SSGA FUNDS, 485APOS, 1999-10-12

SSGA FUNDS
485APOS, 1999-10-12

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Filed Pursuant to Rule 485(a)

As filed with the Securities and Exchange Commission on October 12, 1999

Registration No. 33-19229; 811-5430
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ( X )
-----
Pre-Effective Amendment No. _____ (_____)

Post-Effective Amendment No. 52 ( X )
----- -----

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 ( X )
-----

Amendment No. 54 ( X )
-----

(Check appropriate box or boxes)

SSgA FUNDS
(Exact Name of Registrant as Specified in Charter)

909 A Street
Tacoma, Washington 98402
(Address of Principal Executive Offices)

Registrant's telephone number, including area code: (253) 627-7001

<TABLE>
<CAPTION>
Name and Address of Copies to:
- ------------------- ---------
Agent for Service:
- -----------------
<S> <C>
Karl J. Ege Philip H. Newman, Esq.
Secretary and General Counsel Goodwin, Procter & Hoar
Frank Russell Investment Management Company Exchange Place
909 A Street Boston, Massachusetts 02109
Tacoma, Washington 98402
</TABLE>

Approximate Date of Proposed Public Offering: As soon as
practicable after the effective date of this Registration Statement.

It is proposed that this filing will become effective under Rule 485:
(___) immediately upon filing pursuant to paragraph (b)
( ) on (_____________) pursuant to paragraph (b)
( X ) 60 days after filing pursuant to paragraph (a)
( ) on (date) pursuant to paragraph (a)(1)
(___) 75 days after filing pursuant to paragraph (a)(2)
( ) on (date) pursuant to paragraph (a)(2) of Rule 485

If appropriate, check the following:
(___) This post-effective amendment designates a new effective date for
a previously filed post-effective amendment.

<PAGE>

SSgA FUNDS

Form N-1A Cross Reference Sheet
<TABLE>
<CAPTION>
PART A ITEM NUMBER AND CAPTION PROSPECTUS CAPTION
<S> <C> <C>
1. Front and Back Cover Pages Front and Back Cover Pages

2. Risk/Return Summary: Investments, Risks and Investment Strategies and Principal Risks; Additional
Performance Information about the Fund's Investment Strategies
and Risks

3. Risk/Return Summary: Fee Table Fund Operating Expenses

4. Investment Objectives, Principal Strategies, Investment Objectives, Principal Strategies, and
and Related Risks Related Risks
(a) Fundamental Investment Objective; Non-Fundamental
Investment Objective

(b) Investment Objectives, Principal Strategies, and
Related Risks; Portfolio Turnover

5. Management's Discussion of Fund Performance Annual Reports to Shareholders

6. Management, Organization and Capital Structure Management of the Fund
(a)(1), (2) Advisor

(a)(3) Not Applicable

(b) Not Applicable

7. Shareholder Information

(a) Pricing of Fund Shares

(b) Purchase of Fund Shares

(d) Dividends and Distributions

(e) Taxes

(f) Not Applicable

8. Distribution Arrangements

(a) Fund Operating Expenses

(b) Fund Operating Expenses

9. Financial Highlights Information Financial Highlights
</TABLE>
<PAGE>

<TABLE>
<CAPTION>
PART B ITEM NUMBER AND CAPTION STATEMENT OF ADDITIONAL INFORMATION CAPTION
<S> <C> <C>
10. Cover Page and Table of Contents Cover Page and Table of Contents

11. Fund History Fund History

12. Description of the Fund and Its Investments Description of the Fund and its Investment Risks
and Risks
(a) Description of the Fund and its Investment Risks

(b) Investment Strategies and Risks

(d) Temporary Defensive Position

(e) Portfolio Turnover

13. Management of the Fund

(a), (b), (c) Trustees and Officers

(d) Compensation

(d) Not Applicable

14. Control Persons and Principal Holders of Control Persons and Principal Shareholders
Securities
(a), (b), (c) Control Persons and Principal Shareholders

15. Investment Advisory and Other Services Investment Advisory and Other Services

(a) Advisor

(b) Distributor

(c), (d) Distribution and Shareholder Servicing Arrangements

(e) Not Applicable

(f) Not Applicable

(g) Distribution Plan and Shareholder Servicing
Arrangements--Distribution Plan

(h) Administrator; Transfer Agent and Custodian;
Independent Public Accountants

16. Brokerage Allocation and Other Policies Brokerage Practices
(a), (b), (c) Brokerage Practices
(d) Not Applicable

(e) Brokerage Practices

17 Capital Stock and Other Securities Capitalization and Voting
(a) Capitalization and Voting

(b) Not Applicable
<PAGE>

18. Purchase, Redemption and Pricing of Shares
(a) Purchase of Fund Shares (Prospectus)

(b) Not Applicable

(d) Not Applicable

19 Taxation of the Fund Taxes

20. Underwriters
(a) Distributor

(b), (c) Not Applicable

21. Calculation of Performance Data Yield and Total Return Quotations

22. Financial Statements Financial Statements
</TABLE>

Part C

Information required to be included in Part C is set forth under the
appropriate item, so numbered in Part C of this Registration Statement.

<PAGE>

SSgA FUNDS

Contents of Registration Statement

This Registration Statement consists of the following papers and documents:

Cover Sheet

Form N-1A Cross Reference Sheet

Part A - Prospectus

Part B - Statement of Additional Information

Part C - Other Information

Signature Page

Exhibits

<PAGE>

Filed pursuant to Rule 485(a)
File Nos. 33-19229; 811-5430

SSgA FUNDS
One International Place
Boston, Massachusetts 02110
1-800-997-7327
www.ssgafunds.com

YIELD PLUS FUND

THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED THESE
SECURITIES, NOR DOES IT GUARANTEE THAT THE INFORMATION IN THIS PROSPECTUS IS
ACCURATE OR COMPLETE. IT IS A CRIMINAL OFFENSE TO STATE OTHERWISE.

The Yield Plus Fund seeks high current income and liquidity by investing
primarily in a diversified portfolio of high-quality debt securities and by
maintaining a portfolio duration of one year or less.

PROSPECTUS DATED _______________, 1999

-1-
<PAGE>

TABLE OF CONTENTS

<TABLE>
<S> <C>
INVESTMENT STRATEGIES AND PRINCIPAL RISKS..................................................... 3

NON-FUNDAMENTAL INVESTMENT OBJECTIVE....................................................... 3
PRINCIPAL INVESTMENT STRATEGIES............................................................ 3
PRINCIPAL RISKS OF INVESTING IN THE FUND................................................... 3
PERFORMANCE................................................................................ 4

FEES AND EXPENSES OF THE FUND................................................................. 4

MANAGEMENT OF THE FUND........................................................................ 5

ADDITIONAL INFORMATION ABOUT THE FUND'S OBJECTIVES, INVESTMENT STRATEGIES AND RISKS........... 5

SHAREHOLDER INFORMATION....................................................................... 7

PURCHASE OF FUND SHARES.................................................................... 7
REDEMPTION OF FUND SHARES.................................................................. 9
DISTRIBUTION SERVICES AND SHAREHOLDER SERVICING ARRANGEMENTS............................... 11
PRICING OF FUND SHARES..................................................................... 12
DIVIDENDS AND DISTRIBUTIONS................................................................ 12
TAXES...................................................................................... 13

FINANCIAL HIGHLIGHTS.......................................................................... 14

ADDITIONAL INFORMATION ABOUT THE FUND......................................................... 16
</TABLE>

-2-
<PAGE>

INVESTMENT STRATEGIES AND PRINCIPAL RISKS

NON-FUNDAMENTAL INVESTMENT OBJECTIVE

The fund's investment objective is to seek high current income and liquidity by
investing primarily in a diversified portfolio of high-quality debt securities
and by maintaining a portfolio duration of one year or less.

This objective may be changed by the fund's trustees without shareholder
approval.

PRINCIPAL INVESTMENT STRATEGIES

The fund attempts to meet its objective by investing primarily in high-quality,
investment-grade debt instruments. Unlike a money market fund, the price of the
Yield Plus Fund will fluctuate because of the fund may invest in securities with
higher levels of risk and different maturities.

The fund management team bases its decisions on the relative attractiveness of
different sectors and issues which can vary depending on the general level of
interest rates, market determined risk premiums, as well as supply/demand
imbalances in the market. Risks associated with these investments are described
in the Principal Risks section.

The Yield Plus Fund has obtained a quality rating from one or more national
security rating organizations. To obtain such rating the fund may be required to
adopt additional investment restrictions, which may affect the fund's
performance.

PRINCIPAL RISKS OF INVESTING IN THE FUND

Investment in the fund, like any investment, has risks. Fund shares will rise
and fall in value and there is a risk you could lose money by investing in the
fund. There can be no assurance that the fund will achieve its objective. An
investment in the fund is not a deposit of any bank and is not insured by the
Federal Deposit Insurance Corporation or any other government agency.

Risks of Fixed-Income Securities. Prices of fixed-income securities rise and
fall in response to interest rate changes. Generally, when interest rates rise,
prices of fixed-income securities fall. The longer the duration of the security,
the more sensitive the securities is to this risk. There is also a risk that one
or more of the securities will be downgraded in credit rating or go into
default. Lower-rated bonds generally have higher credit risks.

Risks of Mortgage-Related Securities. There are two primary risks associated
with the roll market for mortgage-backed securities. First, the value and safety
of the roll depends entirely upon the counterparty's ability to redeliver the
security at the termination of the roll. Therefore, the counterparty to a roll
must meet the same credit criteria as any existing repurchase counterparty.
Second, the security which is redelivered at the end of the roll period must be
substantially the same as the initial security, i.e., it must have the same
coupon, be issued by the same agency and be of the same type, have the same
original stated term to maturity, be priced to result in similar market yields
and must be "good delivery." Within these parameters, however, the actual pools
that are redelivered could be less desirable than those originally rolled,
especially with respect to prepayment characteristics.

Dollar-Denominated Instruments. Non-US corporations and banks issuing
dollar-denominated instruments in the US are not necessarily subject to the same
regulatory requirements that apply to US corporations and banks, such as
accounting, auditing and recordkeeping standards, the public availability of
information and, for banks, reserve requirements, loan limitations and
examinations. This increases the possibility that a non-US corporation or bank
may become insolvent or otherwise unable to fulfill its obligations on these
instruments.

Year 2000. The SSgA Funds' operations depend on the smooth functioning of its
service providers' computer systems. The SSgA Funds and its shareholders could
be adversely affected if those computer systems do not properly process and
calculate date-related information on or after January 1, 2000. Many computer
software systems in use today cannot distinguish between the year 2000 and the
year 1900. Although year 2000 related computer problems could have a negative
effect on the SSgA Funds and its shareholders, the service providers have
advised the SSgA Funds that they are working to avoid such problems and expect
all systems to be adapted in time for the event. Because it is the obligation of
those service providers to ensure the proper functioning of their computer
systems, the SSgA Funds do not expect to incur any material expense in
connection with year 2000 preparations.

-3-
<PAGE>

PERFORMANCE

The following bar chart illustrates the risks of investing in the fund by
showing changes in the fund's performance from year to year over the life of the
fund. How the fund has performed in the past is not necessarily an indication of
how the fund will perform in the future.

Annual Total Returns - Yield Plus

[bar chart]

1993 -- 3.44%
1994 -- 4.10%
1995 -- 6.56%
1996 -- 5.48%
1997 -- 5.54%
1998 -- 4.83%

Best Quarter - March 31, 1995: 1.78%
Worst Quarter - July 31, 1993: 0.45%

The following table further illustrates the risks of investing in the fund by
showing how the fund's average annual returns for 1 and 5 years and since the
fund's inception compare to the returns of a broad-based securities market
index.

Average annual total returns
For the periods ended December 31, 1998

<TABLE>
<CAPTION>
1 Year 5 Years Inception
------ ------- ---------
<S> <C> <C> <C>
Yield Plus ............................. 4.83% 5.30% 4.96%

30-Day Yields
for the period ended December 31, 1998

<CAPTION>
Current
-------
<S> <C>
Yield Plus ............................. 5.28%
</TABLE>

Fees and Expenses of the Fund

This table describes the fees and expenses that you may pay if you buy and hold
shares of the fund.

<TABLE>
<CAPTION>
<S> <C>
Shareholder Fees (fees paid directly from your investment)
Maximum Sales Charge (Load) Imposed on Purchases None
Maximum Deferred Sales Charge (Load) None
Maximum Sales Charge (Load) Imposed on Reinvested
Dividends or Other Distributions None
Redemption Fee None
Exchange Fee None
Maximum Account Fee None

Annual Fund Operating Expenses
(expenses that are deducted from Fund assets)
(as a percentage of average daily net assets)
Advisory Fee .25%
Distribution and Service (12b-1) Fees(1) .08
Total Other Expenses .08
---
Total Annual Fund Operating Expenses .41%
====
</TABLE>

Example

This example is intended to help you compare the cost of investing in the fund
with the cost of investing in other mutual funds.

The example assumes that you invest $10,000 in the fund for the time periods
indicated, regardless of whether you redeem all of your shares at the end of
those periods. The example also assumes that your investment has a 5% return
each year and that the fund's operating expenses remain the same. Although your
actual costs may be higher or lower, based on these assumptions, your costs
would be:

<TABLE>
<CAPTION>
<S> <C> <C> <C>
1 year 3 years 5 years 10 years
</TABLE>

- --------
(1) The ratio includes .04% for 12b-1 Distribution and .04% for 12b-1
Shareholder Servicing Fees.

-4-
<PAGE>

Investors purchasing fund shares through a financial intermediary, such as a
bank or an investment advisor, may also be required to pay additional fees for
services provided by the intermediary. Such investors should contact the
intermediary for information concerning what additional fees, if any, will be
charged.

Long-term shareholders of the fund may pay more in Rule 12b-1 fees than the
economic equivalent of the maximum front-end sales charge permitted by the
National Association of Securities Dealers, Inc.

MANAGEMENT OF THE FUND

Investment Advisor. State Street Bank and Trust Company (State Street or
Advisor), 225 Franklin Street, Boston, Massachusetts 02110, serves as the
investment advisor for the fund and directs the investment of the fund in
accordance with the fund's investment objective, policies and restrictions.

For these services, the fund pays State Street an advisory fee, calculated daily
and paid monthly, of 0.25% of the average daily net asset value of the fund.

Mr. John Reohr, Principal, is the portfolio manager primarily responsible for
investment decisions regarding the fund. Mr. Reohr joined State Street in April
1993 with responsibilities in cash and enhanced cash portfolio management. Mr.
Reohr began managing the SSgA Yield Plus Fund in January 1998. Mr. Reohr began
his fixed income career in 1983 working for Lehman Brothers' Treasury Trading
Desk. Until 1989, Mr. Reohr managed short and intermediate fixed income
portfolios for Continental Bank. Since then, Mr. Reohr has also managed
government, mortgage, money market and Federal funds arbitrage portfolios for
the Federal Home Loan Bank of Boston. He earned his BA in Political Science at
Dickinson College and his MBA from the University of Chicago. There are 10 other
portfolio managers who assist in managing the fund.

ADDITIONAL INFORMATION ABOUT THE FUND'S
OBJECTIVES, INVESTMENT STRATEGIES AND RISKS

The investment policies described below reflect the fund's current practices. In
addition to the principal risks explained above, other risks are explained in
some of the descriptions of the investment policies below:

Investment-Grade Securities. The fund limits its investments to bank
instruments, mortgage-related securities, asset-backed securities, commercial
paper, corporate notes and bonds and obligations of foreign governments and
agencies and subdivisions of foreign governments and supranational organizations
that, at the time of acquisition: (1) are rated in one of the four highest
categories (or in the case of commercial paper, in the two highest categories)
by at least one nationally recognized statistical rating organization; or (2) if
not rated, are of comparable quality, as determined by the Advisor in accordance
with procedures established by the Board of Trustees. All securities may be
either fixed income, zero coupon or variable- or floating-rate securities and
may be denominated in US dollars or selected foreign currencies.

Portfolio Duration. The fund will maintain a portfolio duration of one year or
less. Duration is a measure of the price sensitivity of a security to changes in
interest rates. Unlike maturity, which measures the period of time until final
payment is to be made on a security, duration measures the dollar-weighted
average maturity of a security's expected cash flows (i.e., interest and
principal payments), discounted to their present values, after giving effect to
all maturity shortening features, such as call or redemption rights. With
respect to a variable or floating-rate instrument, duration is adjusted to
indicate the price sensitivity of the instrument to changes in the interest rate
in effect until the next reset date. For substantially all securities, the
duration of a security is equal to or less than its stated maturity.

-5-
<PAGE>

corporations, (3) financial institutions or (4) insurance companies that have a
rate of interest subject to adjustment at regular intervals but less frequently
than annually. A variable rate security provides for the automatic establishment
of a new interest rate on set dates. The funds may also purchase floating rate
securities. A floating rate security provides for the automatic adjustment of
its interest rate whenever a specified interest rate changes. Interest rates on
these securities are ordinarily tied to, and are a percentage of, a widely
recognized interest rate, such as the yield on 90-day US Treasury bills or the
prime rate of a specified bank. These rates may change as often as twice daily.
Generally, changes in interest rates will have a smaller effect on the market
value of variable and floating rate securities than on the market value of
comparable fixed income obligations. Thus, investing in variable and floating
rate securities generally allows less opportunity for capital appreciation and
depreciation than investing in comparable fixed income securities. The funds may
also invest in Funding Agreements, which are privately placed, unregistered
obligations negotiated with a purchaser.

Asset-Backed Securities. Asset-backed securities represent undivided fractional
interests in pools of instruments, such as consumer loans, and are similar in
structure to mortgage-related pass-through securities described below. Payments
of principal and interest are passed through to holders of the securities and
are typically supported by some form of credit enhancement, such as over
collateralization, a letter of credit, surety bond, limited guarantee by another
entity or by priority to certain of the borrower's other securities. The degree
of credit enhancement varies, generally applying only until exhausted and
covering only a fraction of the security's par value. If the credit enhancement
of an asset-backed security held by the fund has been exhausted, and if any
required payments of principal and interest are not made with respect to the
underlying loans, the fund may experience loss or delay in receiving payment and
a decrease in the value of the security. Further details are set forth in the
Statement of Additional Information.

Mortgage-Related Securities. The fund may invest in mortgage-related securities,
including Government National Mortgage Association ("GNMA") Certificates
("Ginnie Maes"), Federal Home Loan Mortgage Corporation ("FHLMC") Mortgage
Participation Certificates ("Freddie Macs"), Federal National Mortgage
Association ("FNMA") Guaranteed Mortgage Certificates ("Fannie Maes"), and
Commercial Mortgage-Backed Securities ("CMBS"). Mortgage certificates are
mortgage-backed securities representing undivided fractional interests in pools
of mortgage-backed loans. These loans are made by mortgage bankers, commercial
banks, savings and loan associations and other lenders. Ginnie Maes are
guaranteed by the full faith and credit of the US Government, but Freddie Macs
and Fannie Maes are not.

US Government Securities. US Government securities include US Treasury bills,
notes and bonds and other obligations issued or guaranteed as to interest and
principal by the US Government, its agencies or instrumentalities. Obligations
issued or guaranteed as to interest and principal by the US Government, its
agencies or instrumentalities include securities that are supported by the full
faith and credit of the United States Treasury, securities that are supported by
the right of the issuer to borrow from the United States Treasury, discretionary
authority of the US Government agency or instrumentality, and securities
supported solely by the creditworthiness of the issuer.

Futures Contracts and Options on Futures. For hedging purposes, including
protecting the price or interest rate of securities that the Fund intends to
buy, the Fund may enter into futures contracts that relate to securities in
which they may directly invest and indices comprised of such securities and may
purchase and write call and put options on such contracts.

Substantially all futures contracts are closed out before settlement date or
called for cash settlement. A futures contract is closed out by buying or
selling an identical offsetting futures contract. Upon entering into a futures
contract, a Fund is required to deposit an initial margin with the Custodian for
the benefit of the futures broker. The initial margin serves as a "good faith"
deposit that the Fund will honor their futures commitments. Subsequent payments
(called "variation margin") to and from the broker are made on a daily basis as
the price of the underlying investment fluctuates.

Options on futures contracts give the purchaser the right to assume a position
at a specified price in a futures contract at any time before expiration of the
option contract. When trading futures contracts, the Fund will not commit more
than 5% of the market value of its total assets to initial margin deposits on
futures and premiums paid for options on futures.

Eurodollar Certificates of Deposit (ECDs), Eurodollar Time Deposits (ETDs) and
Yankee Certificates of Deposit (YCDs). ECDs are US dollar denominated
certificates of deposit issued by foreign branches of domestic banks. ETDs are
US dollar denominated deposits in foreign branches of US banks and foreign
banks. YCDs are US dollar denominated certificates of deposit issued by US
branches of foreign banks. Different risks than those associated with the
obligations of domestic banks may exist for ECDs, ETDs and YCDs because the
banks issuing these instruments, or their domestic or foreign branches, are not
necessarily subject to the same regulatory requirements that apply to domestic
banks, such as loan limitations, examinations and reserve, accounting, auditing,
recordkeeping and public reporting requirements.

