<PAGE>
May 1, 1999
Prospectus
GE Investments Funds, Inc.
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Equity Funds
U.S. Equity Fund
S&P 500 Index Fund
Premier Growth Equity Fund
Value Equity Fund
International Equity Fund
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Income Funds
Income Fund
Global Income Fund
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Asset Allocation Funds
Total Return Fund
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Money Market Funds
Money Market Fund
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Other Funds
Real Estate Securities Fund
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Like all mutual funds, the Funds' shares have not been approved or disapproved
by the Securities and Exchange Commission, nor has the Securities and Exchange
Commission passed upon the accuracy or adequacy of this prospectus. Any
representation to the contrary is a criminal offense.
[LOGO]
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Contents
GE Investments Funds, Inc. Prospectus
Equity Funds ....................... 3
U.S. Equity Fund ................... 4
S&P 500 Index Fund ................. 6
Premier Growth Equity Fund ......... 8
Value Equity Fund .................. 10
International Equity Fund .......... 12
Income Funds ....................... 15
Income Fund ........................ 16
Global Income Fund ................. 18
Asset Allocation Funds ............. 21
Total Return Fund .................. 22
Money Market Funds ................. 25
Money Market Fund .................. 26
Other Funds ........................ 29
Real Estate Securities Fund ........ 30
More on Strategies and Risks ....... 32
More on Risks ...................... 32
Other Risk Considerations .......... 36
More on Investment Strategies ...... 36
About the Investment Adviser ....... 44
Investment Adviser and
Administrator .................... 44
About the Funds' Portfolio Managers 45
About the Sub-Advisers ............. 46
Purchase and Redemption
of Shares ........................ 48
Dividend Distributions
and Tax Information .............. 50
Calculating Share Value ............ 51
Financial Highlights ............... 52
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Additional information regarding the GE Investments Funds, Inc. ("Funds") is
contained in the Statement of Additional Information dated May 1, 1999 (or a
subsequent date in 1999), which is incorporated by reference into (legally forms
a part of) this Prospectus.
Shares of the Funds are only available through the purchase of certain variable
annuity and variable life insurance contracts issued by various life insurance
companies some of which may be affiliated persons of the Funds.
<PAGE>
GE Investments Funds, Inc. Prospectus
Equity Funds
Who may want to invest in a GE Investments Equity Fund?
The GE Investments Equity Funds may be appropriate to support your variable
contract if you:
o have a long-term investment goal
o are willing to accept higher short-term risk for potential long-term returns
o want to diversify a portfolio composed mostly of other types of funds
The GE Investments Equity Funds may not be appropriate to support your variable
contract if you want:
o to avoid potentially significant changes in the value of your investment
o a stable return on your investment
Equity funds generally invest in equity securities. Equity securities may
include common stocks, preferred stocks, depositary receipts, convertible
preferred stocks, convertible bonds, convertible debentures, convertible notes
and rights and warrants of U.S. and foreign companies. Stocks represent an
ownership interest in a corporation. Equity funds have more potential for
capital growth than other funds, but they have greater risk.
[Sidebar]
An investment in a GE Investments Equity Fund is not a deposit of any bank and
is not insured by the Federal Deposit Insurance Corporation or any other
government agency. Investment in the Equity Funds is subject to risk, including
possible loss of principal invested.
3
<PAGE>
GE Investments Funds, Inc. Prospectus
Equity Funds
U.S. EQUITY FUND
Investment Objective: Seeks long-term growth of capital.
The Strategy
The U.S. Equity Fund invests primarily in equity securities of U.S. companies.
The portfolio managers use a Multi-Style(Registered) investment strategy that
combines growth and value investment management styles. As a result, the
portfolio has characteristics similar to the Standard & Poor's 500 Composite
Stock Index ("S&P 500 Index"), including capital appreciation and income. Stock
selection is key to the performance of the Fund.
Through fundamental company research, the portfolio managers seek to identify
securities of large companies with characteristics such as:
o attractive valuations
o financial strength
o high quality management focused on generating shareholder value
The Fund also may invest to a lesser extent in foreign securities and debt
securities. The Fund generally intends to hold its investments for a long time,
which results in a relatively low portfolio turnover rate. The portfolio
managers may use various investment techniques to adjust the Fund's investment
exposure, but there is no guarantee that these techniques will work.
The Risks
The principal risks of investing in this Fund are stock market risk and style
risk. To the extent that the portfolio managers invest in foreign securities or
debt securities, the Fund would be subject to foreign exposure risk, interest
rate risk and credit risk.
If you would like additional information regarding the Fund's investment
strategies and risks, please refer to "More on Strategies and Risks" later in
this Prospectus.
4
<PAGE>
Fund Performance
The bar chart and table opposite illustrate the short-term variability in the
Fund's performance and the Fund's returns relative to a common measure of
performance. The bar chart illustrates how the Fund's performance varies from
year to year over the periods shown.
During the periods presented in the bar chart, the Fund's highest return for a
quarter was 19.89% for the quarter ended December 31, 1998. The Fund's lowest
return for a quarter was -10.17% for the quarter ended September 30, 1998. The
Fund's year-to-date return was 5.52% as of March 31, 1999.
The table opposite illustrates how the Fund's average annual returns for
different calendar periods compare to the returns of the S&P 500 Index, a
widely recognized, unmanaged index of common stock prices. The table reflects
the impact of the Fund's expenses. It assumes that you redeem your investment
in the Fund at the end of each period.
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Calendar Year Total Returns
[BARCHART]
1996 1997 1998
- ---- ---- ----
21.72% 32.13% 23.41%
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Average Annual Total Return
(as of December 31, 1998)
Since
1 Year Inception*
------ ----------
U.S. Equity Fund 23.41% 28.12%
S&P 500 Index 28.70% 30.59%
Both the bar chart and table assume reinvestment of dividends and
distributions. If GE Investment Management had not reduced certain expenses
during certain of the periods shown, the Fund's total returns would have been
lower. As with all mutual funds, past performance is not an indication of
future performance.
*Inception date (commencement of investment operations): January 3, 1995
[Sidebar]
All mutual funds use a standard formula to calculate total return. Total
return measures the price change in a share assuming the reinvestment of all
dividend income and capital gain distributions.
5
<PAGE>
GE Investments Funds, Inc. Prospectus
Equity Funds
S&P 500 INDEX FUND
Investment Objective: Seeks growth of capital and accumulation of income that
corresponds to the investment return of the Standard & Poor's 500 Composite
Stock Price Index.
The Strategy
The S&P 500 Index Fund invests primarily in equity securities of companies
contained in S&P 500 Index.* The portfolio manager seeks to replicate the
return of the S&P 500 Index while holding transaction costs low and minimizing
portfolio turnover. The portfolio manager uses a passive management approach
to select a representative group of stocks within the S&P 500 Index. The
portfolio manager also may use statistical selection to determine which
securities within the S&P 500 Index to purchase or sell for the Fund. The Fund
generally will not hold all the securities that comprise the S&P 500 Index
and, in some cases, the Fund's weightings in particular industry segments
represented in the S&P 500 Index may differ significantly from those of the
S&P 500 Index.
The Fund also may invest to a lesser extent in securities that are not in the
S&P 500 Index, foreign securities and debt securities. The Fund generally
intends to hold its investments for a long time, which results in a relatively
low portfolio turnover rate. The portfolio managers may use various investment
techniques to adjust the Fund's investment exposure, but there is no guarantee
that these techniques will work. The Fund will not adopt a temporary defensive
strategy in times of declining stock prices and therefore you will bear the
risk of such declines.
The Risks
The principal risks of investing in this Fund are stock market risk and the
risk that the Fund's return may not correlate exactly with that of the S&P 500
Index. To the extent that the portfolio manager invests in foreign securities
and debt securities, the Fund would be subject to foreign exposure risk,
interest rate risk and credit risk.
If you would like additional information regarding the Fund's investment
strategies and risks, please refer to "More on Strategies and Risks" later in
this Prospectus.
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* Standard & Poor's(R), S&P(R), and S&P 500(R) are trademarks of The
McGraw-Hill Companies, Inc. and have been licensed for use. The S&P 500 Index
Fund is not sponsored, endorsed, sold or promoted by Standard & Poor's, and
Standard & Poor's makes no representation or warranty, express or implied, to
the investors of the Fund or any member of the public regarding the
advisability of investing in securities generally or in this Fund particularly
or the ability of the S&P 500 Index to track general stock market performance.
Please see the statement of additional information for additional disclaimers
and liabilities regarding Standard & Poor's.
6
<PAGE>
Fund Performance
The bar chart and table opposite illustrate the short-term variability in the
Fund's performance and the Fund's returns relative to a common measure of
performance. The bar chart illustrates how the Fund's performance varies from
year to year over the periods shown.
During the periods presented in the bar chart, the Fund's highest return for a
quarter was 21.24% for the quarter ended December 31, 1998. The Fund's lowest
return for a quarter was -15.99% for the quarter ended September 30, 1990. The
Fund's year-to-date return was 4.85% as of March 31, 1999.
The table opposite illustrates how the Fund's average annual returns for
different calendar periods compare to the returns of the S&P 500 Index. The
table reflects the impact of the Fund's expenses and assumes that you redeem
your investment in the Fund at the end of each period.
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Calendar Year Total Returns
[BARCHART]
<TABLE>
<CAPTION>
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998
- ----- ----- ----- ---- ----- ---- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
25.48% -10.23% 34.37% 8.38% 14.52% -0.06% 36.14% 24.51% 30.33% 28.24%
</TABLE>
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Average Annual Total Return
(as of December 31, 1998)
1 Year 5 Years 10 Years
------ ------- --------
S&P 500 Index Fund 28.24% 23.14% 18.18%
S&P 500 Index 28.70% 24.08% 19.21%
Both the bar chart and table assume reinvestment of dividends and
distributions. As with all mutual funds, past performance is not an indication
of future performance.
[Sidebar]
All mutual funds use a standard formula to calculate total return. Total return
measures the price change in a share assuming the reinvestment of all dividend
income and capital gain distributions.
7
<PAGE>
GE Investments Funds, Inc. Prospectus
Equity Funds
PREMIER GROWTH EQUITY FUND
Investment Objective: Seeks long-term growth of capital and future income
rather than current income.
The Strategy
The Premier Growth Equity Fund invests primarily in a more concentrated
portfolio of equity securities of large- and medium-sized companies with
above-average growth histories and/or growth potential. The portfolio manager
chooses equity securities from a number of industries based on the merits of
individual companies. Stock selection is key to the performance of the Fund.
The portfolio manager seeks to identify stocks of growth companies with
characteristics such as:
o above-average annual growth rates
o financial strength
o leadership in their respective industries
o high quality management focused on generating shareholder value
The Fund also may invest to a lesser extent in foreign securities and debt
securities. The Fund generally intends to hold its investments for a long
time, which results in a relatively low portfolio turnover rate. The portfolio
manager may use various investment techniques to adjust the Fund's investment
exposure, but there is no guarantee that these techniques will work.
The Risks
The principal risks of investing in this Fund are stock market risk and style
risk. To the extent that the portfolio manager invests in foreign securities
or debt securities, the Fund would be subject to foreign exposure risk,
interest rate risk and credit risk.
If you would like additional information regarding the Fund's investment
strategies and risks, please refer to "More on Strategies and Risks" later in
this Prospectus.
8
<PAGE>
Fund Performance
The bar chart and table opposite illustrate the short-term variability in the
Fund's performance and the Fund's returns relative to a common measure of
performance. The bar chart illustrates how the Fund's performance varies from
year to year over the periods shown.
During the periods presented in the bar chart, the Fund's highest return for a
quarter was 23.96% for the quarter ended December 31, 1998. The Fund's lowest
return for a quarter was -6.54% for the quarter ended September 30, 1998. The
Fund's year-to-date return was 9.02% as of March 31, 1999.
The table opposite illustrates how the Fund's average annual returns for
different calendar periods compare to the returns of the S&P 500 Index. The
table reflects the impact of the Fund's expenses. It assumes that you redeem
your investment in the Fund at the end of each period.
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Calendar Year Total Returns
[BARCHART]
1998
- -----
36.53%
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Average Annual Total Return
(as of December 31, 1998)
Since
1 Year Inception*
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Premier Growth Equity Fund 36.53% 38.73%
S&P 500 Index 28.70% 29.21%
Both the bar chart and table assume reinvestment of dividends and
distributions. As with all mutual funds, past performance is not an indication
of future performance.
* Inception date (commencement of investment operations): December 12, 1997
[Sidebar]
All mutual funds use a standard formula to calculate total return. Total
return measures the price change in a share assuming the reinvestment of all
dividend income and capital gain distributions.
9
<PAGE>
GE Investments Funds, Inc. Prospectus
Equity Funds
VALUE EQUITY FUND
Investment Objective: Seeks long-term growth of capital and future income.
The Strategy
The Value Equity Fund invests primarily in equity securities of mid-cap U.S.
companies that the portfolio manager believes are undervalued by the market
and have above-average growth potential. The dollar-weighted median market
capitalization of the companies in the Fund's portfolio will fall within the
mid-cap range defined by the Morningstar rating agency between $1.3 and $8.4
billion as of December 31, 1998. The portfolio manager also invests in
companies that are considered "special situation companies" where due to
management turnaround, corporate or asset restructuring or significantly
undervalued assets, their securities may not have performed well in the recent
past, but appears to have potential for significant future earnings growth.
Stock selection is key to the performance of the Fund.
The Fund is value-oriented and seeks to identify undervalued companies where a
catalyst exists to recognize value or improve a company's profitability.
