INVESTORS MARK SERIES FUND INC, 497, 1999-05-17

INVESTORS MARK SERIES FUND INC
497, 1999-05-17

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<PAGE>

INVESTORS MARK SERIES FUND, INC.
700 Karnes Boulevard
Kansas City, Missouri 64108

Investors Mark Series Fund, Inc. is a management investment company,
sometimes called a mutual fund. It is divided into the following different
series or Portfolios

Balanced Portfolio

Global Fixed Income Portfolio

Growth & Income Portfolio

Intermediate Fixed Income Portfolio

Large Cap Value Portfolio

Large Cap Growth Portfolio

Mid Cap Equity Portfolio

Money Market Portfolio

Small Cap Equity Portfolio

The Securities and Exchange Commission has not approved or disapproved these
securities nor has it determined that this prospectus is accurate or complete.
It is a criminal offense to state otherwise.

Prospectus dated May 3, 1999
<PAGE>

TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
----
<S> <C>
SUMMARY.................................................................... 3

MORE ABOUT PORTFOLIO INVESTMENTS........................................... 17

MANAGEMENT OF THE FUND..................................................... 22

PERFORMANCE OF THE PORTFOLIOS.............................................. 27

COMPARABLE PERFORMANCE..................................................... 27

FINANCIAL HIGHLIGHTS....................................................... 29
</TABLE>

2
<PAGE>

SUMMARY

This prospectus provides important information about Investors Mark Series
Fund, Inc. (the "Fund") and its nine Portfolios. Investors Mark Advisors, LLC
(the "Adviser") serves as the investment adviser for all nine Portfolios and
employs Sub-Advisers to assist it in managing the Portfolios.

Individuals cannot invest in the shares of the Portfolios directly. Instead
they participate through variable annuity contracts and variable life insurance
policies (collectively, the "Contracts") issued by an insurance company. You
can participate either through a Contract that you purchase yourself or through
a Contract purchased by your employer.

Through your participation in the Contract, you indirectly participate in
Portfolio earnings or losses, in proportion to the amount of money you invest.
Depending on your Contract, if you withdraw your money before retirement, you
may incur charges and additional tax liabilities. For further information about
your Contract, please refer to your Contract prospectus.

The Contracts may be sold by banks. An investment in a Portfolio of the Fund
through a Contract is not a deposit of a bank and is not insured or guaranteed
by the Federal Deposit Insurance Corporation or any other government agency.

The investment objectives of the Portfolios may be changed without
shareholder approval.

Some of the Portfolios have names and investment objectives that are very
similar to certain publicly available mutual funds that are managed by the same
money managers. These Portfolios are not those publicly available mutual funds
and will not have the same performance. Different performance will result from
such factors as different implementation of investment policies, different cash
flows into and out of the Portfolios, different fees, and different sizes.

Balanced Portfolio
Fact Sheet
Sub-Adviser: Kornitzer Capital Management, Inc.

For more information about each type of investment, please read the section
in this prospectus called "More About Portfolio Investments."

Investment Objective

. seeks long-term capital growth and high current income

Principal Investment Strategy

The Portfolio's Sub-Adviser seeks to achieve long-term capital growth
primarily by investment in common stocks and secondarily by investment in
convertible bonds and convertible preferred stocks. The Sub-Adviser seeks to
achieve high current income by investing in:

. corporate bonds

. government bonds

. mortgage-backed securities

. convertible bonds

. preferred stocks

. convertible preferred bonds

The Portfolio will normally invest in a broad array of securities,
diversified as to types, companies and industries. The Sub-Adviser anticipates
that the majority of common stocks purchased will be those of mid to large
capitalization companies (those with capitalization in excess of $1 billion).

The Portfolio may invest up to 75% of its assets in:

. corporate bonds

. convertible bonds

. preferred stocks

. convertible preferred stocks

The Sub-Adviser expects that from time to time these securities may be rated
below investment grade (BBB) by the major rating agencies. Such securities are
commonly known as "junk bonds." The Sub-Adviser believes this policy is
justified given

. the Sub-Adviser's view that these securities from time to time offer
superior value

. the Sub-Adviser's experience and substantial in-house credit research
capabilities with higher yielding securities

3
<PAGE>

The Portfolio is authorized to write (i.e. sell) covered call options on the
securities in which it may invest and to enter into closing purchase
transactions with respect to certain of such options. Up to 25% of the
Portfolio's total assets may be subject to covered call options. A covered call
option is an option where the Portfolio in return for a premium gives another
party a right to buy specified securities owned by the Portfolio at a specified
future date and price set at the time of the contract. Covered call options
serve as a partial hedge against the price of the underlying security
declining.

The proportion of the Portfolio invested in each type of security is
expected to change over time in accordance with the Sub-Adviser's
interpretation of economic conditions and underlying security values. However
the Sub-Adviser expects that a minimum of 25% of the Portfolio's total assets
will always be invested in fixed income senior securities and that a minimum of
25% of the Portfolio's total assets will always be invested in equity
securities.

Principal Risks

The principal risks of investing in the Portfolio are:

Market Risk: the risk that the value of the securities purchased by the
Portfolio will decline as a result of economic, political or market conditions
or an issuer's financial circumstances.

Credit Risk: the risk that an issuer of a fixed income security owned by the
Portfolio may be unable to make interest or principal payments.

Interest Rate Risk: the risk that fluctuations in interest rates may affect
the value of the Portfolio's interest-paying fixed income securities.

Prepayment Risk: the risk that the holder of a mortgage underlying a
mortgage-backed security owned by the Portfolio will prepay principal,
particularly during periods of declining interest rates.

The lower ratings of certain securities held by the Portfolio may enhance
the risks described above. Lower rated instruments, especially so called "junk
bonds," involve greater risks due to the financial health of the issuer and the
economy generally and their market prices can be more volatile.

Performance Information

The performance information presented herein is intended to help you
evaluate the potential risks and rewards of an investment in the Portfolio by
showing changes in the Portfolio's performance and comparing the Portfolio's
performance with the performance of a broad based market index. How the
Portfolio performed in the past is not necessarily an indication of how the
Portfolio will perform in the future. The fees and expenses related to your
Contract have not been included in the calculations of performance shown below.
Therefore, the actual performance you would have received through your Contract
would have been less than the results shown below.

1998
--------
- 6.0%

Best Quarter: Q-1 1998 6.63%
Worst Quarter: Q-3 1998 -13.57%

This table compares the Portfolio's average annual returns to the returns of
the Standard & Poor's 500 Composite Stock Price Index ("S&P 500 Index") and the
Merrill Lynch High Yield Master Index for 1 calendar year and since inception.

Average Annual Total Return as of December 31, 1998

<TABLE>
<CAPTION>
Since
Inception
1 (November 17,
Year 1997)
----- -------------
<S> <C> <C>
Portfolio.................................................. -6.0% -5.2%
S&P 500 Index and Merrill Lynch High Yield Master Index
(Weighted Average)...................................... 11.6% N/A
</TABLE>

. The S&P 500 Index is an unmanaged index of 500 leading stocks.

. The Merrill Lynch High Yield Master Index is a broad-based measure of
the performance of the non-investment grade U.S. domestic market,
currently capturing close to $200 billion of the outstanding debt of
domestic market issuers rated below investment grade but not in default.

4
<PAGE>

Global Fixed Income Portfolio
Fact Sheet
Sub-Adviser: Standish International Management Company, L.P.

For more information about each type of investment, please read the section
in the prospectus called "More About Portfolio Investments."

Investment Objective

. seeks maximum total return while realizing a market level of income
consistent with preserving capital and liquidity.

Principal Investment Strategy

The Portfolio normally invests at least 65% of its total assets in fixed
income securities of foreign governments or their political subdivisions and
companies located in at least three countries around the world, including the
United States.

The Portfolio intends, however, to invest in no fewer than eight foreign
countries. The Portfolio may invest a substantial portion of its assets in one
or more of those eight countries. The Portfolio may also invest up to 10% of
its total assets in emerging markets generally and may invest up to 3% of its
total assets in any one emerging market.

The Portfolio will be an actively managed non-diversified portfolio
consisting primarily of fixed income securities denominated in foreign
currencies and the U.S. dollar. Non-diversified means that the Portfolio may
invest more than 5% of its total assets in the securities of a single issuer.

The Sub-Adviser seeks to add value to the Portfolio by selecting undervalued
investments, rather than by varying the average maturity of the Portfolio to
reflect interest rate forecasts. The Sub-Adviser utilizes fundamental credit
and sector valuation techniques to evaluate what it considers to be less
efficient markets and sectors of the fixed income marketplace in an attempt to
select securities with the potential for the highest return. The Sub-Adviser
emphasizes intermediate term economic fundamentals relating to foreign
countries and emerging markets, rather than focusing on day-to-day fluctuations
in a particular currency or in the fixed income markets.

The Portfolio invests primarily in investment grade fixed income securities
or those determined by the Sub-Adviser to be of comparable quality, but it may
invest up to 15% of its total assets in below-investment grade securities (junk
bonds). The average dollar weighted credit quality of the Portfolio is expected
to be in a range of Aa to A according to Moody's or AA to A according to S&P,
Duff, Fitch or IBCA.

The Portfolio may invest in all types of fixed income securities including

. bonds

. notes (including structured or hybrid notes)

. mortgage-backed securities

. asset-backed securities

. convertible securities

. Eurodollar and Yankee Dollar instruments

. preferred stocks (including convertible preferred stocks)

. warrants

. money market instruments

These fixed income securities may be issued by various entities including

. foreign and U.S. corporations or entities

. foreign governments and their political subdivisions

. the U.S. Government and its agencies, authorities, instrumentalities or
sponsored enterprises

. supranational entities, including international organizations designated
or supported by governmental entities to promote economic reconstruction
or development, and international banking institutions and related
government agencies

The Portfolio may engage in a variety of foreign currency exchange
transactions to protect against uncertainty in the levels of future currency
exchange rates. These transactions may include the

5
<PAGE>

purchase and sale of foreign currencies and options on foreign currencies. They
also may include the purchase and sale of currency forward contracts and
currency futures contracts and related options.

Principal Risks

The principal risks of investing in the Portfolio are:

Market Risk: the risk that the value of the securities purchased by the
Portfolio will decline as a result of economic, political or market conditions
or an issuer's financial circumstances.

Credit Risk: the risk that an issuer of a fixed income security owned by the
Portfolio may be unable to make interest or principal payments.

Interest Rate Risk: the risk that fluctuations in interest rates may affect
the value of the Portfolio's interest-paying fixed income securities.

Prepayment Risk: the risk that the holder of a mortgage underlying a
mortgage-backed security owned by the Portfolio will prepay principal,
particularly during periods of declining interest rates.

Lack of Diversification Risk: the risk that by investing a significant
amount of the Portfolio's assets in the securities of a small number of foreign
issuers, the Portfolio's net asset value will be more sensitive to events
affecting those issuers.

