February 2, 2000.


(2)   The composite performance results shown reflect the deduction of the
      annual rate of total operating expenses of the Fund - Service Class
      shares.



(3)   The composite performance results shown reflect the deduction of the
      annual rate of total operating expenses of the Fund - Investment Class
      shares.



(4)   The composite performance results shown reflect the deduction of the
      annual rate of total operating expenses of the Fund - Class X shares.


Note A. Performance results provided in the composite for the period from
January 1, 1992 to September 30, 1997 reflect the performance of a single
private account consisting only of General Electric Pension Trust assets. GE
stock has been held in substantially all of the private accounts in the
composite since October 1996. GE stock is not actively traded by the private
accounts and is held at a weight substantially approximating the weight of GE in
the S&P 500 Index, with quarterly rebalancing. GE stock is not held by any
mutual fund. Private accounts that do not hold GE stock and mutual funds in the
composite typically hold a GE substitute (a basket of securities that are
intended to represent, on a collective basis, the principal industries in which
GE conducts business).


Note B. The composite performance results shown reflect the deduction of the
annual rate of total operating expenses, including the maximum advisory and
administration fee, of the Fund; actual expenses of the Accounts may have been
more or less than those of the Fund. The composite results are not required to
be, and were not, calculated in accordance with SEC mandated mutual fund
performance calculation methodology. The use of such methodology could yield a
different result. As of December 31, 2000, the total assets in the composite
were $___ billion. The composite performance is compared to the performance of
the S&P 500/Barra Value Index, which is a capitalization-weighted index of all
of the stocks in the S&P 500 that have low price-to-book ratios. The information
provided above for the composite and the Index reflects the reinvestment of
dividends and distributions.


--------------------------------------------------------------------------------
<PAGE>
------------------------
58  GE Institutional
    Funds Prospectus
    About the Investment
    Adviser


--------------------------------------------------------------------------------
Prior Performance Information of GE Asset Management Incorporated

(Investment Adviser to the International Equity Fund)

The bar chart and table opposite illustrate the performance of a composite of
certain private and mutual fund accounts ("Accounts") managed by GE Asset
Management, the investment adviser to the International Equity Fund. For more
information about GE Asset Management, see "About the Investment Adviser." Each
of the Accounts included in the composite has objectives, policies and
strategies substantially similar to those of the Fund.

Unlike management of the private accounts included in the composite, GE Asset
Management's management of the International Equity Fund is subject to certain
regulatory restrictions (e.g., limits on percentage of assets invested in a
single issuer and industry and requirements on distributing income to
shareholders) that do not apply to the private accounts. In addition, the Fund
generally experiences cash flows that are different from those of the private
accounts. All of these factors may adversely affect the performance of the Fund
and cause it to differ from that of the composite described opposite.

GE Asset Management composite results represent the performance of the Accounts,
net of the annual rate of total operating expenses of the International Equity
Fund; the composite results do not represent the performance of the
International Equity Fund, and should not be considered an indication of future
performance of the Fund.

--------------------------------------------------------------------------------
Calendar Year Total Return

                                   [BAR CHART]


               Composite(1)     International Equity Fund(2)    MSCI EAFE Index
               ------------     ----------------------------    ---------------
1990               -16%                                              -23%
1991                 8%                                               12%
1992                -5%                                              -12%
1993                39%                                               33%
1994                 0%                                                8%
1995                12%                                               11%
1996                14%                                                6%
1997                 7%                                                2%
1998                17%                      17%                      20%
1999                32%                      32%                      27%
2000                 _%                       _%                       _%


--------------------------------------------------------------------------------
Average Annual Total Return

(as of December 31, 2000)



<TABLE>
<CAPTION>
                    Composite--          Composite--       Composite--    International Equity   MSCI EAFE
Period          Investment Class(3)    Service Class(1)    Class X(4)            Fund(2)           Index
                -------------------    ----------------    -----------    --------------------   ---------
<S>                    <C>                   <C>              <C>                 <C>              <C>
1 Year                 ____%                 ____%            ____%               ____%            ____%
3 Years                ____%                 ____%            ____%               ____%            ____%
5 Years                ____%                 ____%            ____%               ____%            ____%
10 Years               ____%                 ____%            ____%               ____%            ____%
Since 8/1/89           ____%                 ____%            ____%               ____%            ____%
</TABLE>



(1)   The composite performance results shown reflect the deduction of the
      annual rate of total operating expenses of the Fund - Service Class
      shares.



(2)   Represents the performance of International Equity Fund - Investment Class
      shares. As of the date of this Prospectus, Service Class and Class X
      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 and Service Class and Class X shares may have other
      expenses that are higher than those of Investment Class, which would lower
      their returns. The Fund's Investment Class commenced operations 11/25/97.
      Fund performance information is shown in the Calendar Year Total Return
      Chart from January 1st of the year following its inception. The Fund
      performance information is net of applicable fees and other expenses. As
      with all mutual funds, past performance is not an indication of future
      performance.



(3)   The composite performance results shown reflect the deduction of the
      annual rate of total operating expenses of the Fund - Investment Class
      shares.



(4)   The composite performance results shown reflect the deduction of the
      annual rate of total operating expenses of the Fund - Class X shares.



Note A. The composite performance results shown reflect the deduction of the
annual rate of total operating expenses, including the maximum advisory and
administration fee, of the Fund; actual expenses of the Accounts may have been
more or less than those of the Fund. The composite results are not required to
be, and were not, calculated in accordance with SEC mandated mutual fund
performance calculation methodology. The use of such methodology could yield a
different result. As of December 31, 2000, the total assets in the composite
were $___ billion. The composite performance is compared to the performance of
the MSCI EAFE Index, which is a composite of foreign securities traded in 22
developed markets in Europe, Australasia, and Far East. The information provided
above for the composite, the Fund and the Index reflects the reinvestment of
dividends and distributions.


--------------------------------------------------------------------------------
<PAGE>
                                                                    ------------
                                                                              59


--------------------------------------------------------------------------------
Prior Performance Information of GE Asset Management Incorporated

(Investment Adviser to the Emerging Markets Fund)

The bar chart and table opposite illustrate the performance of a composite of
certain private and mutual fund accounts ("Accounts") managed by GE Asset
Management, the investment adviser to the Emerging Markets Fund. For more
information about GE Asset Management, see "About the Investment Adviser." Each
of the Accounts included in the composite has objectives, policies and
strategies substantially similar to those of the Fund.

Unlike management of the private accounts included in the composite, GE Asset
Management's management of the Emerging Markets Fund is subject to certain
regulatory restrictions (e.g., limits on percentage of assets invested in a
single issuer and industry and requirements on distributing income to
shareholders) that do not apply to the private accounts. In addition, the Fund
generally experiences cash flows that are different from those of the private
accounts. All of these factors may adversely affect the performance of the Fund
and cause it to differ from that of the composite described opposite.

GE Asset Management composite results represent the performance of the Accounts,
net of the annual rate of total operating expenses of the Emerging Markets Fund;
the composite results do not represent the performance of the Emerging Markets
Fund, and should not be considered an indication of future performance of the
Fund.

--------------------------------------------------------------------------------
Calendar Year Total Return

                                   [BAR CHART]


              Composite(2)     Emerging Markets Fund(3)      MSCI EMF Index
              ------------     ------------------------      --------------
1996(1)           -1%                                              -4%
1997             -13%                                             -12%
1998             -20%                    -20%                     -25%
1999             110%                    108%                      66%
2000              __%                      _%                       _%


--------------------------------------------------------------------------------
Average Annual Total Return

(as of December 31, 2000)



<TABLE>
<CAPTION>
                   Composite--          Composite--     Composite--    Emerging Markets      MSCI
Period         Investment Class(4)   Services Class(2)   Class X(5)         Fund(3)        EMF Index
               -------------------   -----------------  -----------    ----------------    ---------
<S>                   <C>                  <C>              <C>              <C>             <C>
1 Year                ____%                ____%            ____%            ____%           ____%
3 Years               ____%                ____%            ____%            ____%           ____%
Since 7/1/96          ____%                ____%            ____%            ____%           ____%
</TABLE>


(1)   Represents performance from 7/1/96 through 12/31/96.


(2)   The composite performance results shown reflect the deduction of the
      annual rate of total operating expenses of the Fund - Service Class
      shares.



(3)   Represents the performance of Emerging Markets Fund - Investment Class
      shares. As of the date of this Prospectus, Service Class and Class X
      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 and Service Class and Class X shares may have other
      expenses that are higher than those of Investment Class, which would lower
      their returns. The Fund's Investment Class commenced operations 11/25/97.
      Fund performance information is shown in the Calendar Year Total Return
      Chart from January 1st of the year following its inception. The Fund
      performance information is net of applicable fees and other expenses. As
      with all mutual funds, past performance is not an indication of future
      performance.



(4)   The composite performance results shown reflect the deduction of the
      annual rate of total operating expenses of the Fund - Investment Class
      shares.



(5)   The composite performance results shown reflect the deduction of the
      annual rate of total operating expenses of the Fund - Class X shares.



Note A. The composite performance results shown reflect the deduction of the
annual rate of total operating expenses, including the maximum advisory and
administration fee, of the Fund; actual expenses of the Accounts may have been
more or less than those of the Fund. The composite results are not required to
be, and were not, calculated in accordance with SEC mandated mutual fund
performance calculation methodology. The use of such methodology could yield a
different result. As of December 31, 2000, the total assets in the composite
were $__ billion. The composite performance is compared to the performance of
the MSCI Emerging Markets Free Index, which is a composite of securities
available to non-domestic investors traded in 25 emerging markets. The
information provided above for the composite, the Fund and the Index reflects
the reinvestment of dividends and distributions.


--------------------------------------------------------------------------------
<PAGE>
------------------------
60  GE Institutional
    Funds Prospectus
    About the Investment
    Adviser


--------------------------------------------------------------------------------
Prior Performance Information of GE Asset Management Incorporated

(Investment Adviser to the Premier Growth Equity Fund)

The bar chart and table opposite illustrate the performance of a composite of
certain private and mutual fund accounts ("Accounts") managed by GE Asset
Management, the investment adviser to the Premier Growth Equity Fund. For more
information about GE Asset Management, see "About the Investment Adviser." Each
of the Accounts included in the composite has objectives, policies and
strategies substantially similar to those of the Fund.


Unlike management of the private accounts included in the composite, GE Asset
Management's management of the Premier Growth Equity Fund is subject to certain
regulatory restrictions (e.g., limits on percentage of assets invested in a
single issuer and industry and requirements on distributing income to
shareholders) that do not apply to the private accounts. In addition, the Fund
will likely experience cash flows that are different from those of the private
accounts. All of these factors may adversely affect the performance of the Fund
and cause it to differ from that of the composite described opposite.


GE Asset Management composite results represent the performance of the Accounts,
net of the annual rate of total operating expenses of the Premier Growth Equity
Fund; the composite results do not represent the performance of the Premier
Growth Equity Fund, and should not be considered an indication of future
performance of the Fund.

--------------------------------------------------------------------------------
Calendar Year Total Return

                                   [BAR CHART]


               Composite(1)    Premier Growth Equity Fund(2)      S&P 500 Index
               ------------    -----------------------------      -------------
1997               27%                                                 33%
1998               36%                                                 29%
1999               36%                                                 21%
2000                _%                      _%                          _%


--------------------------------------------------------------------------------
Average Annual Total Return(1)

(as of December 31, 2000)



<TABLE>
<CAPTION>
                   Composite--          Composite--     Composite--   Premier Growth     S&P 500
Period         Investment Class(3)   Service Class(1)   Class X(4)    Equity Fund(2)      Index
               -------------------   ----------------   -----------   --------------     -------
<S>                   <C>                  <C>             <C>             <C>            <C>
1 Year                ____%                ____%           ____%           ____%          ____%
3 Years               ____%                ____%           ____%           ____%          ____%
Since 1/1/97          ____%                ____%           ____%           ____%          ____%
</TABLE>



(1)   The composite performance results shown reflect the deduction of the
      annual rate of total operating expenses of the Fund - Service Class
      shares.



(2)   Represents the performance of the Premier Growth Equity Fund - Investment
      Class shares. As of the date of this Prospectus, Service Class and Class X
      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 and Service Class and Class X shares may have other
      expenses that are higher than those of Investment Class, which would lower
      their returns. The Fund's Investment Class commenced operations 10/31/99.
      Fund performance information is shown in the Calendar Year Total Return
      Chart from January 1st of the year following its inception. The Fund
      performance information is net of applicable fees and other expenses. As
      with all mutual funds, past performance is not an indication of future
      performance.



(3)   The composite performance results shown reflect the deduction of the
      annual rate of total operating expenses of the Fund - Investment Class
      shares.



(4)   The composite performance results shown reflect the deduction of the
      annual rate of total operating expenses of the Fund - Class X shares.



Note A. The composite performance results shown reflect the deduction of the
annual rate of total operating expenses, including the maximum advisory and
administration fee, of the Fund; actual expenses of the Accounts may have been
more or less than those of the Fund. The composite results are not required to
be, and were not, calculated in accordance with SEC mandated mutual fund
performance calculation methodology. The use of such methodology could yield a
different result. As of December 31, 2000, the total assets in the composite
were $___ million. The composite performance is compared to the performance of
the S&P 500 Index, which is a composite of the price and dividend performance of
500 widely held U.S. stocks recognized by many investors to be representative of
the stock market in general. The information provided above for the composite
and the Index reflects the reinvestment of dividends and distributions.


--------------------------------------------------------------------------------
<PAGE>

                                                                    ------------
                                                                              61


--------------------------------------------------------------------------------
Prior Performance Information of GE Asset Management Incorporated

(Investment Adviser to the Premier Research Equity Fund)


The bar chart and table opposite illustrate the performance of a composite of
certain private and mutual fund accounts ("Accounts") managed by GE Asset
Management, the investment adviser to the Premier Research Equity Fund. For more
information about GE Asset Management, see "About the Investment Adviser." Each
of the Accounts included in the composite has objectives, policies and
strategies substantially similar to those of the Fund.



Unlike management of the private accounts included in the composite, GE Asset
Management's management of the Premier Research Equity Fund is subject to
certain regulatory restrictions (e.g., limits on percentage of assets invested
in a single issuer and industry and requirements on distributing income to
shareholders) that do not apply to the private accounts. In addition, the Fund
generally experiences cash flows that are different from those of the private
accounts. All of these factors may adversely affect the performance of the Fund
and cause it to differ from that of the composite described opposite.



GE Asset Management composite results represent the performance of the Accounts,
net of the annual rate of total operating expenses of the Premier Research
Equity Fund; the composite results do not represent the performance of the
Premier Research Equity Fund, and should not be considered an indication of
future performance of the Fund.


--------------------------------------------------------------------------------
Calendar Year Total Return(1)

                                   [BAR CHART]


               Composite(3)        S&P 500 Index
               ------------        -------------
1998(2)            12%                  20%
1999               20%                  21%
2000                _%                   _%


--------------------------------------------------------------------------------
Average Annual Total Return(1)

(as of December 31, 2000)



                   Composite--           Composite--       Composite--   S&P 500
Period         Investment Class(4)    Service Class(3)     Class X(5)     Index
               -------------------    ----------------     -----------   -------
1 Year                 __%                   __%               __%          __%
Since 7/1/98           __%                   __%               __%          __%



(1)   No performance figures are shown for the Premier Research Equity Fund
      because the Fund commenced operations April 28, 2000.



(2)   Represents performance from 7/1/98 through 12/31/98.



(3)   The composite performance results shown reflect the deduction of the
      annual rate of total operating expenses of the Fund - Service Class
      shares.



(4)   The composite performance results shown reflect the deduction of the
      annual rate of total operating expenses of the Fund - Investment Class
      Shares.



(5)   The composite performance results shown reflect the deduction of the
      annual rate of total operating expenses of the Fund - Class X Shares.



Note A. The composite performance results shown reflect the deduction of the
annual rate of total operating expenses, including the maximum advisory and
administration fee, of the Fund; actual expenses of the Accounts may have been
more or less than those of the Fund. The composite results are not required to
be, and were not, calculated in accordance with SEC mandated mutual fund
performance calculation methodology. The use of such methodology could yield a
different result. As of December 31, 2000, the total assets in the composite
were $___ billion. The composite performance is compared to the performance of
the S&P 500 Index, which is a composite of the price and dividend performance of
500 widely held U.S. stocks recognized by many investors to be representative of
the stock market in general. The information provided above for the composite,
and the Index reflects the reinvestment of dividends and distributions.


--------------------------------------------------------------------------------
<PAGE>
------------------------
62  GE Institutional
    Funds Prospectus
    About the Investment
    Adviser


--------------------------------------------------------------------------------
Prior Performance Information of GE Asset Management Incorporated

(Investment Adviser to the Premier International Equity Fund)


The bar chart and table opposite illustrate the performance of certain private
and mutual fund accounts ("Accounts") managed by GE Asset Management, the
investment adviser to the Premier International Equity Fund. For more
information about GE Asset Management, see "About the Investment Adviser." Each
of the Accounts included in the composite has objectives, policies and
strategies substantially similar to those of the Fund.



Unlike management of the private accounts included in the composite, GE Asset
Management's management of the Premier International Equity Fund is subject to
certain regulatory restrictions (e.g., limits on percentage of assets invested
in a single issuer and industry and requirements on distributing income to
shareholders) that do not apply to the private accounts. In addition, the Fund
generally experiences cash flows that are different from those of the private
accounts. All of these factors may adversely affect the performance of the Fund
and cause it to differ from that of the composite described opposite.



GE Asset Management composite results represent the performance of the Accounts,
net of the annual rate of total operating expenses of the Premier International
Equity Fund the composite results do not represent the performance of the
Premier International Equity Fund, and should not be considered an indication of
future performance of the Fund.


--------------------------------------------------------------------------------
Calendar Year Total Return(1)

                                   [BAR CHART]


               Composite(2)       MSCI EAFE Index
               ------------       ---------------
1998               22%                  20%
1999               29%                  27%
2000                _%                   _%


--------------------------------------------------------------------------------
Average Annual Total Return(1)

(as of December 31, 1999)



                  Composite--          Composite--      Composite--    MSCI EAFE
Period        Investment Class(4)   Service Class(2)    Class X(4)       Index
              -------------------   ----------------    -----------    ---------
1 Year                __%                  __%              __%           __%
Since 1/1/98          __%                  __%              __%           __%



(1)   No performance figures are shown for the Premier International Equity Fund
      because the Fund commenced operations April 28, 2000.



(2)   The composite performance results shown reflect the deduction of the
      annual rate of total operating expenses of the Fund - Service Class
      shares.



(3)   The composite performance results shown reflect the deduction of the
      annual rate of total operating expenses of the Fund - Investment Class
      shares.



(4)   The composite performance results shown reflect the deduction of the
      annual rate of total operating expenses of the Fund - Class X Shares.



Note A. The composite performance results shown reflect the deduction of the
annual rate of total operating expenses, including the maximum advisory and
administration fee, of the Fund; actual expenses of the Accounts may have been
more or less than those of the Fund. The composite results are not required to
be, and were not, calculated in accordance with SEC mandated mutual fund
performance calculation methodology. The use of such methodology could yield a
different result. As of December 31, 2000, the total assets in the composite
were $__ million. The composite performance is compared to the performance of
the MSCI EAFE Index, which is a composite of foreign securities traded in 22
developed nations in Europe, Australia, Asia and the Far East. The information
provided above for the composite and the Index reflects the reinvestment of
dividends and distributions.


--------------------------------------------------------------------------------
<PAGE>
                                                                    ------------
                                                                              63


--------------------------------------------------------------------------------
Prior Performance Information of GE Asset Management Incorporated

(Investment Adviser to the Income Fund)

The bar chart and table opposite illustrate the performance of a composite of
certain private and mutual fund accounts ("Accounts") managed by GE Asset
Management, the investment adviser to the Income Fund. For more information
about GE Asset Management, see "About the Investment Adviser." Each of the
Accounts included in the composite has objectives, policies and strategies
substantially similar to those of the Fund.

Unlike management of the private accounts included in the composite, GE Asset
Management's management of the Income Fund is subject to certain regulatory
restrictions (e.g., limits on percentage of assets invested in a single issuer
and industry and requirements on distributing income to shareholders) that do
not apply to the private accounts. In addition, the Fund generally experiences
cash flows that are different from those of the private accounts. All of these
factors may adversely affect the performance of the Fund and cause it to differ
from that of the composite described opposite.

GE Asset Management composite results represent the performance of the Accounts,
net of the annual rate of total operating expenses of the Income Fund; the
composite results do not represent the performance of the Income Fund, and
should not be considered an indication of future performance of the Fund.

--------------------------------------------------------------------------------
Calendar Year Total Return

                                   [BAR CHART]


                                                           Lehman Brothers
                  Composite(2)     Income Fund(3)       Aggregate Bond Index
                  ------------     --------------       --------------------
1992(1)                8%                                         9%
1993                   9%                                        10%
1994                  -3%                                        -3%
1995                  18%                                        18%
1996                   4%                                         4%
1997                  10%                                        10%
1998                   8%                8%                       9%
1999                  -1%               -1%                      -1%
2000                   _%                _%                       _%


--------------------------------------------------------------------------------
Average Annual Total Return

(as of December 31, 1999



<TABLE>
<CAPTION>
                    Composite--        Composite--      Composite--                        Lehman Brothers
Period          Investment Class(4)  Service Class(2)   Class X(5)     Income Fund(3)   Aggregate Bond Index
                -------------------  ----------------   -----------    --------------   --------------------
<S>                     <C>                 <C>             <C>              <C>                 <C>
1 Year                  __%                 __%             __%              __%                 __%
3 Years                 __%                 __%             __%              __%                 __%
5 Years                 __%                 __%             __%              __%                 __%
Since 4/1/92            __%                 __%             __%              __%                 __%
</TABLE>



(1)   Represents performance from 4/1/92 through 12/31/92.



(2)   The composite performance results shown reflect the deduction of the
      annual rate of total operating expenses of the Fund - Service Class
      shares.



(3)   Represents the performance of Income Fund - Investment Class shares. As of
      the date of this Prospectus, Service Class and Class X 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 and Service Class and Class X shares may have other
      expenses that are higher than those of Investment Class, which would lower
      their returns. The Fund's Investment Class commenced operations 11/21/97.
      Fund performance information is shown in the Calendar Year Total Return
      Chart from January 1st of the year following its inception. The Fund
      performance information is net of applicable fees and other expenses. As
      with all mutual funds, past performance is not an indication of future
      performance.



(4)   The composite performance results shown reflect the deduction of the
      annual rate of total operating expenses of the Fund - Investment Class
      shares.



(5)   The composite performance results shown reflect the deduction of the
      annual rate of total operating expenses of the Fund - Class X Shares.



Note A. The composite performance results shown reflect the deduction of the
annual rate of total operating expenses, including the maximum advisory and
administration fee, of the Fund; actual expenses of the Accounts may have been
more or less than those of the Fund. The composite results are not required to
be, and were not, calculated in accordance with SEC mandated mutual fund
performance calculation methodology. The use of such methodology could yield a
different result. As of December 31, 2000, the total assets in the composite
were $___ billion. The composite performance is compared to the performance of
the Lehman Brothers Aggregate Bond Index, which is a composite of short-,
medium- and long-term bond performance and is widely recognized as a barometer
of the bond market in general. The information provided above for the composite
and the Index reflects the reinvestment of dividends and distributions.


--------------------------------------------------------------------------------
<PAGE>
------------------------
64  GE Institutional
    Funds Prospectus
    About the Investment
    Adviser


--------------------------------------------------------------------------------
Prior Performance Information of GE Asset Management Incorporated

(Investment Adviser to the Strategic Investment Fund)

The bar chart and table opposite illustrate the performance of a composite of
certain mutual fund accounts ("Accounts") managed by GE Asset Management, the
investment adviser to the Strategic Investment Fund. For more information about
GE Asset Management, see "About the Investment Adviser." Each of the Accounts
included in the composite has objectives, policies and strategies substantially
similar to those of the Fund.

GE Asset Management composite results represent the performance of the Accounts,
net of the annual rate of total operating expenses of the Strategic Investment
Fund; the composite results do not represent the performance of the Strategic
Investment Fund, and should not be considered an indication of future
performance of the Fund.


--------------------------------------------------------------------------------
Calendar Year Total Return

                                   [BAR CHART]

                                          Strategic
                     Composite(2)     Investment Fund(3)    Composite Index(4)
                     ------------     ------------------    ------------------
1992(1)                  12%                                        10%
1993                      9%                                        10%
1994                     -1%                                         0%
1995                     27%                                        30%
1996                     14%                                        15%
1997                     18%                                        24%
1998                     17%                                        21%
1999                     13%                                        12%
2000                      _%                  _%                     _%


--------------------------------------------------------------------------------
Average Annual Total Return

(as of December 31, 2000)



<TABLE>
<CAPTION>
                                                                        Strategic               Lehman Brothers
                   Composite--          Composite--      Composite--    Investment    S&P 500      Aggregate
Period         Investment Class(5)   Service Class(4)    Class X(6)      Fund(3)       Index       Bond Index
               -------------------   ----------------    -----------    ----------    -------   ---------------
<S>                    <C>                  <C>              <C>           <C>          <C>            <C>
1 Year                 __%                  __%              __%           __%          __%            __%
3 Years                __%                  __%              __%           __%          __%            __%
5 Years                __%                  __%              __%           __%          __%            __%
Since 4/1/92           __%                  __%              __%           __%          __%            __%
</TABLE>


(1) Represents performance from 4/1/92 through 12/31/92.


(2)   The composite performance results shown reflect the deduction of the
      annual rate of total operating expenses of the Fund - Service Class
      shares.



(3)   Represents the performance of the Strategic Investment Fund - Investment
      Class Shares. As of the date of this Prospectus, Service Class and Class X
      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 and Service Class and Class X shares may have other
      expenses that are higher than those of Investment Class, which would lower
      their returns. The Fund's Investment Class commenced operations 10/31/99.
      Fund performance information is shown in the Calendar Year Total Return
      Chart from January 1st of the year following its inception. The Fund
      performance information is net of applicable fees and other expenses. As
      with all mutual funds, past performance is not an indication of future
      performance.



(4)   The Composite Index return is a blended return composed of 60% S&P 500
      Index and 40% Lehman Brothers Aggregate Bond Index.



(5)   The composite performance results shown reflect the deduction of the
      annual rate of total operating expenses of the Fund - Investment Class
      shares.



(6)   The composite performance results shown reflect the deduction of the
      annual rate of total operating expenses of the Fund - Class X Shares.



Note A. The composite performance results shown reflect the deduction of the
annual rate of total operating expenses, including the maximum advisory and
administration fee, of the Fund; actual expenses of the Accounts may have been
more or less than those of the Fund. The composite results are not required to
be, and were not, calculated in accordance with SEC mandated mutual fund
performance calculation methodology. The use of such methodology could yield a
different result. As of December 31, 2000, the total assets in the composite
were $___ million. The composite performance is compared to the performance of
the S&P 500 Index and the Lehman Brothers Aggregate Bond Index, S&P 500 Index is
a composite of the price and dividend performace of 500 widely held U.S. stocks
recognized by many investors to be representative of the stock market in
general. Lehman Brothers Aggregate Bond Index is a composite of short-, medium-
and long-term bond performance and is widely recognized as a barometer of the
bond market in general. The information provided above for the composite and the
Index reflects the reinvestment of dividends and distributions.


--------------------------------------------------------------------------------
<PAGE>
                                                                    ------------
                                                                              65


--------------------------------------------------------------------------------
Prior Performance Information of GE Asset Management Incorporated

(Investment Adviser to the Money Market Fund)

The bar chart and table opposite illustrate the performance of a composite of
certain private and mutual fund accounts ("Accounts") managed by GE Asset
Management, the investment adviser to the Money Market Fund. For more
information about GE Asset Management, see "About the Investment Adviser." Each
of the Accounts included in the composite has objectives, policies and
strategies substantially similar to those of the Fund.

Unlike management of the private accounts included in the composite, GE Asset
Management's management of the Money Market Fund is subject to certain
regulatory restrictions (e.g., limits on percentage of assets invested in a
single issuer and industry and requirements on distributing income to
shareholders) that do not apply to the private accounts. In addition, the Fund
generally experiences cash flows that are different from those of the private
accounts. All of these factors may adversely affect the performance of the Fund
and cause it to differ from that of the composite described opposite.

GE Asset Management composite results represent the performance of the Accounts,
net of the annual rate of total operating expenses of the Money Market Fund; the
composite results do not represent the performance of the Money Market Fund, and
should not be considered an indication of future performance of the Fund.

--------------------------------------------------------------------------------
Calendar Year Total Return

                                   [BAR CHART]


                   Composite(2)     Money Market Fund(3)   90-day Treasury Bill
                   ------------     --------------------   ---------------------
1992(1)                 2%                                          3%
1993                    3%                                          3%
1994                    4%                                          4%
1995                    6%                                          6%
1996                    5%                                          5%
1997                    5%                                          5%
1998                    5%                    5%                    5%
1999                    5%                    5%                    5%
2000                    _%                    _%                    _%


--------------------------------------------------------------------------------
Average Annual Total Return

(as of December 31, 2000)



<TABLE>
<CAPTION>
                   Composite--           Composite--       Composite--        Money            90-day
Period         Investment Class(4)    Service Class(2)     Class X(5)     Market Fund(3)    Treasury Bill
               -------------------    ----------------     -----------    --------------    -------------
<S>                    <C>                   <C>               <C>             <C>               <C>
1 Year                 __%                   __%               __%             __%               __%
3 Years                __%                   __%               __%             __%               __%
5 Years                __%                   __%               __%             __%               __%
Since 4/1/92           __%                   __%               __%             __%               __%
</TABLE>


(1)   Represents performance from 4/1/92 through 12/31/92.


(2)   The composite performance results shown reflect the deduction of the
      annual rate of total operating expenses of the Fund - Service Class
      shares.



(3)   Represents the performance of Money Market Fund - Investment Class shares.
      As of the date of this Prospectus, Service Class and Class X 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 and Service Class and Class X shares may have other
      expenses that are higher than those of Investment Class, which would lower
      their returns. The Fund's Investment Class commenced operations 12/2/97.
      Fund performance information is shown in the Calendar Year Total Return
      Chart from January 1st of the year following its inception. The Fund
      performance information is net of applicable fees and other expenses. As
      with all mutual funds, past performance is not an indication of future
      performance. Although the Money Market Fund attempts to maintain a stable
      $1.00 per share value, there is no guarantee it will be able to do so. It
      is possible to lose money investing in the Money Market Fund. Shares of
      the Money Market Fund are not FDIC insured.



(4)   The composite performance results shown reflect the deduction of the
      annual rate of total operating expenses of the Fund - Investment Class
      shares.



(5)   The composite results shown reflect the deduction of the annual rate of
      total operating expenses of the Fund - Class X Shares.



Note A. The composite performance results shown reflect the deduction of the
annual rate of total operating expenses, including the maximum advisory and
administration fee, of the Fund; actual expenses of the Accounts may have been
more or less than those of the Fund. The composite results are not required to
be, and were not, calculated in accordance with SEC mandated mutual fund
performance calculation methodology. The use of such methodology could yield a
different result. As of December 31, 2000, the total assets in the composite
were $_ billion. The composite performance is compared to the performance of the
90-day Treasury Bill which is the average return on three month U.S. Treasury
Bills. The information provided above for the composite, the Fund and the Index
reflects the reinvestment of dividends and distributions.


--------------------------------------------------------------------------------
<PAGE>
------------------------------------------
66  GE Institutional         How To Invest
    Funds Prospectus


--------------------------------------------------------------------------------
Investment Choices


The GE Institutional Funds are designed primarily for institutional investors,
such as corporations, foundations, endowments and trusts that manage various
types of employee benefit plans as well as charitable, religious and educational
institutions. The Funds offer three classes of shares - Investment Class,
Service Class and Class X.



The Service Class and the Investment Class are identical except that the Service
Class shares may have higher other expenses due to higher sub-transfer agent
expenses, and bear a 0.25% shareholder servicing and distribution fee under a
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.



Class X and the Investment Class are identical except that Class X generally
will have higher other expenses due to higher sub-transfer agent expenses.





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>
                                                                    ------------
                                                                              67


--------------------------------------------------------------------------------
Eligible Investors

The Distributor offers Fund shares to certain investors that meet the
eligibility requirements described below.


The GE Institutional Funds are designed for institutional investors.


GE Institutional Funds expects that most of the time each Fund will have
relatively few shareholders (as compared with most mutual funds) but that these
shareholders will invest substantial amounts in a Fund.

Typical institutional investors may include banks, insurance companies,
broker-dealers, investment advisers, trusts that fund qualified pension and
profit-sharing plans (Section 401 of the Code), trusts that fund government
employer non-qualified deferred compensation obligations (Section 457 of the
Code) ("457 Plans"), 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).

--------------------------------------------------------------------------------
Eligibility Requirements




Full-Service Defined Contribution Plan Investors: A full service defined
contribution plan may invest in the GE Institutional Funds if the plan has (or
will have) invested at least $100 million at the time of initial investment in
one or more investment portfolios or accounts that are advised by GE Asset
Management. There is no minimum investment for subsequent purchases.



A full-service defined contribution plan is a defined contribution plan that
receives recordkeeping and administration services provided or paid by GE
Financial Assurance Holdings, Inc. or its affiliates.



A full-service defined contribution plan generally must individually meet the
minimum investment requirements and will not be considered a related investor of
any other investor in the GE Institutional Funds.



Investment Only Defined Contribution Plan Investors: An investment only defined
contribution plan may invest in the GE Institutional Funds if such investor has
at least $50 million of plan assets at the time of initial investment. There is
no minimum investment for subsequent purchases.



An investment only defined contribution plan is a defined contribution plan that
does not receive recordkeeping and administration services provided or paid by
GE Financial Assurance Holding, Inc. or its affiliates.



An investment only defined contribution plan generally must individually meet
the eligibility requirements and will not be considered a related investor of
any other investor in the GE Institutional Funds.



All Other Investors: The minimum initial investment in each Fund is $5 million
for each investor or group of related investors. There is no minimum investment
requirement for subsequent purchases.



The minimum investment requirement is waived for each investor or group of
related investors if such person or group has (or will have) invested at least
$25 million at the time of initial investment in one or more investment
portfolios or accounts that are advised by GE Asset Management.



Related Investors: Related investors are investors that are affiliated persons
of each other within the meaning of the 1940 Act.



Common trust funds and collective trust funds of the same bank (or of affiliated
banks) are considered related investors of each other and their bank(s).
Likewise, separate accounts of the same insurance company (or of affiliated
insurance companies) are related investors of each other and their insurance
company or companies and clients whose assets are managed on a discretionary
basis by the same bank, insurance company, investment adviser or broker-dealer
are related investors of their manager. The Distributor also may treat
institutional clients of a financial intermediary as related investors of the
intermediary where Fund shares are held by that intermediary in an omnibus
account for its clients.


--------------------------------------------------------------------------------
<PAGE>
--------------------
68  GE Institutional
    Funds Prospectus
    How To Invest


--------------------------------------------------------------------------------


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.



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 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.


How to Redeem Shares

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, it 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

Mail your request to the appropriate address:

GE Institutional Funds
P.O. Box 120065
Stamford, CT 06912-0065

For overnight package delivery, send to:

GE Institutional Funds
c/o National Financial Data Services Inc.
330 West 9th Street
Kansas City, MO 64105

Redemptions in Kind

Large redemptions that exceed $250,000 or 1% of a Fund's assets may be
considered detrimental to the Fund's existing shareholders. Therefore, the Fund
may require that you take a "distribution in kind" upon redemption and may give
you portfolio securities instead of cash proceeds. Such Fund portfolio
securities will have to be sold through a broker and you may incur transaction
costs when you sell them. The Funds will redeem shares in kind at your request.

--------------------------------------------------------------------------------
<PAGE>
                                                                    ------------
                                                                              69


--------------------------------------------------------------------------------
How to Exchange Shares

You may exchange shares of one GE Institutional Fund for the same class of
another GE Institutional Fund or for a different class of the same or another GE
Institutional Fund. Exchanges are permitted provided that the acquired Fund is
an investment option available to the investor requesting the exchange and the
investor meets the minimum investment requirement. The Funds may terminate the
exchange privilege upon 60 days written notice to shareholders.

An exchange for the same class of another GE Institutional Fund is a sale and
purchase of shares for tax purposes. You may have a taxable gain or loss when
you exchange your shares. You may exchange shares by writing the Funds at the
appropriate address listed above.

--------------------------------------------------------------------------------
Signature Guarantees

All signature guarantees must be executed by a commercial bank, trust company,
broker, dealer credit union, national securities exchange or registered
association, clearing agency or savings association. The Funds may require
additional information for redemptions made by corporations, executors,
administrators, trustees, guardians or persons utilizing a power of attorney. A
redemption request will not be deemed received in good order until GE
Institutional Funds has received all information typically required to assure
the security of a particular account.

Distribution and Shareholder Service Fees

12 b-1 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 Asset 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 Asset Management, or enable GE Asset 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 Asset Management, or enable GE Asset 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.

Special Compensation Arrangements


GE Asset Management may pay, out of its own resources, financial services firms
that sell Investment Class or Class X shares or provide shareholder services. GE
Asset Management may also pay, out of its own resources, extra compensation to
financial services firms that sell Service Class Shares or provide shareholder
services.


--------------------------------------------------------------------------------
<PAGE>
------------------------------------------------------
70                           Dividends, Capital Gains
                             and Other Tax Information


--------------------------------------------------------------------------------

Most GE Institutional Funds pay dividends from net investment income and from
net capital gains once each year. Dividends and capital gain distributions will
be automatically reinvested in your account. There are no fees or charges to
reinvest dividends.

The Funds are subject to a 4% excise tax on undistributed net investment income
and net capital gains. To avoid this tax, the Funds may pay dividends from net
investment income and net capital gains more frequently.

As a result of the different service fees applicable to the Funds' classes,
dividends and distributions for each class will differ.

--------------------------------------------------------------------------------
Fund                                   Distribution Schedule
--------------------------------------------------------------------------------

U.S. Equity Fund                       o Dividends are typically declared and
                                         paid annually.
S&P 500 Index Fund
                                       o Short-term and long-term capital gains,
Value Equity Fund                        if any, are typically declared and paid
                                         annually.
Mid-Cap Growth Fund

Mid-Cap Value Equity Fund

Small-Cap Value Equity Fund

International Equity Fund

Europe Equity Fund

Emerging Markets Fund

Premier Equity Fund

Premier Research Equity Fund

Premier International Equity 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 typically declared and paid
                                         annually.

--------------------------------------------------------------------------------
<PAGE>
                                                                    ------------
                                                                              71


--------------------------------------------------------------------------------
Taxes

Tax issues can be complicated. We suggest you see your investment professional
or tax advisor for any questions you may have.

Except for investments in tax-deferred accounts, you generally will owe taxes on
amounts distributed to you. Dividends and distributions from net investment
income and short-term capital gains are taxed as ordinary income. Long-term
capital gains are taxed at the long-term capital gains rate. Distributions
generally will be taxed in the same manner whether they are received in cash or
reinvested.

In addition, if you sell or redeem Fund shares, you generally will realize a
capital gain or loss, which will be long-term or short-term, depending upon how
long you held those shares. If you exchange shares for the same class of another
GE Institutional Fund, the exchange will be treated as a sale and purchase of
shares for tax purposes.

Tax Statement

You will receive an annual statement summarizing your dividend and capital gains
distributions. Please consult a tax advisor if you have questions about your
specific tax situation.

Backup Withholding

If you do not provide complete and certified taxpayer identification
information, each Fund is obligated by law to withhold 31% of Fund
distributions.