-6-
<PAGE>

Section 4(2) Commercial Paper. The fund may also invest in commercial paper
issued in reliance on the so-called private placement exemption from
registration afforded by Section 4(2) of the Securities Act of 1933 ("Section
4(2) paper"). Section 4(2) paper is restricted as to disposition under the
Federal securities laws and generally is sold to institutional investors that
agree that they are purchasing the paper for investment and not with a view to
public distribution. Any resale by the purchaser must be in an exempt
transaction. Section 4(2) paper normally is resold to other institutional
investors like the fund through or with the assistance of the issuer or
investment dealers that make a market in Section 4(2) paper. Section 4(2) paper
will not be subject to the fund's 15% limitation on illiquid securities set
forth below where the Board of Trustees of the Investment Company (pursuant to
guidelines adopted by the Board) determines that a liquid trading market exists.

Repurchase Agreements. The fund may enter into repurchase agreements with banks
and other financial institutions, such as broker-dealers. In substance, a
repurchase agreement is a loan for which the fund receives securities as
collateral. Under a repurchase agreement, a fund purchases securities from a
financial institution that agrees to repurchase the securities at the fund's
original purchase price plus interest within a specified time (normally one
business day). The fund will limit repurchase transactions to those member banks
of the Federal Reserve System and broker-dealers whose creditworthiness Advisor
considers satisfactory. Should the counterparty to a transaction fail
financially, the fund may encounter delay and incur costs before being able to
sell the securities, or the fund could incur a loss. Further, the amount
realized upon the sale of the securities may be less than that necessary to
fully compensate the fund.

Portfolio Turnover. Because the fund will actively trade to benefit from
short-term yield disparities among different issues of fixed-income securities,
or otherwise to increase its income, the fund may be subject to a greater degree
of portfolio turnover than might be expected from a fund which invests
substantially all of its assets on a long-term basis. The portfolio turnover
rate cannot be predicted, but it is anticipated that the fund's annual turnover
rate generally fall within the range of 100-300% (excluding turnover of
securities having a maturity of one year or less). A high turnover rate (over
100%) will: (1) increase transaction expenses which will adversely affect a
fund's performance; and (2) result in increased brokerage commissions and other
transaction costs, and the possibility of realized capital gains.

SHAREHOLDER INFORMATION

PURCHASE OF FUND SHARES

Distribution and Eligible Investors. Shares of the funds are offered without a
sales commission by Russell Fund Distributors, Inc. (the Distributor), to
institutional and retail investors which invest for their own account or in a
fiduciary or agency capacity.

Minimum Initial and Subsequent Investments and Account Balance. The fund
requires a minimum initial investment of $1,000, with the exception of IRA
accounts, for which the minimum initial investment is $250. Subsequent
investments must be at least $100. An investment in the account (other than IRA
accounts) may be subject to redemption at the fund's discretion if the account
balance is less than $1,000 as a result of shareholder redemptions. The Transfer
Agent will give shareholders 60 days' notice that the account will be closed
unless an investment is made to increase the account balance to the $1,000
minimum. Failure to bring the account balance to $1,000 may result in the
Transfer Agent closing the account at the net asset value ("NAV") next
determined on the day the account is closed and mailing the proceeds to the
shareholder's address shown on the Transfer Agent's records. The fund reserves
the right to reject any purchase order. Investors purchasing fund assets through
a pension or other participation plan should contact their plan administrator
for further information on purchases.

Purchase Dates and Times. Fund shares may be purchased on any business day
without a sales commission. A business day is one on which the New York Stock
Exchange is open for regular trading. All purchases must be made in US dollars.
Purchase orders in good form (described below) and payments for fund shares by
check or by wire transfer must be received by the Transfer Agent prior to the
close of the regular trading session of the New York Stock Exchange, which is
ordinarily 4 p.m. Eastern time (the "Pricing Time"), to be effective on the date
received. If an order or payment is received after the Pricing Time, the order
will be effective on the next business day. Orders placed through a servicing
agent or broker-dealer that has a selling agreement with the Distributor or the
SSgA Funds must be received by the servicing agent or broker-dealer prior to the
Pricing Time. In addition, purchase orders received and accepted (1) prior to 12
noon Eastern time will purchase shares based on that day's closing net asset
value and earn dividends on the date of the purchase; and (2) at or after 12
noon Eastern time will purchase shares based on that day's closing net asset
value and earn the dividends determined on the next business day.

-7-
<PAGE>

additional information, including the IRA package, additional Applications or
other forms, call the Customer Service Department at 1-800-647-7327, or write:
SSgA Funds, P.O. Box 8317, Boston, MA 02266-8317. You may also access this
information online at www.ssgafunds.com.

To allow the Advisor to manage the fund most effectively, investors are strongly
urged to initiate all trades (investments, exchanges or redemptions of shares)
as early in the day as possible and to notify the Transfer Agent at least one
day in advance of transactions in excess of $25 million.

Mail. For new accounts, please mail the completed Application and check.
Additional investments should also be made by check. You must include the fund
name and account number on your check, or use the remittance form attached to
the confirmation statement (in the return envelope provided). All checks should
be made payable to the SSgA Funds or State Street Bank. If using a servicing
agent or broker-dealer, please verify with them before writing or mailing your
check. All purchase requests should be mailed to one of the following addresses:

<TABLE>
<CAPTION>
<S> <C>
Regular Mail: Registered, Express or Certified Mail:
SSgA Funds SSgA Funds
P.O. Box 8317 2 Heritage Drive
Boston, MA 02266-8317 North Quincy, MA 02171
</TABLE>

All purchases made by check should be in US dollars from a US bank. Third party
checks and checks drawn on credit card accounts will not be accepted.

Telephone Exchange Privilege. You may exchange a minimum of $100 of your shares
for shares of any other SSgA Fund, as long as the minimum investment requirement
is met. The fund offers this service without charge. To use this option, contact
the Customer Service Department at 1-800-647-7327. Shares are exchanged on the
basis of relative net asset value per share on the business day on which the
call is placed or upon written receipt of instructions in good form by the
Transfer Agent. Exchanges may be made over the phone if the registrations of the
two accounts are identical. If you purchased shares of the fund by check, the
shares must have been present in your account for 15 days before the exchange is
made. The exchange privilege will only be available in states which permit
exchanges and may be modified or terminated by the fund upon 60 days' written
notice to shareholders. For Federal income tax purposes, an exchange constitutes
a sale of shares, which may result in a capital gain or loss. Please contact
your tax advisor.

Management believes that market timing strategies may be disruptive to the fund.
For this reason, the Investment Company reserves the right to refuse or restrict
an exchange by any person if the Investment Company reasonably believes that an
exchange is part of a market timing strategy and that the fund may be adversely
affected by the exchange. Although the Investment Company will attempt to give
you prior notice whenever it is reasonably able to do so, it may impose these
restrictions at any time. Of course, your right to redeem shares would be
unaffected by these restrictions.

Each fund reserves the right to terminate or modify the exchange privilege in
the future.

Federal Funds Wire. You may make initial or subsequent investments by wiring
federal funds to State Street, as Transfer Agent, by:

1. Telephoning the Customer Service Department at 1-800-647-7327 between 8
a.m. and 4 p.m. Eastern time, and stating: (a) your account registration
number, address and social security or tax identification number; (b) the
name of the fund in which the investment is to be made and the account
number; and (c) the exact amount being wired.

2. Instructing the wiring bank to wire federal funds to:

State Street Bank and Trust Company
225 Franklin Street, Boston, MA 02110
ABA #0110-0002-8
DDA #9904-631-0
SSgA (Name of Fund) Fund(s)
Account Number and Registration
Dollar Amount Per Account (if one wire is to cover more than one
purchase)

If all wires, checks and transfers are not identified properly as instructed
above, the Transfer Agent may delay, reject and/or incorrectly apply the
settlement of your purchase. Any wires received at State Street Bank without a
corresponding call into the Customer Service Department will be purchased as
indicated on the wire at the next determined net asset value and will earn the
dividend declared on the next business day.

Purchase requests received via telephone prior to 12 noon Eastern time will
receive the net asset value next determined and be entitled to that day's
dividend provided the wire is received by State Street Bank by 4 p.m. Eastern
time. Purchase requests received after 12 noon Eastern time will receive the net
asset value next determined and begin earning dividends the following business
day.

-8-
<PAGE>

Automatic Investment Plan. Once the initial investment has been made, you may
make subsequent investments of at least $100 monthly, quarterly or annually by
direct deposit through Automatic Clearing House (ACH) by completing the
appropriate section of the Application and attaching a voided personal check to
code your account correctly with the bank instructions. You may make subsequent
investments monthly, quarterly or annually by deducting $100 or more from your
bank checking account. You may elect this option on the Application and call the
Customer Service Department at 1-800-647-7327 prior to 3 p.m. Eastern time for
additional automatic purchases, to change the amount of the existing automatic
purchase, or to stop it. Shares will be purchased at the offering price next
determined following receipt of the order by the Transfer Agent.

Systematic Exchange. The fund offers the option of having $100 or more exchanged
within the SSgA Funds for accounts with identical registrations. You can choose
the date, the frequency (monthly, quarterly or annually) and the amount.
Exchanges may be done among the SSgA Funds once the minimum initial investment
per fund has been satisfied.

Third Party Transactions. If you are purchasing fund shares through a program of
services offered by a financial intermediary, such as a bank, broker-dealer,
investment advisor or others, you may be required by the intermediary to pay
additional fees. You should contact the intermediary for information concerning
what additional fees, if any, may be charged.

In-Kind Exchange of Securities. State Street may, at its discretion, permit you
to purchase shares through the exchange of other securities you own. Any
securities exchanged must meet the following criteria:

1. The investment objective, policies and limitations must match that of the
fund;

2. They must have a readily ascertainable market value;

3. They must be liquid;

4. They must not be subject to restrictions on resale; and

5. The market value of any securities exchanged, plus any cash, must be at least
$25 million; State Street reserves the right to make exceptions to this minimum
at its discretion.

Shares purchased in exchange for securities generally may not be redeemed or
exchanged until the transfer has settled--usually within 7 days following the
purchase exchange.

The basis of the exchange will depend upon the relative net asset value of the
shares purchased and securities exchanged. Securities accepted by the fund will
be valued in the same manner as the fund values its assets. Any interest earned
on the securities following their delivery to the Transfer Agent and prior to
the exchange will be considered in valuing the securities. All interest,
dividends subscription or other rights attached to the securities become the
property of the fund, along with the securities.

REDEMPTION OF FUND SHARES

Fund shares may be redeemed on any business day at the net asset value next
determined after the receipt of a redemption request in good order by following
one of the methods described below. Typically, payments will be made as soon as
possible (but will ordinarily not exceed seven days) and will be mailed to the
shareholder's address of record. Upon request, redemption proceeds will be wire
transferred to the shareholder's account at a domestic commercial bank that is a
member of the Federal Reserve System. A dividend will be paid according to the
established dividend payment schedule on shares redeemed if the redemption
request is received by State Street after 12 noon Eastern time. Redemption
requests received before 12 noon Eastern time will not be entitled to that day's
dividend. If Fund shares were purchased by check or an automatic investment
program ("AIP") and the shareholder elects to redeem shares within 15 days of
such purchase, the shareholder may experience delays in receiving redemption
proceeds. The Fund will generally postpone sending redemption proceeds from such
investment until the Fund can verify that the check or AIP investment has been
collected. There will be no such delay for redemptions following investments
paid by federal funds wire or by bank cashier's check, certified check or
treasurer's check.

Redemption requests must be received prior to 4 p.m. Eastern time in order to be
effective on the date received. Shareholder servicing agents with underlying
shareholders in omnibus accounts who receive redemption requests by 4 p.m.
Eastern time may transmit the request to the Transfer Agent by 9 a.m. Eastern
time the next business day and receive the dividend as of the day the redemption
request was originally made by the underlying shareholder, pursuant to a duly
executed shareholder servicing agreement with the SSgA Funds or the Distributor.

-9-
<PAGE>

the investment of excess cash into or the withdrawal of required cash from the
fund on a daily basis. Where the Advisor acts as the money manager, the Advisor
will receive an advisory fee from the client.

Telephone Redemption. Shareholders may normally redeem fund shares by
telephoning the Customer Service Department at 1-800-647-7327 between 8 a.m. and
4 p.m. Eastern time. You must complete the appropriate section of the
application and attach a voided check to code your account correctly with the
bank information before utilizing this feature. The fund and the Transfer Agent
will employ reasonable procedures to confirm that instructions communicated by
telephone are properly authorized. Neither the fund, the Distributor nor the
Transfer Agent will not be responsible for any loss or expense for executing
instructions that are deemed to be authorized and genuine after following
reasonable procedures. These procedures include recording telephonic
instructions, mailing to the shareholder a written confirmation of the
transaction, performing a personal identity test with private information not
likely to be known by other individuals, and restricting mailing of redemptions
to your address of record, if the address has not been changed within 60 days of
the redemption request. To the extent the Transfer Agent fails to use reasonable
procedures as a basis for its belief, it and/or its service contractors may be
liable for telephone instructions that prove to be fraudulent or unauthorized.
The fund, the Distributor or the Transfer Agent will be responsible for the
authenticity of terminal access instructions only if it acts with willful
misfeasance, bad faith or gross negligence.

By Wire. Proceeds exceeding $1,000 may be sent via wire transfer to the
investor's pre-designated bank. Proceeds may be sent, depending on the fund, on
the same or the next day. Although the fund does not charge a fee for this
feature, the investor's bank may charge a fee for receiving the wire. Investors
are advised to check with their bank before requesting this feature. Requests
received prior to 12 noon Eastern time will have the shares redeemed using that
day's closing price with the proceeds wired the same day, unless the request is
for 100% of the account. Because Yield Plus has a fluctuating NAV, redemption
requests for 100% of the account (if received prior to 12 noon Eastern time)
will have 100% of the shares redeemed using that day's closing price, with 95%
of the proceeds being wired the same day and the remaining 5% automatically
wired the following business day. All requests received after 12 noon Eastern
time will have the shares redeemed using that day's closing price and the
proceeds wired the following business day. Redemption requests received prior to
12 noon Eastern time will not be eligible for that day's interest.

Systematic Withdrawal Plan by Check. If your account balance is over $10,000,
you may request periodic cash withdrawals automatically be paid to you or any
person you designate. If the checks are returned to the fund as undeliverable or
remain uncashed for six months or more, the systematic withdrawal plan will be
cancelled and the amount will be reinvested in the relevant fund at the per
share net asset value determined as of the date of the cancellation of the
checks. No interest will accrue on the amounts represented by the uncashed
distributions or redemption checks.

Systematic Withdrawal Plan by ACH. You may make automatic withdrawals of $100 or
more by completing the appropriate sections of the Application and attaching a
voided check to code your account correctly with the bank information. You may
also choose to establish this option with pre-designated withdrawal dates and
amounts, if the account balance is over $10,000 or by calling the Customer
Service Department at 1-800-647-7327, prior to 3 p.m. Eastern time, requesting
the withdrawal. Withdrawals by telephone do not require a minimum account
balance provided the fund's minimum investment is maintained.

Please note that proceeds from ACH withdrawals will be transmitted to the
investor's bank two days after the withdrawal.

Check. Proceeds less than $50,000 may be mailed only to the address shown on the
Transfer Agent's registration record, provided that the address has not been
changed within 60 days of the redemption request. Shares will be redeemed using
that day's closing price. All proceeds by check will normally be sent the
following business day.

DURING PERIODS OF DRASTIC ECONOMIC OR MARKET CHANGES, SHAREHOLDERS USING THIS
METHOD MAY ENCOUNTER DELAYS. IN SUCH EVENT, YOU SHOULD CONSIDER USING THE MAIL
REDEMPTION PROCEDURE DESCRIBED BELOW.

Mail. In certain circumstances, a shareholder will need to make a request to
sell shares in writing (please use the addresses for purchases by mail listed
under "Purchase of Fund Shares"). The shareholder may need to include additional
items with the request, as shown in the table below. Shareholders may need to
include a signature guarantee, which protects them against fraudulent orders. A
signature guarantee will be required if:

1. Your address of record has changed within the past 60 days;

2. You are redeeming more than $50,000 worth of shares; or

3. You are requesting payment other than by a check mailed to the address of
record and payable to the registered owner(s).

Signature guarantees can usually be obtained from the following sources:

1. A broker or securities dealer, registered with a domestic stock exchange;

2. A federal savings, cooperative or other type of bank;

-10-
<PAGE>

3. A savings and loan or other thrift institution;

4. A credit union; or

5. A securities exchange or clearing agency.

Please check with the institution prior to signing to ensure that they are an
acceptable signature guarantor. A NOTARY PUBLIC CANNOT PROVIDE A SIGNATURE
GUARANTEE.

<TABLE>
<CAPTION>
<S> <C>
Seller Requirements for Written Requests

Owner of individual, joint, [ ] Letter of instruction, signed by all persons
sole proprietorship, authorized to sign for the account stating general
UGMA/UTMA (custodial titles/capacity, exactly as the account is
accounts for minors) or registered; and
general partner accounts [ ] Signature guarantee, if applicable (see above).
-------------------------------------------------------------------------------------------
Owners of corporate or [ ] Letter of instruction signed by authorized
association accounts person(s), stating capacity as indicated by the
corporate resolution;
[ ] Corporate resolution, certified within the past
90 days; and
[ ] Signature guarantee, if applicable (see above).
-------------------------------------------------------------------------------------------
Owners or trustees of trust [ ] Letter of instruction, signed by all trustees;
accounts [ ] If the trustees are not named in the
registration, please provide a copy of the trust
document certified within the past 60 days; and
[ ] Signature guarantee, if applicable (see above).
-------------------------------------------------------------------------------------------
Joint tenancy shareholders [ ] Letter of instruction signed by surviving
whose co-tenants are deceased tenant(s);
[ ] Certified copy of the death certificate; and
[ ] Signature guarantee, if applicable (see above).
</TABLE>

Please contact the Customer Service Department at 1-800-647-7327 for questions
and further instructions.

The fund may pay any portion of the redemption amount in excess of $25 million
by a distribution in kind of readily marketable securities from the portfolio of
the fund in lieu of cash. You will incur brokerage charges on the sale of these
portfolio securities. The fund reserves the right to suspend the right of
redemption or postpone the date of payment if emergency conditions, as specified
in the 1940 Act or as determined by the Securities and Exchange Commission,
should exist.

DISTRIBUTION SERVICES AND SHAREHOLDER SERVICING ARRANGEMENTS

-11-
<PAGE>

may cost you more than paying other types of sales charges. Payments to the
Distributor, as well as payments from the fund to service organizations
providing shareholder services to the fund, are not permitted by the Plan to
exceed .25% of a fund's average net asset value per year. Any payments that are
required to be made to the Distributor or service organization that cannot be
made because of the .25% limitation may be carried forward and paid in
subsequent years so long as the Plan is in effect.

Service organizations providing shareholder services to the fund will be
responsible for prompt transmission of purchase and redemption orders and may
charge fees for their services.

PRICING OF FUND SHARES

The fund determines the price per share once each business day at 4:00 p.m.
Eastern time, or the close of the New York Stock Exchange, if earlier. The price
is computed by dividing the current value of the fund's assets, less its
liabilities, by the number of shares of the fund outstanding and rounding to the
nearest cent.

The fund values portfolio securities at market value. The fund values securities
for which market quotations are not readily available at fair value, as
determined in good faith pursuant to procedures established by the Board of
Trustees.

Debt obligation securities maturing within 60 days of the valuation date are
valued at amortized cost unless the Board determines that the amortized cost
method does not represent market value.

DIVIDENDS AND DISTRIBUTIONS

The Board of Trustees intends to declare dividends on shares of the fund from
net investment income daily and have them payable as of the last business day of
each month. Distributions will be made at least annually from net short- and
long-term capital gains, if any. In most instances, distributions will be
declared and paid in mid-October with additional distributions declared and paid
in December, if required, for the Fund to avoid imposition of a 4% federal
excise tax on undistributed capital gains. The fund does not expect any material
long-term capital gains or losses.

Dividends declared in October, November or December and payable to shareholders
of record in such months will be deemed for Federal income tax purposes to have
been paid by the fund and received by shareholders on December 31 of that year
if the dividend is paid prior to February 1 of the following year.

Income dividends and capital gains distributions will be paid in additional
shares at their net asset value on the record date unless you have elected to
receive them in cash. You may make this election by giving 30 days' written
notice to the Transfer Agent. If it is determined that the US Postal Service
cannot properly deliver fund mailings to you, or if a check remains uncashed for
at least six months, the cash election will be changed automatically. Future
dividends and other distributions will be reinvested in additional shares of the
relevant fund until you notify the SSgA Funds in writing of the correct address.
You must also request in writing that the election to receive dividends and
other distributions in cash be reinstated. In addition, following the six-month
period, any undeliverable or uncashed checks will be cancelled and the amounts
will be reinvested in the relevant fund at the per share net asset value
determined as of the date of cancellation of the checks. No interest will accrue
on the amounts represented by the uncashed distribution or redemption checks.

Any dividend or capital gain distribution paid by the fund shortly after a
purchase of shares will reduce the per share net asset value of the fund by the
amount of the dividend or distribution. In effect, the payment will represent a
return of capital to the shareholder. However, you will be subject to taxes with
respect to such dividend or distribution.

Distribution Option. You can choose from four different distribution options as
indicated on the account Application:

[ ] Reinvestment Option--Dividends and capital gains distributions will be
automatically reinvested in additional shares of the fund. If you do not
indicate a choice on the Application, this option will be automatically
assigned.