Foreign Securities Risks

Political Risk: the risk that a change in a foreign government will occur
and that the assets of a company in which the Portfolio has invested will be
affected.

Currency Risk: the risk that a foreign currency will decline in value. The
Portfolio may trade in currencies other than the U.S. dollar. An increase in
the value of the U.S. dollar relative to a foreign currency will adversely
affect the value of the Portfolio.

Limited Information Risk: the risk that foreign companies may not be subject
to accounting standards or governmental supervision comparable to U.S.
companies and that less public information about their operations may exist.

Settlement and Clearance Risk: the risks associated with the clearance and
settlement procedures in non-U.S. markets, which may be unable to keep pace
with the volume of securities transactions and may cause delays.

Liquidity Risk: foreign markets may be less liquid and more volatile than
U.S. markets and offer less protection to investors.

Performance Information

1998
--------
7.2%

Best Quarter: Q.3 1998 3.07%
Worst Quarter: Q.4 1998 0.83%

This table compares the Portfolio's average annual returns to the returns of
the JP Morgan Global Bond Index (Hedged) for 1 calendar year and since
inception.

6
<PAGE>

Average Annual Total Return as of December 31, 1998

<TABLE>
<CAPTION>
Since
Inception
(November 13,
1 Year 1997)
------ -------------
<S> <C> <C>
Portfolio.................................................. 7.2% 7.95%
JP Morgan Global
Bond Index (Hedged)........................................ 11.4% N/A
</TABLE>

. The JP Morgan Global Bond Index (Hedged) is an index for government debt
markets currently comprised of the local currency fixed-rate coupons of
thirteen markets.

Growth & Income Portfolio
Fact Sheet
Sub-Adviser: Lord, Abbett & Co.

For more information about each type of investment, please read the section
in this prospectus called "More About Portfolio Investments."

Investment Objective

. seeks to provide long-term growth of capital and income without excessive
fluctuation in market value.

Principal Investment Strategy

The Portfolio intends to keep its assets invested in those securities which
are selling at reasonable prices in relation to value and, to do so, it may
have to forego some opportunities for gains when, in the judgment of Portfolio
management, they carry excessive risk.

The Portfolio will try to anticipate major changes in the economy and select
stocks which it believes will benefit most from these changes.

The Portfolio will normally invest in common stocks (including securities
convertible into common stocks) of large, seasoned companies, generally with
over $6 billion in market capitalization, that are in sound financial
condition, which common stocks are expected to show above-average price
appreciation. Although the prices of common stocks fluctuate and their
dividends vary, historically, common stocks have appreciated in value and their
dividends have increased when the companies they represent have prospered and
grown.

The Portfolio constantly seeks to balance the opportunity for profit against
the risk of loss. In the past, very few industries have continuously provided
the best investment opportunities. The Portfolio will take a flexible approach
and adjust the Portfolio to reflect changes in the opportunity for sound
investments relative to the risks assumed. Therefore, the Portfolio will sell
stocks that are judged to be overpriced and reinvest the proceeds in other
securities which are believed to offer better values for the Portfolio.

Principal Risks

The principal risks of investing in the Portfolio are:

Market Risk: the risk that the value of the securities purchased by the
Portfolio will decline as a result of economic, political or market conditions
or an issuer's financial circumstances.

Value Investing Risk: the risk that the portfolio manager's judgment that a
particular security is undervalued in relation to the company's fundamental
economic values may prove incorrect.

Risk of Investing in Larger Companies: the risk that larger more established
companies may be unable to respond quickly to new competitive challenges such
as changes in technology and consumer tastes. Many larger companies also may
not be able to attain the high growth rates of successful smaller companies,
especially during extended periods of economic expansion.

Performance Information

7
<PAGE>

Contract would have been less than the results shown below.

1998
--------
12.0%

Best Quarter: Q.4 1998 17.09%
Worst Quarter: Q.3 1998 -12.63%

This table compares the Portfolio's average annual returns to the returns
of the S&P 500 Index for 1 calendar year and since inception.

Average Annual Total Return as of December 31, 1998

<TABLE>
<CAPTION>
Since
Inception
(November 12,
1 Year 1997)
------ -------------
<S> <C> <C>
Portfolio.................................................. 12.00% 14.7%
S&P 500 Index.............................................. 28.60% N/A
</TABLE>

. The S&P 500 Index is an unmanaged index of 500 leading stocks.

Intermediate Fixed Income Portfolio
Fact Sheet
Sub-Adviser: Standish, Ayer & Wood, Inc.

For more information about each type of investment, please read the section
in this prospectus called "More About Portfolio Investments."

Investment Objective

. primarily to achieve a high level of current income consistent with
preserving capital and liquidity.

. secondarily to seek capital appreciation when changes in interest rates or
other economic conditions indicate that capital appreciation may be
available without significant risk to principal.

Principal Investment Strategy

The Portfolio normally invests substantially all, and at least 65% of its
assets, in investment grade fixed income securities. The Portfolio may invest
up to 20% of its assets in fixed income securities of foreign corporations and
foreign governments and their political subdivisions, including securities of
issuers located in emerging markets. No more than 10% of the Portfolio's total
assets will be invested in foreign securities not subject to currency hedging
transactions back into U.S. dollars.

The Sub-Adviser's primary investment management and research focus is at
the security and industry sector level. The Sub-Adviser seeks to add value to
the Portfolio by selecting undervalued investments, rather than by varying the
average maturity of the Portfolio to reflect interest rate forecasts. The Sub-
Adviser utilizes fundamental credit and sector valuation techniques to
evaluate what it considers to be less efficient markets and sectors of the
fixed income marketplace in an attempt to select securities with the potential
for the highest return.

The Portfolio invests primarily in investment grade fixed income securities
or those determined by the Sub-Adviser to be of comparable quality. It may,
however, invest up to 20% of its total assets in below-investment grade
securities (junk bonds). The average dollar-weighted credit quality of the
Portfolio is expected to be Aa according to Moody's or AA according to S&P,
Duff or Fitch.

The Portfolio may invest in all types of fixed income securities including:

. bonds

. notes (including structured or hybrid notes)

. mortgage-backed securities

. asset-backed securities

. convertible securities

. Eurodollar and Yankee Dollar investments

. preferred stocks

. money market instruments

These fixed income securities may be issued by

. U.S. and foreign corporations or entities

. U.S. and foreign banks

. The U.S. Government and its agencies, authorities, instrumentalities or
sponsored enterprises, and foreign governments and their political
subdivisions.

The Portfolio may engage in a variety of foreign currency exchange
transactions to protect against uncertainty in the levels of future currency
exchange rates. These transactions may include the purchase and sale of
foreign currencies and options on foreign currencies. They also may include
the purchase and sale of currency forward contracts and currency futures
contracts and related options.

8
<PAGE>

The Portfolio generally invests in securities with final maturities, average
lives or interest rate reset frequencies of 15 years or less.

Under normal conditions, the Portfolio's average dollar-weighted effective
portfolio maturity will vary from five to thirteen years.

Principal Risks

The principal risks of investing in the Portfolio are:

Market Risk: the risk that the value of the securities purchased by the
Portfolio will decline as a result of economic, political or market conditions
or an issuer's financial circumstances.

Credit Risk: the risk that an issuer of a fixed income security owned by the
Portfolio may be unable to make interest or principal payments.

Interest Rate Risk: the risk that fluctuations in interest rates may affect
the value of the Portfolio's interest-paying fixed income securities.

Prepayment Risk: the risk that the holder of a mortgage underlying a
mortgage-backed security owned by the Portfolio will prepay principal,
particularly during periods of declining interest rates.

Foreign Securities Risks

Political Risk: the risk that a change in a foreign government will occur
and that the assets of a company in which the Portfolio has invested will be
affected.

Liquidity Risk: foreign markets may be less liquid and more volatile than
U.S. markets and offer less protection to investors.

Performance Information

1998
--------
5.2%

Best Quarter: Q.2 1998 2.36%
Worst Quarter: Q.4 1998 -0.57%

This table compares the Portfolio's average annual returns to the returns of
the Lehman Brothers Aggregate Bond Index for 1 calendar year and since
inception.
Average Annual Total Return as of December 31, 1998

<TABLE>
<CAPTION>
Since Inception
(November 13,
1 Year 1997)
------ ---------------
<S> <C> <C>
Portfolio................................................ 5.2% 5.7%
Lehman Brothers Aggregate Bond Index..................... 8.7% N/A
</TABLE>

. The Lehman Brothers Aggregate Bond Index is an unmanaged index of average
yield U.S. investment grade bonds.

9
<PAGE>

Large Cap Value Portfolio
Fact Sheet
Sub-Adviser: David L. Babson & Co., Inc.

For more information about each type of investment, please read the section
in this prospectus called "More About Portfolio Investments."

Investment Objective

. seeks long-term growth of capital and income by investing principally in
a diversified portfolio of common stocks which are considered to be
undervalued in relation to earnings, dividends and/or assets.

Principal Investment Strategy

The Portfolio will normally invest at least 90% of its assets in common
stocks, either listed on an exchange or over-the-counter. The Portfolio may
invest in securities convertible into common stocks.

The Portfolio intends to invest in stocks of companies which are rated "B-"
or better in investment quality (growth and stability of earnings and
dividends) by S&P and/or "B" or better by Value Line in financial strength.

The Sub-Adviser will consider a stock to be undervalued if it is currently
trading at a price below which the Sub-Adviser believes it should be trading
and therefore represents a superior potential investment based on one or more
of the following comparisons:

1. price relative to earnings,

2. price relative to dividends,

3. price relative to assets as measured by book value.

Valuation levels as described above for each security will be compared to a
large universe of stocks as selected by the Sub-Adviser, as well as its own
past history of valuation over several years. The universe will vary from time
to time and may consist of as many as a thousand stocks. Generally, the
Portfolio will invest in securities of companies with market capitalizations of
over $6 billion. The holdings in the Portfolio will be monitored regularly by
the Sub-Adviser to determine that they continue to be relatively favorable
investments.

The Portfolio will typically hold shares of companies whose shares are
relatively unpopular and out-of-favor among investors generally at the time of
purchase. Thus the Portfolio may be considered to be "contrarian" in nature.
However, the Portfolio will be restricted to companies which the Sub-Adviser
believes are sound businesses with good future potential and should, therefore,
eventually gain greater investor favor.

Principal Risks

The principal risks of investing in the Portfolio are:

Market Risk: the risk that the value of the securities purchased by the
Portfolio will decline as a result of economic, political or market conditions
or an issuer's financial circumstances.

Value Investing Risk: the risk that the portfolio manager's judgment that a
particular security is undervalued in relation to the company's fundamental
economic values may prove incorrect.

