Supplement dated January 15, 1997
to Prospectus dated May 1, 1996
The Park Avenue Portfolio
This Supplement should be retained with the Prospectus for future
reference.
The Guardian Asset Allocation Fund
The following supplements the last two paragraphs of the section entitled
"Portfolio Managers" appearing on page 25 of the Prospectus:
As of January 15, 1997, Frank J. Jones, Ph.D., will relinquish his
responsibilities as co-portfolio manager of The Guardian Asset Allocation
Fund (the "Asset Allocation Fund"), but will continue to serve as President
of the Portfolio. Jonathan C. Jankus, CFA, who has shared responsibility
for the allocation of the Asset Allocation Fund's assets since May 1, 1995,
will serve as sole portfolio manager as of such date.
The Guardian Investment Quality Bond Fund
The following replaces the third paragraph of the section entitled
"Portfolio Managers" appearing on page 25 of the Prospectus:
Effective January 15, 1997, responsibility for the portfolio
management of The Guardian Investment Quality Bond Fund (the "Bond Fund")
will be shared by Michele S. Babakian and Thomas G. Sorell, CFA. Frank J.
Jones, Ph.D., President of the Portfolio, will have overall responsibility
for the allocation of the Fund's assets between the various fixed income
sectors managed by Ms. Babakian and Mr. Sorell. Ms. Babakian, Vice
President of the Portfolio, served as the sole manager of the Bond Fund
from its inception in February, 1993. Ms. Babakian is also the co-portfolio
manager (with Mr. Sorell) of The Guardian Bond Fund, Inc. and manages a
portion of the fixed-income assets of The Guardian Life Insurance Company
of America ("Guardian Life"). Ms. Babakian became a Vice President of
Guardian Life in January 1995, and was a Second Vice President prior
thereto. Mr. Sorell has been a Vice President of Guardian Life since July,
1994 and manages a portion of the fixed-income assets of Guardian Life and
its subsidiary, The Guardian Insurance & Annuity Company, Inc. Mr. Sorell
also manages the fixed-income assets of Guardian Asset Management
Corporation, a Guardian Life Subsidiary. Mr. Sorell has not previously
managed a registered management investment company. From December 1993
through July 1994, Mr. Sorell was Director of Fixed Income for White River
Corporation. From April 1993 to December 1993, he served as Director of
Fixed Income for Fund America Enterprises. Prior thereto, Mr. Sorell served
as a Portfolio Manager for AIG Investment Advisors.
The following supplements the information contained in the section entitled
"The Guardian Investment Quality Bond Fund" appearing on pages 14-16 of the
Prospectus.
The Bond Fund may also invest in asset-backed securities. Asset-backed
securities, which are structured similarly to mortgage-backed securities,
are collateralized by interests in pools of loans, receivables or other
obligations originated by single or multiple lenders and may use similar
credit enhancements. The underlying assets, which include motor vehicle
installment purchase contracts, home equity loans, credit card receivables
and other credit arrangements, are securitized in pass-through structures
similar to mortgage pass-throughs or in pay-through structures similar to
CMO's. The Bond Fund may invest in these and other types of asset-backed
securities that may be developed in the future.
<PAGE>
One of the principal characteristics which distinguishes asset-backed
securities from mortgage-backed securities is that asset-backed securities
generally do not have the benefit of first lien security interests in the
related collateral. Certain receivables such as credit card receivables are
generally unsecured, and the debtors are entitled to the protection of a
number of state and federal consumer credit laws, certain of which may
hinder the right to receive full payment. Also, the security interests in
the underlying collateral may not be properly transferred when the pool is
created, resulting in the possibility that the collateral may be resold.
Some asset-backed securities may also have prepayment risk due to
refinancing of their receivables. Generally, these types of loans are of
shorter average life than mortgages, but may have average lives of up to 10
years. These securities, all of which are issued by non-governmental
entities, carry no direct or indirect governmental guarantees.
In addition, the Bond Fund may invest in trust-preferred (or capital)
securities. These securities, which are issued by entities such as special
purpose bank subsidiaries, currently are permitted to treat the interest
payments as a tax-deductible cost. Capital securities, which have no voting
rights, have a final stated maturity date and a fixed schedule for periodic
payments. In addition, capital securities have provisions which afford
preference over common and preferred stock upon liquidation, although the
securities are subordinated to other, more senior debt securities of the
same issuer. The issuers of these securities retain the right to defer
interest payments for a period of up to five years, although interest
continues to accrue cumulatively. The deferral of payments may not exceed
the stated maturity date of the securities themselves. The non-payment of
deferred interest at the end of the permissible period will be treated as
an incidence of default.
At the present time, the Internal Revenue Service treats capital
securities as debt. Tax legislation currently pending in Congress may cause
this tax treatment to be modified in the future. In the event that the tax
treatment of interest payments of these types of securities is modified,
the Bond Fund will reconsider the appropriateness of continued investment
in these securities.
EB-010163(5/96)sup.