Examples of these catalysts are:
o new management
o industry consolidation
o company restructuring
o change in the company's fundamentals
The Fund also may invest to a lesser extent in foreign securities and debt
securities. The portfolio manager may use various investment techniques to
adjust the Fund's investment exposure, but there is no guarantee that these
techniques will work.
The Risks
The principal risks of investing in this Fund are stock market risk and style
risk. To the extent that the portfolio manager invests in foreign securities
or debt securities, the Fund would be subject to foreign exposure risk,
interest rate risk and credit risk.
If you would like additional information regarding the Fund's investment
strategies and risks, please refer to "More on Strategies and Risks" later in
this Prospectus.
10
<PAGE>
Fund Performance
The bar chart and table opposite illustrate the short-term variability in the
Fund's performance and the Fund's returns relative to a common measure of
performance. The bar chart illustrates how the Fund's performance varies from
year to year over the periods shown.
During the periods presented in the bar chart, the Fund's highest return for a
quarter was 13.99% for the quarter ended December 31, 1998. The Fund's lowest
return for a quarter was -17.15% for the quarter ended September 30, 1998. The
Fund's year-to-date return was 6.12% as of March 31,1999.
The table opposite illustrates how the Fund's average annual returns for
different calendar periods compare to the returns of the S&P 500 Index. The
table reflects the impact of the Fund's expenses. It assumes that you redeem
your investment in the Fund at the end of each period.
- -------------------------------------------------------------------------------
Calendar Year Total Returns
[BARCHART]
1998
- ------
6.69%
- -------------------------------------------------------------------------------
Average Annual Total Return
(as of December 31, 1998)
Since
1 Year Inception*
------ ----------
Value Equity Fund 6.69% 23.04%
S&P 500 Index 28.70% 31.37%
Both the bar chart and table assume reinvestment of dividends and
distributions. If GE Investment Management had not reduced certain expenses
during certain of the periods shown, the Fund's total returns would have been
lower. As with all mutual funds, past performance is not an indication of
future performance.
* Inception date (commencement of investment operations): May 1, 1997
[Sidebar]
All mutual funds use a standard formula to calculate total return. Total return
measures the price change in a share assuming the reinvestment of all dividend
income and capital gain distributions.
11
<PAGE>
GE Investments Funds, Inc. Prospectus
Equity Funds
INTERNATIONAL EQUITY FUND
Investment Objective: Seeks long-term growth of capital.
The Strategy
The International Equity Fund invests primarily in equity securities of
companies located in developed and developing countries, other than the United
States. The portfolio managers focus on companies that they expect will grow
faster than relevant markets and whose security price does not fully reflect
their potential for growth. Under normal circumstances, the Fund's assets are
invested in no fewer than three different countries. Stock selection is key to
the performance of the Fund.
The portfolio managers seek to identify securities of growth companies with
characteristics such as:
o low prices relative to their long-term cash earnings potential
o potential for significant improvement in the company's business
o financial strength
o sufficient liquidity
The Fund also may invest to a lesser extent in debt securities and securities
of companies located in the United States. The portfolio managers may use
various investment techniques to adjust the Fund's investment exposure, but
there is no guarantee that these techniques will work.
The Risks
The principal risks of investing in this Fund are stock market risk, foreign
exposure risk, style risk and emerging markets risk. To the extent that the
portfolio managers invest in debt securities, the Fund would be subject to
interest rate risk and credit risk.
If you would like additional information regarding the investment strategies
and risks associated with this Fund, please refer to "More on Strategies and
Risks" later in this Prospectus.
12
<PAGE>
Fund Performance
The bar chart and table opposite illustrate the short-term variability in the
Fund's performance and the Fund's returns relative to a common measure of
performance. The bar chart illustrates how the Fund's performance varies from
year to year over the periods shown.
During the periods presented in the bar chart, the Fund's highest return for a
quarter was 18.67% for the quarter ended December 31, 1998. The Fund's lowest
return for a quarter was -17.55% for the quarter ended September 30, 1998. The
Fund's year-to-date return was 3.28% as of March 31, 1999.
The following table illustrates how the Fund's average annual returns for
different calendar periods compare to the returns of the Morgan Stanley
Capital International Europe Australasia Far East Index ("MSCI EAFE Index").
The table reflects the impact of the Fund's expenses. It assumes that you
redeem your investment in the Fund at the end of each period.
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Calendar Year Total Returns
[BARCHART]
1996 1997 1998
- ----- ------ ------
9.91% 10.17% 17.45%
- -------------------------------------------------------------------------------
Average Annual Total Return
(as of December 31, 1998)
Since
1 Year Inception*
------ ----------
International Equity Fund 17.45% 12.03%
MSCI EAFE Index 20.00% 8.79%
Both the bar chart and table assume reinvestment of dividends and
distributions. If GE Investment Management had not reduced certain expenses
during certain of the periods shown, the Fund's total returns would have been
lower.
As with all mutual funds, past performance is not an indication of future
performance.
* Inception date (commencement of investment operations): May 1, 1995
[Sidebar]
All mutual funds use a standard formula to calculate total return. Total
return measures the price change in a share assuming the reinvestment of all
dividend income and capital gain distributions.
13
<PAGE>
[This page intentionally left blank.]
14
<PAGE>
GE Investments Funds, Inc. Prospectus
INCOME FUNDS
[Sidebar]
An investment in a GE Investment Income Fund is not a deposit of any bank and
is not insured or guaranteed by the Federal Deposit Insurance Corporation or
any other government agency. Investment in the Income Funds is subject to
risk, including possible loss of principal invested.
Who may want to invest in a GE Investments Income Fund?
The GE Investments Income Funds may be appropriate to support your variable
contract if you:
o seek an investment derived from income bearing securities
o seek lower potential volatility than equity funds over the
long term
o want to diversify a portfolio composed mostly of equity funds
The GE Investments Income Funds may not be appropriate to support your
variable contract if you want:
o high potential capital appreciation
Income funds generally invest in debt securities. Debt securities are bonds
and other securities that are used by issuers to borrow money from investors.
Holders of debt securities have a higher priority claim to assets than do
equity holders. Typically, the debt issuer pays the investor a fixed, variable
or floating rate of interest and must repay the borrowed amount at maturity.
Some debt securities, such as zero coupon bonds, are sold at a discount from
their face values instead of paying interest.
15
<PAGE>
GE Investments Funds, Inc. Prospectus
Income Funds
INCOME FUND
Investment Objective: Seeks maximum income consistent with prudent investment
management and the preservation of capital.
The Strategy
The Income Fund invests primarily in a variety of debt securities, such as
mortgage-backed securities, corporate bonds, U.S. Government securities, and
money market instruments. The Fund normally has a weighted average maturity of
approximately five to ten years.
The portfolio managers seek to identify debt securities with characteristics
such as:
o attractive yields and prices
o the potential for capital appreciation
o reasonable credit quality
The Fund also may invest to a lesser extent in asset-backed securities and
foreign securities. The portfolio managers may use various investment
techniques to adjust the Fund's investment exposure, but there is no guarantee
that these techniques will work.
The Risks
The principal risks of investing in this Fund are interest rate risk, credit
risk and prepayment risk. To the extent that the portfolio managers invest in
foreign securities, the Fund would be subject to foreign exposure risk.
Certain portfolio securities are derivative securities that carry derivative
securities risk.
If you would like additional information regarding the risks associated with
this Fund, please refer to "More on Strategies and Risks" later in this
Prospectus.
16
<PAGE>
FUND PERFORMANCE
The bar chart and table opposite illustrate the short-term variability in the
Fund's performance and the Fund's returns relative to a common measure of
performance. The bar chart illustrates how the Fund's performance varies from
year to year over the periods shown.
During the periods presented in the bar chart, the Fund's highest return for a
quarter was 3.84% for the quarter ended November 30, 1996. The Fund's lowest
return for a quarter was -2.03% for the quarter ended March 31, 1996. The
Fund's year-to-date return was -0.65% as of March 31, 1999.
The table opposite illustrates how the Fund's average annual returns for
different calendar periods compare to the returns of the Lehman Brothers
Aggregate Bond Index ("LB Aggregate Bond Index"). The table reflects the
impact of the Fund's expenses. It assumes that you redeem your investment in
the Fund at the end of each period.
- -------------------------------------------------------------------------------
Calendar Year Total Returns
[BARCHART]
1996 1997 1998
- ---- ---- ----
2.92% 9.00% 7.95%
- -------------------------------------------------------------------------------
Average Annual Total Return
(as of December 31, 1998)
Since
1 Year Inception*
------ ----------
Income Fund 7.95% 9.07%
LB Aggregate Bond Index 8.67% 10.00%
Both the bar chart and table assume reinvestment of dividends and
distributions. If GE Investment Management had not reduced certain expenses
during certain of the periods shown, the Fund's total returns would have been
lower. As with all mutual funds, past performance is not an indication of
future performance.
* Inception date (commencement of investment operations): January 3, 1995
[Sidebar]
All mutual funds use a standard formula to calculate total return. Total
return measures the price change in a share assuming the reinvestment of all
dividend income and capital gain distributions.
17
<PAGE>
GE Investments Funds, Inc. Prospectus
Income Funds
Global Income Fund
Investment Objective: Seeks high return, emphasizing current income and, to a
lesser extent, capital appreciation.
The Strategy
The Global Income Fund invests primarily in foreign and domestic
income-bearing debt securities that include U.S. Government securities,
corporate bonds, money market instruments, foreign debt securities,
mortgage-backed securities, asset-backed securities and certificates of
deposit, bankers' acceptances or time deposits of U.S. and foreign banks
(including branches thereof) having total assets of more than $1 billion.
Under normal circumstances, the Fund's assets are invested in no fewer than
three different countries. The portfolio manager considers the following
factors in determining where an issuer is located: country of organization,
primary securities trading market, location of assets, or country where the
issuer derives at least half of its revenues and profits.
In selecting investments for the Fund, the portfolio manager considers such
factors as:
o the instrument's duration
o yield
o issuer credit quality
o prospects for capital appreciation
o currency and interest rate trends
The Fund also may invest to a lesser extent in equity securities. The
portfolio managers may use various investment techniques to adjust the Fund's
investment exposure, but there is no guarantee that these techniques will
work.
The Risks
The principal risks of investing in this Fund are interest rate risk, credit
risk, foreign exposure risk and emerging markets risk. To the extent that the
portfolio managers invest in equity securities, the Fund would be subject to
stock market risk. Certain portfolio securities are derivative securities that
carry derivative securities risk.
If you would like additional information regarding the Fund's investment
strategies and risks, please refer to "More on Strategies and Risks" later in
this Prospectus.
18
<PAGE>
Fund Performance
The bar chart and table opposite illustrate the short-term variability in the
Fund's performance and the Fund's returns relative to a common measure of
performance. The bar chart illustrates how the Fund's performance varies from
year to year over the periods shown.
During the periods presented in the bar chart, the Fund's highest return for a
quarter was 7.34% for the quarter ended September 30, 1998. The Fund's lowest
return for a quarter was 0.46% for the quarter ended October 31, 1998. The
Fund's year-to-date return was -4.27% as of March 31, 1999.
The table opposite illustrates how the Fund's average annual returns for
different calendar periods compare to the returns of the JP Morgan Global
Government Bond Index (" JPM Global Bond Index"). The table reflects the
impact of the Fund's expenses. It assumes that you redeem your investment in
the Fund at the end of each period.
- -------------------------------------------------------------------------------
Calendar Year Total Returns
[BARCHART]
1998
- ----
13.33%
- -------------------------------------------------------------------------------
Average Annual Total Return
(as of December 31, 1998)
Since
1 Year Inception*
------ ----------
Global Income Fund 13.33% 9.96%
JPM Global Bond Index 15.31% 12.18%
Both the bar chart and table assume reinvestment of dividends and
distributions. As with all mutual funds, past performance is not an indication
of future performance.
* Inception date (commencement of investment operations): May 1, 1997
[Sidebar]
All mutual funds use a standard formula to calculate total return. Total
return measures the price change in a share assuming the reinvestment of all
dividend income and capital gain distributions.
19
<PAGE>
[This page intentionally left blank.]
20
<PAGE>
GE Investments Funds, Inc. Prospectus
Asset Allocation Funds
Who may want to invest in a GE Investment Asset Allocation Fund?
The Total Return Fund may be appropriate to support your variable contract if
you:
o seek an investment derived from both capital appreciation and income
o want a long-term investment and do not care whether investment returns are
derived from capital appreciation or income
The Total Return Fund is designed to meet the needs of investors who prefer to
have their asset allocation decisions made by professional money managers. They
provide an investor with a means to seek total return by investing in a core
portfolio that typically holds both equity securities and debt securities.
Although an investor may achieve the same mix of capital appreciation potential
and income by investing in various combinations of individual Equity or Income
Funds, the Total Return Fund offers the opportunity to pursue a total return
strategy by investing in a single fund.
[Sidebar]
An investment in a GE Investments Asset Allocation Fund is not a deposit of any
bank and is not insured by the Federal Deposit Insurance Corporation or any
other government agency. An investment in the GE Investments Total Return Fund
is subject to investment risks, including possible loss of principal invested
21
<PAGE>
GE Investments Funds, Inc. Prospectus
Asset Allocation Funds
Total Return Fund
Investment Objective: Seeks the highest total return, composed of current income
and capital appreciation, as is consistent with prudent investment risk.
The Strategy
The Total Return Fund invests in both equity securities and debt securities. The
portfolio managers follow an asset allocation process established by GE
Investment Management's Asset Allocation Committee to diversify holdings across
asset classes. It is likely that the Fund will maintain a weighting in U.S.
equity securities, debt securities and foreign securities based on the relative
attractiveness of the asset classes. The Fund invests in equity securities
principally for their capital appreciation potential and debt securities
principally for their income potential. Within each asset class, the portfolio
managers use active security selection to choose securities based on the merits
of individual issuers.
