TIAA CREF INSTITUTIONAL MUTUAL FUNDS, 497, 2000-02-04

TIAA CREF INSTITUTIONAL MUTUAL FUNDS
497, 2000-02-04

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FEBRUARY 1, 2000

TIAA-CREF Institutional Mutual Funds
- -------------------------------------------------------------
Prospectus

INSTITUTIONAL INTERNATIONAL EQUITY FUND
INSTITUTIONAL GROWTH EQUITY FUND
INSTITUTIONAL GROWTH AND INCOME FUND
INSTITUTIONAL EQUITY INDEX FUND
INSTITUTIONAL SOCIAL CHOICE EQUITY FUND
INSTITUTIONAL BOND FUND
INSTITUTIONAL MONEY MARKET FUND
-------------------------------

[TIAA CREF LOGO]

Each investment portfolio, or "Fund," currently offers a single class of shares,
which is described in this prospectus. The shares are only available for
purchase by certain intermediaries affiliated with TIAA-CREF ("TIAA-CREF
Intermediaries") or other persons, such as state-sponsored tuition savings
plans, who have entered into a contract with a TIAA-CREF Intermediary that
enables them to purchase shares of the Funds.

The Securities and Exchange Commission has not approved or disapproved these
securities or passed upon the adequacy of this prospectus. Any representation to
the contrary is a criminal offense.
<PAGE> 2

- ------------------------------------------------------------------------------
Table of Contents

<TABLE>
<S> <C>
SUMMARY INFORMATION........................................ 1
INVESTMENT OBJECTIVES, STRATEGIES AND RISKS.............. 1
Dual Investment Management Strategy(SM)............... 1
General Risks of Investing in the Funds............... 2
Institutional International Equity Fund............... 2
Institutional Growth Equity Fund...................... 3
Institutional Growth and Income Fund.................. 4
Institutional Equity Index Fund....................... 4
Institutional Social Choice Equity Fund............... 5
Institutional Bond Fund............................... 5
Institutional Money Market Fund....................... 6
PAST PERFORMANCE......................................... 7
FEES AND EXPENSES........................................ 8
INVESTMENT OBJECTIVES, STRATEGIES AND RISKS................ 9
EQUITY FUNDS USING THE DUAL INVESTMENT MANAGEMENT
STRATEGY(SM).......................................... 10
Institutional International Equity Fund............... 11
Institutional Growth Equity Fund...................... 12
Institutional Growth and Income Fund.................. 13
OTHER EQUITY FUNDS....................................... 14
Institutional Equity Index Fund....................... 14
Institutional Social Choice Equity Fund............... 15
ADDITIONAL INVESTMENT STRATEGIES FOR THE EQUITY FUNDS.... 17
THE FIXED-INCOME FUNDS................................... 18
Institutional Bond Fund............................... 18
Institutional Money Market Fund....................... 20
RISKS OF INVESTING IN ANY OF THE FUNDS................... 22
General Investment Risks.............................. 22
MANAGEMENT OF THE FUNDS.................................. 23
The Funds' Investment Adviser......................... 23
Prior Performance of Investment Adviser............... 24
Fund Managers......................................... 28
Service Providers..................................... 29
CALCULATING SHARE PRICE.................................... 29
DIVIDENDS AND DISTRIBUTIONS................................ 30
</TABLE>

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<TABLE>
<S> <C>
TAXES...................................................... 31
YOUR ACCOUNT: BUYING, SELLING OR EXCHANGING SHARES......... 33
ELIGIBLE INVESTORS....................................... 33
PURCHASE OF FUND SHARES.................................. 34
Purchases by Eligible Investors....................... 34
Investing through the Trust Company................... 34
Points to Remember for All Purchases.................. 35
In-Kind Purchases of Shares........................... 35
HOW TO REDEEM SHARES..................................... 36
Redemptions by Eligible Investors..................... 36
Redeeming Shares through the Trust Company............ 37
In-Kind Redemptions of Shares......................... 37
HOW TO EXCHANGE SHARES................................... 37
Exchanges by Eligible Investors....................... 37
Making Exchanges through the Trust Company............ 37
OTHER INVESTOR INFORMATION............................... 38
FINANCIAL HIGHLIGHTS....................................... 40
</TABLE>

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Summary Information

INVESTMENT OBJECTIVES, STRATEGIES AND RISKS

TIAA-CREF Institutional Mutual Funds consists of seven different Funds:

Institutional International Equity Fund

Institutional Growth Equity Fund

Institutional Growth and Income Fund

Institutional Equity Index Fund

Institutional Social Choice Equity Fund

Institutional Bond Fund

Institutional Money Market Fund

DUAL INVESTMENT MANAGEMENT STRATEGY(SM)
Three of the Funds (the Institutional International Equity Fund, the
Institutional Growth Equity Fund, and the Institutional Growth and Income Fund)
use TIAA-CREF's Dual Investment Management Strategy(SM). Each of these Funds has
a "stock selection" and an "enhanced index" segment.

- - The stock selection segment holds a relatively small number of stocks that the
Fund manager believes offer superior returns. These stocks are chosen using
fundamental analysis.

- - The enhanced index segment seeks to outperform the Fund's benchmark index
while limiting the possibility of significantly underperforming the benchmark.
The Fund manager attempts to outperform the benchmark index by over- or
under-weighting many stocks in the index by small amounts, based on
proprietary scoring models.

The Fund manager has certain flexibilities, using the Dual Investment Management
Strategy, to allocate amounts between the stock selection segment and the
enhanced index segment, based upon investment opportunities that the Fund
manager determines to be available at any particular time. This approach enables
the Funds to stay fully invested even when the Fund manager cannot find
sufficient investment opportunities for the stock selection segment.

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The Institutional Equity Index Fund, the Institutional Social Choice Equity
Fund, the Institutional Bond Fund, and the Institutional Money Market Fund do
not use the Dual Investment Management Strategy. See their descriptions below.

GENERAL RISKS OF INVESTING IN THE FUNDS
The Funds are subject to the following general risks:

- - Market Risk--Stock and bond prices in general can decline over short or
extended periods as a result of political or economic events.

- - Interest Rate Risk--Bond or stock prices may decline if interest rates change.

- - Company Risk--A company's current earnings can fall or its overall financial
soundness may decline. As a result, the price of its securities may go down,
or the company may not be able to pay principal and interest on its bonds when
due.

Special risks associated with particular Funds are discussed in the following
Fund summaries. The use of a particular benchmark index by a Fund is not a
fundamental policy and can be changed.

An investment in TIAA-CREF Institutional Mutual Funds is not a deposit of any
bank and is not insured or guaranteed by the Federal Deposit Insurance
Corporation or any other government agency. An investor can lose money in any of
the Funds, or the Funds could underperform other investments.

INSTITUTIONAL INTERNATIONAL EQUITY FUND
INVESTMENT OBJECTIVE: The Fund seeks favorable long-term returns, mainly
through capital appreciation.

PRINCIPAL INVESTMENT STRATEGIES: The Fund invests in a broadly diversified
portfolio of primarily foreign equity investments, using the Dual Investment
Management Strategy. For the Fund's stock selection segment, we concentrate on
individual stocks rather than on geographic regions, sectors, or industries. We
look for companies of all sizes that have certain characteristics such as
sustainable growth, consistent cash flow and attractive stock prices based on
current earnings, assets and long-term

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growth prospects. The benchmark index for the Fund is the Morgan Stanley Capital
International ("MSCI") EAFE(R) (Europe, Australasia, Far East) Index.

SPECIAL INVESTMENT RISKS: Changes in currency exchange rates, the possible
imposition of market controls or currency exchange controls, lower liquidity and
higher volatility in some foreign markets and/or political, social or diplomatic
events could reduce the value of the Fund's investments. These risks may be even
more pronounced for the Fund's investments in emerging market countries.

WHO MAY WANT TO INVEST: The Fund may be appropriate for investors who seek
above-average long-term returns, who understand the advantages of
diversification across international markets and are willing to tolerate the
greater risks of international investing.

INSTITUTIONAL GROWTH EQUITY FUND
INVESTMENT OBJECTIVE: The Fund seeks a favorable long-term return, mainly
through capital appreciation, primarily from a diversified portfolio of common
stocks that present the opportunity for exceptional growth.

PRINCIPAL INVESTMENT STRATEGIES: The Fund invests in stocks of companies in new
and emerging areas of the economy and companies with distinctive products or
promising market conditions, using the Dual Investment Management Strategy. For
its stock selection segment, the Fund looks primarily for companies that we
believe have the potential for strong earnings or sales growth, or that appear
to be undervalued based on current earnings, assets or growth prospects. It can
also invest in companies to benefit from prospective acquisitions,
reorganizations, or corporate restructurings or other special situations.
Foreign investments may range from 0 to 40 percent of the Fund's portfolio. The
benchmark index for the Fund is the Russell 3000(R) Growth Index. (Russell 3000
is a trademark and a service mark of the Frank Russell Company.)

SPECIAL INVESTMENT RISKS: The Fund may sometimes hold a significant amount of
stocks of smaller, lesser-known companies whose stock prices may fluctuate more
than those of larger companies. This means the Fund will probably be more
volatile than the overall stock market. With foreign investments, changes in
currency exchange rates, the possible imposition of market controls or currency
exchange controls, lower liquidity and

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higher volatility in some foreign markets and/or political, social or diplomatic
events could reduce the value of the Fund's investments.

WHO MAY WANT TO INVEST: The Fund may be appropriate for investors who are
looking for long-term capital appreciation, but who are willing to tolerate
fluctuations in value.

INSTITUTIONAL GROWTH AND INCOME FUND
INVESTMENT OBJECTIVE: The Fund seeks a favorable long-term return through
capital appreciation and investment income.

PRINCIPAL INVESTMENT STRATEGIES: The Fund invests in a broadly diversified
portfolio of common stocks selected for their investment potential, using the
Dual Investment Management Strategy. For its stock selection segment, the Fund
manager looks primarily for stocks of larger, well-established, mature growth
companies that we believe are attractively priced, show the potential to grow
faster than the rest of the market, and offer a growing stream of dividend
income. The Fund may also invest in rapidly growing smaller companies and may
have up to 20 percent of its assets in foreign securities. Normally, at least 80
percent of the Fund's assets will be income-producing equity securities selected
for their investment potential. The benchmark index for the Fund is the Standard
& Poor's 500 ("S&P 500") Index.

SPECIAL INVESTMENT RISKS: Stocks paying relatively high dividends may at times
significantly underperform other stocks during periods of rapid market
appreciation. Changes in currency exchange rates, the possible imposition of
market controls or currency exchange controls, lower liquidity and higher
volatility in some foreign markets and/or political, social or diplomatic events
could reduce the value of the Fund's foreign investments.

WHO MAY WANT TO INVEST: The Fund may be appropriate for investors who want
capital appreciation and current income but who also can accept the risk of
market fluctuations.

INSTITUTIONAL EQUITY INDEX FUND
INVESTMENT OBJECTIVE: The Fund seeks a favorable long-term rate of return from
a diversified portfolio selected to track the overall market for common stocks
publicly traded in the U.S., as represented by a broad stock market index.
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PRINCIPAL INVESTMENT STRATEGIES: The Fund is designed to track U.S. equity
markets as a whole and invests in stocks in the Russell 3000(R) Index. The Fund
uses a sampling approach to create a portfolio that closely matches the overall
investment characteristics (for example, yield and industry weight) of the Index
without actually investing in all 3,000 stocks in the index.

SPECIAL INVESTMENT RISKS: While the Fund attempts to closely track the Russell
3000(R) Index, it does not invest in all 3,000 stocks in the index. Thus there
is no guarantee that the performance of the Fund will match that of the index.

WHO MAY WANT TO INVEST: The Fund may be appropriate for investors who seek a
fund that tracks the return of a broad U.S. equity market index.

INSTITUTIONAL SOCIAL CHOICE EQUITY FUND
INVESTMENT OBJECTIVE: The Fund seeks a favorable long-term rate of return that
tracks the investment performance of the U.S. stock market while giving special
consideration to certain social criteria.

PRINCIPAL INVESTMENT STRATEGIES: The Fund invests primarily in a diversified
set of common stocks. The Fund attempts to track the return of the U.S. stock
market as represented by the S&P 500 Index, while investing only in companies
whose activities are consistent with the Fund's social criteria. It does this
primarily by investing in S&P 500 companies that are not excluded by the Fund's
social criteria, so that the Fund's portfolio approaches the overall investment
characteristics (e.g., yield and industry weight) of the S&P 500.

SPECIAL INVESTMENT RISKS: Because its social criteria exclude some investments,
this Fund may not be able to take advantage of the same opportunities or market
trends as do the Funds that don't use such criteria.

WHO MAY WANT TO INVEST: The Fund may be appropriate for investors who seek an
equity investment that is generally broad-based but excludes companies that
engage in certain activities.

INSTITUTIONAL BOND FUND
INVESTMENT OBJECTIVE: The Fund seeks a favorable long-term return, primarily
through high current income consistent with preserving capital.

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PRINCIPAL INVESTMENT STRATEGIES: The Fund invests primarily in a broad range of
debt securities. The majority of the Fund's portfolio is invested in U.S.
Treasury and Agency securities, corporate bonds, and mortgage-backed or other
asset-backed securities. The Fund holds mainly investment grade securities rated
in the top four credit categories by Moody's or Standard & Poor's. The Fund is
managed to track the duration of the benchmark index for the Fund, the Lehman
Brothers Aggregate Bond Index. (Duration is a measurement of the change in the
value of a bond portfolio in response to a change in interest rates.) The Fund
will overweight or underweight individual securities or sectors depending on
where we find undervalued, overlooked or misunderstood issues that offer the
potential for superior returns compared to the Lehman index. The Fund may also
invest in non-investment grade securities (also called "high-yield" or "junk"
bonds) or privately placed (non-registered) securities.

SPECIAL INVESTMENT RISKS: The Fund is subject to interest rate risk--that is,
prices of bonds held by the Fund may decline if interest rates rise. For
example, if interest rates rise by 1%, the market value of a portfolio with a
duration of 5 years would decline by approximately 5%. Investments in
mortgage-backed securities are subject to prepayment or extension risk. This is
the possibility that a change in interest rates would cause the underlying
mortgages to be paid off sooner or later than expected. If unanticipated
prepayments occur as a result of a declining interest rate environment, the Fund
would have to reinvest the amounts that had been invested in the mortgage-backed
securities, possibly at a lower rate of return. If unanticipated extensions
occur as a result of a rising interest rate environment, the Fund may not have
sufficient cash available for reinvestment when expected. High-yield securities
involve higher risks than investment grade bonds.

WHO MAY WANT TO INVEST: The Fund may be appropriate for those who want to
invest in a general bond fund with a slightly higher level of risk than a
traditional bond fund.

INSTITUTIONAL MONEY MARKET FUND
INVESTMENT OBJECTIVE: The Fund seeks high current income consistent with
maintaining liquidity and preserving capital.

PRINCIPAL INVESTMENT STRATEGIES: The Fund invests primarily in high-quality
short-term money market instruments. It limits its investments to securities

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that present minimal credit risk and are rated in the highest rating categories
for short-term instruments. The benchmark index for the Fund is the IBC Money
Fund All-Taxable Average.

SPECIAL INVESTMENT RISKS: The Fund is subject to current income
volatility--that is, the income received by the Fund may decrease as a result of
a decline in interest rates.

WHO MAY WANT TO INVEST: The Fund may be suitable for conservative investors who
are looking for a high degree of principal stability and liquidity, and are
willing to accept returns that may be lower than those offered by longer-term
fixed-income investments.

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

PAST PERFORMANCE

No performance data for TIAA-CREF Institutional Mutual Funds is included in this
prospectus because none of the Funds has been in operation for one full calendar
year.

Performance information for other registered investment companies managed by the
investment advisory personnel who manage TIAA-CREF Institutional Mutual Funds is
provided on page 26 of this prospectus.

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FEES AND EXPENSES

The following table describes the fees and expenses that you pay if you buy and
hold shares of the Funds.

<TABLE>
<CAPTION>
SHAREHOLDER FEES (DEDUCTED DIRECTLY FROM GROSS AMOUNT OF TRANSACTION)
- ----------------------------------------------------------------------
<S> <C>
Maximum Sales Charge Imposed on Purchases (percentage of
offering price) 0%
Maximum Deferred Sales Charge 0%
Maximum Sales Charge Imposed on Reinvested Dividends and
Other Distributions 0%
Redemption Fee 0%
Exchange Fee 0%
</TABLE>

<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES (DEDUCTED FROM FUND ASSETS)
- ------------------------------------------------------------------------------------------
TOTAL FEE WAIVER
ANNUAL AND/OR
MANAGE- OTHER FUND EXPENSE
MENT EXPENSES OPERATING REIMBURSE- NET
FEES (1) EXPENSES MENT (2,3) EXPENSES
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Institutional International Equity
Fund 0.27% 0.20% 0.47% 0.18% 0.29%
Institutional Growth Equity Fund 0.23% 0.15% 0.38% 0.16% 0.22%
Institutional Growth and Income
Fund 0.23% 0.15% 0.38% 0.16% 0.22%
Institutional Equity Index Fund 0.18% 0.15% 0.33% 0.16% 0.17%
Institutional Social Choice Equity
Fund 0.19% 0.15% 0.34% 0.16% 0.18%
Institutional Bond Fund 0.18% 0.15% 0.33% 0.14% 0.19%
Institutional Money Market Fund 0.15% 0.15% 0.30% 0.14% 0.16%
</TABLE>

- ---------------
(1) "Other Expenses" is based on estimated amounts for the current fiscal year.

(2) Teachers Advisors, Inc. ("Advisors"), the investment manager for the Funds,
has agreed to waive a portion of the Management Fees equal to, on an annual
basis: 0.09% of the average daily net assets of the Institutional
International Equity Fund; 0.07% of the average daily net assets of each of
the Institutional Growth Equity Fund, the Institutional Growth and Income
Fund, the Institutional Equity Index Fund, and the Institutional Social
Choice Equity Fund; and 0.05% of the average daily net assets of each of the
Institutional Bond Fund and the Institutional Money Market Fund. This waiver
is contractual and will remain in effect until July 1, 2003.

(3) Advisors has agreed to reimburse the Institutional International Equity Fund
so that Other Expenses, which do not include investment management fee
expenses, do not exceed, on an annual basis, 0.11% of its average daily net
assets and to reimburse each of the other Funds so that Other Expenses do
not exceed, on an annual basis, 0.06% of its average daily net assets. This
reimbursement agreement is contractual and will remain in effect until July
1, 2003.

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EXAMPLE

This example is intended to help you compare the cost of investing in the Funds
with the cost of investing in other mutual funds.

The example assumes that you invest $10,000 in a Fund for the time periods
indicated and then redeem all of your shares at the end of those periods. The
example also assumes that your investment has a 5 percent return each year and
that the Funds' operating expenses remain the same. Although your actual costs
may be higher or lower, based on these assumptions your costs would be:

<TABLE>
<CAPTION>
1 YEAR 3 YEARS
- --------------------------------------------------------------------------------
<S> <C> <C>
Institutional International Equity Fund $30 $93
Institutional Growth Equity Fund $23 $71
Institutional Growth and Income Fund $23 $71
Institutional Equity Index Fund $17 $55
Institutional Social Choice Equity Fund $18 $58
Institutional Bond Fund $19 $61
Institutional Money Market Fund $16 $52
</TABLE>

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Investment Objectives, Strategies and Risks

Each of the individual investment portfolios, or Funds, described below has its
own investment objective. The following describes each Fund's investment
objective, the principal investment strategies and techniques each Fund uses to
accomplish its objective, and the principal types of securities each Fund
purchases. These policies and techniques are not fundamental and may be changed
by our Board of Trustees without shareholder approval. However, we'll notify you
of any significant changes. For a complete listing of the Funds' policies and
restrictions, see the Statement of Additional Information ("SAI").

There is no guarantee that any Fund will meet its investment objective.

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EQUITY FUNDS USING THE DUAL INVESTMENT MANAGEMENT STRATEGY(SM)

The Institutional International Equity Fund, the Institutional Growth Equity
Fund, and the Institutional Growth and Income Fund use TIAA-CREF's Dual
Investment Management Strategy(SM), which works like this:

Each of these three equity Funds has two separate segments called the
"stock selection" segment and the "enhanced index" segment. The relative
sizes of these two segments vary as the Fund manager shifts money between
them in response to investment opportunities.

The stock selection segment holds a relatively small number of stocks that
the Fund manager believes offer superior returns. The managers of these
equity Funds will usually use fundamental analysis to select individual
stocks or sectors for investment in the stock selection segment. Each
equity Fund's stock selection segment is described further below.

Money that is not invested in an equity Fund's stock selection segment goes
to its enhanced index segment. Here the goal is two-fold: (1) to outperform
each Fund's benchmark index and (2) to limit the possibility of
significantly underperforming that benchmark. The Funds' managers attempt
to outperform the benchmark indexes by over- or under-weighting many stocks
in the index by small amounts, based on proprietary stock scoring models.
In other words, a Fund will hold more or less of some stocks than does its
benchmark index. The managers attempt to control the risk of
underperforming the benchmarks by maintaining the same overall financial
characteristics (such as volatility, dividend yield and industry weights)
as the benchmarks.

