KEYSTONE GLOBAL OPPORTUNITIES FUND, 497, 1996-12-13

KEYSTONE GLOBAL OPPORTUNITIES FUND
497, 1996-12-13

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KEYSTONE GLOBAL OPPORTUNITIES FUND
PROSPECTUS DECEMBER 10, 1996
AS SUPPLEMENTED DECEMBER 11, 1996

CLASS Y

Keystone Global Opportunities Fund (the "Fund") is a mutual fund that is
authorized to issue more than one series of shares ("Portfolios"). At this time,
the Fund issues shares of only one Portfolio, the Global Opportunities Portfolio
(the "Portfolio").

The Portfolio's objective is capital growth. The Portfolio's investments are
globally varied and primarily comprised of equity securities of small to medium
sized companies in a relatively early stage of development.

This prospectus provides information regarding the Portfolio's Class Y shares,
which the Fund will begin offering January 2, 1997. Information on share classes
may be found in the "Fund Shares" section of this prospectus.

This prospectus concisely states information about the Fund that you should
know before investing. Please read it and retain it for future reference.

Additional information about the Fund is contained in a statement of
additional information dated December 10, 1996, as supplemented December 11,
1996, which has been filed with the Securities and Exchange Commission and is
incorporated by reference into this prospectus. For a free copy, or for other
information about the Fund, write to the address or call the telephone number
provided on this page.

SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY, ANY BANK, AND SHARES ARE NOT INSURED OR OTHERWISE PROTECTED BY THE
U.S. GOVERNMENT, THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE
BOARD OR ANY OTHER GOVERNMENT AGENCY AND INVOLVE RISK, INCLUDING THE POSSIBLE
LOSS OF PRINCIPAL. TABLE OF CONTENTS KEYSTONE STRATEGIC INCOME FUND 200 BERKELEY
STREET BOSTON, MASSACHUSETTS 02116-5034 CALL TOLL FREE 1-800-343-2898

Page

Expense Information 2
Financial Highlights 3
The Fund 6
Global Opportunities Portfolio --
Investment Objective and Policies 6
Investment Restrictions 8
Risk Factors 8
Pricing Shares 9
Dividends and Taxes 10
Fund Management and Expenses 11
How to Buy Shares 15
How to Redeem Shares 15
Shareholder Services 17
Performance Data 18
Fund Shares 19
Additional Information 19
Additional Investment Information (i)

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<PAGE>

EXPENSE INFORMATION
KEYSTONE GLOBAL OPPORTUNITIES FUND

The purpose of this fee table is to assist investors in understanding the
costs and expenses that an investor in Class Y shares of the Fund will bear
directly or indirectly. For more complete descriptions of the various costs and
expenses, see the following sections of this prospectus: "Fund Management and
Expenses;'" "How to Buy Shares;'" and "Shareholder Services."

SHAREHOLDER TRANSACTION EXPENSES CLASS Y SHARES
NO LOAD
OPTION(1)
---------
Maximum Sales Load Imposed on Purchases ....................... None
(as a percentage of offering price)
Deferred Sales Load ............................................ None
(as a percentage of the lesser of original purchase price
or redemption proceeds, as applicable) None
Exchange Fee ................................................... None

ANNUAL FUND OPERATING EXPENSES(2)
(as a percentage of average net assets)
Management Fees ................................................ 0.91%
12b-1 Fees ..................................................... None
Other Expenses ................................................. 0.46%
----
Total Fund Operating Expenses .................................. 1.37%
====

EXAMPLES(3) 1 YEAR 3 YEARS
------ -------

You would pay the following expenses on a $1,000
investment, assuming (1) 5% annual return and (2)
redemption at the end of each period:
Class Y ............................................ $14 $43

You would pay the following expenses on the same
investment, assuming no redemption at the end of each
period:
Class Y ............................................ $14 $43

AMOUNTS SHOWN IN THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST
OR FUTURE EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.

- ----------
(1) Class Y shares are only available to certain investors through
broker-dealers who have entered into special distribution agreements with
Evergreen Keystone Distributor, Inc., the Fund's principal underwriter. See
"How to Buy Shares."
(2) Expense ratio is estimated for the Fund's fiscal year ending September 30,
1997. Total Fund Operating Expenses include indirectly paid expenses.
Excluding indirectly paid expenses, the expense ratio for Class Y shares is
expected to be 1.35%. The Fund also offers Class A, B and C shares which
have different expenses and sales charges.
(3) The Securities and Exchange Commission requires use of a 5% annual return
figure for purposes of this example. Actual return for the Fund may be
greater or less than 5%.
<PAGE>
FINANCIAL HIGHLIGHTS
KEYSTONE GLOBAL OPPORTUNITIES FUND
GLOBAL OPPORTUNITIES PORTFOLIO -- CLASS A SHARES
(FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR)

The following table contains important financial information relating to the
Portfolio and has been audited by KPMG Peat Marwick LLP, the Portfolio's
independent auditors. The table appears in the Portfolio's Annual Report and
should be read in conjunction with the Portfolio's financial statements and
related notes, which also appear, together with the independent auditors'
report, in the Portfolio's Annual Report. The Portfolio's financial statements,
related notes, and independent auditors' report are incorporated by reference
into the statement of additional information. Additional information about the
Portfolio's performance is contained in its Annual Report, which will be made
available upon request and without charge.
<TABLE>
<CAPTION>
MARCH 16, 1988
(COMMENCEMENT OF
YEAR ENDED SEPTEMBER 30, OPERATIONS) TO
--------------------------------------------------------------------------------------- SEPTEMBER 30,
1996 1995 1994 1993 1992 1991 1990 1989 1988
---- ---- ---- ---- ---- ---- ---- ---- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE
BEGINNING OF YEAR .. $23.43 $19.42 $18.02 $11.69 $12.89 $ 9.89 $11.17 $ 9.77 $10.00
------ ------ ------ ------ ------ ------ ------ ------ ------
INCOME FROM INVESTMENT
OPERATIONS
Net investment income
(loss) ............. (0.06) (0.16) (0.04) (0.14) (0.08) 0.17 0.19 0.09 0.05
Net realized and
unrealized gain (loss)
on investments and
foreign currency
related transactions 1.19 4.17 1.60 6.47 0.23 3.06 (1.27) 1.66 (0.28)
------ ------ ------ ------ ------ ------ ------ ------ ------
Total from investment
operations ....... 1.13 4.01 1.56 6.33 0.15 3.23 (1.08) 1.75 (0.23)
------ ------ ------ ------ ------ ------ ------ ------ ------
LESS DISTRIBUTIONS FROM
Net investment income 0.00 0.00 0.00 0.00 0.00 (0.23) (0.12) (0.09) 0.00
Net realized gains on
investments ........ 0.00 0.00 (0.16) 0.00 (1.35) 0.00 (0.08) (0.26) 0.00
------ ------ ------ ------ ------ ------ ------ ------ ------
Total distributions 0.00 0.00 (0.16) 0.00 (1.35) (0.23) (0.20) (0.35) 0.00
------ ------ ------ ------ ------ ------ ------ ------ ------
NET ASSET VALUE
END OF YEAR ........ $24.56 $23.43 $19.42 $18.02 $11.69 $12.89 $ 9.89 $11.17 $ 9.77
====== ====== ====== ====== ====== ====== ====== ====== ======
TOTAL RETURN(B) ...... 4.82% 20.65% 8.74% 54.15% 1.81% 32.71% (9.65%) 16.94% (1.20%)
RATIOS/SUPPLEMENTAL DATA
RATIOS TO AVERAGE NET ASSETS:
Total expenses ..... 1.62%(c) 1.83%(c) 2.01% 2.84% 2.50%(a) 2.03%(a) 2.00%(a) 2.00%(a) 1.50%(a)(d)
Net investment
income (loss) .... (0.53%) (0.83%) (0.86%) (1.72%) (0.69%) 1.49% 1.80% 0.86% 1.42%(d)
Portfolio turnover
rate ............... 67% 35% 32% 64% 75% 134% 51% 13% 19%
AVERAGE COMMISSION
RATE PAID .......... $0.0079 N/A N/A N/A N/A N/A N/A N/A N/A
------- ----- ----- ----- ----- ----- ----- ----- -----
NET ASSETS END OF YEAR
(THOUSANDS) ........ $250,427 $94,679 $71,122 $29,942 $10,859 $2,159 $1,519 $1,378 $1,082
<FN>
(a) Figures are net of expense reimbursement by Keystone in connection with voluntary expense limitations. Before the expense
reimbursement, the Ratio of total expenses to average net assets would have been 3.67%, 7.77%, 10.39%, 13.06%, and 5.54% for
the years ended September 30, 1992, 1991, 1990, 1989 and the period March 16, 1988 (Commencement of Operations) to September
30, 1988, respectively.
(b) Excluding applicable sales charges.
(c) Ratio of total expenses to average net assets includes indirectly paid expenses. Excluding indirectly paid expenses, the
expense ratio would have been 1.60% and 1.81% for the years ended September 30, 1996 and 1995, respectively.
(d) Annualized.
</TABLE>
<PAGE>

FINANCIAL HIGHLIGHTS
KEYSTONE GLOBAL OPPORTUNITIES FUND
GLOBAL OPPORTUNITIES PORTFOLIO -- CLASS B SHARES
(FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR)

<TABLE>
<CAPTION>
FEBRUARY 1, 1993
YEAR ENDED SEPTEMBER 30, (DATE OF INITIAL
-------------------------------------------------- PUBLIC OFFERING) TO
1996 1995 1994 SEPTEMBER 30, 1993
---- ---- ---- ------------------
<S> <C> <C> <C> <C>
NET ASSET VALUE BEGINNING OF YEAR ............... $23.00 $19.20 $17.95 $14.04
------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS
Net investment loss ............................. (0.21) (0.25) (0.15) (0.04)
Net realized and unrealized gain on investments
and foreign currency related transactions ..... 1.13 4.05 1.56 3.95
------ ------ ------ ------
Total from investment operations .............. 0.92 3.80 1.41 3.91
------ ------ ------ ------
LESS DISTRIBUTIONS FROM
Net realized gain on investments ................ 0.00 0.00 (0.16) 0.00
------ ------ ------ ------
Total distributions ........................... 0.00 0.00 (0.16) 0.00
------ ------ ------ ------
NET ASSET VALUE END OF YEAR ..................... $23.92 $23.00 $19.20 $17.95
====== ====== ====== ======
TOTAL RETURN (A)................................. 4.00% 19.79% 7.93% 27.85%
RATIOS/SUPPLEMENTAL DATA
RATIOS TO AVERAGE NET ASSETS:

Total expenses ................................ 2.40%(b) 2.58%(b) 2.83% 3.35%(c)
Net investment loss ........................... (1.37%) (1.59%) (1.61%) (1.86%)(c)
Portfolio turnover rate ......................... 67% 35% 32% 64%
AVERAGE COMMISSION RATE PAID .................... $0.0079 N/A N/A N/A
-------- ------ ------ ------
NET ASSETS END OF YEAR (THOUSANDS) .............. $385,839 $238,320 $131,695 $15,534

<FN>
(a) Excluding applicable sales charges.
(b) Ratio of total expenses to average net assets includes indirectly paid expenses. Excluding indirectly paid
expenses, the expense ratio would have been 2.38% and 2.56% for the years ended September 30, 1996 and 1995,
respectively.
(c) Annualized.
</TABLE>
<PAGE>

FINANCIAL HIGHLIGHTS
KEYSTONE GLOBAL OPPORTUNITIES FUND
GLOBAL OPPORTUNITIES PORTFOLIO -- CLASS C SHARES
(FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR)

<TABLE>
<CAPTION>
FEBRUARY 1, 1993
YEAR ENDED SEPTEMBER 30, (DATE OF INITIAL
------------------------------------------------------- PUBLIC OFFERING) TO
1996 1995 1994 SEPTEMBER 30, 1993
---- ---- ---- ------------------
<S> <C> <C> <C> <C>
NET ASSET VALUE BEGINNING OF YEAR ............... $23.04 $19.26 $17.99 $14.04
------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS
Net investment loss ............................. (0.24) (0.27) (0.15) (0.04)
Net realized and unrealized gain on investments
and foreign currency related transactions ..... 1.17 4.05 1.58 3.99
------ ------ ------ ------
Total from investment operations .............. 0.93 3.78 1.43 3.95
------ ------ ------ ------
LESS DISTRIBUTIONS FROM
Net realized gain on investments ................ 0.00 0.00 (0.16) 0.00
------ ------ ------ ------
Total distributions ........................... 0.00 0.00 (0.16) 0.00
------ ------ ------ ------
NET ASSET VALUE END OF YEAR ..................... $23.97 $23.04 $19.26 $17.99
====== ====== ====== ======
TOTAL RETURN (A)................................. 4.04% 19.63% 8.02% 28.13%
RATIOS/SUPPLEMENTAL DATA
RATIOS TO AVERAGE NET ASSETS:
Total expenses ................................ 2.40%(b) 2.58%(b) 2.85% 3.04%(c)
Net investment loss ........................... (1.38%) (1.59%) (1.62%) (1.55%)(c)
Portfolio turnover rate ......................... 67% 35% 32% 64%
AVERAGE COMMISSION RATE PAID .................... $0.0079 N/A N/A N/A
-------- ------- ------- ------
NET ASSETS END OF YEAR (THOUSANDS) .............. $124,549 $86,339 $50,535 $6,217

THE FUND

The Fund is an open-end, diversified management investment company, commonly
known as a mutual fund. The Fund is authorized to issue more than one Portfolio,
each investing in a different portfolio of securities. At this time, the Fund
issues only shares of the Portfolio. The Fund was formed as a Massachusetts
business trust on June 17, 1987. The Fund is one of more than thirty funds
advised and managed by Keystone Investment Management Company ("Keystone").
Keystone has retained the services of Credit Lyonnais International Asset
Management, North America ("CLIAM") to provide the Portfolio with subadvisory
services, subject to the supervision of the Fund's Board of Trustees and
Keystone.

GLOBAL OPPORTUNITIES PORTFOLIO --
INVESTMENT OBJECTIVE AND POLICIES

INVESTMENT OBJECTIVE
The Portfolio's investment objective is capital growth. In selecting its
investments, the Portfolio attempts to identify those companies within various
countries and industries that have the best opportunities for above-average
increases in revenues and earnings and strong prospects for continued revenue
growth. In addition, the Portfolio seeks to identify those countries and
industries where economic and political factors, including currency movements,
are likely to produce above-average growth.

The investment objective of the Portfolio is fundamental and may not be
changed without the vote of a majority of the Portfolio's outstanding shares (as
defined in the Investment Company Act of 1940 ("1940 Act")), which means the
lesser of (1) 67% of the shares represented at a meeting at which more than 50%
of the outstanding shares are represented or (2) more than 50% of the
outstanding shares a ("1940 Act Majority").

Any investment involves risk, and there is no assurance that the Portfolio
will achieve its investment objective.

PRINCIPAL INVESTMENTS
In pursuing its objective, the Portfolio may invest in securities of United
States ("U.S.") companies and of issuers located in certain foreign countries
with developed markets as well as those with emerging markets and the formerly
communist countries of Eastern Europe and the People's Republic of China. In its
investments in securities of issuers in the U.S. and other countries with
developed securities markets, the Portfolio seeks to achieve its objective by
investment in equity securities of small to medium sized companies (generally
under $1 billion in market capitalization) that are in a relatively early stage
of development. In its investments in foreign securities, the Portfolio seeks to
achieve its objective by investing in equity securities of issuers that are
managed and positioned to take advantage of opportunities for above average
increases in revenues and earnings and have strong prospects for continued
revenue growth. For this purpose, countries with emerging markets are generally
those where the per capita income is in the low to middle ranges, as determined
by the International Bank for Reconstruction and Development ("World Bank").

Under ordinary circumstances, the Portfolio invests at least 65% of its assets
in securities of issuers located in at least three countries, one of which may
be the U.S. Under ordinary circumstances, the Portfolio invests at least 65% of
its assets in equity securities.

Some examples of the securities in which the Portfolio may invest are common
stocks, securities convertible into common stocks or having common stock
characteristics (consisting of rights, warrants and options), preferred stocks,
debt securities convertible into or exchangeable for preferred or common stock,
debt securities of the U.S. and any foreign governments, including their
political subdivisions, debt securities of any international agency (such as the
World Bank, Asian Development Bank or Inter-American Development Bank) and time
deposits with U.S. and foreign banks, and may hold cash and cash equivalents as
discussed below. The Portfolio's securities and other assets may be denominated
in U.S. currency or currency of any foreign nation. Except as described above,
there are no limitations on the type, size, operating history or dividend paying
record of companies or industries in which the Portfolio may invest. The
Portfolio's securities may be traded in the over-the-counter market as well as
being listed on a foreign exchange. The primary investment criterion used by the
Portfolio in the selection of portfolio securities is that the securities
provide opportunities for capital growth.

Although the Portfolio intends to invest primarily in common stocks and
securities convertible into common stocks to achieve its objective of growth of
capital, the Portfolio may invest in any security listed above. For example,
because the market value of debt obligations can be expected to vary inversely
with changes in prevailing interest rates, investing in debt securities may
provide an opportunity for capital appreciation when interest rates are expected
to decline. In addition, the Portfolio may hold cash and invest in cash
equivalents, including time deposits, for temporary purposes in order to meet
redemption requests or for such periods of time as are necessary to evaluate
market conditions and other factors.

OTHER ELIGIBLE INVESTMENTS
When, in the opinion of Keystone, market conditions warrant, the Portfolio may
invest up to 100% of its assets for temporary defensive purposes in the
following types of money market instruments: (1) commercial paper, including
master demand notes, that at the date of investment is rated A-1 (the highest
grade given by Standard & Poor's Corporation ("S&P"), PRIME-1 (the highest grade
given by Moody's Investor Service ("Moody's")) or, if not rated by such
services, is issued by a company that at the date of investment has an
outstanding issue rated A or better by S&P or Moody's; (2) obligations,
including certificates of deposit and bankers' acceptances, of banks or savings
and loan associations having at least $1 billion in deposits as of the date of
their most recently published financial statements and which are members of the
Federal Deposit Insurance Corporation, including U.S. branches of foreign banks
and foreign branches of U.S. banks; (3) corporate obligations that at the date
of investment are rated A or better by S&P or Moody's; and (4) obligations
issued or guaranteed by the U.S. government or by any agency or instrumentality
of the U.S. When the Portfolio's assets are being invested for temporary
defensive purposes, the Portfolio is not pursuing its investment objective.

The Portfolio may enter into repurchase and reverse repurchase agreements,
invest in master demand notes, lend portfolio securities, purchase and sell
securities and currencies on a when issued and delayed delivery basis, and
purchase or sell securities on a forward commitment basis, write covered call
and put options and purchase call and put options to close out existing
positions. The Portfolio may also enter into currency and other financial
futures contracts and related options transactions for hedging purposes and not
for speculation, and may employ new investment techniques with respect to such
options and futures contracts and related options.

The Portfolio may invest in restricted securities, including securities
eligible for resale pursuant to Rule 144A under the Securities Act of 1933 (the
"1933 Act"). Generally, Rule 144A establishes a safe harbor from the
registration requirements of the 1933 Act for resales by large institutional
investors of securities not publicly traded in the U.S. The Portfolio intends to
purchase Rule 144A securities when such securities present an attractive
investment opportunity and otherwise meet the Portfolio's selection criteria.
The Board of Trustees has adopted guidelines and procedures pursuant to which
Keystone determines the liquidity of the Portfolio's Rule 144A securities. The
Board monitors Keystone's implementation of such guidelines and procedures.

At the present time, the Portfolio cannot accurately predict exactly how the
market for Rule 144A securities will develop. A Rule 144A security that was
readily marketable upon purchase may subsequently become illiquid. In such an
event, the Board of Trustees will consider what action, if any, is appropriate.

For further information about the types of investments and investment
techniques available to the Portfolio, including the associated risks, see the
"Risk Factors" and "Additional Investment Information" sections of this
prospectus and the statement of additional information.

INVESTMENT RESTRICTIONS
The Fund has adopted the fundamental investment restrictions summarized below,
which may not be changed without the vote of a 1940 Act Majority of the
Portfolio's outstanding shares. These restrictions and certain other fundamental
and nonfundamental restrictions are set forth in the statement of additional
information. Unless otherwise stated, all references to the Portfolio's assets
are in terms of current market value.

Generally, the Portfolio may not do the following: (1) invest more than 5% of
its total assets in the securities of any one issuer (other than U.S. government
securities), except that up to 25% of its total assets may be invested without
regard to this limit; and (2) borrow, except from banks for temporary or
emergency purposes, and/or enter into reverse repurchase agreements in aggregate
amounts up to one-third of the value of the Portfolio's net assets.