[ ] Income-Earned Option--Capital gain distributions will be automatically
reinvested, but a check or wire will be sent for each dividend
distribution.

[ ] Cash Option--A check, wire or direct deposit (ACH) will be sent for each
dividend and capital gain distribution.

[ ] Direct Dividends Option--Dividends and capital gain distribution will be
automatically invested in another identically registered SSgA Fund.

-12-
<PAGE>

The Transfer Agent will wire dividends (if that option is elected) to a
pre-designated bank by the first business day of the following month in which
the dividend is payable. Investors are urged to verify with their bank whether
it charges a fee to accept this wire. Direct deposits through ACH are
transmitted to the investor's account two business days after the payable date
of the distributions, and generally are not charged a fee by the bank.

TAXES

Dividends from net investment income and distributions of net short-term capital
gains are taxable to you as ordinary income under federal income tax laws
whether paid in cash or in additional shares. Distributions from net long-term
gains are taxable as long-term gains regardless of the length of time you have
held the shares and whether you were paid in cash or additional shares.

The fund's distributions, whether received as cash or reinvested in additional
shares of the fund, may be subject to federal income taxes. Dividends and
distributions may also be subject to state or local taxes. Depending on the tax
rules in the state in which you live, a portion of the dividends paid by the
fund attributable to direct obligations of the US Treasury and certain agencies
may be exempt from state and local taxes.

Selling your fund shares is a taxable event and may result in capital gain or
loss. A capital gain or loss may be realized from an ordinary redemption of
shares or an exchange of shares between two mutual funds (or two series of
portfolios of a mutual fund). Any loss incurred on the sale or exchange of fund
shares held for six months or less will be treated as a long-term loss to the
extent of long-term capital gain dividends received with respect to such shares.

You will be notified after each calendar year of the amount of income dividends
and net capital gains distributed. You will also be advised of the percentage,
if any, of the dividends by the fund that are exempt from federal income tax and
the portion, if any, of those dividends that is a tax preference item for
purposes of the alternative minimum tax. The fund is required to withhold a
legally determined portion of all taxable dividends, distributions and
redemption proceeds payable to any noncorporate shareholder that does not
provide the fund with the shareholder's correct taxpayer identification number
or certification that the shareholder is not subject to backup withholding.

The tax discussion in this prospectus is only a summary of certain federal
income tax issues generally affecting the fund and its shareholders.
Circumstances among investors may vary, so you are encouraged to discuss
investment in the fund with your tax advisor.

-13-
<PAGE>

FINANCIAL HIGHLIGHTS

The financial highlights table is intended to help you understand a fund's
financial performance for the past 5 years (or since inception if a fund has
been offered for less than 5 years). Certain information reflects financial
results for a single fund share. The total returns in the table represent the
rate that an investor would have earned (or lost) on an investment in a fund
(assuming reinvestment of all dividends and distributions). This information has
been audited by PricewaterhouseCoopers LLP, whose report, along with the fund's
financial statements, are included in the annual report, which is available upon
request by calling the Distributor at 1-800-647-7327.

<TABLE>
<CAPTION>
Years Ended August 31,

1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $10.01 $10.00 $10.00 $9.99
------ ------ ------ -----
INCOME FROM INVESTMENT OPERATIONS:
Net investment income .57 .54 .56 .56
Net realized and unrealized gain on
investment (.04) .01 .00 .02
----- ------ ------ ------
Total From Investment Operations .53 .55 .56 .58
----- ------ ------ ------
LESS DISTRIBUTIONS:
Net investment income (.57) (.54) (.56) (.56)
In excess of net realized gain on
investments -- -- -- (.01)
-- -- -- ------
Total Distributions (.57) (.54) (.56) (.57)
----- ------ ------ ------
NET ASSET VALUE, END OF PERIOD $9.97 $10.01 $10.00 $10.00
===== ====== ====== ======
TOTAL RETURN(%)
RATIOS/SUPPLEMENTAL DATA 5.40 5.67 5.73 6.01
Net assets, end of period ($omitted) 672,465 840,055 933,485 1,447,097

Ratios to average net assets (%):

Operating expenses .41 .38 .36 .38

Net investment income 5.66 5.42 5.59 5.64

Portfolio turnover rate (%) 249.10 92.38 97.05 199.69
</TABLE>

-14-
<PAGE>

SSgA FUNDS

SSgA Money Market Fund

SSgA US Government Money Market Fund

SSgA Tax Free Money Market Fund

SSgA Yield Plus Fund

SSgA Intermediate Fund

SSgA Bond Market Fund

SSgA High Yield Bond Fund

SSgA Growth and Income Fund

SSgA S&P 500 Index Fund

SSgA Matrix Equity Fund

SSgA Small Cap Fund
(Closed to new investors as of August 31, 1998)

SSgA Special Equity Fund

SSgA Tuckerman Active REIT Fund

SSgA Aggressive Equity Fund

SSgA Emerging Markets Fund

SSgA Active International Fund

SSgA International Growth Opportunities Fund

SSgA Life Solutions Growth Fund

SSgA Life Solutions Balanced Fund

SSgA Life Solutions Income and Growth Fund

SSgA IAM SHARES Fund

-15-
<PAGE>

ADDITIONAL INFORMATION ABOUT THE FUND

A Statement of Additional Information includes additional information about the
fund. The Statement of Additional Information is incorporated into this
Prospectus by reference. Additional information about the fund's investments is
available in the fund's annual and semi-annual reports to shareholders.

The Statement of Additional Information and the fund's annual and semi-annual
reports are available, without charge, upon request. To request a Statement of
Additional Information, the fund's annual or semi-annual report, other
information about the fund or to make any shareholder inquiry, please contact
the fund at:

Russell Fund Distributors, Inc.

One International Place

Boston, Massachusetts 02110

1-800-997-7327

You also can review and copy information about the fund, including the Statement
of Additional Information, at the Securities and Exchange Commission's Public
Reference Room in Washington, D.C. You can receive information on the operation
of the Public Reference Room by calling 1-800-SEC-0330. Copies also may be
obtained, upon payment of a duplicating fee, by writing the Securities and
Exchange Commission's Public Reference Section, Washington, D.C. 20549-6009. The
SEC also maintains a website (www.sec.gov) that contains the Statement of
Additional Information and other information about the fund. You may also access
the SSgA Funds' website at www.ssgafunds.com.

SSgA Funds' Investment Company Act File No. 811-5430

-16-
<PAGE>

Filed pursuant to Rule 485(a)
File Nos. 33-19229; 811-5430

SSgA FUNDS
One International Place
Boston, Massachusetts 02110
1-800-997-7327
www.ssgafunds.com

EMERGING MARKETS FUND

The Emerging Markets Fund seeks to provide maximum total return, primarily
through capital appreciation, by investing primarily in securities of foreign
issuers.

PROSPECTUS DATED _______________, 1999

-1-

<PAGE>

TABLE OF CONTENTS

<TABLE>
<CAPTION>
<S> <C>
INVESTMENT STRATEGIES AND PRINCIPAL RISKS.................................................... 3

FUNDAMENTAL INVESTMENT OBJECTIVE.......................................................... 3
PRINCIPAL INVESTMENT STRATEGIES........................................................... 3
PRINCIPAL RISKS OF INVESTING IN THE FUND.................................................. 3
PERFORMANCE............................................................................... 4

FEES AND EXPENSES OF THE FUND................................................................ 4

MANAGEMENT OF THE FUND....................................................................... 5

ADDITIONAL INFORMATION ABOUT THE FUND'S OBJECTIVES, INVESTMENT STRATEGIES AND RISKS.......... 5

SHAREHOLDER INFORMATION...................................................................... 6

PURCHASE OF FUND SHARES................................................................... 6
REDEMPTION OF FUND SHARES................................................................. 8
DISTRIBUTION SERVICES AND SHAREHOLDER SERVICING ARRANGEMENTS.............................. 10
PRICING OF FUND SHARES.................................................................... 10
DIVIDENDS AND DISTRIBUTIONS............................................................... 10
TAXES..................................................................................... 11

FINANCIAL HIGHLIGHTS......................................................................... 13

ADDITIONAL INFORMATION ABOUT THE FUND........................................................ 15
</TABLE>

-2-
<PAGE>

INVESTMENT STRATEGIES AND PRINCIPAL RISKS

FUNDAMENTAL INVESTMENT OBJECTIVE

The fund's investment objective is to provide maximum total return, primarily
through capital appreciation, by investing primarily in securities of foreign
issuers.

This objective may be changed only with the approval of a majority of the fund's
shareholders as defined in the Investment Company Act of 1940 (the 1940 Act).

PRINCIPAL INVESTMENT STRATEGIES

Under normal circumstances, the fund will invest primarily in equity securities
issued by companies domiciled, or doing a substantial portion of their business,
in countries determined by the fund's management team to have a developing or
emerging economy or securities market. The fund will diversify investments
across many countries (typically at least 10) in order to reduce the volatility
associated with specific markets. The countries in which the fund invests will
be expanded over time as the stock markets in other countries evolve and in
countries for which subcustodian arrangements are approved by the fund's Board
of Trustees. Nearly all of the fund's assets will be invested in equity, and
equity-like, securities concentrated in emerging market countries (i.e.,
typically over 85%). Currently, the definition of an emerging market is that
gross domestic product per capita is less than $10,000 per year. However, due to
the status of a country's stock market, the country may still qualify as an
emerging market even if it exceeds this amount. In determining securities in
which to invest, the fund's management team will evaluate the countries'
economic and political climates with prospects for sustained macro and micro
economic growth. The fund's management team will and take into account
traditional securities valuation methods, including (but not limited to) an
analysis of price in relation to assets, earnings, cash flows, projected
earnings growth, inflation, and interest rates. Liquidity and transaction costs
will also be considered. Risks of emerging markets are discussed in the
Principal Risks section.

Through the use of proprietary evaluation models, the fund invests primarily in
the International Finance Corporation Investable (IFCI) Index countries. As the
IFCI Index introduces new emerging market countries, the fund will expand to
gain exposure to new emerging countries.

PRINCIPAL RISKS OF INVESTING IN THE FUND

Emerging Markets. Investments in emerging or developing markets involve exposure
to economic structures that are generally less diverse and mature, and to
political systems which have less stability than those of more developed
countries. Emerging market securities are subject to currency transfer
restrictions and may experience delays and disruptions in securities settlement
procedures.

International Securities. A fund's return and net asset value may be
significantly affected by political or economic conditions and regulatory
requirements in a particular country. Foreign markets, economies and political
systems may be less stable than US markets, and changes in exchange rates of
foreign currencies can affect the value of a fund's foreign assets. Foreign laws
and accounting standards typically are not as strict as they are in the US and
there may be less public information available about foreign companies.

Equity Securities. The value of equity securities will rise and fall in response
to the activities of the company that issued the stock, general market
conditions, and/or economic conditions.

-3-
<PAGE>

PERFORMANCE

Annual Total Returns - Emerging Markets

[bar chart]

1995 -- -7.89%
1996 -- 14.88%
1997 -- -8.81%
1998 -- -15.94%

Best Quarter - September 30, 1994: 29.65%
Worst Quarter - December 31, 1997: (21.41%)

The following table further illustrates the risks of investing in the fund by
showing how the fund's average annual returns for 1 year and since the
fund's inception compare to the returns of a broad-based securities market
index.

Average annual total returns
For the periods ended December 31, 1998

<TABLE>
<CAPTION>
1 Year Inception
------ ---------
<S> <C> <C>
Emerging Markets ................ (15.94%) (2.61%)
</TABLE>

FEES AND EXPENSES OF THE FUND

This table describes the fees and expenses that you may pay if you buy and hold
shares of the fund.

<TABLE>
<CAPTION>
Shareholder Fees (fees paid directly from your investment)
<S> <C>
Maximum Sales Charge (Load) Imposed on Purchases None
Maximum Deferred Sales Charge (Load) None
Maximum Sales Charge (Load) Imposed on Reinvested
Dividends or Other Distributions None
Redemption Fee None
Exchange Fee None
Maximum Account Fee None

<CAPTION>
Annual Fund Operating Expenses
(expenses that are deducted from fund assets)

(as a percentage of average daily net assets)
Advisory Fee(1) .75%
Distribution and Service (12b-1) Fees(1), (2) .12
Total Other Expenses(1) .51
---
Total Annual Fund Operating Expenses(1) 1.38%
=====
</TABLE>

Example

This example is intended to help you compare the cost of investing in the fund
with the cost of investing in other mutual funds.

- --------
(1) The Advisor has voluntarily agreed to reimburse the Fund for all expenses
in excess of 1.25% of average daily net assets on an annual basis. The net
annual Advisory fee after reimbursement is .62% of average daily net
assets. The total operating expenses of the fund after reimbursement would
be 1.25% of average daily net assets on an annual basis. This agreement
will remain in effect for the current fiscal year.

(2) The ratio includes .09% for 12b-1 Distribution and .03% for 12b-1
Shareholder Servicing Fees.

<PAGE>

operating expenses remain the same. Although your actual costs may be higher or
lower, based on these assumptions, your costs would be:

<TABLE>
<CAPTION>
<S> <C> <C> <C>
1 year 3 years 5 years 10 years
$ $ $ $
= = = =
</TABLE>

Long-term shareholders of the fund may pay more in Rule 12b-1 fees than the
economic equivalent of the maximum front-end sales charge permitted by the
National Association of Securities Dealers, Inc.

MANAGEMENT OF THE FUND

For these services, the fund pays State Street an advisory fee, calculated daily
and paid monthly, of 0.62% (after fee reimbursement) of the average daily net
asset value of the fund.

Mr. Brad Aham, CFA, Principal, is the portfolio manager primarily responsible
for investment decisions regarding the fund. He joined the firm in 1993. Mr.
Aham has worked with the Active Emerging Markets product since its inception,
and he manages several institutional funds. In addition to managing portfolios,
he performs quantitative and qualitative research on SSgA. There are three other
portfolio managers who assist in managing the fund.

ADDITIONAL INFORMATION ABOUT THE FUND'S
OBJECTIVES, INVESTMENT STRATEGIES AND RISKS

Equity Securities. The fund may invest in common and preferred equity securities
publicly traded in the United States or in foreign countries on developed or
emerging markets. The fund's equity securities may be denominated in foreign
currencies and may be held outside the United States. Certain emerging markets
are closed in whole or part to the direct purchase of equity securities by
foreigners. In these markets, the fund may be able to invest in equity
securities solely or primarily through foreign government authorized pooled
investment vehicles.

Foreign Government Securities. Foreign government securities which the fund may
invest in generally consist of obligations issued or backed by the national,
state or provincial government or similar political subdivisions or central
banks in foreign countries. Foreign government securities also include debt
obligations of supranational entities, which include international organizations
designated or backed by governmental entities to promote economic reconstruction
or development, international banking institutions and related government
agencies. These securities also include debt securities of "quasi-government
agencies" and debt securities denominated in multinational currency units of an
issuer. The fund will not invest a material percentage of its assets in
sovereign debt.

-5-
<PAGE>

SHAREHOLDER INFORMATION

PURCHASE OF FUND SHARES

Minimum Initial and Subsequent Investments and Account Balance. The fund
requires a minimum initial investment of $1,000, with the exception of IRA
accounts, for which the minimum initial investment is $250. Subsequent
investments must be at least $100. An investment in the account (other than IRA
accounts) may be subject to redemption at the fund's discretion if the account
balance is less than $1,000 as a result of shareholder redemptions. The Transfer
Agent will give shareholders 60 days' notice that the account will be closed
unless an investment is made to increase the account balance to the $1,000
minimum. Failure to bring the account balance to $1,000 may result in the
Transfer Agent closing the account at the net asset value (NAV) next determined
on the day the account is closed and mailing the proceeds to the shareholder's
address shown on the Transfer Agent's records. The fund reserves the right to
reject any purchase order. If you are purchasing fund assets through a pension
or other participation plan, you should contact your plan administrator for
further information on purchases.

Purchase Dates and Times. Fund shares may be purchased on any business day. A
business day is one on which the New York Stock Exchange is open for regular
trading. All purchases must be made in US dollars. Purchase orders in good form
(described below) and payments for fund shares by check or by wire transfer must
be received by the Transfer Agent prior to the close of the regular trading
session of the New York Stock Exchange, which is ordinarily 4 p.m. Eastern time
(the "Pricing Time"), to be effective on the date received. If an order or
payment is received after the Pricing Time, the order will be effective on the
next business day. Orders placed through a servicing agent or broker-dealer that
has a selling or servicing agreement with the Distributor or the SSgA Funds must
be received by the servicing agent or broker-dealer prior to the Pricing Time.

Order and Payment Procedures. There are several ways to invest in the funds. The
funds require a purchase order in good form, which consists of a completed and
signed Application for each new account, unless the account is opened through a
third party which has a signed agreement with the Distributor or the SSgA Funds
and does not require a completed application to be submitted to the SSgA Funds.
For additional information, including the IRA package, additional Applications
or other forms, call the Customer Service Department at 1-800-647-7327, or
write: SSgA Funds, P.O. Box 8317, Boston, MA 02266-8317. You may also access
this information online at www.ssgafunds.com.

Mail. For new accounts, please mail the completed Application and check.
Additional investments should also be made by check. You must include the fund
name and account number on your check, or use the remittance form attached to
the confirmation statement (in the return envelope provided). All checks should
be made payable to the SSgA Funds or State Street Bank. If using a servicing
agent or broker-dealer, please verify with them before wiring and mailing your
check. All purchase requests should be mailed to one of the following addresses:

<TABLE>
<CAPTION>
<S> <C>
Regular Mail: Registered, Express or Certified Mail:
SSgA Funds SSgA Funds
P.O. Box 8317 2 Heritage Drive
Boston, MA 02266-8317 North Quincy, MA 02171
</TABLE>

All purchases made by check should be in US dollars from a US bank. Third party
checks and checks drawn on credit card accounts will not be accepted.

-6-
<PAGE>

Each fund reserves the right to terminate or modify the exchange privilege in
the future.

Federal Funds Wire. You may make initial or subsequent investments by wiring
federal funds to State Street, as Transfer Agent, by:

1. Telephoning the Customer Service Department at 1-800-647-7327 between 8 a.m.
and 4 p.m. Eastern time, and stating: (a) your account registration number,
address and social security or tax identification number; (b) the name of
the fund in which the investment is to be made and the account number; and
(c) the exact amount being wired.

2. Instructing the wiring bank to wire federal funds to:
State Street Bank and Trust Company
225 Franklin Street, Boston, MA 02110
ABA #0110-0002-8
DDA #9904-631-0
SSgA (Name of Fund) Fund(s)
Account Number and Registration
Dollar Amount Per Account (if one wire is to cover more than one
purchase)

1. The investment objective, policies and limitations must match that of the
fund;

2. They must have a readily ascertainable market value;

3. They must be liquid;

4. They must not be subject to restrictions on resale; and

5. The market value of any securities exchanged, plus any cash, must be at least
$25 million; State Street reserves the right to make exceptions to this
minimum at its discretion.

Shares purchased in exchange for securities generally may not be redeemed or
exchanged until the transfer has settled--usually within 7 days following the
purchase exchange.

-7-
<PAGE>

their delivery to the Transfer Agent and prior to the exchange will be
considered in valuing the securities. All interest, dividends subscription or
other rights attached to the securities become the property of the fund, along
with the securities.

REDEMPTION OF FUND SHARES

Fund shares may be redeemed on any business day at the net asset value next
determined after the receipt of a redemption request in good order by following
one of the methods described below. Typically, payments will be made as soon as
possible (but will ordinarily not exceed seven days) and will be mailed to your
address of record. Upon request, redemption proceeds will be wire transferred to
your account at a domestic commercial bank that is a member of the Federal
Reserve System. If you purchased fund shares by check or an automatic investment
program (AIP) and you elect to redeem shares within 15 days of the purchase, you
may experience delays in receiving redemption proceeds. In this case, the fund
will generally postpone sending redemption proceeds until it can verify that the
check or AIP investment has been collected. There will be no such delay for
redemptions following investments paid by federal funds wire or by bank
cashier's check, certified check or treasurer's check.

Redemption requests must be received prior to 4 p.m. Eastern time in order to be
effective on the date received. Shareholder servicing agents with underlying
shareholders in omnibus accounts who receive redemption requests by 4 p.m.
Eastern time may transmit the request to the Transfer Agent by 9 a.m. Eastern
time the next business day to receive the net asset value and dividend as of the
prior business day, pursuant to a duly executed Shareholder Servicing Agreement
with the SSgA Funds or the Distributor.

By Wire. Proceeds exceeding $1,000 may be sent via wire transfer to your bank as
previously indicated on your application or letter of instruction in good order.
The shares will be redeemed from the account on the day the redemption
instructions are received and the proceeds wire will be sent the following
business day. Although the fund does not charge a fee for this feature, your
bank may charge a fee for receiving the wire. Please check with your bank before
requesting this feature. If bank instructions are not indicated on the account,
a signature guaranteed letter of instruction is required to add the bank
information to send proceeds via wire.

Please note that proceeds from ACH withdrawals will be transmitted to the
investor's bank two days after the withdrawal.

DURING PERIODS OF DRASTIC ECONOMIC OR MARKET CHANGES, SHAREHOLDERS USING THIS
METHOD MAY ENCOUNTER DELAYS. IN SUCH EVENT, YOU SHOULD CONSIDER USING THE MAIL
REDEMPTION PROCEDURE DESCRIBED BELOW.

