Filed Pursuant to Rule 497(e)
1933 Act Registration No. 33-1361
1933 Act Registration No. 33-40496
SUPPLEMENT DATED APRIL 1, 1996
TO THE JOINT PROSPECTUS DATED JUNE 1, 1995
OF
IAI RESERVE FUND (a separate portfolio of IAI Investment Funds V,
Inc.)
IAI MONEY MARKET FUND (a separate portfolio of IAI Investment
Funds VI, Inc.)
On March 21, 1996, the shareholders of the above-referenced
Funds approved IAI's proposal, effective April 1, 1996, to
eliminate each Fund's Plan of Distribution and corresponding
underwriting agreement with IAI Securities, Inc. and to replace
each Fund's management and administrative agreements with a new
contract between each Fund and IAI. Under this new contract, IAI
will provide, or arrange for the provision of, all services
required by a Fund in exchange for one all-inclusive fee. The
new contracts are not intended to result in a fee change.
Because of these changes, certain portions of this Prospectus
have been updated as set forth below.
<TABLE>
<CAPTION>
FUND EXPENSE INFORMATION
The following replaces the material after the table
"Shareholder Transaction Expenses".
Annual Fund Operating Expenses*
<S> <C> <C>
IAI Money Market IAI Reserve
Fund Fund
Management Fee .60% .85%
Rule 12b-1 Fee None None
Other Expenses None None
Total Fund Operating .60% .85%
Expenses
____________________________________________
<FN>
<FN1>
* as a percentage of average daily net assets
</FN>
</TABLE>
Example:
Based upon the levels of Total Fund Operating Expenses
listed above, you would pay the following expenses on a $1,000
investment, assuming a five percent annual return and redemption
at the end of each period:
<TABLE>
<S> <C> <C> <C>
<C>
Fund 1 Year 3 5 10
Years Years Years
Money Market $ 6 $ 19 $ 33 $ 75
Reserve $ 9 $ 27 $ 47 $ 105
</TABLE>
The purpose of the above table is to assist you in
understanding the various costs and expenses that an investor in
a Fund will bear directly or indirectly. The information in the
table has been restated to reflect each Fund's fees as amended
effective April 1, 1996. The example should not be considered a
representation of past or future expenses. Actual expenses may
be greater or less than those shown.
With respect to Money Market Fund, the Fund's investment
adviser has voluntarily agreed to waive the Management Fee in
excess of .50% of the Fund's average daily net assets until June
30, 1996. Absent such voluntary waiver, the Fund would pay .60%
of its average daily net assets as the Management Fee.
Further information concerning fees paid by each Fund is set
forth in the section "Management" below and in the Statement of
Additional Information.
MANAGEMENT
The following replaces the discussion of Fund
administrative and advisory fees, Fund costs, and Reserve
Fund's 12b-1 Plan.
Effective April 1, 1996, each Fund has entered into a
written agreement with IAI (the "Management Agreement"), under
which IAI provides each Fund with investment advisory services
and is responsible for the overall management of each Fund's
business affairs subject to the authority of the Board of
Directors. The Management Agreement also provides that, except
for brokerage commissions and other expenditures in connection
with the purchase and sale of portfolio securities, interest and,
in certain circumstances, taxes and extraordinary expenses, IAI
shall pay all of a Fund's operating expenses. As compensation
under the Management Agreement, Money Market Fund and Reserve
Fund will pay IAI .60% and .85%, respectively, of its average
daily net assets. Because IAI is paying Fund operating expenses,
these fees represent each Fund's total expenses. With respect to
certain of the services for which it is responsible under the
Management Agreement, IAI may also pay qualifying broker-dealers,
financial institutions and other entities for providing such
services to Fund shareholders.
Under the replaced Advisory Agreements, for the fiscal year
ended January 31, 1996, Reserve Fund paid IAI an advisory fee of
.44% of its average month-end net assets, and Money Market Fund
paid IAI an advisory fee of .06% of its average daily net assets
as a result of IAI's voluntary fee waiver. Under the replaced
Administrative Agreements, for the fiscal year ended January 31,
1996, Reserve Fund paid IAI an administrative fee of .20% of its
average month-end net assets and Money Market Fund paid IAI an
administrative fee of .20% of its average daily net assets.