The Dual Investment Management Strategy enables the Funds to stay fully invested
even when the Fund manager cannot find sufficient investment opportunities for
the stock selection segment.

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The benchmarks for each Fund's enhanced index segment currently are as follows:

<TABLE>
<CAPTION>
FUND BENCHMARK
- ----------------------------------------------------------------
<S> <C>
Institutional International MSCI EAFE(R) (Europe,
Equity Fund Australasia, Far East)
Index
Institutional Growth Equity Fund Russell 3000(R) Growth Index
Institutional Growth and Income S&P 500(R) Index
Fund
</TABLE>

Using these indices is not a fundamental policy of TIAA-CREF Institutional
Mutual Funds, so we can substitute other indices without shareholder approval.
We'll notify you before we make such a change.

INSTITUTIONAL INTERNATIONAL EQUITY FUND
The INSTITUTIONAL INTERNATIONAL EQUITY FUND seeks a favorable long-term return,
mainly through capital appreciation from a broadly diversified portfolio that
consists primarily of foreign equity investments. The Fund intends to always
have at least 80 percent of its assets in equity securities of companies located
in at least three different countries, other than the United States.

The Fund uses the Dual Investment Management Strategy. The Fund may invest in
companies of all sizes. For the Fund's stock selection segment, we concentrate
on individual stocks rather than on geographic regions, sectors, or industries.
We do, however, regularly monitor the Fund's sector and country exposure in
order to control risk.

In particular, we look for companies of all sizes that have certain
characteristics, such as:

- - sustainable growth

- - focused management with successful track records

- - unique and easy-to-understand franchises (brands)

- - undervalued stock prices based on current earnings, assets, and long-term
growth prospects

- - consistent generation of free cash flow

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SPECIAL INVESTMENT RISKS: The Fund is subject to the general investment risks
described on page 22. In addition, investing in securities traded on foreign
exchanges or in foreign markets can involve risks beyond those of domestic
investing. These include: (1) changes in currency exchange rates; (2) possible
imposition of market controls or currency exchange controls; (3) possible
imposition of withholding taxes on dividends and interest; (4) possible seizure,
expropriation, or nationalization of assets; (5) more limited foreign financial
information or difficulty in interpreting it because of foreign regulations and
accounting standards; (6) the lower liquidity and higher volatility in some
foreign markets; (7) the impact of political, social, or diplomatic events; (8)
the difficulty of evaluating some foreign economic trends; or (9) the
possibility that a foreign government could restrict an issuer from paying
principal and interest to investors outside the country. Brokerage commissions
and transaction costs are often higher for foreign investments, and it may be
harder to use foreign laws and courts to enforce financial or legal obligations.

The risks noted above often increase in countries with emerging markets. For
example, these countries may have more unstable governments than developed
countries, and their economies may be based on only a few industries. Because
their securities markets may be very small, share prices may be volatile. In
addition, foreign investors are subject to a variety of special restrictions in
many emerging countries. The Fund will focus its investments primarily in those
countries which are included in the MSCI EAFE Index.

INSTITUTIONAL GROWTH EQUITY FUND
The INSTITUTIONAL GROWTH EQUITY FUND seeks a favorable long-term return, mainly
through capital appreciation, primarily from a diversified portfolio of common
stocks that present the opportunity for exceptional growth. Normally, the Fund
will have at least 80 percent of its assets in equity securities that have the
potential for capital appreciation.

The Fund uses the Dual Investment Management Strategy. The Fund's stock
selection segment can invest in companies of all sizes, including companies in
new and emerging areas of the economy and companies with distinctive products or
promising market conditions. We choose individual investments based on a
company's prospects under current or forecasted economic, financial and market
conditions, looking for compa-

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nies we believe have the potential for strong earnings or sales growth, or that
appear to be undervalued based on current earnings, assets, or growth prospects.

The Fund can also invest in large, well-known, established companies,
particularly when we believe they have new or innovative products, services, or
processes that enhance future earnings prospects. The Fund can also invest in
companies in order to benefit from prospective acquisitions, reorganizations, or
corporate restructurings or other special situations.

The Institutional Growth Equity Fund can buy foreign securities and other
instruments if we believe they have superior investment potential. Depending on
investment opportunities, the Fund may have from 0 to 40 percent of its assets
in foreign securities. The securities will be those traded on foreign exchanges
or in other foreign markets and may be denominated in foreign currencies or
other units of account.

SPECIAL INVESTMENT RISKS: The Fund is subject to the general investment risks
described on page 22. In addition, there are special risks to investing in
growth stocks. The Fund may at times hold a significant amount of stocks of
smaller, lesser-known companies. Their stock prices may fluctuate more than
those of larger companies because smaller companies may depend on narrow product
lines, have limited track records, lack depth of management, or have
thinly-traded securities. Also, stocks of companies involved in reorganizations
and other special situations can often involve more risk than ordinary
securities. Accordingly, the Institutional Growth Equity Fund will probably be
more volatile than the overall stock market, and it could significantly
outperform or underperform the stock market during any particular period.

The Fund's foreign holdings are subject to the risks of foreign investments.
These include, among others: changes in currency exchange rates; possible
imposition of market controls or currency exchange controls; possible imposition
of withholding taxes on dividends and interest; and possible seizure,
expropriation, or nationalization of assets.

INSTITUTIONAL GROWTH AND INCOME FUND
The INSTITUTIONAL GROWTH AND INCOME FUND seeks a favorable long-term return
through capital appreciation and investment income, primarily from a

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broadly diversified portfolio of common stocks. Normally, at least 80 percent of
the Fund's assets will be income-producing equity securities selected for their
investment potential.

The Fund invests in a broadly diversified portfolio of common stocks, using the
Dual Investment Management Strategy. The Fund's stock selection segment
concentrates on individual companies rather than sectors or industries. We look
for stocks of larger, well-established companies that we believe are
attractively priced, show the potential to grow faster than the rest of the
market, and offer a growing stream of dividend income. In particular, we look
for companies that are leaders in their industries. We also look for companies
with shareholder-oriented managements dedicated to creating shareholder value.
The Fund may also invest in rapidly growing smaller companies. It can have up to
20 percent of its assets in foreign securities.

SPECIAL INVESTMENT RISKS: The Fund is subject to the general investments risks
described on page 22.

OTHER EQUITY FUNDS

INSTITUTIONAL EQUITY INDEX FUND
The INSTITUTIONAL EQUITY INDEX FUND seeks a favorable long-term rate of return
from a diversified portfolio selected to track the overall market for common
stocks publicly traded in the U.S., as represented by the Russell 3000(R), a
broad market index.

Although the Fund invests in stocks in the Russell 3000 Index, it doesn't invest
in all 3,000 stocks in the index. Rather, we use a sampling approach to create a
portfolio that closely matches the overall investment characteristics (for
example, yield and industry weight) of the index. This means that a company can
remain in the Fund even if it performs poorly, unless the company is removed
from the Russell 3000.

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<PAGE> 18

Using the Russell 3000 Index isn't fundamental to the Fund's investment
objective and policies. We can change the index used in this Fund at any time
and will notify you if we do so.

The Fund can also invest in securities and other instruments, such as futures,
whose return depends on stock market prices. We select these instruments to
attempt to match the total return of the Russell 3000 but may not always do so.

The Russell 3000 Index is an unmanaged index of stocks of the 3,000 largest
publicly traded U.S. companies, based on market capitalization. Russell 3000
companies represent about 98% of the total market capitalization of the publicly
traded U.S. equity market. The market capitalization of the individual companies
in the index ranged from $178 million to $407.2 billion with an average of $5.34
billion as of December 31, 1999. The Frank Russell Company determines the
composition of the index based only on market capitalization and can change its
composition at any time. The Russell 3000 Index is not a mutual fund and you
cannot invest directly in the index.

SPECIAL INVESTMENT RISKS: While the Fund attempts to closely track the Russell
3000 Index and changes are made to its holdings to reflect changes in the index,
the Fund does not invest in all 3,000 stocks in the index. Thus, there is no
guarantee that the performance of the Fund will match that of the index. Also,
because the index's returns aren't reduced by investment and other operating
expenses, the Fund's ability to match the index will be adversely affected by
the costs of buying and selling stocks as well as other expenses. The stock
prices of smaller, lesser-known companies, which make up a small portion of the
index, may fluctuate more than those of larger companies because smaller
companies may depend on narrow product lines, have limited track records, lack
depth of management, or have thinly-traded securities.

INSTITUTIONAL SOCIAL CHOICE EQUITY FUND
The INSTITUTIONAL SOCIAL CHOICE EQUITY FUND seeks a favorable long-term rate of
return that reflects the investment performance of the U.S. stock market while
giving special consideration to certain social criteria. Normally, at least 80%
of the Fund's assets will be invested in common stocks.

15
<PAGE> 19

The Fund attempts to track the return of the U.S. stock market as represented by
the Standard & Poor's 500 Index. It does this primarily by investing in S&P 500
companies that are not excluded by the Fund's social criteria, so that the
Fund's portfolio approaches the overall investment characteristics (e.g., yield
and industry weight) of the S&P 500.

The social criteria the Fund takes into consideration are non-fundamental
investment policies. They can change without the approval of the Fund's
shareholders. Currently, the Fund invests only in companies that do not:

- - engage in activities that result or are likely to result in significant damage
to the natural environment;

- - have a significant portion of its business in weapons manufacturing;

- - produce and market alcoholic beverages or tobacco products;

- - produce nuclear energy; or

- - have operations in Northern Ireland and have not adopted the MacBride
Principles (a fair employment code for U.S. firms operating in Northern
Ireland) or have not operated consistently with such principals and in
compliance with the Fair Employment Act of 1989 (Northern Ireland).

For the first three criteria, we assess the issuer to decide whether the
activity is a "significant" part of its business--basing our decision on, for
example, how large a part of a company's operation the activity involves or how
much revenue it brings in. In determining whether a particular activity is
significant to a company, we do not rely on strict objective criteria, but
rather make judgments based on the facts and circumstances pertaining to the
company.

The Corporate Governance and Social Responsibility Committee of our Board of
Trustees provides guidance in deciding whether investments meet the social
criteria. It uses information from independent organizations such as the
Investor Responsibility Research Center, Inc. We'll do our best to make sure the
Fund's investments meet the social criteria, but we can't guarantee that every
holding will always do so. Even if an investment is not excluded by the social
criteria, we have the option of excluding it if we decide it is not suitable.

16
<PAGE> 20

The Fund isn't restricted from investing in any securities issued or guaranteed
by the U.S. government or its agencies or instrumentalities. The Fund can also
invest in securities issued by other countries or their agencies and
instrumentalities as approved by the Committee on Corporate Governance and
Social Responsibility. The Fund can also invest up to 15% of its assets in
foreign securities.

ADDITIONAL INVESTMENT STRATEGIES FOR THE EQUITY FUNDS

While the equity Funds invest primarily in common stocks, each equity Fund can
also invest, to a limited extent, in other equity securities such as preferred
stock, convertible securities, and warrants. Each equity Fund can also hold
short-term debt securities of the same type as those held by the Institutional
Money Market Fund (see page 20) and other kinds of short-term instruments. These
help the Funds maintain liquidity, use cash balances effectively, and take
advantage of attractive investment opportunities. The equity Funds can also hold
fixed-income securities they acquire because of mergers, recapitalizations, or
otherwise.

Similarly, each equity Fund may also buy and sell options, futures contracts,
and options on futures. We intend to use options and futures primarily for
hedging or for cash management. To manage currency risk, the equity Funds can
also enter into forward currency contracts, and buy or sell options and futures
on foreign currencies.

The equity Funds can also invest in newly developed financial instruments, such
as equity swaps (including arrangements where the return is linked to a stock
market index) and equity-linked fixed-income securities, so long as these are
consistent with a Fund's investment objective and restrictions.

17
<PAGE> 21

THE FIXED-INCOME FUNDS

INSTITUTIONAL BOND FUND
The INSTITUTIONAL BOND FUND seeks a favorable long-term return, primarily
through high current income consistent with preserving capital. Normally, at
least 80 percent of the Fund's assets will be invested in bonds.

The Fund's portfolio is invested primarily in a broad range of debt securities.
The majority is invested in U.S. Treasury and Agency securities, corporate
bonds, and mortgage-backed or other asset-backed securities. The Fund's holdings
are mainly investment grade securities rated in the top four credit categories
by Moody's or Standard & Poor's, or that we determine are of comparable quality.
The Fund is managed to track the duration of the benchmark index for the Fund,
the Lehman Brothers Aggregate Bond Index. (Duration is a measurement of the
change in the value of a bond portfolio in response to a change in interest
rates.) As of December 31, 1999, the duration of the Lehman Brothers Aggregate
Bond Index was 4.92 years. By keeping the duration of the Fund close to the
duration of the Lehman index, the returns due to changes in interest rates
should be similar between the Fund and the index. The Fund will overweight or
underweight individual securities or sectors, as compared to their weight in the
Lehman index, depending on where we find undervalued, overlooked or
misunderstood issues that offer the potential for superior investment returns
compared to the Lehman index. The Fund can make foreign investments, but we
don't expect them to exceed 15 percent of the Fund's assets. The Fund can also
invest in money market instruments.

The Fund may also invest in securities with special features in an effort to
enhance its total return. This category of the Fund's portfolio will primarily
consist of privately placed securities (including "Rule 144A" private
placements) or non-investment grade securities (also called "high-yield" or
"junk" bonds, which are rated Ba1 or lower by Moody's or BB+ or lower by
Standard & Poor's). The Fund will not invest more than 25 percent of its assets
in privately placed and high-yield securities.

The Institutional Bond Fund's investments in mortgage-backed securities can
include pass-through securities sold by private, governmental and
government-related organizations and collateralized mortgage obligations
("CMOs"). Mortgage pass-through securities are created when mortgages

18
<PAGE> 22

are pooled together and interests in the pool are sold to investors. The cash
flow from the underlying mortgages is "passed through" to investors in periodic
principal and interest payments. CMOs are obligations that are fully
collateralized directly or indirectly by a pool of mortgages from which payments
of principal and interest are dedicated to the payment of principal and interest
by the CMOs.

The Fund may use an investment strategy called "mortgage rolls," in which we
"roll over" an investment in a mortgage-backed security before its settlement
date for a similar security with a later settlement date. The Fund may also
engage in duration-neutral relative value trading, a strategy in which we buy
and sell government bonds of identical credit quality but different maturity
dates in an attempt to take advantage of spread differentials along the yield
curve. These strategies are both designed to enhance the Fund's returns, but
they do increase the Fund's portfolio turnover rate. However, we don't expect
these strategies to significantly raise the Fund's capital gains.

The Fund may make certain other investments, but not as principal strategies.
For example, the Fund may invest in interest-only and principal-only
mortgage-backed securities. These instruments have unique characteristics and
are more sensitive to prepayment and extension risks than traditional
mortgage-backed securities. Similarly, the Fund may also buy and sell options,
futures contracts, and options on futures. We intend to use options and futures
primarily as a hedging technique or for cash management. To manage currency
risk, the Fund can also enter into forward currency contracts, and buy or sell
options and futures on foreign currencies. The Fund can also buy and sell swaps
and options on swaps, so long as these are consistent with the Fund's investment
objective and restrictions.

SPECIAL INVESTMENT RISKS: The Fund is subject to interest rate risk--that is,
prices of portfolio securities held by the Fund may decline if interest rates
rise. For example, if interest rates rise by 1%, the market value of a portfolio
with a duration of 5 years would decline by approximately 5%.

Non-investment-grade securities are usually called "high-yield" or "junk" bonds.
These lower-rated bonds offer higher returns but also entail higher risks. Their
issuers may be less creditworthy or have a higher risk of becoming insolvent.
Small changes in the issuer's creditworthiness can

19
<PAGE> 23

have more impact on the price of lower-rated bonds than would comparable changes
for investment-grade bonds (those rated Baa or higher by Moody's or rated BBB or
higher by S&P). Lower-rated bonds can also be harder to value or sell, and their
prices can be more volatile than the prices of higher-quality securities.

The above risks of holding high-yield bonds can also apply to the lower levels
of "investment grade" bonds (for example, Moody's Baa and S&P's BBB). Also,
securities originally rated "investment grade" are sometimes downgraded later
on, should a ratings agency like Moody's or S&P believe the issuer's business
outlook or creditworthiness has deteriorated. A downgraded security already held
in the Fund's portfolio may or may not be sold, depending on our analysis of the
issuer's financial prospects. We don't rely exclusively on ratings agencies when
making investment decisions because they may not alone be an accurate measure of
the risk of lower-rated bonds. Instead, we also do our own credit analysis,
paying particular attention to economic trends and other market events.

The Fund can also invest in privately placed debt securities. One risk of
investing in private placements is that they may be difficult to sell for their
fair market value.

The Fund's investments in mortgage-backed securities are subject to prepayment
or extension risk, which is the possibility that a change in interest rates may
cause the underlying mortgages to be paid off sooner or later than expected. If
unanticipated prepayment occurs as a result of a declining interest rate
environment, the Fund would then have to reinvest the amounts that had been
invested in the mortgage-backed securities, possibly at a lower rate of return.
If unanticipated extension occurs as a result of a rising interest rate
environment, the Fund may not have sufficient cash available for reinvestment
when expected.

INSTITUTIONAL MONEY MARKET FUND
The INSTITUTIONAL MONEY MARKET FUND seeks high current income to the extent
consistent with maintaining liquidity and preserving capital.

We seek to maintain a stable net asset value of $1.00 per share of the
Institutional Money Market Fund by investing in assets that present minimal
credit risk, maintaining an average weighted maturity of 90 days or less, and
investing all of the Fund's assets in dollar-denominated securities or

20
<PAGE> 24

other instruments maturing in 397 days or less. We can't assure you that we will
be able to maintain a stable net asset value of $1.00 per share for this Fund.

The Fund will invest primarily in:

(1) commercial paper (short-term "IOUs" issued by corporations and others)
or variable-rate, floating-rate, or variable-amount securities of
domestic or foreign companies;

(2) obligations of commercial banks, savings banks, savings and loan
associations, and foreign banks whose latest annual financial
statements show more than $1 billion in assets. These include
certificates of deposit, time deposits, bankers' acceptances, and other
short-term debt;

(3) securities issued by or whose principal and interest are guaranteed by
the U.S. government or one of its agencies or instrumentalities;

(4) other debt obligations with a remaining maturity of 397 days or less
issued by domestic or foreign companies;

(5) repurchase agreements involving securities issued or guaranteed by the
U.S. government or one of its agencies or instrumentalities, or
involving certificates of deposit, commercial paper, or bankers'
acceptances;

(6) participation interests in loans banks have made to the issuers of (1)
and (4) above (these may be considered illiquid);

(7) asset-backed securities issued by domestic corporations or trusts;

(8) obligations issued or guaranteed by foreign governments or their
political subdivisions, agencies, or instrumentalities; and

(9) obligations of international organizations (and related government
agencies) designated or supported by the U.S. or foreign government
agencies to promote economic development or international banking.

The Institutional Money Market Fund will only purchase money market instruments
that at the time of purchase are "First Tier Securities", that is

21
<PAGE> 25

rated within the highest category by at least two nationally recognized
statistical rating organizations ("NRSROs"), or rated within the highest
category by one NRSRO if it is the only NRSRO to have issued a rating for the
security, or unrated securities of comparable quality. The Fund can also invest
up to 30 percent of its assets in money-market and debt instruments of foreign
issuers denominated in U.S. dollars.

The above list of investments is not exclusive and the Fund may make other
investments consistent with its investment objective and policies.

SPECIAL INVESTMENT RISKS: The Fund is subject to the risk of current income
volatility--that is, the income the Fund receives may fall as a result of a
decline in interest rates. To a lesser extent, the Fund is also subject to the
general risks described below.

RISKS OF INVESTING IN ANY OF THE FUNDS

GENERAL INVESTMENT RISKS
To varying degrees, the Funds are all subject to several general types of risks.

(1) One is market risk--stock and bond price volatility due to changing
conditions in the financial markets.

(2) Another is interest rate risk--the risk that a bond's or stock's value
will decline if interest rates change. For example, a rise in interest
rates usually causes the market value of fixed-rate securities to go
down.

(3) Another kind of risk is company risk. For stocks and bonds, it comes
from the possibility that current earnings will fall or that overall
financial soundness will decline, reducing the security's value. In
addition, for bonds and other debt securities, company risk comes from
the possibility the issuer won't be able to pay principal and interest
when due.

