TRAVELERS SERIES TRUST, 485BPOS, 1996-06-26

TRAVELERS SERIES TRUST
485BPOS, 1996-06-26

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<PAGE> 1

Registration Statement No. 33-43628
811-6465

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Post-Effective Amendment No. 15

and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 15

THE TRAVELERS SERIES TRUST
(Exact name of Registrant)

ONE TOWER SQUARE, HARTFORD, CONNECTICUT 06183
----------------------------------------------
(Address of Principal Executive Offices)
Registrant's Telephone Number, including Area Code: (860) 277-0111
--------------

ERNEST J. WRIGHT
Secretary to the Board of Trustees
The Travelers Series Trust
One Tower Square
Hartford, Connecticut 06183
----------------------------
(Name and Address of Agent for Service)

Approximate Date of Proposed Public Offering:

It is proposed that this filing will become effective (check appropriate box):

________ immediately upon filing pursuant to paragraph (b).
X
________ on July 31, 1996 pursuant to paragraph (b).
________ 60 days after filing pursuant to paragraph (a)(1).
________ on __________ pursuant to paragraph (a)(1) of Rule 485.
________ 75 days after filing pursuant to paragraph (a)(2).
________ on __________ pursuant to paragraph (a)(2) of Rule 485.

If appropriate, check the following box:
X
_______ this post-effective amendment designates a new effective date for
a previously filed post-effective amendment.

AN INDEFINITE NUMBER OF SHARES OF BENEFICIAL INTEREST OF THE REGISTRANT WERE
REGISTERED PURSUANT TO RULE 24F-2 OF THE INVESTMENT COMPANY ACT OF 1940. A
RULE 24F-2 NOTICE FOR REGISTRANT'S FISCAL YEAR ENDED DECEMBER 31, 1995 WAS
FILED ON FEBRUARY 27, 1996.
<PAGE> 2
THE TRAVELERS SERIES TRUST

Cross-Reference Sheet pursuant to Rule 495 under the Securities Act of 1933

<TABLE>
<CAPTION>
ITEM
NO. CAPTION IN PROSPECTUS
- --- ---------------------
<S> <C> <C>

1. Cover Page Cover Page
2. Synopsis Cover Page
3. Condensed Financial Information Financial Highlights
4. General Description of Registrant Cover Page; The Travelers Series Trust;
Investment Objectives and Policies
5. Management of the Fund Board of Trustees; Investment Advisers;
Securities Transactions; Fund Expenses;
Additional Information
6. Capital Stock and Other Securities The Travelers Series Trust; Dividends
and Tax Status; Shares of the Series
Trust; Pricing Shares
7. Purchase of Securities Being Offered Shares of the Series Trust
8. Redemption or Repurchase Share Redemption
9. Legal Proceedings Legal Proceedings

CAPTION IN STATEMENT OF ADDITIONAL
INFORMATION
--------------------------------------

10. Cover Page Cover Page
11. Table of Contents Table of Contents
12. General Information and History Not Applicable
13. Investment Objectives and Policies Investment Objectives and Policies;
Investment Restrictions
14. Management of the Registrant Trustees and Officers
15. Control Persons and Principal Additional Information
Holders of Securities
16. Investment Advisory and Investment Advisory Services; Additional
Other Services Information
17. Brokerage Allocation Brokerage
18. Capital Stock and Other Declaration of Trust
Securities
19. Purchase, Redemption and Pricing Valuation of Securities
of Securities Being Offered
20. Tax Status Distributions and Taxes
21. Underwriters Not Applicable
22. Calculation of Performance Data Not Applicable
23. Financial Statements Financial Statements
</TABLE>
<PAGE> 3

PART A

INFORMATION REQUIRED IN A PROSPECTUS
<PAGE> 4

THE TRAVELERS SERIES TRUST

TRAVELERS QUALITY BOND PORTFOLIO
LAZARD INTERNATIONAL STOCK PORTFOLIO
MFS EMERGING GROWTH PORTFOLIO
FEDERATED HIGH YIELD PORTFOLIO
FEDERATED STOCK PORTFOLIO
LARGE CAP PORTFOLIO
EQUITY INCOME PORTFOLIO

ONE TOWER SQUARE
HARTFORD, CONNECTICUT 06183
TELEPHONE 1-860-422-3985
- --------------------------------------------------------------------------------

The Travelers Series Trust (the "Series Trust") is a diversified open-end
management investment company (mutual fund) consisting of multiple series of
shares (the "Portfolios"), each with its own investment objectives and policies.
Seven of the Portfolios of the Series Trust are described herein: Travelers
Quality Bond Portfolio, Lazard International Stock Portfolio, MFS Emerging
Growth Portfolio, Federated Stock Portfolio, Federated High Yield Portfolio,
Large Cap Portfolio and Equity Income Portfolio.

Shares of the Portfolios are currently offered without a sales charge to certain
separate accounts of The Travelers Insurance Company and Travelers Life and
Annuity Company (collectively, "Company" or "Travelers"). The Portfolios serve
as investment vehicles for variable annuity and variable life insurance
contracts issued by Travelers. All Portfolios described herein may not be
available under all variable contracts. The term "shareholder" as used herein
refers to any insurance company separate account that may use shares of the
Portfolios as investment vehicles now or in the future.

This Prospectus concisely sets forth the information about the Series Trust and
the Portfolios that you should know before investing. Please read it and retain
it for future reference. Additional information about the Series Trust and the
Portfolios is contained in a Statement of Additional Information ("SAI") dated
, 1996 which has been filed with the Securities and Exchange
Commission ("SEC") and is incorporated by reference into this Prospectus. A copy
may be obtained, without charge, by writing to The Travelers Insurance Company,
Annuity Services, One Tower Square, Hartford, Connecticut 06183-5030, or by
calling 1-860-422-3985.

THIS PROSPECTUS MUST BE ACCOMPANIED BY A CURRENT PROSPECTUS FOR A VARIABLE
ANNUITY OR VARIABLE LIFE INSURANCE CONTRACT ISSUED BY TRAVELERS. BOTH THIS
PROSPECTUS AND THE CONTRACT PROSPECTUS SHOULD BE READ CAREFULLY AND RETAINED FOR
FUTURE REFERENCE.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

THE DATE OF THIS PROSPECTUS IS , 1996.
<PAGE> 5

TABLE OF CONTENTS

<TABLE>
<S> <C>
THE TRAVELERS SERIES TRUST............................................................ 3
TRAVELERS QUALITY BOND PORTFOLIO...................................................... 3
LAZARD INTERNATIONAL EQUITY PORTFOLIO................................................. 4
MFS EMERGING GROWTH PORTFOLIO......................................................... 6
FEDERATED HIGH YIELD PORTFOLIO........................................................ 11
FEDERATED STOCK PORTFOLIO............................................................. 14
LARGE CAP PORTFOLIO................................................................... 15
EQUITY INCOME PORTFOLIO............................................................... 18
PORTFOLIO TURNOVER.................................................................... 19
BOARD OF TRUSTEES..................................................................... 19
INVESTMENT MANAGER.................................................................... 20
INVESTMENT SUBADVISORS................................................................ 21
SECURITIES TRANSACTIONS............................................................... 25
FUND EXPENSES......................................................................... 25
COMPANY TRANSFER AGENT................................................................ 26
Shares of the Series Trust.......................................................... 26
PRICING SHARES........................................................................ 26
SHARE REDEMPTION...................................................................... 27
Dividends and Tax Status............................................................ 27
LEGAL PROCEEDINGS..................................................................... 27
ADDITIONAL INFORMATION................................................................ 27
EXHIBIT A............................................................................. 28
EXHIBIT B............................................................................. 45
</TABLE>

SERIES-2
<PAGE> 6

THE TRAVELERS SERIES TRUST
- --------------------------------------------------------------------------------

The Series Trust is registered with the SEC as an open-end management investment
company. The Series Trust is organized as a business trust under the laws of the
Commonwealth of Massachusetts. An Agreement and Declaration of Trust dated
October 11, 1991 (the "Declaration of Trust") authorizes the shares of the
Series Trust to be divided into two or more series related to separate
portfolios of investments, and further allows the Board of Trustees to establish
additional portfolios at any time.

The Series Trust is currently divided into thirteen series (the "Portfolios"),
each with its own investment objective and policies, all of which are
diversified portfolios under the Investment Company Act of 1940, as amended
("1940 Act"). Seven Portfolios, as described below, are contained in this
prospectus. The other Portfolios are described in a separate prospectus. While
there is no assurance that a Portfolio will achieve its objective, each
Portfolio endeavors to do so by following its investment policies as described
below.

TRAVELERS QUALITY BOND PORTFOLIO
("TRAVELERS BOND PORTFOLIO")
- --------------------------------------------------------------------------------

INVESTMENT OBJECTIVE

The basic investment objective of Travelers Bond Portfolio is to seek current
income, moderate capital volatility and total return.

INVESTMENT POLICIES

The assets of Travelers Bond Portfolio will be primarily invested in money
market obligations, including, but not limited to:

- - treasury bills;
- - repurchase agreements;
- - commercial paper;
- - bank certificates of deposit and bankers' acceptances; and
- - publicly traded debt securities, including bonds, notes, debentures, equipment
trust certificates and short-term instruments.

These securities may carry certain equity features such as conversion or
exchange rights or warrants for the acquisition of stocks of the same or
different issuer, or participation based on revenues, sales or profits. It is
currently anticipated that the market value-weighted average maturity of the
portfolio will not exceed five years. (In the case of mortgage-backed
securities, the estimated average life of cash flows will be used instead of
average maturity.) Investment in longer term obligations may be made if the
Investment Adviser concludes that the investment yields justify a longer term
commitment. No more than 25% of the value of Travelers Bond Portfolio's assets
will be invested in any one industry.

The Portfolio will be actively managed and investments may be sold prior to
maturity if deemed advantageous in light of factors such as market conditions or
brokerage costs. While the investments of Travelers Bond Portfolio are generally
not listed securities, there are firms which make markets in the type of debt
instruments that Travelers Bond Portfolio holds. No problems of liquidity are
anticipated with regard to the investments of Travelers Bond Portfolio.

SERIES-3
<PAGE> 7

changes in interest rates that might otherwise have an adverse effect upon the
value of the Travelers Bond Portfolios securities. See attached Exhibit A for a
more complete description of these investment techniques.

INVESTMENT RESTRICTIONS

The Travelers Bond Portfolio is subject to certain investment restrictions.
Specifically, the Investment Adviser, on behalf of Travelers Bond Portfolio may:

- - invest up to 15% of the value of its assets in the securities of any one
issuer (exclusive of obligations of the United States government and its
instrumentalities, for which there is no limit);
- - borrow from banks in amounts of up to 5% of its assets, but only for emergency
purposes;
- - purchase interests in real estate represented by securities for which there is
an established market;
- - make loans through the acquisition of a portion of a privately placed issue of
bonds, debentures or other evidences of indebtedness of a type customarily
purchased by institutional investors;
- - acquire up to 10% of the voting securities of any one issuer (it is the
present practice of Travelers Bond Portfolio not to exceed 5% of the voting
securities of any one issuer);
- - make purchases on margin in the form of short-term credits which are necessary
for the clearance of transactions; and place up to 5% of its net asset value
in total margin deposits for positions in futures contracts; and
- - invest up to 5% of its assets in restricted securities (securities which may
not be publicly offered without registration under the Securities Act of
1933).

RISK FACTORS

The Investment Adviser will weigh considerations of risks, yield and ratings in
implementing Travelers Bond Portfolio's fundamental investment policies. There
are no specific criteria with regard to quality or ratings of the investments of
Travelers Bond Portfolio, but it is anticipated that they will be of investment
grade or its equivalent. There may or may not be more risk in investing in debt
instruments where there are no specific criteria with regard to quality or
ratings of the investments.

The yield on debt instruments over a period of time should reflect prevailing
interest rates, which depend on a number of factors, including government action
in the capital markets, government fiscal and monetary policy, needs of
businesses for capital goods for expansion, and investor expectations as to
future inflation. The yield on a particular debt instrument is also affected by
the risk that the issuer will be unable to pay principal and interest.

LAZARD INTERNATIONAL STOCK PORTFOLIO

- --------------------------------------------------------------------------------

INVESTMENT OBJECTIVE

The investment objective of the Lazard International Stock Portfolio is to seek
capital appreciation through investing primarily in the equity securities of
non-United States companies (i.e., incorporated or organized outside the United
States).

INVESTMENT POLICIES

The Portfolio expects to invest its assets principally in the following:

- - equity securities of non-U.S. companies, (although the Portfolio may have
substantial investments in American Depository Receipts), ("ADRs" and Global
Depository Receipts -- "GDRs");
- - convertible bonds; and
- - other convertible securities.

SERIES-4
<PAGE> 8

There is no requirement, however, that the Portfolio invest exclusively in
common stocks or other equity securities, and, if deemed advisable, it may
invest up to 20% of the value of its total assets in fixed-income securities and
short-term money market instruments. The Portfolio will not invest in
fixed-income securities rated lower than investment grade.

It is the present intention of the Subadviser to invest the Portfolio's assets
in companies based in Continental Europe, the United Kingdom, the Pacific Basin
and in such other areas and countries as the Subadviser may determine from time
to time. Under normal market conditions, the Portfolio will invest at least 80%
of the value of its total assets in the equity securities of companies within
not less than three different countries (not including the United States). The
percentage of the Portfolio's assets invested in particular geographic sectors
may shift from time to time in accordance with the judgment of the Subadviser.

In selecting investments for the Portfolio, the Subadviser attempts to identify
inexpensive markets world-wide through traditional measures of value, including
low price to earnings ratio, high yield, unrecognized assets, potential for
management change and/or the potential to improve profitability. In addition,
the Subadviser seeks to identify companies that it believes are financially
productive and undervalued in those markets. The Subadviser focuses on
individual stock selection (a "bottom-up" approach) rather than on forecasting
stock market trends (a "top-down" approach).

The Subadviser recognizes that some of the best opportunities are in securities
not generally followed by investment professionals. Thus the Subadviser relies
on its research capability and also maintains a dialogue with foreign brokers
and with the management of foreign companies in an effort to gather the type of
"local knowledge" that it believes is critical to successful investment abroad.
To this end, the Subadviser communicates with its affiliates, Lazard Freres &
Cie. in Paris, Lazard Brothers & Co. Ltd. in London, and Lazard Asset Management
K.K. in Tokyo, for information concerning current business trends, as well as
for a better understanding of the management of local businesses. The
information supplied by these affiliates will be limited to statistical and
factual information, advice regarding economic factors and trends or advice as
to occasional transactions in specific securities.

The Portfolio may enter into foreign currency forward exchange contracts in
order to protect against anticipated changes in foreign currency exchange rates.

When, in the judgment of the Subadviser, business or financial conditions
warrant, the Portfolio may assume a temporary defensive position and invest
without limit in the equity securities of U.S. Companies or short-term money
market instruments or hold its assets in cash.

Please review Exhibit A attached hereto for a more detailed discussion of the
investment techniques the Portfolio will use to attempt to achieve its
investment objectives. In addition, the Lazard International Stock Portfolio may
engage in certain investment activities described in greater detail in the
Exhibit A.

INVESTMENT RESTRICTIONS

The following investment restrictions, except as otherwise noted, are
fundamental policies of the Portfolio that may be changed only when permitted by
law and approved by the holders of a majority of the Portfolio's outstanding
voting securities, as defined in the 1940 Act. Please consult the SAI for
additional information concerning investment restrictions.

The Lazard International Stock Portfolio may not:

SERIES-5
<PAGE> 9

- - make loans, except loans of portfolio securities not having a value in excess
of 10% of the Portfolio's total assets and except that the Portfolio may
purchase debt obligations in accordance with its investment objectives and
policies;
- - invest in illiquid securities if immediately after such investment more than
10% of the value of the Portfolio's net assets, taken at market value, would
be invested in such securities;
- - purchase securities of other investment companies, except in connection with a
merger, consolidation, acquisition or reorganization; provided, however, the
Lazard International Stock Portfolio may purchase securities in an amount up
to 5% of the value of its total assets in any one closed-end fund and may
purchase in the aggregate securities of closed-end funds in an amount of up to
10% of the value of the Portfolio's total assets;
- - purchase the securities of issuers conducting their principal business in the
same industry, if the value of the value of the Portfolio's investment exceeds
25% of the Portfolio's then current net asset value;
- - purchase or sell real estate except in a manner consistent with specific rules
described in greater detail in the SAI;
- - purchase securities on margin;
- - underwrite securities; or
- - make investments for the purpose of exercising control or management.

MFS EMERGING GROWTH PORTFOLIO
("MFS PORTFOLIO")
- --------------------------------------------------------------------------------

INVESTMENT OBJECTIVE

INVESTMENT POLICY

MFS Portfolio's policy is to invest primarily (i.e., at least 80% of its assets
under normal circumstances) in common stocks of companies that are early in
their life cycle but which have the potential to become major enterprises
(emerging growth companies). Such companies generally would be expected to show
earnings growth over time that is well above the growth rate of the overall
economy and the rate of inflation, and would have the products, technologies,
management and market and other opportunities which are usually necessary to
become more widely recognized as growth companies.

Emerging growth companies can be of any size, and the MFS Portfolio may also
invest in more established companies whose rates of earnings growth are expected
to accelerate because of special factors, such as rejuvenated management, new
products, changes in consumer demand, or basic changes in the economic
environment.

The MFS Portfolio is aggressively managed and, therefore, the value of its
shares is subject to greater fluctuation and investments in its shares involve
the assumption of a higher degree of risk than would be the case with an
investment in a conservative equity fund or a growth fund investing entirely in
proven growth equities.

The MFS Portfolio will invest primarily in common stocks. Other investments are
allowed, including, but not limited to those described below. (Refer to Exhibit
A for a discussion of these investment techniques.) MFS may invest in, or write
(as applicable), the following:

SERIES-6
<PAGE> 10

- - foreign currency and forward foreign currency exchange contracts for the
purchase or sale of foreign currency for hedging purposes and non-hedging
purposes, including transactions entered into for the purpose of profiting
from anticipated changes in foreign currency exchange rates, as well as
options on foreign currencies;
- - foreign securities (up to 25% of its total assets) which may be traded on
foreign exchanges (not including American Depository Receipts ("ADRs")). (It
expects generally to invest between 0% to 10% in such securities.);
- - emerging market securities;
- - cash equivalents or other forms of debt securities as a reserve for future
purchases of common stock or to meet liquidity needs;
- - corporate asset-backed securities;
- - covered call and put options and may purchase call and put options on
securities and stock indices in an effort to increase current income and for
hedging purposes;
- - stock index futures contracts and options thereon for hedging purposes and for
non-hedging purposes, subject to applicable law;
- - portfolio securities purchased on a "when-issued" or on a "forward delivery"
basis; and
- - loan participations.

While it is not generally MFS Portfolio's policy to invest or trade for
short-term profits, it may dispose of a portfolio security whenever the
Subadviser is of the opinion that such security no longer has an appropriate
appreciation potential or when another security appears to offer relatively
greater appreciation potential. Subject to tax requirements, portfolio changes
are made without regard to the length of time a security has been held, or
whether a sale would result in a profit or loss.

The nature of investing in emerging growth companies involves greater risk than
is customarily associated with investments in more established companies.
Emerging growth companies often have limited product lines, markets or financial
resources, and they may be dependent on one-person management. In addition,
there may be less research available on many promising small and medium sized
emerging growth companies making it more difficult to find and analyze these
companies. The securities of emerging growth companies may have limited
marketability and may be subject to more abrupt or erratic market movements than
securities of larger, more established growth companies or the market averages
in general. Shares of the MFS Portfolio, therefore, are subject to greater
fluctuation in value than shares of a conservative equity portfolio or of a
growth portfolio which invests entirely in proven growth stocks.

During periods of unusual market conditions when the Subadviser believes that
investing for defensive purposes is appropriate, or in order to meet anticipated
redemption requests, a large portion or all of the assets of MFS Portfolio may
be invested in cash or cash equivalents including, but not limited to,
obligations of banks with assets of $1 billion or more (including certificates
of deposit, bankers' acceptances and repurchase agreements), commercial paper,
short-term notes, obligations issued or guaranteed by the U.S. Government or any
of its agencies, authorities or instrumentalities and related repurchase
agreements. U.S. Government securities also include interests in trusts or other
entities representing interests in obligations that are issued or guaranteed by
the U.S. Government, its agencies, authorities or instrumentalities. See Exhibit
A to this Prospectus for a description of U.S. Government obligations and
certain short-term investments.

In addition, please see Exhibit A for a discussion of the following investment
activities in which MFS Portfolio may engage: (i) lending of Portfolio
securities; (ii) repurchase agreements; (iii) purchase and sales of restricted
securities; (iv) when-issued securities; (v) corporate asset-backed securities;
(vi) loan participation and other direct indebtedness; (vi) foreign securities;
(vii) ADRs; (viii) emerging market securities; (ix) various futures and option
trading techniques; and (x) lending of Portfolio securities.

SERIES-7
<PAGE> 11

INVESTMENT RESTRICTIONS

The MFS Portfolio is subject to certain investment restrictions listed below.
The MFS Portfolio may not:

- borrow amounts in excess of 33 1/3% of its assets including amounts
borrowed and then only as a temporary measure for extraordinary or
emergency purposes;
- underwrite securities issued by other persons except insofar as the
Portfolio may technically be deemed an underwriter under the Securities
Act of 1933, as amended (the "1933 Act") in selling a portfolio security;
- purchase or sell real estate (including limited partnership interest but
excluding securities secured by real estate or interest therein and
securities of companies, such as real estate investment trusts, which
deal in real estate or interests therein), interests in oil, gas or
mineral leases, commodities or commodity contracts (excluding currencies
and any type of option, future contracts and forward contracts) in the
ordinary course of its business. The Portfolio does however, reserve the
right to hold and sell real estate, mineral leases, commodities or
commodity contracts (including currencies and any type of option, future
contracts and forward contracts) acquired as a result of the ownership of
securities;
- issue any senior securities except as permitted by the 1940 Act. For
purposes of this restriction, collateral arrangements with respect to any
type of swap, option, forward contract and futures contracts and
collateral arrangements with respect to initial and variation margin are
not deemed to be the issuance of a senior security;
- make loans to other persons. For these purposes, the purchase of
commercial paper, the purchase of a portion or all of an issue of debt
securities, the lending of portfolio securities, or the investment of the
Portfolio's assets in repurchase agreements, shall not be considered the
making of a loan; or
- purchase any securities of an issuer of a particular industry, if as a
result, more than 25% of its gross assets would be invested in securities
of issuers whose principal business activities are in the same industry
(except there is no limitation with respect to obligations issued or
guaranteed by the U.S. Government or its agencies and instrumentalities
and repurchase agreements collateralized by such obligations).

In addition, there are certain nonfundamental policies which may be changed by
the vote of the Trust's Board of Trustees without shareholder approval. The MFS
Portfolio will not, without obtaining such approval:

- invest in illiquid investments, including securities subject to legal or
contractual restrictions on resale or for which there is no readily
available market (e.g., trading in the security is suspended, or, in the
case of unlisted securities, where no market exists) if more than 1% of
the Portfolio's assets (taken at market value) would be invested in such
securities. Repurchase agreements maturing in more than seven days will
be deemed to be illiquid for purposes of the Portfolio's limitation on
investment in illiquid securities. Securities that are not registered
under the 1933 Act and said in reliance on Rule 144A thereunder, but are
determined to be liquid by the Trust's Board of Trustees (or its
delegee), will not be subject to this 15% limitation;
- purchase securities issued by any other investment company in excess of
the amount permitted by the 1940 Act, except when such purchase is part
of a plan of merger or consolidation;
- purchase any securities or evidences of interest therein on margin,
except that the Portfolio may obtain such short-term credit as may be
necessary for the clearance of any transaction and except that the
Portfolio may make margin deposits in connection with any type of swap,
option, futures contracts and forward contracts;
- sell any security which the Portfolio does not own unless by virtue of
its ownership of other securities the Portfolio has at the time of sale a
right to obtain securities without payment of

SERIES-8
<PAGE> 12

further consideration equivalent in kind and amount to the securities sold and
provided that if such right is conditional, the sale is made upon the same
conditions;
- pledge, mortgage or hypothecate in excess of 33 1/3% of its gross assets.
For purposes of this restriction, collateral arrangements with respect to
any type of swap, option, futures contracts and forward contracts and
payments of initial and variation margin in connection therewith, are not
considered a pledge of assets;
- purchase or sell any put or call option or any combination thereof,
provided that this shall not prevent the purchase, ownership, holding or
sale of (i) warrants where the grantor of the warrants is the issuer of
the underlying securities or (ii) put or call options or combinations
thereof with respect to securities, indices of securities, swaps, foreign
currencies and Futures Contracts;
- invest for the purposes of exercising control or management; or
- invest in the securities of any government agency or instrumentality, at
the end of any calendar quarter (or within 30 days thereafter), to the
extent such holdings would cause the Series to fail to comply with the
diversification requirements imposed by Section 817(h) of the Internal
Revenue Code of 1986, as amended (the "Code"), and Treasury regulations
issued thereunder on segregated asset accounts that fund variable
contracts.

RISK FACTORS

RISK FACTORS REGARDING LOWER RATED SECURITIES -- MFS Portfolio may invest to a
limited extent in lower-rated fixed income securities or comparable unrated
securities. Investments in lower-rated fixed income securities, while generally
providing greater income and opportunity for gain than investments in higher
rated securities, usually entail greater risk of principal and income (including
the possibility of default or bankruptcy of the issuers of such securities), and
involve greater volatility of price (especially during periods of economic
uncertainty or change) than investments in higher rated securities. Because
yields may vary over time, no specified level of income can ever be assured. In
particular, securities rated lower than Baa by Moody's Investors Service, Inc.
("Moody's") or BBB by Standard & Poor's Ratings Services ("S&P") or by Fitch
Investors Services, Inc. ("Fitch") or comparable unrated securities (commonly
known as "junk bonds") are considered speculative.

These lower rated high yielding fixed income securities generally tend to
reflect economic changes (and the outlook for economic growth), short-term
corporate and industry developments and the market's perception of their credit
quality (especially during times of adverse publicity) to a greater extent than
higher rated securities which react primarily to fluctuations in the general
level of interest rates (although these lower rated fixed income securities are
also affected by changes in interest rates). In the past, economic downturns or
an increase in interest rates have under certain circumstances caused a higher
incidence of default by the issuers of these securities and may do so in the
future, especially in the case of highly leveraged issuers. During certain
periods, the higher yields on MFS Portfolio's lower rated high yielding fixed
income securities are paid primarily because of the increased risk of loss of
principal and income, arising from such factors as the heightened possibility of
default or bankruptcy of the issuers of such securities. Due to the fixed income
payments of these securities, MFS Portfolio may continue to earn the same level
of interest income while its net asset value declines due to portfolio losses,
which could result in an increase in MFS Portfolio's yield despite the actual
loss of principal. The prices for these securities may be affected by
legislative and regulatory developments.

Changes in the value of securities subsequent to their acquisition will not
affect cash income or yield to maturity to MFS Portfolio but will be reflected
in the net asset value of shares of MFS Portfolio. The market for these lower
rated fixed-income securities may be less liquid than the market for investment
grade fixed-income securities. Furthermore, the liquidity of these lower rated
securities may be affected by the market's perception of their credit quality.
Therefore, the Subadviser's judgment may at times play a greater role in valuing
these securities than in the case of investment grade fixed-income securities,
and it also may be more difficult during times of certain adverse market
conditions to sell these lower rated securities at their fair value to meet
redemption requests or to

SERIES-9
<PAGE> 13

respond to changes in the market. No minimum rating standard is required by MFS
Portfolio. To the extent MFS Portfolio invests in these lower rated fixed-income
securities, the achievement of its investment objective may be more dependent on
the Subadviser's own credit analysis than in the case of a Portfolio investing
in higher quality bonds. While the Subadviser may refer to ratings issued by
established credit rating agencies, it is not a policy of MFS Portfolio to rely
exclusively on ratings issued by these agencies, but rather to supplement such
ratings with the Subadviser's own independent and ongoing review of credit
quality.

MFS Portfolio may also invest in fixed income securities rated Baa by Moody's or
BBB by S&P and Fitch and comparable unrated securities. These securities, while
normally exhibiting adequate protection parameters, may have speculative
characteristics and changes in economic conditions and other circumstances are
more likely to lead to a weakened capacity to make principal and interest
payments than in the case of higher grade fixed income securities.

ADDITIONAL RISK FACTORS -- The net asset value of the shares of an open-end
investment company which may invest to a limited extent in fixed income
securities changes as the general levels of interest rates fluctuate. When
interest rates decline, the value of a fixed income portfolio can be expected to
rise. Conversely, when interest rates rise, the value of a fixed income
portfolio can be expected to decline.

THE USE OF OPTIONS, FUTURES CONTRACTS, OPTIONS ON FUTURES CONTRACTS, FORWARD
CONTRACTS AND OPTIONS ON FOREIGN CURRENCIES MAY RESULT IN THE LOSS OF PRINCIPAL,
PARTICULARLY WHERE SUCH INSTRUMENTS ARE TRADED FOR OTHER THAN HEDGING PURPOSES
(E.G., TO ENHANCE CURRENT YIELD).

As a result of its investments in foreign securities, MFS Portfolio may receive
interest or dividend payments, or the proceeds of the sale or redemption of such
securities, in the foreign currencies in which such securities are denominated.
In that event, MFS Portfolio may promptly convert such currencies into dollars
at the then current exchange rate. Under certain circumstances, however, such as
where the Subadviser believes that the applicable exchange rate is unfavorable
at the time the currencies are received or the Subadviser anticipates, for any
other reason, that the exchange rate will improve, MFS Portfolio may hold such
currencies for an indefinite period of time.

In addition, MFS Portfolio may be required to receive delivery of the foreign
currency underlying forward foreign currency contracts it has entered into. This
could occur, for example, if an option written by MFS Portfolio is exercised or
MFS Portfolio is unable to close out a forward contract. MFS Portfolio may hold
foreign currency in anticipation of purchasing foreign securities. MFS Portfolio
may also elect to take delivery of the currencies underlying options or forward
contracts if, in the judgment of the Subadviser, it is in the best interest of
MFS Portfolio to do so. In such instances as well, MFS Portfolio may promptly
convert the foreign currencies to dollars at the then current exchange rate, or
may hold such currencies for an indefinite period of time.

While the holding of currencies will permit MFS Portfolio to take advantage of
favorable movements in the applicable exchange rate, it also exposes MFS
Portfolio to risk of loss if such rates move in a direction adverse to MFS
Portfolio's position. Such losses could reduce any profits or increase any
losses sustained by MFS Portfolio from the sale or redemption of securities, and
could reduce the dollar value of interest or dividend payments received. In
addition, the holding of currencies could adversely affect MFS Portfolio's
profit or loss on currency options or forward contracts, as well as its hedging
strategies.

See Exhibit A and the SAI for further discussion of foreign securities and the
holding of foreign currency as well as the associated risks.

The policies described above are not fundamental and may be changed without
shareholder approval, as may MFS Portfolio's investment objective. A change in
MFS Portfolio's investment objective may result in MFS Portfolio having an
investment objective different from the objective which the shareholder
considered appropriate at the time of investment in MFS Portfolio.

SERIES-10
<PAGE> 14

The SAI includes a discussion of other investment policies and a listing of
specific investment restrictions which govern MFS Portfolio's investment
policies. The specific investment restrictions listed in the SAI not be changed
without shareholder approval (see "Investment Restrictions" in the SAI). MFS
Portfolio's investment limitations, policies and rating standards are adhered to
at the time of purchase or utilization of assets; a subsequent change in
circumstances will not be considered to result in a violation of policy.

FEDERATED HIGH YIELD PORTFOLIO
- --------------------------------------------------------------------------------

INVESTMENT OBJECTIVE

The investment objective of the Federated High Yield Portfolio is to seek high
current income by investing primarily in a professionally managed, diversified
portfolio of fixed income securities.

INVESTMENT POLICIES

The Federated High Yield Portfolio will invest primarily in fixed rate corporate
debt obligations. The fixed rate corporate debt obligations in which the
Federated High Yield Portfolio intends to invest are expected to be lower-rated,
but may include investment grade securities as well. The fixed income securities
in which the Portfolio may invest may involve equity features. Permitted
investments currently include, but are not limited to, the following:

- corporate debt obligations having fixed or floating rates of interest and
which generally are rated BBB or lower by nationally recognized
statistical rating organizations;
- preferred stocks; foreign securities and ADRs;
- asset backed securities;
- equipment trust and lease certificates;
- commercial paper;
- obligations of the United States;
- notes, bonds, and discount notes of U.S. government agencies or
instrumentalities, such as the: Farm Credit System, including the
National Bank for Cooperatives and Banks for Cooperatives; Federal Home
Loan Banks; Federal Home Loan Mortgage Corporation; Federal National
Mortgage Association; Government National Mortgage Association;
Export-Import Bank of the United States; Commodity Credit Corporation;
Federal Financing Bank; Student Loan Marketing Association; National
Credit Union Administration and Tennessee Valley Authority;
- time and savings deposits (including certificates of deposit) in
commercial or savings banks whose deposits are insured by the Bank
Insurance Fund ("BIF") or the Savings Association Insurance Fund
("SAIF"), including certificates of deposit issued by and other time
deposits in foreign branches of BIF-insured banks;
- bankers' acceptances issued by a BIF-insured bank, or issued by the
bank's Edge Act subsidiary and guaranteed by the bank, with remaining
maturities of nine months or less;
- general obligations of any state, territory, or possession of the United
States, or their political subdivisions; and
- equity securities, including unit offerings that combine fixed rate
securities and common stock equivalents such as warrants, rights, and
options.

The investment policies and limitations of the Federated High Yield Portfolio
described herein may be changed without approval of shareholders, unless
otherwise noted.

The corporate debt obligations in which the Federated High Yield Portfolio may
invest are generally rated BBB or lower by Standard & Poor's Ratings Group
("S&P") or Baa or lower by Moody's Investors Service, Inc. ("Moody's"), or are
not rated but are determined by the Federated High Yield Portfolio's investment
Subadviser to be of comparable quality.

SERIES-11
<PAGE> 15

The Federated High Yield Portfolio is aggressively managed and, therefore, the
value of its shares is subject to greater fluctuation and investments in its
shares involve the assumption of a higher degree of risk than would be the case
with an investment in a conservative equity fund or a growth fund investing
entirely in proven growth equities.

Certain of the following investment techniques in which The Federated High Yield
Portfolio may engage are described in greater detail in the attached Exhibit A:
(i) restricted securities; (ii) when-issued securities; (iii) temporary
investments; (iv) repurchase agreements; (v) reverse repurchase agreements; (vi)
various futures trading techniques; and (vii) lending of portfolio securities;
(viii) floating and variable rate instruments; (ix) ADRs; (x) emerging market
securities; (xi) temporary bank borrowing; (xii) corporate asset backed
securities; and (xiii) loan participation, and other direct indebtedness.

INVESTMENT RESTRICTIONS

The Federated High Yield Portfolio will not:

- borrow money directly or through reverse repurchase agreements
(arrangements in which the Federated High Yield Portfolio sells a
portfolio instrument for a percentage of its cash value with an agreement
to buy it back on a set date) except, under certain circumstances, the
Federated High Yield Portfolio may borrow up to one-third of the value of
its net assets;
- sell securities short except, under strict limitations, the Federated
High Yield Portfolio may maintain open short positions so long as not
more than 10% of the value of its net assets is held as collateral for
those positions; or
- pledge assets except to secure permitted borrowing.

The above investment limitations cannot be changed without shareholder approval.
The following limitations, however, may be changed by the Board of Trustees
without shareholder approval. Shareholders will be notified before any material
changes in these limitations become effective.

The Federated High Yield Portfolio's primary investment restrictions are set
forth below. Please review the SAI for a more complete discussion of these
investment restrictions. Specifically, the Federated High Yield Portfolio will
not:

- commit more than 5% of the value of its total assets to premiums on open
put option positions;
- invest more than 5% of the value of its total assets in securities of one
issuer (except cash and cash items, repurchase agreements, and U.S.
government obligations) or acquire more than 10% of any class of voting
securities of any one issuer;
- invest more than 10% of the value of its total assets in foreign
securities (foreign securities are defined for these purposes as either
non-U.S. dollar denominated or which are not publicly traded in the
United States); invest directly in minerals;
- underwrite securities;
- invest more than 5% in put options;
- write covered call options unless the securities are held by the
Portfolio;
- invest in real estate, (although the Federated High Yield Portfolio may
invest in the securities of companies whose business involves the
purchase or sale of real estate or in securities which are secured by
real estate or interest in real estate); or
- purchase the securities of other investment companies, except in limited
situations.

RISK FACTORS

The corporate debt obligations in which the Federated High Yield Portfolio
invests are usually not in the three highest rating categories of a nationally
recognized statistical rating organization (AAA, AA, or A for S&P and Aaa, Aa,
or A for Moody's -- see Exhibit B for a more detailed discussion) but are in the
lower rating categories or are unrated but are of comparable quality and have
speculative characteristics or are speculative. Lower-rated or unrated bonds are
commonly referred to as "junk bonds." There is no minimal acceptable rating for
a security to be purchased or held in the Federated High Yield Portfolio's
portfolio, and the Federated High Yield Portfolio may, from time to time,

SERIES-12
<PAGE> 16

purchase or hold securities rated in the lowest rating category. A description
of the rating categories is contained in Exhibit B.

Lower-rated securities will usually offer higher yields than higher-rated
securities. However, there is more risk associated with these investments. This
is because of reduced creditworthiness and increased risk of default.
Lower-rated securities generally tend to reflect short-term corporate and market
developments to a greater extent than higher-rated securities which react
primarily to fluctuations in the general level of interest rates. Short-term
corporate and market developments affecting the price or liquidity of
lower-rated securities could include adverse news affecting major issuers,
underwriters, or dealers of lower-rated corporate debt obligations. In addition,
since there are fewer investors in lower-rated securities, it may be harder to
sell the securities at an optimum time.

As a result of these factors, lower-rated securities tend to have more price
volatility and carry more risk to principal and income than higher-rated
securities.

