ELFUN TRUSTS, 485APOS, 1999-02-25

ELFUN TRUSTS
485APOS, 1999-02-25

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As filed with the Securities and Exchange Commission
on February 25, 1999

Securities Act File No. 2-21301
Investment Company Act File No. 811-483

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 /X/

Pre-Effective Amendment No. / /

Post-Effective Amendment No. 54 /X/

and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 /X /

Amendment No. 54 /X/

(Check appropriate box or boxes)

ELFUN TRUSTS
(Exact Name of Registrant as Specified in Charter)

3003 Summer Street
Stamford, Connecticut 06905

(Address of Principal Executive Office) (Zip Code)

Registrant's Telephone Number, including Area Code:
(203) 326-4040

Alan M. Lewis, Esq.
Executive Vice President, General Counsel & Secretary
c/o General Electric Investment Corporation
3003 Summer Street
Stamford, Connecticut 06905
(Name and Address of Agent for Service)

Copies to:

Burton M. Leibert, Esq.
Willkie Farr & Gallagher
787 Seventh Avenue
New York, New York 10019 - 6099

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

It is proposed that this filing will become effective (check appropriate box):

immediately upon filing pursuant to paragraph (b) ___
on (date) pursuant to paragraph (b) ___
60 days after filing pursuant to paragraph (a)(1) _X_
on (date) pursuant to paragraph (a)(1) of Rule 485 ___
75 days after filing pursuant to paragraph (a)(2) ___
on (date) pursuant to paragraph (a)(2) of Rule 485 ___

If appropriate, check the following box:

This post-effective amendment designates a new
effective date for a previously filed post-effective
amendment. ___

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PROSPECTUS

April __, 1999

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Elfun Funds
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EQUITY FUNDS
Elfun Trusts
Elfun Global Fund

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INCOME FUNDS
Elfun Income Fund
Elfun Tax-Exempt Income Fund

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ASSET ALLOCATION FUND
Elfun Diversified Fund

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MONEY MARKET FUND
Elfun Money Market Fund

[Elm Tree Logo]

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Like all mutual funds, these securities have not been approved or disapproved by
the Securities and Exchange Commission, nor has the Securities and Exchange
Commission passed upon the accuracy or adequacy of this prospectus. Any
representation to the contrary is a criminal offense.

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Contents
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Elfun Funds
Prospectus

Equity Funds
Elfun Trusts
Elfun Global Fund

Income Funds
Elfun Income Fund
Elfun Tax-Exempt Income Fund

Asset Allocation Fund
Elfun Diversified Fund

Money Market Fund
Elfun Money Market Fund

Fund Expenses

More on Strategies and Risks
More on Risks
Other Risk Considerations
More on Investment Strategies

About the Investment Adviser
Investment Adviser and Servicing Agent
About the Funds' Portfolio Managers

How to Invest
How to Purchase Shares
How to Redeem Shares
How to Exchange Shares

Dividends, Capital Gains and Other Tax Information

Calculating Share Value

Appendix: Financial Highlights

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

General Electric Company is not a party to the trust agreements which created
each Fund and does not sponsor the Funds.

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2 Elfun Funds Equity Funds
Prospectus

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Who may want to invest in an Equity Fund?

The Elfun Equity Funds may be appropriate for your investment portfolio if you:

o have a long-term investment goal
o are willing to accept higher short-term risk for potential long-term
returns
o want to diversify a portfolio composed mostly of fixed income investments

The Elfun Equity Funds may not be appropriate if you want:

o to avoid potentially significant changes in share price
o a short-term investment
o regular income

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

[Sidebar: An investment in an Elfun Equity Fund is not a deposit of any bank and
is not insured by the Federal Deposit Insurance Corporation or any other
government agency. An investment in an Elfun Equity Fund is subject to
investment risks, including possible loss of principle invested.]

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3

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The following are important definitions that may be unfamiliar to an investor
reading about the Elfun Equity Funds:

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

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

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

Foreign securities include interests in or obligations of entities located
outside of the United States. The determination of where an issuer of a security
is located will be made by reference to the country in which the issuer (a) is
organized, (b) derives at least 50% of its revenues or profits from goods
produced or sold, investments made or services performed, (c) has at least 50%
of its assets situated, or (d) has the principal trading market for its
securities. Foreign securities may be denominated in non-U.S. currencies and
traded outside the United States or may be in the form of depositary receipts.

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

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

Illiquid Securities are securities that cannot be disposed of by a Fund within
seven days in the ordinary course of business at approximately the amount at
which the Fund has valued the securities.

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

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

[Non-publicly Traded Securities are securities that are subject to contractual
or legal restrictions on transfer, excluding, for purposes of this restriction,
Rule 144A Securities that have been determined to be liquid by a Fund's Board of
Trustees.]

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

The above definitions should be read together with the fund summaries on the
following pages to the extent applicable.

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4 Elfun Funds
Prospectus
Equity Funds

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Elfun Trusts

Investment Objective:

Seeks long-term growth of capital and future income rather than current income.

The Strategy

Elfun Trusts invests primarily in equity securities. The portfolio manager seeks
to identify securities of issuers with characteristics such as:

o financial strength
o leadership in their respective industries
o high quality management focuses on generating shareholder value

The Fund also may invest to a lesser extent in foreign securities and debt
securities. Under normal market conditions, a portion of the Fund's total assets
may be held in cash and cash equivalents and/or invested in money market
instruments, including repurchase agreements.

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

The Risks

The principal risk of investing in this Fund is stock market risk. To the extent
that the portfolio manager invests in foreign securities and debt securities,
the Fund would be subject to foreign exposure risk, interest rate risk and
credit risk. To the extent that the Fund invests in money market instruments,
including repurchase agreements, it may not achieve its investment objective of
long-term growth of capital and may be subject to repurchase agreement risk.

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

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5

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Fund Performance

The bar chart and table below illustrate the short-term variability in the
Fund's performance and the Fund's returns relative to a common measure of
performance. The bar chart illustrates how the Fund's performance varies from
year to year over the periods shown.

Calendar Year Total Returns Chart
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Elfun Trusts
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During the periods presented in the bar chart, the Fund's highest return for a
quarter was ___% for the quarter ended (date). The Fund's lowest return for a
quarter was ____% for the quarter ended (date).

The table opposite illustrates how the Fund's average annual returns for
different calendar periods compare to the returns of the Standard & Poor's 500
Composite Stock Index ("S&P 500 Index"). The table reflects the impact of the
Fund's expenses. It assumes you sold your shares at the end of each period.