--------------------------------------------------------------------------------
<PAGE>
------------------------------------------------------
72  GE Institutional           Calculating Share Value
    Funds Prospectus


--------------------------------------------------------------------------------

Fund shares are sold at net asset value (NAV). The NAV of each share class is
calculated at the close of regular trading on the New York Stock Exchange
(NYSE), normally 4:00 p.m. Eastern time, each day the NYSE is open for trading.
The NAV per share class for Funds (other than the Money Market Fund) is
determined by adding the value of the Fund's investments, cash, and other assets
attributable to that class, subtracting its liabilities, and then dividing the
result by the number of that class' outstanding shares.

A Fund's portfolio securities are valued most often on the basis of market
quotations. Foreign securities are valued on the basis of quotations from the
primary market in which they are traded. Some debt securities are valued using
dealers and pricing services. Municipal bond valuations are based on prices
supplied by a qualified municipal pricing service. The prices are composed of
the mean average of the bid and ask prices on the secondary market. All
portfolio securities of the Money Market Fund and any short-term securities held
by any other Fund with remaining maturities of sixty days or less are valued on
the basis of amortized cost. A Fund's written or purchased options are valued at
the last sales price of the day. If no sales occurred, the options are valued at
the last traded bid price. The value of the portfolio securities held by each
Fund may change on days when shareholders will not be able to purchase or redeem
the Fund's shares.


If quotations are not readily available for any security, or if the value of a
security has been materially affected by events occurring after the closing of
the security's primary market, the security may be valued using procedures
approved by a Fund's Board of Trustees that they believe accurately reflects
"fair value." A security's value may differ depending on the valuation procedure
used to determine its value."


--------------------------------------------------------------------------------
<PAGE>
                                      ------------------------------------------
                                      Financial             GE Institutional  73
                                      Highlights            Funds Prospectus


--------------------------------------------------------------------------------

The financial highlights tables that follow are intended to help you understand
a Fund's financial performance for the fiscal years ended September 30, unless
otherwise noted. Certain information reflects financial results for a single
Fund Investment Class share.


The total returns in the table represent the rate that an investor would have
earned or lost on an investment in the Fund (assuming reinvestment of all
dividends and distributions). Fiscal year end information has been audited by
PricewaterhouseCoopers LLP, whose report, along with the Funds' financial
statements, are included in the Fund's Annual Report, which is available upon
request.


U.S. Equity Fund


<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------
Years ended September 30                                             9/30/00      9/30/99        9/30/98*
---------------------------------------------------------------------------------------------------------
<S>                                                                 <C>          <C>            <C>
Inception date                                                                         --        11/25/97
---------------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Period                                               $10.62         $10.00
---------------------------------------------------------------------------------------------------------
Income (Loss) from Investment Operations:
   Net Investment Income (Loss)                                                      0.11           0.11
---------------------------------------------------------------------------------------------------------
   Net Gains (Losses) on Investments (both realized and unrealized)                  2.84           0.52
---------------------------------------------------------------------------------------------------------
Total Income (Loss) From Investment Operations                                       2.95           0.63
---------------------------------------------------------------------------------------------------------
Less Distributions:
   Dividends (from net investment income)                                            0.13           0.01
---------------------------------------------------------------------------------------------------------
   Distributions (from capital gains)                                                0.25             --
---------------------------------------------------------------------------------------------------------
Total Distributions                                                                  0.38           0.01
---------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period                                                     $13.19         $10.62
---------------------------------------------------------------------------------------------------------

Total Return (a)                                                                    28.27%          6.28%
---------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data:
   Net Assets, End of Period (in thousands)                                      $160,980       $114,553
---------------------------------------------------------------------------------------------------------
   Ratio of Net Investment Income (Loss) to Average Net Assets**                     0.92%          1.21%
---------------------------------------------------------------------------------------------------------
   Ratio of Net Expenses to Average Net Assets**                                     0.41%          0.42%
---------------------------------------------------------------------------------------------------------
   Portfolio Turnover Rate                                                             45%            29%
---------------------------------------------------------------------------------------------------------
</TABLE>


--------------------------------------------------------------------------------
<PAGE>
--------------------
74  GE Institutional
    Funds Prospectus


Financial Highlights

--------------------------------------------------------------------------------
S&P 500 Index Fund


<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------
Years ended September 30                                             9/30/00      9/30/99        9/30/98*
---------------------------------------------------------------------------------------------------------
<S>                                                                  <C>          <C>            <C>
Inception date                                                                         --        11/25/97
---------------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Period                                               $10.85         $10.00
---------------------------------------------------------------------------------------------------------
Income (Loss) from Investment Operations:
   Net Investment Income (Loss)                                                      0.18           0.14
---------------------------------------------------------------------------------------------------------
   Net Gains (Losses) on Investments (both realized and unrealized)                  2.88           0.72
---------------------------------------------------------------------------------------------------------
Total Income (Loss) From Investment Operations                                       3.06           0.86
---------------------------------------------------------------------------------------------------------
Less Distributions:
   Dividends (from net investment income)                                            0.17           0.01
---------------------------------------------------------------------------------------------------------
   Distributions (from capital gains)                                                  --             --
---------------------------------------------------------------------------------------------------------
Total Distributions                                                                  0.17           0.01
---------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period                                                     $13.74         $10.85
---------------------------------------------------------------------------------------------------------

Total Return (a)                                                                    28.41%          8.63%
---------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data:
   Net Assets, End of Period (in thousands)                                       $26,359        $20,186
---------------------------------------------------------------------------------------------------------
   Ratio of Net Investment Income (Loss) to Average Net Assets**                     1.35%          1.57%
---------------------------------------------------------------------------------------------------------
   Ratio of Net Expenses to Average Net Assets**                                     0.15%          0.15%
---------------------------------------------------------------------------------------------------------
   Portfolio Turnover Rate                                                              7%             1%
---------------------------------------------------------------------------------------------------------
</TABLE>



--------------------------------------------------------------------------------
Value Equity Fund



--------------------------------------------------------------------------------
Years ended September 30                                               9/30/00**
--------------------------------------------------------------------------------
Inception date
--------------------------------------------------------------------------------
Net Asset Value, Beginning of Period
--------------------------------------------------------------------------------
Income (Loss) from Investment Operations:
   Net Investment Income (Loss)
--------------------------------------------------------------------------------
   Net Gains (Losses) on Investments (both realized and unrealized)
--------------------------------------------------------------------------------
Total Income (Loss) From Investment Operations
--------------------------------------------------------------------------------
Less Distributions:
   Dividends (from net investment income)
--------------------------------------------------------------------------------
   Distributions (from capital gains)
--------------------------------------------------------------------------------
Total Distributions
--------------------------------------------------------------------------------
Net Asset Value, End of Period
--------------------------------------------------------------------------------

Total Return (a)
--------------------------------------------------------------------------------
Ratios/Supplemental Data:
   Net Assets, End of Period (in thousands)
--------------------------------------------------------------------------------
   Ratio of Net Investment Income (Loss) to Average Net Assets**
--------------------------------------------------------------------------------
   Ratio of Net Expenses to Average Net Assets**
--------------------------------------------------------------------------------
   Portfolio Turnover Rate
--------------------------------------------------------------------------------


--------------------------------------------------------------------------------
<PAGE>
                                                                    ------------
                                                                              75


--------------------------------------------------------------------------------
Mid-Cap Growth Fund


<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------
Years ended September 30                                             9/30/00      9/30/99        9/30/98*
---------------------------------------------------------------------------------------------------------
<S>                                                                  <C>          <C>            <C>
Inception date                                                                         --        11/25/97
---------------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Period                                                $8.87         $10.00
---------------------------------------------------------------------------------------------------------
Income (Loss) from Investment Operations:
   Net Investment Income (Loss)                                                      0.05           0.04
---------------------------------------------------------------------------------------------------------
   Net Gains (Losses) on Investments (both realized and unrealized)                  1.29          (1.16)
---------------------------------------------------------------------------------------------------------
Total Income (Loss) From Investment Operations                                       1.34          (1.12)
---------------------------------------------------------------------------------------------------------
Less Distributions:
   Dividends (from net investment income)                                            0.05           0.01
---------------------------------------------------------------------------------------------------------
   Distributions (from capital gains)                                                  --             --
---------------------------------------------------------------------------------------------------------
Total Distributions                                                                  0.05           0.01
---------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period                                                     $10.16          $8.87
---------------------------------------------------------------------------------------------------------

Total Return (a)                                                                    15.19%        (11.25)%
---------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data:
   Net Assets, End of Period (in thousands)                                       $15,313        $13,208
---------------------------------------------------------------------------------------------------------
   Ratio of Net Investment Income (Loss) to Average Net Assets**                     0.53%          0.53%
---------------------------------------------------------------------------------------------------------
   Ratio of Net Expenses to Average Net Assets**                                     0.55%          0.55%
---------------------------------------------------------------------------------------------------------
   Portfolio Turnover Rate                                                             52%            14%
---------------------------------------------------------------------------------------------------------
</TABLE>


--------------------------------------------------------------------------------
Mid-Cap Value Equity Fund


<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------
Years ended September 30                                             9/30/00     9/30/99***
-------------------------------------------------------------------------------------------
<S>                                                                  <C>          <C>
Inception date                                                                    12/31/98
-------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Period                                               $10.00
-------------------------------------------------------------------------------------------
Income (Loss) from Investment Operations:
   Net Investment Income (Loss)                                                      0.08
-------------------------------------------------------------------------------------------
   Net Gains (Losses) on Investments (both realized and unrealized)                 (0.17)
-------------------------------------------------------------------------------------------
Total Income (Loss) From Investment Operations                                      (0.09)
-------------------------------------------------------------------------------------------
Less Distributions:
   Dividends (from net investment income)                                              --
-------------------------------------------------------------------------------------------
   Distributions (from capital gains)                                                  --
-------------------------------------------------------------------------------------------
Total Distributions                                                                    --
-------------------------------------------------------------------------------------------
Net Asset Value, End of Period                                                      $9.91
-------------------------------------------------------------------------------------------

Total Return (a)                                                                    (0.90)%
-------------------------------------------------------------------------------------------
Ratios/Supplemental Data:
   Net Assets, End of Period (in thousands)                                       $10,182
-------------------------------------------------------------------------------------------
   Ratio of Net Investment Income (Loss) to Average Net Assets**                     1.00%
-------------------------------------------------------------------------------------------
   Ratio of Net Expenses to Average Net Assets**                                     0.65%
-------------------------------------------------------------------------------------------
   Portfolio Turnover Rate                                                             18%
-------------------------------------------------------------------------------------------
</TABLE>


--------------------------------------------------------------------------------
<PAGE>
--------------------
76  GE Institutional
    Funds Prospectus


Financial Highlights

--------------------------------------------------------------------------------
Small-Cap Value Equity Fund


<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------
Years ended September 30                                             9/30/00      9/30/99        9/30/98*
---------------------------------------------------------------------------------------------------------
<S>                                                                  <C>          <C>             <C>
Inception date                                                                         --         8/3/98
---------------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Period                                                $8.91         $10.00
---------------------------------------------------------------------------------------------------------
Income (Loss) from Investment Operations:
   Net Investment Income (Loss)                                                      0.01           0.02
---------------------------------------------------------------------------------------------------------
   Net Gains (Losses) on Investments (both realized and unrealized)                  1.23          (1.11)
---------------------------------------------------------------------------------------------------------
Total Income (Loss) From Investment Operations                                       1.24          (1.09)
---------------------------------------------------------------------------------------------------------
Less Distributions:
   Dividends (from net investment income)                                            0.03             --
---------------------------------------------------------------------------------------------------------
   Distributions (from capital gains)                                                  --             --
---------------------------------------------------------------------------------------------------------
Total Distributions                                                                  0.03             --
---------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period                                                     $10.12          $8.91
---------------------------------------------------------------------------------------------------------

Total Return (a)                                                                    13.98%        (10.90)%
---------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data:
   Net Assets, End of Period (in thousands)                                       $10,287         $9,056
---------------------------------------------------------------------------------------------------------
   Ratio of Net Investment Income (Loss) to Average Net Assets**                     0.13%          1.68%
---------------------------------------------------------------------------------------------------------
   Ratio of Net Expenses to Average Net Assets**                                     0.70%          0.70%
---------------------------------------------------------------------------------------------------------
   Portfolio Turnover Rate                                                            216%            19%
---------------------------------------------------------------------------------------------------------
</TABLE>


--------------------------------------------------------------------------------
International Equity Fund


<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------
Years ended September 30                                             9/30/00      9/30/99        9/30/98*
---------------------------------------------------------------------------------------------------------
<S>                                                                 <C>          <C>            <C>
Inception date                                                                         --        11/25/97
---------------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Period                                               $10.06         $10.00
---------------------------------------------------------------------------------------------------------
Income (Loss) from Investment Operations:
   Net Investment Income (Loss)                                                      0.09           0.14(b)
---------------------------------------------------------------------------------------------------------
   Net Gains (Losses) on Investments (both realized and unrealized)                  2.81          (0.07)(b)
---------------------------------------------------------------------------------------------------------
Total Income (Loss) From Investment Operations                                       2.90           0.07
---------------------------------------------------------------------------------------------------------
Less Distributions:
   Dividends (from net investment income)                                            0.12           0.01
---------------------------------------------------------------------------------------------------------
   Distributions (from capital gains)                                                0.35             --
---------------------------------------------------------------------------------------------------------
Total Distributions                                                                  0.47           0.01
---------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period                                                     $12.49         $10.06
---------------------------------------------------------------------------------------------------------

Total Return (a)                                                                    29.50%          0.66%
---------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data:
   Net Assets, End of Period (in thousands)                                      $197,974       $114,414
---------------------------------------------------------------------------------------------------------
   Ratio of Net Investment Income (Loss) to Average Net Assets**                     0.99%          1.72%
---------------------------------------------------------------------------------------------------------
   Ratio of Net Expenses to Average Net Assets**                                     0.62%          0.64%
---------------------------------------------------------------------------------------------------------
   Portfolio Turnover Rate                                                             50%            53%
---------------------------------------------------------------------------------------------------------
</TABLE>


--------------------------------------------------------------------------------
<PAGE>
                                                                    ------------
                                                                              77


--------------------------------------------------------------------------------
Europe Equity Fund


<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------
Years ended September 30                                             9/30/00      9/30/99***
--------------------------------------------------------------------------------------------
<S>                                                                  <C>           <C>
Inception date                                                                     1/29/99
--------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Period                                               $10.00
--------------------------------------------------------------------------------------------
Income (Loss) from Investment Operations:
   Net Investment Income (Loss)                                                      0.11
--------------------------------------------------------------------------------------------
   Net Gains (Losses) on Investments (both realized and unrealized)                 (0.14)
--------------------------------------------------------------------------------------------
Total Income (Loss) From Investment Operations                                      (0.03)
--------------------------------------------------------------------------------------------
Less Distributions:
   Dividends (from net investment income)                                              --
--------------------------------------------------------------------------------------------
   Distributions (from capital gains)                                                  --
--------------------------------------------------------------------------------------------
Total Distributions                                                                    --
--------------------------------------------------------------------------------------------
Net Asset Value, End of Period                                                      $9.97
--------------------------------------------------------------------------------------------

Total Return (a)                                                                    (0.30)%
--------------------------------------------------------------------------------------------
Ratios/Supplemental Data:
   Net Assets, End of Period (in thousands)                                       $10,080
--------------------------------------------------------------------------------------------
   Ratio of Net Investment Income (Loss) to Average Net Assets**                     1.78%
--------------------------------------------------------------------------------------------
   Ratio of Net Expenses to Average Net Assets**                                     0.75%
--------------------------------------------------------------------------------------------
   Portfolio Turnover Rate                                                             49%
--------------------------------------------------------------------------------------------
</TABLE>


--------------------------------------------------------------------------------
Emerging Markets Fund


<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------
Years ended September 30                                             9/30/00      9/30/99        9/30/98*
---------------------------------------------------------------------------------------------------------
<S>                                                                   <C>          <C>           <C>
Inception date                                                                         --        11/25/97
---------------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Period                                                $6.78         $10.00
---------------------------------------------------------------------------------------------------------
Income (Loss) from Investment Operations:
   Net Investment Income (Loss)                                                      0.01           0.07
---------------------------------------------------------------------------------------------------------
   Net Gains (Losses) on Investments (both realized and unrealized)                  4.70          (3.26)
---------------------------------------------------------------------------------------------------------
Total Income (Loss) From Investment Operations                                       4.71          (3.19)
---------------------------------------------------------------------------------------------------------
Less Distributions:
   Dividends (from net investment income)                                            0.01           0.03
---------------------------------------------------------------------------------------------------------
   Distributions (from capital gains)                                                  --             --
---------------------------------------------------------------------------------------------------------
   Return of Capital                                                                 0.01             --
---------------------------------------------------------------------------------------------------------
Total Distributions                                                                  0.02           0.03
---------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period                                                     $11.47          $6.78
---------------------------------------------------------------------------------------------------------

Total Return (a)                                                                    69.62%        (31.96)%
---------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data:
   Net Assets, End of Period (in thousands)                                        $8,592         $5,063
---------------------------------------------------------------------------------------------------------
   Ratio of Net Investment Income (Loss) to Average Net Assets**                     0.12%          0.82%
---------------------------------------------------------------------------------------------------------
   Ratio of Net Expenses to Average Net Assets**                                     1.05%          1.05%
---------------------------------------------------------------------------------------------------------
   Portfolio Turnover Rate                                                             79%            77%
---------------------------------------------------------------------------------------------------------
</TABLE>


--------------------------------------------------------------------------------
<PAGE>
--------------------
78  GE Institutional
    Funds Prospectus


Financial Highlights


--------------------------------------------------------------------------------
Premier Growth Equity Fund



--------------------------------------------------------------------------------
Years ended September 30                                               9/30/00**
--------------------------------------------------------------------------------
Inception date
--------------------------------------------------------------------------------
Net Asset Value, Beginning of Period
--------------------------------------------------------------------------------
Income (Loss) from Investment Operations:
   Net Investment Income (Loss)
--------------------------------------------------------------------------------
   Net Gains (Losses) on Investments (both realized and unrealized)
--------------------------------------------------------------------------------
Total Income (Loss) From Investment Operations
--------------------------------------------------------------------------------
Less Distributions:
   Dividends (from net investment income)
--------------------------------------------------------------------------------
   Distributions (from capital gains)
--------------------------------------------------------------------------------
Total Distributions
--------------------------------------------------------------------------------
Net Asset Value, End of Period
--------------------------------------------------------------------------------

Total Return (a)
--------------------------------------------------------------------------------
Ratios/Supplemental Data:
   Net Assets, End of Period (in thousands)
--------------------------------------------------------------------------------
   Ratio of Net Investment Income (Loss) to Average Net Assets**
--------------------------------------------------------------------------------
   Ratio of Net Expenses to Average Net Assets**
--------------------------------------------------------------------------------
   Portfolio Turnover Rate
--------------------------------------------------------------------------------



--------------------------------------------------------------------------------
Premier Research Equity Fund



--------------------------------------------------------------------------------
Years ended September 30                                               9/30/00**
--------------------------------------------------------------------------------
Inception date
--------------------------------------------------------------------------------
Net Asset Value, Beginning of Period
--------------------------------------------------------------------------------
Income (Loss) from Investment Operations:
   Net Investment Income (Loss)
--------------------------------------------------------------------------------
   Net Gains (Losses) on Investments (both realized and unrealized)
--------------------------------------------------------------------------------
Total Income (Loss) From Investment Operations
--------------------------------------------------------------------------------
Less Distributions:
   Dividends (from net investment income)
--------------------------------------------------------------------------------
   Distributions (from capital gains)
--------------------------------------------------------------------------------
Total Distributions
--------------------------------------------------------------------------------
Net Asset Value, End of Period
--------------------------------------------------------------------------------

Total Return (a)
--------------------------------------------------------------------------------
Ratios/Supplemental Data:
   Net Assets, End of Period (in thousands)
--------------------------------------------------------------------------------
   Ratio of Net Investment Income (Loss) to Average Net Assets**
--------------------------------------------------------------------------------
   Ratio of Net Expenses to Average Net Assets**
--------------------------------------------------------------------------------
   Portfolio Turnover Rate
--------------------------------------------------------------------------------


--------------------------------------------------------------------------------
<PAGE>
                                                                    ------------
                                                                              79



--------------------------------------------------------------------------------
Premier International Equity Fund



--------------------------------------------------------------------------------
Years ended September 30                                               9/30/00**
--------------------------------------------------------------------------------
Inception date
--------------------------------------------------------------------------------
Net Asset Value, Beginning of Period
--------------------------------------------------------------------------------
Income (Loss) from Investment Operations:
   Net Investment Income (Loss)
--------------------------------------------------------------------------------
   Net Gains (Losses) on Investments (both realized and unrealized)
--------------------------------------------------------------------------------
Total Income (Loss) From Investment Operations
--------------------------------------------------------------------------------
Less Distributions:
   Dividends (from net investment income)
--------------------------------------------------------------------------------
   Distributions (from capital gains)
--------------------------------------------------------------------------------
Total Distributions
--------------------------------------------------------------------------------
Net Asset Value, End of Period
--------------------------------------------------------------------------------

Total Return (a)
--------------------------------------------------------------------------------
Ratios/Supplemental Data:
   Net Assets, End of Period (in thousands)
--------------------------------------------------------------------------------
   Ratio of Net Investment Income (Loss) to Average Net Assets**
--------------------------------------------------------------------------------
   Ratio of Net Expenses to Average Net Assets**
--------------------------------------------------------------------------------
   Portfolio Turnover Rate
--------------------------------------------------------------------------------


--------------------------------------------------------------------------------
Income Fund


<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------
Years ended September 30                                             9/30/00      9/30/99        9/30/98*
---------------------------------------------------------------------------------------------------------
<S>                                                                  <C>          <C>            <C>
Inception date                                                                         --        11/21/97
---------------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Period                                               $10.39         $10.00
---------------------------------------------------------------------------------------------------------
Income (Loss) from Investment Operations:
   Net Investment Income (Loss)                                                      0.55           0.51
---------------------------------------------------------------------------------------------------------
   Net Gains (Losses) on Investments (both realized and unrealized)                 (0.62)          0.39
---------------------------------------------------------------------------------------------------------
Total Income (Loss) From Investment Operations                                      (0.07)          0.90
---------------------------------------------------------------------------------------------------------
Less Distributions:
   Dividends (from net investment income)                                            0.57           0.51
---------------------------------------------------------------------------------------------------------
   Distributions (from capital gains)                                                0.18             --
---------------------------------------------------------------------------------------------------------
Total Distributions                                                                  0.75           0.51
---------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period                                                      $9.57         $10.39
---------------------------------------------------------------------------------------------------------

Total Return (a)                                                                    (0.72)%         9.21%
---------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data:
   Net Assets, End of Period (in thousands)                                       $95,381        $71,444
---------------------------------------------------------------------------------------------------------
   Ratio of Net Investment Income (Loss) to Average Net Assets**                     5.80%          5.81%
---------------------------------------------------------------------------------------------------------
   Ratio of Net Expenses to Average Net Assets**                                     0.30%          0.31%
---------------------------------------------------------------------------------------------------------
   Portfolio Turnover Rate                                                            227%           323%
---------------------------------------------------------------------------------------------------------
</TABLE>


--------------------------------------------------------------------------------
<PAGE>
--------------------
80  GE Institutional
    Funds Prospectus


Financial Highlights


--------------------------------------------------------------------------------
Strategic Investment Fund



--------------------------------------------------------------------------------
Years ended September 30                                               9/30/00**
--------------------------------------------------------------------------------
Inception date
--------------------------------------------------------------------------------
Net Asset Value, Beginning of Period
--------------------------------------------------------------------------------
Income (Loss) from Investment Operations:
   Net Investment Income (Loss)
--------------------------------------------------------------------------------
   Net Gains (Losses) on Investments (both realized and unrealized)
--------------------------------------------------------------------------------
Total Income (Loss) From Investment Operations
--------------------------------------------------------------------------------
Less Distributions:
   Dividends (from net investment income)
--------------------------------------------------------------------------------
   Distributions (from capital gains)
--------------------------------------------------------------------------------
Total Distributions
--------------------------------------------------------------------------------
Net Asset Value, End of Period
--------------------------------------------------------------------------------

Total Return (a)
--------------------------------------------------------------------------------
Ratios/Supplemental Data:
   Net Assets, End of Period (in thousands)
--------------------------------------------------------------------------------
   Ratio of Net Investment Income (Loss) to Average Net Assets**
--------------------------------------------------------------------------------
   Ratio of Net Expenses to Average Net Assets**
--------------------------------------------------------------------------------
   Portfolio Turnover Rate
--------------------------------------------------------------------------------


--------------------------------------------------------------------------------
Money Market Fund


<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------
Years ended September 30                                             9/30/00       9/30/99        9/30/98*
----------------------------------------------------------------------------------------------------------
<S>                                                                  <C>           <C>            <C>
Inception date                                                                         --         12/2/97
----------------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Period                                                $1.00          $1.00
----------------------------------------------------------------------------------------------------------
Income (Loss) from Investment Operations:
   Net Investment Income (Loss)                                                      0.05           0.04
----------------------------------------------------------------------------------------------------------
   Net Gains (Losses) on Investments (both realized and unrealized)                    --             --
----------------------------------------------------------------------------------------------------------
Total Income (Loss) From Investment Operations                                       0.05           0.04
----------------------------------------------------------------------------------------------------------
Less Distributions:
   Dividends (from net investment income)                                            0.05           0.04
----------------------------------------------------------------------------------------------------------
   Distributions (from capital gains)                                                  --             --
----------------------------------------------------------------------------------------------------------
Total Distributions                                                                  0.05           0.04
----------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period                                                      $1.00          $1.00
----------------------------------------------------------------------------------------------------------

Total Return (a)                                                                     4.92%          4.53%
----------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data:
   Net Assets, End of Period (in thousands)                                        $5,736         $7,012
----------------------------------------------------------------------------------------------------------
   Ratio of Net Investment Income (Loss) to Average Net Assets**                     4.81%          5.33%
----------------------------------------------------------------------------------------------------------
   Ratio of Net Expenses to Average Net Assets**                                     0.25%          0.25%
----------------------------------------------------------------------------------------------------------
   Portfolio Turnover Rate                                                            N/A            N/A
----------------------------------------------------------------------------------------------------------
</TABLE>


--------------------------------------------------------------------------------
<PAGE>
                                                                    ------------
                                                                              81


--------------------------------------------------------------------------------
Notes to Financial Highlights

(a)   Total returns are historical and assume changes in share price and
      reinvestment of dividends and capital gains. 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 Statement of
      Changes.

*     Information is for the period from Inception date through September 30,
      1998.

**    Annualized for periods less than one year.

***   Information is for the period from Inception date through September 30,
      1999.

--------------------------------------------------------------------------------
<PAGE>

GE Institutional Funds
Prospectus

--------------------------------------------------------------------------------
If you wish to know more

You will find additional information about the GE Institutional Funds in the
following documents:

Annual/Semi-Annual Reports to Shareholders: These reports detail the Funds'
actual investments as of the report date. Reports include performance numbers
and a discussion of market conditions and investment strategies that
significantly affected Fund performance during the Funds' last fiscal year.

Statement of Additional Information (SAI): The SAI contains additional
information about the Funds and their investment strategies and policies and is
incorporated by reference (legally considered part of the prospectus). The SAI
is on file with the Securities and Exchange Commission (SEC).

You may visit the SEC's Internet Website (http://www.sec.gov) to view the
Annual/Semi-Annual Reports, the SAI and other information about the GE
Institutional Funds. Also, you can obtain copies of this information, after
paying a duplication fee, by sending your request electronically to the
following e-mail address: [email protected], or in writing to the SEC's Public
Reference Section, Washington, D.C. 20549-0102. 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 1-202-942-8090.

--------------------------------------------------------------------------------
GE Institutional Funds

You may obtain a free copy of the SAI or the Funds' annual/semi-annual report
and make shareholder inquiries by contacting:

GE Investment Distributors, Inc.
P.O. Box 7900
3003 Summer Street
Stamford, CT 06904

Telephone 1-800-493-3042

Website http://www.ge.com/mutualfunds

--------------------------------------------------------------------------------
Investment Adviser

GE Asset Management Incorporated
P.O. Box 7900
3003 Summer Street
Stamford, CT 06904

--------------------------------------------------------------------------------
Transfer Agent and Custodian

State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02101

--------------------------------------------------------------------------------
Distributor

GE Investment Distributors, Inc.
777 Long Ridge Road, Building B
Stamford, CT 06927

                 Investment Company Act file number: 811-08257
--------------------------------------------------------------------------------
GE-INSTPRO-1

<PAGE>
                                                       -------------------------
                                                       GE Institutional Funds
                                                       International Equity Fund

Prospectus


January __, 2001


                                    [GRAPHIC]

--------------------------------------------------------------------------------
Like all mutual funds, the Fund's shares have not been approved or disapproved
by the Securities and Exchange Commission, nor has the Securities and Exchange
Commission passed upon the accuracy or adequacy of this Prospectus. Any
representation to the contrary is a criminal offense.

--------------------------------------------------------------------------------
[GE LOGO] We bring good things to life.
--------------------------------------------------------------------------------
<PAGE>


<PAGE>

                                       -----------------------------------------
                                       Contents


--------------------------------------------------------------------------------
GE Institutional Funds
International Equity Fund Prospectus

                                       International Equity Fund               2
                                       -----------------------------------------
                                       The Strategy                            2
                                       -----------------------------------------
                                       The Risks                               2
                                       -----------------------------------------
                                       Fund Performance                        3
                                       -----------------------------------------

                                       Fund Expenses                           4
                                       -----------------------------------------

                                       More on Strategies and Risks            6
                                       -----------------------------------------
                                       Important Definitions                   6
                                       -----------------------------------------
                                       More on Investment Strategies           8
                                       -----------------------------------------
                                       More on Risks                           9
                                       -----------------------------------------
                                       Other Risk Considerations              11
                                       -----------------------------------------

                                       About the Investment Adviser           12
                                       -----------------------------------------
                                       Investment Adviser and Administrator   12
                                       -----------------------------------------
                                       About the Fund's Portfolio Manager     12
                                       -----------------------------------------

                                       How to Invest                          13
                                       -----------------------------------------

                                       Dividends, Capital Gains and Other
                                         Tax Information                      14
                                       -----------------------------------------

                                       Calculating Share Value                15
                                       -----------------------------------------

                                       Appendix: Financial Highlights         16
                                       -----------------------------------------


Additional information regarding the International Equity Fund is contained in
the Statement of Additional Information for GE Institutional Funds dated January
__, 2001, which is incorporated by reference into (legally forms a part of) this
Prospectus.


--------------------------------------------------------------------------------
<PAGE>
----------------------------------------------------------
2  GE Institutional Funds                    International
   International Equity Fund Prospectus      Equity Fund


--------------------------------------------------------------------------------
Investment Objective: Long-term growth of capital.

The Strategy

The International Equity Fund invests primarily in equity securities of
companies located in developed and developing countries other than the United
States. Equity securities may include common stocks, preferred securities,
depositary receipts, convertible securities, rights and warrants. Stocks
represent an ownership interest in a corporation.

The portfolio managers focus on companies that they expect will grow faster than
relevant markets and whose security price does not fully reflect their potential
for growth. Under normal circumstances, the Fund's assets are invested in
foreign securities of companies representing at least three different countries.
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 Fund also
may invest in securities of companies located in the United States. The
portfolio managers may use various investment techniques to adjust the Fund's
investment exposure, but there is no guarantee that these techniques will work.

The Risks

The principal risks of investing in the Fund are stock market risk, foreign
exposure risk, style risk (growth investing risk) and emerging markets risk. To
the extent that the portfolio managers invest in debt securities, the Fund is
subject to interest rate risk and credit risk.

If you would like additional information regarding the Fund's investment
strategies and risks, including a description of the terms in bold type, please
refer to "More on Strategies and Risks" later in this Prospectus.

--------------------------------------------------------------------------------
<PAGE>
                                                                    ------------
                                                                               3


--------------------------------------------------------------------------------
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 periods presented in the bar chart, the
Fund's highest return for a quarter was 21.83% for the quarter ended December
31, 1999. 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%

1999                32%

2000

--------------------------------------------------------------------------------

Average Annual Total Return
(as of December 31, 1999)

                                                                        Since
                                                      1 Year          Inception*
                                                      ------          ----------
International Equity Fund
  Investment Class                                    31.85%            24.62%

MSCI EAFE Index                                       26.96%            22.92%

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.

* Inception date (commencement of operations) of the Fund: November 25, 1997;
MSCI EAFE Index returns are not available from the Fund's Inception date and
therefore are calculated from the month end nearest the Fund's Inception date,
which in this case is December 1, 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>
----------------------------------------------------------
4  GE Institutional Funds                    Fund Expenses
   International Equity Fund Prospectus


--------------------------------------------------------------------------------
Shareholder Transaction Expenses

The Fund imposes no sales charge (load) on purchases or reinvested dividends,
contingent deferred sales charge, redemption fee or exchange fee.

This following table shows what it would cost you to invest in Investment Class
shares of the Fund. Annual fund operating expenses come out of the 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)


                                                                   International
                                                                     Equity Fund
--------------------------------------------------------------------------------
Management Fees**                                                       .75%*
--------------------------------------------------------------------------------
Distribution and Service (12b-1) Fees                                   None
--------------------------------------------------------------------------------
Other Expenses***                                                       .02%
--------------------------------------------------------------------------------
Total Annual Fund Operating Expenses                                    .77%
--------------------------------------------------------------------------------
Waiver and/or Reimbursement                                             None
--------------------------------------------------------------------------------
Net Annual Fund Operating Expenses                                      .77%
--------------------------------------------------------------------------------



*     The advisory and administration fee shown is the maximum payable by the
      Fund; this fee declines incrementally as the Fund's assets increase as
      described under "About the Investment Adviser."



**    The Fund's advisory and administration fee is intended to be a "unitary"
      fee that includes any other operating expenses payable by the Fund, except
      for fees and costs associated with the GE Institutional Funds' independent
      trustees, shareholder servicing and distribution fees, brokerage fees,
      transfer agent (and sub-transfer agent) fees and expenses that are not
      normal operating expenses of the Fund (such as extraordinary expenses,
      interest and taxes). The nature of the services provided to, and the
      advisory and administrative fee paid by, the Fund are described in more
      detail under "About the Investment Adviser."



***   "Other Expenses" include fees beyond those borne by GE Asset Management
      pursuant to the Fund's Advisory and Administration Agreement. These
      expenses, which are not included in the management fee, include only fees
      and costs associated with the GE Institutional Funds' independent
      trustees, brokerage fees, transfer agent (and sub-transfer agent) fees and
      expenses that are not normal operating expenses of the Fund (such as
      extraordinary expenses, interest and taxes). The Fund does not incur
      sub-transfer agent expenses in excess of the expense limitations set forth
      in the Expense Limitation Agreement with GE Asset Management. This
      agreement is in place through January 2004.




--------------------------------------------------------------------------------
<PAGE>
                                                                    ------------
                                                                               5


--------------------------------------------------------------------------------
The Impact of Fund Expenses

This example is intended to help you compare the cost of investing in Investment
Class shares of the Fund with the cost of investing in other mutual funds.
Although actual costs may be higher or lower, you would pay the following
expenses on a $10,000 investment, assuming a 5% annual return and that the
Fund's operating expenses remain the same.

This example also assumes the maximum advisory and administrative fee payable by
the Fund. This fee declines incrementally as the Fund's assets increase.

--------------------------------------------------------------------------------
Example                                        You would pay the following
                                               expenses on a $10,000 investment:

                                   1 Year      3 Years      5 Years     10 Years

--------------------------------------------------------------------------------
International Equity Fund:
  Investment Class                   $__         $___         $___        $___
--------------------------------------------------------------------------------


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<PAGE>
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6  GE Institutional Funds                    More on
   International Equity Fund Prospectus      Strategies
                                             and Risks


--------------------------------------------------------------------------------
Important Definitions

This section defines important terms that may be unfamiliar to an investor
reading about the Fund:

Bank deposits are cash, checks or drafts deposited in a financial institution
for credit to a customer's account. Banks differentiate between demand deposits
(checking accounts on which the customer may draw) and time deposits, which pay
interest and have a specified maturity or require 30 days' notice before
withdrawal.

Cash and cash equivalents are highly liquid and highly rated instruments such as
commercial paper and bank deposits.

Commercial paper includes short-term debt securities issued by banks,
corporations and other borrowers.

Convertible securities may be debt or equity securities that pay interest or
dividends or are sold at discount and that may be converted on specified terms
into the stock of the issuer.

Debt obligations of supranational agencies are obligations of
multi-jurisdictional agencies that operate across national borders (e.g., the
World Bank).

Debt securities are bonds and other securities that are used by issuers to
borrow money from investors. Holders of debt securities have a higher priority
claim to assets than do equity holders. Typically, the debt issuer pays the
investor a fixed, variable or floating rate of interest and must repay the
borrowed amount at maturity. Some debt securities are sold at a discount from
their face values instead of paying interest.

Depositary receipts represent interests in an account at a bank or trust company
which holds equity securities. These interests may include American Depositary
Receipts (held at U.S. banks and traded in the United States), European
Depositary Receipts, Global Depositary Receipts or other similar instruments.

Derivative securities are securities whose values are based on other securities,
currencies or indices, and include options (on stocks, indices, currencies,
futures contracts or bonds), forward currency exchange contracts, futures
contracts, swaps, interest-only and principal-only debt securities and
structured securities.

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 (i) is
organized, (ii) derives at least 50% of its revenues or profits from goods
produced or sold, investments made or services performed, (iii) has at least 50%
of its assets situated or (iv) has the principal trading market for its
securities. Foreign securities may be denominated in non-U.S. currencies and
traded outside the United States or may be in the form of depositary receipts.

Forward currency transactions involve agreements to exchange one currency for
another at a future date. Futures are agreements to buy or sell a specific
amount of a commodity, financial instrument or index at a particular price and
future date. Options on Futures give the purchaser the right, in return for the
premium paid, to assume a position in a futures contract at a specified exercise
price at any time prior to the expiration date of the option.

Growth investing involves buying stocks with above-average growth rates.
Typically, growth stocks are the stocks of faster growing companies in more
rapidly growing sectors of the economy. Generally, growth stock valuation levels
will be higher than those of value stocks and the market averages.

High yield securities are debt securities of corporations, preferred stock and
convertible bonds and convertible preferred stock rated Ba through C by Moody's
or BB through D by S&P (or comparably rated by another nationally recognized
statistical rating organization) or, if not rated, 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.

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<PAGE>
                                                                    ------------
                                                                               7


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Investment grade securities are rated Baa or better by Moody's and BBB or better
by S&P (or comparably rated by another nationally recognized statistical rating
organization), or, if not rated, are of similar quality to such securities.
Securities rated in the fourth highest grade have some speculative elements.

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 Asset Management, which charges no advisory fee
for such services.

Preferred securities are classes of stock that pay dividends at a specified
rate. Dividends are paid on preferred stocks before they are paid on common
stocks. In addition, preferred stockholders have priority over common
stockholders as to the proceeds from the liquidation of a company's assets.

Purchasing and writing options are permitted investment strategies for the Fund.
An option is the right to buy (i.e., a "call") or sell (i.e., a "put")
securities or other interests for a predetermined price on or before a fixed
date. An option on a securities index represents the option holder's right to
obtain from the seller, in cash, a fixed multiple of the amount by which the
exercise price exceeds (in the case of a call) or is less than (in the case of a
put) the closing value of the securities index on the exercise date. An option
on a foreign currency represents the right to buy or sell a particular amount of
that currency for a predetermined price on or before a fixed date.

Repurchase agreements (repos) are used to invest cash on a short-term basis. A
seller (bank or broker-dealer) sells securities, usually government securities,
to the Fund, agreeing to buy them back at a designated price and time -- usually
the next day.

