Elfun Funds
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Supplement Dated November 15, 1996
to
Prospectus Dated April 18, 1996
Each Fund (other than the Money Market Fund), with respect to its limited cash
position, is now authorized to invest in GEI Short-Term Investment Fund (the
"Investment Fund"), an investment fund created specifically to serve as a
vehicle for the collective investment of cash balances of the Funds (other than
the Money Market Fund) and other accounts advised by either the Funds'
investment adviser, General Electric Investment Corporation ("GEIC"), or its
affiliate, GE Investment Management Incorporated ("GEIM"). By using the
Investment Fund, a Fund's cash position is exposed to potentially broader
diversification, lower transaction cost and better investment opportunity than
would be the case if it were invested separately without the potential benefits
of such a large cash pool.
The Investment Fund invests exclusively in the money market instruments
described in (i) through (vii) below. The Investment Fund is advised by GEIM. No
advisory fee is charged by GEIM to the Investment Fund, nor will a Fund incur
any sales charge, redemption fee, distribution fee or service fee in connection
with its investments in the Investment Fund.
Although, during normal market conditions, the uninvested cash balances of each
Fund is generally expected to be relatively small, Elfun Income Fund and Elfun
Tax-Exempt Income Fund are authorized to invest up to 25% of their assets in the
Investment Fund if the size of the particular cash balance so warrants. Elfun
Trusts, Elfun Diversified Fund and Elfun Global Fund may only invest up to 5% of
their assets in the Investment Fund, as a result of an investment policy
prohibiting these Funds from investing more than 5% of their assets in any one
issuer.
As a result of the foregoing development, the first paragraph on page 12 of the
Prospectus under "Additional Investments -- Money Market Instruments" has been
deleted in its entirety and now reads as follows to clarify the types of money
market instruments each Fund (other than the Money Market Fund) may invest in
directly or indirectly through an investment in the Investment Fund:
Money Market Instruments. Each Fund, other than the Money Market Fund, may
invest in the following types of money market instruments: (i) securities
issued or guaranteed by the U.S. Government or one of its agencies or
instrumentalities, (ii) debt obligations of banks, savings and loan
institutions, insurance companies and mortgage bankers, (iii) commercial
paper and notes, including those with variable and floating rates of
interest, (iv) debt obligations of foreign branches of U.S. banks, U.S.
branches of foreign banks and foreign branches of foreign banks, (v) debt
obligations issued or guaranteed by one or more foreign governments or any
of their political subdivisions, agencies or instrumentalities, including
obligations of supranational entities, (vi) debt securities issued by
foreign issuers and (vii) repurchase agreements.