The Portfolio intends to follow policies of the Securities and Exchange
Commission as they are adopted from time to time with respect to illiquid
securities, including, at this time, (1) treating as illiquid, securities that
may not be sold or disposed of in the ordinary course of business within seven
days at approximately the value at which the Portfolio has valued such
securities on its books and (2) limiting its holdings of such securities to 15%
of net assets.

RISK FACTORS
Like any investment, your investment in the Portfolio involves an element of
risk. Before you buy shares of the Portfolio, you should carefully evaluate your
ability to assume the risks your investment in the Portfolio poses. YOU CAN LOSE
MONEY BY INVESTING IN THE PORTFOLIO. YOUR INVESTMENT IS NOT GUARANTEED. A
DECREASE IN THE VALUE OF THE PORTFOLIO'S PORTFOLIO SECURITIES CAN RESULT IN A
DECREASE IN THE VALUE OF YOUR INVESTMENT.

By itself, the Portfolio does not constitute a balanced investment program.
The Portfolio is best suited for investors who can afford to maintain their
investment over a relatively long period of time, and who are seeking a fund
that is growth oriented and has the potential for high returns. The Portfolio
involves a high degree of risk and is not an appropriate investment for
conservative investors who are seeking preservation of capital and/or income.
You should take into account your own investment objectives as well as your
other investments when considering an investment in the Portfolio.

Certain risks related to the Portfolio are discussed below. In addition to the
risks discussed in this section, specific risks, including risks relating to
investing in foreign securities and derivatives, individual securities or
investment practices are discussed in "Additional Investment Information" and
the statement of additional information.

FUND RISKS. Investing in companies with small to medium market capitalizations
in a relatively early stage of development involves greater risk than investing
in larger established companies. The stock prices of developing companies with
smaller market capitalizations can rise very quickly and drop dramatically in a
short period of time. This volatility results from a number of factors,
including reliance by these companies on limited product lines, markets, and
financial and management resources.

These and other factors may make small and mid cap companies more susceptible
to setbacks or downturns. These companies may experience higher rates of
bankruptcy or other failures than larger well established companies. They may be
more likely to be negatively affected by changes in management. In addition, the
stock of small and mid cap companies may be thinly traded.

Moreover, a need for cash due to large liquidations from the Portfolio when
the prices of small and mid cap stocks are declining could result in losses to
the Portfolio.

FOREIGN RISK. Investing in securities of foreign issuers generally involves
more risk than investing in a portfolio consisting solely of securities of
domestic issuers for the following reasons: publicly available information on
issuers and securities may be scarce; many foreign countries do not follow the
same accounting, auditing, and financial reporting standards as are used in the
U.S.; market trading volumes may be smaller, resulting in less liquidity and
more price volatility compared to U.S. securities of comparable quality; there
may be less regulation of securities trading and its participants; the
possibility may exist for expropriation, confiscatory taxation, nationalization,
establishment of exchange controls, political or social instability or negative
diplomatic developments; and dividend or interest withholding may be imposed at
the source.

Investing in securities of issuers in emerging markets countries involves
exposure to economic systems that are generally less mature and political
systems that are generally less stable than those of developed countries. In
addition, investing in companies in emerging markets countries may also involve
exposure to national policies that may restrict investment by foreigners and
undeveloped legal systems governing private and foreign investments and private
property. The typically small size of the markets for securities issued by
companies in emerging markets countries and the possibility of a low or
nonexistent volume of trading in those securities may also result in a lack of
liquidity and in price volatility of those securities. Furthermore, investing in
securities of companies in the formerly communist countries of Eastern Europe
and the People's Republic of China involves additional risks to those associated
with investments in companies in non-formerly communist emerging markets
countries. Specifically, those countries could convert back to a single economic
system, and the claims of property owners prior to the expropriation by the
communist regime could be settled in favor of the former property owners, in
which case the Portfolio could lose its entire investment in those countries.
These risks are carefully considered by Keystone prior to the purchase of these
securities.

Fluctuations in foreign exchange rates impose an additional level of risk,
possibly affecting the value of the Fund's foreign investments and earnings, as
well as gains and losses realized through trades, and the unrealized
appreciation or depreciation of investments. The Fund may also incur costs when
it shifts assets from one country to another.

PRICING SHARES
The Fund computes its net asset value as of the close of trading (currently
4:00 p.m. eastern time) on each day that the New York Stock Exchange (the
"Exchange") is open. However, the Fund does not compute its net asset value on
days when changes in the value of the Portfolio's securities do not affect the
current net asset value of its shares. The Exchange is currently closed on
weekends, New Year's Day, Presidents' Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day and Christmas Day. The net asset
value per share of the Portfolio is arrived at by determining the value of the
Portfolio's assets, subtracting its liabilities and dividing the result by the
number of its shares outstanding.

Current values for the Portfolio's securities are determined as follows:

1. securities that are traded on a national securities exchange or on the
over-the-counter National Market System ("NMS") are valued on the basis of the
last sales price on the exchange where primarily traded or NMS prior to the
time of the valuation, provided that a sale has occurred and that this price
reflects current market value according to procedures established by the Board
of Trustees;

2. securities traded in the over-the-counter market, other than NMS, are
valued at the mean of the bid and asked prices at the time of valuation;

3. short-term investments having maturities of more than sixty days for
which market quotations are readily available, are valued at current market
value; where market quotations are not available, such instruments are valued
at fair value as determined by the Board of Trustees;

4. short-term investments that are purchased with maturities of sixty days
or less (including all master demand notes) are valued at amortized cost
(original purchase cost as adjusted for amortization of premium or accretion
of discount), which, when combined with accrued interest, approximates market;

5. short-term investments maturing in more than sixty days when purchased
that are held on the sixtieth day prior to maturity are valued at amortized
cost (market value on the sixtieth day adjusted for amortization of premium or
accretion of discount), which, when combined with accrued interest,
approximates market; and

6. the following securities are valued at prices deemed in good faith to be
fair under procedures established by the Board of Trustees: (a) securities,
including restricted securities, for which complete quotations are not readily
available; (b) listed securities or those on NMS if, in the Portfolio's
opinion, the last sales price does not reflect a current market value or if no
sale occurred; and (c) other assets.

Foreign securities are generally valued on the basis of valuations provided by
a pricing service, approved by the Fund's Board of Trustees, which uses
information with respect to transactions in such securities, quotations from
broker-dealers, market transactions in comparable securities, and various
relationships between securities and yield to maturity in determining value.

DIVIDENDS AND TAXES
The Portfolio has qualified and intends to continue to qualify as a regulated
investment company (a "RIC") under the Internal Revenue Code of 1986, as amended
(the "Code"). The Portfolio qualifies if, among other things, it distributes to
its shareholders at least 90% of its net investment income for its fiscal year.
The Portfolio also intends to make timely distributions, if necessary,
sufficient in amount to avoid the nondeductible 4% excise tax imposed on a RIC
to the extent that it fails to distribute, with respect to each calendar year,
at least 98% of its ordinary income for such calendar year and 98% of its net
capital gains for the one-year period ending on October 31 of such calendar
year.

Any taxable dividend declared in October, November, or December to
shareholders of record in such a month and paid by the following January 31 will
be includable in the taxable income of the shareholder as if paid on December 31
of the year in which such dividend was declared.

If the Portfolio qualifies as a RIC and if it distributes substantially all of
its net investment income and net capital gains, if any, to shareholders, it
will be relieved of any federal income tax liability.

The Portfolio will make distributions from its net investment income and net
capital gains, if any, at least annually.

Shareholders receive Portfolio distributions in the form of additional shares
of that class of shares upon which the distribution is based or, at the
shareholder's option, in cash. Portfolio distributions in the form of additional
Class Y shares are made at net asset value.

Dividends and distributions are taxable whether they are received in cash or
in shares. Income dividends and net short-term gains dividends are taxable as
ordinary income. Net long-term gains dividends are taxable as capital gains
regardless of how long the Portfolio's shares are held. If Portfolio shares held
for less than six months are sold at a loss, however, such loss will be treated
for tax purposes as a long-term capital loss to the extent of any long-term
capital gains dividends received.

The Portfolio advises its shareholders annually as to the federal tax status
of all distributions made during the year.

If more than 50% of the value of the Portfolio's total assets at the end of a
fiscal year is represented by securities of foreign corporations and the
Portfolio elects to make foreign tax credits available to its shareholders, a
shareholder will be required to include in his gross income both actual
dividends and the amount the Portfolio advises him is his pro rata portion of
income taxes withheld by foreign governments from interest and dividends paid on
the Portfolio's investments. The shareholder will be entitled, however, to take
the amount of such foreign taxes withheld as a credit against his U.S. income
tax, or to treat the foreign tax withheld as an itemized deduction from his
gross income, if that should be to his advantage. In substance, this policy
enables the shareholder to benefit from the same foreign tax credit or deduction
that he would have received if he had been the individual owner of foreign
securities and had paid foreign income tax on the income therefrom. As in the
case of individuals receiving income directly from foreign sources, the above
described tax credit and deductions are subject to certain limitations.

In the event the Fund establishes additional Portfolios, each Portfolio will
be considered, and intends to qualify as, a regulated investment company.

FUND MANAGEMENT AND EXPENSES

BOARD OF TRUSTEES
Under Massachusetts law, the Fund's Board of Trustees has absolute and
exclusive control over the management and disposition of all assets of the Fund.
Subject to the general supervision of the Fund's Board of Trustees, Keystone
provides investment advice, management, and administrative services to the Fund.

INVESTMENT ADVISER
Keystone has provided investment advisory and management services to
investment companies and private accounts since 1932. Keystone is a wholly-owned
subsidiary of Keystone Investments, Inc. ("Keystone Investments"). Keystone
Investments provides accounting, bookkeeping, legal, personnel and general
corporate services to Keystone, its affiliates, and the Keystone Investments
Families of Funds. Both Keystone and Keystone Investments are located at 200
Berkeley Street, Boston, Massachusetts 02116-5034.

On December 11, 1996, Keystone Investments succeeded to the business of a
corporation with the same name, but under different ownership. Keystone
Investments is a wholly-owned subsidiary of First Union National Bank of North
Carolina ("FUNB"). FUNB is a subsidiary of First Union Corporation ("First
Union"), the sixth largest bank holding company in the U.S. based on total
assets as of September 30, 1996.