22
<PAGE> 26

MANAGEMENT OF THE FUNDS

THE FUNDS' INVESTMENT ADVISER
Teachers Advisors, Inc. ("Advisors") manages the assets of TIAA-CREF
Institutional Mutual Funds, under the supervision of the Funds' Board of
Trustees (the "Board"). Advisors is an indirect wholly-owned subsidiary of
Teachers Insurance and Annuity Association of America ("TIAA"). It is registered
as an investment adviser with the U.S. Securities and Exchange Commission under
the Investment Advisers Act of 1940. Advisors also manages the investments of
TIAA Separate Account VA-1, the TIAA-CREF Life Funds, the TIAA-CREF Mutual
Funds, and the investment portfolio of New York State's College Choice Tuition
Savings Plan. Through an affiliated investment adviser, TIAA-CREF Investment
Management, LLC ("Investment Management"), the personnel of Advisors also manage
the investment accounts of the College Retirement Equities Fund ("CREF"). As of
December 31, 1999, Advisors and Investment Management together had $181 billion
of registered investment company assets under management. Advisors is located at
730 Third Avenue, New York, NY 10017.

Advisors' duties include conducting research, recommending investments, and
placing orders to buy and sell securities. Advisors also acts as liaison among
the various service providers to the Funds, including custodians, fund
administrators, and transfer agents.

Under the terms of an Investment Management Agreement between TIAA-CREF
Institutional Mutual Funds and Advisors, Advisors is entitled to an annual fee
of 0.27%, 0.23%, 0.23%, 0.18%, 0.19%, 0.18%, and 0.15% of the average daily net
assets of the Institutional International Equity Fund, the Institutional Growth
Equity Fund, the Institutional Growth and Income Fund, the Institutional Equity
Index Fund, the Institutional Social Choice Equity Fund, the Institutional Bond
Fund, and the Institutional Money Market Fund, respectively. Advisors has agreed
to waive a portion of its investment management fee equal to, on an annual
basis: 0.09% of the average daily net assets of the Institutional International
Equity Fund; 0.07% of the average daily net assets of each of the Institutional
Growth Equity Fund, the Institutional Growth and Income Fund, the Institutional
Equity Index Fund, and the Institutional Social Choice Equity Fund; and 0.05% of
the average daily net assets of each of the Institutional Bond Fund and the
Institutional Money Market Fund. This waiver is contractual and will remain in
effect until July 1, 2003.

23
<PAGE> 27

PRIOR PERFORMANCE OF INVESTMENT ADVISER
Please do not confuse the Funds with other registered investment company
portfolios using very similar or nearly identical names that are offered by
TIAA-CREF Mutual Funds, by CREF, by a separate account of TIAA, or by a mutual
fund dedicated to a separate account of TIAA-CREF Life Insurance Company (a
wholly-owned subsidiary of TIAA). However, the investment objectives and
policies of certain Funds are very similar to the investment objectives and
policies of other registered investment company portfolios that are managed by
Advisors or Investment Management. Nevertheless, the investment performance of
the Funds may be lower, or higher, than the investment results of such other
portfolios. We do not promise that the investment results of any of the Funds
will be comparable to the investment results of any other mutual fund, CREF
account, or separate account portfolio, even if the other portfolio uses a very
similar name, is managed by the same investment advisory personnel, and has the
same investment objective and policies as the applicable Fund.

TIAA-CREF Institutional Mutual Funds commenced operations on June 14, 1999, and
each Fund has a limited performance record. However, the investment objective,
policies, strategies, and risks of each of the Funds (except the Institutional
Social Choice Equity Fund) is substantially similar to one or more other
registered investment company portfolios managed by Advisors or Investment
Management. The performance of these other portfolios may be relevant to
prospective investors in TIAA-CREF Institutional Mutual Funds.

The charts below show historical performance for: the International Equity Fund,
the Growth Equity Fund, the Growth & Income Fund, the Bond Plus Fund, and the
Money Market Fund of TIAA-CREF Mutual Funds (managed by Advisors); the Stock
Index Account of TIAA Separate Account VA-1 (managed by Advisors); the Stock
Index Fund of TIAA-CREF Life Funds (managed by Advisors); and the Growth
Account, the Equity Index Account, and the Money Market Account of CREF (managed
by the same personnel in their capacities with Investment Management). The data
is provided to illustrate the experience of Advisors' personnel in managing
investment portfolios substantially similar to the Institutional International
Equity Fund, the Institutional Growth Equity Fund, the Institutional Growth and
Income Fund, the Institutional Equity Index Fund, the Institutional Bond Fund,
and the Institutional Money Market Fund of TIAA-CREF Institutional Mutual Funds.
(Because CREF's Social Choice Account is a balanced portfolio with

24
<PAGE> 28

both debt and equity components, there exists no investment portfolio managed by
Advisors' personnel that is substantially similar to the Institutional Social
Choice Equity Fund.) The performance of an appropriate broad-based securities
market index, adjusted to reflect the reinvestment of dividends on securities in
the index, is also presented for each Fund.

The historical performance information presented is not intended to predict or
suggest the returns that the corresponding Fund of TIAA-CREF Institutional
Mutual Funds might experience. The results are net of investment management and
other operating expenses of the portfolios.

After taking into account the contractual fee waiver and expense reimbursement
arrangement, each Fund of TIAA-CREF Institutional Mutual Funds has lower total
annual operating expenses than the corresponding portfolios of the TIAA-CREF
Mutual Funds, TIAA-CREF Life Funds (a mutual fund portfolio offered solely to a
separate account of TIAA-CREF Life Insurance Company), TIAA Separate Account
VA-1 (a variable annuity managed account offered solely to TIAA), and CREF
(variable annuity managed accounts) during the periods illustrated.

25
<PAGE> 29

<TABLE>
<CAPTION>
1 YEAR ENDED 5 YEARS ENDED
AVERAGE ANNUAL TOTAL RETURN PERIOD: DEC. 31, 1999 DEC. 31, 1999
- ---------------------------------------------------------------------------------
<S> <C> <C>
Accounts/Funds similar to: INSTITUTIONAL INTERNATIONAL EQUITY FUND
- ---------------------------------------------------------------------------------
International Equity Fund of TIAA-CREF Mutual Funds 55.83% N/A
MSCI EAFE Index 26.97% N/A
- ---------------------------------------------------------------------------------
Accounts/Funds similar to: INSTITUTIONAL GROWTH EQUITY FUND
- ---------------------------------------------------------------------------------
Growth Equity Fund of TIAA-CREF Mutual Funds 33.00% N/A
Russell 3000 Growth Index 33.82% N/A
Growth Account of CREF 32.52% 30.86%
Russell 3000 Growth Index 33.82% 31.10%
- ---------------------------------------------------------------------------------
Accounts/Funds similar to: INSTITUTIONAL GROWTH AND INCOME FUND
- ---------------------------------------------------------------------------------
Growth & Income Fund of TIAA-CREF Mutual Funds 24.46% N/A
S&P 500 Index 21.04% N/A
- ---------------------------------------------------------------------------------
Accounts/Funds similar to: INSTITUTIONAL BOND FUND
- ---------------------------------------------------------------------------------
Bond Plus Fund of TIAA-CREF Mutual Funds (1.01)% N/A
Lehman Aggregate Bond Index (.82)% N/A
Bond Market Account of CREF (1.12)% 7.40%
Lehman Aggregate Bond Index (.82)% 7.73%
- ---------------------------------------------------------------------------------
Accounts/Funds similar to: INSTITUTIONAL EQUITY INDEX FUND
- ---------------------------------------------------------------------------------
Stock Index Fund of TIAA-CREF Life Funds N/A N/A
Russell 3000 Index 20.90% N/A
Stock Index Account of TIAA Separate Account VA-1 20.21% 26.47%
Russell 3000 Index 20.90% 26.94%
Equity Index Account of CREF 20.82% 26.64%
Russell 3000 Index 20.90% 26.94%
- ---------------------------------------------------------------------------------
Accounts/Funds similar to: INSTITUTIONAL MONEY MARKET FUND
- ---------------------------------------------------------------------------------
Money Market Fund of TIAA-CREF Mutual Funds 5.05% N/A
IBC Money Fund All-Taxable Avg. 4.64% N/A
Money Market Account of CREF 4.98% 5.42%
IBC Money Fund All-Taxable Avg. 4.64% 5.57%
- ---------------------------------------------------------------------------------
<CAPTION>
AS OF DECEMBER 28, 1999: 7-DAY YIELD
- ---------------------------------------------------------------------------------
<S> <C>
Money Market Fund of TIAA-CREF Mutual Funds 5.67%
Money Market Account of CREF 5.61%
IBC Money Fund All-Taxable Avg. 5.13%
</TABLE>

26
<PAGE> 30

<TABLE>
<CAPTION>
10 YEARS ENDED INCEPTION TO INCEPTION OF
DEC. 31, 1999 DEC. 31, 1999 ACCOUNT/FUND
- --------------------------------------------------
<S> <C> <C> <C>
- --------------------------------------------------
N/A 29.16% Sept. 2, 1997
N/A 18.41% Sept. 2, 1997
- --------------------------------------------------
- --------------------------------------------------
N/A 33.36% Sept. 2, 1997
N/A 32.01% Sept. 2, 1997
N/A 27.74% Apr. 29, 1994
N/A 28.40% Apr. 29, 1994
- --------------------------------------------------
- --------------------------------------------------
N/A 27.45% Sept. 2, 1997
N/A 25.20% Sept. 2, 1997
- --------------------------------------------------
- --------------------------------------------------
N/A 5.26% Sept. 2, 1997
N/A 5.22% Sept. 2, 1997
N/A 7.68% Mar. 1, 1990
N/A 7.92% Mar. 1, 1990
- --------------------------------------------------
- --------------------------------------------------
N/A 21.20% Jan. 4, 1999
N/A 20.90% Jan. 4, 1999
N/A 24.96% Nov. 1, 1994
N/A 30.51% Nov. 1, 1994
N/A 23.82% Apr. 29, 1994
N/A 24.12% Apr. 29, 1994
- --------------------------------------------------
- --------------------------------------------------
N/A 5.29% Sept. 2, 1997
N/A 5.05% Sept. 2, 1997
5.24% 5.73% Apr. 1, 1988
6.05% 7.17% Apr. 1, 1988
- --------------------------------------------------
<CAPTION>
7-DAY EFFECTIVE YIELD
- --------------------------------------------------
<S> <C> <C> <C>
5.83%
5.76%
5.26%
</TABLE>

27
<PAGE> 31

FUND MANAGERS
The Institutional International Equity Fund is managed by Chris Semenuk,
Director-Global Portfolio Management for Advisors. He is also one of three
co-managers of the CREF Global Equities Account and is also responsible for
managing TIAA-CREF Mutual Funds' International Equity Fund. From 1995 to 1997,
he was responsible for company research and analysis for the CREF Global
Equities Account. Previously he was a senior securities analyst for the CREF
Stock Account. Mr. Semenuk joined TIAA-CREF in 1993.

The Institutional Growth Equity Fund is managed by Advisors' growth portfolio
management group, whose members are jointly responsible for the day-to-day
management of the Fund.

The Institutional Growth and Income Fund is managed by Carlton N. Martin,
Managing Director-Global Research for Advisors. He has also been one of three
co-managers of the CREF Global Equities Account since 1998 and manages TIAA-CREF
Mutual Funds' Growth & Income Fund. Prior to 1998, he was responsible for
investments in the chemical, paper and forest products as well as the
environmental, engineering and construction industries for certain CREF
Accounts. Mr. Martin joined TIAA-CREF in 1980.

The Institutional Equity Index Fund and the Institutional Social Choice Equity
Fund are managed by Advisors' quantitative portfolio management group, whose
members are jointly responsible for the day-to-day management of the Funds.

The Institutional Bond Fund is managed by Elizabeth D. Black, Managing
Director-Portfolio Management for Advisors. Ms. Black has also been responsible
for managing the investments in CREF's Bond Market Account and the bond portion
of CREF's Social Choice Account since 1996, and TIAA-CREF Mutual Funds' Bond
Plus Fund since 1997. Prior to 1996, she was sector manager of TIAA's
mortgage-backed securities group. Ms. Black joined TIAA-CREF in 1987.

The Institutional Money Market Fund is managed by Steven Traum, Managing
Director-Money Markets and Inflation Linked Bond for Advisors. Mr. Traum has
also been responsible for managing the investments of the CREF Money Market
Account since 1988, the CREF Inflation Linked Bond Account since 1997, and
TIAA-CREF Mutual Funds' Money Market Fund since 1997. He also manages the cash
components of the other TIAA-CREF

28
<PAGE> 32

Institutional Mutual Funds, the other TIAA-CREF Mutual Funds and the CREF
accounts. Mr. Traum joined TIAA-CREF in 1983.

SERVICE PROVIDERS
TIAA-CREF Institutional Mutual Funds may rely on affiliated or unaffiliated
persons for services related to record keeping and other shareholder services
(e.g., unaffiliated transfer agents maintaining individual account records for
omnibus accounts in certain circumstances), may compensate such service
providers, and may reflect these payments as an administrative expense of the
applicable class of shares.

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

Calculating Share Price

We determine the net asset value ("NAV") per share, or share price, of a Fund on
each day the New York Stock Exchange is open for business. We do this when
trading closes on all U.S. national exchanges where securities or other
investments of a Fund are principally traded. We will not price Fund shares on
days that the New York Stock Exchange is closed. We compute a Fund's NAV by
dividing the value of the Fund's assets, less its liabilities, by the number of
outstanding shares of that Fund.

For Funds other than the Institutional Money Market Fund, we usually use market
quotations or independent pricing services to value securities and other
instruments held by the Funds. If market quotations or independent pricing
services aren't readily available, we'll use a security's "fair value," as
determined in good faith by or under the direction of the TIAA-CREF
Institutional Mutual Funds' Board of Trustees. Money market instruments with
maturities of sixty days or less are valued at amortized cost. We may also use
fair value if events that have a significant effect on the value of an
investment (as determined in our sole discretion) occur between the time when
its price is determined and the time a Fund's net asset value is calculated.

To calculate the Institutional Money Market Fund's net asset value per share, we
value its portfolio securities at their amortized cost. This valuation method
does not take into account unrealized gains or losses on the Fund's portfolio
securities. Amortized cost valuation involves first valuing a security at cost,
and thereafter assuming an amortization to maturity of any discount or premium,
regardless of the impact of fluctuating

29
<PAGE> 33

interest rates on the security's market value. While this method provides
certainty in valuation, there may be times when the value of a security, as
determined by amortized cost, may be higher or lower than the price the
Institutional Money Market Fund would receive if it sold the security.

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

Dividends and Distributions

Each Fund expects to declare and distribute to shareholders substantially all of
its net investment income and net realized capital gains, if any. The amount
distributed will vary according to the income received from securities held by
the Fund and capital gains realized from the sale of securities. The following
table shows how often we plan to pay dividends on each Fund:

<TABLE>
<CAPTION>
FUND DIVIDEND PAID
- ---------------------------------------------------------------------------
<S> <C>
Institutional International Equity Fund Annually
Institutional Growth Equity Fund Annually
Institutional Growth and Income Fund Quarterly
Institutional Equity Index Fund Annually
Institutional Social Choice Equity Fund Annually
Institutional Bond Fund Monthly
Institutional Money Market Fund Monthly
</TABLE>

Although we pay dividends monthly from the Institutional Money Market Fund,
these dividends are calculated and declared daily.

We intend to pay net capital gains from Funds that have them once a year.

You can elect from among the following distribution options:

1. REINVESTMENT OPTION, SAME FUND. We'll automatically reinvest your dividend
and capital gain distributions in additional shares of the Fund. Unless you
elect otherwise, this will be your distribution option.

2. INCOME-EARNED OPTION. We'll automatically reinvest your capital gain
distributions, but you will be sent a check for each dividend distribution.

30
<PAGE> 34

3. CAPITAL GAINS OPTION. We'll automatically reinvest your dividend
distributions, but you will be sent a check for each capital gain
distribution.

4. CASH OPTION. We'll send a check for your dividend and each capital gain
distribution.

We make distributions for each Fund on a per share basis to the shareholders of
record on the Fund's distribution date. We do this regardless of how long the
shares have been held. That means if you buy shares just before or on a record
date, you will pay the full price for the shares and then you may receive a
portion of the price back as a taxable distribution. (See the discussion of
"buying a dividend" below.) Cash distribution checks will be mailed within seven
days of the distribution date.

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

Taxes

As with any investment, you should consider how your investment in any Fund will
be taxed.

TAXES ON DISTRIBUTIONS. Unless you are tax-exempt or hold Fund shares in a
tax-deferred account, you must pay federal income tax, and possibly also state
or local taxes, on distributions each year. Your distributions are taxable when
they are paid, whether you take them in cash or reinvest them. However,
distributions declared in October, November or December and paid in January are
taxable as if they were paid on December 31 of the prior year.

For federal tax purposes, income and short-term capital gain distributions from
a Fund are taxed as ordinary income; long-term capital gain distributions are
taxed as long-term capital gains. Every January, we will send you and the IRS a
statement showing the taxable distributions paid to you in the previous year
from each Fund. Long-term capital gain distributions may be taxed at a maximum
federal rate of 20 percent to individual investors (or at 10 percent to
individual investors who are in the 15 percent tax bracket).

31
<PAGE> 35

TAXES ON TRANSACTIONS. Redemptions, including exchanges to other Funds, are
also subject to capital gains tax or capital loss deductions. A capital gain or
loss is the difference between the cost of your shares and the price you receive
when you sell them.

Whenever you sell shares of a Fund, we will send you a confirmation statement
showing how many shares you sold and at what price. However, you or your tax
preparer must determine whether this sale resulted in a capital gain or loss and
the amount of tax to be paid on any gain. Be sure to keep your regular account
statements; the information they contain will be essential in calculating the
amount of your capital gains or losses.

BACKUP WITHHOLDING. If you fail to provide a correct taxpayer identification
number or fail to certify that it is correct, we are required by law to withhold
31% of all the taxable distributions and redemption proceeds paid from your
account. We are also required to begin backup withholding if instructed by the
IRS to do so.

"BUYING A DIVIDEND." If you buy shares just before a Fund deducts a
distribution from its net asset value, you will pay the full price for the
shares and then receive a portion of the price back in the form of a taxable
distribution. This is referred to as "buying a dividend." For example, assume
you bought shares of a Fund for $10.00 per share the day before the Fund paid a
$0.25 dividend. After the dividend was paid, each share would be worth $9.75,
and you would have to include the $0.25 dividend in your gross income for tax
purposes.

EFFECT OF FOREIGN TAXES. Foreign governments may impose taxes on a Fund and its
investments and these taxes generally will reduce such Fund's distributions. If
a Fund qualifies to pass through a credit for such taxes paid and elects to do
so, an offsetting tax credit or deduction may be available to you. If so, your
tax statement will show more taxable income than was actually distributed by the
Fund, but will also show the amount of the available offsetting credit or
deduction.

OTHER RESTRICTIONS. There are tax requirements that all mutual funds must
follow in order to avoid federal taxation. In its effort to adhere to these
requirements, a Fund may have to limit its investment in some types of
instruments.

32
<PAGE> 36

SPECIAL CONSIDERATIONS FOR CERTAIN INSTITUTIONAL INVESTORS. If you are a
corporate investor, a portion of the dividends from net investment income paid
by the Institutional Growth Equity Fund, the Institutional Growth and Income
Fund, the Institutional Equity Index Fund, and the Institutional Social Choice
Equity Fund will generally qualify for the corporate dividends-received
deduction. However, the portion of the dividends that qualify depends on the
aggregate qualifying dividend income received by each Fund from domestic (U.S.)
sources. Certain holding period and debt financing restrictions may apply to
corporate investors seeking to claim the deduction. We expect that little or
none of the distributions paid by the Institutional International Equity Fund,
the Institutional Bond Fund, and the Institutional Money Market Fund will
qualify for the corporate dividends-received deduction.

CLIENTS OF TIAA-CREF TRUST COMPANY, FSB. If you purchased Fund shares through
TIAA-CREF Trust Company, FSB, it is responsible for providing you with a
statement showing taxable distributions paid to you from each Fund.

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

Your Account: Buying, Selling or
Exchanging Shares

ELIGIBLE INVESTORS

Shares of TIAA-CREF Institutional Mutual Funds are only available for purchase
by certain intermediaries affiliated with TIAA-CREF ("TIAA-CREF
Intermediaries"), such as TIAA-CREF Trust Company, FSB (the "Trust Company"), or
other persons, such as state-sponsored tuition savings plans, who have entered
into a contract with a TIAA-CREF Intermediary that enables them to purchase
shares of the Funds. Collectively with TIAA-CREF Intermediaries, these
contractually eligible investors are referred to as "Eligible Investors" in the
rest of this prospectus.

In the future, TIAA-CREF Institutional Mutual Funds may offer additional classes
of shares (with different shareholder servicing, distribution, administrative,
or other fees and expenses) for some or all of its Funds. For example, we may
introduce another class of shares to be sold directly to

33
<PAGE> 37

investors who do not have a specific contractual relationship with a TIAA-CREF
Intermediary.

PURCHASE OF FUND SHARES

There is no minimum investment requirement for Eligible Investors. All purchases
must be in U.S. dollars.

We consider all requests for purchases to be received when they are received in
"good order" (see page 38).

There may be circumstances when we will not permit Eligible Investors to invest
in one or more of the Funds. We reserve the right to suspend or terminate the
offering of shares by one or more Funds. We also reserve the right to reject any
specific purchase request.