Average Annual Total Return Table
Average Annual Total Return As of December 31, 1998
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1 Year 5 Years 10 Years
Elfun Trusts
S&P 500 Index

Both the bar chart and table assume reinvestment of dividends and distributions.
As with all mutual funds, past performance is not an indication of future
performance.

[Sidebar]
All mutual funds use a standard formula to calculate total return. Total return
measures the price change in a share assuming the reinvestment of all dividend
income and capital gain distributions.

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6 Elfun Funds
Prospectus
Equity Funds

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Elfun Global
Fund

Investment Objective:

Seeks long-term growth of capital and future income.

The Strategy

The Elfun Global Fund invests primarily in equity securities companies located
in developed and developing countries, including the United States. The
portfolio manager focuses on companies that are expected to grow faster than
relevant markets and whose security price does not fully reflect its potential
growth. Under normal circumstances, the Fund's assets are invested primarily in
countries included in the Morgan Stanley Capital International World Index and
in no fewer than three different countries. Stock selection is key to the
performance of the Fund.

The portfolio managers seek to identify securities of companies with
characteristics such as:
o low prices relative to their long-term cash earnings potential
o potential for significant improvement in the company's business
o financial strength
o sufficient liquidity

The Fund also may invest to a lesser extent in [investment grade] debt
securities and under normal circumstances, a portion of the Fund's total assets
may be held in cash and cash equivalents, and money market instruments. The
portfolio managers may use various investment techniques to adjust the Fund's
investment exposure, but there is no guarantee that these techniques will work.

The Risks

The principal risks of investing in this Fund are stock market risk, foreign
exposure risk[, style risk] and emerging markets risk. To the extent that the
portfolio managers invest in debt securities, the Fund would be subject to
interest rate risk and credit risk. [To the extent that the Fund invests in cash
and cash equivalents and money market instruments, the Fund may not achieve its
investment objective of long-term growth of capital.]

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

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7

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Fund Performance

Calendar Year Total Returns Chart
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Elfun Global Fund
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The table opposite illustrates how the Fund's average annual returns for
different calendar periods compare to the returns of the Morgan Stanley Capital
International World Index ("MSCIW Index"). The table reflects the impact of the
Fund's expenses. It assumes that you sold your shares at the end of each period.

Both the bar chart and table assume reinvestment of dividends and distributions.
As with all mutual funds, past performance is not an indication of future
performance.

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8 Elfun Funds Income
Prospectus Funds

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Who may want to invest in an Income Fund?

Elfun Income Funds may be appropriate for your investment portfolio if you:

o seek regular income
o seek lower volatility than equity funds over the long term
o want to diversify a portfolio composed mostly of equity investments

The Elfun Tax-Exempt Income Fund may be appropriate for your investment
portfolio if you :

o are in a high tax bracket
o want income that is exempt from federal income tax

Elfun Income Funds may not be appropriate if you want:

o high potential capital appreciation

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

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

The following are important definitions unfamiliar to an investor reading about
the Elfun Income Funds:

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

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

Corporate bonds are debt securities issued by companies.

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

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9

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or services performed, (c) has at least 50% of its assets situated, or (d) has
the principal trading market for its securities. Foreign securities may be
denominated in non-U.S. currencies and traded outside the United States or may
be in the form of depositary receipts.

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

Mortgage-backed securities include securities issued by the Government National
Mortgage Association (Ginnie Mae), the Federal National Mortgage Association
(Fannie Mae), the Federal Home Loan Mortgage Corporation (Freddie Mac) and other
government agencies and private issuers. They may also include collateralized
mortgage obligations ("CMOs") which are derivative securities that are fully
collateralized by a portfolio of mortgages.

Municipal securities are debt obligations of local, state or regional
governments. Municipal securities include both municipal bonds (securities with
maturities of more than one year) and municipal notes (securities with
maturities of less than one year). They may be a general obligation of the
municipality that issued them or they may be secured by the revenues of a
special project or facility. Income derived from investments in municipal
securities is typically exempt from Federal income tax, however, capital gains
are subject to Federal tax.

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

U.S. Government Securities are issued or guaranteed by the U.S. Government or
one of its agencies or instrumentalities. Some U.S. Government Securities are
backed by the full faith and credit of the federal government. Other U.S
Government Securities are backed by the issuer's right to borrow from the U.S.
Treasury and some are backed only by the credit of the issuing organization. All
U.S. Government Securities are considered highly creditworthy.

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

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

Duration - a mathematical calculation of the average life of a bond [or
portfolio of bonds] that serves as a useful measure of its price risk. Each year
of duration approximates an expected one percent change in the bond's price for
every one percent change in the interest rate.

The above definitions should be read together with the fund summaries on the
following pages to the extent applicable.

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10 Elfun Funds
Prospectus
Income Funds

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Elfun Income
Fund

Investment Objective: Seeks a high level of income consistent with prudent
investment management and the preservation of capital.

The Strategy

The Elfun Income Fund invests primarily in investment grade securities,
including mortgage-backed securities, corporate bonds, U.S. Government
Securities and money market instruments. The Fund is subject to no limitation
with respect to the maturities of the instruments in which it may invest.

The portfolio managers seek to identify debt securities with characteristics
such as:
o attractive yields and prices
o the potential for capital appreciation
o reasonable credit quality

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

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

The Risks

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

If you would like additional information regarding the risks associated with
this Fund, please refer to "More on Strategies and Risks" later in this
Prospectus.

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11

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Fund Performance

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

Both the bar chart and table assume reinvestment of dividends and distributions.
As with all mutual funds, past performance is not an indication of future
performance.

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12 Elfun Funds
Prospectus
Income Funds

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Elfun Tax-exempt
Income Fund

Investment Objective:

Seeks as high a level of current interest income exempt from Federal income
taxation as is available from concentration of investment in municipal bonds
consistent with prudent investment management and the preservation of capital.

The Strategy

The Elfun Tax-Exempt Income Fund invests primarily in municipal securities. The
portfolio manager manages the Fund so that at least 80% of the Fund's net assets
is invested in municipal securities, the income from which is typically exempt
from federal personal income tax and the federal alternative minimum tax. A
majority of the Fund's total assets will be invested in investment-grade
securities.

The portfolio manager seeks to identify debt securities with characteristics
such as:
o attractive yields and prices
o the potential for income generation
o the potential for capital appreciation
o reasonable credit quality

The Fund also may invest to a lesser extent in non-publicly traded securities,
high yield securities, tax-free or taxable money market instruments and may hold
cash. The portfolio manager may use various investment techniques to adjust the
Fund's investment exposure, but there is no guarantee that these techniques will
work.