The portfolio managers seek to identify equity securities of companies with
characteristics such as:
o strong earnings growth
o attractive prices
o a presence in successful industries
o high quality management
The portfolio managers seek to identify debt securities with characteristics
such as:
o attractive yields and prices
o the potential for capital appreciation
o reasonable credit quality
The portfolio managers may use various investment techniques to adjust the
Fund's investment exposure, but there is no guarantee that these techniques will
work.
The Fund's asset allocation process may result in a high portfolio turnover
rate, which may cause the Fund to experience increased transaction costs and
shareholders to incur increased taxes on their investment in the Fund.
The Risks
The principal risks of investing in this Fund are stock market risk, foreign
exposure risk, interest rate risk, credit risk, municipal securities risk and
prepayment risk. Certain portfolio securities are derivative securities that
carry derivative securities risk.
If you would like additional information regarding the Fund's investment
strategies and risks, please refer to "More on Strategies and Risks" later in
this Prospectus.
22
<PAGE>
Fund Performance
The bar chart and table opposite illustrate the short-term variability in the
Fund's performance. The bar chart illustrates how the Fund's performance varies
from year to year over the periods shown.
During the periods presented in the bar chart, the Fund's highest return for a
quarter was 10.69% for the quarter ended March 31, 1991. The Fund's lowest
return for a quarter was -9.91% for the quarter ended September 30, 1990.The
Fund's year-to-date return was 3.41% as of March 31, 1999.
The table opposite illustrates how the Fund's average annual returns for
different calendar periods compare to the return of the S&P 500 Index and the
return of the Lehman Brothers Aggregate Bond Index ("LB Aggregate Bond Index").
The table reflects the impact of the Fund's expenses. It assumes that you redeem
your investment in the Fund at the end of each period.
- --------------------------------------------------------------------------------
Calendar Year Total Returns
1989 15.21%
1990 -0.38%
1991 27.35%
1992 7.48%
1993 13.55%
1994 2.54%
1995 28.07%
1996 10.60%
1997 17.99%
1998 17.10%
- --------------------------------------------------------------------------------
Average Annual Total Return
(as of December 31, 1998)
<TABLE>
<CAPTION>
1 Year 5 Years 10 Years
------ ------- --------
<S> <C> <C> <C>
Total Return Fund 17.10% 14.99% 13.60%
S&P 500 Index 28.70% 24.08% 19.21%
LB Aggregate Bond Index 8.67% 7.27% 9.26%
</TABLE>
Both the bar chart and table assume reinvestment of dividends and distributions.
As with all mutual funds, past performance is not an indication of future
performance.
[Sidebar]
All mutual funds use the same formula to calculate total return. Total return
measures the price change in a share assuming the reinvestment of all dividend
income and capital gain distributions.
23
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24
<PAGE>
GE Investments Funds, Inc. Prospectus
Money Market Funds
Who may want to invest in the GE Investments Money Market Fund?
The GE Investments Money Market Fund may be appropriate to support your variable
contract if you:
o want an investment derived from modest but regular income
o are investing for a short period of time
o want a stable investment
The GE Investments Money Market Fund may not be appropriate to support your
variable contract if you:
o want a long-term investment
o seek capital appreciation
Money Market funds invest in short-term, high quality debt securities. They seek
to provide stability of principal and regular income. The income provided by a
money market fund varies with interest rate movements.
25
<PAGE>
GE Investments Funds, Inc. Prospectus
Money Market Funds
Money Market Fund
Investment Objective: Seeks a high level of current income consistent with the
preservation of capital and maintenance of liquidity.
The Strategy
The Money Market Fund invests primarily in short-term, U.S. dollar-denominated
money market instruments. The Fund's investments may include U.S. Government
securities, repurchase agreements, commercial paper, foreign certificates of
deposit, variable rate securities, debt securities, Eurodollar deposits and
domestic and foreign bank deposits. The portfolio manager limits investments to
high quality securities with maturities of up to 13 months and limits the
weighted average maturity to 90 days.
The Fund invests consistent with industry standards governing security quality,
maturity and portfolio diversification. The Fund may invest more than 25% of its
total assets in the banking services industry. Changes in banking regulations or
the economy can have a significant negative impact on the banking industry.
All of the Fund's assets are rated in the two highest short-term rating
categories (or their unrated equivalents), and 95% of its assets are rated in
the highest rating category (or its unrated equivalent) by a nationally
recognized statistical rating organization. Additional information about the
money market instruments in which the Fund may invest, including rating
categories, is contained in the Statement of Additional Information.
The Risks
The principal risks of investing in this Fund are interest rate risk, credit
risk, repurchase agreement risk and foreign exposure risk.
An investment in the Fund is not insured or guaranteed by the Federal Deposit
Insurance Corporation (FDIC) or any other government agency. Although the Fund
seeks to maintain a share price of $1.00, it is possible to lose money by
investing in the Fund. The Fund's yield will change due to movements in current
short-term interest rates and market conditions. A change in interest rates or
default on the Fund's investments could cause the Fund's share price to decline
below $1.00.
If you would like additional information regarding the investment strategies and
risks associated with this Fund, please refer to "More on Strategies and Risks"
later in this Prospectus.
26
<PAGE>
Fund Performance
The bar chart and table opposite illustrate the short-term variability in the
Fund's performance and the Fund's returns relative to a common measure of
performance. The bar chart illustrates how the Fund's performance varies from
year to year over the periods shown.
During the periods presented in the bar chart, the Fund's highest return for a
quarter was 2.17% for the quarter ended June 30, 1989. The Fund's lowest return
for a quarter was 0.20% for the quarter ended January 31, 1994. The Fund's
year-to-date return was 1.16% as of March 31, 1999.
The table opposite illustrates how the Fund's average annual returns for
different calendar periods compare to the returns of the 90 Day Treasury Bill
Rate ("90 Day T-Bill"). The table reflects the impact of the Fund's expenses. It
assumes that you redeemed your investment in the Fund at the end of each period.
The Fund's seven day yield was 4.72% as of December 31, 1998
- --------------------------------------------------------------------------------
Calendar Year Total Returns
1989 8.66%
1990 7.14%
1991 5.29%
1992 3.02%
1993 2.39%
1994 3.77%
1995 5.90%
1996 5.41%
1997 5.41%
1998 5.26%
- --------------------------------------------------------------------------------
Average Annual Total Return
(as of December 31, 1998)
<TABLE>
<CAPTION>
1 Year 5 Years 10 Years
------ ------- --------
<S> <C> <C> <C>
Money Market Fund 5.26% 5.14% 5.20%
90 Day T-Bill 4.88% 5.05% 5.34%
</TABLE>
Both the bar chart and table assume reinvestment of dividends and distributions.
If GE Investment Management had not reduced certain expenses during certain of
the periods shown, the Fund's total returns would have been lower. As with all
mutual funds, past performance is not an indication of future performance.
[Sidebar]
All mutual funds use a standard formula to calculate total return. Total return
measures the price change in a share assuming the reinvestment of all dividend
income and capital gain distributions.
27
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28
<PAGE>
GE Investments Funds, Inc. Prospectus
Other Funds
[Sidebar]
An investment in the Real Estate Securities Fund is not a deposit of any bank
and is not insured or guaranteed by the Federal Deposit Insurance Corporation or
any other agency. Investment in this Fund is subject to risk, including possible
loss of principal invested.
Who May Want to Invest in the Real Estate Securities Fund?
The Real Estate Securities Fund may be appropriate to support your variable
contract if you:
o seek an investment derived from both current income and capital appreciation
o are willing to ride out market fluctuations in pursuit of
potential long-term returns
The Real Estate Securities Fund may not be an appropriate investment to support
your variable contract if you:
o want any degree of market sector diversification in your investment
o are unwilling to accept potentially significant losses on your investment
during periods (possibly extended periods) when real estate values or the
fortunes of the real estate industry are in decline or depressed
The Real Estate Securities Fund is designed for investors who seek to allocate a
portion of their variable contract investment to a fund that concentrates in
investments in a wide range of equity securities and debt securities of issuers
in the real estate industry.
29
<PAGE>
GE Investments Funds, Inc. Prospectus
Other Funds
Real Estate Securities Fund
Investment Objective:
Seeks maximum total return through current income and capital appreciation.
The Strategy
The Real Estate Securities Fund invests primarily in equity securities and debt
securities of U.S. issuers that are principally engaged in or related to the
real estate industry, including those that own significant real estate assets -
real estate securities. The Fund does not invest directly in real estate.
The portfolio manager considers an issuer to be principally "engaged in" or
"principally related to" the real estate industry if at least 50% of its assets
(marked-to-market), gross income or net profits are attributable to ownership,
construction, management or sale of residential, commercial or industrial real
estate, or to products or services related to the real estate industry. Issuers
engaged in the real estate industry include equity REITs, mortgage REITs, real
estate brokers and developers, companies that manage real estate and companies
that own substantial amounts of real estate. Issuers in businesses related to
the real estate industry include manufacturers and distributors of building
supplies and financial institutions that issue or service mortgages.
The Fund also may invest to a lesser extent in equity securities and debt
securities of issuers outside the real estate industry as well as foreign
securities. The Fund also may invest in high yield securities. The portfolio
managers may use various investment techniques to adjust the Fund's investment
exposure, but there is no guarantee that these techniques will work.
Because the Fund may acquire debt securities of issuers primarily engaged in or
related to the real estate industry, it also could conceivably own real estate
directly as a result of a default on such securities. Any rental income or
income from the disposition of such real estate could adversely affect its
ability to retain its tax status as a regulated investment company.
The Risks
The principal risks of investing in this Fund are stock market risk,
concentration risk, REIT-specific risk and real estate securities risk. To the
extent that the portfolio manager invests in foreign securities or debt
securities, the Fund would be subject to foreign exposure risk, interest rate
risk and credit risk. To the extent that the portfolio manager invests in high
yield securities, the Fund would be subject high yield securities risk.
If you would like additional information regarding the Fund's investment
strategies and risks, please refer to "More on Strategies and Risks" later in
this Prospectus.
30
<PAGE>
Fund Performance
The bar chart and table opposite illustrate the short-term variability in the
Fund's performance and the Fund's returns relative to a common measure of
performance. The bar chart illustrates how the Fund's performance varies from
year to year over the periods shown.
During the periods presented in the bar chart, the Fund's highest return for a
quarter was 19.11% for the quarter ended December 31, 1996. The Fund's lowest
return for a quarter was -10.17% for the quarter ended September 30, 1998. The
Fund's year-to-date return was -3.02% as of March 31, 1999.
The table opposite illustrates how the Fund's average annual returns for
different calendar periods compare to the returns of the Wilshire Real Estate
Investment Trust Index ("Wilshire REIT Index"). The table reflects the impact of
the Fund's expenses. It assumes that you redeem your investment in the Fund at
the end of each period.
- --------------------------------------------------------------------------------
Calendar Year Total Returns Chart
1996 36.24%
1997 19.49%
1998 -17.68%
- --------------------------------------------------------------------------------
Average Annual Total Return
(as of December 31, 1998)
<TABLE>
<CAPTION>
Since
1 Year Inception*
<S> <C> <C>
Real Estate Securities Fund -17.68% 13.03%
Wilshire REIT Index -17.43% 12.56%
</TABLE>
Both the bar chart and table assume reinvestment of dividends and distributions.
If GE Investment Management had not reduced certain expenses during certain of
the periods shown, the Fund's total return would have been lower. As with all
mutual funds, past performance is not an indication of future performance.
*Inception date (commencement of investment operations): May 1, 1995
[Sidebar]
All mutual funds use a standard formula to calculate total return. Total return
measures the price change in a share assuming the reinvestment of all dividend
income and capital gain distributions.
31
<PAGE>
GE Investments Funds, Inc. Prospectus
More on Strategies and Risks
More on Risks
Like all mutual funds, investing in the GE Investments Funds involves risk
factors and special considerations. A Fund's risk is defined primarily by its
principal investment strategies, which are described earlier in this Prospectus.
Investments in a Fund are not insured against loss of principal. As with any
mutual fund, there can be no assurance that a Fund will achieve its investment
objective. Investing in shares of a Fund should not be considered a complete
investment program. The share value of the Equity Funds, Income Funds, Total
Return Fund and Real Estate Securities Fund will rise and fall. Although the
Money Market Fund seeks to preserve the value of your investment at $1.00 per
share, it is possible to lose money by investing in the Fund.
One of your most important investment considerations should be balancing risk
and return. Different types of investments tend to respond differently to shifts
in the economic and financial environment. So, diversifying your investments
among different asset classes -- such as stocks, bonds and cash -- and within an
asset class -- such as small-cap and large-cap stocks -- can help you manage
risk and achieve the results you need to comfortably reach your financial goals.
The primary risks of particular investments are summarized below. For more
information about the risks associated with the Funds, please see the Statement
of Additional Information (SAI), which is incorporated by reference into this
Prospectus.
High yield securities risk: Below investment-grade securities, sometimes called
"junk bonds," are considered speculative. These securities have greater risk of
default than higher rated securities. The market value of below investment-grade
securities is more sensitive to individual corporate developments and economic
changes than higher rated securities. The market for below investment-grade
securities may be less active than for higher rated securities, which can
adversely affect the price at which these securities may be sold. Less active
markets may diminish a Fund's ability to obtain accurate market quotations when
valuing the portfolio securities and calculating a Fund's net asset value. In
addition, a Fund may incur additional expenses if a holding defaults and a Fund
has to seek recovery of its principal investment. Below investment-grade
securities may also present risks based on payment expectations. For example,
these securities may contain redemption or call provisions. If an issuer
exercises these provisions in a declining interest rate market the Fund would
have to replace the security with a lower yielding security resulting in a
decreased return for investors.