First Union is headquartered in Charlotte, North Carolina, and had $133.9
billion in consolidated assets as of September 30, 1996. First Union and its
subsidiaries provide a broad range of financial services to individuals and
businesses throughout the U.S. The Capital Management Group of FUNB ("CGM"),
together with Lieber & Company and Evergreen Asset Management Corp. ("Evergreen
Asset"), wholly-owned subsidiaries of FUNB, manage or otherwise oversee the
investment of over $50 billion in assets belonging to a wide range of clients,
including the Evergreen Family of Funds.

Pursuant to its Investment Advisory and Management Agreement (the "Advisory
Agreement") with the Fund, Keystone manages the investment and reinvestment of
the Fund's assets, supervises the operation of the Fund and provides all
necessary office space, facilities and equipment.

The Fund currently pays Keystone a fee for its services at the annual rate set
forth below:

Aggregate Net Asset Value
Management of the Shares
Fee of the Fund
- ------------------------------------------------------------------------------
1.00% of the first $200,000,000, plus
0.95% of the next $200,000,000, plus
0.85% of the next $200,000,000, plus
0.75% of amounts over $600,000,000;

Keystone's fee is computed as of the close of business on each business day and
payable daily.

A management fee of 0.75% is higher than that paid by most other investment
companies. However, the Fund's fee structure is comparable to that of other
global and international funds subject to the higher costs involved in managing
a portfolio of predominantly international securities.

The Advisory Agreement continues in effect for two years from its effective
date and, thereafter, from year to year only so long as such continuance is
specifically approved at least annually by the Board of Trustees or by vote of
shareholders of the Portfolio. In either case, the terms of the Advisory
Agreement and continuance thereof must be approved by the vote of a majority of
the Fund's Independent Trustees (Trustees, who are not "interested persons" of
the Fund, as defined in the 1940 Act, and who have no direct or indirect
financial interest in the Fund's Distribution Plans or any agreement related
thereto) cast in person at a meeting called for the purpose of voting on such
approval. The Advisory Agreement may be terminated, without penalty, on 60 days'
written notice by the Fund or Keystone or by a vote of shareholders of the Fund.
The Advisory Agreement will terminate automatically upon its assignment.

SUBADVISER
Keystone has entered into a Subadvisory Agreement with CLIAM (the "Sub-
advisory Agreement"), an international investment management firm located at 50
Rowes Wharf, Suite 240, Boston, Massachusetts 02110. CLIAM is a subsidiary of
Credit Lyonnais, which is among the world's largest banks, with $250 billion in
assets and offices in 76 countries. Under the Subadvisory Agreement, CLIAM
provides the Portfolio with certain investment advisory services, and Keystone
pays CLIAM at the beginning of each fiscal quarter a fee for its services that
represents 50% of the management fee paid by the Portfolio to Keystone for the
preceding quarter on Portfolio assets of up to $250,000,000 and 30% of the
management fee paid by the Portfolio to Keystone for the preceding quarter on
Portfolio assets in excess of $250,000,000. The Portfolio has no responsibility
to pay CLIAM's fee.

The Subadvisory Agreement continues in effect for two years from its effective
date and thereafter from year to year only so long as such continuance is
specifically approved at least annually by the Fund's Board of Trustees or by
vote of shareholders of the Portfolio. In either case, the terms of the
Subadvisory Agreement and continuance thereof must be approved by the vote of a
majority of the Fund's Independent Trustees cast in person at a meeting called
for the purpose of voting on such approval. The Subadvisory Agreement may be
terminated, without penalty, on 60 days' written notice by the Fund or Keystone
or by a vote of shareholders of the Portfolio. The Subadvisory Agreement will
terminate automatically upon its assignment.

PRINCIPAL UNDERWRITER
Evergreen Keystone Distributor, Inc. (formerly Evergreen Funds Distributor,
Inc.) ("EKD"), a wholly-owned subsidiary of Furman Selz LLC ("Furman Selz"),
which is not affiliated with First Union, is the Fund's principal
underwriter (the "Principal Underwriter"). EKD replaces Evergreen Keystone
Investment Services, Inc. (formerly Keystone Investment Distributors Company)
("EKIS") as the Fund's principal underwriter. EKIS may no longer act as
principal underwriter of the Fund due to regulatory restrictions imposed by the
Glass-Steagall Act upon national banks, such as FUNB and their affiliates, that
prohibit such entities from acting as the underwriters or distributors of mutual
fund shares. While EKIS may no longer act as principal underwriter of the Fund
as discussed above, EKIS may continue to receive compensation from the Fund or
the Principal Underwriter in respect of underwriting and distribution services
performed prior to the termination of EKIS as principal underwriter. In
addition, EKIS may also be compensated by the Principal Underwriter for the
provision of certain marketing support services to the Principal Underwriter at
an annual rate of up to .75% of the average daily net assets of the Fund,
subject to certain restrictions. Both EKD and Furman Selz are located at 230
Park Avenue, New York, New York 10169.

SUB-ADMINISTRATOR
Furman Selz provides officers and certain administrative services to the Fund
pursuant to a sub-administration agreement. For its services under that
agreement, Furman Selz receives a fee from Keystone at the maximum annual rate
of .01% of the average daily net assets of the Fund.

It is expected that on or about January 2, 1997, Furman Selz will transfer
EKD, and its related mutual fund distribution and administration business, to
BISYS Group, Inc. ("BISYS"). At that time, BISYS will succeed as sub-
administrator for the Fund. It is not expected that the acquisition of the
mutual fund distribution and administration business by BISYS will affect the
services currently provided by EKD or Furman Selz.

PORTFOLIO MANAGER
Margery C. Parker has been the Fund's Portfolio Manager since July 1996. Ms.
Parker is currently a Keystone Vice President and has been an investment
professional with Keystone since 1982.

FUND EXPENSES
The Portfolio pays all of its expenses. In addition to the investment advisory
fees discussed above, the principal expenses the Portfolio is expected to pay
include, but are not limited to, expenses of certain of its Independent
Trustees; transfer, dividend disbursing, and shareholder servicing agent
expenses; custodian expenses; fees of its independent auditors; expenses of
legal counsel to the Fund and its Independent Trustees; fees payable to
government agencies, including registration and qualification fees attributable
to the Fund and its shares under federal and state securities laws; and certain
extraordinary expenses. In addition, each class will pay all of the expenses
attributable to it. Such expenses are currently limited to Distribution Plan
expenses for the Class A, B and C shares. The Fund also pays its brokerage
commissions, interest charges and taxes.

For the fiscal year ended September 30, 1996, the Fund paid or accrued to
Keystone investment management and administrative services fees of $5,668,408
(0.91% of the Fund's average daily net asset value on an annualized basis). Of
such amount, Keystone paid or accrued $1,561,491 to CLIAM for its services as
sub-adviser to the Portfolio.

For the fiscal year ended September 30, 1996, the Fund paid or accrued
$2,013,849 to Evergreen Keystone Service Company (formerly Keystone Investor
Resource Center, Inc.) ("EKSC") for services rendered as the Fund's transfer
agent and dividend disbursing agent and $26,856 to Keystone Investments for
certain accounting services. EKSC, located at 200 Berkeley Street, Boston,
Massachusetts 02116-5034, is a wholly-owned subsidiary of Keystone.

SECURITIES TRANSACTIONS
Under policies established by the Board of Trustees, Keystone selects
broker-dealers to execute transactions subject to the receipt of best execution.
When selecting broker-dealers to execute portfolio transactions for the
Portfolio, Keystone may consider the number of shares of the Portfolio sold by
the broker-dealer. In addition, broker-dealers executing portfolio transactions
may, from time to time, be affiliated with the Fund, Keystone, CLIAM, the Fund's
principal underwriter, or their affiliates.

The Portfolio may pay higher commissions to broker-dealers that provide
research services. Keystone may use these services in advising the Portfolio as
well as in advising its other clients.

PORTFOLIO TURNOVER
The Portfolio's portfolio turnover rate for the fiscal years ended September
30, 1995 and 1996 were 35% and 67%, respectively.

For further information about brokerage and distributions, see the statement
of additional information.

CODE OF ETHICS
The Fund has adopted a Code of Ethics incorporating policies on personal
securities trading as recommended by the Investment Company Institute.

ARRANGEMENTS WITH BROKER-DEALERS AND OTHERS
The Principal Underwriter may, from time to time, provide promotional
incentives to certain broker-dealers whose representatives have sold or are
expected to sell significant amounts of Fund shares. In addition, broker-dealers
may, from time to time, receive additional cash payments. The Principal
Underwriter may also provide written information to broker-dealers with whom it
has dealer agreements that relates to sales incentive campaigns conducted by
such broker-dealers for their representatives as well as financial assistance in
connection with pre-approved seminars, conferences and advertising. No such
programs or additional compensation will be offered to the extent they are
prohibited by the laws of any state or any self-regulatory agency such as the
NASD.

The Principal Underwriter may, at its own expense, pay concessions in addition
to those described above to broker-dealers including, from time to time,
First Union Brokerage Services, Inc., an affiliate of Keystone, that satisfy
certain criteria established, from time to time, by the Principal Underwriter.
These conditions relate to increasing sales of shares of the Keystone funds over
specified periods and certain other factors. Such payments may, depending on the
broker-dealer's satisfaction of the required conditions, be periodic and may be
up to 1.00% of the value of shares sold by such broker-dealer.

State securities laws on this issue may differ from the interpretations of
federal law expressed herein and banks and financial institutions may be
required to register as broker-dealers pursuant to state law.

EFFECTS OF BANKING LAWS
The Glass-Steagall Act currently limits the ability of depository institutions
(such as a commercial bank or a savings and loan association) to become an
underwriter or distributor of securities. In the event the Glass- Steagall Act
is deemed to prohibit depository institutions from accepting payments under the
arrangement described above, or should Congress relax current restrictions on
depository institutions, the Board of Trustees will consider what action, if
any, is appropriate.

The Glass-Steagall Act and other banking laws and regulations also presently
prohibit member banks of the Federal Reserve System ("Member Banks") or their
non-bank affiliates from sponsoring, organizing, controlling, or distributing
the shares of registered open-end investment companies such as the Fund. Such
laws and regulations also prohibit banks from issuing, underwriting or
distributing securities in general. However, under the Glass-Steagall Act and
such other laws and regulations, a Member Bank or an affiliate thereof may act
as investment adviser transfer agent or custodian to a registered open-end
investment company and may also act as agent in connection with the purchase of
shares of such an investment company upon the order of its customer. Keystone
and its affiliates, since they are direct or indirect subsidiaries of FUNB, are
subject to and in compliance with the aforementioned laws and regulations.

