HARTFORD SERIES FUND INC, 497, 1998-10-07

HARTFORD SERIES FUND INC
497, 1998-10-07

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<PAGE>

Hartford HLS Mutual Funds
PROSPECTUS -- SEPTEMBER 30, 1998
Class IA Shares

This Prospectus provides a choice of fifteen mutual funds (each a "Fund" and
together the "Funds") which serve as underlying investment vehicles for certain
variable annuity and variable life insurance separate accounts of Hartford Life
Insurance Company and Hartford Life and Annuity Insurance Company (collectively,
"Hartford Life"). Each Fund offers two classes of shares: Class IA shares
offered hereby and Class IB shares offered pursuant to another prospectus. The
Funds, which have different investment objectives and policies, are described
below.
STOCK FUNDS
<TABLE>
<CAPTION>
FUND NAME GOAL INVESTMENT STYLE
--------------------------- ------------------------------ ------------------------------------------------------------
<S> <C> <C>
Capital Appreciation Growth of capital Equity: Invests in small, medium, and large companies;
portfolio is comprised primarily of a blend of growth and
value stocks and is broadly diversified across industries.
Dividend and Growth High level of income, growth Equity: Invests primarily in large, well-known U.S.
of capital companies that have historically paid above average
dividends and have the ability to sustain and potentially
increase dividends; portfolio is broadly diversified across
industries.
Global Leaders Growth of capital Equity: Invests primarily in high-quality U.S. and non-U.S.
growth companies; portfolio is broadly diversified across
industries and companies, and under normal market conditions
will be diversified across at least five countries, one of
which will be the U.S.
Growth and Income Growth of capital, current Equity: Invests primarily in equity securities with earnings
income growth potential and steady or rising dividends; portfolio
is broadly diversified across industries.
Index To track general stock market Equity: Seeks investment results which approximate the price
performance and yield performance of publicly-traded common stocks in
the aggregate; attempts to approximate the capital
performance and the dividend income of the Standard & Poor's
500 Composite Stock Index.
International Opportunities Growth of capital International Equity: Invests primarily in large,
high-quality non-U.S. companies in established markets, and
on a limited basis, in smaller companies and emerging
markets; portfolio is broadly diversified across industries
and countries.
MidCap Growth of capital Equity: Invests primarily in high quality U.S. companies
with market capitalizations within the range represented by
the Standard & Poor's MidCap 400 Index; portfolio is broadly
diversified across industries which are expected to grow
faster than the overall economy.
Small Company Growth of capital Equity: Invests primarily in stocks of companies with market
capitalizations within the range represented by the Russell
2000 Index; portfolio is broadly diversified across
industries.
Stock Growth of capital Equity: Invests primarily in large, high quality U.S.
companies; portfolio is broadly diversified across
industries which are expected to grow faster than the
overall economy.
ASSET ALLOCATION FUNDS

<CAPTION>
FUND NAME GOAL INVESTMENT STYLE
--------------------------- ------------------------------ ------------------------------------------------------------
<S> <C> <C>
Advisers Long-term total return Asset Allocation: Invests in a mix of stocks, bonds and
money market instruments; portfolio assets are allocated
gradually among the asset classes based upon the portfolio
manager's view of the economy and valuation of the market
sectors; short term market timing is not used.
International Advisers Long-term total return International Asset Allocation: Invests in a mix of stocks,
bonds and money market instruments; portfolio assets are
diversified among at least five countries and are allocated
gradually among the asset classes based upon the portfolio
manager's view of the economy and valuation of the market
sectors; short term market timing is not used.
</TABLE>
<PAGE>

<TABLE>
<S> <C> <C>
BOND FUNDS
<CAPTION>
FUND NAME GOAL INVESTMENT STYLE
--------------------------- ------------------------------ ------------------------------------------------------------
<S> <C> <C>
Bond High level of income, total Bond: Invests primarily in investment grade bonds; up to 20%
return may be invested in the highest quality tier of the high
yield rating category.
High Yield High current income; growth of Bond: Invests primarily in high yield, non-investment grade
capital is a secondary bonds.
objective
Mortgage Securities Maximum current income Mortgage-related securities: Invests primarily in high
consistent with preservation quality mortgage-related securities, including securities
of principal issued or guaranteed by government agencies,
instrumentalities or sponsored corporations.
MONEY MARKET FUND
<CAPTION>
FUND NAME GOAL INVESTMENT STYLE
--------------------------- ------------------------------ ------------------------------------------------------------
<S> <C> <C>
Money Market Maximum current income Money Market: Invests in short-term money market
consistent with preservation instruments.
of capital
</TABLE>

AN INVESTMENT IN THE MONEY MARKET FUND IS NEITHER INSURED NOR GUARANTEED BY THE
U.S. GOVERNMENT. WHILE THE MONEY MARKET FUND SEEKS TO MAINTAIN A STABLE NET
ASSET VALUE OF $1.00 PER SHARE, THERE CAN BE NO ASSURANCE THAT THE MONEY MARKET
FUND WILL ACHIEVE THIS GOAL.
- --------------------------------------------------------------------------------

THE HIGH YIELD FUND INVESTS PRIMARILY IN HIGH YIELD DEBT SECURITIES THAT ARE
RATED BELOW INVESTMENT GRADE AND ARE CONSIDERED SPECULATIVE. THESE SECURITIES
ARE ALSO KNOWN AS "JUNK BONDS" AND MAY HAVE GREATER PRICE VOLATILITY AND GREATER
RISK OF LOSS OF PRINCIPAL AND INTEREST THAN INVESTMENTS IN HIGHER RATED DEBT
SECURITIES.
- --------------------------------------------------------------------------------

THIS PROSPECTUS SETS FORTH CONCISELY THE INFORMATION ABOUT A FUND THAT A
PROSPECTIVE INVESTOR SHOULD KNOW BEFORE INVESTING. PLEASE READ AND RETAIN THIS
PROSPECTUS FOR FUTURE REFERENCE. ADDITIONAL INFORMATION ABOUT THE FUNDS HAS BEEN
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ("SEC") IN A STATEMENT OF
ADDITIONAL INFORMATION DATED SEPTEMBER 30, 1998 ("SAI"), WHICH HAS BEEN
INCORPORATED BY REFERENCE INTO THIS PROSPECTUS. TO OBTAIN A COPY WITHOUT CHARGE
CALL 1-800-862-6668 OR WRITE TO "HARTFORD FAMILY OF FUNDS, C/O INDIVIDUAL
ANNUITY OPERATIONS," P.O. BOX 5085, HARTFORD, CT 06102-5085.

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

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
- --------------------------------------------------------------------------------

NO DEALER, SALESPERSON OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS, OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS, IN CONNECTION WITH THE OFFER CONTAINED IN THIS PROSPECTUS AND, IF
GIVEN OR MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON
AS HAVING BEEN AUTHORIZED BY THE FUNDS. THIS PROSPECTUS DOES NOT CONSTITUTE AN
OFFER BY THE FUNDS TO SELL OR A SOLICITATION OF ANY OFFER TO BUY ANY OF THE
SECURITIES OFFERED HEREBY IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS
UNLAWFUL FOR THE FUNDS TO MAKE SUCH OFFER.
- --------------------------------------------------------------------------------
<PAGE>
HARTFORD HLS MUTUAL FUNDS 3
- --------------------------------------------------------------------------------

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
Financial Highlights.................................................. 4
Introduction to the Hartford HLS Mutual Funds......................... 16
Investment Objectives and Styles of the Funds......................... 16
Common Investment Policies and Risk Factors........................... 23
Management of the Funds............................................... 29
Administrative Services for the Funds................................. 32
Expenses of the Funds................................................. 32
Performance Related Information....................................... 32
Dividends............................................................. 33
Determination of Net Asset Value...................................... 33
Purchase of Fund Shares............................................... 33
Sale and Redemption of Shares......................................... 33
Federal Income Taxes.................................................. 34
Ownership and Capitalization of the Funds............................. 34
General Information................................................... 35
Appendix A: Description of Securities Ratings......................... 36
Appendix B: Credit Quality Distribution............................... 38
</TABLE>

There is the possibility that an individual Fund may be held liable for a
misstatement, inaccuracy or incomplete disclosure in this Prospectus concerning
the other Fund(s).

Additional information about the performance of each Fund, including
Management's Discussion and Analysis of Results, is contained in the Funds'
annual and semi-annual reports to shareholders, which may be obtained without
charge by calling 1-800-862-6668.
<PAGE>
4 HARTFORD CAPITAL APPRECIATION HLS FUND, INC.
- --------------------------------------------------------------------------------

FINANCIAL HIGHLIGHTS

<TABLE>
<CAPTION>
(FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
------------------------------------------------------------------------------------------------------------------
YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED
12/31/97 12/31/96 12/31/95 12/31/94 12/31/93 12/31/92 12/31/91 12/31/90 12/31/89 12/31/88
---------- ---------- --------- ----------- --------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE
AT BEGINNING
OF PERIOD...... $ 3.914 $ 3.490 $ 2.860 $ 3.052 $ 2.634 $ 2.607 $ 1.709 $ 2.020 $ 1.678 $ 1.341
NET INVESTMENT
INCOME......... 0.020 0.022 0.030 0.011 0.003 0.008 $ 0.021 $ 0.029 $ 0.023 $ 0.015
NET REALIZED AND
UNREALIZED
GAINS (LOSSES)
ON
INVESTMENTS.... 0.794 0.655 0.785 0.070 0.526 0.388 0.898 (0.246) 0.376 0.337
---------- ---------- --------- ----------- --------- -------- -------- -------- -------- --------
TOTAL FROM
INVESTMENT
OPERATIONS..... 0.814 0.677 0.815 0.081 0.529 0.396 0.919 (0.217) 0.399 0.352
DIVIDENDS FROM
NET INVESTMENT
INCOME......... (0.022) (0.025) (0.030) (0.011) (0.003) (0.008) (0.021) (0.029) (0.023) (0.015)
DISTRIBUTION
FROM NET
REALIZED GAINS
ON
SECURITIES..... (0.296) (0.228) (0.155) (0.262) (0.108) (0.361) 0.000 (0.065) (0.034) 0.000
RETURN OF
CAPITAL........ 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000
---------- ---------- --------- ----------- --------- -------- -------- -------- -------- --------
TOTAL FROM
DISTRIBUTIONS... (0.318) (0.253) (0.185) (0.273) (0.111) (0.369) (0.021) (0.094) (0.057) (0.015)
---------- ---------- --------- ----------- --------- -------- -------- -------- -------- --------
NET INCREASE
(DECREASE) IN
NET ASSETS..... 0.496 0.424 0.630 (0.192) 0.418 0.027 0.898 (0.311) 0.342 0.337
NET ASSET VALUE
AT END OF
PERIOD......... $ 4.410 $ 3.914 $ 3.490 $ 2.860 $ 3.052 $ 2.634 $ 2.607 $ 1.709 $ 2.020 $ 1.678
---------- ---------- --------- ----------- --------- -------- -------- -------- -------- --------
---------- ---------- --------- ----------- --------- -------- -------- -------- -------- --------

TOTAL RETURN.... 22.34% 20.70% 30.25% 2.50% 20.80% 16.98% 53.99% (10.90)% 24.11% 26.37%
NET ASSETS (IN
THOUSANDS)..... 4,802,992 3,386,670 2,157,892 1,158,644 778,904 300,373 158,046 56,032 59,922 34,226
RATIO OF
OPERATING
EXPENSES TO
AVERAGE NET
ASSETS......... 0.64% 0.65% 0.68% 0.72% 0.76% 0.87% 0.92% 0.96% 0.94% 0.97%
RATIO OF NET
INVESTMENT
INCOME TO
AVERAGE NET
ASSETS......... 0.44% 0.60% 0.95% 0.40% 0.12% 0.36% 0.92% 1.58% 1.25% 0.91%
PORTFOLIO
TURNOVER
RATE........... 57.6% 85.4% 78.6% 73.3% 91.4% 100.3% 107.2% 51.8% 35.0% 48.9%
AVERAGE
COMMISSION
RATE*.......... $ 0.0588 $ 0.0665
</TABLE>

- ---------
* Not required for years prior to 1996.
<PAGE>
HARTFORD DIVIDEND & GROWTH HLS FUND, INC. 5
- --------------------------------------------------------------------------------

FINANCIAL HIGHLIGHTS

<TABLE>
<CAPTION>
(FOR A SHARE OUTSTANDING
THROUGHOUT THE INDICATED PERIOD)
-------------------------------------------------
YEAR YEAR YEAR
ENDED ENDED ENDED 03/08/94-
12/31/97 12/31/96 12/31/95 12/31/94(a)
----------- --------- --------- -----------
<S> <C> <C> <C> <C>
NET ASSET VALUE AT BEGINNING OF PERIOD............ $ 1.547 $ 1.371 $ 0.994 $ 1.000
NET INVESTMENT INCOME............................. 0.035 0.034 0.033 0.024
NET REALIZED AND UNREALIZED GAINS (LOSSES) ON
INVESTMENTS...................................... 0.445 0.258 0.323 (0.005)
----------- --------- --------- -----------
TOTAL FROM INVESTMENT OPERATIONS.................. 0.480 0.292 0.356 0.019
DIVIDENDS FROM NET INVESTMENT INCOME.............. (0.031) (0.034) (0.033) (0.024)
DISTRIBUTION FROM NET REALIZED GAINS ON
SECURITIES....................................... (0.044) (0.028) 0.000 (0.001)
RETURN OF CAPITAL................................. 0.000 0.000 0.000 0.000
----------- --------- --------- -----------
TOTAL FROM DISTRIBUTIONS.......................... (0.075) (0.062) (0.033) (0.025)
----------- --------- --------- -----------
NET INCREASE (DECREASE) IN NET ASSETS............. 0.405 0.230 0.323 (0.006)
NET ASSET VALUE AT END OF PERIOD.................. $ 1.952 $ 1.547 $ 1.317 $ 0.994
----------- --------- --------- -----------
----------- --------- --------- -----------

TOTAL RETURN...................................... 31.89 22.91% 36.37% 1.60%***
NET ASSETS (IN THOUSANDS)......................... 1,994,653 879,980 265,070 55,066
RATIO OF OPERATING EXPENSES TO AVERAGE NET
ASSETS........................................... 0.68% 0.73% 0.77% 0.83%*
RATIO OF NET INVESTMENT INCOME TO AVERAGE NET
ASSETS........................................... 2.21% 2.52% 2.91% 3.52%*
PORTFOLIO TURNOVER RATE........................... 34.2% 56.9% 41.4% 27.8%
AVERAGE COMMISSION RATE**......................... $ 0.0543 $ 0.0715
</TABLE>

- ---------
(a) The Fund was declared effective by the Securities and Exchange Commission
on March 8, 1994.

* Annualized. Management fees were waived until assets (excluding assets
contributed by companies affiliated with HL Advisors) reached $20 million.
The ratio of operating expenses to average net assets would have been
higher if management fees were not waived. The ratio of net investment
income to average net assets would have been lower if management fees were
not waived.

** Not required for years prior to 1996.

*** Not annualized.
<PAGE>
6 HARTFORD INDEX HLS FUND, INC.
- --------------------------------------------------------------------------------

FINANCIAL HIGHLIGHTS

The following information has been audited by Arthur Andersen LLP,
independent public accountants, whose report thereon is included in the
Statement of Additional Information, which is incorporated by reference to this
prospectus.
<TABLE>
<CAPTION>
(FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
-------------------------------------------------------------------------------------------------------
YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED
12/31/97 12/31/96 12/31/95 12/31/94 12/31/93 12/31/92 12/31/91 12/31/90 12/31/89
----------- --------- --------- --------- --------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE AT
BEGINNING
OF PERIOD........ $ 2.382 $ 2.028 $ 1.522 $ 1.546 $ 1.450 $ 1.390 $ 1.134 $ 1.220 $ 0.960
NET INVESTMENT
INCOME........... 0.035 0.044 0.044 0.038 0.035 0.033 0.036 0.037 0.029
NET REALIZED AND
UNREALIZED GAINS
(LOSSES) ON
INVESTMENTS...... 0.692 0.393 0.507 (0.024) 0.096 0.060 0.294 (0.086) 0.260
----------- --------- --------- --------- --------- -------- -------- -------- --------
TOTAL FROM
INVESTMENT
OPERATIONS....... 0.727 0.437 0.551 0.014 0.131 0.093 0.330 (0.049) 0.289
DIVIDENDS FROM NET
INVESTMENT
INCOME........... (0.035) (0.044) (0.044) (0.038) (0.035) (0.033) (0.036) (0.037) (0.029)
DISTRIBUTION FROM
NET REALIZED
GAINS ON
SECURITIES....... (0.196) (0.039) (0.001) 0.000 0.000 0.000 (0.038) 0.000 0.000
RETURN OF
CAPITAL.......... 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000
----------- --------- --------- --------- --------- -------- -------- -------- --------
TOTAL FROM
DISTRIBUTIONS.... (0.231) (0.083) (0.045) (0.038) (0.035) (0.033) (0.074) (0.037) (0.029)
----------- --------- --------- --------- --------- -------- -------- -------- --------
NET INCREASE
(DECREASE) IN NET
ASSETS........... 0.496 0.354 0.506 (0.024) 0.096 0.060 0.256 (0.086) 0.260
NET ASSET VALUE AT
END
OF PERIOD........ $ 2.878 $ 2.382 $ 2.028 $ 1.522 $ 1.546 $ 1.450 $ 1.390 $ 1.134 $ 1.220
----------- --------- --------- --------- --------- -------- -------- -------- --------
----------- --------- --------- --------- --------- -------- -------- -------- --------

TOTAL RETURN...... 32.61% 22.09% 36.55% 0.94% 9.12% 6.82% 29.53% (3.99)% 30.47%
NET ASSETS (IN
THOUSANDS)....... 1,123,455 621,065 318,253 157,660 140,396 82,335 47,770 26,641 19,456
RATIO OF OPERATING
EXPENSES TO
AVERAGE NET
ASSETS........... 0.39% 0.39% 0.39% 0.45% 0.49% 0.60% 0.67% 0.91% 1.10%
RATIO OF NET
INVESTMENT INCOME
TO AVERAGE NET
ASSETS........... 1.52% 2.07% 2.46% 2.50% 2.36% 2.48% 2.89% 3.27% 2.60%
PORTFOLIO TURNOVER
RATE............. 5.7% 19.3% 1.5% 1.8% 0.8% 1.2% 6.7% 25.5% 12.9%
AVERAGE COMMISSION
RATE*............ $ 0.0230 $ 0.0500

<CAPTION>
YEAR
ENDED
12/31/88
--------
<S> <C>
NET ASSET VALUE AT
BEGINNING
OF PERIOD........ $ 0.854
NET INVESTMENT
INCOME........... 0.030
NET REALIZED AND
UNREALIZED GAINS
(LOSSES) ON
INVESTMENTS...... 0.106
--------
TOTAL FROM
INVESTMENT
OPERATIONS....... 0.136
DIVIDENDS FROM NET
INVESTMENT
INCOME........... (0.030)
DISTRIBUTION FROM
NET REALIZED
GAINS ON
SECURITIES....... 0.000
RETURN OF
CAPITAL.......... 0.000
--------
TOTAL FROM
DISTRIBUTIONS.... (0.030)
--------
NET INCREASE
(DECREASE) IN NET
ASSETS........... 0.106
NET ASSET VALUE AT
END
OF PERIOD........ $ 0.960
--------
--------
TOTAL RETURN...... 16.35%
NET ASSETS (IN
THOUSANDS)....... 10,050
RATIO OF OPERATING
EXPENSES TO
AVERAGE NET
ASSETS........... 1.23%
RATIO OF NET
INVESTMENT INCOME
TO AVERAGE NET
ASSETS........... 3.29%
PORTFOLIO TURNOVER
RATE............. 20.9%
AVERAGE COMMISSION
RATE*............
</TABLE>

- ------------
(a) The Fund was declared effective by the Securities and Exchange Commission
on May 1, 1987.

* Not required for years prior to 1996.
<PAGE>
HARTFORD INTERNATIONAL OPPORTUNITIES HLS FUND, INC. 7
- --------------------------------------------------------------------------------

FINANCIAL HIGHLIGHTS

<TABLE>
<CAPTION>
(FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
-----------------------------------------------------------------------------------------------
YEAR YEAR YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED ENDED 07/02/90-
12/31/97 12/31/96 12/31/95 12/31/94 12/31/93 12/31/92 12/31/91 12/31/90(A)
----------- --------- --------- --------- --------- -------- -------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE AT BEGINNING
OF PERIOD.................... $ 1.407 $ 1.306 $ 1.176 $ 1.215 $ 0.917 $ 0.973 $ 0.871 $ 1.000
NET INVESTMENT INCOME......... 0.022 0.023 0.020 0.016 0.009 0.013 0.011 0.015
NET REALIZED AND UNREALIZED
GAINS (LOSSES) ON
INVESTMENTS.................. (0.019) 0.140 0.141 (0.039) 0.298 (0.056) 0.102 (0.129)
----------- --------- --------- --------- --------- -------- -------- -----------
TOTAL FROM INVESTMENT
OPERATIONS................... 0.003 0.163 0.161 (0.023) 0.307 (0.043) 0.113 (0.114)
DIVIDENDS FROM NET INVESTMENT
INCOME....................... (0.012) (0.025) (0.020) (0.016) (0.009) (0.013) (0.011) (0.015)
DISTRIBUTION FROM NET REALIZED
GAINS ON SECURITIES.......... (0.104) (0.037) (0.011) 0.000 0.000 0.000 0.000 0.000
RETURN OF CAPITAL............. 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000
----------- --------- --------- --------- --------- -------- -------- -----------
TOTAL FROM DISTRIBUTIONS...... (0.116) (0.062) (0.031) (0.016) (0.009) (0.013) (0.011) (0.015)
----------- --------- --------- --------- --------- -------- -------- -----------
NET INCREASE (DECREASE) IN NET
ASSETS....................... (0.113) 0.101 0.130 (0.039) 0.298 (0.056) 0.102 (0.129)
NET ASSET VALUE AT END OF
PERIOD....................... $ 1.294 $ 1.407 $ 1.306 $ 1.176 $ 1.215 $ 0.917 $ 0.973 $ 0.871
----------- --------- --------- --------- --------- -------- -------- -----------
----------- --------- --------- --------- --------- -------- -------- -----------

TOTAL RETURN.................. 0.34% 12.91% 13.93% (1.94)% 33.73% (4.43)% 13.00% (11.76)%
NET ASSETS (IN THOUSANDS)..... 1,092,946 996,543 686,475 563,765 281,608 47,560 22,854 9,352
RATIO OF OPERATING EXPENSES TO
AVERAGE NET ASSETS........... 0.77% 0.79% 0.86% 0.85% 1.00% 1.23% 1.24% 1.04%*
RATIO OF NET INVESTMENT INCOME
TO AVERAGE NET ASSETS........ 1.48% 1.74% 1.60% 1.42% 0.84% 1.40% 1.17% 2.65%*
PORTFOLIO TURNOVER RATE....... 72.7% 70.0% 55.6% 46.4% 31.8% 25.1% 24.7% 3.0%
AVERAGE COMMISSION RATE**..... $ 0.0037 n/a
</TABLE>

- ------------
(a) The Fund was declared effective by the Securities and Exchange Commission
on July 2, 1990.

* Annualized.

** Not required for years prior to 1996.
<PAGE>
8 HARTFORD MIDCAP HLS FUND, INC.
- --------------------------------------------------------------------------------

FINANCIAL HIGHLIGHTS

<TABLE>
<CAPTION>
(FOR A SHARE
OUTSTANDING THROUGHOUT
THE INDICATED PERIOD)
----------------------
7/15/97-
12/31/97
----------------------
<S> <C>
NET ASSET VALUE AT BEGINNING OF PERIOD............ $ 1.000
NET INVESTMENT INCOME............................. 0.001
NET REALIZED AND UNREALIZED GAINS (LOSSES) ON
INVESTMENTS...................................... 0.137
-------
TOTAL FROM INVESTMENT OPERATIONS.................. 0.138
DIVIDENDS FROM NET INVESTMENT INCOME.............. (0.001)
DISTRIBUTION FROM NET REALIZED GAINS ON
SECURITIES....................................... 0.000
RETURN OF CAPITAL................................. 0.000
-------
TOTAL FROM DISTRIBUTIONS.......................... (0.001)
-------
NET INCREASE (DECREASE) IN NET ASSETS............. 0.137
NET ASSET VALUE AT END OF PERIOD.................. $ 1.137
-------
-------

TOTAL RETURN...................................... 13.81%*
NET ASSETS (IN THOUSANDS)......................... 27,589
RATIO OF OPERATING EXPENSES TO AVERAGE NET
ASSETS........................................... 0.46%**
RATIO OF NET INVESTMENT INCOME TO AVERAGE NET
ASSETS........................................... 0.45%**
PORTFOLIO TURNOVER RATE........................... 46.1%
AVERAGE COMMISSION RATE........................... $0.0247
</TABLE>

- ------------
* Not annualized.

** Annualized. Management fees were waived until assets (excluding assets
contributed by companies affiliated with HL Advisors) reached $20 million.
The ratio of operating expenses to average net assets would have been higher
if management fees were not waived. The ratio of net investment income to
average net assets would have been lower if management fees were not waived.
<PAGE>
HARTFORD SMALL COMPANY HLS FUND, INC. 9
- --------------------------------------------------------------------------------

FINANCIAL HIGHLIGHTS

<TABLE>
<CAPTION>
(FOR A SHARE
OUTSTANDING THROUGHOUT
THE INDICATED PERIOD)
----------------------------------
YEAR
ENDED 08/09/96-
12/31/97 12/31/96(a)
--------- ----------------------
<S> <C> <C>
NET ASSET VALUE AT BEGINNING OF PERIOD............ $ 1.069 $ 1.000
NET INVESTMENT INCOME............................. 0.001 0.002
NET REALIZED AND UNREALIZED GAINS (LOSSES) ON
INVESTMENTS...................................... 0.195 0.069
--------- --------
TOTAL FROM INVESTMENT OPERATIONS.................. 0.196 0.071
DIVIDENDS FROM NET INVESTMENT INCOME.............. (0.001) (0.002)
DISTRIBUTION FROM NET REALIZED GAINS ON
SECURITIES....................................... (0.062) 0.000
RETURN OF CAPITAL................................. 0.000 0.000
--------- --------
TOTAL FROM DISTRIBUTIONS.......................... (0.063) (0.002)
--------- --------
NET INCREASE (DECREASE) IN NET ASSETS............. 0.133 0.069
NET ASSET VALUE AT END OF PERIOD.................. $ 1.202 $ 1.069
--------- --------
--------- --------

TOTAL RETURN...................................... 18.38% 7.15%**
NET ASSETS (IN THOUSANDS)......................... 210,769 42,812
RATIO OF OPERATING EXPENSES TO AVERAGE NET
ASSETS........................................... 0.77% 0.72%*
RATIO OF NET INVESTMENT INCOME TO AVERAGE NET
ASSETS........................................... 0.08% 0.31%*
PORTFOLIO TURNOVER RATE........................... 222.2% 31.8%
AVERAGE COMMISSION RATE........................... $ 0.4120 $0.0290
</TABLE>

- ------------
(a) The Fund was declared effective by the Securities and Exchange Commission
on August 9, 1996.

* Annualized. Management fees were waived until assets (excluding assets
contributed by companies affiliated with HL Advisors) reached $20 million.
The ratio of operating expenses to average net assets would have been higher
if management fees were not waived. The ratio of net investment income to
average net assets would have been lower if management fees were not waived.