Credit Risk: The price of a bond is affected by the issuer's or counterparty's
credit quality. Changes in financial condition and general economic conditions
can affect the ability to honor financial obligations and therefore credit
quality. Lower quality bonds are generally more sensitive to these changes than
higher quality bonds. Even within securities considered investment grade,
differences exist in credit quality and some investment grade debt securities
may have speculative characteristics. A security's price may be adversely
affected by the market's opinion of the security's credit quality level even if
the issuer or counterparty has suffered no degradation in ability to honor the
obligation.
32
<PAGE>
Derivative Securities Risk: A fund's use of various investment techniques to
increase or decrease its exposure to changing security prices, interest rates,
currency exchange rates, commodity prices or other factors that affect security
values may involve derivative securities and contracts. Derivative securities
and contracts (securities or contracts whose values are based on other
securities, currencies or indices) include options contracts (on stocks,
indices, currencies, futures contracts, or bonds), forward currency exchange
contracts, futures contracts (on securities, indices and bonds), currency and
interest rate swap contracts, and structured securities. Derivative securities
and contracts may be used as a direct investment or as a hedge for a Fund's
portfolio or a portion of a portfolio. Hedging involves using a security or
contract to offset investment risk. Hedging may include reducing the risk of a
position held in a portfolio. Hedging and other investment techniques also may
be used to increase a Fund's exposure to a particular investment strategy. If
the portfolio managers' judgment of market conditions proves incorrect or the
strategy does not correlate well with a Fund's investments, the use of
derivatives could result in a loss, regardless of whether the intent was to
reduce risk or increase return, and may increase a Fund's volatility. In
addition, in the event that non-exchange traded derivatives are used, these
derivatives could result in a loss if the counterparty to the transaction does
not perform as promised.
Emerging Markets Risk: Emerging markets securities bear most foreign exposure
risks discussed below. In addition, there are greater risks involved in
investing in emerging markets than in developed foreign markets. Specifically,
the economic structures in emerging markets countries are less diverse and
mature than those in developed countries, and their political systems are less
stable. Investments in emerging markets countries may be affected by national
policies that restrict foreign investment. Emerging markets countries may have
less developed legal structures, and the small size of their securities markets
and low trading volumes can make investments illiquid and more volatile than
investments in developed countries. As a result, a Fund investing in emerging
markets countries may be required to establish special custody or other
arrangements before investing.
Foreign Exposure Risk: Investing in foreign securities, including depositary
receipts, or securities of U.S. entities with significant foreign operations,
involves additional risks which can affect a Fund's performance. Foreign
securities markets, particularly emerging markets, may be less liquid, more
volatile and subject to less government supervision than U.S. markets. There may
be difficulties enforcing contractual obligations, and it may take more time for
transactions to clear and settle in foreign countries than in the U.S. Less
information may be available about foreign issuers. The costs of buying and
selling foreign securities, including tax, brokerage and custody costs,
generally are higher than those involving domestic transactions. The specific
risks of investing in foreign securities include:
o Currency Risk: The values of foreign investments may be affected by changes
in currency rates or exchange control regulations. If the local currency gains
strength against the U.S. dollar, the value of the foreign security increases in
U.S. dollar terms. Conversely, if the local currency weakens against the U.S.
dollar, the value of the foreign security declines in U.S. dollar terms. U.S.
dollar-denominated securities of foreign issuers, including depositary receipts,
also are subject to currency risk based on their related investments.
o Political/Economic Risk: Changes in economic, tax or foreign investment
policies, government stability, war or other
33
<PAGE>
GE Investments Funds, Inc. Prospectus
More on Strategies and Risks
political or economic actions may have an adverse effect on a Fund's foreign
investments.
o Regulatory Risk: Foreign companies often are not subject to uniform
accounting, auditing and financial reporting standards or to other regulatory
practices and requirements common to U.S. companies.
Illiquid Securities Risk: Illiquid securities may be difficult to resell at
approximately the price they are valued in the ordinary course of business in
seven days or less. When investments cannot be sold readily at the desired time
or price, a Fund may have to accept a lower price or may not be able to sell the
security at all, or forgo other investment opportunities, all of which may have
an impact on the Fund.
Interest Rate Risk: Bond prices rise when interest rates decline and decline
when interest rates rise. The longer the duration of a bond, the more a change
in interest rates affects the bond's price. Short-term and long-term interest
rates may not move the same amount and may not move in the same direction.
Municipal Securities Risk: Municipal securities are backed by the entities that
issue them and/or other revenue streams. Like other debt securities, prices of
municipal debt securities are affected inversely by changes in interest rates
and by changes in the credit rating or financial condition of the issuer. Some
municipal securities are insured and guarantee the timely payment of interest
and repayment of principal. The market for municipal securities is volatile and
can be significantly affected by tax, legislative or political changes.
Prepayment Risk: Prices and yields of mortgage-backed securities assume the
securities will be redeemed at a given time. When interest rates decline,
mortgage-backed securities experience higher prepayments because the underlying
mortgages are repaid earlier than expected. A Fund's portfolio manager may be
forced to invest the proceeds from prepaid mortgage-backed securities at lower
rates, which results in a lower return for the Fund. When interest rates
increase, mortgage-backed securities experience lower prepayments because the
underlying mortgages may be repaid later than expected. This typically reduces
the value of the underlying securities.
Real Estate Securities Risk: The securities of issuers that own, construct,
manage or sell residential, commercial or industrial real estate are subject to
risks in addition to those of other issuers. Such risks include: changes in real
estate values and property taxes, overbuilding, variations in rental income,
interest rates and changes in tax and regulatory requirements, such as those
relating to the environment. Performance of a particular real estate security
also may depend on the structure, cash flow, and management skill of the
particular company.
REIT-Specific Risk: Equity REITs may be affected by changes in the value of the
underlying property owned by the trusts, while mortgage REITs may be affected by
the quality of any credit extended. Further, equity and mortgage REITs are
dependent upon management skill and are not diversified. Such trusts are also
subject to heavy cash flow dependency, defaults by borrowers, self-liquidation,
and the possibility of failing to qualify for special tax treatment under
Subchapter M of the Internal Revenue Code and to maintain an exemption under the
1940 Act. Finally, certain REITs may be self-liquidating in that a specific term
of existence is provided for in the trust document. Such trusts run the risk of
liquidating at an economically inopportune time.
34
<PAGE>
Repurchase and Reverse Repurchase Agreements Risk: A Fund entering into a
repurchase agreement may suffer a loss if the other party to the transaction
defaults on its obligations and could be delayed or prevented from exercising
its rights to dispose of the underlying securities. The value of the underlying
securities might decline while the Fund seeks to assert its rights. The Fund
could incur additional expenses in asserting its rights or may lose all or part
of the income from the agreement. A reverse repurchase agreement involves the
risk that the market value of the securities retained by a Fund may decline
below the price of the securities the Fund has sold but is obligated to
repurchase at a higher price under the agreement.
Restricted Securities Risk: Restricted securities may be subject to legal
restraints on resale and, therefore, are typically less liquid than other
securities. The prices received from reselling restricted securities in
privately negotiated transactions may be less than those originally paid by a
Fund. Companies whose securities are restricted are not subject to the same
investor protection requirements as publicly traded securities.
Stock Market Risk: A Fund's share price will move up and down in reaction to
stock market movements. Stock prices change daily in response to company
activity and general economic and market conditions. A Fund's investments in
common stocks and other equity securities are subject to stock market risk,
which is the risk that the value of equity securities may decline. Also, equity
securities are subject to the risk that a particular issuer's securities may
decline in value, even during periods when equity securities in general are
rising. Additional stock market risks may be introduced when a particular equity
security is traded on a foreign market. For more detail on the related risks
involved in foreign markets, see foreign exposure risks.
Style Risk: Securities with different characteristics tend to shift in and out
of favor depending upon market and economic conditions as well as investor
sentiment. A Fund may underperform other equity funds that employ a different
style. A Fund also may employ a combination of styles that impact its risk
characteristics. Examples of different styles include growth and value
investing, as well as those focusing on large, medium, or small company stocks.
Growth investing risk: Growth stocks may be more volatile than other stocks
because they are more sensitive to investor perceptions of the issuing company's
growth potential. Growth oriented funds will typically underperform when value
investing is in favor.
Value investing risk: Undervalued stocks may not realize their perceived value
for extended periods of time or may never realize their perceived value. Value
stocks may respond differently to market and other developments than other types
of stocks. Value oriented funds will typically underperform when growth
investing is in favor.
Mid-Cap Company risk: Investments in securities of mid-cap companies entail
greater risks than investments in larger, more established companies. Mid-cap
companies tend to have more narrow product lines, more limited financial
resources and a more limited trading market for their stocks, as compared with
larger companies. As a result, their stock prices may decline significantly as
market conditions change.
35
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GE Investments Funds, Inc. Prospectus
More on Strategies and Risks
Other Risk Considerations
EURO Conversion. On January 1, 1999, eleven of the fifteen member countries of
the European Economic and Monetary Union (Participating Countries) established
fixed conversion rates between their existing sovereign currencies and the EURO,
a new common currency in Europe. The introduction of the EURO may result in
uncertainties for securities of European companies, European markets and the
operation of the Funds. The redenomination of certain European debt and equity
securities over a period of time may result in differences in various
accounting, tax and/or legal treatments that would not otherwise occur. Market
disruptions may occur that could adversely affect the value of European
securities and currencies held by the Funds. Other risks relate to the ability
of financial institution systems to process EURO transactions.
GE Investment Management has addressed ongoing EURO conversion issues in a broad
range of areas, including internal business applications, trading systems and
accounting systems. In addition, GE Investment Management has worked closely
with the Funds' major service providers to address EURO conversion issues. It is
possible, however, that the markets for securities in which certain Funds invest
may be adversely affected by the conversion to the EURO. Furthermore, individual
issuers may suffer increased costs and decreased earnings due to the long-term
impact of EURO conversion.
Year 2000. Like other business organizations and individuals around the world,
each of the Funds could be adversely affected if the computer systems used by
its Investment Managers and external service providers do not properly process
and calculate date-related information from and after January 1, 2000. This is
commonly known as the "Year 2000 Problem." GE Investment Management is engaged
in a multi-year effort to address the Year 2000 Problem in a broad range of
areas, including internal business applications, process-enabling systems and
facilities. In addition, efforts are underway to track each of the Funds' major
service providers to see what they have completed, or have undertaken to address
the Year 2000 Problem. At this time, however, there can be no assurance that
these steps will be sufficient to avoid any adverse impact on the Funds.
Furthermore, it is possible that the markets for securities in which the Funds
invest may be detrimentally affected by computer failures throughout the
financial services industry beginning January 1, 2000. Corporate and
governmental data processing errors may result in production problems for
individual companies and overall economic uncertainties. Earnings of individual
issuers may be affected by remediation costs. In addition, it has been reported
that foreign institutions have made less progress in addressing the Year 2000
Problem than major U.S. entities, which could have a greater impact on certain
GE Investments Funds' investments that are more sensitive to these risks.
More on Investment Strategies
A Fund is permitted to use other securities and investment strategies in pursuit
of its investment objective, subject to limits established by the Funds' Board
of Trustees. No Fund is under any obligation to use any of the techniques or
strategies at any given time or under any particular economic condition. Certain
instruments and investment strategies may expose the Funds to other risks and
considerations, which are discussed in the Funds' SAI.
36
<PAGE>
Holding Cash and Temporary Defensive Positions: Under normal circumstances, each
Fund may hold cash and/or money market instruments (i) pending investment, (ii)
for cash management purposes, and (iii) to meet operating expenses. A Fund
(other than the S&P 500 Index Fund) may from time to time take temporary
defensive positions when the portfolio manager believes that adverse market,
economic, political or other conditions exist. In these circumstances, the
portfolio manager may (i) without limit hold cash and/or invest in money market
instruments, or (ii) restrict the securities markets in which a Fund's assets
are invested by investing those assets in securities markets deemed to be
conservative in light of the Fund's investment objective and strategies. The
Funds, other than the Money Market Fund, may invest in money market instruments
directly or indirectly through investment in the GEI Short-Term Investment Fund
(Investment Fund). The Investment Fund is advised by GE Investment Management,
which charges no advisory fee to the Fund.
To the extent that a Fund, other than the Money Market Fund, holds cash or
invests in money market instruments, it may not achieve its investment
objective.
Various investment techniques are utilized by a Fund to increase or decrease its
exposure to changing security prices, interest rates, currency exchange rates,
commodity prices or other factors that affect security values. These techniques
may involve derivative securities transactions such as buying and selling
options and futures contracts, entering into currency exchange contracts or swap
agreements and purchasing indexed securities and selling securities short. These
techniques are designed to adjust the risk and return characteristics of a
Fund's portfolio of investments and are not used for leverage. To the extent
that a Fund employs these techniques, the Fund would be subject to derivative
securities risk.
The following are important definitions that may be unfamiliar to an investor
reading about the Funds:
Bank Deposits are cash, checks or drafts deposited in a financial institution
for credit to a customer's account. Banks differentiate between demand deposits
(checking accounts on which the customer may draw) and time deposits, which pay
interest and have a specified maturity or require 30 days' notice before
withdrawal.