Restricted securities (which include Rule 144A Securities) may have contractual
restrictions on resale, or cannot be resold publicly until registered. Illiquid
securities may be difficult or impossible to sell when the Fund wants to sell
them at a price at which the Fund values them. Certain restricted securities may
be illiquid. Rule 144A Securities are restricted securities that may be sold to
certain institutional purchasers under Rule 144A.

Reverse repurchase agreements involve selling securities held and concurrently
agreeing to repurchase the same securities at a specified price and future date.

Rights represent a preemptive right of stockholders to purchase additional
shares of a stock at the time of a new issuance, before the stock is offered to
the general public, allowing the stockholder to retain the same ownership
percentage after the new stock offering.

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<PAGE>
-------------------------------------------------------
8  GE Institutional Funds
   International Equity Fund Prospectus
   More on
   Strategies and Risks


--------------------------------------------------------------------------------

Short sales against the box involve selling short securities actually owned or
otherwise covered at all times during the period the short position is open.

Various investment techniques are utilized by the 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. 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 the Fund's portfolio
of investments and are not used for leverage. To the extent that the Fund
employs these techniques, the Fund would be subject to derivative securities
risk.

Warrants are securities that are usually issued together with a bond or
preferred stock, that permits the holder to buy a proportionate amount of common
stock at a specified price that is usually higher than the stock price at the
time of issue.

When-issued and delayed delivery securities are securities that are purchased or
sold for delivery and payment at a future date, i.e., beyond normal settlement
date.

More on Investment Strategies

In addition to the International Equity Fund's principal investment strategies
described earlier in this Prospectus, the Fund is permitted to use other
securities and investment strategies in pursuit of its investment objective. The
Fund is under no 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 Fund to other risks and considerations,
which are discussed later in the Prospectus or in the Fund's Statement of
Additional Information (SAI).

Holding Cash and Temporary Defensive Positions: Under normal circumstances, the
Fund may hold cash and/or money market securities (i) pending investment, (ii)
for cash management purposes, and (iii) to meet operating expenses. The Fund may
from time to time take temporary defensive positions when the portfolio managers
believe that adverse market, economic, political or other conditions exist. In
these circumstances, the portfolio managers may (i) without limit hold cash
and/or invest in money market instruments, or (ii) restrict the securities
markets in which the 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 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 Asset Management, which
charges no advisory fee to the Fund. To the extent that the Fund holds cash or
invests in money market instruments, it may not achieve its investment
objective.

Other Permitted Investments: The Fund is permitted to invest in the instruments,
or utilize the investment strategies, described below. Certain techniques and
limitations may be changed at the discretion of GE Asset Management. Please note
that percentage figures refer to the percentage of the Fund's assets that may be
invested in accordance with the indicated policy.

o Borrowing (33 1/3%)

o Repurchase Agreements

o Reverse Repurchase Agreements

o Restricted and Illiquid Securities

o Purchasing and Writing Securities Options

o Purchasing and Writing Securities Index Options

o Futures and Options on Futures

o Forward Currency Transactions

o Options on Foreign Currencies

o Debt Securities (35%)

o Below Investment-Grade Debt Securities (5%)

o Foreign Securities (100%)

o When-Issued and Delayed Delivery Securities

o Lending Portfolio Securities

o Rule 144A Securities

o Debt Obligations of Supranational Agencies

o Depositary Receipts

o Securities of Other Investment Funds

o Short Sales Against the Box

--------------------------------------------------------------------------------
<PAGE>
                                                                    ------------
                                                                               9


--------------------------------------------------------------------------------
More on Risks

Like all mutual funds, investing in the International Equity Fund involves risk
factors and special considerations. The Fund's risk is defined primarily by its
principal investment strategies, which are described earlier in this Prospectus.
Investments in the Fund are not insured against loss of principal. As with any
mutual fund, there can be no assurance that the Fund will achieve its investment
objective. Investing in shares of the Fund should not be considered a complete
investment program. The share value of the International Equity Fund will rise
and fall.

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 -- 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 Fund, please see the
SAI, which is incorporated by reference into this Prospectus.

Credit Risk: The price of a bond is affected by the issuer's or counterparty's
credit quality. Changes in financial condition and general economic conditions
can affect the ability to honor financial obligations and therefore lower credit
quality. Lower quality bonds are generally more sensitive to these changes than
higher quality bonds. Even within securities considered investment grade,
differences exist in credit quality and some investment grade debt securities
may have speculative characteristics. A security's price may be adversely
affected by the market's opinion of the security's credit quality level even if
the issuer or counterparty has suffered no degradation in ability to honor the
obligation.

Derivative Securities Risk: The Fund's use of various investment techniques to
increase or decrease its exposure to changing security prices, interest rates,
currency exchange rates, commodity prices, or other factors that affect security
values may involve derivative securities and contracts. Derivative securities
and contracts (securities and contracts whose values are based on other
securities, currencies or indices) include options contracts (on stocks,
indices, currencies, futures contracts or bonds), forward currency exchange
contracts, futures contracts, currency and interest rate swap contracts and
structured securities. Derivative securities and contracts may be used as a
direct investment or as a hedge for the Fund's portfolio or a portion of its
portfolio. Hedging involves using a security or contract to offset investment
risk. Hedging may include reducing the risk of a position held in the Fund's
portfolio. Hedging and other investment techniques also may be used to increase
the Fund's exposure to a particular investment strategy. If the portfolio
managers' judgment of market conditions proves incorrect or the strategy does
not correlate well with the 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 the 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. The
Fund is not obligated to pursue any hedging strategy. In addition, hedging
techniques may not be available, may be too costly to use effectively or may be
unable to be used for other reasons. These investments may be considered
speculative.

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

--------------------------------------------------------------------------------
<PAGE>
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10  GE Institutional Funds
    International Equity Fund Prospectus
    More on
    Strategies and Risks


--------------------------------------------------------------------------------
illiquid and more volatile than investments in developed countries. As a result,
the Fund when investing in emerging markets countries may be required to
establish special custody or other arrangements before investing.

Foreign Exposure Risk: Investing in foreign securities, including depositary
receipts, or securities of U.S. entities with significant foreign operations,
involves additional risks which can affect the 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 the Fund's foreign investments.

o Regulatory Risk: Foreign companies often are not subject to uniform
accounting, auditing and financial reporting standards or to other regulatory
practices and requirements common to U.S. companies.

High Yield Securities Risk: Below investment-grade securities, sometimes called
"junk bonds," are considered speculative. These securities have greater risk of
default than higher rated securities. The market value of below investment-grade
securities is more sensitive to individual corporate developments and economic
changes than higher rated securities. The market for below investment-grade
securities may be less active than for higher rated securities, which can
adversely affect the price at which these securities may be sold. Less active
markets may diminish the Fund's ability to obtain accurate market quotations
when valuing the portfolio securities and calculating the Fund's net asset
value. In addition, the Fund may incur additional expenses if a holding defaults
and the Fund has to seek recovery of its principal investment.

Below investment-grade securities may also present risks based on payment
expectations. For example, these securities may contain redemption or call
provisions. If an issuer exercises these provisions in a declining interest rate
market the Fund would have to replace the security with a lower yielding
security resulting in a decreased return for investors.

Illiquid Securities Risk: Illiquid securities may be difficult to resell at
approximately the price they were valued in the ordinary course of business in
seven days or less. When investments cannot be sold readily at the desired time
or price, the Fund may have to accept a lower price or may not be able to sell
the security at all, or forego other investment opportunities, all of which may
have an impact on the Fund.

Interest Rate Risk: Bond prices generally rise when interest rates decline and
decline when interest rates rise. The longer the duration of a bond, the more a
change in interest rates affects the bond's price. Short-term and long-term
interest rates may not move the same amount and may not move in the same
direction.

Repurchase and Reverse Repurchase Agreements Risk: If the Fund enters into a
repurchase agreement, it 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 dis-

--------------------------------------------------------------------------------
<PAGE>
                                                                    ------------
                                                                              11


--------------------------------------------------------------------------------

pose 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 the Fund may decline below the
price of the securities the Fund has sold but is obligated to repurchase at a
higher price under the agreement.

Restricted Securities Risk: Restricted securities (including Rule 144A
securities) may be subject to legal restraints on resale and, therefore, are
typically less liquid than other securities. The prices received from reselling
restricted securities in privately negotiated transactions may be less than
those originally paid by the Fund. Companies whose securities are restricted are
not subject to the same investor protection requirements as publicly traded
securities.

Stock Market Risk: Stock market risk is the risk that the value of equity
securities may decline. Stock prices change daily in response to company
activity and general economic and market conditions. Stock prices may decline in
value, even during periods when equity securities in general are rising, or may
not perform as well as the market in general. Additional stock market risks may
be introduced when a particular equity security is traded on a foreign market.
For more detail on the related risks involved in foreign markets, see Foreign
Exposure Risk.

Style Risk: Securities with different characteristics tend to shift in and out
of favor depending upon market and economic conditions as well as investor
sentiment. The Fund may underperform other funds that employ a different style.
The 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, such as the Fund, will typically
underperform when value investing is in favor.

Institutional Investor Risk: Investors in the Fund may be materially affected by
the actions of other large institutional investors. For example, if a large
institutional investor withdraws an investment in the Fund, the Fund could
diminish in size by a substantial amount causing the remaining investors to
experience higher pro rata operating expenses, resulting in lower returns for
such investors. The purchase or withdrawal by a large investor may result in
significant portfolio trading expenses that are borne by other shareholders.

Other Risk Considerations

EURO Conversion: The introduction of the EURO, a new common currency in Europe,
may result in uncertainties for European companies and markets. Individual
issuers may suffer increased costs and decreased earnings. Market disruptions
may occur that could adversely affect the value of European securities and
currencies.



--------------------------------------------------------------------------------
<PAGE>
--------------------------------------------------------
12  GE Institutional Funds                    About the
    International Equity Fund Prospectus      Investment
                                              Adviser


--------------------------------------------------------------------------------
Investment Adviser and Administrator


GE Asset Management Incorporated, located at 3003 Summer Street, P.O. Box 7900,
Stamford, Connecticut 06904, is the investment adviser and administrator of the
Fund. GE Asset Management is a wholly-owned subsidiary of General Electric
Company (GE) and a registered investment adviser. GE Asset Management's
principal officers, directors and portfolio managers hold similar positions with
General Electric Investment Corporation (GEIC), a wholly-owned subsidiary of GE.
As of December 31, 2000, GE's investment advisory firms oversaw $____ billion
and managed individual and institutional assets of $___ billion, of which more
than $___ billion was invested in mutual funds.


For many years, GE's tradition of ingenuity and customer focus has included
financial services. In the late 1920s, through a desire to promote the financial
well-being of its employees, GE began managing assets for its employee pension
plan. By the mid-1930s, GE pioneered some of the nation's earliest mutual funds,
the Elfun Funds -- to be followed years later by the GE Savings and Security
Program Funds. The success of these Funds spurred growth; eventually GE expanded
its mutual fund offerings to include a wide variety of investment products
called the GE Family of Funds, created specifically for the general public.

GE Asset Management bases its investment philosophy on two enduring principles.
First, GE Asset 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 Asset 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.

The Fund pays GE Asset Management a combined fee for advisory and administrative
services that is accrued daily and paid monthly. The advisory and administration
fee for the 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 the Fund, and the
relevant breakpoints, are stated in the schedule below (fees are expressed as an
annual rate) up to the maximum annual fee for investment management services.

--------------------------------------------------------------------------------
About the Fund's Portfolio Manager

Ralph R. Layman is a Director and Executive Vice President of GE Asset
Management. He manages the overall international equity investments for GE Asset
Management. Mr. Layman leads a team of portfolio managers for the International
Equity Fund. He has served in that capacity since the Fund's commencement. Mr.
Layman joined GE Asset Management in 1991 as Executive Vice President for
International Investments.

Investment Management and Administration Fees Payable to GE Asset Management:

                        Average Daily Net Assets of Fund

Name of Fund                               Annual Rate                Percentage
--------------------------------------------------------------------------------
International Equity Fund               First $25 million                  0.75%
                                        Next $50 million                   0.65%
                                        Over $75 million                   0.55%
--------------------------------------------------------------------------------

From time to time, GE Asset Management may waive or reimburse advisory or
administrative fees paid by the Fund.

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<PAGE>
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GE Institutional Funds                      How to Invest                     13
International Equity Fund Prospectus


--------------------------------------------------------------------------------


The Fund offers three classes of shares -- Service Class, Investment Class and
Class X. The GE Savings and Security Program ("S&SP") International Equity
investment option invests in Investment Class shares of the International Equity
Fund of the GE Institutional Funds. The S&SP purchases and redeems Investment
Class shares of the International Equity Fund for its International Equity
investment option at net asset value without sales or redemption charges.


Plan participants should consult the Summary Plan Description and other
materials describing S&SP for information about how to invest in the S&SP's
International Equity investment option.

--------------------------------------------------------------------------------
<PAGE>
-----------------------------------------------------------
14  GE Institutional Funds                    Dividends,
    International Equity Fund Prospectus      Capital Gains
                                              and Other Tax
                                              Information


--------------------------------------------------------------------------------
Dividend and Capital Gains Distributions

The Fund typically pays dividends from net investment income and from net
capital gains once each year. Dividends and capital gain distributions made by
the Fund to the S&SP will be automatically reinvested in Investment Class shares
of the Fund at the Fund's net asset value.

Taxes

For federal income tax purposes, the Fund is treated as a separate entity from
other funds of GE Institutional Funds. The Fund intends to qualify each year as
a "regulated investment company" under the Internal Revenue Code. By so
qualifying, the Fund is not subject to federal income taxes to the extent that
its net investment income and net realized capital gains are distributed to the
S&SP and other shareholders.

Since the S&SP holds shares of the Fund on behalf of Plan participants, no
discussion is included herein as to the federal income tax consequences to the
Plan or Plan participants. For information concerning the federal tax
consequences to Plan participants, consult the Summary Plan Description and
other materials describing S&SP tax matters.

--------------------------------------------------------------------------------
<PAGE>
-------------------------------------------------------             ------------
GE Institutional Funds                      Calculating                       15
International Equity Fund Prospectus        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 Investment Class share for the International Equity 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.

The 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. Short-term securities held by the Fund with
remaining maturities of sixty days or less are valued on the basis of amortized
cost. The Fund's written or purchased options are valued at the last sales price
of the day. If no sales occurred, the options are valued at the last traded bid
price. The 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
the security's primary market, the security may be valued using procedures
approved by the Fund's Board of Trustees that they believe accurately reflects
"fair value." A security's value may differ depending on the valuation procedure
used to determine its value.


--------------------------------------------------------------------------------
<PAGE>
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16  GE Institutional Funds                    Financial
    International Equity Fund Prospectus      Highlights
    Appendix


--------------------------------------------------------------------------------

The financial highlights table that follows is intended to help you understand
the International Equity Fund's financial performance for the fiscal years ended
September 30, unless otherwise noted. The total returns in the table represent
the rate that an investor would have earned or lost on an investment in the Fund
(assuming reinvestment of all dividends and distributions). Fiscal year end
information has been audited by PricewaterhouseCoopers LLP, whose report, along
with the Fund's financial statements, are included in the Fund's Annual Report,
which is available upon request.

--------------------------------------------------------------------------------
International Equity Fund


<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------
Years ended September 30                                                  9/30/00        9/30/99       9/30/98*
---------------------------------------------------------------------------------------------------------------
<S>                                                                      <C>            <C>            <C>
Inception date                                                                                --       11/25/97
---------------------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Period                                                      $10.06         $10.00
---------------------------------------------------------------------------------------------------------------
Income (Loss) from Investment Operations:
   Net Investment Income (Loss)                                                             0.09           0.14(b)
---------------------------------------------------------------------------------------------------------------
   Net Gains (Losses) on Investments (both realized and unrealized)                         2.81          (0.07)(b)
---------------------------------------------------------------------------------------------------------------
Total Income (Loss) from Investments Operations                                             2.90           0.07
---------------------------------------------------------------------------------------------------------------
Less Distributions
   Dividends (from net investment income)                                                   0.12           0.01
---------------------------------------------------------------------------------------------------------------
   Distributions (from capital gains)                                                       0.35             --
---------------------------------------------------------------------------------------------------------------
Total Distributions                                                                         0.47           0.01
---------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period                                                            $12.49         $10.06
---------------------------------------------------------------------------------------------------------------

Total Return (a)                                                                           29.50%          0.66%
---------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data:
   Net Assets, End of Period (in thousands)                                             $197,974       $114,414
---------------------------------------------------------------------------------------------------------------
   Ratio of Net Investment Income (Loss) to Average Net Assets**                            0.99%          1.72%
---------------------------------------------------------------------------------------------------------------
   Ratio of Net Expenses to Average Net Assets**                                            0.62%          0.64%
---------------------------------------------------------------------------------------------------------------
   Portfolio Turnover Rate                                                                    50%            53%
---------------------------------------------------------------------------------------------------------------
</TABLE>


--------------------------------------------------------------------------------
Notes to Financial Highlights

(a)   Total returns are historical and assume changes in share price,
      reinvestment of dividends and capital gains. 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 Fund's Annual Report.

*     Information is for the period from Inception date through September 30,
      1998.

**    Annualized for periods less than one year.

--------------------------------------------------------------------------------
<PAGE>

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                      [This Page Intentionally Left Blank]


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<PAGE>

-----------------------------------------------------------
GE Institutional Funds                        International                   18
International Equity Fund Prospectus          Equity Fund


--------------------------------------------------------------------------------
If you wish to know more

You will find additional information about the International Equity Fund in the
following documents:

Annual/Semi-Annual Reports to Shareholders: These reports detail the Fund's
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 Fund's last fiscal year.

Statement of Additional Information (SAI): The SAI contains additional
information about the Fund and its 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
Annual/Semi-Annual Reports, the SAI and other information about the GE
Institutional Funds. Also, you can obtain copies of this information, after
paying a duplicating fee, by sending your request electronically to the
following e-mail address: public [email protected], or in writing to the SEC's Public
Reference Section, Washington, D.C. 20549-0102. You may review and copy
information about the Fund, 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 1-202-942-8090.

--------------------------------------------------------------------------------
GE Institutional Funds

You may obtain a free copy of the SAI or the Fund's annual/semi-annual report
and make shareholder inquiries by contacting:

GE Investment Distributors, Inc.
P.O. Box 7900
3003 Summer Street
Stamford, CT 06904

Telephone 1-800-493-3042

Website http://www.ge.com/mutualfunds

--------------------------------------------------------------------------------
Investment Adviser

GE Asset Management Incorporated
P.O. Box 7900
3003 Summer Street
Stamford, CT 06904

--------------------------------------------------------------------------------
Transfer Agent and Custodian

State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02101

--------------------------------------------------------------------------------
Distributor

GE Investment Distributors, Inc.
777 Long Ridge Road, Building B
Stamford, CT 06927

                 Investment Company Act file number: 811-08257
--------------------------------------------------------------------------------
GE INT-PRO-1

<PAGE>

                       STATEMENT OF ADDITIONAL INFORMATION


                                January __, 2001


GE INSTITUTIONAL FUNDS

3003 Summer Street, Stamford, Connecticut 06905
For information, call (800) 242-0134


*  U.S. Equity Fund
*  S&P 500 Index Fund              o  Premier Growth Equity Fund
*  Value Equity Fund               o  Premier Research Equity Fund
*  Mid-Cap Growth Fund             o  Premier International Equity
*  Mid-Cap Value Equity Fund          Fund
*  Small-Cap Value Equity Fund     *  Income Fund
*  International Equity Fund       *  Strategic Investment Fund
*  Europe Equity Fund              *  Money Market Fund
o  Emerging Markets Fund           *  High Yield Fund
                                   *  Small-Cap Growth Equity Fund


         This Statement of Additional Information ("SAI") supplements the
information contained in the current Prospectuses of GE Institutional Funds (the
"Trust") dated January _, 2001 (the "Prospectuses"), and should be read in
conjunction with the relevant Prospectus. This SAI, although not a prospectus,
is incorporated in its entirety by reference into the Prospectuses. Copies of
the Prospectuses describing each series of the Trust listed above ("Funds") may
be obtained without charge by calling the Trust at the telephone number listed
above.

         The Trust's financial statements for the fiscal year ended September
30, 1999, and the Auditor's Reports thereon, are incorporated herein by
reference to the Trust's Annual Report dated September 30, 2000. The Annual
Report may be obtained without charge by calling the Trust at the telephone
number listed above.


         Information regarding the status of shareholder accounts may be
obtained by calling the Trust at the telephone number listed above or by writing
to the Trust at P.O. Box 120065, Stamford, CT 06912-0065. Terms that are defined
in the Prospectuses shall have the same meanings in this SAI.


<PAGE>


                                Table of Contents

                                                                            Page


INVESTMENT STRATEGIES AND RISKS ...........................................    1

INVESTMENT RESTRICTIONS ...................................................   39

MANAGEMENT OF THE TRUST ...................................................   45

COMPENSATION TABLE ........................................................   48

PURCHASE, REDEMPTION AND EXCHANGE OF SHARES ...............................   55

NET ASSET VALUE ...........................................................   61

DIVIDENDS, DISTRIBUTIONS AND TAXES ........................................   62

THE FUNDS' PERFORMANCE ....................................................   65

PRINCIPAL STOCKHOLDERS ....................................................

FUND HISTORY AND ADDITIONAL INFORMATION ...................................   78

FINANCIAL STATEMENTS ......................................................   81


DESCRIPTION OF RATINGS.....................................................  A-1


                                      iii
<PAGE>


                         INVESTMENT STRATEGIES AND RISKS

         The Prospectuses discuss the investment objectives and principal
investment strategies of the following diversified open-end funds: the U.S.
Equity Fund, the S&P 500 Index Fund,(1) the Value Equity Fund, the Mid-Cap
Growth Fund, the Mid-Cap Value Equity Fund (the "Mid-Cap Value Fund"), the
Small-Cap Value Equity Fund (the "Small-Cap Value Fund"), the International
Equity Fund (the "International Fund"), the Europe Equity Fund, the Emerging
Markets Fund, the Premier Growth Equity Fund (the "Premier Growth Fund"), the
Premier Research Equity Fund ("Premier Research Fund"), the Premier
International Equity Fund ("Premier International Fund"), the Income Fund, the
Strategic Investment Fund (the "Strategic Fund"), and the Money Market Fund. The
High Yield Fund and the Small-Cap Growth Equity Fund (the "Small-Cap Growth
Fund"), each an additional series of the Trust, are not currently being offered
by the Trust.

U.S. Equity Fund

         The investment objective of the U.S. Equity Fund is long-term growth of
capital. The Fund seeks to achieve this objective by investing primarily in
equity securities of U.S. companies. In pursuing its objective, the Fund, under
normal conditions, will invest at least 65% of its assets in equity securities.



----------
(1)  The S&P 500 Index Fund is not sponsored, endorsed, sold or promoted by
     Standard & Poor's, a division of The McGraw-Hill Companies, Inc. ("S&P").
     S&P 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. S&P's only relationship to the Fund is the licensing of
     certain trademarks and trade names of S&P and of the S&P 500 Index which is
     determined, composed and calculated by S&P without regard to the Fund. S&P
     has no obligation to take the needs of the Fund or the investors in the
     Fund into consideration in determining, composing or calculating the S&P
     500 Index. S&P is not responsible for and has not participated in the
     determination of the prices or composition of the S&P 500 Index Fund or the
     timing of the issuance or sale of the shares of that Fund. S&P has no
     obligation or liability in connection with the administration, marketing or
     trading of the Fund.

     S&P DOES NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF THE S&P 500
     INDEX OR ANY DATA INCLUDED THEREIN AND S&P SHALL HAVE NO LIABILITY FOR ANY
     ERRORS, OMISSIONS, OR INTERRUPTIONS THEREIN. S&P MAKES NO WARRANTY, EXPRESS
     OR IMPLIED, AS TO THE RESULTS TO BE OBTAINED BY THE FUND, INVESTORS IN THE
     FUND, OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE S&P 500 INDEX OR
     ANY DATA INCLUDED THEREIN. S&P MAKES NO EXPRESS OR IMPLIED WARRANTIES, AND
     EXPRESSLY DISCLAIMS ALL WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A
     PARTICULAR PURPOSE OR USE WITH RESPECT TO THE S&P 500 INDEX OR ANY DATA
     INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL
     S&P HAVE ANY LIABILITY FOR ANY SPECIAL, PUNITIVE, INDIRECT OR CONSEQUENTIAL
     DAMAGES (INCLUDING LOST PROFITS), EVEN IF NOTIFIED OF THE POSSIBILITY OF
     SUCH DAMAGES.


                                       1
<PAGE>

S&P 500 Index Fund

         The investment objective of the S&P 500 Index Fund is growth of capital
and accumulation of income that corresponds to the investment return of the
Standard and Poor's 500 Composite Stock Index. The Fund seeks to achieve this
objective by investing in common stocks comprising that Index.

Value Equity Fund

         The investment objective of the Value Equity Fund is long-term growth
of capital and future income. The Fund seeks to achieve its objective by
investing primarily in equity securities of companies with large sized market
capitalizations that GE Asset Management Incorporated ("GE Asset Management")
considers to be undervalued by the market. Undervalued securities are those
selling for low prices given the fundamental characteristics of their issuers.
During normal market conditions, the Fund invests at least 65% of its assets in
common stocks, preferred stocks, convertible bonds, convertible debentures,
convertible notes, convertible preferred stocks, and warrants or rights issued
by U.S. and foreign companies.

Mid-Cap Growth Fund

         The investment objective of the Mid-Cap Growth Fund is long-term growth
of capital. The Fund seeks to achieve this objective by investing primarily in
the equity securities of companies with medium-sized market capitalizations
("mid-cap") that have the potential for above-average growth. The Fund, under
normal market conditions, will invest at least 65% of its total assets in a
portfolio of equity securities of mid-cap companies traded on U.S. securities
exchanges or in the U.S. over-the-counter market.

Mid-Cap Value Equity Fund

         The investment objective of the Mid-Cap Value Equity Fund is long-term
growth of capital. In seeking its investment objective, the 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.

Small-Cap Value Equity Fund

         The investment objective of the Small-Cap Value Equity Fund is
long-term growth of capital. The Fund seeks to achieve its investment objective
by investing, under normal market conditions, at least 65% of its assets in a
portfolio of equity securities of small-capitalization companies traded on U.S.
securities exchanges or in the U.S. over-the-counter market.

International Equity Fund

         The investment objective of the International Equity Fund is long-term
growth of capital. The Fund seeks to achieve its objective by investing
primarily in foreign equity securities. The Fund may invest in securities of


                                       2
<PAGE>

companies and governments located in developed and developing countries outside
the United States. The Fund intends to position itself broadly among countries
and, under normal circumstances, at least 65% of the Fund's total assets will be
invested in securities of issuers collectively in no fewer than three different
countries other than the United States. The International Fund, under normal
conditions, invests at least 65% of its assets in common stocks, preferred
stocks, convertible debentures, convertible notes, convertible preferred stocks
and warrants or rights issued by companies believed by GE Asset Management to
have a potential for superior growth in sales and earnings.

Europe Equity Fund

         The investment objective of the Europe Equity Fund is long-term growth
of capital. In seeking its investment objective, the Fund invests, under normal
conditions, at least 65% of its total assets in equity securities of companies
located in developed European countries.

Emerging Markets Fund

         The investment objective of the Emerging Markets Fund is long-term
growth of capital. In seeking its investment objective, the Fund invests, under
normal conditions, at least 65% of its total assets in equity securities of
issuers that are located in emerging market countries.

Premier Growth Equity Fund

         The investment objective of the Premier Growth Equity Fund is long-term
growth of capital and future income. The Fund seeks to achieve this objective by
investing primarily in growth-oriented equity securities which, under normal
market conditions, will represent at least 65% of the Fund's assets.

Premier Research Equity Fund

         The investment objective of the Premier Research Fund is long-term
growth of capital and future income. The Fund seeks to achieve this objective
through investment primarily in a limited number equity securities which, under
normal market conditions, will represent at least 65% of the Fund's assets.

Premier International Equity Fund

         The investment objective of the Premier International Fund is long-term
growth of capital, which the Fund seeks to achieve by investing primarily in
foreign equity securities. The Fund, under normal conditions, invests at least
65% of its assets in a limited number of equity securities.


                                       3
<PAGE>

Income Fund

         The investment objective of the Income Fund is maximum income
consistent with prudent investment management and the preservation of capital.
Capital appreciation with respect to the Fund's portfolio securities may occur
but is not an objective of the Fund.

Strategic Investment Fund

         The investment objective of the Strategic Investment Fund is maximum
total return. In seeking its objective, the Fund follows an asset allocation
strategy that provides diversification across a range of asset classes and
contemplates shifts among them from time to time.

         GE Asset Management has broad latitude in selecting the classes of
investments to which the Strategic Investment Fund's assets are committed.
Although the Fund has the authority to invest solely in equity securities,
solely in debt securities, solely in money market instruments or in any
combination of these classes of investments, GE Asset Management anticipates
that at most times the Fund will be invested in a combination of equity and debt
instruments.

Money Market Fund

         The investment objective of the Money Market Fund is a high level of
current income consistent with the preservation of capital and the maintenance
of liquidity. In seeking its objective, the Fund invests in the following U.S.
dollar denominated, short-term money market instruments: (i) Government
Securities (defined below); (ii) debt obligations of banks, savings and loan
institutions, insurance companies and mortgage bankers; (iii) commercial paper
and notes, including those with floating or variable rates of interest; (iv)
debt obligations of foreign branches of U.S. banks, U.S. branches of foreign
banks and foreign branches of foreign banks; (v) debt obligations issued or
guaranteed by one or more foreign governments or any of their political
subdivisions, agencies or instrumentalities, including obligations of
supra-national entities; (vi) debt securities issued by foreign issuers; and
(vii) repurchase agreements.

High Yield Fund

         The investment objective of the High Yield Fund is to maximize total
return, consistent with the preservation of capital and prudent investment
management. In seeking to achieve its investment objective, the Fund will invest
primarily in high yield securities (including bonds rated below investment
grade, sometimes called "junk bonds").

Small-Cap Growth Equity Fund

         The investment objective of the Small-Cap Growth Equity Fund is
long-term growth of capital. The Fund seeks to achieve its objective by
investing primarily in equity securities of companies with small-sized market
capitalizations that GE Asset Management believes have the potential for
above-average growth.


                                       4
<PAGE>

                                  *    *    *

         Supplemental information concerning certain of the securities and other
instruments in which the Funds may invest, the investment policies and
strategies that the Funds may utilize and certain risks attendant to those
investments, policies and strategies is provided below.

         Some or all of the Funds may invest in the types of instruments and
engage in the types of strategies described in detail below. A Fund will not
purchase all of the following types of securities or employ all of the following
strategies unless doing so is consistent with its investment objective.


                                       5
<PAGE>

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                          Purchasing     Purchasing
                                                           Reverse      Restricted and  Structured and    and Writing   and Writing
                                         Repurchase       Repurchase       Illiquid         Indexed       Securities     Securities
                          Borrowing      Agreements       Agreements      Securities      Securities        Options    Index Options
------------------------------------------------------------------------------------------------------------------------------------

<S>                       <C>            <C>              <C>           <C>             <C>               <C>          <C>
U.S. Equity Fund           33 1/3%           Yes             Yes             Yes              No              Yes            Yes
------------------------------------------------------------------------------------------------------------------------------------
S&P 500 Index Fund         33 1/3%           Yes             Yes             Yes              No              Yes            Yes
------------------------------------------------------------------------------------------------------------------------------------
Value Equity Fund          33 1/3%           Yes             Yes             Yes              No              Yes            Yes
------------------------------------------------------------------------------------------------------------------------------------
Mid-Cap Growth Fund        33 1/3%           Yes             Yes             Yes              No              Yes            Yes
------------------------------------------------------------------------------------------------------------------------------------
Mid-Cap Value Equity       33 1/3%           Yes             Yes             Yes              Yes             Yes            Yes
Fund
------------------------------------------------------------------------------------------------------------------------------------
Small-Cap Value            33 1/3%           Yes             Yes             Yes              No              Yes            Yes
Equity Fund
------------------------------------------------------------------------------------------------------------------------------------
International Equity       33 1/3%           Yes             Yes             Yes              No              Yes            Yes
Fund
------------------------------------------------------------------------------------------------------------------------------------
Europe Equity Fund         33 1/3%           Yes             Yes             Yes              Yes             Yes            Yes
------------------------------------------------------------------------------------------------------------------------------------
Emerging Markets Fund      33 1/3%           Yes             Yes             Yes              No              Yes            Yes
------------------------------------------------------------------------------------------------------------------------------------
Premier Growth Equity      33 1/3%           Yes             Yes             Yes              No              Yes            Yes
Fund
------------------------------------------------------------------------------------------------------------------------------------
Premier Research           33 1/3%           Yes             Yes             Yes              No              Yes            Yes
Equity Fund
------------------------------------------------------------------------------------------------------------------------------------
Premier International      33 1/3%           Yes             Yes             Yes              No              Yes            Yes
Equity Fund
------------------------------------------------------------------------------------------------------------------------------------
Income Fund                33 1/3%           Yes             Yes             Yes              Yes             Yes            Yes
------------------------------------------------------------------------------------------------------------------------------------
Strategic Investment       33 1/3%           Yes             Yes             Yes              Yes             Yes            Yes
Fund
------------------------------------------------------------------------------------------------------------------------------------
Money Market Fund          33 1/3%           Yes             Yes              No              No              No              No
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>


                                       6
<PAGE>

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
                                                                                            Maximum
                                                                                         Investment in     Maximum   When-Issued and
                         Futures and       Forward        Options on      Maximum       Below-Investment  Investment     Delayed
                          Options on       Currency         Foreign     Investment in      Grade Debt     in 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
------------------------------------------------------------------------------------------------------------------------------------
Value Equity Fund            Yes             Yes              Yes             35%             5%             25%*            Yes
------------------------------------------------------------------------------------------------------------------------------------
Mid-Cap Growth Fund          Yes             Yes              Yes        35% (maximum    10% in BB or B      35%*            Yes
                                                                         of 25% in BBB   by S&P or Ba or
                                                                         by S&P, Baa or  B by Moody's or
                                                                         by Moody's or equivalent
                                                                         equivalent)
------------------------------------------------------------------------------------------------------------------------------------
Mid-Cap Value Equity         Yes             Yes              Yes             35%       15% in securities    15%*            Yes
   Fund                                                                                 rated BBB or
                                                                                        below by S&P or
                                                                                        Baa or below by
                                                                                        Moody's or
                                                                                        equivalent
------------------------------------------------------------------------------------------------------------------------------------
Small-Cap Value Equity       No              No              No              35%             10%            10%*             Yes
Fund
------------------------------------------------------------------------------------------------------------------------------------
International Equity         Yes             Yes              Yes             35%             5%             100%            Yes
Fund
------------------------------------------------------------------------------------------------------------------------------------
Europe Equity Fund           Yes             Yes              Yes             35%             15%            100%            Yes
------------------------------------------------------------------------------------------------------------------------------------
Emerging Markets Fund        Yes             Yes              Yes        35% (maximum    10% in BB or B      100%            Yes
                                                                         of 25% in BBB   by S&P or Ba or
                                                                         by S&P, Baa by  B by Moody's or
                                                                         Moody's or      equivalent
                                                                         equivalent)
------------------------------------------------------------------------------------------------------------------------------------
Premier Growth Equity        Yes             Yes              No              35%             5%             25%*            Yes
Fund
------------------------------------------------------------------------------------------------------------------------------------
Premier Research Equity      Yes             Yes              No              35%             5%             25%*            Yes
Fund
------------------------------------------------------------------------------------------------------------------------------------
Premier International        Yes             Yes              Yes             35%             5%             100%            Yes
Equity Fund
------------------------------------------------------------------------------------------------------------------------------------
Income Fund                  Yes             Yes              Yes        100%           10% in BB or B       35%*            Yes
                                                                         (maximum of    by S&P or Ba or
                                                                         25% in BBB by  B by Moody's or
                                                                         S&P or Baa by  equivalent
                                                                         Moody's or
                                                                         equivalent)
------------------------------------------------------------------------------------------------------------------------------------
Strategic Investment         Yes             Yes              Yes        100%           10% in BB or B       30%*            Yes
Fund                                                                     (maximum of    by S&P or Ba or
                                                                         25% in BBB by  B by Moody's or
                                                                         S&P or Baa by  equivalent
                                                                         Moody's or
                                                                         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 traded
          on the Nasdaq National Market or the Nasdaq Small-Cap Market.


                                       7
<PAGE>

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------------------
                                                    Debt                     Securities of                            Participation
                        Lending                 Obligations of                  Other                 Floating and     Interests in
                       Portfolio    Rule 144A   Supranational  Depositary     Investment   Municipal  Variable Rate     Municipal
                       Securities   Securities     Agencies     Receipts         Funds       Leases    Instruments     Obligations
----------------------------------------------------------------------------------------------------------------------------------
<S>                    <C>          <C>         <C>            <C>           <C>           <C>        <C>             <C>
U.S. Equity Fund           Yes          Yes           Yes          Yes            No            No          No*             No
----------------------------------------------------------------------------------------------------------------------------------
S&P 500 Index Fund         Yes          Yes           Yes          Yes            Yes           No          No*             No
----------------------------------------------------------------------------------------------------------------------------------
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       Yes          Yes           Yes          Yes            Yes           No          No*             No
Fund
----------------------------------------------------------------------------------------------------------------------------------
Small-Cap Value            Yes          Yes           Yes          Yes            Yes           No          No*             No
Equity Fund
----------------------------------------------------------------------------------------------------------------------------------
International Equity       Yes          Yes           Yes          Yes            Yes           No          No*             No
Fund
----------------------------------------------------------------------------------------------------------------------------------
Europe Equity Fund         Yes          Yes           Yes          Yes            Yes           No          Yes             No
----------------------------------------------------------------------------------------------------------------------------------
Emerging Markets Fund      Yes          Yes           Yes          Yes            Yes           No          No*             No
----------------------------------------------------------------------------------------------------------------------------------
Premier Growth             Yes          Yes           Yes          Yes            Yes           No          No*             No
Equity Fund
----------------------------------------------------------------------------------------------------------------------------------
Premier Research           Yes          Yes           Yes          Yes            Yes           No          No*             No
Equity Fund
----------------------------------------------------------------------------------------------------------------------------------
Premier International      Yes          Yes           Yes          Yes            Yes           No          No*             No
Equity Fund
----------------------------------------------------------------------------------------------------------------------------------
Income Fund                Yes          Yes           Yes          Yes            Yes           No          Yes             No
----------------------------------------------------------------------------------------------------------------------------------
Strategic Investment       Yes          Yes           Yes          Yes            Yes          Yes          Yes            Yes
Fund
----------------------------------------------------------------------------------------------------------------------------------
Money Market Fund          Yes          Yes           Yes           No            No            No          Yes             No
----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

     *    Excludes commercial paper and notes with variable and floating rates
          of interest.


