<PAGE>
SUPPLEMENT DATED JULY 31, 1997 TO THE
PROSPECTUS FOR PACIFIC SELECT FUND ("THE FUND") DATED MAY 1, 1997
("PROSPECTUS")
NEW PORTFOLIO MANAGER FOR THE INTERNATIONAL PORTFOLIO
Morgan Stanley Asset Management Inc. ("Morgan Stanley"), a wholly-owned
subsidiary of Morgan Stanley, Dean Witter, Discover & Co., became the
Portfolio Manager for the International Portfolio effective June 1, 1997
pursuant to a portfolio management agreement with the Adviser and the Fund.
The new portfolio management agreement was approved by the Board of Trustees,
including a majority of the Trustees who are not parties to the new portfolio
management agreement or interested persons of such parties, at a meeting held
on May 15, 1997. Variable Contract Owners having an interest in the
International Portfolio as of the record date June 13, 1997 will be asked at a
special meeting of Shareholders to be held August 8, 1997 to approve the new
portfolio management agreement with Morgan Stanley.
Morgan Stanley's address is 1221 Avenue of the Americas, New York, New York
10020. Morgan Stanley, together with its affiliated asset management
companies, conducts a worldwide portfolio management business and provides a
broad range of portfolio management services to customers in the United States
and abroad. As of February 28, 1997 Morgan Stanley, together with its
affiliated asset management companies, had approximately $176.9 billion in
assets under management as an investment manager or as a fiduciary adviser.
Morgan Stanley has been managing international securities since 1986.
Pacific Mutual Life will pay Morgan Stanley a fee at an annual rate of .35%
based on the average daily net assets of the International Portfolio.
Francine J. Bovich, a Principal of Morgan Stanley, is primarily responsible
for the day-to-day investment management and implementation of Morgan
Stanley's investment strategy for the International Portfolio. Prior to
joining Morgan Stanley in 1993, Ms. Bovich was a Principal and Executive Vice
President of Westwood Management Corp., a registered investment adviser (1986-
1993). Before joining Westwood, she was a Managing Director of Citicorp
Investment Management, Inc. (now Chancellor Capital Management), where she was
responsible for the Institutional Investment Management group (1980-1986). Ms.
Bovich began her investment career with Bankers Trust Company (1973-1980). She
holds a B.A. in Economics from Connecticut College and an M.B.A. in Finance
from New York University.
PRIOR PERFORMANCE OF COMPARABLE ACCOUNTS MANAGED BY MORGAN STANLEY
The table below sets forth composite performance data relating to the
historical performance of all accounts with assets in excess of $25 million
managed by Morgan Stanley that have investment objectives, policies,
strategies and risks substantially similar, although not identical, to those
of the Fund's International Portfolio. The composite consists of four
accounts, including two advisory accounts, one mutual fund and a pooled trust.
The data is provided to illustrate the past performance of Morgan Stanley in
managing accounts substantially similar to the International Portfolio but
does not represent the performance of the International Portfolio. The table
below also sets forth the performance of the International Portfolio and the
performance of the Morgan Stanley Capital International Index ("MSCI EAFE")
for the periods shown. In addition, for those persons who also wish to review
different time periods and/or more detailed data in order to analyze market
cycle returns, volatility or for other analytical purposes, monthly returns,
inception to date returns, and 12-month returns have been provided. The
performance data for the International Portfolio reflects the Portfolio's fees
and expenses.