Cash and cash equivalents are highly liquid and highly rated instruments such as
commercial paper and bank deposits.
Certificates of Deposit include short-term debt securities issued by banks.
Commercial paper includes short-term debt securities issued by banks,
corporations and other borrowers.
Convertible securities may be debt or equity securities that pay interest or
dividends and that may be converted on specified terms into the stock of the
issuer.
Corporate bonds are debt securities issued by companies.
Debt securities are bonds and other securities that are used by issuers to
borrow money from investors. Holders of debt securities have a higher priority
claim to assets than do equity holders. Typically, the debt issuer pays the
investor a fixed, variable or floating rate of interest and must repay the
borrowed amount at maturity. Some debt securities, such as zero coupon bonds,
are sold at a discount from their face values instead of paying interest.
Depositary receipts represent interests in an account at a bank or trust company
which holds equity securities. These interests may include American Depositary
Receipts (held at U.S. banks and traded in the United States), European
Depositary Receipts, Global Depositary Receipts or other similar instruments.
37
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GE Investments Funds, Inc. Prospectus
More on Strategies and Risks
Derivative Securities (securities on whose values are based on other securities,
currencies or indices) include options (on stocks, indices, currencies, futures
contracts or bonds), forward currency exchange contracts, futures contracts,
swaps, interest-only and principal-only debt securities, certain mortgage-backed
securities like collateralized mortgage obligations (CMOs), and structured
securities.
Duration -- a mathematical calculation of the average life of a bond based on
its cash flows (or portfolio of bonds) that serves as a useful measure of the
security's sensitivity to changes in interest rates. Each year of duration
approximates an expected one percent change in the bond's price for every one
percent change in the interest rate.
Equity securities may include common stocks, preferred stocks, Depositary
Receipts, convertible preferred stocks, convertible bonds, convertible
debentures, convertible notes, rights and warrants of U.S. and foreign
companies. Stocks represent an ownership interest in a corporation.
Eurodollar Deposits are deposits issued in U.S. dollars by foreign banks and
foreign branches of U.S. banks.
Foreign debt securities are issued by foreign corporations or governments. They
may include the following:
o Eurodollar Bonds, which are dollar-denominated securities issued outside the
U.S. by foreign corporations and financial institutions or by foreign branches
of U.S. corporations and financial institutions
o Yankee Bonds, which are dollar-denominated securities issued by foreign
issuers in the U.S.
o Securities denominated in currencies other than U.S. dollars
Foreign issuers are those located in a foreign country. Portfolio managers
who consider the following factors in determining where an issuer is located:
country of organization, primary securities trading market, location of assets,
or country where the issuer derives at least half of its revenues and profits.
Foreign securities include interests in or obligations of entities located
outside of the United States. The determination of where an issuer of a security
is located will be made by reference to the country in which the issuer (a) is
organized, (b) derives at least 50% of its revenues or profits from goods
produced or sold, investments made or services performed, (c) has at least 50%
of its assets situated, or (d) has the principal trading market for its
securities. Foreign securities may be denominated in non-U.S. currencies and
traded outside the United States or may be in the form of depositary receipts.
Growth investing involves buying stocks with above-average growth rates.
Typically, growth stocks are the stocks of faster growing companies in more
rapidly growing sectors of the economy. Generally, growth stock valuation levels
will be higher than those of value stocks and the market averages.
High yield securities are debt securities of corporations, preferred stock and
convertible preferred stock that are rated Ba through C by Moody's or BB through
D by S&P (or comparably rated by another nationally recognized statistical
rating organization) or, if not rated by Moody's or S&P, are considered by
portfolio management to be of equivalent quality. High yield securities include
bonds rated below investment-grade, sometimes called "junk bonds" are considered
speculative by the major credit rating agencies.
Investment grade securities are rated Baa or better by Moody's and BBB or better
by S&P or are comparably rated by another nationally recognized statistical
rating organization, or, if not rated, are of similar quality to such
securities. Securities rated in the fourth highest grade have some speculative
elements.
Maturity -- the date on which a debt security matures or when the issuer must
pay back the principal amount of the security.
Mortgage-backed securities include securities issued by the Government National
Mortgage Association (Ginnie Mae), the Federal National Mortgage Association
(Fannie Mae), the Federal Home Loan Mortgage Corporation
38
<PAGE>
(Freddie Mac) and other government agencies and private issuers. They may also
include CMOs which are derivative securities that are fully collateralized by a
portfolio of mortgages.
Money market instruments are short-term debt securities of the U.S. government,
banks and corporations. The Funds may invest in money market instruments through
investments in the GEI Short-Term Investment Fund (Investment Fund). The
Investment Fund is advised by GE Investment Management, which charges no
advisory fee for such services.
Municipal securities are debt obligations of local, state or regional
governments. Municipal securities generally include both municipal bonds
(securities with maturities of more than one year) and municipal notes
(securities with maturities of less than one year). They may be a general
obligation of the municipality that issued them or they may be secured by the
revenues of a special project or facility. Income derived from investments in
municipal securities is typically exempt from federal income tax, however,
capital gains are subject to federal tax.
Preferred securities are classes of stock that pay dividends at a specified
rate. Dividends are paid on preferred stocks before they are paid on common
stocks. In addition, preferred stockholders have priority over common
stockholders as to the proceeds from the liquidation of a company's assets.
Real Estate Investment Trusts (REITs) are pooled investment vehicles that invest
primarily in income producing real estate or real estate related loans or
interests therein. REITs are generally classified as Equity REITs or Mortgage
REITS or a combination of Equity or Mortgage REITs. Equity REITs invest a
majority of their assets directly in real property and derive income primarily
from the collection of rents. Equity REITs can also realize capital gains by
selling properties that have appreciated in value. Mortgage REITs invest the
majority of their assets in real estate mortgages and derive income from the
collection of interest payments.
Repurchase agreements (repos) are used to invest cash on a short-term basis. A
seller (bank or broker-dealer) sells securities, usually government securities,
to the Fund, agreeing to buy them back at a designated price and time -- usually
the next day.
U.S. Government securities are issued or guaranteed by the U.S. Government or
one of its agencies or instrumentalities. Some U.S. Government securities are
backed by the full faith and credit of the federal government. Other U.S.
Government securities are backed by the issuer's right to borrow from the U.S.
Treasury and some are backed only by the credit of the issuing organization. All
U.S. Government securities are considered highly creditworthy.
Value investing involves buying stocks that are out of favor and/or undervalued
in comparison to their peers and/or their prospects for growth. Generally, value
stock valuation levels are lower than those of growth stocks.
Variable Rate Securities carry interest rates that may be adjusted periodically
to market rates. Interest rate adjustments could increase or decrease the income
generated by the securities.
Weighted average maturity -- the length of time in days or years until the
average security in a money market or bond fund will mature or be redeemed by
its issuer. The average maturity is weighted according to the dollar amounts
invested in the various securities in the fund. This measure indicates an income
fund's sensitivity to changes in interest rates. In general, the longer a fund's
average weighted maturity, the more its share price will fluctuate in response
to changing interest rates.
The following tables summarize each Fund's current investment policies and
limitations. Certain policies and limitations may be changed at the discretion
of GE Investment Management. Percentage figures refer to the percentage of a
Fund's assets that may be invested in accordance with the indicated policy.
39
<PAGE>
GE Investments Funds, Inc. Prospectus
More on Strategies and Risks
<TABLE>
<CAPTION>
- ---------------------------- ------------ ------------ ----------- -------------- ----------------- ------------------
Repurchase Reverse Illiquid Structured Purchasing and Purchasing and
Agreements Repurchase Securities and Indexed Writing Writing
Agreements Securities Securities Securities Index
Options Options
- ---------------------------- ------------ ------------ ----------- -------------- ----------------- ------------------
<S> <C> <C> <C> <C> <C> <C>
U.S. Equity Fund Yes Yes Yes No Yes Yes
- ---------------------------- ------------ ------------ ----------- -------------- ----------------- ------------------
S&P 500 Index Fund Yes No Yes No Yes Yes
- ---------------------------- ------------ ------------ ----------- -------------- ----------------- ------------------
Premier Growth Equity Fund Yes Yes Yes No Yes Yes
- ---------------------------- ------------ ------------ ----------- -------------- ----------------- ------------------
Value Equity Fund Yes No Yes No Yes Yes
- ---------------------------- ------------ ------------ ----------- -------------- ----------------- ------------------
International Equity Fund Yes No Yes No Yes Yes
- ---------------------------- ------------ ------------ ----------- -------------- ----------------- ------------------
Income Fund Yes Yes Yes Yes Yes Yes
- ---------------------------- ------------ ------------ ----------- -------------- ----------------- ------------------
Global Income Fund Yes No Yes Yes Yes Yes
- ---------------------------- ------------ ------------ ----------- -------------- ----------------- ------------------
Total Return Fund Yes No Yes Yes Yes Yes
- ---------------------------- ------------ ------------ ----------- -------------- ----------------- ------------------
Money Market Fund Yes No Yes No No No
- ---------------------------- ------------ ------------ ----------- -------------- ----------------- ------------------
Real Estate Securities Fund Yes No Yes Yes Yes Yes
- ---------------------------- ------------ ------------ ----------- -------------- ----------------- ------------------
</TABLE>
40
<PAGE>
<TABLE>
<CAPTION>
- --------------------- ------------ ------------ ----------- ---------------- ----------------- ----------- -----------
Futures and Forward Options on Maximum Maximum Maximum When-Issued
Options on Currency Foreign Investment in Investment in Investment and Delayed
Futures Transactions Currencies Debt Securities Below-Investment in Foreign Delivery
Grade Debt Securities Securities
Securities
- --------------------- ------------ ------------ ----------- ---------------- ----------------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
U.S. Equity Fund Yes Yes Yes 35% 5% 15%* Yes
- --------------------- ------------ ------------ ----------- ---------------- ----------------- ----------- -----------
S&P 500 Index Fund Yes No No 35% None 35% Yes
- --------------------- ------------ ------------ ----------- ---------------- ----------------- ----------- -----------
Premier Growth
Equity Fund Yes No No 35% 5% 25%* Yes
- --------------------- ------------ ------------ ----------- ---------------- ----------------- ----------- -----------
Value Equity Fund Yes No No 35% 15% 35% Yes
- --------------------- ------------ ------------ ----------- ---------------- ----------------- ----------- -----------
International
Equity Fund Yes Yes Yes 35% 5% 100% Yes
- --------------------- ------------ ------------ ----------- ---------------- ----------------- ----------- -----------
Income Fund Yes Yes Yes 100% (maximum 10% in BB or B 35%* Yes
of 25% BBB by by S&P or Ba or
S&P or Baa by B by Moody's or
Moody's or equivalent
equivalent)
- --------------------- ------------ ------------ ----------- ---------------- ----------------- ----------- -----------
Global Income Fund Yes Yes Yes 100% 25% in BB and B 100% Yes
by S&P or Ba
and B by
Moody's, and
10% in by B by
S&P or by Moody's
- --------------------- ------------ ------------ ----------- ---------------- ----------------- ----------- -----------
Total Return Yes Yes Yes 100% 30% 35% Yes
- --------------------- ------------ ------------ ----------- ---------------- ----------------- ----------- -----------
Money Market Fund No No No 100% None 20%* Yes
- --------------------- ------------ ------------ ----------- ---------------- ----------------- ----------- -----------
Real Estate
Securities Fund Yes No No 100% 30% 20% Yes
- --------------------- ------------ ------------ ----------- ---------------- ----------------- ----------- -----------
</TABLE>
*This limitation excludes ADRs and securities of a foreign issuer with a class
of securities registered with the Securities and Exchange Commission and listed
on a U.S. national securities exchange or traded on the Nasdaq National Market
or the Nasdaq Small Cap Market.
41
<PAGE>
GE Investments Funds, Inc. Prospectus
More on Strategies and Risks
<TABLE>
<CAPTION>
- --------------------- ---------- ---------- -------------- ----------- ----------- ----------- ---------- ----------- ------------
Lending Rule Debt Depositary Borrowing Securities Municipal Floating Participation
Portfolio 144A Obligations Receipts of Other Leases and Interests
Securities Securities of Investment Variable in
Supranational Funds Rate Municipal
Agencies Instruments Obligations
- --------------------- ---------- ---------- -------------- ----------- ----------- ----------- ---------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
U.S. Equity Fund Yes Yes Yes Yes 33.33% Yes No No* No
- --------------------- ---------- ---------- -------------- ----------- ----------- ----------- ---------- ----------- ------------
S&P 500 Index Fund Yes No No Yes 20% Yes No Yes No
- --------------------- ---------- ---------- -------------- ----------- ----------- ----------- ---------- ----------- ------------
Premier Growth
Equity Fund Yes Yes Yes Yes 33.33% Yes No No* No
- --------------------- ---------- ---------- -------------- ----------- ----------- ----------- ---------- ----------- ------------
Value Equity Fund Yes Yes Yes Yes 10% Yes No No* No
- --------------------- ---------- ---------- -------------- ----------- ----------- ----------- ---------- ----------- ------------
International
Equity Fund Yes Yes Yes Yes 10% Yes No No* No
- --------------------- ---------- ---------- -------------- ----------- ----------- ----------- ---------- ----------- ------------
Income Fund Yes Yes Yes Yes 33.33% Yes No Yes No
- --------------------- ---------- ---------- -------------- ----------- ----------- ----------- ---------- ----------- ------------
Global Income Fund Yes Yes Yes Yes 10% Yes No Yes No
- --------------------- ---------- ---------- -------------- ----------- ----------- ----------- ---------- ----------- ------------
Total Return Fund Yes No Yes Yes 10% Yes No Yes No
- --------------------- ---------- ---------- -------------- ----------- ----------- ----------- ---------- ----------- ------------
Money Market Fund Yes No Yes No 10% Yes No Yes No
- --------------------- ---------- ---------- -------------- ----------- ----------- ----------- ---------- ----------- ------------
Real Estate
Securities Fund Yes Yes Yes Yes 10% Yes No Yes No
- --------------------- ---------- ---------- -------------- ----------- ----------- ----------- ---------- ----------- ------------
</TABLE>
- --------------------------------------------------------------------------------
*Excludes commercial paper and notes with variable and floating rates of
interest.