PURCHASES BY ELIGIBLE INVESTORS
Only Eligible Investors may invest in the Funds. All other prospective investors
should contact their TIAA-CREF Intermediary for applicable purchase
requirements.

To purchase shares, an Eligible Investor should instruct its bank to wire money
to

State Street Bank and Trust Company
ABA Number 011000028
DDA Number 9905-454-6.

Specify on the wire:

(1) TIAA-CREF Institutional Mutual Funds;

(2) account registration (names of registered owners), address and
Social Security Number(s) or Taxpayer Identification Number;

(3) whether the investment is for a new or existing account (provide
Fund account number if existing); and

(4) the Fund or Funds in which you want to invest, and amount to be
invested in each.

34
<PAGE> 38

INVESTING THROUGH THE TRUST COMPANY
Clients of the Trust Company may invest in TIAA-CREF Institutional Mutual Funds
only through the Trust Company, which is an Eligible Investor and serves as the
TIAA-CREF Intermediary for its clients. Contact the Trust Company regarding how
investments in Fund shares are held for your benefit. In addition to the fees
and expenses deducted by the Funds, you may be charged a fee by the Trust
Company for the services it provides you.

POINTS TO REMEMBER FOR ALL PURCHASES
- - Each investment by an Eligible Investor in TIAA-CREF Institutional Mutual
Funds must be for a specified dollar amount. We can't accept purchase requests
specifying a certain price, date, or number of shares; we'll return these
investments.

- - If you invest in TIAA-CREF Institutional Mutual Funds through an Eligible
Investor, the Eligible Investor may charge you a fee in connection with your
investment (in addition to the fees and expenses deducted by the Funds).
Contact the Eligible Investor to learn whether there are any other conditions,
such as a minimum investment requirement, on your transactions. In addition,
Eligible Investors that are not themselves affiliated with TIAA-CREF may be
charged a fee by their TIAA-CREF Intermediary (in addition to the fees and
expenses deducted by the Funds).

- - If we do not receive good funds through wire transfer, we will treat this as a
redemption of the shares purchased when your wire transfer is received. You
will be responsible for any resulting loss incurred by any of the Funds. If
you are already a shareholder, we can redeem shares from any of your
account(s) as reimbursement for all losses. We also reserve the right to
restrict you from making future purchases in any of the Funds.

IN-KIND PURCHASES OF SHARES
Advisors, at its sole discretion, may permit an Eligible Investor to purchase
shares with investment securities (instead of cash), if: (1) Advisors believes
the securities are appropriate investments for the particular Fund; (2) the
securities offered to the Fund are not subject to any restrictions upon their
sale by the Fund under the Securities Act of 1933, or otherwise; and (3) the

35
<PAGE> 39

securities are permissible holdings under the Fund's investment restrictions. If
the Fund accepts the securities, the Eligible Investor's account will be
credited with Fund shares equal in net asset value to the market value of the
securities received. Eligible Investors interested in making in-kind purchases
should contact their TIAA-CREF Intermediary.

HOW TO REDEEM SHARES

REDEMPTIONS BY ELIGIBLE INVESTORS
Eligible Investors can redeem (sell) their Fund shares at any time. If your
shares were purchased through an Eligible Investor, contact the Eligible
Investor for applicable redemption requirements. Shares purchased through an
Eligible Investor must be redeemed by the Eligible Investor. For further
information, contact your TIAA-CREF Intermediary.

We will only accept redemption requests that specify a dollar amount or number
of shares to be redeemed. All other requests, including those specifying a
certain price or date, will be returned.

We accept redemption orders through a telephone request made by calling 800
897-9069.

Usually, we send redemption proceeds to the Eligible Investor on the second
business day after we receive a redemption request, but not later than seven
days afterwards, assuming the request is in good order (see page 38). If a
redemption is requested shortly after a recent purchase by check, the redemption
proceeds may not be paid until payment for the purchase is collected. This can
take up to ten days.

We can postpone payment if (a) the New York Stock Exchange is closed for other
than usual weekends or holidays, or trading on the New York Stock Exchange is
restricted; (b) an emergency exists as defined by the SEC, or the SEC requires
that trading be restricted; or (c) the SEC permits a delay for the protection of
investors.

We send redemption proceeds to the Eligible Investor at the address or bank
account of record. If proceeds are to be sent elsewhere, we will require a
letter of instruction from the Eligible Investor with a signature guarantee. We
can send the redemption proceeds by check to the address of record or by wire
transfer.

36
<PAGE> 40

REDEEMING SHARES THROUGH THE TRUST COMPANY
If you purchased shares through the Trust Company, it is responsible for making
any redemption proceeds available to you. In addition, the Trust Company may
impose its own restrictions on your ability to redeem shares. Please contact the
Trust Company directly for more information.

IN-KIND REDEMPTIONS OF SHARES
Large redemptions by any Eligible Investor that exceed $250,000 or 1% of a
Fund's assets during any 90-day period may be considered detrimental to the
Fund's existing shareholders. Therefore, at its sole discretion, the Fund may
require that you take a "distribution in kind" upon redemption and may give you
portfolio securities instead of cash. The securities you receive in this manner
will need to be sold through a broker, and you may therefore incur transaction
costs when you sell them.

HOW TO EXCHANGE SHARES

EXCHANGES BY ELIGIBLE INVESTORS
Eligible Investors can exchange shares in a Fund for shares of any other Fund at
any time. (An exchange is a simultaneous redemption of shares in one Fund and a
purchase of shares in another Fund.) If you hold shares through a TIAA-CREF
Intermediary or other Eligible Investor, contact the Eligible Investor for
applicable exchange requirements. Exchanges between accounts can be made only if
the accounts are registered in the same name(s), address and Social Security or
Tax Identification Number. An exchange is considered a sale of securities, and
therefore is a taxable event.

We reserve the right, at our sole discretion, to reject any exchange request and
to modify, suspend, or terminate the exchange privilege at any time.

Eligible Investors can make an exchange through a telephone request by calling
800 897-9069. Once made, an exchange request cannot be modified or canceled.

MAKING EXCHANGES THROUGH THE TRUST COMPANY
If you purchased shares through the Trust Company, it is responsible for making
any exchanges on your behalf. In addition, the Trust Company may

37
<PAGE> 41

impose its own restrictions on your ability to make exchanges. Please contact
the Trust Company directly for more information.

OTHER INVESTOR INFORMATION

GOOD ORDER. Requests for transactions by Eligible Investors will not be
processed until they are received in good order by our transfer agent, Boston
Financial Data Services. "Good order" means that an Eligible Investor's
transaction request includes its Fund account number, the amount of the
transaction (in dollars or shares), signatures of all account owners exactly as
registered on the account, and any other supporting legal documentation that may
be required.

SHARE PRICE. The share price we use for transactions will be the NAV per share
next calculated after Boston Financial Data Services receives an Eligible
Investor's request in good order. If an Eligible Investor purchases or redeems
shares anytime before the New York Stock Exchange closes (usually 4:00 p.m.
Eastern Time), the transaction price will be the NAV per share for that day. If
an Eligible Investor makes a purchase or redemption request after the New York
Stock Exchange closes, the transaction price will be the NAV per share for the
next business day. If you purchased shares through an Eligible Investor, the
Eligible Investor (including the Trust Company) may require you to communicate
to it any purchase, redemption, or exchange request before a specified deadline
earlier than 4:00 p.m. in order to receive that day's NAV per share as the
transaction price.

TAX IDENTIFICATION NUMBER. Each Eligible Investor must provide its Taxpayer
Identification Number (which, for most individuals, is your Social Security
Number) to us and indicate whether or not it is subject to back-up withholding.
If an Eligible Investor doesn't furnish its Taxpayer Identification Number,
redemptions and exchanges of shares, as well as dividends and capital gains
distributions, will be subject to back-up tax withholding.

SIGNATURE GUARANTEE. For some transaction requests by an Eligible Investor, we
may require a letter of instruction from the Eligible Investor with a signature
guarantee. This requirement is designed to protect you and the TIAA-CREF
Institutional Mutual Funds from fraud, and to comply with rules on stock
transfers.

38
<PAGE> 42

TRANSFERRING SHARES. An Eligible Investor may transfer ownership of its shares
to another person or organization that also qualifies as an Eligible Investor or
may change the name on its account by sending us written instructions. All
registered owners of the account must sign the request and provide signature
guarantees.

39
<PAGE> 43

- ------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS

TIAA-CREF INSTITUTIONAL MUTUAL FUNDS
For the Period June 14, 1999 (commencement of operations)
to September 30, 1999

The Financial Highlights table is intended to help you understand the Funds'
financial performance since they began operations on June 14, 1999 through the
period ended September 30, 1999. Certain information reflects financial results
for a single share of a Fund. The total returns in the table show the rates that
an investor would have earned or lost on an investment in a Fund (assuming
reinvestment of all dividends and distributions). The information has been
audited by Ernst & Young, LLP, independent auditors. Their report appears in
TIAA-CREF Institutional Mutual Funds' Annual Report. It is available without
charge upon request.

<TABLE>
<CAPTION>
INSTITUTIONAL INSTITUTIONAL
INTERNATIONAL GROWTH
EQUITY EQUITY
FUND FUND
- ----------------------------------------------------------------------------------------
<S> <C> <C>
SELECTED PER SHARE DATA
Net asset value, beginning of period................ $ 10.00 $ 10.00
------- -------
Gain (loss) from operations:
Net investment income............................. 0.04 0.02
Net realized and unrealized gain (loss) on
investments..................................... 0.62 0.12
------- -------
Total gain (loss) from operations............. 0.66 0.14
Less distributions from:
Net investment income............................. -- --
------- -------
Total distributions........................... -- --
------- -------
Net asset value, end of period...................... $ 10.66 $ 10.14
======= =======
TOTAL RETURN........................................ 6.60% 1.40%
RATIOS AND SUPPLEMENTAL DATA
Net assets at end of period (in thousands).......... $27,472 $30,535
Ratio of expenses to average net assets before fee
waiver and expense reimbursement.................. 0.39% 0.35%
Ratio of expenses to average net assets after fee
waiver and expense reimbursement.................. 0.09% 0.07%
Ratio of net investment income to average net
assets............................................ 0.45% 0.20%
Portfolio turnover rate............................. 21.35% 21.08%
</TABLE>

The percentages shown above are not annualized.

40
<PAGE> 44

<TABLE>
<CAPTION>
INSTITUTIONAL
INSTITUTIONAL INSTITUTIONAL SOCIAL INSTITUTIONAL
GROWTH & EQUITY CHOICE INSTITUTIONAL MONEY
INCOME INDEX EQUITY BOND MARKET
FUND FUND FUND FUND FUND
- ----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$ 10.00 $ 10.00 $ 10.00 $ 10.00 $ 1.00
------- ------- ------- ------- -------
0.04 0.04 0.04 0.17 0.02
(0.25) (0.28) (0.18) (0.03) --
------- ------- ------- ------- -------
(0.21) (0.24) (0.14) 0.14 0.02
(0.03) -- -- (0.17) (0.02)
------- ------- ------- ------- -------
(0.03) -- -- (0.17) (0.02)
------- ------- ------- ------- -------
$ 9.76 $ 9.76 $ 9.86 $ 9.97 $ 1.00
======= ======= ======= ======= =======
(2.05)% (2.40)% (1.40)% 1.42% 1.51%
$25,174 $25,064 $24,731 $30,354 $25,378
0.38% 0.36% 0.37% 0.35% 0.36%
0.07% 0.05% 0.05% 0.06% 0.05%
0.36% 0.39% 0.37% 1.77% 1.52%
10.95% 9.51% 0.06% 173.31% n/a
</TABLE>

41
<PAGE> 45

FOR MORE INFORMATION ABOUT TIAA-CREF INSTITUTIONAL
MUTUAL FUNDS

The following documents contain more information about the Funds and are
available free upon request:

STATEMENT OF ADDITIONAL INFORMATION ("SAI"). The SAI contains more information
about all aspects of the Funds. A current SAI has been filed with the U.S.
Securities and Exchange Commission ("SEC") and is incorporated in this
prospectus by reference.

ANNUAL AND SEMI-ANNUAL REPORTS. The Funds' annual and semi-annual reports
provide additional information about the Funds' investments. In the Funds'
annual report, you will find a discussion of the market conditions and
investment strategies that significantly affected each Fund's performance during
the preceding fiscal year.

REQUESTING DOCUMENTS. You can request a copy of the SAI or these reports
without charge, or contact us for any other purpose, in any of the following
ways:

<TABLE>
<S> <C>
By telephone: Call 800 478-2966
In writing: TIAA-CREF Institutional Mutual Funds
P.O. Box 4674
New York, NY 10164
Over the Internet: www.tiaa-cref.org/mfunds
</TABLE>

Information about TIAA-CREF Institutional Mutual Funds (including the SAI) can
be reviewed and copied at the SEC's public reference room (1-800-SEC-0339) in
Washington, D.C. The reports and other information are also available through
the SEC's internet website at www.sec.gov. Copies of the information can also be
obtained, upon payment of a duplicating fee, by writing the SEC's Public
Reference Section, Washington, D.C. 20549-6009.

To lower costs and eliminate duplicate documents sent to your home, we may begin
mailing only one copy of the TIAA-CREF Institutional Mutual Funds prospectus,
prospectus supplements, annual and semi-annual reports, or any other required
documents, to your household, even if more than one shareholder lives there. If
you would prefer to continue receiving your own copy of any of these documents,
you may call us toll-free at 800 478-2966 or write us.

Investment Company Act File No. 811-9301

(LOGO)Printed on recycled paper TCIMFPOS-2/00
<PAGE> 46

TIAA-CREF INSTITUTIONAL MUTUAL FUNDS

STATEMENT OF ADDITIONAL INFORMATION

This Statement of Additional Information ("SAI") contains additional information
that you should consider before investing in TIAA-CREF Institutional Mutual
Funds (the "Trust"). It is not a prospectus and should be read carefully in
conjunction with the Trust's prospectus dated February 1, 2000 (the
"Prospectus"), which may be obtained by writing us at TIAA-CREF Institutional
Mutual Funds, P.O. Box 4674, New York, NY 10164 or by calling 800 478-2966.
Terms used in the Prospectus are incorporated in this SAI.

The date of this SAI is February 1, 2000.

[TIAA CREF Logo]
<PAGE> 47

Table of Contents

<TABLE>
<CAPTION>
Item Page
- ------------------------------------------------------------------
<S> <C>
Investment Objectives, Policies, and Restrictions........... B-3
Fundamental Policies.................................... B-3
Investment Policies and Risk Considerations............. B-3
Management of TIAA-CREF Institutional Mutual Funds.......... B-10
Trustees and Officers of TIAA-CREF Institutional Mutual
Funds................................................... B-10
Trustee and Officer Compensation........................ B-12
Principal Holders of Securities............................. B-13
Investment Advisory and Other Services...................... B-13
About TIAA-CREF Institutional Mutual Funds and the Shares... B-14
Indemnification of Shareholders......................... B-14
Indemnification of Trustees............................. B-15
Limitation of Fund Liability............................ B-15
Shareholder Meetings and Voting Rights.................. B-15
Additional Funds or Classes............................. B-15
Dividends and Distributions............................. B-15
Pricing of Shares........................................... B-15
Investments for Which Market Quotations Are Readily
Available............................................... B-15
Foreign Investments..................................... B-15
Debt Securities......................................... B-15
Special Valuation Procedures for the Institutional Money
Market Fund............................................. B-16
Options and Futures..................................... B-16
Investments for Which Market Quotations Are Not Readily
Available............................................... B-16
Tax Status.................................................. B-16
Brokerage Allocation........................................ B-18
Underwriters................................................ B-19
Calculation of Performance Data............................. B-19
Total Return Calculations............................... B-19
Yield Calculations...................................... B-19
Performance Returns..................................... B-20
Performance Comparisons................................. B-21
Illustrating Compounding................................ B-21
Net Asset Value......................................... B-21
Moving Averages......................................... B-21
Fund Statistics......................................... B-21
Voting Rights............................................... B-21
Legal Matters............................................... B-21
Experts..................................................... B-21
Additional Considerations................................... B-21
Financial Statements........................................ B-22
</TABLE>

B-2
<PAGE> 48

Investment Objectives, Policies, and Restrictions

The following discussion of investment policies and restrictions supplements the
Prospectus descriptions of the investment objective and principal investment
strategies of each of the Trust's seven separate investment portfolios or funds
("Funds"). Under the Investment Company Act of 1940, as amended (the "1940
Act"), any fundamental policy of a registered investment company may not be
changed without the vote of a majority of the outstanding voting securities (as
defined in the 1940 Act) of that series. However, each Fund's investment
objective, policies and principal investment strategies described in the
Prospectus, as well as the investment restrictions contained in "Investment
Policies and Risk Considerations" below, are not fundamental and therefore may
be changed by the Trust's board of trustees (the "Board of Trustees" or the
"Board") at any time. Each Fund will be "diversified" within the meaning of the
1940 Act.

Unless stated otherwise, each of the following investment policies and risk
considerations apply to each Fund.

FUNDAMENTAL POLICIES
The following restrictions are fundamental policies of each Fund:

1. The Fund will not issue senior securities except as permitted by law.

2. The Fund will not borrow money, except: (a) each Fund may purchase
securities on margin, as described in restriction 7 below; and (b) from
banks (only in amounts not in excess of 33 1/3 percent of the market value
of that Fund's assets at the time of borrowing), and, from other sources,
for temporary purposes (only in amounts not exceeding 5 percent, or such
greater amount as may be permitted by law, of that Fund's total assets taken
at market value at the time of borrowing).

3. The Fund will not underwrite the securities of other companies, except to
the extent that it may be deemed an underwriter in connection with the
disposition of securities from its portfolio.

4. The Fund will not purchase real estate or mortgages directly.

5. The Fund will not purchase commodities or commodities contracts, except to
the extent futures are purchased as described herein.

6. The Fund will not lend any security or make any other loan if, as a result,
more than 33 1/3 percent of its total assets would be lent to other parties,
but this limit does not apply to repurchase agreements.

7. The Fund will not purchase any security on margin except that the Fund may
obtain such short-term credit as may be necessary for the clearance of
purchases and sales of portfolio securities.

8. The Fund will not, with respect to at least 75 percent of the value of its
total assets, invest more than 5 percent of its total assets in the
securities of any one issuer, other than securities issued or guaranteed by
the United States Government, its agencies or instrumentalities, or hold
more than 10 percent of the outstanding voting securities of any one issuer.

The following restriction is a fundamental policy of each Fund other than the
Institutional Money Market Fund.

9. The Fund will not invest in an industry if after giving effect to that
investment that Fund's holding in that industry would exceed 25 percent of
its total assets.

The following restriction is a fundamental policy of the Institutional Money
Market Fund:

10. The Fund may invest more than 25 percent of its assets in obligations issued
or guaranteed by the U.S. government, its agencies or instrumentalities; the
Fund will not otherwise invest in an industry if after giving effect to that
investment the Fund's holding in that industry would exceed 25 percent of
its total assets.

INVESTMENT POLICIES AND RISK CONSIDERATIONS
The following restrictions are non-fundamental policies of each Fund. These
restrictions may be changed without the approval of the shareholders in the
affected Fund.

NON-EQUITY INVESTMENTS OF THE EQUITY FUNDS. The equity Funds can, in addition to
stocks, hold other types of securities with equity characteristics, such as
convertible bonds, preferred stock, warrants and depository receipts or rights.
Pending more permanent investments or to use cash balances effectively, these
Funds can hold the same types of money market instruments the Institutional
Money Market Fund invests in (see Prospectus, page 20), as well as other
short-term instruments. These other instruments are the same type of instruments
the Institutional Money Market Fund holds, but they have longer maturities than
the instruments allowed in the Institutional Money Market Fund, or else don't
meet the requirements for "First Tier Securities."

When market conditions warrant, the equity Funds can invest directly in debt
securities similar to those the Institutional Bond Fund may invest in. The
equity Funds can also hold debt securities that they acquire because of mergers,
recapitalizations or otherwise.

BORROWING AND LENDING AMONG AFFILIATES. At some time in the future, the Funds
may establish a facility for borrowing and lending money among themselves as
well as with TIAA or other registered investment companies managed by Advisors
or Investment Management.

If a Fund borrows money, it could leverage its portfolio by keeping securities
it might otherwise have had to sell. Leveraging

B-3
<PAGE> 49

exposes a Fund to special risks, including greater fluctuations in net asset
value in response to market changes.

ILLIQUID SECURITIES. Each Fund can invest up to 15 percent of its assets (10
percent for the Institutional Money Market Fund) in investments that may not be
readily marketable. It may be difficult to sell these investments for their fair
market value.

PREFERRED STOCK. The Funds can invest in preferred stock consistent with their
investment objectives.

OPTIONS AND FUTURES. Each of the Funds may engage in options and futures
strategies to the extent permitted by the SEC and Commodity Futures Trading
Commission ("CFTC"). We do not intend for any Fund to use options and futures
strategies in a speculative manner but rather we would use them primarily as
hedging techniques or for cash management purposes.