The Risks

The principal risks of investing in this Fund are municipal securities risk,
interest rate risk and credit risk. To the extent that the Fund invests in
non-publicly traded securities and high yield securities, it also faces
restricted securities risk and below investment-grade debt securities risk.
Certain portfolio securities are derivative securities that carry derivative
securities risk.

If you would like additional information regarding the investment strategies and
risks associated with this Fund, please refer to "More on Strategies and Risks"
later in this Prospectus.

[Sidebar]
Tax-Exempt Investing

Tax-exempt investing usually benefits investors in higher tax bracket. The Elfun
Tax-Exempt Income Fund's income may be subject to state and local taxes.

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13

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Fund Performance

Calendar Year Total Returns Chart
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Elfun Tax-Exempt Income Fund
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The table opposite illustrates how the Fund's average annual returns for
different calendar periods compare to the returns of the Lehman Brothers
Municipal Bond Index ("LB Muni Bond Index"). The table reflects the impact of
the Fund's expenses. It assumes that you sold your shares at the end of each
period.

Both the bar chart and table assume reinvestment of dividends and distributions.
As with all mutual funds, past performance is not an indication of future
performance.

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14 Elfun Funds Asset Allocation
Prospectus Funds

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WHO MAY WANT TO INVEST IN AN ASSET ALLOCATION FUND?

An Asset Allocation Fund may be appropriate for your investment portfolio if
you:

o seek both capital appreciation and current income
o want a single diversified investment

Asset allocation funds are designed to meet the needs of investors who prefer to
have their asset allocation decisions made by professional money managers. They
provide an investor with a means to diversify by investing in a core portfolio
that typically holds both equity securities and debt securities. Although an
investor may achieve the same level of diversification by buying individual
Elfun Equity or Income Funds, the Elfun Diversified Fund presents a
diversification alternative within one fund.

[Sidebar: An investment in the Elfun Diversified Fund is not a deposit of any
bank and is not insured by the Federal Deposit Insurance Corporation or any
other government agency. An investment in the Elfun Diversified Fund is subject
to investment risks, including possible loss of principle invested.]

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15

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The following are important definitions that may be unfamiliar to an investor
reading about the Elfun Diversified Fund:

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

Equity securities may include common stocks, preferred stocks, Depositary
Receipts, convertible preferred stocks, convertible bonds, convertible
debentures, convertible notes, rights and warrants of U.S. and foreign
companies. Stocks represent an ownership interest in a corporation.

Foreign securities include interests in or obligations of entities located
outside of the United States. The determination of where an issuer of a security
is located will be made by reference to the country in which the issuer (a) is
organized, (b) derives at least 50% of its revenues or profits from goods
produced or sold, investments made or services performed, (c) has at least 50%
of its assets situated or (d) has the principal trading market for its
securities. Foreign securities may be denominated in non-U.S. currencies and
traded outside the United States or may be in the form of depositary receipts.

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

Money market instruments are short-term debt securities of the U.S. government,
banks and corporations.

Illiquid Securities are securities that cannot be disposed of by a Fund within
seven days in the ordinary course of business at approximately the amount at
which the Fund has valued the securities.

The above definitions should be read together with fund summary on the following
page.

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16 Elfun Funds
Prospectus
Asset Allocation
Funds

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Elfun Diversified
Fund

Investment Objective:

Seeks the highest total return consistent with prudent investment management and
the preservation of capital.

The Strategy

The Elfun Diversified Fund invests primarily in equity securities and debt
securities. The portfolio managers follow an asset allocation process
established by GE Investment Corporation's Asset Allocation Committee to
diversify holdings across asset classes. It is likely that the Fund will
maintain a weighting in U.S. equity securities, debt securities and foreign
securities based on the relative attractiveness of the asset classes. The Fund
invests in equity securities principally for their capital appreciation
potential and debt securities principally for their income potential. Within
each asset class, the portfolio managers use active security selection to choose
securities based on the merits of individual issuers.

The portfolio managers seek to identify equity securities of companies with
characteristics such as:
o strong earnings growth
o attractive prices
o a presence in successful industries
o high quality management

In determining whether to invest in a particular debt security, the portfolio
managers consider such factors as:
o attractive yields, coupons and prices
o favorable cash flow
o reasonable credit quality

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

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

The Risks

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

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

<PAGE>

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17

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Fund Performance

The bar chart and table below illustrate the short-term variability in the
Fund's performance. The bar chart illustrates how the Fund's performance varies
from year to year over the periods shown.

Calendar Year Total Returns Chart
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Elfun Diversified Fund
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The table opposite illustrates how the Fund's average annual returns for
different calendar periods compare to the return of the S&P 500 Index and the
return of the LB Aggregate Bond Index. The table reflects the impact of the
Fund's expenses. It assumes that you sold your shares at the end of each period.

Average Annual Total Return Chart

Average Annual Return As of December 31, 1998
- --------------------------------------------------------------------------------
1 Year 5 Years 10 Years
Elfun Diversified Fund
S&P 500 Index
LB Aggregate Bond Index

Both the bar chart and table assume reinvestment of dividends and distributions.
As with all mutual funds, past performance is not an indication of future
performance.

[Sidebar]
All mutual Funds must use the same formula to calculate total return. Total
return measures the price change in a share assuming the reinvestment of all
dividend income and capital gain distributions.

<PAGE>

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18 Elfun Funds Money Market
Prospectus Funds

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Who may want to invest in a Money Market Fund?

The Elfun Money Market Fund may be appropriate for your portfolio if you: o want
regular income
o are investing for a short-term goal
o want an investment that seeks to maintain a stable share price

The Elfun Money Market Fund may not be appropriate if you:
o want a long-term investment
o seek capital appreciation

Money Market Funds invest in short-term, high quality debt securities. They seek
to provide stability of principal and regular income. The income provided by a
money market Fund varies with interest rate movements.

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19

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The following are important definitions that may be unfamiliar to an investor
reading about the Elfun Money Market Fund:

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

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

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

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

Foreign debt securities are issued by foreign corporations and governments. They
may include the following:
o Eurodollar Bonds, which are dollar-denominated securities issued outside
the U.S. by foreign corporations and financial institutions and by foreign
branches of U.S. corporations and financial institutions
o Yankee Bonds, which are dollar-denominated securities issued by foreign
issuers in the U.S.
o Securities denominated in currencies other than U.S. dollars

Repurchase Agreements (repos) are transactions in which a security (usually a
government security) is purchased with a simultaneous commitment to sell it back
to the seller (a commercial bank or recognized securities dealer) at an agreed
upon price on an agreed upon date - usually the next day.