42
<PAGE>
<TABLE>
<CAPTION>
- --------------------- ------------ ------------ ------------ ---------- ------------ ------------ ------------- ---------- ---------
Non- Asset
Zero Municipal Custodial Mortgage Publicly Government Backed Mortgage Short
Coupon Obligation Receipts Related Traded Stripped Securities Dollar Sales
Obligations Components on Securities, Securities Mortgage and Rolls Against
Municipal including Related Receivable- the Box
Obligations CMOs Securities Backed
Securities
- --------------------- ------------ ------------ ------------ ---------- ------------ ------------ ------------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
U.S. Equity Fund Yes No No No Yes No No No Yes
- --------------------- ------------ ------------ ------------ ---------- ------------ ------------ ------------- ---------- ---------
S&P 500 Index Fund No No No No No No No No Yes
- --------------------- ------------ ------------ ------------ ---------- ------------ ------------ ------------- ---------- ---------
Premier Growth
Equity Fund No No No No Yes No No No Yes
- --------------------- ------------ ------------ ------------ ---------- ------------ ------------ ------------- ---------- ---------
Value Equity Fund Yes No No Yes Yes Yes Yes Yes Yes
- --------------------- ------------ ------------ ------------ ---------- ---------- ------------ ------------- ---------- ---------
International
Equity Fund No No No No Yes No No No Yes
- --------------------- ------------ ------------ ------------ ---------- ------------ ------------ ------------- ---------- ---------
Income Fund Yes No No Yes Yes Yes Yes Yes Yes
- --------------------- ------------ ------------ ------------ ---------- ------------ ------------ ------------- ---------- ---------
Global Income Fund Yes No No Yes Yes Yes Yes Yes Yes
- --------------------- ------------ ------------ ------------ ---------- ------------ ------------ ------------- ---------- ---------
Total Return Fund Yes Yes Yes Yes No Yes Yes Yes Yes
- --------------------- ------------ ------------ ------------ ---------- ------------ ------------ ------------- ---------- ---------
Money Market Fund No No No No No No No No No
- --------------------- ------------ ------------ ------------ ---------- ------------ ------------ ------------- ---------- ---------
Real Estate
Securities Fund No No No Yes Yes Yes Yes Yes Yes
- --------------------- ------------ ------------ ------------ ---------- ------------ ------------ ------------- ---------- ---------
</TABLE>
43
<PAGE>
GE Investments Funds, Inc. Prospectus
About the Investment Adviser
Investment Adviser and Administrator
GE Investment Management Incorporated, located at 3003 Summer Street, P.O. Box
7900, Stamford, Connecticut 06904, is the investment adviser and administrator
of each Fund. GE Investment Management is a wholly-owned subsidiary of GE and a
registered investment adviser. GE Investment Management's principal officers,
directors and portfolio managers hold similar positions with General Electric
Investment Corporation (GEIC), a wholly-owned subsidiary of General Electric
Company ("GE"). As of March 1, 1999, GE Investment Management and GEIC managed
roughly $80 billion in assets, including $16 billion in mutual funds.
For many years, GE's tradition of ingenuity and customer focus has included
financial services. In the late 1920s, through a desire to promote the financial
well-being of its employees, GE began managing assets for its employee pension
plan. By the mid-1930s, GE pioneered some of the nation's earliest mutual funds,
the Elfun Funds -- to be followed years later by the GE Savings and Security
Program Funds. The success of these Funds spurred growth; eventually GE expanded
its mutual fund offerings to include a wide variety of investment products
called the GE Family of Funds, created specifically for the general public.
GE Investment Management bases its investment philosophy on two enduring
principles. First, GE Investment Management believes that a disciplined,
consistent approach to investing can add value to an investment portfolio over
the long term. Its commitment to in-depth research, sound judgment and hard work
provides investors with an opportunity to take advantage of attractive
investments around the world. Second, GE Investment Management follows the same
principles of integrity and quality that have guided GE over the past century
and have made it the world-class company that it is today.
Investment Management Fee:
Each Fund pays GE Investment Management an investment management fee.
The fee is accrued daily and paid monthly up to the following maximum annual fee
rates:
<TABLE>
<S> <C>
U.S. Equity Fund 0.55%
- -----------------------------------------------------------------------------
S&P 500 Index Fund 0.35%
- -----------------------------------------------------------------------------
Premier Growth Fund 0.65%
- -----------------------------------------------------------------------------
Value Equity Fund 0.65%
- -----------------------------------------------------------------------------
International Equity Fund 1.00%
- -----------------------------------------------------------------------------
Income Fund 0.50%
- -----------------------------------------------------------------------------
Global Income Fund 0.60%
- -----------------------------------------------------------------------------
Total Return Fund 0.50%
- -----------------------------------------------------------------------------
Money Market Fund 0.50%*
- -----------------------------------------------------------------------------
Real Estate Securities Fund 0.85%
- -----------------------------------------------------------------------------
</TABLE>
For their services, GE Investment Management pays (out of the advisory fee that
it receives) Seneca, NWQ, GEIUS, and SSGA monthly compensation in the form of an
investment sub-advisory fee. The fee is paid by GE Investment Management monthly
and is based upon the average daily net assets of the Fund that each sub-adviser
manages. The fees payable to GE Investment Management in connection with the
Money Market Fund, Total Return Fund, International Equity Fund, and Real
Estate Securities Fund are graduated so that increases in the respective Fund's
average annual net assets may result in a lower fee and decreases in a Fund's
average annual net assets may increase the fee.
* GE Investment Management has voluntarily waived a portion of the investment
management fee such that the fee paid by the Money Market Fund is currently
0.25%.
44
<PAGE>
About the Funds' Portfolio Managers
Eugene Bolton is Director and Executive Vice President of GE Investment
Management. He manages the overall U.S. equity investments for GE Investment
Management. He leads a team of portfolio managers for the U.S. Equity Fund. He
has served in that capacity since the Fund's inception. Mr. Bolton joined GE
Investment Management in 1984 as Chief Financial Officer and has been a
portfolio manager since 1986.
David B. Carlson is Senior Vice President of GE Investment Management and
portfolio manager for the Premier Growth Equity Fund. Mr. Carlson is also
responsible for the domestic equity portion of the Total Return Fund. He has
served in those capacities since the Fund's inception. Since joining GE
Investment Management in 1982, Mr. Carlson has held several positions.
Ralph R. Layman is Director and Executive Vice President of GE Investment
Management. Mr. Layman leads a team of portfolio managers for the International
Equity Fund. He is also responsible for the international equity portion of the
Total Return Fund. He has served in those capacities since each Fund's
inception. Mr. Layman joined GE Investment Management in 1991 as Executive Vice
President for International Investments.
Robert A. MacDougall is Director and Executive Vice President of GE Investment
Management. He leads a team of portfolio managers for the Income Fund and the
Money Market Fund. Mr. MacDougall is also responsible for the debt portion of
the Total Return Fund. He has served in those capacities since each Fund's
inception. Mr. MacDougall joined GE Investment Management in 1986 as Vice
President.
45
<PAGE>
GE Investments Funds, Inc. Prospectus
About the Investment Adviser
About the Sub-Advisers
GE Investment Management believes that it has the responsibility to make the
best managers available to Fund shareholders at all times, whether that means
accessing GE Investment Management's wealth of internal talent or using external
talent (Sub-Advisers). When GE Investment Management feels the need to access
specialists outside, it carefully investigates and engages Sub-Advisers with
strong performance records and styles that match the investment objectives of
the Funds. GE Investment Management is proud to engage the following
Sub-Advisers to conduct the investment programs for the following Funds.
S&P 500 Index Fund
State Street Global Advisors (SSGA)
Two International Place
Boston, MA 02110
SSGA is a division of State Street Bank and Trust Company ("State Street").
State Street is a wholly-owned subsidiary of State Street Corporation, a
publicly held bank holding company. State Street, with approximately $493
billion under management as of December 31, 1998, provides complete global
investment management services from offices in the United States, London,
Sydney, Hong Kong, Tokyo, Toronto, Montreal, Luxembourg, Melbourne, Paris,
Dubai, Munich and Brussels.
The Fund is managed by a team of portfolio managers led by James B. May. Mr. May
has been an investment officer and portfolio manager in the U.S. Structured
Products Group of State Street since 1994. From 1991 to 1993, Mr. May served as
an Investment Support Analyst in the U.S. Passive Services Group of State
Street. Mr. May earned his MBA from Boston College and is a member of the
Financial Management Association.
Value Equity Fund
NWQ Investment Management Company (NWQ)
2049 Century Park East - 4th Floor
Los Angeles, CA 90067
NWQ is a wholly owned subsidiary of United Asset Management Corporation, a
company whose principal business is managing investments for institutional
clients through 50 operating subsidiaries and acquiring investment management
firms. NWQ is an investment adviser with 17 years of experience managing
domestic investment portfolios for individual, union, corporate, municipal,
endowment and foundation clients. As of December 31, 1998, NWQ had in excess of
$8.1 billion of assets under management.
Jon D. Bosse is the portfolio manager of the Value Equity Fund and has served in
that capacity since the Fund's inception. Mr. Bosse has more than 12 years of
investment experience and has held the position of Director of Equity Research
and Managing Director at NWQ since 1996. Prior to his joining NWQ, he spent ten
years with ARCO Investment Management Company where he was director of equity
research and managed a value-oriented portfolio. Previous to this, he spent four
years in the corporate finance department of ARCO. Mr. Bosse earned his MBA from
Wharton Business School, University of Pennsylvania, and is a Chartered
Financial Analyst and a member of the Association for Investment Management and
Research (AIMR) and the Los Angeles Society of Financial Analysts.
46
<PAGE>
Global Income Fund
GE Investments (US) Limited ("GEIUS")
Sweden House
20 St. James's Street
London, SW1A 1ES, England
GEIUS is a wholly owned subsidiary of GE and is considered under common control
with GE Investment Management. Although GEIUS has no prior experience advising a
U.S. mutual fund, it currently manages approximately $1.3 billion in assets.
GEIUS has been the investment sub-adviser for the Fund since May 1, 1997.
William R. Wright, portfolio manager of the Global Income Fund, is a Vice
President of GE Investment Management. He assumed responsibility for GEIUS at
its inception in 1995. Prior to joining GE Investment Management, Mr. Wright
worked for Continental Asset Management Corp., where he was a portfolio manager
of its U.K. subsidiary. After serving as a language specialist in the U.S. Army
Security Agency, he began his career in 1979 with Coopers & Lybrand, and joined
Bankers Trust Company in 1980. Mr. Wright is a member of the Association for
Investment Management and Research and the New York Society of Security
Analysts.
Real Estate Securities Fund
Seneca Capital Management ("Seneca")
909 Montgomery Street
San Francisco, CA 94133
Seneca is a limited liability company and a majority owned subsidiary of Phoenix
Investment Partners ("Phoenix"). Forty per cent of the stock of Phoenix is
publicly held and traded on the New York Stock Exchange while the remaining
sixty per cent is owned by a wholly owned subsidiary of Phoenix Home Life Mutual
Insurance Company. Seneca is an investment adviser that provides investment
management services to foundations, endowments, corporations, mutual funds and
private clients. As of December 31, 1998, Seneca managed approximately $6.6
billion in equity, fixed income and real estate assets.
David A. Shapiro, portfolio manager of the Real Estate Securities Fund, joined
Seneca as a portfolio manager in 1995. In 1992, Mr. Shapiro became and still
remains a principal of Asset Holdings Group. From 1982 to 1992, he was a
Managing Director of The Adco Group, a real estate development and finance
company.
47
<PAGE>
GE Investments Funds, Inc. Prospectus
Purchase and Redemption of Shares
GE Investments Funds, Inc. (the "Company") currently offers each class of its
capital stock to separate accounts (the "Accounts") of various life insurance
companies as funding vehicles for certain variable annuity contracts and
variable life insurance contracts ("variable contracts") issued by such life
insurers through the Accounts. Certain of these life insurance companies may be
affiliates of the Company or GE Investment Management. The Company does not
offer its stock directly to the general public. All but one of the Accounts is
currently registered as an investment company with the Securities and Exchange
Commission ("SEC") and a separate prospectus describing the particular Account
and variable contract being offered through that Account will accompany this
prospectus when shares of the Company are offered as a funding vehicle for such
variable contracts. The remaining Account is not registered as an investment
Company but a separate disclosure document (rather than a prospectus) describing
that Account and the variable contracts being offered through that Account will
accompany this prospectus when shares of the Company are offered as a funding
vehicle for such variable contracts. The Company may, in the future, offer any
class of its capital stock directly to qualified pension and retirement plans.
Shares of the Funds are sold in a continuous offering to the Accounts to support
the variable contracts. Net purchase payments under the variable contracts are
placed in one or more subaccounts of the Accounts and the assets of each such
subaccount are invested in the shares of the Fund corresponding to that
subaccount. The Accounts purchase and redeem shares of the Funds for their
subaccounts at a net asset value without sales or redemption charges.
