BT INVESTMENT FUNDS, 497, 1999-04-12

BT INVESTMENT FUNDS
497, 1999-04-12

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. BT INVESTMENT FUNDS .

BT Investment Lifecycle Short Range Fund

BT Investment Lifecycle Mid Range Fund

BT Investment Lifecycle Long Range Fund

A family of asset allocation funds, each investing in stocks, bonds and short-
term instruments to achieve a distinct goal.
PROSPECTUS
- --------------------------------------------------------------------------------
June 30, 1998
As Revised April 12, 1999

BT Investment Funds (the "Trust") is an open-end, management investment company
(mutual fund) which consists of a number of separate investment funds.

Please read this Prospectus carefully before investing and retain it for future
reference. It contains important information about the BT Investment Lifecycle
Short Range Fund, BT Investment Lifecycle Mid Range Fund and BT Investment
Lifecycle Long Range Fund (each a "Fund" and together the "Funds") that you
should know and can refer to in deciding whether the Funds' goals match your
own.

A Statement of Additional Information ("SAI") with the same date has been filed
with the Securities and Exchange Commission ("SEC"), and is incorporated herein
by reference. You may request a free copy of the SAI or a paper copy of this
prospectus, if you have received your prospectus electronically, free of charge
by calling the Funds' Service Agent at 1-800-730-1313. The SAI, material incor-
porated by reference into this document, and other information regarding the
Trust is maintained electronically with the SEC at Internet Web site
(http://www.sec.gov).

Unlike other mutual funds, each Fund seeks to achieve its investment objectives
by investing all of its investable assets ("Assets") in a separate investment
company (each a "Portfolio" and together the "Portfolios") with an identical
investment objective. The investment performance of each Fund will correspond
directly to the investment performance of the corresponding Portfolio. See
"Special Information Concerning Master Feeder Fund Structure" herein.

Bankers Trust Company ("Bankers Trust") is the investment adviser (the "Advis-
er") of each Portfolio. Shares of the Funds are not deposits or obligations of,
or guaranteed or endorsed by, Bankers Trust or any other banking or depository
institution. Shares are not federally guaranteed or insured by the Federal
Deposit Insurance Corporation, the U.S. government, the Federal Reserve Board
or any other agency and are subject to investment risk, including the possible
loss of the principal amount invested.

LIKE SHARES OF ALL MUTUAL FUNDS, THESE SECURITIES 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 PROSPEC-
TUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

ICC DISTRIBUTORS, INC.
Two Portland Square . Portland, Maine . 04101
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TABLE OF CONTENTS

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<TABLE>
<CAPTION>
PAGE
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<S> <C>
The Funds................................................................... 3

Who May Want to Invest...................................................... 3

Summary of Fund Expenses.................................................... 4

Financial Highlights........................................................ 5

Investment Objectives and Policies.......................................... 7

Risk Factors: Matching the Fund to Your Investment Needs.................... 10

Net Asset Value............................................................. 13

Purchase and Redemption of Shares........................................... 13

Dividends, Distributions and Taxes.......................................... 17

Performance Information and Reports......................................... 18

Management of the Trust and Portfolios...................................... 19

Additional Information...................................................... 22
</TABLE>

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2
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THE FUNDS
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Each Fund seeks to achieve its investment objective by allocating investments
among three asset classes: stocks, bonds, and short-term instruments. The
Funds' investment objectives are as follows:

. BT Investment Lifecycle Short Range Fund -- seeks high income over the long
term consistent with conservation of capital.

. BT Investment Lifecycle Mid Range Fund -- seeks long term capital growth,
current income, and growth of income, consistent with reasonable investment
risk.

. BT Investment Lifecycle Long Range Fund -- seeks high total return with
reduced risk over the long term.

The Trust seeks to achieve the investment objective of each Fund by investing
all of the Assets of the Fund in the corresponding Portfolio. Each Portfolio
has the same investment objective as the corresponding Fund.

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WHO MAY WANT TO INVEST
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The Funds are designed to make investing for your future easy. Each Fund is
diversified across stocks, bonds, and short-term instruments; each Fund is
professionally managed by a team of Bankers Trust experts; and each Fund is
specially designed to meet the investment objectives of investors at different
points in the wealth accumulation cycle. Thus, investing in the Funds is eas-
ier than typical mutual funds, since with the Funds the worry of deciding how
much to put in stocks or bonds is left to professionals. All you decide is how
long it will be until you need your savings.

. BT Investment Lifecycle Short Range Fund: This Fund is designed for invest-
ors with less than five years until they need their savings. Since the Fund
seeks high income over the long term, it may be appropriate for investors
who need current income rather than capital growth and who are not willing
to ride out market fluctuations.

. BT Investment Lifecycle Mid Range Fund: This Fund is designed for investors
who will not need their savings for at least five years. Since the Fund
seeks long term capital growth, current income, and growth of income, it may
be appropriate for investors who can tolerate some short-term market value
fluctuation, but who also need the added stability of share value that can
be derived from investing for income.

. BT Investment Lifecycle Long Range Fund: This Fund is designed for investors
who have more than ten years until they will need their savings. In other
words, since the Fund seeks high total return with reduced risk over the
long term, the Fund is appropriate for investors who are willing to ride out
market fluctuations.

3
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SUMMARY OF FUND EXPENSES
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The following table provides (i) a summary of expenses relating to purchases
and sales of the shares of each Fund, and the annual operating expenses of
each Fund and its corresponding Portfolio, as a percentage of average net
assets of each Fund; and (ii) an example illustrating the dollar cost of such
expenses on a $1,000 investment in each Fund.

The Trustees of the Trust believe that the expenses of each Fund and expenses
of the corresponding Portfolio, in the aggregate, will be less than or approx-
imately equal to the expenses which each Fund would incur if the Trust
retained the services of an investment adviser and the Assets of that Fund
were invested directly in the type of securities being held by the correspond-
ing Portfolio.

<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
BT Investment BT Investment BT Investment
Lifecycle Lifecycle Lifecycle
Short Range Mid Range Long Range
Fund Fund Fund
------------- ------------- -------------
<S> <C> <C> <C>
Annual Operating Expenses

(as a percentage of the
average daily net assets of
each Fund)
- ---------------------------
Investment advisory fee
(after waivers)........... 0.47% 0.49% 0.51%
12b-1 fees................. None None None
Other expenses (after
reimbursements or
waivers).................. 0.53 0.51 0.49
---- ---- ----
Total operating expenses
(after reimbursements or
waivers).................. 1.00% 1.00% 1.00%
---- ---- ----

<CAPTION>
Example: 1 year 3 years 5 years 10 years
- -------- ------ ------- ------- --------
<S> <C> <C> <C> <C>
You would pay the following
expenses for each Fund on
a $1,000 investment,
assuming (1) 5% annual
return and (2) redemption
at the end of each time
period.................... $ 10 $ 32 $ 55 $122
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</TABLE>

The expense table and the example above show the costs and expenses that an
investor will bear directly or indirectly as a shareholder of each of the
Funds. Bankers Trust has voluntarily agreed to waive a portion of its invest-
ment advisory fee with respect to the Portfolios. Without such waivers, each
Portfolio's investment advisory fee would have been equal to 0.65% of the
Portfolio's average daily net assets. The expense table and the example
reflect a voluntary undertaking by Bankers Trust to waive or reimburse
expenses such that the total operating expenses will not exceed 1.00% of the
Fund's average net assets. In the absence of this undertaking, for the fiscal
year ended March 31, 1998 "Total operating expenses" above of the BT Invest-
ment Lifecycle Short Range Fund, BT Investment Lifecycle Mid Range Fund and BT
Investment Lifecycle Long Range Fund, and corresponding Portfolios, would have
been equal to approximately 1.58%, 1.48% and 1.45%, respectively, of each
Fund's average net assets. The example should not be considered a representa-
tion of past or future expenses and actual expenses may be greater or less
than those shown. Moreover, while each example assumes a 5% annual return,
actual performance will vary and may result in a return greater or less than
5%.

The Funds are distributed by ICC Distributors, Inc. ("ICC," or the "Distribu-
tor") to investors including customers of Bankers Trust or to customers of
another bank or a dealer or other institution that has a sub-shareholder ser-
vicing agreement with Bankers Trust (along with Bankers Trust, a "Service
Agent"). Some Service Agents may impose certain conditions on their customers
in addition to or different from those imposed by each Fund and may charge
their customers a direct fee for their services, including transaction fees on
purchases and redemptions of Fund shares. Each Service Agent has agreed to
transmit to shareholders who are its customers appropriate disclosures of any
fees that it may charge them directly.

For more information with respect to the expenses of the Funds and the Portfo-
lios, see "Management of the Trust and Portfolios" herein.

4
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FINANCIAL HIGHLIGHTS
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The following tables show selected data for a share outstanding, total invest-
ment return, ratios to average net assets and other supplemental data of the
Funds for the periods indicated and have been audited by
PriceWaterhouseCoopers LLP, the Funds' independent accountants, whose report
thereon appears in the Funds' Annual Report which is incorporated by reference
in the Funds' SAI.
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<TABLE>
<CAPTION>
Short Range
-----------------------------------------------------
For the period
October 15, 1993
For the years ended March 31, (Commencement
---------------------------------- of Operations) to
1998 1997 1996 1995 March 31, 1994
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Per Share Operating
Performance:
Net Asset Value,
Beginning of Period.... $ 10.31 $ 10.03 $ 9.50 $ 9.60 $ 10.00
------- ------- ------- ------- -------
Income from Investment
Operations
Net Investment Income.. 0.44 0.48 0.45 0.41 0.13
Net Realized and
Unrealized Gain (Loss)
on Investments,
Foreign Currency
Transactions, Forward
Foreign Currency
Contracts and Futures
Contracts............. 1.39 0.34 0.54 (0.13) (0.47)
------- ------- ------- ------- -------
Total from Investment
Operations............. 1.83 0.82 0.99 0.28 (0.34)
------- ------- ------- ------- -------
Distributions to
Shareholders
Net Investment Income.. (0.46) (0.54) (0.46) (0.37) (0.06)
Net Realized Gain from
Investment
Transactions.......... (0.86) -- -- (0.01) --
------- ------- ------- ------- -------
Total Distributions..... (1.32) (0.54) (0.46) (0.38) (0.06)
------- ------- ------- ------- -------
Net Asset Value, End of
Period................. $ 10.82 $ 10.31 $ 10.03 $ 9.50 $ 9.60
======= ======= ======= ======= =======
Total Investment
Return................. 18.68% 8.32% 10.67% 3.08% (7.39)%*
Supplemental Data and
Ratios:
Net Assets, End of
Period (000s
omitted).............. $49,408 $32,552 $28,899 $21,137 $17,582
Ratios to Average Net
Assets:
Net Investment Income.. 4.06% 4.24% 4.64% 4.47% 3.12%*
Expenses, Including
Expenses of the Asset
Management Portfolio
III................... 1.00% 1.00% 1.00% 1.00% 1.00%*
Decrease Reflected in
Above Expense Ratio
Due to Absorption of
Expenses by Bankers
Trust................. 0.58% 0.65% 0.65% 0.82% 1.12%*
<CAPTION>
Mid Range
-----------------------------------------------------
For the period
October 14, 1993
For the years ended March 31, (Commencement
---------------------------------- of Operations) to
1998 1997 1996 1995 March 31, 1994
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Per Share Operating
Performance:
Net Asset Value,
Beginning of Period.... $ 10.80 $ 10.48 $ 9.61 $ 9.45 $ 10.00
------- ------- ------- ------- -------
Income from Investment
Operations
Net Investment Income.. 0.37 0.42 0.41 0.37 0.11
Net Realized and
Unrealized Gain (Loss)
on Investments,
Foreign Currency
Transactions, Forward
Foreign Currency
Contracts and Futures
Contracts............. 2.36 0.72 0.96 0.11 (0.60)
------- ------- ------- ------- -------
Total from Investment
Operations............. 2.73 1.14 1.37 0.48 (0.49)
------- ------- ------- ------- -------
Distributions to
Shareholders
Net Investment Income.. (0.37) (0.44) (0.44) (0.32) (0.06)
Net Realized Gain from
Investment
Transactions.......... (0.84) (0.38) (0.06) -- --
------- ------- ------- ------- -------
Total Distributions..... (1.21) (0.82) (0.50) (0.32) (0.06)
------- ------- ------- ------- -------
Net Asset Value, End of
Period................. $ 12.32 $ 10.80 $ 10.48 $ 9.61 $ 9.45
======= ======= ======= ======= =======
Total Investment
Return................. 26.33% 11.16% 14.65% 5.24% (10.48)%*
Supplemental Data and
Ratios:
Net Assets, End of
Period (000s
omitted).............. $95,103 $61,867 $51,466 $25,733 $19,170
Ratios to Average Net
Assets:
Net Investment Income.. 3.31% 3.48% 4.15% 4.01% 2.77%*
Expenses, Including
Expenses of the Asset
Management Portfolio
II.................... 1.00% 1.00% 1.00% 1.00% 1.00%*
Decrease Reflected in
Above Expense Ratio
Due to Absorption of
Expenses by Bankers
Trust................. 0.48% 0.55% 0.58% 0.76% 1.10%*
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</TABLE>