U.S. Government Securities are issued or guaranteed by the U.S. Government or
one of its agencies or instrumentalities. Some U.S. Government Securities are
backed by the full faith and credit of the federal government. Other U.S.
Government Securities are backed by the issuer's right to borrow from the U.S.
Treasury and some are backed only by the credit of the issuing organization. All
U.S. Government Securities are considered highly creditworthy.

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

The above definitions should be read together with the fund summary on the
following pages.

<PAGE>

- ----------------------
20 Elfun Funds
Prospectus
Money Market
Funds

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

Elfun Money
Market Fund

Investment Objective:

Seeks a high level of current income consistent with prudent investment
management and the preservation of capital.

The Strategy

The Elfun Money Market Fund invests primarily in short-term, U.S.
dollar-denominated money market instruments. The Fund's investments may include
U.S. government securities, repurchase agreements, commercial paper, variable
rate securities, foreign debt securities and bank deposits of domestic and
foreign banks. The portfolio manager limits investments to high quality
securities with maturities of up to 13 months and limits the average maturity to
90 days.

The Fund invests consistent with regulatory standards governing security
quality, maturity and portfolio diversification. The Fund may invest more than
25% of its total assets in the banking industry. Changes in banking regulations
or the economy can have a significant negative impact on the banking industry.

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

The Risks

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

An investment in the Fund is not insured or guaranteed by the Federal Deposit
Insurance Corporation (FDIC) or any other government agency. Although the Fund
seeks to preserve the value of your investment at $1.00 per share, it is
possible to lose money by investing in the Fund. The Fund's yield will change
due to movements in current short-term interest rates and market conditions. A
change in interest rates or default on the Fund's investments could cause the
Fund's share price to decline below $1.00.

If you would like additional information regarding the investment strategies and
risks associated with this Fund, please refer to "More on Strategies and Risks"
later in this Prospectus.

<PAGE>

----------
21

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

Calendar Year Total Returns Chart
- --------------------------------------------------------------------------------

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

The table opposite illustrates how the Fund's average annual returns for
different calendar periods compare to the returns of the90 Day Treasury Bill
Rate ("90 Day T-Bill"). The table reflects the impact of the Fund's expenses. It
assumes that you sold your shares at the end of each period. The Fund's seven
day yield was __% and the seven day effective yield was __% as of _______.

Both the bar chart and table assume reinvestment of dividends and distributions.
As with all mutual funds, past performance is not an indication of future
performance.

*Inception date (commencement of investment operations): June 14, 1990

<PAGE>

- -----------------------------------------------
22 Elfun Funds Fund Expenses
Prospectus

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

This summary shows what it will cost you directly or indirectly to invest in a
Fund. Fund expenses come out of the Fund's assets and are reflected in the
Fund's share price and dividends. Shareholder fees, if any, are paid directly
from your account and are not reflected in the share price. The figures below
show actual expenses during the fiscal year ended December 31, 1998 and are
calculated as a percentage of average net assets.

Annual Fund Operating Expenses
(as a percentage of average net assets)

<TABLE>
<CAPTION>
Elfun Elfun
Elfun Income Tax-Exempt Elfun Elfun
Elfun Global Fund Income Diversified Money
Trusts Fund Fund Fund Fund Market
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Management fees:*
Other expenses:**
Total Operating Expenses:
</TABLE>

* The nature of the services provided to, and the management fees paid by, each
Fund are described under "About the Investment Adviser."

**"Other expenses" includes fees for unitholder services, custodial fees, legal
and accounting fees, printing costs and registration fees, the costs of
regulatory compliance, the costs associated with maintaining a Fund's legal
existence and the costs involved in communicating with unitholders of the Funds.

<PAGE>

----------
23

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

Examples +
These examples are intended to help you compare the cost of investing in a Fund
with the cost of investing in other mutual funds. Although actual costs may be
higher or lower, you would pay the following expenses on a $10,000 investment,
assuming a 5% annual return and that the Fund's operating expenses remain the
same. The examples also assume that you either redeemed all of your shares at
the end of each period shown or you did not redeem your shares. The examples
should not be considered to be a representation of past or future expenses of a
Fund. Actual expenses may be greater or less than those shown.

<TABLE>
<CAPTION>
You would pay the following You would pay the following
expenses on a $10,000 investment, expenses on a $10,000
assuming redemption: investment assuming no redemption:
1 Year 3 Years 5 Years 10 Years** 1 Year 3 Years 5 Years 10 Years**
------------------------------------ ------------------------------------
<S> <C> <C>
Elfun Trusts:

Elfun Global Fund:

Elfun Income Fund:

Elfun Tax-Exempt Income Fund:

Elfun Diversified Fund:

Elfun Money Market Fund:
</TABLE>

<PAGE>

- ---------------------------------------
24 Elfun Funds More on
Propectus Strategies
and Risks
- --------------------------------------------------------------------------------
More On Risks

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

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

For more information about the risks associated with the Funds, please see the
Statement of Additional Information (SAI), which is incorporated by reference
into this Prospectus.

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

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

<PAGE>

----------
25

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

Derivative Securities Risk: Derivative securities (securities whose values are
based on other securities, currencies or indices) include options (on stocks,
indices, currencies, futures contracts or bonds), forward currency exchange
contracts, futures contracts, swaps and structured securities. Derivative
securities may be used as a direct investment or as a hedge for a Fund's
portfolio or a portion of a portfolio. Hedging involves using a security to
offset investment risk. Hedging may include reducing the risk of a position held
in a portfolio. Hedging and other investment techniques also may be used to
increase a Fund's exposure to a particular investment strategy. If the portfolio
manager's judgment of market conditions proves incorrect or the strategy does
not correlate well with a Fund's investments, the use of derivatives could
result in a loss regardless of whether the intent was to reduce risk or increase
return and may increase a Fund's volatility. In addition, in the event that
non-exchange traded derivatives are used, these derivatives could result in a
loss if the counterparty to the transaction does not perform as promised.

Emerging Markets Risk: Emerging markets securities bear all foreign exposure
risks discussed below. In addition, there are greater risks involved in
investing in emerging markets than in developed foreign markets. Specifically,
the economic structures in emerging markets countries are less diverse and
mature than those in developed countries, and their political systems are less
stable. Investments in emerging markets countries may be affected by national
policies that restrict foreign investment. Emerging markets countries may have
less developed legal structures, and the small size of their securities markets
and low trading volumes can make investments illiquid and more volatile than
investments in developed countries. As a result, a Fund investing in emerging
markets countries may be required to establish special custody or other
arrangements before investing.