An economic downturn may adversely affect the value of some lower-rated bonds.
Such a downturn may especially affect highly leveraged companies or companies in
cyclically sensitive industries, where deterioration in a company's cash flow
may impair its ability to meet its obligation to pay principal and interest to
bondholders in a timely fashion. From time to time, as a result of changing
conditions, issuers of lower-rated bonds may seek or may be required to
restructure the terms and conditions of the securities they have issued. As a
result of these restructurings, holders of lower-rated securities may receive
less principal and interest than they had bargained for at the time such bonds
were purchased. In the event of a restructuring, the Federated High Yield
Portfolio may bear additional legal or administrative expenses in order to
maximize recovery from an issuer.

The secondary trading market for lower-rated bonds is generally less liquid than
the secondary trading market for higher-rated bonds. Adverse publicity and the
perception of investors relating to issuers, underwriters, dealers or underlying
business conditions, whether or not warranted by fundamental analysis, may
affect the price or liquidity of lower-rated bonds. On occasion, therefore, it
may become difficult to price or dispose of a particular security in the
portfolio.

The Federated High Yield Portfolio may, from time to time, own zero coupon bonds
or pay-in-kind securities. A zero coupon bond makes no periodic interest
payments and the entire obligation becomes due only upon maturity. Pay-in-kind
securities make periodic payments in the form of additional securities (as
opposed to cash). The price of zero coupon bonds and pay-in-kind securities are
generally more sensitive to fluctuations in interest rates than are conventional
bonds. Additionally, federal tax law requires that interest on zero coupon bonds
and pay-in-kind securities be reported as income to the Federated High Yield
Portfolio even though the Federated High Yield Portfolio receives no cash
interest until the maturity or payment date of such securities.

Many corporate debt obligations, including many lower-rated bonds, permit the
issuers to call the security and thereby redeem their obligations earlier than
the stated maturity dates. Issuers are more likely to call bonds during periods
of declining interest rates. In these cases, if the Federated High Yield
Portfolio owns a bond which is called, the Federated Portfolio will receive its
return of principal earlier than expected and would likely be required to
reinvest the proceeds at lower interest rates, thus reducing income to the
Federated Portfolio.

REDUCING RISKS OF LOWER-RATED SECURITIES. The Federated Portfolio's Subadviser
believes that the risks of investing in lower-rated securities can be reduced.
The professional portfolio management techniques used by the Federated High
Yield Portfolio to attempt to reduce these risks include:

CREDIT RESEARCH. The Federated High Yield Portfolio's Subadviser will
perform its own credit analysis in addition to using nationally recognized
statistical rating organizations and other sources, including discussions
with the issuer's management, the judgment of other investment analysts,
and its own informed judgment. The Federated High Yield Portfolio's
Subadviser's credit analysis will consider the issuer's financial
soundness, its responsiveness to changes in interest rates and business
conditions, and its anticipated cash flow, interest or dividend coverage
and earnings. In evaluating an issuer, the Federated High Yield Portfolio's
investment adviser

SERIES-13
<PAGE> 17

places special emphasis on the estimated current value of the issuer's
assets rather than historical costs.

DIVERSIFICATION. The Federated High Yield Portfolio invests in
securities of many different issuers, industries, and economic sectors to
reduce portfolio risk.

ECONOMIC ANALYSIS. The Federated High Yield Portfolio's investment
adviser will analyze current developments and trends in the economy and in
the financial markets. When investing in lower-rated securities, timing and
selection are critical and analysis of the business cycle can be important.

FEDERATED STOCK PORTFOLIO
- --------------------------------------------------------------------------------

INVESTMENT OBJECTIVE

The investment objective of the Portfolio is to provide growth of income and
capital by investing principally in a professionally managed and diversified
portfolio of common stock of high-quality companies. These companies generally
are leaders in their industries and are characterized by sound management and
the ability to finance expected growth. While there is no assurance that the
Portfolio will achieve its investment objective, it endeavors to do so by
following the investment policies described in this prospectus. Unless otherwise
noted the investment policies and limitations described below can be changed
without the approval of shareholders.

INVESTMENT POLICIES

The Portfolio's investment approach is based on the conviction that over the
long term the economy will continue to expand and develop and that this economic
growth will be reflected in the growth of the revenues and earnings of major
corporations. The Portfolio invests primarily in common stocks of companies
selected by the Portfolio's Subadviser on the basis of traditional research
techniques, including assessment of earnings and dividend growth prospects and
of the risk and volatility of the company's industry. Ordinarily, these
companies will be in the top 25% of their industries with regard to revenues.
However, other factors, such as product position or market share, will be
considered by the Portfolio's Subadviser and may outweigh revenues. Other
permitted investments include, but are not limited to:

- preferred stocks, corporate bonds, notes, and warrants of these
companies. The prices of fixed income securities generally fluctuate
inversely to the direction of interest rates;
- U.S. government securities;
- repurchase agreements;
- reverse repurchase agreements;
- money market instruments;
- securities of foreign issuers which are freely traded on United States
securities exchanges or in the over-the-counter market in the form of
American Depository Receipts ("ADRs") (in an amount of not more than 10%
if its assets);
- when-issued securities;
- restricted and illiquid securities;
- lending of portfolio securities; and
- temporary bank borrowing.

See Exhibit A and the SAI for a more detailed discussion of the above
investments.

SERIES-14
<PAGE> 18

INVESTMENT RESTRICTIONS

The primary investment restrictions of the Federated Stock Portfolio are set
forth below. Please consult the SAI for a more complete discussion of these
restrictions. The Federated Stock Portfolio will not:

- borrow money or pledge securities except, under certain circumstances,
the Portfolio may borrow up to one-third of the value of its total assets
and pledge up to 10% of the value of those assets to secure such
borrowings;
- invest more than 5% of its total assets in the securities of one issuer
(except cash and cash items and U.S. government securities);
- acquire more than 10% of the voting securities of any one issuer;
- invest in real estate, (although the Federated Stock Portfolio may invest
in the securities of companies whose business involves the purchase or
sale of real estate or in securities which are secured by real estate or
interests in real estate).
- issue senior securities;
- trade in puts and calls; or
- underwrite securities.

LARGE CAP PORTFOLIO
- --------------------------------------------------------------------------------

INVESTMENT OBJECTIVES

Large Cap Portfolio seeks long-term growth of capital by investing primarily in
equity securities of companies with large market capitalizations. Normally, at
least 65% of the Portfolio's total assets will be invested in these securities.
The Portfolio has the flexibility, however, to invest the balance in other
market capitalizations and security types.

INVESTMENT POLICIES

The Portfolio will invest primarily in the following:

- large market capitalization companies defined as those companies with
market capitalizations of $1 billion or more at the time of the
Portfolio's investment. Companies whose capitalization falls below this
level after purchase continue to be considered large-capitalized for
purposes of the 65% policy;
- equity securities;
- debt securities;
- foreign securities;
- repurchase agreements;
- reverse repurchase agreements;

- various futures and option related techniques and instruments;

- ADRs;
- emerging market securities;
- leading portfolio securities;
- real estate related instruments;
- corporate asset-backed securities;
- loans participations and other direct indebtedness;
- indexed securities;
- short sales "against the box";
- swap agreements; and
- restricted securities.

SERIES-15
<PAGE> 19

Please review Exhibit A and the SAI for a detailed discussion of these
investment techniques.

The Portfolio also reserves the right to invest without limitation in preferred
stocks and investment-grade debt instruments for temporary, defensive purposes,
and to lend portfolio securities.

Policies and limitations are considered at the time of purchase; the sale of
instruments is not required in the event of a subsequent change in
circumstances.

The Large Cap Portfolio may use various investment techniques to hedge a portion
of the fund's risks, but there is no guarantee that these strategies will work
as intended. The Portfolio seeks to spread investment risk by diversifying its
holdings among many companies and industries.

The Portfolio may not buy all of these instruments or use all of these
techniques to the full extent permitted unless it believes that doing so will
help the funds achieve their goals. Current holdings and recent investment
strategies are described in the fund's financial reports which are sent to
shareholders twice a year.

More detailed information about the Portfolio's investments policies and
restrictions is contained in the SAI.

RISK FACTORS

Companies with large market capitalizations typically have a large number of
publicly held shares and a high trading volume, resulting in a high degree of
liquidity. These tend to be quality companies with strong management
organizations. Large capitalization companies may have less growth potential
than smaller companies and may be able to react less quickly to changes in the
marketplace.

The value of the Portfolio's domestic and foreign investments varies in response
to many factors. Stock values fluctuate in response to the activities of
individual companies, and general market and economic conditions. Investments in
foreign securities may involve risks in addition to those of U.S. investments,
including increased political and economic risk, as well as exposure to currency
fluctuations.

INVESTMENT RESTRICTIONS

Some of the policies and restrictions discussed below are fundamental, that is,
subject to change only by shareholder approval. The following restrictions are
fundamental. The Portfolio may not:

- with respect to 75% of the Portfolio's total assets, purchase the
securities of any issuer (other than securities issues or guaranteed by
the U.S. government or any of its agencies or instrumentalities) if, as a
result, (a) more than 5% of the Portfolio's total assets would be
invested in the securities of that issuer, or (b) the Portfolio's would
hold more than 10% of the outstanding voting securities of that issuer;
- issue senior securities, except as permitted under the 1940 Act;
- borrow money, except that the fund may borrow money for temporary or
emergency purposes (not for leveraging or investment) in an amount not
exceeding 33 1/3% of its total assets (including the amount borrowed)
less liabilities (other than borrowings). Any borrowings that come to
exceed this amount will be reduced within three days (not including
Sundays and holidays) to the extent necessary to comply with the 33 1/3%
limitation;
- underwrite securities issued by others, except to the extent that the
Portfolio may be considered to be an underwriter within the meaning of
the 1933 Act in connection with the disposition of restricted securities;
- purchase the securities of any issuer (other than securities issued or
guaranteed by the U.S. government or any of its agencies or
instrumentalities) if, as a result, more than 25% of the Portfolio's
total assets would be invested in the securities of companies whose
principal business activities are in the same industry;
- purchase or sell real estate unless acquired as a result of ownership of
securities or other instruments (but this shall not prevent the Portfolio
from investing in securities or other

SERIES-16
<PAGE> 20

instruments backed by real estate or securities or companies engaged in
the real estate business);
- purchase or sell physical commodities unless acquired as a result of
ownership of securities or other instruments (but this shall not prevent
the Portfolio from purchasing or selling options and futures contracts or
from investing in securities or other instruments backed by physical
commodities);
- lend any security or make any other loan if, as a result, more than
33 1/3% of its total assets would be lent to other parties, but this
limitation does not apply to purchases of debt securities or to
repurchase agreements;
- the Portfolio may, notwithstanding any other fundamental investment
policy or limitation, invest all the assets in the securities of a single
open-end management investment company managed by the Subadviser or any
affiliate or successor with substantially the same investment objective,
policies, and limitations as the Portfolio.

THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE CHANGED
WITHOUT SHAREHOLDER APPROVAL.

- The Portfolio does not currently intend to sell securities short, unless
it owns or has the right to obtain securities equivalent in kind and
amount to the securities sold short, and provided that transactions in
futures contracts and options are not deemed to constitute selling
securities short.
- The Portfolio does not currently intend to purchase securities on margin,
except that the fund may obtain such short-term credits as are necessary
for the clearance of transaction, and provided that margin payments in
connection with futures contracts and options on futures shall not
constitute purchasing securities on margin.
- The Portfolio may borrow money only (a) from a bank or from a registered
investment company or portfolio for which the Subadviser or an affiliate
serves as investment adviser or (b) by engaging in reverse repurchase
agreements with any party (reverse repurchase agreements are treated as
borrowings for purposes of fundamental investment limitation (3)). The
Portfolio will not purchase any security while borrowings representing
more than 5% of its total assets are outstanding. The Portfolio will not
borrow from other funds advised by the Subadviser or its affiliates if
total outstanding borrowings immediately after such borrowing would
exceed 15% of the fund's total assets.
- The Portfolio does not currently intend to purchase any security if, as a
result, more than 10% of its net assets would be invested in securities
that are deemed to be illiquid because they are subject to legal or
contractual restrictions on resale or because they cannot be sold or
disposed of in the ordinary course of business at approximately the
prices at which they are valued.
- The Portfolio does not currently intend to purchase interests in real
estate investment trusts that are not readily marketable or interests in
real estate limited partnerships that are not listed on an exchange or
traded on the NASDAQ National Market System if, as a result, the sum of
such interests and other investments considered illiquid (described
directly above) would exceed 10% of the Portfolio's net assets.
- The Portfolio does not currently intend to lend assets other than
securities to other parties, except by (a) lending money (up to 5% of the
fund's net assets) to a registered investment company or portfolio for
which the Subadviser or an affiliate serves as investment adviser or (b)
acquiring loans, loan participations, or other forms of direct debt
instruments and, in connection therewith, assuming any associated
unfunded commitments of the sellers. (This limitation does not apply to
purchases of debt securities or to repurchase agreements.)
- The Portfolio does not currently intend to (a) purchase securities of
other investment companies, except in the open market where no commission
except the ordinary broker's commission is paid, or (b) purchase or
retain securities issued by other open-end investment companies.
Limitation (a) and (b) do not apply to securities received as dividends,
through offers of exchange, or as a result of a reorganization,
consolidation, or merger.

SERIES-17
<PAGE> 21

- The Portfolio does not currently intend to invest in oil, gas, or other
mineral exploration or development programs or leases.
- The Portfolio does not currently intend to purchase warrants, valued at
the lower of cost or market, in excess of 5% of the fund's total assets.
Warrants acquired by the fund in units or attached to securities are not
subject to these restrictions.
- The Portfolio does not currently intend to purchase the securities of any
issuer (other than securities issued or guaranteed by domestic or foreign
governments or political subdivisions thereof) if, as a result, more than
5% of its total assets would be invested in the securities of business
enterprises that, including predecessors, have a record of less than
three years of continuous operation.
- The Portfolio does not currently intend to purchase the securities of any
issuer if those officers and Trustees of the trust and those officers and
directors of the Subadviser who individually own more than 1/2 of 1% of
the securities of such issuer together own more than 5% of such issuer's
securities.
- The Portfolio does not currently intend to invest all of its assets in
the securities of a single open-end management investment company
sub-advised by Fidelity Management & Research Company or an affiliate or
successor with substantially the same fundamental investment objective,
policies, and limitations as the Portfolio.

EQUITY INCOME PORTFOLIO
- --------------------------------------------------------------------------------

INVESTMENT OBJECTIVE

The Portfolio seeks reasonable income by investing primarily in income-producing
equity securities. Normally, at least 65% of the Portfolio's total assets will
be invested in these securities. The Portfolio has the flexibility, however, to
invest the balance in all types of domestic and foreign securities, including
bonds. The Portfolio seeks to achieve a yield that exceeds that of the
securities comprising the S&P 500. The Portfolio does not expect to invest in
debt securities of companies that do not have proven earnings or credit. When
choosing the Portfolio's investments, the Subadviser also considers the
potential for capital appreciation.

INVESTMENT POLICIES

The value of the Portfolio's domestic and foreign investments varies in response
to many factors. Stock values fluctuate in response to the activities of
individual companies, and general market and economic conditions. The value of
bonds fluctuates based on changes in interest rates and in the credit quality of
the issuer. Investments in foreign securities may involve risks in addition to
those of U.S. investments, including increased political and economic risk, as
well as exposure to currency fluctuations. The Subadviser may use various
investment techniques to hedge the Portfolio's risks, but there is no guarantee
that these strategies will work as the Subadviser intends. The Portfolio seeks
to spread investment risk by diversifying its holdings among many companies and
industries.

The Subadviser normally invests the Portfolio's assets according to its
investment strategy. The Portfolio also reserves the right to invest without
limitation in preferred stocks and investment-grade debt instruments for
temporary, defensive purposes.

Policies and limitations are considered at the time of purchase; the sale of
instruments is not required in the event of a subsequent change in
circumstances.

The Subadviser may not buy all of these instruments or use all of these
techniques to the full extent permitted unless it believes that doing so will
help the Portfolio achieve its goal. Current holdings and recent investment
strategies are described in the Portfolio's financial reports which are sent to
shareholders twice a year.

SERIES-18
<PAGE> 22

Equity Income Portfolio may engage in trade of certain other securities and use
other investment techniques as described more fully in Exhibit A attached hereto
including: (i) equity securities; (ii) debt securities; (iii) foreign securities
(including ADRs); (iv) repurchase agreements; (v) reverse repurchase agreements;
(vi) restricted securities; (vii) Portfolio lending (viii) various
futures and options trading activities and techniques; (ix) emerging market
securities; (x) real estate related instruments; (xi) loan participations and
other direct indebtedness; (xii) indexed securities; (xiii) short sales "against
the box;" and (xiv) swap agreements.

More detailed information about the Portfolio's investments is contained in
Exhibit A and the Portfolio's SAI.

ADJUSTING INVESTMENT EXPOSURE. The Portfolio can use various techniques to
increase or decrease its exposure to changing security prices, interest rates,
currency exchange rates, commodity prices, or other factors that affect security
values. These techniques may to changes in interest rates. Longer-term bonds are
generally more sensitive to interest rate changes than short-term bonds.

RISK FACTORS

Lower-quality debt securities (sometimes called "junk bonds") are often
considered to be speculative and involve greater risk of default or price
changes due to changes in the issuer's creditworthiness, or they may already be
in default. The market prices of these securities may fluctuate more than
higher-quality securities and may decline significantly in periods of general
economic difficulty.

INVESTMENT RESTRICTIONS

The Equity Income Portfolio is subject to the same investment limitations as the
Large Cap Portfolio described above. Please refer to "Large Cap -- Investment
Restrictions" section of this prospectus and to the SAI for a complete
discussion of such applicable limitations.

In addition to those limitations, the Equity Income Portfolio will conform its
purchases of debt security to a stated debt quality policy. For example, the
Portfolio may make purchases of lower-rated debt securities if such securities
are rated at or above the stated level by Moody's or rated in the equivalent
categories of S&P, or is unrated but judged to be of equivalent quality by the
Subadviser. The Portfolio currently intends to limit its investments in lower
than Baa-quality debt securities to 20% of its assets. (See Exhibit B for a
discussion of rating agency procedures.)

PORTFOLIO TURNOVER
- --------------------------------------------------------------------------------

Although none of the Portfolios intends to invest for the purpose of seeking
short-term profits, securities held by each Portfolio will be sold whenever the
Portfolio's investment adviser or Subadviser believes it is appropriate to do so
in light of the Portfolio's investment objective, without regard to the length
of time a particular security may have been held. Because the Portfolios are
new, no Portfolio turnover information is presently available.

BOARD OF TRUSTEES
- --------------------------------------------------------------------------------

Under Massachusetts law, the Series Trust's Board of Trustees has absolute and
exclusive control over the management and disposition of all assets of the
Series Trust. Subject to the provisions of the Declaration of Trust, the
business and affairs of the Series Trust shall be managed by the Trustees or
other parties so designated by the Trustees. Information relating to the Board
of Trustees, including its members and their compensation, is contained in the
SAI.

SERIES-19
<PAGE> 23

INVESTMENT MANAGER
- --------------------------------------------------------------------------------

As described above, the Board of Trustees monitors the activities of those
entities which provide investment management and Subadvisory services to the
Portfolios. The Travelers Group Asset Management Company ("TGAM," also referred
to throughout this prospectus as the "Investment Adviser") provides investment
supervision to the Portfolios described herein in accordance with each
Portfolio's investment objectives, policies and restrictions. TGAM'S
responsibilities generally include the following:

(1) engaging the services of one or more firms to serve as investment
adviser to the Portfolios;

(2) reviewing from time to time the investment policies and restrictions of
the Portfolios in light of the Portfolio's performance and otherwise
and after consultation with the Board, recommending any appropriate
changes to the Board;

(3) supervising the investment program prepared for the Portfolios by the
Subadviser;

(4) monitoring, on a continuing basis, the performance of the Portfolio's
securities;

(5) arranging for the provision of such economic and statistical data as
TGAM shall determine or as may be requested by the Board; and

(6) providing the Board with such information concerning important
economic and political developments as TGAM deems appropriate or as
the Board requests.

TGAM is a registered investment adviser which was incorporated in 1996. TGAM is
a direct wholly owned subsidiary of Travelers Group Inc., and its principal
offices are located at 388 Greenwich Street, New York, NY, 10013.

The Executive Committee of TGAM is comprised of the following persons:

JEFFREY B. LANE is Vice Chairman of Smith Barney ("SB"). He is responsible for
Asset Management, Mutual Funds, Futures and Commodities. Prior to joining
Primerica in early 1990, Mr. Lane was President and Chief Operating Officer at
Shearson Lehman Brothers Inc., a post he held since 1987. Mr. Lane served in a
number of management capacities for Shearson beginning in 1969, when he joined
Cogan, Berlind, Weill and Levitt, (a predecessor of Shearson Lehman Brothers) as
a security analyst. Mr. Lane serves as a Director of ICI Mutual Insurance
Company. Mr. Lane received his B.A. from New York University in 1964 and his
M.B.A. from Columbia in 1970.

BARRY BERLIN is a Managing Director of SB and the President and Chief Investment
Officer of SB Equity Management ("SBEM") and founded SBEM in 1983. Previously,
he was a Supervisory Analyst in the Equity Research Department and a member of
its Investment Policy Committee. Before joining Shearson in 1971, Mr. Berlin was
a Research Analyst for Reynolds & Co. He holds a B.A. from New York University
and has a total of 33 years of investment experience.

JESSICA BIBLIOWICZ is an Executive Vice President and head of SB Mutual Funds
and SB Insured Investor Group. Prior to joining SB, she spent eight years in the
Asset Management Division of Shearson Lehman Brothers. She then spent two years
as Director of Sales and Marketing for Prudential Mutual Funds. Ms. Bibliowicz
is a member of the Board of Governors of the Investment Company Institute (ICI),
the mutual fund association. Ms. Bibliowicz holds a B.A. from Cornell
University.

MAURITS EDERSHEIM is an Executive Fund Manager -- Managing Director of SB, which
he joined in 1990. He was formerly a Principal of Drexel Burnham Lambert with
investment experience spanning well over forty years and serves as a member of
the Advisory Committee on the International Capital Markets of the New York
Stock Exchange. Mr. Edersheim is a graduate of Ecole De Sciences Politiques,
Paris, France.

LAURIE A. HESSLEIN is an Executive Vice President of SB and director of the
Firm's Unit Investment Trust Business. Prior to joining SB, she worked for
Shearson Lehman Brothers from 1981 to 1990 as

SERIES-20
<PAGE> 24

National Sales Manager for Unit Trust. Ms. Hesslein received her B.A. in
Economics from the University of Pennsylvania.

HEATH MCLENDON is a Managing Director of SB and Chairman of the SB Mutual Funds
Board of Directors. He has been with SB or its predecessor firms since 1960. He
holds a B.A. from Stanford University and an M.B.A. from Harvard University
Graduate School of Business Administration.

THOMAS PULLING is a Managing Director of SB and Chairman and Chief Executive
Officer of Smith Barney Investment Advisers ("SBIA"). He has been with SB or its
predecessors since 1976. Prior to joining SB, he was a Vice President at L.M.
Rosenthal & Co., Inc. Mr. Pulling holds a B.A. from Princeton University.

BRUCE SARGENT is a Managing Director of SB and Chairman and Chief Executive
Officer for SB Capital Management. He joined Smith Barney in 1968 and is a
member of the New York Society of Security Analysts. He is a Chartered Financial
Analyst and holds a B.A. from Columbia College and an M.B.A. from Columbia
University School of Business.

THOMAS STILES is Chairman and Chief Executive Officer of Greenwich Street
Advisors and is Managing Director of SB. He acts as Chief Investment Officer for
SB Mutual Fund Company. Prior to joining SB, he was an Executive Vice President
and Director of E.F. Hutton. Mr. Stiles received his B.A. from Yale University
and an M.B.A. from Harvard University.

INVESTMENT SUBADVISERS
- --------------------------------------------------------------------------------

GENERAL

Under the terms of the Investment Subadvisory Agreements, the Subadviser
provides an investment program for the Portfolios. The Subadvisers make all
determinations with respect to the purchase and sale of the portfolio securities
(subject to the terms and conditions of the investment objectives, policies, and
restrictions of the Portfolio and to the supervision of the Board of Trustees
and TGAM) and places, in the name of the Portfolio, call orders for execution of
the portfolio transactions. In addition, only Fidelity Management Resource, Inc.
("FMR") also executes the offers, while MFS, Lazard and Federated only place the
orders for TGAM to execute.

For services rendered to the Portfolios, the Subadvisers charge a fee to TGAM.
The Portfolios do not pay the Subadvisers' fee nor any part thereof, nor will
they have any obligation or responsibility to do so.

QUALITY BOND PORTFOLIO
SUBADVISER: TAMIC

TAMIC is a registered investment adviser which has provided investment advisory
services its incorporation in 1978. TAMIC is an indirect wholly owned subsidiary
of Travelers Group, Inc., and its principal offices are located at One Tower
Square, Hartford, Connecticut, 06183. In addition to providing investment advice
to the Portfolio, TAMIC also acts as investment adviser for other investment
companies used to fund variable products. TAMIC also provides investment advice
to individual and pooled pension and profit-sharing accounts, offshore insurance
companies affiliated with Travelers Insurance, and non-affiliated insurance
companies, both domestic and offshore.

Under its Subadvisory Agreement with TGAM, TAMIC is paid an amount equivalent on
an annual basis of .3233% of the average daily net assets of the Fund. The fee
is computed daily and paid weekly.

SERIES-21
<PAGE> 25

PORTFOLIO MANAGER

The Portfolio is managed by David A. Tyson, Ph.D. and CFA, since February 1994.
Mr. Tyson is currently Senior Vice President and the head of the Company's
Portfolio Management Group. He directly manages The Travelers Annuity, Life
Surplus and Convertible portfolios. His previous responsibilities have included
managing The Travelers Derivatives, Mortgage-Backed and Quantitative Investment
Groups. Mr. Tyson joined Travelers Insurance in 1985 and TAMIC in 1994. He
previously spent seven years with the Equitable Investment Management
Corporation where he was responsible for quantitative equity research and new
product development.

LAZARD INTERNATIONAL STOCK PORTFOLIO
SUBADVISER: LAZARD FRERES ASSET MANAGEMENT

Lazard Freres Asset Management ("Lazard"), 30 Rockefeller Plaza, New York, New
York 10020, has entered into an investment Subadvisory agreement (the "Lazard
Subadvisory Agreement") on behalf of the Portfolio with TGAM to provide
Subadvisory services to the Lazard International Stock Portfolio. Pursuant to
the Lazard Subadvisory Agreement, Lazard will regularly provide the Portfolio
with investment research, advice and supervision and furnish continuously an
investment program for the Portfolio consistent with its investment objectives
and policies, including the purchase, retention and disposition of securities.

Lazard Freres Asset Management is a division of Lazard Freres ("Lazard Freres"),
a New York limited liability company, which is registered as an investment
adviser with the Commission and is a member of the New York, American and
Midwest Stock Exchanges. Lazard Freres provides its clients with a wide variety
of investment banking, brokerage and related services.

Lazard Freres performs such brokerage services in conformity with Rule 17e-1
under the 1940 Act and procedures adopted by the Fund's Board of Directors. In
addition, the Investment Manager may allocate brokerage transactions to brokers
who direct to the Investment Manager persons who purchase Fund shares.

TGAM pays the Subadviser an investment Subadvisory fee at the annual rate of
.8250% of the average daily net asset value of the Portfolio. The fee is accrued
daily and paid monthly.

MANAGEMENT OF LAZARD PORTFOLIO

Herbert Gullquist is primarily responsible for the day-to-day management of the
assets of the Portfolio. Mr. Gullquist is a Managing Director and Chief
Investment Officer of Lazard Freres, and has been with the Subadviser since 1982
He has also acted as the Managing Director of the Lazard International Equity
Fund, a publicly traded mutual fund offered by Lazard Freres since that fund's
inception in 1992.

John R. Reinsberg is a Managing Director of Lazard Freres, and has been with the
Subadviser since 1992. Prior thereto, he was Executive Vice President of General
Electric Investment Company. He has also acted as the Managing Director of the
International Equity Fund since that fund's inception.

MFS PORTFOLIO
SUBADVISER: MFS

MFS is America's oldest mutual fund organization. MFS and its predecessor
organizations have a history of money management dating from 1924 and the
founding of the first mutual fund in the United States, Massachusetts Investors
Trust. Net assets under the management of MFS were approximately $43.9 billion
on behalf of approximately 1.9 million investor accounts as of February 29,
1996. As of such date, MFS managed approximately $11.5 billion of assets
invested in equity securities and approximately $20 billion of assets invested
in fixed income securities. Approximately $3.8 billion of the assets managed by
MFS are invested in securities of foreign issuers and non-

SERIES-22
<PAGE> 26

U.S. dollar denominated securities of U.S. issuers. MFS is a subsidiary of Sun
Life of Canada (U.S.), which in turn is a wholly owned subsidiary of Sun Life
Assurance Company of Canada ("Sun Life").

For its services and facilities, TGAM pays MFS a management fee, computed and
paid monthly, in an amount equal to 0.75% of MFS Portfolio's average daily net
assets for its then-current fiscal year.

MANAGEMENT OF MFS PORTFOLIO

John W. Ballen a Senior Vice President of MFS, has been MFS Fund's portfolio
manager since MFS Portfolio's inception in 1986. Mr. Ballen has been employed as
a portfolio manager by MFS since 1984.

The Directors of MFS are A. Keith Brodkin, Jeffrey L. Shames, Arnold D. Scott,
John D. McNeil and John R. Gardner. Mr. Brodkin is the Chairman, Mr. Shames is
the President and Mr. Scott is the Secretary and a Senior Executive Vice
President of MFS. Messrs. McNeil and Gardner are the Chairman and President,
respectively, of Sun Life. Sun Life, a mutual life insurance company, is one of
the largest international life insurance companies and has been operating in the
United States since 1895, establishing a headquarters office here in 1973. The
executive officers of MFS report to the Chairman of Sun Life.

A. Keith Brodkin, the Chairman of MFS, is the Chairman and President of the
Trust. W. Thomas London, Stephen E. Cavan, James R. Bordewick, Jr., Leslie J.
Nanberg and James O. Yost, all of whom are officers of MFS, are officers of the
Trust.

FEDERATED HIGH YIELD PORTFOLIO
SUBADVISER: FEDERATED MANAGEMENT, INC.

Federated Management, Inc. ("Federated Management") a Delaware business
Federated Portfolio organized on April 11, 1989, is a registered investment
adviser under the 1940 Act. It is a subsidiary of Federated Investors. All of
the Class A (voting) shares of Federated Investors are owned by a Federated
Portfolio, the trustees of which are John F. Donahue, Chairman and Trustee of
Federated Investors, Mr. Donahue's wife, and Mr. Donahue's son, J. Christopher
Donahue, who is President and Trustee of Federated Investors.

Federated Management and other subsidiaries of Federated Investors serve as
investment advisers to a number of investment companies and private accounts.
Certain other subsidiaries also provide administrative services to a number of
investment companies. Total assets under management or administration by these
and other subsidiaries of Federated Investors are approximately $70 billion.
Federated Investors, which was founded in 1956 as Federated Investors, Inc.,
develops and manages mutual funds primarily for the financial industry.
Federated Investors' track record of competitive performance and its
disciplined, risk-averse investment philosophy serve approximately 3,500 client
institutions nationwide. Through these same client institutions, individual
shareholders also have access to this same level of investment expertise.

Pursuant to an agreement between TGAM and Federated Management dated acts
as the Subadviser for the Federated High Yield Portfolio. In its capacity as
Subadviser, Federated Management continually conducts investment research and
supervision for the Federated Portfolio and is responsible for the purchase or
sale of portfolio instruments, for which it receives an annual fee from the
investment adviser.

Federated Management receives an annual investment advisory fee equal to .65 of
1% of the Federated Portfolio's average daily net assets for providing
Subadvisory services to the Portfolio.

MANAGEMENT OF THE FEDERATED HIGH YIELD PORTFOLIO

Mark E. Durbiano serves as the Federated High Yield Portfolio manager. Mr.
Durbiano has served the Federated High Yield Fund, a public retail mutual fund
since 1984. Mr. Durbiano joined Federated Investors in 1982 and has been a Vice
President of the Federated Portfolio's investment adviser since

SERIES-23
<PAGE> 27

1988. Mr. Durbiano is a Chartered Financial Analyst and received his MBA in
Finance from the University of Pittsburgh.

FEDERATED STOCK PORTFOLIO
SUBADVISER: FEDERATED MANAGEMENT, INC.

Federated Management also serves as the Subadviser to the Federated Stock
Portfolio. (See "Federated High Yield Portfolio--Background" above for a
discussion of Federated Management.)

Federated Management serves as Subadviser to the Federated Stock Portfolio
pursuant to an agreement between itself and TGAM dated . Pursuant to this
agreement, Federated Management will continually conducts investment research
and supervision for the Portfolio and is responsible for the purchase or sale of
portfolio instruments. For these services, Federated Management will receive an
annual fee of .6250% of 1% from the Portfolio.

MANAGEMENT OF FEDERATED STOCK PORTFOLIO

Timothy E. Keefe serves as the Federated Stock Portfolio's manager. Mr. Keefe
joined Federated Investors in 1987 and has been a Vice President of an affiliate
of the Portfolio's sub-adviser since 1995. Mr. Keefe served as an Assistant Vice
President of an affiliate of the Portfolio's sub-adviser between 1993 and 1995,
and as an Investment Analyst from 1991 to 1993. Mr. Keefe is a Chartered
Financial Analyst and received his M.B.A. in Business Administration from the
University of Pittsburgh.

LARGE CAP PORTFOLIO
SUBADVISER: FIDELITY MANAGEMENT & RESEARCH COMPANY

Fidelity Management & Research Company ("FMR") serves as the investment
Subadviser to the Large Cap Portfolio. FMR is an investment adviser registered
as such with the SEC. Its principal office is located at 82 Devonshire Street,
Boston, MA 02109-3614.

At present, the principal operating activities of FMR Corp. are those conducted
by three of its divisions as follows: FMR, which is the transfer and shareholder
servicing agent for certain of the funds advised by FMR; Fidelity Investments
Institutional Operations Company, which performs shareholder servicing functions
for institutional customers and funds sold through intermediaries; and Fidelity
Investments Retail Marketing Company, which provides marketing services to
various companies within the Fidelity organization.

All of the stock of FMR is owned by FMR Corp., its parent company organized in
1972. Through ownership of voting common stock and the execution of a
shareholders' voting agreement, Edward C. Johnson 3d, Johnson family members,
and various trusts for the benefit of the Johnson family form a controlling
group with respect to FMR. Corp.

FMR serves as Subadviser to the Large Cap Portfolio pursuant to an agreement
between itself and TGAM dated . Pursuant to this agreement, FMR will
continually conducts investment research and supervision for the Portfolio and
is responsible for the purchase or sale of portfolio instruments. For these
services, FMR will receive an annual fee of .75% of 1% from the Portfolio.

FMR has sub-subadvisory agreements with FMR U.K. and FMR Far East. TAMIC is also
a party to these agreements in its capacity as Investment Adviser. These
sub-Subadvisers provide FMR with investment research and advice on issuers based
outside the United States. Under the sub-subadvisory agreements, FMR pays FMR
U.K. and FMR Far East fees equal to 110% and 105%, respectively, of the costs of
providing these services.

The sub-Subadvisers may also provide investment management services. In return,
FMR pays FMR U.K. and FMR Far East a fee equal to 60% of its management fee rate
with respect to a Portfolio's investments that the sub-Subadviser manages on a
discretionary basis.

SERIES-24
<PAGE> 28

MANAGEMENT OF LARGE CAP PORTFOLIO

John B. McDowell is the manager of Large Cap Portfolio, which he has managed
since . Mr. McDowell is also the manager of Fidelity Adviser Large Cap
Fund and Fidelity Large Cap Stock Fund. He joined Fidelity in 1985.

EQUITY INCOME PORTFOLIO
SUBADVISER: FIDELITY MANAGEMENT & RESEARCH COMPANY

FRM also serves as the Subadviser to the Equity Income Portfolio. See "Large Cap
Portfolio -- Fidelity Resource Management -- Background" above for a discussion
of FMR.

FMR serves as Subadviser to the Equity Income Portfolio pursuant to an agreement
between itself and TGAM dated . Pursuant to this agreement, FMR will
continually conducts investment research and supervision for the Portfolio and
is responsible for the purchase or sale of portfolio instruments. For these
services, FMR will receive an annual fee of .75% of 1% from the Portfolio.

Stephen Peterson is manager of Equity Income Portfolio which he has managed
since 1983. He also manages Fidelity Equity Income Fund. Mr. Peterson is also
senior vice president of Fidelity Management Trust Co. Previously, he was vice
president and manager of several trust accounts. Mr. Peterson joined Fidelity in
October 1980.

SECURITIES TRANSACTIONS
- --------------------------------------------------------------------------------

Under policies established by the Board of Trustees, the investment manager,
TGAM, selects broker-dealers to execute transactions subject to the receipt of
best execution. When selecting broker-dealers to execute portfolio transactions
for the Portfolios, the investment adviser may follow a policy of considering as
a factor the number of shares of a Portfolio sold by such broker-dealers. In
addition, broker-dealers may from time to time be affiliated with the Series
Trust, the investment advisers or their affiliates.

The Portfolios may pay higher commissions to broker-dealers which provide
research services. The investment advisers may use these services in advising
the Portfolios, as well as in advising their other clients.

FUND EXPENSES
- --------------------------------------------------------------------------------

In addition to the investment advisory fees discussed above, the other principal
expenses of the Series Trust and the Portfolios include the charges and expenses
of the transfer agent, the custodian, the independent auditors, and any outside
legal counsel employed by either the Series Trust or the Board of Trustees; the
compensation for the unaffiliated members of the Board of Trustees; the costs of
printing and mailing the Series Trust's prospectus, proxy solicitation
materials, and annual, semiannual and periodic reports; brokerage commissions,
interest charges and taxes; and any registration, filing and other fees payable
to government agencies in connection with the registration of the Series Trust
and its shares under federal and state securities laws. Additional high
portfolio turnover may involve correspondingly greater brokerage commissions and
other transaction costs, which will be borne directly by the Portfolios, as well
as additional gains and/or losses to shareholders.