* Annualized

Further information about each Fund's performance is contained in the Funds'
Annual Report, dated March 31, 1998, which can be obtained free of charge.

5
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FINANCIAL HIGHLIGHTS (continued)
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- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Long Range
------------------------------------------------------
For the period
November 16, 1993
For the years ended March 31, (Commencement
----------------------------------- of Operations) to
1998 1997 1996 1995 March 31, 1994
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Per Share Operating
Performance:
Net Asset Value,
Beginning of Period.... $ 11.96 $ 11.32 $ 10.07 $ 9.68 $10.00
-------- ------- ------- ------- ------
Income from Investment
Operations
Net Investment Income.. 0.32 0.35 0.37 0.30 0.02
Net Realized and
Unrealized Gain (Loss)
on Investments,
Foreign Currency
Transactions, Forward
Foreign Currency
Contracts and Futures
Contracts............. 3.57 1.18 1.54 0.32 (0.34)
-------- ------- ------- ------- ------
Total from Investment
Operations............. 3.89 1.53 1.91 0.62 (0.32)
-------- ------- ------- ------- ------
Distributions to
Shareholders
Net Investment Income.. (0.33) (0.39) (0.38) (0.23) --
Net Realized Gain from
Investment
Transactions.......... (0.95) (0.50) (0.28) -- --
-------- ------- ------- ------- ------
Total Distributions..... (1.28) (0.89) (0.66) (0.23) --
-------- ------- ------- ------- ------
Net Asset Value, End of
Period................. $ 14.57 $ 11.96 $ 11.32 $ 10.07 $ 9.68
======== ======= ======= ======= ======
Total Investment
Return................. 33.69% 13.88% 19.41% 6.60% (8.42)%*
Supplemental Data and
Ratios:
Net Assets, End of
Period (000s
omitted).............. $138,801 $78,291 $56,012 $13,366 $5,203
Ratios to Average Net
Assets:
Net Investment Income.. 2.57% 2.73% 3.58% 3.41% 2.69%*
Expenses, Including
Expenses of the Asset
Management Portfolio.. 1.00% 1.00% 1.00% 1.00% 1.00%*
Decrease Reflected in
Above Expense Ratio
Due to Absorption of
Expenses by Bankers
Trust................. 0.45% 0.48% 0.60% 0.91% 6.00%*
- --------------------------------------------------------------------------------
</TABLE>
* Annualized

Further information about each Fund's performance is contained in the Funds'
Annual Report, dated March 31, 1998, which can be obtained free of charge.

6
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INVESTMENT OBJECTIVES AND POLICIES
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Each Fund seeks to achieve its investment objective by allocating investments
among three asset classes: stocks, bonds, and short-term instruments. The
Funds' investment objectives are as follows:

. BT Investment Lifecycle Short Range Fund -- seeks high income over the long
term consistent with conservation of capital.

. BT Investment Lifecycle Mid Range Fund -- seeks long term capital growth,
current income, and growth of income, consistent with reasonable investment
risk.

. BT Investment Lifecycle Long Range Fund -- seeks high total return with
reduced risk over the long term.

The Funds offer investors a convenient means of diversifying their holdings in
various classes of assets while relieving those investors of the administra-
tive burdens typically associated with purchasing and holding these instru-
ments, such as determining asset class allocations, coordinating maturities
and reinvestments, providing for safekeeping and maintaining detailed records.

The Trust seeks to achieve the investment objective of each Fund by investing
all the Assets of the BT Investment Lifecycle Short Range Fund in the Asset
Management Portfolio III, the BT Investment Lifecycle Mid Range Fund in the
Asset Management Portfolio II, and the BT Investment Lifecycle Long Range Fund
in the Asset Management Portfolio. Each corresponding Portfolio has the same
investment objective as the Fund. There can be no assurances that the invest-
ment objective of any of the Funds or the Portfolios will be achieved. The
investment objective of each of the Funds and the Portfolios is not a funda-
mental policy and may be changed upon notice to, but without the approval of,
a Fund's shareholders or a Portfolio's investors, respectively. See "Special
Information Concerning Master Feeder Fund Structure" herein.

Since the investment characteristics of the Funds will correspond directly to
those of the Portfolios, the following is a discussion of the various invest-
ments and investment policies of each Portfolio. Additional information about
the investment policies of the Portfolios appears in the SAI.

All Portfolios

Investment Allocations. In seeking to achieve each Portfolio's investment
objective, the Adviser, allocates the Portfolio's assets among three principal
asset classes (as discussed below): stocks, bonds and short-term instruments.
The asset classes stated below are based on risk characteristics and may not
be identical to the Portfolio's total aggregate holdings of the three types of
instruments. For example, a Portfolio may buy or sell a futures contract to
increase or decrease the Portfolio's exposure to the stock market. Bankers
Trust will normally allocate the assets of each Fund's corresponding Portfolio
within the following parameters:

<TABLE>
<CAPTION>
Short-Term
Instruments Bonds Stocks
----------- ------ ------
<S> <C> <C> <C>
BT Investment Lifecycle Short Range Fund.............. 0-65% 35-70% 0-30%
BT Investment Lifecycle Mid Range Fund................ 0-50% 30-60% 20-50%
BT Investment Lifecycle Long Range Fund............... 0-25% 25-55% 40-70%

The asset classes of the corresponding Portfolio of each Fund fluctuates
around the following neutral position:

<CAPTION>
Short-Term
Instruments Bonds Stocks
----------- ------ ------
<S> <C> <C> <C>
BT Investment Lifecycle Short Range Fund.............. 30% 55% 15%
BT Investment Lifecycle Mid Range Fund................ 20% 45% 35%
BT Investment Lifecycle Long Range Fund............... 10% 35% 55%

As of March 31, 1998, the asset classes of the corresponding Portfolio of each
Fund were allocated as follows:

<CAPTION>
Short-Term
Instruments Bonds Stocks
----------- ------ ------
<S> <C> <C> <C>
BT Investment Lifecycle Short Range Fund.............. 23% 50% 27%
BT Investment Lifecycle Mid Range Fund................ 8% 43% 49%
BT Investment Lifecycle Long Range Fund............... 7% 28% 65%
</TABLE>

Each Portfolio may make substantial temporary investments in cash and money
market instruments for defensive purposes when, in Bankers Trust's judgment,
market conditions warrant, or when the Portfolio has less than $10 million in
assets.

Bankers Trust regularly reviews each Portfolio's investment allocations, and
will gradually vary them over time to favor asset classes that, in Bankers
Trust's current

7
<PAGE>

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judgment, provide the most favorable total return outlook consistent with each
Portfolio's investment objective. In making allocation decisions, Bankers
Trust will evaluate projections of risk, market and economic conditions, vola-
tility, yields and expected return. Bankers Trust will seek to reduce risk
relative to an investment in common stocks by emphasizing the bond and short-
term classes when stocks appear overvalued. Bankers Trust's management will
include use of database systems to help analyze past situations and trends,
research specialists in each of the asset classes to help in securities selec-
tion, portfolio management professionals to determine asset allocation and to
select individual securities, and its own credit analysis as well as credit
analysis provided by rating services to determine the quality of debt securi-
ties.

Short-Term Instruments. These securities include the following types of domes-
tic and foreign securities and money market instruments with remaining maturi-
ties of thirteen months or less, as well as shares of money market mutual
funds (see "Investment Company Securities" herein). Bankers Trust will seek to
maximize total return within the short-term class by taking advantage of yield
differentials between different instruments, issuers and currencies. The
short-term class consists of foreign and domestic: (i) short-term obligations
of sovereign governments, their agencies, instrumentalities, authorities or
political subdivisions; (ii) other short-term debt securities rated Aa or
higher by Moody's Investors Service, Inc. ("Moody's") or AA or higher by Stan-
dard & Poor's ("S&P") or, if unrated, of comparable quality in the opinion of
Bankers Trust; (iii) commercial paper; (iv) bank obligations, including nego-
tiable certificates of deposit, time deposits and bankers' acceptances; and
(v) repurchase agreements. At the time a Portfolio invests in commercial
paper, bank obligations or repurchase agreements, the issuer or the issuer's
parent must have outstanding debt rated Aa or higher by Moody's or AA or
higher by S&P or outstanding commercial paper or bank obligations rated Prime
1 by Moody's or A 1 by S&P; or, if no such ratings are available, the instru-
ment must be of comparable quality in the opinion of Bankers Trust. These
instruments may be denominated in U.S. dollars or foreign currencies and will
have been determined to be of high quality by a nationally recognized statis-
tical rating organization ("NRSRO") or, if unrated, by Bankers Trust.

Bonds. These securities include investment grade domestic and foreign fixed
income securities with remaining maturities or durations greater than thirteen
months. Bankers Trust seeks to maximize total returns within the bond class by
adjusting each Portfolio's investments in securities with different credit
qualities, maturities, and coupon or dividend rates, as well as by exploiting
yield differentials between securities. The bond class consists of bonds,
notes, adjustable rate preferred stocks, convertible bonds, mortgage related
and asset backed securities, domestic and foreign government and government
agency securities, zero coupon bonds, Rule 144A securities and other interme-
diate and long term securities. As with the short-term class, these securities
may be denominated in U.S. dollars or foreign currency. No more than 5% of
each Portfolio's net assets (at the time of investment) may be in lower rated
(BB/Ba or lower), high yield bonds. Each Portfolio may retain any bond whose
rating drops below investment grade if it is in the best interest of the
respective Fund's shareholders. Securities rated BB/Ba by a NRSRO are consid-
ered to have speculative characteristics. See the Appendix to the SAI for fur-
ther information on these securities.