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

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

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

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

<PAGE>

- ---------------------------------------
26 Elfun Funds More on
Propectus Strategies
and Risks
- --------------------------------------------------------------------------------

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

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

Municipal Securities Risk: Municipal securities are backed by the entities that
issue them and/or other revenue streams. Like other debt securities, prices of
municipal debt securities are affected inversely by changes in interest rates
and by changes in the credit rating or financial condition of the issuer. Income
derived from investments in municipal securities typically is exempt from
Federal income tax, however capital gains are subject to Federal tax. Some
municipal securities are insured and guarantee the timely payment of interest
and repayment of principal.

Prepayment Risk: Prices and yields of mortgage-backed securities assume the
securities will be redeemed at a given time. When interest rates decline,
mortgage-backed securities experience higher prepayments because the underlying
mortgages are repaid earlier than expected. A Fund's portfolio manager may be
forced to invest the proceeds from prepaid mortgage-backed securities at lower
rates, which results in a lower return for the Fund. When interest rates
increase, mortgage-backed securities experience lower prepayments because the
underlying mortgages may be repaid later than expected. This typically reduces
the value of the underlying securities.

Repurchase [and Reverse Repurchase] Agreements Risk: A Fund entering into a
repurchase agreement may suffer a loss if the other party to the transaction
defaults on its obligations and could be delayed or prevented from exercising
its rights to dispose of the underlying securities. The value of the underlying
securities might decline while the Fund seeks to assert its rights. The Fund
could incur additional expenses in asserting its rights or may lose all or part
of the income from the agreement. A reverse repurchase agreement involves the
risk that the market value of the securities retained by a Fund may decline
below the price of the securities the Fund has sold but is obligated to
repurchase at a higher price under the agreement.

Restricted Securities Risk: Restricted securities may be subject to legal
restraints and, therefore, are less liquid than other securities. The prices
received from reselling restricted securities in privately negotiated
transactions may be less than those originally paid by a Fund. Companies whose
securities are restricted are not subject to the same investor protection
requirements as publicly traded securities.

Stock Market Risk: A Fund's share price will move up and down in reaction to
stock market movements. Stock prices change daily in response to company
activity and general economic and market conditions. A Fund's investments in
common stocks and other equity securities are subject to stock market risk,
which is the risk that the value of equity securities may decline. Also, equity
securities are subject to the risk that a particular issuer's securities may
decline in value, even during periods when equity securities in general are
rising. Additional stock market risks may be introduced when a particular equity
security is traded on a foreign market. For more detail on the related risks
involved in foreign markets, see Foreign exposure risks.

<PAGE>

----------
27

- --------------------------------------------------------------------------------
Other Risk Considerations:

EURO Conversion: On January 1, 1999, eleven of the fifteen member countries of
the European Economic and Monetary Union (Participating Countries) established
fixed conversion rates between their existing sovereign currencies and the EURO,
a new common currency in Europe. The introduction of the EURO may result in
uncertainties for securities of European companies, European markets and the
operation of the Funds. The redenomination of certain European debt and equity
securities over a period of time may result in differences in various
accounting, tax and/or legal treatments that would not otherwise occur. Market
disruptions may occur that could adversely affect the value of European
securities and currencies held by the Funds. Other risks relate to the ability
of financial institution systems to process EURO transactions.

GE Investment Corporation has addressed EURO conversion issues in a broad range
of areas, including internal business applications, trading systems and
accounting systems. In addition, GE Investment Corporation has worked closely
with the Funds' major service providers to address the issue. It is possible,
however, that the markets for securities in which certain Funds invest may be
adversely affected by the conversion to the EURO. Furthermore, individual
issuers may suffer increased costs and decreased earnings due to the long-term
impact of EURO conversion.

Year 2000

Like other business organizations and individuals around the world, each of the
Funds could be adversely affected if the computer systems used by its Investment
Managers and external service providers do not properly process and calculate
date-related information from and after January 1, 2000. This is commonly known
as the "Year 2000 Problem." GE Investment Corporation is engaged in a multi-year
effort to address the Year 2000 Problem in a broad range of areas, including
internal business applications, process-enabling systems and facilities. In
addition, efforts are underway to track each of the Funds' major service
providers to see what they have completed, or have been undertaken to address
the Year 2000 Problem. At this time, however, there can be no assurance that
these steps will be sufficient to avoid any adverse impact on the Funds.

Furthermore, it is possible that the markets for securities in which the Funds
invest may be detrimentally affected by computer failures throughout the
financial services industry beginning January 1, 2000. Corporate and
governmental data processing errors may result in production problems for
individual companies and overall economic uncertainties. Earnings of individual
issuers may be affected by remediation costs. In addition, it has been reported
that foreign institutions have made less progress in addressing the Year 2000
Problem than major U.S. entities, which could have a greater impact on certain
Elfun Funds' investments that are more sensitive to these risks.

MORE ON INVESTMENT STRATEGIES

A Fund is permitted to use other securities and investment strategies in pursuit
of its investment objective, subject to limits established by the Funds' Board
of Trustees. Certain instruments and investment strategies may expose the Funds
to other risks and considerations, which are discussed in the Funds' SAI.

Holding Cash and Temporary Defensive Positions: Under normal circumstances, each
Fund may hold cash and/or money market instruments (i) pending investment, (ii)
for cash management purposes, and (iii) to meet operating expenses. A Fund may
from time to time take temporary defensive positions when the portfolio manager

<PAGE>

- ---------------------------------------
28 Elfun Funds Propectus
More on Strategies
and Risks
- --------------------------------------------------------------------------------

believes that adverse market, economic, political or other conditions exist. In
these circumstances, the portfolio manager may (i) without limit hold cash
and/or invest in money market instruments, or (ii) restrict the securities
markets in which a Fund's assets are invested by investing those assets in
securities markets deemed to be conservative in light of the Fund's investment
objective and strategies. The Funds, other than the Money Market Fund, may
invest in money market instruments directly or indirectly through investment in
the GEI Short-Term Investment Fund ("Investment Fund"). The Investment Fund is
advised by GE Investment Management, which charges no advisory fee to the Fund.

To the extent that a Fund, other than the Elfun Money Market Fund, holds cash or
invests in money market instruments, it may not achieve its investment
objective.