Performance Information

10
<PAGE>

1998
--------
5.0%

Best Quarter: Q.1 1998 14.24%
Worst Quarter: Q.3 1998 -18.21%

This table compares the Portfolio's average annual returns to the returns of
the S&P 500 Index for 1 calendar year and since inception.

Average Annual Total Return as of December 31, 1998

<TABLE>
<CAPTION>
Since Inception
1 (December 7,
Year 1997)
----- ---------------
<S> <C> <C>
Portfolio................................................. 5.0% 1.7%
S&P 500 Index............................................. 28.6% N/A
</TABLE>

. The S&P 500 Index is an unmanaged index of 500 leading stocks.

Large Cap Growth Portfolio
Fact Sheet
Sub-Adviser: Stein Roe & Farnham, Incorporated

For more information about each type of investment, please read the section
in this prospectus called "More About Portfolio Investments."

Investment Objective

. seeks long-term capital appreciation

Principal Investment Strategy

The Portfolio normally invests at least 65% of its total assets in common
stocks and other equity-type securities that the Sub-Adviser believes have
long-term appreciation possibilities. Such equity-type securities include

. preferred stocks

. securities convertible into or exchangeable for common stocks

. warrants or rights to purchase common stocks

The Portfolio is designed for long-term investors who desire to participate
in the stock market with more investment risk and volatility than the stock
market in general, but with less investment risk and volatility than aggressive
capital appreciation funds. The Portfolio seeks to reduce risk by investing in
a diversified portfolio, but this does not eliminate risk.

The Sub-Adviser considers a company to be large cap if its market
capitalization is at least 90 percent of the weighted market capitalization of
the Standard & Poor's Mid-Cap 400 Index.

The Portfolio also may invest in investment grade debt securities of
corporate and government issuers.

The Portfolio may invest up to 25% of its total assets in foreign
securities. The Portfolio also may invest in options, futures contracts and
futures options.

Principal Risks

The principal risks of investing in the Portfolio are:

Market Risk: the risk that the value of the securities purchased by the
Portfolio will decline as a result of economic, political or market conditions
or an issuer's financial circumstances.

Growth Investing Risk: the risk of the volatility of growth stocks. Growth
companies usually invest a high portion of earnings in their businesses, and
may lack the dividends of value stocks that can cushion prices in a falling
market. Also, earnings disappointments often lead to sharp declines in prices
because investors buy growth stocks in anticipation of superior earnings
growth.

Foreign Securities Risks

Political Risk: the risk that a change in a foreign government will occur
and that the assets of a company in which the Portfolio has invested will be
affected.

11
<PAGE>

Liquidity Risk: foreign markets may be less liquid and more volatile than
U.S. markets and offer less protection to investors.

Performance Information

1998
--------
24.4%

Best Quarter: Q.4 1998 23.66%
Worst Quarter: Q.3 1998 -14.86%

This table compares the Portfolio's average annual returns to the returns of
the S&P 500 Index for 1 calendar year and since inception.

Average Annual Total Return as of December 31, 1998

<TABLE>
<CAPTION>
Since
Inception
1 (November 13,
Year 1997)
----- -------------
<S> <C> <C>
Portfolio................................................... 24.4% 28.8%
S&P 500 Index............................................... 28.6% N/A
</TABLE>

. The S&P 500 Index is an unmanaged index of 500 leading stocks.

Mid Cap Equity Portfolio
Fact Sheet
Sub-Adviser: Standish, Ayer & Wood, Inc.

For more information about each type of investment, please read the section
in this prospectus called "More About Portfolio Investments."

Investment Objective

. seeks to achieve long-term growth of capital through investment
primarily in equity and equity-related securities of companies which
appear to be undervalued.

Principal Investment Strategy

The Portfolio will normally invest at least 80% of the Portfolio's total
assets in equity and equity-related securities issued by U.S. or foreign
companies. These include

. exchange-traded and over-the-counter common and preferred stocks

. warrants

. rights

. convertible securities

. depository shares and receipts

. trust certificates

. shares of other investment companies

. limited partnership interests

. equity participations

The Portfolio follows a disciplined investment strategy, emphasizing stocks
which the Sub-Adviser believes offer above average potential for capital

12
<PAGE>

growth. The Sub-Adviser intends to use statistical modeling techniques that
utilize stock specific factors to identify attractive equity securities. Such
factors include:

. current price earnings ratios

. stability of earnings growth

. forecasted changes in earnings growth

. trends in consensus analysts' estimates

. measures of earnings results relative to expectations

Once identified, these securities will be subject to further fundamental
analysis by the Sub-Adviser's professional staff before they are included in
the Portfolio's holdings. Securities selected for inclusion in the Portfolio's
holdings will represent various industries and sectors. The Sub-Adviser's
security selection tends to have a midcap bias, as its research indicates that
the potential returns associated with its approach are highest in that sector
of the market. The Sub-Adviser defines mid-cap as companies with market
capitalizations generally under $6 billion.

The Sub-Adviser seeks to add value to portfolios of securities by finding
companies with improving business momentum whose securities have reasonable
valuations. The Sub-Adviser utilizes both quantitative and fundamental analysis
to find stocks whose estimates of earnings are being revised upwards but whose
valuation does not yet reflect this positive trend.

When the Sub-Adviser believes that foreign markets offer above average
growth potential, the Portfolio may invest without limit in equity and equity-
related securities of foreign issuers that are listed on a United States
securities exchange or traded in the U.S. over-the-counter market.

The Portfolio may invest in shares of real estate investment trusts (REITs),
which are pooled investment vehicles that invest in real estate or real estate
loans or interests.

The Portfolio may invest in debt securities and preferred stocks which are
convertible into, or exchangeable for, common stocks.

Principal Risks

The principal risks of investing in the Portfolio are:

Market Risk: the risk that the value of the securities purchased by the
Portfolio will decline as a result of economic, political or market conditions
or an issuer's financial circumstances.

Value Investing Risk: the risk that the portfolio manager's judgment that a
particular security is undervalued in relation to the company's fundamental
economic values may prove incorrect.

Foreign Securities Risks

Political Risk: the risk that a change in a foreign government will occur
and that the assets of a company in which the Portfolio has invested will be
affected.

Liquidity Risk: foreign markets may be less liquid and more volatile than
U.S. markets and offer less protection to investors; over-the-counter
securities may also be less liquid than exchange-traded securities.

13
<PAGE>

Performance Information

1998
--------
7.0%

Best Quarter: Q.4 1998 18.56%
Worst Quarter: Q.3 1998 -18.01%

This table compares the Portfolio's average annual returns to the returns of
the Standard & Poors Mid-Cap 400 Index ("S&P Mid-Cap 400 Index") for 1 calendar
year and since inception.

Average Annual Total Return as of December 31, 1998

<TABLE>
<CAPTION>
Since
Inception
1 (November 13,
Year 1997)
----- -------------
<S> <C> <C>
Portfolio................................................... 7.0% 10.9%
S&P Mid-Cap 400 Index....................................... 19.3% N/A
</TABLE>

. The S&P Mid-Cap 400 Index is a capitalization-weighted index of 400
domestic stocks chosen on the basis of market capitalization, liquidity
and industry group representation.

Money Market Portfolio
Fact Sheet
Sub-Adviser: Standish, Ayer & Wood, Inc.

For more information about each type of investment, please read the section
in this prospectus called "More About Portfolio Investments."

Investment Objective

. seeks to obtain the highest level of current income which is consistent
with the preservation of capital and maintenance of liquidity.

Principal Investment Strategy

The Portfolio invests only in:

. obligations of the United States Government

. obligations issued by agencies or instrumentalities of the United States
Government

. instruments that are secured or collateralized by obligations of the
United States Government, its agencies or its instrumentalities

. short-term obligations of United States banks and savings and loan
associations and companies having assets of more than $1 billion

. instruments fully secured or collateralized by such bank and savings and
loan obligations

. dollar-denominated short-term obligations of foreign banks, foreign
branches of foreign or U.S. banks (referred to as "Eurodollars"), and
short-term obligations of U.S. branches and agencies of foreign banks
(referred to as "Yankee dollars")

. commercial paper and short-term corporate debt securities rated in one
of the two highest categories for short term debt securities by at least
two nationally recognized statistical rating organizations (NRSROs) or
one such NRSRO if only one has rated the security

. corporate or other notes guaranteed by letters of credit from banks in
the United States having assets of more than $1 billion or
collateralized by United States Government obligations

. obligations of (i) consumer and commercial finance companies, (ii)
securities brokerage companies, (iii) leasing companies and (iv)
insurance companies.

14
<PAGE>

Certain of these obligations may be variable or floating rate instruments.

The Portfolio may only invest in high quality U.S. dollar-denominated
instruments that are determined to present minimal credit risks.

The Portfolio will enter into repurchase agreements under which it
purchases securities, subject to agreement by the seller to repurchase the
securities at a higher price on a specified date, with the gain establishing
the yield during the Portfolio's holding period. The Sub-Adviser, under
general policies established by the Fund's Directors, reviews the
creditworthiness of the other party to any repurchase agreement, and will only
enter into repurchase agreements with parties whose credit is deemed
satisfactory.

Principal Risks

The principal risks of investing in the Portfolio are:

Risk of Money Market Funds: Although the Portfolio seeks to preserve the
value of your investment at $1.00 per share, it is possible to lose money by
investing in the Portfolio. An investment in the Portfolio is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other
government agency.

Credit Risk: the risk that an issuer of a fixed income security owned by
the Portfolio may be unable to make interest or principal payments.

Interest Rate Risk: the risk that fluctuations in interest rates may affect
the value of the Portfolio's interest-paying fixed income securities.

Repurchase Agreement Risk: the risk that if the seller becomes bankrupt,
the Portfolio may experience delays in recovering its money, fail to recover
part or all of its investment, and incur costs in disposing of the securities
used as collateral for the seller's repurchase obligation.

Performance Information

The performance information presented herein is intended to help you
evaluate the potential risks and rewards of an investment in the Portfolio by
showing changes in the Portfolio's performance.
How the Portfolio performed in the past is not necessarily an indication of
how the Portfolio will perform in the future. The fees and expenses related to
your Contract have not been included in the calculations of performance shown
below. Therefore, the actual performance you would have received through your
Contract would have been less than the results shown below.

1998
--------
5.1%

Best Quarter: Q2 1998 1.34%
Worst Quarter: Q4 1998 1.05%

Average Annual Total Return as of December 31, 1998

<TABLE>
<CAPTION>
Since
Inception
1 (November 13,
Year 1997)
----- -------------
<S> <C> <C>
Portfolio................................................... 5.10% 5.11%
</TABLE>

7 day yield as of December 31, 1998 was 4.03%

Small Cap Equity Portfolio
Fact Sheet
Sub-Adviser: Stein Roe & Farnham, Incorporated

For more information about each type of investment, please read the section
in this prospectus called "More About Portfolio Investments."

