July 2, 1997
Limited-Term Government Fund
Supplement to Statement of Additional Information
Dated February 28, 1997
The following replaces average annual total return and
cumulative total return information for Class A Shares at offer
in the section of the Statement of Additional Information
entitled Performance Information:
Average Annual Total Return Cumulative Total Return
Class A Class A
Shares (at Shares (at
Offer)(1)(2) Offer)(1)(2)
1 year ended 3 months ended
12/31/96 0.79% 12/31/96 (1.12%)
3 years ended 6 months ended
12/31/96 2.46% 12/31/96 0.21%
5 years ended 9 months ended
12/31/96 3.65% 12/31/96 0.69%
10 years ended 1 year ended
12/31/96 6.15% 12/31/96 0.79%
Period 11/24/85(3) 3 years ended
to 12/31/96 6.34% 12/31/96 7.55%
5 years ended
12/31/96 19.62%
10 years ended
12/31/96 81.71%
Period 11/24/85(3)
through 12/31/96 97.98%
(1) The Manager elected to waive voluntarily the portion of its
annual compensation under its Investment Management
Agreement with Limited-Term Funds, Inc. on behalf of the
Fund to limit operating expenses to 1.00% from the date of
the initial public offering through July 31, 1986 and of
each class to 0.75% (exclusive of 12b-1 payments with
respect to Class A Shares) from February 25, 1991 until
December 30, 1992. In the absence of such voluntary
waivers, performance would have been affected negatively.
(2) Effective June 9, 1997, the maximum front-end sales charge
was reduced from 3.00% to 2.75%. The above performance
numbers are calculated using 2.75% as the applicable sales
charge for all time periods, and are more favorable than
they would have been had they been calculated using the
former front-end sales charges.
(3) Date of initial public offering of Class A Shares.
The following replaces yield for Class A Shares in the
section of the Statement of Additional Information entitled
Performance Information:
The 30-day yield as of December 31, 1996 was 5.92% for Class
A Shares. Yield has been calculated using the new maximum front-
end sales charge in effect on June 9, 1997 described above.