For each day on which a Fund's net asset value is calculated, the Accounts
transmit to the Funds any orders to purchase or redeem shares of the Funds based
on the net purchase payments, redemption (surrender) requests, and transfer
requests from variable contract owners, annuitants and beneficiaries that have
been processed on that day. Similarly, qualified pension and retirement plans
may in the future transmit to the Funds any orders to purchase or redeem shares
of the Fund(s) based on the instructions of plan trustees or participants. The
Account purchases and redeems shares of each Fund at the Fund's net asset value
per share calculated as of the day the Funds receive the order, although such
purchases and redemptions may be executed the next morning. Money received by GE
Investment Management from the Accounts for the purchase of shares of the
International Equity Fund or Global Income Fund may not be invested by the Funds
until the day following the execution of such purchases. Payment for shares
redeemed will be made within seven days after receipt of a proper notice of
redemption, except that the right of redemption may be suspended or payments
postponed when permitted by applicable laws and regulations.
A potential for certain conflicts exists between the interests of variable
annuity contract owners and variable life insurance contract owners. A potential
for certain conflicts would also exist between the interests of any of these
investors and participants in a qualified pension and retirement plan that might
invest in the Funds. To the extent that such classes of investors are invested
in the same Fund when a conflict of interest arises that might involve the Fund,
one or more such classes of investors could be disadvantaged. The Company does
not currently foresee any such disadvantage to owners of variable contracts or
to plan participants. Nonetheless, the board of directors of the Company will
monitor the Funds for the existence of any irreconcilable material conflicts of
interest. If such a conflict affecting owners of variable contracts is
determined to exist, the life insurers investing in the
48
<PAGE>
Company will, to the extent reasonable practicable, take such action as is
necessary to remedy or eliminate the conflict. If such a conflict were to occur,
one or more of the Accounts might be required to withdraw its investment in one
or more Funds or it may substitute shares of one Fund for another. This might
force a Fund to sell its portfolio securities at a disadvantageous price.
- --------------------------------------------------------------------------------
Contract Owner Voting Rights
With regard to Fund matters for which the Investment Company Act of 1940 (the
"1940 Act") requires a shareholder vote, life insurance companies sponsoring an
Account holding shares of a Fund vote such shares in accordance with
instructions received from the owners of variable contracts (or annuitants or
beneficiaries thereunder) having a voting interest in that Account. Each share
has one vote and votes are counted on an aggregate basis except as to matters
where the interests of Funds differ (such as approval of an investment advisory
agreement or a change in a Fund's fundamental investment policies). In such a
case, the voting is on a Fund-by-Fund basis. Fractional shares are counted.
Shares held by an Account for which no instructions are received are voted by
their insurance company sponsors for or against any propositions, or in
abstention, in the same proportion as the shares for which instructions have
been received.
- --------------------------------------------------------------------------------
Plan Participant Voting Rights
With regard to matters for which the 1940 Act requires a shareholder vote,
trustees of qualified pension and retirement plans are expected to vote Fund
shares held by their plans either in their own discretion or in accordance with
instructions received from participants in such plans.
49
<PAGE>
GE Investments Funds, Inc. Prospectus
Dividend Distributions and Tax Information
Dividend and Capital Gains Distribution
Each Fund intends to distribute substantially all of its net investment income
annually. Each Fund also intends to distribute substantially all of its net
realized capital gains annually. All income dividends and capital gains
distributions made by a Fund are reinvested in shares of that Fund at that
Fund's net asset value.
Taxes
For federal income tax purposes, each Fund is treated as a separate entity. Each
Fund intends to qualify each year as a "regulated investment company" under the
Internal Revenue Code as amended ("Code"). By so qualifying, a Fund is not
subject to federal income taxes to the extent that its net investment income and
net realized capital gains are distributed to the Accounts or to qualified
pension and retirement plans.
Since the Accounts are the only shareholders of the Funds, no discussion is
included herein as to the federal income tax consequences at the shareholder
level. For information concerning the federal tax consequences to the purchasers
of variable contracts, see the attached prospectus for such contract.
50
<PAGE>
GE Investments Funds, Inc. Prospectus
Calculating Share Value
Fund Shares are sold at net asset value ("NAV"). The NAV of each Fund is
calculated at the close of regular trading on the New York Stock Exchange
(NYSE), normally 4:00 p.m. Eastern time, each day the NYSE is open for trading.
The NAV per share for Funds (other than the Money Market Fund) is determined by
adding the value of the Fund's investments, cash, and other assets, subtracting
its liabilities, and then dividing the result by the number of that Fund's
outstanding shares.
A Fund's portfolio securities are valued most often on the basis of market
quotations. Foreign securities are valued on the basis of quotations from the
primary market in which they are traded. Some debt securities are valued using
dealers and pricing services. Municipal bond valuations are based on prices
supplied by a qualified municipal pricing service. The prices are composed of
the mean average of the bid and ask prices on the secondary market. All
portfolio securities of the Money Market Fund and any short-term securities held
by any other Fund with remaining maturities of sixty days or less are valued at
the last sales price of the day. If no sales occurred, the options are valued at
the last traded bid price. A Fund's NAV may change on days when shareholders
will not be able to purchase or redeem the Fund's shares.
If quotations are not readily available for any security, or if the value of a
security has been materially affected by events occurring after the closing of a
market, the security may be valued by using procedures approved by a Fund's
Board of Trustees that they believe accurately reflects "fair value."
51
<PAGE>
GE Investments Funds, Inc. Prospectus
Financial Highlights
The financial highlights tables that follow are intended to help you understand
a Fund's financial performance for the period of the Fund's operations. Certain
information reflects financial results for a single Fund share. The total
returns in the table represent the rate that an investor would have earned or
lost on an investment in the Fund (assuming reinvestment of all dividends and
distributions). This information has been audited by KPMG LLP, whose report,
along with the Funds' financial statements, are included in the Funds' Annual
Report, which is available on request.
52
<PAGE>
US Equity Fund
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
12/31/98 12/31/97(c) 12/31/96 12/31/95(h)
- ---------------------------------------------------------------------------------------------------------------------------
Inception date -- -- -- 1/3/95
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $27.88 $21.11 $19.27 $15.00
- ---------------------------------------------------------------------------------------------------------------------------
Income (Loss) from Investment Operations
- ---------------------------------------------------------------------------------------------------------------------------
Net Investment Income 0.28 0.24 0.34 0.46
- ---------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized Gains (Losses) on Investments 6.23 6.54 3.90 4.87
- ---------------------------------------------------------------------------------------------------------------------------
Total Income (Loss) From Investment Operations 6.51 6.78 4.24 5.33
- ---------------------------------------------------------------------------------------------------------------------------
Less Distributions from
- ---------------------------------------------------------------------------------------------------------------------------
Net Investment Income 0.28 0.00 0.35 0.47
- ---------------------------------------------------------------------------------------------------------------------------
Net realized Gains 0.61 0.01 2.05 0.59
- ---------------------------------------------------------------------------------------------------------------------------
Total Distributions 0.89 0.01 2.40 1.06
- ---------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $33.50 $27.88 $21.11 $19.27
- ---------------------------------------------------------------------------------------------------------------------------
Total Return (a) 23.41% 32.13% 21.72% 35.58%
- ---------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data:
- ---------------------------------------------------------------------------------------------------------------------------
Net Assets, End of Period (in thousands) $31,160 $23,917 $18,027 $9,071
- ---------------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
- ---------------------------------------------------------------------------------------------------------------------------
Net Investment Income* 0.95% 0.94% 1.80% 2.10%
- ---------------------------------------------------------------------------------------------------------------------------
Net Expenses* 0.69% 0.80% 0.80% 0.80%
- ---------------------------------------------------------------------------------------------------------------------------
Gross Expenses* 0.69% 0.86% 0.88% 1.03%
- ---------------------------------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 41% 33% 35% 71%
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
S&P 500
Index Fund
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
12/31/98 12/31/97(b,c) 12/30/96 12/31/95 12/31/94
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Inception date -- -- -- -- 4/15/85
- ---------------------------------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Period $19.23 $15.14 $20.99 $15.72 $15.99
- ---------------------------------------------------------------------------------------------------------------------------
Income (Loss) from Investment Operations
- ---------------------------------------------------------------------------------------------------------------------------
Net Investment Income 0.21 0.23 0.78 0.27 0.22
- ---------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized Gains (Losses)
on Investments 5.20 4.36 4.36 5.41 (0.23)
- ---------------------------------------------------------------------------------------------------------------------------
Total Income (Loss) From Investment Operations 5.41 4.59 5.14 5.68 (0.01)
- ---------------------------------------------------------------------------------------------------------------------------
Less Distributions from
- ---------------------------------------------------------------------------------------------------------------------------
Net Investment Income 0.21 0.23 0.77 0.27 0.22
- ---------------------------------------------------------------------------------------------------------------------------
Net realized Gains 0.72 0.27 10.22 0.14 0.04
- ---------------------------------------------------------------------------------------------------------------------------
Total Distributions 0.93 0.50 10.99 0.41 0.26
- ---------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $23.71 $19.23 $15.14 $20.99 $15.72
- ---------------------------------------------------------------------------------------------------------------------------
Total Return (a) 28.24% 30.33% 24.51% 36.14% (0.06%)
- ---------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
- ---------------------------------------------------------------------------------------------------------------------------
Net Assets, End of Period (in thousands) $326,961 $164,294 $35,522 $66,017 $23,930
- ---------------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
- ---------------------------------------------------------------------------------------------------------------------------
Net Investment Income* 1.20% 1.70% 1.91% 1.98% 2.22%
- ---------------------------------------------------------------------------------------------------------------------------
Net Expenses* 0.45% 0.46% 0.48% 0.66% 0.75%
- ---------------------------------------------------------------------------------------------------------------------------
Gross Expenses* 0.45% 0.46% 0.48% 0.66% 1.10%
- ---------------------------------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 13% 6% 63% 15% 4%
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Highlights
53
<PAGE>
GE Investments Funds, Inc. Prospectus
Financial Highlights
Premier Growth
Equity Fund
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
12/31/98 12/31/97(d)
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Inception date -- 12/12/97
- ---------------------------------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Period $51.48 $49.79
- ---------------------------------------------------------------------------------------------------------------------------
Income from Investment Operations
- ---------------------------------------------------------------------------------------------------------------------------
Net Investment Income 0.25 0.03
- ---------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized Gains on Investments 18.43 1.69
- ---------------------------------------------------------------------------------------------------------------------------
Total Income (Loss) From Investment Operations 18.68 1.72
- ---------------------------------------------------------------------------------------------------------------------------
Less Distributions from
- ---------------------------------------------------------------------------------------------------------------------------
Net Investment Income 0.24 0.03
- ---------------------------------------------------------------------------------------------------------------------------
Net realized gains 2.70 0.00
- ---------------------------------------------------------------------------------------------------------------------------
Total Distributions 2.94 0.03
- ---------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $67.22 $51.48
- ---------------------------------------------------------------------------------------------------------------------------
Total Return (a) 36.53% 3.46%
- ---------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data:
- ---------------------------------------------------------------------------------------------------------------------------
Net Assets, End of Period (in thousands) $19,879 $16,237
- ---------------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
- ---------------------------------------------------------------------------------------------------------------------------
Net Investment Income* 0.41% 1.04%
- ---------------------------------------------------------------------------------------------------------------------------
Expenses* 0.82% 0.69%
- ---------------------------------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 34% 3%
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
Value Equity Fund
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
12/31/98 12/31/97(g)
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Inception date -- 5/1/97
- ---------------------------------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Period $13.11 $10.00
- ---------------------------------------------------------------------------------------------------------------------------
Income (Loss) from Investment Operations
- ---------------------------------------------------------------------------------------------------------------------------
Net Investment Income 0.07 0.02
- ---------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized Gains (Losses) on Investments 0.79 3.23
- ---------------------------------------------------------------------------------------------------------------------------
Total Income (Loss) From Investment Operations 0.86 3.25
- ---------------------------------------------------------------------------------------------------------------------------
Less Distributions from
- ---------------------------------------------------------------------------------------------------------------------------
Net Investment Income 0.07 0.02
- ---------------------------------------------------------------------------------------------------------------------------
Net realized Gains 0.33 0.12
- ---------------------------------------------------------------------------------------------------------------------------
Total Distributions 0.40 0.14
- ---------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $13.57 $13.11
- ---------------------------------------------------------------------------------------------------------------------------
Total Return (a) 6.69% 32.56%
- ---------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
- ---------------------------------------------------------------------------------------------------------------------------
Net Assets, End of Period (in thousands) $53,643 $30,856
- ---------------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
- ---------------------------------------------------------------------------------------------------------------------------
Net Investment Income* 0.59% 0.38%
- ---------------------------------------------------------------------------------------------------------------------------
Expenses* 0.75% 0.69%
- ---------------------------------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 14% 18%
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Highlights
54
<PAGE>
International Equity Fund
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
12/31/98 12/31/97(c) 12/30/96 12/31/95(f)
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Inception date -- -- -- 5/1/95
- ---------------------------------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Period $10.68 $10.83 $10.47 $10.00
- ---------------------------------------------------------------------------------------------------------------------------
Income from Investment Operations
- ---------------------------------------------------------------------------------------------------------------------------
Net Investment Income 0.08 0.02 0.03 0.20
- ---------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized Gains on Investments 1.77 1.10 1.01 0.47
- ---------------------------------------------------------------------------------------------------------------------------
