BT INVESTMENT FUNDS
INTERNATIONAL EQUITY FUND
SUPPLEMENT TO PROSPECTUS DATED JANUARY 31, 1997
Under the section entitled "Management of the Trust and Portfolio,"
beginning on page 17, the first two paragraphs under "Investment Adviser"
have been replaced as follows:
"The Trust has not retained the services of an investment adviser since the
Trust seeks to achieve the investment objective of the Fund by investing
all the Assets of the Fund in the Portfolio. The Portfolio has retained
the services of Bankers Trust as investment adviser. Mr. Michael Levy,
Manager Director of Bankers Trust Global Investment Management, has been a
manager of the Portfolio since joining Bankers Trust in March, 1993 and has
been its primary manager since 1995. He also heads the international
equity team, which is responsible for the day to day management of the
Portfolio. Since joining Bankers Trust, Mr. Levy has been the head of this
team and International Equity Strategist. The international equity team
has provided input into the management of the Portfolio since the
Portfolio's commencement of operations. Prior to joining Bankers Trust,
Mr. Levy was an investment bankers and an equity analyst with Oppenheimer &
Company. He has twenty-six years of business experience, of which fifteen
years have been in the investment industry.
Robert Reiner, Vice President of Bankers Trust Global Investment
Management, has been a manager of the Portfolio since joining Bankers Trust
in 1994 and its co-manager since 1995. At Bankers Trust, he has been
responsible for managing global portfolios and developing analytical and
investment tools for the group's global equity team. His primary focus has
been on Japanese and European markets. Prior to joining Bankers Trust, he
was an equity analyst and also provided macroeconomic coverage for Scudder,
Stevens & Clark. He previously served as Senior Analyst at Sanford C.
Bernstein & Co. and was instrumental in the development of Bernstein's
International Value Fund. Mr. Reiner spent more than nine years at
standard & Poor's Corporation, where he was a member of its international
ratings group. His tenure include managing the day to day operations of
Standard & Poor's Corporation Tokyo office for three years."
Under the section entitled "Additional Information," beginning on page 22,
the third paragraph under "Options on Foreign Currencies" has been replaced
as follows:
"As in the case of forward contracts, certain options on foreign currencies
are traded over-the-counter and involve liquidity and credit risks which
may not be present in the case of exchange-traded currency options. In
some circumstances, the Portfolio's ability to terminate over-the-counter
options ("OTC Options") may be more limited than with exchange-traded
options. It is also possible that broker-dealers participating in OTC
Options transactions will not fulfill their obligations. Provided that a
dealer or institutional trading market in such securities exists, these
restricted securities are not covered by the Portfolio's 15% limit on
illiquid securities. Under the supervision of the Board of Trustees of the
Portfolio, Bankers Trust determines the liquidity of restricted securities
and, through reports from Bankers Trust determines the liquidity of
restricted securities and, through reports from Bankers Trust, the Board
will monitor trading activity in restricted securities. With respect to
options written with primary dealers in U.S. government securities pursuant
to an agreement required a closing purchase transaction at a formula price,
the amount of illiquid securities may be calculated with reference to the
repurchase formula."
Under the section entitled "Additional Information," beginning on page 23,
the first paragraph under "Options on Foreign Stock Indices" has been
replaced as follows:
"The Portfolio may purchase and write put and call options on foreign stock
indices listed on domestic and foreign stock exchanges. The portfolio may
also purchase and write OTC Options on foreign stock indices. These OTC
Options would be subject to the same liquidity and credit risks noted above
with respect to OTC Options on foreign currencies. A stock index
fluctuates with changes in the market values of the stocks included in the
index.
OTC Options are purchased from or sold to securities dealers, financial
institutions or other parties (collectively referred to as "Counterparties"
and individually referred to as a "Counterparty") through direct bilateral
agreement with the Counterparty. In contrast to exchange listed options,
which generally have standardized terms and performance mechanics, all of
the terms of an OTC Option, include such terms as method of settlement,
term exercise price, premium, guaranties and security, are set by
negotiation of the parties.
Unless the parties provide for it, no central clearing or guaranty function
is involved in an OTC Option. As a result, if a Counterparty fails to make
or take delivery of the security, current or other instrument underlying an
OTC Option it has entered into with the Portfolio or fails to make a cash
settlement payment due in accordance with the terms of that option, the
Portfolio will lose any premium it paid for the option as well as any
anticipated benefit of the transaction. Thus, Bankers Trust must assess
the creditworthiness of each such Counterparty or any guarantor or credit
enhancement of the Counterparty's credit to determine the likelihood that
the terms of the OTC Option will be met."