** Not annualized.
<PAGE>

10 HARTFORD STOCK FUND HLS FUND

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

FINANCIAL HIGHLIGHTS

The following information has been audited by Arthur Andersen LLP,
independent public accountants, whose report thereon is included in the
Statement of Additional Information, which is incorporated by reference to this
prospectus.
<TABLE>
<CAPTION>
(FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
-----------------------------------------------------------------------------------------------------------
YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED
12/31/97 12/31/96 12/31/95 12/31/94 12/31/93 12/31/92 12/31/91 12/31/90 12/31/89
---------- ---------- ---------- ----------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE
AT BEGINNING
OF PERIOD..... $ 4.143 $ 3.527 $ 2.801 $ 3.099 $ 2.965 $ 2.927 $ 2.452 $ 2.775 $ 2.304
NET INVESTMENT
INCOME........ 0.050 0.060 0.070 0.061 0.053 0.051 0.059 0.070 0.065
NET REALIZED
AND UNREALIZED
GAINS (LOSSES)
ON
INVESTMENTS... 1.196 0.763 0.840 (0.111) 0.339 0.219 0.532 (0.179) 0.522
---------- ---------- ---------- ----------- --------- --------- --------- --------- ---------
TOTAL FROM
INVESTMENT
OPERATIONS.... 01.246 0.823 0.910 (0.050) 0.392 0.270 0.591 (0.109) 0.587
DIVIDENDS FROM
NET INVESTMENT
INCOME........ (0.049) (0.059) (0.070) (0.061) (0.053) (0.051) (0.059) (0.070) (0.065)
DISTRIBUTION
FROM NET
REALIZED GAINS
ON
SECURITIES.... (0.217) (0.148) (0.114) (0.187) (0.205) (0.181) (0.057) (0.144) (0.051)
RETURN OF
CAPITAL....... 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000
---------- ---------- ---------- ----------- --------- --------- --------- --------- ---------
TOTAL FROM
DISTRIBUTIONS... (0.266) (0.207) (0.184) (0.248) (0.258) (0.232) (0.116) (0.214) (0.116)
---------- ---------- ---------- ----------- --------- --------- --------- --------- ---------
NET INCREASE
(DECREASE) IN
NET ASSETS.... 0.980 0.616 0.726 (0.298) 0.134 0.038 0.475 (0.323) 0.471
NET ASSET VALUE
AT END OF
PERIOD........ $ 5.123 $ 4.143 $ 3.527 $ 2.801 $ 3.099 $ 2.965 $ 2.927 $ 2.452 $ 2.775
---------- ---------- ---------- ----------- --------- --------- --------- --------- ---------
---------- ---------- ---------- ----------- --------- --------- --------- --------- ---------

TOTAL RETURN... 31.38% 24.33% 34.10% (1.89)% 14.34% 10.04% 24.58% (3.87)% 26.02%
NET ASSETS (IN
THOUSANDS).... 4,713,322 2,994,209 1,876,884 1,163,158 968,425 569,903 406,489 257,553 266,756
RATIO OF
OPERATING
EXPENSES TO
AVERAGE NET
ASSETS........ 0.45% 0.46% 0.48% 0.50% 0.53% 0.57% 0.60% 0.66% 0.64%
RATIO OF NET
INVESTMENT
INCOME TO
AVERAGE NET
ASSETS........ 1.11% 1.59% 2.23% 2.17% 1.86% 1.90% 2.14% 2.76% 2.31%
PORTFOLIO
TURNOVER
RATE.......... 31.6% 42.3% 52.9% 63.8% 69.0% 69.8% 24.3% 20.2% 24.4%
AVERAGE
COMMISSION
RATE*......... $ 0.0531 $ 0.0490

<CAPTION>
YEAR
ENDED
12/31/88
---------
<S> <C>
NET ASSET VALUE
AT BEGINNING
OF PERIOD..... $ 1.977
NET INVESTMENT
INCOME........ 0.045
NET REALIZED
AND UNREALIZED
GAINS (LOSSES)
ON
INVESTMENTS... 0.327
---------
TOTAL FROM
INVESTMENT
OPERATIONS.... 0.372
DIVIDENDS FROM
NET INVESTMENT
INCOME........ (0.045)
DISTRIBUTION
FROM NET
REALIZED GAINS
ON
SECURITIES.... 0.000
RETURN OF
CAPITAL....... 0.000
---------
TOTAL FROM
DISTRIBUTIONS.. (0.045)
---------
NET INCREASE
(DECREASE) IN
NET ASSETS.... 0.327
NET ASSET VALUE
AT END OF
PERIOD........ $ 2.304
---------
---------
TOTAL RETURN... 19.00%
NET ASSETS (IN
THOUSANDS).... 187,511
RATIO OF
OPERATING
EXPENSES TO
AVERAGE NET
ASSETS........ 0.65%
RATIO OF NET
INVESTMENT
INCOME TO
AVERAGE NET
ASSETS........ 2.08%
PORTFOLIO
TURNOVER
RATE.......... 22.9%
AVERAGE
COMMISSION
RATE*.........
</TABLE>

- ------------
* Not required for years prior to 1996.
<PAGE>

HARTFORD ADVISERS HLS FUND, INC. 11

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

FINANCIAL HIGHLIGHTS

The following information has been audited by Arthur Andersen LLP,
independent public accountants, whose report thereon is included in the
Statement of Additional Information, which is incorporated by reference to this
prospectus.
<TABLE>
<CAPTION>
(FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
-------------------------------------------------------------------------------------------------------------
YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED
12/31/97 12/31/96 12/31/95 12/31/94 12/31/93 12/31/92 12/31/91 12/31/90 12/31/89
----------- ----------- ----------- ------------ ---------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE AT
BEGINNING
OF PERIOD........ $ 2.169 $ 1.958 $ 1.600 $ 1.752 $ 1.676 $ 1.649 $ 1.436 $ 1.543 $ 1.332
NET INVESTMENT
INCOME........... 0.056 0.059 0.064 0.054 0.050 0.059 0.063 0.074 0.062
NET REALIZED AND
UNREALIZED GAINS
(LOSSES) ON
INVESTMENTS...... 0.455 0.255 0.377 (0.100) 0.145 0.070 0.223 (0.059) 0.221
----------- ----------- ----------- ------------ ---------- --------- --------- --------- ---------
TOTAL FROM
INVESTMENT
OPERATIONS....... 0.511 0.314 0.441 (0.046) 0.195 0.129 0.286 0.015 0.283
DIVIDENDS FROM NET
INVESTMENT
INCOME........... (0.055) (0.059) (0.064) (0.054) (0.050) (0.059) (0.063) (0.074) (0.062)
DISTRIBUTION FROM
NET REALIZED
GAINS ON
SECURITIES....... (0.098) (0.044) (0.019) (0.052) (0.069) (0.043) (0.010) (0.048) (0.010)
RETURN OF
CAPITAL.......... 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000
----------- ----------- ----------- ------------ ---------- --------- --------- --------- ---------
TOTAL FROM
DISTRIBUTIONS.... (0.153) (0.103) (0.083) (0.106) (0.119) (0.102) (0.073) (0.122) (0.072)
----------- ----------- ----------- ------------ ---------- --------- --------- --------- ---------
NET INCREASE
(DECREASE) IN NET
ASSETS........... 0.358 0.211 0.358 (0.152) 0.076 0.027 0.213 (0.107) 0.211
NET ASSET VALUE AT
END OF PERIOD.... $ 2.527 $ 2.169 $ 1.958 $ 1.600 $ 1.752 $ 1.676 $ 1.649 $ 1.436 $ 1.543
----------- ----------- ----------- ------------ ---------- --------- --------- --------- ---------
----------- ----------- ----------- ------------ ---------- --------- --------- --------- ---------

TOTAL RETURN...... 24.51% 16.62% 28.34% (2.74)% 12.25% 8.30% 20.33% 1.26% 21.72%
NET ASSETS (IN
THOUSANDS)....... 8,283,912 5,879,529 4,262,769 3,034,034 2,426,550 985,747 631,424 416,839 371,917
RATIO OF OPERATING
EXPENSES TO
AVERAGE NET
ASSETS........... 0.63% 0.63% 0.65% 0.65% 0.69% 0.78% 0.81% 0.89% 0.89%
RATIO OF NET
INVESTMENT INCOME
TO AVERAGE NET
ASSETS........... 2.44% 2.92% 3.57% 3.34% 3.07% 3.55% 4.13% 4.65% 4.14%
PORTFOLIO TURNOVER
RATE............. 36.1% 53.8% 63.5% 60.0% 55.3% 72.8% 42.1% 35.7% 33.5%
AVERAGE COMMISSION
RATE*............ $ 0.0529 $ 0.0487

<CAPTION>
YEAR
ENDED
12/31/88
---------
<S> <C>
NET ASSET VALUE AT
BEGINNING
OF PERIOD........ $ 1.213
NET INVESTMENT
INCOME........... 0.051
NET REALIZED AND
UNREALIZED GAINS
(LOSSES) ON
INVESTMENTS...... 0.119
---------
TOTAL FROM
INVESTMENT
OPERATIONS....... 0.170
DIVIDENDS FROM NET
INVESTMENT
INCOME........... (0.051)
DISTRIBUTION FROM
NET REALIZED
GAINS ON
SECURITIES....... 0.000
RETURN OF
CAPITAL.......... 0.000
---------
TOTAL FROM
DISTRIBUTIONS.... (0.051)
---------
NET INCREASE
(DECREASE) IN NET
ASSETS........... 0.119
NET ASSET VALUE AT
END OF PERIOD.... $ 1.332
---------
---------
TOTAL RETURN...... 14.24%
NET ASSETS (IN
THOUSANDS)....... 264,750
RATIO OF OPERATING
EXPENSES TO
AVERAGE NET
ASSETS........... 0.90%
RATIO OF NET
INVESTMENT INCOME
TO AVERAGE NET
ASSETS........... 3.93%
PORTFOLIO TURNOVER
RATE............. 30.9%
AVERAGE COMMISSION
RATE*............
</TABLE>

- -------------
* Not required for years prior to 1996.
<PAGE>
12 HARTFORD INTERNATIONAL ADVISERS HLS FUND, INC.
- --------------------------------------------------------------------------------

FINANCIAL HIGHLIGHTS

<TABLE>
<CAPTION>
(FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
------------------------------------------
YEAR YEAR
ENDED ENDED 03/01/95-
12/31/97 12/31/96 12/31/95(a)
----------- ---------- ------------
<S> <C> <C> <C>
NET ASSET VALUE AT BEGINNING OF PERIOD............ $ 1.167 $ 1.109 $ 1.000
NET INVESTMENT INCOME............................. 0.056 0.040 0.030
NET REALIZED AND UNREALIZED GAINS (LOSSES) ON
INVESTMENTS...................................... 0.006 0.093 0.126
----------- -------- -------
TOTAL FROM INVESTMENT OPERATIONS.................. 0.062 0.133 0.156
DIVIDENDS FROM NET INVESTMENT INCOME.............. ) (0.050 (0.051) (0.030)
DISTRIBUTION FROM NET REALIZED GAINS ON
SECURITIES....................................... ) (0.004 (0.024) (0.017)
RETURN OF CAPITAL................................. 0.000 0.000 0.000
----------- -------- -------
TOTAL FROM DISTRIBUTIONS.......................... ) (0.054 (0.075) (0.047)
----------- -------- -------
NET INCREASE (DECREASE) IN NET ASSETS............. 0.008 0.058 0.109
NET ASSET VALUE AT END OF PERIOD.................. $ 1.175 $ 1.167 $ 1.109
----------- -------- -------
----------- -------- -------

TOTAL RETURN...................................... % 5.52 12.25% 13.24%***
NET ASSETS (IN THOUSANDS)......................... 207,582 104,486 31,264
RATIO OF OPERATING EXPENSES TO AVERAGE NET
ASSETS........................................... % 0.87 0.96% 0.65%*
RATIO OF NET INVESTMENT INCOME TO AVERAGE NET
ASSETS........................................... % 3.08 3.24% 3.36%*
PORTFOLIO TURNOVER RATE........................... % 162.5 95.2% 47.2%
AVERAGE COMMISSION RATE**......................... $ 0.0045 $0.0064
</TABLE>

- ------------
(a) The Fund was declared effective by the Securities and Exchange Commission
on March 1, 1995.

** Not required for years prior to 1996.

*** Not annualized.
<PAGE>
HARTFORD BOND HLS FUND, INC. 13
- --------------------------------------------------------------------------------

FINANCIAL HIGHLIGHTS

<TABLE>
<CAPTION>
(FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
-------------------------------------------------------------------------------------------------------
YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED
12/31/97 12/31/96 12/31/95 12/31/94 12/31/93 12/31/92 12/31/91 12/31/90 12/31/89 12/31/88
--------- --------- --------- --------- --------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE AT
BEGINNING
OF PERIOD............... $ 1.000 $ 1.028 $ 0.926 $ 1.044 $ 1.024 $ 1.061 $ 0.979 $ 0.976 $ 0.945 $ 0.952
NET INVESTMENT INCOME.... 0.063 0.064 0.064 0.060 0.062 0.074 0.072 0.075 0.079 0.077
NET REALIZED AND
UNREALIZED GAINS
(LOSSES) ON
INVESTMENTS............. 0.047 (0.029) 0.102 (0.100) 0.039 (0.019) 0.082 0.003 0.031 (0.007)
--------- --------- --------- --------- --------- -------- -------- -------- -------- --------
TOTAL FROM INVESTMENT
OPERATIONS.............. 0.110 0.035 0.166 (0.040) 0.101 0.055 0.154 0.078 0.110 0.070
DIVIDENDS FROM NET
INVESTMENT
INCOME.................. (0.060) (0.063) (0.064) (0.060) (0.062) (0.074) (0.072) (0.075) (0.079) (0.077)
DISTRIBUTION FROM NET
REALIZED GAINS ON
SECURITIES.............. 0.000 0.000 0.000 (0.018) (0.019) (0.018) 0.000 0.000 0.000 0.000
RETURN OF CAPITAL........ 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000
--------- --------- --------- --------- --------- -------- -------- -------- -------- --------
TOTAL FROM
DISTRIBUTIONS........... (0.060) (0.063) (0.064) (0.078) (0.081) (0.092) (0.072) (0.075) (0.079) (0.077)
--------- --------- --------- --------- --------- -------- -------- -------- -------- --------
NET INCREASE (DECREASE)
IN NET ASSETS........... 0.050 (0.028) 0.102 (0.118) 0.020 (0.037) 0.082 0.003 0.031 (0.007)
NET ASSET VALUE AT END OF
PERIOD.................. $ 1.050 $ 1.000 $ 1.028 $ 0.926 $ 1.044 $ 1.024 $ 1.061 $ 0.979 $ 0.976 $ 0.945
--------- --------- --------- --------- --------- -------- -------- -------- -------- --------
--------- --------- --------- --------- --------- -------- -------- -------- -------- --------

TOTAL RETURN............. 11.35% 3.54% 18.49% (3.95)% 10.24% 5.53% 16.43% 8.39% 12.10% 7.60%
NET ASSETS (IN
THOUSANDS).............. 552,870 402,548 342,495 247,458 239,602 128,538 97,377 70,915 61,602 54,215
RATIO OF OPERATING
EXPENSES TO AVERAGE NET
ASSETS.................. 0.51% 0.52% 0.53% 0.55% 0.57% 0.64% 0.66% 0.67% 0.67% 0.69%
RATIO OF NET INVESTMENT
INCOME TO AVERAGE NET
ASSETS.................. 6.58% 6.37% 6.51% 6.23% 5.93% 7.21% 7.29% 7.82% 8.09% 8.12%
PORTFOLIO TURNOVER
RATE.................... 112.9%** 212.0% 215.0% 328.8% 494.3% 434.1% 337.0% 161.6% 225.0% 230.3%
CURRENT YIELD*........... 6.34% 6.25% 6.46% 7.19% 4.93% 6.48% 6.62% 8.17% 7.92% 9.15%
</TABLE>

- ------------
* The yield information will fluctuate and publication of yield may not
provide a basis for comparison with bank deposits, other investments which
are insured and/or pay a fixed yield for a stated period of time, or other
investment companies. In addition, information may be of limited use for
comparative purposes because it does not reflect charges imposed at the
Separate Account level which, if included, would decrease the yield. This
figure has not been audited.

** Excluding mortgage dollar rolls.
<PAGE>
14 HARTFORD MORTGAGE SECURITIES HLS FUND, INC.
- --------------------------------------------------------------------------------

FINANCIAL HIGHLIGHTS

<TABLE>
<CAPTION>
(FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
---------------------------------------------------------------------------------------------------------
YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED
12/31/97 12/31/96 12/31/95 12/31/94 12/31/93 12/31/92 12/31/91 12/31/90 12/31/89 12/31/88
--------- --------- --------- --------- --------- --------- --------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE AT
BEGINNING
OF PERIOD.............. $ 1.056 $ 1.071 $ 0.984 $ 1.075 $ 1.079 $ 1.115 $ 1.054 $ 1.045 $ 1.006 $ 1.011
NET INVESTMENT INCOME... 0.071 0.069 0.068 0.068 0.071 0.086 0.088 0.087 0.088 0.087
NET REALIZED AND
UNREALIZED GAINS
(LOSSES) ON
INVESTMENTS............ 0.022 (0.018) 0.087 (0.086) (0.004) (0.036) 0.061 0.009 0.039 (0.005)
--------- --------- --------- --------- --------- --------- --------- -------- -------- --------
TOTAL FROM INVESTMENT
OPERATIONS............. 0.093 0.051 0.155 (0.018) 0.067 0.050 0.149 0.096 0.127 0.082
DIVIDENDS FROM NET
INVESTMENT INCOME...... (0.065) (0.066) (0.068) (0.068) (0.071) (0.086) (0.088) (0.087) (0.088) (0.087)
DISTRIBUTION FROM NET
REALIZED GAINS ON
SECURITIES............. 0.000 0.000 0.000 (0.005) 0.000 0.000 0.000 0.000 0.000 0.000
RETURN OF CAPITAL....... 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000
--------- --------- --------- --------- --------- --------- --------- -------- -------- --------
TOTAL FROM
DISTRIBUTIONS.......... (0.065) (0.066) (0.068) (0.073) (0.071) (0.086) (0.088) (0.087) (0.088) (0.087)
--------- --------- --------- --------- --------- --------- --------- -------- -------- --------
NET INCREASE (DECREASE)
IN NET ASSETS.......... 0.028 (0.015) 0.087 (0.091) (0.004) (0.036) 0.061 0.009 0.039 (0.005)
NET ASSET VALUE AT END
OF PERIOD.............. $ 1.084 $ 1.056 $ 1.071 $ 0.984 $ 1.075 $ 1.079 $ 1.115 $ 1.054 $ 1.045 $ 1.006
--------- --------- --------- --------- --------- --------- --------- -------- -------- --------
--------- --------- --------- --------- --------- --------- --------- -------- -------- --------

TOTAL RETURN............ 9.01% 4.99% 16.17% (1.61)% 6.31% 4.64% 14.71% 9.70% 13.13% 8.38%
NET ASSETS (IN
THOUSANDS)............. 325,702 325,495 327,565 304,147 365,198 258,711 162,484 105,620 85,908 85,075
RATIO OF OPERATING
EXPENSES TO AVERAGE NET
ASSETS................. 0.45% 0.45% 0.47% 0.48% 0.49% 0.56% 0.58% 0.58% 0.58% 0.60%
RATIO OF NET INVESTMENT
INCOME TO AVERAGE NET
ASSETS................. 6.60% 6.67% 6.50% 6.65% 6.49% 7.96% 8.25% 8.42% 8.64% 8.56%
PORTFOLIO TURNOVER
RATE................... 46.5** 200.0% 489.4% 365.7% 183.4% 277.2% 152.2% 85.6% 91.3% 185.0%
CURRENT YIELD*.......... 6.66% 6.67% 6.90% 7.84% 5.73% 7.51% 8.16% 8.21% 8.28% 9.12%
</TABLE>

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

* The yield information will fluctuate and publication of yield may not
provide a basis for comparison with bank deposits, other investments which
are insured and/or pay a fixed yield for a stated period of time, or other
investment companies. In addition, information may be of limited use for
comparative purposes because it does not reflect charges imposed at the
Separate Account level which, if included, would decrease the yield. This
figure has not been audited.

** Excluding mortgage dollar rolls.
<PAGE>
HARTFORD MONEY MARKET HLS FUND, INC. 15
- --------------------------------------------------------------------------------

FINANCIAL HIGHLIGHTS

<TABLE>
<CAPTION>
(FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
------------------------------------------------------------------------------------------------------------
YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED
12/31/97 12/31/96 12/31/95 12/31/94 12/31/93 12/31/92 12/31/91 12/31/90 12/31/89 12/31/88
--------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE AT
BEGINNING OF
PERIOD............... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
NET INVESTMENT
INCOME............... 0.049 0.050 0.056 0.039 0.029 0.036 0.059 0.078 0.088 0.071
NET REALIZED AND
UNREALIZED GAINS
(LOSSES) ON
INVESTMENTS.......... 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000
--------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
TOTAL FROM INVESTMENT
OPERATIONS........... 0.049 0.050 0.056 0.039 0.029 0.036 0.059 0.078 0.088 0.071
DIVIDENDS FROM NET
INVESTMENT INCOME.... (0.049) (0.050) (0.056) (0.039) (0.029) (0.036) (0.059) (0.078) (0.088) (0.071)
DISTRIBUTION FROM NET
REALIZED GAINS ON
SECURITIES........... 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000
RETURN OF CAPITAL..... 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000
--------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
TOTAL FROM
DISTRIBUTIONS........ (0.049) (0.050) (0.056) (0.039) (0.029) (0.036) (0.059) (0.078) (0.088) (0.071)
--------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
NET INCREASE
(DECREASE) IN NET
ASSETS............... 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000
NET ASSET VALUE AT END
OF
PERIOD............... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
--------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
TOTAL RETURN.......... 5.31% 5.09% 5.74% 3.95% 2.94% 3.63% 6.01% 8.09% 9.10% 7.40%

NET ASSETS (IN
THOUSANDS)........... 612,480 542,586 339,709 321,465 234,088 190,246 177,483 194,462 129,808 127,346
RATIO OF OPERATING
EXPENSES TO AVERAGE
NET ASSETS........... 0.44% 0.44% 0.45% 0.47% 0.48% 0.53% 0.54% 0.57% 0.58% 0.58%
RATIO OF NET
INVESTMENT INCOME TO
AVERAGE NET ASSETS... 5.21% 5.04% 5.57% 3.99% 2.91% 3.60% 5.88% 7.80% 8.75% 7.19%
PORTFOLIO TURNOVER
RATE................. -- -- -- -- -- -- -- -- -- --
CURRENT YIELD*........ 5.36% 5.1% 5.40% 5.43% 2.89% 3.09% 4.66% 7.73% 8.21% 8.49%
EFFECTIVE YIELD*...... 5.50% 5.23% 5.54% 5.58% 2.93% 3.14% 4.79% 8.03% 8.55% 8.85%
</TABLE>

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

* The yield information will fluctuate and publication of yield may not provide
a basis for comparison with bank deposits, other investments which are
insured and/or pay a fixed yield for a stated period of time, or other
investment companies. In addition, information may be of limited use for
comparative purposes because it does not reflect charges imposed at the
Separate Account level which, if included, would decrease the yield. This
figure has not been audited.
<PAGE>
16 HARTFORD HLS MUTUAL FUNDS
- --------------------------------------------------------------------------------

INTRODUCTION TO THE
HARTFORD HLS MUTUAL FUNDS

The Funds are made available to serve as the underlying investment vehicles
for certain variable annuity and variable life insurance separate accounts of
Hartford Life. Each Fund operates as a diversified open-end management
investment company. Each Fund has different investment objectives, styles and
policies. These differences affect the types of securities in which each Fund
may invest and, therefore, the potential return of each Fund and the associated
risks. There is no assurance, however, that any Fund will meet its investment
goals. Whether an investment in a particular Fund is appropriate for you depends
on your investment goals, including the return you seek, the expected duration
of your investment and the level of risk you are willing to bear.

Each Fund offers two classes of shares: Class IA shares and Class IB shares.
The shares of each Fund are currently sold only to insurance company separate
accounts in connection with variable life insurance contracts and variable
annuity contracts issued by Hartford Life. Both classes of shares are offered
and redeemed at their net asset value without the imposition of any sales load.
Only Class IA shares are offered by this Prospectus. Class IB shares are offered
pursuant to another prospectus and are subject to the same expenses as the Class
IA shares, but unlike the Class IB shares, Class IA shares are not subject to
distribution fees imposed pursuant to a distribution plan adopted pursuant to
Rule 12b-1 under the Investment Company Act of 1940 (the "1940 Act"). Inquiries
regarding Class IB shares should be addressed to Hartford Family of Funds, c/o
Individual Annuity Operations, P.O. Box 5085, Hartford, CT 06102-5085 or by
calling 1-800-862-6668.

HL Investment Advisors, Inc. ("HL Advisors") is the investment manager to
each Fund. In addition, under HL Advisors' general management, Wellington
Management Company, LLP ("Wellington Management") serves as investment
sub-adviser to the Capital Appreciation HLS Fund, Dividend and Growth HLS Fund,
Global Leaders HLS Fund, Growth and Income HLS Fund, International Opportunities
HLS Fund, MidCap HLS Fund, Small Company HLS Fund, Stock HLS Fund, Advisers HLS
Fund and International Advisers HLS Fund. In addition, under HL Advisors'
general management, The Hartford Investment Management Company
("HIMCO-Registered Trademark-") serves as investment sub-adviser to the High
Yield HLS Fund, Index HLS Fund, Bond HLS Fund, Mortgage Securities HLS Fund, and
Money Market HLS Fund.

HL Advisors was incorporated in Connecticut in 1981 and is a majority-owned
indirect subsidiary of The Hartford Financial Services Group, Inc. ("The
Hartford"), a Connecticut insurance holding company with over $130 billion in
assets. Wellington Management, a Massachusetts limited liability partnership, is
a professional investment counseling firm that provides services to investment
companies, employee benefit plans, endowments, foundations and other
institutions and individuals. Wellington Management and its predecessor
organizations have provided investment advisory services since 1928. HIMCO is a
professional money management firm that provides services to investment
companies, employee benefit plans, its affiliated insurance companies and other
institutional accounts. HIMCO was incorporated in 1996 and is a wholly-owned
subsidiary of The Hartford. As of March 31, 1998, HL Advisors had investment
management authority with respect to approximately $24 billion of assets, HIMCO
and its wholly-owned subsidiary had investment management authority with respect
to approximately $56 billion of assets and Wellington Management had investment
management authority with respect to approximately $194 billion of assets for
various clients.

INVESTMENT OBJECTIVES AND
STYLES OF THE FUNDS

The Funds have different investment objectives and policies, as described
below. These differences can be expected to affect the return of each Fund and
the degree of market and financial risk to which each Fund is subject. For more
information about the investment strategies employed by the Funds, see "Common
Investment Policies and Risk Factors." The investment objective of each Fund and
certain other investment restrictions enumerated in detail in the SAI are
considered fundamental and cannot be changed without the affirmative vote of a
majority of the outstanding voting securities of the particular Fund. All other
policies not specifically designated as fundamental are nonfundamental and may
be changed by the Board of Directors of the particular Fund. The percentage
limits described in the sections below are based on market value and are
determined as of the time securities are purchased. See the SAI for a complete
listing of investment restrictions. Stated below is the investment objective and
investment style for each Fund. For a description of each Fund's investment
policies and risk factors, see "Common Investment Policies and Risk Factors."

HARTFORD CAPITAL APPRECIATION HLS FUND, INC.

Hartford Capital Appreciation HLS Fund, Inc. (formerly known as Hartford
Capital Appreciation Fund, Inc.) (the "Capital Appreciation Fund") was
incorporated in 1983 under Maryland law.

INVESTMENT OBJECTIVE.

The Capital Appreciation Fund seeks growth of capital by investing in equity
securities selected on the basis of potential for capital appreciation.
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HARTFORD HLS MUTUAL FUNDS 17
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INVESTMENT STYLE.
The Capital Appreciation Fund invests in a diversified portfolio of
primarily equity securities. Wellington Management identifies, through
fundamental analysis, companies that it believes have substantial near-term
capital appreciation potential regardless of company size or industry sector.
Income, if any, is an incidental consideration. This approach is sometimes
referred to as a "stock picking" approach and results in having all market
capitalization sectors (i.e., small, medium, and large companies) represented.
Small and medium sized companies are selected primarily on the basis of dynamic
earnings growth potential. Larger companies are selected primarily based on the
expectation for a catalyst event that will trigger stock price appreciation.
Fundamental analysis involves the assessment of a company through such factors
as its business environment, management, balance sheet, income statement,
anticipated earnings, revenues, dividends, and other related measures of value.
Up to 20% of the Capital Appreciation Fund's total assets may be invested in
securities of non-U.S. companies.

HARTFORD DIVIDEND AND GROWTH HLS FUND, INC.

Hartford Dividend and Growth HLS Fund, Inc. (formerly known as Hartford
Dividend and Growth Fund, Inc.) (the "Dividend and Growth Fund") was
incorporated in 1993 under Maryland law.

INVESTMENT OBJECTIVE.

The Dividend and Growth Fund seeks a high level of current income consistent
with growth of capital by investing primarily in equity securities.

INVESTMENT STYLE.

The Dividend and Growth Fund invests in a diversified portfolio of primarily
equity securities that typically have above average income yield and whose
prospects for capital appreciation are considered favorable by Wellington
Management. Under normal market and economic conditions at least 65% of the
Dividend and Growth Fund's total assets are invested in dividend paying equity
securities. Wellington Management uses fundamental analysis to evaluate a
security for purchase or sale by the Dividend and Growth Fund. Fundamental
analysis involves the assessment of a company through such factors as its
business environment, management, balance sheet, income statement, anticipated
earnings, revenues, dividends, and other related measures of value. As a key
component of the fundamental analysis done for the Dividend and Growth Fund,
Wellington Management evaluates a company's ability to sustain and potentially
increase its dividend. The Dividend and Growth Fund's portfolio is broadly
diversified by industry and company. Up to 20% of the Dividend and Growth Fund's
total assets may be invested in securities of non-U.S. companies.

HARTFORD GLOBAL LEADERS HLS FUND

Hartford Global Leaders HLS Fund (the "Global Leaders Fund") is a
diversified series of Hartford Series Fund, Inc., an open-end management
investment company which was incorporated in 1998 under Maryland law.

INVESTMENT OBJECTIVE.

The Global Leaders Fund seeks growth of capital by investing primarily in
equity securities issued by U.S. companies and non-U.S. companies.

INVESTMENT STYLE.

The Global Leaders Fund invests in a diversified portfolio of primarily
equity securities covering a broad range of countries, industries and companies.
Securities in which the Global Leaders Fund invests are denominated in both U.S.
dollars and non-U.S. currencies (including the European Currency Unit and its
successor, the Euro) and may trade in U.S. markets and non-U.S. markets. Under
normal market and economic conditions at least 65% of the total assets of the
Fund are invested in equity securities of high quality growth companies
worldwide that, in the opinion of Wellington Management, are leaders within
their respective industries as indicated by an established market presence and
strong competitive position on a global, regional or country basis. Under normal
market conditions, the Fund will diversify its investments in securities of
issuers in at least five countries, one of which will be the United States. The
Global Leaders Fund does not have predetermined percentages on the amount of the
Fund's assets that may be invested in each country. From time to time, the Fund
may invest up to 25% of its assets in securities of issuers located in emerging
countries.

The Global Leaders Fund uses a two-tiered investment approach. First, under
what is sometimes referred to as a "top-down" approach, Wellington Management
analyzes the global macro economic and investment environments. This includes an
evaluation of U.S. and non-U.S. economic and political conditions, fiscal and
monetary policies, demographic trends and investor sentiment. Through top down
analysis, Wellington Management anticipates secular and cyclical changes to
identify companies which offer the most potential for capital appreciation given
current and projected global and local economic and market conditions.

Second, top down analysis is followed by what is sometimes referred to as a
"bottom up" approach, which is the use of fundamental analysis to identify
specific securities for purchase or sale. The Global Leaders Fund emphasizes
high-quality growth companies. The key characteristics of high-quality growth
companies include a strong balance sheet, a high return on equity, a strong
management team and attractive relative value within the context of the global
marketplace or a security's primary trading market. Fundamental analysis
involves the assessment of a company
<PAGE>
18 HARTFORD HLS MUTUAL FUNDS
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through such factors as its business environment, management, balance sheet,
income statements, anticipated earnings, revenues and other related measures of
value.

HARTFORD GROWTH AND INCOME HLS FUND

Hartford Growth and Income HLS Fund (the "Growth and Income Fund") is a
diversified series of Hartford Series Fund, Inc., an open-end management
investment company which was incorporated in 1998 under Maryland law.

INVESTMENT OBJECTIVE.
The Growth and Income Fund seeks growth of capital and current income by
investing primarily in equity securities with earnings growth potential and
steady or rising dividends.

INVESTMENT STYLE.
The Growth and Income Fund invests in a diversified portfolio of primarily
equity securities that typically have steady or rising dividends and whose
prospects for capital appreciation are considered favorable by Wellington
Management. Wellington Management uses fundamental analysis to evaluate a
security for purchase or sale by the Fund. Fundamental analysis involves the
assessment of a company through such factors as its business environment,
management, balance sheet, income statement, anticipated earnings, revenues,
dividends, and other related measures of value. Wellington Management then uses
proprietary quantitative techniques to affirm its fundamental evaluation of a
security. The quantitative techniques evaluate a security using valuation
analysis, which includes use of a dividend discount model and cash flow
analysis, combined with momentum analysis, which includes an assessment of a
company's earnings momentum and stock price momentum. The quantitative
techniques look to affirm the fundamental evaluation by identifying those
securities that are attractive from the fundamental perspective and are also
both inexpensive based on the quantitative valuation factors and timely
according to the quantitative momentum factors. The Fund's portfolio will be
broadly diversified by industry and company. Up to 20% of the Fund's total
assets may be invested in securities of non-U.S. companies.

HARTFORD INDEX HLS FUND, INC.

Hartford Index HLS Fund, Inc. (formerly known as Hartford Index Fund, Inc.)
(the "Index Fund") was incorporated in 1983 under Maryland law.