Pursuant to a Management Agreement dated May 1, 1993 between the Series Trust
and the Company, the Company agreed to reimburse the Series Trust for the amount
by which each Portfolio's aggregate annual expenses, including investment
advisory fees but excluding brokerage commissions, interest charges and taxes,
exceed 1.25% of each Portfolio's average net assets for any fiscal year.

SERIES-25

<PAGE> 29

COMPANY TRANSFER AGENT
- --------------------------------------------------------------------------------

The Travelers Insurance Company, One Tower Square, Hartford, Connecticut 06183,
serves as the Series Trust's transfer agent and dividend disbursing agent.

SHARES OF THE SERIES TRUST

The Series Trust currently issues one class of shares divided into thirteen
separate series. Under the Declaration of Trust, the Board of Trustees is
authorized to create new series of shares without the necessity of a vote of
shareholders of the Series Trust. All shares of each series of the Series Trust
have equal voting, dividend and liquidation rights. When issued and paid for,
the shares will be fully paid and nonassessable by the Series Trust and will
have no preference, conversion, exchange or preemptive rights.

Shareholders are entitled to one vote for each full share owned and fractional
votes for fractional shares. Shares of each series are entitled to vote
separately to approve investment advisory agreements or changes in fundamental
investment restrictions, but shares of all series vote together in the election
of Trustees and the selection of accountants. Shares are redeemable,
transferable and freely assignable as collateral. There are no sinking fund
provisions. (See the accompanying separate account prospectus for a discussion
of voting rights applicable to purchasers of variable annuity and variable life
insurance contracts.)

Shares of the Series Trust are currently sold only to insurance company separate
accounts in connection with variable annuity and variable life insurance
contracts issued by the Company. Shares are not sold to the general public.
Shares of the Series Trust are sold on a continuing basis, without a sales
charge, at the net asset value next computed after payment is made by the
insurance company to the Series Trust's custodian. However, the separate
accounts to which shares are sold may impose sales and other charges, as
described in the appropriate contract prospectus.

Under Massachusetts law, it is possible that a shareholder of any series may be
held personally liable for a Portfolio's obligations. However, the Series
Trust's Declaration of Trust provides that shareholders shall not be subject to
any personal liability for the Series Trust's obligations and provides
indemnification from Series Trust assets for any shareholder held personally
liable for the Series Trust's obligations. Disclaimers of such liability are
included in each agreement entered into by the Series Trust or its Portfolios.

Although the Series Trust is not currently aware of any disadvantages to
contract owners of either variable annuity or variable life insurance contracts
because the Series Trust's shares are available with respect to both products,
an irreconcilable material conflict may conceivably arise between contract
owners of different separate accounts investing in the Series Trust due to
differences in tax treatment, management of the Trust's investments, or other
considerations. The Series Trust's Board of Trustees will monitor events in
order to identify any material conflicts between variable annuity contract
owners and variable life insurance policy owners, and will determine what
action, if any, should be taken in the event of such a conflict.

PRICING SHARES
- --------------------------------------------------------------------------------

The net asset value of a Portfolio share is computed as of the close of trading
on each day on which the New York Stock Exchange is open for trading, except on
days when changes in the value of the Portfolio's securities do not affect the
current net asset value of its shares. The net asset value per share is arrived
at by determining the value of the Portfolio's assets, subtracting its
liabilities, and dividing the result by the number of shares outstanding.

SERIES-26
<PAGE> 30

The Portfolios value short-term money market instruments with maturities of
sixty days or less at amortized cost (original purchase cost as adjusted for
amortization of premium or accretion of discount) which, when combined with
accrued interest, approximates market. All other investments are valued at
market value, or where market quotations are not readily available, at fair
value as determined in good faith by the Series Trust's Board of Trustees.

SHARE REDEMPTION
- --------------------------------------------------------------------------------

Full and fractional shares of the Portfolios may be redeemed on any business
day. Redemptions are effected at the per share net asset value next determined
after receipt by the Portfolio of a proper redemption request. The redemption
value is the net asset value adjusted for fractions of a cent and may be more or
less than the shareholder's cost depending upon changes in the value of the
Portfolio's securities between purchase and redemption.

The Portfolio computes the redemption value at the close of the New York Stock
Exchange ("Exchange") at the end of the day on which they have received all
proper documentation from the shareholder. Redemption proceeds are normally
wired or mailed either the same or the next business day, but in no event later
than seven days thereafter.

The Series Trust or the Portfolio may temporarily suspend the right to redeem
their shares when: (1) the Exchange is closed, other than customary weekend and
holiday closings; (2) trading on the Exchange is restricted; (3) an emergency
exists as determined by the SEC so that disposal of the Portfolio's investments
or determination of its net asset value is not reasonably practicable; or (4)
the SEC, for the protection of shareholders, so orders.

DIVIDENDS AND TAX STATUS

The Series Trust and its Portfolios have qualified and intend to qualify in the
future as a regulated investment company under Subchapter M of the Internal
Revenue Code, as amended. A Portfolio qualifies if, among other things, it
distributes to its shareholders at least 90% of its investment company taxable
income during each fiscal year.

Capital gains and dividends are distributed in cash or reinvested in additional
shares of a Portfolio without a sales charge. Although purchasers of variable
contracts are not currently subject to federal income taxes on distributions
made by the Portfolios, they may be subject to state and local taxes and should
review the accompanying contract prospectus for a discussion of the tax
treatment applicable to purchasers of variable annuity and variable life
insurance contracts.

LEGAL PROCEEDINGS
- --------------------------------------------------------------------------------

There are no pending material legal proceedings affecting the Series Trust or
the Portfolios.

ADDITIONAL INFORMATION
- --------------------------------------------------------------------------------

Except as otherwise stated in this Prospectus or as required by law, the Series
Trust reserves the right to change the terms of the offer stated in this
Prospectus without shareholder approval, including the right to impose or change
fees for services provided.

SERIES-27
<PAGE> 31

EXHIBIT A
- --------------------------------------------------------------------------------

DESCRIPTION OF CERTAIN TYPES OF INVESTMENTS AND
INVESTMENT TECHNIQUES AVAILABLE TO THE PORTFOLIOS

The following types of investments and investment techniques are available to
the Portfolios as noted in the discussion of each. Please refer to the
investment objective and policies of each Portfolio for a list of available
investments.

CASH INSTRUMENTS

Certain of the Portfolio may invest temporarily in cash and cash items during
times of unusual market conditions for defensive purposes and to maintain
liquidity. Cash items may include, but are not limited to, obligations such as:
commercial paper (generally lower-rated); short-term notes; obligations issued
or guaranteed as to principal and interest by the U.S. government or any of its
agencies or instrumentalities (see "U.S. Government Obligations" below).

SHORT-TERM MONEY MARKET INSTRUMENTS

Certain of the Portfolios, including the Lazard International Portfolio may at
any time invest funds awaiting investment or held as reserves for the purposes
of satisfying redemption requests, payment of dividends or making other
distributions to shareholders, in cash and short-term money market instruments;
provided, however, that, such investments will not ordinarily exceed 5% of the
total assets of the Portfolio. Short-term money market instruments in which the
Portfolio may invest include (i) short-term U.S. Government Securities and,
short-term obligations of foreign sovereign governments and their agencies and
instrumentalities, (ii) interest bearing savings deposits on, and certificates
of deposit and bankers' acceptances of, United States and foreign banks, (iii)
commercial paper of U.S. or of foreign issuers rated A-l or higher by S&P or
Prime-1 by Moody's, issued by companies which have an outstanding debt issue
rated AA or higher by S&P or Aa or higher by Moody's or, if not rated,
determined by the Investment Subadviser to be of comparable quality to those
rated obligations which may be purchased by the Portfolio and (iv) repurchase
agreements relating to the foregoing.

CERTIFICATES OF DEPOSIT AND BANKERS' ACCEPTANCES

Certain of the Portfolios, including the Federated High Yield Portfolio and the
Lazard International Portfolio may purchase certificates of deposit.
Certificates of deposit are receipts issued by a bank in exchange for the
deposit of funds. The issuer agrees to pay the amount deposited plus interest to
the bearer of the receipt on the date specified on the certificate. The
certificate can usually be traded in the secondary market prior to maturity.

Bankers' Acceptances are short-term credit arrangements designed to enable
business to obtain funds to finance commercial transactions. Generally, an
acceptance is a time draft drawn on a bank by an exporter or an importer to
obtain a stated amount of funds to pay for specific merchandise. The draft is
then "accepted " by a bank that, in effect, unconditionally guarantees to pay
the face value of the instrument on its maturity date. The acceptance may then
be held by the accepting bank as an earning asset or it may be sold in the
secondary market at the going rate of discount for a specific maturity. The MFS
Portfolio may use this investment technique.

Certificates of deposit will be limited to U.S. dollar denominated certificates
of United States banks which have at least $1 billion in deposits as of the date
of their most recently published financial statements (including foreign
branches of U.S. banks, U.S. branches of foreign banks which are members of the
Federal Reserve System or the Federal Deposit Insurance Corporation, and savings
and loan associations which are insured by the FDIC).

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U.S. GOVERNMENT OBLIGATIONS

The Portfolios may invest in direct obligations of the U.S. Treasury (such as
U.S. Treasury bills, notes, and bonds) and obligations issued or guaranteed by
U.S. government agencies or instrumentalities. These securities are backed by
the full faith and credit of the U.S. Treasury.

The Federated Portfolios may also invest in U.S. Government obligations which
may not always receive financial support from the U.S. government including
obligations of the:

- Federal Land Banks;
- Central Bank for Cooperatives;
- Federal Intermediate Credit Banks;
- Federal Home Loan Banks;
- Farmers Home Administration; and
- Federal National Mortgage Association.

EQUITY SECURITIES

Certain of the Portfolios may invest in equity securities. By definition, equity
securities include common stocks, convertible securities, and warrants. Common
stocks, the most familiar type, represent an equity (ownership) interest in a
corporation. Although equity securities have a history of long-term growth in
value, their prices fluctuate based on changes in a company's financial
condition and on overall market and economic conditions. Smaller companies are
especially sensitive to these factors. The Federated High Yield Portfolio may
invest in debt obligations which involve equity features such as conversion or
exchange rights, warrants for the acquisition of common stock of the same or a
different issuer, participations based on revenues, sales or profits, or the
purchase of common stock in a unit transaction (where corporate debt securities
and common stock are offered as a unit).

DEBT SECURITIES

Additionally, investments may be made in bonds and other debt instruments are
used by issuers to borrow money from investors. Debt instruments involve the
promise, by the issuer of the instrument to pay the investor a fixed or variable
rate of interest. Such repayment will occur at maturity. Some debt securities,
such as zero coupon bonds, do not pay current interest, but are purchased at a
discount from their face values. In general, bond prices rise when interest
rates fall, and vice versa. Debt securities have varying degrees of quality and
varying levels of sensitivity to changes in interest rates. Longer-term bonds
are generally more sensitive to interest rate changes than short-term bonds.

Investment-grade debt securities are medium- and high-quality securities. Some,
however, may possess speculative characteristics and may be more sensitive to
economic changes and to changes in the financial condition of issuers.

Lower-quality debt securities (sometimes called "junk bonds") are considered to
have speculative characteristics and involve greater risk of default or price
changes due to changes in the issuer's creditworthiness, or they may already be
in default. The market prices of these securities may fluctuate more than
higher-quality securities and may decline significantly in periods of general
economic difficulty. Certain of the Portfolio's may be permitted to invest in
such lower-quality debt securities.

FLOATING AND VARIABLE RATE INSTRUMENTS

The Lazard International Portfolio and the Federated High Yield Portfolio may
purchase obligations that have a floating or variable rate of interest. Such
obligations bear interest at rates that are not fixed, but vary with changes in
specified market rates or indices, such as the prime rate, and at specified
intervals. Certain of these obligations may carry a demand feature that would
permit the holder to tender them back to the issuer at par value prior to
maturity. The Portfolio limits its purchases of

SERIES-29
<PAGE> 33

floating and variable rate obligations to those of the same quality as it
otherwise is allowed to purchase. The Investment Subadviser monitors on an
ongoing basis the ability of an issuer of a demand instrument to pay principal
and interest on demand. The Portfolio's right to obtain payment at par on a
demand instrument can be affected by events occurring between the date the
Portfolio elects to demand payment and the date payment is due that may affect
the ability of the issuer of the instrument to make payment when due, except
when such demand instruments permit same-day settlement. To facilitate
settlement, these same-day demand instruments may be held in book entry form at
a bank other than the Portfolio's custodian, subject to a subcustodian agreement
approved by the Portfolio between that bank and the Portfolio's custodian.

The floating and variable rate obligations that the Portfolio may purchase
include certificates of participation in obligations purchased from banks. A
certificate of participation gives the Portfolio an undivided interest in the
underlying obligations in the proportion that the Portfolio's interest bears to
the total principal amount of such obligations. Certain of such certificates of
participation may carry a demand feature that would permit the holder to tender
them back to the issuer prior to maturity.

To the extent that floating and variable rate instruments without demand
features are not readily marketable, they will be subject to the investment
restriction that the Portfolio may not invest an amount equal to 10% or more of
the current value of its net assets in illiquid securities. See "Illiquid
Securities" and "Investment Restrictions" below.

VARIABLE AMOUNT MASTER DEMAND NOTES

Variable amount master demand notes are unsecured obligations that permit the
investment of fluctuating amounts by a Portfolio at varying rates of interest
pursuant to direct arrangements between the Portfolio as lender and the issuer
as borrower. Master demand notes permit daily fluctuations in the interest rate
and daily changes in the amounts borrowed. A Portfolio has the right to increase
the amount under the note at any time up to the full amount provided by the note
agreement, or to decrease the amount, and the borrower may repay up to the full
amount of the note without penalty. Because these types of notes are direct
lending arrangements between the lender and the borrower, it is not generally
contemplated that such instruments will be traded, and there is no secondary
market for these notes, although they are redeemable and thus repayable by the
borrower at face value plus accrued interest at any time. Accordingly, a
Portfolio's right to redeem is dependent on the ability of the borrower to pay
principal and interest on demand. In connection with master demand note
arrangements, the Investment adviser and Subadvisers will consider the earning
power, cash flow and other liquidity ratios of the issuer. These notes, as such,
are not typically rated by credit rating agencies. Unless they are so rated, the
Portfolios will invest in them only if, at the time of an investment, the issuer
meets the criteria set forth for all other commercial paper. Pursuant to
procedures established by the Investment adviser or Subadviser, such notes are
treated as instruments maturing in one day and valued at their par value. The
investment adviser and Subadviser intend to continuously monitor factors related
to the ability of the borrower to pay principal and interest on demand.

REPURCHASE AGREEMENTS

The Travelers Quality Bond, Lazard International, MFS, Federated High Yield,
Federated Stock, Large Cap and Equity Income Portfolios each may enter into
repurchase agreements. Repurchase agreements are arrangements in which banks,
broker/dealers, and other recognized financial institutions sell U.S. government
securities and or other securities to a Portfolio and each agrees at the time of
the sale to repurchase the securities at a mutually agreed upon time and price.
Interim cash balances may be invested from time to time in repurchase agreements
with approved counterparties (i.e., national banks or reporting broker-dealers
meeting the investment advisor's credit quality standards as presenting minimal
risk of default). Repurchase transactions generally mature the next business day
but, in the event of a transaction of longer maturity, collateral will be marked
to market daily and, when required, additional cash or qualifying collateral
will be required from the counterparty.

SERIES-30
<PAGE> 34

In any repurchase agreement, the risk that the original seller does not
repurchase the securities as called for in the repurchase agreement exists. A
Portfolio could receive less than the repurchase price on any sale of such
securities. Additionally, if the seller becomes subject to a proceeding under
the bankruptcy laws or its assets are otherwise subject to a stay order, a
Portfolio's right to liquidate the securities may be restricted (during which
time the value of the securities could decline). The Investment Adviser and
Subadviser, however, each believe that under the regular procedures normally in
effect for custody of the Portfolio's securities subject to repurchase
agreements, a court of competent jurisdiction would rule in favor of the
Portfolio and allow retention or disposition of such securities.

Each of the Portfolios may adopt rules concerning the collateralization of
repurchase agreements. For example, with regard to the Travelers Quality Bond
Portfolio, repurchase agreements must be collateralized by U.S. Government
securities with market values of no less than 102% of the amount of the
transaction, including accrued interest.

The Portfolios will only enter into repurchase agreements with banks and other
recognized financial institutions such as broker/dealers which are found by the
particular Portfolio's adviser to be creditworthy pursuant to guidelines
established for the Portfolio.

Physical delivery or, in the case of "book-entry" securities, segregation in the
counterparty's account at the Federal Reserve for the benefit of the Portfolio
is required to establish a perfected claim to the collateral for the term of the
agreement in the event the counterparty fails to fulfill its obligation.

As the securities collateralizing a repurchase transaction are generally of
longer maturity than the term of the transaction, in the event of default by the
counterparty on its obligation, the Portfolio would bear the risks of delay,
adverse market fluctuation and transaction costs in disposing of the collateral.

The Portfolio or its custodian will take possession of the securities subject to
repurchase agreements, and these securities will be marked to market daily.

REVERSE REPURCHASE AGREEMENTS

The Federated High Yield, Federated Stock, Large Cap, Lazard International, and
Equity Income Portfolios may enter into reverse repurchase agreements. This
transaction is similar to borrowing cash. In a reverse repurchase agreement the
Portfolio transfers possession of a portfolio instrument to another person, such
as a financial institution, broker, or dealer, in return for a percentage of the
instrument's market value in cash, and agrees that on a stipulated date in the
future the Portfolio will repurchase the portfolio instrument by remitting the
original consideration plus interest at an agreed upon rate. The use of reverse
repurchase agreements may enable the Portfolio to avoid selling portfolio
instruments at a time when a sale may be deemed to be disadvantageous, but the
ability to enter into reverse repurchase agreements does not ensure that the
Portfolio will be able to avoid selling portfolio instruments at a
disadvantageous time.

When effecting reverse repurchase agreements, liquid assets of the Portfolio, in
a dollar amount sufficient to make payment for the obligations to be purchased,
are segregated at the trade date. These securities are marked to market daily
and are maintained until the transaction is settled. During the period any
reverse repurchase agreement are outstanding, but only to the extent necessary
to assure completion of the reverse repurchase agreements, the Portfolio will
restrict the purchase of portfolio instruments to money market instruments
maturing on or before the expiration date of the reverse repurchase agreements.

WHEN-ISSUED SECURITIES

Each of the Portfolios may purchase securities on a when-issued or delayed
delivery basis. Transactions of this type are arrangements in which the
particular Portfolio purchases securities with payment and delivery scheduled
for a future time. Their purpose is to help to ensure the availability of
suitable securities.

SERIES-31
<PAGE> 35

The prices of such securities will be fixed at the time the commitment to
purchase is made, and may be expressed in either dollar price or yield
maintenance terms. Such commitment to purchase be viewed as a senior security,
and generally will be marked to market and reflected in the Portfolio's
Accumulation Unit Value daily from the commitment date. Delivery and payment may
be at a future date beyond customary settlement time.

It is the customary practice of Travelers Quality Bond Portfolio to make
when-issued purchases for settlement no more than 90 days beyond the commitment
date. The Travelers Quality Bond Portfolio may only securities are limited to
new issue government or agency securities.

While it is the intention of each Portfolio to take physical delivery of these
securities, offsetting transactions may be made prior to settlement, if it is
advantageous to do so. For example, Travelers Quality Bond Portfolio does not
make payment or begin to accrue interest on these securities until settlement
date. In order to invest its assets pending settlement, Travelers Quality Bond
Portfolio will normally invest in short-term money market instruments and other
securities maturing no later than the scheduled settlement date.

Travelers Quality Bond Portfolio does not intend to purchase when-issued
securities for speculative or "leverage" purposes. Consistent with Section 18 of
the 1940 Act and the General Policy Statement of the SEC thereunder, when
Travelers Quality Bond Portfolio commits to purchase a when-issued security, it
will identify and place in a segregated account high-grade money market
instruments and other liquid securities equal in value to the purchase cost of
the when-issued securities

The Investment Adviser and Subadvisers engaged in trades of when issued
securities each believes that purchasing securities in this manner will be
advantageous. This practice, however does include certain risks, namely the
default of the counterparty on its obligation to deliver the security as
scheduled. In this event, an affected Portfolio would endure a loss (or gain)
equal to the price appreciation (or depreciation) in value from the commitment
date. Further, such failure to complete a transaction may cause the affected
Portfolio to miss other opportunities.

To guard against such risks, the Investment Adviser and Subadviser employ a
rigorous credit quality procedure in determining the counterparties with which
it will deal in when-issued securities and, in some circumstances, will require
the counterparty to post cash or some other form of security as margin to
protect the value of its delivery obligation pending settlement.

It is expected that, under normal circumstances, the Portfolios will take
delivery of such securities. In general, the Portfolios do not pay for the
securities until received and the Portfolios do not start earning interest on
the obligations until the contractual settlement date. While awaiting delivery
of the obligations purchased on such bases, the Portfolios will establish a
segregated account consisting of cash, short-term money market instruments or
high quality debt securities equal to the amount of the commitments to purchase
when-issued securities.

The MFS Portfolio may engage in trades of when-issued securities. The value of
this Portfolio's securities, together with the value of all securities of the
issuer of the "when-issued security" may not exceed 5% of the value of the
Portfolio's total assets at the time that the initial commitment to purchase
such securities is made. An increase in the percentage of the Portfolio's assets
committed to the purchase of securities on a when-issued basis may increase the
volatility of its net asset value.

A Portfolio may dispose of a commitment prior to settlement if the adviser deems
it appropriate to do so. In addition, the Portfolio may enter in transactions to
sell its purchase commitments to third parties at current market values and
simultaneously acquire other commitments to purchase similar securities at later
dates. A Portfolio may realize short-term profits or losses upon the sale of
such commitments.

FUTURES CONTRACTS

Certain of the Portfolios including Large Cap, Equity Income, MFS, and Lazard
International Portfolios may use exchange-traded financial futures contracts as
a hedge to protect against changes in interest

SERIES-32
<PAGE> 36

rates or stock prices. Financial futures contracts consist of stock index
futures contracts and futures contracts on debt securities. An interest rate
futures contract is a contract to buy or sell specified debt securities at a
future time for a fixed price. A stock index futures contract is a contractual
obligation to buy or sell a specified index of stocks at a future date for a
fixed price.

Hedging by use of interest rate futures seeks to establish, with more certainty
than would otherwise be possible, the effective rate of return on portfolio
securities. When hedging is successful, any depreciation in the value of
portfolio securities will substantially be offset by appreciation in the value
of the futures position. Conversely, any appreciation in the value of the
portfolio securities will substantially be offset by depreciation in the value
of the futures position. At no time will any Portfolios' futures trading
transactions be employed for speculative purposes.

Stock index futures may be used, to a limited extent, to hedge specific common
stocks with respect to market (systematic) risk (involving the market's
assessment of overall economic prospects) as distinguished from stock-specific
risk (involving the market's evaluation of the merits of the issuer of a
particular security). Gains and losses on futures contracts employed as hedges
for specific securities will normally be offset by losses or gains,
respectively, on the hedged security.

When a futures contract is purchased, the Portfolios will set aside, in an
identifiable manner, an amount of cash and cash equivalents equal to the total
market value of the futures contract, less the amount of the initial margin. The
Portfolios will not purchase or sell futures contracts for which the aggregate
initial margin exceeds five percent (5%) of the fair market value of their
respective assets, after taking into account unrealized profits and unrealized
losses on any such contracts they have entered into.

Positions taken in the futures market are not normally held to maturity, but
instead are liquidated through offsetting transactions which may result in a
profit or a loss. Closing out an open futures contract sale or purchase is
effected by entering into an offsetting futures contract purchase or sale,
respectively, for the same aggregate amount of the debt security and the same
delivery date. If the offsetting purchase price is less than the original sale
price, the Portfolio realizes a gain; if it is more, the Portfolio realizes a
loss. Conversely, if the offsetting sale price is more than the original
purchase price, the Portfolio realizes a gain; if less, a loss. While futures
positions taken by the Portfolios will usually be liquidated in this manner, the
Portfolios may instead make or take delivery of the underlying securities
whenever it appears economically advantageous for them to do so. In determining
gain or loss, transaction costs must be taken into account. There can be no
assurance that the Portfolios will be able to enter into an offsetting
transaction with respect to a particular contract at a particular time.

All interest rate and stock index futures contracts will be traded on exchanges
that are licensed and regulated by the Commodity Futures Trading Commission
("CFTC"). To ensure that its futures transactions meet CFTC standards, the
Portfolios will enter into futures contracts for hedging purposes only, i.e.,
for the purposes or with the intent specified in CFTC regulations and
interpretations, subject to the requirements of the SEC. The Portfolios will
further seek to assure that fluctuations in the price of any futures contracts
that they use for hedging purposes will be substantially related to fluctuations
in the price of the securities which they hold or which they expect to purchase,
or for other risk reduction strategies, though there can be no assurance the
expected result will always be achieved.

As evidence of its hedging intent, the Portfolios expect that on seventy-five
percent (75%) or more of the occasions on which they purchase a long futures
contract, they will effect the purchase of securities in the cash market or take
delivery as they close out a futures position. In particular cases, however,
when it is economically advantageous, a long futures position may be terminated
without the corresponding purchase of securities.

TRANSACTIONS IN OPTIONS, FUTURES AND FORWARD CONTRACTS: MFS Portfolio may enter
into transactions in options, futures and forward contracts on a variety of
instruments and indices, in order to protect

SERIES-33
<PAGE> 37

against declines in the value of portfolio securities or increases in the cost
of securities or other assets to be acquired and, subject to applicable law, to
increase MFS Portfolio's gross income.

SPECIAL RISKS RELATING TO FUTURES CONTRACTS

While certain futures contracts may be purchased and sold to reduce certain
risks, these transactions may entail other risks. Thus, while the Portfolios may
benefit from the use of such futures, changes in interest rates or stock price
movements may result in a poorer overall performance for the Portfolios than if
they had not entered into such futures contracts. Moreover, in the event of an
imperfect correlation between the futures position and the portfolio position
which is intended to be protected, the desired protection may not be obtained
and the Portfolios may be exposed to risk of loss. The investment advisers will
attempt to reduce this risk by engaging in futures transactions, to the extent
possible, where, in their judgment, there is a significant correlation between
changes in the prices of the futures contracts and the prices of any Portfolio
securities sought to be hedged.

In addition to the possibility that there may be a less than perfect correlation
between movements in the futures contracts and securities in the Portfolio being
hedged, the prices of futures contracts may not correlate perfectly with
movements in the underlying security due to certain market distortions. First,
rather than meeting variation margin deposit requirements should a futures
contract value move adversely, investors may close future contracts through
offsetting transactions which could distort the normal relationship between the
index and futures markets. Second, since margin requirements in the futures
market are less onerous than in the securities market, the futures market may
attract more speculators than the securities market. Increased participation by
speculators may cause temporary price distortions. Due to the possibility of
such price distortion, and also because of the imperfect correlation discussed
above, even a correct forecast of general market trends by the investment
advisers may not result in a successful hedging transaction in the futures
market over a short time period.

Successful use of futures contracts for hedging purposes is also subject to the
investment advisers' ability to predict correctly movements in the direction of
the market. The Investment Adviser and Subadvisers believe that over time the
value of the investments of the Portfolios will tend to move in the same
direction as the market indices which are intended to correlate to the price
movements of the portfolio securities sought to be hedged.

WRITING COVERED CALL OPTIONS

The Federated High Yield, Large Cap, Equity Income, Lazard International Stock
and MFS Portfolios may write (i.e., sell) covered call options. By writing a
call option, a Portfolio becomes obligated during the term of the option to
deliver the securities underlying the option upon payment of the exercise price.

The principal reason for writing call options is to obtain, through a receipt of
premiums, a greater current return than would be realized on the underlying
securities alone. Purchases of puts or sales of calls are intended to protect
against price movements in particular securities in a Portfolio's portfolio.
Sales of calls may also generate income. The Portfolios receive a premium from
writing a call option which they retain whether or not the option is exercised.

Certain risks exist in this practice. By writing a call option, a Portfolio
might lose the potential for gain on the underlying security while the option is
open. Prior to exercise or expiration, an option position can only be terminated
by entering into a closing purchase or sale transaction. This requires a
secondary market on an exchange for call or put options which may or may not
exist for any particular call or put option at any specific time. The absence of
a liquid secondary market also may limit the Portfolio's ability to dispose of
the securities underlying an option. The inability to close options also could
have an adverse impact on the Portfolio's ability to effectively hedge.

SERIES-34
<PAGE> 38

The Portfolios may only write "covered" options. This means that as long as a
Portfolio is obligated as the writer of a call option, it will own the
underlying securities subject to the option or, in the case of call options on
U.S. Treasury bills, a Portfolio might own substantially similar U.S. Treasury
bills.

Options on some securities are relatively new and it is impossible to predict
the amount of trading interest that will exist in such options. There can be no
assurance that viable markets will develop or continue. The failure of such
markets to develop or continue could significantly impair a Portfolio's ability
to use such options to achieve its investment objectives.

BUYING PUT AND CALL OPTIONS

The Large Cap, Equity Income, Federated High Yield, Lazard International and MFS
Portfolios may purchase put options on securities held, or on futures contracts
whose price volatility is expected to closely match that of securities held, as
a defensive measure to preserve shareholders' capital when market conditions
warrant. The Portfolios may purchase call options on specific securities, or on
futures contracts whose price volatility is expected to closely match that of
securities eligible for purchase by the Portfolios, in anticipation of or as a
substitute for the purchase of the securities themselves. These options may
(must, in the case of the Federated Portfolios) be listed on a national exchange
or executed "over-the-counter" with a broker-dealer as the counterparty. While
the investment advisers anticipate that the majority of option purchases and
sales will be executed on a national exchange, put or call options on specific
securities or for non-standard terms are likely to be executed directly with a
broker-dealer when it is advantageous to do so. Option contracts will be
short-term in nature, generally less than nine months in duration.

The Portfolios will pay a premium in exchange for the right to purchase (call)
or sell (put) a specific par value of a fixed income or equity security or
futures contract at a specified price (the strike price) on or before the
expiration date of the option contract. In either case, a Portfolio's risk is
limited to the option premium paid and the risk of depreciation in value of
securities on which it has written call options. By writing a call option on a
security, however, a Portfolio limits its opportunity to profit from any
increase in the market value of the underlying security, since the holder will
usually exercise the call option when the market value of the underlying
security exceeds the exercise price of the call.

The Portfolios may sell the put and call options prior to their expiration and
thereby realize a gain or loss. A call option will expire worthless if the price
of the related security is below the contract strike price at the time of
expiration; a put option will expire worthless if the price of the related
security is above the contract strike price at the time of expiration.

Put and call options will be employed for bona fide hedging purposes only.
Liquid securities sufficient to fulfill the call option delivery obligation will
be identified and segregated in an account; deliverable securities sufficient to
fulfill the put option obligation will be similarly identified and segregated.
In the case of put options on futures contracts, portfolio securities whose
price volatility is expected to match that of the underlying futures contract
will be identified and segregated.

If a Portfolio writes an option which expires unexercised or is closed out by
the Portfolio at a profit, it will retain the premium paid for the option which
will increase its gross income and will offset in part the reduced value of the
portfolio security underlying the option, or the increased cost of portfolio
securities to be acquired. In contrast, however, if the price of the underlying
security moves adversely to the Portfolio's position, the option may be
exercised and the Portfolio will be required to purchase or sell the underlying
security at a disadvantageous price, which may only be partially offset by the
amount of the premium. MFS Portfolio may also write combinations of put and call
options on the same security, known as "straddles." Such transactions can
generate additional premium income but also present increased risk.

MFS Portfolio may also purchase put or call options in anticipation of market
fluctuations which may adversely affect the value of its portfolio or the prices
of securities that MFS Portfolio wants to purchase at a later date. In the event
that the expected market fluctuations occur, MFS Portfolio may be able to offset
the resulting adverse effect on its portfolio, in whole or in part, through the
options

SERIES-35
<PAGE> 39

purchased. The premium paid for a put or call option plus any transaction costs
will reduce the benefit, if any, realized by MFS Portfolio upon exercise or
liquidation of the option, and, unless the price of the underlying security
changes sufficiently, the option may expire without value to MFS Portfolio.

In certain instances, MFS Portfolio may enter into options on Treasury
securities which may be referred to as "reset" options or "adjustable strike"
options. These options provide for periodic adjustment of the strike price and
may also provide for the periodic adjustment of the premium during the term of
the option.

OPTIONS ON STOCK INDICES -- MFS Portfolio and Lazard International Portfolio may
write (sell) covered call and put options and purchase call and put options on
stock indices. The MFS Portfolio and Lazard International Portfolio may write
options on stock indices for the purpose of increasing its gross income and to
protect its portfolio against declines in the value of securities it owns or
increases in the value of securities to be acquired. When MFS or Lazard
International Portfolio writes an option on a stock index, and the value of the
index moves adversely to the holder's position, the option will not be
exercised, and the Portfolios will either close out the option at a profit or
allow it to expire unexercised. The Portfolios will thereby retain the amount of
the premium, less related transaction costs, which will increase its gross
income and offset part of the reduced value of portfolio securities or the
increased cost of securities to be acquired. Such transactions, however, will
constitute only partial hedges against adverse price fluctuations, since any
such fluctuations will be offset only to the extent of the premium received by
the Portfolios for the writing of the option, less related transaction costs. In
addition if the value of an underlying index moves adversely to the Portfolios'
option position, the option may be exercised, and the Portfolios will experience
a loss which may only be partially offset by the amount of the premium received.

MFS Portfolio may also purchase put or call options on stock indices in order,
respectively, to hedge its investments against a decline in value or to attempt
to reduce the risk of missing a market or industry segment advance. MFS
Portfolio's possible loss in either case will be limited to the premium paid for
the option, plus related transaction costs.

INDEX FUTURES CONTRACTS

FUTURES CONTRACTS -- MFS Portfolio, Large Cap Portfolio, Equity Income
Portfolio, and Lazard International may enter into stock index futures contracts
(Index Futures). The Portfolios will utilize Index Futures for hedging and
non-hedging purposes, subject to applicable law. Purchases or sales of stock
index futures contracts for hedging purposes are used to attempt to protect the
Portfolios' current or intended stock investments from broad fluctuations in
stock prices. In the event that an anticipated decrease in the value of
portfolio securities occurs as a result of a general stock market decline, a
general increase in interest rates or a decline in the dollar value of foreign
currencies in which portfolio securities are denominated, the adverse effects of
such changes may be offset, in whole or part, by gains on the sale of futures
contracts. Conversely, the increased cost of portfolio securities to be
acquired, caused by a general rise in the stock market, a general decline in
interest rates or a rise in the dollar value of foreign currencies, may be
offset, in whole or part, by gains on Index Futures contracts purchased by the
Portfolios. A Portfolio will incur brokerage fees when it purchases and sells
Index Futures contracts, and it will be required to make and maintain margin
deposits.

OPTIONS ON INDEX FUTURES CONTRACTS -- MFS Portfolio and Lazard International
Portfolio may purchase and write options on stock index futures contracts. Such
investment strategies will be used for hedging and non-hedging purposes, subject
to applicable law. Put and call options on futures contracts may be traded by
the Portfolios in order to protect against declines in the values of portfolio
securities or against increases in the cost of securities to be acquired.
Purchases of options on futures contracts may present less risk in hedging the
portfolios of the Portfolios than the purchase or sale of the underlying futures
contracts since the potential loss is limited to the amount of the premium plus
related transaction costs. The writing of such options, however, does not
present less risk than the

SERIES-36
<PAGE> 40

trading of futures contracts and will constitute only a partial hedge, up to the
amount of the premium received. In addition, if an option is exercised, the
Portfolios may suffer a loss on the transaction.

FORWARD CONTRACTS ON FOREIGN CURRENCY -- MFS Portfolio, Large Cap Portfolio,
Equity Income Portfolio, and Lazard International may enter into contracts for
the purchase or sale of a specific currency at a future date at a price set at
the time of the contract (a "Forward Contract"). The Portfolios will enter into
Forward Contracts for hedging and non-hedging purposes, including transactions
entered into for the purpose of profiting from anticipated changes in foreign
currency exchange rates. Transactions in Forward Contracts entered into for
hedging purposes may include forward purchases or sales of foreign currencies
for the purpose of protecting the dollar value of securities denominated in a
foreign currency or protecting the dollar equivalent of interest or dividends to
be paid on such securities. The Portfolios may also enter into Forward Contracts
for "cross hedging" purposes, e.g., the purchase or sale of a Forward Contract
on one type of currency as a hedge against adverse fluctuations in the value of
a second type of currency. By entering into such transactions, however, the
Portfolios may be required to forgo the benefits of advantageous changes in
exchange rates. The Portfolios may also enter into transactions in Forward
Contracts for other than hedging purposes. For example, if the Subadviser
believes that the value of a particular foreign currency will increase or
decrease relative to the value of the U.S. dollar, the Portfolios may purchase
or sell such currency, respectively, through a Forward Contract. If the expected
changes in the value of the currency occur, the Portfolios will realize profits
which will increase its gross income. Such transactions, however, may be
considered speculative and could involve significant risk of loss, as set forth
below. the Portfolios have established procedures consistent with statements of
the SEC and its staff regarding the use of Forward Contracts by registered
investment companies, which requires use of segregated assets or "cover" in
connection with the purchase and sale of such Contracts.

Forward Contracts are traded over-the-counter, and not on organized commodities
or securities exchanges. As a result, such contracts operate in a manner
distinct from exchange-traded instruments, and their use involves certain risks
beyond those associated with transactions in the Futures and Options contracts
described above.