                                       8
<PAGE>

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
                                                                        Mortgage    Government   Asset-Backed
                                                         Custodial       Related     Stripped   Securities and                Short
                                            Municipal   Receipts on    Securities,   Mortgage     Receivable-                 Sales
                              Zero Coupon  Obligations   Municipal      including     Related       Backed      Mortgage     Against
                              Obligations  Components   Obligations       CMOs       Securities   Securities   Dollar 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
------------------------------------------------------------------------------------------------------------------------------------
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
------------------------------------------------------------------------------------------------------------------------------------
Premier Growth Equity Fund        No           No            No            No            No            No            No         No
------------------------------------------------------------------------------------------------------------------------------------
Premier Research Equity Fund      No           No            No            No            No            No            No         No
------------------------------------------------------------------------------------------------------------------------------------
Premier International             No           No            No            No            No            No            No         Yes
Equity Fund
------------------------------------------------------------------------------------------------------------------------------------
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>


                                       9
<PAGE>


         Money Market Fund Investments. The Money Market Fund limits its
portfolio investments to securities that the Trust's Board of Trustees
determines present minimal credit risk and that are "Eligible Securities" at the
time of acquisition by the Fund. "Eligible Securities" as used in this SAI means
securities rated by the requisite nationally recognized statistical rating
organizations ("NRSROs") in one of the two highest short-term rating categories,
consisting of issuers that have received these ratings with respect to other
short-term debt securities and comparable unrated securities. "Requisite NRSROs"
means (i) any two NRSROs that have issued ratings with respect to a security or
class of debt obligations of an issuer or (ii) one NRSRO, if only one NRSRO has
issued such a rating at the time that the Fund acquires the security. Currently,
five organizations are NRSROs: S&P, Moody's Investors Service, Inc. ("Moody's"),
Fitch Investors Service, Inc., Duff and Phelps, Inc. and Thomson BankWatch Inc.
A discussion of the ratings categories is contained in the appendix to this SAI.
By limiting its investments to Eligible Securities, the Fund may not achieve as
high a level of current income as a fund investing in lower-rated securities.

         The Money Market Fund may not invest more than 5% of its total assets
in the securities of any one issuer, except for Government Securities and except
to the extent permitted under rules adopted by the Securities and Exchange
Commission ("SEC") under the 1940 Act. In addition, the Fund may not invest more
than 5% of its total assets in Eligible Securities that have not received the
highest short-term rating for debt obligations and comparable unrated securities
(collectively, "Second Tier Securities"), and may not invest more than the
greater of $1,000,000 or 1% of its total assets in the Second Tier Securities of
any one issuer. The Fund may invest more than 5% (but not more than 25%) of the
then-current value of the Fund's total assets in the securities of a single
issuer for a period of up to three business days, so long as (i) the securities
either are rated by the requisite NRSROs in the highest short-term rating
category or are securities of issuers that have received such ratings with
respect to other short-term debt securities or are comparable unrated securities
and (ii) the Fund does not make more than one such investment at any one time.
Determinations of comparable quality for purchases of unrated securities are
made by GE Asset Management in accordance with procedures established by the
Trust's Board of Trustees (the "Board"). The Fund invests only in instruments
that have (or, pursuant to regulations adopted by the SEC, are deemed to have)
remaining maturities of 13 months or less at the date of purchase (except
securities subject to repurchase agreements), determined in accordance with a
rule promulgated by the SEC. Up to 25% of the Fund's total assets may be
invested in foreign securities, excluding, for purposes of this limitation,
ADRs, and securities of a foreign issuer with a class of securities registered
with the SEC and listed on a U.S. national securities exchange or traded on the
Nasdaq National Market or the Nasdaq SmallCap Market. The Fund will maintain a
dollar-weighted average portfolio maturity of 90 days or less. The assets of the
Fund are valued on the basis of amortized cost, as described below under "Net
Asset Value." The Fund also may hold liquid Rule 144A Securities (see
"Restricted and Other Illiquid Securities").


                                       10
<PAGE>

         Money Market Instruments. The types of money market instruments in
which each Fund, other than the Money Market Fund, may invest directly or
indirectly through its investment in the GEI Short-Term Investment Fund (the
"Investment Fund"), described below, are as follows: (i) securities issued or
guaranteed by the U.S. Government or one of its agencies or instrumentalities
("Government Securities"), (ii) debt obligations of banks, savings and loan
institutions, insurance companies and mortgage bankers, (iii) commercial paper
and notes, including those with variable and floating rates of interest, (iv)
debt obligations of foreign branches of U.S. banks, U.S. branches of foreign
banks and foreign branches of foreign banks, (v) debt obligations issued or
guaranteed by one or more foreign governments or any of their political
subdivisions, agencies or instrumentalities, including obligations of
supranational entities, (vi) debt securities issued by foreign issuers and (vii)
repurchase agreements.

         Each Fund, other than the Money Market Fund, may also invest in the
Investment Fund, an investment fund created specifically to serve as a vehicle
for the collective investment of cash balances of the Funds (other than the
Money Market Fund) and other accounts advised by GE Asset Management. The
Investment Fund invests exclusively in the money market instruments described in
(i) through (vii) above. The Investment Fund is advised by GE Asset Management.
No advisory fee is charged by GE Asset Management to the Investment Fund, nor
will a Fund incur any sales charge, redemption fee, distribution fee or service
fee in connection with its investments in the Investment Fund. Each Fund, other
than the Money Market Fund, may invest up to 25% of its assets in the Investment
Fund.

         Each of the Funds may invest in the following types of Government
Securities: debt obligations of varying maturities issued by the U.S. Treasury
or issued or guaranteed by the Federal Housing Administration, Farmers Home
Administration, Export-Import Bank of the United States, Small Business
Administration, Government National Mortgage Association ("GNMA"), General
Services Administration, Central Bank for Cooperatives, Federal Farm Credit
Banks Funding Corporation, Federal Home Loan Banks, Federal Home Loan Mortgage
Corporation ("FHLMC"), Federal Intermediate Credit Banks, Federal Land Banks,
Federal National Mortgage Association ("FNMA"), Federal Deposit Insurance
Corporation, Maritime Administration, Tennessee Valley Authority, District of
Columbia Armory Board, Student Loan Marketing Association and Resolution Trust
Corporation. Direct obligations of the U.S. Treasury include a variety of
securities that differ in their interest rates, maturities and dates of
issuance. Certain of the Government Securities that may be held by the Funds are
instruments that are supported by the full faith and credit of the United
States, whereas other Government Securities that may be held by the Funds are
supported by the right of the issuer to borrow from the U.S. Treasury or are
supported solely by the credit of the instrumentality. Because the U.S.
Government is not obligated by law to provide support to an instrumentality that
it sponsors, a Fund will invest in obligations issued by an instrumentality of
the U.S. Government only if the Investment Manager(2) determines that the
instrumentality's credit risk does not make its securities unsuitable for
investment by the Fund.

----------
(2) As used in this SAI, the term "Investment Manager" shall refer to GE Asset
Management, the Funds' investment adviser and administrator, Palisade Capital
Management, L.L.C., the sub-investment adviser to the Small-Cap Value Fund,
State Street Global Advisors, the investment sub-adviser to the S&P 500 Index
Fund, or NWQ Investment Management Company, the sub-adviser to the Mid-Cap Value
Fund, as applicable.


                                       11
<PAGE>

         Each Fund, other than the Money Market Fund, may invest in money market
instruments issued or guaranteed by foreign governments or by any of their
political subdivisions, authorities, agencies or instrumentalities. Money market
instruments held by a Fund, other than the Money Market Fund, may be rated no
lower than A-2 by S&P or Prime-2 by Moody's or the equivalent from another
NRSRO, or if unrated, must be issued by an issuer having an outstanding
unsecured debt issue then rated within the three highest categories. A
description of the rating systems of Moody's and S&P is contained in the
Appendix. At no time will the investments of a Fund, other than the Money Market
Fund, in bank obligations, including time deposits, exceed 25% of the value of
the Fund's assets.

         Temporary Defensive Positions. During periods when the Investment
Manager believes there are unstable market, economic, political or currency
conditions domestically or abroad, the Investment Manager may assume, on behalf
of a Fund, a temporary defensive posture and (i) without limitation hold cash
and/or invest in money market instruments, or (ii) restrict the securities
markets in which the Fund's assets will be invested by investing those assets in
securities markets deemed by the Investment Manager to be conservative in light
of the Fund's investment objective and policies. Under normal circumstances,
each Fund may invest a portion of its total assets in cash and/or money market
instruments for cash management purposes, pending investment in accordance with
the Fund's investment objective and policies and to meet operating expenses. 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. For
temporary defensive purposes, the Premier Growth Equity Fund may invest in fixed
income securities without limitation.

         Bank Obligations. Domestic commercial banks organized under Federal law
are supervised and examined by the U.S. Comptroller of the Currency and are
required to be members of the Federal Reserve System and to be insured by the
Federal Deposit Insurance Corporation ("FDIC"). Foreign branches of U.S. banks
and foreign banks are not regulated by U.S. banking authorities and generally
are not bound by mandatory reserve requirements, loan limitations, accounting,
auditing and financial reporting standards comparable to U.S. banks. Obligations
of foreign branches of U.S. banks and foreign banks are subject to the risks
associated with investing in foreign securities generally. These obligations
entail risks that are different from those of investments in obligations in
domestic banks, including foreign economic and political developments outside
the United States, foreign governmental restrictions that may adversely affect
payment of principal and interest on the obligations, foreign exchange controls
and foreign withholding or other taxes on income.

         A U.S. branch of a foreign bank may or may not be subject to reserve
requirements imposed by the Federal Reserve System or by the state in which the
branch is located if the branch is licensed in that state. In addition, branches
licensed by the Comptroller of the Currency and branches licensed by certain
states ("State Branches") may or may not be required to: (i) pledge to the
regulator by depositing assets with a designated bank within the state, an
amount of its assets equal to 5% of its total liabilities; and (ii) maintain
assets within the state in an amount equal to a specified percentage of the
aggregate amount of liabilities of the foreign bank payable at or through all of


                                       12
<PAGE>

its agencies or branches within the state. The deposits of State Branches may
not necessarily be insured by the FDIC. In addition, less information may be
available to the public about a U.S. branch of a foreign bank than about a U.S.
bank.

         Debt Instruments. A debt instrument held by a Fund will be affected by
general changes in interest rates that will in turn result in increases or
decreases in the market value of those obligations. The market value of debt
instruments in a Fund's portfolio can be expected to vary inversely to changes
in prevailing interest rates. In periods of declining interest rates, the yield
of a Fund holding a significant amount of debt instruments will tend to be
somewhat higher than prevailing market rates, and in periods of rising interest
rates, the Fund's yield will tend to be somewhat lower. In addition, when
interest rates are falling, money received by such a Fund from the continuous
sale of its shares will likely be invested in portfolio instruments producing
lower yields than the balance of its portfolio, thereby reducing the Fund's
current yield. In periods of rising interest rates, the opposite result can be
expected to occur.

         Ratings as Investment Criteria. The ratings of NRSROs such as S&P or
Moody's represent the opinions of those organizations as to the quality of
securities that they rate. Although these ratings, which are relative and
subjective and are not absolute standards of quality, are used by the Investment
Manager as initial criteria for the selection of portfolio securities on behalf
of the Funds, the Investment Manager also relies upon its own analysis to
evaluate potential investments.

         Subsequent to its purchase by a Fund, an issue of securities may cease
to be rated or its rating may be reduced below the minimum required for purchase
by the Fund. Although neither event will require the sale of the securities by a
Fund, other than the Money Market Fund, the Investment Manager will consider the
event in its determination of whether the Fund should continue to hold the
securities. In the event the rating of a security held by the Money Market Fund
falls below the minimum acceptable rating or the issuer of the security
defaults, the Money Market Fund will dispose of the security as soon as
practicable, unless the Board determines that disposal of the security would not
be in the best interests of the Money Market Fund. To the extent that a NRSRO's
ratings change as a result of a change in the NRSRO or its rating system, the
Funds will attempt to use comparable ratings as standards for their investments
in accordance with their investment objectives and policies.

         Certain Investment Grade Debt Obligations. Although obligations rated
BBB by S&P or Baa by Moody's are considered investment grade, they may be viewed
as being subject to greater risks than other investment grade obligations.
Obligations rated BBB by S&P are regarded as having only an adequate capacity to
pay principal and interest and those rated Baa by Moody's are considered
medium-grade obligations that lack outstanding investment characteristics and
have speculative characteristics as well.

         Low-rated Debt Securities. Certain Funds are authorized to invest in
securities rated lower than investment grade (sometimes referred to as "junk
bonds"). Low-rated and comparable unrated securities (collectively referred to
as "low-rated" securities) likely have quality and protective characteristics
that, in the judgment of a rating organization, are outweighed by large


                                       13
<PAGE>

uncertainties or major risk exposures to adverse conditions, and are
predominantly speculative with respect to the issuer's capacity to pay interest
and repay principal in accordance with the terms of the obligation. Securities
in the lowest rating categories may be in default or may present substantial
risks of default.

         The market values of certain low-rated securities tend to be more
sensitive to individual corporate developments and changes in economic
conditions than higher-rated securities. In addition, low-rated securities
generally present a higher degree of credit risk. Issuers of low-rated
securities are often highly leveraged and may not have more traditional methods
of financing available to them, so that their ability to service their debt
obligations during an economic downturn or during sustained periods of rising
interest rates may be impaired. The risk of loss due to default by these issuers
is significantly greater because low-rated securities generally are unsecured
and frequently are subordinated to the prior payment of senior indebtedness. A
Fund may incur additional expenses to the extent that it is required to seek
recovery upon a default in the payment of principal or interest on its portfolio
holdings. The existence of limited markets for low-rated securities may diminish
the Trust's ability to obtain accurate market quotations for purposes of valuing
the securities held by a Fund and calculating the Fund's net asset value.

         Repurchase and Reverse Repurchase Agreements. Each Fund may engage in
repurchase agreement transactions with respect to instruments in which the Fund
is authorized to invest. The Funds may engage in repurchase agreement
transactions with certain member banks of the Federal Reserve System and with
certain dealers listed on the Federal Reserve Bank of New York's list of
reporting dealers. Under the terms of a typical repurchase agreement, which is
deemed a loan for purposes of the Investment Company Act of 1940, as amended
("1940 Act"), a Fund would acquire an underlying obligation for a relatively
short period (usually from one to seven days) subject to an obligation of the
seller to repurchase, and the Fund to resell, the obligation at an agreed-upon
price and time, thereby determining the yield during the Fund's holding period.
This arrangement results in a fixed rate of return that is not subject to market
fluctuations during the Fund's holding period. The value of the securities
underlying a repurchase agreement of a Fund are monitored on an ongoing basis by
the Investment Manager to ensure that the value is at least equal at all times
to the total amount of the repurchase obligation, including interest. The
Investment Manager also monitors, on an ongoing basis to evaluate potential
risks, the creditworthiness of those banks and dealers with which a Fund enters
into repurchase agreements.

         Each Fund may engage in reverse repurchase agreements, subject to their
investment restrictions. A reverse repurchase agreement, which is considered a
borrowing by a Fund, involves a sale by the Fund of securities that it holds
concurrently with an agreement by the Fund to repurchase the same securities at
an agreed upon price and date. A Fund uses the proceeds of reverse repurchase
agreements to provide liquidity to meet redemption requests and to make cash
payments of dividends and distributions when the sale of the Fund's securities
is considered to be disadvantageous. Cash, Government Securities or other liquid
assets equal in value to a Fund's obligations with respect to reverse repurchase
agreements are segregated and maintained with the Trust's custodian or
designated sub-custodian.


                                       14
<PAGE>

         A Fund entering into a repurchase agreement will bear a risk of loss in
the event that the other party to the transaction defaults on its obligations
and the Fund is delayed or prevented from exercising its rights to dispose of
the underlying securities. The Fund will be, in particular, subject to the risk
of a possible decline in the value of the underlying securities during the
period in which the Fund seeks to assert its right to them, the risk of
incurring expenses associated with asserting those rights and the risk of losing
all or a 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 under the agreement.
In the event the buyer of securities under a reverse repurchase agreement files
for bankruptcy or becomes insolvent, a Fund's use of the proceeds of the
agreement may be restricted pending a determination by the party, or its trustee
or receiver, whether to enforce the Fund's obligation to repurchase the
securities.

         Restricted and Other Illiquid Securities. Each Fund, other than the
Money Market Fund, may invest up to 10% of its assets in restricted securities.
Restricted securities are securities that are subject to contractual or legal
restrictions on transfer, excluding for purposes of this restriction, Rule 144A
Securities that have been determined to be liquid by the Board based upon the
trading markets for the securities. In addition, each Fund, other than the Money
Market Fund, may invest up to 15% of its assets in "illiquid securities"; the
Money Market Fund may not, under any circumstance, invest in illiquid
securities. Illiquid securities are securities that cannot be disposed of by a
Fund within seven days in the ordinary course of business at approximately the
amount at which the Fund has valued the securities. Illiquid securities that are
held by a Fund may take the form of options traded over-the-counter, repurchase
agreements maturing in more than seven days, certain mortgage related securities
and securities subject to restrictions on resale that the Investment Manager has
determined are not liquid under guidelines established by the Board.

         Restricted securities may be less liquid than publicly traded
securities. Although these securities may be resold in privately negotiated
transactions, the prices realized from these sales could be less than those
originally paid by a Fund. In addition, companies whose securities are not
publicly traded are not subject to the disclosure and other investor protection
requirements that may be applicable if their securities were publicly traded. A
Fund's investments in illiquid securities are subject to the risk that should
the Fund desire to sell any of these securities when a ready buyer is not
available at a price that the Investment Manager deems representative of their
value, the value of the Fund's net assets could be adversely affected.

         Rule 144A Securities. Each of the Funds may purchase Rule 144A
Securities. Certain Rule 144A Securities may be considered illiquid and
therefore subject to a Fund's limitation on the purchase of illiquid securities,
unless the Board determines on an ongoing basis that an adequate trading market
exists for the Rule 144A Securities. A Fund's purchase of Rule 144A Securities
could have the effect of increasing the level of illiquidity in the Fund to the
extent that qualified institutional buyers become uninterested for a time in
purchasing Rule 144A Securities held by the Fund. The Board has established


                                       15
<PAGE>

standards and procedures for determining the liquidity of a Rule 144A Security
and monitors the Investment Manager's implementation of the standards and
procedures. The ability to sell to qualified institutional buyers under Rule
144A is a recent development and the Investment Manager cannot predict how this
market will develop.

         When-Issued and Delayed-Delivery Securities. To secure prices or yields
deemed advantageous at a particular time, a Fund may purchase securities on a
when-issued or delayed-delivery basis, in which case, delivery of the securities
occurs beyond the normal settlement period; no payment for or delivery of the
securities is made by, and no income accrues to, the Fund, however, prior to the
actual delivery or payment by the other party to the transaction. Each Fund will
enter into when-issued or delayed-delivery transactions for the purpose of
acquiring securities and not for the purpose of leverage. When-issued securities
purchased by a Fund may include securities purchased on a "when, as and if
issued" basis under which the issuance of the securities depends on the
occurrence of a subsequent event, such as approval of a merger, corporate
reorganization or debt restructuring. Cash or other liquid assets in an amount
equal to the amount of each Fund's when-issued or delayed-delivery purchase
commitments will be segregated with the Trust's custodian, or with a designated
subcustodian, in order to avoid or limit any leveraging effect that may arise in
the purchase of a security pursuant to such a commitment.

         Securities purchased on a when-issued or delayed-delivery basis may
expose a Fund to risk because the securities may experience fluctuations in
value prior to their delivery. Purchasing securities on a when-issued or
delayed- delivery basis can involve the additional risk that the return
available in the market when the delivery takes place may be higher than that
applicable at the time of the purchase. This characteristic of when-issued and
delayed-delivery securities could result in exaggerated movements in a Fund's
net asset value.

         When a Fund engages in when-issued or delayed-delivery securities
transactions, it relies on the selling party to consummate the trade. Failure of
the seller to do so may result in the Funds incurring a loss or missing an
opportunity to obtain a price considered to be advantageous.

         Warrants. Because a warrant, which is a security permitting, but not
obligating, its holder to subscribe for another security, does not carry with it
the right to dividends or voting rights with respect to the securities that the
warrant holder is entitled to purchase, and because a warrant does not represent
any rights to the assets of the issuer, a warrant may be considered more
speculative than certain other types of investments. In addition, the value of a
warrant does not necessarily change with the value of the underlying security
and a warrant ceases to have value if it is not exercised prior to its
expiration date. The investment by a Fund in warrants valued at the lower of
cost or market, may not exceed 5% of the value of the Fund's net assets.
Warrants acquired by a Fund in units or attached to securities may be deemed to
be without value.

         Smaller Capitalization Companies. Investing in securities of small- and
medium-capitalization companies may involve greater risks than investing in
larger, more established issuers. Such smaller capitalization companies may have
limited product lines, markets or financial resources and their securities may
trade less frequently and in more limited volume than the securities of larger


                                       16
<PAGE>

or more established companies. In addition, these companies are typically
subject to a greater degree of changes in earnings and business prospects than
are larger, more established issuers. As a result, the prices of securities of
smaller capitalization companies may fluctuate to a greater degree than the
prices of securities of other issuers. Although investing in securities of
smaller capitalization companies offers potential for above-average returns, the
risk exists that the companies will not succeed and the prices of the companies'
shares could significantly decline in value.

         Investment in Foreign Securities. Investing in securities issued by
foreign companies and governments, including securities issued in the form of
depositary receipts, involves considerations and potential risks not typically
associated with investing in obligations issued by the U.S. Government and U.S.
corporations. Less information may be available about foreign companies than
about U.S. companies, and foreign companies generally are not subject to uniform
accounting, auditing and financial reporting standards or to other regulatory
practices and requirements comparable to those applicable to U.S. companies. The
values of foreign investments are affected by changes in currency rates or
exchange control regulations, restrictions or prohibitions on the repatriation
of foreign currencies, application of foreign tax laws, including withholding
taxes, changes in governmental administration or economic or monetary policy (in
the United States or abroad) or changed circumstances in dealings between
nations. Costs are also incurred in connection with conversions between various
currencies. In addition, foreign brokerage commissions are generally higher than
those charged in the United States and foreign securities markets may be less
liquid, more volatile and less subject to governmental supervision than in the
United States. Investments in foreign countries could be affected by other
factors not present in the United States, including expropriation, confiscatory
taxation, lack of uniform accounting and auditing standards, limitations on the
use or removal of funds or other assets (including the withholding of
dividends), and potential difficulties in enforcing contractual obligations, and
could be subject to extended clearance and settlement periods.

         Certain Funds may invest in securities of foreign issuers in the form
of ADRs and European Depositary Receipts ("EDRs"), which are sometimes referred
to as Continental Depositary Receipts ("CDRs"). ADRs are publicly traded on
exchanges or over-the-counter in the United States and are issued through
"sponsored" or "unsponsored" arrangements. In a sponsored ADR arrangement, the
foreign issuer assumes the obligation to pay some or all of the depositary's
transaction fees, whereas under an unsponsored arrangement, the foreign issuer
assumes no obligations and the depositary's transaction fees are paid directly
by the ADR holders. In addition, less information is available in the United
States about an unsponsored ADR than about a sponsored ADR. Each of these Funds
may invest in ADRs through both sponsored and unsponsored arrangements. EDRs and
CDRs are generally issued by foreign banks and evidence ownership of either
foreign or domestic securities.

         The recent introduction of a single European currency, the EURO, for
participating European countries in the Economic and Monetary Union
("Participating Countries") presents unique risks and uncertainties for
investors in those countries, including (i) the creation of suitable clearing
and settlement payment schemes for the EURO; (ii) the legal treatment of


                                       17
<PAGE>

outstanding financial contracts after January 1, 1999 that refer to existing
currencies rather than the EURO; (iii) the fluctuation of the EURO relative to
non-EURO currencies during the transition period from January 1, 1999 to
December 31, 2000 and beyond; and (iv) whether the interest rate, tax and labor
regimes of the Participating Countries will converge over time. Further, the
conversion of the currencies of other Economic and Monetary Union countries,
such as the United Kingdom, and the admission of other countries, including
Central and Eastern European countries, to the Economic and Monetary Union could
adversely affect the EURO. These or other factors may cause market disruptions
and could adversely affect the value of European securities and currencies held
by the Funds.

         Currency Exchange Rates. A Fund's share value may change significantly
when the currencies, other than the U.S. dollar, in which the Fund's portfolio
investments are denominated, strengthen or weaken against the U.S. dollar.
Currency exchange rates generally are determined by the forces of supply and
demand in the foreign exchange markets and the relative merits of investments in
different countries as seen from an international perspective. Currency exchange
rates can also be affected unpredictably by intervention by U.S. or foreign
governments or central banks or by currency controls or political developments
in the United States or abroad.

         Investing in Developing Countries. Investing in securities issued by
companies located in developing countries involves not only the risks described
above with respect to investing in foreign securities, but also other risks,
including exposure to economic structures that are generally less diverse and
mature than, and to political systems that can be expected to have less
stability than, those of developed countries. Other characteristics of
developing countries that may affect investment in their markets include certain
national policies that may restrict investment by foreigners in issuers or
industries deemed sensitive to relevant national interests and the absence of
developed legal structures governing private and foreign investments and private
property. The typically small size of the markets for securities issued by
companies located in developing countries and the possibility of a low or
nonexistent volume of trading in those securities may also result in a lack of
liquidity and in price volatility of those securities.

         Lending Portfolio Securities. Each Fund is authorized to lend its
portfolio securities to well-known and recognized U.S. and foreign brokers,
dealers and banks. These loans, if and when made, may not exceed 30% of a Fund's
assets taken at value. The Fund's loans of securities will be collateralized by
cash, letters of credit or Government Securities. Cash or instruments
collateralizing a Fund's loans of securities are segregated and maintained at
all times with the Trust's custodian, or with a designated sub-custodian, in an
amount at least equal to the current market value of the loaned securities. In
lending securities, a Fund will be subject to risks, which, like those
associated with other extensions of credit, include possible loss of rights in
the collateral should the borrower fail financially.

         If a Fund loans its portfolio securities, it will adhere to the
following conditions whenever its portfolio securities are loaned: (i) the Fund
must receive at least 100% cash collateral or equivalent securities from the
borrower; (ii) the borrower must increase the collateral whenever the market
value of the securities loaned rises above the level of the collateral; (iii)
the Fund must be able to terminate the loan at any time; (iv) the Fund must


                                       18
<PAGE>

receive reasonable interest on the loan, as well as any dividends, interest or
other distributions on the loaned securities, and any increase in market value;
(v) the Fund may pay only reasonable custodian fees in connection with the loan;
and (vi) voting rights on the loaned securities may pass to the borrower except
that, if a material event adversely affecting the investment in the loaned
securities occurs, the Board must terminate the loan and regain the right to
vote the securities. From time to time, a Fund may pay a part of the interest
earned from the investment of collateral received for securities loaned to the
borrower and/or a third party that is unaffiliated with the Fund and is acting
as a "finder."

         Securities of Other Investment Companies. Certain Funds may invest in
investment funds that invest principally in securities in which the Fund is
authorized to invest. Currently, under the 1940 Act, a Fund may hold securities
of another investment company in amounts which (i) do not exceed 3% of the total
outstanding voting stock of such company, (ii) do not exceed 5% of the value of
the Fund's total assets and (iii) when added to all other investment company
securities held by the Fund, do not exceed 10% of the value of the Fund's total
assets. Investments by a Fund (other than the Money Market Fund) in the
Investment Fund are not considered an investment in another investment company
for purposes of this restriction. To the extent a Fund invests in other
investment companies, the Fund's shareholders will incur certain duplicative
fees and expenses, including investment advisory fees.

         Purchasing Put and Call Options on Securities. Each Fund, other than
the Money Market Fund, may purchase put and call options that are traded on a
U.S. or foreign securities exchange or in the over-the-counter market. A Fund
may utilize up to 10% of its assets to purchase put options on portfolio
securities and may do so at or about the same time that it purchases the
underlying security or at a later time. By buying a put, a Fund will seek to
limit its risk of loss from a decline in the market value of the security until
the put expires. Any appreciation in the value of the underlying security,
however, will be partially offset by the amount of the premium paid for the put
option and any related transaction costs. A Fund may utilize up to 10% of its
assets to purchase call options on portfolio securities. Call options may be
purchased by a Fund in order to acquire the underlying securities for a price
that avoids any additional cost that would result from a substantial increase in
the market value of a security. A Fund may also purchase call options to
increase its return at a time when the call is expected to increase in value due
to anticipated appreciation of the underlying security. Prior to their
expirations, put and call options may be sold by a Fund in closing sale
transactions, which are sales by the Fund, prior to the exercise of options that
it has purchased, of options of the same series. Profit or loss from the sale
will depend on whether the amount received is more or less than the premium paid
for the option plus the related transaction costs. The aggregate value of the
securities underlying the calls or obligations underlying the puts, determined
as of the date the options are sold, shall not exceed 25% of the net assets of a
Fund. In addition, the premiums paid by a Fund in purchasing options on
securities, options on securities indices, options on foreign currencies and
options on futures contracts will not exceed 20% of the Fund's net assets.


                                       19
<PAGE>

         Covered Option Writing. Each Fund, other than the Money Market Fund,
may write covered put and call options on securities. A Fund will realize fees
(referred to as "premiums") for granting the rights evidenced by the options. A
put option embodies the right of its purchaser to compel the writer of the
option to purchase from the option holder an underlying security at a specified
price at any time during the option period. In contrast, a call option embodies
the right of its purchaser to compel the writer of the option to sell to the
option holder an underlying security at a specified price at any time during the
option period.

         The Funds with option-writing authority will write only options that
are covered. A call option written by a Fund will be deemed covered (i) if the
Fund owns the securities underlying the call or has an absolute and immediate
right to acquire those securities without additional cash consideration upon
conversion or exchange of other securities held in its portfolio, (ii) if the
Fund holds a call at the same exercise price for the same exercise period and on
the same securities as the call written, (iii) in the case of a call option on a
stock index, if the Fund owns a portfolio of securities substantially
replicating the movement of the index underlying the call option, or (iv) if at
the time the call is written, an amount of cash, Government Securities or other
liquid assets equal to the fluctuating market value of the optioned securities,
is segregated with the Trust's custodian or with a designated sub-custodian. A
put option will be deemed covered (i) if, at the time the put is written, an
amount of cash, Government Securities or other liquid assets having a value at
least equal to the exercise price of the underlying securities is segregated
with the Trust's custodian or with a designated sub-custodian, or (ii) if the
Fund continues to own an equivalent number of puts of the same "series" (that
is, puts on the same underlying securities having the same exercise prices and
expiration dates as those written by the Fund), or an equivalent number of puts
of the same "class" (that is, puts on the same underlying securities) with
exercise prices greater than those that it has written (or if the exercise
prices of the puts it holds are less than the exercise prices of those it has
written, the difference is segregated with the Trust's custodian or with a
designated sub-custodian).

         The principal reason for writing covered call options on a securities
portfolio is to attempt to realize, through the receipt of premiums, a greater
return than would be realized on the securities alone. In return for a premium,
the writer of a covered call option forfeits the right to any appreciation in
the value of the underlying security above the strike price for the life of the
option (or until a closing purchase transaction can be effected). Nevertheless,
the call writer retains the risk of a decline in the price of the underlying
security. Similarly, the principal reason for writing covered put options is to
realize income in the form of premiums. The writer of a covered put option
accepts the risk of a decline in the price of the underlying security. The size
of the premiums that a Fund may receive may be adversely affected as new or
existing institutions, including other investment companies, engage in or
increase their option-writing activities.

         Options written by a Fund will normally have expiration dates between
one and nine months from the date written. The exercise price of the options may
be below, equal to or above the market values of the underlying securities at
the times the options are written. In the case of call options, these exercise
prices are referred to as "in-the-money," "at-the-money" and "out-of-the-money,"
respectively.


                                       20
<PAGE>

         So long as the obligation of a Fund as the writer of an option
continues, the Fund may be assigned an exercise notice by the broker-dealer
through which the option was sold, requiring the Fund to deliver, in the case of
a call, or take delivery of, in the case of a put, the underlying security
against payment of the exercise price. This obligation terminates when the
option expires or the Fund effects a closing purchase transaction. A Fund can no
longer effect a closing purchase transaction with respect to an option once it
has been assigned an exercise notice. To secure its obligation to deliver the
underlying security when it writes a call option, or to pay for the underlying
security when it writes a put option, a Fund will be required to deposit in
escrow the underlying security or other assets in accordance with the rules of
the Options Clearing Corporation (the "Clearing Corporation") and of the
securities exchange on which the option is written.

         A Fund may engage in a closing purchase transaction to realize a
profit, to prevent an underlying security from being called or put or, in the
case of a call option, to unfreeze an underlying security (thereby permitting
its sale or the writing of a new option on the security prior to the outstanding
option's expiration). To effect a closing purchase transaction, a Fund would
purchase, prior to the holder's exercise of an option that the Fund has written,
an option of the same series as that on which the Fund desires to terminate its
obligation. The obligation of a Fund under an option that it has written would
be terminated by a closing purchase transaction, but the Fund would not be
deemed to own an option as the result of the transaction. An option position may
be closed out only if a secondary market exists for an option of the same series
on a recognized securities exchange or in the over-the-counter market. In light
of the need for a secondary market in which to close an option position, the
Funds are expected to purchase only call or put options issued by the Clearing
Corporation. The Investment Manager expects that the Funds will write options,
other than those on Government Securities, only on national securities
exchanges. Options on Government Securities may be written by the Funds in the
over-the-counter market.

         A Fund may realize a profit or loss upon entering into closing
transactions. When a Fund has written an option, for example, it will realize a
profit if the cost of the closing purchase transaction is less than the premium
received upon writing the original option; the Fund will incur a loss if the
cost of the closing purchase transaction exceeds the premium received upon
writing the original option. When a Fund has purchased an option and engages in
a closing sale transaction, whether the Fund realizes a profit or loss will
depend upon whether the amount received in the closing sale transaction is more
or less than the premium the Fund initially paid for the original option plus
the related transaction costs.

         Option writing for a Fund may be limited by position and exercise
limits established by U.S. securities exchanges and the National Association of
Securities Dealers, Inc. and by requirements of the Internal Revenue Code of
1986, as amended (the "Code") for qualification as a regulated investment
company. In addition to writing covered put and call options to generate current
income, a Fund may enter into options transactions as hedges to reduce
investment risk, generally by making an investment expected to move in the
opposite direction of a portfolio position. A hedge is designed to offset a loss


                                       21
<PAGE>

on a portfolio position with a gain on the hedge position; at the same time,
however, a properly correlated hedge will result in a gain on the portfolio's
position being offset by a loss on the hedge position.

         A Fund will engage in hedging transactions only when deemed advisable
by the Investment Manager. Successful use by a Fund of options will depend on
the Investment Manager's ability to predict correctly movements in the direction
of the securities underlying the option used as a hedge. Losses incurred in
hedging transactions and the costs of these transactions will affect a Fund's
performance.

         Securities Index Options. In seeking to hedge all or a portion of its
investments, each Fund, other than the Money Market Fund, may purchase and write
put and call options on securities indices listed on U.S. or foreign securities
exchanges or traded in the over-the-counter market, which indices include
securities held in the Fund's portfolio. The Funds with such option writing
authority may write only covered options. A Fund may also use securities index
options as a means of participating in a securities market without making direct
purchases of securities.

         A securities index measures the movement of a certain group of
securities by assigning relative values to the securities included in the index.
Options on securities indexes are generally similar to options on specific
securities. Unlike options on securities, however, options on securities indices
do not involve the delivery of an underlying security; the option in the case of
an option on a securities index represents the holder's right to obtain from the
writer in cash a fixed multiple of the amount by which the exercise price
exceeds (in the case of a call) or is less than (in the case of a put) the
closing value of the underlying securities index on the exercise date. A Fund
may purchase and write put and call options on securities indexes or securities
index futures contracts that are traded on a U.S. exchange or board of trade or
a foreign exchange, to the extent permitted under rules and interpretations of
the Commodity Futures Trading Commission ("CFTC"), as a hedge against changes in
market conditions and interest rates, and for duration management, and may enter
into closing transactions with respect to those options to terminate existing
positions. A securities index fluctuates with changes in the market values of
the securities included in the index. Securities index options may be based on a
broad or narrow market index or on an industry or market segment.

         The delivery requirements of options on securities indices differ from
options on securities. Unlike a securities option, which contemplates the right
to take or make delivery of securities at a specified price, an option on a
securities index gives the holder the right to receive a cash "exercise
settlement amount" equal to (i) the amount, if any, by which the fixed exercise
price of the option exceeds (in the case of a put) or is less than (in the case
of a call) the closing value of the underlying index on the date of exercise,
multiplied by (ii) a fixed "index multiplier." Receipt of this cash amount will
depend upon the closing level of the securities index upon which the option is
based being greater than, in the case of a call, or less than, in the case of a
put, the exercise price of the option. The amount of cash received will be equal
to the difference between the closing price of the index and the exercise price
of the option expressed in dollars times a specified multiple. The writer of the
option is obligated, in return for the premium received, to make delivery of
this amount. The writer may offset its position in securities index options


                                       22
<PAGE>

prior to expiration by entering into a closing transaction on an exchange or it
may allow the option to expire unexercised.

         The effectiveness of purchasing or writing securities index options as
a hedging technique will depend upon the extent to which price movements in the
portion of a securities portfolio being hedged correlate with price movements of
the securities index selected. Because the value of an index option depends upon
movements in the level of the index rather than the price of a particular
security, whether a Fund realizes a gain or loss from the purchase or writing of
options on an index depends upon movements in the level of prices in the market
generally or, in the case of certain indices, in an industry or market segment,
rather than movements in the price of a particular security. As a result,
successful use by a Fund of options on securities indices is subject to the
Investment Manager's ability to predict correctly movements in the direction of
the market generally or of a particular industry. This ability contemplates
different skills and techniques from those used in predicting changes in the
price of individual securities.

         Securities index options are subject to position and exercise limits
and other regulations imposed by the exchange on which they are traded. The
ability of a Fund to engage in closing purchase transactions with respect to
securities index options depends on the existence of a liquid secondary market.
Although a Fund will generally purchase or write securities index options only
if a liquid secondary market for the options purchased or sold appears to exist,
no such secondary market may exist, or the market may cease to exist at some
future date, for some options. No assurance can be given that a closing purchase
transaction can be effected when the Investment Manager desires that a Fund
engage in such a transaction.

         Over-the-Counter ("OTC") Options. Certain Funds may purchase OTC or
dealer options or sell covered OTC options. Unlike exchange-listed options where
an intermediary or clearing corporation, such as the Clearing Corporation,
assures that all transactions in such options are properly executed, the
responsibility for performing all transactions with respect to OTC options rests
solely with the writer and the holder of those options. A listed call option
writer, for example, is obligated to deliver the underlying stock to the
clearing organization if the option is exercised, and the clearing organization
is then obligated to pay the writer the exercise price of the option. If a Fund
were to purchase a dealer option, however, it would rely on the dealer from whom
it purchased the option to perform if the option were exercised. If the dealer
fails to honor the exercise of the option by the Fund, the Fund would lose the
premium it paid for the option and the expected benefit of the transaction.

         Listed options generally have a continuous liquid market while dealer
options have none. Consequently, a Fund will generally be able to realize the
value of a dealer option it has purchased only by exercising it or reselling it
to the dealer who issued it. Similarly, when a Fund writes a dealer option, it
generally will be able to close out the option prior to its expiration only by
entering into a closing purchase transaction with the dealer to which the Fund
originally wrote the option. Although the Funds will seek to enter into dealer
options only with dealers who will agree to and that are expected to be capable
of entering into closing transactions with the Funds, there can be no assurance
that a Fund will be able to liquidate a dealer option at a favorable price at
any time prior to expiration. The inability to enter into a closing transaction


                                       23
<PAGE>

may result in material losses to a Fund. Until a Fund, as a covered OTC call
option writer, is able to effect a closing purchase transaction, it will not be
able to liquidate securities (or other assets) used to cover the written option
until the option expires or is exercised. This requirement may impair a Fund's
ability to sell portfolio securities or, with respect to currency options,
currencies at a time when such sale might be advantageous. In the event of
insolvency of the other party, the Fund may be unable to liquidate a dealer
option.