Various investment techniques are utilized by a Fund to increase or decrease its
exposure to changing security prices, interest rates, currency exchange rates,
commodity prices or other factors that affect security values. These techniques
may involve derivative transactions such as buying and selling options and
futures contracts, entering into currency exchange contracts or swap agreements,
purchasing indexed securities and selling securities short. These techniques are
designed to adjust the risk and return characteristics of a Fund's portfolio of
investments. There is no guarantee that these techniques will work.

The following tables summarize each Fund's investment policies and limitations.
Percentage figures refer to the percentage of a Fund's assets that may be
invested in accordance with the indicated policy.

<TABLE>
<CAPTION>
Non-Publicly Structured Purchasing Purchasing
Reverse Traded and and and Writing and Writing
Repurchase Repurchase Illiquid Indexed Securities Securities
Agreements Agreements Securities Securities Options Index Options
---------- ---------- ---------- ---------- ------- -------------
<S> <C> <C> <C> <C> <C> <C>
Elfun Trusts Yes No Yes No Yes Yes

Elfun Global Fund Yes No Yes No Yes Yes

Elfun Income Fund Yes No Yes Yes Yes Yes

Elfun Tax-Exempt Income Fund Yes Yes Yes No Yes Yes

Elfun Diversified Fund Yes No Yes Yes Yes Yes

Elfun Money Market Fund Yes Yes No No No No
</TABLE>

<PAGE>

----------
29

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

<TABLE>
<CAPTION>
Maximum Maximum When-Issued
Futures Investment in Investment and
and Forward Options on Maximum Below-Investment in Delayed
Options on Currency Foreign Investment in Grade Debt Foreign Delivery
Futures Transactions Currencies Debt Securities Securities Securities Securities
--------- ------------ ---------- --------------- ---------------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Elfun Trusts Yes No No 5% Yes

Elfun Global Fund Yes Yes Yes 35% 5% 100% Yes

Elfun Income Fund Yes Yes Yes 100% (maximum 10% BB or B by 35%* Yes
of 25% BBB by S&P or Ba or B
S&P, Baa by by Moody's or
Moody's or equivalent
equivalent)

Elfun Tax-Exempt Yes No No 100% (maximum 5% in debt None Yes
Income Fund of 10% in BBB downgraded
by S&P or Baa below
by Moody's or investment
equivalent) grade
subsequent to
purchase

Elfun Diversified Yes Yes Yes 100% (maximum 10% BB or B by 30%* Yes
Fund of 25% BBB by S&P or B by
S&P, Baa by Moody's or
Moody's or equivalent
equivalent)

Elfun Money Market No No No 100% None 25%* Yes
Fund
</TABLE>

* This limitation excludes ADRs and U.S. Listed Securities and Nasdaq Traded
Securities.

<PAGE>

- ---------------------------------------
30 Elfun Funds Propectus
More on Strategies
and Risks
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
Debt Floating Participation
Obligations Securities and Interests
Lending Rule of of Other Variable in
Portfolio 144A Supranational Depositary Investment Municipal Rate Municipal
Securities Securities Agencies Receipts Funds Leases Instruments Obligations
---------- ---------- -------- -------- ----- ------ ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Elfun Trusts Yes Yes No Yes Yes No No No

Elfun Global Fund Yes Yes No Yes Yes No No* No

Elfun Income Fund Yes Yes Yes Yes Yes No Yes No

Elfun Tax-Exempt Yes Yes Yes No Yes Yes Yes Yes
Income Fund

Elfun Diversified Yes Yes Yes Yes Yes Yes Yes Yes
Fund

Elfun Money Market Yes Yes Yes No No No Yes No
Fund
</TABLE>

* Excludes commercial paper and notes with variable and floating rates of
interest.

<PAGE>

----------
31

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

<TABLE>
<CAPTION>
Asset
Custodial Mortgage Government Backed
Receipts Related Stripped Securities Short
Zero Municipal on Securities, Mortgage and Mortgage Sales
Coupon Obligation Municipal including Related Receivable-Backed Dollar Against
Obligations Components Obligations CMOs Securities Securities Rolls the Box
----------- ---------- ----------- ---- ---------- ---------- ----- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Elfun Trusts No No No No No No No

Elfun Global Fund No No No No No No No Yes

Elfun Income Fund Yes No No Yes Yes Yes Yes No

Elfun Tax-Exempt Yes Yes Yes No No No No Yes
Income Fund

Elfun Diversified Yes Yes Yes Yes Yes Yes Yes No
Fund

Elfun Money Market No No No No No No No No
Fund

</TABLE>

<PAGE>

- ---------------------------------------
32 Elfun Funds About the
Propectus Investment
Adviser
- --------------------------------------------------------------------------------
Investment Adviser and Servicing Agent

General Electric Investment Corporation (GEIC), located at 3003 Summer Street,
P.O. Box 7900, Stamford, Connecticut 06904, is the investment adviser and
servicing agent of each Fund. As Servicing Agent, GEIC is responsible for
processing redemption requests, providing services which assist the Funds'
transfer agent and responding to unitholder inquiries. GEIC is reimbursed for
the reasonable costs incurred in providing its services as Servicing Agent. GEIC
is a wholly-owned subsidiary of GE and a registered investment adviser. GEIC's
principal officers, directors and portfolio managers hold similar positions with
General Electric Investment Management (GEIM), a wholly-owned subsidiary of GE.
As of [ ], 1999, GEIC and GEIM manage roughly $[ ] billion in assets, including
$[ ] billion in mutual funds.

Each Fund pays GEIC up to the following maximum annual fee for investment
management services:

Elfun Trusts
Elfun Global Fund
Elfun Income Fund
Elfun Tax-Exempt Income Fund
Elfun Diversified Fund
Elfun Money Market Fund

<PAGE>

----------
33

- --------------------------------------------------------------------------------
About The Funds' Portfolio Managers

David B. Carlson is Senior Vice President of GEIC. He is portfolio manager of
Elfun Trusts and is also responsible for the management of the domestic equity
related investments of the portfolio of the Elfun Diversified Fund. He has
served Elfun Trusts as a Portfolio Manager since 1988 and has served the Elfun
Diversified Fund as a Portfolio manager since 1992. He has more than 16 years of
investment experience and has held positions with GEIC, or its affiliates since
1982.

Robert R. Kaelin is a Senior Vice President of GE Investments and is the
Portfolio Manager of the Elfun Tax-Exempt Income Fund. He has served as a
Portfolio Manager for the Fund since 1984 and has over 29 years of investment
experience. Mr. Kaelin has held positions with GEIC since 1984.