OPTIONS ON FOREIGN CURRENCIES -- MFS Portfolio, Large Cap Portfolio, Equity
Income Portfolio, and Lazard International may purchase and write put and call
options on foreign currencies for the purpose of protecting against declines in
the dollar value of portfolio securities, and against increases in the dollar
cost of securities to be acquired. As in the case of other types of options,
however, the writing of an option on foreign currency will constitute only a
partial hedge, up to the amount of the premium received, and the Portfolios
could be required to purchase or sell foreign currencies at disadvantageous
exchange rates, thereby incurring losses. The purchase of an option on foreign
currency may constitute an effective hedge against fluctuations in exchange
rates although, in the event of rate movements adverse to the Portfolio's
position, it may forfeit the entire amount of the premium plus related
transaction costs. As in the case of Forward Contracts, certain options on
foreign currencies are traded over-the-counter and involve risks which may not
be present in the case of exchange-traded instruments.

"NON-PUBLICLY TRADED" OR "ILLIQUID SECURITIES"

Lazard International, MFS, Federated High Yield, Federated Stock, Large Cap, and
Equity Income Portfolios may purchase and sell securities that are not
registered under the Securities Act of 1933, as amended (the "1933 Act")
("restricted securities"), including those that can be offered and sold to
"qualified institutional buyers" under Rule 144A under the 1933 Act ("Rule 144A
securities"). Sale of this type of security is typically restricted under the
federal securities laws. The above mentioned Portfolios may also purchase and
sell securities that are subject to transfer restrictions, and are accordingly
illiquid.

Such securities are referred to as "illiquid" because sale of these securities
may be difficult and the Portfolio engaging in trading of illiquid securities
may not be able to sell them (or sell them at fair market value) when the
investment adviser or Subadviser believes it is desirable to do so.

SERIES-37
<PAGE> 41

Accordingly such sales may be made at less than fair market value or may not be
able to sell them when the investment adviser believes it is desirable to do so.

The following Portfolios currently limit the amount of net assets that may be
invested in restricted securities percentage of investments. Specifically, the
Lazard Portfolio is limited to 5% of its net assets, Federated Stock Portfolio,
Large Cap and Equity Income Portfolios are limited to 10% of net assets, while
the Federated High Yield Portfolio, and MFS Portfolios are limited to 15% of net
assets. Federated Stock is limited to investing 10% of its net assets in
illiquid securities, while Federated High Yield is limited to investing 15% of
its net assets in illiquid securities.

Securities may be illiquid securities for different reasons including, among
others, (i)absence of a readily available market or legal or contractual
restrictions on resale; and (ii) repurchase agreements not terminable within
seven days. Securities eligible for resale under Rule 144A under the Securities
Act that have legal or contractual restrictions on resale but have a readily
available market are not deemed illiquid securities for this purpose.

Each Subadviser will monitor the liquidity of such restricted securities. This
monitoring process will involve a continuing review of the trading markets for
the specific Rule 144A security, whether such security is illiquid and thus
subject to the particular Portfolio's limitation on investing its net assets in
illiquid investments. In monitoring a restricted security, the Investment
adviser or Subadviser will review the current value of the security based on
currently available information. The Subadviser, however, will retain sufficient
oversight and be ultimately responsible for the determinations.

This investment practice could have the effect of increasing the level of
illiquidity in MFS Portfolio to the extent that qualified institutional buyers
become for a time uninterested in purchasing Rule 144A securities held in MFS
Portfolio's portfolio.

Subject to the limitation on investments in illiquid investments, the Portfolios
may also invest in restricted securities that may not be sold under Rule 144A,
which presents certain risks. As a result, a Portfolio might not be able to sell
these securities when the Subadviser wishes to do so, or might have to sell them
at less than fair value. In addition, market quotations are less readily
available. Therefore, the judgment of the Subadviser may at times play a greater
role in valuing these securities than in the case of unrestricted securities.

Additionally, the Federated Portfolios may engage in trading of commercial paper
which is illiquid. The limitation for illiquid securities are not applicable to
commercial paper issued under Section 4(2) of the Securities Act of 1933. As a
matter of investment practice, which may be changed without shareholder
approval, the Federated Portfolios will limit investments in illiquid
securities, including certain restricted securities not determined by the
Subadviser to be liquid, and repurchase agreements providing for settlement in
more than seven days after notice, to 15% of net assets.

The Federated Portfolios may invest in commercial paper issued in reliance on
the exemption from registration afforded by Section 4(2) of the 1933 Act.
Section 4(2) commercial paper is restricted as to disposition under federal
securities law and is generally sold to institutional investors, such as the
Portfolio, who agree that it is purchasing the paper for investment purposes and
not with a view to public distribution. Any resale by the purchaser must be
pursuant to an exempt transaction. Section 4(2) commercial paper is normally
resold to other institutional investors like the Portfolio through or with the
assistance of the issuer or the investment dealers who make a market in Section
4(2) commercial paper, thus providing liquidity. The Federated Portfolios
believe that Section 4(2) commercial paper and possibly certain other restricted
securities which meet the criteria for liquidity established by the Portfolios'
Subadviser are quite liquid. The Portfolios may, therefore, treat the restricted
securities which meet the criteria for liquidity established by the Subadviser,
including Section 4(2) commercial paper, as determined by the Subadviser of the
Portfolio, as liquid and not subject to the investment limitation applicable to
illiquid securities.

SERIES-38
<PAGE> 42

FOREIGN SECURITIES AND AMERICAN DEPOSITORY RECEIPTS

The MFS, Large Cap, Federated High Yield, and Equity Income Portfolios may each
purchase foreign securities or American Depository Receipts ("ADRs"). ADRs are
U.S. dollar-denominated receipts issued generally by domestic banks representing
the deposit with the bank of a security of a foreign issuer. ADRs are publicly
traded on exchanges or over the counter in the United States.

Investing in the securities of foreign companies involves special risks and
considerations not typically associated with investing in U.S. companies. These
risks include differences in accounting, auditing and financial reporting
standards, changes in currency rates, generally higher brokerage or commission
rates on foreign trades, the possibility of expropriation or confiscatory
taxation, adverse changes in investment or exchange control regulations,
political instability which could affect U.S. investments in foreign countries,
potential difficulties in enforcing contractual relationships, and potential
restrictions on the flow of international capital. Additionally, dividends
payable on foreign securities may be subject to foreign taxes withheld prior to
distribution. Foreign securities often trade with less frequency and volume than
domestic securities and therefore may exhibit greater price volatility. Changes
in foreign exchange rates will affect the value of those securities which are
denominated or quoted in currencies other than the U.S. dollar. Many of the
foreign securities held by a Portfolio will not be registered with, nor will the
issuers thereof be subject to the reporting requirements of, the SEC.
Accordingly, foreign securities are subject to less supervision and there may be
less publicly available information about the securities and the foreign company
or government issuing them than is available about a domestic company of
government entity. Moreover, individual foreign economies may differ favorably
or unfavorably from the U.S. economy in such respects as growth of gross
national product, rate of inflation, capital reinvestment, resource
self-sufficiency and balance of payment positions.

Certain restrictions apply concerning the amount of a Portfolio's net assets
which may be invested in foreign securities. For example MFS Portfolio may
invest up to 25% of its net assets in such securities, although it generally
expects to invest between 0% and 10% of its total assets in foreign securities
(not including ADRs).

MFS Portfolio may hold foreign currency received in connection with investments
in foreign securities when, in the judgment of the Subadviser, it would be
beneficial to convert such currency into U.S. dollars at a later date, based on
anticipated changes in the relevant exchange rate. MFS Portfolio may also hold
foreign currency in anticipation of purchasing foreign securities.

AMERICAN DEPOSITORY RECEIPTS

As noted above, ADRs are certificates issued by a U.S. depository (usually a
bank) and represent a specified quantity of shares of an underlying non-U.S.
stock on deposit with a custodian bank as collateral. Because ADRs trade on
United States securities exchanges, the Subadviser does not treat them as
foreign securities. However, they are subject to many of the risks of foreign
securities described above.

EMERGING MARKET SECURITIES

The MFS, Large Cap, Federated High Yield, Lazard International, and Equity
Income Portfolios may invest in countries or regions with relatively low gross
national product per capita compared to the world's major economies, and in
countries or regions with the potential for rapid economic growth (emerging
markets). Emerging markets will include any country: (i) having an "emerging
stock market" as defined by the International Finance Corporation; (ii) with
low-to-middle-income economies according to the International Bank for
Reconstruction and Development (the "World Bank"); (iii) listed in World Bank
publications as developing; or (iv) determined by the Subadviser to be an
emerging market as defined above. Additionally, the Portfolios may invest in
securities of: (i) companies the principal securities trading market for which
is an emerging market country; (ii) companies organized under the laws of, and
with a principal office in, an emerging market

SERIES-39
<PAGE> 43

country; (iii) companies whose principal activities are located in emerging
market countries; or (iv) companies traded in any market that derives 50% or
more of their total revenue from either goods or services produced in an
emerging market or sold in an emerging market.

The risks of investing in foreign securities may be intensified in the case of
investments in emerging markets. Securities of many issuers in emerging markets
may be less liquid and more volatile than securities of comparable domestic
issuers. Emerging markets also have different clearance and settlement
procedures, and in certain markets there have been times when settlements have
been unable to keep pace with the volume of securities transactions, making it
difficult to conduct such transactions. Countries with emerging markets may have
relatively unstable governments, present the risk of nationalization of
businesses, restrictions on foreign ownership, or prohibitions of repatriation
of assets, and may have less protection of property rights than more developed
countries. The economies of countries with emerging markets may be predominantly
based on only a few industries, may be highly vulnerable to changes in local or
global trade conditions. Delays in settlement could result in temporary periods
when a portion of the assets of a Portfolio is uninvested and no return is
earned thereon. The inability of a Portfolio to make intended security purchases
due to settlement problems could cause the Portfolio to miss attractive
investment opportunities. Inability to dispose of portfolio securities due to
settlement problems could result in losses to a Portfolio. Emerging nations may
suffer from extreme and volatile debt burdens or inflation rates. Securities of
issuers located in countries with emerging markets may have limited
marketability and may be subject to more abrupt or erratic price movements.

Certain emerging markets may require governmental approval for the repatriation
of investment income, capital or the proceeds of sales of securities by foreign
investors. In addition, if a deterioration occurs in an emerging market's
balance of payments or for other reasons, a country could impose temporary
restrictions on foreign capital remittances. A Portfolio could be adversely
affected by delays in, or a refusal to grant, any required governmental approval
for repatriation of capital, as well as by the application to a Portfolio of any
restrictions on investments. Investments in certain foreign emerging market debt
obligations may be restricted or controlled to varying degrees. These
restrictions or controls may at times preclude investment in certain foreign
emerging market debt obligations and increase the expenses of a Portfolio.

LENDING PORTFOLIO SECURITIES

The Lazard International, MFS, Federated High Yield, Federated Stock, Large Cap
and Equity Income Portfolios are each authorized to lend their portfolio
securities to brokers, dealers and other financial organizations. The purpose of
this lending activity is to generate additional income. The primary risk
associated with lending portfolio securities, as with other extensions of
credit, consists of possible loss of rights in the collateral should the
borrower fail financially.

As with any securities lending, a risk exists that when the Portfolio lends
portfolio securities, the securities may not be available to the Portfolio on a
timely basis and the Portfolio may, therefore, lose the opportunity to sell the
securities at a desirable price. In addition, in the event that a borrower of
securities files for bankruptcy or becomes insolvent, disposition of the
securities may be delayed pending court action.

Each of the Portfolios engaging in securities lending will follow certain
guidelines in determining whether a particular potential securities borrower is
appropriate. For example, MFS will usually only make loans to member banks of
the Federal Reserve System and member firms (and subsidiaries thereof) of the
New York Stock Exchange (the "Exchange") and would be required to be secured
continuously by collateral in cash, cash equivalents or U. S. Government
securities maintained on a current basis at an amount at least equal to the
market value of the securities loaned. MFS Portfolio would continue to collect
the equivalent of the interest on the securities loaned and would also receive
either interest (through investment of cash collateral) or a fee (if the
collateral is U. S. Government securities or a letter of credit). The Lazard and
Federated Portfolios may lend securities from its portfolio to brokers, dealers
and financial institutions if cash or cash equivalent collateral,

SERIES-40
<PAGE> 44

including letters of credit, marked-to-market daily and equal to at least 100%
of the current market value of the securities loaned (including accrued interest
and dividends thereon) plus the interest payable to the Portfolio with respect
to the loan is maintained by the borrower with the Portfolio in a segregated
account.

In determining whether to lend a security to a particular broker, dealer or
financial institution, the Investment Subadviser will consider all relevant
facts and circumstances, including the creditworthiness of the broker, dealer or
financial institution. A Portfolio will not enter into any portfolio security
lending arrangement having a duration of longer than one year. Any securities
that the Portfolio may receive as collateral will not become part of the
Portfolio's investment Portfolio at the time of the loan and, in the event of a
default by the borrower, the Portfolio will, if permitted by law, dispose of
such collateral except for such part thereof that is a security in which the
Portfolio is permitted to invest. During the time securities are on loan, the
borrower will pay the Portfolio any accrued income on those securities and the
Portfolio may invest the cash collateral and earn additional income or receive
an agreed upon fee from a borrower that has delivered cash equivalent
collateral. The Portfolio will not lend securities having a value that exceeds
10% of the current value of its total assets. Loans of securities will be
subject to termination at the Portfolio's or the borrower's option. The
Portfolio may pay reasonable administrative and custodial fees in connection
with a securities loan and may pay a negotiated portion of the interest or fee
earned with respect to the collateral to the borrower or the placing broker.

TEMPORARY BANK BORROWING

The Lazard International Portfolio may borrow from banks for temporary purposes,
including the meeting of redemption requests which might require the untimely
disposition of securities. The Federated Portfolios may borrow up to 25% of
assets for such reasons as well.

Temporary or emergency borrowing in the aggregate may not exceed 15%, and
borrowing for purposes other than meeting redemptions may not exceed 5%, of the
value of the Lazard Portfolio's total assets (including the amount borrowed)
less liabilities (including the amount borrowed) at the time the borrowing is
made. Securities may not be purchased by the Portfolio while borrowings in
excess of 5% of the value of the Lazard Portfolio's total assets are
outstanding.

LETTERS OF CREDIT

The Lazard Portfolio may also engage in trades of municipal obligations,
certificates of participation therein, commercial paper and other short-term
obligations that are backed by irrevocable letters of credit issued by banks
which assume the obligation for payment of principal and interest in the event
of default by an issuer. Only banks the securities of which, in the opinion of
the Investment Subadviser, are of investment quality comparable to other
permitted investments of the Lazard Portfolio may be used for letter of
credit-backed investment.

INVESTMENT IN UNSEASONED COMPANIES

The Lazard Portfolio may also invest Portfolio assets in securities of companies
that have operated for less than three years, including the operations of
predecessors. The Portfolio has undertaken that it will not make investments
that will result in more than 5% of its total assets being invested in the
securities of newly formed companies and equity securities that are not readily
marketable. Investing in securities of unseasoned companies may, under certain
circumstances, involve greater risk than is customarily associated with
investment in more established companies.

REAL ESTATE-RELATED INSTRUMENTS

The Large Cap and Equity Income Portfolios may engage in the purchase and sale
of real estate related instruments including real estate investment trusts,
commercial and residential mortgage-backed securities, and real estate
financings. The Large Cap and Equity Income Portfolios do not currently

SERIES-41
<PAGE> 45

intend to purchase interests in real estate investment trusts that are not
readily marketable or interests in real estate limited partnerships that are not
listed on an exchange or traded on the NASDAQ National Market System if, as a
result, the sum of such interests would exceed 10% of the Portfolio's net
assets. Real estate-related instruments are sensitive to factors such as real
estate values and property taxes, interest rates, cash flow of underlying real
estate assets, over building, and the management skill and creditworthiness of
the issuer. Real estate-related instruments may also be affected by tax and
regulatory requirements, such as those relating to the environment.

CORPORATE ASSET-BACKED SECURITIES

Federated High Yield, MFS Portfolio, Large Cap Portfolio and Equity Income
Portfolio may invest in corporate asset-backed securities. These securities,
issued by trusts and special purpose corporations, are backed by a pool of
assets, such as credit card or automobile loan receivables, representing the
obligations of a number of different parties. Corporate asset-backed securities
present certain risks. For instance, in the case of credit card receivables,
these securities may not have the benefit of any security interest in the
related collateral.

ASSET-BACKED MORTGAGE SECURITIES

Securities of this type include interests in pools of lower-rated debt
securities, or consumer loans or mortgages, or complex instruments such as
collateralized mortgage obligations and stripped mortgage-backed securities. The
value of these securities may be significantly affected by changes in interest
rates, the market's perception of the issuers, and the creditworthiness of the
parties involved. Some securities may have a structure that makes their reaction
to interest rates and other factors difficult to predict, making their value
highly volatile. These securities may also be subject to prepayment risk.

LOAN PARTICIPATIONS AND OTHER DIRECT INDEBTEDNESS

MFS Portfolio, Federated High Yield, Large Cap and Equity Income Portfolios may
invest a portion of their assets in "loan participations" and other direct
indebtedness. By purchasing a loan participation, the Portfolios acquire some or
all of the interest of a bank or other lending institution in a loan to a
corporate borrower. Many such loans are secured, and most impose restrictive
covenants which must be met by the borrower. These loans are made generally to
finance internal growth, mergers, acquisitions, stock repurchases, leveraged
buy-outs and other corporate activities. Such loans may be in default at the
time of purchase.

MFS, Large Cap and Equity Income Portfolios may also purchase other direct
indebtedness such as trade or other claims against companies, which generally
represent money owed by the company to a supplier of goods and services. These
claims may also be purchased at a time when the company is in default. Certain
of the loan participations and other direct indebtedness acquired by these
Portfolios may involve revolving credit facilities or other standby financing
commitments which obligate the Portfolios to pay additional cash on a certain
date or on demand.

The highly leveraged nature of many such loans and other direct indebtedness may
make such loans especially vulnerable to adverse changes in economic or market
conditions. Loan participations and other direct indebtedness may not be in the
form of securities or may be subject to restrictions on transfer, and only
limited opportunities may exist to resell such instruments. As a result, the
Portfolios may be unable to sell such investments at an opportune time or may
have to resell them at less than fair market value. For a further discussion of
loan participations, other direct indebtedness and the risks related to
transactions therein, please review the SAI.

INVESTMENT COMPANY SECURITIES

The Large Cap, Equity Income, and Lazard International Portfolios may purchase
and sell securities of closed-end investment companies.

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<PAGE> 46

AFFILIATED BANK TRANSACTIONS

The Portfolios may engage in transactions with financial institutions that are,
or may be considered to be "affiliated persons" of the fund under the Investment
Company Act of 1940. These transactions may include repurchase agreements with
custodian banks; short-term obligations of, and repurchase agreements with, the
50 largest U.S. banks (measured by deposits): municipal securities, U. S.
government securities with affiliated financial institutions that are primary
dealers in these securities; short-term currency transactions; and short-term
borrowings. The Board of Trustees and the Subadvisers of Portfolios engaged in
affiliated bank transactions have established and will periodically review
procedures applicable to transactions involving affiliated financial
institutions.

INDEXED SECURITIES

The Large Cap, Equity Income, and Lazard International Portfolios may purchase
securities whose prices are indexed to the prices of other securities,
securities indices, currencies, precious metals or other commodities, or other
financial indicators. Indexed securities typically, but not always, are debt
securities or deposits whose value at maturity or coupon rate is determined by
reference to a specific instrument or statistic. Gold-indexed securities, for
example, typically provide for a maturity value that depends on the price of
gold, resulting, in a security whose price tends to rise and fall together with
gold prices. Currency-indexed securities typically are short-term to
intermediate-term debt securities whose maturity values or interest rates are
determined by reference to the values of one or more specified foreign
currencies, and may offer higher yields than U.S. dollar-denominated securities
of equivalent issuers. Currency-indexed securities may be positively or
negatively indexed; that is, their maturity value may increase when the
specified currency value increases, resulting in a security that performs
similarly to a foreign-denominated instrument, or their maturity value may
decline when foreign currencies increase, resulting in a security whose price
characteristics are similar to a put on the underlying currency,
Currency-indexed securities may also have prices that depend on the values of a
number of different foreign currencies relative to each other.

The performance of indexed securities depends to a great extent on the
performance of the security, currency, or other instrument to which they are
indexed, and may also be influenced by interest rate changes in the United
States and abroad. At the same time, indexed securities are subject to the
credit risks associated with the issuer of the security, and their values may
decline substantially if the issuer's creditworthiness deteriorates. Recent
issuers of indexed securities have included banks, corporations, and certain
U.S. government agencies. Indexed securities may be more volatile than the
underlying instruments.

SHORT SALES "AGAINST THE BOX"

The Large Cap, Equity Income, and Lazard International Portfolios may enter into
a short sale against the box. If either Large Cap Portfolio decides to enter
into such transitions, it will be required to set aside securities equivalent in
kind and amount to the securities sold short (or securities convertible or
exchangeable into such securities) and will be required to hold such securities
while the short sale is outstanding.

SWAP AGREEMENTS

The Large Cap and Equity Income Portfolios may engage in swap agreements which
can be individually negotiated and structured to include exposure to a variety
of different types of investments or market factors. Depending on their
structure, swap agreements may increase or decrease a fund's exposure to long-
or short-term interest rates (in the United States or abroad), foreign currency
values, mortgage securities, corporate borrowing rates, or other factors such
as security prices or inflation rates. Swap agreements can take many different
forms and are known by a variety of names. A Portfolio is not limited to any
particular form of swap agreement if the Subadviser determines it is consistent
with the fund's investment objective and policies.

SERIES-43
<PAGE> 47

In a typical cap or floor agreement, one party agrees to make payments only
under specified circumstances, usually in return for payment of a fee by the
other party. For example, the buyer of an interest rate cap obtains the right to
receive payments to the extent that a specified interest rate exceeds an
agreed-upon level, while the seller of an interest rate floor is obligated to
make payments to the extent that a specified interest rate falls below an
agreed-upon level. An interest rate collar combines elements of buying a cap and
selling a floor.

Swap agreements will tend to shift a Portfolio's investment exposure from one
type of investment to another. For example, if the fund agreed to exchange
payments in dollars for payments in foreign currency, the swap agreement would
tend to decrease the fund's exposure to U.S. interest rates and increase its
exposure to foreign currency and interest rates. Caps and floors have an effect
similar to buying or writing options. Depending on how they are used, swap
agreements may increase or decrease the overall volatility of a fund's
investments and its share price.

The most significant factor in the performance of swap agreements is the change
in the specific interest rate, currency, or other factors that determine the
amounts of payments due to and from a fund. If a swap agreement calls for
payments by the fund, the fund must be prepared to make such payments when due.
In addition, if the counterparty's creditworthiness declined, the value of a
swap agreement would be likely to decline, potentially resulting in losses. Each
Portfolio expects to be able to eliminate its exposure under swap agreements
either by assignment or other disposition, or by entering into an offsetting
swap agreement with the same party or a similarly creditworthy party.

Each Portfolio will maintain appropriate liquid assets in a segregated custodial
account to cover its current obligations under swap agreements. If a Portfolio
enters into a swap agreement on a net basis, it will segregate assets with a
daily value at least equal to the excess, if any, of the Portfolio's accrued
obligations under the swap agreement over the accrued amount the Portfolio is
entitled to receive under the agreement. If a Portfolio enters into a swap
agreement on other than a net basis, it will segregate assets with a value equal
to the full amount of the Portfolio's accrued obligations under the agreement.

SERIES-44

<PAGE> 48

EXHIBIT B
- --------------------------------------------------------------------------------

A. DESCRIPTION OF MOODY'S INVESTORS SERVICE, INC.'S CORPORATE BOND RATINGS

Aaa -- Bonds rated Aaa are judged to be of the best quality. They carry the
smallest degree of investment risk and are generally referred to as "gilt edge."
Interest payments are protected by a large or by an exceptionally stable margin
and principal is secure. While the various protective elements are likely to
change, such changes as can be visualized are most unlikely to impair the
fundamentally strong position of such issues.

Aa -- Bonds rated Aa are judged to be of high quality by all standards. Together
with the Aaa group they comprise what are generally known as high-grade bonds.
They are rated lower than the best bonds because margins of protection may not
be as large as in Aaa securities or fluctuation of protective elements may be of
greater amplitude or there may be other elements present which make the
long-term risks appear somewhat larger than in Aaa securities.

A -- Bonds rated A possess many favorable investment attributes are to be
considered as upper-medium-grade obligations. Factors giving security to
principal and interest are considered adequate but elements may be present which
suggest susceptibility to impairment sometime in the future.

Baa -- Bonds rated Baa are considered as medium-grade obligations, i.e., they
are neither highly protected nor poorly secured. Interest payments and principal
security appear adequate for the present but certain protective elements may be
lacking or may be characteristically unreliable over any great length of time.
Such bonds lack outstanding investment characteristics and in fact have
speculative characteristics as well.

Ba -- Bonds rated Ba are judged to have speculative elements. Their future
cannot be considered as well assured. Often the protection of interest and
principal payments may be very moderate and thereby not well safeguarded during
both good and bad times over the future. Uncertainty of position characterizes
bonds in this class.

B -- Bonds rated B generally lack characteristics of the desirable investment.
Assurance of interest and principal payments or maintenance of other terms of
the contract over any long period of time may be small.

Caa -- Bonds rate Caa are of poor standing. Such issues may be in default or
there may be present elements of danger with respect to principal or interest.

Ca -- Bonds rated Ca represent obligations which are speculative in a high
degree. Such issues are often in default or have other market short-comings.

C -- Bonds rate C are the lowest-rated class of bonds and issued so rated can be
regarded as having extremely poor prospects of ever attaining any real
investment standing.

Moody's applies numerical modifiers, 1, 2, and 3, in each generic rating
classification from Aa through B in its corporate bond rating system. The
modifier 1 indicates that the security ranks in the higher end of its generic
rating category; the modifier 2 indicates a mid-range ranking; and the modifier
3 indicates that the issue ranks in the lower end of its generic rating
category.

B. DESCRIPTION OF STANDARD & POOR'S CORPORATION'S CORPORATE BOND RATINGS

AAA -- Debt rated AAA has the highest rating assigned by Standard & Poor's to a
debt obligation. Capacity to pay interest and repay principal is extremely
strong.

AA -- Debt rated AA has a very strong capacity to pay interest and repay
principal and differs from the higher-rated issued only in small degree.

A -- Debt rated A has a strong capacity to pay interest and repay principal,
although it is somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions.

SERIES-45
<PAGE> 49

BBB -- Debt rated BBB is regarded as having an adequate capacity to pay interest
and repay principal. Whereas it normally exhibits adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay interest and repay principal for
debt in this category than in higher-rated categories.

BB -- Debt rate BB has less near-term vulnerability to default than other
speculative issues. However, it faces major ongoing uncertainties or exposure to
adverse business, financial, or economic conditions which could lead to
inadequate capacity to meet timely interest and principal payments.

B -- Debt rated B has a greater vulnerability to default but currently has the
capacity to meet interest payments and principal repayments. Adverse business,
financial, or economic conditions will likely impair capacity or willingness to
pay interest and repay principal. The B rating category is also used for debt
subordinated to senior debt that is assigned an actual or implied BB- rating.

CCC -- Debt rated CCC has a currently identifiable vulnerability to default, and
is dependent upon favorable business, financial, and economic conditions to meet
timely payment of interest and repayment of principal. In the event of adverse
business, financial, or economic conditions, it is not likely to have the
capacity to pay interest or repay principal.

CC -- Debt rated DD is typically applied to debt subordinated to senior debt
which is assigned an actual or implied CCC debt rating.

C -- The rating C is typically applied to debt subordinated to senior debt which
is assigned an actual or implied CCC debt rating. The C rating may be used to
cover a situation where a bankruptcy petition has been filed but debt service
payments are continued.

CI -- The rating CI is reserved for income bonds on which no interest is being
paid.

D -- Debt rated D is in payment default. The D rating category is used when
interest payments or principal payments are not made on the date due even if the
applicable grace period has not expired, unless S&P believes that such payments
will be made during such grace period. The D rating will also be used upon the
filing of a bankruptcy petition if debt service payments are jeopardized.

The ratings from AA to CCC may be modified by the addition of a plus or minus to
show relative standing within the major rating categories.

SERIES-46
<PAGE> 50

THE TRAVELERS SERIES TRUST

U.S. GOVERNMENT SECURITIES PORTFOLIO

SOCIAL AWARENESS STOCK PORTFOLIO

UTILITIES PORTFOLIO

ONE TOWER SQUARE

HARTFORD, CONNECTICUT 06183

TELEPHONE 860-422-3985
- --------------------------------------------------------------------------------

The Travelers Series Trust (the "Series Trust") is a diversified open-end
management investment company (mutual fund) which consists of multiple series of
shares (the "Portfolios"), each with its own investment objective and policies.
The Portfolios of the Series Trust described herein are the U.S. Government
Securities Portfolio, the Social Awareness Stock Portfolio and the Utilities
Portfolio.

Shares of the Portfolios are currently offered without a sales charge to
separate accounts of The Travelers Insurance Company and The Travelers Life and
Annuity Company (collectively, "the Company" or "The Travelers"). The Portfolios
serve as investment vehicles for variable annuity and variable life insurance
contracts issued by the Company. All Portfolios described herein may not be
available under all variable contracts. The term "shareholder" as used herein
refers to any insurance company separate account that may use shares of the
Portfolios as investment vehicles now or in the future.

This Prospectus concisely sets forth the information about the Series Trust and
applicable Portfolios that you should know before investing. Please read it and
retain it for future reference. Additional information about the Series Trust
and the Portfolios is contained in a Statement of Additional Information ("SAI")
dated April 1, 1996 which has been filed with the Securities and Exchange
Commission ("SEC") and is incorporated by reference into this Prospectus. A copy
may be obtained, without charge, by writing to The Travelers, Annuity Services,
One Tower Square, Hartford, Connecticut 06183-5030, or by calling 860-422-3985.

THIS PROSPECTUS MUST BE ACCOMPANIED BY A CURRENT PROSPECTUS FOR A VARIABLE
ANNUITY OR VARIABLE LIFE INSURANCE CONTRACT ISSUED BY THE TRAVELERS. BOTH THIS
PROSPECTUS AND THE CONTRACT PROSPECTUS SHOULD BE READ CAREFULLY AND RETAINED FOR
FUTURE REFERENCE.

THE DATE OF THIS PROSPECTUS IS APRIL 3, 1996.
<PAGE> 51

THIS PAGE INTENTIONALLY LEFT BLANK.
<PAGE> 52

TABLE OF CONTENTS

<TABLE>
<S> <C>
FINANCIAL HIGHLIGHTS -- U.S. Government Securities Portfolio.......................... 4
FINANCIAL HIGHLIGHTS -- Social Awareness Stock Portfolio.............................. 5
FINANCIAL HIGHLIGHTS -- Utilities Portfolio........................................... 6
THE TRAVELERS SERIES TRUST............................................................ 7
U.S. GOVERNMENT SECURITIES PORTFOLIO.................................................. 7
Investment Objective and Policies................................................... 7
Investment Restrictions............................................................. 8
Risk Factors........................................................................ 8
SOCIAL AWARENESS STOCK PORTFOLIO...................................................... 8
Investment Objective and Policies................................................... 8
Investment Restrictions............................................................. 9
Risk Factors........................................................................ 10
UTILITIES PORTFOLIO................................................................... 10
Investment Objective and Policies................................................... 10
Investment Restrictions............................................................. 11
Risk Factors and Special Considerations............................................. 11
BOARD OF TRUSTEES..................................................................... 12
INVESTMENT ADVISERS................................................................... 13
TAMIC............................................................................... 13
Portfolio Manager -- U.S. Government Securities Portfolio........................... 13
Advisory Fees -- U.S. Government Securities Portfolio............................... 13
SBMFM............................................................................... 13
Portfolio Manager -- Social Awareness Stock Portfolio............................... 13
Advisory Fees -- Social Awareness Stock Portfolio................................... 14
Portfolio Manager -- Utilities Portfolio............................................ 14
Advisory Fees -- Utilities Portfolio................................................ 14
SECURITIES TRANSACTIONS............................................................... 14
FUND EXPENSES......................................................................... 15
TRANSFER AGENT........................................................................ 15
SHARES OF THE SERIES TRUST............................................................ 15
PRICING SHARES........................................................................ 16
SHARE REDEMPTION...................................................................... 16
DIVIDENDS AND TAX STATUS.............................................................. 17
LEGAL PROCEEDINGS..................................................................... 17
ADDITIONAL INFORMATION................................................................ 17
EXHIBIT A............................................................................. 18
</TABLE>

SERIES-3
<PAGE> 53

FINANCIAL HIGHLIGHTS

- --------------------------------------------------------------------------------

THE TRAVELERS SERIES TRUST

U.S. GOVERNMENT SECURITIES PORTFOLIO
PER SHARE DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD

The following information on per share data for the U.S. Government Securities
Portfolio for each of the three years in the period ended December 31, 1995 and
the period January 24, 1992 (date operations commenced) to December 31, 1992 has
been audited by Coopers & Lybrand L.L.P., Independent Accountants. Their report
on the per share data for each of the periods ended December 31, 1995 is
contained in the SAI. Refer to the cover of this Prospectus for information on
obtaining a free copy of the SAI.

<TABLE>
<CAPTION>
JANUARY 24,*
YEAR ENDED DECEMBER 31, TO
-------------------------------- DECEMBER 31,
1995 1994 1993 1992
<S> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------
PER SHARE DATA
Net asset value, beginning of period................. $ 10.58 $ 11.63 $ 10.79 $10.00
Income from operations
Net investment income................................ 0.65 0.60 0.57 0.53
Net gains on securities (realized and unrealized).... 1.80 (1.23) 0.44 0.26
-------- -------- -------- ------------
Total from investment operations................... 2.45 (0.63) 1.01 0.79
Less distributions
Distributions from net investment income and short-
term realized gains................................ (0.60) (0.39) (0.17) --
Distributions from long-term realized gains.......... -- (0.03) -- --
-------- -------- -------- ------------
Total distributions................................ $ (0.60) $ (0.42) $ (0.17) --
Net asset value, end of period....................... $ 12.43 $ 10.58 $ 11.63 $10.79
======= ======= ======= ===========
TOTAL RETURN**......................................... $ 24.42% (5.64)% 9.48% 7.90%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (thousands)................ $ 28,192 $ 24,522 $ 25,520 $9,017
Ratio of expenses to average net assets+............. 0.56% 0.71% 0.58% 0.38%***
Ratio of net income to average net assets............ 5.80% 5.56% 5.04% 4.72%***
Portfolio turnover rate.............................. 214% 16% 51% 25%
* Date operations commenced.
** Total return is determined by dividing the increase (decrease) in value of a share during the period, after
reflecting the reinvestment of dividends declared during the period, by the beginning of period share price.
Shares in the U.S. Government Securities Portfolio are only sold to The Travelers separate accounts in
connection with the issuance of variable annuity and variable life insurance contracts. Total return does not
reflect the deduction of any contract charges or fees assessed by The Travelers separate accounts. For the
periods less than one year, total returns are not annualized.
*** Annualized.
+ The ratio of expenses to average net assets reflects an expense reimbursement by The Travelers in connection
with voluntary expense limitations. Without the expense reimbursement, the ratio of operating expenses to
average net assets would have been 0.77% and 0.72% for the year ended December 31, 1993 and the period ended
December 31, 1992, respectively. For the years ended December 31, 1995 and 1994, there were no expense
reimbursements by The Travelers in connection with the voluntary expense limitations.
</TABLE>

SERIES-4
<PAGE> 54

FINANCIAL HIGHLIGHTS

- --------------------------------------------------------------------------------

THE TRAVELERS SERIES TRUST

SOCIAL AWARENESS STOCK PORTFOLIO

PER SHARE DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD

The following information on per share data for the Social Awareness Stock
Portfolio for each of the three years in the period ended December 31, 1995 and
the period May 1, 1992 (date operations commenced) to December 31, 1992 has been
audited by Coopers & Lybrand L.L.P., Independent Accountants. Their report on
the per share data for each of the periods ended December 31, 1995 is contained
in the SAI. Refer to the cover of this Prospectus for information on obtaining a
free copy of the SAI.

<TABLE>
<CAPTION>
MAY 1,*
TO
YEAR ENDED DECEMBER 31, DECEMBER
--------------------------------------- 31,
1995 1994 1993 1992
<S> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------
PER SHARE DATA
Net asset value, beginning of period.............. $ 11.05 $11.64 $ 10.95 $ 10.00
Income from operations
Net investment income............................. 0.12 0.16 0.17 0.16
Net gains on securities (realized and
unrealized)..................................... 3.47 (0.45) 0.65 0.79
------- ------------ ------------ -----------
Total from investment operations................ 3.59 (0.29) 0.82 0.95
Less distributions
Distributions from net investment income and
short-term realized gains....................... (0.14) (0.24) (0.13) --
Distributions from long-term realized gains....... (0.18) (0.06) -- --
------- ------------ ------------ -----------
Total distributions............................. (0.32) (0.30) (0.13) --
Net asset value, end of period.................... $ 14.32 $11.05 $ 11.64 $ 10.95
====== =========== ====== ===========
TOTAL RETURN**...................................... 33.37% (2.69)% 7.55% 9.50%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (thousands)............. $ 7,055 $3,879 $ 3,361 $ 1,394
Ratio of expenses to average net assets #......... 1.25% 1.25% 1.05% 0.71%***
Ratio of net income to average net assets......... 0.99% 1.43% 1.50% 2.22%***
Portfolio turnover rate........................... 73% 137% %60 56%
Average Commission Rate Paid****.................. .0540 -- -- --
* Date operations commenced.
** Total return is determined by dividing the increase (decrease) in value of a share during the period, after
reflecting the reinvestment of dividends declared during the period, by the beginning of period share price.
Shares in the Social Awareness Stock Portfolio are only sold to The Travelers separate accounts in connection
with the issuance of variable annuity contracts. Total return does not reflect the deduction of any contract
charges or fees assessed by The Travelers separate accounts. For the periods less than one year, total
returns are not annualized.
*** Annualized.
**** The Average Commission Rate Paid is required for funds that have over 10% in equities for which commissions
are paid. This information is required for funds with fiscal year ends on or after September 30, 1996;
earlier compliance is allowed.
# The ratio of expenses to average net assets reflects an expense reimbursement by The Travelers in connection
with voluntary expense limitations. Without the expense reimbursement, the ratio of operating expenses to
average net assets would have been 1.75%, 3.34%, 3.73% and 2.19% for the years ended December 31, 1995, 1994,
1993 and the period ended December 31, 1992, respectively.
</TABLE>

SERIES-5
<PAGE> 55

FINANCIAL HIGHLIGHTS

- --------------------------------------------------------------------------------

THE TRAVELERS SERIES TRUST

UTILITIES PORTFOLIO

PER SHARE DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD

The following information on per share data for the Utilities Portfolio for the
year ended December 31, 1995 and the period February 4, 1994 (date operations
commenced) to December 31, 1994 has been audited by Coopers & Lybrand L.L.P.,
Independent Accountants. Their report on the per share data for the period ended
December 31, 1995 is contained in the SAI. Refer to the cover of this Prospectus
for information on obtaining a free copy of the SAI.