-8-
<PAGE>

1. Your address of record has changed within the past 60 days;

2. You are redeeming more than $50,000 worth of shares; or

3. You are requesting payment other than by a check mailed to the address of
record and payable to the registered owner(s).

Signature guarantees can usually be obtained from the following sources:

1. A broker or securities dealer, registered with a domestic stock exchange;

2. A federal savings, cooperative or other type of bank;

3. A savings and loan or other thrift institution;

4. A credit union; or

5. A securities exchange or clearing agency.

Please check with the institution prior to signing to ensure that they are an
acceptable signature guarantor. A NOTARY PUBLIC CANNOT PROVIDE A SIGNATURE
GUARANTEE.

<TABLE>
<CAPTION>
Seller Requirements for Written Requests
<S> <C>
Owner of individual, joint, [ ] Letter of instruction, signed by all persons
sole proprietorship, authorized to sign for the account stating general
UGMA/UTMA (custodial titles/capacity, exactly as the account is
accounts for minors) or registered; and
general partner accounts [ ] Signature guarantee, if applicable (see above).
------------------------------ ------------------------------------------------------------
Owners of corporate or [ ] Letter of instruction signed by authorized
association accounts person(s), stating capacity as indicated by the
corporate resolution;
[ ] Corporate resolution, certified within the past
90 days; and
[ ] Signature guarantee, if applicable (see above).
------------------------------ ------------------------------------------------------------
Owners or trustees of trust [ ] Letter of instruction, signed by all trustees;
accounts [ ] If the trustees are not named in the
registration, please provide a copy of the trust
document certified within the past 60 days; and
[ ] Signature guarantee, if applicable (see above).
------------------------------ ------------------------------------------------------------
Joint tenancy shareholders [ ] Letter of instruction signed by surviving
whose co-tenants are deceased tenant(s);
[ ] Certified copy of the death certificate; and
[ ] Signature guarantee, if applicable (see above).
</TABLE>

-9-
<PAGE>

Please contact the Customer Service Department at 1-800-647-7327 for questions
and further instructions.

DISTRIBUTION SERVICES AND SHAREHOLDER SERVICING ARRANGEMENTS

The fund has adopted a distribution plan pursuant to Rule 12b-1 (the Plan) under
the Investment Company Act of 1940. The Plan allows the fund to pay distribution
and other fees for the sale and distribution of fund shares and for services
provided to shareholders. Because these fees are paid out of fund assets on an
ongoing basis, over time these fees will increase the cost of your investment
and may cost you more than paying other types of sales charges. Payments to the
Distributor, as well as payments from the fund to service organizations
providing shareholder services to the fund, are not permitted by the Plan to
exceed .25% of a fund's average net asset value per year. Any payments that are
required to be made to the Distributor or service organization that cannot be
made because of the .25% limitation may be carried forward and paid in
subsequent years so long as the Plan is in effect.

Service organizations providing shareholder services to the fund will be
responsible for prompt transmission of purchase and redemption orders and may
charge fees for their services.

PRICING OF FUND SHARES

Debt obligation securities maturing within 60 days of the valuation date are
valued at amortized cost unless the Board determines that the amortized cost
method does not represent market value.

DIVIDENDS AND DISTRIBUTIONS

The Board of Trustees intends to declare and pay dividends on shares of the fund
annually from net investment income. The Board of Trustees intends to declare
distributions annually from net short- and long-term capital gains, if any,
generally in mid-October. It is intended that an additional distribution may be
declared and paid in December if required for the fund to avoid the imposition
of a 4% federal excise tax on undistributed capital gains.

-10-
<PAGE>

Distribution Option. You can choose from four different distribution options as
indicated on the account Application:

[ ] Income-Earned Option--Capital gain distributions will be automatically
reinvested, but a check or wire will be sent for each dividend
distribution.

[ ] Cash Option--A check, wire or direct deposit (ACH) will be sent for each
dividend and capital gain distribution.

[ ] Direct Dividends Option--Dividends and capital gain distribution will be
automatically invested in another identically registered SSgA Fund.

Distributions will be sent to a pre-designated bank by the Automatic Clearing
House ("ACH") by the payable date, if the Cash Option is selected.

TAXES

Foreign Income Taxes. Investment income received by the fund from sources within
foreign countries may be subject to foreign income taxes withheld at the source.
The United States has entered into tax treaties with many foreign countries
which would entitle the fund to a reduced rate of such taxes or exemption from
taxes on such income. It is impossible to determine the effective rate of
foreign tax for the fund in advance since the amount of the assets to be
invested within various countries is not known.

Foreign shareholders should consult with their tax advisors as to if and how the
federal income tax and its withholding requirements applies to them.

If more than 50% in value of a fund's total assets at the close of any taxable
year consists of securities of foreign corporations, the fund may file an
election with the Internal Revenue Service (the Foreign Election) that would
permit you to take a credit (or a deduction) for foreign income taxes paid by
the fund. The fund may be subject to certain holding requirements with respect
to

-11-
<PAGE>

securities held to take advantage of this credit. If the Foreign Election is
made, you would include in you gross income both dividends received from the
fund and foreign income taxes paid by the fund. You would be entitled to treat
the foreign income taxes withheld as a credit against your United States federal
income taxes, subject to the limitations set forth in the Internal Revenue Code
with respect to the foreign tax credit generally. Alternatively, you could treat
the foreign income taxes withheld as a deduction from gross income in computing
taxable income rather than as a tax credit. It is anticipated that the fund will
qualify to make the Foreign Election; however, the fund cannot be certain that
it will be eligible to make such an election or that you will be eligible for
the foreign tax credit.

-12-
<PAGE>

FINANCIAL HIGHLIGHTS

Years Ended August 31,

1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $12.33 $10.87 $10.30 $11.45
------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income .18 .12 .11 .14
Net realized and unrealized gain (loss) on (5.58) 1.51 .68 (1.19)
investments ----- ------ ------ ------
Total From Investment Operations (5.40) 1.63 .79 (1.05)
----- ------ ------ ------
LESS DISTRIBUTIONS:
Net investment income (.15) (.11) (.12) (.10)
Net realized gain on investment -- (.06) (.10) --
----- ------ ------ ------
In excess of net realized gain on investments (.26) -- -- --
----- ------ ------ ------
Total Distributions (.41) (.17) (.22) (.10)
----- ------ ------ ------
NET ASSET VALUE, END OF PERIOD $6.52 $12.33 $10.87 $10.30
===== ====== ====== ======
TOTAL RETURN (%) (45.36) 15.12 7.83 (9.28)
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period ($000 omitted) 206,370 252,708 120,216 68,385
Ratios to average net assets (%):
Operating expenses, net(1) 1.25 1.25 1.28 1.50
Operating expenses, gross(3) 1.38 1.51 1.67 1.90
Net investment income 1.85 1.07 1.10 1.74
Portfolio turnover (%) 38.94 15.00 4.36 19.77
</TABLE>

(1) See Note 4 of the Annual Report for current period amounts.

-13-
<PAGE>

SSgA FUNDS

SSgA Money Market Fund

SSgA US Government Money Market Fund

SSgA Tax Free Money Market Fund

SSgA Yield Plus Fund

SSgA Intermediate Fund

SSgA Bond Market Fund

SSgA High Yield Bond Fund

SSgA Growth and Income Fund

SSgA S&P 500 Index Fund

SSgA Matrix Equity Fund

SSgA Small Cap Fund
(Closed to new investors as of August 31, 1998)

SSgA Special Equity Fund

SSgA Tuckerman Active REIT Fund

SSgA Aggressive Equity Fund

SSgA Emerging Markets Fund

SSgA Active International Fund

SSgA International Growth Opportunities Fund

SSgA Life Solutions Growth Fund

SSgA Life Solutions Balanced Fund

SSgA Life Solutions Income and Growth Fund

SSgA IAM SHARES Fund

-14-
<PAGE>

ADDITIONAL INFORMATION ABOUT THE FUND

Russell Fund Distributors, Inc.

One International Place

Boston, Massachusetts 02110

1-800-997-7327

SSgA Funds' Investment Company Act File No. 811-5430

-15-

<PAGE>

SSgA FUNDS
One International Place
Boston, Massachusetts 02110
1-800-997-7327
www.ssgafunds.com

IAM SHARES FUND

The SSgA IAM SHARES Fund seeks to achieve its investment objective of maximizing
the fund's total return primarily through investments in equity securities of
companies that have entered into collective bargaining agreements with the
International Association of Machinists and Aerospace Workers or affiliated
labor unions (IAM companies).

PROSPECTUS DATED _______________, 1999

-1-
<PAGE>

TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C>
INVESTMENT STRATEGIES AND PRINCIPAL RISKS.................................................. 3

NON-FUNDAMENTAL INVESTMENT OBJECTIVE.................................................... 3
PRINCIPAL INVESTMENT STRATEGIES......................................................... 3
PRINCIPAL RISKS OF INVESTING IN THE FUND................................................ 3

FEES AND EXPENSES OF THE FUND.............................................................. 4

MANAGEMENT OF THE FUND..................................................................... 6

ADDITIONAL INFORMATION ABOUT THE FUND'S OBJECTIVES, INVESTMENT STRATEGIES AND RISKS........ 6

SHAREHOLDER INFORMATION.................................................................... 7

PURCHASE OF FUND SHARES................................................................. 7
REDEMPTION OF FUND SHARES............................................................... 9
DISTRIBUTION SERVICES AND SHAREHOLDER SERVICING ARRANGEMENTS............................ 11
PRICING OF FUND SHARES.................................................................. 11
DIVIDENDS AND DISTRIBUTIONS............................................................. 11
TAXES................................................................................... 12

FINANCIAL HIGHLIGHTS....................................................................... 13

ADDITIONAL INFORMATION ABOUT THE FUND...................................................... 15
</TABLE>

-2-
<PAGE>

INVESTMENT STRATEGIES AND PRINCIPAL RISKS

NON-FUNDAMENTAL INVESTMENT OBJECTIVE

The fund's investment objective is to maximize total return by investing
primarily in equity securities of companies that have entered into collective
bargaining agreements with the International Association of Machinists and
Aerospace Workers or affiliated labor unions (IAM companies).

This objective may be changed by the fund's trustees without shareholder
approval.

PRINCIPAL INVESTMENT STRATEGIES

The purpose of the IAM SHARES Fund is to provide an investment vehicle where the
majority of holdings are securities of IAM companies. Under normal market
conditions, the fund will invest at least 65% of its total assets in equity
securities of IAM companies. As of the date of this prospectus, a universe of
______ IAM-represented companies was developed by the IAM. Based on the current
model environment, over half of the ______ IAM-represented companies qualify as
investments by this fund. All investments are: (1) publicly traded; (2)
sufficiently capitalized, the current weighted average capitalization is $_____
billion; (3) trade within the limits of the market volatility. Investments that
are not selected in the current model environment are still included in the
investable universe and may be selected for future investment.

IAM companies are diverse both geographically and by industry. The portfolio
manager will rebalance the fund frequently in order to maintain its relative
exposure to IAM companies, as well as to account for any changes to the universe
of IAM companies. While the fund seeks a high correlation with the S&P 500
Index(R) returns, the fund will not fully replicate the S&P 500 Index,
therefore, the fund's returns will likely vary from the index's returns.

The fund's investment strategy is driven by an investment process that manages
portfolio exposure to fundamental attributes in a multifactor risk model
environment. These attributes include industry allocations as well as factors
such as size, style, growth expectations and valuation ratios. This model
attempts to create a portfolio with the best expected return per unit of risk.

PRINCIPAL RISKS OF INVESTING IN THE FUND

The principal risks of investing in the fund are those risks generally
associated with investing in common stocks, including the possibility that the
fund will fluctuate in value significantly over time. Because the fund will
invest at least 65% of its in assets in IAM companies, the return may be less
than in a fund that may invest without restriction in all types of companies.
The fund's emphasis on large-cap stocks makes the fund susceptible to the
business risks of larger companies, which usually cannot change as quickly as
smaller companies in response to competitive challenges. Larger companies also
tend not to be able to maintain the high growth rates of well-managed smaller
companies, especially during strong economic periods. Finally, the success of
the fund's principal investment strategy depends on the Advisor's skill in
designing and using its proprietary analytical model as a tool for selecting
undervalued stocks.

-3-
<PAGE>

FEES AND EXPENSES OF THE FUND

This table describes the fees and expenses that you may pay if you buy and hold
shares of the fund.

<CAPTION>
Annual Fund Operating Expenses
(expenses that are deducted from fund assets)

(as a percentage of average daily net assets)
Advisory Fee .25%
Distribution and Service (12b-1) Fees(1) .12
Total Other Expenses .28
---
Total Annual Fund Operating Expenses(2) .65%
====
</TABLE>

- --------
(1) The ratio includes .09% for 12b-1 Distribution and .025% for 12b-1
Shareholder Servicing Fees

(2) The Advisor has agreed to reimburse the fund for all expenses in excess
of .65% of average daily net assets on an annual basis.

-4-
<PAGE>

Example

This example is intended to help you compare the cost of investing in the fund
with the cost of investing in other mutual funds.

<TABLE>
<CAPTION>
<S> <C>
1 year 3 years
$66 $207
</TABLE>

Long-term shareholders of the fund may pay more in Rule 12b-1 fees than the
economic equivalent of the maximum front-end sales charge permitted by the
National Association of Securities Dealers, Inc.

-5-
<PAGE>

MANAGEMENT OF THE FUND

For these services, the fund pays State Street an advisory fee, calculated daily
and paid monthly, of 0.25% of the average daily net asset value of the fund.

Mr. Michael J. Feehily, Principal of SSgA, is the portfolio manager primarily
responsible for investment decisions regarding the fund. Mr. Feehily joined
State Street Corporation in August 1992 in the Global Operations area before
moving to the Performance & Analytics group. He helped to develop and work with
a proprietary application which is used to analyze venture capital, real estate,
and other private investments. There are four other portfolio managers who
assist in managing the fund.

ADDITIONAL INFORMATION ABOUT THE FUND'S
OBJECTIVES, INVESTMENT STRATEGIES AND RISKS

Futures Contracts. A futures contract is an agreement to buy or sell something
at some point in the future. There are certain investment risks in using futures
contracts. Such risks may include: (1) the inability to close out a futures
contract caused by the nonexistence of a liquid secondary market; and (2) an
imperfect correlation between price movements of the futures contracts or option
with price movements of the portfolio securities or securities index.

American Depository Receipts (ADRs). The fund may invest in securities of
foreign issuers in the form of ADRs, and similar instruments, or other
securities convertible into securities of eligible issuers. ADRs represent the
right to receive securities of foreign issuers deposited in a domestic bank or a
correspondent bank. ADRs do not eliminate the risk inherent in investing in the
securities of foreign issuers. The information available for ADRs is subject to
the accounting, auditing and financial reporting standards of the domestic
market or exchange on which they are traded, which standards are more uniform
and more exacting than those to which many foreign issuers are subject. For
purposes of the fund's investment policies, the fund's investments in ADRs and
similar instruments will be deemed to be investments in the equity securities
representing securities of foreign issuers into which they may be converted.

The ADRs chosen for investment by the IAM SHARES Fund may have collective
bargaining agreements with the IAM or affiliated unions.

Stock Index Futures. A stock index futures contract is a contract to buy or sell
specified units of a stock index at a specified future date at a price agreed
upon when the contract is made. The value of a unit is based on the current
value of the contract index. Under such contracts no delivery of the actual
stocks making up the index takes place. Rather, upon expiration of the contract,
settlement is made by exchanging cash in an amount equal to the difference
between the contract price and the closing price of the index at expiration, net
of variation margin previously paid.

Substantially all futures contracts are closed out before settlement date or
called for cash settlement. A futures contract is closed out by buying or
selling an identical offsetting futures contract. Upon entering into a futures
contract, a fund is required to deposit an initial margin with Custodian for the
benefit of the futures broker. The initial margin serves as a `good faith'
deposit that the fund will honor their futures commitments. Subsequent payments
(called "variation margin") to and from the broker are made on a daily basis as
the price of the underlying investment fluctuates.

-6-
<PAGE>

SHAREHOLDER INFORMATION

PURCHASE OF FUND SHARES

Minimum Initial and Subsequent Investments and Account Balance. The fund
requires a minimum initial investment of $1,000, with the exception of IRA
accounts, for which the minimum initial investment is $250. Subsequent
investments must be at least $100. An investment in the account (other than IRA
accounts) may be subject to redemption at the fund's discretion if the account
balance is less than $1,000 as a result of shareholder redemptions. The Transfer
Agent will give shareholders 60 days' notice that the account will be closed
unless an investment is made to increase the account balance to the $1,000
minimum. Failure to bring the account balance to $1,000 may result in the
Transfer Agent closing the account at the net asset value (NAV) next determined
on the day the account is closed and mailing the proceeds to the shareholder's
address shown on the Transfer Agent's records. The fund reserves the right to
reject any purchase order. If you are purchasing fund assets through a pension
or other participation plan, you should contact your plan administrator for
further information on purchases.

Order and Payment Procedures. There are several ways to invest in the funds. The
funds require a purchase order in good form, which consists of a completed and
signed Application for each new account, unless the account is opened through a
third party which has a signed agreement with the SSgA Funds and does not
require a completed application to be submitted to the SSgA Funds. For
additional information, including the IRA package, additional Applications or
other forms, call the Customer Service Department at 1-800-647-7327, or write:
SSgA Funds, P.O. Box 8317, Boston, MA 02266-8317. You may also access this
information online at www.ssgafunds.com.

Mail. For new accounts, please mail the completed Application and check.
Additional investments should also be made by check. You must include the fund
name and account number on your check, or use the remittance form attached to
the confirmation statement (in the return envelope provided). All checks should
be made payable to the SSgA Funds or State Street Bank. If using a servicing
agent or broker-dealer, please verify with them before writing and mailing your
check. All purchase requests should be mailed to one of the following addresses:

<TABLE>
<CAPTION>
<S> <C>
Regular Mail: Registered, Express or Certified Mail:
SSgA Funds SSgA Funds
P.O. Box 8317 2 Heritage Drive
Boston, MA 02266-8317 North Quincy, MA 02171
</TABLE>

All purchases made by check should be in US dollars from a US bank. Third party
checks and checks drawn on credit card accounts will not be accepted.

-7-
<PAGE>

Each fund reserves the right to terminate or modify the exchange privilege in
the future.

Federal Funds Wire. You may make initial or subsequent investments by wiring
federal funds to State Street, as Transfer Agent, by:

1. Telephoning the Customer Service Department at 1-800-647-7327 between
8 a.m. and 4 p.m. Eastern time, and stating: (a) your account registration
number, address and social security or tax identification number; (b) the
name of the fund in which the investment is to be made and the account
number; and (c) the exact amount being wired.

1. The investment objective, policies and limitations must match that of the
fund;

2. They must have a readily ascertainable market value;

3. They must be liquid;

4. They must not be subject to restrictions on resale; and

5. The market value of any securities exchanged, plus any cash, must be at least
$25 million; State Street reserves the right to make exceptions to this
minimum at its discretion.

Shares purchased in exchange for securities generally may not be redeemed or
exchanged until the transfer has settled--usually within 7 days following the
purchase exchange.

-8-
<PAGE>

REDEMPTION OF FUND SHARES

Fund shares may be redeemed on any business day at the net asset value next
determined after the receipt of a redemption request in good order by following
one of the methods described below. Typically, payments will be made as soon as
possible (but will ordinarily not exceed seven days) and will be mailed to your
address of record. Upon request, redemption proceeds will be wire transferred to
your account at a domestic commercial bank that is a member of the Federal
Reserve System. If you purchased fund shares by check or an automatic investment
program (AIP) and you elect to redeem shares within 15 days of the purchase, you
may experience delays in receiving redemption proceeds. In this case, the fund
will generally postpone sending redemption proceeds until it can verify that the
check or AIP investment has been collected. There will be no such delay for
redemptions following investments paid by federal funds wire or by bank
cashier's check, certified check or treasurer's check.

Redemption requests must be received prior to 4 p.m. Eastern time in order to be
effective on the date received. Shareholder servicing agents with underlying
shareholders in omnibus accounts who receive redemption requests by 4 p.m.
Eastern time may transmit the request to the Transfer Agent by 9 a.m. Eastern
time the next business day to receive the net asset value and dividend as of the
prior business day, pursuant to a duly executed Shareholder Servicing Agreement
with the SSgA Funds or the Distributor.

Please note that proceeds from ACH withdrawals will be transmitted to the
investor's bank two days after the withdrawal.

DURING PERIODS OF DRASTIC ECONOMIC OR MARKET CHANGES, SHAREHOLDERS USING THIS
METHOD MAY ENCOUNTER DELAYS. IN SUCH EVENT, YOU SHOULD CONSIDER USING THE MAIL
REDEMPTION PROCEDURE DESCRIBED BELOW.

-9-
<PAGE>

1. Your address of record has changed within the past 60 days;

2. You are redeeming more than $50,000 worth of shares; or

3. You are requesting payment other than by a check mailed to the address of
record and payable to the registered owner(s).