Investment Objective

. seeks long-term capital appreciation

Principal Investment Strategy

The Portfolio invests primarily in a diversified portfolio of common stocks
and other equity-type securities of entrepreneurially managed companies that
the Sub-Adviser believes represent special opportunities. Equity-type
securities include:

. preferred stocks

. securities convertible or exchangeable for common stocks

. warrants or rights to purchase common stocks

15
<PAGE>

The Portfolio emphasizes investments in financially strong small and medium-
sized companies, based principally on appraisal of their management and stock
valuations. The Sub-Adviser considers "small" and "medium-sized" companies to
be those with market capitalizations of less than $1 billion and $1 to $3
billion, respectively.

In both its initial and ongoing appraisals of a company's management, the
Sub-Adviser seeks to know both the principal owners and senior management and
to assess their business judgment and strategies through personal visits. The
Sub- Adviser favors companies whose management has an owner/operator, risk-
adverse orientation and a demonstrated ability to create wealth for investors.

Attractive company characteristics include

. unit growth

. favorable cost structures or competitive positions

. financial strength that enables management to execute business
strategies under difficult conditions

The Sub-Adviser believes that a company is attractively valued when its
stock can be purchased at a meaningful discount to the value of the underlying
business.

The Portfolio is designed for long-term investors who want greater return
potential than is available from the stock market in general, and who are
willing to tolerate the greater investment risk and market volatility
associated with investments in small and medium-sized companies. Although the
Portfolio does not attempt to reduce or limit risk through wide industry
diversification of investment, it usually allocates its investments among a
number of different industries rather than concentrating in a particular
industry or group of industries.

The Portfolio may invest up to 35% of its assets in debt securities of
corporate and governmental issuers, primarily investment grade.

The Portfolio may invest up to 25% of its total assets in foreign securities.
The Portfolio also may invest in options, futures contracts and futures options.

Principal Risks

The principal risks of investing in the Portfolio are:

Market Risk: the risk that the value of the securities purchased by the
Portfolio will decline as a result of economic, political or market conditions
or an issuer's financial circumstances.

Small Capitalization Company Risk: the risk that small companies may be
generally subject to more abrupt or erratic market movements than securities of
larger, more established companies.

Liquidity Risk: the risk that the degree of market liquidity of some stocks
in which the Portfolio invests may be relatively limited in that the Portfolio
invests in over-the-counter stocks.

Credit Risk: the risk that an issuer of a fixed income security owned by the
Portfolio may be unable to make interest or principal payments.

Interest Rate Risk: the risk that fluctuations in interest rates may affect
the value of the Portfolio's interest-paying fixed income securities.

Foreign Securities Risks

Political Risk: the risk that a change in a foreign government will occur
and that the assets of a company in which the Portfolio has invested will be
affected.

16
<PAGE>

Performance Information

1998
--------
-16.2%

Best Quarter: Q.4 1998 13.11%
Worst Quarter: Q.3 1998 -20.68%

This table compares the Portfolio's average annual returns to the returns of
the Standard & Poor's Small Cap 600 Index ("S&P Small Cap 600 Index") for 1
calendar year and since inception.

Average Annual Total Return as of December 31, 1998

<TABLE>
<CAPTION>
Since
Inception
(December 13,
1 Year 1997)
------ -------------
<S> <C> <C>
Portfolio.................................................. -16.2% -16.6%
S&P Small Cap 600 Index.................................... -1.3% N/A
</TABLE>

. The Standard & Poor's Small Cap 600 Index is a capitalization-weighted
index of 600 domestic stocks chosen for market size, liquidity and
industry group representation.

MORE ABOUT PORTFOLIO INVESTMENTS

Certain of the investment techniques, instruments and risks associated with
each Portfolio are referred to in the discussion that follows.

Equity Securities

Equity securities represent an ownership position in a company. The prices
of equity securities fluctuate based on changes in the financial condition of
the issuing company and on market and economic conditions. Companies sell
equity securities to get the money they need to grow.

Stocks are one type of equity security. Generally, there are two types of
stocks:

Common stock--Each share of common stock represents a part of the ownership
of a company. The holder of common stock participates in the growth of a
company through increasing stock price and dividends. If a company experiences
difficulty, a stock price can decline and dividends may not be paid.

Preferred stock--Each share of preferred stock allows the holder to receive
a dividend before the common stock shareholders receive dividends on their
shares.

Other types of equity securities include, but are not limited to,
convertible securities, warrants, rights and foreign equity securities such as
American Depository Receipts (ADRs), European Depository Receipts (EDRs), and
Global Depository Receipts (GDRs).

Fixed Income Securities

Fixed income securities include a broad array of short, medium and long term
obligations, including notes and bonds. Fixed income securities may have fixed,
variable or floating rates of interest,

17
<PAGE>

including rates of interest that vary inversely at a multiple of a designated
or floating rate, or that vary according to changes in relative values of
currencies. Fixed income securities generally involve an obligation of the
issuer to pay interest on either a current basis or at the maturity of the
security and to repay the principal amount of the security at maturity.

Bonds are one type of fixed income security and are sold by governments on
the local, state and federal levels and by companies. Investing in a bond is
like making a loan for a fixed period of time at a fixed interest rate. During
the fixed period, the bond pays interest on a regular basis. At the end of the
fixed period, the bond matures and the investor usually gets back the principal
amount of the bond.

Fixed periods to maturity are categorized as:

. Short-term (generally less than 12 months)

. Intermediate- or Medium-term (one to ten years)

. Long-term (10 years or more)

Commercial paper--is a specific type of corporate or short-term note. In
fact, it is very short-term, being paid in less than 270 days. Most commercial
paper matures in 50 days or less.

Mortgage-backed securities--are securities representing interests in "pools"
of mortgage loans securitized by residential or commercial property. Payments
of interest and principal on these securities are generally made monthly, in
effect, "passing through" monthly payments made by individual borrowers on the
mortgage loans which underlie the securities.

U.S. Government securities--are obligations of, or guaranteed by the U.S.
Government or its agents or instrumentalities. Some U.S. Government securities,
such as Treasury bills, notes, bonds and securities issued by GNMA, are
supported by the full faith and credit of the U.S.; others such as securities
issued by the Federal Home Loan Banks, are supported by the right of the issuer
to borrow from the U.S. Treasury; others such as those of FNMA, and FHLMC are
supported by the discretionary authority of the U.S. Government to purchase the
agency's obligations, while still others such as those of the Student Loan
Marketing Association, the Tennessee Valley Authority and the Small Business
Authority are supported only by the credit of the instrumentality. High quality
money market instruments may include:

. Cash and cash equivalents

. U.S. Government securities

. Certificates of deposit or other obligations of U.S. banks with total
assets in excess of $1 billion

. Corporate debt obligations with remaining maturities of 12 months or
less

. Commercial paper sold by corporations and finance companies

. Repurchase agreements, money market securities of foreign issuers
payable in U.S. dollars, asset-backed securities, loan participations
and adjustable rate securities

. Bankers' acceptances

. Time deposits

Bonds, commercial paper and mortgage-backed securities are not the only
types of fixed income securities. Other fixed income securities and instruments
include, but are not limited to:

. convertible bonds, debentures and notes

. asset-backed securities

. certificates of deposit

. fixed time deposits

. bankers' acceptances

. repurchase agreements

. reverse repurchase agreements

Money Market Instruments

All of the Portfolios may invest in high quality money market instruments. A
money market instrument is high quality when it is rated in one of the two
highest rating categories by S&P or Moody's or another nationally recognized
service, or if unrated, deemed high quality by the Adviser or a Sub-Adviser.

Foreign Securities

Foreign securities are the equity, fixed income or money market securities
of foreign issuers. Securities of foreign issuers include obligations of

18
<PAGE>

foreign branches of U.S. banks and of foreign banks, common and preferred
stocks, and fixed income securities issued by foreign governments, corporations
and supranational organizations. They also include ADRs, GDRs, IDRs and EDRs.

ADRs are certificates issued by a U.S. bank or trust company and represent
the right to receive securities of a foreign issuer deposited in a domestic
bank or foreign branch of a U.S. Bank. GDRs, IDRs and EDRs are receipts
evidencing an arrangement with a non-U.S. bank.

Portfolio Turnover

Portfolio turnover occurs when a Portfolio sells its investments and buys
new ones. In some Portfolios, high portfolio turnover occurs when they engage
in frequent trading as part of their investment strategy.

High portfolio turnover may cause a Portfolio's expenses to increase. For
example, a Portfolio may have to pay brokerage fees and other related expenses.
A portfolio turnover rate of 100% or more a year is considered high. A high
rate increases a Portfolio's transaction costs and expenses.

Portfolio turnover rates for each Portfolio are found in the Financial
Highlights section of this Prospectus.

A Word About Risk

As described in the fact sheet for each Portfolio, participation in a
Portfolio involves risk--even the risk that you will receive a minimal return
on your investment or the value of your investment will decline. It is
important for you to consider carefully the following risks when you allocate
purchase payments or premiums to the Portfolios.

Market Risk

Market risk refers to the loss of capital resulting from changes in the
price of investments. Generally, equity securities are considered to be subject
to market risk. For example, market risk occurs when the expectations of lower
corporate profits in general cause the broad market of stocks to fall in price.
When this happens, even though a company may be experiencing a growth in
profits, the price of its stock could fall.

Growth Investing Risk

This investment approach has additional risk associated with it due to the
volatility of growth stocks. Growth companies usually invest a high portion of
earnings in their businesses, and may lack the dividends of value stocks that
can cushion prices in a falling market. Also, earnings disappointments often
lead to sharply falling prices because investors buy growth stocks in
anticipation of superior earnings growth.

Value Investing Risk

This investment approach has additional risk associated with it because the
Portfolio manager's judgment that a particular security is undervalued in
relation to the company's fundamental economic values may prove incorrect.

Credit Risk

Credit risk refers to the risk that an issuer of a fixed income security may
be unable to pay principal or interest payments due on the securities. To help
the Portfolios' Sub-Advisers decide which corporate and foreign fixed income
securities to buy, they rely on Moody's and S&P (two nationally recognized bond
rating services), and on their own research, to lower the risk of buying a
fixed income security of a company that may not pay the interest or principal
on the fixed income security.

The credit risk of a portfolio depends on the quality of its investments.
Fixed income securities that are rated as investment grade have ratings ranging
from AAA to BBB. These fixed income securities are considered to have adequate
ability to make interest and principal payments.

Interest Rate Risk

Interest rate risk refers to the risk that fluctuations in interest rates
may affect the value of interest paying securities in a Portfolio. Fixed income
securities such as U.S. Government bonds are subject to interest rate risk. If
a Portfolio sells a bond before it matures, it may lose money, even if the bond
is guaranteed by the U.S. Government. Say, for example, a Portfolio bought an
intermediate government bond last year that was paying interest at a fixed rate
of 6%, it will have to sell it at a discount (and realize a loss) to attract
buyers if they can buy new bonds paying an interest rate of 7%.

