Filed Pursuant to Rule
497(e) 1933 Act
Registration No. 33-1361
1933 Act Registration No.
3340496
SUPPLEMENT DATED APRIL 1, 1996
TO THE JOINT PROSPECTUS DATED JUNE 1, 1995
OF
IAI RESERVE FUND (a separate portfolio of IAI
Investment Funds V,
Inc.)
IAI MONEY MARKET FUND (a separate portfolio of IAI
Investment Funds VI, Inc.)
On March 21, 1996, the shareholders of the above
referenced Funds approved IAI's proposal, effective
April 1, 1996, to eliminate each Fund's Plan of
Distribution and corresponding underwriting agreement with
IAI Securities, Inc. and to replace each Fund's management
and administrative agreements with a new contract between
each Fund and IAI. Under this new
contract, IAI
will provide, or arrange for the provision of, all
services required by a Fund in exchange for one allinclusive
fee. The new contracts are not intended to result in
a fee change. Because of these changes,
certain portions of this Prospectus have been updated as
set forth below.
FUND EXPENSE INFORMATION
The following replaces the material after the
table
"Shareholder Transaction Expenses".
<TABLE>
<CAPTION>
Annual Fund Operating Expenses*
IAI Money Market IAI Reserve
Fund Fund
<S> <C> <C>
Management Fee .60% .85%
Rule 12b-1 Fee None
None
Other Expenses None
None
Total Fund Operating .60%
.85%
Expenses
____________________________________________
<FN>
<FN1>
* as a percentage of average daily net assets
</FN>
</TABLE>
Example:
Based upon the levels of Total Fund Operating
Expenses listed above, you would pay the following expenses
on a $1,000 investment, assuming a five percent annual
return and
redemption at the end of each period:
<TABLE>
Fund 1 Year 3 5 10
Years Years Years
<S> <C> <C> <C> <C>
Money Market $ 6 $ 19 $ 33 $ 75
Reserve $ 9 $ 27 $ 47 $ 105
</TABLE>
The purpose of the above table is to assist you
in understanding the various costs and expenses that an
investor in a Fund will bear directly or indirectly. The
information in the
table has been restated to reflect each Fund's fees as
amended effective April 1, 1996. The example should not be
considered a representation of past or future expenses.
Actual expenses may be greater or less than those shown.
With respect to Money Market Fund, the Fund's
investment adviser has voluntarily agreed to waive the
Management Fee in excess of .50% of the Fund's average
daily net assets until June 30, 1996. Absent such
voluntary waiver, the Fund would pay .60%
of its average daily net assets as the Management Fee.
Further information concerning fees paid by each Fund
is
set forth in the
section "Management" below and in the Statement of
Additional Information.
MANAGEMENT
The following replaces the discussion of
Fund
administrative and advisory fees, Fund costs, and
Reserve Fund's 12b-1 Plan.
Effective April 1, 1996, each Fund has entered
into a written agreement with IAI (the "Management
Agreement"), under which IAI
provides each Fund with investment advisory services
and is responsible for the overall management of each
Fund's business affairs subject to the authority of
the Board of Directors. The Management Agreement also
provides that, except for brokerage commissions and other
expenditures in connection with the purchase and sale of
portfolio securities, interest and, in certain
circumstances, taxes and extraordinary expenses, IAI shall
pay
all of a Fund's operating expenses. As compensation
under the Management Agreement, Money Market Fund and
Reserve
Fund will pay IAI .60% and .85%, respectively, of its
average daily net assets. Because IAI is paying Fund
operating expenses, these fees represent each Fund's total
expenses. With respect to certain of the services for which
it is responsible under the Management Agreement, IAI may
also pay qualifying broker-dealers, financial institutions
and other entities for providing such services to Fund
shareholders.
Under the replaced Advisory Agreements, for the fiscal
year ended January 31, 1996, Reserve Fund paid IAI an
advisory fee of .44% of its average month-end net assets,
and Money Market Fund paid IAI an advisory fee of .06% of
its average daily net assets as a
result of IAI's voluntary fee waiver. Under the replaced
Administrative Agreements, for the fiscal year ended January
31, 1996, Reserve Fund paid IAI an administrative fee of
.20% of its
average month-end net assets and Money Market Fund paid IAI
an administrative fee of .20% of its average daily net
assets.