<TABLE>
<CAPTION>
FEBRUARY 4*
TO
DECEMBER 31,
1995 1994
- -------------------------------------------------------------------------------------------------------
<S> <C> <C>
PER SHARE DATA:
Net asset value, beginning of period...................................... $ 10.17 $10.00
Income from operations
Net investment income..................................................... 0.48 0.35
Net losses on securities (realized and unrealized)........................ 2.44 (0.18)
-------- ------------
Total from investment operations........................................ 2.92 0.17

Less distributions
Distributions from net investment income and short-term
realized gains.......................................................... (0.24) --
-------- ------------
Total distributions..................................................... (0.24) --
Net asset value, end of period............................................ $ 12.85 $10.17
======= ===========
TOTAL RETURN**.............................................................. 29.29% 1.70%

RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (thousands)..................................... $ 15,340 $5,757
Ratio of expenses to average net assets***................................ 1.25% 1.25%#
Ratio of net investment income to average net assets...................... 4.29% 3.86%#
Portfolio turnover rate................................................... 25% 32%
Average Commission Rate Paid****.......................................... .0590 --

* Date operations commenced.

** Total return is determined by dividing the increase (decrease) in value of a share during the period, after
reflecting the reinvestment of dividends declared during the period, by the beginning of period share price.
Shares in the Utilities Portfolio are only sold to The Travelers separate accounts in connection with the
issuance of variable annuity and variable life insurance contracts. The total return does not reflect
contract charges or fees assessed by The Travelers separate accounts. For periods less than one year, total
returns are not annualized.

*** The ratio of expenses to average net assets reflects an expense reimbursement by The Travelers in connection
with the voluntary expense limitations. Without the expense reimbursement, the ratio of operating expenses to
average net assets would have been 1.27% and 3.49% annualized for the year ended December 31, 1995 and the
period ended December 31, 1994, respectively.

**** The Average Commission Rate Paid is required for funds that have over 10% in equities for which commissions
are paid. This information is required for funds with fiscal year ends on or after September 30, 1996;
earlier compliance is allowed.

# Annualized.
</TABLE>

SERIES-6
<PAGE> 56

THE TRAVELERS SERIES TRUST

- --------------------------------------------------------------------------------

The Travelers Series Trust (the "Series Trust") is registered with the SEC as an
open-end management investment company. The Series Trust is organized as a
business trust under the laws of the Commonwealth of Massachusetts. An Agreement
and Declaration of Trust dated October 11, 1991 (the "Declaration of Trust")
authorizes the shares of the Series Trust to be divided into two or more series
related to separate portfolios of investments, and further allows the Board of
Trustees to establish additional portfolios at any time.

The Series Trust is currently divided into six series (the "Portfolios") (with
seven Portfolios to be added by June 1996), each with its own investment
objective and policies, all of which are diversified portfolios under the
Investment Company Act of 1940, as amended ("1940 Act").

U.S. GOVERNMENT SECURITIES PORTFOLIO

- --------------------------------------------------------------------------------

INVESTMENT OBJECTIVE AND POLICIES

The U.S. Government Securities Portfolio's investment objective is to seek the
highest credit quality, current income and total return. To achieve this
objective, the U.S. Government Securities Portfolio invests primarily in direct
obligations of the United States, obligations of its instrumentalities supported
by its full faith and credit, and obligations issued or guaranteed by federal
agencies which are independent corporations sponsored by the United States and
which are subject to its general supervision, but which are not supported by the
full faith and credit of the United States. The Portfolio may, from time to
time, purchase new-issue or government or agency securities on a "when-issued"
or "to-be-announced" basis.

When market conditions warrant, the U.S. Government Securities Portfolio may
adopt a defensive position by investing in money market instruments. Such
instruments, which must mature within one year of their purchase, consist of
U.S. Government securities; certificates of deposit, demand and time deposits
and bankers' acceptances of banks which are members of the Federal Deposit
Insurance Corporation and which have assets of at least $1 billion, including
U.S. branches of foreign banks and foreign branches of U.S. banks; prime
commercial paper, including master demand notes; and repurchase agreements
secured by U.S. Government securities. The investments of the U.S. Government
Securities Portfolio in commercial paper are limited to those rated A-1 by
Standard & Poor's Corporation and Prime-1 by Moody's Investors Service, Inc.
(For a description of these rating systems, see the Appendix to the SAI.)

Direct obligations of the United States include Treasury Bills which are issued
on a discount basis with a maturity of one year or less, Treasury Notes which
have maturities at issuance of between one and ten years, and Treasury Bonds
which have maturities at issuance of greater than ten years. Instrumentalities
of the United States whose debt obligations are backed by its full faith and
credit include: Government National Mortgage Association, Federal Housing
Administration, Farmers Home Administration, Export-Import Bank of the United
States, Small Business Administration, General Services Administration, Maritime
Administration, District of Columbia Armory Board, Farm Credit System, Financial
Assistance Corporation, Federal Financing Bank and Washington Metropolitan Area
Transit Authority. Federal agencies include: Farm Credit System, Federal Home
Loan Banks, Federal Home Loan Mortgage Corporation, Federal National Mortgage
Association and Student Loan Marketing Association.

The U.S. Government Securities Portfolio may write covered call options on
securities which it owns. Such an option on an underlying security would
obligate the Portfolio to sell, and give the purchaser of the option the right
to buy, that security at a stated exercise price at any time until a stated
expiration date of the option. The Portfolio may also purchase put and call
options for bona fide hedging purposes.

SERIES-7
<PAGE> 57

The U.S. Government Securities Portfolio may use exchange-traded futures
contracts as a hedge to protect against changes in interest rates.

A detailed discussion of certain types of investments and investment techniques
utilized by the U.S. Government Securities Portfolio is included in Exhibit A to
this Prospectus.

INVESTMENT RESTRICTIONS

The U.S. Government Securities Portfolio has adopted the following fundamental
investment restrictions which may not be changed without a vote of a majority of
the Portfolio's outstanding voting securities, as defined in the 1940 Act. These
restrictions and certain other fundamental investment restrictions are fully set
forth in the SAI. Unless otherwise noted, all references to the Portfolio's
assets are in terms of current market value. The U.S. Government Securities
Portfolio will not: (1) invest more than 5% of its assets in the securities of
any one issuer (exclusive of securities issued or guaranteed by the United
States government, its agencies or instrumentalities, for which there is no
limit); (2) borrow money, except to facilitate redemptions or borrow money for
temporary or emergency purposes and then only from banks and in amounts of up to
10% of its gross assets computed at cost; assets pledged to secure borrowings
shall be no more than the lesser of the amount borrowed or 10% of the
Portfolio's gross assets computed at cost; (3) invest more than 25% of its
assets in the securities of issuers in any single industry (exclusive of
securities of the United States, its agencies or instrumentalities, for which
there is no limit); and (4) make margin purchases or short sales of securities,
except for short-term credits which are necessary for the clearance of
transactions, and to place not more than 5% of its net asset value in total
margin deposits for positions in futures contracts.

RISK FACTORS

U.S. Government securities are considered among the safest of fixed-income
investments. As a result, however, their yields are generally lower than the
yields available from corporate debt securities. The value of the Portfolio's
securities will fluctuate based on market conditions and interest rates.
Interest rates depend on a number of factors, including government action in the
capital markets, government fiscal and monetary policy, needs of businesses for
capital goods for expansion, and investor expectations as to future inflation.
An increase in interest rates will generally reduce the value of debt
securities, and conversely a decline in interest rates will generally increase
the value of debt securities.

SOCIAL AWARENESS STOCK PORTFOLIO

- --------------------------------------------------------------------------------

INVESTMENT OBJECTIVE AND POLICIES

The investment objective of the Social Awareness Stock Portfolio (the "Social
Awareness Portfolio") is long-term capital appreciation and retention of net
investment income. The Portfolio seeks to fulfill this objective by selecting
investments, primarily common stocks, that meet certain social criteria, based
on analysis of data supplied by various research services. This principal
objective does not preclude the realization of short-term gains when conditions
suggest the long-term goal is accomplished by such short-term transactions.

The assets of the Social Awareness Portfolio generally will be invested in a
portfolio of equity securities, primarily common stocks, diversified across
industries and companies. However, when it is determined that investments of
other types may be advantageous for defensive purposes or for temporary
investment of cash flows, investments may be made in bonds, notes or other
evidence of indebtedness, issued publicly or placed privately, deemed to be of
suitable credit quality, including obligations of the United States government.

The Social Awareness Portfolio utilizes certain social criteria to define
acceptable investment vehicles for the Portfolio. Companies will not meet the
social criteria established for the Portfolio if a

SERIES-8
<PAGE> 58

significant portion of their revenues, as determined by Smith Barney Mutual
Fund Management, Inc. ("SBMFM"), are derived from: (a) the production of
tobacco, tobacco products, alcohol, or military defense systems; or (b) the
provision of military defense related services, or (c) gambling services. These
investment restrictions are not fundamental and may be changed without
shareholder approval.

Based upon SBMFM's analysis of information supplied by research services, the
Social Awareness Portfolio will not invest in the securities of a company if
SBMFM determines that the company fails to meet the social criteria outlined
above. SBMFM will review the available universe of common stocks on a quarterly
basis, and will determine which securities are acceptable investments for assets
of the Portfolio. From those deemed acceptable, SBMFM will select securities for
the Portfolio, seeking companies which appear attractive based upon quantitative
and/or qualitative analysis.

If a company fails a social criteria restriction after the Social Awareness
Portfolio has purchased its common stock, or should the Portfolio inadvertently
acquire a security which is not an acceptable investment, SBMFM will eliminate
the securities of such company from the Social Awareness Portfolio's portfolio
in an orderly manner within a reasonable period of time.

The Social Awareness Portfolio may use exchange-traded financial futures
contracts as a hedge to protect against changes in stock prices or interest
rates. The use of stock futures contracts by the Portfolio is intended primarily
to limit transaction and borrowing costs. The Social Awareness Portfolio may
also purchase and sell interest rate futures to hedge against changes in
interest rates that might otherwise have an adverse effect on the value of the
Portfolio's securities. The Portfolio may also write covered call options on
securities which it owns, and may purchase index or individual equity call or
put options. When market conditions warrant, the Social Awareness Portfolio may
adopt a defensive position to preserve shareholders' capital by investing in
money market instruments. Such instruments, which must mature within one year of
their purchase, consist of U.S. government securities; instruments of banks
which are members of the Federal Deposit Insurance Corporation and have assets
of at least $1 billion, such as certificates of deposit, demand and time
deposits and bankers' acceptances; prime commercial paper, including master
demand notes; and repurchase agreements secured by U.S. government securities.

INVESTMENT RESTRICTIONS

In addition to the social criteria listed above, the Social Awareness Portfolio
has adopted the following fundamental investment restrictions which may not be
changed without a vote of a majority of the Portfolio's outstanding voting
securities, as defined in the 1940 Act. These restrictions and certain other
fundamental investment restrictions are fully set forth in the SAI. Unless
otherwise noted, all references to the Portfolio's assets are in terms of
current market value. The Social Awareness Portfolio will not (1) invest more
than 5% of its assets in the securities of any one issuer, except obligations of
the U.S. government and its instrumentalities; (2) borrow money, except for
extraordinary or emergency purposes, including meeting redemptions or settling
securities transactions and then only from banks and in amounts of up to 10% of
its total assets; the Portfolio will not purchase securities while borrowings
exceed 5% of its total assets, except to honor prior commitments; (3) purchase
interests in real estate, except as may be represented by securities for which
there is an established market; (4) make loans, except through the acquisition
of a portion of a privately placed issue of bonds, debentures or other evidences
of indebtedness of a type customarily purchased by institutional investors; (5)
acquire more than 10% of the voting securities of any one issuer; (6) make
purchases on margin, except for short-term credits which are necessary for the
clearance of transactions, and for the placement of not more than 5% of its net
asset value in total margin deposits for positions in futures contracts; and (7)
invest more than 5% of its assets in restricted securities.

SERIES-9
<PAGE> 59

RISK FACTORS

The investment experience of equity investments over time will tend to reflect
levels of stock market prices and dividend payouts. Both are affected by diverse
factors, including not only business conditions and investor confidence in the
economy, but current conditions in a particular industry or company. The yield
on a common stock is not contractually determined. Equity securities are subject
to financial risks relating to the earning stability and overall financial
soundness of an issue. They are also subject to market risks relating to the
effect of general changes in the securities market on the price of a security.

UTILITIES PORTFOLIO

- --------------------------------------------------------------------------------

INVESTMENT OBJECTIVE AND POLICIES

The primary investment objective of the Utilities Portfolio (the "Portfolio") is
to provide current income. Long-term capital appreciation is a secondary
objective. The Portfolio's investment objectives may be changed only with the
approval of a majority of the Portfolio's outstanding shares. There can be no
assurance that the Portfolio will achieve its investment objectives.

The Portfolio seeks to achieve its objectives by investing in equity and debt
securities of companies in the utility industries. For purposes of this
Prospectus, the utility industries are deemed to be comprised of companies
principally engaged in the manufacture, production, generation, transmission and
sale of electric and gas energy and companies principally engaged in the
communications field, including entities such as telephone, telegraph,
satellite, microwave and other companies regulated by governmental agencies as
utilities that provide communication facilities for the public benefit, but not
including those in public broadcasting. For purposes of this prospectus,
"principally engaged" means that at least 50% of a company's assets, gross
income or net profits results from utility operations or the company is
regulated as a utility by a government agency or authority. The Portfolio will
invest primarily in utility equity and debt securities that have a high expected
rate of return, as determined by the investment adviser. Under normal market
conditions, the Portfolio will invest at least 65% of its assets in such
securities. The Portfolio may invest up to 35% of its assets in equity and debt
securities of non-utility companies believed to afford a reasonable opportunity
for achieving the Portfolio's investment objectives. When the investment adviser
believes that market conditions warrant, the Portfolio may adopt a temporary
defensive posture and may invest, without limit, in debt securities (whether or
not they are utility securities) such as rated or unrated bonds, debentures and
commercial paper, U.S. government securities and money market instruments. The
Portfolio may invest up to 10% of its assets in securities rated BB or B by
Standard & Poor's Corporation ("S&P") or Ba or B by Moody's Investors Service,
Inc. ("Moody's") whenever the investment adviser believes that the incremental
yield on such securities is advantageous to the Portfolio in comparison to the
additional risk involved (such lower-rated securities are commonly known as
"junk bonds"). The yields on lower-rated fixed-income securities generally are
higher than the yields available on higher-rated securities. However,
investments in lower-rated securities may be subject to greater market
fluctuations and greater risks of loss of income or principal (including the
possibility of default by, or bankruptcy of, the issuers of such securities)
than higher-rated securities. Lower-rated securities also may have speculative
characteristics. In addition, the Portfolio may enter into repurchase
agreements. (For a description of the rating systems identified above, see the
Appendix to the SAI.)

The Utilities Portfolio has the ability to engage in a number of specialized
investment strategies and techniques designed to enable the Portfolio to achieve
its investment objectives. Included among these strategies are lending its
portfolio securities, selling securities "short against the box," writing
covered call and secured put options, as well as purchasing options on
securities, purchasing and selling interest rate futures contracts, options on
futures contracts, stock index put and call options and stock index futures
contracts, each of which are discussed in Exhibit A to this Prospectus.

SERIES-10
<PAGE> 60

INVESTMENT RESTRICTIONS

The investment restrictions set forth below are fundamental and may not be
changed without a vote of a majority of the outstanding voting securities of the
Portfolio, as defined in the 1940 Act. The Utilities Portfolio will not:

1. purchase the securities of any issuer (other than U.S. government
securities) if as a result more than 5% of the value of the Portfolio's
total assets would be invested in the securities of the issuer, except
that up to 25% of the value of the Portfolio's total assets may be
invested without regard to this 5% limitation;

2. purchase more than 10% of the voting securities of any one issuer,
provided that this limitation shall not apply to investments in U.S.
government securities;

3. purchase securities on margin, except that the Portfolio may obtain any
short-term credits necessary for the clearance of purchases and sales of
securities. For purposes of this restriction, the deposit or payment of
initial or variation margin in connection with futures contracts or
related options will not be deemed to be a purchase of securities on
margin by the Portfolio;

4. make short sales of securities or maintain a short position, except to
the extent of 5% of the Portfolio's net assets and except that the
Portfolio may engage in such activities without limit if, at all times
when a short position is open, the Portfolio owns an equal amount of the
securities or securities convertible into or exchangeable, without
payment of any further consideration, for securities of the same issuer
as, and at least equal in amount to, the securities sold short;

5. borrow money, including reverse repurchase agreements, except that the
Portfolio may borrow from banks for temporary or emergency (not
leveraging) purposes including the meeting of redemption requests that
might otherwise require the untimely disposition of securities, in an
amount not exceeding 20% of the value of the Portfolio's total assets
(including the amount borrowed) valued at market less liabilities (not
including the amount borrowed) at the time the borrowing is made.
Whenever borrowings exceed 5% of the value of the Portfolio's total
assets, the Portfolio will not make any additional investments;

6. pledge, hypothecate, mortgage or otherwise encumber more than 10% of the
value of the Portfolio's total assets as security for any indebtedness.
For purposes of this restriction (a) the deposit of assets in escrow in
connection with the writing of covered put or call options and the
purchase of securities on a when-issued or delayed-delivery basis and
(b) collateral arrangements with respect to (i) the purchase and sale of
stock options, options on foreign currencies and options on stock
indexes and (ii) initial or variation margin for futures contracts will
not be deemed to be pledges of the Portfolio's assets;

7. invest in commodities, except that the Portfolio may purchase or write
futures contracts and options on futures contracts as described in this
Prospectus;

8. make loans to others, except through the purchase of qualified debt
obligations, loans of portfolio securities and the entry into repurchase
agreements; and

9. concentrate in any industry, except that the Portfolio will concentrate
in excess of 25% of its assets in the securities of companies within the
utility industries.

In addition, the Portfolio will not purchase restricted securities, illiquid
securities (such as repurchase agreements with maturities in excess of seven
days) or other securities that are not readily marketable if more than 10% of
the total assets of the Portfolio would be invested in such securities.

RISK FACTORS AND SPECIAL CONSIDERATIONS

SERIES-11
<PAGE> 61

strategy followed by the Portfolio and certain of the strategies and techniques
used by the Portfolio depend on forecasts made by Greenwich Street Advisors that
may or may not prove to be correct.

Because the Portfolio concentrates its investments in one sector, its portfolio
may be subject to greater risk and market fluctuations than a portfolio of
securities representing a broader range of investment alternatives. The
Portfolio is particularly subject to risks that are inherent to the utility
industries that make up this sector, including difficulty in obtaining an
adequate return on invested capital, difficulty in financing large construction
programs during an inflationary period, restriction on operations and increased
cost and delays attributable to environmental consideration and regulation,
difficulty in raising capital in adequate amounts on reasonable terms in periods
of high inflation and unsettled capital markets, increased costs and reduced
availability of certain types of fuel, occasional reduced availability and high
costs of natural gas for resale, the effects of energy conservation, the effects
of a national energy policy and lengthy delays and greatly increased costs and
other problems associated with the design, construction, licensing, regulation
and operation of nuclear facilities for electric generation, including, among
other considerations, the problems associated with the use of radioactive
materials and disposal of radioactive wastes. There are substantial differences
between the regulatory practices and policies of various jurisdictions, and any
given regulatory agency may make major shifts in policy from time to time. There
is no assurance that regulatory authorities will grant rate increases in the
future or that such increases will be adequate to permit the payment of
dividends on common stocks. Additionally, existing and possible future
regulatory legislation may make it even more difficult for these utilities to
obtain adequate relief. Certain of the issuers of securities held by the
Portfolio may own or operate nuclear generating facilities. Governmental
authorities may from time to time review existing policies, and impose
additional requirements governing the licensing, construction and operation of
nuclear power plants.

Each of the risks referred to above could adversely affect the ability and
inclination of public utilities to declare or pay dividends and the ability of
holders of common stock to realize any value from the assets of the issuer upon
liquidation or bankruptcy. All of the utilities which are issuers of the
securities held by the Portfolio have been experiencing one or more of these
problems in varying degrees. Moreover, price disparities within selected utility
groups and discrepancies in relation to averages and indices have occurred
frequently for reasons not directly related to the general movements or price
trends of utility common stocks. Causes of these discrepancies include changes
in the overall demand for and supply of various securities (including the
potentially depressing effect of new stock offerings), and changes in investment
objectives, market expectations or cash requirements of other purchasers and
sellers of securities.

BOARD OF TRUSTEES

- --------------------------------------------------------------------------------

Additionally, the Board of Trustees annually selects an independent public
accountant, reviews the terms of the management and investment advisory
agreements, recommends any changes in the fundamental investment policies, and
takes any other actions necessary in connection with the operation and
management of the Series Trust.

SERIES-12
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INVESTMENT ADVISERS

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As described above, the Board of Trustees monitors the activities of those
entities which provide investment advisory services to the Portfolios. Travelers
Asset Management International Corporation (TAMIC) and Smith Barney Mutual Funds
Management Inc. (SBMFM) (collectively, the "investment advisers") provide
investment advice and, in general, supervise the management and investment
programs of the Portfolios of the Series Trust.

TAMIC

TAMIC is a registered investment adviser which has provided investment advisory
services since its incorporation in 1978. TAMIC is an indirect wholly owned
subsidiary of Travelers Group Inc., a financial services holding company, and
its principal offices are located at One Tower Square, Hartford, Connecticut
06183. In addition to serving as the investment adviser for the U.S. Government
Securities Portfolio, TAMIC acts as investment adviser for other investment
companies used to fund variable products issued by The Travelers and The
Travelers Life and Annuity Company; as well as for individual and pooled pension
and profit-sharing accounts and for offshore insurance companies affiliated with
The Travelers.

PORTFOLIO MANAGER -- U.S. GOVERNMENT SECURITIES PORTFOLIO

The U.S. Government Securities Portfolio has been managed by Joseph M. Mullally
since mid-1995. Mr. Mullally is a 1989 graduate of the Massachusetts Institute
of Technology with a degree in Economics and minor in Mathematics. While at MIT
he worked three years as a research assistant at the Sloan School and the
Harvard Business School. Areas of research included interest rate expectations,
foreign exchange rate expectations and causality among price volatility, volume
and investor expectations. Prior to joining The Travelers, he spend six years at
CS First Boston. He was the Corporate Fixed Income Strategist, Chief Fixed
Income Strategist and Global Product Manager for Government Securities. He has
worked extensively with mortgages, corporates, treasuries, and other investment
grade securities. He also worked in the Portfolio Strategy Group for several
years, focusing on constructing portfolios to outperform benchmark indices.

ADVISORY FEES -- U.S. GOVERNMENT SECURITIES PORTFOLIO

SBMFM

SBMFM is located at 388 Greenwich Street, New York, New York and has been in the
investment counseling business since 1968. SBMFM renders investment advice to a
wide variety of individual, institutional and investment company clients with
aggregate assets under management in excess of $54 billion. SBMFM is a wholly
owned subsidiary of Travelers Group Inc.

SBMFM manages the day-to-day operations of the Social Awareness Stock Portfolio
and the Utilities Portfolio pursuant to Investment Advisory Agreements entered
into by the Series Trust on behalf of the Portfolios. Under the Advisory
Agreements, SBMFM is responsible for furnishing or causing to be furnished to
the Portfolios advice and assistance with respect to the acquisition, holding or
disposal of securities and recommendations with respect to other aspects and
affairs of the Portfolios.

PORTFOLIO MANAGER -- SOCIAL AWARENESS STOCK PORTFOLIO

The Social Awareness Portfolio is managed by a team of investment professionals
from Greenwich Street Advisors, a division of SBMFM. Robert J. Brady is a
Managing Director and portfolio manager for Greenwich Street Advisors and also
a Chartered Financial Analyst. Mr. Brady is also a Chartered Financial Analyst.

SERIES-13
<PAGE> 63

Mr. Brady has been with Smith Barney and its predecessor firms since 1976. Gene
H. Martino is Vice President and portfolio manager for Greenwich Street
Advisors. He has been involved with investment management for more than fifteen
years. Mr. Martino has been with Smith Barney and its predecessor firms since
1986. Previous positions also include portfolio management at Chase Manhattan
Bank and the Bankers Trust Company.

ADVISORY FEES -- SOCIAL AWARENESS STOCK PORTFOLIO

Under its Advisory Agreement with the Social Awareness Stock Portfolio, SBMFM is
paid an amount equivalent on an annual basis to the advisory fee schedule set
forth in the table below. The fee is computed daily and paid weekly.

<TABLE>
<CAPTION>
ANNUAL AGGREGATE NET ASSET
MANAGEMENT FEE VALUE OF THE FUND
--------------- --------------------
<S> <C> <C> <C>
0.65% of the first $ 50,000,000, plus
0.55% of the next $ 50,000,000, plus
0.45% of the next $100,000,000, plus
0.40% of amounts over $200,000,000
</TABLE>

PORTFOLIO MANAGER -- UTILITIES PORTFOLIO

The Utilities Portfolio is managed by a team of investment professionals from
Greenwich Street Advisors, a division of SBMFM. Jack S. Levande is a Managing
Director and Portfolio Manager for Greenwich Street Advisors. Prior to joining
Greenwich Street Advisors in 1987, Mr. Levande worked at E.F. Hutton as Product
Manager for convertible securities. In addition to managing the Utilities
Portfolio, Mr. Levande also manages the SB Convertible Bond Fund and serves as a
member of the Greenwich Street Advisors Investment Policy Committee. George
Mueller is a Senior Vice President of Taxable Fixed-Income Management at
Greenwich Street Advisors, specializing in corporate bond portfolios. Prior to
joining the firm in 1985, he was a Portfolio Manager for pension and charitable
foundation accounts at Chase Manhattan Bank. In addition to his responsibilities
associated with the Utilities Portfolio, Mr. Mueller is the Portfolio Manager
for the SB Investment Grade Bond Fund, and serves as a member of the Greenwich
Street Advisors Investment Policy Committee.

ADVISORY FEES -- UTILITIES PORTFOLIO

For the services provided under the Advisory Agreement with the Utilities
Portfolio, the Portfolio pays SBMFM a management fee equivalent on an annual
basis to 0.65% of its average daily net assets. The fee is calculated daily and
paid monthly.

SECURITIES TRANSACTIONS

- --------------------------------------------------------------------------------

Under policies established by the Board of Trustees, the investment advisers
select broker-dealers to execute transactions subject to the receipt of best
execution. When selecting broker-dealers to execute portfolio transactions for
the Portfolios, the investment advisers may consider the number of Portfolio
shares sold by such broker-dealers. In addition, broker-dealers may from time to
time be affiliated with the Series Trust, the investment advisers or their
affiliates.

The Portfolios may pay higher commissions to broker-dealers that provide
research services. The investment advisers may use these services in advising
the Portfolios, as well as in advising their other clients.

SERIES-14
<PAGE> 64

FUND EXPENSES

- --------------------------------------------------------------------------------

In addition to the investment advisory fees discussed above, other expenses of
the Series Trust and the Portfolios include the charges and expenses of the
transfer agent, the custodian, the independent auditors, and any outside legal
counsel employed by either the Series Trust or the Board of Trustees; the
compensation for the unaffiliated members of the Board of Trustees; the costs of
printing and mailing the Series Trust's prospectus, proxy solicitation
materials, and annual, semiannual and periodic reports; brokerage commissions,
interest charges and taxes; and any registration, filing and other fees payable
to government agencies in connection with the registration of the Series Trust
and its shares under federal and state securities laws. Additional high
portfolio turnover may involve greater brokerage commissions and other
transaction costs, which will be borne directly by the Portfolios, as well as
additional gains and/or losses to shareholders.

Pursuant to Management Agreements dated May 1, 1996 between the Series Trust and
The Travelers Insurance Company and between the Series Trust and The Travelers
Life and Annuity Company, each Company agreed to reimburse the Series Trust for
the amount by which each Portfolio's aggregate annual expenses, including
investment advisory fees but excluding brokerage commissions, interest charges
and taxes, exceed 1.25% of each Portfolio's average net assets for any fiscal
year.

For the fiscal year ended December 31, 1995, the U.S. Government Securities
Portfolio, the Social Awareness Stock Portfolio and the Utilities Portfolio paid
.56%, 1.25% and 1.25%, respectively, of their average net assets in expenses.
For the Social Awareness Stock Portfolio and the Utilities Portfolio, these
expenses would have been 1.75% and 1.27%, respectively, of the Portfolios'
average net assets if the Company had not paid for any of their expenses. For
the U.S. Government Securities Portfolio, there was no expense reimbursement for
the fiscal year ended December 31, 1995.

TRANSFER AGENT

- --------------------------------------------------------------------------------

The Travelers Insurance Company, One Tower Square, Hartford, Connecticut 06183,
serves as the Series Trust's transfer agent and dividend disbursing agent.

SHARES OF THE SERIES TRUST

- --------------------------------------------------------------------------------

The Series Trust currently issues one class of shares divided into multiple
series. Under the Declaration of Trust, the Board of Trustees is authorized to
create new series of shares without the necessity of a vote of shareholders of
the Series Trust. All shares of each series of the Series Trust have equal
voting, dividend and liquidation rights. When issued and paid for, the shares
will be fully paid and nonassessable by the Series Trust and will have no
preference, conversion, exchange or preemptive rights.

SERIES-15
<PAGE> 65

Series Trust's obligations. Disclaimers of such liability are included in each
agreement entered into by the Series Trust or its Portfolios.

Shares of the Series Trust are currently sold only to insurance company separate
accounts in connection with variable annuity and variable life insurance
contracts issued by the Company and The Travelers Life and Annuity Company.
Shares are not sold to the general public. Shares of the Series Trust are sold
on a continuing basis, without a sales charge, at the net asset value next
computed after payment is made by the insurance company to the Series Trust's
custodian. However, the separate accounts to which shares are sold may impose
sales and other charges, as described in the appropriate contract prospectus.

PRICING SHARES

- --------------------------------------------------------------------------------
The net asset value of a Portfolio share is computed as of the close of trading
on each day on which the New York Stock Exchange is open for trading, except on
days when changes in the value of the Portfolio's securities do not affect the
current net asset value of its shares. The net asset value per share is arrived
at by determining the value of the Portfolio's assets, subtracting its
liabilities, and dividing the result by the number of shares outstanding.

The Portfolios value short-term money market instruments with maturities of
sixty days or less at amortized cost (original purchase cost as adjusted for
amortization of premium or accretion of discount) which, when combined with
accrued interest approximates market. All other investments are valued at market
value, or where market quotations are not readily available, at fair value as
determined in good faith by the Series Trust's Board of Trustees.

SHARE REDEMPTION

- --------------------------------------------------------------------------------

Portfolio shares are redeemed at the redemption value next determined after the
Portfolios receive a redemption request. The redemption value is the net asset
value adjusted for fractions of a cent and may be more or less than the
shareholder's cost depending upon changes in the value of the Portfolio's
securities between purchase and redemption.

SERIES-16
<PAGE> 66

DIVIDENDS AND TAX STATUS

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LEGAL PROCEEDINGS

- --------------------------------------------------------------------------------

There are no pending material legal proceedings affecting the Series Trust or
the Portfolios.

ADDITIONAL INFORMATION

- --------------------------------------------------------------------------------

SERIES-17
<PAGE> 67

EXHIBIT A

- --------------------------------------------------------------------------------

DESCRIPTION OF CERTAIN TYPES OF INVESTMENTS AND
INVESTMENT TECHNIQUES AVAILABLE TO THE PORTFOLIOS

The following types of investments and investment techniques are available to
each of the Portfolios unless otherwise specifically indicated. Please refer to
the investment objective and policies of each Portfolio for a list of available
investments.

VARIABLE AMOUNT MASTER DEMAND NOTES

Variable amount master demand notes are unsecured obligations that permit the
investment of fluctuating amounts by a Portfolio at varying rates of interest
pursuant to direct arrangements between the Portfolio as lender and the issuer
as borrower. Master demand notes permit daily fluctuations in the interest rate
and daily changes in the amounts borrowed. A Portfolio has the right to increase
the amount under the note at any time up to the full amount provided by the note
agreement, or to decrease the amount, and the borrower may repay up to the full
amount of the note without penalty. Because these types of notes are direct
lending arrangements between the lender and the borrower, it is not generally
contemplated that such instruments will be traded, and there is no secondary
market for these notes, although they are redeemable and thus repayable by the
borrower at face value plus accrued interest at any time. Accordingly, a
Portfolio's right to redeem is dependent on the ability of the borrower to pay
principal and interest on demand. In connection with master demand note
arrangements, the investment advisers consider earning power, cash flow and
other liquidity ratios of the issuer. These notes, as such, are not typically
rated by credit rating agencies. Unless they are so rated, the Portfolios will
invest in them only if, at the time of an investment, the issuer meets the
criteria set forth for all other commercial paper. Pursuant to procedures
established by the investment advisers, such notes are treated as instruments
maturing in one day and valued at their par value. The investment advisers
intend to continuously monitor factors related to the ability of the borrower to
pay principal and interest on demand.

REPURCHASE AGREEMENTS

Interim cash balances may be invested from time to time in repurchase agreements
with approved counterparties (i.e., national banks or reporting broker-dealers
meeting the investment advisor's credit quality standards as presenting minimal
risk of default). All repurchase transactions must be collateralized by U.S.
Government securities with market value no less than 102% of the amount of the
transaction, including accrued interest. Repurchase transactions generally
mature the next business day but, in the event of a transaction of longer
maturity, collateral will be marked to market daily and, when required,
additional cash or qualifying collateral will be required from the counterparty.

In executing a repurchase agreement, a Portfolio purchases eligible securities
subject to the seller's simultaneous agreement to repurchase them on a mutually
agreed upon date and at a mutually agreed upon price. The purchase and resale
prices are negotiated with the counterparty on the basis of current short-term
interest rates, which may be more or less than the rate on the securities
collateralizing the transaction. Physical delivery or, in the case of
"book-entry" securities, segregation in the counterparty's account at the
Federal Reserve for the benefit of the Portfolio is required to establish a
perfected claim to the collateral for the term of the agreement in the event the
counterparty fails to fulfill its obligation.

SERIES-18
<PAGE> 68

WHEN-ISSUED SECURITIES

The U.S. Government Securities Portfolio may, from time to time, purchase
new-issue Government or Agency securities on a "when-issued" or
"to-be-announced" ("TBA") basis ("when-issued securities"). The prices of such
securities will be fixed at the time the commitment to purchase is made, and may
be expressed in either dollar price or yield maintenance terms. Delivery and
payment may be at a future date beyond customary settlement time. It is the
customary practice of the Portfolio to make when-issued or TBA purchases for
settlement no more than 90 days beyond the commitment date.

The commitment to purchase a when-issued security may be viewed as a senior
security, and will be marked to market and reflected in the Portfolio's net
asset value daily from the commitment date. While it is the investment adviser's
intention to take physical delivery of these securities, offsetting transactions
may be made prior to settlement, if it is advantageous to do so. The Portfolio
does not make payment or begin to accrue interest on these securities until
settlement date. In order to invest its assets pending settlement, the Portfolio
will normally invest in short-term money market instruments and other securities
maturing no later than the scheduled settlement date.

The Portfolio does not intend to purchase when-issued securities for speculative
or "leverage" purposes. Consistent with Section 18 of the 1940 Act and the
General Policy Statement of the SEC thereunder, when the Portfolio commits to
purchase a when-issued security, it will identify and place in a segregated
account high-grade money market instruments and other liquid securities equal in
value to the purchase cost of the when-issued securities.

The investment adviser believes that purchasing securities in this manner will
be advantageous to the Portfolio. However, this practice does entail certain
additional risks, namely the default of the counterparty on its obligations to
deliver the security as scheduled. In this event, the Portfolio would experience
a gain or loss equal to the appreciation or depreciation in value from the
commitment date. The investment adviser employs rigorous credit quality
procedures in determining the counterparties with which it will deal in
when-issued securities, and in some circumstances, will require the counterparty
to post cash or some other form of security as margin to protect the value of
its delivery obligation pending settlement.

CERTIFICATES OF DEPOSIT

Certificates of deposit are receipts issued by a bank in exchange for the
deposit of funds. The issuer agrees to pay the amount deposited plus interest to
the bearer of the receipt on the date specified on the certificate. The
certificate can usually be traded in the secondary market prior to maturity.

The Portfolios will not acquire time deposits or obligations issued by the
International Bank for Reconstruction and Development, the Asian Development
Bank or the Inter-American Development Bank. Additionally, the Portfolios do not
currently intend to purchase such foreign securities (except to the extent that
certificates of deposit of foreign branches of U.S. banks may be deemed foreign
securities) or purchase certificates of deposit, bankers' acceptances or other
similar obligations issued by foreign banks.

