Fortis Series Fund, Inc.
March 1, 2000
Supplement to Fortis Series Fund Prospectus Dated May 1, 1999
The following information is inserted between the first and
second paragraphs of the Investment Adviser section of
the prospectus on page 24. In addition, the first
sentence of the second paragraph is deleted.
Each Series pays Advisers a monthly fee for providing
investment advisory services. The services provided by
Advisers include:
1) General management of all Series.
2) Investment management for those Series that do not have
a sub-adviser.
3) Ultimate responsibility (subject to oversight by the
Fund's Board of Directors) to oversee any sub-advisers
hired to manage all or a portion of any of the Series
and recommend the hiring, termination and replacement
of sub-advisers.
The Fund has received an exemptive order from the
Securities and Exchange Commission under which the Fund
uses a "Manager of Managers" structure. This permits
Advisers to appoint new sub-advisers, with approval by
the Fund's Board of Directors and without obtaining
approval from those contract holders who participate in
the applicable Series. Within 90 days after hiring any
new sub-adviser, affected contract holders will receive
all information about the new sub-advisory relationship
that would have been included if a proxy statement had
been required. Advisers will not enter into a sub-
advisory agreement with an affiliated sub-adviser
unless contract holders approve such agreement.
The following information replaces all of the information on
pages 4 and 5 of the prospectus, except the section on
Series performance:
Multi-Sector Bond Series
From its inception on January 3, 1995 until March 13,
2000, this Series was managed by a different sub-
adviser and was named the Global Bond Series. As the
Global Bond Series, the Series invested principally in
high quality U.S. and foreign government and corporate
fixed income securities. As of March 13, 2000, the
Series will be sub-advised by AIM Advisors in the
manner described below.
Objective
The objective of Multi-Sector Bond Series is to achieve a
high level of current income consistent with reasonable
concern for safety of principal.
Principal investment strategies
Multi-Sector Bond Series pursues its objective by
investing primarily in fixed-rate corporate debt and
U.S. Government obligations.
The Series may invest up to 40% of its total assets in
securities of foreign governments and companies.
The Series may invest up to 35% of its total assets in non-
investment grade corporate bonds (sometimes referred to
as "junk bonds" or "high yield" securities) and unrated
corporate bonds deemed by the Series' sub-adviser to be
of comparable quality. The Series may also invest in
preferred stock issues and convertible corporate debt.
The Series' sub-adviser, A I M Advisors, Inc. ("AIM"),
focuses on securities that it believes have favorable
prospects for current income, consistent with its
concern for safety of principal. The decision to
purchase a particular security is based upon many
factors, the most important of which are the
characteristics of the security (interest rate, term,
call provisions, etc.), the financial stability and
managerial strength of the issuer, and diversification
in the Series. AIM considers whether to sell a
particular security when any one of these factors
materially changes.
Principal risks
Multi-Sector Bond Series' share price and yield will
change daily because of changes in interest rates and
other factors. You may lose money if you invest in the
Series. The principal risks of investing in Multi-
Sector Bond Series include:
Interest rate risk. Debt securities in the Series will
fluctuate in value with changes in interest rates. In
general, debt securities will increase in value when
interest rates fall and decrease in value when interest
rates rise. One measure of interest rate risk is
duration. Securities with longer durations generally
have more volatile prices than securities of comparable
quality with shorter durations.
Income risk. Income risk is the potential for a decline
in the Series' income due to falling interest rates.
Credit or default risk. If a bond issuer's credit quality
declines or its credit agency ratings are downgraded,
there may be a resulting decline in the bond's price.
If credit quality deteriorates to the point of possible
or actual default (inability to pay interest or repay
principal on a timely basis), the bond's market value
could decline precipitously.
Call risk. The Series is subject to the possibility that,
under certain conditions, especially during periods of
falling interest rates, a bond issuer will "call"-or
repay-its bonds before their maturity date. The Series
may then be forced to invest the unanticipated proceeds
at lower interest rates, resulting in a decline in the
Series' income.
Risks of high yield/high risk securities. A significant
portion of the Series' portfolio may consist of non-
investment grade fixed income securities, commonly
referred to as "high yield" securities or "junk bonds."
These securities generally have more volatile prices
and carry more risk to principal than investment grade
securities.
Risks of foreign investing. The Series' investment in
foreign securities subjects it to risks not typically
associated with U.S. investing. Because of these risks,
the Series may be subject to greater volatility than
most mutual funds that invest principally in domestic
securities. The Series may experience a decline in net
asset value resulting from changes in exchange rates
between the United States dollar and foreign
currencies. Other risks of foreign investing include
limited liquidity and volatile prices of non-U.S.
securities, limited availability of information
regarding non-U.S. companies, investment and
repatriation restrictions, and foreign taxation.
The following information is inserted into page 6 of the
prospectus in the Principal Investment Strategies
section of High Yield Series:
Accrual bonds and zero coupon bonds are no longer subject to
the 7.5% and 15% net asset limitations placed on IOs,
POs and inverse floaters. The Series may now invest up
to 25% of its net assets in accrual bonds and zero
coupon bonds.
The following information is inserted into page 22 of the
prospectus relating to the Aggressive Growth Series:
The following paragraph is added to the Principal
Investment Strategies section:
The Series' investments include common stocks purchased
in initial public offerings (IPOs).
The following paragraphs are added to the Principal
Risks section:
Risks of initial public offerings. Companies
making initial public offerings of their stock
generally have limited operating histories and
their prospects for future profitability may be
uncertain. Prices of IPOs may also be unstable due
to the absence of a prior public market and the
small number of shares available for trading.
The Fund's total return during 1999 was benefited
from its investments in IPOs. The effect of IPOs
on the Series' total returns going forward may not
be as significant, either as a result of changes
in the IPO market or growth of the Series' assets
which may reduce the Series' total return.
Risks of short-term trading. Due to many factors,
the Series may trade securities frequently and
hold securities in its portfolio for one year or
less. Frequent purchases and sales of portfolio
securities will increase the Series' transaction
costs. Factors that can lead to short-term trading
include market volatility; a significant positive
or negative development concerning a security; an
attempt to maintain the Series' market
capitalization target; and the need to sell a
security to meet redemption activity in the
Series.