Act Registration No. 33-
1361 1933 Act Registration No.
33-40496
SUPPLEMENT DATED APRIL 1, 1996
TO THE STATEMENT OF ADDITIONAL INFORMATION DATED JUNE 1, 1995
OF
IAI RESERVE FUND (a separate portfolio of IAI Investment
Funds V, Inc.)
IAI MONEY MARKET FUND (a separate portfolio of IAI
Investment Funds VI, Inc.)
On March 21, 1996, the shareholders of the above-
referenced Funds approved IAI's proposal, effective
April 1, 1996, to
eliminate each Fund's Plan of Distribution and
corresponding
underwriting agreement with IAI Securities, Inc. and to
replace each Fund's management and administrative agreements
with a new contract between each Fund and IAI. Under this
new contract, IAI will provide, or arrange for the
provision of, all services required by a Fund in exchange
for one all-inclusive fee. The
new contracts are not intended to result in a fee change.
Because of these changes, this Statement of Additional
Information has been updated as set forth below.
Management Agreement- All Funds Other Than Capital
Appreciation Fund
Effective April 1, 1996, each Fund entered into new
written agreement with IAI (the "Management Agreement").
Pursuant to the Management Agreement between each Fund and
IAI, IAI has agreed to provide each Fund with investment
advice, statistical and
research facilities, and certain equipment and
services, including, but not limited to, office space and
necessary office facilities, equipment, and the services
of required personnel and, in connection therewith, IAI
has the sole authority and responsibility to make and
execute investment decisions for a Fund within the
framework of such Fund's investment policies, subject to
review by the directors of the Funds. In addition, IAI has
agreed to provide or arrange for the provision of all
required administrative, stock transfer, redemption,
dividend disbursing, accounting, and shareholder services
including, without limitation, the following: (1) the
maintenance of a Fund's accounts, books and records; (2)
the calculations of the daily net asset value in
accordance with a Fund's current Prospectus and Statement
of Additional Information; (3) daily and periodic reports;
(4) all information necessary to complete tax returns,
questionnaires and other reports requested by a Fund; (5)
the maintenance of stock registry records; (6) the processing
of requested account registration changes, stock
certificate issuances and redemption requests; and (7) the
administration of payments and dividends and distributions
declared by a Fund; (8) answering shareholder questions, (9)
providing reports and other information and (10) other
services designed to maintain shareholder accounts.
IAI may also pay
qualifying broker-
dealers, financial institutions and other entities that
provide such services. In return for such services,
Reserve Fund has
agreed to pay IAI .85% of its average daily net assets.
Money Market Fund has agreed to pay IAI an annual fee as a
percentage of such Fund's average daily net assets as set
forth below:
<TABLE>
Daily Net Assets Fee IAI
Receives
Annually
<C> <C>
For the first $100 million
.60%
For the next $150 million
.55%
Above $250 million .50%
Except for brokerage commissions and other expenditures
in connection with the purchase and sale of portfolio
securities, interest expense, and, subject to the specific
approval of a majority of the disinterested directors of
a Fund, taxes and extraordinary expenses, IAI has agreed
to pay all of a Fund's other costs and expenses,
including, for example, costs incurred in the purchase and
sale of assets, taxes, charges of the custodian of a
Fund's assets, costs of reports and proxy material sent to
Fund shareholders, fees paid for independent accounting and
legal services, costs of printing Prospectuses for Fund
shareholders and registering a Fund's shares, postage,
insurance premiums, and costs of attending investment
conferences. The
Management Agreement further provides that IAI will
either reimburse a Fund for the fees and expenses it pays to
directors who are not "interested persons" of such Fund or
reduce its fee by an equivalent amount. IAI is not liable
for any loss suffered by a Fund in the absence of willful
misfeasance, bad faith or negligence in the performance of
its duties and obligations.
</TABLE>