Changes to applicable laws and regulations or future judicial or
administrative decisions could prevent Keystone Investments or its affiliates
from performing the services required under the Advisory Agreement or
from acting as agent in connection with the purchase of shares of a fund by its
customers. In such event, it is expected that the Trustees would identify, and
call upon each Fund's shareholders to approve, a new investment adviser. If this
were to occur, it is not anticipated that the shareholders of any Fund would
suffer any adverse financial consequences.

HOW TO BUY SHARES
Class Y shares are offered at net asset value without a front-end or
back-end sales load. Class Y shares are not offered to the general public and
are available only to (1) persons who at or prior to December 31, 1994 owned
shares in a mutual fund advised by Evergreen Asset of Purchase, New York, (2)
certain institutional investors and (3) investment advisory clients of CMG,
Evergreen Asset or their affiliates.

You may purchase shares of the Portfolio from any broker-dealer that has a
selling agreement with the Principal Underwriter.

In addition, you may purchase shares of the Portfolio by mailing to the
Portfolio, c/o Evergreen Keystone Service Company, P.O. Box 2121, Boston,
Massachusetts 02106-2121, a completed account application and a check payable to
the Portfolio. You may also telephone 1-800-343-2898 to obtain the number of an
account to which you can wire or electronically transfer funds and then send in
a completed account application. Subsequent investments in any amount may be
made by check, by wiring federal funds, by direct deposit or by an electronic
funds transfer ("EFT").

Orders for the purchase of Class Y shares of the Portfolio will be confirmed
at the public offering price, which is equal to the net asset value per share
next determined after receipt of the order in proper form by the Principal
Underwriter (generally as of the close of the Exchange on that day). Orders
received by broker-dealers or other firms prior to the close of the Exchange and
received by the Principal Underwriter prior to the close of its business day
will be confirmed at the offering price effective as of the close of the
Exchange on that day. Broker-dealers and other financial services firms are
obligated to transmit orders promptly.

Orders for Class Y shares received other than as stated above will receive the
public offering price, which is equal to the net asset value per share next
determined (generally the next business day's offering price).

The Portfolio reserves the right to determine the net asset value more
frequently than once a day if deemed desirable.

The initial purchase amount must be at least $1,000, which may be waived in
certain circumstances. There is no minimum amount for subsequent purchases.

The Portfolio reserves the right to withdraw all or any part of the offering
made by this prospectus and to reject purchase orders.

Shareholder inquiries should be directed to EKSC by calling toll free 1-800-
343-2898 or writing to EKSC or to the firm from which you received this
prospectus.

HOW TO REDEEM SHARES
You may redeem Class Y shares of the Portfolio for cash at their net
redemption value by writing to the Portfolio, c/o EKSC, and presenting a
properly endorsed share certificate (if certificates have been issued) to the
Portfolio. Your signature(s) on the written order and certificates must be
guaranteed as described below. In order to redeem by telephone or to engage in
telephone transactions generally, you must complete the authorization in your
account application. Proceeds for shares redeemed on telephone order will be
deposited by wire or EFT only to the bank account designated in your account
application.

You may also redeem your shares through your broker-dealer. The Principal
Underwriter, acting as agent for the Fund, stands ready to repurchase Fund
shares upon orders from broker-dealers and will calculate the net asset value on
the same terms as those orders for the purchase of shares received from
broker-dealers and described under "How to Buy Shares." If the Principal
Underwriter has received proper documentation it will pay the redemption
proceeds to the broker-dealer placing the order within seven days thereafter.
The Principal Underwriter charges no fee for this service. Your broker-dealer,
however, may charge a service fee.

The redemption value equals the net asset value per share adjusted for
fractions of a cent and may be more or less than your cost depending upon
changes in the value of the Portfolio's portfolio securities between purchase
and redemption.

REDEMPTION OF SHARES IN GENERAL
At various times, the Portfolio may be requested to redeem shares for which it
has not yet received good payment. In such a case, the Portfolio will mail the
redemption proceeds upon clearance of the purchase check, which may take up to
15 days or more. Any delay may be avoided by purchasing shares either with a
certified check, by Federal Reserve or bank wire of funds, by direct deposit or
by EFT. Although the mailing of a redemption check or the wiring or EFT of
redemption proceeds may be delayed, the redemption value will be determined and
the redemption processed in the ordinary course of business upon receipt of
proper documentation. In such a case, after the redemption and prior to the
release of the proceeds, no appreciation or depreciation will occur in the value
of the redeemed shares, and no interest will be paid on the redemption proceeds.
If the payment of a redemption has been delayed, the check will be mailed or the
proceeds wired or sent EFT promptly after good payment has been collected.

The Portfolio computes the amount due you at the close of the Exchange at the
end of the day on which it has received all proper documentation from you.
Payment of the amount due on redemption will be made within seven days
thereafter except as discussed herein.

For your protection, SIGNATURES ON CERTIFICATES, STOCK POWERS AND ALL WRITTEN
ORDERS OR AUTHORIZATIONS MUST BE GUARANTEED BY A U.S. STOCK EXCHANGE MEMBER, A
BANK OR OTHER PERSONS ELIGIBLE TO GUARANTEE SIGNATURES UNDER THE SECURITIES
EXCHANGE ACT OF 1934 AND EKSC'S POLICIES. The Portfolio or EKSC may waive this
requirement or may require additional documents in certain cases. Currently, the
requirement for a signature guarantee has been waived on redemptions of $50,000
or less when the account address of record has been the same for a minimum
period of 30 days. The Portfolio and KIRC reserve the right to withdraw this
waiver at any time.

If the Portfolio receives a redemption order, but you have not clearly
indicated the amount of money or number of shares involved, the Portfolio cannot
execute your order. In such cases, the Portfolio will request the missing
information from you and process the order on the day such information is
received.

TELEPHONE REDEMPTIONS
Under ordinary circumstances, you may redeem up to $50,000 from your account
by telephone by calling toll free 1-800-343-2898. As mentioned above, to engage
in telephone transactions generally, you must complete the appropriate sections
of the Fund's application.

In order to insure that instructions received by EKSC are genuine when you
initiate a telephone transaction, you will be asked to verify certain criteria
specific to your account. At the conclusion of the transaction, you will be
given a transaction number confirming your request, and written confirmation of
your transaction will be mailed the next business day. Your telephone
instructions will be recorded. Redemptions by telephone are allowed only if the
address and bank account of record have been the same for a minimum period of 30
days.

If you cannot reach the Portfolio by telephone, you should follow the
procedures for redeeming by mail or through a broker-dealer as set forth herein.

SMALL ACCOUNTS
Due to the high cost of maintaining small accounts, the Portfolio reserves the
right to redeem your account if its value has fallen below $1,000, the current
minimum investment level, as a result of your redemptions (but not as a result
of market action). You will be notified in writing and allowed 60 days to
increase the value of your account to the minimum investment level.

GENERAL
The Portfolio reserves the right at any time to terminate, suspend or change
the terms of any redemption method described in this prospectus, except
redemption by mail, and to impose fees.

Except as otherwise noted, neither the Portfolio, EKSC, nor the Principal
Underwriter assumes responsibility for the authenticity of any instructions
received by any of them from a shareholder in writing, over the Keystone
Automated Response Line ("KARL"), or by telephone. EKSC will employ reasonable
procedures to confirm that instructions received over KARL or by telephone are
genuine. Neither the Portfolio, EKSC, nor the Principal Underwriter will be
liable when following instructions received over KARL or by telephone that EKSC
reasonably believes to be genuine.

The Portfolio may temporarily suspend the right to redeem its shares when (1)
the Exchange is closed, other than customary weekend and holiday closings; (2)
trading on the Exchange is restricted; (3) an emergency exists and the Portfolio
cannot dispose of its investments or fairly determine their value; or (4) the
Securities and Exchange Commission so orders.

SHAREHOLDER SERVICES
Details on all shareholder services may be obtained from EKSC by writing or by
calling toll free 1-800-343-2898.

KEYSTONE AUTOMATED RESPONSE LINE
KARL offers you specific fund account information and price and yield
quotations as well as the ability to do account transactions, including
investments, exchanges and redemptions. You may access KARL by dialing toll free
1-800-346-3858 on any touch-tone telephone, 24 hours a day, seven days a week.

EXCHANGES
If you have obtained the appropriate prospectus, you may exchange Class Y
shares of the Portfolio for Class Y shares of certain other Keystone America
Funds at net asset value by calling or writing to EKSC or by using KARL.

Orders for exchanges received by the Portfolio prior to 4:00 p.m. eastern time
on any day the funds are open for business will be executed at the respective
net asset values of each fund's Class Y shares determined as of the close of
business that day. Orders for exchanges received after 4:00 p.m. eastern time on
any business day will be executed at the respective net asset values determined
at the close of the next business day.

An excessive number of exchanges may be disadvantageous to the Portfolio.
Therefore, the Portfolio, in addition to its right to reject any exchange,
reserves the right to terminate the exchange privilege of any shareholder who
makes more than five exchanges of shares of the funds in a year or three in a
calendar quarter.

An exchange order must comply with the requirements for a redemption or
repurchase order and must specify the dollar value or number of shares to be
exchanged. An exchange constitutes a sale for federal income tax purposes.

The exchange privilege is available only in states where shares of the fund
being acquired may legally be sold.

AUTOMATIC INVESTMENT PLAN
With a Keystone Automatic Investment Plan, you can automatically transfer as
little as $25 per month or $75 per quarter from your bank account or Keystone
Liquid Trust to the Keystone fund of your choice. Your bank account will be
debited for each transfer. You will receive confirmation with your next account
statement.

To establish or terminate an Automatic Investment Plan or to change the amount
or schedule of your automatic investments, you may write to or call EKSC. Please
include your account numbers. Termination may take up to 30 days.

RETIREMENT PLANS
The Fund has various retirement plans available to you, including Individual
Retirement Accounts (IRAs); Rollover IRAs; Simplified Employee Pension Plans
(SEPs); Salary-Reduction Plans (SARSEPs); Tax Sheltered Annuity Plans (TSAs);
403(b)(7) Plans; 401(k) Plans; Keogh Plans; Corporate Profit-Sharing Plans; and
Money Purchase Plans. For details, including fees and application forms,
call toll free 1-800-247-4075 or write to EKSC.

