Supplement dated January 15, 1997
to Prospectus dated May 1, 1996
The Guardian Bond Fund
This Supplement should be retained with the Prospectus for future
reference.
The following replaces the fourth paragraph of the section entitled "Fund
Management and The Investment Adviser" appearing on page GBF-7 of the
Prospectus:
Effective January 15, 1997, responsibility for the portfolio
management of The Guardian Bond Fund (the "Fund") will be shared by Michele
S. Babakian and Thomas G. Sorell, CFA. Frank J. Jones, Ph.D., will have
overall responsibility for the allocation of the Fund's assets between the
various fixed income sectors managed by Ms. Babakian and Mr. Sorell. Ms.
Babakian, Vice President of the Fund, served as the sole manager of the
Fund from its inception in February, 1993. Ms. Babakian is also the
co-portfolio manager (with Mr. Sorell) of The Guardian Investment Quality
Bond Fund, a series of The Park Avenue Portfolio and manages a portion of
the fixed-income assets of The Guardian Life Insurance Company of America
("Guardian Life"). Ms. Babakian became a Vice President of Guardian Life in
January 1995, and was a Second Vice President prior thereto. Mr. Sorell has
been a Vice President of Guardian Life since July, 1994 and manages a
portion of the fixed-income assets of Guardian Life and its subsidiary, The
Guardian Insurance & Annuity Company, Inc. Mr. Sorell also manages the
fixed-income assets of Guardian Asset Management Corporation, a Guardian
Life Subsidiary. Mr. Sorell has not previously managed a registered
management investment company. From December 1993 through July 1994, Mr.
Sorell was Director of Fixed Income for White River Corporation. From April
1993 to December 1993, he served as Director of Fixed Income for Fund
America Enterprises. Prior thereto, Mr. Sorell served as a Portfolio
Manager for AIG Investment Advisors.
The following supplements the information contained in the section entitled
"Investment Objectives and Policies" appearing on pages GBF-3-5 of the
Prospectus.
The Fund may also invest in asset-backed securities. Asset-backed
securities, which are structured similarly to mortgage-backed securities,
are collateralized by interests in pools of loans, receivables or other
obligations originated by single or multiple lenders and may use similar
credit enhancements. The underlying assets, which include motor vehicle
installment purchase contracts, home equity loans, credit card receivables
and other credit arrangements, are securitized in pass-through structures
similar to mortgage pass-throughs or in pay-through structures similar to
CMO's. The Fund may invest in these and other types of asset-backed
securities that may be developed in the future. One of the principal
characteristics which distinguishes asset-backed securities from
mortgage-backed securities is that asset-backed securities generally do not
have the benefit of first lien security interests in the related
collateral. Certain receivables such as credit card receivables are
generally unsecured, and the debtors are entitled to the protection of a
number of state and federal consumer credit laws, certain of which may
hinder the right to receive full payment. Also, the security interests in
the underlying collateral may not be properly transferred when the pool is
created, resulting in the possibility that the collateral may be resold.
Some asset-backed securities may also have prepayment risk due to
refinancing of their receivables. Generally, these types of loans are of
shorter average life than mortgages, but may have average lives up to 10
years. These securities, all of which are issued by non-governmental
entities, carry no direct or indirect governmental guarantees.
<PAGE>
In addition, the Fund may invest in trust-preferred (or capital)
securities. These securities, which are issued by entities such as special
purpose bank subsidiaries, currently are permitted to treat the interest
payments as a tax-deductible cost. Capital securities, which have no voting
rights, have a final stated maturity date and a fixed schedule for periodic
payments. In addition, capital securities have provisions which afford
preference over common and preferred stock upon liquidation, although the
securities are subordinated to other, more senior debt securities of the
same issuer. The issuers of these securities retain the right to defer
interest payments for a period of up to five years, although interest
continues to accrue cumulatively. The deferral of payments may not exceed
the stated maturity date of the securities themselves. The non-payment of
deferred interest at the end of the permissible period will be treated as
an incidence of default.
At the present time, the Internal Revenue Service treats capital
securities as debt. Tax legislation currently pending in Congress may cause
this tax treatment to be modified in the future. In the event that the tax
treatment of interest payments of these types of securities is modified,
the Fund will reconsider the appropriateness of continued investment in
these securities.
EB-010951(5/96)sup.