         Futures and Related Options. Each Fund, other than the Small-Cap Value
Fund and the Money Market Fund, may enter into interest rate, financial and
stock or bond index futures contracts or related options that are traded on a
U.S. or foreign exchange or board of trade approved by the Commodity Futures
Trading Commission or in the over-the-counter market. If entered into, these
transactions will be made solely for the purpose of hedging against the effects
of changes in the value of portfolio securities due to anticipated changes in
interest rates and/or market conditions, to gain market exposure for
accumulating and residual cash positions, for duration management, or when the
transactions are economically appropriate to the reduction of risks inherent in
the management of the Fund involved. No Fund will enter into a transaction
involving futures and options on futures for speculative purposes.

         An interest rate futures contract provides for the future sale by one
party and the purchase by the other party of a specified amount of a particular
financial instrument (debt security) at a specified price, date, time and place.
Financial futures contracts are contracts that obligate the holder to deliver
(in the case of a futures contract that is sold) or receive (in the case of a
futures contract that is purchased) at a future date a specified quantity of a
financial instrument, specified securities, or the cash value of a securities
index. A municipal bond index futures contract is based on an index of
long-term, tax-exempt municipal bonds and a corporate bond index futures
contract is based on an index of corporate bonds. Stock index futures contracts
are based on indices that reflect the market value of common stock of the
companies included in the indices. An index futures contract is an agreement
pursuant to which two parties agree to take or make delivery of an amount of
cash equal to the difference between the value of the index at the close of the
last trading day of the contract and the price at which the index contract was
originally written. An option on an interest rate or index futures contract
generally gives the purchaser the right, in return for the premium paid, to
assume a position in a futures contract at a specified exercise price at any
time prior to the expiration date of the option.

         A Fund may not enter into futures and options contracts for which
aggregate initial margin deposits and premiums paid for unexpired options exceed
5% of the fair market value of the Fund's total assets, after taking into
account unrealized losses or profits on futures contracts or options on futures
contracts into which it has entered. The current view of the staff of the SEC is
that a Fund's long and short positions in futures contracts as well as put and
call options on futures written by it must be collateralized with cash or other
liquid assets and segregated with the Trust's custodian or a designated
sub-custodian or "covered" in a manner similar to that for covered options on
securities.

         No consideration is paid or received by a Fund upon trading a futures
contract. Upon entering into a futures contract, cash, short-term Government
Securities or other U.S. dollar-denominated, high-grade, short-term money market


                                       24
<PAGE>

instruments equal to approximately 1% to 10% of the contract amount will be
segregated with the Trust's custodian or a designated sub-custodian. This
amount, which is subject to change by the exchange on which the contract is
traded, is known as "initial margin" and is in the nature of a performance bond
or good faith deposit on the contract that is returned to the Fund upon
termination of the futures contract, so long as all contractual obligations have
been satisfied; the broker will have access to amounts in the margin account if
the Fund fails to meet its contractual obligations. Subsequent payments, known
as "variation margin," to and from the broker, will be made daily as the price
of the securities underlying the futures contract fluctuates, making the long
and short positions in the contract more or less valuable, a process known as
"marking-to-market." At any time prior to the expiration of a futures contract,
a Fund may elect to close a position by taking an opposite position, which will
operate to terminate the Fund's existing position in the contract.

         Although the Trust intends that the Funds enter into futures contracts
only if an active market exists for the contracts, no assurance can be given
that an active market will exist for the contracts at any particular time. Most
U.S. futures exchanges and boards of trade limit the amount of fluctuation
permitted in futures contract prices during a single trading day. Once the daily
limit has been reached in a particular contract, no trades may be made on that
day at a price beyond that limit. Futures contract prices may move to the daily
limit for several consecutive trading days with little or no trading, thereby
preventing prompt liquidation of futures positions and subjecting some futures
traders to substantial losses. In such a case, and in the event of adverse price
movements, a Fund would be required to make daily cash payments of variation
margin. In such circumstances, an increase in the value of the portion of the
portfolio being hedged, if any, may partially or completely offset losses on the
futures contract.

         If a Fund has hedged against the possibility of an increase in interest
rates and rates decrease instead, the Fund will lose part or all of the benefit
of the increased value of securities that it has hedged because it will have
offsetting losses in its futures positions. In addition, in such situations, if
the Fund had insufficient cash, it may have to sell securities to meet daily
variation margins requirements at a time when it may be disadvantageous to do
so. These sales of securities may, but will not necessarily, be at increased
prices that reflect the decline in interest rates.

         An option on a futures contract, unlike a direct investment in such a
contract, gives the purchaser the right, in return for the premium paid, to
assume a position in the futures contract at a specified exercise price at any
time prior to the expiration date of the option. Upon exercise of an option, the
delivery of the futures position by the writer of the option to the holder of
the option will be accompanied by delivery of the accumulated balance in the
writer's futures margin account, which represents the amount by which the market
price of the futures contract exceeds, in the case of a call, or is less than,
in the case of a put, the exercise price of the option on the futures contract.
The potential loss related to the purchase of an option on futures contracts is
limited to the premium paid for the option (plus transaction costs). Because the
price of the option to the purchaser is fixed at the point of sale, no daily
cash payments are made to reflect changes in the value of the underlying
contract. The value of the option, however, does change daily and that change
would be reflected in the net asset value of the Fund holding the options.


                                       25
<PAGE>

         The use of futures contracts and options on futures contracts as a
hedging device involves several risks. No assurance can be given that a
correlation will exist between price movements in the underlying securities or
index and price movements in the securities that are the subject of the hedge.
Positions in futures contracts and options on futures contracts may be closed
out only on the exchange or board of trade on which they were entered, and no
assurance can be given that an active market will exist for a particular
contract or option at any particular time. Losses incurred in hedging
transactions and the costs of these transactions will affect a Fund's
performance.

         Forward Currency Transactions. Each Fund, other than the Small-Cap
Value Fund, and the Money Market Fund, may hold currencies to meet settlement
requirements for foreign securities and each Fund, other than the Premier Fund,
the Small-Cap Value Fund, the Mid-Cap Value Fund, and the Money Market Fund, may
engage in currency exchange transactions to protect against uncertainty in the
level of future exchange rates between a particular foreign currency and the
U.S. dollar or between foreign currencies in which the Fund's securities are or
may be denominated. No Fund will enter into forward currency transactions for
speculative purposes.

         Forward currency contracts are agreements to exchange one currency for
another at a future date. The date (which may be any agreed-upon fixed number of
days in the future), the amount of currency to be exchanged and the price at
which the exchange will take place will be negotiated and fixed for the term of
the contract at the time that a Fund enters into the contract. Forward currency
contracts (i) are traded in a market conducted directly between currency traders
(typically, commercial banks or other financial institutions) and their
customers, (ii) generally have no deposit requirements and (iii) are typically
consummated without payment of any commissions. A Fund, however, may enter into
forward currency contracts requiring deposits or involving the payment of
commissions. To assure that a Fund's forward currency contracts are not used to
achieve investment leverage, cash or other liquid assets will be segregated with
the Trust's custodian or a designated sub-custodian in an amount at all times
equal to or exceeding the Fund's commitment with respect to the contracts.

         Upon maturity of a forward currency contract, a Fund may (i) pay for
and receive the underlying currency, (ii) negotiate with the dealer to roll over
the contract into a new forward currency contract with a new future settlement
date or (iii) negotiate with the dealer to terminate the forward contract into
an offset with the currency trader providing for the Fund's paying or receiving
the difference between the exchange rate fixed in the contract and the then
current exchange rate. The Trust may also be able to negotiate such an offset on
behalf of a Fund prior to maturity of the original forward contract. No
assurance can be given that new forward contracts or offsets will always be
available to a Fund.

         In hedging a specific portfolio position, a Fund may enter into a
forward contract with respect to either the currency in which the position is
denominated or another currency deemed appropriate by the Investment Manager. A
Fund's exposure with respect to forward currency contracts is limited to the
amount of the Fund's aggregate investments in instruments denominated in foreign
currencies.


                                       26
<PAGE>

         The cost to a Fund of engaging in currency transactions varies with
factors such as the currency involved, the length of the contract period and the
market conditions then prevailing. Because transactions in currency exchange are
usually conducted on a principal basis, no fees or commissions are involved. The
use of forward currency contracts does not eliminate fluctuations in the
underlying prices of the securities, but it does establish a rate of exchange
that can be achieved in the future. In addition, although forward currency
contracts limit the risk of loss due to a decline in the value of the hedged
currency, at the same time, they limit any potential gain that might result
should the value of the currency increase. If a devaluation is generally
anticipated, a Fund may not be able to sell currency at a price above the
anticipated devaluation level. A Fund will not enter into a currency transaction
if, as a result, it will fail to qualify as a regulated investment company under
the Code for a given year.

         In entering into forward currency contracts, a Fund will be subject to
a number of risks and special considerations. The market for forward currency
contracts, for example, may be limited with respect to certain currencies. The
existence of a limited market may in turn restrict the Fund's ability to hedge
against the risk of devaluation of currencies in which the Fund holds a
substantial quantity of securities. The successful use of forward currency
contracts as a hedging technique draws upon the Investment Manager's special
skills and experience with respect to those instruments and will usually depend
upon the Investment Manager's ability to forecast interest rate and currency
exchange rate movements correctly. Should interest or exchange rates move in an
unexpected manner, a Fund may not achieve the anticipated benefits of forward
currency contracts or may realize losses and thus be in a less advantageous
position than if those strategies had not been used. Many forward currency
contracts are subject to no daily price fluctuation limits so that adverse
market movements could continue with respect to those contracts to an unlimited
extent over a period of time. In addition, the correlation between movements in
the prices of those contracts and movements in the prices of the currencies
hedged or used for cover will not be perfect.

         The ability to dispose of a Fund's positions in forward currency
contracts depends on the availability of active markets in those instruments,
and the Investment Manager cannot predict the amount of trading interest that
may exist in the future in forward currency contracts. Forward currency
contracts may be closed out only by the parties entering into an offsetting
contract. As a result, no assurance can be given that a Fund will be able to
utilize these contracts effectively for the intended purposes.

         Options on Foreign Currencies. Each Fund, other than the Premier Fund,
the Mid-Cap Value Fund, the Small-Cap Value Fund and the Money Market Fund, may
purchase and write put and call options on foreign currencies for the purpose of
hedging against declines in the U.S. dollar value of foreign currency
denominated securities and against increases in the U.S. dollar cost of
securities to be acquired by the Fund. The Funds with such option writing
authority may write only covered options. No Fund will enter into a transaction
involving options on foreign currencies for speculative purposes. Options on
foreign currencies to be written or purchased by a Fund are traded on U.S. or
foreign exchanges or in the over-the-counter market. The Trust will limit the


                                       27
<PAGE>

premiums paid on a Fund's options on foreign currencies to 5% of the value of
the Fund's total assets.

         Certain transactions involving options on foreign currencies are
undertaken on contract markets that are not regulated by the CFTC. Options on
foreign currencies traded on national securities exchanges are within the
jurisdiction of the SEC, as are other securities traded on those exchanges. As a
result, many of the protections provided to traders on organized exchanges will
be available with respect to those transactions. In particular, all foreign
currency option positions entered into on a national securities exchange are
cleared and guaranteed by the Clearing Corporation, thereby reducing the risk of
counter party default. In addition, a liquid secondary market in options traded
on a national securities exchange may exist, potentially permitting a Fund to
liquidate open positions at a profit prior to exercise or expiration, or to
limit losses in the event of adverse market movements.

         The purchase and sale of exchange-traded foreign currency options are
subject to the risks of the availability of a liquid secondary market as
described above, as well as the risks regarding adverse market movements,
margining of options written, the nature of the foreign currency market,
possible intervention by governmental authorities and the effects of other
political and economic events. In addition, exercise and settlement of
exchange-traded foreign currency options must be made exclusively through the
Clearing Corporation, which has established banking relationships in applicable
foreign countries for this purpose. As a result, the Clearing Corporation may,
if it determines that foreign governmental restrictions or taxes would prevent
the orderly settlement of foreign currency option exercises, or would result in
undue burdens on the Clearing Corporation or its clearing members, impose
special procedures on exercise and settlement, such as technical changes in the
mechanics of delivery of currency, the fixing of dollar settlement prices or
prohibitions on exercise.

         Like the writing of other kinds of options, the writing of an option on
a foreign currency constitutes only a partial hedge, up to the amount of the
premium received; a Fund could also be required, with respect to any option it
has written, to purchase or sell foreign currencies at disadvantageous exchange
rates, thereby incurring losses. The purchase of an option on a foreign currency
may constitute an effective hedge against fluctuation in exchange rates,
although in the event of rate movements adverse to a Fund's position, the Fund
could forfeit the entire amount of the premium plus related transaction costs.

         Options on foreign currencies may be traded on foreign exchanges, to
the extent permitted by the CFTC. These transactions are subject to the risk of
governmental actions affecting trading in or the prices of foreign currencies or
securities. The value of these positions could also be adversely affected by (i)
other complex foreign political and economic factors, (ii) lesser availability
of data on which to make trading decisions than in the United States, (iii)
delays in a Fund's ability to act upon economic events occurring in foreign
markets during non-business hours in the United States, (iv) the imposition of
different exercise and settlement terms and procedures and margin requirements
than in the United States and (v) lesser trading volume.


                                       28
<PAGE>

         Structured and Indexed Securities. Certain Funds may also invest in
structured and indexed securities, the value of which is linked to currencies,
interest rates, commodities, indexes or other financial indicators ("reference
instruments"). The interest rate or the principal amount payable at maturity or
redemption may be increased or decreased depending on changes in the value of
the reference instrument. Structured or indexed securities may be positively or
negatively indexed, so that appreciation of the reference instrument may produce
an increase or a decrease in interest rate or value at maturity of the security.
In addition, the change in the interest rate or value at maturity of the
security may be some multiple of the change in value of the reference
instrument. Thus, in addition to the credit risk of the security's issuer, the
Funds will bear the market risk of the reference instrument.

         Mortgage Related Securities. Certain Funds may invest in mortgage
related securities which represent pools of mortgage loans assembled for sale to
investors by various governmental agencies, such as GNMA, by government related
organizations, such as FNMA and FHLMC, as well as by private issuers, such as
commercial banks, savings and loan institutions, mortgage bankers and private
mortgage insurance companies.

         The average maturity of pass-through pools of mortgage related
securities in which certain of the Funds may invest varies with the maturities
of the underlying mortgage instruments. In addition, a pool's stated maturity
may be shortened by unscheduled payments on the underlying mortgages. Factors
affecting mortgage prepayments include the level of interest rates, general
economic and social conditions, the location of the mortgaged property and age
of the mortgage. Because prepayment rates of individual mortgage pools vary
widely, the average life of a particular pool cannot be predicted accurately.

         Mortgage related securities may be classified as private, governmental
or government-related, depending on the issuer or guarantor. Private mortgage
related securities represent pass-through pools consisting principally of
conventional residential mortgage loans created by non-governmental issuers,
such as commercial banks, savings and loan associations and private mortgage
insurance companies. Governmental mortgage related securities are backed by the
full faith and credit of the United States. GNMA, the principal U.S. guarantor
of these securities, is a wholly-owned U.S. government corporation within the
Department of Housing and Urban Development. Government-related mortgage related
securities are not backed by the full faith and credit of the United States.
Issuers include FNMA and FHLMC. FNMA is a government-sponsored corporation owned
entirely by private stockholders, which is subject to general regulation by the
Secretary of Housing and Urban Development. Pass-through securities issued by
FNMA are guaranteed as to timely payment of principal and interest by FNMA.
FHLMC is a corporate instrumentality of the United States, the stock of which is
owned by the Federal Home Loan Banks. Participation certificates representing
interests in mortgages from FHLMC's national portfolio are guaranteed as to the
timely payment of interest and ultimate collection of principal by FHLMC.

         Private, governmental or government-related entities may create
mortgage loan pools offering pass-through investments in addition to those
described above. The mortgages underlying these securities may be alternative
mortgage instruments, that is, mortgage instruments whose principal or interest


                                       29
<PAGE>

payments may vary or whose terms to maturity may be shorter than previously
customary. The Investment Manager assesses new types of mortgage related
securities as they are developed and offered to determine their appropriateness
for investment by the relevant Fund.

         Several risks are associated with mortgage related securities
generally. The monthly cash inflow from the underlying loans, for example, may
not be sufficient to meet the monthly payment requirements of the mortgage
related security. Prepayment of principal by mortgagors or mortgage foreclosures
will shorten the term of the underlying mortgage pool for a mortgage related
security. Early returns of principal will affect the average life of the
mortgage related securities remaining in these Funds. The occurrence of mortgage
prepayments is affected by factors including the level of interest rates,
general economic conditions, the location and age of the mortgage and other
social and demographic conditions. In periods of rising interest rates, the rate
of prepayment tends to decrease, thereby lengthening the average life of a pool
of mortgage related securities. Conversely, in periods of falling interest rates
the rate of prepayment tends to increase, thereby shortening the average life of
a pool. Reinvestment of prepayments may occur at higher or lower interest rates
than the original investment, thus affecting the yield of these Funds. Because
prepayments of principal generally occur when interest rates are declining, the
Fund will likely have to reinvest the proceeds of prepayments at lower interest
rates than those at which its assets were previously invested, resulting in a
corresponding decline in the Fund's yield. Thus, mortgage related securities may
have less potential for capital appreciation in periods of falling interest
rates than other fixed income securities of comparable maturity, although those
other fixed income securities may have a comparable risk of decline in market
value in periods of rising interest rates. To the extent that these Funds
purchase mortgage related securities at a premium, unscheduled prepayments,
which are made at par, will result in a loss equal to any unamortized premium.

         Adjustable rate mortgage related securities ("ARMs") have interest
rates that reset at periodic intervals, thereby allowing certain Funds to
participate in increases in interest rates through periodic adjustments in the
coupons of the underlying mortgages, resulting in both higher current yields and
lower price fluctuation than would be the case with more traditional long-term
debt securities. Furthermore, if prepayments of principal are made on the
underlying mortgages during periods of rising interest rates, these Funds
generally will be able to reinvest these amounts in securities with a higher
current rate of return. None of these Funds, however, will benefit from
increases in interest rates to the extent that interest rates rise to the point
at which they cause the current yield of ARMs to exceed the maximum allowable
annual or lifetime reset limits (or "caps") for a particular mortgage. In
addition, fluctuations in interest rates above these caps could cause ARMs to
behave more like long-term fixed rate securities in response to extreme
movements in interest rates. As a result, during periods of volatile interest
rates, these Funds' net asset values may fluctuate more than if they did not
purchase ARMs. Moreover, during periods of rising interest rates, changes in the
coupon of the adjustable rate mortgages will slightly lag changes in market
rates, creating the potential for some principal loss for shareholders who
redeem their shares of these Funds before the interest rates on the underlying
mortgages are adjusted to reflect current market rates.


                                       30
<PAGE>

         Collateralized mortgage related securities ("CMOs") are obligations
fully collateralized by a portfolio of mortgages or mortgage related securities.
Payments of principal and interest on the mortgages are passed through to the
holders of the CMOs on the same schedule as they are received, although certain
classes of CMOs have priority over others with respect to the receipt of
prepayments on the mortgages. Therefore, depending on the type of CMOs in which
these Funds invest, the investment may be subject to a greater or lesser risk of
prepayment than other types of mortgage related securities.

         Mortgage related securities may not be readily marketable. To the
extent any of these securities are not readily marketable in the judgment of the
Investment Manager, each of these Funds limits its investments in these
securities, together with other illiquid instruments, to not more than 15% of
the value of its net assets.

         Supranational Agencies. Each Fund may invest up to 10% of its assets in
debt obligations of supranational agencies such as: the International Bank for
Reconstruction and Development (commonly referred to as the World Bank), which
was chartered to finance development projects in developing member countries;
the European Community, which is a twelve-nation organization engaged in
cooperative economic activities; the European Coal and Steel Community, which is
an economic union of various European nations' steel and coal industries; and
the Asian Development Bank, which is an international development bank
established to lend funds, promote investment and provide technical assistance
to member nations in the Asian and Pacific regions. Debt obligations of
supranational agencies are not considered Government Securities and are not
supported, directly or indirectly, by the U.S. Government.

         Municipal Obligations. The term "Municipal Obligations" as used in the
Prospectuses and this SAI means debt obligations issued by, or on behalf of,
states, territories and possessions of the United States and the District of
Columbia and their political subdivisions, agencies and instrumentalities or
multistate agencies or authorities, the interest from which debt obligations is,
in the opinion of bond counsel to the issuer, excluded from gross income for
Federal income tax purposes. Municipal Obligations generally are understood to
include debt obligations issued to obtain funds for various public purposes,
including the construction of a wide range of public facilities, refunding of
outstanding obligations, payment of general operating expenses and extensions of
loans to public institutions and facilities. Private activity bonds that are
issued by or on behalf of public authorities to finance privately operated
facilities are considered to be Municipal Obligations if the interest paid on
them qualifies as excluded from gross income (but not necessarily from
alternative minimum taxable income) for Federal income tax purposes in the
opinion of bond counsel to the issuer.

         Opinions relating to the validity of Municipal Obligations and to the
exemption of interest on them from Federal income taxes are rendered by bond
counsel to the respective issuers at the time of issuance. Neither the Trust nor
the Investment Manager will review the proceedings relating to the issuance of
Municipal Obligations or the basis for opinions of counsel. The Strategic Fund
may invest without limit in debt obligations that are repayable out of revenues
generated from economically related projects or facilities or debt obligations


                                       31
<PAGE>

whose issuers are located in the same state. Sizable investments in these
obligations could involve an increased risk to the Funds should any of the
related projects or facilities experience financial difficulties.

         Municipal Obligations may be issued to finance life care facilities,
which are an alternative form of long-term housing for the elderly that offer
residents the independence of a condominium life-style and, if needed, the
comprehensive care of nursing home services. Bonds to finance these facilities
have been issued by various state industrial development authorities. Because
the bonds are secured only by the revenues of each facility and not by state or
local government tax payments, they are subject to a wide variety of risks,
including a drop in occupancy levels, the difficulty of maintaining adequate
financial reserves to secure estimated actuarial liabilities, the possibility of
regulatory cost restrictions applied to health care delivery and competition
from alternative health care or conventional housing facilities.

         Even though Municipal Obligations are interest-bearing investments that
promise a stable flow of income, their prices are inversely affected by changes
in interest rates and, therefore, are subject to the risk of market price
fluctuations. The values of Municipal Obligations with longer remaining
maturities typically fluctuate more than those of similarly rated Municipal
Obligations with shorter remaining maturities. The values of fixed income
securities also may be affected by changes in the credit rating or financial
condition of the issuing entities.

         Tax legislation in recent years has included several provisions that
may affect the supply of, and the demand for, Municipal Obligations, as well as
the tax-exempt nature of interest paid on those obligations. Neither the Trust
nor the Investment Manager can predict with certainty the effect of recent tax
law changes upon the Municipal Obligation market, including the availability of
instruments for investment by a Fund. In addition, neither the Trust nor the
Investment Manager can predict whether additional legislation adversely
affecting the Municipal Obligation market will be enacted in the future. The
Trust monitors legislative developments and considers whether changes in the
objective or policies of a Fund need to be made in response to those
developments. If any laws are enacted that would reduce the availability of
Municipal Obligations for investment by the Tax-Exempt Fund so as to affect the
Fund's shareholders adversely, the Trust will reevaluate the Fund's investment
objective and policies and might submit possible changes in the Fund's structure
to the Fund's shareholders for their consideration. If legislation were enacted
that would treat a type of Municipal Obligation as taxable for Federal income
tax purposes, the Trust would treat the security as a permissible taxable money
market instrument for the Fund within the applicable limits set forth in the
Prospectuses.

         Municipal leases are Municipal Obligations that may take the form of a
lease or an installment purchase contract issued by state and local governmental
authorities to obtain funds to acquire a wide variety of equipment and
facilities such as fire and sanitation vehicles, computer equipment and other
capital assets. Interest payments on qualifying municipal leases are exempt from
Federal income taxes and state income taxes within the state of issuance.
Although municipal lease obligations do not normally constitute general
obligations of the municipality, a lease obligation is ordinarily backed by the
municipality's agreement to make the payments due under the lease obligation.


                                       32
<PAGE>

These obligations have evolved to make it possible for state and local
government authorities to acquire property and equipment without meeting
constitutional and statutory requirements for the issuance of debt. Thus,
municipal leases have special risks not normally associated with Municipal
Obligations. These obligations frequently contain "non-appropriation" clauses
that provide that the governmental issuer of the obligation has no obligation to
make future payments under the lease or contract unless money is appropriated
for those purposes by the legislative body on a yearly or other periodic basis.
In addition to the non-appropriation risk, municipal leases represent a type of
financing that has not yet developed the depth of marketability associated with
other Municipal Obligations. Some municipal lease obligations may be, and could
become, illiquid. Moreover, although municipal leases will be secured by the
leased equipment, the disposition of the equipment in the event of foreclosure
might prove to be difficult.

         Municipal lease obligations may be deemed to be illiquid as determined
by or in accordance with methods adopted by the Board. In determining the
liquidity and appropriate valuation of a municipal lease obligation, the
following factors relating to the security are considered, among others: (i) the
frequency of trades and quotes; (ii) the number of dealers willing to purchase
or sell the security; (iii) the willingness of dealers to undertake to make a
market; (iv) the nature of the marketplace trades; and (v) the likelihood that
the obligation will continue to be marketable based on the credit quality of the
municipality or relevant obligor.

         Municipal leases held by a Fund will be considered illiquid securities
unless the Board determines on an ongoing basis that the leases are readily
marketable. An unrated municipal lease with a non-appropriation risk that is
backed by an irrevocable bank letter of credit or an insurance policy issued by
a bank or insurer deemed by the Investment Manager to be of high quality and
minimal credit risk, will not be deemed to be illiquid solely because the
underlying municipal lease is unrated, if the Investment Manager determines that
the lease is readily marketable because it is backed by the letter of credit or
insurance policy.

         Municipal leases that a Fund may acquire will be both rated and
unrated. Rated leases that may be held by a Fund include those rated investment
grade at the time of investment or those issued by issuers whose senior debt is
rated investment grade at the time of investment. A Fund may acquire unrated
issues that the Investment Manager deems to be comparable in quality to rated
issues in which a Fund is authorized to invest. A determination that an unrated
lease obligation is comparable in quality to a rated lease obligation and that
there is a reasonable likelihood that the lease will not be canceled will be
subject to oversight and approval by the Board.

         To limit the risks associated with municipal leases, a Fund will invest
no more than 5% of its total assets in those leases. In addition, a Fund will
purchase lease obligations that contain non-appropriation clauses when the lease
payments will commence amortization of principal at an early date resulting in
an average life of five years or less for the lease obligation.


                                       33
<PAGE>

         The Strategic Fund intends to invest in Municipal Obligations of a
broad range of issuers, consistent with prudent regional diversification.
Investors in certain states may be subject to state taxation on all or a portion
of the income and capital gains produced by such securities.

         Floating and Variable Rate Instruments. Certain Funds may invest in
floating and variable rate instruments. Income securities may provide for
floating or variable rate interest or dividend payments. The floating or
variable rate may be determined by reference to a known lending rate, such as a
bank's prime rate, a certificate of deposit rate or the London InterBank Offered
Rate (LIBOR). Alternatively, the rate may be determined through an auction or
remarketing process. The rate also may be indexed to changes in the values of
interest rate or securities indexes, currency exchange rate or other
commodities. Variable and floating rate securities tend to be less sensitive
than fixed rate securities to interest rate changes and to have higher yields
when interest rates increase. However, during periods of rising interest rates,
changes in the interest rate of an adjustable rate security may lag changes in
market rates. The amount by which the rates paid on an income security may
increase or decrease may be subject to periodic or lifetime caps. Fluctuations
in interest rates above these caps could cause adjustable rate securities to
behave more like fixed rate securities in response to extreme movements in
interest rates.

         Floating and variable rate income securities include securities whose
rates vary inversely with changes in market rates of interest. Such securities
may also pay a rate of interest determined by applying a multiple to the
variable rate. The extent of increases and decreases in the value of securities
whose rates vary inversely with changes in market rates of interest generally
will be larger than comparable changes in the value of an equal principal amount
of a fixed rate security having similar credit quality, redemption provisions
and maturity.

         Certain Funds may purchase floating and variable rate demand bonds and
notes, which are Municipal Obligations ordinarily having stated maturities in
excess of one year but which permit their holder to demand payment of principal
at any time or at specified intervals. Variable rate demand notes include master
demand notes, which are obligations that permit a Fund to invest fluctuating
amounts, which may change daily without penalty, pursuant to direct arrangements
between the Fund, as lender, and the borrower. These obligations have interest
rates that fluctuate from time to time and frequently are secured by letters of
credit or other credit support arrangements provided by banks. Use of letters of
credit or other credit support arrangements will not adversely affect the
tax-exempt status of variable rate demand notes. Because they are direct lending
arrangements between the lender and borrower, variable rate demand notes
generally will not be traded and no established secondary market generally
exists for them, although they are redeemable at face value. If variable rate
demand notes are not secured by letters of credit or other credit support
arrangements, a Fund's right to demand payment will be dependent on the ability
of the borrower to pay principal and interest on demand. Each obligation
purchased by a Fund will meet the quality criteria established by the Investment
Manager for the purchase of Municipal Obligations. The Investment Manager
considers on an ongoing basis the creditworthiness of the issuers of the
floating and variable rate demand obligations in the relevant Fund's portfolio.


                                       34
<PAGE>

         Participation Interests. Certain Funds may purchase from financial
institutions participation interests in certain Municipal Obligations. A
participation interest gives the Fund an undivided interest in the Municipal
Obligation in the proportion that the Fund's participation interest bears to the
total principal amount of the Municipal Obligation. These instruments may have
fixed, floating or variable rates of interest. If the participation interest is
unrated, or has been given a rating below one that is otherwise permissible for
purchase by a Fund, the participation interest will be backed by an irrevocable
letter of credit or guarantee of a bank that the Board has determined meets
certain quality standards, or the payment obligation otherwise will be
collateralized by Government Securities. A Fund will have the right, with
respect to certain participation interests, to demand payment, on a specified
number of days' notice, for all or any part of the Fund's participation interest
in the Municipal Obligation, plus accrued interest. The Trust intends that a
Fund exercise its right to demand payment only upon a default under the terms of
the Municipal Obligation, or to maintain or improve the quality of its
investment portfolio. A Fund will invest no more than 5% of the value of its
total assets in participation interests.

         Zero Coupon Obligations. Certain Funds may invest in zero coupon
obligations. Zero coupon securities generally pay no cash interest (or dividends
in the case of preferred stock) to their holders prior to maturity. Accordingly,
such securities usually are issued and traded at a deep discount from their face
or par value and generally are subject to greater fluctuations of market value
in response to changing interest rates than securities of comparable maturities
and credit quality that pay cash interest (or dividends in the case of preferred
stock) on a current basis. Although each of these Funds will receive no payments
on its zero coupon securities prior to their maturity or disposition, it will be
required for federal income tax purposes generally to include in its dividends
each year an amount equal to the annual income that accrues on its zero coupon
securities. Such dividends will be paid from the cash assets of the Fund, from
borrowings or by liquidation of portfolio securities, if necessary, at a time
that the Fund otherwise would not have done so. To the extent these Funds are
required to liquidate thinly traded securities, the Funds may be able to sell
such securities only at prices lower than if such securities were more widely
traded. The risks associated with holding securities that are not readily
marketable may be accentuated at such time. To the extent the proceeds from any
such dispositions are used by these Funds to pay distributions, each of those
Funds will not be able to purchase additional income-producing securities with
such proceeds, and as a result its current income ultimately may be reduced.

         The Strategic Fund and the High Yield Fund may each invest up to 10% of
its assets in zero coupon Municipal Obligations. Zero coupon Municipal
Obligations are generally divided into two categories: "Pure Zero Obligations,"
which are those that pay no interest for their entire life and "Zero/Fixed
Obligations," which pay no interest for some initial period and thereafter pay
interest currently. In the case of a Pure Zero Obligation, the failure to pay
interest currently may result from the obligation's having no stated interest
rate, in which case the obligation pays only principal at maturity and is sold
at a discount from its stated principal. A Pure Zero Obligation may, in the
alternative, provide for a stated interest rate, but provide that no interest is
payable until maturity, in which case accrued, unpaid interest on the obligation
may be capitalized as incremental principal. The value to the investor of a zero


                                       35
<PAGE>

coupon Municipal Obligation consists of the economic accretion either of the
difference between the purchase price and the nominal principal amount (if no
interest is stated to accrue) or of accrued, unpaid interest during the
Municipal Obligation's life or payment deferral period.

         Municipal Obligation Components. Certain Funds may invest in Municipal
Obligations, the interest rate on which has been divided by the issuer into two
different and variable components, which together result in a fixed interest
rate. Typically, the first of the components (the "Auction Component") pays an
interest rate that is reset periodically through an auction process, whereas the
second of the components (the "Residual Component") pays a residual interest
rate based on the difference between the total interest paid by the issuer on
the Municipal Obligation and the auction rate paid on the Auction Component. A
Fund may purchase both Auction and Residual Components. Because the interest
rate paid to holders of Residual Components is generally determined by
subtracting the interest rate paid to the holders of Auction Components from a
fixed amount, the interest rate paid to Residual Component holders will decrease
as the Auction Component's rate increases and decrease as the Auction
Component's rate increases. Moreover, the extent of the increases and decreases
in market value of Residual Components may be larger than comparable changes in
the market value of an equal principal amount of a fixed rate Municipal
Obligation having similar credit quality, redemption provisions and maturity.

         Custodial Receipts. Certain Funds may acquire custodial receipts or
certificates underwritten by securities dealers or banks that evidence ownership
of future interest payments, principal payments, or both, on certain Municipal
Obligations. The underwriter of these certificates or receipts typically
purchases Municipal Obligations and deposits the obligations in an irrevocable
trust or custodial account with a custodian bank, which then issues receipts or
certificates that evidence ownership of the periodic unmatured coupon payments
and the final principal payment on the obligations. Custodial receipts
evidencing specific coupon or principal payments have the same general
attributes as zero coupon Municipal Obligations described above. Although under
the terms of a custodial receipt a Fund would be typically authorized to assert
its rights directly against the issuer of the underlying obligation, the Fund
could be required to assert through the custodian bank those rights as may exist
against the underlying issuers. Thus, in the event the underlying issuer fails
to pay principal and/or interest when due, a Fund may be subject to delays,
expenses and risks that are greater than those that would have been involved if
the Fund had purchased a direct obligation of the issuer. In addition, in the
event that the trust or custodial account in which the underlying security has
been deposited is determined to be an association taxable as a corporation,
instead of a non-taxable entity, the yield on the underlying security would be
reduced in recognition of any taxes paid.


                                       36
<PAGE>

         Government Stripped Mortgage Related Securities. Certain Funds may
invest in government stripped mortgage related securities issued and guaranteed
by GNMA, FNMA or FHLMC. These securities represent beneficial ownership
interests in either periodic principal distributions ("principal-only") or
interest distributions ("interest-only") on mortgage related certificates issued
by GNMA, FNMA or FHLMC. The certificates underlying the government stripped
mortgage related securities represent all or part of the beneficial interest in
pools of mortgage loans. These Funds will invest in government stripped mortgage
related securities in order to enhance yield or to benefit from anticipated
appreciation in value of the securities at times when the Investment Manager
believes that interest rates will remain stable or increase. In periods of
rising interest rates, the expected increase in the value of government stripped
mortgage related securities may offset all or a portion of any decline in value
of the securities held by these Funds.

         Investing in government stripped mortgage related securities involves
risks normally associated with investing in mortgage related securities issued
by government or government related entities. In addition, the yields on
government stripped mortgage related securities are extremely sensitive to the
prepayment experience on the mortgage loans underlying the certificates
collateralizing the securities. If a decline in the level of prevailing interest
rates results in a rate of principal prepayments higher than anticipated,
distributions of principal will be accelerated, thereby reducing the yield to
maturity on interest-only government stripped mortgage related securities and
increasing the yield to maturity on principal-only government stripped mortgage
related securities. Sufficiently high prepayment rates could result in these
Funds' not fully recovering their initial investment in an interest-only
government stripped mortgage related security. Under current market conditions,
these Funds expect that investments in government stripped mortgage related
securities will consist primarily of interest-only securities. The sensitivity
of an interest-only security that represents the interest portion of a
particular class, as opposed to the interest portion of an entire pool, to
interest rate fluctuations, may be increased because of the characteristics of
the principal portion to which they relate. Government stripped mortgage related
securities are currently traded in an over-the-counter market maintained by
several large investment banking firms. No assurance can be given that these
Funds will be able to effect a trade of a government stripped mortgage related
security at a desired time. These Funds will acquire government stripped
mortgage related securities only if a secondary market for the securities exists
at the time of acquisition. Except for government stripped mortgage related
securities based on fixed rate FNMA and FHLMC mortgage certificates that meet
certain liquidity criteria established by the Board, the Trust treats government
stripped mortgage related securities as illiquid and will limit each of these
Funds' investments in these securities, together with other illiquid
investments, to not more than 15% of its net assets.

         Asset-Backed and Receivable-Backed Securities. Certain Funds may invest
in asset-backed and receivable-backed securities. To date, several types of
asset-backed and receivable-backed securities have been offered to investors
including "Certificates for Automobile Receivables" ("CARs(SM)") and interests
in pools of credit card receivables. CARs(SM) represent undivided fractional
interests in a trust, the assets of which consist of a pool of motor vehicle
retail installment sales contracts and security interests in the vehicles


                                       37
<PAGE>

securing the contracts. Payments of principal and interest on CARs(SM) are
passed through monthly to certificate holders and are guaranteed up to certain
amounts and for a certain time period by a letter of credit issued by a
financial institution unaffiliated with the trustee or originator of the trust.

         An investor's return on CARs(SM) may be affected by early prepayment of
principal on the underlying vehicle sales contracts. If the letter of credit is
exhausted, these Funds may be prevented from realizing the full amount due on a
sales contract because of state law requirements and restrictions relating to
foreclosure sales of vehicles and the availability of deficiency judgments
following these sales, because of depreciation, damage or loss of a vehicle,
because of the application of Federal and state bankruptcy and insolvency laws
or other factors. As a result, certificate holders may experience delays in
payment if the letter of credit is exhausted. Consistent with each of these
Funds' investment objective and policies and subject to the review and approval
of the Board, these Funds may also invest in other types of asset-backed and
receivable-backed securities.

         Mortgage Dollar Rolls. Certain Funds may, with respect to up to 25% of
their total assets, enter into mortgage "dollar rolls" in which the Fund sells
securities for delivery in the current month and simultaneously contracts with
the same counterparty to repurchase similar (same type, coupon and maturity) but
not identical securities on a specified future date. The Fund loses the right to
receive principal and interest paid on the securities sold. However, the Fund
would benefit to the extent of any price received for the securities sold and
the lower forward price for the future purchase (often referred to as the
"drop") or fee income plus the interest earned on the cash proceeds of the
securities sold until the settlement date of the forward purchase. Unless such
benefits exceed the income, capital appreciation and gain or loss due to
mortgage repayments that would have been realized on the securities sold as part
of the mortgage dollar roll, the use of this technique will diminish the
investment performance of the Fund compared with what such performance would
have been without the use of mortgage dollar rolls. The Fund will hold and
maintain in a segregated account until the settlement date cash or liquid assets
in an amount equal to the forward purchase price. The benefits derived from the
use of mortgage dollar rolls may depend upon the Investment Manager's ability to
predict correctly mortgage prepayments and interest rates. There is no assurance
that mortgage dollar rolls can be successfully employed.

         For financial reporting and tax purposes, each of these Funds proposes
to treat mortgage dollar rolls as two separate transactions: one involving the
purchase of a security and a separate transaction involving a sale. The Funds do
not currently intend to enter into mortgage dollar rolls that are accounted for
as a financing.

         Short Sales Against the Box. Certain Funds may sell securities "short
against the box." Whereas a short sale is the sale of a security a Fund does not
own, a short sale is "against the box" if at all times during which the short
position is open, the Fund owns at least an equal amount of the securities or
securities convertible into, or exchangeable without further consideration for,
securities of the same issue as the securities sold short.