<PAGE>
In comparing the performance of the comparable accounts managed by Morgan
Stanley to the performance of the International Portfolio, it should be noted
that the country weighting of the Morgan Stanley accounts varied in certain
respects from those of the International Portfolio. During the periods shown,
the comparable accounts managed by Morgan Stanley were generally not invested
in emerging market countries, whereas the International Portfolio frequently
invested in emerging markets. Also, the weighting of securities issued by
companies located in Japan held by the Morgan Stanley accounts was
significantly greater than the weighting of Japanese securities held by the
International Portfolio. Morgan Stanley has advised the Fund that it will
employ an investment strategy that combines regional asset allocation with
value based stock selection. It is expected that under Morgan Stanley, the
allocation of assets among various countries for the International Portfolio
will be more closely correlated with the weighting of countries in the MSCI
EAFE Index. The MSCI EAFE is an index of more than 1,000 major selected
foreign issuers in various countries including most nations in Western Europe,
Australia, Japan, New Zealand and certain developed countries in Asia, such as
Hong Kong and Singapore. Morgan Stanley has advised the Fund that it does make
strategic regional and country weighting allocations that may significantly
differ from the MSCI EAFE Index in seeking relative outperformance, but it is
expected that Morgan Stanley generally would not invest in emerging market
countries.
The figures shown for Morgan Stanley's composite performance of comparable
accounts are based on gross results that are adjusted to reflect the fees and
expenses of the International Portfolio for the periods shown. The composite
performance figures also reflect the inclusion of any dividends and interest
income received, the deduction of any brokerage commissions, and other related
portfolio transaction expenses which are generally reflected as part of the
cost of a security. The composite data was calculated in accordance with
recommended standards of the Association for Investment Management and
Research ("AIMR"), retroactively applied to all time periods. Accounts which
are to be included in the composite of comparable accounts are included the
month after operations commence or the month after meeting minimum dollar
criteria (if applicable) for inclusion in the composite. To determine
composite values, the beginning market value of each comparable account is
divided by the sum of the market values of all comparable accounts, which
results in a percentage number. The percentage number is multiplied by each
comparable account's rate of return. The sum of all such amounts for the
comparable accounts results in a dollar-weighted composite return. The
composite investment results are unaudited.
In connection with the assumption of portfolio management duties by Morgan
Stanley, significant portfolio turnover may have occurred or may occur in
connection with a restructuring of the Portfolio's holdings to reflect the
management style of Morgan Stanley. Such restructuring may result in increased
transaction costs in the Portfolio's current fiscal year.
Because of the differences in computation methods, such as the method or
frequency of reinvesting dividends or measuring gains, the data for the
comparable accounts shown below may not be precisely comparable to performance
data for the International Portfolio. In addition, the performance data for
the advisory accounts and pooled trust included in the composite may not be
representative of the International Portfolio because those accounts are not
subject to the obligation to redeem shares upon request and to meet
diversification requirements, specific tax restrictions and investment
limitations imposed on the Portfolio by the 1940 Act or Subchapter M of the
Internal Revenue Code, which, if imposed, could have adversely affected the
performance. In addition, if the asset size of the comparable accounts varies
from that of the International Portfolio, this might reduce the comparability
of the International Portfolio's performance to that of the comparable
accounts. Moreover, the International Portfolio's current and future
investments are not and will not necessarily be identical to those of the
comparable accounts. Investors should also be aware that the use of a
methodology different from that used to calculate these composite returns
could result in different performance data.
The investment results presented below are not intended to predict or
suggest the returns that might be experienced by the International Portfolio
or an individual investor investing in the International Portfolio.
THE FOLLOWING PERFORMANCE DATA DOES NOT REFLECT THE DEDUCTION FOR SEPARATE
ACCOUNT OR CONTRACT LEVEL CHARGES.