Stocks. These securities include domestic and foreign equity securities of all
types (other than adjustable rate preferred stocks, included in the bond
class). Bankers Trust seeks to maximize total return within this asset class
by actively allocating assets to industry sectors expected to benefit from
major trends, and to individual stocks that it believes to have superior
investment potential. Securities in the stock class may include common stocks,
fixed rate preferred stocks (including convertible preferred stocks), war-
rants, rights, depositary receipts, securities of closed end investment compa-
nies, and other equity securities issued by companies of any size, located
anywhere in the world.

Bankers Trust believes that diversification of a Portfolio's investments among
the asset classes will, under most market conditions, better enable each Port-
folio to reduce risk while seeking high total return consistent with the Port-
folio's objectives.

Maturity and Duration. The remaining maturity of a fixed income instrument is
the amount of time left before the bond's principal is due. The duration of an
instrument or a group of instruments measures the instrument's or group of
instruments' value's expected response to changes in interest rates.

Foreign Investments and Currency Management. Each Portfolio focuses on U.S.
investment opportunities, but

8
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may invest a portion of its assets in foreign securities. Each Portfolio will
not invest more than 25% of its total assets in equity securities of foreign
issuers under normal conditions. Each Portfolio also will not invest more than
25% of its total assets in each of the bond and short-term classes in foreign
securities and securities denominated in foreign currencies. Foreign
securities of all types will normally constitute less than 50% of each
Portfolio's assets.

In connection with each Portfolio's investments denominated in foreign curren-
cies, Bankers Trust may choose to utilize a variety of currency management
strategies. Bankers Trust seeks to take advantage of different yield, risk,
and return characteristics that different currencies, currency denominations,
and countries can provide to U.S. investors. In doing so, Bankers Trust will
consider such factors as the outlook for currency relationships, current and
anticipated interest rates, levels of inflation within various countries,
prospects for relative economic growth, and government policies influencing
currency exchange rates and business conditions.

To manage exposure to currency fluctuations, each Portfolio may enter into
forward currency exchange contracts (agreements to exchange one currency for
another at a future date), may buy and sell options and futures contracts
relating to foreign currencies, and may purchase securities indexed to foreign
currencies. Each Portfolio will use currency exchange contracts in the normal
course of business to lock in an exchange rate in connection with purchases
and sales of securities denominated in foreign currencies. These currency man-
agement strategies allow Bankers Trust to hedge portfolio securities, to shift
investment exposure from one currency to another, or to attempt to profit from
anticipated declines in the value of a foreign currency relative to the U.S.
dollar. Some of these strategies will require the Portfolio to segregate liq-
uid assets in a custodial account to cover its obligations. For additional
information on foreign investments and currency management, see "Additional
Information" herein and the SAI.

Options and Futures Contracts. Each Portfolio may buy and sell options and
futures contracts to manage its exposure to changing interest rates, security
prices and currency exchange rates, and as an efficient means of managing
allocations between asset classes. Each Portfolio may invest in options and
futures based on any type of security or index related to the Portfolio's
investments, including options and futures traded on foreign exchanges.

Some options and futures strategies, including selling futures, buying puts,
and writing calls, hedge the Portfolios' investments against price fluctua-
tions. Other strategies, including buying futures, writing puts, and buying
calls, tend to increase market exposure. Options and futures may be combined
with each other, or with forward contracts, in order to adjust the risk and
return characteristics of an overall strategy. See "Additional Information"
herein for further information on options on stocks, options and futures con-
tracts on stock indices, options on futures contracts, foreign currency
exchange transactions, and options on foreign currencies.

Investment Company Securities. Securities of other investment companies may be
acquired by each Portfolio to the extent permitted under the 1940 Act, that
is, a Portfolio may invest a maximum of up to 10% of its total assets in secu-
rities of other investment companies so long as not more than 3% of the total
outstanding voting stock of any one investment company is held by the Portfo-
lio. In addition, not more than 5% of a Portfolio's total assets may be
invested in the securities of any one investment company. Each Portfolio may
be permitted to exceed these limitations by an exemptive order of the SEC. It
should be noted that investment companies incur certain expenses such as man-
agement, custodian, and transfer agency fees, and, therefore, any investment
by a Portfolio in shares of other investment companies would be subject to
such duplicate expenses.

Other Investments and Investment Techniques

Each Portfolio may also utilize the following investments and investment tech-
niques and practices: when issued and delayed delivery securities, short
sales, indexed securities, securities lending, repurchase agreements, Rule
144A securities, zero coupon debt securities, government securities, mortgage
backed securities, collateralized mortgage obligations, asset backed securi-
ties and foreign investments. See "Additional Information" herein for further
information.

Additional Investment Limitations

As diversified funds, no more than 5% of the assets of each Portfolio may be
invested in the securities of one issuer (other than U.S. government securi-
ties), except that up to 25% of a Portfolio's assets may be invested without
regard to this limitation. Each Portfolio will not

9
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invest more than 25% of its assets in the securities of issuers in any one
industry. These are fundamental investment policies of each Portfolio which
may not be changed without investor approval. No more than 15% of each Portfo-
lio's net assets may be invested in illiquid or not readily marketable securi-
ties (including repurchase agreements and time deposits maturing in more than
seven calendar days). Additional investment policies of each Portfolio are
contained in the SAI.
- -------------------------------------------------------------------------------
RISK FACTORS: MATCHING THE FUNDS TO YOUR INVESTMENT NEEDS

- -------------------------------------------------------------------------------
The Funds are designed to make investing for your future easy. Each Fund is
diversified across stocks, bonds, and short-term instruments; each Fund is
professionally managed by a team of Bankers Trust experts; and each Fund is
specially designed to meet the investment objectives of investors at different
points in the wealth accumulation cycle. Thus, investing in the Funds is eas-
ier than typical mutual funds, since with the Funds the worry of deciding how
much to put in stocks or bonds is left to professionals. All you decide is how
long it will be until you need your savings.

Each Fund is designed for investors seeking to achieve their investment objec-
tives through a variety of investments selected at the discretion of the Port-
folio's Adviser, yet subject to parameters that generally limit risk and expo-
sure to any one asset class. Each Portfolio diversifies its investments among
short-term instruments, bonds and stocks as economic conditions change. Each
Fund may also be appropriate for investors who wish to moderate risks over
time by taking advantage of the asset class with the best relative value. Each
Portfolio allocates its investments within the parameters described in "In-
vestment Objectives, Policies and Risks" herein. Since each Portfolio's asset
allocation involves significant investment in short-term instruments and bonds
over time, it is expected that each Portfolio will be less volatile than a
fund that invests primarily in common stocks. Each Fund's share price, yield
and total return fluctuate and your investment may be worth more or less than
your original cost when you redeem your shares.

Each Fund's performance may be affected by many different factors depending on
the corresponding Portfolio's emphasis. Short-term instruments are generally
the most stable securities in which each Portfolio will invest. Their returns
depend primarily on current short-term interest rates although currency fluc-
tuations can also be significant with respect to short-term foreign securi-
ties.

The bond class is affected primarily by interest rates: prices of fixed income
securities tend to rise when interest rates fall, and fall when interest rates
rise. Interest rate changes will have a greater impact on a Portfolio if it is
heavily invested in long term or zero coupon bonds. Fixed income securities
may also be affected by changes in credit quality.

The stock class is subject to the risks of stock market investing, including
the possibility of sudden or prolonged market declines as well as the risks
associated with individual companies. These risks may be intensified for
investments in smaller or less well known companies or in foreign securities.

10
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Risks of Investing in Foreign Securities

The investment in foreign securities may involve additional risks. Foreign
securities usually are denominated in foreign currencies, which means their
value will be affected by changes in the strength of foreign currencies rela-
tive to the U.S. dollar as well as the other factors that affect security
prices. Foreign companies may not be subject to accounting standards or gov-
ernmental supervision comparable to U.S. companies, and there often is less
publicly available information about their operations. Generally, there is
less governmental regulation of foreign securities markets, and security trad-
ing practices abroad may offer less protection to investors such as a Portfo-
lio. The value of such investments may be adversely affected by changes in
political or social conditions, diplomatic relations, confiscatory taxation,
expropriation, nationalization, limitation on the removal of funds or assets,
or imposition of (or change in) exchange control or tax regulations in those
foreign countries. Foreign securities may be less liquid or more volatile than
domestic investments. Bankers Trust considers these factors in making invest-
ments for each Portfolio and limits the amount of each Portfolio's assets that
may be invested in foreign securities to 25% of its total assets for each
asset class and to less than 50% for all classes under normal conditions. How-
ever, within each Portfolio's limitations, investments in any one country or
currency are not restricted.

Derivatives

Each Portfolio may invest in various instruments that are commonly known as
"derivatives." Generally, a derivative is a financial arrangement, the value
of which is based on, or "derived" from, a traditional security, asset or mar-
ket index. Some "derivatives" such as mortgage related and other asset backed
securities are in many respects like any other investment, although they may
be more volatile or less liquid than more traditional debt securities. There
are, in fact, many different types of derivatives and many different ways to
use them. There are a range of risks associated with those uses. The Portfolio
may use futures and options for traditional hedging purposes to attempt to
protect the Portfolio from exposure to changing interest rates, securities
prices or currency exchange rates and for cash management or other investment
purposes as a low cost method of gaining exposure to a particular securities
market without investing directly in those securities. The use of derivatives
may result in some leverage. The Portfolio will limit the leverage created by
its use of derivatives for investment purposes by "covering" such positions as
required by the SEC. The Adviser will use derivatives only in circumstances
where the Adviser believes they offer the most economical means of improving
the risk/reward profile of a Portfolio. Derivatives will not be used to
increase portfolio risk above the level that could be achieved using only tra-
ditional investment securities or to acquire exposure to changes in the value
of assets or indexes that by themselves would not be purchased for a Portfo-
lio. The use of derivatives for non hedging purposes may be considered specu-
lative. A description of the derivatives that the Portfolios may use and some
of their associated risks is found under "Additional Information" herein.

Each Portfolio's investment in options, futures or forward contracts, and sim-
ilar strategies depend on Bankers Trust's judgment as to the potential risks
and rewards of different types of strategies. Options and futures can be vola-
tile investments, and may not perform as expected. If Bankers Trust applies a
hedge at an inappropriate time or judges price trends incorrectly, options and
futures strategies may lower a Portfolio's return. Options and futures traded
on foreign exchanges generally are not regulated by U.S. authorities, and may
offer less liquidity and less protection to a Portfolio in the event of
default by the other party to the contract. Each Portfolio could also experi-
ence losses if the prices of its options and futures positions were poorly
correlated with its other investments, or if it could not close out its posi-
tions because of an illiquid secondary market.

Further descriptions of a number of investments and investment techniques
available to the Portfolios, including foreign investments and the use of
options and futures and other investment techniques which may be considered
"derivatives", and certain risks associated with these investments and tech-
niques are included under "Additional Information" herein.