BANKERS' ACCEPTANCES

Bankers' acceptances typically arise from short-term credit arrangements
designed to enable businesses to obtain funds to finance commercial
transactions. Generally, an acceptance is a time draft drawn on a bank by an
exporter or an importer to obtain a stated amount of funds to pay for specific

SERIES-19
<PAGE> 69

merchandise. The draft is then "accepted" by the bank which, in effect,
unconditionally guarantees to pay the face value of the instrument on its
maturity date. The acceptance may then be held by the accepting bank as an
earning asset or it may be sold in the secondary market at the going rate of
discount for a specific maturity. Although maturities for acceptances can be as
long as 270 days, most acceptances have maturities of six months or less.
Bankers' acceptances acquired by the Portfolios must have been accepted by U.S.
commercial banks, including foreign branches of U.S. commercial banks, having
total deposits at the time of purchase in excess of $1 billion and must be
payable in U.S. dollars.

FUTURES CONTRACTS

The Portfolios may use exchange-traded financial futures contracts as a hedge to
protect against changes in interest rates or stock prices. Financial futures
contracts consist of stock index futures contracts and futures contracts on debt
securities ("interest rate futures"). An interest rate futures contract is a
contract to buy or sell specified debt securities at a future time for a fixed
price. A stock index futures contract is a contractual obligation to buy or sell
a specified index of stocks at a future date for a fixed price.

Hedging by use of interest rate futures seeks to establish, with more certainty
than would otherwise be possible, the effective rate of return on portfolio
securities. When hedging is successful, any depreciation in the value of
portfolio securities will substantially be offset by appreciation in the value
of the futures position. Conversely, any appreciation in the value of the
portfolio securities will substantially be offset by depreciation in the value
of the futures position. At no time will the Portfolios' transactions in such
financial futures be employed for speculative purposes.

SERIES-20
<PAGE> 70

fluctuations in the price of any futures contracts that they use for hedging
purposes will be substantially related to fluctuations in the price of the
securities which they hold or which they expect to purchase, or for other risk
reduction strategies, though there can be no assurance the expected result will
always be achieved.

SPECIAL RISKS RELATING TO FUTURES CONTRACTS

In addition to the possibility that there may be a less than perfect correlation
between movements in the futures contracts and securities in the portfolio being
hedged, the prices of futures contracts may not correlate perfectly with
movements in the underlying security due to certain market distortions. First,
rather than meeting variation margin deposit requirements should a futures
contract value move adversely, investors may close future contracts through
offsetting transactions which could distort the normal relationship between the
index and futures markets. Second, since margin requirements in the futures
market are less onerous than in the securities market, the futures market may
attract more speculators than the securities market. Increased participation by
speculators may cause temporary price distortions. Due to the possibility of
such price distortion, and also because of the imperfect correlation discussed
above, even a correct forecast of general market trends by the investment
advisers may not result in a successful hedging transaction in the futures
market over a short time period.

Successful use of futures contracts for hedging purposes is also subject to the
investment advisers' ability to predict correctly movements in the direction of
the market. However, the investment advisers believe that over time the value of
the investments of the Portfolios will tend to move in the same direction as the
market indices which are intended to correlate to the price movements of the
portfolio securities sought to be hedged.

WRITING COVERED CALL OPTIONS

The Portfolios may write (i.e., sell) covered call options. By writing a call
option, a Portfolio becomes obligated during the term of the option to deliver
the securities underlying the option upon payment of the exercise price.

The principal reason for writing call options is to obtain, through a receipt of
premiums, a greater current return than would be realized on the underlying
securities alone. The Portfolios receive a premium from writing a call option
which they retain whether or not the option is exercised. By writing a call
option, a Portfolio might lose the potential for gain on the underlying security
while the option is open.

SERIES-21
<PAGE> 71

BUYING PUT AND CALL OPTIONS

The Portfolios may purchase put options on securities held, or on futures
contracts whose price volatility is expected to closely match that of securities
held, as a defensive measure to preserve shareholders' capital when market
conditions warrant. The Portfolios may purchase call options on specific
securities, or on futures contracts whose price volatility is expected to
closely match that of securities eligible for purchase by the Portfolios, in
anticipation of or as a substitute for the purchase of the securities
themselves. These options may be listed on a national exchange or executed
"over-the-counter" with a broker-dealer as the counterparty. While the
investment advisers anticipate that the majority of option purchases and sales
will be executed on a national exchange, put or call options on specific
securities or for non-standard terms are likely to be executed directly with a
broker-dealer when it is advantageous to do so. Option contracts will be
short-term in nature, generally less than nine months in duration.

SHORT SALES AGAINST THE BOX

The Utilities Portfolio may make short sales (except to the extent of 5% of the
Portfolio's net assets) if at all times when a position is open, the Portfolio
owns the stock or owns preferred stock or debt securities convertible or
exchangeable without payment of further consideration for, securities of the
same issue as the securities sold short. Short sales of this kind are referred
to as "against the box." Short sales against the box are used to defer
recognition of capital gains or losses.

Possible losses from short sales differ from losses that could be incurred from
a purchase of a security, because losses from short sales may be unlimited,
whereas losses from purchases can equal only the total amount invested.

NON-PUBLICLY TRADED AND ILLIQUID SECURITIES

The sale of securities that are not publicly traded is typically restricted
under the federal securities laws. As a result, the Utilities Portfolio may be
forced to sell these securities at less than fair market value or may not be
able to sell them when the investment adviser believes it is desirable to do so.
The Portfolio's investments in illiquid securities are subject to the risk that
should the Portfolio desire to sell any of these securities when a ready buyer
is not available at a price that the Portfolio deems representative of their
value, the value of the Portfolio's net assets could be adversely affected. The
Portfolio currently limits its investments in such securities to 10% of the
Portfolio's assets.

SERIES-22
<PAGE> 72

FOREIGN SECURITIES AND AMERICAN DEPOSITORY RECEIPTS

The Utilities Portfolio may purchase foreign securities or American Depository
Receipts ("ADRs"). ADRs are U.S. dollar-denominated receipts issued generally by
domestic banks representing the deposit with the bank of a security of a foreign
issuer. ADRs are publicly traded on exchanges or over the counter in the United
States.

Investing in the securities of foreign companies involves special risks and
considerations not typically associated with investing in U.S. companies. These
risks include differences in accounting, auditing and financial reporting
standards, generally higher commission rates on foreign portfolio transactions,
the possibility of expropriation or confiscatory taxation, adverse changes in
investment or exchange control regulations, political instability which could
affect U.S. investments in foreign countries and potential restrictions on the
flow of international capital. Additionally, dividends payable on foreign
securities may be subject to foreign taxes withheld prior to distribution.
Foreign securities often trade with less frequency and volume than domestic
securities and therefore may exhibit greater price volatility. Changes in
foreign exchange rates will affect the value of those securities which are
denominated or quoted in currencies other than the U.S. dollar. Many of the
foreign securities held by the Portfolio will not be registered with, nor will
the issuers thereof be subject to the reporting requirements of, the SEC.
Accordingly, there may be less publicly available information about the
securities and the foreign company or government issuing them than is available
about a domestic company of government entity. Moreover, individual foreign
economies may differ favorably or unfavorably from the U.S. economy in such
respects as growth of gross national product, rate of inflation, capital
reinvestment, resource self-sufficiency and balance of payment positions.

LENDING PORTFOLIO SECURITIES

The U.S. Government Securities Portfolio and the Utilities Portfolio are
authorized to lend their portfolio securities to brokers, dealers and other
financial organizations. The Portfolios' loan of securities will be
collateralized by cash, letters of credit or U.S. government securities that are
maintained at all times in an amount at least equal to the current market value
of the loaned securities. By lending its securities, the Portfolio seeks to
generate income by continuing to receive interest on the loaned securities, by
investing the cash collateral in shortterm instruments or by obtaining yield in
the form of interest paid by the borrower when U.S. government securities are
used as collateral.

The risk associated with lending portfolio securities, as with other extensions
of credit, consists of possible loss of rights in the collateral should the
borrower fail financially.

SERIES-23
<PAGE> 73

THE TRAVELERS SERIES TRUST

U.S. GOVERNMENT SECURITIES PORTFOLIO

SOCIAL AWARENESS STOCK PORTFOLIO

UTILITIES PORTFOLIO

TIC Ed. 4-96
L-11788-U Printed in U.S.A.
<PAGE> 74

THE TRAVELERS SERIES TRUST

U.S. GOVERNMENT SECURITIES PORTFOLIO
UTILITIES PORTFOLIO
ZERO COUPON BOND FUND PORTFOLIOS
(SERIES 1998, 2000, 2005)

ONE TOWER SQUARE
HARTFORD, CONNECTICUT 06183
TELEPHONE 860-422-3985
- --------------------------------------------------------------------------------

The Travelers Series Trust (the "Series Trust") is a diversified open-end
management investment company (mutual fund) which consists of multiple series of
shares (the "Portfolios"), each with its own investment objective and policies.
The Portfolios of the Series Trust described herein are the U.S. Government
Securities Portfolio, the Utilities Portfolio, and the Zero Coupon Bond Fund
Portfolios (Series 1998, 2000 and 2005).

THE DATE OF THIS PROSPECTUS IS APRIL 3, 1996.
<PAGE> 75

TABLE OF CONTENTS

<TABLE>
<S> <C>
FINANCIAL HIGHLIGHTS -- U.S. Government Securities Portfolio.......................... 3
FINANCIAL HIGHLIGHTS -- Utilities Portfolio........................................... 4
FINANCIAL HIGHLIGHTS -- Zero Coupon Bond Fund Portfolios
(Series 1998, 2000, 2005)........................................................... 5
THE TRAVELERS SERIES TRUST............................................................ 6
U.S. GOVERNMENT SECURITIES PORTFOLIO.................................................. 6
Investment Objective and Policies................................................... 6
Investment Restrictions............................................................. 7
Risk Factors........................................................................ 7
UTILITIES PORTFOLIO................................................................... 7
Investment Objective and Policies................................................... 7
Investment Restrictions............................................................. 8
Risk Factors and Special Considerations............................................. 9
ZERO COUPON BOND FUND PORTFOLIOS (Series 1998, 2000, 2005)............................ 10
Investment Objective and Policies................................................... 10
Investment Restrictions............................................................. 10
Risk Factors and Special Considerations Relating to Maturity........................ 11
Tax Considerations.................................................................. 12
BOARD OF TRUSTEES..................................................................... 13
INVESTMENT ADVISERS................................................................... 13
TAMIC............................................................................... 13
Portfolio Managers -- U.S. Government Securities Portfolio;
Zero Coupon Bond Fund Portfolios................................................. 13
Advisory Fees -- U.S. Government Securities Portfolio;
Zero Coupon Bond Fund Portfolios................................................. 14
SBMFM............................................................................... 14
Portfolio Manager -- Utilities Portfolio............................................ 14
Advisory Fees -- Utilities Portfolio................................................ 14
SECURITIES TRANSACTIONS............................................................... 14
FUND EXPENSES......................................................................... 15
TRANSFER AGENT........................................................................ 15
SHARES OF THE SERIES TRUST............................................................ 15
PRICING SHARES........................................................................ 16
SHARE REDEMPTION...................................................................... 16
DIVIDENDS AND TAX STATUS.............................................................. 17
LEGAL PROCEEDINGS..................................................................... 17
ADDITIONAL INFORMATION................................................................ 17
EXHIBIT A............................................................................. 18
</TABLE>

SERIES-2
<PAGE> 76

FINANCIAL HIGHLIGHTS

- --------------------------------------------------------------------------------

THE TRAVELERS SERIES TRUST

U.S. GOVERNMENT SECURITIES PORTFOLIO
PER SHARE DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD

<TABLE>
<C> <S>
* Date operations commenced.
** Total return is determined by dividing the increase (decrease) in value of a share during the period, after
reflecting the reinvestment of dividends declared during the period, by the beginning of period share price.
Shares in the U.S. Government Securities Portfolio are only sold to The Travelers separate accounts in
connection with the issuance of variable annuity and variable life insurance contracts. Total return does not
reflect the deduction of any contract charges or fees assessed by The Travelers separate accounts. For the
periods less than one year, total returns are not annualized.
*** Annualized.
+ The ratio of expenses to average net assets reflects an expense reimbursement by The Travelers in connection
with voluntary expense limitations. Without the expense reimbursement, the ratio of operating expenses to
average net assets would have been 0.77% and 0.72% for the year ended December 31, 1993 and the period ended
December 31, 1992, respectively. For the years ended December 31, 1995 and 1994, there were no expense
reimbursements by The Travelers in connection with the voluntary expense limitations.
</TABLE>

SERIES-3
<PAGE> 77

FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------

THE TRAVELERS SERIES TRUST

UTILITIES PORTFOLIO
PER SHARE DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
The following information on per share data for the Utilities Portfolio for the
year ended December 31, 1995 and the period February 4, 1994 (date operations
commenced) to December 31, 1994 has been audited by Coopers & Lybrand L.L.P.,
Independent Accountants. Their report on the per share data for each of the
periods ended December 31, 1995 is contained in the SAI. Refer to the cover of
this Prospectus for information on obtaining a free copy of the SAI.

<TABLE>
<CAPTION>
FEBRUARY 4,*
TO
DECEMBER 31,
1995 1994
- --------------------------------------------------------------------------------------------------------
<S> <C> <C>
PER SHARE DATA
Net asset value, beginning of period......................................... $ 10.17 $10.00
Income from operations
Net investment income........................................................ 0.48 0.35
Net losses on securities (realized and unrealized)........................... 2.44 (0.18)
-------- ------------
Total from investment operations........................................... 2.92 0.17

Less distributions
Distributions from net investment income and short-term realized gains....... (0.24) --
-------- ------------
Total distributions........................................................ (0.24) --
Net asset value, end of period............................................... $ 12.85 $10.17
======= ===========
TOTAL RETURN**................................................................. 29.29% 1.70%

RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (thousands)........................................ $ 15,340 $5,757
Ratio of expenses to average net assets***................................... 1.25% 1.25%#
Ratio of net investment income to average net assets......................... 4.29% 3.86%#
Portfolio turnover rate...................................................... 25% 32%
Average Commission Rate Paid****............................................. .0590 --

* Date operations commenced.

# Annualized.
</TABLE>

SERIES-4
<PAGE> 78

FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------

THE TRAVELERS SERIES TRUST

ZERO COUPON BOND FUND PORTFOLIOS
PER SHARE DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD

The following information on per share data for the Zero Coupon Bond Fund
Portfolios (Series 1998, 2000, 2005) for the period October 11, 1995 (date
operations commenced) to December 31, 1995 has been audited by Coopers & Lybrand
L.L.P., Independent Accountants. Their report on the per share data for the
period ended December 31, 1995 is contained in the SAI. Refer to the cover of
this Prospectus for information on obtaining a free copy of the SAI.

<TABLE>
<CAPTION>
OCTOBER 11* TO DECEMBER 31, 1995
-----------------------------------------
SERIES 1998 SERIES 2000 SERIES 2005
<S> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------
PER SHARE DATA
Net asset value, beginning of period............................. $ 10.00 $ 10.00 $ 10.00
Income from operations
Net investment income............................................ 0.12 0.13 0.13
Net losses on securities (realized and unrealized)............... 0.13 0.18 0.35
----------- ----------- -----------
Total from investment operations............................... 0.25 0.31 0.48
Net asset value, end of period................................... $ 10.25 $ 10.31 $ 10.48
========= ========= =========
TOTAL RETURN**..................................................... 2.50% 3.10% 4.80%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (thousands)............................ $ 1,024 $ 1,029 $ 1,050
Ratio of expenses to average net assets***....................... 0.15%# 0.15%# 0.15%#
Ratio of net investment income to average net assets............. 5.55%# 5.61%# 5.89%#
Portfolio turnover rate.......................................... 20% 34% 23%
</TABLE>

<TABLE>
<C> <S>
* Date operations commenced.
** Total return is determined by dividing the increase (decrease) in value of a share during the period, after
reflecting the reinvestment of dividends declared during the period, by the beginning of period share price.
Shares of the three Zero Coupon Bond Fund Portfolios are only sold to The Travelers separate accounts in
connection with the issuance of variable life insurance contracts. The total return does not reflect contract
charges or fees assessed by The Travelers separate accounts. For periods less than one year, total returns are
not annualized.
*** The ratio of expenses to average net assets reflects an expense reimbursement by The Travelers in connection
with the voluntary expense limitations. Without the expense reimbursements, the ratios of operating expenses
to average net assets would have been, on an annualized basis, 6.51%, 6.51%, and 6.48% for Series 1998, 2000
and 2005, respectively.
# Annualized.
</TABLE>

SERIES-5
<PAGE> 79

THE TRAVELERS SERIES TRUST
- --------------------------------------------------------------------------------

U.S. GOVERNMENT SECURITIES PORTFOLIO
- --------------------------------------------------------------------------------

INVESTMENT OBJECTIVE AND POLICIES

SERIES-6
<PAGE> 80

The U.S. Government Securities Portfolio may use exchange-traded futures
contracts as a hedge to protect against changes in interest rates.

A detailed discussion of certain types of investments and investment techniques
utilized by the U.S. Government Securities Portfolio is included in Exhibit A to
this Prospectus.

INVESTMENT RESTRICTIONS

RISK FACTORS

UTILITIES PORTFOLIO
- --------------------------------------------------------------------------------

INVESTMENT OBJECTIVE AND POLICIES

The primary investment objective of the Utilities Portfolio (the "Portfolio") is
to provide current income. Long-term capital appreciation is a secondary
objective. The Portfolio's investment objectives may be changed only with the
approval of a majority of the Portfolio's outstanding shares. There can be no
assurance that the Portfolio will achieve its investment objectives.

SERIES-7
<PAGE> 81

return, as determined by the investment adviser. Under normal market conditions,
the Portfolio will invest at least 65% of its assets in such securities. The
Portfolio may invest up to 35% of its assets in equity and debt securities of
non-utility companies believed to afford a reasonable opportunity for achieving
the Portfolio's investment objectives. When the investment adviser believes that
market conditions warrant, the Portfolio may adopt a temporary defensive posture
and may invest, without limit, in debt securities (whether or not they are
utility securities) such as rated or unrated bonds, debentures and commercial
paper, U.S. government securities and money market instruments. The Portfolio
may invest up to 10% of its assets in securities rated BB or B by Standard &
Poor's Corporation ("S&P") or Ba or B by Moody's Investors Service, Inc.
("Moody's") whenever the investment adviser believes that the incremental yield
on such securities is advantageous to the Portfolio in comparison to the
additional risk involved (such lower-rated securities are commonly known as
"junk bonds"). The yields on lower-rated fixed-income securities generally are
higher than the yields available on higher-rated securities. However,
investments in lower-rated securities may be subject to greater market
fluctuations and greater risks of loss of income or principal (including the
possibility of default by, or bankruptcy of, the issuers of such securities)
than higher-rated securities. Lower-rated securities also may have speculative
characteristics. In addition, the Portfolio may enter into repurchase
agreements. (For a description of the rating systems identified above, see the
Appendix to the SAI.)

INVESTMENT RESTRICTIONS

2. purchase more than 10% of the voting securities of any one issuer,
provided that this limitation shall not apply to investments in U.S.
government securities;

SERIES-8
<PAGE> 82

borrowed) at the time the borrowing is made. Whenever borrowings exceed
5% of the value of the Portfolio's total assets, the Portfolio will not
make any additional investments;

7. invest in commodities, except that the Portfolio may purchase or write
futures contracts and options on futures contracts as described in this
Prospectus;

8. make loans to others, except through the purchase of qualified debt
obligations, loans of portfolio securities and the entry into repurchase
agreements; and

9. concentrate in any industry, except that the Portfolio will concentrate
in excess of 25% of its assets in the securities of companies within the
utility industries.

RISK FACTORS AND SPECIAL CONSIDERATIONS

Investment in the Utilities Portfolio may involve above-average risk of loss
because of, among other things, the Portfolio's use of strategies and techniques
that may be considered to be speculative. The strategy followed by the Portfolio
and certain of the strategies and techniques used by the Portfolio depend on
forecasts made by Greenwich Street Advisors that may or may not prove to be
correct.

SERIES-9
<PAGE> 83

degrees. Moreover, price disparities within selected utility groups and
discrepancies in relation to averages and indices have occurred frequently for
reasons not directly related to the general movements or price trends of utility
common stocks. Causes of these discrepancies include changes in the overall
demand for and supply of various securities (including the potentially
depressing effect of new stock offerings), and changes in investment objectives,
market expectations or cash requirements of other purchasers and sellers of
securities.

ZERO COUPON BOND FUND PORTFOLIOS
(SERIES 1998, 2000, 2005)
- --------------------------------------------------------------------------------

INVESTMENT OBJECTIVE AND POLICIES

The objective of each of the three Zero Coupon Bond Portfolios is to provide as
high an investment return as is consistent with the preservation of capital.
Each Portfolio's investment objective may be changed only with the approval of a
majority of the Portfolio's outstanding shares. There can be no assurance that a
Portfolio will achieve its investment objective.

Each Portfolio seeks to return a reasonably assured targeted dollar amount,
predictable at the time of investment, on a specific target date in the future
by investing in primarily zero coupon securities that pay no cash income but are
acquired by the Portfolio at substantial discounts from their values at
maturity. The Zero Coupon Bond Portfolios may not be appropriate for contract
owners who do not plan to allocate their premiums to the Portfolios for the
long-term or until maturity.

Under normal circumstances, each Zero Coupon Bond Portfolio will invest at least
65% of its net assets in "Stripped Securities," a term used collectively for
Stripped Treasury Securities, Stripped Government Securities, Stripped Corporate
Securities and Stripped Eurodollar Obligations and other stripped securities,
all described in Exhibit A to this prospectus.

The remaining 35% of each Zero Coupon Bond Portfolio's assets may be invested in
non-zero coupon securities such as common stock and other equity securities,
bonds and other debt securities, and money market instruments.

Each Zero Coupon Bond Portfolio may invest up to 25% of its assets in securities
of foreign issuers. Investments in Stripped Eurodollar Obligations where
delivery takes place outside the U.S. will be made in compliance with any
applicable U.S. and foreign currency restrictions, tax laws and laws limiting
the amount and types of foreign investments. Stripped Eurodollar Obligations
involve special risks associated with investment in foreign securities related
to market, currency, economic, political, and other factors.

To provide income for expenses, redemption payments, and cash dividends, up to
20% of each Portfolio's assets may be invested in money market instruments.

INVESTMENT RESTRICTIONS

The investment restrictions set forth below are fundamental and may not be
changed without a vote of majority of the outstanding voting securities of each
Zero Coupon Bond Portfolio, as defined in the 1940 Act. Each of the Zero Coupon
Bond Portfolios will not:

(1) purchase the securities of any issuer (other than U.S. government
securities) if as a result more than 5% of the value of the Portfolio's
total assets would be invested in the securities of the issuer, except
that up to 25% of the value of the Portfolio's total assets may be
invested without regard to this 5% limitation;

(2) purchase more than 10% of the voting securities of any one issuer,
provided that this limitation shall not apply to investments in U.S.
government securities;

SERIES-10
<PAGE> 84

(3) purchase securities on margin, except that each Portfolio may obtain
any short-term credits necessary for the clearance of purchases and
sales of securities. For purposes of this restriction, the deposit or
payment of initial or variation margin in connection with futures
contracts or related options will not be deemed to be a purchase of
securities on margin by a Portfolio;

(4) make short sales of securities or maintain a short position, except to
the extent of 5% of each Portfolio's net assets and except that a
Portfolio may engage in such activities without limit if, at all times
when a short position is open, the Portfolio owns an equal amount of
the securities or securities convertible into or exchangeable, without
payment of any further consideration, for securities of the same issuer
as, and at least equal in amount to, the securities sold short;

(5) borrow money, including reverse repurchase agreements, except that each
Portfolio may borrow from banks for temporary or emergency (not
leveraging) purposes including the meeting of redemption requests that
might otherwise require the untimely disposition of securities, in an
amount not exceeding 20% of the value of the Portfolio's total assets
(including the amount borrowed) valued at market less liabilities (not
including the amount borrowed) at the time the borrowing is made.
Whenever borrowings exceed 5% of the value of a Portfolio's total
assets, the Portfolio will not make any additional investments;

(6) pledge, hypothecate, mortgage or otherwise encumber more than 10% of
the value of a Portfolio's total assets as security for any
indebtedness. For purposes of this restriction (a) the deposit of
assets in escrow in connection with the writing of covered put or call
options and the purchase of securities on a when-issued or
delayed-delivery basis and (b) collateral arrangements with respect to
(i) the purchase and sale of stock options, options on foreign
currencies and options on stock indexes and (ii) initial or variation
margin for futures contracts will not be deemed to be pledges of a
Portfolio's assets;

(7) invest in commodities, except that each Portfolio may purchase or write
futures contracts and options on futures contracts as described in this
Prospectus;

(8) make loans to others, except through the purchase of qualified debt
obligations, loans of portfolio securities and the entry into
repurchase agreements; and

(9) concentrate in any industry.

In addition, the Portfolios will not purchase restricted securities, illiquid
securities (such as repurchase agreements with maturities in excess of seven
days) or other securities that are not readily marketable if more than 10% of
the total assets of a Portfolio would be invested in such securities.

RISK FACTORS AND SPECIAL CONSIDERATIONS RELATING TO MATURITY

Various levels of risk are involved with each Zero Coupon Bond Portfolio. The
risks inherent in investing in any of the Portfolios are that their net asset
value will fluctuate in response to changes in economic conditions, interest
rates and the market's perception of the underlying securities of the
Portfolios.

Stripped securities investments, like other investments in debt securities, are
subject to certain risks, including credit and market risks. To the extent that
the Portfolios invest in Stripped Securities other than Stripped Treasury
Securities, such investments will be rated at least A by one or more nationally
recognized statistical rating agencies. Such securities are regarded as having
an adequate capacity to pay principal and interest but with greater
vulnerability to adverse economic conditions and have some speculative
characteristics. The Zero Coupon Bond Portfolios will also attempt to minimize
the impact of individual credit risks by diversifying their portfolio
investments.

Stripped Securities do not make any periodic payments of interest prior to
maturity and the stripping of the interest coupons causes the Stripped
Securities to be offered at a substantial or "deep"

SERIES-11
<PAGE> 85

discount from their face amounts. The market value of Stripped Securities and,
therefore, of the shares of the Zero Coupon Bond Portfolios, will fluctuate with
changes in interest rates and other factors and may be subject to greater
fluctuations in response to changing interest rates than would a fund consisting
of debt obligations of comparable maturities that pay interest currently. The
amount of fluctuation increases with a longer period of maturity.

Special Considerations Relating to Maturity: The Series Trust currently offers
three separate Zero Coupon Bond Portfolios, each maturing on the third Friday of
December of its specific maturity year (the "Target Date"): 1998, 2000, and
2005. On each Portfolio's Target Date, the Portfolio will be converted to cash
and an investor may invest in another of the Contract's Funds. If an investor
does not complete an instruction form directing what should be done with
liquidation proceeds, the proceeds will be automatically invested in the Smith
Barney Money Market Portfolio or Cash Income Trust, as applicable, and the
Policyholder will be notified of such event.

Because each Portfolio will be primarily invested in zero coupon securities,
investors whose premiums are invested in shares held to maturity, including
those obtained through reinvestment of dividends and distributions, will
experience a return consisting primarily of the amortization of discount on the
underlying securities in the Portfolio. However, the net asset value of a
Portfolio's shares increases or decreases with changes in the market value of
that Portfolio's investments, which tends to vary inversely with changes in
prevailing interest rates. If shares of a Zero Coupon Bond Portfolio are
redeemed prior to the maturity of the Portfolio, an investor may experience a
significantly different investment return than was anticipated at the time of
purchase.

The Portfolio's investment adviser will attempt to maintain the average duration
of each Portfolio to within twelve months of the Portfolio's Target Date.
Duration is a measure of the length of an investment which takes into account,
through present value analysis, the timing and amount of any interest payments
as well as the amount of the principal repayment. Duration is commonly used by
professional managers to help identify and control reinvestment risk. Since each
Portfolio will not be invested entirely in zero coupon securities maturing on
the Target Date, there will be some reinvestment risk with respect to those
other investments. By balancing investments with slightly longer and shorter
durations, the investment adviser believes it can maintain a Portfolio's average
duration within twelve months of the Portfolio's Target Date and thereby reduce
its reinvestment risk. Because they do not pay interest, zero coupon securities
tend to be subject to greater fluctuation of market value in response to changes
in interest rates than interest-paying securities of similar maturities.
Investors can expect more appreciation from a Zero Coupon Bond Portfolio during
periods of declining interest rates than from interest-paying securities of
similar maturity. Conversely, when interest rates rise, a Zero Coupon Bond
Portfolio will normally decline more in price than interest-paying securities of
similar maturity. Price fluctuations are expected to be greatest in the longer-
maturity Funds and are expected to diminish as a Portfolio approaches its
maturity date. Interest rates can change suddenly and unpredictably.

In addition, due to securities maturing prior to the termination of the Zero
Coupon Bond Portfolio, a risk that the proceeds from the sale of such securities
will not be reinvested at the same interest rate which was available at the time
of the contract owner's purchase may exist. As an example, in a falling interest
rate environment, proceeds for securities that mature prior to the termination
date of a Zero Coupon Bond Portfolio will be reinvested at a lower rate.
Similarly, in a rising interest environment, the proceeds will be invested at a
higher interest rate.

TAX CONSIDERATIONS

Under the federal income tax law, a portion of the difference between the
purchase price of the zero coupon securities and their face value ("original
issue discount") is considered to be income to the Zero Coupon Bond Portfolios
each year, even though such Portfolio will not receive cash payments
representing the discount from these securities. This original issue discount
will comprise a part of the net taxable investment income of such Portfolio
which must be "distributed" to the insurance company shareholders each year,
whether or not such distributions are paid in cash. To the extent

SERIES-12
<PAGE> 86

such distributions are paid in cash, the Portfolio may have to generate the
required cash from interest earned on non-zero coupon securities such as
corporate bonds or possibly from the disposition of zero coupon securities.

BOARD OF TRUSTEES
- --------------------------------------------------------------------------------

INVESTMENT ADVISERS
- --------------------------------------------------------------------------------

TAMIC

PORTFOLIO MANAGERS -- U.S. GOVERNMENT SECURITIES PORTFOLIO;
ZERO COUPON BOND FUND PORTFOLIOS

The Zero Coupon Bond Fund Portfolios are managed by David A. Tyson, Ph.D. and
CFA. Mr. Tyson is currently Senior Vice President and the head of the Company's
Portfolio Management Group. He directly manages The Travelers Annuity, Life
Surplus and Convertible portfolios. His previous

SERIES-13
<PAGE> 87

responsibilities have included managing The Travelers Derivatives,
Mortgage-Backed and Quantitative Investment Groups. Mr. Tyson joined The
Travelers in 1985 and TAMIC in 1994. He previously spent seven years with the
Equitable Investment Management Corporation where he was responsible for
quantitative equity research and new product development.

ADVISORY FEES -- U.S. GOVERNMENT SECURITIES PORTFOLIO;
ZERO COUPON BOND FUND PORTFOLIOS

Under its Advisory Agreement with the U.S. Government Securities Portfolio,
TAMIC is paid an amount equivalent to 0.3233%, on an annual basis, of the
average daily net assets of the Portfolio. Under its Advisory Agreement with the
Zero Coupon Bond Portfolios, TAMIC is paid an amount equivalent on an annual
basis to .10% of the average daily net assets of each Portfolio. The fees are
computed daily and paid weekly. The Travelers has decided to voluntarily
reimburse the Zero Coupon Bond Fund Portfolios for any expenses above 0.15%
(includes the .10% management fee to TAMIC, but excludes brokerage commissions
and interest charges).

SBMFM

SBMFM manages the day-to-day operations of the Utilities Portfolio pursuant to
an Investment Advisory Agreement entered into by the Series Trust on behalf of
the Portfolio. Under the Advisory Agreement, SBMFM is responsible for furnishing
or causing to be furnished to the Portfolio advice and assistance with respect
to the acquisition, holding or disposal of securities and recommendations with
respect to other aspects and affairs of the Portfolio.

PORTFOLIO MANAGER -- UTILITIES PORTFOLIO

ADVISORY FEES -- UTILITIES PORTFOLIO

SECURITIES TRANSACTIONS
- --------------------------------------------------------------------------------

SERIES-14
<PAGE> 88

Portfolio shares sold by such broker-dealers. In addition, broker-dealers may
from time to time be affiliated with the Series Trust, the investment advisers
or their affiliates.

FUND EXPENSES
- --------------------------------------------------------------------------------

For the fiscal year ended December 31, 1995, the U.S. Government Securities
Portfolio, and the Utilities Portfolio paid .56% and 1.25%, respectively, of
their average net assets in expenses. For the Utilities Portfolio, these
expenses would have been 1.27% of the Portfolio's average net assets if the
Company had not paid for any of its expenses. For the U.S. Government Securities
Portfolio, there was no expense reimbursement for the fiscal year ended December
31, 1995.

The three Zero Coupon Bond Fund Portfolios began operating on October 11, 1995.
Series 1998 paid .15%, Series 2000 paid .15% and Series 2005 paid .15% of their
average assets in expenses. These expenses would have been, on an annualized
basis, 6.51%, 6.51% and 6.48%, respectively, of the Portfolios' average net
assets if the Company had not paid for any of their expenses.

TRANSFER AGENT
- --------------------------------------------------------------------------------

The Travelers Insurance Company, One Tower Square, Hartford, Connecticut 06183,
serves as the Series Trust's transfer agent and dividend disbursing agent.

SHARES OF THE SERIES TRUST
- --------------------------------------------------------------------------------

SERIES-15
<PAGE> 89

Shares of the Series Trust are currently sold only to insurance company separate
accounts in connection with variable annuity and variable life insurance
contracts issued by the Company and The Travelers Life and Annuity Company.
Shares are not sold to the general public. Shares of the Series Trust are sold
on a continuing basis, without a sales charge, at the net asset value next
computed after payment is made by the insurance company to the Series Trust's
custodian. However, the separate accounts to which shares are sold may impose
sales and other charges, as described in the appropriate contract prospectus.

PRICING SHARES
- --------------------------------------------------------------------------------

The Portfolios value short-term money market instruments with maturities of
sixty days or less at amortized cost (original purchase cost as adjusted for
amortization of premium or accretion of discount) which, when combined with
accrued interest approximates market. All other investments are valued at market
value, or where market quotations are not readily available, at fair value as
determined in good faith by the Series Trust's Board of Trustees.

SHARE REDEMPTION
- --------------------------------------------------------------------------------

SERIES-16
<PAGE> 90

DIVIDENDS AND TAX STATUS
- --------------------------------------------------------------------------------

LEGAL PROCEEDINGS
- --------------------------------------------------------------------------------

There are no pending material legal proceedings affecting the Series Trust or
the Portfolios.

ADDITIONAL INFORMATION
- --------------------------------------------------------------------------------

SERIES-17
<PAGE> 91

EXHIBIT A
- --------------------------------------------------------------------------------

DESCRIPTION OF CERTAIN TYPES OF INVESTMENTS AND
INVESTMENT TECHNIQUES AVAILABLE TO THE PORTFOLIOS

VARIABLE AMOUNT MASTER DEMAND NOTES

Variable amount master demand notes are unsecured obligations that permit the
investment of fluctuating amounts by a Portfolio at varying rates of interest
pursuant to direct arrangements between the Portfolio as lender and the issuer
as borrower. Master demand notes permit daily fluctuations in the interest rate
and daily changes in the amounts borrowed. A Portfolio has the right to increase
the amount under the note at any time up to the full amount provided by the note
agreement, or to decrease the amount, and the borrower may repay up to the full
amount of the note without penalty. Because these types of notes are direct
lending arrangements between the lender and the borrower, it is not generally
contemplated that such instruments will be traded, and there is no secondary
market for these notes, although they are redeemable and thus repayable by the
borrower at face value plus accrued interest at any time. Accordingly, a
Portfolio's right to redeem is dependent on the ability of the borrower to pay
principal and interest on demand. In connection with master demand note
arrangements, the investment advisers consider earning power, cash flow and
other liquidity ratios of the issuer. These notes, as such, are not typically
rated by credit rating agencies. Unless they are so rated, the Portfolios will
invest in them only if, at the time of an investment, the issuer meets the
criteria set forth for all other commercial paper. Pursuant to procedures
established by the investment advisers, such notes are treated as instruments
maturing in one day and valued at their par value. The investment advisers
intend to continuously monitor factors related to the ability of the borrower to
pay principal and interest on demand.

REPURCHASE AGREEMENTS

SERIES-18
<PAGE> 92

WHEN-ISSUED SECURITIES

CERTIFICATES OF DEPOSIT

BANKERS' ACCEPTANCES

SERIES-19
<PAGE> 93

FUTURES CONTRACTS

Hedging by use of interest rate futures seeks to establish, with more certainty
than would otherwise be possible, the effective rate of return on portfolio
securities. When hedging is successful, any depreciation in the value of
portfolio securities will substantially be offset by appreciation in the value
of the futures position. Conversely, any appreciation in the value of the
portfolio securities will substantially be offset by depreciation in the value
of the futures position. At no time will the Portfolios' transactions in such
financial futures be employed for speculative purposes.

SERIES-20
<PAGE> 94

SPECIAL RISKS RELATING TO FUTURES CONTRACTS

WRITING COVERED CALL OPTIONS

SERIES-21
<PAGE> 95

BUYING PUT AND CALL OPTIONS

SHORT SALES AGAINST THE BOX

NON-PUBLICLY TRADED AND ILLIQUID SECURITIES

SERIES-22
<PAGE> 96

FOREIGN SECURITIES AND AMERICAN DEPOSITORY RECEIPTS

Investing in the securities of foreign companies involves special risks and
considerations not typically associated with investing in U.S. companies. These
risks include differences in accounting, auditing and financial reporting
standards, generally higher commission rates on foreign portfolio transactions,
the possibility of expropriation or confiscatory taxation, adverse changes in
investment or exchange control regulations, political instability which could
affect U.S. investments in foreign countries and potential restrictions on the
flow of international capital. Additionally, dividends payable on foreign
securities may be subject to foreign taxes withheld prior to distribution.
Foreign securities often trade with less frequency and volume than domestic
securities and therefore may exhibit greater price volatility. Changes in
foreign exchange rates will affect the value of those securities which are
denominated or quoted in currencies other than the U.S. dollar. Many of the
foreign securities held by the Portfolio will not be registered with, nor will
the issuers thereof be subject to the reporting requirements of, the SEC.
Accordingly, there may be less publicly available information about the
securities and the foreign company or government issuing them than is available
about a domestic company of government entity. Moreover, individual foreign
economies may differ favorably or unfavorably from the U.S. economy in such
respects as growth of gross national product, rate of inflation, capital
reinvestment, resource self-sufficiency and balance of payment positions.