Ralph R. Layman is Director and Executive Vice President of GEIC. Mr. Layman is
a Co-Portfolio Manager of the Elfun Global Fund and has served the Fund in a
portfolio management capacity since 1991. He is also responsible for the
management of the international equity related investments of the Elfun
Diversified Fund and has served in that capacity since March 1997. He has more
than 20 years of investment experience and has held positions with GEIC since
1991.

Robert A. MacDougall is Director and Executive Vice President of GEIC. He leads
a team of portfolio managers for the Elfun Income Fund and is also responsible
for the management of fixed income related investments of the portfolio of the
Elfun Diversified Fund. Mr. MacDougall has served the Elfun Income Fund since
1986 and the Elfun Diversified Fund since its inception in 1987. He has more
than 15 years of investment experience and has held positions with GEIC since
1986.

Michael J. Solecki is Vice President of GEIC and Co-Portfolio Manager of the
Elfun Global Fund and has served in that capacity since March 1997. He has more
than eight years of investment experience and has held positions with GEIC since
1990.

<PAGE>

- ---------------------------------------
34 Elfun Funds How to Invest
Propectus

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

How to Purchase Shares

Purchase of Units in General

Units of any of the six Elfun Funds ("Units") to which this Prospectus pertains
may be purchased by:

1. Regular and senior members of the Elfun Society,

2. The immediate family of those members,

3. Trusts whose sole beneficiaries are such members,

4. The surviving unremarried spouse of a deceased member,

5. Members of the Board of Directors of General Electric Company ("GE"),

6. GE and its subsidiaries and

7. Such others as the trustees of the Funds may permit provided that their
participation does not affect the Funds' status as "employees' securities
companies" within the meaning of section 2(a)(13) of the Investment Company
Act of 1940, as amended (the "1940 Act").

Regular members of the Elfun Society are selected from active employees of GE
and/or its majority owned subsidiaries. Senior members are former members who
have retired from those companies. Immediate family is defined as spouse,
children or step-children.

Units of the Funds are sold at the net asset value per Unit next determined
after receipt and acceptance of the unitholder's check or funds. Purchase orders
for Units of a Fund will be accepted by the Fund only on a day on which the
Fund's net asset value is calculated. The Fund may in its discretion reject any
order for the purchase of Units of a Fund. With respect to all purchases,
dividends begin to accrue on the next business day following the receipt of the
unitholder's check or funds.

[The Funds no longer issue physical certificates representing Units in any Fund.
Ownership of Units is evidenced by Statements of Account representing Units
issued in book-entry form.]

The Elfun Funds offer several ways to purchase shares. You may open an account
and make an investment by mail and make subsequent investments by bank wire,
payroll deduction or electronic funds transfer, as described below.

If a unitholder has questions about purchases or redemptions of Units, please
write to:

Elfun Mutual Funds
3003 Summer Street
P.O. Box 120065
Stamford, CT 06912-0074

Or telephone any of the following numbers:

800-242-0134 (toll-free)
203-326-4040 or
8*224-4040 (Dial Comm)

<PAGE>

----------
35

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

Minimum Investments

Initial Investment $500
Subsequent Investments $100

Subsequent minimums are reduced to $25 for Automatic Investment and Payroll
Savings Plans. [Accounts that fall below the $500 account minimum may be
automatically redeemed by a Fund on 30 days' notice.]

Investing By Mail

o Read this prospectus.
o If opening a new account, complete and sign the attached application. You
may obtain an application by calling the Funds' Distributor at the number
listed on the back cover.
o Send a check drawn on a U.S. bank in U.S. dollars payable to the applicable
Fund. Third-party checks or endorsed checks are not accepted by the Funds
for payment of Units of the Fund.
o If adding to an existing account, include your account number on the check.
o If the check used for the purchase does not clear, the Fund will cancel the
purchase and the investor may be liable for losses or fees incurred.

Mail to:
Elfun Mutual Funds
P.O. Box 419631
Kansas City, MO 64141-6631

Overnight delivery:

Elfun Mutual Funds
c/o National Financial Data Services Inc.
1004 Baltimore
Kansas City, MO 64105

<PAGE>

- ---------------------------------------
36 Elfun Funds How to Invest
Propectus

- --------------------------------------------------------------------------------
Once You Have Opened an Account- You Have Additional Options

By Wire

o Wire to the address below. Include your name, the name of the Fund and your
account number. The unitholder's bank may charge a fee for this service
o Wire orders received by the close of regular trading on the New York Stock
Exchange (NYSE) are executed at that day's offering price. Wire orders
received after the close of regular trading on the NYSE receive the next
business days' offering price.

Wire Address:
State Street Bank and Trust Company
ABA #[ ]
DDA #[ ]

Direct Deposit or Payroll Deduction

o You must furnish a completed Payroll Deduction Authorization Elfun Mutual
Funds Form to the Servicing Agent. Contact the Servicing Agent for a copy
of the Payroll Deduction Form.
o Statements of Account are sent on a quarterly basis to those investing
through payroll deductions.

Automatic Investment Plan

o You may have funds transferred directly from your bank account each month.
Call (800) 242-0134 to make arrangements.
o If an automatic monthly investment transaction fails due to insufficient
funds in your account, you may be assessed an additional charge.

Retirement Accounts

Units of the Funds, other than the Elfun Tax-Exempt Fund, are available for
purchase by an Elfun Traditional or Roth Individual Retirement Account ("Elfun
IRAs"). An Elfun IRA application and further details about the procedures to be
followed by IRAs and other retirement plans are available from the Distributor.

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37

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How To Redeem Shares

Bookunits may be redeemed either by telephonic request or by mail. Units
represented by Certificates should be sent to the addresses listed below for
deposit into Bookunits.

A redemption request received in proper form will be effected at the net asset
value per Unit next determined less any redemption fee (not, however, to exceed
1%) as the Trustees from time to time prescribe. At the present time, the
Trustees do not contemplate instituting any redemption fee for redemption by
mail. Unitholders will be notified in advance in the event that a fee for
redemptions by mail is instituted.

By Mail

Send a signed written request, stating the number of shares or specific dollar
amount you want to sell. The written request must also identify the Fund from
which units are to be redeemed and the account number. Your signature(s) must
appear exactly as it does on the account registration.

Signature(s) must each be guaranteed for any redemption:

o exceeding $25,000 o mailed to a different address from that on record
o paid to someone else
o wired to a financial institution
o mailed to an address that has been changed within the last 30 days

Mail to:
Elfun Mutual Funds
P.O. Box 419631
Kansas City, MO 64141-6631

Overnight Delivery:

Elfun Mutual Funds
c/o National Financial Data Services Inc.
330 West 9th Street
Kansas City, MO 64105
Telephone: (816) 843-7335

By Telephone

Shares may be redeemed by telephone utilizing the Funds' automated system or by
agent during business hours. The telephone option must have been selected during
initial account setup or subsequently by written request signed by all
registered shareholders. A single $10 charge will be assessed with each
telephonic redemption request. Call toll-free (800) 242-0134.