OPTION-RELATED ACTIVITIES COULD INCLUDE: (1) selling of covered call option
contracts, and the purchase of call option contracts for the purpose of a
closing purchase transaction; (2) buying covered put option contracts, and
selling put option contracts to close out a position acquired through the
purchase of such options; and (3) selling call option contracts or buying put
option contracts on groups of securities and on futures on groups of securities
and buying similar call option contracts or selling put option contracts to
close out a position acquired through a sale of such options. This list of
options-related activities is not intended to be exclusive, and each Fund may
engage in other types of options transactions consistent with its investment
objective and policies and applicable law.

A call option is a short-term contract (generally for nine months or less) which
gives the purchaser of the option the right to purchase the underlying security
at a fixed exercise price at any time (American style) or at a set time
(European style) prior to the expiration of the option regardless of the market
price of the security during the option period. As consideration for the call
option, the purchaser pays the seller a premium, which the seller retains
whether or not the option is exercised. The seller of a call option has the
obligation, upon the exercise of the option by the purchaser, to sell the
underlying security at the exercise price at any time during the option period.
Selling a call option would benefit the seller if, over the option period, the
underlying security declines in value or does not appreciate above the aggregate
of the exercise price and the premium. However, the seller risks an "opportunity
loss" of profits if the underlying security appreciates above the aggregate
value of the exercise price and the premium.

A Fund may close out a position acquired through selling a call option by buying
a call option on the same security with the same exercise price and expiration
date as the call option that it had previously sold on that security. Depending
on the premium for the call option purchased by the Fund, the Fund will realize
a profit or loss on the transaction.

A put option is a similar short-term contract that gives the purchaser of the
option the right to sell the underlying security at a fixed exercise price prior
to the expiration of the option regardless of the market price of the security
during the option period. As consideration for the put option, the purchaser
pays the seller a premium, which the seller retains whether or not the option is
exercised. The seller of a put option has the obligation, upon the exercise of
the option by the purchaser, to purchase the underlying security at the exercise
price during the option period. The buying of a covered put contract limits the
downside exposure for the investment in the underlying security to the
combination of the exercise price less the premium paid. The risk of purchasing
a put is that the market price of the underlying stock prevailing on the
expiration date may be above the option's exercise price. In that case the
option would expire worthless and the entire premium would be lost.

A Fund may close out a position acquired through buying a put option by selling
a put option on the same security with the same exercise price and expiration
date as the put option which it had previously bought on the security. Depending
on the premium of the put option sold by the Fund, the Fund would realize a
profit or loss on the transaction.

In addition to options (both calls and puts) on individual securities, there are
also options on groups of securities, such as the Standard & Poor's 100 Index
traded on the Chicago Board Options Exchange. There are also options on futures
of groups of securities such as the Standard & Poor's 500 Stock Index and the
New York Stock Exchange Composite Index. The selling of calls can be used in
anticipation of, or in, a general market or market sector decline that may
adversely affect the market value of a Fund's portfolio of securities. To the
extent that a Fund's portfolio of securities changes in value in correlation
with a given stock index, the sale of call options on the futures of that index
would substantially reduce the risk to the portfolio of a market decline, and,
by so doing, provides an alternative to the liquidation of securities positions
in the portfolio with resultant transaction costs. A risk in all options,
particularly the relatively new options on groups of securities and on futures
on groups of securities, is a possible lack of liquidity. This will be a major
consideration before a Fund deals in any option.

There is another risk in connection with selling a call option on a group of
securities or on the futures of groups of securities. This arises because of the
imperfect correlation between movements in the price of the call option on a
particular group of securities and the price of the underlying securities held
in the portfolio. Unlike a covered call on an individual security, where a large
movement on the upside for the call option will be offset by a similar move on
the underlying stock, a move in the price of a call option on a group of
securities may not be offset by a similar move in the price of securities held
due to the difference in the composition of the particular group and the
portfolio itself.

To the extent permitted by applicable regulatory authorities, each Fund may
purchase and sell futures contracts on securities or other instruments, or on
groups or indexes of securities or other instruments. The purpose of hedging
techniques using financial futures is to protect the principal value of a Fund
against adverse changes in the market value of securities or instruments in its

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<PAGE> 50

portfolio, and to obtain better returns on future investments than actually may
be available at the future time. Since these are hedging techniques, the gains
or losses on the futures contract normally will be offset by losses or gains,
respectively, on the hedged investment. Futures contracts also may be offset
prior to the future date by executing an opposite futures contract transaction.

A futures contract on an investment is a binding contractual commitment which,
if held to maturity, will result in an obligation to make or accept delivery,
during a particular future month, of the securities or instrument underlying the
contract. By purchasing a futures contract -- assuming a "long" position -- a
Fund legally will obligate itself to accept the future delivery of the
underlying security or instrument and pay the agreed price. By selling a futures
contract -- assuming a "short" position -- it legally will obligate itself to
make the future delivery of the security or instrument against payment of the
agreed price.

Positions taken in the futures markets are not normally held to maturity, but
are instead liquidated through offsetting transactions which may result in a
profit or a loss. While futures positions taken by a Fund usually will be
liquidated in this manner, a Fund may instead make or take delivery of the
underlying securities or instruments whenever it appears economically
advantageous to the Fund to do so. A clearing corporation associated with the
exchange on which futures are traded assumes responsibility for closing out
positions and guarantees that the sale and purchase obligations will be
performed with regard to all positions that remain open at the termination of
the contract.

A stock index futures contract, unlike a contract on a specific security, does
not provide for the physical delivery of securities, but merely provides for
profits and losses resulting from changes in the market value of the contract to
be credited or debited at the close of each trading day to the respective
accounts of the parties to the contract. On the contract's expiration date, a
final cash settlement occurs and the futures positions are closed out. Changes
in the market value of a particular stock index futures contract reflect changes
in the specified index of equity securities on which the future is based.

Stock index futures may be used to hedge the equity investments of each Fund
with regard to market (systematic) risk (involving the market's assessment of
overall economic prospects), as distinguished from stock specific risk
(involving the market's evaluation of the merits of the issuer of a particular
security). By establishing an appropriate "short" position in stock index
futures, a Fund may seek to protect the value of its securities portfolio
against an overall decline in the market for equity securities. Alternatively,
in anticipation of a generally rising market, a Fund can seek to avoid losing
the benefit of apparently low current prices by establishing a "long" position
in stock index futures and later liquidating that position as particular equity
securities are in fact acquired. To the extent that these hedging strategies are
successful, a Fund will be affected to a lesser degree by adverse overall market
price movements, unrelated to the merits of specific portfolio equity
securities, than would otherwise be the case.

Unlike the purchase or sale of a security, no price is paid or received by a
Fund upon the purchase or sale of a futures contract. Initially, the Fund will
be required to deposit in a custodial account an amount of cash, United States
Treasury securities, or other permissible assets equal to approximately 5
percent of the contract amount. This amount is known as "initial margin." The
nature of initial margin in futures transactions is different from that of
margin in security transactions in that futures contract margin does not involve
the borrowing of funds by the customer to finance the transactions. Rather, the
initial margin is in the nature of a performance bond or good faith deposit on
the contract which is returned to the Fund upon termination of the futures
contract assuming all contractual obligations have been satisfied. Subsequent
payments to and from the broker, called "variation margin," will be made on a
daily basis as the price of the underlying stock index fluctuates making the
long and short positions in the futures contract more or less valuable, a
process known as "marking to the market." For example, when a Fund has purchased
a stock index futures contract and the price of the underlying stock index has
risen, that position will have increased in value, and the Fund will receive
from the broker a variation margin payment equal to that increase in value.
Conversely, where a Fund has purchased a stock index futures contract and the
price of the underlying stock index has declined, the position would be less
valuable and the Fund would be required to make a variation margin payment to
the broker. At any time prior to expiration of the futures contract, the Fund
may elect to close the position by taking an opposite position which will
operate to terminate the Fund's position in the futures contract. A final
determination of variation margin is then made, additional cash is required to
be paid by or released to the Fund, and the Fund realizes a loss or a gain.

There are several risks in connection with the use of a futures contract as a
hedging device. One risk arises because of the imperfect correlation between
movements in the prices of the futures contracts and movements in the securities
or instruments which are the subject of the hedge. Each Fund will attempt to
reduce this risk by engaging in futures transactions, to the extent possible,
where, in our judgment, there is a significant correlation between changes in
the prices of the futures contracts and the prices of each Fund's portfolio
securities or instruments sought to be hedged.

Successful use of futures contracts for hedging purposes also is subject to the
user's ability to predict correctly movements in the direction of the market.
For example, it is possible that, where a Fund has sold futures to hedge its
portfolio against declines in the market, the index on which the futures are
written may advance and the values of securities or instruments held in the
Fund's portfolio may decline. If this occurred, the Fund would lose money on the
futures and also experience a decline in value in its portfolio investments.
However, we believe that over time the value of a Fund's portfolio will tend to
move in the same direction as the market indices which are intended to correlate
to the price movements of the portfolio securities or instruments

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<PAGE> 51

sought to be hedged. It also is possible that, for example, if a Fund has hedged
against the possibility of the decline in the market adversely affecting stocks
held in its portfolio and stock prices increased instead, the Fund will lose
part or all of the benefit of increased value of those stocks that it has hedged
because it will have offsetting losses in its futures positions. In addition, in
such situations, if the Fund has insufficient cash, it may have to sell
securities or instruments to meet daily variation margin requirements. Such
sales may be, but will not necessarily be, at increased prices which reflect the
rising market. The Fund may have to sell securities or instruments at a time
when it may be disadvantageous to do so.

In addition to the possibility that there may be an imperfect correlation, or no
correlation at all, between movements in the futures contracts and the portion
of the portfolio being hedged, the prices of futures contracts may not correlate
perfectly with movements in the underlying security or instrument due to certain
market distortions. First, all transactions in the futures market are subject to
margin deposit and maintenance requirements. Rather than meeting additional
margin deposit requirements, investors may close futures contracts through
offsetting transactions which could distort the normal relationship between the
index and futures markets. Second, the margin requirements in the futures market
are less onerous than margin requirements in the securities market, and as a
result the futures market may attract more speculators than the securities
market does. Increased participation by speculators in the futures market also
may cause temporary price distortions. Due to the possibility of price
distortion in the futures market and also because of the imperfect correlation
between movements in the futures contracts and the portion of the portfolio
being hedged, even a correct forecast of general market trends by Teachers
Advisors, Inc. ("Advisors"), the investment adviser for TIAA-CREF Institutional
Mutual Funds, still may not result in a successful hedging transaction over a
very short time period.

Each Fund may also use futures contracts and options on futures contracts to
manage its cash flow more effectively. To the extent that a Fund enters into
non-hedging positions, it will do so only in accordance with certain CFTC
exemptive provisions. Thus, pursuant to CFTC Rule 4.5, the aggregate initial
margin and premiums required to establish non-hedging positions in commodity
futures or commodity options contracts may not exceed 5 percent of the
liquidation value of the Fund's portfolio, after-taking into account unrealized
profits and unrealized losses on any such contracts it has entered into
(provided that the in-the-money amount of an option that is in-the-money when
purchased may be excluded in computing such 5 percent).

Options and futures transactions may increase a Fund's transaction costs and
portfolio turnover rate and will be initiated only when consistent with its
investment objectives.

INVESTMENT COMPANIES. Each Fund can invest up to 5 percent of its assets in any
single investment company and up to 10 percent of its assets in all other
investment companies in the aggregate. However, no Fund can hold more than 3
percent of the total outstanding voting stock of any single investment company.

FIRM COMMITMENT AGREEMENTS AND PURCHASE OF "WHEN-ISSUED" SECURITIES. Each Fund
can enter into firm commitment agreements for the purchase of securities on a
specified future date. When a Fund enters into a firm commitment agreement,
liability for the purchase price -- and the rights and risks of ownership of the
securities -- accrues to the Fund at the time it becomes obligated to purchase
such securities, although delivery and payment occur at a later date.
Accordingly, if the market price of the security should decline, the effect of
the agreement would be to obligate the Fund to purchase the security at a price
above the current market price on the date of delivery and payment. During the
time the Fund is obligated to purchase such securities, it will be required to
segregate assets. See below, "Segregated Accounts."

PASS-THROUGH SECURITIES. The Funds may invest in mortgage pass-through
securities such as GNMA certificates or FNMA and FHLMC mortgage-backed
obligations, or modified pass-through securities such as collateralized mortgage
obligations issued by various financial institutions. In connection with these
investments, early repayment of principal arising from prepayments of principal
on the underlying mortgage loans due to the sale of the underlying property, the
refinancing of the loan, or foreclosure may expose a Fund to a lower rate of
return upon reinvestment of the principal. Prepayment rates vary widely and may
be affected by changes in market interest rates. In periods of falling interest
rates, the rate of prepayment tends to increase, thereby shortening the actual
average life of the mortgage-related security. Conversely, when interest rates
are rising, the rate of prepayment tends to decrease, thereby lengthening the
actual average life of the mortgage-related security. Accordingly, it is not
possible to accurately predict the average life of a particular pool.
Reinvestment of prepayments may occur at higher or lower rates than the original
yield on the certificates. Therefore, the actual maturity and realized yield on
pass-through or modified pass-through mortgage-related securities will vary
based upon the prepayment experience of the underlying pool of mortgages. For
purposes of calculating the average life of the assets of the relevant Fund, the
maturity of each of these securities will be the average life of such securities
based on the most recent or estimated annual prepayment rate.

LENDING OF SECURITIES. Subject to investment policy 6 on page B-3 (relating to
loans of portfolio securities), each Fund may lend its securities to brokers and
dealers that are not affiliated with Teachers Insurance and Annuity Association
of America ("TIAA"), are registered with the SEC and are members of the NASD,
and also to certain other financial institutions. All loans will be fully
collateralized. In connection with the lending of its securities, a Fund will
receive as collateral cash, securities issued or guaranteed by the United States
Government (i.e., Treasury securities), or other collateral permitted by
applicable law, which at all times while the loan is outstanding will be
maintained in amounts equal to at least 102 percent of the current market value
of the loaned securities, or such lesser percentage as may be permitted by the
Securities and Exchange Commission ("SEC") (not to fall

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<PAGE> 52

below 100 percent of the market value of the loaned securities), as reviewed
daily. By lending its securities, a Fund will receive amounts equal to the
interest or dividends paid on the securities loaned and in addition will expect
to receive a portion of the income generated by the short-term investment of
cash received as collateral or, alternatively, where securities or a letter of
credit are used as collateral, a lending fee paid directly to the Fund by the
borrower of the securities. Such loans will be terminable by the Fund at any
time and will not be made to affiliates of TIAA. The Fund may terminate a loan
of securities in order to regain record ownership of, and to exercise beneficial
rights related to, the loaned securities, including but not necessarily limited
to voting or subscription rights, and may, in the exercise of its fiduciary
duties, terminate a loan in the event that a vote of holders of those securities
is required on a material matter. The Fund may pay reasonable fees to persons
unaffiliated with the Fund for services or for arranging such loans. Loans of
securities will be made only to firms deemed creditworthy. As with any extension
of credit, however, there are risks of delay in recovering the loaned
securities, should the borrower of securities default, become the subject of
bankruptcy proceedings, or otherwise be unable to fulfill its obligations or
fail financially.

REPURCHASE AGREEMENTS. Repurchase agreements have the characteristics of loans,
and will be fully collateralized (either with physical securities or evidence of
book entry transfer to the account of the custodian bank) at all times. During
the term of the repurchase agreement, the Fund entering into the agreement
retains the security subject to the repurchase agreement as collateral securing
the seller's repurchase obligation, continually monitors the market value of the
security subject to the agreement, and requires the Fund's seller to deposit
with the Fund additional collateral equal to any amount by which the market
value of the security subject to the repurchase agreement falls below the resale
amount provided under the repurchase agreement. Each Fund will enter into
repurchase agreements only with member banks of the Federal Reserve System, and
with primary government securities dealers or other domestic or foreign
broker-dealers whose creditworthiness has been reviewed and found satisfactory
by Advisors and who have, therefore, been determined to present minimal credit
risk.

Securities underlying repurchase agreements will be limited to certificates of
deposit, commercial paper, bankers' acceptances, or obligations issued or
guaranteed by the United States Government or its agencies or instrumentalities,
in which the Fund entering into the agreement may otherwise invest.

If a seller of a repurchase agreement defaults and does not repurchase the
security subject to the agreement, the Fund entering into the agreement would
look to the collateral security underlying the seller's repurchase agreement,
including the securities subject to the repurchase agreement, for satisfaction
of the seller's obligation to the Fund; in such event the Fund might incur
disposition costs in liquidating the collateral and might suffer a loss if the
value of the collateral declines. In addition, if bankruptcy proceedings are
instituted against a seller of a repurchase agreement, realization upon the
collateral may be delayed or limited.

SWAP TRANSACTIONS. Each Fund may, to the extent permitted by the SEC, enter into
privately negotiated "swap" transactions with other financial institutions in
order to take advantage of investment opportunities generally not available in
public markets. In general, these transactions involve "swapping" a return based
on certain securities, instruments, or financial indices with another party,
such as a commercial bank, in exchange for a return based on different
securities, instruments, or financial indices.

By entering into a swap transaction, a Fund may be able to protect the value of
a portion of its portfolio against declines in market value. Each Fund may also
enter into swap transactions to facilitate implementation of allocation
strategies between different market segments or countries or to take advantage
of market opportunities which may arise from time to time. A Fund may be able to
enhance its overall performance if the return offered by the other party to the
swap transaction exceeds the return swapped by the Fund. However, there can be
no assurance that the return a Fund receives from the counterparty to the swap
transaction will exceed the return it swaps to that party.

While a Fund will only enter into swap transactions with counterparties it
considers creditworthy (and will monitor the creditworthiness of parties with
which it enters into swap transactions), a risk inherent in swap transactions is
that the other party to the transaction may default on its obligations under the
swap agreement. If the other party to the swap transaction defaults on its
obligations, the Fund entering into the agreement would be limited to the
agreement's contractual remedies. There can be no assurance that a Fund will
succeed when pursuing its contractual remedies. To minimize a Fund's exposure in
the event of default, it will usually enter into swap transactions on a net
basis (i.e., the parties to the transaction will net the payments payable to
each other before such payments are made). When a Fund enters into swap
transactions on a net basis, the net amount of the excess, if any, of the Fund's
obligations over its entitlements with respect to each such swap agreement will
be accrued on a daily basis and an amount of liquid assets having an aggregate
market value at least equal to the accrued excess will be segregated by the
Fund's custodian. To the extent a Fund enters into swap transactions other than
on a net basis, the amount segregated will be the full amount of the Fund's
obligations, if any, with respect to each such swap agreement, accrued on a
daily basis. See "Segregated Accounts," below.

Swap agreements may be considered illiquid by the SEC staff and subject to the
limitations on illiquid investments.

To the extent that there is an imperfect correlation between the return a Fund
is obligated to swap and the securities or instruments representing such return,
the value of the swap transaction may be adversely affected. No Fund therefore
will enter into a swap transaction unless it owns or has the right to acquire
the securities or instruments representative of the return it is obligated to
swap with the counterparty to the swap transaction. It is not the intention of
any Fund to engage in swap transactions in a speculative manner but rather
primarily to hedge or manage the risks associated with assets held in, or to
facilitate the

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<PAGE> 53

implementation of portfolio strategies of purchasing and selling assets for, the
Fund.

SEGREGATED ACCOUNTS. In connection with when-issued securities, firm commitment
and certain other transactions in which a Fund incurs an obligation to make
payments in the future, a Fund may be required to segregate assets with its
custodian bank in amounts sufficient to settle the transaction. To the extent
required, such segregated assets can consist of liquid assets, including equity
or other securities, or other instruments such as cash, United States Government
securities or other securities as may be permitted by law.

CURRENCY TRANSACTIONS. The value of a Fund's assets as measured in United States
dollars may be affected favorably or unfavorably by changes in foreign currency
exchange rates and exchange control regulations, and the Fund may incur costs in
connection with conversions between various currencies. To minimize the impact
of such factors on net asset values, the Fund may engage in foreign currency
transactions in connection with their investments in foreign securities. The
Funds will not speculate in foreign currency exchange, and will enter into
foreign currency transactions only to "hedge" the currency risk associated with
investing in foreign securities. Although such transactions tend to minimize the
risk of loss due to a decline in the value of the hedged currency, they also may
limit any potential gain which might result should the value of such currency
increase.

The Funds will conduct their currency exchange transactions either on a spot
(i.e., cash) basis at the rate prevailing in the currency exchange market, or
through forward contracts to purchase or sell foreign currencies. A forward
currency contract involves an 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.
These contracts are entered into with large commercial banks or other currency
traders who are participants in the interbank market.