Signature guarantees can usually be obtained from the following sources:

1. A broker or securities dealer, registered with a domestic stock exchange;

2. A federal savings, cooperative or other type of bank;

3. A savings and loan or other thrift institution;

4. A credit union; or

5. A securities exchange or clearing agency.

Please check with the institution prior to signing to ensure that they are an
acceptable signature guarantor. A NOTARY PUBLIC CANNOT PROVIDE A SIGNATURE
GUARANTEE.

<TABLE>
<CAPTION>
Seller Requirements for Written Requests
<S> <C>

Owners of corporate or [ ] Letter of instruction signed by authorized
association accounts person(s), stating capacity as indicated by the
corporate resolution;
[ ] Corporate resolution, certified within the past
90 days; and
[ ] Signature guarantee, if applicable (see above).

Owners or trustees of trust [ ] Letter of instruction, signed by all trustees;
accounts [ ] If the trustees are not named in the
registration, please provide a copy of the trust
document certified within the past 60 days; and
[ ] Signature guarantee, if applicable (see above).

Joint tenancy shareholders [ ] Letter of instruction signed by surviving
whose co-tenants are deceased tenant(s);
[ ] Certified copy of the death certificate; and
[ ] Signature guarantee, if applicable (see above).
</TABLE>

-10-
<PAGE>

Please contact the Customer Service Department at 1-800-647-7327 for questions
and further instructions.

DISTRIBUTION SERVICES AND SHAREHOLDER SERVICING ARRANGEMENTS

Service organizations providing shareholder services to the fund will be
responsible for prompt transmission of purchase and redemption orders and may
charge fees for their services.

PRICING OF FUND SHARES

Debt obligation securities maturing within 60 days of the valuation date are
valued at amortized cost unless the Board determines that the amortized cost
method does not represent market value.

DIVIDENDS AND DISTRIBUTIONS

The Board of Trustees intends to declare and pay dividends on shares of the fund
quarterly from net investment income. Distributions will be made at least
annually from net short- and long-term capital gains, if any, generally in
mid-October. It is intended that an additional distribution may be declared and
paid in December if required for the fund to avoid the imposition of a 4%
federal excise tax on undistributed capital gains.

Distribution Option. You can choose from four different distribution options as
indicated on the account Application:

-11-
<PAGE>

[ ] Income-Earned Option--Capital gain distributions will be automatically
reinvested, but a check or wire will be sent for each dividend
distribution.

[ ] Cash Option--A check, wire or direct deposit (ACH) will be sent for each
dividend and capital gain distribution.

[ ] Direct Dividends Option--Dividends and capital gain distribution will be
automatically invested in another identically registered SSgA Fund.

Distributions will be sent to a pre-designated bank by the Automatic Clearing
House ("ACH") by the payable date, if the Cash Option is selected.

TAXES

-12-
<PAGE>

FINANCIAL HIGHLIGHTS

[TABLE TO BE ADDED IN B FILING]

-13-
<PAGE>

SSgA FUNDS

SSgA Money Market Fund

SSgA US Government Money Market Fund

SSgA Tax Free Money Market Fund

SSgA Yield Plus Fund

SSgA Intermediate Fund

SSgA Bond Market Fund

SSgA High Yield Bond Fund

SSgA Growth and Income Fund

SSgA S&P 500 Index Fund

SSgA Matrix Equity Fund

SSgA Small Cap Fund
(Closed to new investors as of August 31, 1998)

SSgA Special Equity Fund

SSgA Tuckerman Active REIT Fund

SSgA Aggressive Equity Fund

SSgA Emerging Markets Fund

SSgA Active International Fund

SSgA International Growth Opportunities Fund

SSgA Life Solutions Growth Fund

SSgA Life Solutions Balanced Fund

SSgA Life Solutions Income and Growth Fund

SSgA IAM SHARES Fund

-14-

<PAGE>

ADDITIONAL INFORMATION ABOUT THE FUND

Russell Fund Distributors, Inc.

One International Place

Boston, Massachusetts 02110

1-800-997-7327

SSgA Funds' Investment Company Act File No. 811-5430

-15-
<PAGE>

Filed pursuant to Rule 485(a)
File Nos. 33-19229; 811-5430

SSgA FUNDS
One International Place
Boston, Massachusetts 02110
1-800-997-7327
www.ssgafunds.com

MONEY MARKET FUND

The Money Market fund seeks to maximize current income, to the extent consistent
with the preservation of capital and liquidity and the maintenance of a stable
$1.00 per share net asset value, by investing in dollar denominated securities.

PROSPECTUS DATED _______________, 1999

-1-
<PAGE>

TABLE OF CONTENTS

<TABLE>
<CAPTION>
<S> <C>
INVESTMENT STRATEGIES AND PRINCIPAL RISKS................................................ 3

NON-FUNDAMENTAL INVESTMENT OBJECTIVE.................................................. 3
PRINCIPAL INVESTMENT STRATEGIES....................................................... 3
PRINCIPAL RISKS OF INVESTING IN THE FUND.............................................. 3
PERFORMANCE........................................................................... 3

FEES AND EXPENSES OF THE FUND............................................................ 4

MANAGEMENT OF THE FUND................................................................... 5

ADDITIONAL INFORMATION ABOUT THE FUND'S OBJECTIVES, INVESTMENT STRATEGIES AND RISKS...... 5

SHAREHOLDER INFORMATION.................................................................. 8

PURCHASE OF FUND SHARES............................................................... 8
REDEMPTION OF FUND SHARES............................................................. 10
DISTRIBUTION SERVICES AND SHAREHOLDER SERVICING ARRANGEMENTS.......................... 13
PRICING OF FUND SHARES................................................................ 13
DIVIDENDS AND DISTRIBUTIONS........................................................... 13
TAXES................................................................................. 14

FINANCIAL HIGHLIGHTS..................................................................... 15

ADDITIONAL INFORMATION ABOUT THE FUND.................................................... 17
</TABLE>

-2-
<PAGE>

INVESTMENT STRATEGIES AND PRINCIPAL RISKS

A NON-FUNDAMENTAL INVESTMENT OBJECTIVE

The Money Market Fund's investment objective is to maximize current income, to
the extent consistent with the preservation of capital and liquidity and the
maintenance of a stable $1.00 per share net asset value, by investing in dollar
denominated securities.

This objective may be changed by the fund's trustees without shareholder
approval.

PRINCIPAL INVESTMENT STRATEGIES

The fund attempts to meet its investment objective by investing in high quality
money market instruments. There are risks associated with these instruments,
which are described in the section called Principal Risks.

The fund management team bases its decisions on the relative attractiveness of
different money market investments which can vary depending on the general level
of interest rates as well as supply/demand imbalances in the market.

The Money Market Fund has obtained a quality rating from one or more national
security rating organizations. To obtain such rating the fund may be required to
adopt additional investment restrictions, which may affect the fund's
performance.

PRINCIPAL RISKS OF INVESTING IN THE FUND

Investment in the fund, like any investment, has risks. Although the fund seeks
to preserve the value of your investment at $1.00 per share, it is possible to
lose money by investing in the fund. There can be no assurance that the fund
will achieve its objective. An investment in the fund is not a deposit of any
bank and is not insured by the Federal Deposit Insurance Corporation or any
other government agency.

PERFORMANCE

-3-
<PAGE>

Annual Total Returns - Money Market

[bar chart]

1989 -- 9.29%
1990 -- 8.28%
1991 -- 6.28%
1992 -- 3.91%
1993 -- 3.09%
1994 -- 3.99%
1995 -- 5.76%
1996 -- 5.21%
1997 -- 5.37%
1998 -- 5.30%

Best Quarter - May 31, 1999: 2.42%
Worst Quarter - November 30, 1993: 0.73%

The following table further illustrates the risks of investing in the fund by
showing how the fund's average annual returns for 1, 5 and 10 years compare to
the returns of a broad-based securities market index.

Average annual total returns
For the periods ended December 31, 1998

<TABLE>
<CAPTION>
1 Year 5 Years 10 Years
------ ------- --------
<S> <C> <C> <C>
Money Market ........................ 5.30% 5.12% 5.63%

30-Day Yields
for the period ended December 31, 1998

<CAPTION>
Current Effective
------- ---------
<S> <C> <C>
Money Market ..................... 4.83% 4.94%

7-Day Yields
for the period ended December 31, 1998

<CAPTION>
Current Effective
------- ---------
<S> <C> <C>
Money Market ..................... 4.84% 4.96%
</TABLE>

FEES AND EXPENSES OF THE FUND

This table describes the fees and expenses that you may pay if you buy and hold
shares of the fund.

<CAPTION>
Annual Fund Operating Expenses
(expenses that are deducted from Fund assets)

(as a percentage of average daily net assets)
Advisory Fee .25%
Distribution and Service (12b-1) Fees(1) .09
</TABLE>

-4-
<PAGE>

<TABLE>
<CAPTION>
<S> <C>
Total Other Expenses .07
---
Total Annual Fund Operating Expenses .41%
====
</TABLE>

Example

This example is intended to help you compare the cost of investing in the fund
with the cost of investing in other mutual funds.

<TABLE>
<CAPTION>
<S> <C> <C> <C>
1 year 3 years 5 years 10 years
</TABLE>

MANAGEMENT OF THE FUND

For these services, the fund pays State Street an advisory fee, calculated daily
and paid monthly, of 0.25% of the average daily net asset value of the fund.

ADDITIONAL INFORMATION ABOUT THE FUND'S
OBJECTIVES, INVESTMENT STRATEGIES AND RISKS

Investment-Grade Securities. The fund will limit its portfolio investments to
those United States dollar-denominated instruments which at the time of
acquisition the Advisor determines present minimal credit risk and which qualify
as "eligible" securities under the Securities and Exchange Commission rules
applicable to money market mutual funds. In general, eligible securities include
securities that: (1) are rated in the highest category by at least two
nationally recognized statistical rating organizations ("NRSRO"); (2) by one
NRSRO, if only one rating service has rated the security; or (3) if unrated, are
of comparable quality, as determined by the fund's Advisor in accordance with
procedures established by the Board of Trustees. See the Appendix in the
Statement of Additional Information for a description of a NRSRO.

- --------
(1) The ratio includes .05% for 12b-1 Distribution and .04% for 12b-1
Shareholder Servicing Fees.

-5-
<PAGE>

Portfolio Maturity. The fund must limit its investments to securities with
remaining maturities of 397 days or less (as determined in accordance with
applicable SEC regulations) and must maintain a dollar-weighted average maturity
of 90 days or less. The fund will normally hold portfolio instruments to
maturity, but may dispose of them prior to maturity if the Advisor finds it
advantageous or necessary. Investing in short-term money market instruments will
result in high portfolio turnover. Since the cost of these transactions is
small, high turnover is not expected to adversely affect the fund's price or
yield.

Variable and Floating Rate Securities and Funding Agreements. The funds may
purchase variable rate securities which are instruments issued or guaranteed by
entities such as the: (1) US Government, or an agency or instrumentality
thereof, (2) corporations, (3) financial institutions or (4) insurance companies
that have a rate of interest subject to adjustment at regular intervals but less
frequently than annually. A variable rate security provides for the automatic
establishment of a new interest rate on set dates. Variable rate obligations
whose interest is readjusted no less frequently than annually will be deemed to
have a maturity equal to the period remaining until the next readjustment of the
interest rate. The funds may also purchase floating rate securities. A floating
rate security provides for the automatic adjustment of its interest rate
whenever a specified interest rate changes. Interest rates on these securities
are ordinarily tied to, and are a percentage of, a widely recognized interest
rate, such as the yield on 90-day US Treasury bills or the prime rate of a
specified bank. These rates may change as often as twice daily. Generally,
changes in interest rates will have a smaller effect on the market value of
variable and floating rate securities than on the market value of comparable
fixed income obligations. Thus, investing in variable and floating rate
securities generally allows less opportunity for capital appreciation and
depreciation than investing in comparable fixed income securities. The funds may
also invest in Funding Agreements, which are privately placed, unregistered
obligations negotiated with a purchaser.

Securities purchased by the fund may include variable and floating rate
instruments, which may have a stated maturity in excess of the fund's maturity
limitations but which will, except for certain US Government obligations, permit
the fund to demand payment of the principal of the instrument at least once
every thirteen months upon not more than 30 days' notice. Variable and floating
rate instruments may include variable amount master demand notes that permit the
indebtedness thereunder to vary in addition to providing for periodic
adjustments in the interest rate. There may be no active secondary market with
respect to a particular variable or floating rate instrument. Nevertheless, the
periodic readjustments of their interest rates tend to assure that their value
to the fund will approximate their par value. Illiquid variable and floating
rate instruments (instruments which are not payable upon seven days' notice and
do not have an active trading market) that are acquired by the fund are subject
to the fund's percentage limitations regarding securities that are illiquid or
not readily marketable. The fund's investment advisor will continuously monitor
the creditworthiness of issuers of variable and floating rate instruments in
which the Investment Company invests, and their ability to repay principal and
interest.

-6-
<PAGE>

purchasing the paper for investment and not with a view to public distribution.
Any resale by the purchaser must be in an exempt transaction. Section 4(2) paper
normally is resold to other institutional investors like the fund through or
with the assistance of the issuer or investment dealers that make a market in
Section 4(2) paper. Section 4(2) paper will not be subject to the fund's 15%
limitation on illiquid securities set forth below where the Board of Trustees of
the Investment Company (pursuant to guidelines adopted by the Board) determines
that a liquid trading market exists.

-7-
<PAGE>

SHAREHOLDER INFORMATION

PURCHASE OF FUND SHARES

Minimum Initial and Subsequent Investments and Account Balance. The fund
requires a minimum initial investment of $1,000, with the exception of IRA
accounts, for which the minimum initial investment is $250. Subsequent
investments must be at least $100. An investment in the fund (other than IRA
accounts) may be subject to redemption at the fund's discretion if the account
balance is less than $1,000 as a result of shareholder redemptions. The Transfer
Agent will give shareholders 60 days' notice that the account will be closed
unless an investment is made to increase the account balance to the $1,000
minimum. Failure to bring the account balance to $1,000 may result in the
Transfer Agent closing the account at the net asset value (NAV) next determined
on the day the account is

-8-
<PAGE>

closed and mailing the proceeds to the shareholder's address shown on the
Transfer Agent's records. The fund reserves the right to reject any purchase
order. If you are purchasing fund assets through a pension or other
participation plan, you should contact your plan administrator for further
information on purchases.

Purchase Dates and Times. Fund shares may be purchased on any business day. A
business day is one on which the New York Stock Exchange or Boston Federal
Reserve are open for regular trading. All purchases must be made in US dollars.
Purchase orders in good form (described below) and payments for fund shares by
check or by wire transfer must be received by the Transfer Agent prior to the
close of the regular trading session of the New York Stock Exchange, which is
ordinarily 4 p.m. Eastern time (the "Pricing Time"), to be effective on the date
received. If an order or payment is received after the Pricing Time, the order
will be effective on the next business day. Orders placed through a servicing
agent or broker-dealer that has a selling agreement with the Distributor or the
SSgA Funds must be received by the servicing agent or broker-dealer prior to the
Pricing Time.

Mail. For new accounts, please mail the completed Application and check.
Additional investments should also be made by check. You must include the fund
name and account number on your check, or use the remittance form attached to
the confirmation statement (in the return envelope provided). All checks should
be made payable to the SSgA Funds or State Street Bank. If using a servicing
agent or broker-dealer, please verify with them before wiring and mailing your
check. All purchase requests should be mailed to one of the following addresses:

<TABLE>
<CAPTION>
<S> <C>
Regular Mail: Registered, Express or Certified Mail:
SSgA Funds SSgA Funds
P.O. Box 8317 2 Heritage Drive
Boston, MA 02266-8317 North Quincy, MA 02171
</TABLE>

All purchases made by check should be in US dollars from a US bank. Third party
checks and checks drawn on credit card accounts will not be accepted.

Each fund reserves the right to terminate or modify the exchange privilege in
the future.

Federal Funds Wire. You may make initial or subsequent investments by wiring
federal funds to State Street, as Transfer Agent, by:

1. Telephoning the Customer Service Department at 1-800-647-7327 between
8 a.m. and 4 p.m. Eastern time, and stating: (a) your account registration
number, address and social security or tax identification number; (b) the
name of the fund in which the investment is to be made and the account
number; and (c) the exact amount being wired.

-9-
<PAGE>

1. The investment objective, policies and limitations must match that of the
fund;

2. They must have a readily ascertainable market value;

3. They must be liquid;

4. They must not be subject to restrictions on resale; and

5. The market value of any securities exchanged, plus any cash, must be at
least $25 million; State Street reserves the right to make exceptions to
this minimum at its discretion.

Shares purchased in exchange for securities generally may not be redeemed or
exchanged until the transfer has settled--usually within 7 days following the
purchase exchange.

REDEMPTION OF FUND SHARES

-10-
<PAGE>

it can verify that the check or AIP investment has been collected. There will be
no such delay for redemptions following investments paid by federal funds wire
or by bank cashier's check, certified check or treasurer's check.

Checkwriting Service. If you have authorized the check writing feature on the
Application and have completed the signature card, you may redeem shares in your
account by check, provided that the appropriate signatures are on the check. The
minimum check amount is $500. There is a one-time service charge of $5 per fund
to establish this feature, and you may write an unlimited number of checks
provided that the account minimum of $1,000 per fund is maintained.

Cash Sweep Program. Money managers of master trust clients may participate in a
cash sweep program to automatically invest excess cash in the fund. A money
manager must select the fund, give authorization to complete the fund's
Application and authorize the investment of excess cash into or the withdrawal
of required cash from the fund on a daily basis. Where the Advisor acts as the
money manager, the Advisor will receive an advisory fee from the client.

Please note that proceeds from ACH withdrawals will be transmitted to the
investor's bank two days after the withdrawal.

DURING PERIODS OF DRASTIC ECONOMIC OR MARKET CHANGES, SHAREHOLDERS USING THIS
METHOD MAY ENCOUNTER DELAYS. IN SUCH EVENT, YOU SHOULD CONSIDER USING THE MAIL
REDEMPTION PROCEDURE DESCRIBED BELOW.

1. Your address of record has changed within the past 60 days;

2. You are redeeming more than $50,000 worth of shares; or

-11-
<PAGE>

3. You are requesting payment other than by a check mailed to the address of
record and payable to the registered owner(s).

Signature guarantees can usually be obtained from the following sources:

1. A broker or securities dealer, registered with a domestic stock exchange;

2. A federal savings, cooperative or other type of bank;

3. A savings and loan or other thrift institution;

4. A credit union; or

5. A securities exchange or clearing agency.

Please check with the institution prior to signing to ensure that they are an
acceptable signature guarantor. A NOTARY PUBLIC CANNOT PROVIDE A SIGNATURE
GUARANTEE.

<TABLE>
<CAPTION>
Seller Requirements for Written Requests
<S> <C>
Owner of individual, joint, [ ] Letter of instruction, signed by all persons
sole proprietorship, authorized to sign for the account stating general
UGMA/UTMA (custodial titles/capacity, exactly as the account is
accounts for minors) or registered; and
general partner accounts [ ] Signature guarantee, if applicable (see above).
-----------------------------------------------------------------------------------------
Owners of corporate or [ ] Letter of instruction signed by authorized
association accounts person(s), stating capacity as indicated by the
corporate resolution;
[ ] Corporate resolution, certified within the past
90 days; and
[ ] Signature guarantee, if applicable (see above).
-----------------------------------------------------------------------------------------
Owners or trustees of trust [ ] Letter of instruction, signed by all trustees;
accounts [ ] If the trustees are not named in the
registration, please provide a copy of the trust
document certified within the past 60 days; and
[ ] Signature guarantee, if applicable (see above).
-----------------------------------------------------------------------------------------
Joint tenancy shareholders [ ] Letter of instruction signed by surviving
whose co-tenants are deceased tenant(s);
[ ] Certified copy of the death certificate; and
[ ] Signature guarantee, if applicable (see above).
</TABLE>

Please contact the Customer Service Department at 1-800-647-7327 for questions
and further instructions.

-12-
<PAGE>

fund reserves the right to suspend the right of redemption or postpone the date
of payment if emergency conditions, as specified in the 1940 Act or as
determined by the Securities and Exchange Commission, should exist.

DISTRIBUTION SERVICES AND SHAREHOLDER SERVICING ARRANGEMENTS

Service organizations providing shareholder services to the fund will be
responsible for prompt transmission of purchase and redemption orders and may
charge fees for their services.

PRICING OF FUND SHARES

The fund determines the price per share once each business day as of the close
of the regular trading session of the New York Stock Exchange (ordinarily 4 p.m.
Eastern time). The price is computed by adding the value of all securities and
other assets of the fund, deducting accrued liabilities, dividing by the number
of shares outstanding and rounding to the nearest cent.

The fund seeks to maintain a $1.00 per share net asset value and, accordingly,
uses the amortized cost valuation method to value its portfolio instruments. The
amortized cost valuation method initially prices an instrument at its cost and
thereafter assumes a constant amortization to maturity of any discount or
premium, regardless of the impact of fluctuating interest rates on the market
value of the instrument.

DIVIDENDS AND DISTRIBUTIONS

Distribution Option. You can choose from four different distribution options as
indicated on the account Application:

[ ] Income-Earned Option--Capital gain distributions will be automatically
reinvested, but a check or wire will be sent for each dividend
distribution.

-13-
<PAGE>

[ ] Cash Option--A check, wire or direct deposit (ACH) will be sent for each
dividend and capital gain distribution.