Portfolio Turnover

The frequency of portfolio transactions -- a Portfolio's turnover rate --
will vary from year to year depending on market conditions. For the fiscal
years ended March 31, 1998, and 1997, respectively, each Portfolio's portfolio
turnover rates were as follows: Asset Management Portfolio III -- 389% and
307%; Asset Management Portfolio II -- 275% and 209%; and Asset Management
Portfolio -- 199% and 137%. Because a higher turnover rate increases trans-
action costs and may

11
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increase taxable capital gains, Bankers Trust carefully weighs the anticipated
benefits of short-term investment against these consequences.

Special Information Concerning Master-Feeder Fund Structure

Unlike other open end management investment companies (mutual funds) which
directly acquire and manage their own portfolio securities, the Funds seek to
achieve their investment objectives by investing all of their Assets in the
corresponding Portfolio, a separate registered investment company with the
same investment objectives as the respective Fund. Therefore, an investor's
interest in the Portfolio's securities is indirect. In addition to selling a
beneficial interest to a Fund, a Portfolio may sell beneficial interests to
other mutual funds or institutional investors. Such investors will invest in
the Portfolio on the same terms and conditions and will pay a proportionate
share of the Portfolio's expenses. However, the other investors investing in
the Portfolio are not required to sell their shares at the same public offer-
ing price as the Funds due to variations in sales commissions and other oper-
ating expenses. Therefore, investors in the Funds should be aware that these
differences may result in differences in returns experienced by investors in
the different funds that invest in the Portfolios. Such differences in returns
are also present in other mutual fund structures. Information concerning other
holders of interests in the Portfolios is available by contacting Bankers
Trust at 1-800-730-1313.

The master-feeder structure is relatively complex, so shareholders should
carefully consider this investment approach.

Smaller funds investing in the Portfolios may be materially affected by the
actions of larger funds investing in the Portfolios. For example, if a large
fund withdraws from a Portfolio, the remaining funds may experience higher pro
rata operating expenses, thereby producing lower returns (however, this possi-
bility exists as well for traditionally structured funds which have large
institutional investors). Additionally, the Portfolio may become less diverse,
resulting in increased portfolio risk. Also, funds with a greater pro rata
ownership in the Portfolios could have effective voting control of the opera-
tions of the Portfolios. Whenever the Trust is requested to vote on matters
pertaining to the Portfolio, the Trust will, except as permitted by the SEC,
hold a meeting of shareholders of the corresponding Fund and will cast all of
its votes in the same proportion as the votes of the Fund's shareholders. Fund
shareholders who do not vote will not affect the Trust's votes at the Portfo-
lio meeting. The percentage of the Trust's votes representing Fund sharehold-
ers not voting will be voted by the Trustees or officers of the Trust in the
same proportion as the Fund shareholders who do, in fact, vote. Certain
changes in a Portfolio's investment objectives, policies or restrictions may
require the corresponding Fund to withdraw its interest in the Portfolio. Any
such withdrawal could result in a distribution "in kind" of portfolio securi-
ties (as opposed to a cash distribution from the Portfolio). If securities are
distributed, a Fund could incur brokerage, tax or other charges in converting
the securities to cash. In addition, the distribution in kind may result in a
less diversified portfolio of investments or adversely affect the liquidity of
a Fund. Notwithstanding the above, there are other means for meeting redemp-
tion requests, such as borrowing.

A Fund may withdraw its investments from the corresponding Portfolio at any
time, if the Board of Trustees of the Trust determines that it is in the best
interests of the shareholders of the Fund to do so. Upon any such withdrawal,
the Board of Trustees of the Trust would consider what action might be taken,
including the investment of all the Assets of a Fund in another pooled invest-
ment entity having the same investment objectives as the Fund or the retaining
of an investment adviser to manage the Fund's assets in accordance with the
investment policies described below with respect to the Portfolio.

Each Fund's investment objective is not a fundamental policy and may be
changed upon notice to, but without the approval of, the Fund's shareholders.
If there is a change in a Fund's investment objective, the Fund's shareholders
should consider whether the Fund remains an appropriate investment in light of
their then current needs. The investment objective of each Portfolio is also
not a fundamental policy. Shareholders of the Funds will receive 30 days prior
written notice with respect to any change in the investment objective of the
Funds or the Portfolios. See "Investment Objective and Policies" herein and in
the SAI for a description of the fundamental policies of the Portfolios that
cannot be changed without approval by the holders of "a majority of the out-
standing voting securities" (as defined in the 1940 Act) of each Portfolio.

12
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For descriptions of the investment objective, policies and restrictions of the
Portfolios, see "Investment Objectives and Policies" herein and in the SAI.
For descriptions of the management and expenses of the Portfolios, see "Man-
agement of the Trust and Portfolios" herein and in the SAI.
- -------------------------------------------------------------------------------
NET ASSET VALUE

- -------------------------------------------------------------------------------

The net asset value ("NAV") per share of each Fund is calculated on each day
on which the New York Stock Exchange Inc. (the "NYSE") is open (each such day
being a "Valuation Day"). The NYSE is currently open on each day, Monday
through Friday, except: (a) January 1st, Martin Luther King Jr. Day (the third
Monday in January), Presidents' Day (the third Monday in February), Good Fri-
day, Memorial Day (the last Monday in May), July 4th, Labor Day (the first
Monday in September), Thanksgiving Day (the last Thursday in November) and
December 25th; and (b) the preceding Friday or the subsequent Monday when one
of the calendar determined holidays falls on a Saturday or Sunday, respective-
ly.

The NAV per share of each Fund is calculated once on each Valuation Day as of
the close of regular trading on the NYSE, which is currently 4:00 p.m., New
York time or in the event that the NYSE closes early, at the time of such
early closing (the "Valuation Time"). The NAV per share of each Fund is com-
puted by dividing the value of the Fund's Assets (i.e., the value of its
investment in the Portfolio and other assets), less all liabilities, by the
total number of its shares outstanding. Each Portfolio's securities and other
assets are valued on the basis of market quotations or, if market quotations
are not readily available, by a method which that Portfolio's Board of Trust-
ees believes accurately reflects fair value.

Under procedures adopted by the Board, a NAV for a Fund later determined to
have been inaccurate for any reason will be recalculated. Purchases and
redemptions made at a NAV determined to have been inaccurate will be adjusted,
although in certain circumstances, such as where the difference between the
original net asset value and the recalculated net asset value divided by the
recalculated net asset value is 0.005 (1/2 of 1%) or less or shareholder
transactions are otherwise insubstantially affected, further action is not
required.
- -------------------------------------------------------------------------------
PURCHASE AND REDEMPTION OF SHARES

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How to Buy Shares

The Trust accepts purchase orders for shares of each Fund at the NAV per Share
(and, if applicable, of the respective class of shares) next determined after
the order is received on each Valuation Day. See "Net Asset Value" herein.
Shares of each Fund may be available through Investment Professionals, such as
broker/dealers and investment advisers (including Service Agents).

Purchase orders for shares of each Fund (including those purchased through a
Service Agent) that are transmitted to the Trust's Transfer Agent (the "Trans-
fer Agent"), prior to the Valuation Time on any Valuation Day will be effec-
tive at that day's Valuation Time. The Trust and Transfer Agent reserve the
right to reject any purchase order.

Shares must be purchased in accordance with procedures established by the
Transfer Agent and each Service Agent. It is the responsibility of each Serv-
ice Agent to transmit to the Transfer Agent purchase and redemption orders and
to transmit to Bankers Trust as the Trust's custodian (the "Custodian") pur-
chase payments by the following business day (trade date + 1) after an order
for shares is placed. A shareholder must settle with the Service Agent for his
or her entitlement to an effective purchase or redemption order as of a par-
ticular time. Because Bankers Trust is the Custodian and Transfer Agent of the
Trust, funds may be transferred directly from or to a customer's account held
with Bankers Trust to settle transactions with the Fund without incurring the
additional costs or delays associated with the wiring of Federal funds.

13
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The Trust and Bankers Trust have authorized one or more brokers to accept on
the Trust's behalf purchase and redemption orders. Such brokers are authorized
to designate other intermediaries to accept purchase and redemption orders on
the Trust's behalf. The Transfer Agent will be deemed to have received a pur-
chase or redemption order when an authorized broker or, if applicable, a bro-
ker's authorized designee, accepts the order. Customer orders will be priced
at the appropriate Fund's NAV next computed after they are accepted by an
authorized broker or the broker's authorized designee.

Certificates for shares will not be issued. Each shareholder's account will be
maintained by a Service Agent or Transfer Agent.

If orders are placed through an Investment Professional, it is the responsi-
bility of the Investment Professional to transmit the order to buy shares of
each class to the Transfer Agent before the Valuation Time.

The Transfer Agent must receive payment within one business day after an order
for shares is placed; otherwise, the purchase order may be canceled and the
investor could be held liable for resulting fees and/or losses.

Minimum Investments

<TABLE>
<S> <C>
To Open an Account $2,500
For retirement accounts 500
Through automatic investment plans 1,000

To Add to an Account $ 250
For retirement accounts 100
Through automatic investment plan 100

Minimum Balance $1,000
For retirement accounts None
</TABLE>

If you are new to BT Investment Funds complete and sign an account application
and mail it along with your check to the address listed below. If there is no
account application accompanying this Prospectus, call the BT Service Center
at 1-800-730-1313.

BT Service Center
P.O. Box 419210
Kansas City, MO 64141-6210

Overnight mailings:

BT Service Center
210 West 10th Street, 8th Floor
Kansas City, MO 64105-1716

If you already have money invested in a fund in the BT Family of Funds, you
can:

. Mail an account application with a check,
. Wire money into your account,
. Open an account by exchanging from another fund in the BT Family of Funds,
or
. Contact your Service Agent or Investment Professional.

If you are investing through a tax-sheltered retirement plan, such as an IRA,
for the first time, you will need a special application. Contact your Invest-
ment Professional for more information and a retirement account application.

Additional Information About Buying Shares
<TABLE>
<S> <C>
To Open an Account To Add to an Account

By Wire Call the BT Service Center at Call your Investment Professional or
1-800-730-1313 to receive wire additional investment to:
wire instructions for
account establishment. Routing No.: 021001033
Attn: Bankers Trust/IFTC Deposit
DDA No.: 00-226-296
FBO: (Account name)
(Account number)
Credit: Fund Number (see below)
BT Investment Lifecycle Short Range
Fund -- 474
BT Investment Lifecycle Mid Range
Fund -- 475
BT Investment Lifecycle Long Range
Fund -- 476
Specify the complete name of the Fund of
your choice, and include your account
number and your name.
</TABLE>

14
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<TABLE>
<CAPTION>
To Open an Account To Add to an Account
<S> <C> <C>
By Phone Contact your Service Agent, Investment Contact your Service Agent, Investment
Professional, or call BT's Service Professional, or call BT's Service
Center at 1-800-730-1313. If you are an Center at 1-800-730-1313. If you are an
existing shareholder, you may exchange existing shareholder, you may exchange
from another BT account with the same from another BT account with the same
registration, including, name, address, registration, including, name, address,
and taxpayer ID number. and taxpayer ID number.

