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CAPITAL APPRECIATION FUND
SUPPLEMENT DATED SEPTEMBER 16, 1996 TO MAY 1, 1996 PROSPECTUS
The Fund's Board of Trustees recently voted to change the investment adviser to
the Fund, effective July 1, 1996. All references in this prospectus to "TIMCO"
are hereby changed to "TAMIC." The following replaces information regarding
the investment adviser, and its relationship with the subadviser, as discussed
under the heading "Investment Advisers." The investment advisory professionals
who direct the daily investment operations of the Fund are not affected by this
change.
INVESTMENT ADVISERS
Travelers Asset Management International Corporation ("TAMIC") provides
investment advice and, in general, supervises the management and investment
program of the Fund. Janus Capital Corporation provides subadvisory services
to the Fund with respect to its daily investment operations, subject to the
supervision of the Board of Trustees and TAMIC.
TAMIC
TAMIC is a registered investment adviser that was incorporated in 1978. Its
principal offices are located at One Tower Square, Hartford, Connecticut, and
it is an indirect wholly owned subsidiary of Travelers Group Inc., a financial
services holding company. TAMIC also acts as investment adviser or subadviser
for other investment companies used to fund variable products, as well as for
individual and pooled pension and profit-sharing accounts, and for domestic
insurance companies affilliated with The Travelers Insurance Company and
nonaffiliated insurance companies.
Under the Investment Advisory Agreement, TAMIC will be paid an amount
equivalent on an annual basis to 0.75% of the average daily net asets of the
Fund. From this amount, TAMIC will in turn pay an amount equivalent on an
annual basis to 0.55% of the average daily net assets of the Fund to Janus
Capital Corporation for its services as sub-adviser. TAMIC will retain 0.20%
as compenstion for its services as described above. The fee is computed daily
and paid weekly.
JANUS CAPITAL CORPORATION
Janus Capital Corporation (Janus Capital), 100 Filmore Street, Denver, Colorado
80206, is employed by TAMIC as subadviser to manage the daily operations of
the Fund, subject to the supervision of both TAMIC and the Board of Trustees.
Kansas City Southern Industries, Inc., a publicly traded holding company whose
primary subsidiaries are engaged in transportation, financial services and real
estate, owns approximately 83% of the outstanding voting stock of Janus
Capital. Janus Capital also acts as investment adviser to other investment
companies not affiliated with the Fund, as well as to individual, corporate,
charitable and retirement accounts.
As described above, TAMIC, and not the Fund, will pay to Janus Capital an
amount equivalent on an annual basis to 0.55% of the Fund's average daily net
assets for its services as subadviser to the Fund.
L-11171A 9/96