INVESTMENT OBJECTIVE.

The Index Fund seeks to provide investment results which approximate the
price and yield performance of publicly-traded common stocks in the aggregate.

INVESTMENT STYLE.

The Index Fund uses the Standard & Poor's 500 Composite Stock Price Index
(the "Index") as its standard performance comparison because it represents a
significant proportion of the total market value of all common stocks, is well
known to investors and, in the opinion of the management of the Index Fund, is
representative of the performance of publicly-traded common stocks. Therefore,
the Index Fund attempts to approximate the capital performance and dividend
income of the Index.

The Index Fund generally invests in no fewer than 499 stocks. HIMCO selects
stocks for the Index Fund's portfolio after taking into account their individual
weights in the Index. Temporary cash balances, normally not expected to exceed
2% of the Index Fund's net assets, may be invested in short-term money market
instruments.

The Index is comprised of 500 selected common stocks, most of which are
listed on the New York Stock Exchange. Standard & Poor's Corporation ("S&P")
chooses the stocks to be included in the Index on a proprietary basis. The
weightings of stocks in the Index are based on each stock's relative total
market value, that is, its market price per share times the number of shares
outstanding. Because of this weighting, as of December 31, 1997, approximately
fifty percent of the Index was composed of the fifty-six largest companies, the
five largest being General Electric Co., Coca-Cola Company, Microsoft Corp.,
Exxon Corp. and Merck & Co., Inc.

No attempt is made to "manage" the Index Fund's portfolio in the traditional
sense, using economic, financial and market analysis, nor will the adverse
financial situation of a company directly result in its elimination from the
Index Fund's portfolio unless, of course, the company is removed from the Index.
From time to time administrative adjustments may be made in the Index Fund's
portfolio because of mergers, changes in the composition of the Index and
similar reasons.

The Index Fund's ability to approximate the performance of the Index will
depend to some extent on the size of cash flows into and out of the Index Fund.
Investment changes to accommodate these cash flows will be made to maintain the
similarity of the Index Fund's portfolio to the Index, to the maximum
practicable extent.

"Standard & Poor's-Registered Trademark-", "S&P-Registered Trademark-", "S&P
500-Registered Trademark-", "Standard & Poor's 500", and "500" are trademarks of
The McGraw-Hill Companies, Inc. and have been licensed for use by Hartford Life
Insurance Company. The Index Fund is not sponsored, endorsed, sold or promoted
by S&P. S&P makes no representation or warranty, express or implied, to the
shareholders of the Index Fund regarding the advisability of investing in
securities generally or in the Index Fund particularly or the ability of the S&P
500 Index to track general stock market performance. S&P's only relationship
<PAGE>
HARTFORD HLS MUTUAL FUNDS 19
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to Hartford Life Insurance Company is the licensing of certain trademarks and
trade names of S&P and of the S&P 500 Index which is determined, composed and
calculated by S&P without regard to the Index Fund or Hartford Life Insurance
Company. S&P has no obligation to take the needs of the Index Fund or its
shareholders, or Hartford Life Insurance Company, into consideration in
determining, composing or calculating the S&P 500 Index. S&P is not responsible
for and has not participated in the determination of the net asset value of the
Index Fund or the timing of the issuance or sale of shares in the Index Fund.
S&P has no obligation or liability in connection with the administration,
marketing or trading of the Index Fund.

In addition, S&P does not guarantee the accuracy and/or the completeness of
the S&P 500 Index or any data included therein and S&P shall have no liability
for any errors, omissions, or interruptions therein. S&P makes no warranty,
express or implied, as to results to be obtained by the Index Fund, its
shareholders or any other person or entity from the use of the S&P 500 Index or
any data included therein. S&P makes no express or implied warranties, and
expressly disclaims all warranties of merchantability or fitness for a
particular purpose or use with respect to the S&P 500 Index or any data included
therein. Without limiting any of the foregoing, in no event shall S&P have any
liability for any special, punitive, indirect, or consequential damages
(including lost profits), even if notified of the possibility of such damages.

HARTFORD INTERNATIONAL OPPORTUNITIES
HLS FUND, INC.

Hartford International Opportunities HLS Fund, Inc. (formerly known as
Hartford International Opportunities Fund, Inc.) (the "International
Opportunities Fund") was incorporated in 1990 under Maryland law.

INVESTMENT OBJECTIVE.

The International Opportunities Fund seeks growth of capital by investing
primarily in equity securities issued by non-U.S. companies.

INVESTMENT STYLE.

The International Opportunities Fund invests in a diversified portfolio of
primarily equity securities covering a broad range of countries, industries, and
companies. Securities in which the International Opportunities Fund invests are
denominated in both U.S. dollars and non-U.S. currencies (including the European
Currency Unit and its successor, the Euro) and generally are traded in non-U.S.
markets. Under normal market conditions, at least 65% of the International
Opportunities Fund's total assets are invested in equity securities issued by
non-U.S. companies. Wellington Management uses a three-pronged investment
approach. First, Wellington Management determines the relative attractiveness of
the many countries in which the International Opportunities Fund may invest
based upon the economic and political environment of each country. Second,
Wellington Management evaluates industries on a global basis to determine which
industries offer the most potential for capital appreciation given current and
projected global and local economic and market conditions. Finally, Wellington
Management conducts fundamental research on individual companies and considers
companies for inclusion in the International Opportunities Fund's portfolio that
are typically larger, high quality companies that operate in established
markets. Fundamental analysis involves the assessment of a company through such
factors as its business environment, management, balance sheet, income
statement, anticipated earnings, revenues, dividends, and other related measures
of value. In analyzing companies for investment, Wellington Management looks
for, among other things, a strong balance sheet, attractive industry dynamics,
strong competitive advantages and attractive relative value within the context
of a security's primary trading market. The International Opportunities Fund may
also invest on a limited basis in smaller companies and less developed markets.
The International Opportunities Fund anticipates that, under normal market
conditions, it will diversify its investments in at least three countries other
than the United States. See "Non-U.S. Securities" below and the SAI for
additional risk disclosure concerning non-U.S. securities. The International
Opportunities Fund will be subject to certain risks because it invests primarily
in securities issued by non-U.S. companies.

HARTFORD MIDCAP HLS FUND, INC.

Hartford MidCap HLS Fund, Inc. (formerly known as Hartford MidCap Fund,
Inc.) (the "MidCap Fund") was incorporated in 1997 under Maryland law.

INVESTMENT OBJECTIVE.

The MidCap Fund seeks to achieve long-term capital growth through capital
appreciation by investing primarily in equity securities.

INVESTMENT STYLE.

The MidCap Fund seeks to achieve its objective by investing in a diversified
portfolio of primarily equity securities and securities convertible into equity
securities. Under normal market and economic conditions at least 65% of the
MidCap Fund's total assets are invested in equity securities of companies with
market capitalizations within the range represented by the Standard & Poor's
MidCap 400 Index. The MidCap Fund uses a two-tiered investment approach. First,
under what is sometimes referred to as a "top down" approach, Wellington
Management analyzes the macro economic and investment environment. This includes
an evaluation of economic conditions, U.S. fiscal and monetary policy, and
demographic trends. Through top down analysis, Wellington Management anticipates
secular and
<PAGE>
20 HARTFORD HLS MUTUAL FUNDS
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cyclical changes and identifies industries and economic sectors that are
expected to grow faster than the overall economy.
Second, top down analysis is followed by what is sometimes referred to as a
"bottom up" approach, which is the use of fundamental analysis to identify
specific securities for purchase or sale. The MidCap Fund's portfolio emphasizes
high-quality growth companies. The key characteristics of high-quality growth
companies include a leadership position within an industry, a strong balance
sheet, a high return on equity, and a strong management team. Fundamental
analysis involves the assessment of a company through such factors as its
business environment, management, balance sheet, income statement, anticipated
earnings, revenues, and other related measures of value. Up to 20% of the MidCap
Fund's total assets may be invested in securities of non-U.S. companies.

HARTFORD SMALL COMPANY HLS FUND, INC.

Hartford Small Company HLS Fund, Inc. (formerly known as Hartford Small
Company Fund, Inc.) (the "Small Company Fund") was incorporated in 1996 under
Maryland law.

INVESTMENT OBJECTIVE.

The Small Company Fund seeks growth of capital by investing primarily in
equity securities selected on the basis of potential for capital appreciation.

INVESTMENT STYLE.

Under normal market and economic conditions at least 65% of the Small
Company Fund's total assets are invested in equity securities of companies with
market capitalizations within the range represented by the Russell 2000 Index
("Small Capitalization Securities"). Wellington Management identifies, through
fundamental analysis, companies that it believes have substantial near-term
capital appreciation potential regardless of industry sector. However, overall
industry exposure is monitored by Wellington Management so as to maintain broad
industry diversification. In selecting investments, Wellington Management
considers securities of companies that, in its opinion, have potential for
above-average earnings growth, are undervalued in relation to their investment
potential, have business and/or fundamental financial characteristics that are
misunderstood by investors, or are relatively obscure, i.e., undiscovered by the
overall investment community. Fundamental analysis involves the assessment of a
company through such factors as its business environment, management, balance
sheet, income statement, anticipated earnings, revenues, dividends, and other
related measures of value. Up to 20% of the Small Company Fund's total assets
may be invested in securities of non-U.S. companies. Investing in Small
Capitalization Securities involves special risks. See "Common Investment
Policies and Risk Factors -- Small Capitalization Securities."

HARTFORD STOCK HLS FUND, INC.

Hartford Stock HLS Fund, Inc. (formerly known as Hartford Stock Fund, Inc.)
(the "Stock Fund") was incorporated in 1976 under Maryland law.

INVESTMENT OBJECTIVE.

The Stock Fund seeks long-term growth of capital, with income as a secondary
consideration, by investing in primarily equity securities.

INVESTMENT STYLE.

Under normal market and economic conditions at least 65% of the Stock Fund's
total assets are invested in stocks. The Stock Fund invests in a diversified
portfolio of primarily equity securities using a two-tiered investment approach.
First, under what is sometimes referred to as a "top down" approach, Wellington
Management analyzes the macro economic and investment environment. This includes
an evaluation of economic conditions, U.S. fiscal and monetary policy,
demographic trends, and investor sentiment. Through top down analysis,
Wellington Management anticipates secular and cyclical changes and identifies
industries and economic sectors that are expected to grow faster than the
overall economy. Second, top down analysis is followed by what is sometimes
referred to as a "bottom up" approach, which is the use of fundamental analysis
to identify specific securities for purchase or sale. The Stock Fund's portfolio
emphasizes high-quality growth companies. The key characteristics of
high-quality growth companies include a leadership position within an industry,
a strong balance sheet, a high return on equity, sustainable or increasing
dividends, a strong management team, and a globally competitive position.
Fundamental analysis involves the assessment of a company through such factors
as its business environment, management, balance sheet, income statement,
anticipated earnings, revenues, dividends, and other related measures of value.
Up to 20% of the Stock Fund's total assets may be invested in securities of
non-U.S. companies.

HARTFORD ADVISERS HLS FUND, INC.

Hartford Advisers HLS Fund, Inc. (formerly known as Hartford Advisers Fund,
Inc.) (the "Advisers Fund") was incorporated in 1982 under Maryland law.

INVESTMENT OBJECTIVE.

The Advisers Fund seeks maximum long-term total rate of return by investing
in common stocks and other equity securities, bonds and other debt securities,
and money market instruments.
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HARTFORD HLS MUTUAL FUNDS 21
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INVESTMENT STYLE.

The Advisers Fund seeks to achieve its objective through the active
allocation of its assets among the asset categories of equity securities, debt
securities and money market instruments based upon Wellington Management's
judgment of the projected investment environment for financial assets, relative
fundamental values and attractiveness of each asset category, and expected
future returns of each asset category. Wellington Management bases its asset
allocation decisions on fundamental analysis and does not attempt to make
short-term market timing decisions among asset categories. As a result, shifts
in asset allocation are expected to be gradual and continuous and the Advisers
Fund will normally have some portion of its assets invested in each asset
category. The Advisers Fund does not have percentage limitations on the amount
that may be allocated to each asset category. The Advisers Fund's investments in
equity securities and securities that are convertible into equity securities
will be substantially similar to the investments permitted for the Stock Fund.
See "Hartford Stock Fund." The debt securities in which the Advisers Fund may
invest include securities issued or guaranteed by the U.S. Government and its
agencies or instrumentalities, securities rated investment grade, or if unrated,
are deemed by Wellington Management to be of comparable quality, and with
respect to 5% of the Advisers Fund's assets, securities rated below investment
grade which are known as high yield-high risk securities or junk bonds. The
money market instruments in which the Adviser's Fund may invest are described
under "Common Investment Policies and Risk Factors -- Money Market Instruments
and Temporary Investment Strategies." Up to 20% of the Advisers Fund's total
assets may be invested in securities of non-U.S. companies.

HARTFORD INTERNATIONAL ADVISERS HLS FUND, INC.

Hartford International Advisers HLS Fund, Inc. (formerly known as Hartford
International Advisers Fund, Inc.) (the "International Advisers Fund") was
incorporated in 1994 under Maryland law.

INVESTMENT OBJECTIVE.

The International Advisers Fund seeks maximum long-term total rate of return
by investing in a portfolio of equity, debt and money market securities.
Securities in which the Fund invests primarily will be denominated in non-U.S.
currencies and will be traded in non-U.S. markets.

INVESTMENT STYLE.

The International Advisers Fund seeks to achieve its objective through the
active allocation of its assets among the asset categories of equity securities,
debt securities and money market instruments based upon Wellington Management's
judgment of the projected investment environment for financial assets, relative
fundamental values and attractiveness of each asset category, and expected
future returns of each asset category. Wellington Management bases its asset
allocation decisions on fundamental analysis and does not attempt to make
short-term market timing decisions among asset categories. As a result, shifts
in asset allocation are expected to be gradual and continuous and the
International Advisers Fund will normally have some portion of its assets
invested in each asset category. The International Advisers Fund does not have
percentage limitations on the amount that may be allocated to each asset
category. The International Advisers Fund's investments in equity securities are
substantially similar to the equity securities investments permitted for the
International Opportunities Fund. See "Hartford International Opportunities
Fund, Inc. -- Investment Style."

The International Advisers Fund consists of a diversified portfolio of
securities covering a broad range of countries, industries, and companies. The
International Advisers Fund anticipates that, under normal market conditions, it
will diversify its investments in at least three countries other than the United
States. See "Non-U.S. Securities" below and the SAI for additional risk
disclosure concerning non-U.S. securities.

Securities in which the International Advisers Fund invests are denominated
in both U.S. dollars and non-U.S. currencies (including the European Currency
Unit and its successor, the Euro) and generally are traded on non-U.S. markets.

Debt securities in which the International Advisers Fund may invest include
investment grade, non-convertible debt securities assigned within the four
highest bond rating categories by Moody's Investors Service, Inc. ("Moody's") or
S&P, or, if unrated, which are determined by Wellington Management to be of
comparable quality. In addition, the International Advisers Fund may invest up
to 15% of its total assets in high yield-high risk securities, commonly known as
"junk bonds." Such securities may be rated as low as "C" by Moody's and by S&P,
or, if unrated, are of comparable quality as determined by Wellington
Management.

HARTFORD BOND HLS FUND, INC.

Hartford Bond HLS Fund, Inc. (formerly known as Hartford Bond Fund, Inc.)
(the "Bond Fund") was incorporated in 1982 under Maryland law.

INVESTMENT OBJECTIVE.

The Bond Fund seeks maximum current income consistent with preservation of
capital by investing primarily in fixed-income securities.

INVESTMENT STYLE.

The Bond Fund is comprised of a diversified portfolio of fixed-income
securities. Under normal circumstances at least 80% of the Bond Fund's portfolio
is invested in investment grade fixed income securities. Up to 20% of the Bond

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22 HARTFORD HLS MUTUAL FUNDS
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Fund may be invested in securities rated in the highest category of below
investment grade bonds ("Ba" by Moody's or "BB" by S&P, or securities which, if
unrated, are determined by HIMCO to be of comparable quality. Securities rated
below investment grade are commonly referred to as "high yield-high risk
securities" or "junk bonds". Investments in securities rated in the highest
category below investment grade may offer an attractive risk/reward trade-off
and investment in this sector may enhance the current yield and total return of
the Bond Fund over time. Investing in securities within this rating category
combined with the investment grade portion of the portfolio is designed to
provide investors with both a high level of current income and attractive
relative total returns.

The Bond Fund will invest at least 65% of its total assets in bonds and debt
securities with a maturity of at least one year. The Bond Fund may invest up to
15% of its total assets in preferred stocks, convertible securities, and
securities carrying warrants to purchase equity securities. The Bond Fund will
not invest in common stocks directly, but may retain, for reasonable periods of
time, common stocks acquired upon conversion of debt securities or upon exercise
of warrants acquired with debt securities. Under normal circumstances, up to 20%
of the Bond Fund's total assets may be invested in securities of non-U.S.
companies.

HARTFORD HIGH YIELD HLS FUND

Hartford High Yield HLS Fund (the "High Yield Fund") is a diversified series
of Hartford Series Fund, Inc., an open-end management investment company which
was incorporated in 1998 under Maryland law.

INVESTMENT OBJECTIVE.

The High Yield Fund seeks high current income by investing in non-investment
grade fixed-income securities. Growth of capital is a secondary objective.

INVESTMENT STYLE.

The High Yield Fund is comprised of a diversified portfolio of fixed-income
securities of U.S. issuers and non-U.S. issuers. Under normal circumstances at
least 65% of the High Yield Fund's portfolio is invested in non-investment grade
bond-type securities ("Ba" or lower by Moody's or "BB" or lower by S&P, or
securities which, if unrated, are determined by HIMCO to be of comparable
quality). Securities rated below investment grade are commonly referred to as
"high yield-high risk securities" or "junk bonds". Although the High Yield Fund
is permitted to invest up to 100% of its total assets in non-investment grade
securities, no more than 10% of total assets will be invested in securities
rated below B3 by Moody's or B- by S&P, or if unrated, determined to be of
comparable quality by HIMCO.

The High Yield Fund may invest up to 15% of its total assets in preferred
stocks, convertible securities, and securities carrying warrants to purchase
equity securities. The High Yield Fund will not invest in common stocks
directly, but may retain, for reasonable periods of time, common stocks acquired
upon conversion of debt securities or upon exercise of warrants acquired with
debt securities. Under normal circumstances, up to 30% of the High Yield Fund's
total assets may be invested in securities of non-U.S. issuers, of which up to
10% may be issued in non-U.S. currencies (including the European Currency Unit
and its successor, the Euro). Non-U.S. dollar denominated securities for which
the High Yield Fund uses currency transactions to reflect U.S. dollar valuation
at the time of purchase or while the High Yield Fund holds the security are
excluded from the calculation of the percentage of securities issued in non-U.S.
currencies. The High Yield Fund may also invest in non-U.S. debt securities of
issuers located in less developed markets, which are also known as emerging
markets. See "Non-U.S. Securities" below and the SAI for additional risk
disclosure concerning non-U.S. securities.

HARTFORD MORTGAGE SECURITIES HLS FUND, INC.

Hartford Mortgage Securities HLS Fund, Inc. (formerly known as Hartford
Mortgage Securities Fund, Inc.) (the "Mortgage Securities Fund") was
incorporated in 1984 under Maryland law.

INVESTMENT OBJECTIVE.

The Mortgage Securities Fund seeks maximum current income consistent with
safety of principal and maintenance of liquidity by investing primarily in
mortgage-related securities, including securities issued by the Government
National Mortgage Association.

INVESTMENT STYLE.

The Mortgage Securities Fund seeks to achieve its objective by investing,
under normal circumstances, at least 65% of its total assets in high quality
mortgage-related securities either (i) issued by U.S. Government agencies,
instrumentalities or sponsored corporations or (ii) rated A or better by Moody's
or S&P or, if not rated, which are of equivalent investment quality as
determined by HIMCO. At times the Mortgage Securities Fund may invest in
mortgage-related securities not meeting the foregoing investment quality
standards when HIMCO deems such investments to be consistent with the Fund's
investment objective; however, no such investments will be made in excess of 20%
of the value of the Fund's total assets. Such investments will be considered
mortgage-related securities for purposes of the policy that the Fund invest at
least 65% of the value of its total assets in mortgage-related securities,
including securities issued by the GNMA.

HARTFORD MONEY MARKET HLS FUND, INC.

Hartford Money Market HLS Fund, Inc. (formerly known as HVA Money Market
Fund, Inc.) (the "Money
<PAGE>
HARTFORD HLS MUTUAL FUNDS 23
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Market Fund") was incorporated in 1982 under Maryland law.

INVESTMENT OBJECTIVE.

The Money Market Fund seeks maximum current income consistent with liquidity
and preservation of capital.

INVESTMENT STYLE.

The Money Market Fund seeks to maintain a stable net asset value of $1.00
per share; however, there can be no assurance that the Fund will achieve this
goal. The Money Market Fund's portfolio will consist entirely of cash, cash
equivalents and high quality debt securities as permitted under Rule 2a-7 of the
Investment Company Act of 1940 (the "1940 Act"). Each investment will have an
effective maturity date of 397 days or less computed in accordance with Rule
2a-7. The average maturity of the portfolio will vary according to HIMCO's
appraisal of money market conditions and will not exceed 90 days. All securities
purchased by the Money Market Fund will be U.S. dollar denominated.

COMMON INVESTMENT POLICIES
AND RISK FACTORS

The percentage limits described in the sections below are based on market
value and are determined as of the time securities are purchased.

MONEY MARKET INSTRUMENTS AND
TEMPORARY INVESTMENT STRATEGIES

In addition to the Money Market Fund, which may hold cash and invest in
money market instruments at any time, all other Funds may hold cash and invest
in high quality money market instruments under appropriate circumstances as
determined by HIMCO or Wellington Management. Such Funds may invest up to 100%
of their assets in cash or money market instruments only for temporary defensive
purposes.

Money market instruments include: (1) banker's acceptances; (2) obligations
of governments (whether U.S. or non-U.S.) and their agencies and
instrumentalities; (3) short-term corporate obligations, including commercial
paper, notes, and bonds; (4) other short-term debt obligations; (5) obligations
of U.S. banks, non-U.S. branches of U.S. banks (Eurodollars), U.S. branches and
agencies of non-U.S. banks (Yankee dollars), and non-U.S. branches of non-U.S.
banks; (6) asset-backed securities; and (7) repurchase agreements.

REPURCHASE AGREEMENTS

Each Fund is permitted to enter into fully collateralized repurchase
agreements. A repurchase agreement is an agreement by which the seller of a
security agrees to repurchase the security sold at a mutually agreed upon time
and price. It may also be viewed as the loan of money by a Fund to the seller.
The resale price would be in excess of the purchase price, reflecting an agreed
upon market interest rate. Delays or losses could result if the other party to
the agreement defaults or becomes insolvent. The Fund's Board of Directors has
established standards for evaluation of the creditworthiness of the banks and
securities dealers with which the Funds may engage in repurchase agreements and
monitors on a quarterly basis HIMCO's and Wellington Management's compliance
with such standards.

REVERSE REPURCHASE AGREEMENTS

Each Fund may also enter into reverse repurchase agreements. Reverse
repurchase agreements involve sales by a Fund of portfolio assets concurrently
with an agreement by a Fund to repurchase the same assets at a later date at a
fixed price. Reverse repurchase agreements carry the risk that the market value
of the securities which a Fund is obligated to repurchase may decline below the
repurchase price. A reverse repurchase agreement is viewed as a collateralized
borrowing by a Fund. Borrowing magnifies the potential for gain or loss on the
portfolio securities of a Fund and, therefore, increases the possibility of
fluctuation in a Fund's net asset value. A Fund will establish a segregated
account with the Fund's custodian bank in which a Fund will maintain liquid
assets equal in value to a Fund's obligations in respect of reverse repurchase
agreements. As a non-fundamental policy, a Fund will not enter into reverse
repurchase transactions if the combination of all borrowings from banks and the
value of all reverse repurchase agreements for the particular Fund equals more
than 33 1/3% of the value of the Fund's total assets.

DEBT SECURITIES

Each Fund is permitted to invest in debt securities including: (1)
securities issued or guaranteed as to principal or interest by the U.S.
Government, its agencies or instrumentalities; (2) debt securities issued or
guaranteed by U.S. corporations or other issuers (including foreign governments
or corporations); (3) asset-backed securities (International Opportunities Fund,
International Advisers Fund, Advisers Fund, Bond Fund, High Yield Fund, Mortgage
Securities Fund and Money Market Fund only); (4) mortgage-related securities,
including collateralized mortgage obligations ("CMO's") (International
Opportunities Fund, International Advisers Fund, Advisers Fund, Bond Fund, High
Yield Fund and Mortgage Securities Fund only); and (5) securities issued or
guaranteed as to principal or interest by a sovereign government or one of its
agencies or political subdivisions, supranational entities such as development
banks, non-U.S. corporations, banks or bank holding companies, or other non-U.S.
issuers.
<PAGE>
24 HARTFORD HLS MUTUAL FUNDS
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Investors should consider that bonds are subject to interest rate risk,
which is the potential for changes in the price of bonds arising from changes in
interest rates. The price of bonds typically varies inversely with interest
rates. This means that when interest rates rise, the price of bonds generally
falls, and when interest rates fall, the price of bonds generally rises.
Generally speaking, the longer the maturity of the bond, the more sensitive the
price of bonds is to changes in interest rates. As a result, when interest rates
rise, the price of bonds generally will fall by a greater amount for bonds of a
longer maturity than shorter maturity. Conversely, when interest rates fall, the
price of bonds generally will increase by a greater amount for bonds of a longer
maturity than a shorter maturity.

INVESTMENT GRADE DEBT SECURITIES

Each Fund is permitted to invest in debt securities rated within the four
highest rating categories (i.e., Aaa, Aa, A or Baa by Moody's or AAA, AA, A or
BBB by S&P), or, if unrated, securities of comparable quality as determined by
HIMCO or Wellington Management. These securities are generally referred to as
"investment grade securities." Each rating category has within it different
gradations or sub-categories. If a Fund is authorized to invest in a certain
rating category, the Fund is also permitted to invest in any of the
sub-categories or gradations within that rating category. If a security is
downgraded to a rating category which does not qualify for investment, HIMCO or
Wellington Management will use its discretion on whether to hold or sell based
upon its opinion on the best method to maximize value for shareholders over the
long term. Debt securities carrying the fourth highest rating (i.e., "Baa" by
Moody's and "BBB" by S&P), and unrated securities of comparable quality (as
determined by HIMCO or Wellington Management) are viewed as having adequate
capacity for payment of principal and interest, but do involve a higher degree
of risk than that associated with investments in debt securities in the higher
rating categories.

HIGH YIELD-HIGH RISK DEBT SECURITIES

The Capital Appreciation Fund, Dividend and Growth Fund, Global Leaders
Fund, Growth and Income Fund, MidCap Fund, Small Company Fund, Stock Fund,
Advisers Fund and International Opportunities Fund may invest up to 5% of their
assets and the International Advisers Fund may invest up to 15% of its assets in
high yield debt securities (i.e., rated as low as "C" by Moody's or S&P, and
unrated securities of comparable quality as determined by Wellington
Management). The Bond Fund may invest up to 20% of its assets in securities
rated in the highest level below investment grade ("Ba" by Moody's or "BB" by
S&P) or, if unrated, determined to be of comparable quality by HIMCO. Although
the High Yield Fund is permitted to invest up to 100% of its total assets in
securities rated below investment grade, no more than 10% of total assets will
be invested in securities rated below B3 by Moody's or B- by S&P or, if unrated,
determined to be of comparable quality by HIMCO. Securities rated below
investment grade are commonly referred to as "high yield-high risk securities"
or "junk bonds". Each rating category has within it different gradations or
sub-categories. If a Fund is authorized to invest in a certain rating category,
the Fund is also permitted to invest in any of the sub-categories or gradations
within that rating category. If a security is downgraded to a rating category
which does not qualify for investment, HIMCO or Wellington Management will use
its discretion on whether to hold or sell based upon its opinion on the best
method to maximize value for shareholders over the long term. Securities in the
rating categories below "Baa" as determined by Moody's and "BBB" as determined
by S&P are considered to be of poor standing and predominantly speculative. The
rating services' descriptions of securities are set forth in Appendix A. High
yield-high risk debt securities are considered speculative with respect to the
issuer's capacity to pay interest and repay principal in accordance with the
terms of the obligations. Accordingly, it is possible that these types of
factors could, in certain instances, reduce the value of securities held by a
Fund with a commensurate effect on the value of the Fund's shares.

MORTGAGE-BACKED AND ASSET-BACKED SECURITIES

The International Opportunities Fund, International Advisers Fund, Advisers
Fund, Bond Fund, High Yield Fund and Mortgage Securities Fund may invest in
mortgage-backed securities and the International Opportunities Fund,
International Advisers Fund, Advisers Fund, Bond Fund, High Yield Fund, Mortgage
Securities Fund and Money Market Fund may invest in asset-backed securities.
Mortgage-backed securities represent a participation in, or are secured by,
mortgage loans and include securities issued or guaranteed by the U.S.
Government or one of its agencies or instrumentalities; securities issued by
private issuers that represent an interest in, or are collateralized by,
mortgage-backed securities issued or guaranteed by the U.S. Government or one or
its agencies or instrumentalities; or securities issued by private issuers that
represent an interest in or are collateralized by mortgage loans or mortgage-
backed securities without a government guarantee but usually having some form of
private credit enhancement. Asset-backed securities are structured like
mortgage-backed securities, but instead of mortgage loans or interests in
mortgage loans, the underlying assets may include motor vehicle installment
sales or installment loan contracts, leases of various types of real and
personal property, and receivables from credit card agreements.

Due to the risk of prepayment, especially when interest rates decline,
mortgage-backed and asset-backed securities are less effective than other types
of securities as a means of "locking in" attractive long-term interest rates
and, as a result, may have less potential for capital appreciation
<PAGE>
HARTFORD HLS MUTUAL FUNDS 25
- --------------------------------------------------------------------------------

during periods of declining interest rates than other securities of comparable
maturities. The ability of an issuer of asset-backed securities to enforce its
security interest in the underlying assets may be limited.

EQUITY SECURITIES

All Funds except the Bond Fund and High Yield Fund as described below and
except the Mortgage Securities Fund and Money Market Fund may invest in equity
securities including common stocks, preferred stocks, convertible preferred
stock and rights to acquire such securities. In addition, these Funds may invest
in securities such as bonds, debentures and corporate notes which are
convertible into common stock at the option of the holder. The Bond Fund and
High Yield Fund may each invest up to 15% of its total assets in preferred
stocks, convertible securities, and securities carrying warrants to purchase
equity securities. The Bond Fund and High Yield Fund will not invest in common
stocks directly, but may retain, for reasonable periods of time, common stocks
acquired upon conversion of debt securities or upon exercise of warrants
acquired with debt securities.