LENDING PORTFOLIO SECURITIES

The risk associated with lending portfolio securities, as with other extensions
of credit, consists of possible loss of rights in the collateral should the
borrower fail financially.

STRIPPED SECURITIES

(1) debt obligations issued by the U.S. Treasury that have been stripped of
their unmatured interest coupons; interest coupons that have been
stripped from debt obligations issued by the U.S. Treasury; and
receipts and certificates for stripped debt obligations and stripped
coupons, including U.S. government trust certificates (collectively,
"Stripped Treasury Securities") (but currently not anticipated to be in
excess of 55% of the Funds' assets);

(2) other zero coupon securities issued by the U.S. government and its
agencies and instrumentalities, by a variety of tax-exempt issuers such
as state and local governments and their agencies and instrumentalities
and by "mixed-ownership government corporations" (collectively,
"Stripped Government Securities");

SERIES-23
<PAGE> 97

(3) zero coupon securities issued by domestic corporations which consist of
corporate debt obligations without interest coupons, and, if available,
interest coupons that have been stripped from corporate debt
obligations, and receipts and certificates for such stripped debt
obligations and stripped coupons (collectively, "Stripped Corporate
Securities");

(4) zero coupon securities issued by certain entities which consist of
stripped debt obligations and stripped coupons of asset-backed
securities, which zero coupon-type securities may exist today or may be
developed in the future. These securities may be illiquid and are
subject to the 10% limitation for such restricted securities, as
described under Investment Restrictions.

(5) stripped Eurodollar obligations, which are debt securities denominated
in U.S. dollars that are issued by foreign issuers, often subsidiaries
of domestic corporations ("Stripped Eurodollar Obligations").

SERIES-24
<PAGE> 98

PART B

INFORMATION REQUIRED IN A STATEMENT OF ADDITIONAL INFORMATION
<PAGE> 99
STATEMENT OF ADDITIONAL INFORMATION

THE TRAVELERS SERIES TRUST
U.S. GOVERNMENT SECURITIES PORTFOLIO
SOCIAL AWARENESS STOCK PORTFOLIO
UTILITIES PORTFOLIO
ZERO COUPON BOND FUND PORTFOLIOS
(SERIES 1998, 2000, 2005)
LARGE CAP PORTFOLIO
EQUITY INCOME PORTFOLIO
TRAVELERS QUALITY BOND PORTFOLIO
LAZARD INTERNATIONAL STOCK PORTFOLIO
MFS EMERGING GROWTH PORTFOLIO
FEDERATED HIGH YIELD PORTFOLIO
FEDERATED STOCK PORTFOLIO

________, 1996

This Statement of Additional Information ("SAI") is not a prospectus but
relates to, and should be read in conjunction with, the Trust's prospectus
dated _________, 1996. A copy of the Prospectus is available from the office of
the Series Trust at The Travelers Insurance Company, Annuity Services, One
Tower Square, Hartford, Connecticut 06183-5030 or by calling 860-422-3985.

<PAGE> 100

TABLE OF CONTENTS

PAGE
<S> <C>
THE TRAVELERS SERIES TRUST . . . . . . . . . . . . . . . . . . . . . . . . . .

U.S. GOVERNMENT SECURITIES PORTFOLIO . . . . . . . . . . . . . . . . . . . . .
Investment Objective and Policies . . . . . . . . . . . . . . . . . . . .
Investment Restrictions . . . . . . . . . . . . . . . . . . . . . . . . .

SOCIAL AWARENESS STOCK PORTFOLIO . . . . . . . . . . . . . . . . . . . . . . .
Investment Objective and Policies . . . . . . . . . . . . . . . . . . . .
Social Criteria . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investment Restrictions . . . . . . . . . . . . . . . . . . . . . . . . .

UTILITIES PORTFOLIO. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investment Objective and Policies . . . . . . . . . . . . . . . . . . . .
Investment Restrictions . . . . . . . . . . . . . . . . . . . . . . . . .

ZERO COUPON BOND FUND PORTFOLIOS (Series 1998, 2000, 2005) . . . . . . . . . .
Investment Objective and Policies . . . . . . . . . . . . . . . . . . . .
Investment Securities, Strategies and Techniques. . . . . . . . . . . . .
Investment Restrictions . . . . . . . . . . . . . . . . . . . . . . . . .

LARGE CAP PORTFOLIO . . . . . . . . .. . . . . . . . . . . . . . . . . . . . .
Investment Objective and Policies . . . . . . . . . . . . . . . . . . . .
Investment Securities, Strategies and Techniques. . . . . . . . . . . . .
Investment Restrictions . . . . . . . . . . . . . . . . . . . . . . . . .

TRAVELERS QUALITY BOND PORTFOLIO . . . . . . . . .. . . . . . . . . . . . . .
Investment Objective and Policies . . . . . . . . . . . . . . . . . . . .
Investment Securities, Strategies and Techniques. . . . . . . . . . . . .
Investment Restrictions . . . . . . . . . . . . . . . . . . . . . . . . .

LAZARD INTERNATIONAL STOCK PORTFOLIO . . . . . . . . . . . . . . . . . . . . .
Investment Objective and Policies . . . . . . . . . . . . . . . . . . . .
Investment Securities, Strategies and Techniques. . . . . . . . . . . . .
Investment Restrictions . . . . . . . . . . . . . . . . . . . . . . . . .

MFS EMERGING GROWTH PORTFOLIO . . . . . . . . . . . . . . . . . . . . . . . .
Investment Objective and Policies . . . . . . . . . . . . . . . . . . . .
Investment Securities, Strategies and Techniques. . . . . . . . . . . . .
Investment Restrictions . . . . . . . . . . . . . . . . . . . . . . . . .

FEDERATED HIGH YIELD PORTFOLIO . . . . . . . .. . .. . . . . . .. . . . . . .
Investment Objective and Policies . . . . . . . . . . . . . . . . . . . .
Investment Securities, Strategies and Techniques. . . . . . . . . . . . .
Investment Restrictions . . . . . . . . . . . . . . . . . . . . . . . . .

FEDERATED STOCK PORTFOLIO . . . . . . .. . . . . . . . . . . . . . . . . . .
Investment Objective and Policies . . . . . . . . . . . . . . . . . . . .
Investment Securities, Strategies and Techniques. . . . . . . . . . . . .
Investment Restrictions . . . . . . . . . . . . . . . . . . . . . . . . .

EQUITY INCOME PORTFOLIO . . . . . . . . .. . . . . . . . . . . . . . . . . . .
Investment Objective and Policies . . . . . . . . . . . . . . . . . . . .
Investment Securities, Strategies and Techniques. . . . . . . . . . . . .
Investment Restrictions . . . . . . . . . . . . . . . . . . . . . . . . .

VALUATION OF SECURITIES. . . . . . . . . . . . . . . . . . . . . . . . . . . .

DISTRIBUTIONS AND TAXES. . . . . . . . . . . . . . . . . . . . . . . . . . . .

TRUSTEES AND OFFICERS . . . . . . . . . . . . . . . . . . . . . . . . . . . .
</TABLE>

<PAGE> 101
<TABLE>
<S> <C>
DECLARATION OF TRUST . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

INVESTMENT ADVISORY SERVICES . . . . . . . . . . . . . . . . . . . . . . . . .
TAMIC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Lazard. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
MFS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Federated . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fidelity . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
The Advisory Agreements . . . . . . . . . . . . . . . . . . . . . . . . .

REDEMPTIONS IN KIND. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

BROKERAGE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

ADDITIONAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . .

APPENDIX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
</TABLE>

<PAGE> 102

THE TRAVELERS SERIES TRUST

The Travelers Series Trust (the "Series Trust") is registered with the
Securities and Exchange Commission ("SEC") as an open-end management investment
company, and is organized as a business trust under the laws of the
Commonwealth of Massachusetts. An Agreement and Declaration of Trust dated
October 11, 1991 (the "Declaration of Trust") authorizes the shares of the
Series Trust to be divided into two or more series related to separate
portfolios of investments, and further allows the Board of Trustees to
establish additional portfolios at any time.

The Series Trust is currently divided into six series (the "Portfolios")
(with seven Portfolios to be added by June 1996) each with its own investment
objective and policies, each of which are diversified portfolios under the
Investment Company Act of 1940 (the "1940 Act").

U.S. GOVERNMENT SECURITIES PORTFOLIO

INVESTMENT OBJECTIVE AND POLICIES

The investment objective of the U.S. Government Securities Portfolio is
the selection of investments from the point of view of an investor concerned
primarily with highest credit quality, current income and total return. To
achieve this objective, the Portfolio invests primarily in direct obligations
of the United States Government, in obligations of its instrumentalities
supported by its full faith and credit, and in obligations issued or guaranteed
by Federal Agencies which are independent corporations sponsored by the United
States and which are subject to its general supervisory oversight, but which do
not carry the full faith and credit obligations of the United States.

INVESTMENT RESTRICTIONS

None of the restrictions enumerated in this paragraph may be changed
without a vote of a majority of the outstanding voting securities of the
Portfolio, as defined in the 1940 Act. The U.S. Government Securities
Portfolio will not:

(1) invest more than 5% of its total assets, computed at market
value, in the securities of any one issuer (exclusive of securities
issued by the United States Government, its agencies or
instrumentalities, for which there is no limit);

(2) invest in more than 10% of any class of securities of any one issuer;

(3) borrow money, except to facilitate redemptions or for
emergency or extraordinary purposes and then only from banks and in
amounts of up to 10% of its gross assets computed at cost; while
outstanding according to the 1940 Act, a borrowing may not exceed
one-third of the value of the net assets, including the amount
borrowed; the Portfolio has no intention of attempting to increase
its net income by borrowing and all borrowings will be repaid before
additional investments are made; assets pledged to secure borrowings
shall be no more than the lesser of the amount borrowed or 10% of
the gross assets computed at cost;

(4) underwrite securities, except that the Portfolio may purchase
securities from issuers thereof or others and dispose of such
securities in a manner consistent with its other investment
policies; in the is position of restricted securities, the Portfolio
may be deemed to be an underwriter, as defined in the Securities Act
of 1933;

(5) purchase real estate or interests in real estate, except
through the purchase of securities of a type commonly purchased by
financial institutions which do not include direct interest in real
estate or

<PAGE> 103

mortgages, or commodities or commodity contracts, except transactions
involving financial futures in order to limit transactions and
borrowing costs and for hedging purposes;

(6) invest for the primary purpose of control or management;

(7) make margin purchases or short sales of securities, except
for short-term credits which are necessary for the clearance of
transactions, and to place not more than 5% of its net asset value
in total margin deposits for positions in futures contracts;

(8) make loans, except that the Portfolio may purchase money
market securities, enter into repurchase agreements, buy publicly
and privately distributed debt securities and lend limited amounts
of its portfolio securities to broker/dealers; all such investments
must be consistent with the investment objective and policies;

(9) invest more than 25% of its total assets in the securities of
issuers in any single industry (other than securities issued by the
United States Government, its agencies or instrumentalities); or

(10) purchase securities of other investment companies, except in
the open market and at customary brokerage rates and in no event
more than 3% of the voting securities of any investment company;
when consistent with its investment objectives, the Portfolio may
purchase securities of brokers, dealers, underwriters or investment
advisers.

SOCIAL AWARENESS STOCK PORTFOLIO

INVESTMENT OBJECTIVE AND POLICIES

The investment objective of the Social Awareness Stock Portfolio is
long-term capital appreciation and retention of net investment income. The
Portfolio seeks to fulfill this objective by selecting investments, primarily
common stocks, that Smith Barney Mutual Fund Management, Inc. ("SBMFM")
determines meet certain social criteria, based on analysis of data. It is up
to the discretion of the investment adviser to determine the source for the
data. This principal objective does not preclude the realization of short-term
gains when conditions suggest the long-term goal is accomplished by such
short-term transactions.

The assets of the Social Awareness Portfolio generally will be invested in
a portfolio of equity securities, primarily common stocks, diversified across
industries and companies. However, when it is determined that investments of
other types may be advantageous for defensive purposes or for temporary
investment of cash flows, investments may be made in bonds, notes or other
evidence of indebtedness, issued publicly or placed privately, deemed to be of
suitable credit quality, including obligations of the United States Government.

SOCIAL CRITERIA

The Social Awareness Stock Portfolio utilizes certain social criteria to
define a universe of common stocks that are acceptable investment vehicles for
the Portfolio. Companies will not meet the social criteria established for the
Portfolio if a significant portion of their revenues, as determined by SBMFM,
are derived from (a) the production of tobacco, tobacco products, alcohol, or
military defense systems; or (b) the provision of military defense related
services, or gambling services. These investment restrictions are not
fundamental and may be changed without shareholder approval.

If a company fails a social criteria restriction after the Social
Awareness Portfolio has purchased its common stock or should the Portfolio
inadvertently acquire a security which is not an acceptable investment, SBMFM
will eliminate the securities of such company from the Social Awareness
Portfolio's portfolio in an orderly manner within a reasonable period of time.

<PAGE> 104

INVESTMENT RESTRICTIONS

The investment restrictions set forth in Items 1 through 9 below are
fundamental and may not be changed without a vote of a majority of the
outstanding voting securities of the Portfolio, as defined in the 1940 Act.

Items 10 through 13 may be changed by a vote of the Board of Trustees. The
Social Awareness Stock Portfolio will not:

(1) invest more than 5% of its total assets in securities of any
one issuer, except obligations of the United States Government and
its instrumentalities;

(2) borrow money, except that the right is reserved to borrow
from banks for emergency purposes, provided that such borrowings
will not exceed 5% of the value of the assets of the Portfolio and
that immediately after the borrowing, and at all times thereafter,
and while any such borrowing is unrepaid, there will be asset
coverage of at least 300% for all borrowings of the Portfolio;

(3) underwrite securities of other issuers, except that the
Portfolio could be deemed an underwriter when engaged in the sale of
restricted securities (see item 13);

(4) purchase interests in real estate, except as may be
represented by securities for which there is an established market;

(5) purchase commodities or commodity contracts, except
transactions involving financial futures in order to limit
transaction and borrowing costs and for hedging purposes;

(6) make loans, except through the acquisition of a portion of
privately placed issue of bonds, debentures or other evidences of
indebtedness of a type customarily purchased by institutional
investors (see item 13);

(7) invest in the securities of a company for the purpose of exercising
management or control;

(8) acquire more than 10% of the voting securities of any one
issuer (it is the present practice of the Portfolio not to exceed 5%
of the voting securities of any one issuer);

(9) issue senior securities;

(10) make short sales of securities;

(11) make purchases on margins, except for short-term credits
which are necessary for the clearance of transactions, and to place
not more than 5% of its net asset value in total margin deposits for
positions in futures contracts;

(12) invest in securities of other investment companies, except as
part of a plan of merger, consolidation or acquisition of assets; or

(13) invest more than 5% of the value of the assets of the
Portfolio in restricted securities (securities which may not be
publicly offered without registration under the Securities Act of
1933).

Changes in the investments of the Portfolio may be made from time to time
to take into account changes in the outlook for particular industries or
companies. The Portfolio's investments will not, however, be concentrated in
any one industry; that is, no more than twenty-five percent (25%) of the value
of its assets will be

<PAGE> 105

invested in any one industry. While the Portfolio may occasionally invest in
foreign securities, it is not anticipated that such investments will, at any
time, account for more than ten percent (10%) of its
investment portfolio.

The assets of the Portfolio will be kept fully invested except that (a)
sufficient cash may be kept on hand reasonably to provide for variable annuity
contract obligations, and (b) reasonable amounts of cash, United States
Government or other liquid securities, such as short-term bills and notes, may
be held for limited periods, pending investments in accordance with their
respective investment policies.

UTILITIES PORTFOLIO

INVESTMENT OBJECTIVE AND POLICIES

The primary investment objective of the Utilities Portfolio (the
"Portfolio") is to provide current income. Long-term capital appreciation is a
secondary objective. The Portfolio seeks to achieve its objectives by
investing in equity and debt securities of companies in the utility industries,
which industries are deemed for these purposes to be comprised of companies
principally engaged (that is, at least 50% of a company's assets, gross income
or net profits results from utility operations or the company is regulated as a
utility by a government agency or authority) in the manufacture, production,
generation, transmission and sale of electric and gas energy and companies
principally engaged in the communications field, including entities such as
telephone, telegraph, satellite, microwave and other companies regulated by
governmental agencies as utilities that provide communication facilities for
the public benefit, but not including those in public broadcasting. The
Portfolio will invest primarily in utility equity and debt securities that have
a high expected rate of return, as determined by the investment adviser. Under
normal market conditions, the Portfolio will invest at least 65% of its assets
in such securities. The Portfolio may invest up to 35% of its assets in equity
and debt securities of non-utility companies believed to afford a reasonable
opportunity for achieving the Portfolio's investment objectives. When the
investment adviser believes that market conditions warrant, the Portfolio may
adopt a temporary defensive posture and may invest, without limit, in debt
securities (whether or not they are utility securities) such as rated or
unrated bonds, debentures and commercial paper, United States government
securities and money market instruments. The Portfolio may invest up to 10% of
its assets in securities rated BB or B by Standard & Poor's Corporation ("S&P")
or Ba or B by Moody's Investors Service, Inc. ("Moody's") whenever the
investment adviser believes that the incremental yield on such securities is
advantageous to the Portfolio in comparison to the additional risk involved.
The yields on lower-rated fixed-income securities generally are higher than the
yields available on higher-rated securities. However, investments in
lower-rated securities may be subject to greater market fluctuations and
greater risks of loss of income or principal (including the possibility of
default by, or bankruptcy of, the issuers of such securities) than higher-rated
securities. Lower-rated securities also may have speculative characteristics.
In addition, the Portfolio may enter into repurchase agreements.

INVESTMENT RESTRICTIONS

The investment restrictions set forth below are fundamental and may not be
changed without a vote of a majority of the outstanding voting securities of
the Portfolio, as defined in the 1940 Act. The Utilities Portfolio will not:

(1) purchase the securities of any issuer (other than U.S.
government securities) if as a result more than 5% of the value of
the Portfolio's total assets would be invested in the securities of
the issuer, except that up to 25% of the value of the Portfolio's
total assets may be invested without regard to this 5% limitation;

(2) purchase more than 10% of the voting securities of any one
issuer, provided that this limitation shall not apply to investments
in U.S. government securities;

<PAGE> 106

(3) purchase securities on margin, except that the Portfolio may
obtain any short-term credits necessary for the clearance of
purchases and sales of securities (for purposes of this restriction,
the deposit or payment of initial or variation margin in connection
with futures contracts or related options will not be deemed to be a
purchase of securities on margin by the Portfolio);

(4) make short sales of securities or maintaining a short
position, except to the extent of 5% of the Portfolio's net assets
and except that the Portfolio may engage in such activities without
limit if, at all times when a short position is open, the Portfolio
owns an equal amount of the securities or securities convertible
into or exchangeable, without payment of any further consideration,
for securities of the same issuer as, and at least equal in amount
to, the securities sold short;

(5) borrow money, including reverse repurchase agreements, except
that the Portfolio may borrow from banks for temporary or emergency
(not leveraging) purposes including the meeting of redemption
requests that might otherwise require the untimely disposition of
securities, in an amount not exceeding 20% of the value of the
Portfolio's total assets (including the amount borrowed) valued at
market less liabilities (not including the amount borrowed) at the
time the borrowing is made. Whenever borrowings exceed 5% of the
value of the Portfolio's total assets, the Portfolio will not make
any additional investments;

(6) pledge, hypothecate, mortgage or otherwise encumber more than
10% of the value of the Portfolio's total assets as security for any
indebtedness (for purposes of this restriction (a) the deposit of
assets in escrow in connection with the writing of covered put or
call options and the purchase of securities on a when-issued or
delayed-delivery basis and (b) collateral arrangements with respect
to (i) the purchase and sale of stock options, options on foreign
currencies and options on stock indexes and (ii) initial or
variation margin for futures contracts will not be deemed to be
pledges of the Portfolio's assets);

(7) invest in commodities, except that the Portfolio may purchase
or write futures contracts and options on futures contracts as
described in this Prospectus;

(8) make loans to others, except through the purchase of
qualified debt obligations, loans of portfolio securities and the
entry into repurchase agreements; and

(9) concentrate in any industry, except that the Portfolio will
concentrate in excess of 25% of its assets in the securities of
companies within the utility industries.

In addition, the Portfolio will not purchase restricted securities,
illiquid securities (such as repurchase agreements with maturities in excess of
seven days) or other securities that are not readily marketable if more than
10% of the total assets of the Portfolio would be invested in such securities.

ZERO COUPON BOND FUND PORTFOLIOS
(SERIES 1998, 2000, 2005)

INVESTMENT OBJECTIVE AND POLICIES

The objective of each of the three Zero Coupon Bond Portfolios is to
provide as high an investment return as is consistent with the preservation of
capital. Each Portfolio's investment objective may be changed only with the
approval of a majority of the Portfolio's outstanding shares. There can be no
assurance that a Portfolio will achieve its investment objective.

<PAGE> 107

Each Portfolio seeks to return a reasonably assured targeted dollar amount,
predictable at the time of investment, on a specific target date in the future
by investing in primarily zero coupon securities that pay no cash income but
are acquired by the Portfolio at substantial discounts from their value at
maturity. The Zero Coupon Bond Portfolios may not be appropriate for contract
owners who do not plan to have their premiums invested in shares of the
Portfolios for the long-term or until maturity.

INVESTMENT SECURITIES, STRATEGIES AND TECHNIQUES

Under normal circumstances, each Zero Coupon Bond Portfolio will invest at
least 65% of its net assets in "Stripped Securities," a term used collectively
for Stripped Treasury Securities, Stripped Government Securities, Stripped
Corporate Securities and Stripped Eurodollar Obligations and other stripped
securities, all described below. The Stripped Securities in which each
Portfolio will invest consist of:

(1) debt obligations issued by the U.S. Treasury that have been
stripped of their unmatured interest coupons, interest coupons that
have been stripped from debt obligations issued by the U.S.
Treasury, and receipts and certificates for stripped debt
obligations and stripped coupons, including U.S. government trust
certificates (collectively, "Stripped Treasury Securities") (but
currently not anticipated to be in excess of 55% of the Funds'
assets);

(2) other zero coupon securities issued by the U.S. government
and its agencies and instrumentalities, by a variety of tax-exempt
issuers such as state and local governments and their agencies and
instrumentalities and by "mixed-ownership government corporations"
(collectively, "Stripped Government Securities");

(3) zero coupon securities issued by domestic corporations which
consist of corporate debt obligations without interest coupons, and,
if available, interest coupons that have been stripped from
corporate debt obligations, and receipts and certificates for such
stripped debt obligations and stripped coupons (collectively,
"Stripped Corporate Securities");

(4) zero coupon securities issued by certain entities which
consist of stripped debt obligations and stripped coupons of
asset-backed securities, which zero coupon-type securities may exist
today or may be developed in the future. These securities may be
illiquid and are subject to the 10% limitation for such restricted
securities, as described on page 4.

(5) stripped Eurodollar obligations, which are debt securities
denominated in U.S. dollars that are issued by foreign issuers,
often subsidiaries of domestic corporations ("Stripped Eurodollar
Obligations").

As to the remaining 35% of each Zero Coupon Bond Portfolio, the assets may
be invested in non-zero coupon securities such as common stock and other equity
securities, bonds and other debt securities, and money market instruments.

INVESTMENT RESTRICTIONS

The investment restrictions set forth below are fundamental and may not be
changed without a vote of majority of the outstanding voting securities of each
Zero Coupon Bond Portfolio, as defined in the Investment Company Act of 1940,
as amended. Each of the Zero Coupon Bond Portfolios will not:

(1) purchase the securities of any issuer (other than U.S.
government securities) if as a result more than 5% of the value of
the Portfolio's total assets would be invested in the securities of
the issuer, except that up to 25% of the value of the Portfolio's
total assets may be invested without regard to this 5% limitation;

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(2) purchase more than 10% of the voting securities of any one
issuer, provided that this limitation shall not apply to investments
in U.S. government securities;

(3) purchase securities on margin, except that each Portfolio may
obtain any short-term credits necessary for the clearance of
purchases and sales of securities. For purposes of this
restriction, the deposit or payment of initial or variation margin
in connection with futures contracts or related options will not be
deemed to be a purchase of securities on margin by a Portfolio;

(4) make short sales of securities or maintain a short position,
except to the extent of 5% of each Portfolio's net assets and except
that a Portfolio may engage in such activities without limit if, at
all times when a short position is open, the Portfolio owns an equal
amount of the securities or securities convertible into or
exchangeable, without payment of any further consideration, for
securities of the same issuer as, and at least equal in amount to,
the securities sold short;

(5) borrow money, including reverse repurchase agreements, except
that each Portfolio may borrow from banks for temporary or emergency
(not leveraging) purposes including the meeting of redemption
requests that might otherwise require the untimely disposition of
securities, in an amount not exceeding 20% of the value of the
Portfolio's total assets (including the amount borrowed) valued at
market less liabilities (not including the amount borrowed) at the
time the borrowing is made. Whenever borrowings exceed 5% of the
value of a Portfolio's total assets, the Portfolio will not make any
additional investments;

(6) pledge, hypothecate, mortgage or otherwise encumber more than
10% of the value of a Portfolio's total assets as security for any
indebtedness. For purposes of this restriction (a) the deposit of
assets in escrow in connection with the writing of covered put or
call options and the purchase of securities on a when-issued or
delayed-delivery basis and (b) collateral arrangements with respect
to (i) the purchase and sale of stock options, options on foreign
currencies and options on stock indexes and (ii) initial or
variation margin for futures contracts will not be deemed to be
pledges of a Portfolio's assets;

(7) invest in commodities, except that each Portfolio may
purchase or write futures contracts and options on futures contracts
as described in this Prospectus;

(8) make loans to others, except through the purchase of
qualified debt obligations, loans of portfolio securities and the
entry into repurchase agreements; and

(9) concentrate in any industry.

In addition, the Portfolios will not purchase restricted securities,
illiquid securities (such as repurchase agreements with maturities in excess of
seven days) or other securities that are not readily marketable if more than
10% of the total assets of a Portfolio would be invested in such securities.

TRAVELERS QUALITY BOND PORTFOLIO ("TRAVELERS BOND PORTFOLIO")
INVESTMENT OBJECTIVES AND POLICIES

The basic investment objective of Travelers Bond Portfolio is to seek current
income, moderate capital volatility and total return.

The assets of Travelers Bond Portfolio will be primarily invested in money
market obligations, including, but not limited to:

- - treasury bills;
- - repurchase agreements;

<PAGE> 109

- - commercial paper;
- - bank certificates of deposit and bankers' acceptances; and
- - publicly traded debt securities, including bonds, notes, debentures,
equipment trust certificates and short-term instruments.

The Portfolio will be actively managed and investments may be sold prior to
maturity if deemed advantageous in light of factors such as market conditions
or brokerage costs. While the investments of Travelers Bond Portfolio are
generally not listed securities, there are firms which make markets in the type
of debt instruments that Travelers Bond Portfolio holds. No problems of
liquidity are anticipated with regard to the investments of Travelers Bond
Portfolio.

From time to time, Travelers Bond Portfolio may commit to purchase new-issue
government or agency securities on a "when-issued" basis (referred to
throughout as "when-issued securities"). Travelers Bond Fund may also purchase
and sell interest rate futures contracts to hedge against changes in interest
rates that might otherwise have an adverse effect upon the value of the
Travelers Bond Portfolios securities. See Exhibit A to the Prospectus for a
more complete description of these investment techniques.

INVESTMENT RESTRICTIONS

The Travelers Bond Portfolio is subject to certain investment restrictions.
Specifically, the Investment Adviser, on behalf of Travelers Bond Portfolio
may:

- - invest up to 15% of the value of its assets in the securities of any one
issuer (exclusive of obligations of the United States government and its
instrumentalities, for which there is no limit);
- - borrow from banks in amounts of up to 5% of itsassets, but only for
emergency purposes;
- - purchase interestsin real estate represented by securities for which there
is an established market;
- - make loans through the acquisition of a portion of a privately placed issue
of bonds, debentures or other evidences of indebtedness of a type
customarily purchased by institutional investors;
- - acquire up to 10% of the voting securities of any one issuer (it is the
present practice of Travelers Bond Portfolio not to exceed 5% of the voting
securities of any one issuer);
- - make purchases on margin in the form of short-term credits which are
necessary for the clearance of transactions; and place up to 5% of its net
asset value in total margin deposits for positions in futures contracts;
and
- - invest up to 5% of its assets in restricted securities (securities which
may not be publicly offered without registration under the Securities Act
of 1933).

Please see the Prospectus for additional information concerning this Portfolio.

LAZARD INTERNATIONAL STOCK PORTFOLIO
INVESTMENT OBJECTIVES AND POLICIES

The investment objective of the International Stock Portfolio is to seek
capital appreciation through investing primarily in the equity securities of
non-United States companies (i.e., incorporated or organized outside the United
States).

<PAGE> 110

The Portfolio expects to invest its assets principally in the following common
stocks of non-U.S. companies, (although the Portfolio may have substantial
investments in American Depository Receipts ("ADRs" and Global Depository
Receipts); convertible bonds; and other convertible securities.

There is no requirement, however, that the Portfolio invest exclusively in
common stocks or other equity securities, and, if deemed advisable, it may
invest up to 20% of the value of its total assets in fixed-income securities
and short-term money market instruments. The Portfolio will not invest in
fixed-income securities rated lower than investment grade.

The Subadviser recognizes that some of the best opportunities are in securities
not generally followed by investment professionals. Thus the Subadviser relies
on its research capability and also maintains a dialogue with foreign brokers
and with the management of foreign companies in an effort to gather the type of
"local knowledge" that it believes is critical to successful investment abroad.
To this end, the Subadviser communicates with its affiliates, Lazard Freres &
Cie. in Paris, Lazard Brothers & Co. Ltd. in London, and Lazard Freres K.K. in
Japan, for information concerning current business trends, as well as for a
better understanding of the management of local businesses. The information
supplied by these affiliates will be limited to statistical and factual
information, advice regarding economic factors and trends or advice as to
occasional transactions in specific securities.

The Portfolio may enter into foreign currency forward exchange contracts in
order to protect against anticipated changes in foreign currency exchange
rates.

In addition, the Lazard International Stock Portfolio may engage in the
following additional investment activities described in greater detail in the
attached Exhibit A: (i) trading of short term money market instruments; (ii)
lending of Portfolio securities; (iii) floating and variable rate instruments;
(iv) letters of credit; (v) purchase and sales of restricted securities; (vi)
investments in emerging or unseasoned companies.

INVESTMENT RESTRICTIONS

The following investment restrictions, except as otherwise noted, are
fundamental policies of the Portfolio that may be changed only when
permitted by law and approved by the holders of a majority of the
Portfolio's outstanding voting securities, as defined in the 1940 Act.
Please consult the SAI for additional information concerning investment
restrictions.

The Lazard International Stock Portfolio may not:

<PAGE> 111

- - issue senior securities, borrow money or pledge or mortgage its assets,
except that the Portfolio may borrow from banks for temporary purposes,
including the meeting of redemption requests which might require the
untimely disposition of securities. For purposes of this investment
restriction, the Portfolio's entry into options, forward contracts,
futures contracts, including those related to indexes shall not constitute
borrowing;
- - make loans, except loans of portfolio securities not having a value in
excess of 10% of the Portfolio's total assets and except that the
Portfolio may purchase debt obligations in accordance with its investment
objectives and policies;
- - invest in illiquid securities if immediately after such investment more
than 10% of the value of the Portfolio's net assets, taken at market
value, would be invested in such securities;
- - purchase securities of other investment companies, except in connection
with a merger, consolidation, acquisition or reorganization; provided,
however, the Lazard International Stock Portfolio may purchase securities
in an amount up to 5% of the value of its total assets in any one
closed-end fund and may purchase in the aggregate securities of closed-end
funds in an amount of up to 10% of the value of the Portfolio's total
assets;
- - purchase the securities of issuers conducting their principal business in
the same industry, if the value of the value of the Portfolio's
investment exceeds 25% of the Portfolio's then current net asset value;
- - purchase or sell real estate except in a manner consistent with specific
rules described in greater detail in the SAI;
- - purchase securities on margin;
- - underwrite securities; or
- - make investments for the purpose of exercising control or management.

MFS EMERGING GROWTH PORTFOLIO ("MFS PORTFOLIO")
INVESTMENT OBJECTIVES AND POLICIES

MFS Portfolio's investment objective is to seek to provide long-term growth of
capital. Dividend and interest income from portfolio securities, if any, is
incidental to the MFS Portfolio's investment objective. MFS Portfolio's policy
is to invest primarily (i.e., at least 80% of its assets under normal
circumstances) in common stocks of small and medium-sized companies that are
early in their life cycle but which have the potential to become major
enterprises (emerging growth companies). Such companies generally would be
expected to show earnings growth over time that is well above the growth rate
of the overall economy and the rate of inflation, and would have the products,
management and market opportunities which are usually necessary to become more
widely recognized as growth companies.

However, the MFS Portfolio may also invest in more established companies whose
rates of earnings growth are expected to accelerate because of special factors,
such as rejuvenated management, new products, changes in consumer demand, or
basic changes in the economic environment.

The MFS Portfolio will invest primarily in common stocks. Other investments
are allowed, including, but not limited to those described below. (Refer to
Exhibit A for a discussion of these investment techniques.) MFS may invest
in, or write (as applicable), the following:

- - foreign or convertible securities and warrants when relative values make
such purchases appear attractive either as individual issues or as types
of securities in certain economic environments (see Exhibit A);
- - foreign currency and forward foreign currency exchange contracts for the
purchase or sale of foreign currency for hedging purposes and non-hedging
purposes, including transactions entered into for the purpose of

<PAGE> 112
profiting from anticipated changes in foreign currency exchange rates, as
well as options on foreign currencies;
- - foreign securities (up to 25% of its total assets) which may be traded on
foreign exchanges (not including American Depository Receipts ("ADRs")).
(It expects generally to invest between 0% to 10% in such securities.);
- - emerging market securities;
- - cash equivalents or other forms of debt securities as a reserve for future
purchases of common stock or to meet liquidity needs;
- - corporate asset-backed securities;
- - covered call and put options and may purchase call and put options on
securities and stock indices in an effort to increase current income and
for hedging purposes;
- - stock index futures contracts and options thereon for hedging purposes and
for non-hedging purposes, subject to applicable law;
- - portfolio securities purchased on a "when-issued" or on a "forward
delivery" basis; and
- - loan participations.

In addition, MFS Portfolio may engage in certain investment activity described
in greater detail n the attached Exhibit A: (i) lending of Portfolio
securities; (ii) repurchase agreements; (iii) purchase and sales of restricted
securities; (iv) when issued securities; (v) corporate asset-backed securities;
(vi) loan participation and other direct indebtedness; (vi) foreign securities;
(vii) ADRs; (viii) emerging market securities; and (ix) various futures and
option trading techniques.

INVESTMENT RESTRICTIONS

The MFS Portfolio is subject to certain investment restrictions listed below
and discussed in greater detail in the SAI. The MFS Portfolio will not:

- - borrow money in an amount in excess of 33 1/3% of its net assets;
- - underwrite securities;
- - concentrate its investments in any particular industry in excess of 25% of
its total net assets;
- - purchase or sell real estate in the ordinary course of its business;
- - make loans except bythe purchase of obligations in which the Portfolio is
authorized to invest;
- - purchase the securities of any issuer if such purchase, at the time
thereof, would cause more than 5% of its total assets to be invested in the
securities of such issuer;
- - invest for the purpose of control or management;
- - purchase securities on margin, except as provided in the SAI;
- - issue any senior security; and
- - purchase, except on a limited basis, securities issued by any other
registered investment company.

FEDERATED HIGH YIELD PORTFOLIO
INVESTMENT OBJECTIVES AND POLICIES

The investment objective of the Federated High Yield Portfolio is to seek high
current income by investing primarily in a professionally managed, diversified
portfolio of fixed income securities. The fixed income securities in which the
Federated High Yield Portfolio intends to invest are expected to be lower-rated
corporate debt obligations. The investment objective stated above and the
investment policies and limitations described below cannot be changed without
approval of shareholders.

<PAGE> 113

- - corporate debt obligations having fixed or floating rates of interest and
which are rated BBB or lower by nationally recognized statistical rating
organizations;
- - commercial paper;
- - obligations of the United States;
- - notes, bonds, and discount notes of U.S. government agencies or
instrumentalities, such as the: Farm Credit System, including the National
Bank for Cooperatives and Banks for Cooperatives; Federal Home Loan Banks;
Federal Home Loan Mortgage Corporation; Federal National Mortgage
Association; Government National Mortgage Association; Export-Import Bank
of the United States; Commodity Credit Corporation; Federal Financing
Bank; Student Loan Marketing Association; National Credit Union
Administration and Tennessee Valley Authority;
- - time and savings deposits (including certificates of deposit) in
commercial or savings banks whose deposits are insured by the Bank
Insurance Fund ("BIF") or the Savings Association Insurance Fund ("SAIF"),
including certificates of deposit issued by and other time deposits in
foreign branches of BIF-insured banks;
- - bankers' acceptances issued by a BIF-insured bank, or issued by the bank's
Edge Act subsidiary and guaranteed by the bank, with remaining maturities
of nine months or less. The total acceptances of any bank held by the
Federated High Yield Portfolio cannot exceed 0.25 of 1% of such bank's
total deposits according to the bank's last published statement of
condition preceding the date of the acceptance; and
- - general obligations of any state, territory, or possession of the United
States, or their political subdivisions, so long as they are either (1)
rated in one of the four highest grades by nationally recognized
statistical rating organizations, or (2) issued by a public housing agency
and backed by the full faith and credit of the United States.

