Allmerica Funds
Investment Grade Income Fund
(Supplement to Prospectus dated April 29, 1996)
The following information replaces the first paragraph of
the disclosure found in the Fund's Prospectus under "Certain
Investment Strategies, Policies and Risk Considerations --
Asset-Backed Securities and Mortgage-Backed Securities:"
Asset-Backed Securities and Mortgage-Backed Securities
The Fund may purchase asset-backed securities, which
represent a participation in, or are secured by and payable
from, a stream of payments generated by particular assets,
frequency a pool of assets similar to one another. Assets
generating such payments include instruments such as motor
vehicle installment purchase obligations, credit card
receivables, and home equity loans. Payment of principal
and interest may be guaranteed for certain amounts and time
periods by a letter of credit issued by a financial
institution unaffiliated with the issuer of the securities.
The estimated life of an asset-backed security varies with
the prepayment experience of the underlying debt
instruments. The rate of such prepayments, and hence the
life of the asset-backed security, will be primarily a
function of current market rates, although other economic
and demographic factors will be involved. Under certain
interest rates and prepayment rate scenarios, the Fund may
fail to recoup fully its investment in asset-baked
securities. The Fund will not invest more than 20% of its
total assets in asset-backed securities.
Dated: November 21, 1996
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