By Mail Complete and sign the account Make your check payable to the complete
application. Make your check payable to name of the Fund of your choice.
the complete name of the Fund of your Indicate your Fund account number on
choice. Mail to the appropriate address your check and mail to the address
indicated on the application. printed on your account statement.
</TABLE>
How to Sell Shares

You can arrange to take money out of your Fund account at any time by selling
(redeeming) some or all of your shares. Your shares shall be sold at the next
NAV calculated after an order is received by the Transfer Agent. Redemption
requests should be transmitted by customers in accordance with procedures
established by the Transfer Agent and the Shareholder's Service Agent. Redemp-
tion requests for shares of the Fund received by the Service Agent and trans-
mitted to the Transfer Agent prior to the Valuation Time on each Valuation Day
will be effective at that day's Valuation Time and the redemption proceeds
normally will be delivered to the shareholder's account the next day, but in
any event within seven calendar days following receipt of the request.

Service Agents may allow redemptions or exchanges by telephone and may dis-
claim liability for following instructions communicated by telephone that the
Service Agent reasonably believes to be genuine. The Service Agent must pro-
vide the investor with an opportunity to choose whether or not to utilize the
telephone redemption or exchange privilege. The Transfer Agent and the Service
Agent must employ reasonable procedures to confirm that instructions communi-
cated by telephone are genuine. If the Shareholder Servicing Agent does not do
so, it may be liable for any losses due to unauthorized or fraudulent instruc-
tions. Such procedures may include, among others, requiring some form of per-
sonal identification prior to acting upon instructions received by telephone,
providing written confirmation of such transactions and/or tape recording of
telephone instructions.

Redemption orders are processed without charge by the Trust. A Service Agent
may on at least 30 days' notice involuntarily redeem a shareholder's account
with the Fund having a balance below the minimum, but not if an account is
below the minimum due to a change in market value. See "Minimum Investments"
above for minimum balance amounts.

To sell shares in a retirement account, your request must be made in writing,
except for exchanges to other eligible funds in the BT Family of Funds, which
can be requested by phone or in writing. For information on retirement distri-
butions, contact your Service Agent or call the BT Service Center at 1-800-
730-1313.

If you are selling some but not all of your non-retirement account shares,
leave at least $1,000 worth of shares in the account to keep it open.

To sell shares by bank wire you will need to sign up for these services in
advance when completing your account application.

Certain requests must include a signature guarantee to protect you and Bankers
Trust from fraud. Redemption requests in writing must include a signature
guarantee if any of the following situations apply:

. Your account registration has changed within the last 30 days,
. The check is being mailed to a different address than the one on your
account (record address),
. The check is being made payable to someone other than the account owner,
. The redemption proceeds are being transferred to a BT account with a differ-
ent registration, or
. You wish to have redemption proceeds wired to a non-predesignated bank
account.

A signature guarantee is also required if you change the pre-designated bank
information for receiving redemption proceeds on your account.

You should be able to obtain a signature guarantee from a bank, broker, deal-
er, credit union (if authorized under

15
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state law), securities exchange or association, clearing agency, or savings
association. A notary public cannot provide a signature guarantee.

Additional Information about Selling Shares

By Wire -- You must sign up for the wire feature before using it. To verify
that it is in place, call 1-800-730-1313. Minimum wire: $1,000. Your wire
redemption request must be received by the Transfer Agent before 4:00 p.m.
Eastern time for money to be wired on the next business day.

In Writing -- Write a signed "letter of instruction" with your name, the
Fund's name and Fund's number, your Fund account number, the dollar amount or
number of shares to be redeemed, and mail to one of the following addresses:

BT Service Center
P.O. Box 419210
Kansas City, MO 64141-6210

Overnight mailings:

BT Service Center
210 West 10th Street, 8th Floor
Kansas City, MO 64105-1716

For Trust accounts, the trustee must sign the letter indicating capacity as
trustee. If the trustee's name is not on the account registration, provide a
copy of the trust document certified within the last 60 days.

For a Business or Organization account, at least one person authorized by cor-
porate resolution to act on the account must sign the letter.

Unless otherwise instructed, the Transfer Agent will send a check to the
account address of record. The Trust reserves the right to close investor
accounts via 30 day notice in writing if the Fund account balance falls below
the Fund minimums.

Investor Services

BT Investment Funds provide a variety of services to help you manage your
account.

Information Services

Statements and reports that your Investment Professional or the Transfer Agent
may send to you include the following:

. Confirmation statements (after every transaction that affects your account
balance, including distributions or your account registration)

. Account statements (monthly)

. Financial reports (every six months)

To reduce expenses, only one copy of most financial reports will be mailed,
even if you have more than one account in a Fund. Call your Investment Profes-
sional or the BT Service Center at 1-800-730-1313 if you need additional cop-
ies of financial reports.

Exchange Privilege

Shareholders may exchange their shares for shares of certain other funds in
the BT Family of Funds registered in their state. Each Fund reserves the right
to terminate or modify the exchange privilege in the future. To make an
exchange, follow the procedures indicated in "How to Buy Shares" and "How to
Sell Shares" herein. Before making an exchange, please note the following:

. Call your Service Agent for information and a prospectus. Read the prospec-
tus for relevant information.

. Complete and sign an application, taking care to register your new account
in the same name, address and taxpayer identification number as your exist-
ing account(s).

. Each exchange represents the sale of shares of one fund and the purchase of
shares of another, which may produce a gain or loss for tax purposes. Your
Service Agent will receive a written confirmation of each exchange transac-
tion.

Note that exchanges out of a Fund may be limited to four per calendar year and
that they may have tax consequences for you.

16
<PAGE>

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Systematic Programs

To move money from your bank account to BT Investment Funds

<TABLE>
<CAPTION>
Minimum Minimum Frequency Setting up or changing
Initial Subsequent

<S> <C> <C> <C>
$1,000 $100 Monthly, bimonthly, For a new account, complete the appropriate
quarterly or semi- section on the application.
annually
For existing accounts, call your Investment
Professional for an application. To change
the amount or frequency of your investment,
contact your Investment Professional directly
or call 1-800-730-1313. Call at least 10
business days prior to your next scheduled
investment date.
</TABLE>

Systematic Withdrawal Program lets you set up periodic redemptions from your
account.

<TABLE>
<CAPTION>
Minimum Frequency Setting up or changing

<S> <C> <C>
$100 Monthly, quarterly, semi- To establish, call your Investment
annually or annually Professional or call 1-800-730-1313 after
your account is open.

The accounts from which the withdrawals be
processed must have a minimum balance of
$10,000, other than retirement accounts
subject to required minimum distributions.
</TABLE>

Tax-Saving Retirement Plans

Retirement plans offer significant tax savings and are available to individu-
als, partnerships, small businesses, corporations, nonprofit organizations and
other institutions. Contact Bankers Trust for further information. Bankers
Trust can set up your new account in a Fund under a number of several tax-sav-
ings or tax-deferred plans. Minimums may differ from those listed elsewhere in
this Prospectus.

. Individual Retirement Accounts (IRAs): personal savings plans that offer tax
advantages for individuals to set aside money for retirement and allow new
contributions of $2,000 per tax year.

. ROLLOVER IRAS: tax-deferred retirement accounts that retain the special tax
advantages of lump sum distributions from qualified retirement plans and
transferred IRA accounts.

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DIVIDENDS, DISTRIBUTIONS AND TAXES
- -------------------------------------------------------------------------------

Distributions. Each Fund distributes substantially all of its net investment
income and capital gains to shareholders each year. Income dividends are dis-
tributed quarterly. In addition, the Fund will distribute net capital gains,
if any, at least annually and potentially semi-annually, if required, to
remain in compliance with the applicable tax regulations. Unless a shareholder
instructs the Trust to pay such dividends and distributions in cash, they will
be automatically reinvested in additional shares of the Fund.

Federal Taxes. Each Fund intends to qualify as a regulated investment company,
as defined in the Internal Revenue Code of 1986, as amended (the "Code"). Pro-
vided the Fund meets the requirements imposed by the Code and distributes all
of its income and gains, the Fund will not pay any Federal income or excise
taxes. The Portfolio will also not be required to pay any Federal income or
excise taxes.

Distributions from the Funds' income and short-term capital gains are taxed as
dividends, and long term capital gain distributions are taxed as long term
capital gains. The Funds' distributions are taxable when they are paid,
whether you take them in cash or reinvest them in additional shares. Distribu-
tions declared to shareholders of record in November and December and paid in
January are taxable as if paid on December 31. Each

17
<PAGE>

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Fund will send each shareholder a tax statement by January 31 showing the tax
status of the distributions received in the past year.

Capital Gains. You may realize a capital gain or loss when you redeem (sell)
or exchange shares. Because the tax treatment also depends on your purchase
price and your personal tax position, you should keep your regular account
statements to use in determining your tax.

"Buying a Dividend." On the ex-date for a distribution from income and/or cap-
ital gains, each Fund's share value is reduced by the amount of the distribu-
tion. If you buy shares just before the ex-date ("buying a dividend"), you
will pay the full price for the shares and then receive a portion of the price
back as a taxable distribution.

Other Tax Information. In addition to Federal taxes, you may be subject to
state or local taxes on your investment, depending on the laws in your area.
Income received by the Portfolios from sources within foreign countries may be
subject to withholding and other taxes imposed by such countries. You should
consult with your own tax adviser concerning the application of Federal, state
and local taxes to your distributions from the Fund.

- -------------------------------------------------------------------------------
PERFORMANCE INFORMATION AND REPORTS
- -------------------------------------------------------------------------------

The Funds' performance may be used from time to time in advertisements, share-
holder reports or other communications to shareholders or prospective share-
holders. Performance information may include each Fund's investment results
and/or comparisons of its investment results to the Lipper Flexible Funds
Average, S&P 500 Index, Salomon Broad Investment Grade Bond Index, Salomon
U.S. Dollar T Bill Index and various unmanaged indices (or a blended rate of
several of such indices) or results of other mutual funds or investment or
savings vehicles. Each Fund's investment results as used in such communica-
tions will be calculated on a yield or total rate of return basis in the man-
ner set forth below. From time to time, fund rankings may be quoted from vari-
ous sources such as Lipper Analytical Services, Inc., Value Line and Morning-
star, Inc.

The Trust may provide period and average annualized "total return" quotations
for the Funds. The "total return" refers to the change in the value of an
investment in each Fund over a stated period based on any change in net asset
value per share and including the value of any shares purchasable with any
dividends or capital gains distributed during such period. An average annual
total return is a hypothetical rate of return that, if achieved annually,
would have produced the same cumulative total return if performance had been
constant over the entire period. Average annual total return calculations
smooth out variations in performance; they are not the same as actual year-by-
year results. Average annual total returns covering periods of less than one
year assume that performance will remain constant for the rest of the year.

The Trust may provide annualized "yield" quotations for the Funds. The "yield"
of a Fund refers to the income generated by an investment in the Fund over a
30 day or one month period (which period shall be stated in any such adver-
tisement or communications). This income is then annualized; that is, the
amount generated by the investment over the period is assumed to be generated
over a one year period and is shown as a percentage of the investment.