19
<PAGE>

Risks of Investing in Below Investment Grade Bonds or Junk Bonds

Investing in below investment grade bonds, such as the lower quality, higher
yielding bonds called junk bonds, can increase the risks of loss for a
Portfolio. Junk bonds are bonds that are issued by small companies or companies
with limited assets or short operating histories. These companies are more
likely than more established or larger companies to default on the bonds and
not pay interest or pay back the full principal amount. Third parties may not
be willing to purchase the bonds from the Portfolios, which means they may be
difficult to sell and some may be considered illiquid. Because of these risks,
the companies issuing the junk bonds pay higher interest rates than companies
issuing higher grade bonds. The higher interest rates can give investors a
higher return on their investment.

Prepayment Risk

Prepayment risk is the risk that the holder of a mortgage underlying a
mortgage-backed security owned by the Portfolio will prepay principal,
particularly during periods of declining interest rates. This will reduce the
stream of cash payments that flow through to the Portfolio. Securities subject
to prepayment risk also pose a potential for loss when interest rates rise.
Rising interest rates may cause prepayments to occur at a slower rate than
expected thereby lengthening the maturity of the security and making it more
sensitive to interest rate changes.

Risks Associated with Foreign Securities

A foreign security is a security issued by an entity domiciled or
incorporated outside of the U.S. Among the principal risks of owning foreign
securities are:

Political Risk: the risk that a change in a foreign government will occur
and that the assets of a company in which the Portfolio has invested will be
affected. In some countries there is the risk that the government may take over
the assets or operations of a company and/or that the government may impose
taxes or limits on the removal of a Portfolio's assets from that country.

Currency Risk: the risk that a foreign currency will decline in value. As
long as a Portfolio holds a security denominated in a foreign currency, its
value will be affected by the value of that currency relative to the U.S.
dollar. An increase in the value of the U.S. dollar relative to a foreign
currency will adversely affect the value of the Portfolio.

Liquidity Risk: foreign markets may be less liquid and more volatile than
U.S. markets and offer less protection to investors. Certain markets may
require payment for securities before delivery and delays may be encountered in
settling securities transactions. In some foreign markets there may not be
protection against failure by other parties to complete transactions.

Limited Information Risk: the risk that less government supervision of
foreign markets may occur. Foreign issuers may not be subject to the uniform
accounting, auditing and financial reporting standards and practices that apply
to U.S. issuers. In addition, less public information about their operations
may exist.

Emerging Market Country Risk: the risks associated with investment in
foreign securities are heightened in connection with investments in the
securities of issuers in emerging markets countries. Such countries are
generally defined as countries in the initial stages of their industrialization
cycles with low per capita income. Although the markets of these developing
countries offer higher rates of return, they also pose additional risks to
investors, including immature economic structures, national policies
restricting investments by foreigners and different legal systems.

Settlement and Clearance Risk: the risks associated with the different
clearance and settlement procedures that are utilized in certain foreign
markets. In certain foreign markets, settlements may be unable to keep pace
with the volume of securities transactions, which may cause delays. If there is
a settlement delay, a Portfolio's assets may be uninvested and not earning
returns. A Portfolio also may miss investment opportunities or be unable to
dispose of a security because of these delays.

Year 2000 Risk

Like other mutual funds, as well as other financial and business
organizations around the

20
<PAGE>

world, the Fund could be adversely affected if the computer systems used by the
Adviser, the Sub-Advisers and other service providers, in performing their
administrative functions do not properly process and calculate date-related
information and data as of and after January 1, 2000. This is commonly known as
the "Year 2000 issue." The Adviser and Sub-Advisers are taking steps that they
believe are reasonably designed to address the Year 2000 issue with respect to
computer systems that they use and to obtain reasonable assurances that
comparable steps are being taken by the Fund's other major service providers.
For example, the Fund's portfolio and operational areas could be impacted,
including securities trade processing, securities pricing, reporting, custody
functions and others. The Fund could experience difficulties in effecting
transactions if any of its foreign subcustodians, or foreign broker/dealers or
foreign markets are not ready for Year 2000.

When evaluating current and potential portfolio positions, Year 2000 is one
of the factors that a Portfolio's Sub-Adviser may consider. Sub-Advisers may
rely upon public filings and other statements made by companies regarding their
Year 2000 readiness. Issuers in countries outside of the U.S., particularly in
emerging markets, may be more susceptible to Year 2000 problems and may not be
required to make the same level of disclosure regarding Year 2000 readiness as
is required in the U.S. The Sub-Advisers, of course, cannot audit any company
or their major suppliers to verify their Year 2000 readiness. If a company in
which any Portfolio is invested is adversely affected by Year 2000 problems, it
is likely that the price of its security will also be adversely affected. A
decrease in the value of one or more of a Portfolio's holdings will have a
similar impact on the Portfolio's performance.

The Adviser and Sub-Advisers are taking steps that they believe are
reasonably designed to address the Year 2000 issue with respect to computer
systems that they use and to obtain reasonable assurances that comparable steps
are being taken by the Fund's other major service providers. At this time,
however, there can be no assurance that these steps will be sufficient to avoid
any adverse impact to the Fund.

Managing Investment Risks

In pursuing their investment objectives, each Portfolio assumes investment
risk. The Portfolios try to limit their investment risk by diversifying their
investment portfolios across different industry sectors.

Defensive Investment Strategy

Under normal market conditions, none of the Portfolios intends to have a
substantial portion of its assets invested in cash or money market instruments,
except the Money Market Portfolio. When a Sub-Adviser determines that adverse
market conditions exist, a Portfolio may adopt a temporary defensive position
and invest entirely in cash and money market instruments. When a Portfolio is
invested in this manner, it may not be able to achieve its investment
objective.

Derivatives

Certain Portfolios may use various investment strategies

. to hedge market risks

. to manage the effective maturity or duration of fixed income securities
or

. to enhance potential gain

The strategies which may be used by all the Portfolios include, but are not
limited to, financial futures contracts, options on financial futures, options
on broad market indices and options on securities.

Certain Portfolios may purchase and sell foreign currencies on a spot basis
in connection with the settlement of transactions traded in such foreign
currencies. These Portfolios may also hedge the risks associated with their
investments by entering into forward foreign currency contracts and foreign
currency futures and options contracts, generally in anticipation of making
investments in companies whose securities are denominated in those currencies.
These investments are often referred to as derivatives.

21
<PAGE>

MANAGEMENT OF THE FUND

The management and affairs of the Fund are supervised by the Board of
Directors under the laws of the State of Maryland. The Directors have approved
agreements under which, as described below, certain companies provide essential
management services to the Fund.

INVESTMENT ADVISER

Investors Mark Advisors, LLC (the "Adviser"), 700 Karnes Boulevard, Kansas
City, Missouri 64108, serves as the investment adviser of each Portfolio and,
as such, provides each Portfolio with professional investment supervision and
management. The Adviser, a Delaware limited liability company, is a wholly-
owned subsidiary of Jones & Babson, Inc. ("Jones & Babson"). Jones & Babson is
a wholly-owned subsidiary of Business Men's Assurance Company of America
("BMA"). Assicurazioni Generali S.p.A., an insurance organization founded in
1831 based in Trieste, Italy, is the ultimate parent of BMA.

The Adviser, formed in 1997, has been the investment adviser for each
Portfolio since its inception.

The Adviser oversees each Portfolio's day-to-day operations and supervises
the purchase and sale of Portfolio investments. The Adviser employs Sub-
Advisers to make investment decisions for each of the Portfolios.

The Adviser serves in its capacity as investment adviser through an
investment advisory agreement it enters into with the Fund. The Investment
Advisory Agreement provides for the Fund to pay all expenses not specifically
assumed by the Adviser. Examples of expenses paid by the Fund include custodial
fees, and the fees of outside legal and auditing firms. The Fund allocates
these expenses to each Portfolio in a manner approved by the Directors. The
Investment Advisory Agreement is renewed each year by the Directors.

Personnel of Jones & Babson provide the Adviser with experienced
professional fund administration and portfolio accounting under a services
agreement between the Adviser and Jones & Babson. As compensation, Jones &
Babson receives an annual fee equal to 0.06% of the average daily net assets of
the Fund. Jones & Babson, founded in 1960, serves as the investment manager of
numerous other mutual funds.

Advisory Fees

Each Portfolio pays the Adviser a fee based on its average daily net asset
value. A Portfolio's net asset value is the total value of the Portfolio's
assets minus any money it owes for operating expenses plus any other
liabilities, such as the fee paid to its Custodian to safeguard the Portfolio's
investments.

During 1998, the first full fiscal year of the Portfolios, each of the
Portfolios paid the Adviser the following percentage of its average daily net
assets as compensation for its services as investment adviser to the
Portfolios:

<TABLE>
<CAPTION>
Advisory
Portfolio Fee Paid
- --------- --------
<S> <C>
Intermediate Fixed Income.............................................. .60%
Mid Cap Equity......................................................... .80%
Money Market........................................................... .40%
Global Fixed Income.................................................... .75%
Small Cap Equity....................................................... .95%
Large Cap Growth....................................................... .80%
Large Cap Value........................................................ .80%
Growth & Income........................................................ .80%
Balanced............................................................... .80%
</TABLE>

As full compensation for its services under the Investment Advisory
Agreement, the Fund pays Adviser a monthly fee at the annual rates shown in the
table below based on the average daily net assets of each Portfolio.

<TABLE>
<CAPTION>
Advisory Fee
(Annual Rate Based
on Average Daily
Net Assets of Each
Portfolio Portfolio)
- --------- ------------------
<S> <C>
Intermediate Fixed Income.................................... .60%
Mid Cap Equity............................................... .80%
Money Market................................................. .40%
Global Fixed Income.......................................... .75%
Small Cap Equity............................................. .95%
Large Cap Growth............................................. .80%
Large Cap Value.............................................. .80%
Growth & Income.............................................. .80%
Balanced..................................................... .80%
</TABLE>

22
<PAGE>

The Adviser may enter into administrative services agreements with insurance
companies pursuant to which the Adviser will compensate such companies for
administrative responsibilities relating to the Fund which are performed by
such insurance companies.

The Adviser has agreed that it will, if necessary, pay the expenses of each
Portfolio of the Fund until April 30, 2000 to the extent that expenses of a
Portfolio exceed the following percentages:

<TABLE>
<CAPTION>
Expense
Portfolio Cap
- --------- -------
<S> <C>
Mid Cap Equity.......................................................... .90%
Large Cap Growth........................................................ .90%
Large Cap Value......................................................... .90%
Growth & Income......................................................... .90%
Balanced................................................................ .90%
Intermediate Fixed Income............................................... .80%
Money Market............................................................ .50%
Global Fixed Income..................................................... 1.00%
Small Cap Equity........................................................ 1.05%
</TABLE>

This expense limitation may be modified or terminated in the discretion of
the Adviser at any time without notice to shareholders after April 30, 2000.
The Adviser may be reimbursed by the Portfolios for such expenses at a later
date. This may be done only if such reimbursement does not cause a Portfolio's
expenses to exceed the expense cap percentage shown above.