SMALL CAPITALIZATION SECURITIES
All Funds except the Mortgage Securities Fund and Money Market Fund may
invest in equity securities (including securities issued in initial public
offerings) of companies with market capitalizations within the range represented
by the Russell 2000 Index ("Small Capitalization Securities"). Because the
issuers of Small Capitalization Securities tend to be smaller or less
well-established companies, they may have limited product lines, market share or
financial resources and may have less historical data with respect to operations
and management. As a result, Small Capitalization Securities are often less
marketable and experience a higher level of price volatility than securities of
larger or more well-established companies. In addition, companies whose
securities are offered in initial public offerings may be more dependent on a
limited number of key employees. Because securities issued in initial public
offerings are being offered to the public for the first time, the market for
such securities may be inefficient and less liquid.

NON-U.S. SECURITIES

Under normal circumstances the International Opportunities Fund and
International Advisers Fund intend to invest at least 65% of their assets in
securities issued by non-U.S. issuers ("non-U.S. securities"). In addition, the
International Opportunities Fund and International Advisers Fund may invest in
commingled pools offered by non-U.S. banks. The Global Leaders Fund intends to
invest its assets in at least five countries, one of which will be the U.S. Each
other Fund, except the Mortgage Securities Fund and High Yield Fund, is
permitted to invest up to 20% of its assets, and the Money Market Fund is
permitted to invest up to 25% of its assets, in non-U.S. securities. The High
Yield Fund is permitted to invest up to 30% of its assets in non-U.S.
securities. The determination of the country where the issuer of a security is
located may be based on such factors as the issuer's country of organization,
the location of the primary trading market for its securities and the location
of its offices and personnel. The Bond Fund intends to purchase securities
denominated in U.S. dollars, or if not so denominated, to use currency
transactions to reflect U.S. dollar valuation at the time of purchase or while
the security is held by the Fund. Each Fund except the Bond Fund, High Yield
Fund and Money Market Fund may invest in American Depositary Receipts ("ADRs")
and Global Depositary Receipts ("GDRs"). ADRs are certificates issued by a U.S.
bank or trust company and represent the right to receive non-U.S. securities.
ADRs are traded on a U.S. securities exchange, or in an over-the-counter market,
and are denominated in U.S. dollars. GDRs are certificates issued globally and
evidence a similar ownership arrangement. GDRs are traded on non-U.S. securities
exchanges and are denominated in non-U.S. currencies. The value of an ADR or a
GDR will fluctuate with the value of the underlying security, will reflect any
changes in exchange rates and otherwise will involve risks associated with
investing in non-U.S. securities.

When selecting non-U.S. securities HIMCO or Wellington Management will
evaluate the economic and political climate and the principal securities markets
of the country in which the issuer is located. Investing in non-U.S. securities
involves considerations and potential risks not typically associated with
investing in U.S. securities. Less information may be available about non-U.S.
issuers compared with U.S. issuers. For example, non-U.S. companies generally
are not subject to uniform accounting, auditing and financial reporting
standards or to other regulatory practices and requirements comparable to those
applicable to U.S. companies. In addition, the values of non-U.S. securities are
affected by changes in currency rates or exchange control regulations,
restrictions or prohibitions on the repatriation of non-U.S. currencies,
application of non-U.S. tax laws, including withholding taxes, changes in
governmental administration or economic or monetary policy (in the U.S. or
outside the U.S.) or changed circumstances in dealings between nations. Costs
are also incurred in connection with conversions between various currencies.
From time to time, the International Opportunities Fund, International Advisers
Fund, Global Leaders Fund and High Yield Fund may invest up to 25%, 25%, 25% and
30%, respectively, of their assets in securities of issuers located in emerging
countries. Compared to the United States and other developed countries,
developing countries may have relatively unstable governments, economies based
on only a few industries, and securities markets that are less liquid and trade
a small number of securities. Prices on these exchanges tend to be volatile and,
in the past, securities in these countries have offered greater potential for
gain (as

<PAGE>
26 HARTFORD HLS MUTUAL FUNDS
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well as loss) than securities of issuers located in developed countries. See the
SAI for additional risk disclosure concerning non-U.S. securities.

CURRENCY TRANSACTIONS

Each Fund, except the Index Fund, Mortgage Securities Fund and Money Market
Fund, may engage in currency transactions to hedge the value of portfolio
securities denominated in particular currencies against fluctuations in relative
value. Currency transactions include forward currency contracts, currency swaps,
exchange-listed and over-the-counter ("OTC") currency futures contracts and
options thereon and exchange listed and OTC options on currencies.

Forward currency contracts involve a privately negotiated obligation to
purchase or sell a specific currency at a future date, which may be any fixed
number of days from the date of the contract agreed upon by the parties, at a
price set at the time of the contract. Currency swaps are agreements to exchange
cash flows based on the notional difference between or among two or more
currencies. See "Swap Agreements."

The use of currency transactions to protect the value of a Fund's assets
against a decline in the value of a currency does not eliminate potential losses
arising from fluctuations in the value of the Fund's underlying securities.
Further, the Funds may enter into currency transactions only with counterparties
that HIMCO or Wellington Management deem to be creditworthy.

The Funds may also enter into options and futures contracts relative to
foreign currency to hedge against fluctuations in foreign currency rates. See
"Options and Futures Contracts" for a discussion of risk factors relating to
foreign currency transactions including related options and futures contracts.

OPTIONS AND FUTURES CONTRACTS

Each Fund, except the Money Market Fund, may employ certain hedging, income
enhancement and risk management techniques involving options and futures
contracts, though such techniques may also result in losses to the Fund. The
Funds may write covered call options or purchase put and call options on
individual securities, write covered put and call options and purchase put and
call options on foreign currencies, aggregates of equity and debt securities,
indices of prices of equity and debt securities and other financial indices, and
enter into futures contracts and options thereon for the purchase or sale of
aggregates of equity and debt securities, indices of equity and debt securities
and other financial indices.

A Fund may write covered options only. "Covered" means that, so long as a
Fund is obligated as the writer of an option, it will own either the underlying
securities or currency or an option to purchase or sell the same underlying
securities or currency having an expiration date not earlier than the expiration
date of the covered option and an exercise price equal to or less than the
exercise price of the covered option, or will establish or maintain with its
custodian for the term of the option a "segregated account" consisting of cash
or other liquid securities having a value equal to the fluctuating market value
of the optioned securities or currencies. A Fund receives a premium from writing
a call or put option, which increases the Fund's return if the option expires
unexercised or is closed out at a net profit.

To hedge against fluctuations in currency exchange rates, these Funds may
purchase or sell foreign currency futures contracts, and write put and call
options and purchase put and call options on such futures contracts. To the
extent that a Fund enters into futures contracts, options on futures contracts
and options on foreign currencies that are traded on an exchange regulated by
the Commodities Futures Trading Commission ("CFTC"), in each case that are not
for BONA FIDE hedging purposes (as defined by the CFTC), the aggregate initial
margin and premiums required to establish those non-hedging positions may not
exceed 5% of the liquidation value of Fund's portfolio, after taking into
account the unrealized profits and unrealized losses on any such contracts the
Fund has entered into.

A Fund's use of options, futures and options thereon and forward currency
contracts (as described under "Currency Transactions") would involve certain
investment risks and transaction costs to which it might not be subject were
such strategies not employed. Such risks include: (1) dependence on the ability
of HIMCO or Wellington Management to predict movements in the prices of
individual securities, fluctuations in the general securities markets or market
sections and movements in interest rates and currency markets; (2) imperfect
correlation between movements in the price of the securities or currencies
hedged or used for cover; (3) the fact that skills and techniques needed to
trade options, futures contracts and options thereon or to use forward currency
contracts are different from those needed to select the securities in which a
Fund invests; (4) lack of assurance that a liquid secondary market will exist
for any particular option, futures contract, option thereon or forward contract
at any particular time, which may affect a Fund's ability to establish or close
out a position; (5) possible impediments to effective portfolio management or
the ability to meet current obligations caused by the segregation of a large
percentage of a Fund's assets to cover its obligations; and (6) the possible
need to defer closing out certain options, futures contracts, options thereon
and forward contracts in order to continue to qualify for the beneficial tax
treatment afforded "regulated investment companies" under the Internal Revenue
Code of 1986, as amended (the "Code"). See the SAI for additional information on
options and futures contracts.
<PAGE>
HARTFORD HLS MUTUAL FUNDS 27
- --------------------------------------------------------------------------------

Options and futures contracts are commonly known as "derivative" securities.

SWAP AGREEMENTS

Each Fund, except the Index Fund and Money Market Fund, may enter into
interest rate swaps, currency swaps and other types of swap agreements such as
caps, collars, and floors. In a typical interest rate swap, one party agrees to
make regular payments equal to a floating interest rate multiplied by a
"notional principal amount," in return for payments equal to a fixed rate
multiplied by the same amount, for a specified period of time. If a swap
agreement provides for payments in different currencies, the parties might agree
to exchange the notional principal amount as well. Swaps may also depend on
other prices or rates, such as the value of an index or mortgage prepayment
rates.

In a typical cap or floor agreement, one party agrees to make payments only
under specified circumstances, usually in return for payment of a fee by the
other party. For example, the buyer of an interest rate cap obtains the right to
receive payments to the extent that a specified interest rate exceeds an
agreed-upon level, while the seller of an interest rate floor is obligated to
make payments to the extent that a specified interest rate falls below an
agreed-upon level. An interest rate collar combines elements of buying a cap and
selling a floor.

Swap agreements will tend to shift a Fund's investment exposure from one
type of investment to another. For example, if a Fund agreed to exchange
floating rate payments for fixed rate payments, the swap agreement would tend to
decrease the Fund's exposure to rising interest rates. Caps and floors have an
effect similar to buying or writing options. Depending on how they are used,
swap agreements may increase or decrease the overall volatility of a Fund's
investments and its share price and yield. Swap agreements are commonly known as
"derivative" securities.

The successful utilization of hedging and risk management transactions
requires skills different from those needed in the selection of a Fund's
portfolio securities and depends on HIMCO's or Wellington Management's ability
to predict correctly the direction and degree of movement in interest rates.
Although the Funds believe that the use of the hedging and risk management
techniques described above will benefit the Funds, if HIMCO's or Wellington
Management's judgment about the direction or extent of the movement in interest
rates is incorrect, a Fund's overall performance would be worse than if it had
not entered into any such transactions. These activities are commonly used when
managing derivative investments.

ILLIQUID SECURITIES

Each Fund is permitted to invest in illiquid securities. The maximum
percentage of illiquid securities which may be purchased by each Fund is 15%
except for the Money Market Fund for which the limit is 10% of their net assets.
"Illiquid Securities" are securities that may not be sold or disposed of in the
ordinary course of business within seven days at approximately the price used to
determine a Fund's net asset value. Each Fund may purchase certain restricted
securities commonly known as Rule 144A securities that can be resold to
institutions and which may be determined to be liquid pursuant to policies and
guidelines of the Board of Directors.

Under current interpretations of the Securities and Exchange Commission
("SEC") staff, the following securities may be considered illiquid: (1)
repurchase agreements maturing in more than seven days; (2) certain restricted
securities (securities whose public resale is subject to legal or contractual
restrictions); (3) options, with respect to specific securities, not traded on a
national securities exchange that are not readily marketable; and (4) any other
securities in which a Fund may invest that are not readily marketable.

WHEN-ISSUED AND DELAYED-DELIVERY SECURITIES

Each Fund is permitted to purchase or sell securities on a when-issued or
delayed-delivery basis. When-issued or delayed-delivery transactions arise when
securities are purchased or sold with payment and delivery taking place in the
future in order to secure what is considered to be an advantageous price and
yield at the time of entering into the transaction. While the Funds generally
purchase securities on a when-issued basis with the intention of acquiring the
securities, the Funds may sell the securities before the settlement date if
HIMCO or Wellington Management deems it advisable. At the time a Fund makes the
commitment to purchase securities on a when-issued basis, the Fund will record
the transaction and thereafter reflect the value, each day, of such security in
determining net asset value. At the time of delivery of the securities, the
value may be more or less than the purchase price.

OTHER INVESTMENT COMPANIES

Each Fund, except the Index Fund and Money Market Fund, is permitted to
invest in other investment companies. Securities in certain countries are
currently accessible to the Funds only through such investments. The investment
in other investment companies is limited in amount and will involve the indirect
payment of a portion of the expenses, including advisory fees, of such other
investment companies. A Fund will not purchase a security if, as a result, (1)
more than 10% of the Fund's assets would be invested in securities of other
investment companies, (2) such purchase
<PAGE>
28 HARTFORD HLS MUTUAL FUNDS
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would result in more than 3% of the total outstanding voting securities of any
one such investment company being held by the Fund or (3) more than 5% of the
Fund's assets would be invested in any one such investment company.

PORTFOLIO SECURITIES LENDING

Each Fund may lend its portfolio securities to broker/ dealers and other
institutions as a means of earning interest income. Delays or losses could
result if a borrower of portfolio securities becomes bankrupt or defaults on its
obligation to return the loaned securities. A Fund may lend securities only if:
(1) each loan is fully secured by appropriate collateral at all times as
determined by HL Advisors; and (2) the value of all loaned securities of the
Fund is not more than 33 1/3% of the Fund's total assets (including collateral
received in connection with any loans).

OTHER RISK FACTORS

As mutual funds that primarily invest in equity and/or debt securities, each
Fund is subject to market risk, i.e., the possibility that equity and/or debt
prices in general will decline over short or even extended periods of time. The
financial markets tend to be cyclical, with periods when security prices
generally rise and periods when security prices generally decline.

The value of the debt securities in which the Funds invest will tend to
increase when interest rates are falling and to decrease when interest rates are
rising.

No Fund should be considered to be a complete investment program in and of
itself. Each prospective purchaser should take into account his or her own
investment objectives as well as his or her other investments when considering
the purchase of shares of any investment company.

There can be no assurance that the investment objectives of the Funds will
be met. In addition, the risk inherent in investing in the Funds is common to
any security -- the net asset value will fluctuate in response to changes in
economic conditions, interest rates and the market's perception of the
underlying portfolio securities of each Fund.

In pursuit of a Fund's investment objective, HIMCO and Wellington Management
attempt to select appropriate individual securities for inclusion in a Fund's
portfolio. In addition, HIMCO and Wellington Management attempt to successfully
forecast market trends and increase investments in the types of securities best
suited to take advantage of such trends. Thus, the investor is dependent on
HIMCO's or Wellington Management's success not only in selecting individual
securities, but also in identifying the appropriate mix of securities consistent
with a Fund's investment objective.

The services provided to the Funds by Hartford Life, HL Advisors, HIMCO,
Wellington Management and other service providers, depend on the smooth
functioning of their computer systems. Many computer software systems in use
today cannot distinguish the year 2000 from the year 1900 because of the way
dates are encoded and calculated. That failure could have a negative impact on
the handling of securities trades, pricing and account services. Hartford Life,
HL Advisors, HIMCO, Wellington Management and other service providers have been
actively working on necessary changes to their computer systems to deal with the
year 2000 issue and expect that their systems will be adapted in time for that
event.

On January 1, 1999 several participating European countries will convert to
a single form of currency known as the "euro." The conversion to a single
currency presents several uncertainties, among them the establishment and
maintenance of exchange rates between the existing currencies of the
participating countries and the euro; whether the computer systems in the
banking and other financial institutions that deal in securities and other
investments to be denominated in the euro will be in place in time and will
function properly; the legal uncertainties of financial contracts that are
outstanding as of January 1, 1999 which refer to existing currencies rather than
the euro; and the impact that the new European Central Bank will have on the
economic policies of the participating countries, which will no longer control
their own monetary policies. These, along with other factors, such as the
political issues of having additional countries participate in the single
currency in the future, and the economic risks which may arise during the full
transition to the euro, could negatively impact the value of securities and
disrupt the foreign markets in which these securities are traded. In addition,
operational difficulties may arise in converting the value of securities from an
existing currency to the euro, and thus may cause a fund to delay, or eliminate,
a trading opportunity.

INVESTMENT LIMITATIONS

The Funds have adopted certain limitations in an attempt to reduce their
exposure to specific situations. Some of these limitations are that each Fund
will not:

(a) invest more than 25% of its assets in any one industry;

(b) borrow money, except from banks, and then only in amounts not exceeding
33 1/3% of the value of a Fund's total assets (although for purposes of this
restriction reverse repurchase agreements are not considered borrowings, as
a non-fundamental operating policy, each Fund will limit combined borrowings
and reverse repurchase transactions to 33 1/3% of the value of a Fund's
total assets);

(c) with respect to 75% of the value of each Fund's total assets, purchase the
securities of any issuer (other than cash, cash items or securities issued
or guaranteed by
<PAGE>
HARTFORD HLS MUTUAL FUNDS 29
- --------------------------------------------------------------------------------

the U.S. Government, its agencies, instrumentalities or authorities) if:

(1) such purchase would cause more than 5% of the Fund's total assets taken
at market value to be invested in the securities of such issuer; or
(2) such purchase would at the time result in more than 10% of the
outstanding voting securities of such issuer being held by the Fund.
These investment restrictions are considered at the time investment
securities are purchased. The limitations described above, except as noted under
(b), and those listed under Fundamental Restrictions of the Funds in the SAI,
are considered fundamental and as such can only be changed with the approval of
a majority of each Fund's shareholders.

MANAGEMENT OF THE FUNDS

Each Fund's Board of Directors manages the business and affairs of that Fund
and takes action on all matters not reserved for the shareholders, including the
annual election of officers of the Fund who carry out all orders and resolutions
of the Board of Directors and carry out functions relating to the day to day
management of the affairs of the Fund.

MANAGEMENT SERVICES

HL Advisors serves as investment manager to each Fund pursuant to written
agreements entered into between HL Advisors and each Fund. Pursuant to such
agreements HL Advisors has overall investment supervisory responsibility for
each Fund. In addition, Hartford Life, an affiliate of HL Advisors, provides
administrative personnel, services, equipment and facilities and office space
for proper operation of the Funds. HL Advisors has contracted with Wellington
Management for the provision of day to day investment management services to the
Capital Appreciation Fund, Dividend and Growth Fund, Global Leaders Fund, Growth
and Income Fund, International Opportunities Fund, MidCap Fund, Small Company
Fund, Stock Fund, Advisers Fund, and International Advisers Fund. In addition,
HL Advisors has contracted with HIMCO for the provision of day to day investment
management and other services for the Bond Fund, High Yield Fund, Index Fund,
Mortgage Securities Fund and Money Market Fund. Each Fund pays a fee to HL
Advisors, a portion of which may be used to compensate Wellington Management or
HIMCO.

For services rendered to the Funds, HL Advisors charges a monthly fee based
on the following annual rates as applied to the average of the calculated daily
net asset value of the Funds.

INDEX FUND

<TABLE>
<CAPTION>
NET ASSET VALUE ANNUAL RATE
- ------------------------------------------- -------------
<S> <C>
All Assets 0.20%
</TABLE>

MORTGAGE SECURITIES FUND AND MONEY MARKET FUND

<TABLE>
<CAPTION>
NET ASSET VALUE ANNUAL RATE
- ------------------------------------------- -------------
<S> <C>
All Assets 0.25%
</TABLE>

BOND FUND AND STOCK FUND

<TABLE>
<CAPTION>
NET ASSET VALUE ANNUAL RATE
- ------------------------------------------- -----------
<S> <C>
First $250,000,000 0.325%
Next $250,000,000 0.300%
Next $500,000,000 0.275%
Amount Over $1 Billion 0.250%
</TABLE>

CAPITAL APPRECIATION FUND, DIVIDEND AND GROWTH FUND, HIGH YIELD FUND, GLOBAL
LEADERS FUND, GROWTH AND INCOME FUND, INTERNATIONAL OPPORTUNITIES FUND, MIDCAP
FUND, SMALL COMPANY FUND, ADVISERS FUND AND INTERNATIONAL ADVISERS FUND

<TABLE>
<CAPTION>
NET ASSET VALUE ANNUAL RATE
- ------------------------------------------- -----------
<S> <C>
First $250,000,000 0.575%
Next $250,000,000 0.525%
Next $500,000,000 0.475%
Amount Over $1 Billion 0.425%
</TABLE>

HL Advisors has agreed to waive its fees for the Growth and Income Fund
until the assets of this Fund (excluding assets contributed by companies
affiliated with HL Advisors) first reach $20 million, to waive its fees for the
Global Leaders Fund until the assets of this Fund (excluding assets contributed
by companies affiliated with HL Advisors) first reach $20 million, and to waive
its fees for the High Yield Fund until the assets of this Fund (excluding assets
contributed by companies affiliated with HL Advisors) first reach $20 million.

Under the terms of the Investment Management Agreements, HL Advisors,
subject to the supervision of the Funds' Board of Directors, provides investment
management supervision to each Fund in accordance with the Funds' investment
objectives, policies and restrictions.

For 1997, the management fees (advisory and administrative fees) for each
Fund as a percentage of average net assets were as follows:

<TABLE>
<CAPTION>
% OF ASSETS
-------------
<S> <C>
Capital Appreciation Fund .62%
Dividend and Growth Fund .66%
Index Fund .37%
International Opportunities Fund .68%
MidCap Fund(1) .13%
Small Company Fund .74%
Stock Fund .44%
Advisers Fund .61%
International Advisers Fund .75%
Bond Fund .49%
Mortgage Securities Fund .43%
Money Market Fund .42%
</TABLE>

- ---------

(1) Portion of management fee waived in 1997
<PAGE>
30 HARTFORD HLS MUTUAL FUNDS
- --------------------------------------------------------------------------------

Figures are not shown for the Global Leaders Fund, Growth and Income Fund
and High Yield Fund because those Funds were not in operation in 1997.

HL Advisors, Hartford Plaza, Hartford, Connecticut 06115, is a wholly-owned
subsidiary of Hartford Life and was organized under the laws of the State of
Connecticut in 1981. A wholly-owned subsidiary of HL Investment Advisors,
Hartford Investment Financial Services Company, serves as investment adviser to
several other Hartford Life-sponsored funds which are also registered with the
SEC. Hartford Life is a majority owned subsidiary of Hartford Fire Insurance
Company, one of the largest multiple lines insurance carriers in the United
States. Hartford Fire Insurance Company is a subsidiary of The Hartford
Financial Services Group, Inc.

Certain officers of the Funds are also officers and/or directors of HL
Advisors and HIMCO: Joseph H. Gareau is a Director and the President of HL
Advisors and HIMCO; Andrew W. Kohnke is a Managing Director and a Director of HL
Advisors and HIMCO; and C. Michael O'Halloran is a Director, Secretary and
General Counsel of HL Advisors and HIMCO.

INVESTMENT SUB-ADVISORY AND OTHER SERVICES

Wellington Management serves as investment sub-adviser to the Capital
Appreciation Fund, Dividend and Growth Fund, Global Leaders Fund, Growth and
Income Fund, International Opportunities Fund, MidCap Fund, Small Company Fund,
Stock Fund, Advisers Fund and International Advisers Fund pursuant to written
contracts entered into between HL Advisors and Wellington Management. In
addition, HIMCO serves as investment sub-adviser to the Index Fund, Mortgage
Securities Fund, Bond Fund, High Yield Fund and Money Market Fund pursuant to
written agreements between HL Advisors and HIMCO.

In connection with the services provided to the Funds, Wellington Management
and HIMCO make all determinations with respect to the purchase and sale of
portfolio securities (subject to the terms and conditions of the investment
objectives, policies and restrictions of the Funds and to the general
supervision of the Fund's Boards of Directors and HL Advisors) and places, in
the name of the Funds, all orders for execution of these Funds' portfolio
transactions. In conjunction with such activities, Wellington Management and
HIMCO regularly furnish reports to the Fund's Boards of Directors concerning
economic forecasts, investment strategy, portfolio activity and performance of
the Funds.

For services rendered to the Wellington Management-advised Funds, Wellington
Management charges a quarterly fee to HL Advisors. The Funds do not pay
Wellington Management's fee nor any part thereof, nor do the Funds have any
obligation or responsibility to do so. Wellington Management's quarterly fee is
based upon the following annual rates as applied to the average of the
calculated daily net asset value of each Fund.

DIVIDEND AND GROWTH FUND, GROWTH AND INCOME FUND, STOCK FUND AND ADVISERS FUND

<TABLE>
<CAPTION>
NET ASSET VALUE ANNUAL RATE
- ------------------------------------------- -----------
<S> <C>
First $50,000,000 0.325%
Next $100,000,000 0.250%
Next $350,000,000 0.200%
Amount Over $500,000,000 0.150%
</TABLE>

Wellington Management has agreed to waive 100% of its sub-advisory fee with
respect to the Growth and Income Fund until shareholder assets (excluding assets
contributed by HL Advisors or its affiliates) reach $50 million.

CAPITAL APPRECIATION FUND, GLOBAL LEADERS FUND, INTERNATIONAL OPPORTUNITIES
FUND, MIDCAP FUND, SMALL COMPANY FUND AND INTERNATIONAL ADVISERS FUND

<TABLE>
<CAPTION>
NET ASSET VALUE ANNUAL RATE
- ------------------------------------------- -----------
<S> <C>
First $50,000,000 0.400%
Next $100,000,000 0.300%
Next $350,000,000 0.250%
Amount Over $500,000,000 0.200%
</TABLE>

Wellington Management has agreed to waive 100% of its sub-advisory fee with
respect to the Global Leaders Fund until shareholder assets (excluding assets
contributed by HL Advisors or its affiliates) reach $50 million.

Wellington Management is a professional investment counseling firm which
provides investment services to investment companies, employee benefit plans,
endowments, foundations and other institutions and individuals. Wellington
Management and its predecessor organizations have provided investment advisory
services since 1928. As of March 31, 1998, Wellington Management held
discretionary management authority with respect to approximately $194 billion of
client assets. Wellington Management, 75 State Street, Boston, MA 02109, is a
Massachusetts limited liability partnership, of which the following persons are
managing partners: Robert W. Doran, Duncan M. McFarland and John R. Ryan.

HIMCO is a professional money management firm which provides services to
investment companies, employee benefit plans, its affiliated insurance company
accounts and other institutional accounts. HIMCO was incorporated in 1996 and is
a wholly owned subsidiary of The Hartford. As a corporate affiliate of HL
Advisors, HIMCO is reimbursed by HL Advisors for the costs it incurs in
providing such services to the Bond Fund, High Yield Fund, Index Fund, Mortgage
Securities Fund and Money Market Fund.
<PAGE>
HARTFORD HLS MUTUAL FUNDS 31
- --------------------------------------------------------------------------------

PORTFOLIO MANAGERS

Saul J. Pannell, Senior Vice President of Wellington Management, serves as
portfolio manager to the Capital Appreciation Fund. Mr. Pannell has been a
portfolio manager with Wellington Management since 1979.

Laurie A. Gabriel, CFA and Senior Vice President of Wellington Management,
serves as portfolio manager to the Dividend and Growth Fund. Ms. Gabriel joined
Wellington Management in 1976. She has been a portfolio manager with Wellington
Management since 1987.

James A. Rullo, CFA and Vice President of Wellington Management, serves as
portfolio manager to the Growth and Income Fund. Prior to joining Wellington
Management in 1994 as a quantitative analyst and portfolio manager, Mr. Rullo
was a portfolio manager with PanAgora Asset Management from 1991 to 1994 and
prior to that with The Boston Company from 1987.
The International Opportunities Fund is managed by Trond Skramstad, Senior
Vice President of Wellington Management and Chairman of the firm's Global Equity
Strategy Group, a group of senior investment professionals focused on global
investing. Andrew S. Offit, Vice President of Wellington Management, is
Associate Portfolio Manager, in addition to serving as Associate Portfolio
Manager of the International Advisers Fund and as one of the portfolio managers
of the Global Leaders Fund. Prior to joining Wellington Management in 1993, Mr.
Skramstad was an international equity portfolio manager at Scudder, Stevens &
Clark since 1990.
Phillip H. Perelmuter, Vice President of Wellington Management, serves as
portfolio manager to the MidCap Fund. Mr. Perelmuter joined Wellington
Management in 1995 as Associate Portfolio Manager of the Stock Fund and the
Advisers Fund. Prior to joining Wellington Management, Mr. Perelmuter was Vice
President of Institutional Equity Sales at CS First Boston Corporation
(1988-1995), and a financial consultant at Merrill Lynch & Company (1983-1986).
Mr. Perelmuter has over ten years of experience in the investment industry.

Mark S. Waterhouse, Vice President of Wellington Management Company, LLP,
serves as portfolio manager to the Small Company Fund. Mr. Waterhouse joined
Wellington Management in 1995 as Associate Portfolio Manager of the Capital
Appreciation Fund. Prior to joining Wellington Management in 1995, Mr.
Waterhouse was a portfolio manager with the Pioneer Group. He was previously a
financial analyst at GTE Service Corporation from 1984.

Rand L. Alexander, Senior Vice President of Wellington Management, serves as
portfolio manager to the Stock Fund and as one of the portfolio managers to the
Global Leaders Fund. Mr. Alexander holds a CFA and has been a portfolio manager
with Wellington Management since 1990.

Paul D. Kaplan and Rand L. Alexander serve as co-portfolio managers to the
Advisers Fund. Mr. Kaplan, Senior Vice President of Wellington Management,
manages the fixed income component of the Advisers Fund. He has been a portfolio
manager with Wellington Management since 1982. Rand L. Alexander, who is
portfolio manager to the Stock Fund and one of the portfolio managers to the
Global Leaders Fund, manages the equity component of the Advisers Fund.

The equity component of the International Advisers Fund is managed by Trond
Skramstad. Andrew S. Offit, one of the portfolio managers to the Global Leaders
Fund and Associate Portfolio Manager to the International Opportunities Fund,
serves as Associate Portfolio Manager for the equity component. The debt
component of the International Advisers Fund is managed by Robert L. Evans, Vice
President of Wellington Management. Prior to joining Wellington Management as a
portfolio manager in 1995, Mr. Evans was a Senior Global Fixed Income Portfolio
Manager with PIMCO from 1991 through 1994, and in the Global Fixed Income
Department of Lehman Brothers International in London, England and New York
City, New York from 1985 through 1990.

Andrew S. Offit, Vice President of Wellington Management, serves as one of
the portfolio managers to the Global Leaders Fund and as Associate Portfolio
Manager to the International Opportunities Fund and International Advisers Fund.
Prior to joining Wellington Management in 1997, Mr. Offit was a portfolio
manager at Chestnut Hill Management during 1997, and at Fidelity Investments
since 1987.

The Bond Fund and High Yield Fund are managed by Alison D. Granger. Ms.
Granger, a Senior Vice President of HIMCO, joined HIMCO in 1993 as a senior
corporate bond trader. She became Director of Trading in 1994 and a portfolio
manager in 1995. Prior to joining HIMCO, Ms. Granger was a corporate bond
portfolio manager at The Home Insurance Company and Axe-Houghton Management. Ms.
Granger holds a CFA and has over eighteen years of experience with fixed income
investments.