SYSTEMATIC INCOME PLAN
Under a Systematic Income Plan, if your account has a value of at least
$10,000, you may arrange for regular monthly or quarterly fixed withdrawal
payments. Each payment must be at least $75 and may be as much as 1.0% per month
or 3.0% per quarter of the total net asset value of the Portfolio shares in your
account when the Systematic Income Plan was opened. Excessive withdrawals may
decrease or deplete the value of your account.

DOLLAR COST AVERAGING
Through dollar cost averaging you can invest a fixed dollar amount each month
or each quarter in any Keystone America Fund. This results in more shares being
purchased when the selected fund's net asset value is relatively low and fewer
shares being purchased when the fund's net asset value is relatively high and
may result in a lower average cost per share than a less systematic investment
approach.

Prior to participating in dollar cost averaging, you must establish an account
in a Keystone America Fund or a money market fund managed or advised by
Keystone. You should designate on the application (1) the dollar amount of each
monthly or quarterly investment you wish to make and (2) the fund in which the
investment is to be made. Thereafter, on the first day of the designated month,
an amount equal to the specified monthly or quarterly investment will
automatically be redeemed from your initial account and invested in shares of
the designated fund.

TWO DIMENSIONAL INVESTING
You may elect to have income and capital gains distributions from any Class Y
Keystone America Fund shares you may own automatically invested to purchase the
same class of shares of certain other Keystone America Funds. You may select
this service on your application and indicate the Keystone America Fund (s) into
which distributions are to be invested.

OTHER SERVICES
Under certain circumstances, you may, within 30 days after a redemption,
reinstate your account in the same class of shares that you redeemed at current
net asset value.

PERFORMANCE DATA
From time to time the Fund may advertise "total return" and "current yield."
ALL DATA IS BASED ON HISTORICAL RESULTS. PAST PERFORMANCE SHOULD NOT BE
CONSIDERED REPRESENTATIVE OF RESULTS FOR ANY FUTURE PERIOD OF TIME. Total return
and current yield are computed separately for each class of shares of the Fund.

Total return refers to average annual compounded rates of return over
specified periods determined by comparing the initial amount invested in a
particular class to the ending redeemable value of that amount. The resulting
equation assumes reinvestment of all dividends and distributions and deduction
of the maximum sales charge or applicable contingent deferred sales charge and
all recurring charges, if any, applicable to all shareholder accounts. The
exchange fee is not included in the calculation.

Current yield quotations represent the yield on an investment for a stated
30-day period computed by dividing net investment income earned per share during
the base period by the maximum offering price per share on the last day of the
base period.

The Portfolio may also include comparative performance data for each class of
shares when advertising or marketing the Portfolio's shares, such as data from
Lipper Analytical Services, Inc., Morningstar, Inc., Standard & Poor's
Corporation, Ibbotson Associates or other industry publications.

FUND SHARES
The Fund issues Class A, B, C and Y shares, which participate proportionately
based on their relative net asset values in dividends and distributions and have
equal voting, liquidation and other rights except that (1) expenses related to
the distribution of Class A, B and C shares, or other expenses that the Board of
Trustees may designate as class expenses from time to time, are borne solely by
the relevant class; (2) each class of shares having a Distribution Plan has
exclusive voting rights with respect to its Distribution Plan; (3) each class
has different exchange privileges; and (4) each class generally has a different
designation. When issued and paid for, the shares will be fully paid and
nonassessable by the Fund.

Class A shares bear most of the costs of distribution of such shares through
payment of a front-end sales load while Class B and Class C shares bear such
expenses through a higher annual distribution fee. As a result, expenses
attributable to Class B shares and Class C shares will generally be higher, and
income distributions paid by the Fund with respect to Class A shares will
generally be greater than those paid with respect to Class B and Class C shares.

Class Y shares are not subject to a front-end sales load or a contingent
deferred sales charge and pay no distribution or shareholder servicing expenses.
Therefore, income distributions paid by the Fund on Class Y shares will be
greater than those paid with respect to Class A, B and C shares.

Class Y shares may be exchanged as explained under "Shareholder Services," but
will have no other preference, conversion, exchange or preemptive rights. Shares
are redeemable, transferable and freely assignable as collateral. The Fund is
authorized to issue additional series or classes of shares.

Shareholders are entitled to one vote for each full share owned and fractional
votes for fractional shares. Shares of the Fund vote together except when
required by law to vote separately by class. The Fund does not have annual
meetings. The Fund will have special meetings, from time to time, as required
under its Declaration of Trust and under the 1940 Act. As provided in the Fund's
Declaration of Trust, shareholders have the right to remove Trustees by an
affirmative vote of two-thirds of the outstanding shares. A special meeting of
the shareholders will be held when holders of 10% of the outstanding shares
request a meeting for the purpose of removing a Trustee. The Fund is prepared to
assist shareholders in communications with one another for the purpose of
convening such a meeting as prescribed by Section 16(c) of the 1940 Act.

Under Massachusetts law, it is possible that a Fund shareholder may be held
personally liable for the Fund's obligations. The Fund's Declaration of Trust
provides, however, that shareholders shall not be subject to any personal
liability for the Fund's obligations and provides indemnification from Fund
assets for any shareholder held personally liable for the Fund's obligations.
Disclaimers of such liability are included in each Fund agreement.

ADDITIONAL INFORMATION
When the Fund determines from its records that more than one account in the
Fund is registered in the name of a shareholder or shareholders having the same
address, upon notice to those shareholders, the Fund intends, when an annual
report or a semi-annual report of the Fund is required to be furnished, to mail
one copy of such report to that address.

Except as otherwise stated in this prospectus or required by law, the Fund
reserves the right to change the terms of the offer stated in this prospectus
without shareholder approval, including the right to impose or change fees for
services provided.

ADDITIONAL INVESTMENT INFORMATION

The Portfolio may engage in the following investment practices to the extent
described in the prospectus and the statement of additional information.

OBLIGATIONS OF FOREIGN BRANCHES OF UNITED STATES BANKS
The obligations of foreign branches of U.S. banks may be general obligations
of the parent bank in addition to the issuing branch or may be limited by the
terms of a specific obligation and by government regulation. Payment of interest
and principal upon these obligations also may be affected by governmental action
in the country of domicile of the branch (generally referred to as sovereign
risk). In addition, evidences of ownership of such securities may be held
outside the U.S. and the Portfolio may be subject to the risks associated with
the holding of such property overseas. Various provisions of federal law
governing domestic branches do not apply to foreign branches of domestic banks.

OBLIGATIONS OF UNITED STATES BRANCHES OF FOREIGN BANKS
Obligations of U.S. branches of foreign banks may be general obligations of
the parent bank in addition to the issuing branch, or may be limited by the
terms of a specific obligation and by federal and state regulation as well as by
governmental action in the country in which the foreign bank has its head
office. In addition, there may be less publicly available information about a
U.S. branch of a foreign bank than about a domestic bank.

TIME DEPOSITS
The Portfolio may acquire time deposits or obligations issued by
international agencies, such as the International Bank for Reconstruction and
Development, the Asian Development Bank, or the Inter-American Bank.
Additionally, the Portfolio may purchase certificates of deposit, bankers'
acceptances, time deposits, or other similar obligations issued by foreign
banks.

MASTER DEMAND NOTES
Master demand notes are unsecured obligations that permit the investment of
fluctuating amounts by the Portfolio at varying rates of interest pursuant to
direct arrangements between the Portfolio, as lender, and the issuer, as
borrower. Master demand notes may permit daily fluctuations in the interest rate
and daily changes in the amounts borrowed. The Portfolio has the right to
increase the amount under the note at any time up to the full amount provided by
the note agreement or to decrease the amount, and the borrower may repay up to
the full amount of the note without penalty. Notes purchased by the Portfolio
permit the Portfolio to demand payment of principal and accrued interest at any
time (on not more than seven days' notice). Notes acquired by the Portfolio may
have maturities of more than one year, provided (1) the Portfolio is entitled to
payment of principal and accrued interest upon not more than seven days' notice,
and (2) the rate of interest on such notes is adjusted automatically at periodic
intervals which normally will not exceed 31 days, but may extend up to one year.
The notes are deemed to have a maturity equal to the longer of the period
remaining to the next interest rate adjustment or the demand notice period.
Because these types of notes are direct lending arrangements between the lender
and the borrower, such instruments are not normally traded and there is no
secondary market for these notes, although they are repayable by the borrower at
face value plus accrued interest at any time. Accordingly, the Portfolio's right
to redeem is dependent on the ability of the borrower to pay principal and
interest on demand. In connection with master demand note arrangements, Keystone
considers, under standards established by the Board of Trustees, earning power,
cash flow and other liquidity ratios of the borrower and will monitor the
ability of the borrower to pay principal and interest on demand. These notes are
not typically rated by credit rating agencies. Unless rated, the Portfolio will
invest in them only if the issuer meets the criteria established for commercial
paper.

REPURCHASE AGREEMENTS
The Portfolio may enter into repurchase agreements; i.e., the Portfolio
purchases a security subject to the Fund's obligation to resell and the seller's
obligation to repurchase that security at an agreed upon price and date, such
date usually being not more than seven days from the date of purchase. The
resale price is based on the purchase price plus an agreed upon current market
rate of interest that (for purposes of the transaction) is generally unrelated
to the coupon rate or maturity of the purchased security. A repurchase agreement
imposes an obligation on the seller to pay the agreed upon price, which
obligation is in effect secured by the value of the underlying security. The
value of the underlying security is at least equal to the amount of the agreed
upon resale price and marked to market daily to cover such amount. The Portfolio
may enter into such agreements only with respect to U.S. government and foreign
government securities, which may be denominated in U.S. or foreign currencies.
The Portfolio may enter into such repurchase agreements with foreign banks and
securities dealers approved in advance by the Fund's Trustees. Whether a
repurchase agreement is the purchase and sale of a security or a collateralized
loan has not been definitively established. This might become an issue in the
event of the bankruptcy of the other party to the transaction. It does not
presently appear possible to eliminate all risks involved in repurchase
agreements. These risks include the possibility of an increase in the market
value of the underlying securities or inability of the repurchaser to perform
its obligation to repurchase coupled with an uncovered decline in the market
value of the collateral, including the underlying securities, as well as delay
and costs to the Portfolio in connection with enforcement or bankruptcy
proceedings. Therefore, it is the policy of the Portfolio to enter into
repurchase agreements only with large, well-capitalized banks that are members
of the Federal Reserve System and with primary dealers in U.S. government
securities (as designated by the Federal Reserve Board) whose creditworthiness
has been reviewed and found satisfactory by the Portfolio's advisers.

