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SUPPLEMENT TO STATEMENT OF ADDITIONAL INFORMATION
FOR NORTH AMERICAN FUNDS
Dated March 1, 1999
1. The second sentence of the first paragraph under "HEDGING AND OTHER
STRATEGIC TRANSACTIONS" on page 18 of the Statement of Additional Information
(SAI) is replaced with the following:
Except for the International Equity Portfolio, these strategies will be
used for hedging purposes only, including hedging various market risks (such as
interest rates, currency exchange rates and broad or specific market movements),
and managing the effective maturity or duration of debt instruments held by the
Fund.
2. The following heading and paragraph are added after the paragraph with
the heading "Other Limitations" on page 24 of the SAI:
International Equity Portfolio
The International Equity Portfolio may use certain Strategic Transactions
and instruments for both hedging and non-hedging purposes. Circumstances under
which such techniques might be used to further the Fund's investment objective
include, but are not limited to, the purchase or sale of stock and stock index
futures contracts: to gain exposure to a market in response to changes in the
Fund's investment strategy; upon the inflow of investable cash; when the
instrument provides greater liquidity than the underlying market; when the Fund
is restricted from directly owning a security or currency; or when these
strategies and instruments provide a pricing advantage or lower transaction
costs. The Fund also may purchase combinations of instruments in order to gain
exposure to an investment instead of actually purchasing such investment. For
example, the Fund may purchase and sell forward foreign currency exchange
contracts in combination with other transactions (such as the purchase and sale
of stock and stock index futures contracts). The Fund will not use derivatives
in a manner that creates leverage.
August 31, 1999