The Mortgage Securities Fund is managed by Timothy J. Wilhide. Mr. Wilhide
is a Portfolio Manager and Senior Vice President of HIMCO. He has seventeen
years of experience in the fixed income markets. Prior to joining HIMCO in June
1994, Mr. Wilhide was vice president and fixed income manager for J.P. Morgan &
Co.
<PAGE>
32 HARTFORD HLS MUTUAL FUNDS
- --------------------------------------------------------------------------------

PORTFOLIO TURNOVER

Each Fund may sell a portfolio investment soon after its acquisition if
HIMCO and/or Wellington Management believe that such a disposition is in the
Fund's best interest. For the fiscal year ended December 31, 1997, the portfolio
turnover rate of each Fund in operation as of that date was below 100% except
for the Small Company Fund, International Advisers Fund and Bond Fund, which
were 222%, 163% and 113%, respectively. A high rate of portfolio turnover
involves correspondingly greater brokerage commission expenses and other
transaction costs, which must be ultimately borne by a Fund's shareholders. High
portfolio turnover may result in the realization of substantial capital gains.

BROKERAGE COMMISSIONS

Although the rules of the National Association of Securities Dealers, Inc.
prohibit its members from seeking orders for the execution of investment company
portfolio transactions on the basis of their sales of investment company shares,
under such rules, sales of investment company shares may be considered in
selecting brokers to effect portfolio transactions. Accordingly, some portfolio
transactions are, subject to such rules and to obtaining best prices and
executions, effected through dealers who sell shares of the Funds.

ADMINISTRATIVE SERVICES
FOR THE FUNDS

An Administrative Services Agreement between each Fund and Hartford Life
provides that Hartford Life will manage the business affairs and provide
administrative services to each Fund. Under the terms of these Agreements,
Hartford Life will provide the following: administrative personnel, services,
equipment and facilities and office space for proper operation of the Funds.
Hartford Life has also agreed to arrange for the provision of additional
services necessary for the proper operation of the Funds, although the Funds pay
for these services directly. See "Expenses of the Funds." As compensation for
the services to be performed by Hartford Life, each Fund pays to Hartford Life,
as promptly as possible after the last day of each month, a monthly fee equal to
the annual rate of .20% of the average daily net assets of the Fund.

EXPENSES OF THE FUNDS

Each Fund assumes and pays the following costs and expenses: interest;
taxes; brokerage charges (which may be to affiliated broker-dealers); costs of
preparing, printing and filing any amendments or supplements to the registration
forms of each Fund and its securities; all federal and state registration,
qualification and filing costs and fees, (except the initial costs and fees,
which will be borne by Hartford Life), issuance and redemption expenses,
transfer agency and dividend and distribution disbursing agency costs and
expenses; custodian fees and expenses; accounting, auditing and legal expenses;
fidelity bond and other insurance premiums; fees and salaries of directors,
officers and employees of each Fund other than those who are also officers of
Hartford Life or its affiliates; industry membership dues; all annual and
semiannual reports and prospectuses mailed to each Fund's shareholders as well
as all quarterly, annual and any other periodic report required to be filed with
the SEC or with any state; any notices required by a federal or state regulatory
authority, and any proxy solicitation materials directed to each Fund's
shareholders as well as all printing, mailing and tabulation costs incurred in
connection therewith, and any expenses incurred in connection with the holding
of meetings of each Fund's shareholders and other miscellaneous expenses related
directly to the Funds' operations and interest.

The total expenses of each Fund including administrative and investment
advisory fees for 1997 as a percentage of the Funds' average net assets were as
follows:

<TABLE>
<CAPTION>
% OF ASSETS
-------------
<S> <C>
Capital Appreciation Fund .64%
Dividend and Growth Fund .68%
Index Fund .39%
International Opportunities Fund .77%
MidCap Fund(1) .46%
Small Company Fund .77%
Stock Fund .45%
Advisers Fund .63%
International Advisers Fund .87%
Bond Fund .51%
Mortgage Securities Fund .45%
Money Market Fund .44%
</TABLE>

- ---------

(1) Portion of fees waived in 1997

Figures are not shown for the Global Leaders Fund, Growth and Income Fund
and High Yield Fund because those Funds were not in operation in 1997.

PERFORMANCE RELATED INFORMATION

The Funds may advertise certain performance related information. Performance
information about a Fund is based on the Fund's past performance only and is no
indication of future performance.

Each Fund may include its total return in advertisements or other sales
material. When a Fund advertises its total return, it will usually be calculated
for one year, five
<PAGE>
HARTFORD HLS MUTUAL FUNDS 33
- --------------------------------------------------------------------------------

years, and ten years or some other relevant periods if the Fund has not been in
existence for at least ten years. Total return is measured by comparing the
value of an investment in the Fund at the beginning of the relevant period to
the value of the investment at the end of the period (assuming immediate
reinvestment of any dividends or capital gains distributions).

The Money Market Fund may advertise yield and effective yield. The yield of
each of those Funds is based upon the income earned by the Fund over a seven-day
period and then annualized, i.e. the income earned in the period is assumed to
be earned every seven days over a 52-week period and stated as a percentage of
the investment. Effective yield is calculated similarly but when annualized, the
income earned by the investment is assumed to be reinvested in Fund shares and
thus compounded in the course of a 52-week period.

The Funds are offered exclusively through variable insurance products.
Performance information presented for the Funds should not be compared directly
with performance information of other insurance products without taking into
account insurance-related charges and expenses payable with respect to these
insurance products. Insurance related charges and expenses are not reflected in
the Funds' performance information and will reduce an investor's return under
the insurance product.

DIVIDENDS

The shareholders of each Fund shall be entitled to receive such dividends as
may be declared by each Fund's Board of Directors, from time to time based upon
the investment performance of the assets making up that Fund's portfolio. The
policy with respect to each Fund, except the Money Market Fund, is to pay
dividends from net investment income and to make distributions of realized
capital gains, if any, at least once each year. The Money Market Fund declares
dividends on a daily basis and pays them monthly.

Such dividends and distributions will be automatically invested in
additional full or fractional shares monthly on the last business day of each
month at the per share net asset value on that date. Provision is also made to
pay such dividends and distributions in cash if requested. Such dividends and
distributions will be in cash or in full or fractional shares of the Fund at net
asset value.

DETERMINATION OF
NET ASSET VALUE

The net asset value per share is determined for each Fund as of the close of
the NYSE (normally 4:00 p.m. Eastern Time) on each regular business day (as
previously defined) by dividing the value of the Fund's net assets by the number
of shares outstanding. The assets of each Fund (except the money market funds)
are valued primarily on the basis of market quotations. If quotations are not
readily available, assets are valued by a method that the Board of Directors
believes accurately reflects fair value. The assets of the Money Market Fund are
valued at their amortized cost pursuant to procedures established by the Board
of Directors. Foreign securities are valued on the basis of quotations from the
primary market in which they are traded, and are translated from the local
currency into U.S. dollars using current exchange rates. With respect to all
Funds, short-term investments that will mature in 60 days or less are also
valued at amortized cost, which approximates market value.

PURCHASE OF FUND SHARES

Fund shares are made available to serve as the underlying investment
vehicles for variable annuity and variable life insurance separate accounts of
Hartford Life. Shares of the Funds are sold by Hartford Securities Distribution
Company (the "Distributor") on a no-load basis at their net asset values. See
"Determination of Net Asset Value" and "Sale and Redemption of Shares."

It is conceivable that in the future it may be disadvantageous for variable
annuity separate accounts and variable life insurance separate accounts to
invest in the Funds simultaneously. Although Hartford Life and the Funds do not
currently foresee any such disadvantages either to variable annuity contract
owners or variable life insurance policy owners, each Fund's Board of Directors
intends to monitor events in order to identify any material conflicts between
such contract owners and policy owners and to determine what action, if any,
should be taken in response thereto. If the Board of Directors of a Fund were to
conclude that separate funds should be established for variable life and
variable annuity separate accounts, the variable life and variable annuity
contract holders would not bear any expenses attendant to the establishment of
such separate funds.

The Funds offer investors two different classes of shares -- Class IA and
Class IB. Class IA shares are offered by this Prospectus. Class IB shares are
offered by a separate prospectus in connection with a variable annuity product.
The different classes of shares represent investments in the same portfolio of
securities but are subject to different expenses and will likely have different
share prices and performance.

SALE AND REDEMPTION
OF SHARES

The Class IA shares of each Fund are sold and redeemed by the Fund at their
net asset value next determined after receipt of a purchase or redemption order
in
<PAGE>
34 HARTFORD HLS MUTUAL FUNDS
- --------------------------------------------------------------------------------

good order in writing at its home office, P.O. Box 5085, Hartford, CT
06102-5085. The value of shares redeemed may be more or less than original cost,
depending upon the market value of the portfolio securities at the time of
redemption. Payment for shares redeemed will be made within seven days after the
redemption request is received in proper form by the Funds. However, the right
to redeem Fund shares may be suspended or payment therefor postponed for any
period during which: (1) trading on the NYSE is closed for other than weekends
and holidays; (2) an emergency exists, as determined by the SEC, as a result of
which (a) disposal by a Fund of securities owned by it is not reasonably
practicable, or (b) it is not reasonably practicable for a Fund to determine
fairly the value of its net assets; or (3) the SEC by order so permits for the
protection of stockholders of the Funds.

FEDERAL INCOME TAXES

Each Fund has elected and intends to qualify under Subchapter M of the Code.
Each Fund intends to distribute all of its net income and gains to shareholders.
Such distributions are taxable income and capital gains. Each Fund will inform
shareholders of the amount and nature of such income and gains. Each Fund may be
subject to a 4% nondeductible excise tax as well as an income tax measured with
respect to certain undistributed amounts of income and capital gain. Each Fund
expects to make such additional distributions of net investment income as are
necessary to avoid the application of these taxes. For a discussion of the tax
implications of a purchase or sale of the Funds' shares by the insurer,
reference should be made to the section entitled "Federal Tax Considerations" in
the appropriate separate account prospectus.

If eligible, each Fund may make an election to pass through to its
shareholder, Hartford Life, a credit for any foreign taxes paid during the year.
If such election is made, the pass-through of the foreign tax credit will result
in additional taxable income and income tax to Hartford Life. The amount of
additional tax may be more than offset by the foreign tax credits which are
passed through. These foreign tax credits may provide a benefit to Hartford
Life.

OWNERSHIP AND CAPITALIZATION OF THE FUNDS
CAPITAL STOCK
The Board of Directors is authorized, without further shareholder approval,
to authorize additional shares and to classify and reclassify the Funds into one
or more classes. Accordingly, the Directors have authorized the issuance of two
classes of shares of the Funds designated as Class IA and Class IB shares. The
shares of each class represent an interest in the same portfolio of investments
of the Funds and have equal rights as to voting, redemption, and liquidation.
However, each class bears different expenses and therefore the net asset values
of the two classes and any dividends declared may differ between the two
classes.

As of the date of this Prospectus, the authorized capital stock of the
Funds, except for the Global Leaders Fund, Growth and Income Fund and High Yield
Fund, consisted of the following shares at a par value of $.10 per share:
Capital Appreciation Fund, 2 billion; Dividend and Growth Fund, 3 billion; Index
Fund, 1 billion; International Opportunities Fund, 1.5 billion; MidCap Fund, 750
million; Small Company Fund, 750 million; Stock Fund, 2 billion; Advisers Fund,
6 billion; International Advisers Fund, 750 million; Bond Fund, 1.5 billion;
Mortgage Securities Fund, 800 million; and Money Market Fund, 1.3 billion. The
authorized capital stock of the Hartford Series Fund, Inc. consisted of 3
billion shares at a par value of $.001 per share, which is allocated as follows:
Global Leaders Fund, 1 billion; Growth and Income Fund, 1 billion; and High
Yield Fund, 1 billion. The shares of each Fund are divided into Class IA and
Class IB.

As of December 31, 1997, HL Advisors owned 3,000,000 Class IA shares
(12.36%) of the MidCap Fund.

At December 31, 1997, certain Hartford Life group pension contracts held
direct interests in Class IA shares of the Funds as follows:

<TABLE>
<CAPTION>
SHARES %
------------ ---------
<S> <C> <C>
Index Fund.............................. 23,020,319 5.90%
Mortgage Securities Fund................ 16,076,327 5.35%
Money Market Fund....................... 25,433,642 4.15%
Capital Appreciation Fund............... 20,321,589 1.87%
International Opportunities Fund........ 9,832,576 1.16%
Advisers Fund........................... 30,369,579 0.93%
Small Company Fund...................... 1,508,936 0.86%
Bond Fund............................... 3,649,073 0.69%
Dividend & Growth Fund.................. 4,708,801 0.46%
International Advisers Fund............. 534,692 0.30%
Stock Fund.............................. 2,343,837 0.25%
</TABLE>

VOTING

Under each Fund's multi-class system, shares of each class of a Fund
represent an equal pro rata interest in that Fund and, generally, shall have
identical voting, dividend, liquidation, and other rights, preferences, powers,
restrictions, limitations, qualifications and terms and conditions, except that:
(a) each class shall have a different designation; (b) each class of shares
shall bear its "Class Expenses;" (c) each class shall have exclusive voting
rights on any matter submitted to shareholders that relates solely to its
distribution arrangements; (d) each class shall have separate voting rights on
any matter submitted to shareholders in which the interests of one class differ
from the interests of
<PAGE>
HARTFORD HLS MUTUAL FUNDS 35
- --------------------------------------------------------------------------------

any other class; (e) each class may have separate exchange privileges, although
exchange privileges are not currently contemplated; and (f) each class may have
different conversion features, although a conversion feature is not currently
contemplated. Expenses currently designated as "Class Expenses" by the Fund's
Board of Directors under the plan pursuant to Rule 18f-3 are currently limited
to payments made to the Distributor for the Class IB shares, pursuant to the
Distribution Plan for the Class IB shares adopted pursuant to Rule 12b-1 under
the 1940 Act. Each shareholder shall be entitled to one vote for each share of
the Funds held upon all matters submitted to the shareholders generally. Class
specific issues, such as a modification to a Rule 12b-1 plan for Class IB shares
that could materially increase fees, will be voted on only by the affected
class. With respect to the Funds' shares issued as described above under
"Purchase of Fund Shares," as well as Fund shares which are not otherwise
attributable to variable annuity contract owners or variable life policy
holders, Hartford Life shall be the shareholder of record. Hartford Life will
vote all Fund shares, pro rata, according to the written instructions of the
contract owners of the variable annuity contracts and the policy holders of the
variable life contracts issued by it using the Funds as investment vehicles.
This position is consistent with the policy of the SEC staff.
OTHER RIGHTS

Each share of Fund stock, when issued and paid for in accordance with the
terms of the offering, will be fully paid and non-assessable. Shares of Fund
stock have no pre-emptive, subscription or conversion rights and are redeemable
as set forth under "Sale and Redemption of Shares." Upon liquidation of a Fund,
the shareholders of that Fund shall be entitled to share, pro rata, in any
assets of the Fund after discharge of all liabilities and payment of the
expenses of liquidation.

GENERAL INFORMATION
REPORTS TO SHAREHOLDERS
The Funds will issue unaudited semiannual reports showing current
investments in each Fund and other information and annual financial statements
examined by independent auditors for the Funds.

DISTRIBUTOR

Hartford Securities Distribution Company, Inc., 200 Hopmeadow Street,
Simsbury, CT 06089, serves as Distributor to the Funds.

CUSTODIAN

State Street Bank and Trust Company, Boston, Massachusetts, serves as
custodian of each Fund's assets.

TRANSFER AND DIVIDEND DISBURSING AGENTS

Hartford Life Insurance Company, 200 Hopmeadow Street, Simsbury, CT 06089,
serves as Transfer and Dividend Disbursing Agent for the Funds.

PENDING LEGAL PROCEEDINGS

As of the date of this Prospectus, there are no material pending legal
proceedings involving the Funds, HL Advisors, HIMCO or Wellington Management as
a party.

REQUESTS FOR INFORMATION

This Prospectus does not contain all the information included in the
Registration Statement filed with the SEC. The Registration Statement, including
the exhibits filed therewith, may be examined at the SEC's office in Washington,
D.C. Statements contained in the Prospectus as to the contents of any contract
or other document referred to herein are not necessarily complete, and, in each
instance, reference is made to the copy of such contract or other document filed
as an exhibit to the Registration Statement of which this Prospectus forms a
part, each such statement being qualified, in all respects by such reference.

For additional information, write to "Hartford Family of Funds", c/o
Individual Annuity Operations, P.O. Box 5085, Hartford, CT 06102-5085.
<PAGE>
36 HARTFORD HLS MUTUAL FUNDS
- --------------------------------------------------------------------------------

APPENDIX A

The rating information which follows describes how the rating services
mentioned presently rate the described securities. No reliance is made upon the
rating firms as "experts" as that term is defined for securities purposes.
Rather, reliance on this information is on the basis that such ratings have
become generally accepted in the investment business.

RATING OF BONDS

MOODY'S INVESTORS SERVICE, INC. ("MOODY'S")

Aaa -- Bonds which are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to as
"gilt edge." Interest payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various protective elements are
likely to change, such changes as can be visualized are most unlikely to impair
the fundamentally strong position of such issues.

Aa -- Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally known as
high grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities or fluctuation of protective
elements may be of greater amplitude or there may be other elements present
which make the long term risks appear somewhat larger than in Aaa securities.

A -- Bonds which are rated A possess many favorable investment attributes
and are to be considered as upper medium grade obligations. Factors giving
security to principal and interest are considered adequate but elements may be
present which suggest a susceptibility to impairment sometime in the future.

Baa -- Bonds which are rated Baa are considered as medium grade obligations,
i.e., they are neither highly protected nor poorly secured. Interest payments
and principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.

Ba -- Bonds which are rated Ba are judged to have speculative elements;
their future cannot be considered as well assured. Often the protection of
interest and principal payments may be very moderate and thereby not well
safeguarded during both good and bad times over the future. Uncertainty of
position characterizes bonds in this class.

B -- Bonds which are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small.

Caa -- Bonds which are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to principal or
interest.

Ca -- Bonds which are rated Ca represent obligations which are speculative
in a high degree. Such issues are often in default or have other marked
shortcomings.

C -- Bonds which are rated C are the lowest rated class of bonds and issues
so rated can be regarded as having extremely poor prospects of ever earning any
real investment standing.

STANDARD & POOR'S CORPORATION ("STANDARD & POOR'S")

AAA -- Bonds rated AAA are the highest grade obligations. Capacity to pay
interest and repay principal is extremely strong.

AA -- Bonds rated AA have a very strong capacity to pay interest and repay
principal and differ from AAA issues only in small degree.

A -- Bonds rated A have a very strong capacity to pay interest and repay
principal although they are somewhat more susceptible to the considerable
investment strength but are not entirely free from adverse effects of changes in
circumstances and economic conditions than debt in the highest rated categories.

BBB -- Bonds rated BBB and regarded as having an adequate capacity to pay
interest and repay principal. Whereas they normally exhibit adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay interest and repay principal for
debt in this category then in higher rated categories.

BB, B, CCC, CC, C -- Debt rated BB, B, CCC, CC, and C is regarded, on
balance, as predominantly speculative with respect to the issuer's capacity to
pay interest and repay principal in accordance with the terms of the obligation.
While such debt will likely have some quality and protective characteristics,
these are outweighed by large uncertainties or major risk exposures to adverse
conditions.

RATING OF COMMERCIAL PAPER

Purchases of corporate debt securities used for short-term investment,
generally called commercial paper, will be limited to the top two grades of
Moody's, Standard & Poor's, Duff & Phelps, Fitch Investor Services and Thomson
Bank Watch or other NRSROs (nationally recognized statistical rating
organizations) rating services and will be an eligible security under Rule 2a-7.
<PAGE>
HARTFORD HLS MUTUAL FUNDS 37
- --------------------------------------------------------------------------------

MOODY'S

Issuers rated Prime-1 (or related supporting institutions) have a superior
capacity for repayment of short-term promissory obligations. Prime-1 repayment
capacity will normally be evidenced by the following characteristics:

- - Leading market positions in well-established industries.

- - High rates of return on funds employed.

- - Conservative capitalization structures with moderate reliance on debt and
ample asset protection.

- - Broad margins in earnings coverage of fixed financial charges and high
internal cash generation.

- - Well-established access to a range of financial markets and assured sources of
alternate liquidity.

Issuers rated Prime-2 (or related supporting institutions) have a strong
capacity for repayment of short-term promissory obligations. This will normally
be evidenced by many of the characteristics cited above but to a lesser degree.
Earnings trends and coverage ratios, while sound, will be more subject to
variation. Capitalization characteristics, while still appropriate, may be more
affected by external conditions. Ample alternate liquidity is maintained.

Issuers rated Prime-3 (or related supporting institutions) have an
acceptable capacity for repayment of short-term promissory obligations. The
effect of industry characteristics and market composition may be more
pronounced. Variability in earnings and profitability may result in changes in
the level of debt protection measurements and the requirement for relatively
high financial leverage. Adequate alternate liquidity is maintained.

Issuers rated Not Prime do not fall within any of the Prime rating
categories.

STANDARD & POOR'S

The relative strength or weakness of the following factors determines
whether the issuer's commercial paper is rated A-1 or A-2.

- - Liquidity ratios are adequate to meet cash requirements.

Liquidity ratios are basically as follows, broken down by the type of
issuer:

Industrial Company: acid test ratio, cash flow as a percent of current
liabilities, short-term debt as a percent of current liabilities, short-term
debt as a percent of current assets.

Utility: current liabilities as a percent of revenues, cash flow as a
percent of current liabilities, short-term debt as a percent of capitalization.

Finance Company: current ratio, current liabilities as a percent of net
receivables, current liabilities as a percent of total liabilities.

- - The long-term senior debt rating is "A" or better; in some instances "BBB"
credits may be allowed if other factors outweigh the "BBB".

- - The issuer has access to at least two additional channels of borrowing.

- - Basic earnings and cash flow have an upward trend with allowances made for
unusual circumstances.

- - Typically, the issuer's industry is well established and the issuer has a
strong position within its industry.

- - The reliability and quality of management are unquestioned.
<PAGE>
38 HARTFORD HLS MUTUAL FUNDS
- --------------------------------------------------------------------------------

APPENDIX B
CREDIT QUALITY DISTRIBUTION

HARTFORD BOND FUND

The average quality distribution of the portfolio of the Hartford Bond Fund
as of December 31, 1997 as assigned by Moody's Investors Services, Inc.
("Moody's") and Standard & Poor's Corporation ("Standard & Poor's"), was as
follows:

<TABLE>
<CAPTION>
QUALITY
DISTRIBUTION QUALITY
AS DISTRIBUTION AS
ASSIGNED BY PERCENTAGE OF ASSIGNED BY PERCENTAGE OF
MOODY'S PORTFOLIO STANDARD & POORS PORTFOLIO
- ------------- ------------- ----------------- -------------
<S> <C> <C> <C>
Aaa 46.0% AAA 47.4%
Aa 9.9% AA 10.7%
A 8.8% A 7.0%
Baa 11.2% BBB 14.4%
Ba 20.8% BB 13.9%
B 1.1% B 4.6%
Unrated 2.2% Unrated 2.0%
------------- -------------
Total 100.0% Total 100.0%
</TABLE>
<PAGE>

PART B

STATEMENT OF ADDITIONAL INFORMATION

HARTFORD CAPITAL APPRECIATION HLS FUND, INC.
HARTFORD DIVIDEND AND GROWTH HLS FUND, INC.
HARTFORD GLOBAL LEADERS HLS FUND
HARTFORD GROWTH AND INCOME HLS FUND
HARTFORD INDEX HLS FUND, INC.
HARTFORD INTERNATIONAL OPPORTUNITIES HLS FUND, INC.
HARTFORD MIDCAP HLS FUND, INC.
HARTFORD SMALL COMPANY HLS FUND, INC.
HARTFORD STOCK HLS FUND, INC.
HARTFORD ADVISERS HLS FUND, INC.
HARTFORD INTERNATIONAL ADVISERS HLS FUND, INC.
HARTFORD BOND HLS FUND, INC.
HARTFORD HIGH YIELD HLS FUND
HARTFORD MORTGAGE SECURITIES HLS FUND, INC.
HARTFORD MONEY MARKET HLS FUND, INC.

CLASS IA and CLASS IB SHARES

P.O. Box 5085
Hartford, CT 06102-5085

This Statement of Additional Information ("SAI") is not a prospectus but
should be read in conjunction with the prospectus. To obtain a free copy of
the prospectus send a written request to: Hartford Family of Funds, c/o
Individual Annuity Operations, P.O. Box 5085, Hartford, CT 06102-5085 or call
1-800-862-6668.

Date of Prospectus: September 30, 1998
Date of Statement of Additional Information: September 30, 1998

<PAGE>

TABLE OF CONTENTS PAGE

GENERAL INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1

INVESTMENT OBJECTIVES AND POLICIES . . . . . . . . . . . . . . . . . . . . . .1

MANAGEMENT OF THE FUNDS. . . . . . . . . . . . . . . . . . . . . . . . . . . 16

INVESTMENT MANAGEMENT ARRANGEMENTS . . . . . . . . . . . . . . . . . . . . . 22

PORTFOLIO TURNOVER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

FUND EXPENSES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

DISTRIBUTION ARRANGEMENTS. . . . . . . . . . . . . . . . . . . . . . . . . . 27

PORTFOLIO TRANSACTIONS AND BROKERAGE . . . . . . . . . . . . . . . . . . . . 27

DETERMINATION OF NET ASSET VALUE . . . . . . . . . . . . . . . . . . . . . . 29

PURCHASE AND REDEMPTION OF SHARES. . . . . . . . . . . . . . . . . . . . . . 30

INVESTMENT PERFORMANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

TAXES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38

CUSTODIAN. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41

TRANSFER AGENT SERVICES. . . . . . . . . . . . . . . . . . . . . . . . . . . 41

DISTRIBUTOR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42

INDEPENDENT PUBLIC ACCOUNTANTS . . . . . . . . . . . . . . . . . . . . . . . 42

OTHER INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42

FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42

<PAGE>

GENERAL INFORMATION

The Hartford Capital Appreciation HLS Fund, Inc., Hartford Dividend and
Growth HLS Fund, Inc., Hartford Index HLS Fund, Inc., Hartford International
Opportunities HLS Fund, Inc., Hartford MidCap HLS Fund, Inc., Hartford Small
Company HLS Fund, Inc., Hartford Stock HLS Fund, Inc., Hartford Advisers HLS
Fund, Inc., Hartford International Advisers HLS Fund, Inc., Hartford Bond HLS
Fund, Inc., Hartford Mortgage Securities HLS Fund, Inc., Hartford Money
Market HLS Fund, Inc., Hartford Global Leaders HLS Fund, Hartford Growth and
Income HLS Fund and Hartford High Yield HLS Fund operate as diversified
open-end management investment companies consisting of separate portfolios
(each a "Fund" or together the "Funds"). This SAI relates to all fifteen
Funds. HL Investment Advisors, Inc. ("HL Advisors") is the investment manager
to each Fund. HL Advisors is an indirect majority owned subsidiary of The
Hartford Financial Services Group, Inc., ("The Hartford") an insurance
holding company with over $130 billion in assets. In addition, Wellington
Management Company, LLP ("Wellington Management") and The Hartford Investment
Management Company ("HIMCO"), an affiliate of HL Advisors, are sub-advisers
to certain of the Funds. Prior to May 1, 1998, each Fund did not carry the
HLS in its name and the Hartford Money Market HLS Fund, Inc. was known as the
HVA Money Market Fund, Inc.

INVESTMENT OBJECTIVES AND POLICIES

A. FUNDAMENTAL RESTRICTIONS OF THE FUNDS

Each Fund has adopted the following fundamental investment restrictions
which may not be changed without approval of a majority of the applicable
Fund's outstanding voting securities. Under the Investment Company Act of
1940 (the "1940 Act"), and as used in the Prospectus and this SAI, a
"majority of the outstanding voting securities" means the approval of the
lesser of (1) the holders of 67% or more of the shares of a Fund represented
at a meeting if the holders of more than 50% of the outstanding shares of the
Fund are present in person or by proxy or (2) the holders of more than 50% of
the outstanding shares of the Fund.

The investment objective, investment style and certain investment
policies of each Fund are set forth in the Prospectus. Set forth below are
the fundamental investment policies applicable to each Fund followed by the
non-fundamental policies applicable to each Fund.

Each Fund may not:

1. Issue senior securities. For purposes of this restriction, the
issuance of shares of common stock in multiple classes or series, obtaining
of short-term credits as may be necessary for the clearance of purchases and
sales of portfolio securities, short sales against the box, and the following
practices when a segregated account has been established to cover such
transactions or when an offsetting position has been established by the Fund
are not deemed to be issuances of senior securities: the purchase or sale of
permissible options and futures transactions

-1-

<PAGE>

(and the use of initial and maintenance margin arrangements with respect to
futures contracts or related options transactions), the purchase or sale of
securities on a when issued or delayed delivery basis, permissible borrowings
entered into in accordance with the Fund's investment policies, and reverse
repurchase agreements and mortgage dollar rolls.

2. Borrow money, except from banks and then only if immediately after
each such borrowing there is asset coverage of at least 300% as defined in
the 1940 Act. Although reverse repurchase agreements, mortgage dollar rolls,
short sales against the box, futures contracts, options on futures contracts,
securities or indices, when issued and delayed delivery transactions and
securities lending are not subject to this restriction, in most cases a
segregated account will be set up to cover such transactions.

3. Act as an underwriter for securities of other issuers.

4. Purchase or sell real estate, except that a Fund may (i) acquire or
lease office space for its own use, (ii) invest in securities of issuers that
invest in real estate or interests therein, (e.g. real estate investment
trusts) (iii) invest in securities that are secured by real estate or
interests therein, (iv) purchase and sell mortgage-related securities, (v)
hold and sell real estate acquired by the fund as a result of the ownership
of securities and (vi) invest in real estate limited partnerships.

5. Invest in commodities, except that a Fund may (i) invest in
securities of issuers that invest in commodities, and (ii) engage in
permissible options and futures transactions and forward foreign currency
contracts, entered into in accordance with the Fund's investment policies.

6. Make loans, except that a Fund (i) may lend portfolio securities in
accordance with the Fund's investment policies in amounts up to 33-1/3% of
the Fund's total assets taken at market value, (ii) enter into fully
collateralized repurchase agreements, and (iii) purchase debt obligations in
which the Fund may invest consistent with its investment policies.

7. Purchase the securities of issuers conducting their principal
activity in the same industry if, immediately after such purchase, the value
of its investments in such industry would exceed 25% of its total assets
taken at market value at the time of such investment. This limitation does
not apply to investments in obligations issued or guaranteed by the U.S.
Government or any of its agencies, instrumentalities or authorities.

In addition, each Fund will operate as a "diversified" fund within the
meaning of the 1940 Act. This means that with respect to 75% of a Fund's total
assets, a Fund will not purchase securities of an issuer (other than cash, cash
items or securities issued or guaranteed by the U.S. Government, its agencies,
instrumentalities or authorities), if

-2-

<PAGE>

(a) such purchase would cause more than 5% of the Fund's total assets
taken at market value to be invested in the securities of such issuer; or

(b) such purchase would at the time result in more than 10% of the
outstanding voting securities of such issuer being held by the Fund.