By entering into a forward contract for the purchase or sale of foreign currency
involved in underlying security transactions, a Fund is able to protect itself
against possible loss between trade and settlement dates for that purchase or
sale resulting from an adverse change in the relationship between the U.S.
dollar and such foreign currency. This practice is sometimes referred to as
"transaction hedging." In addition, when it appears that a particular foreign
currency may suffer a substantial decline against the U.S. dollar, a Fund may
enter into a forward contract to sell an amount of foreign currency
approximating the value of some or all of its portfolio securities denominated
in such foreign currency. This practice is sometimes referred to as "portfolio
hedging." Similarly, when it appears that the U.S. dollar may suffer a
substantial decline against a foreign currency, a Fund may enter into a forward
contract to buy that foreign currency for a fixed dollar amount.

The Funds may also hedge their foreign currency exchange rate risk by engaging
in currency financial futures, options and "cross-hedge" transactions. In
"cross-hedge" transactions, a Fund holding securities denominated in one foreign
currency will enter into a forward currency contract to buy or sell a different
foreign currency (one that generally tracks the currency being hedged with
regard to price movements). Such cross-hedges are expected to help protect a
Fund against an increase or decrease in the value of the U.S. dollar against
certain foreign currencies.

The Funds may hold a portion of their respective assets in bank deposits
denominated in foreign currencies, so as to facilitate investment in foreign
securities as well as protect against currency fluctuations and the need to
convert such assets into U.S. dollars (thereby also reducing transaction costs).
To the extent these monies are converted back into U.S. dollars, the value of
the assets so maintained will be affected favorably or unfavorably by changes in
foreign currency exchange rates and exchange control regulations.

The forecasting of short-term currency market movement is extremely difficult
and whether a short-term hedging strategy will be successful is highly
uncertain. Moreover, it is impossible to forecast with absolute precision the
market value of portfolio securities at the expiration of a foreign currency
forward contract. Accordingly, a Fund may be required to buy or sell additional
currency on the spot market (and bear the expense of such transaction) if its
predictions regarding the movement of foreign currency or securities markets
prove inaccurate. In addition, the use of cross-hedging transactions may involve
special risks, and may leave a Fund in a less advantageous position than if such
a hedge had not been established. Because foreign currency forward contracts are
privately negotiated transactions, there can be no assurance that a Fund will
have flexibility to roll-over the foreign currency forward contract upon its
expiration if it desires to do so. Additionally, there can be no assurance that
the other party to the contract will perform its obligations thereunder.

There is no express limitation on the percentage of a Fund's assets that may be
committed to foreign currency exchange contracts. A Fund will not enter into
foreign currency forward contracts or maintain a net exposure in such contracts
where that Fund would be obligated to deliver an amount of foreign currency in
excess of the value of that Fund's portfolio securities or other assets
denominated in that currency or, in the case of a cross-hedge transaction,
denominated in a currency or currencies that Fund's investment adviser believes
will correlate closely to the currency's price movements. The Funds generally
will not enter into forward contracts with terms longer than one year.

FOREIGN INVESTMENTS. As described more fully in the Prospectus, certain Funds
may invest in foreign securities, including those in emerging markets. In
addition to the general risk factors discussed in the Prospectus, there are a
number of country- or region-specific risks and other considerations that may
affect these investments.

INVESTMENT IN EUROPE. The total European market (consisting of the European
Union, the European Free Trade Association and Eastern European countries)
contains over 450 million consumers, a market larger than either the United
States or Japan.

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European businesses compete both intra-regionally and globally in a wide range
of industries, and recent political and economic changes throughout Europe are
likely further to expand the role of Europe in the global economy. As a result,
a great deal of interest and activity has been generated aimed at understanding
and benefiting from the "new" Europe that may result. The incipient aspects of
major developments in Europe as well as other considerations means that there
can be no guarantee that outcomes will be as anticipated or will have results
that investors would regard as favorable.

THE EUROPEAN UNION. The European Union ("EU") consists of Austria, Belgium,
Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg,
Netherlands, Portugal, Spain, Sweden, and the United Kingdom (the "EU Nations"),
with a total population exceeding 370 million. The EU Nations have undertaken to
establish, among themselves, a single market that is largely free of internal
barriers and hindrances to the free movement of goods, persons, services and
capital. Although it is difficult to predict when this goal will be fully
realized, macro-and micro-economic adjustments already in train are indicative
of significant increases in efficiency and the ability of the EU Nations to
compete globally by simplifying product distribution networks, promoting
economies of scale, and increasing labor mobility, among other effects. The
establishment of the eleven-country European Monetary Union, a subset of the
European Union countries, with its own central bank, the European Central Bank;
its own currency, the Euro; and a single interest rate structure, represents a
new economic entity, the Euro-area. While authority for monetary policy thus
shifts from national hands to an independent supranational body, sovereignty
elsewhere remains largely at the national level. Uncertainties with regard to
balancing of monetary policy against national fiscal and other political issues
and their extensive ramifications represent important risk considerations for
investors in these countries.

INVESTMENT IN THE PACIFIC BASIN. The economies of the Pacific Basin vary widely
in their stages of economic development. Some (such as Japan, Australia,
Singapore, and Hong Kong) are considered advanced by Western standards; others
(such as Thailand, Indonesia, and Malaysia) are considered "emerging" -- rapidly
shifting from natural resource- and agriculture-based systems to more
technologically advanced systems oriented toward manufacturing and services. The
major reform of China's economy and polity continues to be an important
influence on economic growth internally, and, through trade, across the region.
Intra-regional trade has become increasingly important to a number of these
economies. Japan, the second largest economy in the world, is the dominant
economy in the Pacific Basin, with one of the highest per capita incomes in the
world. Its extensive trade relationships also contribute to expectations for
regional and global economic growth. Economic growth has historically been
relatively strong in the region, but recent economic turmoil among the emerging
economies, and unmitigated recessionary impulses in Japan, in the recent past
have raised important questions with regard to prospective longer-term outcomes.
Potential policy miscalculations or other events could pose important risks to
equity investors in any of these economies.

INVESTMENT IN CANADA. Canada, a country rich in natural resources and a leading
industrial country of the world, is by far the most important trading partner of
the United States. The U.S., Canada, and Mexico have established the North
American Free Trade Agreement ("NAFTA"), which is expected to significantly
benefit the economies of each of the countries through the more rational
allocation of resources and production over the region. Uncertainty regarding
the longer-run political structure of Canada is an added risk to investors,
along with highly volatile commodities prices.

INVESTMENT IN LATIN AMERICA. Latin America (including Mexico and Central
America) has a population of approximately 455 million and is rich in natural
resources. Important gains in the manufacturing sector have developed in several
of the major countries in the region. A number of countries in the region have
taken steps to reduce impediments to trade, most notably through the NAFTA
agreement between the U.S., Canada and Mexico and the Mercosur agreement between
Argentina, Brazil, Paraguay and Uruguay, with Chile as an associate member.
Restrictions on international capital flows, intermittent problems with capital
flight, and some potential difficulties in the repayment of external debt,
however, remain important concerns in the region -- exacerbating the risks in
these equity markets. As a result Latin American equity markets have been
extremely volatile. Efforts to restructure these economies through privatization
and fiscal and monetary reform have been met with some success, with gains in
output growth and slowing rates of inflation. These efforts may result in
attractive investment opportunities. However, recent events have shown that
large shifts in sentiment in markets elsewhere on the globe may very quickly
reverberate among these markets, adding greater risk to already volatile
markets. There can be no assurance that attempted reforms will ultimately be
successful or will bring about results investors would regard as favorable.

OTHER REGIONS. There are developments in other regions and countries around the
world which could lead to additional investment opportunities. We will monitor
these developments and may invest when appropriate.

DEPOSITORY RECEIPTS. The equity Funds can invest in American, European and
Global Depository Receipts ("ADRs," "EDRs" and "GDRs"). They are alternatives to
the purchase of the underlying securities in their national markets and
currencies. Although their prices are quoted in U.S. dollars, they don't
eliminate all the risks of foreign investing.

ADRs represent the right to receive securities of foreign issuers deposited in a
domestic bank or a foreign correspondent bank. To the extent that a Fund
acquires ADRs through banks which do not have a contractual relationship with
the foreign issuer of the security underlying the ADR to issue and service such
ADRs, there may be an increased possibility that the Fund would not become aware
of and be able to respond to corporate actions such as stock splits or rights
offerings involving the foreign issuer in a timely manner. In addition, the lack
of information may result in inefficiencies in the valuation of such
instruments. However, by investing in ADRs rather than directly in the stock of

B-9
<PAGE> 55

foreign issuers, a Fund will avoid currency risks during the settlement period
for either purchases or sales. In general, there is a large, liquid market in
the U.S. for ADRs quoted on a national securities exchange or the NASD's
national market system. The information available for ADRs is subject to the
accounting, auditing and financial reporting standards of the domestic market or
exchange on which they are traded, which standards are more uniform and more
exacting than those to which many foreign issuers may be subject.

EDRs and GDRs are receipts evidencing an arrangement with a non-U.S. bank
similar to that for ADRs and are designed for use in non-U.S. securities
markets. EDRs and GDRs are not necessarily quoted in the same currency as the
underlying security.

OTHER INVESTMENT TECHNIQUES AND OPPORTUNITIES. Each Fund may take certain
actions with respect to merger proposals, tender offers, conversion of
equity-related securities and other investment opportunities with the objective
of enhancing the portfolio's overall return, regardless of how these actions may
affect the weight of the particular securities in the Fund's portfolio.

INDUSTRY CONCENTRATIONS. None of the Funds will concentrate more than 25 percent
of its total assets in any one industry.

Management of TIAA-CREF Institutional Mutual Funds

TRUSTEES AND OFFICERS OF TIAA-CREF INSTITUTIONAL MUTUAL FUNDS
Trustees who are "interested persons" within the meaning of the 1940 Act are
indicated by an asterisk (*).

<TABLE>
<CAPTION>
TRUSTEE AGE PRINCIPAL OCCUPATIONS DURING PAST 5 YEARS
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Robert H. Atwell (1) 69 President Emeritus, American Council on Education and senior
447 Bird Key Drive consultant for A.T. Kearney, Inc., since November 1996.
Sarasota, FL 34236 Previously, President, American Council on Education.

Elizabeth E. Bailey (1) 61 John C. Hower Professor of Public Policy and Management, The
The Wharton School Wharton School, University of Pennsylvania.
University of Pennsylvania
Suite 3100
Steinberg-Dietrich Hall
Philadelphia, PA 19104-6372

John H. Biggs* (3) 63 Chairman, Chief Executive Officer, and President, College
TIAA-CREF Retirement Equities Fund ("CREF") and TIAA, since 1997.
730 Third Avenue Formerly, Chairman and Chief Executive Officer, CREF and
New York, NY 10017-3206 TIAA.

Joyce A. Fecske (1) 52 Vice President Emerita, DePaul University, since 1994.
11603 Briarwood Lane Formerly, Vice President for Human Resources, DePaul
Burr Ridge, IL 60525-5173 University.

Edes P. Gilbert 67 Consultant, Independent Education Services, since 1998.
Independent Education Formerly, Head, The Spence School.
Services
49 East 78th Street, Suite
4A
New York, NY 10021

Stuart T. K. Ho (3) 64 Chairman and President, Capital Investment of Hawaii, Inc.;
Capital Investment of Chairman, Gannett Pacific Corporation.
Hawaii, Inc.
733 Bishop Street, Suite
1700
Honolulu, HI 96813

Nancy L. Jacob (2) 57 President and Managing Principal, Windermere Investment
Windermere Investment Associates, since January 1997. Formerly, Chairman and Chief
Associates Executive Officer, CTC Consulting, Inc., and Managing
121 S.W. Morrison Street, Director, Capital Trust Company.
Suite 925
Portland, OR 97204

Marjorie Fine Knowles (2) 60 Professor of Law, Georgia State University College of Law.
College of Law
Georgia State University
P.O. Box 4037
Atlanta, GA 30303-4037
</TABLE>

B-10
<PAGE> 56

<TABLE>
<CAPTION>
TRUSTEE AGE PRINCIPAL OCCUPATIONS DURING PAST 5 YEARS
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Martin L. Leibowitz* (3) 63 Vice Chairman and Chief Investment Officer, CREF and TIAA,
TIAA-CREF since 1995. President, TIAA-CREF Investment Management, Inc.
730 Third Avenue ("Investment Management"), and President, Teachers Advisors,
New York, NY 10017-3206 Inc. ("Advisors"). Executive Vice President, Investments,
CREF and TIAA from June 1995 to November 1995. Formerly,
managing director-director of research and a member of the
executive committee, Salomon Brothers, Inc.
Bevis Longstreth (3) 66 Of Counsel, Debevoise & Plimpton, since 1998. Formerly,
Debevoise & Plimpton Partner, Debevoise & Plimpton. Formerly, Adjunct Professor
875 Third Avenue of Law, Columbia University.
New York, NY 10022-6225
Robert M. Lovell, Jr. (2) 69 Founding Partner, First Quadrant L.P. Formerly, Chairman and
First Quadrant L.P. Chief Executive Officer, First Quadrant Corp. (investment
100 Campus Drive, Suite 230 management firm).
P.O. Box 939
Florham Park, NJ 07932-0939
Stephen A. Ross (2) 55 Franco Modigliani Professor of Finance and Economics, Sloan
Sloan School of Management School of Management, Massachusetts Institute of Technology,
Massachusetts Institute of since 1998. Co-Chairman, Roll & Ross Asset Management Corp.
Technology Formerly, Sterling Professor of Economics and Finance, Yale
77 Massachusetts Avenue School of Management, Yale University.
Cambridge, MA 02139
Eugene C. Sit (3) 61 Chairman, Chief Executive and Chief Investment Executive
Sit Investment Associates, Officer, Sit Investment Associates, Inc. and Sit/Kim
Inc. International Investment Associates, Inc.
4600 Norwest Center
90 South Seventh Street
Minneapolis, MN 55402-4130
Maceo K. Sloan (2) 50 Chairman and Chief Executive Officer, Sloan Financial Group,
NCM Capital Management Inc., and NCM Capital Management Group, Inc.
Group, Inc.
103 West Main Street, Suite
400
Durham, NC 27701-3638
David K. Storrs (2) 55 President and Chief Executive Officer, Alternative
Alternative Investment Investment Group, L.L.C., since August 1996. Formerly,
Group, L.L.C. Adviser to the President, The Common Fund, January - October
65 South Gate Lane 1996; President and Chief Executive Officer, The Common
Southport, CT 06490 Fund, 1993 - 1995.
Robert W. Vishny (2) 40 Eric J. Gleacher Professor of Finance, University of Chicago
Graduate School of Business Graduate School of Business. Founding Partner, LSV Asset
University of Chicago Management.
1101 East 58th Street
Chicago, IL 60637
(1) Member of the Executive Committee. The Executive Committee is responsible for day to day oversight of
TIAA-CREF Institutional Funds' operation.
(2) Member of the Finance Committee. The Finance Committee oversees the investments of TIAA-CREF
Institutional Mutual Funds.
(3) Member of the Executive and Finance Committees.
- -------------------------------------------------------------------------------------------------------------
</TABLE>

B-11
<PAGE> 57

<TABLE>
<CAPTION>
POSITION WITH PRINCIPAL OCCUPATIONS
OFFICER* AGE REGISTRANT DURING PAST 5 YEARS
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
John J. McCormack 55 President Executive Vice President, TIAA and CREF, since November
1983, and President, TIAA-CREF Enterprises, since June 1998.

Scott C. Evans 40 Executive Vice Executive Vice President, TIAA and CREF, Advisors and
President Investment Management, since September 1997. Previously,
Managing Director, TIAA, CREF, Advisors and Investment
Management from March 1997 to September 1997. Previously
Second Vice President, TIAA and CREF, Advisors and
Investment Management.

Richard L. Gibbs 52 Executive Vice Executive Vice President, TIAA and CREF, since March 1993.
President Executive Vice President, Advisors, Investment Management,
Teachers Personal Investors Services, Inc. ("TPIS") and
TIAA-CREF Individual & Institutional Services, Inc.
("Services").

E. Laverne Jones 50 Secretary Vice President, and Corporate Secretary, TIAA and CREF,
since August 1998. Previously, Senior Counsel, TIAA and
CREF.

Richard J. 58 Vice President and Vice President and Treasurer, TIAA and CREF, Investment
Adamski Treasurer Management, Advisors, TPIS and Services.
* The address for all officers of TIAA-CREF Institutional Mutual Funds is 730 Third Avenue, New York, NY
10017-3206.
- -------------------------------------------------------------------------------------------------------------------
</TABLE>

TRUSTEE AND OFFICER COMPENSATION
The following table shows the estimated compensation to be received by each
non-officer Trustee from the Funds and the TIAA-CREF fund complex for TIAA-CREF
Institutional Mutual Funds' fiscal year ending September 30, 2000. The Funds'
officers receive no compensation from any fund in the TIAA-CREF fund complex.
The TIAA-CREF fund complex consists of: College Retirement Equities Fund, TIAA
Separate Account VA-1, TIAA-CREF Life Funds, TIAA-CREF Mutual Funds and
TIAA-CREF Institutional Mutual Funds, each a registered investment company.

TIAA-CREF Institutional Mutual Funds has a long-term performance deferred
compensation plan for non-employee Trustees. Under this unfunded plan, annual
contributions equal to half the amount of the basic annual Trustee stipend are
allocated to notional CREF and TIAA accounts, in predetermined percentages.
Benefits will be paid in a lump sum after the Trustee leaves the Board. Pursuant
to a separate deferred compensation plan, non-employee Trustees also have the
option to defer payment of their basic stipend and allocate it to notional TIAA
and CREF accounts chosen by the individual Trustee. Benefits under that plan are
also paid in a lump sum after the Trustee leaves the Board.

COMPENSATION OF TRUSTEES(1)

<TABLE>
<CAPTION>
LONG TERM
PERFORMANCE
DEFERRED TOTAL
AGGREGATE COMPENSATION COMPENSATION
COMPENSATION CONTRIBUTION FROM TIAA-CREF
NAME FROM THE FUND AS PART OF EXPENSES FUND COMPLEX
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
Robert H. Atwell $217 $59 $58,500

Elizabeth E. Bailey $231 $59 $61,500

Joyce A. Fecske $203 $59 $55,500

Edes P. Gilbert $217 $59 $58,500

Stuart T. K. Ho $175 $59 $49,500

Nancy L. Jacob $217 $59 $58,500

Marjorie Fine Knowles $175 $59 $49,500

Bevis Longstreth $203 $59 $55,500

Robert M. Lovell, Jr. $231 $59 $61,500

Stephen A. Ross $146 $59 $43,500

Eugene C. Sit $231 $59 $61,500

Maceo K. Sloan $231 $59 $61,500

David K. Storrs $203 $59 $55,500

Robert W. Vishny $203 $59 $55,500

(1) Estimated payments for the fiscal year ending September 30, 2000.
- -------------------------------------------------------------------------------
</TABLE>

B-12
<PAGE> 58

Principal Holders of Securities

As of December 31, 1999, the following persons are known by the Fund to hold
beneficially 5% or more of the outstanding shares of the following Funds:

Teachers Insurance and Annuity Association of America ("TIAA")*
730 Third Avenue
New York, NY 10017

<TABLE>
<CAPTION>
FUND PERCENT OF SHARES
- --------------------------------------------------------------
<S> <C>
Institutional International Equity Fund 69.81%

Institutional Growth Equity Fund 8.38%

Institutional Growth and Income Fund 59.01%

Institutional Equity Index Fund 93.46%

Institutional Social Choice Equity Fund 96.79%

Institutional Bond Fund 42.73%

Institutional Money Market Fund 59.47%
</TABLE>

TIAA-CREF Trust Company, FSB ("Trust Company")**
211 North Broadway - Suite 1000
St. Louis, MO 63102

<TABLE>
<CAPTION>
FUND PERCENT OF SHARES
- --------------------------------------------------------------
<S> <C>
Institutional International Equity Fund 13.79%

Institutional Growth Equity Fund 38.55%

Institutional Growth and Income Fund 38.19%

Institutional Equity Index Fund 5.04%

Institutional Bond Fund 23.45%
</TABLE>

Golden State ScholarShare College Savings Trust
c/o ScholarShare Investment Board
California State Treasurers Office
915 Capitol Mall
Sacramento, CA 95814

<TABLE>
<CAPTION>
FUND PERCENT OF SHARES
- --------------------------------------------------------------
<S> <C>
Institutional Growth Equity Fund 15.22%
Institutional Bond Fund 18.30%
</TABLE>

Kentucky Education Savings Plan Trust
P.O. Box 81100
Boston, MA 02266-8100

<TABLE>
<CAPTION>
FUND PERCENT OF SHARES
- --------------------------------------------------------------
<S> <C>
Institutional Growth Equity Fund 5.94%

Institutional Bond Fund 9.80%

Institutional Money Market Fund 6.71%
</TABLE>

James S. McDonnell Foundation
1034 South Brentwood Blvd. - Suite 1860
St. Louis, MO 63117

<TABLE>
<CAPTION>
FUND PERCENT OF SHARES
- --------------------------------------------------------------
<S> <C>
Institutional International Equity Fund 16.25%
</TABLE>

Claneil Foundation, Inc.
630 West Germantown Pike - Suite 400
Plymouth Meeting, PA 19462

<TABLE>
<CAPTION>
FUND PERCENT OF SHARES
- --------------------------------------------------------------
<S> <C>
Institutional Growth Equity Fund 25.7%
</TABLE>

Community Funds, Inc.
2 Park Avenue
New York, NY 10016

<TABLE>
<CAPTION>
FUND PERCENT OF SHARES
- --------------------------------------------------------------
<S> <C>
Institutional Money Market Fund 24.62%
</TABLE>

* TIAA, a New York State chartered insurance company, holds these shares in
exchange for providing the initial seed capital to these Funds.
** The Trust Company, a federal savings bank, holds these shares in a fiduciary
capacity for its clients. The Trust Company has sole voting and investment
discretion over these shares.