                                       38
<PAGE>

         WEBs and Other Index-related Securities. Each of the International
Fund, the Emerging Markets Fund and the Strategic Fund may invest in shares in a
particular series issued by Foreign Fund, Inc., an investment company whose
shares also are known as "World Equity Benchmark Shares" or "WEBS." WEBS have
been listed for trading on the American Stock Exchange, Inc. The Funds also may
invest in shares in a particular series issued by CountryBaskets Index Fund,
Inc., or another fund the shares of which are the substantial equivalent of
WEBS. Each of the U.S. Equity Fund, Premier Growth Fund, Value Fund and
Strategic Fund may invest in Standard & Poor's Depositary Receipts, or "SPDRs."
SPDRs are securities that represent ownership in a long-term unit investment
trust that holds a portfolio of common stocks designed to track the performance
of the S&P 500 Index. A Fund investing in a SPDR would be entitled to receive
proportionate quarterly cash distributions corresponding to the dividends that
accrue to the S&P 500 stocks in the underlying portfolio, less trust expenses.

                             INVESTMENT RESTRICTIONS

         Each Fund is subject to fundamental and non-fundamental investment
policies and limitations. Under the 1940 Act, fundamental investment policies
and limitations may not be changed without the vote of a majority of the
outstanding voting securities (as defined in the 1940 Act) of the Fund.

         The following policies and limitations supplement those described in
the Prospectuses and this SAI. Investment restrictions numbered 1 through 12
below have been adopted by the Trust as fundamental policies of all of the
Funds. Under the 1940 Act, a fundamental policy may not be changed with respect
to a Fund without the vote of a majority of the outstanding voting securities
(as defined in the 1940 Act) of the Fund. Investment restrictions 13 and 14 may
be changed by a vote of the Board of Trustees at any time.

1.       No Fund may borrow money, except that a Fund may enter into reverse
repurchase agreements and may borrow from banks for temporary or emergency (not
leveraging) purposes, including the meeting of redemption requests and cash
payments of dividends and distributions that might otherwise require the
untimely disposition of securities, in an amount not to exceed 33-1/3% of the
value of the Fund's total assets (including the amount borrowed) valued at
market less liabilities (not including the amount borrowed) at the time the
borrowing is made. Whenever borrowings, including reverse repurchase agreements,
of 5% or more of a Fund's total assets are outstanding, the Fund will not make
any additional investments.

2.       No Fund may lend its assets or money to other persons, except through
(a) purchasing debt obligations, (b) lending portfolio securities in an amount
not to exceed 30% of the Fund's total assets taken at market value, (c) entering
into repurchase agreements, (d) trading in financial futures contracts, index
futures contracts, securities indexes and options on financial futures
contracts, options on index futures contracts, options on securities and options
on securities indexes and (e) entering into variable rate demand notes.

3.       No Fund may purchase securities (other than Government Securities) of
any issuer if, as a result of the purchase, more than 5% of the Fund's total
assets would be invested in the securities of the issuer, except that (a) up to


                                       39
<PAGE>

25% of the value of the total assets of each non-money market Fund may be
invested without regard to this limitation, and (b) the Money Market Fund may
hold more than 5% of its total assets in the securities of an issuer to the
extent permitted by Rule 2a-7 under the 1940 Act. All securities of a foreign
government and its agencies will be treated as a single issuer for purposes of
this restriction.

4.       No Fund may purchase more than 10% of the voting securities of any one
issuer, or more than 10% of the outstanding securities of any class of issuer,
except that (a) this limitation is not applicable to a Fund's investments in
Government Securities and (b) up to 25% of the value of the assets of a
non-money market Fund may be invested without regard to these 10% limitations.
All securities of a foreign government and its agencies will be treated as a
single issuer for purposes of this restriction.

5.       No Fund may invest more than 25% of the value of its total assets in
securities of issuers in any one industry. For purposes of this restriction, the
term industry will be deemed to include (a) the government of any one country
other than the United States, but not the U.S. Government and (b) all
supra-national organizations. In addition, securities held by the Money Market
Fund that are issued by domestic banks are excluded from this restriction.

6.       No Fund may underwrite any issue of securities, except to the extent
that the sale of portfolio securities in accordance with the Fund's investment
objective, policies and limitations may be deemed to be an underwriting, and
except that the Fund may acquire securities under circumstances in which, if the
securities were sold, the Fund might be deemed to be an underwriter for purposes
of the Securities Act of 1933, as amended.

7.       No Fund may purchase or sell real estate or real estate limited
partnership interests, or invest in oil, gas or mineral leases, or mineral
exploration or development programs, except that a Fund may (a) invest in
securities secured by real estate, mortgages or interests in real estate or
mortgages, (b) purchase securities issued by companies that invest or deal in
real estate, mortgages or interests in real estate or mortgages, (c) engage in
the purchase and sale of real estate as necessary to provide it with an office
for the transaction of business or (d) acquire real estate or interests in real
estate securing an issuer's obligations in the event of a default by that
issuer.

8.       No Fund may make short sales of securities or maintain a short
position, unless at all times when a short position is open, the Fund owns an
equal amount of the securities or securities convertible into or exchangeable
for, without payment of any further consideration, securities of the same issue
as, and equal in amount to, the securities sold short.

9.       No Fund may purchase securities on margin, except that a Fund may
obtain any short-term credits necessary for the clearance of purchases and sales
of securities. For purposes of this restriction, the deposit or payment of
initial or variation margin in connection with futures contracts, financial
futures contracts or related options, and options on securities, options on
securities indexes and options on currencies will not be deemed to be a purchase
of securities on margin by a Fund.


                                       40
<PAGE>

10.      No Fund may invest in commodities, except that each non-money market
Fund may invest in futures contracts (including financial futures contracts,
index futures contracts or securities index futures contracts) and related
options and other similar contracts (including foreign currency forward, futures
and options contracts) as described in this Statement of Additional Information
and in each Prospectus.

11.      No Fund may invest in companies for the purpose of exercising control
or management.

12.      No Fund may issue senior securities except as otherwise permitted by
the 1940 Act and as otherwise permitted herein.

13.      No Fund may purchase illiquid securities if more than 15% of the net
assets of the Fund would be invested in illiquid securities; the Money Market
Fund will not purchase illiquid securities. For purposes of this restriction,
illiquid securities are securities that cannot be disposed of by a Fund within
seven days in the ordinary course of business at approximately the amount at
which the Fund has valued the securities.

14.      No Fund may purchase restricted securities if more than 10% of the
total assets of the Fund would be invested in restricted securities. Restricted
securities are securities that are subject to contractual or legal restrictions
on transfer, excluding for purposes of this restriction, restricted securities
that are eligible for resale pursuant to Rule 144A under the Securities Act of
1933, as amended ("Rule 144A Securities"), that have been determined to be
liquid by the Trust's Board of Trustees based upon the trading markets for the
securities.

Notes to Investment Restrictions

         The Trust may make commitments more restrictive than the restrictions
listed above with respect to a Fund to permit the sale of shares of the Fund in
certain states. Should the Trust determine that any such commitment is no longer
in the best interests of a Fund and its shareholders, the Trust will revoke the
commitment by terminating the sale of shares of the Fund in the state involved
or may otherwise modify its commitment based on a change in the state's
restrictions.

         The percentage limitations in the restrictions listed above apply at
the time of purchases of securities. For purposes of investment restriction
number 5, the Trust may use the industry classifications reflected by the S&P
500 Composite Stock Index, if applicable at the time of determination. For all
other portfolio holdings, the Trust may use the Directory of Companies Required
to File Annual Reports with the SEC and Bloomberg Inc. In addition, the Trust
may select its own industry classifications, provided such classifications are
reasonable.

Portfolio Transactions and Turnover

         Decisions to buy and sell securities for each Fund are made by the
Investment Manager, subject to review by the Board. Transactions on domestic
stock exchanges and some foreign stock exchanges involve the payment of


                                       41
<PAGE>

negotiated brokerage commissions. On exchanges on which commissions are
negotiated, the cost of transactions may vary among different brokers. On many
foreign exchanges, commissions are fixed and may be higher than for securities
traded on U.S. exchanges. Generally, no stated commissions are applicable to
securities traded in U.S. over-the-counter markets, but the prices of those
securities include undisclosed commissions or mark-ups. The cost of securities
purchased from underwriters include an underwriting commission or concession,
and the prices at which securities are purchased from and sold to dealers
include a dealer's mark-up or mark-down. Government Securities generally will be
purchased on behalf of a Fund from underwriters or dealers, although certain
newly issued Government Securities may be purchased directly from the U.S.
Treasury or from the issuing agency or instrumentality.


         The following table shows the total amount of brokerage commissions
paid by each Fund over the past three fiscal years. The Trust commenced
operations in November 1997; accordingly, no Fund paid commissions to
broker-dealers prior to the fiscal period ended September 30, 1998.




<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
                                        Total Commissions           Total Commissions            Total Commissions for
                                     for Fiscal Year Ended        for Fiscal Year Ended           Fiscal Period Ended
         Fund                           September 30, 2000          September 30, 1999             September 30, 1998
------------------------------------------------------------------------------------------------------------------------------------
<S>                                  <C>                          <C>                            <C>
U.S. Equity Fund                                                          $127,820                        $146,766
------------------------------------------------------------------------------------------------------------------------------------
S&P 500 Index Fund                                                         $1,651                         $12,381
------------------------------------------------------------------------------------------------------------------------------------
Premier Growth Fund                                                          N/A                            N/A
------------------------------------------------------------------------------------------------------------------------------------
Value Equity Fund                                                            N/A                            N/A
------------------------------------------------------------------------------------------------------------------------------------
Mid-Cap Growth Fund                                                        $17,379                        $27,664
------------------------------------------------------------------------------------------------------------------------------------
Mid-Cap Value Fund                                                         $21,261                          N/A
------------------------------------------------------------------------------------------------------------------------------------
Small-Cap Value Fund                                                       $98,908                          N/A
------------------------------------------------------------------------------------------------------------------------------------
International Equity Fund                                                 $414,804                        $311,499
------------------------------------------------------------------------------------------------------------------------------------
Europe Equity Fund                                                         $37,628                          N/A
------------------------------------------------------------------------------------------------------------------------------------
Emerging Markets Fund                                                      $47,611                        $60,902
------------------------------------------------------------------------------------------------------------------------------------
Strategic Investment Fund                                                    N/A                            N/A
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>


         In selecting brokers or dealers to execute securities transactions on
behalf of a Fund, the Investment Manager seeks the most favorable terms
available under the circumstances ("best execution"). In assessing the overall
terms available to ensure best execution for any transaction, the Investment
Manager considers factors that it deems relevant, including the breadth of the
market in the security, the price of the security, the financial condition and
execution capability of the broker or dealer and the reasonableness of the
commission, if any, for the specific transaction and on a continuing basis.

         In addition, the investment advisory agreement between the Trust and GE
Asset Management relating to each Fund authorizes the Investment Manager, on
behalf of the Fund, in selecting brokers or dealers to execute a particular
transaction, and in evaluating the best overall terms available, to consider the
brokerage and research services (as those terms are defined in Section 28(e) of


                                       42
<PAGE>

the Securities Exchange Act of 1934) provided to the Fund and/or other accounts
over which the Investment Manager or its affiliates exercise investment
discretion. The fees under the investment advisory agreement relating to a Fund
will not be reduced by reason of the Fund's receiving brokerage and research
services. Such broker-dealers may provide analyses and reports regarding
issuers, industries, economic trends, portfolio strategy, and may effect
securities transactions and perform certain functions related thereto. In
addition, such services may include advice concerning the advisability of
investing in, purchasing or selling securities and the availability of
particular securities or buyers or sellers of securities. The research services
received from broker-dealers that execute transactions on behalf of a Fund may
be useful to the Investment Manager in servicing that Fund as well as all of the
Investment Manager's accounts and not all of these services may be used in
connection with the particular Fund or Funds generating the commissions.
Consistent with limits established by the Federal Securities Laws, a Fund may
pay a broker-dealer commissions for agency transactions that exceed the amount
of commissions charged by other broker-dealers in recognition of their research
and execution services. In addition, subject to the overall policy of best
execution, the Investment Manager may consider sales of Fund shares in selecting
brokers or dealers to execute securities transactions on behalf of a Fund.


         The following table shows the dollar amount of brokerage commissions
paid to firms that provided research and execution services and the approximate
dollar amount of transactions involved during the fiscal period ended September
30, 2000. Funds that are not listed paid no brokerage commissions to firms that
provided such services.


<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------
                                                                                           Total Amount of
                                               Commissions Paid to Firms               Transactions to Firms for
                                               for Brokerage and Research               Brokerage and Research
        Fund                                           Services                               Services
----------------------------------------------------------------------------------------------------------------------
<S>                                            <C>                                     <C>
U.S. Equity Fund                                        $16,985                              $16,852,543
----------------------------------------------------------------------------------------------------------------------
S&P 500 Index Fund                                        --                                     --
----------------------------------------------------------------------------------------------------------------------
Premier Growth Fund                                       --                                     --
----------------------------------------------------------------------------------------------------------------------
Value Equity Fund                                         --                                     --
----------------------------------------------------------------------------------------------------------------------
Mid-Cap Growth Fund                                      $865                                 $544,986
----------------------------------------------------------------------------------------------------------------------
Mid-Cap Value Fund                                       $442                                 $199,217
----------------------------------------------------------------------------------------------------------------------
Small-Cap Value Fund                                      --                                     --
----------------------------------------------------------------------------------------------------------------------
International Equity Fund                               $19,146                              $11,177,206
----------------------------------------------------------------------------------------------------------------------
Europe Equity Fund                                       $560                                 $312,039
----------------------------------------------------------------------------------------------------------------------
Emerging Markets Fund                                    $579                                 $198,393
----------------------------------------------------------------------------------------------------------------------
Strategic Investment Fund                                 N/A                                    --
----------------------------------------------------------------------------------------------------------------------
</TABLE>

         The Board periodically reviews the commissions paid by a Fund to
determine if the commissions paid over representative periods of time were
reasonable in relation to the benefits inuring to the Fund. Over-the-counter
purchases and sales on behalf of the Funds will be transacted directly with
principal market makers except in those cases in which better prices and
executions may be obtained elsewhere. A Fund will not purchase any security,
including Government Securities, during the existence of any underwriting or
selling group relating to the security of which any affiliate of the Fund or the


                                       43
<PAGE>

Investment Manager is a member, except to the extent permitted under rules,
interpretations or exemptions of the SEC.

         The Investment Manager may select broker-dealers who are affiliated
with the Trust or the Investment Manager. All brokerage transaction commissions
paid to affiliates will be fair and reasonable to the shareholders.

         Certain of the Funds' investment strategies may result in the Fund
having a higher portfolio turnover rate. Higher portfolio turnover rates may
cause a Fund to experience increased transaction costs, brokerage expenses and
other acquisition costs, and shareholders to incur increased taxes on their
investment in a Fund. The Investment Manager does not consider portfolio
turnover rate a limiting factor in making investment decisions on behalf of any
Fund consistent with the Fund's investment objective and policies. Variations in
portfolio turnover rates may be due to fluctuations in shareholder purchase,
exchange and redemption transactions, market conditions or changes in the
Investment Manager's outlook. The Money Market Fund may attempt to increase its
yield by trading to take advantage of short-term market variations, which
trading would result in the Fund's experiencing high portfolio turnover. Because
purchases and sales of money market instruments are usually effected as
principal transactions, however, this type of trading by the Money Market Fund
will not result in the Fund's paying higher brokerage commissions.


         The following table provides the portfolio turnover rates for each of
the Funds over the past three fiscal years.




<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------
                                     Portfolio Turnover for         Portfolio Turnover           Portfolio Turnover for
                                        Fiscal Year ended         for Fiscal Year ended           Fiscal Period ended
              Fund                     September 30, 2000           September 30, 1999             September 30, 1998*
------------------------------------------------------------------------------------------------------------------------------
<S>                                  <C>                          <C>                            <C>
U.S. Equity Fund                                                             45%                            29%
------------------------------------------------------------------------------------------------------------------------------
S&P 500 Index Fund                                                           7%                              1%
------------------------------------------------------------------------------------------------------------------------------
Mid-Cap Growth Fund                                                          52%                            14%
------------------------------------------------------------------------------------------------------------------------------
Mid-Cap Value Fund                                                           18%                            N/A
------------------------------------------------------------------------------------------------------------------------------
Small-Cap Value Fund                                                        216%                            19%
------------------------------------------------------------------------------------------------------------------------------
International Equity Fund                                                    50%                            53%
------------------------------------------------------------------------------------------------------------------------------
Europe Equity Fund                                                           49%                            N/A
------------------------------------------------------------------------------------------------------------------------------
Emerging Markets Fund                                                        79%                            77%
------------------------------------------------------------------------------------------------------------------------------
Income Fund                                                                 227%                            323%
------------------------------------------------------------------------------------------------------------------------------
</TABLE>


* Information is from inception date through September 30, 1998.


                                       44
<PAGE>

                             MANAGEMENT OF THE TRUST

Trustees and Officers

         The Board of Trustees oversees the business affairs of the Trust. The
Trustees approve all significant agreements between the Trust and the persons
and companies that furnish services to the Funds, including agreements with the
Funds' investment adviser and administrator, distributor, custodian and transfer
agent. The day-to-day operations of the Funds have been delegated to GE Asset
Management.

         The names of the Trustees and executive officers of the Trust, their
addresses and their principal occupations during the past five years and their
other affiliations are shown below. Each person named as a Trustee also may
serve in a similar capacity for other Funds advised by GE Asset Management. The
executive officers of the Trust are employees of organizations that provide
services to the Funds. An asterisk appears before the name of each Trustee who
is an "interested person" of the Trust, as defined in the 1940 Act. The business
address of each Trustee and executive officer who is an "interested person" (as
defined in the 1940 Act) is 3003 Summer Street, Stamford, Connecticut 06905.


                                       45
<PAGE>


<TABLE>
<CAPTION>
                                  Position(s) Held                    Age and Principal Occupation(s)
   Name and Address                  With Trust                            During Past Five Years
   ----------------                  ----------                            ----------------------
<S>                            <C>                           <C>
Michael J. Cosgrove*           Chairman of the Board and     Age 51. President, Asset Management, GE Investment Services
                               President                     Group of GE Financial Assurance Holdings, Inc. ("GEFA"), an
                                                             indirect wholly-owned subsidiary of General Electric Company
                                                             ("GE"), since February 1997; Executive Vice President -
                                                             Mutual Funds of GE Asset Management, a wholly-owned
                                                             subsidiary of GE that is registered as an investment adviser
                                                             under the Investment Advisers Act of 1940, as amended, since
                                                             March 1993; Director of GE Asset Management since 1988; from
                                                             1988 until 1993, Mr. Cosgrove served as Executive Vice
                                                             President - Finance and Administration of GE Asset
                                                             Management; Chairman of the Board, Chief-Executive Officer
                                                             and President of GE Investment Distributors, Inc., a
                                                             registered broker-dealer, since 1993; Chairman of the Board
                                                             and Chief Executive Officer of GE Investment Retirement

Alan M. Lewis*                 Trustee and Executive         Age 54.  Executive Vice President, General Counsel and
                               Vice President                Secretary of GE Asset Management since 1988.

John R. Costantino             Trustee                       Age 54.  Managing Director, Walden  Partners, Ltd.,
150 East 58th Street                                         consultants and investors, since August 1992;
New York, NY 10055                                           President, CMG Acquisition Corp., Inc., a holding
                                                             company, since 1988; Vice Chairman, Acoustiguide
                                                             Holdings, Inc., a holding company, since 1989;
                                                             President CMG/IKH, Inc., a holding company, since 1991;
                                                             Director, Crossland Federal Savings Bank, a financial
                                                             institution; Director, Brooklyn Bankcorp, Inc., a
                                                             financial institution; Director, IK Holdings, Inc., a
                                                             holding company since 1991; Director, I. Kleinfeld &
                                                             Son, Inc., a retailer, since 1991; Director, High
                                                             Performance Appliances, Inc., a distributor of kitchen
                                                             appliances ("HPA"), since 1991; Director, HPA Hong
                                                             Kong, Ltd., a service subsidiary of HPA, since 1991;
                                                             Director, Lancit Media Productions, Ltd., a children's
                                                             and family television film and videotape production
                                                             company, since 1995.
</TABLE>



                                       46
<PAGE>

<TABLE>
<CAPTION>
                                  Position(s) Held                    Age and Principal Occupation(s)
   Name and Address                  With Trust                            During Past Five Years
   ----------------                  ----------                            ----------------------
<S>                            <C>                           <C>
William J. Lucas               Trustee                       Age 53. Vice President and Treasurer of Fairfield
Fairfield University                                         University since 1983.
North Benson Road
Fairfield, CT 06430

Robert P. Quinn                Trustee                       Age 64.  Retired since 1983 from Salomon Brothers Inc;
45 Shinnecock Road                                           Director, GP Financial Corp., a holding company, since
Quogue, NY 11959                                             1994; Director, The Greenpoint Savings Bank, a
                                                             financial institution, since 1987.

Michael Tansley                Treasurer                     Age 36.  Manager of Fund Administration at GE Asset
                                                             Management since May 1998; from 1990 to May 1998, Mr.
                                                             Tansley held various progressive positions leading to
                                                             senior manager in July 1996, in the Investment Company
                                                             Services Group of Pricewaterhouse-Coopers LLP (formerly
                                                             Price Waterhouse LLP).

Matthew J. Simpson             Secretary                     Age 39.  Vice President and General Counsel, Asset
                                                             Management Services group of GEFA since February 1997;
                                                             Vice President, Associate General Counsel and Assistant
                                                             Secretary of GE Asset Management since October 1992.
</TABLE>


         No employee of GE or any of its affiliates receives any compensation
from the Trust for acting as a Trustee or officer of the Trust. Each Trustee of
the Trust who is not a director, officer or employee of GE Asset Management,
GEID, GE, or any affiliate of those companies, receives an annual fee of $5,000
for services as Trustee. In addition, each Trustee receives $500 for each
meeting of the Board attended by the Trustee and is reimbursed for expenses
incurred in connection with attendance at Board meetings.


                                       47
<PAGE>


Trustees' Compensation
(for the fiscal year ended September 30, 2000)



<TABLE>
<CAPTION>
                               COMPENSATION TABLE
--------------------------------------------------------------------------------
                                                        Total Compensation from
                       Total Compensation                 Investment Companies
Name of Trustee          From the Trust                    Managed by GE Asset
                                                               Management
--------------------------------------------------------------------------------
<S>                    <C>                              <C>
Michael J. Cosgrove                                                 +
--------------------------------------------------------------------------------
Alan M. Lewis                                                       +
--------------------------------------------------------------------------------
John R. Costantino                                                 ++
--------------------------------------------------------------------------------
William J. Lucas                                                   ++
--------------------------------------------------------------------------------
Robert P. Quinn                                                    ++
--------------------------------------------------------------------------------
</TABLE>

+ As of September 30, 2000, Mr. Cosgrove served as Trustee or Director of twelve
investment companies advised by GEAM. Mr. Lewis serves as Trustee of eleven
investment companies advised by GEAM. They are considered to be interested
persons of each investment company advised by GE Asset Management or GEIC, as
defined under Section 2(a)(19) of the 1940 Act, and, accordingly, serve as
Trustees thereof without compensation.

++ As of September 30, 2000, Messrs. Costantino, Lucas and Quinn served as
Trustees or Directors of four investment companies advised by GE Asset
Management and the compensation is for their services as Trustees or Directors
of these companies.


Investment Adviser and Administrator


         GE Asset Management Incorporated (formerly GE Investment Management
Incorporated) serves as the Trust's investment adviser and administrator. GE
Asset Management is registered as an investment adviser under the Investment
Advisers Act of 1940, as amended, and is located at 3003 Summer Street,
Stamford, Connecticut 06905. GE Asset Management, which was formed under the
laws of Delaware in 1988, is a wholly owned subsidiary of GE. GE is a highly
diversified conglomerate comprised of 12 global manufacturing and service sector
businesses. GE's businesses include aircraft engines, appliances, capital
services, lighting, medical systems, broadcasting, plastic manufacturing, power
systems, electrical distribution and control systems, industrial control
systems, information services and transportation systems. GE Asset Management
currently provides advisory services with respect to a number of other mutual
funds and private institutional accounts. The professionals responsible for the
investment operations of GE Asset Management provide investment advisory
services with respect to GE's pension and benefit plans and a number of funds
offered exclusively to GE employees, retirees and certain related persons. These
funds include the Elfun family of Funds (the first of which, Elfun Trusts, was
established in 1935) and the funds offered as part of GE's 401(k) program (also
known as the GE Savings and Security Program), which are referred to as the GE
S&S Program Mutual Fund and the GE S&S Long Term Interest Fund. The investment
professionals at GE Asset Management and its predecessors have managed GE's



                                       48
<PAGE>


pension assets since 1927. As of December 31, 2000, GE's investment advisory
firms oversaw $[__] billion and managed individual and institutional assets of
$[__] billion, of which more than $[__] billion was invested in mutual funds.

Personnel of each of the Funds, GE Asset Management, and GE Investment
Distributors, Inc., are subject to a code of ethics, pursuant to Rule 17j-1
under the 1940 Act, which establishes procedures for personal investing and
restricts certain transactions by persons subject to the code. Personnel subject
to the code of ethics are permitted to invest in securities, including
securities that may be purchased or held by a Fund, if they follow procedures
outlined in the code.


GE Asset Management Investment Advisory and Administration Agreements

         The duties and responsibilities of GE Asset Management are specified in
investment advisory and administration agreements (each, an "Advisory Agreement"
and collectively, the "Advisory Agreements") between GE Asset Management and the
Trust on behalf of the respective Funds. Under each Advisory Agreement, GE Asset
Management, subject to the supervision of the Trust's Board of Trustees,
provides a continuous investment program for the relevant Fund's assets,
including investment research and management. GE Asset Management determines
from time to time what investments are purchased, retained or sold by the Fund
and places purchase and sale orders for the Fund's investments. GE Asset
Management provides the Trust with all executive, administrative, clerical and
other personnel necessary to operate each Fund, and pays salaries and other
employment-related costs of employing these persons. GE Asset Management
furnishes the Trust and each Fund with office space, facilities, and equipment
and pays the day-to-day expenses related to the operation of such space,
facilities and equipment. GE Asset Management, as administrator, also: (a)
maintains the books and records of each Fund; (b) prepares reports to
shareholders of each Fund; (c) prepares and files tax returns for each Fund; (d)
assists with the preparation and filing of reports and the Trust's registration
statement with the SEC; (e) provides appropriate officers for the Trust; (f)
provides administrative support necessary for the Board of Trustees to conduct
meetings; and (g) supervises and coordinates the activities of other service
providers, including independent auditors, legal counsel, custodians, accounting
service agents and transfer agents.

         GE Asset Management is generally responsible for employing sufficient
staff and consulting with other persons that it determines to be necessary or
useful in the performance of its obligations under each Advisory Agreement. Each
Advisory Agreement obligates GE Asset Management to provide services in
accordance with the relevant Fund's investment objective, policies and
restrictions as stated in the Trust's current registration statement, as amended
from time to time, and to keep the Trust informed of developments materially
affecting that Fund, including furnishing the Trust with whatever information
and reports the Board of Trustees reasonably requests.

         Each Advisory Agreement provides that GE Asset Management may render
similar advisory and administrative services to other clients so long as when a
Fund or any other client served by GE Asset Management are prepared to invest in
or desire to dispose of the same security, available investments or


                                       49
<PAGE>

opportunities for sales will be allocated in a manner believed by GE Asset
Management to be equitable to the Fund. The Advisory Agreements also provide
that GE Asset Management shall not be liable for any error of judgment or
mistake of law or for any loss incurred by a Fund in connection with GE Asset
Management's services pursuant to the Agreement, except for a loss resulting
from willful misfeasance, bad faith or gross negligence in the performance of
its duties or from reckless disregard of its obligations and duties under the
Agreement.


         Each class is responsible for paying all of its expenses that are not
assumed by GE Asset Management pursuant to the Advisory Agreements. Such
expenses include fees payable to GE Institutional Funds' independent Trustees,
brokerage fees, transfer agent (and sub-transfer agent) fees, and expenses that
are not normal operating expenses of the Funds (such as extraordinary expenses,
interest and taxes).


         Each Advisory Agreement is effective from its date of execution, and
continues in effect for an initial two-year term and will continue from year to
year thereafter so long as its continuance is approved annually by (a) the Board
of Trustees or (b) a vote of a majority of the relevant Fund's outstanding
voting securities, provided that in either event the continuance also is
approved by the vote of a majority of the Trustees who are not parties to the
Agreement or interested persons, as such term is defined in the 1940 Act, of any
party to the Agreement by a vote cast in person at meeting called for the
purpose of voting on such approval.

         Each Advisory Agreement is not assignable and may be terminated without
penalty by either the Trust or GE Asset Management upon no more than 60 days'
nor less than 30 days' written notice to the other or by vote of holders of a
majority of the relevant Fund's outstanding voting securities.

Investment Advisory Fees

         For its services to each Fund of the Trust, GE Asset Management
receives a monthly advisory and administrative fee. The fee is deducted daily
from the assets of each of the Funds and paid to GE Asset Management 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 fees payable to GE Asset Management are based on the average
daily net assets of each Fund at the following rates:

                                       Average Daily              Annual Rate
Name of Fund                           Net Assets of Fund       Percentage (%)*
------------                           ------------------       ---------------
U.S. Equity Fund                       First $25 million              .55
Value Equity Fund                      Next $25 million               .45
Mid-Cap Growth Fund                    Over $50 million               .35
Premier Growth Equity Fund
Premier Research Equity Fund


                                       50
<PAGE>

                                       Average Daily              Annual Rate
Name of Fund                           Net Assets of Fund       Percentage (%)*
------------                           ------------------       ---------------
S&P 500 Index Fund                     All assets                     .15

Mid-Cap Value Equity Fund              First $25 million              .65
                                       Next $25 million               .60
                                       Over $50 million               .55

Small-Cap Value Equity Fund Small-Cap  First $25 million              .70
Growth Equity Fund                     Next $25 million               .65
                                       Over $50 million               .60

International Equity Fund              First $25 million              .75
Europe Equity Fund                     Next $50 million               .65
Premier International Equity Fund      Over $75 million               .55

Emerging Markets Fund                  First $50 million              1.05
                                       Over $50 million               .95

Income Fund                            First $25 million              .35
                                       Next $25 million               .30
                                       Next $50 million               .25
                                       Over $100 million              .20

Strategic Investment Fund              First $25 million              .45
High Yield Fund                        Next $25 million               .40
                                       Over $50 million               .35

Money Market Fund                      First $25 million              .25
                                       Next $25 million               .20
                                       Next $50 million               .15
                                       Over $100 million              .10

----------
* From time to time, GE Asset Management may waive advisory or administrative
fees paid by a Fund.

         The Advisory Agreement does not contain any provisions prescribing
limits on the operating expenses of the Trust or any Fund.


         The following table provides total management fees paid by each Fund
over the past three fiscal years. The Trust commenced operations in November
1997. Accordingly, no Fund paid investment advisory and administrative fees
prior to the fiscal period ended September 30, 1998.



                                       51
<PAGE>

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
                                               Total Management             Total Management               Total Management
                                             Fees for Fiscal Year         Fees for Fiscal Year           Fees for Fiscal Period
                 Fund                         ended September 30,           ended September 30,            ended September 30,
                                                    2000                           1999                          1998
------------------------------------------------------------------------------------------------------------------------------------
<S>                                          <C>                          <C>                            <C>
U.S. Equity                                                                      $596,183                      $406,706
------------------------------------------------------------------------------------------------------------------------------------
S&P 500 Index                                                                    $38,140                       $25,543
------------------------------------------------------------------------------------------------------------------------------------
Premier Growth                                                                     N/A                           N/A
------------------------------------------------------------------------------------------------------------------------------------
Value Equity                                                                       N/A                           N/A
------------------------------------------------------------------------------------------------------------------------------------
Mid-Cap Growth                                                                   $85,788                       $67,792
------------------------------------------------------------------------------------------------------------------------------------
Mid-Cap Value                                                                    $51,327                         N/A
------------------------------------------------------------------------------------------------------------------------------------
Small-Cap Value                                                                  $68,479                        $9,766
------------------------------------------------------------------------------------------------------------------------------------
International Equity                                                             $915,623                      $555,236
------------------------------------------------------------------------------------------------------------------------------------
Europe Equity                                                                    $48,474                         N/A
------------------------------------------------------------------------------------------------------------------------------------
Emerging Markets                                                                 $73,879                       $69,291
------------------------------------------------------------------------------------------------------------------------------------
Income                                                                           $227,814                      $16,642
------------------------------------------------------------------------------------------------------------------------------------
Strategic Investment                                                               N/A                           N/A
------------------------------------------------------------------------------------------------------------------------------------
Money Market                                                                     $17,307                       $22,488
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>


Sub-Investment Advisers

         Each Advisory Agreement permits GE Asset Management, subject to the
approval of the Board of Trustees and other applicable legal requirements, to
enter into any advisory or sub-advisory agreement with affiliated or
unaffiliated entities whereby such entity would perform some or all of GE Asset
Management's responsibilities under the Advisory Agreement. In this event, GE
Asset Management remains responsible for ensuring that these entities perform
the services that each undertakes pursuant to a sub-advisory agreement. GE Asset
Management has engaged the following sub-advisers to manage certain of the
Funds.

         S&P 500 Index Fund. GE Asset Management has retained State Street
Global Advisors ("SSGA"), a division of State Street Bank and Trust Company
("State Street"), as sub-adviser to the S&P 500 Index Fund. SSGA and State
Street are located at Two International Place, Boston, Massachusetts 02110.
State Street is a wholly-owned subsidiary of State Street Corporation, a
publicly held bank holding company. For SSGA's services, GE Asset Management
(and not the Fund) pays SSGA monthly compensation in the form of an investment
sub-advisory fee. The fee is paid by GE Asset Management monthly and is a
percentage of the average daily net assets of the Fund at the annual rate of
 .05% of the first $100 million, .04% of the next $200 million and .03% for all
amounts over $300 million.




                                       52
<PAGE>


         Small-Cap Value Fund. Palisade Capital Management, L.L.C. ("Palisade"),
located at One Bridge Plaza, Fort Lee, New Jersey 07024, has been retained by GE
Asset Management to act as sub-investment adviser of the Small-Cap Value Fund.
Pursuant to the sub-investment advisory agreement between Palisade and GE Asset
Management, Palisade bears all expenses in connection with the performance of
its services as the Small-Cap Value Fund's sub-investment adviser. Although
Palisade has no previous experience managing mutual fund portfolios, Palisade
has managed various institutional and private accounts. For its services as
sub-investment adviser to the Small-Cap Value Fund, GE Asset Management (and not
the Fund) pays Palisade a fee equal to an annual rate of .35% of the first $200
million, .325% of the next $100 million and .30% of amounts in excess of $300
million.

Sub-Advisory Agreements


         SSGA and Palisade serve as sub-advisers to the S&P 500 Index Fund, the
Small-Cap Value Fund, and the Mid-Cap Value Fund, respectively, pursuant to
sub-advisory agreements with GE Asset Management (the "Sub-Advisory
Agreements"). Each of the Sub-Advisory Agreements is not assignable and may be
terminated without penalty by either the sub-adviser or GE Asset Management upon
60 days' written notice to the other or by the Board of Trustees, or by the vote
of a majority of the outstanding voting securities of the Fund, on 60 days'
written notice to the sub-adviser. The Sub-Advisory Agreements provide that the
sub-adviser may render similar sub-advisory services to other clients so long as
the services that it provides under the Agreement are not impaired thereby. The
Sub-Advisory Agreements also provide that the sub-adviser shall not be liable
for any error of judgment or mistake of law or for any loss incurred by the Fund
except for a loss resulting from willful misfeasance, bad faith or gross
negligence in the performance of its duties or from reckless disregard of its
obligations and duties under the Sub-Advisory Agreement.


Securities Activities of the Investment Manager

         Securities held by the Funds also may be held by other funds or
separate accounts for which the Investment Manager acts as an adviser. Because
of different investment objectives or other factors, a particular security may
be bought by the Investment Manager for one or more of their clients, when one
or more other clients are selling the same security. If purchases or sales of
securities for a Fund or other client of the Investment Manager arise for
consideration at or about the same time, transactions in such securities will be
made, insofar as feasible, for the Fund and other clients in a manner deemed
equitable to all. To the extent that transactions on behalf of more than one
client of the Investment Manager during the same period may increase the demand
for securities being purchased or the supply of securities being sold, there may
be an adverse effect on price.


                                       53
<PAGE>

         On occasions when the Investment Manager (under the supervision of the
Board of Trustees) deems the purchase or sale of a security to be in the best
interests of the Trust as well as other funds or accounts it may, to the extent
permitted by applicable laws and regulations, but will not be obligated to,
aggregate the securities to be sold or purchased for the Trust with those to be
sold or purchased for other funds or accounts in order to obtain favorable
execution and low brokerage commissions. In that event, allocation of the
securities purchased or sold, as well as the expenses incurred in the
transaction, will be made by the Investment Manager in the manner it considers
to be most equitable and consistent with its fiduciary obligations to the Trust
and to such other funds or accounts. In some cases this procedure may adversely
affect the size the position obtainable for a Fund.

Shareholder Servicing and Distribution Plan

         The Trust's Board of Trustees adopted a Shareholder Servicing and
Distribution Plan with respect to the Trust's Service Class shares pursuant to
Rule 12b-1 under the 1940 Act (the "Plan"). Under the Plan, the Trust pays GE
Asset Management, with respect to the Service Class shares of each Fund, an
annual fee of .25% of the value of the average daily net assets attributed to
such Service Class shares. The shareholder servicing and distribution fee is
intended to (a) compensate GE Asset Management, or enable GE Asset Management to
compensate other persons ("Service Providers"), for providing ongoing servicing
and/or maintenance of the accounts of Service Class shareholders of a Fund and
(b) compensate GE Asset Management, or enable GE Asset Management to compensate
Service Providers (including any distributor of Service Class shares of the
Fund), for providing services primarily intended to result in, or are primarily
attributable to, the sale of Service Class shares.

         The Plan was approved by the sole initial shareholder of the Trust.
Under its terms, the Plan continues from year to year, provided its continuance
is approved annually by vote of the Trust's full Board of Trustees, as well as
by a majority of the Trustees who are not interested persons of the Trust and
who have no direct or indirect financial interest in the operation of the Plan
or in any agreements related to the Plan ("Independent Trustees"). The Plan may
not be amended to increase materially the amount of the fees paid under the Plan
with respect to a Fund without approval of Service Class shareholders of the
Fund. In addition, all material amendments of the Plan must be approved by the
Trustees and Independent Trustees in the manner described above. The Plan may be
terminated with respect to a Fund at any time, without penalty, by vote of a
majority of the Independent Trustees or by a vote of a majority of the
outstanding voting securities of the Service Class shares of that Fund (as
defined in the 1940 Act).


                                       54
<PAGE>

Custodian and Transfer Agent

         State Street Bank and Trust Company ("State Street"), located at 225
Franklin Street, Boston, Massachusetts 02101, serves as custodian and transfer
agent of the Funds' investments. Under its custodian contract with the Trust,
State Street is authorized to appoint one or more banking institutions as
subcustodians of assets owned by each Fund. For its custody services, State
Street receives monthly fees based upon the month-end, aggregate net asset value
of the Funds, plus certain charges for securities transactions. The assets of
the Trust are held under bank custodianship in accordance with the 1940 Act. As
transfer agent, State Street is responsible for subscriptions and redemptions.