REVERSE REPURCHASE AGREEMENTS
Under a reverse repurchase agreement, the Portfolio would sell securities and
agree to repurchase them at a mutually agreed upon date and price. The Portfolio
intends to enter into reverse repurchase agreements to avoid otherwise having to
sell securities during unfavorable market conditions in order to meet
redemptions. At the time the Portfolio enters into a reverse repurchase
agreement, it will establish a segregated account with the Portfolio's custodian
containing liquid assets having a value not less than the repurchase price
(including accrued interest) and will subsequently monitor the account to ensure
such value is maintained. Reverse repurchase agreements involve the risk that
the market value of the securities which the Portfolio is obligated to
repurchase may decline below the repurchase price.

FOREIGN SECURITIES
The Portfolio may invest in securities principally traded in securities
markets outside the United States. While investment in foreign securities is
intended to reduce risk by providing further diversification, such investments
involve sovereign risk in addition to the credit and market risks normally
associated with domestic securities. Foreign investments may be affected
favorably or unfavorably by changes in currency rates and exchange control
regulations. There may be less publicly available information about a foreign
company, particularly emerging market country companies, than about a U.S.
company, and foreign companies may not be subject to accounting, auditing and
financial reporting standards and requirements comparable to those applicable to
U.S. companies. Securities of some foreign companies are less liquid or more
volatile than securities of U.S. companies, and foreign brokerage commissions
and custodian fees are generally higher than in the United States. Investments
in foreign securities may also be subject to other risks different from those
affecting U.S. investments, including local political or economic developments,
particularly with respect to companies in the formerly communist countries of
Eastern Europe and the People's Republic of China, expropriation or
nationalization of assets, imposition of withholding taxes on dividend or
interest payments and currency blockage (which would prevent cash from being
brought back to the United States).

"WHEN ISSUED" SECURITIES
The Portfolio may also purchase and sell securities or currencies on a when
issued and delayed delivery basis. When issued and delayed delivery transactions
arise when securities or currencies are purchased or sold by the Portfolio with
payment and delivery taking place in the future in order to secure what is
considered to be an advantageous price and yield to the Portfolio at the time of
entering into the transaction. When the Portfolio engages in when issued and
delayed delivery transactions, the Portfolio relies on the buyer or seller, as
the case may be, to consummate the sale. Failure to do so may result in the
Portfolio missing the opportunity to obtain a price or yield considered to be
advantageous. When issued and delayed delivery transactions may be expected to
occur a month or more before delivery is due. No payment or delivery is made by
the Fund, however, until it receives payment or delivery from the other party to
the transaction. A separate account of liquid assets equal to the value of such
commitments will be maintained until payment is made.

When issued and delayed delivery agreements are subject to risks from changes
in value based upon changes in the level of interest rates and other market
factors, both before and after delivery. The Portfolio does not accrue any
income on such securities prior to their delivery. To the extent the Portfolio
engages in when issued and delayed delivery transactions, it will do so
consistent with its investment objective and policies and not for the purpose of
investment leverage.

DERIVATIVES
The Portfolio may use derivatives in furtherance of its investment objective.
Derivatives are financial contracts whose value depends on, or is derived from,
the value of an underlying asset, reference rate or index. These assets, rates
and indices may include bonds, stocks, mortgages, commodities, interest rates,
currency exchange rates, bond indices and stock indices. Derivatives can be used
to earn income or protect against risk, or both. For example, one party with
unwanted risk may agree to pass that risk to another party who is willing to
accept the risk, the second party being motivated, for example, by the desire
either to earn income in the form of a fee or premium from the first party, or
to reduce its own unwanted risk by attempting to pass all or part of that risk
to the first party.

Derivatives can be used by investors such as the Portfolio to earn income and
enhance returns, to hedge or adjust the risk profile of the portfolio, and
either in place of more traditional direct investments or to obtain exposure to
otherwise inaccessible markets. The Portfolio is permitted to use derivatives
for one or more of these purposes. Each of these uses entails greater risk than
if derivatives were used solely for hedging purposes. The Portfolio uses futures
contracts and related options for hedging purposes. Derivatives are a valuable
tool which, when used properly, can provide significant benefit to Portfolio
shareholders. Keystone is not an aggressive user of derivatives with respect to
the Portfolio. However, the Portfolio may take positions in those derivatives
that are within its investment policies if, in Keystone's judgment, this
represents an effective response to current or anticipated market conditions.
Keystone's use of derivatives is subject to continuous risk assessment and
control from the standpoint of the Portfolio's investment objectives and
policies.

Derivatives may be (1) standardized, exchange-traded contracts or (2)
customized, privately negotiated contracts. Exchange-traded derivatives tend to
be more liquid and subject to less credit risk than those that are privately
negotiated.

There are four principal types of derivative instruments -- options, futures,
forwards and swaps -- from which virtually any type of derivative transaction
can be created. Further information regarding options and futures is provided
later in this section and is provided in the Portfolio's statement of additional
information. The Portfolio does not presently engage in the use of swaps.

While the judicious use of derivatives by experienced investment managers such
as Keystone can be beneficial, derivatives also involve risks different from,
and, in certain cases, greater than, the risks presented by more traditional
investments.

Following is a general discussion of important risk factors and issues
concerning the use of derivatives that investors should understand before
investing in the Portfolio.

* Market Risk -- This is the general risk attendant to all investments that the
value of a particular investment will decline or otherwise change in a way
detrimental to the Portfolio's interest.

* Management Risk -- Derivative products are highly specialized instruments that
require investment techniques and risk analyses different from those
associated with stocks and bonds. The use of a derivative requires an
understanding not only of the underlying instrument, but also of the
derivative itself, without the benefit of observing the performance of the
derivative under all possible market conditions. In particular, the use and
complexity of derivatives require the maintenance of adequate controls to
monitor the transactions entered into, the ability to assess the risk that a
derivative adds to the Portfolio's portfolio and the ability to forecast
price, interest rate or currency exchange rate movements correctly.

* Credit Risk -- This is the risk that a loss may be sustained by the Portfolio
as a result of the failure of another party to a derivative (usually referred
to as a "counterparty") to comply with the terms of the derivative contract.
The credit risk for exchange-traded derivatives is generally less than for
privately negotiated derivatives, since the clearing house, which is the
issuer or counterparty to each exchange-traded derivative, provides a
guarantee of performance. This guarantee is supported by a daily payment
system (i.e., margin requirements) operated by the clearing house in order to
reduce overall credit risk. For privately negotiated derivatives, there is no
similar clearing agency guarantee. Therefore, the Portfolio considers the
creditworthiness of each counterparty to a privately negotiated derivative in
evaluating potential credit risk.

* Liquidity Risk -- Liquidity risk exists when a particular instrument is
difficult to purchase or sell. If a derivative transaction is particularly
large or if the relevant market is illiquid (as is the case with many
privately negotiated derivatives), it may not be possible to initiate a
transaction or liquidate a position at an advantageous price.

* Leverage Risk -- Since many derivatives have a leverage component, adverse
changes in the value or level of the underlying asset, rate or index can
result in a loss substantially greater than the amount invested in the
derivative itself. In the case of swaps, the risk of loss generally is related
to a notional principal amount, even if the parties have not made any initial
investment. Certain derivatives have the potential for unlimited loss,
regardless of the size of the initial investment.

* Other Risk -- Other risks in using derivatives include the risk of mispricing
or improper valuation and the inability of derivatives to correlate perfectly
with underlying assets, rates and indices. Many derivatives, in particular,
privately negotiated derivatives, are complex and often valued subjectively.
Improper valuations can result in increased cash payment requirements to
counterparties or a loss of value to a Portfolio. Derivatives do not always
perfectly or even highly correlate or track the value of the assets, rates or
indices they are designed to closely track. Consequently, the Portfolio's use
of derivatives may not always be an effective means of, and sometimes could be
counterproductive to, furthering the Portfolio's investment objective.

OPTIONS TRANSACTIONS
WRITING COVERED OPTIONS. The Portfolio may write (i.e., sell) covered call and
put options. By writing a call option, the Portfolio becomes obligated during
the term of the option to deliver the securities underlying the option upon
payment of the exercise price. By writing a put option, the Portfolio becomes
obligated during the term of the option to purchase the securities underlying
the option at the exercise price if the option is exercised. The Portfolio also
may write straddles (combinations of covered puts and calls on the same
underlying security).

The Portfolio may only write "covered" options. This means that so long as the
Portfolio is obligated as the writer of a call option, it will own the
underlying securities subject to the option or, in the case of call options on
U.S. Treasury bills, the Portfolio might own substantially similar U.S. Treasury
bills. If the Portfolio has written options against all of its securities that
are available for writing options, the Portfolio may be unable to write
additional options unless it sells a portion of its portfolio holdings to obtain
new securities against which it can write options. If this were to occur, higher
portfolio turnover and correspondingly greater brokerage commissions and other
transaction costs may result. The Portfolio does not expect, however, that this
will occur.

The Portfolio will be considered "covered" with respect to a put option it
writes if, so long as it is obligated as the writer of the put option, it
deposits and maintains with its custodian in a segregated account liquid assets
having a value equal to or greater than the exercise price of the option.

The principal reason for writing call or put options is to obtain, through a
receipt of premiums, a greater current return than would be realized on the
underlying securities alone. The Portfolio receives a premium from writing a
call or put option which it retains whether or not the option is exercised. By
writing a call option, the Portfolio might lose the potential for gain on the
underlying security while the option is open, and by writing a put option, the
Portfolio might become obligated to purchase the underlying security for more
than its current market price upon exercise.

PURCHASING OPTIONS. The Portfolio may purchase put or call options for the
purpose of offsetting previously written put or call options of the same
series.

If the Portfolio 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 securities or dispose of assets held in a segregated account
until the options expire or are exercised.

An option position may be closed out only in a secondary market for an option
of the same series. Although the Portfolio generally will write only those
options for which there appears to be an active secondary market, there is no
assurance that a liquid secondary market will exist for any particular option at
any particular time, and for some options, no secondary market may exist. In
such event it might not be possible to effect a closing transaction in a
particular option.

Options on some securities are relatively new, and it is impossible to predict
the amount of trading interest that will exist in such options. There can be no
assurance that viable markets will develop or continue. The failure of such
markets to develop or continue could significantly impair the Portfolio's
ability to use such options to achieve its investment objective.