During fiscal 1998, total expenses, including investment advisory fees, of
each of the Portfolios amounted to the following percentages of average net
assets, reflecting an expense limitation in effect during the period:

<TABLE>
<S> <C>
Intermediate Fixed Income................................................. .80%
Mid Cap Equity............................................................ .90%
Money Market.............................................................. .50%
Global Fixed Income....................................................... 1.00%
Small Cap Equity.......................................................... 1.05%
Large Cap Growth.......................................................... .90%
Large Cap Value........................................................... .90%
Growth & Income........................................................... .90%
Balanced.................................................................. .90%
</TABLE>

The expense limitation currently in effect is described above.

SUB-ADVISERS

For all of the Portfolios, the Adviser works with Sub-Advisers, financial
service companies that specialize in certain types of investing. However, the
Adviser still retains ultimate responsibility for managing the Portfolios. Each
Sub-Adviser's role is to make investment decisions for the Portfolios according
to each Portfolio's investment objectives and restrictions.

The following organizations act as Sub-Advisers to the Portfolios:

Standish, Ayer & Wood, Inc. ("Standish"), One Financial Center, Boston,
Massachusetts 02111, is the Sub-Adviser for the Intermediate Fixed Income, Mid
Cap Equity and Money Market Portfolios of the Fund. Standish is a Massachusetts
corporation incorporated in 1933 and is a registered investment adviser under
the Investment Advisers Act of 1940. Standish provides fully discretionary
management services and counseling and advisory services to a broad range of
clients throughout the United States and abroad. As of December 31, 1998,
Standish managed approximately $46 billion of assets.

The Intermediate Fixed Income Portfolio manager is Caleb F. Aldrich. Mr.
Aldrich also manages the Standish Fixed Income Fund. During the past six years,
Mr. Aldrich has served as a Managing Director and Vice President of Standish.

The Mid Cap Equity Portfolio managers are Ralph S. Tate and David C.
Cameron. Mr. Tate and Mr. Cameron also manage the Equity Portfolio of the
Standish, Ayer & Wood Master Portfolio. During the past five years, Mr. Tate
has served as a Managing Director of Standish (since 1995) and President of
Standish International Management Company, L.P. ("SIMCO") (since 1996) and both
Messrs. Tate and Cameron have served as a Director and Vice President of
Standish and a Director of SIMCO (since 1995 for Mr. Cameron).

The Money Market Portfolio manager is Jennifer A. Pline. Ms. Pline also
manages the Standish Short-Term Asset Reserve Fund. During the past six years,
Ms. Pline has served as a Vice President of Standish.

23
<PAGE>

SIMCO, One Financial Center, Boston, Massachusetts 02111, is the Sub-Adviser
for the Global Fixed Income Portfolio of the Fund. SIMCO is a Delaware limited
partnership organized in 1991 and is a registered investment adviser under the
Investment Advisers Act of 1940. The general partner of the Adviser is Standish
which holds a 99.98% partnership interest. The limited partners, who each hold
a 0.01% interest in SIMCO, are Walter M. Cabot, Sr., a Senior Adviser to SIMCO
and Standish, and D. Barr Clayson, Chairman and Vice President of the Board of
SIMCO and Director and Vice President of Standish. Ralph S. Tate, Managing
Director of Standish, is President and a Director of SIMCO. Richard S. Wood,
Vice President and a Managing Director of Standish, is the Executive Vice
President of SIMCO. Standish and SIMCO provide fully discretionary management
services and counseling and advisory services to a broad range of clients
throughout the United States and abroad.

The Global Fixed Income Portfolio manager is Richard S. Wood. Mr. Wood also
manages the Standish International Fixed Income Fund and the Standish Global
Fixed Income Portfolio. During the past six years, Mr. Wood has served as a
Vice President and a Managing Director (since 1995) of Standish and Executive
Vice President of SIMCO.

Stein Roe & Farnham Incorporated ("Stein Roe"), One South Wacker Drive,
Chicago, Illinois 60606, is the Sub-Adviser for the Large Cap Growth and Small
Cap Equity Portfolios of the Fund. Stein Roe is registered as an investment
adviser under the Investment Advisers Act of 1940. Stein Roe was organized in
1986 to succeed to the business of Stein Roe & Farnham, a partnership that had
advised and managed mutual funds since 1949. Stein Roe is a wholly-owned
subsidiary of Liberty Financial Companies, Inc. ("Liberty Financial"), which in
turn is a majority owned indirect subsidiary of Liberty Mutual Insurance
Company.

The Large Cap Growth Portfolio manager is Erik P. Gustafson. Mr. Gustafson
also manages the Growth Stock Portfolio of SR&F Base Trust and had managed
Stein Roe Growth Stock Fund since 1994. Mr. Gustafson is a senior vice
president and senior portfolio manager with Stein Roe which he joined in 1992.
From 1989 to 1992 he was an attorney with Fowler, White, Burnett, Hurley,
Banick & Strickroot. He holds a B.A. from the University of Virginia (1985) and
M.B.A. and J.D. degrees from Florida State University (1989). Mr. Gustafson was
responsible for managing $2.1 billion in mutual fund net assets at December 31,
1998. David P. Brady is associate portfolio manager. Mr. Brady is a vice
president of Stein Roe, which he joined in 1993, and was an equity investment
analyst with State Farm Mutual Automobile Insurance Company from 1986 to 1993.

The Small Cap Equity Portfolio managers are William M. Garrison and Steven
M. Salopek. Mr. Garrison is a vice president of Stein Roe, which he joined in
1989. He has been an associate portfolio manager of the Stein Roe Balanced Fund
since 1995 and has been an equity research analyst with Stein Roe since 1993.
Mr. Salopek is also a vice president of Stein Roe, which he joined in 1996 as
an analyst. Prior to joining Stein Roe, Mr. Salopek was an analyst with Banc
One Investment Advisors from 1990 to 1996.

David L. Babson & Co. Inc. ("Babson"), One Memorial Drive, Cambridge,
Massachusetts 02142-1300, is the Sub-Adviser for the Large Cap Value Portfolio
of the Fund. Babson, a registered investment adviser under the Investment
Advisers Act of 1940, is an indirect subsidiary of Massachusetts Mutual Life
Insurance Company headquartered in Springfield, Massachusetts. Massachusetts
Mutual Life Insurance Company is an insurance organization founded in 1851 and
is considered to be a controlling person of Babson under the 1940 Act.

The Large Cap Value Portfolio manager is Roland W. Whitridge. Mr. Whitridge
also manages the Babson Value Fund and has done so since its inception in 1984.
Mr. Whitridge, a Chartered Financial Analyst, joined Babson in 1974, and has
over 30 years of investment management experience.

Lord, Abbett & Co. ("Lord Abbett"), The General Motors Building, 767 Fifth
Avenue, New York, New York 10153-0203, is the Sub-Adviser for the Growth &
Income Portfolio of the Fund. Lord Abbett, a registered investment adviser
under the Investment Advisers Act of 1940, has been an investment manager for
nearly 70 years. As of

24
<PAGE>

December 31, 1998, Lord Abbett managed approximately $30 billion in a family of
mutual funds and other advisory accounts.

The Growth & Income Portfolio manager is W. Thomas Hudson, Jr. Mr. Hudson
has been employed by Lord Abbett since 1982. Mr. Hudson has been a portfolio
manager since 1989 and became a Partner of Lord Abbett in 1997.

Kornitzer Capital Management, Inc. ("Kornitzer"), 7715 Shawnee Mission
Parkway, Shawnee Mission, Kansas 66202, is the Sub-Adviser for the Balanced
Portfolio of the Fund. Kornitzer, a registered investment adviser under the
Investment Advisers Act of 1940, is an independent investment counseling firm
founded in 1989. It serves a broad variety of individual, corporate and other
institutional clients by maintaining an extensive research and analytical
staff. Kornitzer is a closely held corporation and has limitations in the
ownership of its stock designed to maintain control in those who are active in
management. Owners of 5% or more of Kornitzer are John C. Kornitzer, Kent W.
Gasaway, Willard R. Lynch, Thomas W. Laming and Susan Stack. Kornitzer manages
over $1.3 billion including the Buffalo family of mutual funds.

The Balanced Portfolio utilizes a team approach to both research and
portfolio management.

Sub-Advisory Fees

Under the Sub-Advisory Agreements, the Adviser has agreed to pay each Sub-
Adviser a fee for its services out of the fees the Adviser receives from the
Portfolios. During 1998, the first full fiscal year of the Portfolios, the
Adviser paid the Sub-Advisers fees based on the following percentages of each
Portfolio's average daily net assets:
<TABLE>
<CAPTION>
Sub-
Advisory
Portfolio Fee Paid
- --------- --------
<S> <C>
Intermediate Fixed Income.............................................. .20%
Mid Cap Equity......................................................... .35%
Money Market........................................................... .15%
Global Fixed Income.................................................... .35%
Small Cap Equity....................................................... .55%
</TABLE>

<TABLE>
<CAPTION>
Sub-
Advisory
Portfolio Fee Paid
- --------- --------
<S> <C>
Large Cap Growth....................................................... .45%
Large Cap Value........................................................ .45%
Growth & Income........................................................ .45%
Balanced............................................................... .40%
</TABLE>

Under the terms of each Sub-Advisory Agreement, the Adviser is obligated to
pay each Sub-Adviser, as full compensation for services rendered under the Sub-
Advisory Agreement with respect to each Portfolio, monthly fees at the
following annual rates based on the average daily net assets of each Portfolio:

<TABLE>
<CAPTION>
Portfolio Sub-Advisory Fee
--------- ----------------
<S> <C>
Intermediate Fixed
Income Portfolio.... .20%
Mid Cap Equity
Portfolio........... .35%
Money Market
Portfolio........... .15%
Global Fixed Income
Portfolio........... .35%
Small Cap Equity
Portfolio........... .55%
Large Cap Growth
Portfolio........... .45%
Large Cap Value
Portfolio........... .45% of first $40 million .40% of average daily net
assets over and above $40 million
Growth & Income
Portfolio........... .45% of first $40 million .40% of average daily net
assets over and above $40 million
Balanced Portfolio... .40% of first $40 million .35% of average daily net
assets over and above $40 million
</TABLE>

Placing Orders for Shares

The prospectus for your Contract describes the procedures for investing your
purchase payments or premiums in shares of the Portfolios. You may obtain a
copy of that prospectus, free of charge, from the life insurance company or
from the person

25
<PAGE>

who sold you the Contract. The Portfolios do not charge any fees for selling
(redeeming) shares.