Total Income (Loss) From Investment Operations 1.85 1.12 1.04 0.67
- ---------------------------------------------------------------------------------------------------------------------------
Less Distributions from
- ---------------------------------------------------------------------------------------------------------------------------
Net Investment Income 0.07 0.08 0.03 0.20
- ---------------------------------------------------------------------------------------------------------------------------
Net realized Gains 0.57 1.19 0.65 0.00
- ---------------------------------------------------------------------------------------------------------------------------
Total Distributions: 0.64 1.27 0.68 0.20
- ---------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $11.89 $10.68 $10.83 $10.47
- ---------------------------------------------------------------------------------------------------------------------------
Total Return (a) 17.45% 10.17% 9.91% 6.70%
- ---------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
- ---------------------------------------------------------------------------------------------------------------------------
Net Assets, End of Period (in thousands) $36,952 $31,931 $17,644 $15,348
- ---------------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
- ---------------------------------------------------------------------------------------------------------------------------
Net Investment Income* 0.65% 0.47% 0.23% 0.44%
- ---------------------------------------------------------------------------------------------------------------------------
Net Expenses* 1.15% 1.34% 1.50% 1.54%
- ---------------------------------------------------------------------------------------------------------------------------
Gross Expenses* 1.15% 1.43% 1.56% 2.17%
- ---------------------------------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 60% 166% 150% 58%
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
Income Fund
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
12/31/98 12/31/97(c) 12/31/96 12/31/95(h)
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Inception date -- -- -- 1/3/95
- ---------------------------------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Period $12.11 $11.84 $12.53 $12.00
- ---------------------------------------------------------------------------------------------------------------------------
Income (Loss) from Investment Operations
- ---------------------------------------------------------------------------------------------------------------------------
Net Investment Income 0.62 0.76 0.76 0.82
- ---------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized Gains (Losses) on Investments 0.34 0.27 (0.43) 1.13
- ---------------------------------------------------------------------------------------------------------------------------
Total Income (Loss) from Investment Operations 0.96 1.03 0.33 1.95
- ---------------------------------------------------------------------------------------------------------------------------
Less Distributions from
- ---------------------------------------------------------------------------------------------------------------------------
Net Investment Income 0.62 0.76 0.76 0.84
- ---------------------------------------------------------------------------------------------------------------------------
Net realized Gains 0.11 0.00 0.26 0.58
- ---------------------------------------------------------------------------------------------------------------------------
Total Distributions 0.73 0.76 1.02 1.42
- ---------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $12.34 $12.11 $11.84 $12.53
- ---------------------------------------------------------------------------------------------------------------------------
Total Return (a) 7.95% 9.00% 2.92% 16.83%
- ---------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
- ---------------------------------------------------------------------------------------------------------------------------
Net Assets, End of Period (in thousands) $59,077 $45,555 $5,388 $3,271
- ---------------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
- ---------------------------------------------------------------------------------------------------------------------------
Net Investment Income* 5.54% 5.11% 6.37% 6.52%
- ---------------------------------------------------------------------------------------------------------------------------
Net Expenses* 0.64% 0.59% 0.75% 0.75%
- ---------------------------------------------------------------------------------------------------------------------------
Gross Expenses* 0.64% 0.77% 1.03% 1.15%
- ---------------------------------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 217% 356% 222% 253%
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Highlights
55
<PAGE>
GE Investments Funds, Inc. Prospectus
Financial Highlights
Global Income Fund
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
12/31/98 12/31/97(c,g)
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Inception date -- 5/1/97
- --------------------------------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Period $9.85 $10.00
- ---------------------------------------------------------------------------------------------------------------------------
Income (Loss) from Investment Operations
- ---------------------------------------------------------------------------------------------------------------------------
Net Investment Income 0.44 0.35
- ---------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized Gains (Losses) on Investments 0.87 (0.01)
- ---------------------------------------------------------------------------------------------------------------------------
Total Income (Loss) From Investment Operations 1.31 0.34
- ---------------------------------------------------------------------------------------------------------------------------
Less Distributions from
- ---------------------------------------------------------------------------------------------------------------------------
Net Investment Income 0.61 0.45
- ---------------------------------------------------------------------------------------------------------------------------
Net realized Gains 0.02 0.04
- --------------------------------------------------------------------------------------------------------------------------
Total Distributions 0.63 0.49
- --------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $10.53 $9.85
- ---------------------------------------------------------------------------------------------------------------------------
Total Return (a) 13.33% 3.41%
- ---------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data:
- ---------------------------------------------------------------------------------------------------------------------------
Net Assets, End of Period (in thousands) $9,739 $5,851
- --------------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
- ---------------------------------------------------------------------------------------------------------------------------
Net Investment Income* 4.73% 5.54%
- --------------------------------------------------------------------------------------------------------------------------
Net Expenses* 0.82% 0.84%
- --------------------------------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 64% 119%
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
Money Market Fund
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
12/31/98 12/31/97(c,e) 12/30/96 12/31/95 12/31/94
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Inception date -- -- -- -- 7/1/85
- ---------------------------------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Period $1.00 $1.00 $1.00 $0.98 $0.97
- ---------------------------------------------------------------------------------------------------------------------------
Income (Loss) from Investment Operations
- ---------------------------------------------------------------------------------------------------------------------------
Net Investment Income 0.05 0.05 0.05 0.06 0.03
- ---------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized Gains (Losses)
on Investments 0.00 0.00 0.00 0.00 0.01
- ---------------------------------------------------------------------------------------------------------------------------
Total Income (Loss) From Investment Operations 0.05 0.05 0.05 0.06 0.04
- ---------------------------------------------------------------------------------------------------------------------------
Less Distributions from:
- ---------------------------------------------------------------------------------------------------------------------------
Net Investment Income 0.05 0.05 0.05 0.04 0.03
- ---------------------------------------------------------------------------------------------------------------------------
Net realized Gains 0.00 0.00 0.00 0.00 0.00
- ---------------------------------------------------------------------------------------------------------------------------
Total Distributions 0.05 0.05 0.05 0.04 0.03
- ---------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $1.00 $1.00 $1.00 $1.00 $0.98
- ---------------------------------------------------------------------------------------------------------------------------
Total Return (a) 5.26% 5.41% 5.41% 5.90% 3.77%
- ---------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
- ---------------------------------------------------------------------------------------------------------------------------
Net Assets, End of Period (in thousands) $239,547 $144,815 $113,263 $63,083 $33,529
- ---------------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
- ---------------------------------------------------------------------------------------------------------------------------
Net Investment Income* 5.14% 5.17% 5.29% 5.74% 4.04%
- ---------------------------------------------------------------------------------------------------------------------------
Net Expenses* 0.37% 0.32% 0.15% 0.23% 0.42%
- ---------------------------------------------------------------------------------------------------------------------------
Gross Expenses* 0.59% 0.48% 0.55% 0.63% 0.70%
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Highlights
56
<PAGE>
Total Return Fund
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
12/31/98 12/31/97(c) 12/30/96 12/31/95 12/31/94
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Inception date -- -- -- -- 7/1/85
- ---------------------------------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Period $13.21 $12.73 $15.93 $13.40 $13.59
- ---------------------------------------------------------------------------------------------------------------------------
Income (Loss) from Investment Operations
- ---------------------------------------------------------------------------------------------------------------------------
Net Investment Income 0.34 0.34 1.02 0.41 0.35
- ---------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized Gains
(Losses) on Investments 1.90 1.95 0.67 3.34 (0.01)
- ---------------------------------------------------------------------------------------------------------------------------
Total Income (Loss) from Investment Operations 2.24 2.29 1.69 3.75 0.34
- ---------------------------------------------------------------------------------------------------------------------------
Less Distributions from
- ---------------------------------------------------------------------------------------------------------------------------
Net Investment Income 0.34 0.34 1.02 0.42 0.35
- ---------------------------------------------------------------------------------------------------------------------------
Net realized Gains 0.45 1.47 3.87 0.80 0.18
- ---------------------------------------------------------------------------------------------------------------------------
Total Distributions 0.79 1.81 4.89 1.22 0.53
- ---------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $14.66 $13.21 $12.73 $15.93 $13.40
- ---------------------------------------------------------------------------------------------------------------------------
Total Return (a) 17.10% 17.99% 10.60% 28.07% 2.54%
- ---------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
- ---------------------------------------------------------------------------------------------------------------------------
Net Assets, End of Period (in thousands) $72,632 $50,007 $27,814 $70,507 $34,708
- ---------------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
- ---------------------------------------------------------------------------------------------------------------------------
Net Investment Income* 2.69% 2.56% 2.73% 3.42% 4.00%
- ---------------------------------------------------------------------------------------------------------------------------
Net Expenses* 0.63% 0.65% 0.60% 0.65% 0.77%
- ---------------------------------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 124% 135% 144% 106% 67%
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
Real Estate Securities Fund
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
12/31/98 12/31/97(c) 12/30/96 12/31/95(f)
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Inception date -- -- -- 5/1/95
- ---------------------------------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Period $15.28 $14.11 $11.05 $10.00
- ---------------------------------------------------------------------------------------------------------------------------
Income (Loss) from Investment Operations
- ---------------------------------------------------------------------------------------------------------------------------
Net Investment Income 0.73 0.74 0.64 0.46
- ---------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized Gains
(Losses) on Investments (3.46) 2.01 3.36 1.23
- ---------------------------------------------------------------------------------------------------------------------------
Total Income (Loss) From Investment Operations (2.73) 2.75 4.00 1.69
- ---------------------------------------------------------------------------------------------------------------------------
Less Distributions from
- ---------------------------------------------------------------------------------------------------------------------------
Net Investment Income 0.50 0.53 0.65 0.46
- ---------------------------------------------------------------------------------------------------------------------------
Net realized Gains 0.46 1.05 0.29 0.18
- ---------------------------------------------------------------------------------------------------------------------------
Total Distributions 0.96 1.58 0.94 0.64
- ---------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $11.59 $15.28 $14.11 $11.05
- ---------------------------------------------------------------------------------------------------------------------------
Total Return (a) (17.68%) 19.49% 36.24% 17.00%
- ---------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
- ---------------------------------------------------------------------------------------------------------------------------
Net Assets, End of Period (in thousands) $47,756 $48,887 $24,533 $13,429
- ---------------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
- ---------------------------------------------------------------------------------------------------------------------------
Net Investment Income* 5.43% 4.83% 5.90% 6.85%
- ---------------------------------------------------------------------------------------------------------------------------
Net Expenses* 0.99% 0.95% 1.07% 1.31%
- ---------------------------------------------------------------------------------------------------------------------------
Gross Expenses* 0.99% 0.95% 1.07% 1.61%
- ---------------------------------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 29% 58% 30% 54%
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Highlights
57
<PAGE>
GE Investments Funds, Inc. Prospectus
Financial Highlights
Notes to Financial Highlights
(a) Total returns are historical and assume changes in share price and
reinvestment of dividends and capital gains. Had the adviser not absorbed a
portion of expenses, total returns would have been lower. Periods less than
one year are not annualized.
(b) As of April 30, 1997, the fund's name was changed to S&P 500 Index Fund
from Common Stock Index Portfolio.
(c) GEIM assumed management responsibilities for the Funds effective May 1,
1997. See Note 3 in the Notes to Financial Statements for further
information.
(d) Information is for the period December 12, 1997, commencement of investment
operations, through December 31, 1997.
(e) Effective May 5, 1997, the Fund began maintaining a constant net asset
value per share of $1.00. Per share information prior to January 1, 1997
have been restated to reflect the 10.41 to 1 stock split.
(f) Information is for the period May 1, 1995, commencement of investment
operations, through December 31, 1995.
(g) Information is for the period May 1, 1997, commencement of investment
operations, through December 31, 1997.
(h) Information is for the period January 3, 1995, commencement of investment
operations, through December 31, 1995.
* Annualized for periods less than one year.
58
<PAGE>
[This page intentionally left blank]
<PAGE>
GE Investments Funds, Inc. Prospectus
Investment Adviser Transfer Agent and Custodian
GE Investment Management Incorporated State Street Bank and Trust Company
P.O. Box 7900 225 Franklin Street
3003 Summer Street Boston, MA 02101
Stamford, CT 06904
Distributor
GE Investment Distributors, Inc.
777 Long Ridge Road, Building B
Stamford, CT 06927
This Prospectus must be read along with the current prospectus for the variable
annuity contract or variable life insurance policy being applied for.
If you wish to know more
You will find additional information about the GE Investments Funds in the
following documents:
Annual/Semi-Annual Reports to Shareholders: These reports detail the Funds'
actual investments as of the report date. Reports usually include performance
numbers, a discussion of market conditions and investment strategies that
affected Fund performance during the Funds' last fiscal year.
Statement of Additional Information (SAI): The SAI contains additional
information about the Funds and their investment strategies and policies and is
incorporated by reference (legally considered part of the prospectus). The SAI
is on file with the Securities and Exchange Commission (SEC).
You may visit the SEC's Internet Website (http://www.sec.gov) to view the SAI
and other information. Also, you can obtain copies of this information by
sending your request and duplicating fee to the SEC's Public Reference Section,
Washington, D.C. 20549-6009. You may review and copy information about the
Funds, including the SAI, at the SEC's Public Reference Room in Washington, D.C.
To find out more about the public reference room, call the SEC at
1-800-SEC-0330.
You may obtain a free copy of the SAI or the Funds' annual/semiannual report and
make shareholder inquiries by contacting:
GE Investment Distributors, Inc.
P.O. Box 7900
3003 Summer Street
Stamford, CT 06904
or
Capital Brokerage Corporation
6630 West Broad Street
Richmond, VA 23230
Telephone 1-800-493-3042
Investment Company Act file number: 811-04041
- --------------------------------------------------------------------------------
GEI-PRO-1