February 26, 1997
EDGEWOOD SERVICES, INC.
Distributor
Cusip #055922868
BT INVESTMENT FUNDS
INTERMEDIATE TAX FREE FUND
GLOBAL HIGH YIELD SECURITIES FUND
CAPITAL APPRECIATION FUND
SMALL CAP FUND
INTERNATIONAL EQUITY FUND
PACIFIC BASIN EQUITY FUND
LATIN AMERICAN EQUITY FUND
SUPPLEMENT TO PROSPECTUS DATED JANUARY 31, 1997
Under the section entitled "Securities and Investment Practices,"
"Derivatives," beginning on page 26, the first paragraph under "Options on
Stock and Bond Indices" has been replaced as follows:
"Each Portfolio may purchase and write put and call options on stock or
bond indices listed on domestic and foreign stock exchanges, in lieu of
direct investment in the underlying securities or for hedge purposes. The
International Equity Portfolio may also purchase and write over the counter
options ("OTC Options") on domestic or foreign stock indices. A stock or
bond index fluctuates with changes in the market value of the stock
included in the index.
In some circumstances, the Portfolio's ability to terminate OTC Options may
be more limited than with exchange-traded options. It is also possible
that broker-dealers participating in OTC Options transactions will not
fulfill their obligations. Provided that a dealer or institutional trading
market in such securities exists, these restricted securities are not
covered by the Portfolio's 15% limit on illiquid securities. Under the
supervision of the Board of Trustees of the Portfolio, Bankers Trust
determines the liquidity of restricted securities and, through reports from
Bankers Trust, the Board will monitor trading activity in restricted
securities. With respect to options written with primary dealers in U.S.
government securities pursuant to an agreement requiring a closing purchase
transaction at a formula price, the amount of illiquid securities may be
calculated with reference to the repurchase formula.
OTC Options are purchased from or sold to securities dealers, financial
institutions or other parties (collectively referred to as "Counterparties"
and individually referred to as a "Counterparty") through direct bilateral
agreement with the Counterparty. In contrast to exchange listed options,
which generally have standardized terms and performance mechanics, all of
the terms of an OTC Option, including such terms as method of settlement,
term exercise price, premium, guaranties and security, are set by
negotiation of the parties.
Unless the parties provide for it, no central clearing or guaranty function
is involved in an OTC Option. As a result, if a Counterparty fails to make
or take delivery of the security, currency or other instrument underlying
an OTC Option it has entered into with the Portfolio or fails to make a
cash settlement payment due in accordance with the terms of that option,
the Portfolio will lose any premium it paid for the option as well as any
anticipated benefit of the transaction. Thus, Bankers Trust must assess
the creditworthiness of each such Counterparty or any guarantor or credit
enhancement of the Counterparty's credit to determine the likelihood that
the terms of the OTC Option will be met."
Under the section entitled "Management of the Trust and Portfolios,"
beginning on page 30, please remove the third paragraph under "Portfolio
Managers."
Under the section entitled "Management of the Trust and Portfolios,"
beginning on page 31, the sixth and seventh paragraphs under "Portfolio
Managers" have been replaced as follows:
Mr. Michael Levy, Manager Director of Bankers Trust Global Investment
Management, has been a manager of the Portfolio since joining Bankers Trust
in March, 1993 and has been its primary manager since 1995. He also heads
the international equity team, which is responsible for the day to day
management of the Portfolio. Since joining Bankers Trust, Mr. Levy has
been the head of this team and International Equity Strategist. The
international equity team has provided input into the management of the
Portfolio since the Portfolio's commencement of operations. Prior to
joining Bankers Trust, Mr. Levy was an investment bankers and an equity
analyst with Oppenheimer & Company. He has twenty-six years of business
experience, of which fifteen years have been in the investment industry.
Robert Reiner, Vice President of Bankers Trust Global Investment
Management, has been a manager of the Portfolio since joining Bankers Trust
in 1994 and its co-manager since 1995. At Bankers Trust, he has been
responsible for managing global portfolios and developing analytical and
investment tools for the group's global equity team. His primary focus has
been on Japanese and European markets. Prior to joining Bankers Trust, he
was an equity analyst and also provided macroeconomic coverage for Scudder,
Stevens & Clark. He previously served as Senior Analyst at Sanford C.
Bernstein & Co. and was instrumental in the development of Bernstein's
International Value Fund. Mr. Reiner spent more than nine years at
Standard & Poor's Corporation, where he was a member of its international
ratings group. His tenure included managing the day to day operations of
Standard & Poor's Corporation Tokyo office for three years."
February 26, 1997
EDGEWOOD SERVICES, INC.
Distributor
Cusip #055922868