If a percentage restriction on investment or utilization of assets as
set forth above is adhered to at the time an investment is made, a later
change in percentage resulting from changes in the values of a Fund's assets
will not be considered a violation of the restriction; provided, however,
that the asset coverage requirement applicable to borrowings under Section
18(f)(1) of the 1940 Act shall be maintained in the manner contemplated by
that Section.

In order to permit the sale of shares of the Funds in certain states,
the Board of Directors may, in its sole discretion, adopt restrictions on
investment policy more restrictive than those described above. Should the
Board of Directors determine that any such more restrictive policy is no
longer in the best interest of a Fund and its shareholders, the Fund may
cease offering shares in the state involved and the Board of Directors may
revoke such restrictive policy. Moreover, if the states involved shall no
longer require any such restrictive policy, the Board of Directors may, in
its sole discretion, revoke such policy.

B. NON-FUNDAMENTAL INVESTMENT RESTRICTIONS OF THE FUNDS

The following restrictions are designated as non-fundamental and may be
changed by the Board of Directors without the approval of shareholders.

Each Fund may not:

1. Purchase securities on margin or make short sales of securities,
except that a Fund may obtain such short-term credit as may be necessary for
the clearance of purchases and sales of securities and except for
transactions in futures contracts and options thereon.

2. Purchase securities which are illiquid if, as a result of such
purchase, more than 15% of its net assets (10% for the Money Market Fund)
would consist of such securities.

3. Alone or together with any other of the Hartford Mutual Funds, make
investments for the purpose of exercising control over or management of any
issuer.

4. Mortgage, pledge, hypothecate, or in any manner transfer, as
security for indebtedness, any securities owned or held by it, except to
secure reverse repurchase agreements; however, for purposes of this
restriction, collateral arrangements with respect to transactions in futures
contracts and options thereon are not deemed to be a pledge of securities.

-3-

<PAGE>

5. Invest more than 5% of its assets in securities of other investment
companies and will not acquire more than 3% of the total outstanding voting
securities of any one investment company, except that the Index Fund and
Money Market Fund will not purchase securities of other investment companies
at all.

6. Purchase additional securities when money borrowed exceeds 5% of
the Fund's total assets.

7. Borrow money, engage in reverse repurchase agreements or engage in
activities which are the economic equivalent of borrowing if the combination
of such activities exceeds 33-1/3% of a Fund's total assets.

ALL FUNDS

U.S. TREASURY DEPARTMENT DIVERSIFICATION REGULATIONS. The U.S. Treasury
Department has issued diversification regulations under Section 817 of the
Internal Revenue Code. If a mutual fund underlying a variable contract, other
than a pension plan contract, is not adequately diversified within the terms
of these regulations, the contract owner will have adverse income tax
consequences. These regulations provide, among other things, that a mutual
fund shall be considered adequately diversified if (i) no more than 55% of
the value of the assets in the fund is represented by any one investment;
(ii) no more than 70% of the value of the assets in the fund is represented
by any two investments; (iii) no more than 80% of the value of the assets in
the fund is represented by any three investments and (iv) no more than 90% of
the value of the total assets of the fund is represented by any four
investments. In determining whether the diversification standards are met,
each United States Government Agency or instrumentality shall be treated as a
separate issuer.

MISCELLANEOUS INVESTMENT PRACTICES

A further description of certain of the policies described in the
Prospectus is set forth below. The percentage limits described in the sections
below are based on market value and are determined as of the time the
securities are purchased.

MONEY MARKET INSTRUMENTS AND TEMPORARY INVESTMENT STRATEGIES

In addition to the Money Market Fund which may hold cash and invest in
money market instruments at any time, all other Funds may hold cash and
invest in high quality money market instruments under appropriate
circumstances as determined by HIMCO or Wellington Management. Such Funds may
invest up to 100% of their assets in cash or money market instruments only
for temporary defensive purposes.

-4-

<PAGE>

Money market instruments include: (1) banker's acceptances; (2)
obligations of governments (whether U.S. or non-U.S.) and their agencies and
instrumentalities; (3) short-term corporate obligations, including commercial
paper, notes, and bonds; (4) other short-term debt obligations; (5)
obligations of U.S. banks, non-U.S. branches of U.S. banks (Eurodollars),
U.S. branches and agencies of non-U.S. banks (Yankee dollars), and non-U.S.
branches of non-U.S. banks; (6) asset-backed securities; and (7) repurchase
agreements.

REPURCHASE AGREEMENTS

Each Fund is permitted to enter into fully collateralized repurchase
agreements. The Fund's Board of Directors has established standards for
evaluation of the creditworthiness of the banks and securities dealers with
which the Funds will engage in repurchase agreements and monitors on a
quarterly basis HIMCO and Wellington Management's compliance with such
standards. Presently, each Fund may enter into repurchase agreements only
with commercial banks with at least $1 billion in assets or with recognized
government securities dealers with a minimum net capital of $100 million.

HIMCO or Wellington Management will monitor such transactions to ensure
that the value of underlying collateral will be at least equal at all times
to the total amount of the repurchase obligation, including the accrued
interest. If the seller defaults, the Fund could realize a loss on the sale
of the underlying security to the extent that the proceeds of sale including
accrued interest are less than the resale price provided in the agreement
including interest.

A repurchase agreement is an agreement by which the seller of a security
agrees to repurchase the security sold at a mutually agreed upon time and
price. It may also be viewed as the loan of money by a Fund to the seller.
The resale price would be in excess of the purchase price, reflecting an
agreed upon market interest rate.

REVERSE REPURCHASE AGREEMENTS

Each Fund may also enter into reverse repurchase agreements. Reverse
repurchase agreements involve sales by a Fund of portfolio assets
concurrently with an agreement by a Fund to repurchase the same assets at a
later date at a fixed price. Reverse repurchase agreements carry the risk
that the market value of the securities which a Fund is obligated to
repurchase may decline below the repurchase price. A reverse repurchase
agreement is viewed as a collateralized borrowing by a Fund. Borrowing
magnifies the potential for gain or loss on the portfolio securities of a
Fund and, therefore, increases the possibility of fluctuation in a Fund's net
asset value. A Fund will establish a segregated account with the Fund's
custodian bank in which a Fund will maintain liquid assets equal in value to
a Fund's obligations in respect of reverse repurchase agreements. A Fund will
not enter into reverse repurchase transactions if the combination of all
borrowings from banks and the value of all reverse repurchase agreements for
the particular Fund equals more than 33-1/3% of the value the Fund's total
assets.

-5-

<PAGE>

DEBT SECURITIES

Each Fund is permitted to invest in debt securities including: (1)
securities issued or guaranteed as to principal or interest by the U.S.
Government, its agencies or instrumentalities; (2) non-convertible debt
securities issued or guaranteed by U.S. corporations or other issuers
(including foreign governments or corporations); (3) asset-backed securities
(International Opportunities Fund, International Advisers Fund, Advisers
Fund, Bond Fund, High Yield Fund, Mortgage Securities Fund and Money Market
Fund only); (4) mortgage-related securities, including collateralized
mortgage obligations ("CMO's") (International Opportunities Fund,
International Advisers Fund, Advisers Fund, Bond Fund, High Yield Fund, and
Mortgage Securities Fund only); and (5) securities issued or guaranteed as to
principal or interest by a sovereign government or one of its agencies or
political subdivisions, supranational entities such as development banks,
non-U.S. corporations, banks or bank holding companies, or other non-U.S.
issuers.

INVESTMENT GRADE DEBT SECURITIES

The Money Market Fund is permitted to invest only in high quality, short
term instruments as determined by Rule 2a-7 under the 1940 Act. Each of the
other Funds is permitted to invest in debt securities rated within the four
highest rating categories (i.e., Aaa, Aa, A or Baa by Moody's or AAA, AA, A
or BBB by S&P) (or, if unrated, securities of comparable quality as
determined by HIMCO or Wellington Management). These securities are generally
referred to as "investment grade securities." Each rating category has within
it different gradations or sub-categories. If a Fund is authorized to invest
in a certain rating category, the Fund is also permitted to invest in any of
the sub-categories or gradations within that rating category. If a security
is downgraded to a rating category which does not qualify for investment,
HIMCO or Wellington Management will use its discretion on whether to hold or
sell based upon its opinion on the best method to maximize value for
shareholders over the long term. Debt securities carrying the fourth highest
rating (i.e., "Baa" by Moody's and "BBB" by S&P), and unrated securities of
comparable quality (as determined by HIMCO or Wellington Management) are
viewed to have adequate capacity for payment of principal and interest, but
do involve a higher degree of risk than that associated with investments in
debt securities in the higher rating categories and such securities lack
outstanding investment characteristics and do have speculative
characteristics.

HIGH YIELD-HIGH RISK SECURITIES

Each of the Capital Appreciation Fund, Dividend and Growth Fund, Global
Leaders Fund, Growth and Income Fund, MidCap Fund, Small Company Fund, Stock
Fund, Advisers Fund and International Opportunities Fund is permitted to
invest up to 5%, and the International Advisers Fund is permitted to invest
up to 15%, of its assets in securities rated as low as "C" by Moody's or "CC"
by S&P or of comparable quality if not rated. The Bond Fund is permitted to
invest up to 20% of its assets in securities rated in the highest level below
investment grade (i.e., "Ba" for Moody's or "BB" by S&P), or if unrated,
securities determined to be of comparable quality by

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HIMCO. Although the High Yield Fund is permitted to invest up to 100% of its
total assets in securities rated below investment grade, no more than 10% of
total assets will be invested in securities rated below B3 by Moody's or B-
by S&P, or, if unrated, determined to be of comparable quality by HIMCO.
Securities rated below investment grade are commonly referred to as "high
yield-high risk securities" or "junk bonds". Each rating category has within
it different gradations or sub-categories. For instance the "Ba" rating for
Moody's includes "Ba3", "Ba2" and "Ba1". Likewise the S&P rating category of
"BB" includes "BB+", "BB" and "BB-". If a Fund is authorized to invest in a
certain rating category, the Fund is also permitted to invest in any of the
sub-categories or gradations within that rating category. Securities in the
highest category below investment grade are considered to be of poor standing
and predominantly speculative. These securities are considered speculative
with respect to the issuer's capacity to pay interest and repay principal in
accordance with the terms of the obligations. Accordingly, it is possible
that these types of factors could, in certain instances, reduce the value of
securities held by a Fund with a commensurate effect on the value of a Fund's
shares. If a security is downgraded to a rating category which does not
qualify for investment, HIMCO or Wellington Management will use its
discretion on whether to hold or sell based upon its opinion on the best
method to maximize value for shareholders over the long term.

MORTGAGE-RELATED SECURITIES

The mortgage-related securities in which the International
Opportunities Fund, International Advisers Fund, Advisers Fund, Bond Fund,
High Yield Fund, and Mortgage Securities Fund may invest include interests in
pools of mortgage loans made by lenders such as savings and loan
institutions, mortgage bankers, commercial banks and others. Pools of
mortgage loans are assembled for sale to investors (such as the Funds) by
various governmental, government-related and private organizations. These
Funds may also invest in similar mortgage-related securities which provide
funds for multi-family residences or commercial real estate properties.

The value of these securities may be significantly affected by interest
rates, the market's perception of the issuers and the creditworthiness of the
parties involved. These securities may also be subject to prepayment risk.
The yield characteristics of the mortgage securities differ from those of
traditional debt securities. Among the major differences are that interest
and principal payments are made more frequently on mortgage securities,
usually monthly, and that principal may be prepaid at any time because the
underlying mortgage loans or other assets generally permit prepayment at any
time. Evaluating the risks associated with prepayment and determining the
rate at which prepayment is influenced by a variety of economic, geographic,
demographic, social and other factors including interest rate levels, changes
in housing needs, net equity built by mortgagors in the mortgaged properties,
job transfers, and unemployment rates. If a Fund purchases these securities
at a premium, a prepayment rate that is faster than expected will reduce
yield to maturity, while a prepayment rate that is slower than expected will
have the opposite effect of increasing yield to maturity. Conversely, if a
Fund purchases these securities at a discount, faster than expected
prepayments will increase, while slower than expected prepayments will
reduce, yield to maturity. Amounts available for reinvestment are likely to
be greater during a period of declining interest rates and, as a result, are
likely to be reinvested at lower interest rates than during a period of
declining interest rates and, as a result, are likely to be reinvested at
lower interest rates than during a period of rising interest rates. Accelerated

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prepayments on securities purchased by a Fund at a premium also
impose a risk of loss of principal because the premium may not have been
fully amortized at the time the principal is repaid in full.

The mortgage securities in which each Fund invests differ from
conventional bonds in that principal is paid back over the life of the
mortgage securities rather than at maturity. As a result, the holder of the
mortgage securities (i.e., a Fund) receives monthly scheduled payments of
principal and interest, and may receive unscheduled principal payments
representing prepayments on the underlying mortgages. When the holder
reinvests the payments and any unscheduled prepayments of principal it
receives, it may receive a rate of interest which is lower than the rate on
the existing mortgage securities. For this reason, mortgage securities are
less effective than other types of U.S. Government securities as a means of
"locking in" long-term interest rates. See "Illiquid Securities."

ASSET-BACKED SECURITIES

The International Opportunities Fund, International Advisers Fund,
Advisers Fund, Bond Fund, High Yield Fund, Mortgage Securities Fund and the
Money Market Fund may invest in asset-backed securities. The securitization
techniques used for asset-backed securities are similar to those used for
mortgage-related securities. The collateral for these securities has included
home equity loans, automobile and credit card receivables, boat loans,
computer leases, airplane leases, mobile home loans, recreational vehicle
loans and hospital accounts receivables. These Funds may invest in these and
other types of asset-backed securities that may be developed in the future.
These securities may be subject to the risk of prepayment or default. The
ability of an issuer of asset-backed securities to enforce its security
interest in the underlying securities may be limited.

EQUITY SECURITIES

Each Fund except the Bond Fund and High Yield Fund as described below
and except the Mortgage Securities Fund and Money Market Fund may invest in
equity securities which include common stocks, preferred stocks (including
convertible preferred stock) and rights to acquire such securities. In
addition, these Funds may invest in securities such as bonds, debentures and
corporate notes which are convertible into common stock at the option of the
holder. The Bond Fund and High Yield Fund may each invest up to 15% of its
total assets in preferred stocks, convertible securities, and securities
carrying warrants to purchase equity securities. The Bond Fund and High Yield
Fund will not invest in common stocks directly, but may retain, for
reasonable periods of time, common stocks acquired upon conversion of debt
securities or upon exercise of warrants acquired with debt securities.

SMALL CAPITALIZATION SECURITIES

All Funds except the Mortgage Securities Fund and Money Market Fund may
invest in equity securities (including securities issued in initial public
offerings) of companies with market capitalizations within the range
represented by the Russell 2000 Index

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("Small Capitalization Securities"). Because the issuers of Small
Capitalization Securities tend to be smaller or less well-established
companies, they may have limited product lines, market share or financial
resources and may have less historical data with respect to operations and
management. As a result, Small Capitalization Securities are often less
marketable and experience a higher level of price volatility than securities
of larger or more well-established companies. In addition, companies whose
securities are offered in initial public offerings may be more dependent on a
limited number of key employees. Because securities issued in initial public
offerings are being offered to the public for the first time, the market for
such securities may be inefficient and less liquid.

NON-U.S. SECURITIES

Each Fund, except the Mortgage Securities Fund, is permitted to invest a
portion of its assets in non-U.S. securities, including, in the case of
permitted equity investments, American Depositary Receipts ("ADRs") and
Global Depositary Receipts ("GDRs"). ADRs are certificates issued by a U.S.
bank or trust company and represent the right to receive securities of a
non-U.S. issuer deposited in a domestic bank or non-U.S. branch of a U.S.
bank. ADRs are traded on a U.S. securities exchange, or in an
over-the-counter market, and are denominated in U.S. dollars. GDRs are
certificates issued globally and evidence a similar ownership arrangement.
GDRs are traded on non-U.S. securities exchanges and are denominated in
non-U.S. currencies. The value of an ADR or a GDR will fluctuate with the
value of the underlying security, will reflect any changes in exchange rates
and otherwise will involve risks associated with investing in non-U.S.
securities. When selecting securities of non-U.S. issuers, HIMCO or
Wellington Management will evaluate the economic and political climate and
the principal securities markets of the country in which an issuer is located.

Investing in securities issued by non-U.S. issuers involves
considerations and potential risks not typically associated with investing in
obligations issued by U.S. issuers. Less information may be available about
non-U.S. issuers compared with U.S. issuers. For example, non-U.S. companies
generally are not subject to uniform accounting, auditing and financial
reporting standards or to other regulatory practices and requirements
comparable to those applicable to U.S. companies. In addition, the values of
non-U.S. securities are affected by changes in currency rates or exchange
control regulations, restrictions or prohibition on the repatriation of
non-U.S. currencies, application of non-U.S. tax laws, including withholding
taxes, changes in governmental administration or economic or monetary policy
(in the U.S. or outside the U.S.) or changed circumstances in dealings
between nations. Costs are also incurred in connection with conversions
between various currencies.

Investing in non-U.S. sovereign debt will expose a Fund to the direct or
indirect consequences of political, social or economic changes in the developing
and emerging countries that issue the securities. The ability and willingness of
sovereign obligers in developing and emerging countries or the governmental
authorities that control repayment of their external debt to pay principal and
interest on such debt when due may depend on general economic and

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political conditions within the relevant country. Countries such as those in
which the Funds may invest have historically experienced, and may continue to
experience, high rates of inflation, high interest rates, exchange rate trade
difficulties and unemployment. Some of these countries are also characterized
by political uncertainty or instability. Additional factors which may
influence the ability or willingness to service debt include, but are not
limited to, a country's cash flow situation, the availability of sufficient
foreign exchange on the date a payment is due, the relative size of its debt
service burden to the economy as a whole, and its government's policy towards
the IMF, the World Bank and other international agencies.

From time to time, each of the Global Leaders Fund, International
Opportunities Fund and International Advisers Fund may invest up to 25% of
each of their assets and the High Yield Fund may invest up to 30% of its assets
in securities of issuers located in emerging countries. Compared to the United
States and other developed countries, developing countries may have relatively
unstable governments, economies based on only a few industries, and securities
markets that are less liquid and trade a small number of securities. Prices on
these exchanges tend to be volatile and, in the past, securities in these
countries have offered greater potential for gain (as well as loss) than
securities of companies located in developed countries. Under normal market
conditions, the Global Leaders Fund will invest in at least five countries,
one of which will be the United States.

CURRENCY TRANSACTIONS

Each Fund, except the Index Fund, Mortgage Securities Fund and Money
Market Fund, may engage in currency transactions to hedge the value of
portfolio securities denominated in particular currencies against
fluctuations in relative value. Currency transactions include forward
currency contracts, currency swaps, exchange-listed and over-the-counter
("OTC") currency futures contracts and options thereon and exchange listed
and OTC options on currencies.

Forward currency contracts involve a privately negotiated obligation to
purchase or sell a specific currency at a future date, which may be any fixed
number of days from the date of the contract agreed upon by the parties, at a
price set at the time of the contract. Currency swaps are agreements to
exchange cash flows based on the notional difference between or among two or
more currencies. See "Swap Agreements."

The use of currency transactions to protect the value of a Fund's assets
against a decline in the value of a currency does not eliminate potential
losses arising from fluctuations in the value of the Fund's underlying
securities. Further, the Funds may enter into currency transactions only with
counterparties that HIMCO or Wellington Management deems to be creditworthy.

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OPTIONS AND FUTURES CONTRACTS

In seeking to protect against the effect of changes in equity market
values, currency exchange rates or interest rates that are adverse to the
present or prospective position of the Funds, for cash flow management, and,
to a lesser extent, to enhance returns, each Fund, except the Money Market
Fund, may employ certain hedging, income enhancement and risk management
techniques, including the purchase and sale of options, futures and options
on futures involving equity and debt securities and foreign currencies,
aggregates of equity and debt securities, indices of prices of equity and
debt securities and other financial indices. A Fund's ability to engage in
these practices may be limited by tax considerations and certain other legal
considerations.

A Fund may write covered options and purchase put and call options on
individual securities as a partial hedge against an adverse movement in the
security and in circumstances consistent with the objective and policies of
the Fund. This strategy limits potential capital appreciation in the
portfolio securities subject to the put or call option.

The Funds may also write covered put and call options and purchase put
and call options on foreign currencies to hedge against the risk of foreign
exchange fluctuations on foreign securities the particular Fund holds in its
portfolio or that it intends to purchase. For example, if a Fund enters into
a contract to purchase securities denominated in foreign currency, it could
effectively establish the maximum U.S. dollar cost of the securities by
purchasing call options on that foreign currency. Similarly, if a Fund held
securities denominated in a foreign currency and anticipated a decline in the
value of that currency against the U.S. dollar, the Fund could hedge against
such a decline by purchasing a put option on the foreign currency involved.

In addition, a Fund may purchase put and call options and write covered
put and call options on aggregates of equity and debt securities, and may
enter into futures contracts and options thereon for the purchase or sale of
aggregates of equity and debt securities, indices of equity and debt
securities and other financial indices, all for the purpose of protecting
against potential changes in the market value of portfolio securities or in
interest rates. Aggregates are composites of equity or debt securities that
are not tied to a commonly known index. An index is a measure of the value of
a group of securities or other interests. An index assigns relative values to
the securities included in that index, and the index fluctuates with changes
in the market value of those securities.

A Fund may write covered options only. "Covered" means that, so long as
a Fund is obligated as the writer of a call option on particular securities
or currency, it will own either the underlying securities or currency or an
option to purchase the same underlying securities or currency having an
expiration date not earlier than the expiration date of the covered option
and an exercise price equal to or less than the exercise price of the covered
option, or will establish or maintain with its custodian for the term of the
option a segregated account consisting of cash, U.S. Government securities or
other liquid, high grade debt obligations having a value equal to

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the fluctuating market value of the optioned securities or currencies. A Fund
will cover any put option it writes on particular securities or currency by
maintaining a segregated account with its custodian as described above.

To hedge against fluctuations in currency exchange rates, a Fund may
purchase or sell foreign currency futures contracts, and write put and call
options and purchase put and call options on such futures contracts. For
example, a Fund may use foreign currency futures contracts when it
anticipates a general weakening of the foreign currency exchange rate that
could adversely affect the market values of the Fund's foreign securities
holdings. In this case, the sale of futures contracts on the underlying
currency may reduce the risk of a reduction in market value caused by foreign
currency variations and, by so doing, provide an alternative to the
liquidation of securities positions in the Fund and resulting transaction
costs. When the Fund anticipates a significant foreign exchange rate increase
while intending to invest in a non-U.S. security, the Fund may purchase a
foreign currency futures contract to hedge against a rise in foreign exchange
rates pending completion of the anticipated transaction. Such a purchase of a
futures contract would serve as a temporary measure to protect the Fund
against any rise in the foreign exchange rate that may add additional costs
to acquiring the non-U.S. security position. The Fund similarly may use
futures contracts on equity and debt securities to hedge against fluctuations
in the value of securities it owns or expects to acquire.

The Funds also may purchase call or put options on foreign currency
futures contracts to obtain a fixed foreign exchange rate at limited risk. A
Fund may purchase a call option on a foreign currency futures contract to
hedge against a rise in the foreign exchange rate while intending to invest
in a non-U.S. security of the same currency. A Fund may purchase put options
on foreign currency futures contracts to hedge against a decline in the
foreign exchange rate or the value of its non-U.S. securities. A Fund may
write a call option on a foreign currency futures contract as a partial hedge
against the effects of declining foreign exchange rates on the value of
non-U.S. securities and in circumstances consistent with a Fund's investment
objectives and policies.

Options on indexes are settled in cash, not in delivery of securities.
The exercising holder of an index option receives, instead of a security,
cash equal to the difference between the closing price of the securities
index and the exercise price of the option. When a Fund writes a covered
option on an index, a Fund will be required to deposit and maintain with a
custodian cash or high-grade, liquid short-term debt securities equal in
value to the aggregate exercise price of a put or call option pursuant to the
requirements and the rules of the applicable exchange. If, at the close of
business on any day, the market value of the deposited securities falls below
the contract price, the Fund will deposit with the custodian cash or
high-grade, liquid short-term debt securities equal in value to the
deficiency.

To the extent that a Fund enters into futures contracts, options on
futures contracts and options on foreign currencies that are traded on an
exchange regulated by the Commodities Futures Trading Commission ("CFTC"), in
each case that are not for "BONA FIDE hedging"

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purposes (as defined by regulations of the CFTC), the aggregate initial
margin and premiums required to establish those positions may not exceed 5%
of the liquidation value of the Fund's portfolio, after taking into account
the unrealized profits and unrealized losses on any such contracts the Fund
has entered into. However, the "in-the-money" amount of such options may be
excluded in computing the 5% limit. Adoption of this guideline will not limit
the percentage of a Fund's assets at risk to 5%.

Although any one Fund may not employ all or any of the foregoing
strategies, its use of options, futures and options thereon and forward
currency contracts (as described under "Currency Transactions") would involve
certain investment risks and transaction costs to which it might not be
subject were such strategies not employed. Such risks include: (1) dependence
on the ability of HIMCO or Wellington Management to predict movements in the
prices of individual securities, fluctuations in the general securities
markets or market sections and movements in interest rates and currency
markets; (2) imperfect correlation between movements in the price of the
securities or currencies hedged or used for cover; (3) the fact that skills
and techniques needed to trade options, futures contracts and options thereon
or to use forward currency contracts are different from those needed to
select the securities in which a Fund invests; (4) lack of assurance that a
liquid secondary market will exist for any particular option, futures
contract, option thereon or forward contract at any particular time, which
may affect a Fund's ability to establish or close out a position; (5)
possible impediments to effective portfolio management or the ability to meet
current obligations caused by the segregation of a large percentage of a
Fund's assets to cover its obligations; and (6) the possible need to defer
closing out certain options, futures contracts, options thereon and forward
contracts in order to continue to qualify for the beneficial tax treatment
afforded "regulated investment companies" under the Code. In the event that
the anticipated change in the price of the securities or currencies that are
the subject of such a strategy does not occur, it may be that a Fund would
have been in a better position had it not used such a strategy at all.

SWAP AGREEMENTS

Each Fund, except the Index Fund and Money Market Fund, may enter into
interest rate swaps, currency swaps, and other types of swap agreements such
as caps, collars, and floors. In a typical interest rate swap, one party
agrees to make regular payments equal to a floating interest rate multiplied
by a "notional principal amount," in return for payments equal to a fixed
rate multiplied by the same amount, for a specified period of time. If a swap
agreement provides for payments in different currencies, the parties might
agree to exchange the notional principal amount as well. Swaps may also
depend on other prices or rates, such as the value of an index or mortgage
prepayment rates.

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obligated to make payments to the extent that a specified interest rate falls
below an agreed-upon level. An interest rate collar combines elements of
buying a cap and selling a floor.

Swap agreements will tend to shift a Fund's investment exposure from one
type of investment to another. For example, if a Fund agreed to exchange
floating rate payments for fixed rate payments, the swap agreement would tend
to decrease the Fund's exposure to rising interest rates. Caps and floors
have an effect similar to buying or writing options. Depending on how they
are used, swap agreements may increase or decrease the overall volatility of
a Fund's investments and its share price and yield.

The Funds will usually enter into interest rate swaps on a net basis,
i.e., where the two parties make net payments with a Fund receiving or
paying, as the case may be, only the net amount of the two payments. The net
amount of the excess, if any, of a Fund's obligations over its entitlement
with respect to each interest rate swap will be U.S. Government Securities or
other liquid high grade debt obligations having an aggregate net asset value
at least equal to the accrued excess will be maintained by the Fund's
custodian in a segregated account. If a Fund enters into a swap on other than
a net basis, the Fund will maintain in the segregated account the full amount
of the Fund's obligations under each such swap. The Fund may enter into
swaps, caps, collars and floors with member banks of the Federal Reserve
System, members of the New York Stock Exchange or other entities determined
by HIMCO or Wellington Management, pursuant to procedures adopted and
reviewed on an ongoing basis by the Board of Directors, to be creditworthy.
If a default occurs by the other party to such transaction, a Fund will have
contractual remedies pursuant to the agreements related to the transaction
but such remedies may be subject to bankruptcy and insolvency laws which
could affect such Fund's rights as a creditor.

The swap market has grown substantially in recent years with a large
number of banks and financial services firms acting both as principals and as
agents utilizing standardized swap documentation. As a result, the swap
market has become relatively liquid. Caps, collars and floors are more recent
innovations and they are less liquid than swaps. There can be no assurance,
however, that a Fund will be able to enter into interest rate swaps or to
purchase interest rate caps, collars or floors at prices or on terms HIMCO or
Wellington Management, as appropriate, believes are advantageous to such
Fund. In addition, although the terms of interest rate swaps, caps, collars
and floors may provide for termination, there can be no assurance that a Fund
will be able to terminate an interest rate swap or to sell or offset interest
rate caps, collars or floors that it has purchased. Because interest rate
swaps, caps, collars and floors are privately negotiated transactions rather
then publicly traded, they may be considered to be illiquid securities.

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Management's judgment about the direction or extent of the movement in
interest rates is incorrect, a Fund's overall performance would be worse than
if it had not entered into any such transactions. For example, if a Fund had
purchased an interest rate swap or an interest rate floor to hedge against
its expectation that interest rates would decline but instead interest rates
rose, such Fund would lose part or all of the benefit of the increased
payments it would receive as a result of the rising interest rates because it
would have to pay amounts to its counterparties under the swap agreement or
would have paid the purchase price of the interest rate floor. These
activities are commonly used when managing derivative investments.

ILLIQUID SECURITIES

Each Fund is permitted to invest in illiquid securities. No illiquid
securities will be acquired if upon the purchase more than 10% of the Money
Market Fund's net assets or 15% of each other Fund's net assets would consist
of such securities. "Illiquid Securities" are securities that may not be sold
or disposed of in the ordinary course of business within seven days at
approximately the price used to determine a Fund's net asset value. Each Fund
may purchase certain restricted securities commonly known as Rule 144A
securities that can be resold to institutions and which may be determined to
be liquid pursuant to policies and guidelines of the Board of Directors. A
Fund may not be able to sell illiquid securities when HIMCO or Wellington
Management considers it desirable to do so or may have to sell such
securities at a price that is lower than the price that could be obtained if
the securities were more liquid. A sale of illiquid securities may require
more time and may result in higher dealer discounts and other selling
expenses than does the sale of securities that are not illiquid. Illiquid
securities also may be more difficult to value due to the unavailability of
reliable market quotations for such securities, and investment in illiquid
securities may have an adverse impact on net asset value.