Unlike some bank deposits or other investments which pay a fixed yield for a
stated period of time, the total return of a Fund will vary depending upon
interest rates, the current market value of the securities held by the corre-
sponding Portfolio and changes in the Fund's expenses. In addition, during
certain periods for which total return or yield quotations may be provided,
Bankers Trust, as Adviser, Service Agent or Administrator may have voluntarily
agreed to waive portions of its fees on a month to month basis. Such waivers
will have the effect of increasing a Fund's net income (and therefore its
total return or yield) during the period such waivers are in effect.

Shareholders will receive financial reports semi annually that include the
Portfolios' financial statements, including listings of investment securities
held by the Portfolios at those dates. Annual reports are audited by indepen-
dent accountants.

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MANAGEMENT OF THE TRUST AND PORTFOLIOS

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Board of Trustees

The affairs of the Trust and each Portfolio are managed under the supervision
of their respective Boards of Trustees. By virtue of the responsibilities
assumed by Bankers Trust, as the Administrator of the Trust and each Portfo-
lio, neither the Trust nor any Portfolio requires employees other than its
officers. None of the Trust's or any Portfolio's officers devotes full time to
the affairs of the Trust or the respective Portfolio.

The Trustees of each of the Trust and the Portfolios who are not "interested
persons" (as defined in the 1940 Act) (the "Independent Trustees") of the
Trust or of the Portfolios, as the case may be, have adopted written proce-
dures reasonably appropriate to deal with potential conflicts of interest, up
to and including creating separate boards of trustees. For more information
with respect to the Trustees of the Trust and the Portfolios, see "Management
of the Trust and Portfolios" in the SAI.

Investment Adviser

The Trust has not retained the services of an investment adviser since the
Trust seeks to achieve the investment objective of each Fund by investing all
the Assets of each Fund in the corresponding Portfolio. Each Portfolio has
retained the services of Bankers Trust, as investment adviser.

Bankers Trust Company and Its Affiliates

Bankers Trust, a New York banking corporation with principal offices at 130
Liberty Street, New York, New York 10006, is a wholly owned subsidiary of
Bankers Trust Corporation. Bankers Trust conducts a variety of general banking
and trust activities and is a major wholesale supplier of financial services
to the international and domestic institutional markets. As of March 31, 1998,
Bankers Trust Corporation was the seventh largest bank holding company in the
United States with total assets of over $150 billion. Bankers Trust is a dedi-
cated to servicing the needs of corporations, governments, financial institu-
tions and private clients through a global network of over 90 offices in more
than 50 countries. Investment management is a core business of Bankers Trust,
built on a tradition of excellence from its roots as a trust bank founded in
1903. The scope of Bankers Trust's investment management capability is unique
due to its leadership positions in both active and passive quantitative man-
agement and its presence in major equity and fixed income markets around the
world. Bankers Trust is one of the nation's largest and most experienced
investment managers, with approximately $277 billion in assets under manage-
ment globally. Of that total, approximately $1.2 billion are in tactical asset
allocation funds. This makes Bankers Trust one of the nation's leading manag-
ers of tactical asset allocation funds.

On March 11, 1999, Bankers Trust announced that it had reached an agreement
with the United States Attorney's Office in the Southern District of New York
to resolve an investigation concerning inappropriate transfers of unclaimed
funds and related record-keeping problems that occurred between 1994 and early
1996. Pursuant to its agreement with the U.S. Attorney's Office, Bankers Trust
pleaded guilty to misstating entries in the bank's books and records and
agreed to pay a $60 million fine to federal authorities. Separately, Bankers
Trust agreed to pay a $3.5 million fine to the
State of New York. The events leading up to the guilty pleas did not arise out
of the investment advisory or mutual fund management activities of Bankers
Trust or its affiliates.

As a result of the plea, absent an order from the SEC, Bankers Trust would not
be able to continue to provide investment advisory services to the Funds. The
SEC has granted a temporary order to permit Bankers Trust and its affiliates
to continue to provide investment advisory services to registered investment
companies. There is no assurance that the SEC will grant a permanent order.

Bankers Trust has more than 50 years of experience managing retirement assets
for the nation's largest corporations and institutions. In the past, these
clients have been serviced through separate account and commingled fund struc-
tures. Now, the BT Family of Funds brings Bankers Trust's extensive investment
management expertise, once available to only the largest institutions in the
U.S., to individual investors. Bankers Trust's officers have had extensive
experience in managing investment portfolios having objectives similar to
those of the Portfolios.

On November 30, 1998, Bankers Trust Corporation entered into an Agreement and
Plan of Merger with Deutsche Bank AG under which Bankers Trust Corporation
would merge with and into a subsidiary of Deutsche Bank AG. Deutsche Bank AG
is a major

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global banking institution that is engaged in a wide range of financial serv-
ices, including investment management, mutual funds, retail and commercial
banking, investment banking and insurance. The transaction is contingent upon
various regulatory approvals, and continuation of the Funds' advisory rela-
tionship with Bankers Trust thereafter is subject to the approval of Fund
shareholders. If the transaction is approved and completed, Deutsche Bank AG,
as Bankers Trust's new parent company, will control its operations as invest-
ment adviser. Bankers Trust believes that, under this new arrangement, the
services provided to the Funds will be maintained at their current level.

Bankers Trust, subject to the supervision and direction of the Board of Trust-
ees of the respective Portfolio, manages each Portfolio in accordance with
that Portfolio's investment objective and stated investment policies, makes
investment decisions for each Portfolio, places orders to purchase and sell
securities and other financial instruments on behalf of each Portfolio and
employs professional investment managers and securities analysts who provide
research services to each Portfolio. Bankers Trust may utilize the expertise
of any of its worldwide subsidiaries and affiliates to assist it in its role
as investment adviser. All orders for investment transactions on behalf of
each Portfolio are placed by Bankers Trust with broker dealers and other
financial intermediaries that it selects, including those affiliated with
Bankers Trust. A Bankers Trust affiliate will be used in connection with a
purchase or sale of an investment for each Portfolio only if Bankers Trust
believes that the affiliate's charge for the transaction does not exceed usual
and customary levels. Each Portfolio will not invest in obligations for which
Bankers Trust or any of its affiliates is the ultimate obligor or accepting
bank. Each Portfolio may, however, invest in the obligations of correspondents
or customers of Bankers Trust.

Under its Investment Advisory Agreement, Bankers Trust receives a fee from
each Portfolio computed daily and paid monthly at the annual rate of 0.65% of
the average daily net assets of the Portfolio. Under certain circumstances
Bankers Trust has agreed to pay fees to certain securities brokers, dealers
and other entities that facilitate the sale of Fund shares, and in connection
therewith provide administrative, shareholder, or distribution related serv-
ices to the Funds or their shareholders. Fees paid to entities that administer
mutual fund "supermarkets" may be higher than fees paid for other types of
services.

Bankers Trust has been advised by its counsel that, in counsel's opinion,
Bankers Trust currently may perform the services for the Trust and the Portfo-
lios described in this Prospectus and the SAI without violation of the Glass
Steagall Act or other applicable banking laws or regulations. State laws on
this issue may differ from the interpretations of relevant Federal law and
banks and financial institutions may be required to register as dealers pursu-
ant to state securities law.

Portfolio Managers

Mr. Philip Green, and Ms. Karen Keller are responsible for the day-to-day man-
agement of the Portfolios.

Mr. Green, Managing Director, is a portfolio manager in the quantitative
investments group. Mr. Green joined Bankers Trust in 1985 and has over four-
teen years of investment experience. During his career, Mr. Green has held a
wide variety of portfolio management assignments including equity, currency
and balanced portfolios. He received his B.S.E. from the Wharton School of
Business and a M.B.A. from New York University. Mr. Green managed the Portfo-
lios from January, 1995 to July, 1996, and since March, 1997.

Ms. Keller, Vice President, is a portfolio manager in the quantitative invest-
ments group. She also provides on-going research for model development and
portfolio strategies. Ms. Keller joined Bankers Trust in 1988 and has over
eleven years of investment experience. She has a B.A. in Economics from Tufts
University and an M.B.A. in Finance from New York University. Ms. Keller has
been involved in the management of the Portfolios since their inception in
1993.

Administrator

Under its Administration and Services Agreement with the Trust, Bankers Trust
calculates the NAV of each Fund and generally assists the Board of Trustees of
the Trust in all aspects of the administration and operation of the Trust. The
Administration and Services Agreement provides for the Trust to pay Bankers
Trust a fee computed daily and paid monthly at the annual rate of 0.65% of the
average daily net assets of each Fund.

Under an Administration and Services Agreement with each Portfolio, Bankers
Trust calculates the value of the assets of the Portfolios and generally
assists the Board of Trustees of the Portfolios in all aspects of the adminis-
tration and operation of the Portfolios. Each Adminis-

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tration and Services Agreement provides for the respective Portfolio to pay
Bankers Trust a fee computed daily and paid monthly at the rate of 0.10% of
the average daily net assets of that Portfolio. Under each Administration and
Services Agreement, Bankers Trust may delegate one or more of its responsibil-
ities to others at Bankers Trust's expense. For more information, see the SAI.

For the fiscal year of each Fund ended March 31, 1998, the Funds and their
respective Portfolios, after a partial waiver by Bankers Trust, paid Bankers
Trust total administrative and services fees equal to 0.35%, 0.43% and 0.44%,
respectively, of the average daily net assets of the BT Investment Lifecycle
Short Range Fund, BT Investment Lifecycle Mid Range Fund and BT Investment
Lifecycle Long Range Fund.

Distributor

ICC Distributors, Inc. is the principal distributor for shares of the Funds.
In addition, ICC provides distribution services for other registered invest-
ment companies. The principal business address of ICC and its affiliates is
Two Portland Square, Portland, Maine 04101.

Service Agent

All shareholders must be represented by a Service Agent. Bankers Trust acts as
a Service Agent pursuant to its Administration and Services Agreement with the
Trust and receives no additional compensation from the Funds for such share-
holder services. The service fees of any other Service Agents, including bro-
ker dealers, will be paid by Bankers Trust from its fees. The services pro-
vided by a Service Agent may include establishing and maintaining shareholder
accounts, processing purchase and redemption transactions, arranging for bank
wires, performing shareholder sub accounting, answering client inquiries
regarding the Trust, assisting clients in changing dividend options, account
designations and addresses, providing periodic statements showing the client's
account balance, transmitting proxy statements, periodic reports, updated pro-
spectuses and other communications to shareholders and, with respect to meet-
ings of shareholders, collecting, tabulating and forwarding to the Trust exe-
cuted proxies and obtaining such other information and performing such other
services as the Administrator or the Service Agent's clients may reasonably
request and agree upon with the Service Agent. Service Agents may separately
charge their clients additional fees only to cover provision of additional or
more comprehensive services not already provided under the Administration and
Services Agreement with Bankers Trust, or of the type or scope not generally
offered by a mutual fund, such as cash management services or enhanced retire-
ment or trust reporting. Each Service Agent has agreed to transmit to share-
holders who are its customers appropriate disclosures of any fees that it may
charge them directly.

Custodian and Transfer Agent

Bankers Trust acts as Custodian of the assets of the Trust and each Portfolio
and serves as the Transfer Agent for the Trust and each Portfolio under the
Trust's Administration and Services Agreement with the Trust and each Portfo-
lio.