[ ] Direct Dividends Option--Dividends and capital gain distribution will be
automatically invested in another identically registered SSgA Fund.

Please note that dividends will not be paid until the last business day even if
an account closes during the month. If the account, at the end of the month, has
a zero balance due to a redemption, the dividend will automatically be sent as a
check to the address of record regardless of distribution option.

TAXES

Although the sale or exchange of fund shares is a taxable event, no gain or loss
is anticipated because the fund seeks to maintain a stable $1.00 per share net
asset value.

-14-
<PAGE>

FINANCIAL HIGHLIGHTS

<TABLE>
<CAPTION>
Years Ended August 31,
1999 1998 1997 1996 1995

<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $1.0000 $1.0000 $1.0000 $1.0000
------- ------- ------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income .0528 .0516 .0524 .0538
LESS DISTRIBUTIONS:
Net investment income (.0528) (.0516) (.0524) (.0538)
------- ------- ------- -------
NET ASSET VALUE, END OF PERIOD $1.0000 $1.0000 $1.0000 $1.0000
======= ======= ======= =======
TOTAL RETURN (%) 5.41 5.28 5.36 5.52
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period ($000 omitted) 5,477,326 4,278,165 3,475,409 2,752,895
Ratios to average net assets (%):
Operating expenses .41 .39 .39 .39
Net investment income 5.28 5.17 5.20 5.37
</TABLE>

-15-
<PAGE>

SSgA FUNDS

SSgA Money Market Fund

SSgA US Government Money Market Fund

SSgA Tax Free Money Market Fund

SSgA Yield Plus Fund

SSgA Intermediate Fund

SSgA Bond Market Fund

SSgA High Yield Bond Fund

SSgA Growth and Income Fund

SSgA S&P 500 Index Fund

SSgA Matrix Equity Fund

SSgA Small Cap Fund
(Closed to new investors as of August 31, 1998)

SSgA Special Equity Fund

SSgA Tuckerman Active REIT Fund

SSgA Aggressive Equity Fund

SSgA Emerging Markets Fund

SSgA Active International Fund

SSgA International Growth Opportunities Fund

SSgA Life Solutions Growth Fund

SSgA Life Solutions Balanced Fund

SSgA Life Solutions Income and Growth Fund

SSgA IAM SHARES Fund

-16-
<PAGE>

ADDITIONAL INFORMATION ABOUT THE FUND

Russell Fund Distributors, Inc.

One International Place

Boston, Massachusetts 02110

1-800-997-7327

SSgA Funds' Investment Company Act File No. 811-5430

-17-
<PAGE>
Filed pursuant to Rule 485(a)
File Nos. 33-19229; 811-5430

SSgA FUNDS
One International Place
Boston, Massachusetts 02110
1-800-997-7327
www.ssgafunds.com

PRIME MONEY MARKET FUND

The Prime Money Market Fund seeks to maximize current income, to the extent
consistent with the preservation of capital and liquidity and the maintenance of
a stable $1.00 per share net asset value, by investing in dollar denominated
securities.

PROSPECTUS DATED _______________, 1999

-1-
<PAGE>

TABLE OF CONTENTS

<TABLE>
<CAPTION>
<S> <C>
INVESTMENT STRATEGIES AND PRINCIPAL RISKS............................................. 3

FUNDAMENTAL INVESTMENT OBJECTIVE................................................... 3
PRINCIPAL INVESTMENT STRATEGIES.................................................... 3
PRINCIPAL RISKS OF INVESTING IN THE FUND........................................... 3
PERFORMANCE........................................................................ 3

FEES AND EXPENSES OF THE FUND......................................................... 4

MANAGEMENT OF THE FUND................................................................ 5

ADDITIONAL INFORMATION ABOUT THE FUND'S OBJECTIVES, INVESTMENT STRATEGIES AND RISKS... 5

SHAREHOLDER INFORMATION............................................................... 7

PURCHASE OF FUND SHARES............................................................ 7
REDEMPTION OF FUND SHARES.......................................................... 8
DISTRIBUTION SERVICES AND SHAREHOLDER SERVICING ARRANGEMENTS....................... 9
PRICING OF FUND SHARES............................................................. 9
DIVIDENDS AND DISTRIBUTIONS........................................................ 9
TAXES.............................................................................. 10

FINANCIAL HIGHLIGHTS.................................................................. 12

ADDITIONAL INFORMATION ABOUT THE FUND................................................. 13
</TABLE>

-2-
<PAGE>

INVESTMENT STRATEGIES AND PRINCIPAL RISKS

FUNDAMENTAL INVESTMENT OBJECTIVE

This objective may be changed only with the approval of a majority of the fund's
shareholders as defined in the Investment Company Act of 1940 (the 1940 Act).

PRINCIPAL INVESTMENT STRATEGIES

The Prime Money Market Fund attempts to meet its investment objective by
investing in high quality money market instruments. Such instruments include:
(1) US Treasury bills, notes and bonds; (2) other obligations issued or
guaranteed as to interest and principal by the US Government, its agencies, or
instrumentalities; (3) instruments of US and foreign banks, including
certificates of deposit, banker's acceptances and time deposits; these
instruments may include Eurodollar Certificates of Deposit ("ECDs"), Eurodollar
Time Deposits ("ETDs") and Yankee Certificates of Deposit ("YCDs"); (4)
commercial paper of US and foreign companies; (5) asset-backed securities; (6)
corporate obligations of US and foreign companies; (7) variable and floating
rate notes; and (8) repurchase agreements.

Fund managers base their decisions on the relative attractiveness of different
money market investments which can vary depending on the general level of
interest rates as well as supply/demand imbalances in the market.

The Prime Money Market Fund has obtained a quality rating from one or more
national security rating organizations. To obtain such rating the fund may be
required to adopt additional investment restrictions, which may affect the
fund's performance.

PRINCIPAL RISKS OF INVESTING IN THE FUND

PERFORMANCE

-3-
<PAGE>

Annual Total Returns - Prime Money Market

[bar chart]

1995 -- 6.04%
1996 -- 5.44%
1997 -- 5.60%
1998 -- 5.52%

Best Quarter - May 31, 1995: 1.54%
Worst Quarter - May 31, 1994: 0.94%

The following table further illustrates the risks of investing in the fund by
showing how the fund's average annual returns for 1 year and since the fund's
inception compare to the returns of a broad-based securities market index.

Average annual total returns
For the periods ended December 31, 1998

<TABLE>
<CAPTION>
1 Year Inception
------ ---------
<S> <C> <C>
Prime Money Market ............... 5.52% 5.45%

30-Day Yields
for the period ended December 31, 1998

<CAPTION>
Current Effective
------- ---------

<S> <C> <C>
Prime Money Market ............... 5.04% 5.16%

7-Day Yields
for the period ended December 31, 1998

<CAPTION>
Current Effective
------- ---------

<S> <C> <C>
Prime Money Market ............... 5.13% 5.26%
</TABLE>

FEES AND EXPENSES OF THE FUND

This table describes the fees and expenses that you may pay if you buy and hold
shares of the fund.

<CAPTION>
Annual Fund Operating Expenses
(expenses that are deducted from Fund assets)

(as a percentage of average daily net assets)
Advisory Fee(1) .15%
Distribution and Service (12b-1) Fees(2) .06
Total Other Expenses .07
---
Total Annual Fund Operating Expenses .28%
====
</TABLE>

Example

This example is intended to help you compare the cost of investing in the fund
with the cost of investing in other mutual funds.

<TABLE>
<CAPTION>
<S> <C> <C> <C>
1 year 3 years 5 years 10 years
</TABLE>

- --------
(1) The Advisor has agreed to reimburse the fund for all expenses in excess
of .20% of average daily net assets on an annual basis. The total operating
expenses of the fund after the fee reimbursement are .20% of average daily
net assets on an annual basis. The gross annual Advisory fee expense after
reimbursement is .07% of average daily net assets. This agreement is
expected to remain in effect during the current fiscal year.

(2) The ratio includes .03% for 12b-1 Distribution and .02% for 12b-1
Shareholder Servicing Fees.

-4-
<PAGE>

MANAGEMENT OF THE FUND

For these services, the fund pays State Street an advisory fee, calculated daily
and paid monthly, of 0.07%, after fee reimbursement, of the average daily net
asset value of the fund.

ADDITIONAL INFORMATION ABOUT THE FUND'S
OBJECTIVES, INVESTMENT STRATEGIES AND RISKS

Investment-Grade Securities. The fund will limit its portfolio investments to
those United States dollar-denominated instruments which at the time of
acquisition the Advisor determines present minimal credit risk and which qualify
as "eligible" securities under the Securities and Exchange Commission rules
applicable to money market mutual funds. In general, eligible securities include
securities that: (1) are rated in the highest category by at least two
nationally recognized statistical rating organizations ("NRSRO"); (2) by one
NRSRO, if only one rating service has rated the security; or (3) if unrated, are
of comparable quality, as determined by the Fund's Advisor in accordance with
procedures established by the Board of Trustees. See the Appendix in the
Statement of Additional Information for a description of a NRSRO.

-5-
<PAGE>

principal of the instrument at least once every thirteen months upon not more
than 30 days' notice. Variable and floating rate instruments may include
variable amount master demand notes that permit the indebtedness thereunder to
vary in addition to providing for periodic adjustments in the interest rate.
There may be no active secondary market with respect to a particular variable or
floating rate instrument. Nevertheless, the periodic readjustments of their
interest rates tend to assure that their value to the fund will approximate
their par value. Illiquid variable and floating rate instruments (instruments
which are not payable upon seven days' notice and do not have an active trading
market) that are acquired by the fund are subject to the fund's percentage
limitations regarding securities that are illiquid or not readily marketable.
The fund's investment advisor will continuously monitor the creditworthiness of
issuers of variable and floating rate instruments in which the Investment
Company invests, and their ability to repay principal and interest.

Section 4(2) Commercial Paper. The fund may also invest in commercial paper
issued in reliance on the so-called private placement exemption from
registration afforded by Section 4(2) of the Securities Act of 1933 ("Section
4(2) paper"). Section 4(2) paper is restricted as to disposition under the
Federal securities laws and generally is sold to institutional investors that
agree that they are purchasing the paper for investment and not with a view to
public distribution. Any resale by the purchaser must be in an exempt
transaction. Section 4(2) paper normally is resold to other institutional
investors like the fund through or with the assistance of the issuer or
investment dealers that make a market in Section 4(2) paper. Section 4(2) paper
will not be subject to the fund's 10% limitation on illiquid securities set
forth below where the Board of Trustees of the Investment Company (pursuant to
guidelines adopted by the Board) determines that a liquid trading market exists.

-6-
<PAGE>
SHAREHOLDER INFORMATION

PURCHASE OF FUND SHARES

Distribution and Eligible Investors. Shares of the funds are offered without a
sales commission by Russell Fund Distributors, Inc. (the Distributor), to
institutional investors which invest for their own account or in a fiduciary or
agency capacity.

Minimum Initial Investment and Account Balance. The Prime Money Market Fund
requires a minimum initial investment of $20 million and a minimum account
balance of $15 million. The fund reserves the right to reject any purchase
order.

Purchase Dates and Times. Fund shares may be purchased on any business day. All
purchases must be made in US dollars. Payments for fund shares must be received
by the Transfer Agent, and the accompanying payment must be in federal funds or
converted into federal funds by the Transfer Agent before the purchase order can
be accepted. Shares of the fund purchased by orders accepted prior to 3 p.m.
Eastern time will earn the dividend determined on the date of purchase.

Order and Payment Procedures. There are several ways to invest in the fund. The
SSgA Funds requires a purchase order in good form, which consists of a completed
and signed SSgA Funds' Institutional Account Application, regardless of the
investment method. For additional information, additional Applications or other
forms, call the Customer Service Department at (800) 647-7327, or write: SSgA
Funds, 1 International Place, 27th Floor, Boston, MA 02110.

Federal Funds Wire. In order to assure timely processing of purchase orders, the
Investment Company strongly recommends that you make initial or subsequent
investments by wiring federal funds to State Street Bank and Trust Company as
the Transfer Agent by:

1. Completing the SSgA Funds' Institutional Account Application and fax it to
(617) 664-6011. Please confirm that the fax was received by calling
(800) 997-7327.

2. Telephoning State Street Bank and Trust Company at (800) 647-7327 and
providing: (1) the investor's account registration number, address and
social security or tax identification number; (2) the name of the fund;
(3) the amount being wired; (4) the name of the wiring bank; and (5) the
name and telephone number of the person at the wiring bank to be contacted
in connection with the order.

3. Instructing the wiring bank to wire federal funds to:

State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02110
ABA #0110-0002-8
DDA# 9904-631-0
SSgA Prime Money Market Fund
Account Number and Registration

Orders transmitted via this purchase method will be credited when federal funds
are received by State Street. You will not be permitted to redeem shares from
the account until an original completed application has been received. Please
send completed applications to: State Street Bank, attention SSgA Funds, P.O.
Box 8317, Boston, MA 02266-8317. Please reference the account number on the
application.

Mail. To purchase shares by mail, send a check or other negotiable bank draft
payable to: State Street Bank and Trust Company, P.O. Box 8317, Boston, MA
02266-8317, Attention: SSgA Prime Money Market Fund. Third party checks, except
those payable to an existing shareholder (not a corporation or partnership) and
checks drawn on credit card accounts will not be accepted. Certified checks are
not necessary; however, all checks are accepted subject to collection at full
face value in United States funds and must be drawn in United States dollars on
a United States bank. Normally, checks and drafts are converted to federal funds
within two business days following receipt of the check or draft. Initial
investments should be accompanied by a completed Application, and subsequent
investments are to be accompanied by the investor's account number.

-7-
<PAGE>

1. The investment objective, policies and limitations must match that of the
fund;

2. They must have a readily ascertainable market value;

3. They must be liquid;

4. They must not be subject to restrictions on resale; and

5. The market value of any securities exchanged, plus any cash, must be at least
$25 million; State Street reserves the right to make exceptions to this
minimum at its discretion.

Shares purchased in exchange for securities generally may not be redeemed or
exchanged until the transfer has settled--usually within 7 days following the
purchase exchange.

Exchange Privilege. Subject to the fund's minimum investment requirement,
investors may exchange their fund shares without charge for shares of any other
investment portfolio offered by the Investment Company. Shares are exchanged on
the basis of relative net asset value per share on the business day on which the
call is placed or upon written receipt of instructions in good form by the
Transfer Agent. Exchanges may be made: (1) by telephone if the registrations of
the two accounts are identical; or (2) in writing addressed to State Street Bank
and Trust Company, P.O. Box 8317, Boston, MA 02266-8317, Attention: SSgA Prime
Money Market Fund. If shares of the fund were purchased by check, the shares
must have been present in an account for 10 days before an exchange is made. The
exchange privilege will only be available in states where the exchange may
legally be made, and may be modified or terminated by the Investment Company
upon 60 days' notice to shareholders.

REDEMPTION OF FUND SHARES

Fund shares may be redeemed on any business day at the net asset value next
determined after the receipt of a redemption request.. Typically, payment will
be made as soon as possible (but will ordinarily not exceed seven days) and will
be mailed to the shareholder's address of record. Upon request, redemption
proceeds will be wire transferred to the shareholder's account at a domestic
commercial bank that is a member of the Federal Reserve System. Although the
Investment Company does not currently charge a fee for this service, Investment
Company reserves the right to charge a fee for the cost of wire-transferred
redemptions of less than $1,000. Redemption requests received prior to 3:00 p.m.
Eastern time will not be entitled to that day's dividend. If fund shares were
purchased by check or an automatic investment program ("AIP") and the
shareholder elects to redeem shares within 15 days of such purchase, the
shareholder may experience delays in receiving redemption proceeds. The fund
will generally postpone sending redemption proceeds from such investment until
the fund can verify that the check or AIP investment has been collected. There
will be no such delay for redemptions following investments paid by federal
funds wire or by bank cashier's check, certified check or treasurer's check. An
investor will not be permitted to redeem shares from the account until a
completed Application is on file.

Telephone Redemption. Shareholders may normally redeem fund shares by
telephoning the Customer Service Department at 1-800-647-7327 between 8 a.m. and
4 p.m. Eastern time. You must complete the appropriate section of the
application and attach a voided check (if applicable) before utilizing this
feature. The fund and the Transfer Agent will employ reasonable procedures to
confirm that instructions communicated by telephone are properly authorized.
Neither the fund, the Distributor nor the Transfer Agent will not be responsible
for any loss or expense for executing instructions that are deemed to be
authorized and genuine after following reasonable procedures. These procedures
include recording telephonic instructions, mailing to the shareholder a written
confirmation of the transaction, performing a personal identity test with
private information not likely to be known by other individuals, and restricting
mailing of redemptions to your address of record, if the address has not been
changed within 60 days of the redemption request. To the extent the Transfer
Agent fails to use reasonable procedures as a basis for its belief, it and/or
its service contractors may be liable for telephone instructions that prove to
be fraudulent or unauthorized. The fund, the Distributor or the Transfer Agent

-8-
<PAGE>

will be responsible for the authenticity of terminal access instructions only if
it acts with willful misfeasance, bad faith or gross negligence.

DURING PERIODS OF DRASTIC ECONOMIC OR MARKET CHANGES, SHAREHOLDERS USING THIS
METHOD MAY ENCOUNTER DELAYS. IN SUCH EVENT, YOU SHOULD CONSIDER USING THE MAIL
REDEMPTION PROCEDURE DESCRIBED BELOW.

Mail. In certain circumstances, you will need to make a request to sell shares
in writing (please use the address for purchases by mail under "Purchase of Fund
Shares"). The redemption will be processed based on the net asset value next
determined after receipt by State Street of all required documentation in good
order. Good order means that the request must include the following:

1. A clear letter of instruction or a stock assignment stating the fund and
account number that the redemption is to be process from, the dollar
amount to be redeemed and where the proceeds are to be sent. The letter
must be signed by all owners of the shares in the exact names in which
they appear on the account, together with a guarantee of the signature of
each owner by a bank, trust company or member of a recognized stock
exchange; and

2. Such other supporting legal documents, if required by applicable law or
the Transfer Agent, in the case of estates, trusts, guardianships,
custodianships, corporations and pension and profit-sharing plans.

The Prime Money Market Fund reserves the right to redeem the shares in any
account with a balance of less than $15 million as a result of shareholder
redemptions. Before shares are redeemed to close an account, you will be
notified in writing and allowed 60 days to purchase additional shares to meet
the minimum account balance.

The Prime Money Market Fund may pay any portion of the redemption amount in
excess of $10 million by a distribution in kind of readily marketable securities
from the portfolio of the fund in lieu of cash. Investors will incur brokerage
charges on the sale of these portfolio securities. The fund reserves the right
to suspend the right of redemption or postpone the date of payment if emergency
conditions, as specified in the 1940 Act or determined by the Securities and
Exchange Commission, should exist.

DISTRIBUTION SERVICES AND SHAREHOLDER SERVICING ARRANGEMENTS

Service organizations providing shareholder services to the fund will be
responsible for prompt transmission of purchase and redemption orders and may
charge fees for their services.

PRICING OF FUND SHARES

The price per share for the fund is computed by adding the value of all
securities and other assets of the fund, deducting accrued liabilities, dividing
by the number of shares outstanding and rounding to the nearest cent. The fund's
price is determined as of 3:00 p.m. Eastern time (or as of the close of the
regular trading session of the new York Stock Exchange, if earlier). A business
day is one on which the New York Stock Exchange and Boston Federal Reserve are
open for business. The fund seeks to maintain a $1.00 per share net asset value
and, accordingly, uses the amortized cost valuation method to value its
portfolio instruments. The amortized cost valuation method initially prices an
instrument at its cost and thereafter assumes a constant amortization to
maturity of any discount or premium, regardless of the impact of fluctuating
interest rates on the market value of the instrument.

DIVIDENDS AND DISTRIBUTIONS

-9-
<PAGE>

Distribution Option. You can choose from four different distribution options as
indicated on the account Application:

[ ] Income-Earned Option--Capital gain distributions will be automatically
reinvested, but a check or wire will be sent for each dividend
distribution.

[ ] Cash Option--A check, wire or direct deposit (ACH) will be sent for each
dividend and capital gain distribution.

[ ] Direct Dividends Option--Dividends and capital gain distribution will be
automatically invested in another identically registered SSgA Fund.

If Cash Option has been selected and the account is closed anytime during the
month, the dividends will automatically be wired the following business day
after the redemption to the bank where the redemption wire was sent. If an
account is closed during the month and dividends were to be reinvested, the
proceeds will automatically be sent by check to the address of record.

TAXES

-10-
<PAGE>

Although the sale or exchange of fund shares is a taxable event, no gain or loss
is anticipated because the fund seeks to maintain a stable $1.00 per share net
asset value.

-11-
<PAGE>

FINANCIAL HIGHLIGHTS

1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $1.0000 $1.0000 $1.0000 $1.0000
------- ------- ------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income .0544 .0528 .0546 .0567
LESS DISTRIBUTIONS:
Net investment income (.0544) (.0528) (.0546) (.0567)
------- ------- -------- --------
NET ASSET VALUE, END OF PERIOD $1.0000 $1.0000 $1.0000 $1.0000
======= ======= ======= =======
TOTAL RETURN (%) 5.63 5.52 5.60 5.82
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period ($000 omitted) 2,125,020 1,406,263 1,095,631 1,076,630
Ratios to average net assets (%):
Operating expenses, net(1) .20 .20 .20 .14
Operating expenses, gross(1) .28 .28 .25 .27
Net investment income 5.48 5.40 5.44 5.76
</TABLE>

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

(1) See Note 4 of the Annual Report for current period amounts.