Under current interpretations of the SEC Staff, the following types of
securities in which a Fund may invest will be considered illiquid: (1)
repurchase agreements maturing in more than seven days; (2) certain
restricted securities (securities whose public resale is subject to legal or
contractual restrictions); (3) options, with respect to specific securities,
not traded on a national securities exchange that are not readily marketable;
and (4) any other securities in which a Fund may invest that are not readily
marketable.

WHEN-ISSUED AND DELAYED-DELIVERY SECURITIES

Each Fund is permitted to purchase or sell securities on a when-issued
or delayed-delivery basis. When-issued or delayed-delivery transactions arise
when securities are purchased or sold with payment and delivery taking place
in the future in order to secure what is considered to be an advantageous
price and yield at the time of entering into the transaction. While the Funds
generally purchase securities on a when-issued basis with the intention of
acquiring the securities, the Funds may sell the securities before the
settlement date if HIMCO or Wellington Management deems it advisable. At the
time a Fund makes the commitment to purchase securities on a when-issued
basis, the Fund will record the transaction and thereafter reflect the

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value, each day, of such security in determining the net asset value of the
Fund. At the time of delivery of the securities, the value may be more or
less than the purchase price. A Fund will maintain, in a segregated account,
cash, U.S. Government securities or other liquid, high-grade debt obligations
having a value equal to or greater than the Fund's purchase commitments;
likewise a Fund will segregate securities sold on a delayed-delivery basis.

OTHER INVESTMENT COMPANIES

Each Fund, except the Index Fund and Money Market Fund, is permitted to
invest in other investment companies. Securities in certain countries are
currently accessible to the Funds only through such investments. The
investment in other investment companies is limited in amount and will
involve the indirect payment of a portion of the expenses, including advisory
fees, of such other investment companies. A Fund will not purchase a security
of an investment company if, as a result, (1) more than 10% of the Fund's
assets would be invested in securities of other investment companies, (2)
such purchase would result in more than 3% of the total outstanding voting
securities of any one such investment company being held by the Fund; or (3)
more than 5% of the Fund's assets would be invested in any one such
investment company.

PORTFOLIO SECURITIES LENDING

Each of the Funds may lend its portfolio securities to broker/dealers
and other institutions as a means of earning interest income. The borrower
will be required to deposit as collateral, cash, cash equivalents, U.S.
government securities or other high quality liquid debt securities that at
all times will be at least equal to 100% of the market value of the loaned
securities and such amount will be maintained in a segregated account of the
respective Fund. While the securities are on loan the borrower will pay the
respective Fund any income accruing thereon.

Delays or losses could result if a borrower of portfolio securities
becomes bankrupt or defaults on its obligation to return the loaned
securities. The Funds may lend securities only if: (1) each loan is fully
secured by appropriate collateral at all times; and (2) the value of all
loaned securities of any Fund is not more than 33-1/3% of the Fund's total
assets taken at the time of the loan (including collateral received in
connection with any loans).

MANAGEMENT OF THE FUNDS

The directors and officers of the fund and their principal business
occupations for the last five years are set forth below. Those directors who
are deemed to be "interested persons" of the fund, as that term is defined in
the 1940 Act are indicated by an asterisk next to their respective names.

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NAME, ADDRESS, AGE AND POSITION WITH THE FUND
- ----------------------------------------------

JOSEPH ANTHONY BIERNAT (age 71)
Director
30 Hurdle Fence Drive
Avon, CT 06001

Mr. Biernat served as Senior Vice President and Treasurer of United
Technologies Corporation from 1984 until March, 1987, when he retired. He
subsequently served as Executive Vice President of Boston Security
Counselors, Inc., Hartford, Connecticut (1988-1989), and served as Vice
President-Client Services of Wright Investors' Service, Bridgeport,
Connecticut (1989-1990). Mr. Biernat presently is consulting to organizations
on financial matters, with the majority of time spent with T.O. Richardson &
Co., Farmington, Connecticut.

WINIFRED ELLEN COLEMAN (age 66)
Director
27 Buckingham Lane
West Hartford, CT 06117

Ms. Coleman has served as President of Saint Joseph College since 1991. She
is a Director of LeMoyne College, St. Francis Hospital, Connecticut Higher
Education Student Loan Administration, and The National Conference (Greater
Hartford Board of Directors).

JOSEPH HARRY GAREAU* (age 51)
Director and President
55 Farmington Avenue
Hartford, CT 06105

Mr. Gareau serves as President and Chief Investment Officer of HIMCO.
Previously he served as Executive Vice President and Chief Investment Officer
of The Hartford from 1993-1996, as Senior Vice President and Chief Investment
Officer/Property-Casualty Division (September, 1992 - April, 1993) and as
Vice President (October, 1987 - September, 1992). Mr. Gareau is also a
Director HIMCO, a Director and Executive Vice President of Hartford
Investment Financial Services Company ("HIFSCO"), a Hartford affiliated
registered investment adviser, and a Director of Hartford Fire Insurance
Company.

WILLIAM ATCHISON O'NEILL (age 68)
Director
Box 360
East Hampton, CT 06424

The Honorable William A. O'Neill served as Governor of the State of
Connecticut from 1980 until 1991. He is presently retired.

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MILLARD HANDLEY PRYOR, JR. (age 65)
Director
695 Bloomfield Avenue
Bloomfield, CT 06002

Mr. Pryor has served as Managing Director of Pryor & Clark Company, Hartford,
Connecticut, since June, 1992. He served as Chairman and Chief Executive
Officer of Corcap, Inc. from 1988-1992. In addition, Mr. Pryor is a Director
of Pryor & Clark Company, Corcap, Inc., the Wiremold Company, Hoosier
Magnetics, Inc., Infodata Systems, Inc. and Pacific Scientific Corporation.

LOWNDES ANDREW SMITH* (age 59)
Director and Chairman
P.O. Box 2999
Hartford, CT 06104-2999

Mr. Smith has served as Vice Chairman of Hartford Financial Services Group,
Inc. since February, 1997, as President and Chief Executive Officer of
Hartford Life, Inc. since February, 1997, and as President and Chief
Operating Officer of The Hartford Life Insurance Companies since January,
1989. He was formerly Senior Vice President and Group Comptroller of The
Hartford Insurance Group from 1987-1989. He has been a Director of
Connecticut Children's Medical Center since 1993, a Director of American
Counsel of Life Insurance from 1993-1996 and a Director of Insurance
Marketplace Standards Association from 1996 to present. He is also a member
of the ACLI Directors Council. Mr. Smith is also President and a Director of
HIFSCO.

JOHN KELLEY SPRINGER (age 67)
Director
225 Asylum Avenue
Hartford, CT 06103

Mr. Springer currently serves as Chairman of Medspan, Inc. From 1986 to 1997
he served as Chief Executive Officer of Connecticut Health System, Inc.
Formerly, he served as the Chief Executive Officer of Hartford Hospital,
Hartford, Connecticut (June, 1976 - August, 1989). He is also a Director of
Hartford Hospital, and CHS Insurance Ltd. (Chairman).

PETER CUMMINS (age 61)
Vice President
P. O. Box 2999
Hartford, CT 06104-2999

Mr. Cummins has served as Senior Vice President since 1997 and Vice President
since 1989 of sales and marketing of the Individual Life and Annuity Division of
The Hartford Life Insurance Company. He is also a Director and Vice President of
HIFSCO.

-18-

<PAGE>

JOHN PHILLIP GINNETTI (age 53)
Vice President
P.O. Box 2999
Hartford, CT 06104-2999

Mr. Ginnetti has served as Executive Vice President and Director of Asset
Management Services, a division of The Hartford Life Insurance Company, since
1994. From 1988 to 1994 he served as Senior Vice President and Director of
the Individual Life and Annuities Division, also a division of The Hartford
Life Insurance Company.

ANDREW WILLIAM KOHNKE (age 40)
Vice President
55 Farmington Avenue
Hartford, CT 06105

Mr. Kohnke serves as Managing Director and a Director of HIMCO. Previously
he served as Vice President of HIMCO (1986-1996) and Investment Manager for
HIMCO (1983-1986). Mr. Kohnke is also a Director and Managing Director of
HIMCO and a Director and Vice President of HIFSCO.

THOMAS MICHAEL MARRA (age 40)
Vice President
P.O. Box 2999
Hartford, CT 06104-2999

Mr. Marra has served as an Executive Vice President since 1996, and as Senior
Vice President and Director since 1994 of the Individual Life and Annuity
Division of The Hartford Life Insurance Company. Mr. Marra is also a Director
and Executive Vice President of HIFSCO. Mr. Marra joined The Hartford Life
Insurance Company in 1980.

CHARLES MINER O'HALLORAN (age 51)
Vice President and Secretary
Hartford Plaza
Hartford, CT 06115

Mr. O'Halloran has served as Senior Vice President since January, 1998,
Corporate Secretary since 1996, Vice President since 1994 and Senior
Associate General Counsel since 1988 of The Hartford Financial Services
Group, Inc. Mr. O'Halloran is also a Director, Secretary and General Counsel
of HIMCO and a Director of HIFSCO.

-19-

<PAGE>

GEORGE RICHARD JAY (age 46)
Controller and Treasurer
P.O. Box 2999
Hartford, CT 06104-2999

Mr. Jay has served as Secretary and Director, Life and Equity Accounting and
Financial Control, of The Hartford Life Insurance Company since 1987.

KEVIN J. CARR (age 44)
Assistant Secretary and Counsel
55 Farmington Avenue
Hartford, CT 06105

Mr. Carr has served as Counsel since November 1996 and Associate Counsel
since November 1995, of The Hartford Financial Services Group, Inc. Formerly
he served as Counsel of Connecticut Mutual Life Insurance Company from March
1995 to November 1995, Associate Counsel of 440 Financial Group of Worcester
from 1994 to 1995 and Corporate Counsel-General Manager of Parker Media, a
Hartford-based publishing company, from 1990-1994. Mr. Carr is also an
Assistant Secretary of HIFSCO.

CHRISTOPHER JAMES COSTA (age 34)
Assistant Secretary
P.O. Box 2999
Hartford, CT 06104-2999

Mr. Costa has served as the Tax Manager of The Hartford-Sponsored Mutual
Funds since July 1996. Formerly he served as the Tax Manager and Assistant
Treasurer of The Phoenix Mutual Funds from June 1994 to June 1996 and as a
Tax Consultant with Arthur Andersen LLP from September 1990 to June 1994.

An Audit Committee and Nominating Committee have been appointed for the
Fund. Each Committee is made up of those directors who are not "interested
persons" of the Fund.

All Board members and officers of the Fund are also board members and
officers of The Hartford Mutual Funds, Inc., an open-end management
investment company comprised of ten separate funds, whose shares are sold to
the general public. Each of the Directors and principal officers affiliated
with the Fund who is also an affiliated person of HL Advisors, HIMCO or
Wellington Management is named above, together with the capacity in which
such person is affiliated with the Fund, HL Advisors, HIMCO or Wellington
Management.

COMPENSATION OF OFFICERS AND DIRECTORS. The Funds pay no salaries or
compensation to any officer or director affiliated with The Hartford. The
chart below sets forth

-20-

<PAGE>

the fees paid by the Fund to the non-interested Directors and certain other
information as of December 31, 1997:

<TABLE>
<CAPTION>
JOSEPH A. WINIFRED E. WILLIAM A. MILLARD H. JOHN K.
BIERNAT COLEMAN O'NEILL PRYOR SPRINGER
<S> <C> <C> <C> <C> <C>
COMPENSATION $18,000 $18,000 $18,000 $18,000 $18,000
RECEIVED FROM THE
FUNDS

PENSION OR $0 $0 $0 $0 $0
RETIREMENT
BENEFITS ACCRUED
AS FUND EXPENSE

TOTAL COMPENSATION $23,250 $23,250 $23,250 $23,250 $23,250
FROM THE FUNDS AND
COMPLEX PAID TO
DIRECTORS*
</TABLE>

*As of December 31, 1997, there were twenty-one funds in the Complex
(including the Funds).

OTHER INFORMATION ABOUT THE FUND. Each Fund, except for the Global Leaders
Fund, Growth and Income Fund and High Yield Fund, is a Maryland corporation
with authorized capital stock, par value $0.10 per share as follows: Capital
Appreciation Fund, 2 billion; Dividend and Growth Fund, 3 billion; Index
Fund, 1 billion; International Opportunities Fund, 1.5 billion; MidCap Fund,
750 million; Small Company Fund, 750 million; Stock Fund, 2 billion; Advisers
Fund, 6 billion; International Advisers Fund, 750 million; Bond Fund, 1.5
billion; Mortgage Securities Fund, 800 million; and Money Market Fund, 1.3
billion. The Global Leaders Fund, Growth and Income Fund and High Yield Fund
are diversified series of Hartford Series Fund, Inc., a Maryland corporation,
with authorized capital stock consisting of 3 billion shares at a par value
of $.001 per share, which is allocated as follows: Global Leaders Fund, 1
billion; Growth and Income Fund, 1 billion; and High Yield Fund, 1 billion.
The shares of each Fund have been divided into Class IA and Class IB. The
Board of Directors may reclassify authorized shares to increase or decrease
the allocation of shares in each Fund. The Board of Directors is also
authorized, from time to time and without further shareholder approval, to
authorize additional shares of each Fund.

As of December 31, 1997, HL Advisors owned 3,000,000 Class IA shares
(12.36%) of the MidCap Fund.

At December 31, 1997, certain Hartford Life group pension contracts held
direct interests in Class IA shares of the Funds as follows:

SHARES %
------ -
Index Fund 23,020,319 5.90%
Mortgage Securities Fund 16,076,327 5.35%
Money Market Fund 25,433,642 4.15%
Capital Appreciation Fund 20,321,589 1.87%
International Opportunities Fund 9,832,576 1.16%
Advisers Fund 30,369,579 0.93%
Small Company Fund 1,508,936 0.86%
Bond Fund 3,649,073 0.69%
Dividend and Growth Fund 4,708,801 0.46%
International Advisers Fund 534,692 0.30%
Stock Fund 2,343,837 0.25%

Figures are not shown for the Global Leaders Fund, Growth and Income
Fund and High Yield Fund because these Funds were not in operation as of
December 31, 1997.

-21-

<PAGE>

VOTING

Each shareholder shall be entitled to one vote for each share of the
Funds held upon all matters submitted to the shareholders generally. With
respect to the Funds' shares issued as described above under "Purchase of
Fund Shares," as well as Fund shares which are not otherwise attributable to
variable annuity contract owners or variable life policy holders, the
Hartford Life Insurance Companies ("Hartford Life") shall be the shareholder
of record. Hartford Life will vote all Fund shares, pro rata, according to
the written instructions of the contract owners of the variable annuity
contracts and the policy holders of the variable life contracts issued by it
using the Funds as investment vehicles. This position is consistent with the
policy of the SEC Staff. Issues related to only one class of a Fund's shares
are voted on only by the shareholders of that class.

OTHER RIGHTS

Each share of Fund stock, when issued and paid for in accordance with
the terms of the offering, will be fully paid and non-assessable. Shares of
Fund stock have no pre-emptive, subscription or conversion rights and are
redeemable as set forth under "Sale and Redemption of Shares." There are no
shareholder pre-emptive rights. Upon liquidation of a Fund, the shareholders
of that Fund shall be entitled to share, pro rata, in any assets of the Fund
after discharge of all liabilities and payment of the expenses of liquidation.

Each Fund's Articles of Incorporation provides that the Directors,
officers and employees of the Fund may be indemnified by the Fund to the
fullest extent permitted by Maryland law and the federal securities laws. The
Fund's Bylaws provide that the Fund shall indemnify each of its Directors,
officers and employees against liabilities and expenses reasonably incurred
by them, in connection with, or resulting from, any claim, action, suit or
proceeding, threatened against or otherwise involving such Director, officer
or employee, directly or indirectly, by reason of being or having been a
Director, officer or employee of the Fund. Neither the Articles of
Incorporation nor the Bylaws authorize the Fund to indemnify any Director or
officer against any liability to which he or she would otherwise be subject
by reason of or for willful misfeasance, bad faith, gross negligence or
reckless disregard of such person's duties.

-22-

<PAGE>
INVESTMENT MANAGEMENT ARRANGEMENTS

Each Fund has entered into an investment advisory agreement with HL
Investment Advisors, Inc. ("HL Advisors"). The investment advisory agreement
provides that HL Advisors, subject to the supervision and approval of each
Fund's Board of Directors, is responsible for the management of each Fund. HL
Advisors is responsible for investment management supervision of all Funds.
HL Advisors has entered into an investment services agreement with The
Hartford Investment Management Company ("HIMCO") for services related to the
day-to-day investment and reinvestment of the assets of the Index Fund,
Mortgage Securities Fund, Bond Fund, High Yield Fund and Money Market Fund.
In connection with its management of the such Funds, HIMCO provides
investment research and supervision of the investments held by a Fund and
conducts a continuous program of investment and reinvestment of the Funds'
assets, in accordance with the investment objectives and policies of a Fund.
HIMCO also furnishes the Funds such statistical information, with respect to
the investments which the Funds may hold or contemplate purchasing, as the
Fund may reasonably request. HIMCO will apprise the Fund of important
developments materially affecting any of the Funds and furnish the Funds from
time to time with such information as HIMCO may believe appropriate for this
purpose. In addition, Hartford Life, a corporate affiliate of HL Advisors and
HIMCO, provides administrative services to the Funds including administrative
personnel, services, equipment and facilities and office space for proper
operation of the Funds. Although Hartford Life has agreed to arrange for the
provision of additional services necessary for the proper operation of the
Fund, each Fund pays for these services directly.

With respect to the Small Company Fund, Capital Appreciation Fund,
International Advisers Fund, International Opportunities Fund, MidCap Fund,
Stock Fund, Dividend and Growth Fund, Global Leaders Fund, Growth and Income
Fund and Advisers Fund, HL Advisors has entered into an investment
sub-advisory agreement with Wellington Management Company ("Wellington
Management"). Under the sub-advisory agreement, Wellington Management,
subject to the general supervision of the Board of Directors and HL Advisors,
is responsible for (among other things) the day-to-day investment and
reinvestment of the assets of such Funds and furnishing each such Fund with
advice and recommendations with respect to investments and the purchase and
sale of appropriate securities for each Fund.

As provided by the investment advisory agreement, each Fund pays HL
Advisors an investment management fee, which is accrued daily and paid
monthly, equal on an annual basis to a stated percentage of the respective
Fund's average daily net asset value. HL Advisors, not any Fund, pays the
subadvisory fees of Wellington Management as set forth in the Prospectus. HL
Advisors pays HIMCO the direct and indirect costs incurred in managing the
HIMCO-advised Funds.

No person other than HL Advisors, HIMCO or Wellington Management and
their directors and employees regularly furnishes advice to the Funds with
respect to the desirability of the Funds investing in, purchasing or selling
securities. HIMCO and Wellington Management

-23-

<PAGE>

may from time to time receive statistical or other information regarding
general economic factors and trends, from The Hartford and its affiliates.

Securities held by any Fund may also be held by other funds and other
clients for which HIMCO, Wellington Management or their respective affiliates
provide investment advice. Because of different investment objectives or
other factors, a particular security may be bought by HIMCO or Wellington
Management for one or more clients when one or more clients are selling the
same security. If purchases or sales of securities arise for consideration at
or about the same time for any Fund or client accounts (including other
funds) for which HIMCO or Wellington Management act as an investment adviser,
(including the Funds described herein) transactions in such securities will
be made, insofar as feasible, for the respective funds and other client
accounts in a manner deemed equitable to all. To the extent that transactions
on behalf of more than one client of HIMCO, Wellington Management or their
respective affiliates during the same period may increase the demand for
securities being purchased or the supply of securities being sold, there may
be an adverse effect on price.

For the last three fiscal years, each Fund has paid the following
advisory fees to HL Advisors:

FUND NAME 1997 1996 1995
--------- ---- ---- ----
Capital Appreciation Fund $18,471,888 $12,519,486 $7,715,873
Dividend and Growth Fund $6,910,062 $2,968,879 $757,373
Index Fund $1,771,465 $945,609 $447,326
International Opportunities $5,565,620 $4,428,186 $3,213,660
MidCap Fund(1) $28,186 -- --
Small Company Fund $657,507 $31,521 --
Stock Fund $10,265,666 $6,450,702 $4,134,925
Advisers Fund $31,252,771 $22,209,882 $16,044,763
International Advisers Fund $926,609 $392,271 --
Bond Fund $1,422,689 $1,152,953 $906,000
Mortgage Securities Fund $802,900 $804,297 $790,058
Money Market Fund $1,436,068 $1,121,482 $762,534

(1) Portion of advisory fee waived for 1997

Figures are not shown for the Global Leaders Fund, Growth and Income
Fund and High Yield Fund because these Funds were not in operation for the
years shown.

For the last three fiscal years, each Fund has paid the following
administrative fees to Hartford Life:

FUND NAME 1997 1996 1995
--------- ---- ---- ----
Capital Appreciation Fund $7,245,777 $4,795,769 $2,814,856
Dividend and Growth Fund $2,486,421 $965,006 $230,541
Index Fund $1,550,032 $827,408 $391,411
International Opportunities $1,931,542 $1,493,655 $1,045,064
MidCap Fund(1) $9,636 -- --
Small Company Fund $200,110 $13,232 --
Stock Fund $6,879,714 $4,210,075 $2,586,517
Advisers Fund $12,508,493 $8,785,932 $6,244,398
International Advisers Fund $282,011 $119,528 $24,683
Bond Fund $794,107 $636,196 $491,868
Mortgage Securities Fund $562,030 $563,008 $553,041
Money Market Fund $1,005,248 $784,977 $542,895

(1) Portion of administrative fee waived for 1997

Figures are not shown for the Global Leaders Fund, Growth and Income
Fund and High Yield Fund because these Funds were not in operation for the
years shown.

-24-

<PAGE>

Pursuant to the investment advisory agreement, investment sub-advisory
agreements and investment services agreements neither HL Advisors, HIMCO nor
Wellington Management is liable to the Funds or their shareholders for any
error of judgment or mistake of law or for any loss suffered by the Funds in
connection with the matters to which their respective agreements relate,
except a loss resulting from willful misfeasance, bad faith or gross
negligence on the part of HIMCO or Wellington Management in the performance
of their duties or from their reckless disregard of the obligations and
duties under the applicable agreement.

HL Advisors, whose principal business address is at 200 Hopmeadow
Street, Simsbury, Connecticut 06089, was organized in 1981. As of March 31,
1998, HL Advisors had approximately $24 billion in assets under management.
HL Advisors is a majority owned indirect subsidiary of The Hartford. HIMCO,
whose principal business addresses is 55 Farmington Avenue, Hartford,
Connecticut 06105, was organized in 1996 and is a wholly-owned subsidiary of
The Hartford. HIMCO is a professional money management firm that provides
services to investment companies, employee benefit plans, its affiliated
insurance companies and other institutional accounts. As of March 31, 1998,
HIMCO and its wholly-owned subsidiary had approximately $56 billion in assets
under management.

Wellington Management, 75 State Street, Boston, MA 02109, is a
professional investment counseling firm that provides services to investment
companies, employee benefit plans, endowments, foundations and other
institutions and individuals. Wellington Management and its predecessor
organizations have provided investment advisory services since 1928. As of
March 31, 1998, Wellington Management had investment management authority
with respect to approximately $194 billion in assets. Wellington Management
is a Massachusetts Limited Liability Partnership. The three managing partners
of Wellington Management are Robert W. Doran, Duncan M. McFarland and John R.
Ryan.

The investment management agreement, investment subadvisory agreements
and investment services agreements continue in effect for two years from
initial approval and from year to year thereafter if approved annually by a
vote of a majority of the Directors of the Fund including a majority of the
Directors who are not parties to an agreement or interested persons of any
party to the contract, cast in person at a meeting called for the purpose of
voting on such

-25-

<PAGE>

approval, or by holders of a majority of the applicable Fund's outstanding
voting securities. The contract automatically terminates upon assignment as
defined under the 1940 Act. The investment advisory agreement may be
terminated without penalty on 60 days' notice at the option of either party
to the respective contract or by vote of the holders of a majority of the
outstanding voting securities of the applicable Fund. The investment
subadvisory agreements and investment services agreements may be terminated
at any time without the payment of any penalty by the Board of Directors, by
vote of a majority of the outstanding voting securities of the respective
Fund or by HL Advisors, upon 60 days' notice to HIMCO and Wellington
Management, and by Wellington Management or HIMCO upon 90 days' written
notice to HL Advisors (with respect to that Fund only). The investment
subadvisory agreement and investment services agreements terminate
automatically upon the termination of the corresponding investment advisory
agreement.

HL Advisors may make payments from time to time from its own resources,
which may include the management fees paid by the Fund to compensate broker
dealers, depository institutions, or other persons for providing distribution
assistance and administrative services and to otherwise promote the sale of
shares of the Funds including paying for the preparation, printing and
distribution of prospectuses and sales literature or other promotional
activities.

PORTFOLIO TURNOVER

For the last three fiscal years, each Fund had the following portfolio
turnover rates:

FUND NAME 1997 1996 1995
--------- ---- ---- ----
Capital Appreciation Fund 58% 85% 79%
Dividend and Growth Fund 34% 57% 41%
Index Fund 6% 19% 2%
International Opportunities 73% 70% 56%
MidCap Fund 46%(1) -- --
Small Company Fund 222% 32%(2) N/A
Stock Fund 32% 42% 53%
Advisers Fund 36% 54% 64%
International Advisers Fund 163% 95% 47%(3)
Bond Fund 113%(4) 212% 215%
Mortgage Securities Fund 47%(4) 201% 489%
Money Market Fund(5) N/A N/A N/A

(1) The MidCap Fund commenced operations on July 15, 1997. It is
anticipated that the portfolio turnover rate of the MidCap Fund
will not exceed 100%.
(2) For the period August 9, 1996 to December 31, 1996.
(3) For the period February 28, 1995 to December 31, 1995.
(4) Excluding mortgage dollar rolls.
(5) Because of the short-term nature of their portfolio securities
and market conditions, no meaningful or accurate prediction can be
made of the portfolio turnover rate for the Money Market Fund.

Figures are not shown for the Global Leaders Fund, Growth and Income
Fund and High Yield Fund because these Funds were not in operation for the
years shown.

-26-

<PAGE>

Turnover rate is computed by determining the percentage relationship of
the lesser of purchases and sales of securities to the monthly average of the
value of securities owned for the fiscal year, exclusive of securities whose
maturities at the time of acquisition were one year or less. A high turnover
rate will result in increased brokerage expenses and the likelihood of some
short term gains which may be taxable to shareholders at ordinary income tax
rates (see "Federal Income Taxes" in the Prospectus).

FUND EXPENSES

Each Fund assumes and pays the following costs and expenses: interest;
taxes; brokerage charges (which may be to affiliated broker-dealers); costs
of preparing, printing and filing any amendments or supplements to the
registration forms of each Fund and its securities; all federal and state
registration, qualification and filing costs and fees, (except the initial
costs and fees, which will be borne by Hartford Life), issuance and
redemption expenses, transfer agency and dividend and distribution disbursing
agency costs and expenses; custodian fees and expenses; accounting, auditing
and legal expenses; fidelity bond and other insurance premiums; fees and
salaries of directors, officers and employees of each Fund other than those
who are also officers of Hartford Life; industry membership dues; all annual
and semiannual reports and prospectuses mailed to each Fund's shareholders as
well as all quarterly, annual and any other periodic report required to be
filed with the SEC or with any state; any notices required by a federal or
state regulatory authority, and any proxy solicitation materials directed to
each Fund's shareholders as well as all printing, mailing and tabulation
costs incurred in connection therewith, and any expenses incurred in
connection with the holding of meetings of each Fund's shareholders, expenses
related to distribution activities as provided under each Fund's rule 12b-1
distribution plan for Class IB shares and other miscellaneous expenses
related directly to the Funds' operations and interest.

DISTRIBUTION ARRANGEMENTS

Each Fund's shares are sold by Hartford Securities Distribution Company
on a continuous basis to separate accounts sponsored by The Hartford and its
affiliates.

PORTFOLIO TRANSACTIONS AND BROKERAGE

The Funds have no obligation to deal with any dealer or group of dealers
in the execution of transactions in portfolio securities. Subject to any
policy established by HL Advisors and the Board of Directors, HIMCO and
Wellington Management are primarily responsible for the investment decisions
of each Fund and the placing of its portfolio transactions. In placing
orders, it is the policy of each fund to obtain the most favorable net
results, taking into account various factors, including price, dealer spread
or commission, if any, size of the transaction and difficulty

-27-

<PAGE>

of execution. while HIMCO and Wellington Management generally seek reasonably
competitive spreads or commissions HIMCO and Wellington Management may direct
brokerage transactions to broker/dealers who also sell The Hartford's
variable annuity and variable life insurance contracts and the sale of such
contracts may be taken into account by HIMCO and Wellington Management when
allocating brokerage transactions.

HIMCO and Wellington Management will generally deal directly with the
dealers who make a market in the securities involved (unless better prices
and execution are available elsewhere) if the securities are traded primarily
in the over-the-counter market. such dealers usually act as principals for
their own account. On occasion, securities may be purchased directly from the
issuer. Bonds and money market securities are generally traded on a net basis
and do not normally involve either brokerage commissions or transfer taxes.
Portfolio securities in the Money Market Fund normally are purchased directly
from, or sold directly to, the issuer, an underwriter or market maker for the
securities. There usually will be no brokerage commissions paid by the Money
Market Fund for such purchases or sales.

While HIMCO and Wellington Management (as applicable) seek to obtain the
most favorable net results in effecting transactions in a Fund's portfolio
securities, dealers who provide supplemental investment research to HIMCO or
Wellington Management may receive orders for transactions from HIMCO or
Wellington Management. Such supplemental research services ordinarily consist of
assessments and analyses of the business or prospects of a company, industry, or
economic sector. If, in the judgment of HIMCO or Wellington Management, a Fund
will be benefited by such supplemental research services, HIMCO and Wellington
Management are authorized to pay spreads or commissions to brokers or dealers
furnishing such services which are in excess of spreads or commissions which
another broker or dealer may charge for the same transaction. Information so
received will be in addition to and not in lieu of the services required to be
performed by HIMCO and Wellington Management under the investment advisory
agreement or the sub-investment advisory agreement. The expenses of HIMCO and
Wellington Management will not necessarily be reduced as a result of the receipt
of such supplemental information. HIMCO and Wellington Management may use such
supplemental research in providing investment advice to portfolios other than
those for which the transactions are made. Similarly, the Funds may benefit from
such research obtained by HIMCO and Wellington Management for portfolio
transactions for other clients.

Investment decisions for the Funds will be made independently from those of
any other clients that may be (or in the future may be) managed by HIMCO,
Wellington Management or their affiliates. If, however, accounts managed by
HIMCO or Wellington Management are simultaneously engaged in the purchase of the
same security, then, pursuant to general authorization of each Fund's Board of
Directors, available securities may be allocated to each Fund or other client
account and may be averaged as to price in whatever manner HIMCO or Wellington
Management deems to be fair. Such allocation and pricing may affect the amount
of brokerage commissions paid by each Fund. In some cases, this system might
adversely affect the

-28-

<PAGE>

price paid by a fund (for example, during periods of rapidly rising or
falling interest rates) or limit the size of the position obtainable for a
Fund (for example, in the case of a small issue).