Organization of the Trust and Funds

The Trust was organized on July 21, 1986 under the laws of the Commonwealth of
Massachusetts. Each Fund is a separate series of the Trust and was established
and designated on August 12, 1992. The Trust offers shares of beneficial
interest of separate series, par value $0.001 per share. The shares of the
other series of the Trust are offered through separate prospectuses. No series
of shares has any preference over any other series.

The Trust is an entity of the type commonly known as a "Massachusetts business
trust." Under Massachusetts law, shareholders of such a business trust may,
under certain circumstances, be held personally liable as partners for its
obligations. However, the risk of a shareholder incurring financial loss on
account of shareholder liability is limited to circumstances in which both
inadequate insurance existed and the Trust itself was unable to meet its obli-
gations.

When matters are submitted for shareholder vote, shareholders of each Fund
will have one vote for each full share held and proportionate, fractional
votes for fractional shares held. A separate vote of a Fund is required on any
matter affecting that Fund on which shareholders are entitled to vote. Share-
holders of a Fund are not entitled to vote on Trust matters that do not affect
that Fund. There normally will be no meetings of shareholders for the purpose
of electing Trustees unless and until such time as less than a majority of
Trustees holding office have been elected by shareholders, at which time the
Trustees then in office will call a shareholders' meeting for the election of
Trustees. Any Trustee may be
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removed from office upon the vote of shareholders holding at least two thirds
of the Trust's outstanding shares at a meeting called for that purpose. The
Trustees are required to call such a meeting upon the written request of
shareholders holding at least 10% of the Trust's outstanding shares.

Asset Management Portfolio II and Asset Management Portfolio III are each a
series of BT Investment Portfolios, an open end management investment company.
BT Investment Portfolios and Asset Management Portfolio are each organized as
trusts under the laws of the State of New York. Each Portfolio's Declaration
of Trust provides that the corresponding Fund and other entities investing in
the Portfolio (e.g., other investment companies, insurance company separate
accounts and common and commingled trust funds) will each be liable for all
obligations of the Portfolio. However, the risk of a Fund incurring financial
loss on account of such liability is limited to circumstances in which both
inadequate insurance existed and the corresponding Portfolio itself was unable
to meet its obligations. Accordingly, the Trustees of the Trust believe that
neither the Funds nor their shareholders will be adversely affected by reason
of the Funds investing in the corresponding Portfolios. The interest in BT
Investment Portfolios are divided into separate series, such as Asset Manage-
ment Portfolio II and Asset Management Portfolio III. No series of BT Invest-
ment Portfolios has any preference over any other series.

Each series of the Trust will not be involved in any vote involving a Portfo-
lio in which it does not invest its Assets. Shareholders of all the series of
the Trust will, however, vote together to elect Trustees of the Trust and for
certain other matters. Under certain circumstances, the shareholders of one or
more series could control the outcome of these votes.

As of June 4, 1998, BT Pension Plan c/o Bankers Trust Company, Jersey City,
New Jersey owned 26.70% of the BT Investment Lifecycle Mid Range Fund, and
40.60% of the BT Investment Lifecycle Short Range Fund, and therefore, may for
certain purposes, be deemed to control these Funds and be able to affect the
outcome of certain matters presented for a vote of each Fund's shareholders.

The series of BT Investment Portfolios will vote separately or together in the
same manner as the series of the Trust. Under certain circumstances, the
investors in one or more series of BT Investment Portfolios could control the
outcome of these votes.

Expenses of the Trust

Each Fund bears its own expenses. Operating expenses for each Fund generally
consist of all costs not specifically borne by Bankers Trust or ICC, including
administration and service fees, fees for necessary professional services,
amortization of organizational expenses, and costs associated with regulatory
compliance and maintaining legal existence and shareholder relations. Bankers
Trust has agreed to reimburse each Fund to the extent required by applicable
state law for certain expenses that are described in the SAI. Each Portfolio
bears its own expenses. Operating expenses for each Portfolio generally con-
sist of all costs not specifically borne by Bankers Trust or ICC, including
investment advisory and administration and services fees, fees for necessary
professional services, the costs associated with regulatory compliance and
maintaining legal existence and investor relations.

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ADDITIONAL INFORMATION
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When-Issued and Delayed Delivery Securities. Each Portfolio may buy and sell
securities on a when-issued or delayed delivery basis. These transactions
involve a commitment by the Portfolio to buy or sell securities at a set
price, with payment and delivery taking place at a future date. Purchasing
securities in this manner may cause greater fluctuations in the Portfolio's
share price.

Short Sales. Each Portfolio may engage in short sales with respect to securi-
ties that it owns or has the right to obtain (for example, through conversion
of a convertible bond). These transactions, known as short sales "against the
box," allow the Portfolio to hedge against price fluctuations by locking in a
sale price for securities it does not wish to sell immediately.

Indexed Securities. Each Portfolio may invest in indexed securities whose
value depends on the price of foreign currencies, securities indices or other
financial values or statistics. Examples include debt securities whose value
at maturity is determined by reference to the relative prices of various cur-
rencies or to the price
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of a stock index. These securities may be positively or negatively indexed;
that is, their value may increase or decrease if the underlying instrument
appreciates.

Securities Lending. Each Portfolio is permitted to lend up to 30% of the total
value of its securities. These loans must be secured continuously by cash or
securities issued or guaranteed by the United States government, its agencies
or instrumentalities or by a letter of credit at least equal to the market
value of the securities loaned plus accrued income. By lending its securities,
the Portfolio may increase its income by continuing to receive income on the
loaned securities as well as by the opportunity to receive interest on the
collateral. During the term of the loan the Portfolio continues to bear the
risk of fluctuations in the price of the loaned securities. In lending securi-
ties to brokers, dealers and other organizations, the Portfolio is subject to
risks, which, like those associated with other extensions of credit, include
delays in receiving additional collateral, in recovery should the borrower
fail financially and possible loss of the collateral. Upon receipt of appro-
priate regulatory approval, cash collateral may be invested in a money market
fund managed by Bankers Trust (or its affiliates) and Bankers Trust may serve
as the Portfolio's lending agent and may share in revenue received from secu-
rities lending transactions as compensation for this service.

Repurchase Agreements. Each Portfolio may invest in repurchase agreements. In
a repurchase agreement the Portfolio buys a security and simultaneously agrees
to sell it back at a higher price. In the event of the bankruptcy of the other
party to either a repurchase agreement or a securities loan, a Portfolio could
experience delays in recovering either its cash or the securities it lent. To
the extent that, in the meantime, the value of the securities repurchased had
decreased or the value of the securities lent had increased, the Portfolio
could experience a loss. In all cases, Bankers Trust must find the creditwor-
thiness of the other party to the transaction satisfactory. A repurchase
agreement is considered a collateralized loan under the 1940 Act.

Rule 144A Securities. Each Portfolio may purchase securities in the United
States that are not registered for sale under Federal securities laws but
which can be resold to institutions under the SEC's Rule 144A. Provided that a
dealer or institutional trading market in such securities exists, these
restricted securities are treated as exempt from each Portfolio's 15% limit on
illiquid securities. Under the supervision of the Board of Trustees of each
Portfolio, Bankers Trust determines the liquidity of restricted securities
and, through reports from Bankers Trust, that Board will monitor trading
activity in restricted securities. Because Rule 144A is relatively new, it is
not possible to predict how these markets will develop. If institutional trad-
ing in restricted securities were to decline, the liquidity of each Portfolio
could be adversely affected.

Zero Coupon Debt Securities. Zero coupon debt securities do not make regular
interest payments. Instead they are sold at a deep discount from their face
value. Because a zero coupon bond does not pay current income, its price can
be very volatile when interest rates change. In calculating its dividends,
each Fund takes into account as income a portion of the difference between a
zero coupon bond's purchase price and its face value.

Government Securities. Government securities may or may not be backed by the
full faith and credit of the U.S. government. U.S. Treasury bonds, notes and
bills and certain agency securities, such as those issued by the Federal Hous-
ing Administration, are backed by the full faith and credit of the U.S. gov-
ernment and are the highest quality government securities. Each Portfolio may
also invest a substantial portion of its portfolio in securities issued by
government agencies or instrumentalities (such as executive departments of the
U.S. government or independent Federal organizations supervised by Congress),
which may have different degrees of government backing but which are not
backed by the full faith and credit of the U.S. government. There is no guar-
antee that the government will support these types of securities, and there-
fore they involve more risk than other government obligations.

Mortgage Backed Securities. Mortgage backed securities are securities repre-
senting interests in a pool of mortgages. Principal and interest payments made
on the mortgages in the underlying mortgage pool are passed through to the
investor. Unscheduled prepayments of principal shorten the securities'
weighted average life and may lower their total return. When a mortgage in the
underlying pool is prepaid, an unscheduled principal prepayment is passed
through to the investor. This principal is returned to the investor at par. As
a result, if a mortgage security were trading at a premium, its total return
would be lowered by prepayments, and if a mortgage security were trading at a
discount, its total return would be increased by prepayments. The value of
these

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securities also may change because of changes in the market's perception of
the creditworthiness of the Federal agency that issued them. In addition, the
mortgage securities market in general may be adversely affected by changes in
governmental regulation or tax policies.

Collateralized Mortgage Obligations ("CMOs"). CMOs are pay through securities
collateralized by mortgages or mortgage backed securities. CMOs are issued in
classes and series that have different maturities and often are retired in
sequence. CMOs may be issued by governmental or non governmental entities such
as banks and other mortgage lenders. Non government securities may offer a
higher yield but also may be subject to greater price fluctuation than govern-
ment securities.

Asset Backed Securities. Asset backed securities consist of undivided frac-
tional interests in pools of consumer loans (unrelated to mortgage loans) held
in a trust. Payments of principal and interest are passed through to
certificateholders and are typically supported by some form of credit enhance-
ment, such as a letter of credit, surety bond, limited guarantee or
senior/subordination. The degree of credit enhancement varies, but generally
amounts to only a fraction of the asset backed security's par value until
exhausted. If the credit enhancement is exhausted, certificateholders may
experience losses or delays in payment if the required payments of principal
and interest are not made to the trust with respect to the underlying loans.
The value of these securities also may change because of changes in the mar-
ket's perception of the creditworthiness of the servicing agent for the loan
pool, the originator of the loans or the financial institution providing the
credit enhancement. Asset backed securities are ultimately dependent upon pay-
ment of consumer loans by individuals, and the certificateholder generally has
no recourse to the entity that originated the loans. The underlying loans are
subject to prepayments which shorten the securities' weighted average life and
may lower their return. As prepayments flow through at par, total returns
would be affected by the prepayments: if a security were trading at a premium,
its total return would be lowered by prepayments, and if a security were trad-
ing at a discount, its total return would be increased by prepayments.

Foreign Investments. Each Portfolio may invest in securities of foreign
issuers directly or in the form of American Depositary Receipts ("ADRs"),
Global Depositary Receipts ("GDRs"), European Depositary Receipts ("EDRs") or
other similar securities representing securities of foreign issuers. These
securities may not necessarily be denominated in the same currency as the
securities they represent. Designed for use in U.S. and European securities
markets, respectively, ADRs, GDRs and EDRs are alternatives to the purchase of
the underlying securities in their national markets and currencies, but are
subject to the same risks as the foreign securities to which they relate.