1933 Act Registration No. 33-1361
1933 Act Registration No. 33-40496
SUPPLEMENT DATED APRIL 1, 1996
TO THE STATEMENT OF ADDITIONAL INFORMATION DATED JUNE 1, 1995
OF
IAI RESERVE FUND (a separate portfolio of IAI Investment Funds V,
Inc.)
IAI MONEY MARKET FUND (a separate portfolio of IAI Investment
Funds VI, Inc.)
On March 21, 1996, the shareholders of the above-referenced
Funds approved IAI's proposal, effective April 1, 1996, to
eliminate each Fund's Plan of Distribution and corresponding
underwriting agreement with IAI Securities, Inc. and to replace
each Fund's management and administrative agreements with a new
contract between each Fund and IAI. Under this new contract, IAI
will provide, or arrange for the provision of, all services
required by a Fund in exchange for one all-inclusive fee. The
new contracts are not intended to result in a fee change. Because
of these changes, this Statement of Additional Information has
been updated as set forth below.
Management Agreement- All Funds Other Than Capital Appreciation
Fund
Effective April 1, 1996, each Fund entered into new written
agreement with IAI (the "Management Agreement"). Pursuant to the
Management Agreement between each Fund and IAI, IAI has agreed to
provide each Fund with investment advice, statistical and
research facilities, and certain equipment and services,
including, but not limited to, office space and necessary office
facilities, equipment, and the services of required personnel
and, in connection therewith, IAI has the sole authority and
responsibility to make and execute investment decisions for a
Fund within the framework of such Fund's investment policies,
subject to review by the directors of the Funds. In addition,
IAI has agreed to provide or arrange for the provision of all
required administrative, stock transfer, redemption, dividend
disbursing, accounting, and shareholder services including,
without limitation, the following: (1) the maintenance of a
Fund's accounts, books and records; (2) the calculations of the
daily net asset value in accordance with a Fund's current
Prospectus and Statement of Additional Information; (3) daily and
periodic reports; (4) all information necessary to complete tax
returns, questionnaires and other reports requested by a Fund;
(5) the maintenance of stock registry records; (6) the processing
of requested account registration changes, stock certificate
issuances and redemption requests; and (7) the administration of
payments and dividends and distributions declared by a Fund; (8)
answering shareholder questions, (9) providing reports and other
information and (10) other services designed to maintain
shareholder accounts. IAI may also pay qualifying broker-
dealers, financial institutions and other entities that provide
such services. In return for such services, Reserve Fund has
agreed to pay IAI .85% of its average daily net assets. Money
Market Fund has agreed to pay IAI an annual fee as a percentage
of such Fund's average daily net assets as set forth below:
<TABLE>
<C> <C>
Daily Net Assets Fee IAI Receives
Annually
For the first $100 million .60%
For the next $150 million .55%
Above $250 million .50%
</TABLE>
Except for brokerage commissions and other expenditures in
connection with the purchase and sale of portfolio securities,
interest expense, and, subject to the specific approval of a
majority of the disinterested directors of a Fund, taxes and
extraordinary expenses, IAI has agreed to pay all of a Fund's
other costs and expenses, including, for example, costs incurred
in the purchase and sale of assets, taxes, charges of the
custodian of a Fund's assets, costs of reports and proxy material
sent to Fund shareholders, fees paid for independent accounting
and legal services, costs of printing Prospectuses for Fund
shareholders and registering a Fund's shares, postage, insurance
premiums, and costs of attending investment conferences. The
Management Agreement further provides that IAI will either
reimburse a Fund for the fees and expenses it pays to directors
who are not "interested persons" of such Fund or reduce its fee
by an equivalent amount. IAI is not liable for any loss suffered
by a Fund in the absence of willful misfeasance, bad faith or
negligence in the performance of its duties and obligations.
