July 2, 1997
Tax-Free USA Fund
Tax-Free Insured Fund
Tax-Free USA Intermediate Fund
Supplement to Statement of Additional Information
Dated October 30, 1996
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
USA A Class Insured A Class
at Offer)(1) (at Offer)(1)
1 year ended 1 year ended
8/31/96 (1.90%) 8/31/96 (0.01%)
3 years ended 3 years ended
8/31/96 2.05% 8/31/96 2.23%
5 years ended 5 years ended
8/31/96 5.84% 8/31/96 5.23%
10 years ended 10 years ended
8/31/96 6.80% 8/31/96 6.29%
Period 1/11/84(2) Period 3/25/85(2)
through 8/31/96 9.15% through 8/31/96 7.61%
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Cumulative Total Return
USA A Class Insured A Class
(at Offer)(1) (at Offer)(1)
3 months ended 3 months ended
8/31/96 (3.44%) 8/31/96 (3.21%)
6 months ended 6 months ended
8/31/96 (5.67%) 8/31/96 (5.09%)
9 months ended 9 months ended
8/31/96 (5.16%) 8/31/96 (3.86%)
1 year ended 1 year ended
8/31/96 (1.90%) 8/31/96 (0.01%)
3 years ended 3 years ended
8/31/96 6.28% 8/31/96 6.84%
5 years ended 5 years ended
8/31/96 32.79% 8/31/96 29.04%
10 years ended 10 years ended
8/31/96 93.15% 8/31/96 84.00%
Period 1/11/84(2) Period 3/25/85(2)
through 8/31/96 202.43% through 8/31/96 131.45%
(1) Effective June 9, 1997, the maximum front-end sales charge
was reduced from 4.75% to 3.75%. The above performance
numbers are calculated using 3.75% 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.
(2) Date of initial public offering.
Average Annual Cumulative
Total Return Total Return
Intermediate Intermediate
A Class(1)(2) A Class(1)(2)
(at Offer) (at Offer)
1 year ended 3 months ended
8/31/96 1.68% 8/31/96 (1.14%)
3 years ended 6 months ended
8/31/96 3.36% 8/31/96 (1.76%)
Period 1/7/93(3) 9 months ended
through 8/31/96 5.42% 8/31/96 (0.85%)
1 year ended
8/31/96 1.68%
3 years ended
8/31/96 10.44%
Period 1/7/93(3)
to 8/31/96 21.23%
(1) The Manager elected to waive voluntarily the portion of its
annual compensation payable under its Investment Management
Agreement with the Intermediate Fund to limit operating
expenses of the Fund to 0.25% (including 12b-1 expenses).
That waiver was modified effective May 2, 1994 to limit
operating expenses to 0.10%, exclusive of 12b-1 expenses,
through December 31, 1996. In the absence of such voluntary
waiver, 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.
The following replaces 30-day yield (including the tax-
equivalent yield) figures as of August 31, 1996 for Class A
Shares in the section of the Statement of Additional Information
entitled Performance Information:
30-Day
30-Day Tax-Equivalent
USA Fund 5.32% 7.71%
Insured Fund 4.66% 6.75%
Intermediate Fund 4.80% 6.96%
Each yield has been calculated using the new maximum front-end
sales charge in effect on June 9, 1997 described above. The tax-
equivalent yield assumes a federal income tax rate of 31%. The
yields of the Intermediate Fund reflect the voluntary fee waiver
undertaken by the Manager described above.