With respect to certain countries in which capital markets are either less
developed or not easily accessed, investments by each Portfolio may be made
through investment in other investment companies that in turn are authorized
to invest in the securities of such countries. Investment in other investment
companies is limited in amount by the 1940 Act, will involve the indirect pay-
ment of a portion of the expenses, including advisory fees, of such other
investment companies and may result in a duplication of fees and expenses.

Options on Stocks. Each Portfolio may write and purchase put and call options
on stocks. A call option gives the purchaser of the option the right to buy,
and obligates the writer to sell, the underlying stock at the exercise price
at any time during the option period. Similarly, a put option gives the pur-
chaser of the option the right to sell, and obligates the writer to buy, the
underlying stock at the exercise price at any time during the option period. A
covered call option, which is a call option with respect to which a Portfolio
owns the underlying stock, sold by the Portfolio exposes the Portfolio during
the term of the option to possible loss of opportunity to realize appreciation
in the market price of the underlying stock or to possible continued holding
of a stock which might otherwise have been sold to protect against deprecia-
tion in the market price of the stock. A covered put option sold by a Portfo-
lio exposes the Portfolio during the term of the option to a decline in price
of the underlying stock. A put option sold by a Portfolio is covered when,
among other things, cash or liquid securities are placed in a segregated
account to fulfill the obligations undertaken.

To close out a position when writing covered options, each Portfolio may make
a "closing purchase transaction," which involves purchasing an option on the
same stock with the same exercise price and expiration date as the option
which it has previously written on the stock. A Portfolio will realize a
profit or loss for a closing purchase transaction if the amount paid to pur-
chase

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an option is less or more, as the case may be, than the amount received from
the sale thereof. To close out a position as a purchaser of an option, each
Portfolio may make a "closing sale transaction," which involves liquidating
the Portfolio's position by selling the option previously purchased.

Each Portfolio intends to treat over the counter options ("OTC options") pur-
chased and the assets used to "cover" OTC options written as not readily mar-
ketable and therefore subject to the limitations described in "Investment
Restrictions" in the SAI.

Options on Stock Indices. Each Portfolio may purchase and write put and call
options on stock indices listed on stock exchanges. A stock index fluctuates
with changes in the market values of the stocks included in the index.

Options on stock indices are generally similar to options on stock except that
the delivery requirements are different. Instead of giving the right to take
or make delivery of stock at a specified price, an option on a stock index
gives the holder the right to receive a cash "exercise settlement amount"
equal to (a) the amount, if any, by which the fixed exercise price of the
option exceeds (in the case of a put) or is less than (in the case of a call)
the closing value of the underlying index on the date of exercise, multiplied
by (b) a fixed "index multiplier." Receipt of this cash amount will depend
upon the closing level of the stock index upon which the option is based being
greater than, in the case of a call, or less than, in the case of a put, the
exercise price of the option. The amount of cash received will be equal to
such difference between the closing price of the index and the exercise price
of the option expressed in dollars times a specified multiple. The writer of
the option is obligated, in return for the premium received, to make delivery
of this amount. The writer may offset its position in stock index options
prior to expiration by entering into a closing transaction on an exchange or
the option may expire unexercised.

Because the value of an index option depends upon movements in the level of
the index rather than the price of a particular stock, whether a Portfolio
will realize a gain or loss from the purchase or writing of options on an
index depends upon movements in the level of stock prices in the stock market
generally or, in the case of certain indices, in an industry or market seg-
ment, rather than movements in the price of a particular stock. Accordingly,
successful use by a Portfolio of options on stock indices will be subject to
Bankers Trust's ability to predict correctly movements in the direction of the
stock market generally or of a particular industry. This requires different
skills and techniques than predicting changes in the price of individual
stocks.

Futures Contracts on Securities Indices. Each Portfolio may enter into con-
tracts providing for the making and acceptance of a cash settlement based upon
changes in the value of an index of securities ("futures contracts"). This
investment technique may be used to hedge against anticipated future change in
general market prices which otherwise might either adversely affect the value
of securities held by the Portfolio or adversely affect the prices of securi-
ties which are intended to be purchased at a later date for the Portfolio or
as an efficient means of managing allocations between asset classes. A futures
contract may also be entered into to close out or offset an existing futures
position.

When used for hedging purposes, a futures contracts involves the establishment
of a position which will move in a direction opposite to that of the invest-
ment being hedged. If these hedging transactions are successful, the futures
positions taken for a Portfolio will rise in value by an amount which approxi-
mately offsets the decline in value of the portion of the Portfolio's invest-
ments that are being hedged. Should general market prices move in an unex-
pected manner, the full anticipated benefits of futures contracts may not be
achieved or a loss may be realized.

Futures contracts do involve certain risks. These risks could include a lack
of correlation between the futures contract and the corresponding securities
market, a potential lack of liquidity in the secondary market and incorrect
assessments of market trends which may result in poorer overall performance
than if a futures contract had not been entered into.

Brokerage costs will be incurred and "margin" will be required to be posted
and maintained as a good faith deposit against performance of obligations
under futures contracts written for a Portfolio.

Options on Futures Contracts. Each Portfolio may invest in options on such
futures contracts for similar purposes.

Each Portfolio may not purchase or sell a futures contract or option thereon
if immediately thereafter its mar-

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gin deposits on its outstanding futures contracts (other than futures con-
tracts entered into for bona fide hedging purposes) and premiums paid for
options thereon would exceed 5% of the market value of the Portfolio's total
assets.

Foreign Currency Exchange Transactions. Because each Portfolio buys and sells
securities denominated in currencies other than the U.S. dollar and receives
interest, dividends and sale proceeds in currencies other than the U.S. dol-
lar, the Portfolios from time to time may enter into foreign currency exchange
transactions to convert to and from different foreign currencies and to con-
vert foreign currencies to and from the U.S. dollar. Each Portfolio either
enters into these transactions on a spot (i.e., cash) basis at the spot rate
prevailing in the foreign currency exchange market or uses forward contracts
to purchase or sell foreign currencies.

A forward foreign currency exchange contract is an obligation by a Portfolio
to purchase or sell a specific currency at a future date, which may be any
fixed number of days from the date of the contract. Forward foreign currency
exchange contracts establish an exchange rate at a future date. These con-
tracts are transferable in the interbank market conducted directly between
currency traders (usually large commercial banks) and their customers. A for-
ward foreign currency exchange contract generally has no deposit requirement
and is traded at a net price without commission. Neither spot transactions nor
forward foreign currency exchange contracts eliminate fluctuations in the
prices of a Portfolio's securities or in foreign exchange rates, or prevent
loss if the prices of these securities should decline.

Each Portfolio may enter into foreign currency hedging transactions in an
attempt to protect against changes in foreign currency exchange rates between
the trade and settlement dates of specific securities transactions or changes
in foreign currency exchange rates that would adversely affect a portfolio
position or an anticipated investment position. Since consideration of the
prospect for currency parities will be incorporated into Bankers Trust's long
term investment decisions, each Portfolio will not routinely enter into for-
eign currency hedging transactions with respect to security transactions; how-
ever, Bankers Trust believes that it is important to have the flexibility to
enter into foreign currency hedging transactions when it determines that the
transactions would be in each Portfolio's best interest. Although these trans-
actions tend to minimize the risk of loss due to a decline in the value of the
hedged currency, at the same time they tend to limit any potential gain that
might be realized should the value of the hedged currency increase. The pre-
cise matching of the forward contract amounts and the value of the securities
involved will not generally be possible because the future value of such secu-
rities in foreign currencies will change as a consequence of market movements
in the value of such securities between the date the forward contract is
entered into and the date it matures. The projection of currency market move-
ments is extremely difficult, and the successful execution of a hedging strat-
egy is highly uncertain.

Options on Foreign Currencies. Each Portfolio may write covered put and call
options and purchase put and call options on foreign currencies for the pur-
pose of protecting against declines in the dollar value of portfolio securi-
ties and against increases in the dollar cost of securities to be acquired.
Each Portfolio may use options on currency to cross hedge, which involves
writing or purchasing options on one currency to hedge against changes in
exchange rates for a different, but related currency. As with other types of
options, however, the writing of an option on foreign currency will constitute
only a partial hedge up to the amount of the premium received, and each Port-
folio could be required to purchase or sell foreign currencies at disadvanta-
geous exchange rates, thereby incurring losses. The purchase of an option on
foreign currency may be used to hedge against fluctuations in exchange rates
although, in the event of exchange rate movements adverse to a Portfolio's
position, it may forfeit the entire amount of the premium plus related trans-
action costs. In addition each Portfolio may purchase call options on currency
when the Adviser anticipates that the currency will appreciate in value.

There is no assurance that a liquid secondary market on an options exchange
will exist for any particular option, or at any particular time. If a Portfo-
lio is unable to effect a closing purchase transaction with respect to covered
options it has written, the Portfolio will not be able to sell the underlying
currency or dispose of assets held in a segregated account until the options
expire or are exercised. Similarly, if a Portfolio is unable to effect a clos-
ing sale transaction with respect to options it has purchased, it would have
to exercise the options in order to realize any profit and will incur transac-
tion costs upon the purchase or sale of underlying currency. Each Port-

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folio pays brokerage commissions or spreads in connection with its options
transactions.

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. Each Portfolio's
ability to terminate OTC options will 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. Until such time as
the staff of the SEC changes its position, each Portfolio will treat purchased
OTC options and assets used to cover written OTC options as illiquid securi-
ties. 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.

There can be no assurance that the use of these portfolio strategies will be
successful.

Asset Coverage. To reduce the leverage created by each of the Portfolio's use
of futures and related options, as well as when-issued and delayed delivery
securities and foreign currency exchange transactions, each Portfolio will
cover such transactions, as required under applicable interpretations of the
SEC, either by owning the underlying securities or by segregating with the
Portfolio's custodian liquid securities in an amount at all times equal to or
exceeding the Portfolio's commitment with respect to these instruments or con-
tracts.

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BT INVESTMENT FUNDS
BT Investment Lifecycle Short Range Fund
BT Investment Lifecycle Mid Range Fund
BT Investment Lifecycle Long Range Fund

Investment Adviser of the Portfolios and Administrator
BANKERS TRUST COMPANY
130 Liberty Street
New York, NY 10006

Distributor
ICC DISTRIBUTORS, INC.
Two Portland Square
Portland, Maine 04101

Custodian and Transfer Agent
BANKERS TRUST COMPANY
130 Liberty Street
New York, NY 10006

Independent Accountants
PRICEWATERHOUSECOOPERS LLP
250 West Pratt Street
Baltimore, MD 21201

Counsel
WILLKIE FARR & GALLAGHER
787 7th Avenue
New York, NY 10019

------------------------

No person has been authorized to give any information or to make any represen-
tations other than those contained in the Trust's Prospectuses, its Statements
of Additional Information or the Trust's official sales literature in connec-
tion with the offering of the Trust's shares and, if given or made, such other
information or representations must not be relied on as having been authorized
by the Trust. This Prospectus does not constitute an offer in any state in
which, or to any person to whom, such offer may not lawfully be made.

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Cusips #055922827
#055922835
#055922843

COMBLIFE300 (4/99)