For the last three fiscal years, each Fund has paid the following brokerage
fees:

<TABLE>
<CAPTION>
FUND NAME 1997 1996 1995
- --------- ---- ---- ----
<S> <C> <C> <C>
Capital Appreciation Fund $6,360,557 $6,257,262 $3,069,000
Dividend and Growth Fund $1,876,099 $1,256,273 $303,000
Index Fund $66,985 $258,946 $66,000
International Opportunities $4,019,255 $3,607,685 $1,986,000
MidCap Fund(1) $18,881 --- ---
Small Company Fund(2) $563,124 $32,863 N/A
Stock Fund $2,552,822 $2,403,555 $1,839,000
Advisers Fund $2,994,604 $3,413,943 $2,608,000
International Advisers Fund(3) $436,813 $238,356 $76,000
Bond Fund(4) N/A N/A N/A
Mortgage Securities Fund(4) N/A N/A N/A
Money Market Fund(4) N/A N/A N/A
</TABLE>

(1) Commenced operations in 1997.
(2) Commenced operations in 1996.
(3) Commenced operations in 1995.
(4) No brokerage commissions were paid in 1995, 1996 or 1997 by the
Bond Fund, Mortgage Securities Fund or Money Market Fund.

Figures are not shown for the Global Leaders Fund, Growth and Income
Fund and High Yield Fund because these Funds were not in operation for the
years shown.

Changes in the amounts of brokerage commissions paid reflect changes in
portfolio turnover rates.

DETERMINATION OF NET ASSET VALUE

The net asset value of the shares of each Fund is determined by Hartford
Life, in the manner described in the Funds' Prospectus. The Funds will be closed
for business and will not price their shares on the following business holidays:
New Year's Day, Martin Luther King Day, Presidents' Day, Good Friday, Memorial
Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day. Securities
held by each Fund other than the Money Market Fund will be valued as follows:
Debt securities (other than short-term obligations) are valued on the basis of
valuations furnished by an unaffiliated pricing service which determines
valuations for normal institutional size trading units of debt securities.
Short-term securities held in the Money Market Fund are valued at amortized cost
or original cost plus accrued interest receivable, both of which approximate
market value. All other Funds' short-term investments with a maturity of 60 days
or less when purchased are valued at amortized cost, which approximates market
value. Short-term investments with a maturity of more than 60 days when
purchased are valued based on market quotations until the remaining days to
maturity become less than 61 days. From such time until maturity, the
investments are valued at amortized cost.

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<PAGE>

Equity securities are valued at the last sales price reported on principal
securities exchanges (domestic or foreign). If no sale took place on such day
and in the case of certain equity securities traded over-the-counter, then such
securities are valued at the mean between the bid and asked prices. Securities
quoted in foreign currencies are translated into U.S. dollars at the exchange
rate at the end of the reporting period. Options are valued at the last sales
price; if no sale took place on such day, then options are valued at the mean
between the bid and asked prices. Securities for which market quotations are not
readily available and all other assets are valued in good faith at fair value
by, or under guidelines established by, the Funds' Board of Directors.

The net asset value per share of the Money Market Fund is determined by
using the amortized cost method of valuing its portfolio instruments. Under the
amortized cost method of valuation, an instrument is valued at cost and the
interest payable at maturity upon the instrument is accrued as income, on a
daily basis, over the remaining life of the instrument. Neither the amount of
daily income nor the net asset value is affected by unrealized appreciation or
depreciation of the portfolio's investments assuming the instrument's obligation
is paid in full on maturity. In periods of declining interest rates, the
indicated daily yield on shares of the portfolio computed using amortized cost
may tend to be higher than a similar computation made using a method of
valuation based upon market prices and estimates. In periods of rising interest
rates, the indicated daily yield on shares of the portfolio computed using
amortized cost may tend to be lower than a similar computation made using a
method of valuation based upon market prices and estimates. For all Funds,
securities with remaining maturities of less than 60 days are valued at
amortized cost, which approximates market value.

The amortized cost method of valuation permits the Money Market Fund to
maintain a stable $1.00 net asset value per share. The Fund's Board of Directors
periodically reviews the extent of any deviation from the $1.00 per share value
that would occur if a method of valuation based on market prices and estimates
were used. In the event such a deviation would exceed one-half of one percent,
the Board of Directors will promptly consider any action that reasonably should
be initiated to eliminate or reduce material dilution or other unfair results to
shareholders. Such action may include selling portfolio securities prior to
maturity, not declaring earned income dividends, valuing portfolio securities on
the basis of current market prices, if available, or, if not available, at fair
market value as determined in good faith by the Board of Directors, and
(considered highly unlikely by management of the Fund) redemption of shares in
kind (i.e., portfolio securities).

PURCHASE AND REDEMPTION OF SHARES

For information regarding the purchase of Fund shares, see "Purchase of
Fund Shares" in the Funds' Prospectus.

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<PAGE>

For a description of how a shareholder may have a Fund redeem his/her
shares, or how he/she may sell shares, see "Sale and Redemption of Shares" in
the Funds' Prospectus.

SUSPENSION OF REDEMPTIONS

A Fund may not suspend a shareholder's right of redemption, or postpone
payment for a redemption for more than seven days, unless the New York Stock
Exchange (NYSE) is closed for other than customary weekends or holidays, or
trading on the NYSE is restricted, or for any period during which an emergency
exists as a result of which (1) disposal by a Fund of securities owned by it is
not reasonably practicable, or (2) it is not reasonably practicable for a Fund
to fairly determine the value of its assets, or for such other periods as the
Securities and Exchange Commission may permit for the protection of investors.

INVESTMENT PERFORMANCE

MONEY MARKET FUNDS

In accordance with regulations prescribed by the SEC, the Fund is required
to compute the Money Market Fund's current annualized yield for a seven-day
period in a manner which does not take into consideration any realized or
unrealized gains or losses on its portfolio securities. This current annualized
yield is computed by determining the net change (exclusive of realized gains and
losses on the sale of securities and unrealized appreciation and depreciation)
in the value of a hypothetical account having a balance of one share of the
Money Market Fund at the beginning of such seven-day period, dividing such net
change in account value by the value of the account at the beginning of the
period to determine the base period return and annualizing this quotient on a
365-day basis.

The SEC also permits the Fund to disclose the effective yield of the Money
Market Fund for the same seven-day period, determined on a compounded basis. The
effective yield is calculated by compounding the unannualized base period return
by adding one to the base period return, raising the sum to a power equal to 365
divided by 7, and subtracting one from the result.

The yield on amounts held in the Money Market Fund normally will fluctuate
on a daily basis. Therefore, the disclosed yield for any given past period is
not an indication or representation of future yields or rates of return.

Hartford Money Market HLS Fund

The Money Market Fund's actual yield is affected by changes in interest
rates on money market securities, average portfolio maturity of the Money Market
Fund, the types and quality of portfolio securities held by the Money Market
Fund, and its operating expenses.

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<PAGE>

Yield calculations of the Fund used for illustration purposes are based on
the consideration of a hypothetical account having a balance of exactly one
share at the beginning of a seven day period, which period will end on the date
of the most recent financial statements. The yield for the fund during this
seven day period will be the change in the value of the hypothetical account,
including dividends declared on the original share, dividends declared on any
shares purchased with dividends on that share, and any monthly account charges
or sales charges that would affect an account of average size, but excluding any
capital changes. The following is an example of this yield calculation for the
Fund based on a seven day period ending December 31, 1997.

Example:

Assumptions:

Value of a hypothetical pre-existing account with exactly one share at the
beginning of the period: $1.000000

Value of the same account* (excluding capital changes) at the end of the
seven day period: $1.001028

*This value would include the value of any additional shares purchased with
dividends from the original share, and all dividends declared on both the
original share and any such additional shares.

Calculation:
Ending account value $1.001028
Less beginning account value 1.000000

Net change in account value $.001028
Base period return:(adjusted
change/beginning account
value)$.001028/$1.000000 = $.001028
Current yield = $.001028 X (365/7) = 5.36%
Effective yield = (1 + .001028)365/7 - 1 = 5.50%

The current yield and effective yield information will fluctuate, and
publication of yield information may not provide a basis for comparison with
bank deposits, other investments which are insured and/or pay a fixed yield for
a stated period of time, or other investment companies. In addition, the current
yield and effective yield information may be of limited use for comparative
purposes because it does not reflect charges imposed at the Separate Account
level which, if included, would decrease the yield.

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<PAGE>

OTHER FUNDS

STANDARDIZED AVERAGE ANNUAL TOTAL RETURN QUOTATIONS. Average annual total
return quotations for the Funds are computed by finding the average annual
compounded rates of return that would cause a hypothetical investment made on
the first day of a designated period to equal the ending redeemable value of
such hypothetical investment on the last day of the designated period in
accordance with the following formula:

P(1+T)(n) = ERV
Where:
P = a hypothetical initial n = number of years
payment of $1,000, less
the maximum sales load
applicable to a Fund
T = average annual total ERV = ending redeemable value of
return the hypothetical $1,000
initial payment made at
the beginning of the
designated period (or
fractional portion
thereof)

The computation above assumes that all dividends and distributions made by a
Fund are reinvested at net asset value during the designated period. The average
annual total return quotation is determined to the nearest 1/100 of 1%.

One of the primary methods used to measure performance is "total return."
"Total return" will normally represent the percentage change in value of a class
of a Fund, or of a hypothetical investment in a class of a Fund, over any period
up to the lifetime of the class. Unless otherwise indicated, total return
calculations will assume the deduction of the maximum sales charge and usually
assume the reinvestment of all dividends and capital gains distributions and
will be expressed as a percentage increase or decrease from an initial value,
for the entire period or for one or more specified periods within the entire
period. Total return calculations that do not reflect the reduction of sales
charges will be higher than those that do reflect such charges.

Total return percentages for periods longer than one year will usually be
accompanied by total return percentages for each year within the period and/or
by the average annual compounded total return for the period. The income and
capital components of a given return may be separated and portrayed in a variety
of ways in order to illustrate their relative significance. Performance may also
be portrayed in terms of cash or investment values, without percentages. Past
performance cannot guarantee any particular future result. In determining the
average annual total return (calculated as provided above), recurring fees, if
any, that are charged to all shareholder accounts are taken into consideration.
For any account fees that vary with the size of the account, the account fee
used for purposes of the above computation is assumed to be the fee that would
be charged to the mean account size of the Fund.

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<PAGE>

Each Fund's average annual total return quotations and yield quotations as
they may appear in the Prospectus, this SAI or in advertising are calculated by
standard methods prescribed by the SEC.

In contrast to Class IA shares, the Class IB shares are new and charge
12b-1 fees to cover distribution expenses. Because the historical performance
of Class IA shares may be helpful to a prospective investor's decision, the
Funds may advertise standard average annual total return for Class IA shares
and, when available, Class IB shares.

Each Fund may also publish its distribution rate and/or its effective
distribution rate. A Fund's distribution rate is computed by dividing the most
recent monthly distribution per share annualized, by the current net asset value
per share. A Fund's effective distribution rate is computed by dividing the
distribution rate by the ratio used to annualize the most recent monthly
distribution and reinvesting the resulting amount for a full year on the basis
of such ratio. The effective distribution rate will be higher than the
distribution rate because of the compounding effect of the assumed reinvestment.
A Fund's yield is calculated using a standardized formula, the income component
of which is computed from the yields to maturity of all debt obligations held by
the Fund based on prescribed methods (with all purchases and sales of securities
during such period included in the income calculation on a settlement date
basis), whereas the distribution rate is based on a Fund's last monthly
distribution. A Fund's monthly distribution tends to be relatively stable and
may be more or less than the amount of net investment income and short-term
capital gain actually earned by the Fund during the month (see "Dividends,
Capital Gains and Taxes" in the Funds' Prospectus).

Other data that may be advertised or published about each Fund include the
average portfolio quality, the average portfolio maturity and the average
portfolio duration.

STANDARDIZED YIELD QUOTATIONS. The yield of a class is computed by dividing
the class's net investment income per share during a base period of 30 days, or
one month, by the maximum offering price per share of the class on the last day
of such base period in accordance with the following formula:

a-b
2[(--- +1)(6) -1]
cd
Where:
a = net investment income c = the average daily number
earned during the period of shares of the subject
attributable to the class outstanding during
subject class the period that were
entitled to receive
dividends
b = net expenses accrued for d = the maximum offering price
the period attributable to per share of the subject
the subject class

Net investment income will be determined in accordance with rules established by
the SEC.

NON-STANDARDIZED PERFORMANCE. In addition, in order to more completely
represent a Fund's performance or more accurately compare such performance to
other measures

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<PAGE>

of investment return, a Fund also may include in advertisements, sales
literature and shareholder reports other total return performance data
("Non-Standardized Return"). Non-Standardized Return may be quoted for the
same or different periods as those for which Standardized Return is quoted;
it may consist of an aggregate or average annual percentage rate of return,
actual year-by-year rates or any combination thereof. Non-Standardized Return
may or may not take sales charges into account; performance data calculated
without taking the effect of sales charges into account will be higher than
data including the effect of such charges. All non-standardized performance
will be advertised only if the standard performance data for the same period,
as well as for the required periods, is also presented.

GENERAL INFORMATION. From time to time, the Funds may advertise their
performance compared to similar funds using certain unmanaged indices, reporting
services and publications. Descriptions of some of the indices which may be used
are listed below.

The Standard & Poor's 500 Composite Stock Price Index is a well diversified
list of 500 companies representing the U.S. Stock Market.

The Standard & Poor's MidCap 400 Index is designed to represent price
movements in the mid cap U.S. equity market. It contains companies chosen by the
Standard & Poors Index Committee for their size, liquidity and industry
representation. None of the companies in the S&P 400 overlap with those in the
S&P 500 Index or the S&P 600 Index. Decisions about stocks to be included and
deleted are made by the Committee which meets on a regular basis. S&P 400 stocks
are market cap weighted; each stock influences the Index in proportion to its
relative market cap. REITs are not eligible for inclusion. The range of
capitalization of companies in the Index as of December 29, 1995 was $118
million to $7 billion. The inception year of the S&P MidCap 400 Index is 1982.
The Index is rebalanced as needed. S&P 400 companies which merge or are acquired
are immediately replaced in the Index; other companies are replaced when the
Committee decides they are no longer representative.

The Standard and Poor's Small Cap 600 index is designed to represent price
movements in the small cap U.S. equity market. It contains companies chosen by
the Standard & Poors Index Committee for their size, industry characteristics,
and liquidity. None of the companies in the S&P 600 overlap with the S&P 500 or
the S&P 400 (MidCap Index). The S&P 600 is weighted by market capitalization.
REITs are not eligible for inclusion.

The NASDAQ Composite OTC Price Index is a market value-weighted and
unmanaged index showing the changes in the aggregate market value of
approximately 3,500 stocks.

The Lehman Government Bond Index is a measure of the market value of all
public obligations of the U.S. Treasury; all publicly issued debt of all
agencies of the U.S. Government and all quasi-federal corporations; and all
corporate debt guaranteed by the U.S. Government. Mortgage backed securities,
bonds and foreign targeted issues are not included in the Lehman Government
Index.

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<PAGE>

The Lehman Government/Corporate Bond Index is a measure of the market value
of approximately 5,300 bonds with a face value currently in excess of $1.3
trillion. To be included in the Lehman Government/Corporate Index, an issue must
have amounts outstanding in excess of $1 million, have at least one year to
maturity and be rated "Baa" or higher ("investment grade") by a nationally
recognized rating agency.

The Russell 2000 Index represents the bottom two thirds of the largest 3000
publicly traded companies domiciled in the U.S. Russell uses total market
capitalization to sort its universe to determine the companies that are included
in the Index. Only common stocks are included in the Index. REITs are eligible
for inclusion.

The Russell 2500 Index is a market value-weighted, unmanaged index showing
total return (i.e., principal changes with income) in the aggregate market value
of 2,500 stocks of publicly traded companies domiciled in the United States. The
Index includes stocks traded on the New York Stock Exchange and the American
Stock Exchange as well as in the over-the-counter market.

The Morgan Stanley Capital International EAFE Index (the "EAFE Index") is
an unmanaged index, which includes over 1,000 companies representing the stock
markets of Europe, Australia, New Zealand and the Far East. The EAFE Index is
typically shown weighted by the market capitalization. However, EAFE is also
available weighted by Gross Domestic Product (GDP). These weights are modified
on July 1st of each year to reflect the prior year's GDP. Indices with dividends
reinvested constitute an estimate of total return arrived at by reinvesting one
twelfth of the month end yield at every month end. The series with net dividends
reinvested take into account those dividends net of withholding taxes retained
at the source of payment.

The Lehman Brothers High Yield BB Index is a measure of the market value of
public debt issues with a minimum par value of $100 million and rated Ba1-Ba3 by
Moody's. All bonds within the index are U.S. dollar denominated, non-convertible
and have at least one year remaining to maturity.

The Composite Index for Hartford Advisers Fund is comprised of the S&P 500
(55%), the Lehman Government/Corporate Bond Index (35%), both mentioned above,
and 90 Day U.S. Treasury Bills (10%).

The Composite Index for the Capital Appreciation Fund is the Russell 2500
Index (60%)/S&P 500 Index (40%), both of which are mentioned above.

In addition, from time to time in reports and promotions: (1) a Fund's
performance may be compared to other groups of mutual funds tracked by: (a):
Lipper Analytical Services, a widely used independent research firm which ranks
mutual funds by overall performance,

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<PAGE>

investment objectives, and assets; (b) Morningstar, Inc., another widely used
independent research firm which ranks mutual funds by overall performance,
investment objectives, and assets; or (c) other financial or business
publications, such as Business Week, Money Magazine, Forbes and Barron's
which provide similar information; (2) the Consumer Price Index (measure for
inflation) may be used to assess the real rate of return from an investment
in the Fund; (3) other statistics such as GNP, and net import and export
figures derived form governmental publications, e.g., The Survey of Current
Business or other independent parties, e.g., the Investment Company
Institute, may be used to illustrate investment attributes to the Fund or the
general economic, business, investment, or financial environment in which the
Fund operates; (4) various financial, economic and market statistics
developed by brokers, dealers and other persons may be used to illustrate
aspects of the Fund's performance; (5) the effect of tax-deferred compounding
on the Fund's investment returns, or on returns in general, may be
illustrated by graphs, charts, etc. where such graphs or charts would
compare, at various points in time, the return from an investment in the Fund
(or returns in general) on a tax-deferred basis (assuming reinvestment of
capital gains and dividends and assuming one or more tax rates) with the
return on a taxable basis; and (6) the sectors or industries in which the
Fund invests may be compared to relevant indices or surveys (e.g., S&P
Industry Surveys) in order to evaluate the Fund's historical performance or
current or potential value with respect to the particular industry or sector.

Each Fund's investment performance may be advertised in various financial
publications, newspapers, magazines including the following:

Across the Board California Broker Insurance Advocate
Advertising Age Changing Times Independent
Adviser's Magazine Consumer Reports Insurance Review
Adweek Consumer Digest Investor's
Agent Crain's Insurance Times
American Banker Dow Jones News Service Insurance Week
American Agent and Economist Insurance Product News
Broker Entrepreneur Insurance Sales
Associated Press Entrepreneurial Woman Investment Dealers Digest
Barron's Financial Services Week Investment Advisor
Best's Review Financial World Journal of Commerce
Bloomberg Financial Planning Journal of Accountancy
Broker World Financial Times Journal of the American
Business Week Forbes Society of CLU &
Business Wire Fortune ChFC
Business News Features Hartford Courant Kiplinger's Personal
Business Month Inc Finance
Business Marketing Independent Business Knight-Ridder
Business Daily Institutional Investor Life Association News
Business Insurance Insurance Forum Life Insurance Selling

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<PAGE>

Life Times New York Times The Boston Globe
LIMRA's MarketFacts Pension World The Washington Post
Lipper Analytical Pensions & Investments Tillinghast
Services, Inc. Professional Insurance Time
MarketFacts Agents U.S. News & World
Medical Economics Professional Agent Report
Money Registered Representative U.S. Banker
Morningstar, Inc. Reuter's United Press International
Nation's Business Rough Notes USA Today
National Underwriter Round the Table Value Line
New Choices (formerly 50 Service Wall Street Journal
Plus) Success Wiesenberger Investment
New England Business The Standard Working Woman

From time to time the Fund may publish the sales of shares of one or more
of the Funds on a gross or net basis and for various periods of time, and
compare such sales with sales similarly reported by other investment companies.

The manner in which total return and yield are calculated is described
above. The following table sets forth the average annual total return, and yield
where applicable, for the Class IA shares of each Fund through December 31,
1997.

<TABLE>
<CAPTION>
TOTAL RETURN YIELD
FUND SINCE INCEPTION 1 YEAR 5 YEARS 10 YEARS SEC 30-DAY YIELD
(INCEPTION DATE) --------------- ------- ------- -------- ----------------
<S> <C> <C> <C> <C> <C>
Capital Appreciation 17.77% 22.34% 18.95% 19.60%
(April 2, 1984)
Dividend and Growth 23.73% 31.89% N/A N/A
(March 8, 1994)
Index 14.53% 32.61% 19.48% 17.22%
(May 1, 1987)
International Opportunities 6.58% .34% 11.10% N/A
(July 2, 1990)
MidCap Fund 13.81%* N/A N/A N/A
(July 15, 1997)
Small Company 18.59% 18.38% N/A N/A
(August 9, 1996)
Stock 15.33% 31.38% 19.70% 17.13%
(August 31, 1977)
Advisers 13.24% 24.51% 15.26% 14.06%
(March 31, 1983)
International Advisers 11.63% 5.52% N/A N/A
(March 1, 1995)
Bond 9.09% 11.35% 7.66% 8.81% 6.34%
(August 31, 1977)
</TABLE>
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<PAGE>

<TABLE>
<CAPTION>
TOTAL RETURN YIELD
FUND SINCE INCEPTION 1 YEAR 5 YEARS 10 YEARS SEC 30-DAY YIELD
(INCEPTION DATE) --------------- ------- ------- -------- ----------------
<S> <C> <C> <C> <C> <C>
Mortgage Securities 9.07% 9.01% 6.83% 8.43% 6.66%
(January 1, 1985)
Money Market 7.64% 5.31% 4.62% 5.73%
(June 30, 1980)
</TABLE>

*Not Annualized

Figures are not shown for the Global Leaders Fund, Growth and Income
Fund and High Yield Fund because none had investment performance for the
years shown.

The Funds are offered exclusively through variable insurance products.
Performance information presented for the Funds should not be compared
directly with performance information of other insurance products without
taking into account insurance-related charges and expenses payable with
respect to these insurance products. Insurance related charges and expenses
are not reflected in the Funds' performance information and will reduce an
investor's return under the insurance product.

TAXES

Each Fund is treated as a separate entity for accounting and tax purposes.
Each Fund has qualified and elected or intends to qualify and elect to be
treated as a "regulated investment company" under Subchapter M of the Internal
Revenue Code of 1986, as amended (the "Code"), and intends to continue to so
qualify in the future. As such and by complying with the applicable provisions
of the Code regarding the sources of its income, the timing of its
distributions, and the diversification of its assets, each Fund will not be
subject to federal income tax on taxable income (including net short-term and
long-term capital gains) which is distributed to shareholders at least annually
in accordance with the timing requirements of the Code.

Each Fund will be subject to a 4% non-deductible federal excise tax on
certain amounts not distributed (and not treated as having been distributed) on
a timely basis in accordance with annual minimum distribution requirements. Each
Fund intends under normal circumstances to avoid liability for such tax by
satisfying such distribution requirements.

If a Fund acquires stock in certain non-U.S. corporations that receive at
least 75% of their annual gross income from passive sources (such as interest,
dividends, rents, royalties or capital gain) or hold at least 50% of their
assets in investments producing such passive income ("passive foreign investment
companies"), that Fund could be subject to federal income tax and additional
interest charges on "excess distributions" received from such companies or gain
from the sale of stock in such companies, even if all income or gain actually
received by the Fund is timely distributed to its shareholders. The Fund would
not be able to pass through to its shareholders any credit or deduction for such
a tax. Certain elections may, if available, ameliorate these adverse tax
consequences, but any such election would require the applicable fund to
recognize taxable income or gain without the concurrent receipt of cash. Any
Fund that is permitted to acquire stock in foreign corporations may limit and/or
manage its holdings in passive foreign investment companies to minimize its tax
liability or maximize its return from these investments.

Foreign exchange gains and losses realized by a Fund in connection with
certain transactions involving foreign currency-denominated debt securities,
certain foreign currency futures and options, foreign currency forward
contracts, foreign currencies, or payables or receivables denominated in a
foreign currency are subject to Section 988 of the Code, which generally causes
such gains and losses to be treated as ordinary income and losses and may affect
the amount, timing and character of distributions to shareholders. Any such
transactions that are not directly related to a Fund's investment in stock or
securities, possibly including speculative

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<PAGE>

currency positions or currency derivatives not used for hedging purposes, may
increase the amount of gain it is deemed to recognize from the sale of
certain investments held for less than three months, which gain is limited
under the Code to less than 30% of its annual gross income, and could under
future Treasury regulations produce income not among the types of "qualifying
income" from which the Fund must derive at least 90% of its annual gross
income.

Some Funds may be subject to withholding and other taxes imposed by
foreign countries with respect to their investments in foreign securities.
Tax conventions between certain countries and the U.S. may reduce or
eliminate such taxes. The Funds anticipate that they generally will not
qualify to pass such foreign taxes and any associated tax deductions or
credits through to their shareholders, who therefore generally will not
report such amounts on their own tax returns.

For Federal income tax purposes, each Fund is permitted to carry forward
a net capital loss in any year to offset its own capital gains, if any,
during the eight years following the year of the loss. To the extent
subsequent capital gains are offset by such losses, they would not result in
federal income tax liability to the applicable fund and would not be
distributed as such to shareholders.

Each Fund that invests in certain PIKs, zero coupon securities or
certain deferred interest securities (and, in general, any other securities
with original issue discount or with market discount if the Fund elects to
include market discount in income currently) must accrue income on such
investments prior to the receipt of the corresponding cash payments. However,
each Fund must distribute, at least annually, all or substantially all of its
net income, including such accrued income, to shareholders to qualify as a
regulated investment company under the Code and avoid federal income and
excise taxes. Therefore, a Fund may have to dispose of its portfolio
securities under disadvantageous circumstances to generate cash, or may have
to leverage itself by borrowing the cash, to satisfy distribution
requirements.

Investment in debt obligations that are at risk of or in default
presents special tax issues for any Fund that may hold such obligations. Tax
rules are not entirely clear about issues such as when the Fund may cease to
accrue interest, original issue discount, or market discount, when and to
what extent deductions may be taken for bad debts or worthless securities,
how payments received on obligations in default should be allocated between
principal and income, and whether exchanges of debt obligations in a workout
context are taxable. These and other issues will be addressed by any fund
that may hold such obligations in order to reduce the risk of distributing
insufficient income to preserve its status as a regulated investment company
and seek to avoid becoming subject to federal income or excise tax.

Limitations imposed by the Code on regulated investment companies like
the funds may restrict a Fund's ability to enter into futures, options, and
forward transactions.

Certain options, futures and forward foreign currency transactions
undertaken by a Fund may cause the fund to recognize gains or losses from
marking to market even though its

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<PAGE>

positions have not been sold or terminated and affect the character as
long-term or short-term (or, in the case of certain currency forwards,
options and futures, as ordinary income or loss) and timing of some capital
gains and losses realized by the fund. Also, certain of a Fund's losses on
its transactions involving options, futures or forward contracts and/or
offsetting portfolio positions may be deferred rather than being taken into
account currently in calculating the Fund's taxable income. Certain of the
applicable tax rules may be modified if a Fund is eligible and chooses to
make one or more of certain tax elections that may be available. These
transactions may therefore affect the amount, timing and character of a
Fund's distributions to shareholders. The Funds will take into account the
special tax rules (including consideration of available elections) applicable
to options, futures or forward contracts in order to minimize any potential
adverse tax consequences.

The federal income tax rules applicable to interest rate swaps, caps and
floors are unclear in certain respects, and a fund may be required to account
for these transactions in a manner that, in certain circumstances, may limit
the degree to which it may utilize these transactions.

The foregoing discussion relates solely to U.S. Federal income tax law
as applicable to U.S. persons (i.e., U.S. citizens or residents and U.S.
domestic corporations, partnerships, trusts or estates) subject to tax under
such law. The discussion does not address special tax rules applicable to
certain classes of investors, such as tax-exempt entities, insurance
companies, and financial institutions. Dividends, capital gain distributions,
and ownership of or gains realized on the redemption (including an exchange)
of the shares of a Fund may also be subject to state and local taxes.
Shareholders should consult their own tax advisers as to the federal, state
or local tax consequences of ownership of shares of, and receipt of
distributions from, the Funds in their particular circumstances.

STATE AND LOCAL. Each Fund may be subject to state or local taxes in
jurisdictions in which such fund may be deemed to be doing business. In
addition, in those states or localities which have income tax laws, the
treatment of such Fund and its shareholders under such laws may differ from
their treatment under federal income tax laws, and investment in such fund
may have different tax consequences for shareholders than would direct
investment in such fund's portfolio securities. Shareholders should consult
their own tax advisers concerning these matters.

CUSTODIAN

Portfolio securities of each fund are held pursuant to Custodian Agreements
between each Fund and State Street Bank and Trust Company.

TRANSFER AGENT SERVICES

Hartford Life Insurance Company, 200 Hopmeadow Street, Simsbury, CT 06089,
serves as Transfer and Dividend Disbursing Agent for the Funds. The Transfer
Agent issues and redeems shares of the Funds and disburses any dividends
declared by the Funds.

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<PAGE>

DISTRIBUTOR

Hartford Securities Distribution Company, 200 Hopmeadow Street,
Simsbury, Connecticut 06089, acts as the Fund's Distributor.

INDEPENDENT PUBLIC ACCOUNTANTS

The financial statements and financial highlights as of December 31,
1997 and for the year then ended, included in this SAI, have been audited by
Arthur Andersen LLP, independent public accountants, as stated in their
report appearing herein.

OTHER INFORMATION

The Hartford has granted the fund the right to use the name, "The
Hartford" or "Hartford", and has reserved the right to withdraw its consent
to the use of such name by the fund and the funds at any time, or to grant
the use of such name to any other company.

FINANCIAL STATEMENTS

Each Fund's audited financial statements as of December 31, 1997 and for
the year then ended, together with the notes thereto and the report of Arthur
Andersen LLP, independent public accountants, are attached to this SAI. No
financial information with respect to the Global Leaders Fund, Growth and
Income Fund and High Yield Fund is available because the Company did not
offer those Funds as of the fiscal year ended December 31, 1997.

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