-12-
<PAGE>

ADDITIONAL INFORMATION ABOUT THE FUND

Russell Fund Distributors, Inc.

One International Place

Boston, Massachusetts 02110

1-800-997-7327

SSgA Funds' Investment Company Act File No. 811-5430

-13-
<PAGE>

Filed pursuant to Rule 485(a)
File Nos. 33-19229; 811-5430

SSgA FUNDS
One International Place
Boston, Massachusetts 02110
1-800-997-7327
www.ssgafunds.com

SMALL CAP FUND

The Small Cap Fund seeks to maximize total return through investment in equity
securities; under normal market conditions, at least 65% of total assets will be
invested in securities issued by smaller capitalized issuers.

Effective August 31, 1998, the SSgA Small Cap Fund was closed to purchases by
new investors except for purchases by eligible investors as described below:

o Current shareholders of the SSgA Small Cap Fund may continue to add to the
Fund account.

o Participants in 401(k) plans for which the SSgA Small Cap Fund is an option
may continue to add to their Fund account.

o Participants in asset allocation programs sponsored by financial advisors
may continue to add to their Fund account.

PROSPECTUS DATED _______________, 1999

-1-
<PAGE>

<TABLE>
<CAPTION>
TABLE OF CONTENTS

<S> <C>
INVESTMENT STRATEGIES AND PRINCIPAL RISKS.....................................................3

NON-FUNDAMENTAL INVESTMENT OBJECTIVE.......................................................3
PRINCIPAL INVESTMENT STRATEGIES............................................................3
PRINCIPAL RISKS OF INVESTING IN THE FUND...................................................3
PERFORMANCE................................................................................3

FEES AND EXPENSES OF THE FUND.................................................................4

MANAGEMENT OF THE FUND........................................................................5

ADDITIONAL INFORMATION ABOUT THE FUND'S OBJECTIVES, INVESTMENT STRATEGIES AND RISKS...........5

SHAREHOLDER INFORMATION.......................................................................6

PURCHASE OF FUND SHARES....................................................................6
REDEMPTION OF FUND SHARES..................................................................8
DISTRIBUTION SERVICES AND SHAREHOLDER SERVICING ARRANGEMENTS..............................10
PRICING OF FUND SHARES....................................................................10
DIVIDENDS AND DISTRIBUTIONS...............................................................10
TAXES.....................................................................................11

FINANCIAL HIGHLIGHTS.........................................................................13

ADDITIONAL INFORMATION ABOUT THE FUND........................................................15
</TABLE>

-2-
<PAGE>

INVESTMENT STRATEGIES AND PRINCIPAL RISKS

NON-FUNDAMENTAL INVESTMENT OBJECTIVE

The fund's investment objective is to maximize total return through investment
in equity securities; under normal market conditions, at least 65% of total
assets will be invested in securities of smaller capitalized issuers.

This objective may be changed by the fund's trustees without shareholder
approval.

PRINCIPAL INVESTMENT STRATEGIES

The fund will invest primarily in a portfolio of smaller domestic companies.
Smaller companies will include those stocks with market capitalization generally
ranging in value from $50 million to $3 billion. Sector and industry weight are
maintained at a similar level to that of the Russell 2000(R) Index to avoid
unintended exposure to factors such as the direction of the economy, interest
rates, energy prices and inflation.

Equity securities will be selected for the fund on the basis of proprietary
analytical models of State Street Global Advisors, the fund's Advisor. The fund
management team uses a quantitative approach to investment management, designed
to uncover equity securities which are undervalued, with superior growth
potential. This quantitative investment management approach involves a modeling
process to evaluate vast amounts of financial data and corporate earnings
forecasts. The risks of securities of smaller capitalized companies are
described in Principal Risks.

PRINCIPAL RISKS OF INVESTING IN THE FUND

Equity Securities. The value of equity securities will rise and fall in response
to the activities of the company that issued the stock, general market
conditions, and/or economic conditions.

Securities of Small Cap Companies. Investments in smaller companies may involve
greater risks because these companies often have narrower markets and more
limited managerial and financial resources than larger, more established
companies. As a result their performance can be more volatile which could
increase the volatility of the fund's portfolio.

Analytical Models. The success of a fund's principal investment strategy depends
on the Advisor's skill in designing and using its analytical model as a tool for
selecting undervalued stocks.

PERFORMANCE

Annual Total Returns - Small Cap

[bar chart]

1993 -- 12.96%
1994 -- -0.95%
1995 -- 41.83%
1996 -- 28.79%
1997 -- 23.60%
1998 -- -7.55%

Best Quarter - July 31, 1997: 26.80%
Worst Quarter - September 30, 1998: (27.21%)

-3-
<PAGE>

Average annual total returns
For the periods ended December 31, 1998

<TABLE>
<CAPTION>
1 Year 5 Years Inception
------ ------- ---------
<S> <C> <C> <C>
Small Cap Fund................. (7.55%) 15.63% 16.29%
</TABLE>

FEES AND EXPENSES OF THE FUND

This table describes the fees and expenses that you may pay if you buy and hold
shares of the fund.

<TABLE>
<CAPTION>
Shareholder Fees (fees paid directly from your investment)

<S> <C>
Maximum Sales Charge (Load) Imposed on Purchases None
Maximum Deferred Sales Charge (Load) None
Maximum Sales Charge (Load) Imposed on Reinvested
Dividends or Other Distributions None
Redemption Fee None
Exchange Fee None
Maximum Account Fee None

<CAPTION>
Annual Fund Operating Expenses
(expenses that are deducted from Fund assets)

(as a percentage of average daily net assets)
Advisory Fee .75%
Distribution and Service (12b-1) Fees(1) .16
Total Other Expenses .13
---
Total Annual Fund Operating Expenses 1.04%
=====
</TABLE>

Example

This example is intended to help you compare the cost of investing in the fund
with the cost of investing in other mutual funds.

<TABLE>
<CAPTION>
1 year 3 years 5 years 10 years
<S> <C> <C> <C>
</TABLE>

Long-term shareholders of the fund may pay more in Rule 12b-1 fees than the
economic equivalent of the maximum front-end sales charge permitted by the
National Association of Securities Dealers, Inc.

- --------
(1) The ratio includes .07% for 12b-1 Distribution and .09% for 12b-1
Shareholder Servicing Fees

-4-
<PAGE>

MANAGEMENT OF THE FUND

For these services, the fund pays State Street an advisory fee, calculated daily
and paid monthly, of 0.75% of the average daily net asset value of the fund.

Ms. Jennifer Bardsley, Principal, is the portfolio manager primarily responsible
for investment decisions regarding the fund. Ms. Bardsley joined State Street in
March 1993. Her responsibilities include research, product development, and
portfolio management for the US Active Strategy. She holds BA degrees in
Economics and Russian from Middlebury College, and an MS degree in Computer
Science from Boston College. There are five other portfolio managers who assist
in managing the fund.

ADDITIONAL INFORMATION ABOUT THE FUND'S
OBJECTIVES, INVESTMENT STRATEGIES AND RISKS

The Russell 2000(R) Index. The Russell 2000 Index consists of the smallest 2,000
companies in the Russell 3000(R) Index, representing approximately 11% of the
Russell 3000 Index total market capitalization. The Russell 3000 Index is
composed of 3,000 large US companies, as determined by market capitalization,
representing approximately 98% of the total US equity market. The purpose of the
Russell 2000 Index is to provide a comprehensive representation of the
investable US small-capitalization equity market. The average market
capitalization is $700 million.

A financial futures contract is a contract to buy or sell a specified quantity
of financial instruments such as US Treasury bills, notes and bonds, commercial
paper and bank certificates of deposit or the cash value of a financial
instrument index at a specified future date at a price agreed upon when the
contract is made. A stock index futures contract is a contract to buy or sell
specified units of a stock index at a specified future date at a price agreed
upon when the contract is made. The value of a unit is based on the current
value of the contract index. Under such contracts no delivery of the actual
stocks making up the index takes place. Rather, upon expiration of the contract,
settlement is made by exchanging cash in an amount equal to the difference
between the contract price and the closing price of the index at expiration, net
of variation margin previously paid.

-5-
<PAGE>

SHAREHOLDER INFORMATION

PURCHASE OF FUND SHARES

Minimum Initial and Subsequent Investments and Account Balance. The fund
requires a minimum initial investment of $1,000, with the exception of IRA
accounts, for which the minimum initial investment is $250. Subsequent
investments must be at least $100. An investment in the account (other than IRA
accounts) may be subject to redemption at the fund's discretion if the account
balance is less than $1,000 as a result of shareholder redemptions. The Transfer
Agent will give shareholders 60 days' notice that the account will be closed
unless an investment is made to increase the account balance to the $1,000
minimum. Failure to bring the account balance to $1,000 may result in the
Transfer Agent closing the account at the net asset value (NAV) next determined
on the day the account is closed and mailing the proceeds to the shareholder's
address shown on the Transfer Agent's records. The fund reserves the right to
reject any purchase order. If you are purchasing fund assets through a pension
or other participation plan, you should contact your plan administrator for
further information on purchases.

Mail. For new accounts, please mail the completed Application and check.
Additional investments should also be made by check. You must include the fund
name and account number on your check, or use the remittance form attached to
the confirmation statement (in the return envelope provided). All checks should
be made payable to the SSgA Funds or State Street Bank. If using a servicing
agent or broker-dealer, please verify with them before writing and mailing your
check. All purchase requests should be mailed to one of the following addresses:

<TABLE>
<S> <C>
Regular Mail: Registered, Express or Certified Mail:
SSgA Funds SSgA Funds
P.O. Box 8317 2 Heritage Drive
Boston, MA 02266-8317 North Quincy, MA 02171
</TABLE>

All purchases made by check should be in US dollars from a US bank. Third party
checks and checks drawn on credit card accounts will not be accepted.

-6-
<PAGE>

Each fund reserves the right to terminate or modify the exchange privilege in
the future.

Federal Funds Wire. You may make initial or subsequent investments by wiring
federal funds to State Street, as Transfer Agent, by:

2. Instructing the wiring bank to wire federal funds to:

1. The investment objective, policies and limitations must match that of the
fund;

2. They must have a readily ascertainable market value;

3. They must be liquid;

4. They must not be subject to restrictions on resale; and

5. The market value of any securities exchanged, plus any cash, must be at
least $25 million; State Street reserves the right to make exceptions to
this minimum at its discretion.

Shares purchased in exchange for securities generally may not be redeemed or
exchanged until the transfer has settled--usually within 7 days following the
purchase exchange.

-7-
<PAGE>

REDEMPTION OF FUND SHARES

Fund shares may be redeemed on any business day at the net asset value next
determined after the receipt of a redemption request in good order by following
one of the methods described below. Typically, payments will be made as soon as
possible (but will ordinarily not exceed seven days) and will be mailed to the
shareholder's address of record. Upon request, redemption proceeds will be wire
transferred to the shareholder's account at a domestic commercial bank that is a
member of the Federal Reserve System. If fund shares were purchased by check or
an automatic investment program (AIP) and the shareholder elects to redeem
shares within 15 days of such purchase, the shareholder may experience delays in
receiving redemption proceeds. The fund will generally postpone sending
redemption proceeds from such investment until the fund can verify that the
check or AIP investment has been collected. There will be no such delay for
redemptions following investments paid by federal funds wire or by bank
cashier's check, certified check or treasurer's check.

Redemption requests must be received prior to 4 p.m. Eastern time in order be
effective on the date received. Shareholder servicing agents with underlying
shareholders in omnibus accounts who receive redemption requests by 4 p.m.
Eastern time may transmit the request to the Transfer Agent by 9 a.m. Eastern
time the next business day and receive the net asset value and dividend as of
the prior business day, pursuant to a duly executed Shareholder Servicing
Agreement with the SSgA Funds or the Distributor.

Please note that proceeds from ACH withdrawals will be transmitted to the
investor's bank two days after the withdrawal.

DURING PERIODS OF DRASTIC ECONOMIC OR MARKET CHANGES, SHAREHOLDERS USING THIS
METHOD MAY ENCOUNTER DELAYS. IN SUCH EVENT, YOU SHOULD CONSIDER USING THE MAIL
REDEMPTION PROCEDURE DESCRIBED BELOW.

-8-
<PAGE>

1. Your address of record has changed within the past 60 days;

2. You are redeeming more than $50,000 worth of shares; or

3. You are requesting payment other than by a check mailed to the address of
record and payable to the registered owner(s).

Signature guarantees can usually be obtained from the following sources:

1. A broker or securities dealer, registered with a domestic stock exchange;

2. A federal savings, cooperative or other type of bank;

3. A savings and loan or other thrift institution;

4. A credit union; or

5. A securities exchange or clearing agency.

Please check with the institution prior to signing to ensure that they are an
acceptable signature guarantor. A NOTARY PUBLIC CANNOT PROVIDE A SIGNATURE
GUARANTEE.

<TABLE>
<CAPTION>
Seller Requirements for Written Requests

<S> <C>
Owner of individual, joint, [ ] Letter of instruction, signed by all persons
sole proprietorship, authorized to sign for the account stating general
UGMA/UTMA (custodial titles/capacity, exactly as the account is
accounts for minors) or registered; and
general partner accounts
[ ] Signature guarantee, if applicable (see above).

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

Owners of corporate or [ ] Letter of instruction signed by authorized
association accounts person(s), stating capacity as indicated by the
corporate resolution;

[ ] Corporate resolution, certified within the past
90 days; and

[ ] Signature guarantee, if applicable (see above).

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

Owners or trustees of trust [ ] Letter of instruction, signed by all trustees;
accounts
[ ] If the trustees are not named in the
registration, please provide a copy of the trust
document certified within the past 60 days; and

[ ] Signature guarantee, if applicable (see above).

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

Joint tenancy shareholders [ ] Letter of instruction signed by surviving
whose co-tenants are deceased tenant(s);

[ ] Certified copy of the death certificate; and

[ ] Signature guarantee, if applicable (see above).
</TABLE>

-9-
<PAGE>

Please contact the Customer Service Department at 1-800-647-7327 for questions
and further instructions.

DISTRIBUTION SERVICES AND SHAREHOLDER SERVICING ARRANGEMENTS

Service organizations providing shareholder services to the fund will be
responsible for prompt transmission of purchase and redemption orders and may
charge fees for their services.

PRICING OF FUND SHARES

Debt obligation securities maturing within 60 days of the valuation date are
valued at amortized cost unless the Board determines that the amortized cost
method does not represent market value.

DIVIDENDS AND DISTRIBUTIONS

-10-
<PAGE>

Distribution Option. You can choose from four different distribution options as
indicated on the account Application:

[ ] Income-Earned Option--Capital gain distributions will be automatically
reinvested, but a check or wire will be sent for each dividend
distribution.

[ ] Cash Option--A check, wire or direct deposit (ACH) will be sent for each
dividend and capital gain distribution.

[ ] Direct Dividends Option--Dividends and capital gain distribution will be
automatically invested in another identically registered SSgA Fund.

Distributions will be sent to a pre-designated bank by the Automatic Clearing
House ("ACH") by the payable date, if the Cash Option is selected.

TAXES

If the fund invests in an entity that is classified as a Passive Foreign
Investment Company (PFIC) for federal income tax purposes, the application of
certain provisions of the Code applying to PFICs could result in the imposition
of certain federal income taxes on the fund. The fund can elect to
mark-to-market its PFIC holdings in lieu of paying taxes on gains or
distributions therefrom. It is anticipated that any taxes on a fund with respect
to investments in PFICs would be insignificant.

Foreign shareholders should consult with their tax advisors as to if and how the
federal income tax and its withholding requirements applies to them.

-11-
<PAGE>

-12-
<PAGE>

FINANCIAL HIGHLIGHTS

<TABLE>
<CAPTION>
Years Ended August 31,

1999 1998 1997 1996 1995
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $22.11 $17.44 $14.42 $11.88
------ ------- ------ ------

INCOME FROM INVESTMENT OPERATIONS:

Net investment income .02 .03 .04 .13
Net realized and unrealized gain (loss) on
investments (4.54) 5.87 3.25 3.19
------ ----- ------ ------
Total From Investment Operations (4.52) 5.90 3.29 3.32
------ ----- ---- ----
LESS DISTRIBUTIONS:
Net investment income (.04) (.01) (.07) (.15)
Net realized gain on investment (1.10) (1.22) (.20) (.58)
In excess of net realized gain on investments (.49) -- -- (.05)
----- -- -- ------
Total Distributions (1.63) (1.23) (.27) (.78)
------ ------ ----- ------

NET ASSET VALUE, END OF PERIOD $15.96 $22.11 $17.44 $14.42
====== ====== ====== ======
TOTAL RETURN (%) (22.32) 35.85 23.14 30.04

RATIOS/SUPPLEMENTAL DATA
Net assets, end of period ($000 omitted) 344,630 149,808 55,208 23,301
Ratios to average net assets (%):
Operating expenses, net(2) 1.04 1.00 1.00 .97
Operating expenses, gross(1) 1.04 1.09 1.18 1.58
Net investment income .10 .18 .26 .81
Portfolio turnover (%) 86.13 143.79 76.85 192.88
</TABLE>

- --------
(2) See Note 4 of the Annual Report for current period amounts.

-13-
<PAGE>

SSgA FUNDS

SSgA Money Market Fund

SSgA US Government Money Market Fund

SSgA Tax Free Money Market Fund

SSgA Yield Plus Fund

SSgA Intermediate Fund

SSgA Bond Market Fund

SSgA High Yield Bond Fund

SSgA Growth and Income Fund

SSgA S&P 500 Index Fund

SSgA Matrix Equity Fund

SSgA Small Cap Fund
(Closed to new investors as of August 31, 1998)

SSgA Special Equity Fund

SSgA Tuckerman Active REIT Fund

SSgA Aggressive Equity Fund

SSgA Emerging Markets Fund

SSgA Active International Fund

SSgA International Growth Opportunities Fund

SSgA Life Solutions Growth Fund

SSgA Life Solutions Balanced Fund

SSgA Life Solutions Income and Growth Fund

SSgA IAM SHARES Fund

-14-
<PAGE>

ADDITIONAL INFORMATION ABOUT THE FUND

Russell Fund Distributors, Inc.

One International Place

Boston, Massachusetts 02110

1-800-997-7327

SSgA Funds' Investment Company Act File No. 811-5430

-15-
<PAGE>

Filed pursuant to Rule 485(a)
File Nos. 33-19229; 811-5430

SSgA FUNDS
One International Place
Boston, Massachusetts 02110
1-800-997-7327
www.ssgafunds.com

S&P 500 INDEX FUND

The S&P 500 Index Fund seeks to replicate the total return of the Standard &
Poor's 500 Composite Stock Price Index.

"S&P 500" IS A TRADEMARK OF STANDARD & POOR'S CORPORATION AND HAS BEEN LICENSED
FOR USE BY THE SSgA FUNDS. THE FUND IS NOT SPONSORED, ENDORSED, SOLD OR PROMOTED
BY S&P, AND S&P MAKES NO REPRESENTATION REGARDING THE ADVISABILITY OF INVESTING
IN THIS FUND.

PROSPECTUS DATED _______________, 1999

-1-
<PAGE>

TABLE OF CONTENTS

<TABLE>
<S> <C>
INVESTMENT STRATEGIES AND PRINCIPAL RISKS.....................................................3

FUNDAMENTAL INVESTMENT OBJECTIVE...........................................................3
PRINCIPAL INVESTMENT STRATEGIES............................................................3
PRINCIPAL RISKS OF INVESTING IN THE FUND...................................................3
PERFORMANCE................................................................................4

FEES AND EXPENSES OF THE FUND.................................................................4

MANAGEMENT OF THE FUND........................................................................5

ADDITIONAL INFORMATION ABOUT THE FUND'S OBJECTIVES, INVESTMENT STRATEGIES AND RISKS...........5

SHAREHOLDER INFORMATION.......................................................................6

PURCHASE OF FUND SHARES....................................................................6
REDEMPTION OF FUND SHARES..................................................................8
DISTRIBUTION SERVICES AND SHAREHOLDER SERVICING ARRANGEMENTS..............................10
PRICING OF FUND SHARES....................................................................11
DIVIDENDS AND DISTRIBUTIONS...............................................................11
TAXES.....................................................................................12

FINANCIAL HIGHLIGHTS.........................................................................13

INFORMATION REGARDING STANDARD & POOR'S CORPORATION..........................................14

ADDITIONAL INFORMATION ABOUT THE FUND........................................................16
</TABLE>

-2-
<PAGE>

INVESTMENT STRATEGIES AND PRINCIPAL RISKS

FUNDAMENTAL INVESTMENT OBJECTIVE

The fund's fundamental investment objective is to seek to replicate the total
return of the Standard & Poor's 500 Composite Stock Price Index (the S&P 500
Index).

This objective may be changed only with the approval of a majority of the fund's
shareholders as defined in the Investment Company Act of 1940 (the 1940 Act).

PRINCIPAL INVESTMENT STRATEGIES

The fund is not managed according to traditional methods of "active" investment
management, which involve the buying and selling of securities based upon
economic, financial and market analysis and investment judgment. Instead, the
fund utilizes a "passive" investment approach, attempting to replicate the
investment performance of its benchmark index through automated statistical
analytic procedures.

