July 21, 1999
Tax-Free USA Fund
Tax-Free USA Intermediate Fund
Tax-Free Insured Fund
National High Yield Municipal Bond Fund
A Class/B Class/C Class
Supplement to Prospectus dated October 28, 1998
The following replaces information under Summary of
Expenses for Tax-Free USA Intermediate Fund:
Tax-Free
Annual Operating Expenses USA Intermediate Fund
(as a percentage of Class A Class B Class C
average daily net assets) Shares Shares Shares
Management Fees
(after voluntary
waivers) . . . . . . . . 0.00%* 0.00%* 0.00%*
12b-1 Plan Expenses
(including
service fees). . . . . . 0.15%+ 1.00%+ 1.00%+
Other Operating Expenses
(after voluntary payments). 0.65%* 0.65%* 0.65%*
------- ------- ------
Total Operating Expenses
(after voluntary
waivers and payments) . 0.80%* 1.65%* 1.65%*
==== ==== ====
* Beginning July 21, 1999, the Manager has elected
voluntarily to waive that portion, if any, of the annual
management fees payable by the Tax-Free USA Intermediate
Fund and to pay certain of the Fund's expenses to the
extent necessary to ensure that the Total Operating
Expenses of the Fund do not exceed 0.65% (excluding 12b-1
plan expenses), as a percentage of average daily net
assets. This expense limitation will extend through
December 31, 1999. Prior to July 21, 1999, the Manager's
voluntary commitments of waiver and payment were different
from those currently in effect for the Fund. The expense
information in the Prospectus appearing in the Annual
Operating Expenses table for the Fund has been restated to
reflect the current fees. See the information provided
under Management of the Funds in the Prospectus for a
complete history of the commitments of waiver and payment
by the Manager. If the voluntary expense waivers were not
in effect, the Total Operating Expenses of Tax-Free USA
Intermediate Fund A Class, Tax-Free USA Intermediate Fund
B Class and the Tax-Free USA Intermediate Fund C Class, as
a percentage of average daily net assets, would have been
1.33%, 2.18% and 2.18%, respectively, reflecting
Management Fees of 0.49% for the fiscal year ended August
31, 1998.
+ Class A Shares, Class B Shares and Class C Shares are
subject to separate 12b-1 Plans. Long-term shareholders
of the Classes may pay more than the economic equivalent
of the maximum front-end sales charges permitted by rules
of the National Association of Securities Dealers, Inc.
See Distribution (12b-1) and Service under Management of
the Funds in the Prospectus.
The following example illustrates the expenses that an
investor would pay on a $1,000 investment over various time
periods, assuming (1) a 5% annual rate of return, (2)
redemption and no redemption at the end of each time period and
(3) for Class B Shares and Class C Shares, payment of a CDSC at
the time of redemption, if applicable. The following example
assumes the voluntary waiver of the management fee by the
Manager as discussed above.
Tax-Free USA Intermediate Fund
Assuming Redemption
1 year 3 years 5 years 10 years
Class A
Shares $35(1) $52 $71 $124
Class B
Shares $37 $62 $90(2) $142(2)
Class C
Shares $27 $52 $90 $195
<PAGE>
Assuming No Redemption
1 year 3 years 5 years 10 years
Class A
Shares $35 $52 $71 $124
Class B
Shares $17 $52 $90(2) $142(2)
Class C $17 $52 $90 $195
Shares
(1) Generally, the Fund does not assess a redemption charge
upon redemption of Class A Shares. Under certain
circumstances, however, a Limited CDSC or other CDSC, which has
not been reflected in this calculation, may be imposed on
certain redemptions within 12 months of purchase. See
Contingent Deferred Sales Charge for Certain Purchases of Class
A Shares Made at Net Asset Value under Redemption and Exchange
in the Prospectus.
(2) At the end of approximately five years after purchase,
Tax-Free USA Intermediate Fund B Class shares will be
automatically converted into Tax-Free USA Intermediate Fund A
Class shares. The example above assumes conversion of Class B
Shares at the end of the fifth year. However, the conversion
may occur as late as three months after the fifth anniversary
of purchase, during which time the higher 12b-1 Plan fees
payable by Class B Shares will continue to be assessed.
Information for the sixth through tenth years reflects expenses
of the Class A Shares. See Automatic Conversion of Class B
Shares under Classes of Shares in the Prospectus for a
description of the automatic conversion feature.
The following supplements the section of the Prospectus
entitled Management of the Funds:
Beginning July 21, 1999, the Manager has elected voluntarily to
waive that portion, if any, of the annual management fees
payable by the Tax-Free USA Intermediate Fund and to pay
certain of the Fund's expenses to the extent necessary to
ensure that the Total Operating Expenses of the Fund do not
exceed 0.65% (excluding the 12b-1 plan expenses). This waiver
and expense limitation will extend through December 31, 1999.
Prior to July 21, 1999, the Manager had elected voluntarily to
waive and pay such fees for the Fund to the extent necessary to
ensure that the Total Operating Expenses of the Fund do not
exceed 0.60% (excluding the 12b-1 plan expenses) from February
1, 1999 through July 20, 1999.