Distributor

         GE Investment Distributors, Inc. ("GEID"), located at 777 Long Ridge
Road, Building B, Stamford, Connecticut 06927, serves as the distributor of Fund
shares on a continuing best efforts basis. Michael J. Cosgrove, a member of the
Trust's board of trustees, is the Chairman of the board, Chief Executive Officer
and President of GEID.

                   PURCHASE, REDEMPTION AND EXCHANGE OF SHARES

Purchases

         Shares are offered to investors at the offering price, based on the NAV
next determined after receipt of an investment in good order by State Street
Bank and Trust Company, the Trust's custodian and transfer agent. The offering
price is equal to NAV, as described below.

         GEID and other persons remunerated on the basis of sales of shares may
receive different levels of compensation for selling one class of shares over
another. In addition, trail commissions of up to 0.25% may be paid to authorized
broker-dealers, financial institutions or investment advisers which have entered
into sales agreements with GEID ("Authorized Firms") for providing on-going
services with respect to Service Class shares.

         GEID offers shares of each class to certain investors that meet the
eligibility requirements described below. The Trust was 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. The Trust expects that most
of the time each Fund will have relatively few shareholders (as compared with
most mutual funds) but that these shareholders will invest substantial amounts
in a Fund. Typical institutional investors may include banks, insurance
companies, broker-dealers, investment advisers, trusts that fund qualified
pension and profit-sharing plans (Section 401 of the Code), trusts that fund
government employer non-qualified deferred compensation obligations (Section 457
of the Code) ("457 Plans"), 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


                                       55
<PAGE>

investment companies that are not affiliated persons of the Trust (or affiliated
persons of such persons).

Eligibility Requirements


Full-Service Defined Contribution Plan Investors: A full-service defined
contribution plan may invest in the GE Institutional Funds if the plan has (or
will have) invested at least $100 million at the time of initial investment in
one or more investment portfolios or accounts that are advised by GE Asset
Management. There is no minimum investment for subsequent purchases. A
full-service defined contribution plan is a defined contribution plan that
receives recordkeeping and administration services provided or paid by GE
Financial Assurance Holdings, Inc. or its affiliates. A full-service defined
contribution plan generally must individually meet the minimum investment
requirements and will not be considered a related investor of any other investor
in the GE Institutional Funds.

Investment Only Defined Contribution Plan Investors: A defined contribution plan
that does not receive recordkeeping and administration services provided or paid
by GE Financial Assurance Holding, Inc. or its affiliates may investment in the
GE Institutional Funds if such investor has at least $50 million of plan assets
at the time of initial investment. There is no minimum investment for subsequent
purchases. An investment only defined contribution plan investor of this type
generally must individually meet the eligibility requirements and will not be
considered a related investor of any other investor in the GE Institutional
Funds.

All Other Investors: The minimum initial investment in each Fund is $5 million
for each investor or group of related investors. There is no minimum investment
requirement for subsequent purchases.

The minimum investment requirement is waived for each investor or group of
related investors if such person or group has (or will have) invested at least
$25 million at the time of initial investment in one or more investment
portfolios or accounts that are advised by GE Asset Management.

Related Investors: Related investors are investors that are affiliated persons
of each other within the meaning of the 1940 Act.

Common trust funds and collective trust funds of the same bank (or of affiliated
banks) are considered related investors of each other and their bank(s).
Likewise, separate accounts of the same insurance company (or of affiliated
insurance companies) are related investors of each other and their insurance
company or companies and clients whose assets are managed on a discretionary
basis by the same bank, insurance company, investment adviser or broker-dealer
are related investors of their manager. The Distributor also may treat
institutional clients of a financial intermediary as related investors of the
intermediary where Fund shares are held by that intermediary in an omnibus
account for its clients.

Purchases In-Kind: Investors may purchase shares in amounts of $5 million or
more with either cash or investment securities acceptable to the appropriate
Fund. The Funds' Distributor would inform you of the securities acceptable to
the Fund. The securities would be accepted by the Fund at their market value in
return for Fund shares of equal value. The Funds reserve the right to require
the Distributor to suspend the offering of shares of the Emerging Markets Fund
or International Equity Fund for cash in amounts greater than $5 million and of
the other non-money market Funds in amounts above $10 million.

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 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.



                                       56
<PAGE>



How to Open an Account. Investors must establish an account before purchasing
shares, and may do so either by submitting an account application to GEID or the
transfer agent or through an Authorized Firm (defined below). Investors may
obtain an account application by telephoning the Trust at (800) 493-3042 or by
writing to the Trust at:

         GE Institutional Funds
         P.O. Box 120065
         Stamford, CT 06912-0065

         For overnight package delivery:

         GE Institutional Funds
         c/o National Financial Data Services Inc.
         330 West 9th Street
         Kansas City, MO 64105

         To open an account, an investor must complete and sign an application
and furnish its taxpayer identification number to the Trust. The investor also
must certify whether or not it is subject to withholding for failing to report
income to the Internal Revenue Service.

         How to Buy Shares. After a completed account application has been
received and processed, an investor may purchase Fund shares from GEID or
through brokers, dealers, financial institutions or investment advisers that
have entered into sales agreements with GEID ("Authorized Firms").

         An investor may purchase shares through an Authorized Firm with the
assistance of a sales representative (an "Investment Professional"). The
Authorized Firm will be responsible for transmitting the investor's order
promptly to the transfer agent. Investors should contact their Investment
Professional for further instructions.

         Investors also may purchase 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]. If a wire is received by the close of regular
trading on the NYSE on a Business Day, the shares will be priced according to
the net asset value of the Fund on that day. If a wire is received after the
close of regular trading on the NYSE, the shares will be priced as of the time
the Fund's net asset value per share is next determined.

         Payment for orders that are not accepted will be returned to investors
promptly. An investor's financial institution may charge a fee for wiring its
account.


                                       57
<PAGE>

Redemptions

         The right of redemption of shares of a Fund may be suspended or the
date of payment postponed (i) for any periods during which the NYSE is closed
(other than for customary weekend and holiday closings), (ii) when trading in
the markets the Fund normally utilizes is restricted, or an emergency, as
defined by the rules and regulations of the SEC, exists, making disposal of a
Fund's investments or determination of its net asset value not reasonably
practicable or (iii) for such other periods as the SEC by order may permit for
the protection of the Fund's shareholders. A shareholder who pays for Fund
shares by personal check will receive the proceeds of a redemption of those
shares when the purchase check has been collected, which may take up to 15 days
or more. Shareholders who anticipate the need for more immediate access to their
investment should purchase shares with Federal funds or bank wire or by a
certified or cashier's check.

         Distributions-in-Kind. If the Board determines that it would be
detrimental to the best interests of a Fund's shareholders to make a redemption
payment wholly in cash, the Trust may pay, in accordance with rules adopted by
the SEC, any portion of a redemption in excess of the lesser of $250,000 or 1%
of the Trust's net assets by a distribution in kind of portfolio securities in
lieu of cash. Redemptions failing to meet this threshold must be made in cash.
Portfolio securities issued in a distribution in kind will be deemed by GE Asset
Management to be readily marketable. Shareholders receiving distributions in
kind of portfolio securities may incur brokerage commissions when subsequently
disposing of those securities.

Exchange Privilege


         As described in the Prospectuses, a shareholder of the Investment Class
of a Fund may exchange such shares for Investment Class shares of another Fund
or for Service Class or Class X shares of the same or another Fund. Likewise,
shareholders of the Service Class shares of a Fund may exchange such shares for
Service Class shares of another Fund or for Investment Class shares of the same
or another Fund. Shareholders of Class X shares of a Fund may exchange such
shares for Class X shares of another Fund or Investment Class shares of the same
or another Fund.


         The exchange privilege described in the Prospectuses enables a
shareholder of a Fund to acquire shares in a Fund having a different investment
objective and policies when the shareholder believes that a shift between Funds
is an appropriate investment decision. Upon receipt of proper instructions and
all necessary supporting documents, and provided the Fund is an available
option, the shareholder meets the minimum investment requirement for the Fund
that is the "target" of the exchange, and such Fund may be legally sold in the
shareholder's state of residence, shares submitted for exchange are redeemed at
the then-current net asset value and the proceeds are immediately invested in
shares of the Fund being acquired. The Trust reserves the right to reject any
exchange request and may, upon 60 days' prior written notice to a Fund's
Shareholders, terminate the exchange privilege.


                                       58
<PAGE>


         An exchange for the same class of another GE Institutional Fund is a
sale and purchase of shares for tax purposes. An investor may have a taxable
gain or loss when he or she exchanges shares.


                                 NET ASSET VALUE

         The Trust will not calculate net asset value on days that the NYSE is
closed. On those days, securities held by a Fund may nevertheless be actively
traded, and the value of the Fund's shares could be significantly affected.

         Because of the need to obtain prices as of the close of trading on
various exchanges throughout the world, the calculation of the net asset value
of a class of a Fund may not take place contemporaneously with the determination
of the prices of many of its portfolio securities used in the calculation. A
security that is listed or traded on more than one exchange is valued at the
quotation on the exchange determined to be the primary market for the security.
All assets and liabilities of the Funds initially expressed in foreign currency
values will be converted into U.S. dollar values at the mean between the bid and
offered quotations of the currencies against U.S. dollars as last quoted by any
recognized dealer. If these quotations are not available, the rate of exchange
will be determined in good faith by the Board. In carrying out the Board's
valuation policies, GE Asset Management may consult with one or more independent
pricing services ("Pricing Service") retained by the Trust.

         Debt securities of U.S. issuers (other than Government Securities and
short-term investments), including Municipal Obligations, are valued by a dealer
or by a pricing service based upon a computerized matrix system, which considers
market transactions and dealer supplied valuations. Valuations for municipal
bonds are obtained from a qualified municipal bond pricing service; prices
represent the mean of the secondary market. The procedures of the Pricing
Service are reviewed periodically by GE Asset Management under the general
supervision and responsibility of the Board .

         The valuation of the portfolio securities of the Money Market Fund is
based upon amortized cost, which does not take into account unrealized capital
gains or losses. Amortized cost valuation involves initially valuing an
instrument at its cost and thereafter assuming a constant amortization to
maturity of any discount or premium, regardless of the effect of fluctuating
interest rates on the market value of the instrument. Although this method
provides certainty in valuation, it may result in periods during which value, as
determined by amortized cost, is higher or lower than the price the Money Market
Fund would receive if it sold the instrument.

         The use of the amortized cost method of valuing the portfolio
securities of the Money Market Fund is permitted by a rule adopted by the SEC.
Under this rule, the Money Market Fund must maintain a dollar-weighted average


                                       59
<PAGE>

portfolio maturity of 90 days or less, purchase only instruments having
remaining maturities of 397 calendar days or less, and invest only in "eligible
securities" as defined in the rule, which are determined by GE Asset Management
to present minimal credit risks. Pursuant to the rule, GE Asset Management has
established procedures designed to stabilize, to the extent reasonably possible,
the Fund's price per share as computed for the purpose of sales and redemptions
at $1.00. These procedures include review of the Money Market Fund's portfolio
holdings at such intervals as GE Asset Management may deem appropriate, to
determine whether the Fund's net asset value calculated by using available
market quotations or market equivalents deviates from $1.00 per share based on
amortized cost.

         The rule regarding amortized cost valuation provides that the extent of
certain significant deviations between the Money Market Fund's net asset value
based upon available market quotations or market equivalents and the $1.00 per
share net asset value based on amortized cost must be examined by the Board. In
the event the Board determines that a deviation exists that may result in
material dilution or other unfair results to investors or existing shareholders
of the Money Market Fund, the Board must, in accordance with the rule, cause the
Fund to take such corrective action as the Board regards as necessary and
appropriate, including: selling portfolio instruments of the Fund prior to
maturity to realize capital gains or losses or to shorten average portfolio
maturity; withholding dividends or paying distributions from capital or capital
gains; redeeming shares in kind; or establishing a net asset value per share by
using available market quotations.

                       DIVIDENDS, DISTRIBUTIONS AND TAXES

         Set forth below is a summary of certain Federal income tax
considerations generally affecting the Funds and their shareholders. The summary
is not intended as a substitute for individual tax planning, and shareholders
are urged to consult their tax advisors regarding the application of Federal,
state, local and foreign tax laws to their specific tax situations.

Tax Status of the Funds and their Shareholders

         Each Fund is treated as a separate entity for Federal income tax
purposes. Each Fund's net investment income and capital gains distributions are
determined separately from any other series that the Trust may designate.

         The Trust intends for each Fund to elect to be treated as a "regulated
investment company" under Sub-Chapter M of the Code and to qualify as a
"regulated investment company" each year. If a Fund (i) qualifies as a regulated
investment company and (ii) distributes to its shareholders at least 90% of its
net investment income (including for this purpose its net realized short-term
capital gains) and 90% of its tax-exempt interest income (reduced by certain
expenses), the Fund will not be liable for Federal income taxes to the extent
that its net investment income and its net realized long-term and short-term
capital gains, if any, are distributed to its shareholders. In addition, in
order to avoid a 4% excise tax, a Fund must declare, no later than December 31
and distribute no later than the following January 31, at least 98% of its
taxable ordinary income earned during the calendar year and 98% of its net long


                                       60
<PAGE>

term and short term capital gains for the 1-year period ending generally on
October 31 of such calendar year. One requirement for qualification as a
regulated investment company is that each Fund must diversify its holdings so
that, at the end of each quarter, (i) at least 50% of the market value of the
Fund's assets is represented by cash and cash items, securities of other
regulated investment companies, U.S. government securities and other securities,
with such other securities limited for purposes of this calculation in respect
of any one issuer to an amount not greater than 5% of the value of the Fund's
assets and not greater than 10% of the outstanding voting securities of such
issuer, and (ii) not more than 25% of the value of its total assets is invested
in the securities of any one issuer or of two or more issuers that are
controlled by the Fund (within the meaning of Section 851(b)(3)(B) of the Code)
that are engaged in the same or similar trades or businesses or related trades
or businesses (other than U.S. government securities or the securities of other
regulated investment companies).

         Another requirement for qualification as a regulated investment company
is that each Fund must earn at least 90% of its gross income from dividends,
interest, payments with respect to securities loans, gains from the disposition
of stock or securities (including gains from related investments in foreign
currencies) and income (including gains from options, futures or forward
contracts) derived with respect to its business of investing in such stocks,
securities or currencies (the "90% Test").

         If for any taxable year a Fund does not qualify for the special Federal
income tax treatment afforded regulated investment companies, all of its taxable
income will be subject to Federal income tax at regular corporate rates (without
any deduction for distributions to its shareholders). In such event, dividend
distributions, including amounts derived from interest on tax-exempt
obligations, would be taxable to shareholders to the extent of current and
accumulated earnings and profits, and would be eligible for the dividends
received deduction for corporations in the case of corporate shareholders.

         As of September 30, 1999, the following Funds have capital loss
carryforwards as indicated below. The capital loss carry over is available to
offset future realized capital gains to the extent provided in the Internal
Revenue Code and regulations thereunder. To the extent that these carryover
losses are used to offset future capital gains, it is probable that the gains so
offset will not be distributed to shareholders because they would be taxable as
ordinary income.


<TABLE>
<CAPTION>

           ---------------------------------------------------------------------------
                                                             Expiration Dates:
                   Fund                  Amount                September 30,
           ---------------------------------------------------------------------------
           <S>                          <C>                     <C>
           Emerging Markets Fund
           ---------------------------------------------------------------------------
           Mid-Cap Growth Fund
           ---------------------------------------------------------------------------
</TABLE>


         Each Fund would cease to qualify for pass-through tax treatment under
Sub-chapter M if it is unable to comply with the diversification, qualifying
income or distribution requirements contained in Subchapter M of the Code. Each
such Fund also could be subject to a 4% excise tax if it fails to make certain
distributions.


                                       61
<PAGE>

         Net investment income or capital gains earned by the Funds investing in
foreign securities may be subject to foreign income taxes withheld at the
source. The United States has entered into tax treaties with many foreign
countries that entitle the Funds to a reduced rate of tax or exemption from tax
on this related income and gains. The effective rate of foreign tax cannot be
determined at this time since the amount of these Funds' assets to be invested
within various countries is not now known. The Trust intends that the Funds seek
to operate so as to qualify for treaty-reduced rates of tax when applicable. In
addition, if a Fund qualifies as a regulated investment company under the Code,
if certain distribution requirements are satisfied, and if more than 50% of the
value of the Fund's assets at the close of the taxable year consists of stocks
or securities of foreign corporations, the Trust may elect, for U.S. Federal
income tax purposes, to treat foreign income taxes paid by the Fund that can be
treated as income taxes under U.S. income tax principles as paid by its
shareholders. The International Fund, the Europe Equity Fund and the Emerging
Markets Fund each anticipates that it may qualify for and make this election in
most, but not necessarily all, of its taxable years. If a Fund were to make an
election, an amount equal to the foreign income taxes paid by the Fund would be
included in the income of its shareholders and the shareholders would be
entitled to credit their portions of this amount against their U.S. tax
liabilities, if any, or to deduct those portions from their U.S. taxable income,
if any. Shortly after any year for which it makes an election, the Trust will
report to the shareholders of the Fund, in writing, the amount per share of
foreign tax that must be included in each shareholder's gross income and the
amount that will be available as a deduction or credit. No deduction for foreign
taxes may be claimed by a shareholder who does not itemize deductions. Certain
limitations will be imposed on the extent to which the credit (but not the
deduction) for foreign taxes may be claimed.

         A Fund's transactions in options and futures contracts are subject to
special provisions of the Code that, among other things, may affect the
character of gains and losses realized by the Fund (that is, may affect whether
gains or losses are ordinary or capital), accelerate recognition of income to
the Fund and defer losses of the Fund. These rules (i) could affect the
character, amount and timing of distributions to shareholders of a Fund, (ii)
could require the Fund to "mark to market" certain types of the positions in its
portfolio (that is, treat them as if they were closed out) and (iii) may cause
the Fund to recognize income without receiving cash with which to make
distributions in amounts necessary to satisfy the distribution requirements for
avoiding income and excise taxes described above and in the Prospectuses. The
Trust seeks to monitor transactions of each Fund, seeks to make the appropriate
tax elections on behalf of the Fund and seeks to make the appropriate entries in
the Fund's books and records when the Fund acquires any option, futures contract
or hedged investment, to mitigate the effect of these rules and prevent
disqualification of the Fund as a regulated investment company.

         As a general rule, a shareholder's gain or loss on a sale or redemption
of shares of a Fund will be a long-term capital gain or loss if the shareholder
has held the shares for more than one year. The gain or loss will be a
short-term capital gain or loss if the shareholder has held the shares for one
year or less.

         A Fund's net realized long-term capital gains are distributed as
described in the Prospectuses. The distributions ("capital gain dividends"), if
any, are taxable to a shareholder of a Fund as long-term capital gains,


                                       62
<PAGE>

regardless of how long a shareholder has held the shares, and will be designated
as capital gain dividends in a written notice mailed by the Trust to the
shareholders of the Fund after the close of the Fund's prior taxable year. If a
shareholder receives a capital gain dividend with respect to any share of a
Fund, and if the share is sold before it has been held by the shareholder for
six months or less, then any loss on the sale or exchange of the share, to the
extent of the capital gain dividend, will be treated as a long-term capital
loss. Investors considering buying shares of a Fund on or just prior to the
record date for a taxable dividend or capital gain distribution should be aware
that the amount of the dividend or distribution payment will be a taxable
dividend or distribution payment.

         Special rules contained in the Code apply when a shareholder of a Fund
disposes of shares of the Fund through a redemption or exchange within 90 days
of purchase and subsequently acquires shares of a Fund on which a sales charge
normally is imposed without paying a sales charge in accordance with the
exchange privilege described in the Prospectuses. In these cases, any gain on
the disposition of the shares of the Fund will be increased, or loss decreased,
by the amount of the sales charge paid when the shares were acquired, and that
amount will increase the adjusted basis of the shares of the Fund subsequently
acquired. In addition, if shares of a Fund are purchased within 30 days of
redeeming shares at a loss, the loss will not be deductible and instead will
increase the basis of the newly purchased shares.

         If a shareholder of a Fund fails to furnish the Trust with a correct
taxpayer identification number, fails to report fully dividend or interest
income, or fails to certify that the shareholder has provided a correct taxpayer
identification number and that the shareholder is not subject to "backup
withholding," then the shareholder may be subject to a 31% "backup withholding"
tax with respect to (i) taxable dividends and distributions from the Fund and
(ii) the proceeds of any redemptions of shares of the Fund (other than the Money
Market Fund). An individual's taxpayer identification number is his or her
social security number. The 31% backup withholding tax is not an additional tax
and may be credited against a taxpayer's regular Federal income tax liability.

                             THE FUNDS' PERFORMANCE

         The Trust, from time to time, may quote a Fund's performance, in terms
of a Class' yield and/or total return, in reports or other communications to
shareholders of a Fund or in advertising material. Additional information
regarding the manner in which performance figures are calculated is provided
below.


         As of the date of this SAI, General Electric Assurance Capital Company
("GECA"), an indirect subsidiary of GE, owned 100% of the outstanding Service
Class shares of each of the Funds (other than the Europe Equity Fund and the
Small-Cap Value Fund). The shares were issued to GECA for providing the initial
seed capital to the Funds. Because the Service Class and Class X shares of each
Fund lack an operating history, no performance figures are provided below for
those shares.



                                       63
<PAGE>

         The performance figures for the Investment Class shares of certain
Funds are reflected below. These figures are net of fees and expenses
attributable to such shares of the Funds noted and assume changes in share
price, reinvestment of dividends and capital gains. Because the Investment Class
shares of the Funds do not pay a shareholder servicing and distribution fee, the
performance figures shown below for the Investment Class shares of the Funds
noted can be expected to be higher than the performance figures for the Service
Class shares of the corresponding Fund had such Service Class shares had an
operating history. No performance figures are shown below for the Investment
Class shares of the Premier Growth Fund, the Value Equity Fund, the Small-Cap
Growth Fund, the High Yield Fund and the Strategic Fund because each of these
Funds lacks an operating history as of the date of this SAI.

Yield for the Money Market Fund

         The Trust may, from time to time, include the yield and effective yield
of each class of shares of the Money Market Fund in advertisements or reports to
shareholders or prospective investors. "Current yield" will be based upon the
income that a hypothetical investment in a class of shares of the Fund would
earn over a stated seven-day period. This amount would then be "annualized,"
which means the amount of income generated over that week is assumed to be
generated each week over a 52-week period and is shown as a percentage of the
investment. The Money Market Fund's "effective yield" will be calculated
similarly, but, when annualized, the income earned by an investment in the Fund
is assumed to be reinvested. The effective yield would be slightly higher than
the current yield because of the compounding effect of this presumed
reinvestment.

         The yield for the Money Market Fund is computed by (i) determining the
net change in the value of a hypothetical pre-existing account in the Fund
having a balance of one share at the beginning of a seven-calendar-day period
for which yield is to be quoted, (ii) dividing the net change by the value of
the account at the beginning of the period to obtain the base period return, and
(iii) annualizing the results (that is, multiplying the base period return by
365/7). The net change in the value of the account reflects the value of
additional shares purchased with dividends declared on the original share and
any such additional shares less a hypothetical charge reflecting deductions from
shareholder accounts, but does not include realized gains and losses or
unrealized appreciation and depreciation. In addition, the Trust may calculate a
compounded effective annualized yield by adding one to the base period return
(calculated as described above), raising the sum to a power equal to 365/7 and
subtracting one.


         The seven-day current yield and effective seven-day yield, as of
September 30, 2000, for the Investment Class shares of the Money Market Fund
were [__]% and [__]%, respectively.


30-day yield

         From time to time, the Trust may advertise a Fund's 30-day yield. The
30-day yield figures are calculated for a Class or Fund according to a formula
prescribed by the SEC. The formula can be expressed as follows:


                                       64
<PAGE>

                             Yield = 2[(a-b + 1) 6 -1]
                                        ---
                                        cd

Where:
                  a =  dividends and interest earned during the period.
                  b =  expenses accrued for the period (net of reimbursement).
                  c =  the average daily number of shares outstanding
                         during the period that were entitled to receive
                         dividends.
                  d =  the maximum offering price per share on the last day of
                         the period.

         For the purpose of determining the interest earned (variable "a" in the
formula) on debt obligations that were purchased by a Fund at a discount or
premium, the formula generally calls for amortization of the discount or
premium; the amortization schedule will be adjusted monthly to reflect changes
in the market values of the debt obligations.

         Investors should recognize that, in periods of declining interest
rates, the yield will tend to be somewhat higher than prevailing market rates,
and in periods of rising interest rates the yield will tend to be somewhat
lower. In addition, when interest rates are falling, moneys received by a Fund
from the continuous sale of its shares will likely be invested in portfolio
instruments producing lower yields than the balance of the Fund's portfolio,
thereby reducing the current yield of the Fund. In periods of rising interest
rates, the opposite result can be expected to occur.

         Yield information is useful in reviewing the performance of a Fund, but
because yields fluctuate, this information cannot necessarily be used to compare
an investment in shares of the Fund with bank deposits, savings accounts and
similar investment alternatives that often provide an agreed or guaranteed fixed
yield for a stated period of time. Shareholders of a Fund should remember that
yield is a function of the kind and quality of the instruments in the Fund's
portfolio, portfolio maturity, operating expenses and market conditions.


         The 30-day yield for the period ended September 30, 2000 for the
Investment Class shares of the Income Fund was [__]%.


Average Annual Total Return

         From time to time, the Trust may advertise a Fund's "average annual
total return," which represents the average annual compounded rates of return
over one-, five- and ten-year periods, or other periods, or over the life of the
Fund (as stated in the advertisement) for each Class of shares of a Fund. This
total return figure shows an average percentage change in value of an investment
in the Class from the beginning date of the measuring period to the ending date
of the period. The figure reflects changes in the price of a class of shares and
assumes that any income, dividends and/or capital gains distributions made by
the Fund during the period are reinvested in shares of the same Class. When
considering average annual total return figures for periods longer than one
year, investors should note that a Fund's annual total return for any one year
in the period might have been greater or less than the average for the entire
period.


                                       65
<PAGE>

         The "average annual total return" figures for the Funds described below
are computed for a Class according to a formula prescribed by the SEC. The
formula can be expressed as follows:

                           P(1 + T) n = ERV

         The ERV assumes the maximum applicable sales load is deducted from the
initial investment or redemption amount, in the case of CDSC, complete
redemption of the hypothetical investment at the end of the measuring period.

         The average annual total return for the Investment Class shares of each
Fund was as follows as of September 30, 1999:

Average Annual Return



Fund                                One Year  Since Inception   Inception Date

U.S. Equity Fund                                                   11/25/97
S&P 500 Index Fund                                                 11/25/97
Mid-Cap Growth Fund                                                11/25/97
Mid-Cap Value Equity Fund                                          12/31/98
Small-Cap Value Equity Fund                                        08/03/98
Value Equity Fund                                                  02/02/00
Premier Growth Equity Fund                                         10/31/99
Premier Research Equity Fund                                       04/28/00
Premier International Equity Fund                                  04/28/00
International Equity Fund                                          11/25/97
Europe Equity Fund                                                 01/29/99
Emerging Markets Fund                                              11/25/97
Strategic Investment Fund                                          10/31/99
Income Fund                                                        11/21/97
Money Market Fund                                                  12/02/97


Aggregate Total Return


         The Trust may use "aggregate total return" figures in advertisements,
which represent the cumulative change in value of an investment in a Class of
shares of a Fund for a specific period, and which reflects changes in the Fund's


                                       66
<PAGE>

share price and reinvestment of dividends and distributions. Aggregate total
return may be shown by means of schedules, charts or graphs, and may indicate
subtotals of the various components of total return (that is, the change in
value of initial investment, income dividends and capital gains distributions).
Because there is a .25% shareholder servicing fee imposed on the Service Class
shares and because other expenses will generally differ among Service Class,
Investment Class and Class X shares, the total returns for each of the
Investment Class, Service Class and Class X will differ. Aggregate total return
data reflects compounding over a longer period of time than does annual total
return data, and therefore aggregate total return will be higher.


         The Trust also may advertise the actual annual and annualized total
return performance data for various periods of time, which may be shown by means
of schedules, charts or graphs. Actual annual or annualized total return data
generally will be lower than average annual total return data, because the
latter reflects compounding of return.

         The "aggregate total return" figures for the Funds represent the
cumulative change in the value of an investment in a Class for the specified
period and are computed by the following formula:

                 Aggregate Total Return = ERV - P
                                          -------
                                             P
                       Where P =  a hypothetical initial payment of $1,000; and

                             ERV   =    Ending Redeemable Value of a
                                        hypothetical $1,000 investment made at
                                        the beginning of a 1-, 5- or 10-year
                                        period at the end of the 1-, 5- or
                                        10-year period (or fractional portion
                                        thereof), assuming reinvestment of all
                                        dividends and distributions.

         Yield and return figures are based on historical earnings and are not
intended to indicate future performance.

Distribution Rate

         The Trust may advertise a Fund's distribution rate and/or effective
distribution rate. A Fund's distribution rate differs from yield and total
return and therefore is not intended to be a complete measure of performance.

         A Fund's distribution rate measures dividends distributed for a
specified period. A Fund's distribution rate is computed by dividing the most
recent monthly distribution per share annualized by the current net asset value
per share. A Fund's effective distribution rate is computed by dividing the
distribution rate by the ratio used to annualize the distribution and
reinvesting the resulting amount for a full year on the basis of such ratio. The
effective distribution rate will be higher than the distribution rate because of


                                       67
<PAGE>

the compounding effect of the assumed reinvestment. A Fund's yield is calculated
using the standardized formula described above. In contrast, the distribution
rate is based on the Fund's last monthly distribution, which tends to be
relatively stable and may be more or less than the amount of net investment
income and short-term capital gain actually earned by the Fund during the month.

Comparative Performance Information

         In addition to the comparative performance information included in the
Prospectuses and otherwise quoted in sales and advertising materials, the Trust
may compare the Fund's performance with (a) the performance of other mutual
funds as listed in the rankings prepared by Lipper Analytical Services, Inc. or
similar independent services that monitor the performance of mutual funds, (b)
various unmanaged indices, including the Russell Index, S&P 500 Index, and the
Dow Jones Industrial Average or (c) other appropriate indices of investment
securities or with data developed by GE Asset Management derived from those
indices.

         Performance information also may include evaluations of a Fund
published by nationally recognized ranking services and by financial
publications that are nationally recognized, such as Barron's, Business Week,
Forbes, Fortune, Institutional Investor, Kiplinger's Personal Finance, Money,
Morningstar Mutual Fund Values, The New York Times, The Wall Street Journal and
USA Today. These ranking services or publications may compare a Fund's
performance to, or rank it within, a universe of mutual funds with investment
objectives and policies similar, but not necessarily identical to, the Fund's.
Such comparisons or rankings are made on the basis of several factors, including
the size of the Fund, objectives and policies, management style and strategy,
and portfolio composition, and may change over time if any of those factors
change.

                             PRINCIPAL STOCKHOLDERS


         As of January , 2001, GECA, located at 6604 West Broad Street,
Richmond, Virginia 23230, an indirect subsidiary of GE, owned [__]% of the
outstanding Investment Class shares of the Value Equity Fund, 77.45% of the
outstanding Investment Class shares of the Small-Cap Value Fund, and 100% of the
outstanding Service Class shares of each of the Funds (other than the Small-Cap
Value Fund and the Europe Equity Fund). First Colony Life Insurance Company,
located at 700 Main Street, Lynchburg, Virginia 24505, an indirect subsidiary of
GE, owned 100% of the outstanding Investment Class shares of the Europe Equity
Fund. Union Fidelity Life Insurance Company, 601 Union Street, Suite 1400,
Seattle, Washington 98101, an indirect subsidiary of GE, owned 100% of the
outstanding Investment Class shares of the Mid-Cap Value Fund. The shares were
issued in exchange for providing the initial seed capital to these Funds.

         In addition, as of that date,[(i) Leaseway Transportation Corp. owned
more than 25% of the outstanding voting securities of the U.S. Equity Fund,
Mid-Cap Growth Fund, Emerging Markets Fund, Income Fund; (ii) AID Association
for Lutherans owned more than 25% of the outstanding voting securities of the
International Fund; (iii) GE Savings & Security Program owned more than 25% of


                                       68
<PAGE>

the outstanding voting securities of the International Fund; and (iv) GE Capital
Asset Maintenance Plan owned more than 25% of the outstanding voting securities
of the Premier Growth Fund and the Strategic Investment Fund. ] So long as the
above entities own more than 25% of the outstanding voting securities of the
Funds noted, they may be deemed to control these Funds, and may be able to
significantly influence the outcome of any shareholder vote. For purposes of
voting on matters submitted to shareholders, any person who owns more than 50%
of the outstanding shares of the Fund generally would be able to cast the
deciding vote.


         The current Trustees and officers of each Fund, as a group,
beneficially owned less than 1% of each Fund's outstanding shares.


                                       69
<PAGE>

         The following persons are the only persons known by the Trust to hold
beneficially more than 5% of the outstanding Investment Class shares of the
following Funds as of March 31, 2000:


<TABLE>
<CAPTION>
                                                          Amount of
                                                          Ownership            Percent of
       Name and Address of Record Owner                   (In Shares)            Class
       --------------------------------                   -----------            -----
<S>                                                    <C>                     <C>
U.S. Equity Fund (Investment Class)                    [TO BE UPDATED]

Saxon & Co.
FBO Leaseway Transport
ABC Trust Institutional Service
200 Stevens Drive - Suite 260
Lester, PA 19113-1522

Union Bank TR Nominee
FBO OC Tanner Retirement Plan
P.O. Box 85484
San Diego, CA  92186-5484

Norwest Bank Minnesota NA
FBO GE Investments
#12806102
P.O. Box 1533
Minneapolis, MN  55480-1533

State Street Bank & Trust Co. TTEE
Benchside & Co. - GE Cap Asset Maint.
Master Trust Client SER-W6C
1 Enterprise Drive
N. Quincy, MA  02171-2126
</TABLE>


                                       70
<PAGE>


<TABLE>
<CAPTION>
                                                          Amount of
                                                          Ownership            Percent of
       Name and Address of Record Owner                   (In Shares)            Class
       --------------------------------                   -----------            -----
<S>                                                    <C>                     <C>
S&P 500 Index Fund (Investment Class)

Montgomery Wards Retirement & Savings Plan
U/A  1/1/95
Attn.:  Philip Dobias
535 W. Chicago Avenue, #11
Chicago, IL  60671-0001

Saxon & Co.
FBO Leaseway Transport
ABC Trust Institutional Service
200 Stevens Drive - Suite 260
Lester, PA 19113-1522

Premier Growth Equity (Investment Class)

State Street Bank & Trust Co. TTEE
Benchside & Co. - GE Cap Asset Maint.
Master Trust Client SER-W6C
1 Enterprise Drive
N. Quincy, MA   02171-2126

Montgomery Wards Retirement & Savings Plan
U/A  1/1/95
Attn.:  Philip Dobias
535 W. Chicago Avenue, #11
Chicago, IL  60671-0001

Value Equity Fund (Investment Class)

Colonial Penn Insurance Company
Attn.:  Jerry Fulps
601 Union Street, Suite 1400
Seattle, WA  98101-2341

GEFA Holdings Inc.
Attn.:  Jerry Fulps
601 Union Street, #14
Seattle, WA  98101-2341

GE Capital Assurance
6604 West Broad Street
Richmond, VA 23230-1702
</TABLE>



                                       71
<PAGE>


<TABLE>
<CAPTION>
                                                          Amount of
                                                          Ownership            Percent of
       Name and Address of Record Owner                   (In Shares)            Class
       --------------------------------                   -----------            -----
<S>                                                    <C>                     <C>
Value Equity Fund (Investment Class - Cont.)

St. Francis Hospital
c/o William C. Armstrong CFO
100 Port Washington Blvd.
Roslyn, NY  11578-1348

Mid-Cap Growth Fund (Investment Class)

Saxon & Co.
FBO Leaseway Transport
ABC Trust Institutional Service
200 Stevens Drive - Suite 260
Lester, PA 19113-1522

Defined Benefit Plans Master Trust
Agreement between MRA Sys. Inc. &
State Street Bank & Trust
c/o Joe Mays
1 Newmann Way J-103
Evendale, OH 45215

Mid-Cap Value Equity Fund (Investment Class)

Union Fidelity Life Insurance Company
Attn.:  Jerry Fulps
601 Union Street
Suite 1400
Seattle, Washington 98101

Small-Cap Value Fund (Investment Class)

GE Capital Assurance
2 Union Square, Suite 1400
601 Union Street
Seattle, WA 98101-2321

First Colony Life Insurance
Defined Benefit Pension Plan
Attn.:  Robert Tursky
P.O. Box 1280
Lynchburg, VA  24505-1280
</TABLE>



                                       72
<PAGE>


<TABLE>
<CAPTION>
                                                          Amount of
                                                          Ownership            Percent of
       Name and Address of Record Owner                   (In Shares)            Class
       --------------------------------                   -----------            -----
<S>                                                    <C>                     <C>
International Equity Fund (Investment Class)

AID Association for Lutherans
Ron Anderson Trustee
Attn: David J. Schnarsky
4321 N. Ballard Road
Appleton, WI 54919

Saxon & Co.
FBO Leaseway Transport
ABC Trust Institutional Service
200 Stevens Drive - Suite 260
Lester, PA 19113-1522

S&S International Trust Account
Attn: Mark Buccigross
3003 Summer Street
Stamford, CT 06905-4316
</TABLE>



                                       73
<PAGE>


<TABLE>
<CAPTION>
                                                          Amount of
                                                          Ownership            Percent of
       Name and Address of Record Owner                   (In Shares)            Class
       --------------------------------                   -----------            -----
<S>                                                    <C>                     <C>
Europe Equity Fund (Investment Class)

First Colony Life Insurance Company
601 Union Street, Suite 1400
Seattle, WA 98101

Emerging Markets Fund (Investment Class)

Saxon & Co.
FBO Leaseway Transport
ABC Trust Institutional Service
200 Stevens Drive - Suite 260
Lester, PA 19113-1522

Defined Benefit Plans Master Trust
Agreement between MRA Sys. Inc. &
State Street Bank & Trust
c/o Joe Mays
1 Newman Way J-103
Evendale, OH 45215
</TABLE>



                                       74
<PAGE>


<TABLE>
<CAPTION>
                                                          Amount of
                                                          Ownership            Percent of
       Name and Address of Record Owner                   (In Shares)            Class
       --------------------------------                   -----------            -----
<S>                                                    <C>                     <C>
Income Fund (Investment Class)

A-USA Life Insurance Co. Inc.
Attn.:  Suzanne Montemurro
4 Manhattanville Rd
Purchase, NY  10577-2139

Saxon & Co.
FBO Leaseway Transport
ABC Trust Institutional Services
200 Stevens Drive - Suite 260
Lester, PA 19113-1522

Metal Trades
Branch Local 638 Pension Fund
c/o Kevin J. Driscoll
Steamfitters Ind Fund Office
5 Penn. Plaza
New York, NY 10001-1810

GELCO Corp. DBA GE Capital Fleet Svc.
Norwest Bank N.A.
Attn.: Mutual Funds
510 Marquette, Suite 500
Minneapolis, MN 55402-1118

Strategic Investment Fund (Investment Class)

State Street Bank & Trust Co. TTEE
Benchside & Co. - GE Cap Asset Maint.
Master Trust Client SER-W6C
1 Enterprise Drive
N. Quincy, MA   02171-2126

Money Market Fund (Investment Class)

GE Investment Distributors Inc.
Attn.:  Scott McGregor
777 Long Ridge Rd
Stamford, CT  06927-0001

GE Financial Assurance
c/o Tom Casey CSIG
777 Long Ridge Rd
Stamford, CT  06902-1247
</TABLE>



                                       75
<PAGE>


<TABLE>
<CAPTION>
                                                          Amount of
                                                          Ownership            Percent of
       Name and Address of Record Owner                   (In Shares)            Class
       --------------------------------                   -----------            -----
<S>                                                    <C>                     <C>
Information Alliance Co.
Gary L. Kriechbaum
P.O. Box 2849
Pittsfield, MA  01202-2849

First Colony Life Insurance
Defined Benefit Pension Plan
Attn:  Robert Tursky
P.O. Box 1280
Lynchburg, VA  24505-1280
</TABLE>



                     FUND HISTORY AND ADDITIONAL INFORMATION

         The Trust is an open-end management investment company organized as an
unincorporated business trust under the laws of Delaware pursuant to a
Certificate of Trust dated May 23, 1997, as amended from time to time. The
Trust's Amended and Restated Declaration of Trust, dated July 24, 1998, as
amended from time to time (the "Declaration") permits the Trustees to issue an
unlimited number of full and fractional shares of beneficial interest of the
Trust par value $.001 per share. Under the Declaration, the Trustees have the
authority to create and classify shares of beneficial interest in separate
series, without further action by shareholders.