Payment for Redemptions

Payment for orders to sell (redeem) shares will be made within seven days
after the Fund receives the order.

Suspension or Rejection of Purchases and Redemptions

The Portfolios may suspend the offer of shares, or reject any specific
request to purchase shares from a Portfolio at any time. The Portfolios may
suspend their obligation to redeem shares or postpone payment for redemptions
when the New York Stock Exchange is closed or when trading is restricted on the
Exchange for any reason, including emergency circumstances established by the
Securities and Exchange Commission.

Right to Restrict Transfers

Neither the Fund nor the Separate Accounts are designed for professional
market timing organizations, other entities, or individuals using programmed,
large and/or frequent transfers. The Separate Accounts, in coordination with
the Fund, reserve the right to temporarily or permanently refuse exchange
requests if, in the Adviser's judgment, a Portfolio would be unable to invest
effectively in accordance with its investment objectives and policies, or would
otherwise potentially be adversely affected. In particular, a pattern of
exchanges that coincides with a "market timing" strategy may be disruptive to a
Portfolio and therefore may be refused. Investors should consult the Separate
Account prospectus that accompanies this Fund Prospectus for information on
other specific limitations on the transfer privilege.

Net Asset Value

The value or price of each share of each Portfolio (net asset value per
share) is calculated at the close of business, usually 4:00 p.m., of the New
York Stock Exchange, every day that the New York Stock Exchange is open for
business. The value of all assets held by each Portfolio at the end of the day,
is determined by subtracting all liabilities and dividing the total by the
total number of shares outstanding. This value is provided to the life
insurance company, which uses it to calculate the value of your interest in
your Contract. It is also the price at which shares will be bought or sold in
the Portfolios for orders they received that day.

The value of the net assets of the Portfolio is determined by obtaining
market quotations, where available, usually from pricing services. Short-term
debt instruments maturing in less than 60 days are valued at amortized cost.
Securities for which market quotations are not available are valued at their
fair value as determined, in good faith, by the Adviser based on policies
adopted by the Board of Directors.

Some of the Portfolios trade securities on foreign markets or in foreign
currencies. Those markets are open at different times and occasionally on
different days than securities traded on the New York Stock Exchange. Exchange
rates for foreign currencies are usually determined at 1:00 p.m. rather than
4:00 p.m. These factors may mean that the value of the securities held by these
Portfolios may change after the close of business of the New York Stock
Exchange.

Dividends and Distributions

Each Portfolio will declare and distribute dividends from net ordinary
income and will distribute its net realized capital gains, if any, at least
annually. The life insurance companies generally direct that all dividends and
distributions of the Portfolios be reinvested in the Portfolios under the terms
of the Contracts.

Tax Matters

The Fund intends to qualify as a regulated investment company under the tax
law and, as such distributes substantially all of each Portfolio's ordinary net
income and capital gains each calendar year as a dividend to the Separate
Accounts funding the Contracts to avoid an excise tax on certain undistributed
amounts. The Fund expects to pay no income tax. Dividends are reinvested in
additional full and partial shares of the Portfolios as of the dividend payment
date.

The Fund and its Portfolios intend to comply with special diversification
and other tax law requirements that apply to investments under the Contracts.
Under these rules, shares of the Fund will generally only be available through
the purchase of

26
<PAGE>

a variable life insurance or annuity contract. Income tax consequences to
Contract owners who allocate purchase payments or premiums to Fund shares are
discussed in the prospectus for the Contracts that accompanies this Prospectus.

Additional Information

This Prospectus sets forth concisely the information about the Fund and each
Portfolio that you should know before you invest money in a Portfolio. Please
read this Prospectus carefully and keep it for future reference. The Fund has
prepared and filed with the Securities and Exchange Commission a Statement of
Additional Information that contains more information about the Fund and the
Portfolios. You may obtain a free copy of the Statement of Additional
Information from your registered representative who offers you the Contract.
You may also obtain copies by calling the Fund at 1-800-262-8131 or by writing
to the Fund at the following address: BMA Service Center, 9735 Landmark Parkway
Drive, St. Louis, Missouri 63127-1690.

Mixed and Shared Funding

The Portfolios may sell their shares to insurance companies as investments
under both variable annuity contracts and variable life insurance policies. We
call this mixed funding. The Portfolios may also sell shares to more than one
insurance company. We call this shared funding. Under certain circumstances,
there could be conflicts between the interests of the different insurance
companies, or conflicts between the different kinds of insurance products using
the Portfolios. If conflicts arise, the insurance company with the conflict
might be forced to redeem all of its interest in the Portfolio. If the
Portfolio is required to sell a large percentage of its assets to pay for the
redemption, it may be forced to sell the assets at a discounted price. The
Board of Directors will monitor the interests of the insurance company
shareholders for conflicts to attempt to avoid problems.

Legal Proceedings

Neither the Fund nor any Portfolio is involved in any material legal
proceedings. Neither the Adviser nor any Sub-Adviser is involved in any legal
proceedings that if decided against any such party would materially affect the
ability of the party to carry out its duties to the Portfolios. None of such
persons is aware of any litigation that has been threatened.

PERFORMANCE OF THE PORTFOLIOS
Performance information for the Portfolios of the Fund, including a bar
chart and average annual total return information since the inception of the
Portfolios, is contained in this Prospectus under the heading "Performance
Information."

COMPARABLE PERFORMANCE

Public Fund Performance

Certain Portfolios of the Fund have the same investment objectives and
follow substantially the same investment strategies as certain mutual funds
whose shares are sold to the public and managed by the Sub-Advisers.

The historical performance of each of these public mutual funds is shown
below. This performance data should not be considered as an indication of
future performance of the Portfolios. The public mutual fund performance
figures shown below:

. reflect the deduction of the historical fees and expenses (including any
applicable sales loads) paid by the public mutual funds and not those to
be paid by the Portfolios. The total anticipated expenses of the
Intermediate Fixed Income, Mid Cap Equity and Global Fixed Income
Portfolios are materially higher than those

27
<PAGE>

of the corresponding public funds. Higher expenses will reduce
performance.

. do not reflect Contract fees or charges imposed by the insurance
companies. Investors should refer to the Separate Account prospectus for
information describing the Contract fees and charges. These fees and
charges will have a detrimental effect on Portfolio performance.

The Portfolios and their corresponding public mutual fund series are
expected to hold similar securities. The Portfolios have substantially similar
investment objectives, policies and strategies as their corresponding public
mutual fund series. However, their investment results are expected to differ
for the following reasons:

. differences in asset size and cash flow resulting from purchases and
redemptions of Portfolio shares may result in different security
selections

. differences in the relative weightings of securities

. differences in the price paid for particular portfolio holdings

. differences relating to certain tax matters

The following table shows average annualized total returns for each
comparable public mutual fund for their fiscal 1998 years (ended December 31,
1998).

<TABLE>
<CAPTION>
10 Years
Intermediate Fixed or Since
Income Portfolio 1 Year* 5 Years* Inception*
- ------------------ ------- -------- ----------
<S> <C> <C> <C>
Corresponding Series of the Public Fund
Standish, Ayer & Wood Investment Trust--Standish
Fixed Income Fund................................. 5.25% 6.52% 8.75%

<CAPTION>
10 Years
or Since
Mid Cap Equity Portfolio 1 Year* 5 Years* Inception*
- ------------------------ ------- -------- ----------
<S> <C> <C> <C>
Corresponding Series of the Public Fund
Standish, Ayer & Wood Investment Trust--Standish
Equity Fund....................................... 7.21% 19.65% 20.10%
</TABLE>

<TABLE>
<CAPTION>
10 Years
or Since
Global Fixed Income Portfolio 1 Year* 5 Years* Inception*
- ----------------------------- ------- -------- ----------
<S> <C> <C> <C>
Corresponding Series of the Public Fund
Standish, Ayer & Wood Investment Trust--Standish
Global Fixed Income Fund.......................... 6.98% 8.19% 8.19%

<CAPTION>
10 Years
or Since
Large Cap Growth Portfolio 1 Year* 5 Years* Inception*
- -------------------------- ------- -------- ----------
<S> <C> <C> <C>
Corresponding Series of the Public Fund
Stein Roe Investment Trust--Stein Roe Growth Stock
Fund.............................................. 25.54% 21.13% 19.21%

<CAPTION>
10 Years
or Since
Large Cap Value Portfolio 1 Year* 5 Years* Inception*
- ------------------------- ------- -------- ----------
<S> <C> <C> <C>
Corresponding Public Fund
Babson Value Fund, Inc............................. 6.07% 17.33% 15.59%

<CAPTION>
10 Years
or Since
Balanced Portfolio 1 Year* 5 Years* Inception*
- ------------------ ------- -------- ----------
<S> <C> <C> <C>
Corresponding Public Fund
Buffalo Balanced Fund, Inc......................... -2.78% N/A 10.61%

<CAPTION>
10 Years
or Since
Money Market Portfolio 1 Year* 5 Years* Inception*
- ---------------------- ------- -------- ----------
<S> <C> <C> <C>
Corresponding Series of the Public Fund
Standish, Ayer & Wood Investment Trust--Standish
Short-Term Asset Reserve Fund..................... 5.75% 5.47% 6.45%

<CAPTION>
10 Years
or Since
Growth & Income Portfolio 1 Year* 5 Years* Inception*
- ------------------------- ------- -------- ----------
<S> <C> <C> <C>
Corresponding Public Fund
Lord Abbett Affiliated Fund (Class A Shares)....... 14.4% 18.7% 15.7%
</TABLE>
- --------
* Results shown are through the year ended December 31, 1998 for each public
fund shown. The inception dates for each public fund with less than 10 years
of performance history are: March 30, 1989 for the Standish Fixed Income
Fund, January 3, 1991 for the Standish Equity Fund, January 1, 1994 for the
Standish Global Fixed Income Fund, August 12, 1994 for the Buffalo Balanced
Fund, Inc. and January 3, 1989 for the Standish Short-Term Asset Reserve
Fund.

28
<PAGE>

FINANCIAL HIGHLIGHTS

The Financial Highlights table is intended to help you understand each
Portfolio's financial performance for the period shown. Certain information
reflects financial results for a single Portfolio share. The total return
figures in the table represent the rate that an investor would have earned on
an investment in the Fund (assuming reinvestment of all dividends and
distributions). Your total return would be less due to the fees and charges
under your variable annuity contract or variable life insurance policy. Ernst &
Young LLP has audited this information and its report and the Fund's financial
statements, are included in the Statement of Additional Information, which is
available upon request.