The current Trustees and Officers of the Fund, as a group, beneficially own less
than 1% of each Fund's shares.

Any person owning more than 25% of each Fund's shares may be considered a
"controlling person" of that Fund. A controlling person's vote could have a more
significant effect on matters presented to shareholders for approval than the
vote of other Fund shareholders.

Investment Advisory and Other Services

As explained in the Prospectus, investment advisory and related services for
each of the Funds are provided by personnel of Teachers Advisors, Inc.
("Advisors"). Advisors manages the investment and reinvestment of the assets of
each Fund, subject to the direction and control of the Finance Committee of the
Board of Trustees. As the prospectus describes, Advisors has agreed to waive a
portion of its fee for managing each Fund.

Employees of Advisors and members of their households are limited in trading for
their own accounts. Certain transactions must be reported and approved, and
duplicates of all confirmation statements and other account reports must be sent
to a special compliance unit.

Advisory fees are payable monthly to Advisors. They are calculated as a
percentage of the average value of the net assets each day for each Fund, and
are accrued daily proportionately at

B-13
<PAGE> 59

1/365th (1/366th in a leap year) of the rates set forth in the Prospectus.

From June 14, 1999 (the date of commencement of operations of the Funds) through
September 30, 1999 (the Funds' fiscal year-end) the total dollar amount of
investment management fees for each Fund, before and after the waiver of the
portion of the investment management fee attributable to each Fund, were as
follows:

<TABLE>
<CAPTION>
GROSS WAIVED NET
- -------------------------------------------------------------
<S> <C> <C> <C>
Institutional International
Equity Fund $21,048 $7,016 $14,032

Institutional Growth Equity Fund $19,527 $5,943 $13,584

Institutional Growth & Income
Fund $17,716 $5,392 $12,324

Institutional Equity Index Fund $13,865 $5,392 $ 8,473

Institutional Social Choice
Equity Fund $14,659 $5,401 $ 9,258

Institutional Bond Fund $14,462 $4,017 $10,445

Institutional Money Market Fund $11,262 $3,754 $ 7,508
</TABLE>

Furthermore, as disclosed in the Prospectus, Advisors has agreed to reimburse
the Funds so that the non-investment management fee expenses of the Funds do not
exceed, on an annual basis, 0.06% of the average daily net assets of each of the
Funds, with the exception of the Institutional International Equity Fund, where
Advisors has agreed to reimburse the Fund so that its non-investment management
fees do not exceed, on an annual basis, 0.11% of the Fund's average daily net
assets. The Gross, Waived and Net Investment Management Fees disclosed above do
not reflect this further expense reimbursement arrangement afforded to each of
the Funds by Advisors.

State Street Bank and Trust Company ("State Street"), 225 Franklin Street,
Boston, MA 02209 acts as custodian for TIAA-CREF Institutional Mutual Funds.
State Street is responsible for the safekeeping of the Funds' portfolio
securities.

In addition to serving as custodian of the Funds' portfolio securities, State
Street provides the Funds with limited administrative services, including
preparation of each Fund's federal, state and local tax returns, preparation of
each Fund's financial information, and certain other administrative services.
Boston Financial Data Services, Inc., an affiliate of State Street, also acts as
the transfer and dividend paying agent for the Funds.

Ernst & Young LLP, 787 Seventh Avenue, New York, NY 10019, serves as independent
auditors of TIAA-CREF Institutional Mutual Funds.

Teachers Insurance and Annuity Association of America ("TIAA") holds all of the
shares of TIAA-CREF Enterprises, Inc., which in turn holds all the shares of
Advisors and of Teachers Personal Investors Services, Inc., the principal
underwriter for TIAA-CREF Institutional Mutual Funds.

About TIAA-CREF Institutional Mutual Funds and the Shares

TIAA-CREF Institutional Mutual Funds, was organized as a Delaware business trust
on April 15, 1999. A copy of TIAA-CREF Institutional Mutual Funds' Certificate
of Trust, dated April 15, 1999, as amended, is on file with the Office of the
Secretary of State of the State of Delaware. As a Delaware business trust,
TIAA-CREF Institutional Mutual Funds' operations are governed by its Declaration
of Trust dated April 15, 1999, as amended (the "Declaration"). Upon the initial
purchase of shares of beneficial interest in TIAA-CREF Institutional Mutual
Funds, each shareholder agrees to be bound by the Declaration, as amended from
time to time.

INDEMNIFICATION OF SHAREHOLDERS
Generally, Delaware business trust shareholders are not personally liable for
obligations of the Delaware business trust under Delaware law. The Delaware
Business Trust Act ("DBTA") provides that a shareholder of a Delaware business
trust shall be entitled to the same limitation of liability extended to
shareholders of private for-profit corporations. TIAA-CREF Institutional Mutual
Funds' Declaration expressly provides that TIAA-CREF Institutional Mutual Funds
has been organized under the DBTA and that the Declaration is to be governed by
and interpreted in accordance with Delaware law. It is nevertheless possible
that a Delaware business trust, such as TIAA-CREF Institutional Mutual Funds,
might become a party to an action in another state whose courts refuse to apply
Delaware law, in which case TIAA-CREF Institutional Mutual Funds' shareholders
could possibly be subject to personal liability.

To guard against this risk, the Declaration (i) contains an express disclaimer
of shareholder liability for acts or obligations of TIAA-CREF Institutional
Mutual Funds and provides that notice of such disclaimer may be given in each
agreement, obligation and instrument entered into or executed by TIAA-CREF
Institutional Mutual Funds or its Trustees, (ii) provides for the
indemnification out of Trust property of any shareholders held personally liable
for any obligations of TIAA-CREF Institutional Mutual Funds or any series of
TIAA-CREF Institutional Mutual Funds, and (iii) provides that TIAA-CREF
Institutional Mutual Funds shall, upon request, assume the defense of any claim
made against any shareholder for any act or obligation of TIAA-CREF
Institutional Mutual Funds and satisfy any judgment thereon. Thus, the risk of a
Trust shareholder incurring financial loss beyond his or her investment because
of shareholder liability is limited to circumstances in which all of the
following factors are present: (1) a court refuses to apply Delaware law; (2)
the liability arose under tort law or, if not, no contractual limitation of
liability was in effect; and (3) TIAA-CREF Institutional Mutual Funds itself
would be unable to meet its obligations. In the light of DBTA, the nature of
TIAA-CREF Institutional Mutual Funds' business, and the nature of its assets,
the risk of personal liability to a TIAA-CREF Institutional Mutual Funds
shareholder is remote.

B-14
<PAGE> 60

INDEMNIFICATION OF TRUSTEES
The Declaration further provides that TIAA-CREF Institutional Mutual Funds shall
indemnify each of its Trustees and officers against liabilities and expenses
reasonably incurred by them, in connection with, or arising out of, any action,
suit or proceeding, threatened against or otherwise involving such Trustee or
officer, directly or indirectly, by reason of being or having been a Trustee or
officer of TIAA-CREF Institutional Mutual Funds. The Declaration does not
authorize TIAA-CREF Institutional Mutual Funds to indemnify any Trustee or
officer against any liability to which he or she would otherwise be subject by
reason of or for willful misfeasance, bad faith, gross negligence or reckless
disregard of such person's duties.

LIMITATION OF FUND LIABILITY
All persons dealing with a Fund must look solely to the property of that
particular Fund for the enforcement of any claims against that Fund, as neither
the Trustees, officers, agents or shareholders assume any personal liability for
obligations entered into on behalf of a Fund or TIAA-CREF Institutional Mutual
Funds. No Fund is liable for the obligations of any other Fund. Since the Funds
use a combined Prospectus, however, it is possible that one Fund might become
liable for a misstatement or omission in the Prospectus regarding another Fund
with which its disclosure is combined. The Trustees have considered this factor
in approving the use of the combined Prospectus.

SHAREHOLDER MEETINGS AND VOTING RIGHTS
Under the Declaration, TIAA-CREF Institutional Mutual Funds is not required to
hold annual meetings to elect Trustees or for other purposes. It is not
anticipated that TIAA-CREF Institutional Mutual Funds will hold shareholders'
meetings unless required by law or the Declaration. TIAA-CREF Institutional
Mutual Funds will be required to hold a meeting to elect Trustees to fill any
existing vacancies on the Board if, at any time, fewer than a majority of the
Trustees holding office were elected by the shareholders of TIAA-CREF
Institutional Mutual Funds.

Shares of TIAA-CREF Institutional Mutual Funds do not entitle their holders to
cumulative voting rights, so that the holders of more than 50 percent of the net
asset value represented by the outstanding shares of TIAA-CREF Institutional
Mutual Funds may elect all of the Trustees, in which case the holders of the
remaining shares would not be able to elect any Trustees. Shareholders are
entitled to one vote for each dollar of net asset value (number of shares held
times the net asset value of the applicable Fund).

ADDITIONAL FUNDS OR CLASSES
Pursuant to the Declaration, the Trustees may establish additional Funds
(technically "series" of shares) or "classes" of shares in TIAA-CREF
Institutional Mutual Funds without shareholder approval. The establishment of
additional Funds or classes would not affect the interests of current
shareholders in the existing eight Funds. As of the date of this SAI, the
Trustees do not have any plan to establish another Fund or class.

DIVIDENDS AND DISTRIBUTIONS
Each share of a Fund is entitled to such dividends and distributions out of the
income earned on the assets belonging to that Fund as are declared in the
discretion of the Trustees. In the event of the liquidation or dissolution of
TIAA-CREF Institutional Mutual Funds as a whole or any individual Fund, shares
of the affected Fund are entitled to receive their proportionate share of the
assets which are attributable to such shares and which are available for
distribution as the Trustees in their sole discretion may determine.
Shareholders are not entitled to any preemptive, conversion, or subscription
rights. All shares, when issued, will be fully paid and non-assessable.

Pricing of Shares

The assets of the Funds are valued as of the close of each valuation day in the
following manner:

INVESTMENTS FOR WHICH MARKET QUOTATIONS
ARE READILY AVAILABLE
Investments for which market quotations are readily available are valued at the
market value of such investments, determined as follows:

Equity securities listed or traded on a national market or exchange are valued
based on their sale price on such market or exchange at the close of business
(usually 4:00 p.m. Eastern Time) on the date of valuation, or at the mean of the
closing bid and asked prices if no sale is reported. Such an equity security may
also be valued at fair value as determined in good faith by the Finance
Committee of the Board of Trustees if events materially affecting its value
occur between the time its price is determined and the time a Fund's net asset
value is calculated.

FOREIGN INVESTMENTS
Investments traded on a foreign exchange or in foreign markets are valued at the
closing values of such securities as of the date of valuation under the
generally accepted valuation method in the country where traded, converted to
U.S. dollars at the prevailing rates of exchange on the date of valuation. Since
the trading of investments on a foreign exchange or in foreign markets is
normally completed before the end of a valuation day, such valuation does not
take place contemporaneously with the determination of the valuation of certain
other investments held by the Fund. If events materially affecting the value of
foreign investments occur between the time their share price is determined and
the time when a Fund's net asset value is calculated, such investments will be
valued at fair value as determined in good faith by the Finance Committee of the
Board and in accordance with the responsibilities of the Board as a whole.

DEBT SECURITIES
Debt securities (excluding money market instruments) for which market quotations
are readily available are valued based on the most recent bid price or the
equivalent quoted yield for such securities (or those of comparable maturity,
quality and type). These values will be derived utilizing an independent pricing

B-15
<PAGE> 61

service, except when we believe the prices don't accurately reflect the
security's fair value.

Values for money market instruments (other than those in the Institutional Money
Market Fund) with maturities of sixty days or less are valued at amortized cost,
which approximates fair value. Values for money market instruments (other than
those in the Institutional Money Market Fund) with maturities of more than sixty
days are valued in the same manner as debt securities stated in the preceding
paragraph, or derived from a pricing matrix that has various types of money
market instruments along one axis and various maturities along the other.

All debt securities may also be valued at fair value as determined in good faith
by the Finance Committee of the Board of Trustees.

SPECIAL VALUATION PROCEDURES FOR THE INSTITUTIONAL MONEY
MARKET FUND
For the Institutional Money Market Fund, all of its assets are valued on the
basis of amortized cost in an effort to maintain a constant net asset value per
share of $1.00. The Board has determined that such valuation is in the best
interests of the Fund and its shareholders. Under the amortized cost method of
valuation, securities are valued at cost on the date of their acquisition, and
thereafter a constant accretion of any discount or amortization of any premium
to maturity is assumed. While this method provides certainty in valuation, it
may result in periods in which value as determined by amortized cost is higher
or lower than the price the Fund would receive if it sold the security. During
such periods, the quoted yield to investors may differ somewhat from that
obtained by a similar fund which uses available market quotations to value all
of its securities.

The Board has established procedures reasonably designed, taking into account
current market conditions and the Institutional Money Market Fund's investment
objective, to stabilize the net asset value per share for purposes of sales and
redemptions at $1.00. These procedures include review by the Board, at such
intervals as it deems appropriate, to determine the extent, if any, to which the
net asset value per share calculated by using available market quotations
deviates by more than 1/2 of one percent from $1.00 per share. In the event such
deviation should exceed 1/2 of one percent, the Board will promptly consider
initiating corrective action. If the Board believes that the extent of any
deviation from a $1.00 amortized cost price per share may result in material
dilution or other unfair results to new or existing shareholders, it will take
such steps as it considers appropriate to eliminate or reduce these consequences
to the extent reasonably practicable. Such steps may include: (1) selling
securities prior to maturity; (2) shortening the average maturity of the Fund;
(3) withholding or reducing dividends; or (4) utilizing a net asset value per
share determined from available market quotations. Even if these steps were
taken, the Institutional Money Market Fund's net asset value might still
decline.

OPTIONS AND FUTURES
Portfolio investments underlying options are valued as described above. Stock
options written by a Fund are valued at the last quoted sale price, or at the
closing bid price if no sale is reported for the day of valuation as determined
on the principal exchange on which the option is traded. The value of a Fund's
net assets will be increased or decreased by the difference between the premiums
received on written options and the costs of liquidating such positions measured
by the closing price of the options on the date of valuation.

For example, when a Fund writes a call option, the amount of the premium is
included in the Fund's assets and an equal amount is included in its
liabilities. The liability thereafter is adjusted to the current market value of
the call. Thus, if the current market value of the call exceeds the premium
received, the excess would be unrealized depreciation; conversely, if the
premium exceeds the current market value, such excess would be unrealized
appreciation. If a call expires or if the Fund enters into a closing purchase
transaction, it realizes a gain (or a loss if the cost of the transaction
exceeds the premium received when the call was written) without regard to any
unrealized appreciation or depreciation in the underlying securities, and the
liability related to such call is extinguished. If a call is exercised, the Fund
realizes a gain or loss from the sale of the underlying securities and the
proceeds of the sale increased by the premium originally received.

A premium paid on the purchase of a put will be deducted from a Fund's assets
and an equal amount will be included as an investment and subsequently adjusted
to the current market value of the put. For example, if the current market value
of the put exceeds the premium paid, the excess would be unrealized
appreciation; conversely, if the premium exceeds the current market value, such
excess would be unrealized depreciation.

Stock and bond index futures, and options thereon, which are traded on
commodities exchanges, are valued at their last sale prices as of the close of
such commodities exchanges.

INVESTMENTS FOR WHICH MARKET QUOTATIONS ARE NOT READILY
AVAILABLE
Portfolio securities or other assets for which market quotations are not readily
available will be valued at fair value, as determined in good faith under the
direction of the Trustees.

Tax Status

Although TIAA-CREF Institutional Mutual Funds is organized as a Delaware
business trust, neither TIAA-CREF Institutional Mutual Funds nor its individual
Funds will be subject to any corporate excise or franchise tax in the State of
Delaware, nor will they be liable for Delaware income taxes provided that each
Fund qualifies as a regulated investment company for federal income tax purposes
and satisfies certain income source requirements of Delaware law. If each Fund
so qualifies and distributes all of its income and capital gains, it will also
be exempt from applicable New York State taxes and the New York City general
corporation tax, except for small minimum taxes.

Each Fund intends to qualify as a "regulated investment company" ("RIC") under
Subchapter M of the Code. In general, to

B-16
<PAGE> 62

qualify as a RIC: (a) at least 90 percent of the gross income of a Fund for the
taxable year must be derived from dividends, interest, payments with respect to
loans of securities, gains from the sale or other disposition of securities or
foreign currency, or other income derived with respect to its business of
investing in securities; (b) a Fund must distribute to its shareholders 90
percent of its ordinary income and net short-term capital gains (undistributed
net income may be subject to tax at the Fund level); and (c) a Fund must
diversify its assets so that, at the close of each quarter of its taxable year,
(i) at least 50 percent of the fair market value of its total (gross) assets is
comprised of cash, cash items, U.S. Government securities, securities of other
regulated investment companies and other securities limited in respect of any
one issuer to no more than 5 percent of the fair market value of the Fund's
total assets and 10 percent of the outstanding voting securities of such issuer
and (ii) no more than 25 percent of the fair market value of its total assets is
invested in the securities of any one issuer (other than U.S. Government
securities and securities of other regulated investment companies) or of two or
more issuers controlled by the Fund and engaged in the same, similar, or related
trades or businesses.

If, in any taxable year, a Fund should not qualify as a RIC under the Code: (1)
that Fund would be taxed at normal corporate rates on the entire amount of its
taxable income without deduction for dividends or other distributions to its
shareholders, and (2) that Fund's distributions to the extent made out of that
Fund's current or accumulated earnings and profits would be taxable to its
shareholders (other than tax-exempt shareholders and shareholders in tax
deferred accounts) as ordinary dividends (regardless of whether they would
otherwise have been considered capital gains dividends), and may qualify for the
deduction for dividends received by corporations.

Each Fund must declare and distribute dividends equal to at least 98 percent of
its ordinary income (as of the twelve months ended December 31) and at least 98
percent of its capital gain net income (as of the twelve months ended October
31), in order to avoid a federal excise tax. Each Fund intends to make the
required distributions, but they cannot guarantee that they will do so.
Dividends attributable to a Fund's ordinary income and capital gains
distributions are taxable as such to shareholders in the year in which they are
received except dividends declared in October, November or December and paid in
January, which dividends are treated as paid on the prior December 31.

A distribution of net capital gains reflects a Fund's excess of net long-term
capital gains over its net short-term capital losses. Each Fund will designate
income dividends and must designate distributions of net capital gains and must
notify shareholders of these designations within sixty days after the close of
the Fund's taxable year.

Foreign currency gains and losses are generally taxable as ordinary income. If
the net effect of these transactions is a gain, the dividend paid by the Fund
will be increased; if the result is a loss, the income dividend paid by the Fund
will be decreased.

At the time of purchase, each Fund's net asset value may reflect undistributed
income or net capital gains. A subsequent distribution to shareholders of such
amounts, although constituting a return of their investment, would be taxable
either as dividends or capital gain distributions. For federal income tax
purposes, each Fund is permitted to carry forward its net realized capital
losses, if any, for eight years, and realize net capital gains up to the amount
of such losses without being required to pay taxes on, or distribute such gains.
At September 30, 1999, the Institutional Growth Equity and the Institutional
Social Choice Equity Funds had net capital loss carry forwards of $375,159 and
$5,328, respectively. These carry forward losses are available to reduce future
net capital gains to the extent provided in the Code, and will expire, if not
used, on September 30, 2007. If a shareholder held shares for six months or less
and during that period received a distribution taxable to such shareholder as a
long term capital gain, any loss realized on the sale of such shares during the
six month period would be a long term loss to the extent of such distribution.

Income received by any Fund from sources within various foreign countries may be
subject to foreign income taxes withheld at the source. Under the Code, if more
than 50 percent of the value of a Fund's total assets at the close of its
taxable year consists of securities issued by foreign corporations, the Fund
(e.g., the Institutional International Equity Fund) may file an election with
the Internal Revenue Service to "pass through" to the Fund's shareholders the
amount of any foreign income taxes paid by the Fund. Pursuant to this election,
shareholders will be required to: (i) include in gross income, even though not
actually received, their respective pro rata share of foreign taxes paid by the
Fund; (ii) treat their pro rata share of foreign taxes as paid by them; and
(iii) either deduct their pro rata share of foreign taxes in computing their
taxable income, or use it as a foreign tax credit against U.S. income taxes (but
not both). No deduction for foreign taxes may be claimed by a shareholder who
does not itemize deductions.

