File pursuant to Rule 497(e)
Registration No. 33-1361
Registration No. 811-4463
SUPPLEMENT DATED FEBRUARY 12, 1996
TO THE JOINT PROSPECTUS DATED JUNE 1, 1995 OF
IAI RESERVE FUND (a portfolio of IAI Investment Funds V,
Inc.)
IAI MONEY MARKET FUND (a separate portfolio of IAI
Investment Funds VI, Inc.)
The following supplements the disclosure contained in
the section "Investment Objectives and Policies - Reserve
Fund".
Reserve Fund may also invest in below investment grade
securities. Such securities are commonly referred to as
junk bonds. Reserve Fund currently intends to limit such
investments to less than 10% of its total assets and not to
invest in junk bonds rated lower than B by Moody's or S&P.
Securities rated in the medium to lower rating
categories of nationally recognized statistical rating
organizations and unrated securities of comparable quality
are predominately speculative with respect to the capacity
to pay interest and repay principal in accordance with the
terms of the security and generally involve a greater
volatility of price than securities in higher rating
categories. See "Investment Objectives and Policies" in and
Appendix A to the Statement of Additional Information for
additional information regarding ratings of debt securities.
In purchasing such securities, Reserve Fund will rely on
IAI's judgment, analysis and experience in evaluating the
creditworthiness of an issuer of such securities. IAI will
take into consideration, among other things, the issuer's
financial resources, its sensitivity to economic conditions
and trends, its operating history, the quality of the
issuer's management and regulatory matters.
The following replaces the disclosure under "Risks of
Lower-Rated Debt Securities".
Reserve Fund may invest in debt securities commonly
known as "junk" bonds. Such securities are subject to
higher risks and greater market fluctuations than are lower-
yielding, higher-rating securities. The price of junk bonds
has been found to be less sensitive to changes in prevailing
interest rates than higher-rated investments, but is likely
to be more sensitive to adverse economic changes or
individual corporate developments. During an economic
downturn or substantial period of rising interest rates,
highly leveraged issuers may experience financial stress
which would adversely affect their ability to service their
principal and interest payment obligations, to meet their
projected business goals or to obtain additional financing.
If the issuers of a fixed-income security owned by Reserve
Fund were to default, Reserve Fund might incur additional
expenses to seek recovery. The risk of loss due to default
by issuers of junk bonds is significantly greater than that
associated with higher-rated securities because such
securities generally are unsecured and frequently are
subordinated to the prior payment of senior indebtedness.
In addition, periods of economic uncertainty and change can
be expected to result in an increased volatility of market
prices of junk bonds and a concomitant volatility in the net
asset value of a share of Reserve Fund.
The secondary market for junk bonds is less liquid than
the markets for higher quality securities and, as such, may
have an adverse effect on the market prices of certain
securities. The limited liquidity of the market may also
adversely affect the ability of Reserve Fund to arrive at a
fair value for certain junk bonds at certain times and could
make it difficult for Reserve Fund to sell certain
securities. For a description of Moody's and S&P ratings
see Appendix A to the Statement of Additional Information.