OPTIONS TRADING MARKETS. Options in which the Portfolio will trade are
generally listed on national securities exchanges. Exchanges on which such
options currently are traded, include the Chicago Board Options Exchange and the
New York, American, Pacific and Philadelphia Stock Exchanges. Options on some
securities may not be listed on any Exchange, but traded in the over-the-counter
market. Options traded in the over-the-counter market involve the additional
risk that securities dealers participating in such transactions could fail to
meet their obligations to the Portfolio. The use of options traded in the
over-the-counter market may be subject to limitations imposed by certain state
securities authorities. In addition to the limits on its use of options
discussed herein, the Portfolio is subject to the investment restrictions
described in this prospectus and the statement of additional information.

The staff of the SEC is of the view that the premiums that the Portfolio pays
for the purchase of unlisted options and the value of securities used to cover
unlisted options written by the Portfolio are considered to be invested in
illiquid securities or assets for the purpose of calculating whether the
Portfolio is in compliance with its fundamental investment restriction relating
to illiquid securities.

FUTURES TRANSACTIONS
The Portfolio may enter into currency and other financial futures contracts
and write options on such contracts. The Portfolio intends to enter into such
contracts and related options for hedging purposes. The Portfolio will enter
into securities, currencies or index-based futures contracts in order to hedge
against changes in interest or exchange rates or securities prices. A futures
contract on securities or currencies is an agreement to buy or sell securities
or currencies at a specified price during a designated month. A futures contract
on a securities index does not involve the actual delivery of securities, but
merely requires the payment of a cash settlement based on changes in the
securities index. The Portfolio does not make payment or deliver securities upon
entering into a futures contract. Instead, it puts down a margin deposit, which
is adjusted to reflect changes in the value of the contract and which remains in
effect until the contract is terminated.

The Portfolio may sell or purchase currency and other financial futures
contracts. When a futures contract is sold by the Portfolio, the value of the
contract will tend to rise when the value of the underlying securities or
currencies declines and to fall when the value of such securities or currencies
increases. Thus, the Portfolio sells futures contracts in order to offset a
possible decline in the value of its securities or currencies. If a futures
contract is purchased by the Portfolio, the value of the contract will tend to
rise when the value of the underlying securities or currencies increases and to
fall when the value of such securities or currencies declines. The Portfolio
intends to purchase futures contracts in order to fix what is believed by
Keystone to be a favorable price and rate of return for securities or favorable
exchange rate for currencies the Portfolio intends to purchase.

The Portfolio also intends to purchase put and call options on currency and
other financial futures contracts for hedging purposes. A put option purchased
by the Portfolio would give it the right to assume a position as the seller of a
futures contract. A call option purchased by the Portfolio would give it the
right to assume a position as the purchaser of a futures contract. The purchase
of an option on a futures contract requires the Portfolio to pay a premium. In
exchange for the premium, the Portfolio becomes entitled to exercise the
benefits, if any, provided by the futures contract, but is not required to take
any action under the contract. If the option cannot be exercised profitably
before it expires, the Portfolio's loss will be limited to the amount of the
premium and any transaction costs.

The Portfolio may enter into closing purchase and sale transactions in order
to terminate a futures contract and may sell put and call options for the
purpose of closing out its options positions. The Portfolio's ability to enter
into closing transactions depends on the development and maintenance of a liquid
secondary market. There is no assurance that a liquid secondary market will
exist for any particular contract or at any particular time. As a result, there
can be no assurance that the Portfolio will be able to enter into an offsetting
transaction with respect to a particular contract at a particular time. If the
Portfolio is not able to enter into an offsetting transaction, the Portfolio
will continue to be required to maintain the margin deposits on the contract and
to complete the contract according to its terms, in which case, it would
continue to bear market risk on the transaction.

Although futures and options transactions are intended to enable the Portfolio
to manage market, interest rate or exchange rate risk, unanticipated changes in
interest rates, exchange rates or market prices could result in poorer
performance than if it had not entered into these transactions. Even if Keystone
correctly predicts interest or exchange rate movements, a hedge could be
unsuccessful if changes in the value of the Portfolio's futures position did not
correspond to changes in the value of its investments. This lack of correlation
between the Portfolio's futures and securities or currencies positions may be
caused by differences between the futures and securities or currencies markets
or by differences between the securities or currencies underlying the
Portfolio's futures position and the securities or currencies held by or to be
purchased for the Portfolio. In addition, futures contracts transactions involve
the remote risk that a party participating in a transaction will not be able to
fulfill its obligations and the amount of the obligation will exceed the ability
of the clearing broker to satisfy. Keystone will attempt to minimize these risks
through careful selection and monitoring of the Portfolio's futures and options
positions.

The Portfolio does not intend to use futures transactions for speculation or
leverage. The Portfolio has the ability to write options on futures, but intends
to write such options only to close out options purchased by the Portfolio. The
Portfolio will not change these policies without supplementing the information
in its prospectus and statement of additional information.

FOREIGN CURRENCY TRANSACTIONS
As discussed above, the Portfolio may invest in securities of foreign issuers.
When the Portfolio invests in foreign securities they usually will be
denominated in foreign currencies, and the Portfolio temporarily may hold funds
in foreign currencies. Thus, the value of Portfolio shares will be affected by
changes in exchange rates.

As one way of managing exchange rate risk, in addition to entering into
currency futures contracts, the Portfolio may enter into forward currency
exchange contracts (agreements to purchase or sell currencies at a specified
price and date). The exchange rate for the transaction (the amount of currency
the Portfolio will deliver and receive when the contract is completed) is fixed
when the Portfolio enters into the contract. The Portfolio usually will enter
into these contracts to stabilize the U.S. dollar value of a security it has
agreed to buy or sell. The Portfolio intends to use these contracts to hedge the
U.S. dollar value of a security it already owns, particularly if the Portfolio
expects a decrease in the value of the currency in which the foreign security is
denominated. Although the Portfolio will attempt to benefit from using forward
contracts, the success of its hedging strategy will depend on Keystone's ability
to predict accurately the future exchange rates between foreign currencies and
the U.S. dollar. The value of the Portfolio's investments denominated in foreign
currencies will depend on the relative strength of those currencies and the U.S.
dollar, and the Portfolio may be affected favorably or unfavorably by changes in
the exchange rates or exchange control regulations between foreign currencies
and the U.S. dollar. Changes in foreign currency exchange rates also may affect
the value of dividends and interest earned, gains and losses realized on the
sale of securities and net investment income and gains, if any, to be
distributed to shareholders by the Portfolio. The Portfolio may also purchase
and sell options related to foreign currencies in connection with hedging
strategies.

LOANS OF SECURITIES TO BROKER-DEALERS
The Portfolio may lend securities to brokers and dealers pursuant to
agreements requiring that the loans be continuously secured by cash, or
securities of the U.S. government, its agencies or instrumentalities, or any
combination of cash and such securities, as collateral equal at all times in
value to at least the market value of the securities loaned. Such securities
loans will not be made with respect to the Portfolio if, as a result, the
aggregate of all outstanding securities loans exceeds 15% of the value of the
Portfolio's total assets taken at their current value. The Portfolio continues
to receive interest or dividends on the securities loaned and simultaneously
earns interest on the investment of the cash loan collateral in U.S. Treasury
notes, certificates of deposit, other high-grade, short-term obligations or
interest bearing cash equivalents. Although voting rights attendant to
securities loaned pass to the borrower, such loans may be called at any time and
will be called so that the securities may be voted by the Portfolio if, in the
opinion of the Portfolio, a material event affecting the investment is to occur.
There may be risks of delay in receiving additional collateral or in recovering
the securities loaned or even loss of rights in the collateral should the
borrower of the securities fail financially. Loans may only be made, however, to
borrowers deemed to be of good standing, under standards approved by the Board
of Trustees, when the income to be earned from the loan justifies the attendant
risks.

ZERO COUPON "STRIPPED" BONDS
A zero coupon (interest) "stripped" bond represents ownership in serially
maturing interest payments or principal payments on specific underlying notes
and bonds, including coupons relating to such notes and bonds. The interest and
principal payments are direct obligations of the issuer. These bonds mature on
the payment dates of the interest or principal which they represent. Each zero
coupon bond entitles the holder to receive a single payment at maturity. There
are no periodic interest payments on a zero coupon bond. Zero coupon bonds are
offered at discounts from their face amounts.

In general, owners of zero coupon bonds have substantially all the rights and
privileges of owners of the underlying coupon obligations or principal
obligations. Owners of zero coupon bonds have the right upon default on the
underlying coupon obligations or principal obligations to proceed directly and
individally against the issuer and are not required to act in concert with other
holders of zero coupon bonds.

For federal income tax purposes, a purchaser of principal zero coupon bonds or
coupon zero coupon bonds (either initially or in the secondary market) is
treated as if the buyer had purchased a corporate obligation issued on the
purchase date with an original issue discount equal to the excess of the amount
payable at maturity over the purchase price. The purchaser is required to take
into income each year as ordinary income an allocable portion of such discounts
determined on a "constant yield" method. Any such income increases the holder's
tax basis for the zero coupon bond, and any gain or loss on a sale of the zero
coupon bonds relative to the holder's basis, as so adjusted, is a capital gain
or loss. If the holder owns both principal zero coupon bonds and coupon zero
coupon bonds representing interest in the coupon (interest) payments and the
principal payments from the same underlying issue of securities, a special basis
allocation rule (requiring the aggregate basis to be allocated among the items
sold and retained based on their relative fair market values at the time of
sale) may apply to determine the gain or loss on a sale of any such zero coupon
bonds.
<PAGE>
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KEYSTONE AMERICA
FUND FAMILY

()

Balanced Fund II
Capital Preservation and Income Fund
Government Securities Fund
Intermediate Term Bond Fund
Strategic Income Fund
World Bond Fund
Tax Free Income Fund
California Tax Free Fund
Florida Tax Free Fund
Massachusetts Tax Free Fund
Missouri Tax Free Fund
New York Tax Free Fund
Pennsylvania Tax Free Fund
Fund for Total Return
Global Opportunities Fund
Hartwell Emerging Growth Fund, Inc.
Omega Fund
Fund of the Americas
Global Resources and Development Fund
Small Company Growth Fund II
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Evergreen Keystone
[logo] FUNDS [logo]
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Evergreen Keystone Distributor, Inc.
230 Park Avenue
New York, New York 10169

10M [recycle logo]
540237

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KEYSTONE

[graphic omitted]

GLOBAL
OPPORTUNITIES
FUND
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Evergreen Keystone
[logo] FUNDS [logo]
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PROSPECTUS AND
APPLICATION
Class Y Shares