<PAGE>
SEI TAX EXEMPT TRUST
PENNSYLVANIA MUNICIPAL PORTFOLIO
PENNSYLVANIA TAX FREE PORTFOLIO
SUPPLEMENT DATED AUGUST 17, 1998, TO THE
PROSPECTUS DATED DECEMBER 31, 1997.
THIS SUPPLEMENT PROVIDES NEW AND ADDITIONAL INFORMATION BEYOND THAT CONTAINED IN
THE PROSPECTUS. IT SHOULD BE RETAINED AND READ IN CONJUNCTION WITH SUCH
PROSPECTUS.
Effective August 10, 1998, the name of the Pennsylvania Municipal Portfolio was
changed to the Pennsylvania Municipal Bond Fund. In addition, the Class A shares
of the Pennsylvania Municipal Bond Fund were redesignated Class B shares. The
Prospectus is hereby amended to reflect these changes.
In connection with these changes, the "Annual Operating Expenses" table on page
2 of the prospectus has been deleted and replaced with the following:
ANNUAL OPERATING EXPENSES (as a percentage of average net assets)
<TABLE>
<CAPTION>
FIXED
MONEY MARKET INCOME
PORTFOLIO PORTFOLIO
CLASS A CLASS B CLASS C CLASS B
<S> <C> <C> <C> <C>
Management/Advisory Fees (after fee waiver)(1) .29% .29% .29% .41%
12b-1 Fees None None None None
Total Other Expenses (after fee waiver) .06% .36% .56% .07%(2)
Shareholder Servicing Fees (after fee
waiver) .00%(3) .25% .25% .00%(3)
Total Operating Expenses (after fee
waivers)(4) .35% .65% .85% .48%
</TABLE>
(1) The Manager has waived, on a voluntary basis, a portion of its fee, and the
management/advisory fee shown reflect this voluntary waiver. The Manager
reserves the right to terminate its waiver at any time in its sole
discretion. Absent such waiver, management/advisory fees for the Money
Market Portfolio would be .40% and for the Fixed Income Portfolio would be
.55%.
(2) The Distributor has waived, on a voluntary basis, its Administrative
Services fee. Absent this waiver, Other Expenses would be .12%
(3) The Distributor has waived, on a voluntary basis, all or a portion of its
shareholder servicing fee for the Class A shares, and the Shareholder
Servicing Fees shown reflect this waiver. The Distributor reserves the right
to terminate its waiver at any time in its sole discretion. Absent such
waiver, Shareholder Servicing Fees would be .25% for the Class A shares of
the Money Market Portfolio and .25% for the Fixed Income Portfolio.
(4) Absent these fee waivers, Total Operating Expenses for Class A, Class B and
Class C shares of the Money Market Portfolio would be .71%, .76% and .96%,
respectively, and for the Class B shares of the Fixed Income Portfolio would
be .92%. Additional information may be found under "The Adviser" and "The
Manager."
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EXAMPLE
<TABLE>
<CAPTION>
1 YR. 3 YRS. 5 YRS. 10 YRS.
<S> <C> <C> <C> <C>
An investor in the Portfolios would pay the
following expenses on a $1,000 investment assuming
(1) a 5% annual return and
(2) redemption at the end of each time period:
Money Market Portfolio
Class A $4 $11 $20 $ 44
Class B 7 21 36 81
Class C 9 27 47 105
Fixed Income Portfolio 5 15 27 60
</TABLE>
THE EXAMPLE SHOULD NOT BE CONSIDERED REPRESENTATION OF PAST OR FUTURE EXPENSES.
ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN. THE PURPOSE OF THE
TABLE AND THIS EXAMPLE IS TO ASSIST THE INVESTOR IN UNDERSTANDING THE VARIOUS
COSTS AND EXPENSES THAT MAY BE DIRECTLY OR INDIRECTLY BORNE BY INVESTORS IN THE
CLASS A, B AND C SHARES OF THE PENNSYLVANIA TAX FEE PORTFOLIO AND THE CLASS B
SHARES OF THE PENNSYLVANIA MUNICIPAL BOND FUND. A PERSON WHO PURCHASES SHARES
THROUGH A FINANCIAL INSTITUTION MAY BE CHARGED SEPARATE FEES BY THAT
INSTITUTION. ADDITIONAL INFORMATION MAY BE FOUND UNDER "THE MANAGER," "THE
ADVISER" AND "DISTRIBUTION AND SHAREHOLDER SERVICING."
------------------------------
In addition, under the heading "Purchase and Redemption of Shares" on page 10 of
the prospectus, paragraph 4 has been deleted and replaced with the following:
Purchases will be made in full or fractional shares of the Fixed Income
Portfolio calculated to three decimal places. The Trust will send
shareholders a statement of shares owned after each transaction. The
purchase price of shares is the net asset value next determined after a
purchase order is received and accepted by the Trust. The purchase price of
shares of the Money Market Portfolio is expected to remain constant at
$1.00. The net asset value per share of the Portfolio is determined by
dividing the total value of its investments and other assets, less
liabilities, by the total number of outstanding shares of the Portfolio. The
Money Market Portfolio's investments will be valued by the amortized cost
method described in the Statement of Additional Information. Net asset value
per share is determined on each Business Day as of 2:00 p.m., Eastern time,
for the Money Market Portfolio, and as of the regularly-scheduled close of
normal trading on the New York Stock Exchange (normally 4:00 p.m., Eastern
time) for the Fixed Income Portfolio.
PLEASE RETAIN THIS SUPPLEMENT FOR FUTURE REFERENCE.