<PAGE>
TOTAL RETURN FOR MSCI EAFE, MORGAN STANLEY COMPARABLE ACCOUNTS
AND INTERNATIONAL PORTFOLIO FOR THE PERIODS SHOWN
<TABLE>
<CAPTION>
*MORGAN STANLEY INTERNATIONAL PORTFOLIO
MSCI EAFE ("EAFE") COMPARABLE ACCOUNTS ("MSCA") ("INTERNATIONAL")
--------------------------------- --------------------------------- ---------------------------------
AVG. ANNUAL CUMULATIVE AVG. ANNUAL CUMULATIVE AVG. ANNUAL CUMULATIVE
FOR PERIOD 1 YEAR RETURN SINCE RETURN SINCE 1 YEAR RETURN SINCE RETURN SINCE 1 YEAR RETURN SINCE RETURN SINCE
ENDING RETURN INCEPTION** INCEPTION** RETURN INCEPTION** INCEPTION** RETURN INCEPTION** INCEPTION**
- ---------------- ------- ------------ ------------ ------- ------------ ------------ ------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
5/31/97 7.55% 9.10% 19.03% 15.68% 16.48% 35.67% 20.52% 16.84% 36.58%
<CAPTION>
MORGAN STANLEY INTERNATIONAL PORTFOLIO
MSCI EAFE ("EAFE") COMPARABLE ACCOUNTS ("MSCA") ("INTERNATIONAL")
--------------------------------- ---------------------------- ---------------------------------
INCEPTION ROLLING INCEPTION ROLLING INCEPTION ROLLING
FOR PERIOD MONTHLY TO DATE 12 MONTH MONTHLY TO DATE 12 MONTH MONTHLY TO DATE 12 MONTH
ENDING RETURN RETURN** RETURN RETURN RETURN** RETURN RETURN RETURN** RETURN
-------------- ------- ------------ ------------ ------- ------------ ------------ ------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
June 30 1995 -1.75 -1.75 -0.56 -0.56 1.14 1.14
July 31 6.23 4.36 5.60 5.01 4.30 5.49
August 31 -3.81 0.38 -0.88 4.10 -3.10 2.22
September 30 1.95 2.34 0.59 4.72 1.69 3.95
October 31 -2.69 -0.41 -2.15 2.46 -3.08 0.74
November 30 2.78 2.36 1.71 4.22 0.78 1.53
DECEMBER 31 4.03 6.49 2.98 7.36 1.41 2.96
- ---------------- -------------------------------- --------------------------------- ---------------------------------
January 31 1996 0.41 6.93 4.15 11.84 3.14 6.20
February 29 0.34 7.29 -0.15 11.69 1.77 8.07
March 31 2.12 9.57 1.13 12.96 0.13 8.22
April 30 2.91 12.75 4.35 17.93 3.58 12.09
May 31 -1.84 10.68 10.68 -0.83 16.96 16.96 1.11 13.33 15.07
June 30 0.56 11.30 13.28 1.03 18.19 18.84 0.34 13.72 14.16
July 31 -2.92 8.04 3.53 -4.65 12.65 7.20 -2.94 10.38 6.24
August 31 0.22 8.28 7.87 0.89 13.68 9.13 3.40 14.13 13.37
September 30 2.66 11.16 8.61 3.19 17.37 11.98 1.50 15.84 13.15
October 31 -1.02 10.02 10.47 -1.24 15.91 13.03 1.61 17.71 18.63
November 30 3.98 14.40 11.76 4.69 21.44 16.37 4.66 23.19 22.25
DECEMBER 31 -1.29 12.93 6.05 0.23 21.75 13.24 1.86 25.48 21.89
- ---------------- -------------------------------- --------------------------------- ---------------------------------
January 31 1997 -3.50 8.97 1.92 -0.42 21.25 8.23 2.12 28.14 20.68
February 28 1.64 10.76 3.24 2.10 23.85 10.68 1.31 29.82 20.13
March 31 0.36 11.16 1.46 0.40 24.38 9.88 1.01 31.13 21.17
April 30 0.53 11.75 -0.89 1.08 25.77 6.40 -0.26 30.79 16.69
MAY 31 6.51 19.03 7.55 7.73 35.67 15.68 4.43 36.58 20.52
----------------------------------------------------------------------------------------------------------------------
</TABLE>
* Represents performance of a composite of accounts managed by Morgan Stanley
with objectives and policies substantially similar to the Fund's International
Portfolio. THIS DOES NOT REPRESENT PERFORMANCE OF THE FUND'S INTERNATIONAL
PORTFOLIO. Composite figures are based upon gross performance as adjusted for
the International Portfolio's fees and expenses.
** Returns are since June 1, 1995, the month after the first comparable account
managed by Morgan Stanley began operations.
3