         Currently, there are seventeen Funds in the Trust: the U.S. Equity
Fund, S&P 500 Index Fund, Premier Growth Fund, Premier Research Equity Fund,
Premier International Equity Fund, Value Equity Fund, Mid-Cap Growth Fund,
International Fund, Income Fund, Strategic Fund, Emerging Markets Fund and Money
Market Fund were established as series of the Trust on November 13, 1997. The
Mid-Cap Value Fund, Small-Cap Value Fund, High Yield Fund and Small-Cap Growth
Fund were added as series of the Trust on May 8, 1998. The Europe Equity Fund
was added as a series of the Trust on November 6, 1998. The Premier Research
Equity Fund and Premier International Equity Fund were added as series of the
Trust on December 13, 1999. Additional series may be added in the future.


         The Declaration also authorizes the Trustees to classify and reclassify
the shares of the Trust, or new series of the Trust, into one or more classes.
As of the date of this SAI, the Trustees have authorized the issuance of three
classes of shares of the Funds, designated as the Investment Class shares, the
Service Class shares and the Class X shares. State Street maintains a record of
each shareholder's ownership of shares of a Fund. The shares of each class of
each Fund represent an equal proportionate interest in the aggregate net assets
attributable to that class of that Fund. Holders of Service Class shares have
certain exclusive voting rights on matters relating to the Plan. The different
classes of the Fund may bear different expenses relating to the cost of holding
shareholder meetings necessitated by the exclusive voting rights of any class of
shares.



                                       76
<PAGE>

         In the interest of economy and convenience, certificates representing
shares of a Fund are not physically issued. State Street maintains a record of
each shareholder's ownership of shares of a Fund.


         Dividends paid by each Fund, if any, with respect to each class of
shares will be calculated in the same manner, at the same time and on the same
day and will be in the same amount, except for differences resulting from the
facts that: (a) the distribution and service fees relating to Service Class
shares will be borne exclusively by that class; and (b) each of the Service
Class, the Investment Class and the Class X shares will bear any other class
expenses properly allocable to such class of shares, subject to the requirements
imposed by the Internal Revenue Service on funds having a multiple-class
structure. Similarly, the NAV per share may vary depending on whether Service
Class shares, Investment Class or Class X shares are purchased. In the event of
liquidation, shareholders of each class of each Fund are entitled to share pro
rata in the net assets of the class of the Fund available for distribution to
these shareholders. Shares entitle their holders to one vote per share, are
freely transferable and have no preemptive, subscription or conversion rights.
When issued, shares are fully paid and non-assessable.


         Unless otherwise required by the 1940 Act or the Declaration, the Trust
has no intention of holding annual meetings of shareholders. Fund shareholders
may remove a Trustee by the affirmative vote of at least two-thirds of the
Trust's outstanding shares and the Trustees shall promptly call a meeting for
such purpose when requested to do so in writing by the record holders of not
less than 10% of the outstanding shares of the Trust.

         Shareholder Liability. Generally, Delaware business trust shareholders
are not personally liable for obligations of the Delaware business trust under
Delaware law. The Delaware Business Trust Act ("DBTA") provides that a
shareholder of a Delaware business trust shall be entitled to the same
limitation of liability extended to shareholders of private for-profit
corporations. The Declaration expressly provides that the Trust has been
organized under the DBTA and that the Declaration is to be governed by and
interpreted in accordance with Delaware law. It is nevertheless possible that a
Delaware business trust, such as the Trust, might become a party to an action in
another state whose courts refuse to apply Delaware law, in which case the
Trust's shareholders could possibly be subject to personal liability.

         To guard against this risk, the Declaration: (a) contains an express
disclaimer of shareholder liability for acts or obligations of the Trust and
provides that notice of such disclaimer may be given in each agreement,
obligation and instrument entered into or executed by the Trust or its Trustees,
(b) provides for the indemnification out of Trust property of any shareholders
held personally liable for any obligations of the Trust or any Fund, and (c)
provides that the Trust shall, upon request, assume the defense of any claim
made against any shareholder for any act or obligation of the Trust and satisfy
any judgment thereon. Thus, the risk of a shareholder incurring financial loss
beyond his or her investment because of shareholder liability is limited to
circumstances in which all of the following factors are present: (a) a court
refuses to apply Delaware law; (b) the liability arose under tort law or, if
not, no contractual limitation of liability was in effect; and (c) the Trust
itself would be unable to meet its obligations. In the light of DBTA, the nature


                                       77
<PAGE>

of the Trust's business, and the nature of its assets, the risk of personal
liability to a shareholder is remote.

         Limitation of Trustee and Officer Liability. The Declaration further
provides that the Trust shall indemnify each of its Trustees and officers
against liabilities and expenses reasonably incurred by them, in connection
with, or arising out of, any action, suit or proceeding, threatened against or
otherwise involving such Trustee or officer, directly or indirectly, by reason
of being or having been a Trustee or officer of the Trust. The Declaration does
not authorize the Trust to indemnify any Trustee or officer against any
liability to which he or she would otherwise be subject by reason of or for
willful misfeasance, bad faith, gross negligence or reckless disregard of such
person's duties.

         Limitation of Interseries Liability. All persons dealing with a Fund
must look solely to the property of that particular Fund for the enforcement of
any claims against that Fund, as neither the Trustees, officers, agents or
shareholders assume any personal liability for obligations entered into on
behalf of a Fund or the Trust. No Fund is liable for the obligations of any
other Fund.


         Voting. When issued, shares of a Fund will be fully paid and
non-assessable. Shares are freely transferable and have no preemptive,
subscription or conversion rights. Each of the Service Class, the Investment
Class and Class X represents an identical interest in a Fund's investment
portfolio. As a result, each Class has the same rights, privileges and
preferences, except with respect to: (i) the designation of each Class; (ii) the
sales arrangement; (iii) certain expenses allocable exclusively to each Class;
and (iv) voting rights on matters exclusively affecting a single Class. The
Board does not anticipate that there will be any conflicts among the interests
of the holders of the three Classes. The Trustees, on an ongoing basis, will
consider whether any conflict exists and, if so, take appropriate action.
Certain aspects of the shares may be changed, upon notice to Fund shareholders,
to satisfy certain tax regulatory requirements, if the Trust's Board of Trustees
deems the change necessary by the Board.


         When matters are submitted for shareholder vote, each shareholder of
each Fund will have one vote for each full share held and proportionate,
fractional votes for fractional shares held. In general, shares of all Funds
vote as a single class on all matters except (1) a matter affecting the
interests of one or more of the Funds or Classes of a Fund, in which case only
shares of the affected Funds or Classes would be entitled to vote, or (2) when
the 1940 Act requires the vote of an individual Fund. Normally, no meetings of
shareholders of the Funds will be held for the purpose of electing Trustees of
the Trust unless and until such time as less than a majority of the Trustees
holding office have been elected by shareholders of the Trust, at which time the
Trustees then in office will call a shareholders' meeting for the election of
Trustees. Shareholders of record of no less than two-thirds of the outstanding
shares of the Trust may remove a Trustee through a declaration in writing or by
vote cast in person or by proxy at a meeting called for that purpose. A meeting
will be called for the purpose of voting on the removal of a Trustee at the
written request of holders of 10% of the Trust's outstanding shares.


                                       78
<PAGE>

         Counsel. Sutherland Asbill & Brennan LLP, 1275 Pennsylvania Avenue,
N.W., Washington, D.C. 20004-2415 serves as counsel for the Trust.

         Independent Accountants. PricewaterhouseCoopers LLP, 160 Federal
Street, Boston, Massachusetts 02110, serves as independent accountants of the
Trust.

                              FINANCIAL STATEMENTS


         The Annual Report dated September 30, 2000, which either accompanies
this SAI or has previously been provided to the person to whom this SAI is being
sent, is incorporated herein by reference with respect to all information other
than the information set forth in the Letter to Shareholders included in the
Annual Report.

         The Funds that are included in the Annual Report dated September 30,
2000 are the U.S. Equity Fund, the S&P 500 Index Fund, the Mid-Cap Growth Fund,
the Mid-Cap Value Equity Fund, the Small-Cap Value Equity Fund, the Value Equity
Fund, the Premier Growth Equity Fund, the Premier Research Equity Fund, the
Premier International Equity Fund, the International Equity Fund, the Europe
Equity Fund, the Emerging Markets Fund, the Strategic Investment Fund, the
Income Fund and the Money Market Fund. The High Yield Fund and the Small-Cap
Growth Equity Fund have not yet commenced operations and have no assets as of
the date of this SAI. The remaining Funds did not have an operating history as
of the date of the Annual Report.


         The Trust will furnish, without charge, a copy of the Financial
Reports, upon request to the Trust at P.O. Box 120065, Stamford, CT 06912-0065,
(800) 242-0134.


                                       79
<PAGE>

                                    APPENDIX
                             DESCRIPTION OF RATINGS

Commercial Paper Ratings

         The rating A-1+ is the highest, and A-1 the second highest commercial
paper rating assigned by S&P. Paper rated A-1+ must have either the direct
credit support of an issuer or guarantor that possesses excellent long-term
operating and financial strength combined with strong liquidity characteristics
(typically, such issuers or guarantors would display credit quality
characteristics that would warrant a senior bond rating of AA or higher) or the
direct credit support of an issuer or guarantor that possesses above average
long-term fundamental operating and financing capabilities combined with ongoing
excellent liquidity characteristics. Paper rated A-1 must have the following
characteristics: liquidity ratios are adequate to meet cash requirements;
long-term senior debt is rated A or better; the issuer has access to at least
two additional channels of borrowing; basic earnings and cash flow have an
upward trend with allowance made for unusual circumstances; typically, the
issuer's industry is well established and the issuer has a strong position
within the industry; and the reliability and quality of management are
unquestioned. Capacity for timely payment on issues rated A-2 is satisfactory.
However, the relative degree of safety is not as high as issues designated
"A-1."

         The rating Prime-1 is the highest commercial paper rating assigned by
Moody's. Among the factors considered by Moody's in assigning ratings are the
following: (a) evaluation of the management of the issuer; (b) economic
evaluation of the issuer's industry or industries and an appraisal of
speculative-type risks that may be inherent in certain areas; (c) evaluation of
the issuer's products in relation to competition and customer acceptance; (d)
liquidity; (e) amount and quality of long-term debt; (f) trend of earnings over
a period of ten years; (g) financial strength of parent company and the
relationships that exist with the issue; and (h) recognition by the management
of obligations that may be present or may arise as a result of public interest
questions and preparations to meet the obligations.

         Issuers rated Prime-2 (or supporting institutions) have a strong
ability for repayment of senior short-term debt obligations. This normally will
be evidenced by many of the characteristics cited above, but to a lesser degree.
Earnings trends and coverage ratios, while sound, may be more subject to
variation. Capitalization characteristics, while still appropriate, may be more
affected by external conditions. Ample alternate liquidity is maintained.

         Short-term obligations, including commercial paper, rated A-1+ by ICA
Limited or its affiliate ICA Inc. are obligations supported by the highest
capacity for timely repayment. Obligations rated A-1 have a very strong capacity
for timely repayment. Obligations rated A-2 have a strong capacity for timely
repayment, although that capacity may be susceptible to adverse changes in
business, economic and financial conditions.


                                      A- 1
<PAGE>

         Fitch Investors Services, Inc. employs the rating F-1+ to indicate
issues regarded as having the strongest degree of assurance of timely payment.
The rating F-1 reflects an assurance of timely payment only slightly less in
degree than issues rated F-1+, while the rating F-2 indicates a satisfactory
degree of assurance of timely payment although the margin of safety is not as
great as indicated by the F-1+ and F-1 categories.

         Duff & Phelps Inc. employs the designation of Duff 1 with respect to
top grade commercial paper and bank money instruments. Duff 1+ indicates the
highest certainty of timely payment: short-term liquidity is clearly outstanding
and safety is just below risk-free U.S. Treasury short-term obligations. Duff 1-
indicates high certainty of timely payment. Duff 2 indicates good certainty of
timely payment; liquidity factors and company fundamentals are sound.

         Thomson BankWatch Inc. employs the rating TAW-1 to indicate issues
having a very high degree of likelihood of timely payment. TAW-2 indicates a
strong degree of safety regarding timely payment, however, the relative degree
of safety is not as high as for issues rated TAW-1. While the rating TAW-3
indicates issues that are more susceptible to adverse developments than
obligations with higher ratings, capacity to service principal and interest in a
timely fashion is considered adequate. The lowest rating category is TAW-4; this
rating is regarded as non-investment grade and, therefore, speculative.

         Various NRSROs utilize rankings within ratings categories indicated by
a plus or minus sign. The Funds, in accordance with industry practice, recognize
such ratings within categories or gradations, viewing for example S&P's ratings
of A-1+ and A-1 as being in S&P's highest rating category.

Description of S&P Corporate Bond Ratings

         AAA -- This is the highest rating assigned by S&P to a bond and
indicates an extremely strong capacity to pay interest and repay principal.

         AA -- Bonds rated AA have a very strong capacity to pay interest and
repay principal and differ from AAA issues only in small degree.

         A -- Bonds rated A have a strong capacity to pay interest and repay
principal although they are somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions than debt in higher rated
categories.

         BBB -- Bonds rated BBB have an adequate capacity to pay interest and
repay principal. Adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay interest and repay principal for
bonds in this category (even though they normally exhibit adequate protection
parameters) than for bonds in higher rated categories.


                                      A- 2
<PAGE>

         BB, B and CCC -- Bonds rated BB and B are regarded, on balance, as
predominately speculative with respect to capacity to pay interest and repay
principal in accordance with the terms of the obligation. BB represents a lower
degree of speculation than B, and CCC the highest degree of speculation. While
such bonds will likely have some quality and protective characteristics, these
are outweighed by large uncertainties or major risk exposures to adverse
conditions.

         To provide more detailed indications of credit quality, the ratings
from AA to B may be modified by the addition of a plus or minus sign to show
relative standing within this major rating category.

Description of Moody's Corporate Bond Ratings

         Aaa -- Bonds that are rated Aaa are judged to be of the best quality.
They carry the smallest degree of investment risk and are generally referred to
as "gilt edge." Interest payments are protected by a large or exceptionally
stable margin and principal is secure. While the various protective elements are
likely to change, such changes as can be visualized are most unlikely to impair
the fundamentally strong position of such issues.

         Aa -- Bonds that are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally known as
high grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities or fluctuation of protective
elements may be of greater amplitude or there may be other elements present that
make the long-term risks appear somewhat larger than in Aaa securities.

         A -- Bonds that are rated A possess favorable investment attributes and
are to be considered as upper medium grade obligations. Factors giving security
to principal and interest are considered adequate, but elements may be present
that suggest a susceptibility to impairment sometime in the future.

         Baa -- Bonds that are rated Baa are considered as medium-grade
obligations, that is, they are neither highly protected nor poorly secured.
Interest payments and principal security appear adequate for the present but
certain protective elements may be lacking or may be characteristically
unreliable over any great length of time. Such bonds lack outstanding investment
characteristics and in fact have speculative characteristics as well.

         Ba -- Bonds that are rated Ba are judged to have speculative elements;
their future cannot be considered as well assured. Often the protection of
interest and principal payments may be very moderate and thereby not well
safeguarded during both good and bad times over the future. Uncertainty of
position characterizes bonds in this class.

         B -- Bonds that are rated B generally lack characteristics of desirable
investments. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small.


                                      A- 3
<PAGE>

         Caa -- Bonds that are rated Caa are of poor standing. These issues may
be in default, or present elements of danger may exist with respect to principal
or interest.

         Moody's applies numerical modifiers (1, 2 and 3) with respect to the
bonds rated Aa through B, The modifier 1 indicates that the bond being rated
ranks in the higher end of its generic rating category; the modifier 2 indicates
a mid-range ranking; and the modifier 3 indicates that the bond ranks in the
lower end of its generic rating category.

Description of S&P Municipal Bond Ratings

         AAA -- Prime -- These are obligations of the highest quality. They have
the strongest capacity for timely payment of debt service.

         General Obligation Bonds -- In a period of economic stress, the issuers
will suffer the smallest declines in income and will be least susceptible to
autonomous decline. Debt burden is moderate. A strong revenue structure appears
more than adequate to meet future expenditure requirements. Quality of
management appears superior.

         Revenue Bonds -- Debt service coverage has been, and is expected to
remain, substantial. Stability of the pledged revenues is also exceptionally
strong due to the competitive position of the municipal enterprise or to the
nature of the revenues. Basic security provisions (including rate covenant,
earnings test for issuance of additional bonds, debt service reserve
requirements) are rigorous. There is evidence of superior management.

         AA -- High Grade -- The investment characteristics of bonds in this
group are only slightly less marked than those of the prime quality issues.
Bonds rated AA have the second strongest capacity for payment of debt service.

         A -- Good Grade -- Principal and interest payments on bonds in this
category are regarded as safe although the bonds are somewhat more susceptible
to the adverse effects of changes in circumstances and economic conditions than
bonds in higher rated categories. This rating describes the third strongest
capacity for payment of debt service. The ratings differ from the two higher
ratings of municipal bonds, because:

         General Obligations Bonds -- There is some weakness, either in the
local economic base, in debt burden, in the balance between revenues and
expenditures, or in quality of management. Under certain adverse circumstances,
any one such weakness might impair the ability of the issuer to meet debt
obligations at some future date.

         Revenue Bonds -- Debt service coverage is good, but not exceptional.
Stability of the pledged revenues could show some variations because of
increased competition or economic influences on revenues. Basic security
provisions, while satisfactory, are less stringent. Management performance
appears adequate.


                                      A- 4
<PAGE>

         BBB -- Medium Grade -- Of the investment grade ratings, this is the
lowest. Bonds in this group are regarded as having an adequate capacity to pay
interest and repay principal. Adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity to pay interest and
repay principal for bonds in this category (even though they normally exhibit
adequate protection parameters) than for bonds in higher rated categories.

         General Obligation Bonds -- Under certain adverse conditions, several
of the above factors could contribute to a lesser capacity for payment of debt
service. The difference between A and BBB ratings is that the latter shows more
than one fundamental weakness, or one very substantial fundamental weakness,
whereas, the former shows only one deficiency among the factors considered.

         Revenue Bonds -- Debt coverage is only fair. Stability of the pledged
revenues could show substantial variations, with the revenue flow possibly being
subject to erosion over time. Basic security provisions are no more than
adequate. Management performance could be stronger.

         BB, B, CCC and CC -- Bonds rated BB, B, CCC and CC are regarded, on
balance, as predominately speculative with respect to capacity to pay interest
and repay principal in accordance with the terms of the obligation. BB includes
the lowest degree of speculation and CC the highest degree of speculation. While
these bonds will likely have some quality and protective characteristics, these
characteristics are outweighed by large uncertainties or major risk exposures to
adverse conditions.

         C -- The rating C is reserved for income bonds on which no interest is
being paid.

         D -- Bonds rated D are in default, and payment of interest and/or
repayment of principal is in arrears.

         S&P's letter ratings may be modified by the addition of a plus or a
minus sign, which is used to show relative standing within the major rating
categories, except in the AAA-Prime Grade category.

Description of S&P Municipal Note Ratings

         Municipal notes with maturities of three years or less are usually
given note ratings (designated SP-1, -2 or -3) to distinguish more clearly the
credit quality of notes as compared to bonds. Notes rated SP-1 have a very
strong or strong capacity to pay principal and interest. Those issues determined
to possess overwhelming safety characteristics are given the designation of
SP-1+. Notes rated SP-2 have satisfactory capacity to pay principal and
interest.


                                      A- 5
<PAGE>

Description of Moody's Municipal Bond Ratings

         Aaa -- Bonds that are rated Aaa are judged to be the best quality. They
carry the smallest degree of investment risk and are generally referred to as
"gilt edge." Interest payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various protective elements are
likely to change, such changes as can be visualized are most unlikely to impair
the fundamentally strong position of such issues.

         Aa -- Bonds that are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally known as
high grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities, or fluctuation of
protective elements may be of greater amplitude, or there may be other elements
present that make the long-term risks appear somewhat larger than in Aaa
securities.

         A -- Bonds that are rated A possess many favorable investment
attributes and are to be considered as upper medium grade obligations. Factors
giving security to principal and interest are considered adequate, but elements
may be present that suggest a susceptibility to impairment sometime in the
future.

         Baa -- Bonds that are rated Baa are considered as medium grade
obligations, that is, they are neither highly protected nor poorly secured.
Interest payments and principal security appear adequate for the present but
certain protective elements may be lacking or may be characteristically
unreliable over any great length of time. Such bonds lack outstanding investment
characteristics and in fact have speculative characteristics as well.

         Ba -- Bonds that are rated Ba are judged to have speculative elements;
their future cannot be considered as well assured. Often the protection of
interest and principal payments may be very moderate and thereby not well
safeguarded during both good and bad times over the future. Uncertainty of
position characterize bonds in this class.

         B -- Bonds that are rated B generally lack characteristics of the
desirable investment. Assurance of interest and principal payments or of
maintenance of other terms of the contract over any long period of time may be
small.

         Caa -- Bonds that are rated Caa are of poor standing. Such issues may
be in default or there may be present elements of danger with respect to
principal or interest.

         Ca -- Bonds that are rated Ca represent obligations that are
speculative in a high degree. Such issues are often in default or have other
marked shortcomings.

         C -- Bonds that are rated C are the lowest rated class of bonds, and
issues so rated can be regarded as having extremely poor prospects of ever
attaining any real investment standing.


                                      A- 6
<PAGE>

         Moody's applies the numerical modifiers 1, 2 and 3 in each generic
rating classification from Aa through B. The modifier 1 indicates that the
security ranks in the higher end of its generic ratings category; the modifier 2
indicates a mid-range ranking; and the modifier 3 indicates that the issue ranks
in the lower end of its generic ratings category.

Description of Moody's Municipal Note Ratings

         Moody's ratings for state and municipal notes and other short-term
loans are designated Moody's Investment Grade (MIG) and for variable rate demand
obligations are designated Variable Moody's Investment Grade (VMIG). This
distinction recognizes the differences between short-term credit risk and
long-term risk. Loans bearing the designation MIG 1/VMIG 1 are the best quality,
enjoying strong protection from established cash flows of funds for their
servicing or from established and broad-based access to the market for
refinancing, or both. Loans bearing the designation MIG 2/VMIG 2 are of high
quality, with margins of protection ample, although not as large as the
preceding group. Loans bearing the designation MIG 3/VMIG3 are of favorable
quality, with all security elements accounted for but lacking the undeniable
strength of the higher grades. Market access for refinancing, in particular, is
likely to be less well established. Loans bearing the designation MIG 4/VMIG 4
are of adequate quality. Protection commonly regarded as required of an
investment security is present and although not distinctly or predominantly
speculative, there is specific risk.


                                      A- 7
<PAGE>
                                     PART C

                                OTHER INFORMATION

Item 23.            Exhibits

Exhibit No.         Description of Exhibit

(a)(1)              Certificate of Trust is incorporated herein by reference to
                    Exhibit 1(a) to GE Institutional Funds" ("Registrant") Form
                    N-1A registration statement (File Nos. 333-29337; 811-08257)
                    (the "Registration Statement") filed with the Securities and
                    Exchange Commission (the "Commission") on June 16, 1997
                    (Accession Number 0001010410-97-000104).

(a)(2)              Amended and Restated Declaration of Trust is incorporated
                    herein by reference to Exhibit 1(b) to post-effective
                    amendment number two to the Registration Statement filed
                    with the Commission on July 24, 1998 (Accession Number
                    0001010410-98-000119).

(a)(3)              Form of Amended and Restated Declaration of Trust. To be
                    filed by amendment.

(b)                 Inapplicable.

(c)                 Inapplicable.

(d)(1)              Form of Amended and Restated Investment Advisory and
                    Administration Agreement between Registrant, on behalf of
                    the Emerging Markets Fund, and GE Asset Management
                    Incorporated ("GEAM"). To be filed by Amendment.

(d)(2)              Form of Amended and Restated Investment Advisory and
                    Administration Agreement between Registrant, on behalf of
                    the Premier Growth Equity Fund, and GEAM. To be filed by
                    amendment.

(d)(3)              Form of Amended and Restated Investment Advisory and
                    Administration Agreement between Registrant, on behalf of
                    the Mid-Cap Growth Fund, and GEAM. To be filed by amendment.

(d)(4)              Form of Amended and Restated Investment Advisory and
                    Administration Agreement between Registrant, on behalf of
                    the International Equity Fund, and GEAM. To be filed by
                    amendment.


<PAGE>

(d)(5)              Form of Amended and Restated Investment Advisory and
                    Administration Agreement between Registrant, on behalf of
                    the Value Equity Fund, and GEAM. To be filed by amendment.

(d)(6)              Form of Amended and Restated Investment Advisory and
                    Administration Agreement between Registrant, on behalf of
                    the U.S. Equity Fund, and GEAM. To be filed by amendment.

(d)(7)              Form of Amended and Restated Investment Advisory and
                    Administration Agreement between Registrant, on behalf of
                    the S&P 500 Index Fund, and GEAM. To be filed by amendment.

(d)(8)              Form of Amended and Restated Investment Advisory and
                    Administration Agreement between Registrant, on behalf of
                    the Strategic Investment Fund, and GEAM. To be filed by
                    amendment.

(d)(9)              Form of Amended and Restated Investment Advisory and
                    Administration Agreement between Registrant, on behalf of
                    the Income Fund, and GEAM. To be filed by amendment.

(d)(10)             Form of Amended and Restated Investment Advisory and
                    Administration Agreement between Registrant, on behalf of
                    the Money Market Fund, and GEAM. To be filed by amendment.

(d)(11)             Form of Amended and Restated Investment Advisory and
                    Administration Agreement between Registrant, on behalf of
                    the Small-Cap Growth Equity Fund, and GEAM. To be filed by
                    amendment.

(d)(12)             Form of Amended and Restated Investment Advisory and
                    Administration Agreement between Registrant, on behalf of
                    the Small-Cap Value Equity Fund, and GEAM. To be filed by
                    amendment.

(d)(13)             Form of Amended and Restated Investment Advisory and
                    Administration Agreement between Registrant, on behalf of
                    the Mid-Cap Value Equity Fund, and GEAM. To be filed by
                    amendment.

(d)(14)             Form of Amended and Restated Investment Advisory and
                    Administration Agreement between Registrant, on behalf of
                    the High Yield Fund, and GEAM. To be filed by amendment.

(d)(15)             Form of Amended and Restated Investment Advisory and
                    Administration Agreement between Registrant, on behalf of
                    the Europe Fund, and GEAM. To be filed by amendment.


                                      C-1
<PAGE>

(d)(16)             Form of Amended and Restated Investment Advisory and
                    Administration Agreement between Registrant, on behalf of
                    the Premier Research Equity Fund, and GEAM. To be filed by
                    amendment.

(d)(17)             Form of Amended and Restated Investment Advisory and
                    Administration Agreement between Registrant, on behalf of
                    the Premier International Equity Fund, and GEAM. To be filed
                    by amendment.

(d)(18)             Sub-Advisory Agreement between GEIM and State Street Bank
                    and Trust Company ("State Street"), through State Street
                    Global Advisors, Inc., is incorporated herein by reference
                    to Exhibit 5(k) to pre-effective amendment number two to the
                    Registration Statement, filed with the Commission on
                    November 7, 1997 (Accession Number 0001010410-97-000161).

(d)(19)             Sub-Advisory Agreement between GEIM and Palisade Capital
                    Management, L.L.C. is incorporated herein by reference to
                    Exhibit 5(p) to post-effective amendment number two to the
                    Registration Statement, filed with the Commission on July
                    24, 1998 (Accession Number 0001010410-98-000119).

(e)(1)              Distribution Agreement between Registrant and GE Investment
                    Services Inc. is incorporated herein by reference to Exhibit
                    6(a) to pre-effective amendment number two to the
                    Registration Statement, filed with the Commission on
                    November 7, 1997 (Accession Number 0001010410-97-000161).

(e)(2)              Form of Amended and Restated Shareholder Servicing and
                    Distribution Agreement between Registrant and GEAM. To be
                    filed by amendment.

(f)                 Inapplicable.

(g)                 Custodian Contract is incorporated herein by reference to
                    the Form N-1A registration statement of GE Investments
                    Funds, Inc. (File Nos. 2-91369; 811-4041), filed with the
                    Commission on October 24, 1997 (Accession Number
                    0001010410-97-000148).


                                      C-2
<PAGE>

(h)                 Transfer Agency and Service Agreement between Registrant and
                    State Street is incorporated herein by reference to Exhibit
                    9 to pre-effective amendment number two to the Registration
                    Statement, filed with the Commission on November 7, 1997
                    (Accession Number 0001010410-97-000161).

(i)                 Opinions and Consents of Sutherland Asbill & Brennan LLP are
                    incorporated herein by reference to Exhibit 10 to
                    pre-effective amendment number two to the Registration
                    Statement, filed with the Commission on November 7, 1997
                    (Accession Number 0001010410-97-000161) and Exhibit 10 to
                    post-effective amendment number two to the Registration
                    Statement, filed with the Commission on July 24, 1998
                    (Accession Number 0001010410-98-000119) and Exhibit (i) to
                    post-effective amendment number four to the Registration
                    Statement, filed with the Commission on January 27, 1999
                    (Accession Number 0000889812-99-000221) and Exhibit (i) to
                    post-effective amendment number twelve to the Registration
                    Statement, filed with the Commission on April 25, 2000
                    (Accession Number 0000889812-00-001894).

(j)(1)              Consent of Sutherland Asbill & Brennan LLP. To be filed by
                    amendment.

(j)(2)              Consent of PricewaterhouseCoopers LLP. To be filed by
                    amendment.

(k)                 Inapplicable.

(l)                 Purchase Agreement between Registrant and General Electric
                    Capital Assurance Company is incorporated herein by
                    reference to Exhibit 13 to pre-effective amendment number
                    two to the Registration Statement, filed with the Commission
                    on November 7, 1997 (Accession Number 0001010410-97-000161).

(m)                 Form of Amended and Restated Shareholder Servicing and
                    Distribution Plan adopted pursuant to Rule 12b-1 under the
                    Investment Company Act of 1940, as amended (the "1940 Act").
                    To be filed by amendment.

(n)                 Form of Amended and Restated Multiple Class Plan for
                    Registrant adopted pursuant to Rule 18f-3 under the 1940
                    Act. To be filed by amendment.


                                      C-3
<PAGE>


(p)                 GEFA Code of Ethics is incorporated herein by reference to
                    Exhibit (p) to post-effective amendment number thirty-three
                    to the GE Funds Registration Statement filed with the
                    Commission on November 22, 2000 (Accession Number
                    0001125282-00-000779).

(q)                 Power of Attorney is incorporated herein by reference to
                    Exhibit 99(p) to post-effective amendment number five to the
                    Registration Statement, filed with the Commission on March
                    17, 1999 (Accession Number 0000889812-99-000857).

Item 24. Persons Controlled by or Under Common Control with Registrant

         The list required by this Item 24 of persons controlled by or under
common control with Registrant, which includes the subsidiaries of General
Electric Company ("GE"), is incorporated herein by reference to Exhibit 21,
"Subsidiaries of Registrant," of the Form 10-K filed by GE pursuant to Section
13 or 15(d) of the Securities Exchange Act of 1934, as amended (SEC File No.
1-35) for the fiscal year ended December 31, 1999 (the "Form 10-K"). Additional
information about persons controlled by or under common control with Registrant
is incorporated herein by reference to pages 10-16 of the Form 10-K, beginning
under the caption "GECS."

Item 25. Indemnification

         As a Delaware business trust, the operations of Registrant are governed
by its Amended and Restated Declaration of Trust dated June 2, 1998 (the
"Declaration of Trust"). Generally, Delaware business trust shareholders are not
personally liable for obligations of the Delaware business trust under Delaware
law. The Delaware Business Trust Act (the DBTA) provides that a shareholder of a
trust shall be entitled to the same limitation of liability extended to
shareholders of private for-profit Delaware corporations. Registrant"s
Declaration of Trust expressly provides that it has been organized under the
DBTA and that the Declaration of Trust is to be governed by Delaware law. It
nevertheless is possible that a Delaware business trust, such as Registrant,
might become a party to an action in another state whose courts refuse to apply
Delaware law, in which case Registrant"s shareholders could be subject to
personal liability.

         To protect Registrant's shareholders against the risk of personal
liability, the Declaration of Trust: (i) contains an express disclaimer of
shareholder liability for acts or obligations of Registrant and provides that
notice of such disclaimer may be given in each agreement, obligation and
instrument entered into or executed by Registrant or its Trustees; (ii) provides
for the indemnification out of Trust property of any shareholders held
personally liable for any obligations of Registrant or any series of Registrant;
and (iii) provides that Registrant shall, upon request, assume the defense of
any claim made against any shareholder for any act or obligation of Registrant
and satisfy any judgment thereon. Thus, the risk of a shareholder incurring


                                      C-4
<PAGE>

financial loss beyond his or her investment because of shareholder liability is
limited to circumstances in which all of the following factors are present: (i)
a court refuses to apply Delaware law; (ii) the liability arose under tort law
or, if not, no contractual limitation of liability was in effect; and (iii)
Registrant itself would be unable to meet its obligations. In the light of
Delaware law, the nature of Registrant's business and the nature of its assets,
the risk of personal liability to a shareholder is remote.

         The Declaration of Trust further provides that Registrant shall
indemnify each of its Trustees and officers against liabilities and expenses
reasonably incurred by them, in connection with, or arising out of, any action,
suit or proceeding, threatened against or otherwise involving such Trustee or
officer, directly or indirectly, by reason of being or having been a Trustee or
officer of Registrant. The Declaration of Trust does not authorize Registrant to
indemnify any Trustee or officer against any liability to which he or she would
otherwise be subject by reason of or for willful misfeasance, bad faith, gross
negligence or reckless disregard of such person's duties.

         Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to Trustees, officers and controlling persons
pursuant to the foregoing provisions, or otherwise, Registrant has been advised
that in the opinion of the Securities and Exchange Commission such
indemnification may be against public policy as expressed in the Act and may be,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by Registrant of expenses incurred or
paid by a Trustee, officer or controlling person of Registrant in the successful
defense of any action, suit or proceeding) is asserted by such Trustee, officer
or controlling person in connection with the securities being registered,
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.

Item 26.  Business and Other Connections of Investment Adviser

         Reference is made to "About the Investment Adviser" in the Prospectus
forming Part A, and "Management of the Trust" in the Statement of Additional
Information forming Part B, of this Registration Statement.

         The list required by this Item 26 of officers and directors of GEIM,
the Funds" investment adviser, together with information as to any other
business, profession, vocation or employment of a substantial nature engaged in
by those officers and directors during the past two years, is incorporated
herein by reference to Schedules A and D of the Form ADV filed by GEAM pursuant
to the Investment Advisers Act of 1940, as amended (the "Advisers Act") (SEC
File No. 801-31947).


                                      C-5
<PAGE>


         The list required by this Item 26 of officers and directors of State
Street Global Advisors ("SSGA"), the investment sub-adviser to the S&P 500 Index
Fund, together with information as to any other business, profession, vocation
or employment of a substantial nature engaged in by those officers and directors
during the past two years, is incorporated herein by reference to Schedules A
and D of the Form ADV filed by SSGA pursuant to the Advisers Act (SEC File No.
801-49368).

         The list required by this Item 26 of officers and directors of Palisade
Capital Management, L.L.C. ("Palisade"), the investment sub-adviser to the
Small-Cap Value Equity Fund, together with information as to any other business,
profession, vocation or employment of a substantial nature engaged in by those
officers and directors during the past two years, is incorporated herein by
reference to Schedules A and D of the Form ADV filed by Palisade pursuant to the
Advisers Act (SEC File No. 801-48401).

Item 27. Principal Underwriters

         (a) GE Investment Distributors, Inc. ("GEID") also serves as
distributor for the investment portfolios of GE Institutional Funds, GE Funds,
GE Investments Funds, Inc. and GE LifeStyle Funds and for Elfun Tax-Exempt
Income Fund, Elfun Income Fund, Elfun Global Fund, Elfun Money Market Fund,
Elfun Trusts and Elfun Diversified Fund.

         (b) The information required by this Item 27 with respect to each
director and officer of GEID is incorporated herein by reference to Schedule A
of Form BD filed by GEID pursuant to the Securities Exchange Act of 1934, as
amended (SEC File No. 8-45710).

         (c)   Inapplicable.

Item 28. Location of Accounts and Records

         All accounts, books and other documents required to be maintained by
Registrant pursuant to Section 31(a) of the 1940 Act, and the rules thereunder,
are maintained at the offices of Registrant located at 3003 Summer Street,
Stamford, Connecticut 06905; 777 Long Ridge Road, Stamford, Connecticut 06927;
State Street, Registrant's custodian and transfer agent, located at 225 Franklin
Street, Boston, Massachusetts 02101; and National Financial Data Services Inc.,
an indirect subsidiary of State Street, located at P.O. Box 419631, Kansas, MO
64141-6631.


Item 29. Management Services

         Inapplicable.


                                      C-6
<PAGE>

Item 30. Undertakings

         Inapplicable.


                                      C-7
<PAGE>

                                   SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, and the
Investment Company Act of 1940, as amended, Registrant has duly caused this
Amendment to the Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Stamford, State of
Connecticut on this 29th day of November, 2000.

                                             By:  /s/ Michael J. Cosgrove
                                             -----------------------------------
                                             Michael J. Cosgrove
                                             President and Chairman of the Board


<PAGE>


         Pursuant to the requirements of the Securities Act of 1933, as amended,
this Amendment to Registrant's Registration Statement on Form N-1A has been
signed below by the following persons in the capacities and on the dates
indicated.

Signature                                  Title                         Date


/s/ Michael J. Cosgrove              Trustee, President and            11/29/00
--------------------------
    Michael J. Cosgrove              Chairman of the Board
                                     (Chief Executive Officer)

/s/ John R. Costantino               Trustee                           11/29/00
------------------------
    John R. Costantino*


/s/ Alan M. Lewis                     Trustee                          11/29/00
-----------------
    Alan M. Lewis

/s/ William J. Lucas                  Trustee                          11/29/00
--------------------
    William J. Lucas*


/s/ Robert P. Quinn                   Trustee                          11/29/00
-------------------
    Robert P. Quinn*


/s/ Michael Tansley                   Treasurer                        11/29/00
-------------------                   (Chief Financial and
    Michael Tansley                   Accounting Officer)



         *     Signature affixed by Matthew J. Simpson pursuant to a power of
               attorney dated December 9, 1998 and incorporated by reference to
               Exhibit 99(p) to post-effective amendment number five to the
               Registration Statement, filed with the Commission on March 17,
               1999.

               /s/ Matthew J. Simpson
               ------------------------------
               Matthew J. Simpson



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