Each shareholder will be notified within 60 days after the close of each taxable
year of a Fund, if that Fund will "pass through" qualifying foreign taxes paid
for that year, and, if so, the amount of each shareholder's pro rata share (by
country) of (i) the foreign taxes paid, and (ii) the Fund's gross income from
foreign sources. Of course, shareholders who are not liable for federal income
taxes, such as retirement plans qualified under Section 401 of the Code, will
not be able to utilize any such "pass through" of foreign tax credits.

Each Fund is required by federal law to withhold 31 percent of reportable
payments (which may include income dividends, capital gains distributions, and
share redemption proceeds) paid to shareholders who have not complied with IRS
regulations. In order to avoid this back-up withholding requirement, a
shareholder must certify to the Fund on the application form or on a separate
Internal Revenue Service W-9 Form, that the shareholder's Social Security Number
or Taxpayer Identification Number is correct and that the shareholder is not
currently subject to back-up withholding or is exempt from back-up withholding.

B-17
<PAGE> 63

The foregoing discussion does not address the special tax rules applicable to
certain classes of investors. For example, each shareholder who is not a U.S.
person should consider the U.S. and foreign tax consequences of ownership of
shares of the Funds, including the possibility that such a shareholder may be
subject to a U.S. withholding tax at a rate of 30 percent (or at a lower rate
under an applicable income tax treaty) on Fund distributions treated as ordinary
dividends.

This discussion of the tax treatment of the Funds and their distributions is
based on the federal, Delaware and New York tax laws in effect as of the date of
this SAI. Shareholders should consult their tax advisors to determine the tax
treatment of an investment by him or her in any Fund, including state and local
taxes.

Brokerage Allocation

Advisors is responsible for decisions to buy and sell securities for the Funds
as well as for selecting brokers and, where applicable negotiating the amount of
the commission rate paid. It is the intention of Advisors to place brokerage
orders with the objective of obtaining the best execution, which includes such
factors as best price, research and available data. When purchasing or selling
securities traded on the over-the-counter market, Advisors generally will
execute the transactions with a broker engaged in making a market for such
securities. When Advisors deems the purchase or sale of a security to be in the
best interests of a Fund, its personnel may, consistent with their fiduciary
obligations, decide either to buy or to sell a particular security for the Fund
at the same time as for other funds it may be managing, or that may be managed
by its affiliate, TIAA-CREF Investment Management, Inc. ("Investment
Management"), another investment adviser subsidiary of TIAA. In that event,
allocation of the securities purchased or sold, as well as the expenses incurred
in the transaction, will be made in an equitable manner.

Domestic brokerage commissions are negotiated, as there are no standard rates.
All brokerage firms provide the service of execution of the order made; some
brokerage firms also provide research and statistical data, and research reports
on particular companies and industries are customarily provided by brokerage
firms to large investors. In negotiating commissions, consideration is given by
Advisors to the quality of execution provided and to the use and value of the
data. The valuation of such data may be judged with reference to a particular
order or, alternatively, may be judged in terms of its value to the overall
management of the portfolio.

Advisors will place orders with brokers providing useful research and
statistical data services if reasonable commissions can be negotiated for the
total services furnished even though lower commissions may be available from
brokers not providing such services. Advisors follows guidelines established by
the Board for the placing of orders with the brokers providing such services.
During the partial fiscal year ending September 30, 1999, no brokerage
commissions were paid by the Funds to such brokers.

Research or service obtained for one Fund may be used by Advisors in managing
the other Funds. In such circumstances, the expenses incurred will be allocated
equitably consistent with Advisors' fiduciary duty to the other Funds. Research
or services obtained for TIAA-CREF Institutional Mutual Funds may be used by
personnel of Advisors in managing other investment company accounts, or by
Investment Management for the CREF accounts. In such circumstances, the expenses
incurred will be allocated in an equitable manner consistent with the fiduciary
obligations of personnel of Advisors to TIAA-CREF Institutional Mutual Funds.

The aggregate amount of brokerage commissions paid by the Funds for the partial
fiscal year-ending September 30, 1999 was as follows:

<TABLE>
<CAPTION>
FUND COMMISSIONS
- ------------------------------------------------------------
<S> <C>
Institutional International Equity Fund $122,043

Institutional Growth Equity Fund $ 21,694

Institutional Growth & Income Fund $ 24,613

Institutional Equity Index Fund $ 6,719

Institutional Social Choice Equity Fund $ 4,829
</TABLE>

During the partial fiscal year ending September 30, 1999, certain of the Funds
acquired securities of certain regular brokers or dealers or their parents.
These entities and the value of a Fund's aggregate holdings in the securities of
those entities are set forth below:

REGULAR BROKER OR DEALER BASED ON BROKERAGE COMMISSIONS PAID

<TABLE>
<CAPTION>
FUND BROKER PARENT HOLDINGS (US$)
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Institutional International Equity Fund ABN-AMRO Holdings NV ABN-AMRO Holdings NV 45,594
Dresdner Bank AG Dresdner Kleinwort
Benson America LLC 37,658
Nomura Securities Co. Ltd. Nomura Securities Co. Ltd. 67,973

Institutional Growth & Income Fund Merrill Lynch & Co., Inc. Merrill Lynch & Co., Inc. 33,593
Morgan Stanley, Morgan Stanley,
Dean Witter & Co. Dean Witter & Co. 149,210
Schwab (Charles) Corp. Schwab (Charles) Corp. 40,425
</TABLE>

B-18
<PAGE> 64

REGULAR BROKER OR DEALER BASED ON ENTITIES ACTING AS PRINCIPAL

<TABLE>
<CAPTION>
FUND BROKER PARENT HOLDINGS (US$)
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Institutional International Equity Fund Credit Suisse Group Credit Suisse First
Boston, Inc. 73,305

Institutional Growth & Income Fund Chase Manhattan Corp. Chase Manhattan Corp. 218,286
Lehman Bros. Holdings, Lehman Bros. Holdings,
Inc. Inc. 5,831

Institutional Equity Index Fund Chase Manhattan Corp. Chase Manhattan Corp. 143,212
The Goldman Sachs Group, Goldman Sachs & Co.
Inc. 6,100

Institutional Social Choice Equity Fund Chase Manhattan Corp. Chase Manhattan Corp. 211,050
</TABLE>

Underwriters

Teachers Personal Investors Services, Inc. ("TPIS") may be considered the
"principal underwriter" for TIAA-CREF Institutional Mutual Funds. Shares of
TIAA-CREF Institutional Mutual Funds are offered on a continuous basis with no
sales load. Pursuant to a Distribution Agreement with TIAA-CREF Institutional
Mutual Funds, TPIS has the right to distribute shares of TIAA-CREF Institutional
Mutual Funds for the two-year period beginning June 1, 1999, and thereafter from
year to year subject to approval by the Funds' Board of Trustees. TPIS may enter
into Selling Agreements with one or more broker-dealers, which may or may not be
affiliated with TPIS, to provide distribution-related services to TIAA-CREF
Institutional Mutual Funds.

Calculation of Performance Data

We may quote a Fund's performance in various ways. All performance information
in advertising is historical and is not intended to indicate future returns. A
Fund's share price, yield, and total return fluctuate in response to market
conditions and other factors, and the value of Fund shares when redeemed may be
more or less than their original cost.

TOTAL RETURN CALCULATIONS
Total returns quoted in advertising reflect all aspects of a Fund's returns,
including the effect of reinvesting dividends and capital gain distributions,
and any change in the Fund's net asset value ("NAV") over a stated period.
Average annual returns are calculated by determining the growth or decline in
value of a hypothetical historical investment in a Fund over a stated period,
and then calculating the annually compounded percentage rate that would have
produced the same result if the rate of growth or decline in value had been
constant over the period according to the following formula:

<TABLE>
<S> <C> <C>
P(1 + T)(n) = ERV
where: P = the hypothetical initial payment
T = average annual total return
n = number of years in the period
ERV = ending redeemable value of the
hypothetical payment made at the
beginning of the one-, five-, or
10-year period at the end of the
one-, five-, or 10-year period
(or fractional portion thereof).
</TABLE>

For example, a cumulative return of 100 percent over ten years would produce an
average annual return of 7.18 percent, which is the steady annual rate that
would equal 100 percent growth on a compounded basis in ten years. While average
annual returns are a convenient means of comparing investment alternatives,
investors should realize that a Fund's performance is not constant over time,
but changes from year to year, and that average annual returns represent
averaged figures as opposed to the actual year-to-year performance of the Fund.

In addition to average annual returns, we may quote a Fund's unaveraged or
cumulative total returns reflecting the actual change in value of an investment
over a stated period. Average annual and cumulative total returns may be quoted
as a percentage or as a dollar amount, and may be calculated for a single
investment, a series of investments, or a series of redemptions, over any time
period. Total returns may be broken down into their components of income and
capital (including capital gains and changes in share price) in order to
illustrate the relationship of these factors and their contributions to total
return. Total returns may be quoted on a before or after tax basis. Total
returns, yields, and other performance information may be quoted numerically or
in a table, graph, or similar illustration.

YIELD CALCULATIONS
All Funds other than the Institutional Money Market Fund. Yields are computed by
dividing the Fund's net investment income for a given 30-day or one-month
period, by the average number of Fund shares, dividing this figure by the Fund's
NAV at the end of the period, and annualizing the result (assuming compounding
of income) in order to arrive at an annual percentage rate. Income is calculated
for purposes of yield quotations in accordance with standardized methods
applicable to all stock and bond funds. In general, interest income is reduced
with respect to bonds trading at a premium over their par value by subtracting a
portion of the premium from income on a daily basis, and is increased with
respect to bonds trading at a discount by adding a portion of the discount to
daily income. For a Fund's investments denominated in foreign currencies, income
and expenses are calculated first in their respective currencies, and are then
converted to U.S. dollars, either when they are actually converted or at the end
of the 30-day or one-month period, whichever is earlier. Income is adjusted to
reflect gains and losses from principal repayments received by the Fund with
respect to mort-

B-19
<PAGE> 65

gage-related securities and other asset-backed securities. Other capital gains
and losses generally are excluded from the calculation as are gains and losses
currently from exchange rate fluctuations.

Income calculated for the purposes of calculating a Fund's yield differs from
income as determined for other accounting purposes. Because of the different
accounting methods used, and because of the compounding of income assumed in
yield calculations, a Fund's yield may not equal its distribution rate, the
income paid to your account, or the income reported in a Fund's financial
statements.

Yield information may be useful in reviewing a Fund's performance and in
providing a basis for comparison with other investment alternatives. However, a
Fund's yield fluctuates, unlike investments that pay a fixed interest rate over
a stated period of time. When comparing investment alternatives, investors
should also note the quality and maturity of the portfolio securities of
respective investment companies they have chosen to consider. Investors should
also recognize that in periods of declining interest rates a Fund's yield will
tend to be somewhat higher than prevailing market rates, and in periods of
rising interest rates a Fund's yield will tend to be somewhat lower. Also, when
interest rates are falling, the inflow of net new money to a Fund from the
continuous sale of its shares will likely be invested in instruments producing
lower yields than the balance of the Fund's holdings, thereby reducing the
Fund's current yield. In periods of rising interest rates, the opposite can be
expected to occur.

The Institutional Money Market Fund. Yield quotations for the Institutional
Money Market Fund, including yield quotations based upon the seven-day period
ended on the date of calculation, may also be made available. These yield
quotations are based on a hypothetical pre-existing account with a balance of
one share. In arriving at any such yield quotations, the net change during the
period in the value of that hypothetical account is first determined. Such net
change includes net investment income attributable to portfolio securities but
excludes realized gains and losses from the sale of securities and unrealized
appreciation and depreciation and income other than investment income (which are
included in the calculation of Net Asset Value). For this purpose, net
investment income includes accrued interest on portfolio securities, plus or
minus amortized premiums or purchase discount (including original issue
discount), less all accrued expenses. Such net change is then divided by the
value of that hypothetical account at the beginning of the period to obtain the
base period return, and then the base period return is multiplied by 365/7 to
annualize the current yield figure which is carried to at least the nearest
hundredth of one percent.

The effective yield of the Institutional Money Market Fund for the same
seven-day period may also be disclosed. The effective yield is obtained by
adjusting the current yield to give effect to the compounding nature of the
Fund's investments, and is calculated by the use of the following formula:

Effective Yield = (Base Period Return + 1)(365/7) 1

The Institutional Money Market Fund's yield fluctuates, unlike many bank
deposits or other investments which pay a fixed yield for a stated period of
time. The annualization of one period's income is not necessarily indicative of
future actual yields. Actual yields will depend on such variables as portfolio
quality, average portfolio maturity, the type of instruments held in the
portfolio, changes in interest rates on money market instruments, portfolio
expenses, and other factors.

PERFORMANCE RETURNS
Set forth below is the calculation of each Fund's performance, which reflects
all expense deductions from Fund assets, applied to a hypothetical investment of
$1,000 in each Fund:

INSTITUTIONAL INTERNATIONAL EQUITY FUND

<TABLE>
<CAPTION>
PERIOD CUMULATIVE TOTAL RETURN
- --------------------------------------------------------------
<S> <C>
Since Inception 7.68%
(July 1, 1999 to September 30, 1999)
</TABLE>

INSTITUTIONAL GROWTH EQUITY FUND

<TABLE>
<CAPTION>
PERIOD CUMULATIVE TOTAL RETURN
- --------------------------------------------------------------
<S> <C>
Since Inception (2.97)%
(July 1, 1999 to September 30, 1999)
</TABLE>

INSTITUTIONAL GROWTH & INCOME FUND

<TABLE>
<CAPTION>
PERIOD CUMULATIVE TOTAL RETURN
- --------------------------------------------------------------
<S> <C>
Since Inception (6.69)%
(July 1, 1999 to September 30, 1999)
</TABLE>

INSTITUTIONAL EQUITY INDEX FUND

<TABLE>
<CAPTION>
PERIOD CUMULATIVE TOTAL RETURN
- --------------------------------------------------------------
<S> <C>
Since Inception (6.60)%
(July 1, 1999 to September 30, 1999)
</TABLE>

INSTITUTIONAL SOCIAL CHOICE EQUITY FUND

<TABLE>
<CAPTION>
PERIOD CUMULATIVE TOTAL RETURN
- --------------------------------------------------------------
<S> <C>
Since Inception (6.36)%
(July 1, 1999 to September 30, 1999)
</TABLE>

INSTITUTIONAL BOND FUND

<TABLE>
<CAPTION>
PERIOD CUMULATIVE TOTAL RETURN
- --------------------------------------------------------------
<S> <C>
Since Inception 0.67%
(July 1, 1999 to September 30, 1999)
</TABLE>

INSTITUTIONAL BOND FUND

<TABLE>
<CAPTION>
PERIOD YIELD
- --------------------------------------------------------------
<S> <C>
30 day period ending 6.30%
September 30, 1999
</TABLE>

INSTITUTIONAL MONEY MARKET FUND

<TABLE>
<CAPTION>
PERIOD CUMULATIVE TOTAL RETURN
- --------------------------------------------------------------
<S> <C>
Since Inception 1.28%
(July 1, 1999 to September 30, 1999)
</TABLE>

<TABLE>
<CAPTION>
CURRENT EFFECTIVE
PERIOD YIELD YIELD
- --------------------------------------------------------------
<S> <C> <C>
7 day period ending September 30, 1999 5.21% 5.34%
</TABLE>

B-20
<PAGE> 66

PERFORMANCE COMPARISONS
Performance information for the Funds, may be compared in advertisements, sales
literature, and reports to shareholders, to the performance information reported
by other investments and to various indices and averages. Such comparisons may
be made with, but are not limited to (1) the S&P 500, (2) the Dow Jones
Industrial Average ("DJIA"), (3) Lipper Analytical Services, Inc. Mutual Fund
Performance Analysis Reports and the Lipper General Equity Funds Average, (4)
Money Magazine Fund Watch, (5) Business Week's Mutual Fund Scoreboard, (6) SEI
Funds Evaluation Services Equity Fund Report, (7) CDA Mutual Funds Performance
Review and CDA Growth Mutual Fund Performance Index, (8) Value Line Composite
Average (geometric), (9) Wilshire Associates indices, (10) Frank Russell Co.
Inc. indices, (11) the Consumer Price Index, published by the U.S. Bureau of
Labor Statistics (measurement of inflation), (12) Morningstar, Inc., (13) the
Morgan Stanley Capital International ("MSCI") global market indices, including
the EAFE(R) (Europe, Australasia, Far East) Index, the EAFE+Canada Index and the
International Perspective Index, (14) Lehman Brothers Aggregate Bond Index, and
(15) IBC Money Fund Report Average. We may also discuss ratings or rankings
received from these entities, accompanied in some cases by an explanation of
those ratings or rankings, when applicable. In addition, advertisements may
discuss the performance of the indices listed above.

The performance of each of the Funds also may be compared to other indices or
averages that measure performance of a pertinent group of securities.
Shareholders should keep in mind that the composition of the investments in the
reported averages will not be identical to that of the Fund and that certain
formula calculations (e.g., yield) may differ from index to index. In addition,
there can be no assurance that any of the Funds will continue its performance as
compared to such indices.

We may also advertise ratings or rankings the Funds receive from various rating
services and organizations, including but not limited to any organization listed
above.

ILLUSTRATING COMPOUNDING
We may illustrate in advertisements, sales literature and reports to
shareholders the effects of compounding of earnings on an investment in a Fund.
We may do this using a hypothetical investment earning a specified rate of
return. To illustrate the effects of compounding, we would show how the total
return from an investment of the same dollar amount, earning the same or a
different rate of return, varies depending on when the investment was made.

NET ASSET VALUE
Charts and graphs using a Fund's NAVs, adjusted NAVs, and benchmark indices may
be used to exhibit performance. An adjusted NAV includes any distributions paid
by the Fund (i.e., assuming reinvestment) and reflects all elements of its
return. Unless otherwise indicated, a Fund's adjusted NAVs are not adjusted for
sales charges, if any. Currently there are no sales charges.

MOVING AVERAGES
We may illustrate a Fund's performance using moving averages. A long-term moving
average is the average of each week's adjusted closing NAV for a specified
period. A short-term moving average is the average of each day's adjusted
closing NAV for a specified period. "Moving Average Activity Indicators" combine
adjusted closing NAVs from the last business day of each week with moving
averages for a specified period to produce indicators showing when an NAV has
crossed, stayed above, or stayed below its moving average.

FUND STATISTICS
Investors may be provided with a sampling of a Fund's statistics, representing
aspects of such Fund's performance and portfolio composition.

Voting Rights

We don't plan to hold annual shareholder meetings. However, we may hold special
meetings to elect trustees, change fundamental policies, approve a management
agreement, or for other purposes. We will mail proxy materials to shareholders
for these meetings, and we encourage shareholders who can't attend to vote by
proxy. The number of votes you have on any matter submitted to shareholders
depends on the dollar value of your investment in the Funds.

Legal Matters

All matters of applicable state law pertaining to the Funds have been passed
upon by Charles H. Stamm, Executive Vice President and General Counsel of
TIAA-CREF Institutional Mutual Funds (and TIAA and CREF). Legal matters relating
to the federal securities laws have been passed upon by Sutherland Asbill &
Brennan LLP of Washington, D.C.

Experts

The financial statements incorporated by reference in this Statement of
Additional Information have been audited by Ernst & Young LLP, independent
auditors, as stated in their report appearing therein and have been so included
in reliance upon the report of such firm given upon its authority as experts in
accounting and auditing.

Additional Considerations

TIAA-CREF Institutional Mutual Funds is part of the TIAA-CREF family of
companies. TIAA, founded in 1918, is a stock life insurance company. Its
companion organization, CREF, founded in 1952, is a non-profit corporation
registered with the Securities and Exchange Commission as an investment company.
Together, through the issuance of fixed and variable annuity contracts, TIAA and
CREF form the principal retirement system for the nation's education and
research communities and the largest retirement system in the United States
based on assets under management.

B-21
<PAGE> 67

Investors should also consider TIAA-CREF Institutional Mutual Funds' expense
charges as compared to the expenses of other mutual funds. TIAA-CREF
Institutional Mutual Funds' expense charges are currently among the lowest in
the industry.

When deciding how to invest in mutual funds, it's important for investors to
determine their investment goals so they can choose the mutual fund(s) whose
objective closely matches it. They should also determine their time horizon
(i.e., the period of time they plan to keep money invested in the fund). Time
horizon affects how much risk an investor may be willing to take. Risk tolerance
in turn affects asset allocation decisions. For example, an aggressive investor
who is willing to accept a high level of risk in return for potentially greater
returns over the long term, probably would invest more heavily in equity funds.
To preserve the current value of an investment and avoid losses of principal, an
investor might invest more heavily in non-equity funds.

Financial Statements

The audited financial statements of the TIAA-CREF Institutional Mutual Funds are
incorporated herein by reference to the Funds' Annual Report for the year ended
September 30, 1999, which has been filed with the Securities and Exchange
Commission and provided to all shareholders. We will furnish you, without
charge, another copy of the Annual Report on request.

B-22
<PAGE> 68

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