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38 Elfun Funds How to Invest
Propectus

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By Systematic Withdrawal Plan

You may select a specific amount to be redeemed from your account on a regular
basis.

o Your account balance must be at least $10,000
o Minimum of $50 per withdrawal
o You may sell shares monthly
o If an automatic monthly investment transaction fails due to insufficient
funds in your account, you may be assessed an additional charge.
o [You will receive written confirmation of transactions on a quarterly basis
(except the Elfun Money Market Fund which provides a written confirmation
monthly)]
o [Further information about the Withdrawal Plan may be obtained from the
Servicing Agent]

Checkwriting

Checkwriting privileges may be elected at no cost by shareholders of the Money
Market Fund. Checks may be made payable to any person in amounts of $100 or
more. The Transfer Agent will redeem shares in an amount sufficient to cover the
amount of a check. If the amount of the check is greater than the value of the
Units in a unitholder's account, the check will be returned marked "insufficient
funds" and you may be assessed an additional charge. Please contact the
Distributor at the number listed on the back cover for additional details.

Special Considerations for Selling Shares

o When using a check to sell shares of the Money Market Fund, the minimum
check amount is $100.
o If you have purchased shares of a Fund by personal check, redemption of
these shares can only be processed after your check is cleared by your
bank. This could take up to 15 days or more.
o If your account balance falls below $500, the transfer agent may request
that you bring your balance up to the $500 minimum or request that you
close your account. If you take no action within 30 days, the transfer
agent may sell your shares and mail the proceeds to you.

Redemptions in Kind

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

When We Receive Your Order to Purchase or Redeem Shares

Purchase and redemption requests received in good order will be executed at the
next net asset value calculated after receipt of an investment or transaction
instructions. Third-party checks or endorsed checks are not accepted by the
Funds for payment of Units of the Fund.

Purchase and redemption orders are executed only on days when the NYSE is open
for trading. If the NYSE closes early, the deadlines for purchase and redemption
orders will be accelerated to the earlier closing time. For Funds declaring
daily income dividends, you will begin to earn income as of the first business
day after payment for your order has been received by the Fund.

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39

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How To Exchange Shares

You can exchange shares of one Elfun Fund for shares of another Elfun Fund. An
exchange is a sale and purchase of shares for tax purposes. You may have a
taxable gain or loss when you exchange your shares. To exchange shares:

o by phone, call (800) 242-0134.
o in writing, send your request to Elfun Mutual Funds at the above address.

You must be eligible to purchase the shares that you wish to exchange into and
should review the description of the Fund that you will purchase.

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40 Elfun Funds Dividends, Capital Gains
Propectus And Other Tax Information

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Unless you instruct a Fund to mail dividends from net investment income and net
capital gains to you, they will be reinvested in your account. There are no fees
or charges to reinvest dividends.

<TABLE>
<CAPTION>
Fund Distribution Schedule
- --------------------------------------------------------------------------------------------------
<S> <C>
Elfun Trusts o Dividends are declared and paid annually.

Elfun Global Fund o Short-term and long-term capital gains, if any, are paid
annually.
Elfun Diversified

Elfun Tax-Exempt Income Fund o Dividends are declared daily and paid monthly.

Elfun Income Fund o Short-term and long-term capital gains, if any, are paid
annually.
Elfun Money Market Fund*
</TABLE>

* All expenses of the Elfun Money Market Fund are accrued daily and deducted
before declaration of dividends to unitholders.

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

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41

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Taxes

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

Dividends and distributions from net investment income and short-term capital
gains are taxed as ordinary income. Long-term capital gains distributions are
taxed at the long-term capital gains rate, whether you reinvest your
distributions or have them paid to you.

Distributions from Elfun Tax-Exempt Income Fund

In general, income from the Elfun Tax-Exempt Income Fund is exempt from Federal
income tax but may be subject to state and local taxes. Because the Fund may
invest in taxable securities, some dividends from net investment income may be
subject to Federal and state income taxes. Short-term and long-term capital
gains distributed by the Fund are taxable.

Foreign Taxes

Foreign governments may impose taxes on the fund and its investments, and these
taxes generally will reduce the fund's distributions. However, if you meet
certain holding period requirements with respect to your fund shares, an
offsetting tax credit may be available to you. If you do not meet such holding
period requirements, you may still be entitled to a deduction for certain
foreign taxes. In either case, your tax statement will show more taxable income
or capital gains that were actually distributed by the fund, but will also show
the amount of the available offsetting credit or deduction.

Tax Statement

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

Backup Withholding

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

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42 Elfun Funds Calculating Share Value
Propectus

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

A Fund's portfolio securities are valued most often on the basis of market
quotations. Foreign securities are valued on the basis of quotations from the
primary market in which they are traded. [Some debt securities are valued using
dealers and pricing services. Municipal bond valuations are based on prices
supplied by a qualified municipal pricing service. The prices are composed of
the mean average of the bid and ask prices on the secondary market.] All
portfolio securities of the Money Market Fund and any short-term securities held
by any other Fund with remaining maturities of sixty days or less are valued on
the basis of amortized cost. A Fund's written or purchased options are generally
valued at the mean between the last asked and bid prices. The value of a futures
contract is generally equal to the unrealized gain or loss on the contract that
is determined by marking the contract to the current settlement price for a like
contract on the valuation date of the futures contract. A Fund's NAV may change
on days when shareholders will not be able to purchase or redeem the Fund's
shares.

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

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--------------------------------
Elfun Funds Financial 43
Propectus Highlights
Appendix
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The financial highlights tables that follow are intended to help you understand
a Fund's financial performance for the period of the Fund's operations. Certain
information reflects financial results for a single Fund share. The total
returns in the table represent the rate that an investor would have earned or
lost on an investment in the Fund (assuming reinvestment of all dividends and
distributions). This information has been audited by __________, whose report,
along with the Funds' financial statements, are included in the Funds' Annual
Report, which is available upon request.

Elfun Trusts

Inception date
Net Asset Value, Beginning of period
Income (Loss) from Investment Operations
Net Investment Income (Loss)
Net Gains (Losses) on Investments (both realized and unrealized)
Total Income (Loss) From Investment Operations
Less Distributions
Dividends (from net investment income)
Distributions (from capital gains)
Returns of Capital
Total Distributions