The fund intends to invest in all 500 stocks in the S&P 500 Index in proportion
to their weighting in the S&P 500 Index. The Index is designed to capture the
price performance of a large cross-section of the US publicly traded stock
market. To the extent that all 500 stocks cannot be purchased, the fund will
purchase a representative sample of the stocks listed in the Index in proportion
to their weightings.

To the extent that the fund seeks to replicate the S&P 500 Index using such
sampling techniques, a close correlation between the fund's performance and the
performance of the Index is anticipated in both rising and falling markets. The
fund will attempt to achieve a correlation between the performance of its
portfolio and that of the Index of at least 0.95, before deduction of fund
expenses. A correlation of 1.00 would represent perfect correlation between
portfolio and index performance. It is anticipated that the correlation of the
fund's performance to that of the Index will increase as the size of the fund
increases. The fund's ability to achieve significant correlation between fund
and Index performance may be affected by changes in securities markets, changes
in the composition of the Index and the timing of purchases and redemptions of
fund shares. The fund's management team will monitor correlation. Should the
fund fail to achieve an appropriate level of correlation, State Street Global
Advisors, the fund's Advisor, will report to the Board of Trustees, which will
consider alternative arrangements.

Management of an Index Fund. The fund is not managed according to traditional
methods of "active" investment management, which involve the buying and selling
of securities based upon economic, financial and market analysis and investment
judgment. Instead, the fund utilizes a "passive" investment approach, attempting
to duplicate the investment performance of its benchmark index through automated
statistical analytic procedures.

PRINCIPAL RISKS OF INVESTING IN THE FUND

Large Capitalization Stocks. The fund's emphasis on large-cap stocks makes it
susceptible to the business risks of larger companies, which usually cannot
change as quickly as smaller companies in response to competitive challenges.
Larger companies also tend not to be able to maintain the high growth rates of
well-managed smaller companies, especially during strong economic periods. A
fund's emphasis on large-cap stocks makes it susceptible to the business risks
of larger companies, which usually cannot change as quickly as smaller companies
in response to competitive challenges. Larger companies also tend not to be able
to maintain the high growth rates of well-managed smaller companies, especially
during strong economic periods.

Equity Securities. The value of equity securities will rise and fall in response
to the activities of the company that issued the stock, general market
conditions, and/or economic conditions.

Analytical Models. The success of a fund's principal investment strategy depends
on the Advisor's skill in designing and using its analytical model as a tool for
selecting undervalued stocks.

-3-
<PAGE>

PERFORMANCE

Annual Total Returns - S&P 500 Index

[bar chart]

1994 -- 1.30%
1995 -- 37.02%
1996 -- 22.65%
1997 -- 33.10%
1998 -- 28.35%

Best Quarter - November 30, 1998: 21.96%
Worst Quarter - August 31, 1998: (11.93%)

Average annual total returns
For the periods ended December 31, 1998

<TABLE>
<CAPTION>
1 Year 5 Years Inception
------ ------- ---------
<S> <C> <C> <C>
S&P 500 Index Fund ............... 28.35% 23.80% 21.32%
</TABLE>

FEES AND EXPENSES OF THE FUND

This table describes the fees and expenses that you may pay if you buy and hold
shares of the fund.

<CAPTION>
Annual Fund Operating Expenses
(expenses that are deducted from fund assets)

(as a percentage of average daily net assets)
Advisory Fee(1) .10%
Distribution and Service (12b-1) Fees(1, 2) .08
Total Other Expenses(1) .09
----
Total Annual Fund Operating Expenses(1) .27%
====
</TABLE>

- -----------------------
(1) The Advisor has voluntarily agreed to waive up to the full amount of its
Advisory fee to the extent that total expenses exceed .18% of average daily net
assets on an annual basis. The annual Advisory fee after the waiver is .01% of
average daily net assets. The total operating expense of the fund after the
waiver is .18% of average daily net assets on an annual basis. The Advisory fee
waiver agreement will remain in effect for the current fiscal year.

(2) The ratio includes .04% for 12b-1 Distribution and .04% for 12b-1
Shareholder Servicing Fees

-4-
<PAGE>

Example

This example is intended to help you compare the cost of investing in the fund
with the cost of investing in other mutual funds.

<TABLE>
<CAPTION>
1 year 3 years 5 years 10 years
<S> <C> <C> <C>
$ $ $ $
= = = =
</TABLE>

Long-term shareholders of the fund may pay more in Rule 12b-1 fees than the
economic equivalent of the maximum front-end sales charge permitted by the
National Association of Securities Dealers, Inc.

MANAGEMENT OF THE FUND

For these services, the fund pays State Street an advisory fee, calculated daily
and paid monthly, of 0.01% (after fee waiver) of the average daily net asset
value of the fund.

Mr. James B. May, Principal, has been with State Street since 1989. Before
joining the Global Structured Products Group as a portfolio manager in January
1994, Mr. May served as a Senior Investment Support Analyst for the US
Strcutured Products Group. Mr. May has been the lead portfolio manager for this
fund since May 1995. Mr. May has been a portfolio manager in the US Structured
Products Group of State Street since January 1994. He holds a BS in Finance from
Bentley College and his MBA from Boston College. There are five other members of
the team who assist Mr. May with the management of the fund.

ADDITIONAL INFORMATION ABOUT THE FUND'S
OBJECTIVES, INVESTMENT STRATEGIES AND RISKS

S&P 500 Index. The S&P 500 Index is composed of 500 common stocks which are
chosen by Standard & Poor's Corporation ("Standard & Poor's") to best capture
the price performance of a large cross-section of the US publicly traded stock
market. The Index is structured to approximate the general distribution of
industries in the US economy. The inclusion of a stock in the S&P 500 Index in
no way implies that Standard & Poor's believes the stock to be an attractive
investment, nor is Standard & Poor's a sponsor or in any way affiliated with the
fund. The 500 securities, most of which trade on the New York Stock Exchange,
represent

-5-
<PAGE>

approximately 75% of the market value of all US common stocks. Each
stock in the S&P 500 Index is weighted by its market capitalization. That is,
each security is weighted by its total market value relative to the total market
values of all the securities in the Index. Component stocks included in the S&P
500 Index are chosen with the aim of achieving a distribution at the index level
representative of the various components of the US GNP and therefore do not
represent the 500 largest companies. Aggregate market value and trading activity
are also considered in the selection process. A limited percentage of the Index
may include foreign securities.

Cash Reserves. For defensive purposes, the fund may temporarily invest, without
limitation, in short-term fixed income securities. High quality,
investment-grade securities include obligations issued or guaranteed as to
principal and interest by the US Government, its agencies or instrumentalities
and repurchase agreements collateralized by these obligations, commercial paper,
bank certificates of deposit, bankers' acceptances and time deposits. When using
this strategy, the weighted average maturity of securities held by a fund will
decline, and thereby possibly cause its yield to decline as well.

Debt Securities. The fund may also invest temporarily in investment grade debt
securities for defensive purposes. The fund may invest in convertible debt
securities. Please see the Statement of Additional Information for a description
of securities ratings.

SHAREHOLDER INFORMATION

PURCHASE OF FUND SHARES

Minimum Initial and Subsequent Investments and Account Balance. The fund
requires a minimum initial investment of $10,000, with the exception of IRA
accounts, for which the minimum initial investment is $250. Subsequent
investments must be at least $100. An investment in the fund (other than IRA
accounts) may be subject to redemption at the fund's discretion if the account
balance is less than $10,000 as a result of shareholder redemptions. The
Transfer Agent will give shareholders 60 days' notice that the account will be
closed unless an investment is made to increase the account balance to the
$10,000 minimum. Failure to bring the account

-6-
<PAGE>

balance to $10,000 may result in the Transfer Agent closing the account at the
net asset value ("NAV") next determined on the day the account is closed and
mailing the proceeds to the shareholder's address shown on the Transfer Agent's
records. Shareholders with accounts established prior to December 24, 1997 are
not subject to the $10,000 minimum requirements. The fund reserves the right to
reject any purchase order. Investors purchasing fund assets through a pension or
other participation plan should contact their plan administrator for further
information on purchases.

Purchase Dates and Times. fund shares may be purchased on any business day. A
business day is one on which the New York Stock Exchange is open for regular
trading. All purchases must be made in US dollars. Purchase orders in good form
(described below) and payments for fund shares by check or by wire transfer must
be received by the Transfer Agent prior to the close of the regular trading
session of the New York Stock Exchange, which is ordinarily 4 p.m. Eastern time
(the "Pricing Time"), to be effective on the date received. If an order or
payment is received after the Pricing Time, the order will be effective on the
next business day. Orders placed through a servicing agent or broker-dealer that
has a selling or service agreement with the Distributor or the SSgA Funds must
be received by the servicing agent or broker-dealer prior to the Pricing Time.

Mail. For new accounts, please mail the completed Application and check.
Additional investments should also be made by check. You must include the fund
name and account number on your check, or use the remittance form attached to
the confirmation statement (in the return envelope provided). All checks should
be made payable to the SSgA Funds or State Street Bank. If using a servicing
agent or broker-dealer, please verify with them before writing and mailing your
check. All purchase requests should be mailed to one of the following addresses:

<TABLE>
<S> <C>
Regular Mail: Registered, Express or Certified Mail:
SSgA Funds SSgA Funds
P.O. Box 8317 2 Heritage Drive
Boston, MA 02266-8317 North Quincy, MA 02171
</TABLE>

All purchases made by check should be in US dollars from a US bank. Third party
checks and checks drawn on credit card accounts will not be accepted.

Each fund reserves the right to terminate or modify the exchange privilege in
the future.

Federal Funds Wire. You may make initial or subsequent investments by wiring
federal funds to State Street, as Transfer Agent, by:

1. Telephoning the Customer Service Department at 1-800-647-7327 between 8 a.m.
and 4 p.m. Eastern time, and stating: (a) your account registration number,
address and social security or tax identification number; (b) the name of
the fund in which the investment is to be made and the account number; and
(c) the exact amount being wired.

2. Instructing the wiring bank to wire federal funds to:

-7-
<PAGE>

Automatic Investment Plan. Once the initial investment has been made, you may
make subsequent investments of at least $100 monthly, quarterly or annually by
direct deposit through Automatic Clearing House (ACH) by completing the
appropriate section of the Application and attaching a voided personal check to
code your account correctly with the bank information. You may make subsequent
investments monthly, quarterly or annually by deducting $100 or more from your
bank checking account. You may elect this option on the Application and call the
Customer Service Department at 1-800-647-7327 prior to 3 p.m. Eastern time for
additional automatic purchases, to change the amount of the existing automatic
purchase, or to stop it. Shares will be purchased at the offering price next
determined following receipt of the order by the Transfer Agent.

1. The investment objective, policies and limitations must match that of the
fund;

2. They must have a readily ascertainable market value;

3. They must be liquid;

4. They must not be subject to restrictions on resale; and

5. The market value of any securities exchanged, plus any cash, must be at
least $25 million; State Street reserves the right to make exceptions to
this minimum at its discretion.

Shares purchased in exchange for securities generally may not be redeemed or
exchanged until the transfer has settled--usually within 7 days following the
purchase exchange.

REDEMPTION OF FUND SHARES

Fund shares may be redeemed on any business day at the net asset value next
determined after the receipt of a redemption request in good order by following
one of the methods described below. Typically, payments will be made as soon as
possible (but will ordinarily not exceed seven days) and will be mailed to your
address of record. Upon request, redemption proceeds will be wire transferred to
your account at a domestic commercial bank that is a member of the Federal
Reserve System. If you purchased fund shares by check or an automatic investment
program (AIP) and you elect to redeem shares within 15 days of the purchase, you
may experience delays in receiving redemption proceeds. In this case, the fund
will generally postpone sending redemption proceeds until it can verify that the
check or AIP investment has been collected. There will be no such delay for
redemptions following investments paid by federal funds wire or by bank
cashier's check, certified check or treasurer's check.

-8-
<PAGE>

Redemption requests must be received prior to 4 p.m. Eastern time in order to be
effective on the date received. Shareholder servicing agents with underlying
shareholders in omnibus accounts who receive redemption requests by 4 p.m.
Eastern time may transmit the request to the Transfer Agent by 9 a.m. Eastern
time the next business day to receive the net asset value and dividend as of the
prior business day, pursuant to a duly executed Shareholder Servicing Agreement
with the SSgA Funds or the Distributor.

Please note that proceeds from ACH withdrawals will be transmitted to the
investor's bank two days after the withdrawal.

DURING PERIODS OF DRASTIC ECONOMIC OR MARKET CHANGES, SHAREHOLDERS USING THIS
METHOD MAY ENCOUNTER DELAYS. IN SUCH EVENT, YOU SHOULD CONSIDER USING THE MAIL
REDEMPTION PROCEDURE DESCRIBED BELOW.

1. Your address of record has changed within the past 60 days;

2. You are redeeming more than $50,000 worth of shares; or

3. You are requesting payment other than by a check mailed to the address of
record and payable to the registered owner(s).

Signature guarantees can usually be obtained from the following sources:

1. A broker or securities dealer, registered with a domestic stock exchange;

2. A federal savings, cooperative or other type of bank;

3. A savings and loan or other thrift institution;

-9-
<PAGE>

4. A credit union; or

5. A securities exchange or clearing agency.

Please check with the institution prior to signing to ensure that they are an
acceptable signature guarantor. A NOTARY PUBLIC CANNOT PROVIDE A SIGNATURE
GUARANTEE.

<TABLE>
<S> <C>
Seller Requirements for Written Requests

Owner of individual, [ ] Letter of instruction, signed by all persons
joint, sole proprietorship, authorized to sign for the account stating general
UGMA/UTMA (custodial titles/capacity, exactly as the account is registered;
accounts for minors) or and
general partner accounts
[ ] Signature guarantee, if applicable (see above).

------------------------------------------------------------------------------------------
Owners of corporate or [ ] Letter of instruction signed by authorized person(s),
association accounts stating capacity as indicated by the corporate
resolution;

[ ] Corporate resolution, certified within the past 90
days; and

[ ] Signature guarantee, if applicable (see above).

-------------------------------------------------------------------------------------------
Owners or trustees of trust [ ] Letter of instruction, signed by all trustees;
accounts
[ ] If the trustees are not named in the registration,
please provide a copy of the trust document certified
within the past 60 days; and

[ ] Signature guarantee, if applicable (see above).

-------------------------------------------------------------------------------------------
Joint tenancy shareholders [ ] Letter of instruction signed by surviving tenant(s);
whose co-tenants are
deceased [ ] Certified copy of the death certificate; and

[ ] Signature guarantee, if applicable (see above).
</TABLE>

Please contact the Customer Service Department at 1-800-647-7327 for questions
and further instructions.

DISTRIBUTION SERVICES AND SHAREHOLDER SERVICING ARRANGEMENTS

-10-
<PAGE>

organizations providing shareholder services to the fund, are not permitted by
the Plan to exceed .25% of a fund's average net asset value per year. Any
payments that are required to be made to the Distributor or service organization
that cannot be made because of the .25% limitation may be carried forward and
paid in subsequent years so long as the Plan is in effect.

Service organizations providing shareholder services to the fund will be
responsible for prompt transmission of purchase and redemption orders and may
charge fees for their services.

PRICING OF FUND SHARES

Debt obligation securities maturing within 60 days of the valuation date are
valued at amortized cost unless the Board determines that the amortized cost
method does not represent market value.

DIVIDENDS AND DISTRIBUTIONS

Distribution Option. You can choose from four different distribution options as
indicated on the account Application:

[ ] Income-Earned Option--Capital gain distributions will be automatically
reinvested, but a check or wire will be sent for each dividend
distribution.

[ ] Cash Option--A check, wire or direct deposit (ACH) will be sent for each
dividend and capital gain distribution.

[ ] Direct Dividends Option--Dividends and capital gain distribution will be
automatically invested in another identically registered SSgA Fund.

Distributions will be sent to a pre-designated bank by the Automatic Clearing
House (ACH) by the payable date, if the Cash Option is selected.

-11-
<PAGE>

TAXES

-12-
<PAGE>

FINANCIAL HIGHLIGHTS

<TABLE>
<CAPTION>
Years Ended August 31,

<S> <C> <C> <C> <C> <C>
1999 1998 1997 1996 1995
NET ASSET VALUE, BEGINNING OF PERIOD $18.96 $14.41 $12.81 $10.89
------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income .31 .32 .32 .29
Net realized and unrealized gain (loss) on 1.18 5.22 1.98 1.95
investments ---- ---- ---- ----
Total From Investment Operations 1.49 5.54 2.30 2.24
---- ---- ---- ----
LESS DISTRIBUTIONS:
Net investment income (.32) (.32) (.31) (.29)
Net realized gain on investment (.71) (.67) (.39) (.03)
----- ----- ------ ------
Total Distributions (1.03) (.99) (.70) (.32)
------ ----- ------ ------
NET ASSET VALUE, END OF PERIOD $19.42 $18.96 $14.41 $12.81
====== ====== ====== ======
TOTAL RETURN (%) 7.91 40.30 18.46 21.11
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period ($000 omitted) 1,615,913 1,299,571 704,683 545,200
Ratios to average net assets (%):
Operating expenses, net(1) .17 .16 .18 .19
Operating expenses, gross .27 .26 .28 .29
Net investment income 1.50 2.00 2.32 2.76
Portfolio turnover (%) 26.17 7.54 28.72 38.56
</TABLE>

- -----------------------------------
(1) See Note 4 of the Annual Report for current period amounts.

-13-
<PAGE>

INFORMATION REGARDING STANDARD & POOR'S CORPORATION

"Standard & Poor's," "S&P," "Standard & Poor's 500," and "500" are trademarks of
Standard & Poor's and have been licensed for use by SSgA Fund. The fund is not
sponsored, endorsed, sold or promoted by Standard & Poor's. Standard & Poor's
makes no representation or warranty, express or implied, to the shareholders of
the fund regarding the advisability of investing in securities generally or in
the fund particularly or the ability of the S&P 500 Index to track general stock
market performance. Standard & Poor's only relationship to the fund is the
licensing of the trademarks and tradenames of Standard & Poor's including the
S&P 500 Index, which is determined, composed and calculated by Standard & Poor's
without regard to the fund. Standard & Poor's has no obligation to take the
needs of the shareholders of the fund into consideration in determining,
composing or calculating this Index. Standard & Poor's is not responsible for
and has not participated in the determination of the prices and amount of the
fund or the timing of the issuance or sale of the shares or in the determination
or calculation of the equation by which the shares of the fund are to be
redeemed. Standard & Poor's has no obligation or liability in connection with
the administration, marketing or trading of the fund.

STANDARD & POOR'S DOES NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF THE
INDEX OR ANY DATA INCLUDED THEREIN AND STANDARD & POOR'S SHALL HAVE NO LIABILITY
FOR ANY ERRORS, OMISSIONS, OR INTERRUPTIONS THEREIN. STANDARD & POOR'S MAKES NO
WARRANTY, EXPRESS OR IMPLIED, AS TO RESULTS TO BE OBTAINED BY THE FUND OR THE
SHAREHOLDERS OF THE FUND OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE INDEX
OR ANY DATA INCLUDED THEREIN. STANDARD & POOR'S MAKES NO EXPRESS OR IMPLIED
WARRANTIES, AND EXPRESSLY DISCLAIMS ALL WARRANTIES OF MERCHANTABILITY OR FITNESS
FOR A PARTICULAR PURPOSE OR USE WITH RESPECT TO THE INDEX OR ANY DATA INCLUDED
THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL STANDARD &
POOR'S HAVE ANY LIABILITY FOR ANY SPECIAL, PUNITIVE, INDIRECT, OR CONSEQUENTIAL
DAMAGES (INCLUDING LOST PROFITS) EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH
DAMAGES.

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SSgA FUNDS

SSgA Money Market Fund

SSgA US Government Money Market Fund

SSgA Tax Free Money Market Fund

SSgA Yield Plus Fund

SSgA Intermediate Fund

SSgA Bond Market Fund

SSgA High Yield Bond Fund

SSgA Growth and Income Fund

SSgA S&P 500 Index Fund

SSgA Matrix Equity Fund

SSgA Small Cap Fund
(Closed to new investors as of August 31, 1998)

SSgA Special Equity Fund

SSgA Tuckerman Active REIT Fund

SSgA Aggressive Equity Fund

SSgA Emerging Markets Fund

SSgA Active International Fund

SSgA International Growth Opportunities Fund

SSgA Life Solutions Growth Fund

SSgA Life Solutions Balanced Fund

SSgA Life Solutions Income and Growth Fund

SSgA IAM SHARES Fund

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<PAGE>

ADDITIONAL INFORMATION ABOUT THE FUND

Russell Fund Distributors, Inc.

One International Place

Boston, Massachusetts 02110

1-800-997-7327

SSgA Funds' Investment Company Act File No. 811-5430

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Filed pursuant to Rule 485(a)
File Nos. 33-19229; 811-5430

SSgA FUNDS
One International Place
Boston, Massachusetts 02110
1-800-997-7327
www.ssgafunds.com

TAX FREE MONEY MARKET FUND

The Tax Free Fund seeks to maximize current income, exempt from federal income
taxes, to the extent consistent with the preservation of capital and liquidity
and the maintenance of a stable $1.00 per share net asset value.