<TABLE>
<CAPTION>
LARGE CAP VALUE
------------------------
For the
Period from
For the 11/13/97
Condensed Data for a Share of Capital Stock Outstanding Year Ended (Commencement)
Throughout Each Period 12/31/98 to 12/31/97
- ------------------------------------------------------- ---------- -------------
<S> <C> <C>
Net asset value, beginning of period...................... $ 9.69 $ 10.00
-------- --------
Income from investment operations:
Net investment income................................... 0.1285 0.0291
Net gains (losses) on securities (both realized and
unrealized)............................................ 0.3515 (0.3141)
-------- --------
Total income (loss) from investment operations........ 0.4800 (0.2850)
-------- --------
Less distributions:
Dividends from net investment income.................... (0.1400) (0.0250)
Distributions from capital gains........................ (0.1500) --
-------- --------
Total distributions................................... (0.2900) (0.0250)
-------- --------
Net asset value, end of period...................... $ 9.88 $ 9.69
======== ========
Total return.............................................. 5.03% (2.86)%

Ratios/Supplemental Data
Net assets, end of period (in millions)................. $ 3.2 $ 2.4
Ratio of expenses to average net assets................. 0.90% 0.90%
Ratio of net investment income (loss) to average net
assets................................................. 1.44% 2.21%
Ratio of expenses to average net assets before voluntary
expense reimbursement.................................. 1.55% 2.78%
Ratio of net investment income (loss) to average net
assets before voluntary expense reimbursement.......... 0.79% 0.33%
Portfolio turnover rate................................... 18% --
</TABLE>

29
<PAGE>

<TABLE>
<CAPTION>
LARGE CAP GROWTH MID CAP EQUITY SMALL CAP EQUITY
-------------------------- -------------------------- -------------------------
For the
For the Period For the Period Period from
For the from 11/13/97 For the from 11/13/97 For the 11/13/97
Year Ended (Commencement) Year Ended (Commencement) Year Ended (Commencement)
12/31/98 to 12/31/97 12/31/98 to 12/31/97 12/31/98 to 12/31/97
---------- -------------- ---------- -------------- ---------- -------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period.... $ 10.71 $ 10.00 $ 10.49 $ 10.00 $ 9.72 $ 10.00
-------- ------- -------- -------- -------- --------
Income from investment
operations:
Net investment income. (0.0027) 0.0046 0.0385 0.0185 (0.0443) 0.0037
Net gains (losses) on
securities (both
realized and
unrealized).......... 2.6104 0.7054 0.6915 0.4882 (1.5322) (0.2837)
-------- ------- -------- -------- -------- --------
Total income (loss)
from investment
operations......... 2.6077 0.7100 0.7300 0.5067 (1.5765) (0.2800)
-------- ------- -------- -------- -------- --------
Less distributions:
Dividends from net
investment income.... (0.0041) -- (0.0300) (0.0167) (0.0035) --
Distributions from
capital gains........ (0.0036) -- (0.0800) -- -- --
-------- ------- -------- -------- -------- --------
Total distributions. (0.0077) -- (0.1100) (0.0167) (0.0035) --
-------- ------- -------- -------- -------- --------
Net asset value,
end of period.... $ 13.31 $ 10.71 $ 11.11 $ 10.49 $ 8.14 $ 9.72
======== ======= ======== ======== ======== ========
Total return............ 24.35 % 7.10 % 7.03 % 5.07 % (16.22)% (2.80)%

Ratios/Supplemental Data
Net assets, end of
period (in millions)... $ 3.0 $ 2.2 $ 2.5 $ 2.1 $ 1.8 $ 2.0
Ratio of expenses to
average net assets..... 0.90 % 0.90 % 0.90 % 0.90 % 1.05 % 1.05 %
Ratio of net investment
income (loss) to
average net assets..... (0.02)% 0.33 % 0.38 % 1.34 % (0.52)% 0.29 %
Ratio of expenses to
average net assets
before voluntary
expense reimbursement.. 1.66 % 3.19 % 2.38 % 3.40 % 2.29 % 3.49 %
Ratio of net investment
income (loss) to
average net assets
before voluntary
expense reimbursement.. (0.78)% (1.96)% (1.10)% (1.16)% (1.76)% (2.15)%
Portfolio turnover rate. 49 % -- 166 % 13 % 132 % 8 %
</TABLE>

30
<PAGE>

<TABLE>
<CAPTION>
GROWTH & INCOME
-------------------------
For the
Period From
For the 11/13/97
Condensed Data for a Share of Capital Stock Outstanding Year Ended (Commencement)
Throughout Each Period 12/31/98 to 12/31/97
- ------------------------------------------------------- ---------- -------------
<S> <C> <C>
Net asset value, beginning of period.................... $ 10.41 $ 10.00
-------- --------
Income from investment operations:
Net investment income................................. 0.1304 0.0204
Net gains (losses) on securities (both realized and
unrealized).......................................... 1.1176 0.4046
-------- --------
Total income (loss) from investment operations...... 1.2480 0.4250
-------- --------
Less distributions:
Dividends from net investment income.................. (0.1280) (0.0150)
Distributions from capital gains...................... -- --
Tax return of capital................................. -- --
-------- --------
Total distributions................................. (0.1280) (0.0150)
-------- --------
Net asset value, end of period.................... $ 11.53 $ 10.41
======== ========
Total return............................................ 12.03 % 4.25 %

Ratios/Supplemental Data
Net assets, end of period (in millions)................. $ 2.8 $ 2.1
Ratio of expenses to average net assets................. 0.90 % 0.90 %
Ratio of net investment income (loss) to average net
assets................................................. 1.23 % 1.50 %
Ratio of expenses to average net assets before voluntary
expense reimbursement.................................. 1.75 % 3.19 %
Ratio of net investment income (loss) to average net
assets before voluntary expense reimbursement.......... 0.38 % (0.79)%
Portfolio turnover rate................................. 76 % --
</TABLE>

31
<PAGE>

<TABLE>
<CAPTION>
INTERMEDIATE
BALANCED FIXED INCOME GLOBAL FIXED INCOME
-------------------------- -------------------------- --------------------------
For the Period For the Period For the Period
For the From 11/13/97 For the From 11/13/97 For the From 11/13/97
Year Ended (Commencement) Year Ended (Commencement) Year Ended (Commencement)
12/31/98 to 12/31/97 12/31/98 to 12/31/97 12/31/98 to 12/31/97
---------- -------------- ---------- -------------- ---------- --------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period.... $ 9.96 $ 10.00 $ 10.06 $ 10.00 $ 10.09 $ 10.00
-------- -------- -------- -------- -------- --------
Income from investment
operations:
Net investment income. 0.4694 0.0627 0.5681 0.0728 0.8423 0.0887
Net gains (losses) on
securities (both
realized and
unrealized).......... (1.0794) (0.0447) (0.0481) 0.0542 (0.1123) 0.0813
-------- -------- -------- -------- -------- --------
Total income (loss)
from investment
operations......... (0.6100) 0.0180 0.5200 0.1270 0.7300 0.1700
-------- -------- -------- -------- -------- --------
Less distributions:
Dividends from net
investment income.... (0.4700) (0.0580) (0.5600) (0.0670) (0.5423) (0.0800)
Distributions from
capital gains........ -- -- (0.0700) -- (0.0600) --
Tax return of capital. -- -- -- -- (0.3000) --
-------- -------- -------- -------- -------- --------
Total distributions. (0.4700) (0.0580) (0.6300) (0.0670) (0.9000) (0.0800)
-------- -------- -------- -------- -------- --------
Net asset value, end of
period................. $ 8.88 $ 9.96 $ 9.95 $ 10.06 $ 9.92 $ 10.09
======== ======== ======== ======== ======== ========
Total return............ (6.03)% 0.18 % 5.16 % 1.27 % 7.23 % 1.70 %

Ratios/Supplemental Data
Net assets, end of
period (in millions)... $ 2.6 $ 2.5 $ 2.4 $ 2.0 $ 5.5 $ 5.1
Ratio of expenses to
average net assets..... 0.90 % 0.90 % 0.80 % 0.80 % 1.00 % 1.00 %
Ratio of net investment
income (loss) to
average net assets..... 5.00 % 4.78 % 5.75 % 5.40 % 5.40 % 5.29 %
Ratio of expenses to
average net assets
before voluntary
expense reimbursement.. 1.59 % 2.78 % 1.97 % 3.09 % 1.47 % 2.28 %
Ratio of net investment
income (loss) to
average net assets
before voluntary
expense reimbursement.. 4.31 % 2.90 % 4.58 % 3.11 % 4.93 % 4.01 %
Portfolio turnover rate. 73 % -- 132 % 39 % 185 % 25 %
</TABLE>

32
<PAGE>

<TABLE>
<CAPTION>
MONEY MARKET
--------------------------
For the Period
For the From 11/13/97
Year Ended (Commencement)
12/31/98 to 12/31/97
---------- --------------
<S> <C> <C>
Net asset value, beginning of period............... $ 1.00 $ 1.00
-------- --------
Income from investment operations:
Net investment income............................ 0.0494 0.0071
Net gains (losses) on securities (both realized
and unrealized)................................. -- --
-------- --------
Total income (loss) from investment operations. 0.0494 0.0071
-------- --------
Less distributions:
Dividends from net investment income............. (0.0494) (0.0071)
Distributions from capital gains................. -- --
Tax return of capital............................ -- --
-------- --------
Total distributions............................ (0.0494) (0.0071)
-------- --------
Net asset value, end of period............... $ 1.00 $ 1.00
======== ========
Total return....................................... 5.05 % 0.71 %

Ratios/Supplemental Data
Net assets, end of period (in millions)............ $ 1.3 $ 1.0
Ratio of expenses to average net assets............ 0.50 % 0.50 %
Ratio of net investment income (loss) to average
net assets........................................ 4.93 % 5.26 %
Ratio of expenses to average net assets before
voluntary expense reimbursement................... 2.89 % 4.90 %
Ratio of net investment income (loss) to average
net assets before voluntary expense reimbursement. 2.54 % 0.86 %
Portfolio turnover rate............................ -- --
</TABLE>

33
<PAGE>

INTERESTED IN LEARNING MORE?

The Statement of Additional Information incorporated by reference into this
prospectus contains additional information about the Fund's operations.

Further information about the Fund's investments is available in the Fund's
annual and semi-annual reports to shareholders. The Fund's annual report
discusses market conditions and investment strategies that significantly
affected the Fund's performance results during its last fiscal year.

The Fund can provide you with a free copy of these materials or other
information about the Fund. You may reach the Fund by calling 1-888-262-8131 or
by writing to the Fund at BMA Service Center, 9735 Landmark Parkway Drive, St.
Louis, Missouri 63127-1690.

The Securities and Exchange Commission also maintains copies of these
documents:

To view information on-line: Access the SEC's web site at
http://www.sec.gov.

To review a paper filing or to request that documents be mailed to you,
contact:

SEC Public Reference Room
Washington, D.C. 20549-6009
1-800-SEC-0330

A duplicating fee will be assessed for all copies provided.

The Fund's Investment Company Act filing number is 811-08321.