In addition to the investment techniques described above, the Federated High
Yield Portfolio may also engage in the following investment techniques
described in greater detail in Exhibit A to the Prospectus: (i) restricted
securities; (ii) when-issued securities; (iii) temporary investments; (iv)
repurchase agreements; (v) put and call options; and (vi) lending of portfolio
securities.

INVESTMENT RESTRICTIONS

The Federated High Yield Portfolio will not:

- - borrow money directly or through reverse repurchase agreements
(arrangements in which the Federated High Yield Portfolio sells a portfolio
instrument for a percentage of its cash value with an agreement to buy it
back on a set date) except, under certain circumstances, the Federated High
Yield Portfolio may borrow up to one-third of the value of its net assets;
- - sell securities short except, under strict limitations, the Federated High
Yield Portfolio may maintain open short positions so long as not more than
10% of the value of its net assets is held as collateral for those
positions;
- - pledge assets except to secure permitted borrowing; or

<PAGE> 114

- - purchase the securities of other investment companies, except in limited
situations.

The above investment limitations cannot be changed without shareholder
approval. The following limitations, however, may be changed by the Board of
Trustees without shareholder approval. Shareholders will be notified before any
material changes in these limitations become effective.

- - invest more than 5% of its total assets in securities of issuers that have
records of less than three years of continuous operations;
- - commit more than 5% of the value of its total assets to premiums on open
put option positions;
- - invest more than 5% of the value of its total assets in securities of one
issuer (except cash and cash items, repurchase agreements, and U.S.
government obligations) or acquire more than 10% of any class of voting
securities of any one issuer;
- - invest more than 10% of the value of its total assets in foreign securities
which are not publicly traded in the United States;
- - invest directly in minerals;
- - underwrite securities;
- - invest more than 5% in put options;
- - write covered call options unless the securities are held by the Portfolio;
or
- - invest in real estate.

FEDERATED STOCK PORTFOLIO ("FEDERATED STOCK PORTFOLIO")
INVESTMENT OBJECTIVES AND POLICIES

The investment objective of the Portfolio is to provide growth of income and
capital by investing principally in a professionally managed and diversified
portfolio of common stock of high-quality companies. These companies generally
are leaders in their industries and are characterized by sound management and
the ability to finance expected growth. While there is no assurance that the
Portfolio will achieve its investment objective, it endeavors to do so by
following the investment policies described in this prospectus. Unless
otherwise stated, the investment objective and the policies and limitations
described below cannot be changed without the approval of shareholders.

The Portfolio's investment approach is based on the conviction that over the
long term the economy will continue to expand and develop and that this
economic growth will be reflected in the growth of the revenues and earnings of
major corporations. The Portfolio invests primarily in common stocks of
companies selected by the Portfolio's Subadviser on the basis of traditional
research techniques, including assessment of earnings and dividend growth
prospects and of the risk and volatility of the company's industry.
Ordinarily, these companies will be in the top 25% of their industries with
regard to revenues. However, other factors, such as product position or market
share, will be considered by the Portfolio's Subadviser and may outweigh
revenues. Other permitted investments include, but are not limited to:

- - preferred stocks, corporate bonds, notes, and warrants of these companies.
The prices of fixed income securities generally fluctuate inversely to
the direction of interest rates.;
- - U.S. government securities;
- - repurchase agreements;
- - money market instruments;
- - securities of foreign issuers which are freely traded on United States
securities exchanges or in the over-the-counter market in the form of
American Depository Receipts ("ADRs") (in an amount of not more than 10%
if its assets); and
- - when-issued securities.

<PAGE> 115

See Exhibit A and the Prospectus for a more detailed discussion of the above
investments.

INVESTMENT RESTRICTIONS

- - borrow money or pledge securities except, under certain circumstances, the
Portfolio may borrow up to one-third of the value of its total assets and
pledge up to 10% of the value of those assets to secure such borrowings;
- - invest more than 5% of its total assets in the securities of one issuer
(except cash and cash items and U.S. government securities);
- - invest more than 5% of total assets in securities of issuers that have
records of less than three years of continuous operations;
- - invest more than 10% of its total assets in securities subject to
restrictions on resale;
- - acquire more than 10% of the voting securities of any one issuer;
- - invest in real estate;
- - issue senior securities;
- - trade in puts and calls; or
- - underwrite securities.

LARGE CAP PORTFOLIO ("LARGE CAP PORTFOLIO")

INVESTMENT OBJECTIVES AND POLICIES

The Portfolio will invest primarily in the following:

- - large market capitalization companies defined as those companies with
market capitalizations of $1 billion or more at the time of the
Portfolio's investment. Companies whose capitalization falls below this
level after purchase continue to be considered large-capitalized for
purposes of the 65% policy;
- - equity securities;
- - debt securities;
- - foreign securities;
- - repurchase agreements; and
- - restricted securities.

The Portfolio also reserves the right to invest without limitation in preferred
stocks and investment-grade debt instruments for temporary, defensive purposes,
and to lend portfolio securities.

Policies and limitations are considered at the time of purchase; the sale of
instruments is not required in the event of a subsequent change in
circumstances.

The Subadviser may use various investment techniques to hedge a
portion of the fund's risks, but there is no guarantee that these strategies
will work as intended. The Portfolio seeks to spread investment risk by
diversifying its holdings among many companies and industries.

<PAGE> 116

More detailed information about the Portfolio's investments policies and
restrictions is contained in the SAI.

INVESTMENT RESTRICTIONS

Some of the policies and restrictions discussed below are fundamental, that
is, subject to change only by shareholder approval. The following
restrictions are fundamental:

- - With respect to 75% of the Portfolio's total assets, purchase the
securities of any issuer (other than securities issues or guaranteed by
the U.S. government or any of its agencies or instrumentalities) if, as a
result, (a) more than 5% of the Portfolio's total assets would be
invested in the securities of that issuer, or (b) the Portfolio's would
hold more than 10% of the outstanding voting securities of that issuer;
- - Issue senior securities, except as permitted under the 1940 Act;
- - Borrow money, except that the fund may borrow money for temporary or
emergency purposes (not for leveraging or investment) in an amount not
exceeding 33 1/3% of its total assets (including the amount borrowed) less
liabilities (other than borrowings). Any borrowings that come to exceed
this amount will be reduced within three days (not including Sundays and
holidays) to the extent necessary to comply with the 33 1/3% limitation;
- - underwrite securities;
- - purchase the securities of any issuer (other than securities issued or
guaranteed by the U.S. government or any of its agencies or
instrumentalities) if, as a result, more than 25% of the Portfolio's total
assets would be invested in the securities of companies whose principal
business activities are in the same industry;
- - purchase or sell real estate unless acquired as a result of ownership of
securities or other instruments (but this shall not prevent the Portfolio
from investing in securities or other instruments backed by real estate or
securities or companies engaged in the real estate business);
- - purchase or sell physical commodities unless acquired as a result of
ownership of securities or other instruments;
- - lend any security or make any other loan if, as a result, more than 33
1/3% of its total assets would be lent to other parties, but this
limitation does not apply to purchases of debt securities or to repurchase
agreements;
- - the Portfolio may, notwithstanding any other fundamental investment policy
or limitation, invest all the assets in the securities of a single
open-end management investment company managed by the Subadviser or any
affiliate or successor with substantially the same investment objective,
policies, and limitations as the Portfolio.

THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE CHANGED
WITHOUT SHAREHOLDER APPROVAL.

- - The Portfolio does not currently intend to sell securities short, unless
it owns or has the right to obtain securities equivalent in kind and
amount to the securities sold short, and provided that transactions in
futures contracts and options are not deemed to constitute selling
securities short.
- - The Portfolio does not currently intend to purchase securities on margin,
except that the fund may obtain such short-term credits as are necessary
for the clearance of transaction, and provided that margin payments in
connection with futures contracts and options on futures shall not
constitute purchasing securities on margin.
- - The Portfolio may borrow money only (a) from a bank or from a registered
investment company or portfolio for which the Subadviser or an affiliate
serves as investment adviser or (b) by engaging in reverse repurchase
agreements with any party (reverse repurchase agreements are treated as
borrowings for purposes of fundamental investment limitation (3)). The
Portfolio will not purchase any security while borrowings representing
more than 5% of its total assets are outstanding. The Portfolio will not
borrow from other funds

<PAGE> 117

advised by the Subadviser or its affiliates if total outstanding
borrowings immediately after such borrowing would exceed 15% of the fund's
total assets.
- - The Portfolio does not currently intend to purchase any
security if, as a result, more than 10% of its net assets
would be invested in securities that are deemed to be
illiquid because they are subject to legal or contractual
restrictions on resale or because they cannot be sold or
disposed of in the ordinary course of business at
approximately the prices at which they are valued.
- - The Portfolio does not currently intend to purchase
interests in real estate investment trusts that are not
readily marketable or interests in real estate limited
partnerships that are not listed on an exchange or traded
on the NASDAQ National Market System if, as a result, the
sum of such interests and other investments considered
illiquid (described directly above) would exceed 10% of
the Portfolio's net assets.
- - The Portfolio does not currently intend to lend assets
other than securities to other parties, except by (a)
lending money (up to 5% of the fund's net assets) to a
registered investment company or portfolio for which the
Subadviser or an affiliate serves as investment adviser
or (b) acquiring loans, loan participations, or other
forms of direct debt instruments and, in connection
therewith, assuming any associated unfunded commitments
of the sellers. (This limitation does not apply to
purchases of debt securities or to repurchase
agreements.)
- - The Portfolio does not currently intend to (a) purchase
securities of other investment companies, except in the
open market where no commission except the ordinary
broker's commission is paid, or (b) purchase or retain
securities issued by other open-end investment companies.
Limitation (a) and (b) do not apply to securities
received as dividends, through offers of exchange, or as
a result of a reorganization, consolidation, or merger.
- - The Portfolio does not currently intend to invest in oil,
gas, or other mineral exploration or development programs
or leases.
- - The Portfolio does not currently intend to purchase
warrants, valued at the lower of cost or market, in
excess of 5% of the fund's total assets. Warrants
acquired by the fund in units or attached to securities
are not subject to these restrictions.
- - The Portfolio does not currently intend to purchase the
securities of any issuer (other than securities issued or
guaranteed by domestic or foreign governments or
political subdivisions thereof) if, as a result, more
than 5% of its total assets would be invested in the
securities of business enterprises that, including
predecessors, have a record of less than three years of
continuous operation.

EQUITY INCOME PORTFOLIO ("EQUITY INCOME PORTFOLIO")
INVESTMENT OBJECTIVES AND POLICIES

The Portfolio seeks reasonable income by investing primarily in
income-producing equity securities. Normally, at least 65% of the Portfolio's
total assets will be invested in these securities. The Portfolio has the
flexibility, however, to invest the balance in all types of domestic and
foreign securities, including bonds. The Portfolio seeks to achieve a yield
that beats that of the S&P 500. The Portfolio does not expect to invest in
debt securities of companies that do not have proven earnings or credit. When
choosing the Portfolio's investments, the Subadviser also considers the
potential for capital appreciation.

The value of the Portfolio's domestic and foreign investments varies in
response to many factors. Stock values fluctuate in response to the
activities of individual companies, and general market and economic
conditions. The value of bonds fluctuates based on changes in interest rates
and in the credit quality of the issuer. Investments in foreign securities
may involve risks in addition to those of U.S. investments, including
increased political and economic risk, as well as exposure to currency
fluctuations. The Subadviser may use various investment techniques to hedge
the Portfolio's risks, but there is no guarantee that these strategies will
work as the Subadviser intends. The Portfolio seeks to spread investment
risk by diversifying its holdings among many companies and industries.

<PAGE> 118

Policies and limitations are considered at the time of purchase; the sale of
instruments is not required in the event of a subsequent change in
circumstances.

More detailed information about the Portfolio's investments is contained in
Exhibit A and the Portfolio's Prospectus.

INVESTMENT RESTRICTIONS

The Equity Income Portfolio is subject to the same investment limitations as
the Large Cap Portfolio described above. Please refer to "Large Cap
- --Investment Restrictions" section of this prospectus and to the SAI for a
complete discussion of such applicable limitations.

In addition to those limitations, the Equity Income Portfolio will conform
its purchases of debt security to a stated debt quality policy. For
example, the Portfolio may make purchases of lower-rated debt securities if
such securities are rated at or above the stated level by Moody's or rated in
the equivalent categories of S&P, or is unrated but judged to be of
equivalent quality by the Subadviser. The Portfolio currently intends to
limit its investments in lower than Baa-quality debt securities to 20% of its
assets. (See Exhibit B of the Prospectus for a discussion of rating agency
procedures.)

VALUATION OF SECURITIES

The current values for the portfolio securities of the Portfolios are
determined as follows. Securities that are traded on an established exchange
are valued on the basis of the last sales price on the exchange where primarily
traded prior to the time of valuation. Securities traded in the
over-the-counter market, for which complete quotations are readily available,
are valued at the mean of the bid and asked prices at the time of valuation.
Short-term money market instruments having maturities of sixty days or less are
valued at amortized cost (original purchase price as adjusted for amortization
of premium or accretion of discount) which, when combined with accrued
interest, approximates market. Short-term money market instruments having
maturities of more than sixty days, for which complete quotations are readily
available, are valued at current market value. The Board of Trustees of the
Series Trust values the following at prices it deems in good faith to be fair:
(1) securities, including restricted securities, for which complete quotations
are not readily available, (2) listed securities if in the Board's opinion the
last sales price does not reflect a current market value or if no sale
occurred, and (3) other assets.

The Series Trust believes that reliable market quotations generally are
not readily available for purposes of valuing fixed income securities. As a
result, depending on the particular securities owned by either Portfolio, it is
likely that most of the valuations for such securities will be based upon their
fair value determined under procedures which have been approved by the Board of
Trustees. The Board of Trustees has authorized the use of a pricing service to
determine the fair value of the Portfolios' securities. Securities for which
market quotations are readily available are valued on a consistent basis at
that price quoted which, in the opinion of the Trustees or the person
designated by the Trustees to make the determination, most nearly represents
the market value of the

<PAGE> 119

particular security. Any securities for which market quotations are not
readily available or other assets are valued on a consistent basis at fair
value as determined in good faith using methods prescribed by the Trustees.

DISTRIBUTIONS AND TAXES

It is the Series Trust's intention to distribute dividends from net
investment income and all net realized capital gains from the Portfolios
annually in shares or, at the option of the shareholder, in cash. All of the
Portfolios have qualified, and intend to qualify in the future, as a regulated
investment company under Subchapter M of the Internal Revenue Code. Thus the
Portfolios are relieved of any federal income tax liability by distributing all
of their net investment income and net capital gains, if any, to its
shareholders.

When any Portfolio makes a distribution, it intends to distribute only its
net capital gains and such income as has been predetermined to the best of the
Portfolio's ability to be taxable as ordinary income. Therefore, net
investment income distributions will not be made on the basis of distributable
income as computed on the Portfolio's books, but will be made on a federal
taxation basis.

TRUSTEES AND OFFICERS

<TABLE>
<CAPTION>
Name Present Position and Principal Occupation During Last Five Years
- ---- ----------------------------------------------------------------
<S> <C>
*Heath B. McLendon Managing Director (1993-present), Smith Barney Inc. ("Smith
Chairman and Member Barney"); Chairman (1993-present), Smith Barney Strategy
388 Greenwich Street Advisors, Inc.; President (1994-present), Smith Barney Mutual
New York, New York Funds Management Inc.; Chairman and Director of forty-one
Age 62 investment companies associated with Smith Barney; Chairman,
Board of Trustees, Drew University; Trustee, The East New York
Savings Bank; Advisory Director, First Empire State
Corporation; Chairman, Board of Managers, seven Variable
Annuity Separate Accounts of The Travelers Insurance Company+;
Chairman, Board of Trustees, five Mutual Funds sponsored by The
Travelers Insurance Company++; prior to July 1993, Senior
Executive Vice President of Shearson Lehman Brothers Inc.

Knight Edwards Of Counsel (1988-present), Partner (1956-1988), Edwards &
Member Angell, Attorneys; Member, Advisory Board (1973-1994),
2700 Hospital Trust Tower thirty-one mutual funds sponsored by Keystone Group, Inc.;
Providence, Rhode Island Member, Board of Managers, seven Variable Annuity Separate
Age 72 Accounts of The Travelers Insurance Company+; Trustee, five
Mutual Funds sponsored by The Travelers Insurance Company.++

Robert E. McGill, III Retired manufacturing executive. Director (1983-1995),
Member Executive Vice President (1989-1994) and Senior Vice President,
295 Hancock Street Finance and Administration (1983-1989), The Dexter Corporation
Williamstown, Massachusetts (manufacturer of specialty chemicals and materials); Vice
Age 64 Chairman (1990-1992), Director (1983-1995), Life Technologies,
Inc. (life science/biotechnology products); Director,
(1994-present), The Connecticut Surety Corporation (insurance);
Director (1995-present), Calbiochem Novachem International
(life science/biotechnology products); Director (1995-present),
Chemfab Corporation (specialty materials manufacturer); Member,
Board of Managers, seven Variable Annuity Separate Accounts of
The Travelers
</TABLE>
21

<PAGE> 120
<TABLE>
<CAPTION>
<S> <C>
Insurance Company+; Trustee, five Mutual Funds
sponsored by The Travelers Insurance Company.++

Lewis Mandell Dean, College of Business Administration (1995-present),
Member Marquette University; Professor of Finance (1980-1995) and
606 N. 13th Street Associate Dean (1993-1995), School of Business Administration,
Milwaukee, WI 53233 and Director, Center for Research and Development in Financial
Age 53 Services (1980-1995), University of Connecticut; Director
(1992-present), GZA Geoenvironmental Tech, Inc. (engineering
services); Member, Board of Managers, seven Variable Annuity
Separate Accounts of The Travelers Insurance Company+;
Trustee, five Mutual Funds sponsored by The Travelers Insurance
Company.++

Frances M. Hawk Portfolio Manager (1992-present), HLM Management Company, Inc.
Member (investment management); Assistant Treasurer, Pensions and
222 Berkeley Street Benefits. Management (1989-1992), United Technologies
Boston, Massachusetts Corporation (broad- based designer and manufacturer of high
Age 48 technology products); Member, Board of Managers, seven Variable
Annuity Separate Accounts of The Travelers Insurance Company+;
Trustee, five Mutual Funds sponsored by The Travelers Insurance
Company.++

Ernest J. Wright Assistant Secretary (1994-present), Counsel (1987-present), The
Secretary to the Board Travelers Insurance Company; Secretary, Board of Managers,
One Tower Square seven Variable Annuity Separate Accounts of The Travelers
Hartford, Connecticut Insurance Company+; Secretary, Board of Trustees, five Mutual
Age 55 Funds sponsored by The Travelers Insurance Company.++

Kathleen A. McGah Assistant Secretary and Counsel (1995-present), The Travelers
Assistant Secretary to the Board Insurance Company; Assistant Secretary, Board of Managers,
One Tower Square seven Variable Annuity Separate Accounts of The Travelers
Hartford, Connecticut Insurance Company+; Assistant Secretary, Board of Trustees,
Age 45 five Mutual Funds sponsored by The Travelers Insurance
Company.++ Prior to January 1995, Counsel, ITT Hartford Life
Insurance Company.

Ian R. Stuart Vice President and Financial Officer, Financial Services
Treasurer Department (1994-present), Second Vice President and Financial
One Tower Square Officer, Financial Services Department (1991-1994), The
Hartford, Connecticut Travelers Insurance Company; Senior Manager (1986-1991), Price
39 Waterhouse; Treasurer, Board of Trustees, five Mutual Funds
sponsored by The Travelers Insurance Compny.++
</TABLE>

* These seven Variable Annuity Separate Accounts are: The Travelers Growth
and Income Stock Account for Variable Annuities, The Travelers Quality
Bond Account for Variable Annuities, The Travelers Money Market Account
for Variable Annuities, The Travelers Timed Growth and Income Stock
Account for Variable Annuities, The Travelers Timed Short-Term Bond
Account for Variable Annuities, The Travelers Timed Aggressive Stock
Account for Variable Annuities and The Travelers Timed Bond Account for
Variable Annuities.

** These five Mutual Funds are: Capital Appreciation Fund, Cash Income
Trust, High Yield Bond Trust, Managed Assets Trust and The Travelers
Series Trust.

* Mr. McLendon is an "interested person" within the meaning of the 1940
Act by virtue of his position as Managing Director of Smith Barney Inc., an
indirect wholly owned subsidiary of Travelers Group Inc. and also

<PAGE> 121

owns shares and options to purchase shares of Travelers Group Inc., the
indirect parent of The Travelers Insurance Company.

Members of the Board of Trustees who are also officers or employees of
Travelers Group Inc. or its subsidiaries are not entitled to any fee. Members
of the Board of Trustees who are not affiliated as employees of Travelers Group
Inc. or its subsidiaries receive an aggregate retainer of $17,000 for service
on the Boards of the five Mutual Funds sponsored by The Travelers Insurance
Company and the seven Variable Annuity Separate Accounts established by The
Travelers Insurance Company. They also receive an aggregate fee of $2,000 for
each meeting of such Boards attended.

DECLARATION OF TRUST

The Series Trust is organized as a Massachusetts business trust. Pursuant
to certain decisions of the Supreme Judicial Court of Massachusetts,
shareholders of such a trust may, under certain circumstances, be held
personally liable as partners for the obligations of the trust. However, even
if the Series Trust were held to be a partnership, the possibility of its
shareholders incurring financial loss for that reason appears remote because
the Series Trust's Declaration of Trust contains an express disclaimer of
shareholder liability for obligations of the Series Trust and requires that
notice of such disclaimer be given in each agreement, obligation or instrument
entered into or executed by the Series Trust or the Trustees, and because the
Declaration of Trust provides for indemnification out of Series Trust property
for any shareholder held personally liable for the obligations of the Series
Trust.

The Declaration of Trust provides that a Trustee shall be liable only for
his own willful defaults and, if reasonable care has been exercised in the
selection of officers, agents, employees or investment advisers, a Trustee
shall not be liable for the neglect or wrongdoing of any such person; provided,
however, that nothing in the Declaration of Trust shall protect a Trustee
against any liability for his willful misfeasance, bad faith, gross negligence
or the reckless disregard of his duties.

The Trustees were elected by Shareholders at a meeting held on October 30,
1992. After such meeting, no further meetings of shareholders for the purpose
of electing Trustees will be held, unless required by law, and unless and until
such time as less than a majority of the Trustees holding office have been
elected by shareholders, or if at the time of filling a vacancy less than
two-thirds of the Trustees holding office after filling the vacancy were
elected by shareholders, at which time the Trustees then in office will call a
shareholders' meeting for the election of Trustees.

Except as set forth above, the Trustees shall continue to hold office
indefinitely, unless otherwise required by law, and may appoint successor
Trustees. Any Trustee may voluntarily resign from office, or Trustees may be
removed from office (1) at any time by two-thirds vote of the Trustees; (2) by
a majority vote of Trustees where any Trustee becomes mentally or physically
incapacitated; and (3) either by declaration in writing or at a meeting called
for such purpose by the holders of not less than two-thirds of the outstanding
shares or other voting interests of the Trust. The Trustees are required to
call a meeting for the purpose of considering the removal of a person serving
as trustee, if requested in writing to do so by the holders of not less than
10% of the outstanding shares or other voting interests of the Trust. The
Series Trust is required to assist in Shareholders' communications. In
accordance with current laws, insurance companies will request voting
instructions from contract owners participating in variable annuity and/or
variable life insurance contracts held by their respective separate accounts.
Insurance companies will vote shares of the Portfolios in the same proportion
as the voting instructions received.

Voting rights are not cumulative, that is, the holders of more than 50% of
the shares voting on the election of Trustees can, if they choose to do so,
elect all of the Trustees of the Series Trust, in which event the holders of
the remaining shares will be unable to elect any person as a Trustee.

<PAGE> 122

No amendment may be made to the Declaration of Trust without a "vote of a
majority of the outstanding voting securities" of the Series Trust (as defined
in the 1940 Act).

INVESTMENT ADVISORY SERVICES

(1) engaging the services of one or more firms to serve as investment
adviser to the Portfolios;
(2) reviewing from time to time the investment policies and restrictions of
the Portfolios in light of the Portfolio's performance and otherwise
and after consultation with the Board, recommending any appropriate
changes to the Board;
(3) supervising the investment program prepared for the Portfolios by the
Subadviser;
(4) monitoring, on a continuing basis, the performance of the Portfolio's
securities;
(5) arranging for the provision of such economic and statistical data as
TGAM shall determine or as may be requested by the Board; and
(6) providing the Board with such information concerning important economic
and political developments as TGAM deems appropriate or as the Board
requests.

The Executive Committee of TGAM is comprised of the following persons:

JEFFREY B. LANE is Vice Chairman of Smith Barney ("SB"). He is responsible for
Asset Management, Mutual Funds, Futures and Commodities. Prior to joining
Primerica in early 1990, Mr. Lane was President and Chief Operating Officer at
Shearson Lehman Brothers Inc., a post he held since 1987. Mr. Lane served in a
number of management capacities for Shearson beginning in 1969, when he joined
Cogan, Berlind, Weill and Levitt, (a predecessor of Shearson Lehman Brothers)
as a security analyst. Mr. Lane serves as a Director of ICI Mutual Insurance
Company. Mr. Lane received his B.A. from New York University in 1964 and his
M.B.A. from Columbia in 1970.

BARRY BERLIN is a Managing Director of SB and the President and Chief
Investment Officer of SB Equity Management ("SBEM") and founded SBEM in 1983.
Previously, he was a Supervisory Analyst in the Equity Research Department and
a member of its Investment Policy Committee. Before joining Shearson in 1971,
Mr. Berlin was a Research Analyst for Reynolds & Co. He holds a B.A. from New
York University and has a total of 33 years of investment experience.

JESSICA BIBLIOWICZ is an Executive Vice President and head of SB Mutual Funds
and SB Insured Investor Group. Prior to joining SB, she spent eight years in
the Asset Management Division of Shearson Lehman Brothers. She then spent two
years as Director of Sales and Marketing for Prudential Mutual Funds. Ms.
Bibliowicz is a member of the Board of Governors of the Investment Company
Institute (ICI), the mutual fund association. Ms. Bibliowicz holds a B.A. from
Cornell University.

MAURITS EDERSHEIM is an Executive Fund Manager - Managing Director of SB, which
he joined in 1990. He was formerly a Principal of Drexel Burnham Lambert with
investment experience spanning well over forty years and serves as a member of
the Advisory Committee on the International Capital Markets of the New York
Stock Exchange. Mr. Edersheim is a graduate of Ecole De Sciences Politiques,
Paris, France.

<PAGE> 123

LAURIE A. HESSLEIN is an Executive Vice President of SB and director of the
Firm's Unit Investment Trust Business. Prior to joining SB, she worked for
Shearson Lehman Brothers from 1981 to 1990 as National Sales Manager for Unit
Trust. Ms. Hesslein received her B.A. in Economics from the University of
Pennsylvania.

HEATH MCLENDON is a Managing Director of SB and Chairman of the SB Mutual Funds
Board of Directors. He has been with SB or its predecessor firms since 1960.
He holds a B.A. from Stanford University and an M.B.A. from Harvard University
Graduate School of Business Administration.

THOMAS PULLING is a Managing Director of SB and Chairman and Chief Executive
Officer of Smith Barney Investment Advisers ("SBIA"). He has been with SB or
its predecessors since 1976. Prior to joining SB, he was a Vice President at
L.M. Rosenthal & Co., Inc. Mr. Pulling holds a B.A. from Princeton University.

BRUCE SARGENT is a Managing Director of SB and Chairman and Chief Executive
Officer for SB Capital Management. He joined Smith Barney in 1968 and is a
member of the New York Society of Security Analysts. He is a Chartered
Financial Analyst and holds a B.A. from Columbia College and an M.B.A. from
Columbia University School of Business.

THOMAS STILES is Chairman and Chief Executive Officer of Greenwich Street
Advisors and is Managing Director of SB. He acts as Chief Investment Officer
for SB Mutual Fund Company. Prior to joining SB, he was an Executive Vice
President and Director of E.F. Hutton. Mr. Stiles received his B.A. from Yale
University and an M.B.A. from Harvard University.

INVESTMENT SUBADVISERS

GENERAL

Under the terms of the Investment Subadvisory Agreements, the Subadviser
provides an investment program for the Portfolios. The Subadvisers make all
determinations with respect to the purchase and sale of the portfolio
securities (subject to the terms and conditions of the investment objectives,
policies, and restrictions of the Portfolio and to the supervision of the Board
of Trustees and TGAM) and places, in the name of the Portfolio, call orders for
execution of the portfolio transactions. In addition, only Fidelity Management
Resource, Inc. ("FMR") also executes the offers, while MFS, Lazard and
Federated only place the orders for TGAM to execute.

SUBADVISER: TAMIC ZERO COUPON BOND PORTFOLIO AND U.S. GOVERNMENT SECURITIES

Travelers Asset Management International Corporation ("TAMIC"), an
indirect wholly owned subsidiary of Travelers Group Inc., and Travelers
Quality Bond Portfolio pursuant to an investment advisory agreement
dated [____________] furnishes investment management and advisory
services to the U.S. Government Securities Portfolio in accordance with
the terms of an Investment Advisory Agreement which was approved by
shareholders at a meeting held on April 23, 1993. TAMIC also provides
advisery services to the Zero Coupon Bond Funds.

For furnishing investment management and advisory services to the U.S.
Government Securities Portfolio, TAMIC is paid an amount equivalent on an
annual basis to 0.3233% of the average daily net assets of the Portfolio. The
fee is computed daily and paid weekly. The total advisory fees paid to TAMIC
by the U.S. Government Securities Portfolio for the years ended December 31,
1993, 1994 and 1995 were $56,276, $82,937 and $85,175, respectively. Since the
Travelers Quality Bond is new, to date no advisory or subadvisory fees have
been paid to TAMIC to date.

<PAGE> 124

Under its Subadvisory Agreement with TGAM, TAMIC is paid an amount equivalent
on an annual basis of .3233% of the average daily net assets of the Fund..

TAMIC is a registered investment adviser which has provided investment advisory
services its incorporation in 1978. TAMIC is an indirect wholly owned
subsidiary of Travelers Group, Inc., and its principal offices are located at
One Tower Square, Hartford, Connecticut, 06183. TAMIC also provides investment
advice to individual and pooled pension and profit-sharing accounts, offshore
insurance companies affiliated with Travelers Insurance, and non-affiliated
insurance companies, both domestic and offshore.

LAZARD INTERNATIONAL EQUITY PORTFOLIO
SUBADVISER: LAZARD FRERES ASSET MANAGEMENT

Lazard Freres Asset Management ("Lazard"), 30 Rockefeller Plaza, New
York, New York 10020, has entered into an investment Subadvisory
agreement (the "Lazard Subadvisory Agreement") on behalf of the
Portfolio with TGAM to provide Subadvisory services to the Lazard
International Stock Portfolio. Pursuant to the Lazard Subadvisory
Agreement, Lazard will regularly provide the Portfolio with investment
research, advice and supervision and furnish continuously an investment
program for the Portfolio consistent with its investment objectives and
policies, including the purchase, retention and disposition of
securities.

Lazard Freres Asset Management is a division of Lazard Freres, a New
York limited liability company, which is registered as an investment
adviser with the Commission and is a member of the New York, American
and Midwest Stock Exchanges. Lazard Freres provides its clients with a
wide variety of investment banking, brokerage and related services.

Lazard Freres performs such brokerage services in conformity with Rule
17e-1 under the 1940 Act and procedures adopted by the Fund's Board of
Directors. In addition, the Investment Manager may allocate brokerage
transactions to brokers who direct to the Investment Manager persons who
purchase Fund shares.

TGAM pays the Subadviser an investment Subadvisory fee at the annual rate
of .8250% of the average daily net asset value of the Portfolio. The fee is
accrued daily and paid monthly.

MANAGEMENT OF LAZARD PORTFOLIO

Herbert Gullquist is primarily responsible for the day-to-day management
of the assets of the Portfolio. Mr. Gullquist is a Managing Director of
Lazard Freres, and has been with the Subadviser since 1982 He has also
acted as the Managing Director of the Lazard International Stock Fund, a
publicly traded mutual fund offered by Lazard Freres since that fund's
inception in 1992.

Collin R. Reinsberg is a Managing Director of Lazard Freres, and has been
with the Subadviser since 1992. Prior thereto, he was Executive Vice
President of General Electric Investment Company. He has also acted as
the Managing Director of the International Equity Fund since that fund's
inception.

MFS PORTFOLIO
SUBADVISER: MFS

MFS is America's oldest mutual fund organization. MFS and its predecessor
organizations have a history of money management dating from 1924 and the
founding of the first mutual fund in the United States, Massachusetts Investors
Trust. Net assets under the management of the MFS organization were
approximately $34.5 billion on behalf of approximately 1.6 million investor
accounts as of February 28, 1995. As of such date, the MFS organization
managed approximately $11.5 billion of assets invested in equity securities and
approximately $19.5 billion of assets invested in fixed income securities.
Approximately $3.1 billion of the assets

<PAGE> 125

managed by MFS are invested in securities of foreign issuers and non-U.S.
dollar denominated securities of U.S. issuers. MFS is a wholly owned
subsidiary of Sun Life of Canada (U.S.), which in turn is a wholly owned
subsidiary of Sun Life Assurance Company of Canada ("Sun Life").

For its services and facilities, TGAM pays MFS a management fee, computed and
paid monthly, in an amount equal to 0.75% of MFS Portfolio's average daily net
assets for its then-current fiscal year.

MANAGEMENT OF MFS PORTFOLIO

John W. Ballen a Senior Vice President of MFS, has been MFS Fund's portfolio
manager since MFS Portfolio's inception in 1986. Mr. Ballen has been employed
by the Lazard Freres since 1984.

The Directors of MFS are A. Keith Brodkin, Jeffrey L. Shames, Arnold D. Scott,
John D. McNeil and John R. Gardner. Mr. Brodkin is the Chairman, Mr. Shames is
the President and Mr. Scott is the Secretary and a Senior Executive Vice
President of MFS. Messrs. McNeil and Gardner are the Chairman and President,
respectively, of Sun Life. Sun Life, a mutual life insurance company, is one of
the largest international life insurance companies and has been operating in
the United States since 1895, establishing a headquarters office here in 1973.
The executive officers of MFS report to the Chairman of Sun Life.

FEDERATED HIGH YIELD PORTFOLIO
SUBADVISER: FEDERATED INVESTMENT COUNSELING, INC.

Federated Investment Counseling, Inc. ("Federated Investments") a Delaware
business Federated Portfolio organized on April 11, 1989, is a registered
investment adviser under the 1940 Act. It is a subsidiary of Federated
Investments. All of the Class A (voting) shares of Federated Investments are
owned by a Federated Portfolio, the trustees of which are John F. Donahue,
Chairman and Trustee of Federated Investments, Mr. Donahue's wife, and Mr.
Donahue's son, J. Christopher Donahue, who is President and Trustee of
Federated Investors.

Federated Management and other subsidiaries of Federated Investments serve as
investment advisers to a number of investment companies and private accounts.
Certain other subsidiaries also provide administrative services to a number of
investment companies. Total assets under management or administration by these
and other subsidiaries of Federated Investments are approximately $70 billion.
Federated Investments, which was founded in 1956 as Federated Investors, Inc.,
develops and manages mutual funds primarily for the financial industry.
Federated Investors' track record of competitive performance and its
disciplined, risk-averse investment philosophy serve approximately 3,500 client
institutions nationwide. Through these same client institutions, individual
shareholders also have access to this same level of investment expertise.

Pursuant to an agreement between TGAM and Federated Investments dated ________
acts as the Subadviser for the Federated High Yield Portfolio. In its capacity
as Subadviser, Federated Management continually conducts investment research
and supervision for the Federated Portfolio and is responsible for the purchase
or sale of portfolio instruments, for which it receives an annual fee from the
investment adviser.

Federated Management receives an annual investment advisory fee equal to .65 of
1% of the Federated Portfolio's average daily net assets for providing
Subadvisory services to the Portfolio.

MANAGEMENT OF THE FEDERATED HIGH YIELD PORTFOLIO

<PAGE> 126

has been a Vice President of the Federated Portfolio's investment adviser since
1988. Mr. Durbiano is a Chartered Financial Analyst and received his MBA in
Finance from the University of Pittsburgh.

FEDERATED STOCK PORTFOLIO
SUBADVISER: FEDERATED MANAGEMENT

Federated Management also serves as the Subadviser to the Federated Stock
Portfolio. (See "Federated High Yield Portfolio--Background" above for a
discussion of Federated Management.)

Federated Management serves as Subadviser to the Federated Stock Portfolio
pursuant to an agreement between itself and TGAM dated ____________. Pursuant
to this agreement, Federated Management will continually conducts investment
research and supervision for the Portfolio and is responsible for the purchase
or sale of portfolio instruments. For these services, Federated Management
will receive an annual fee of .6250% of 1% from the Portfolio.

MANAGEMENT OF FEDERATED STOCK PORTFOLIO

Peter R. Anderson serves as the Portfolio's senior portfolio manager. Mr.
Anderson has served in a similar capacity to the Federated Stock Fund, a
publicly traded mutual fund since 1982. Mr. Anderson joined Federated
Investors in 1972 as, and is presently a Senior Vice President of that company.
Mr. Anderson is a Chartered Financial Analyst and received his MBA in Finance
from the University of Wisconsin.

Frederick L. Plautz serves as the Federated Stock Portfolio's co-portfolio
manager. Mr. Plautz has served in a similar capacity to the Federated Stock
Fund since February 1994. Mr. Plautz joined Federated Investors in 1990 and
has been a Vice President of that company since October 1994. Prior to this,
Mr. Plautz served as an Assistant Vice President of the investment adviser.
Mr. Plautz was a portfolio manager at Banc One Asset Management Corp. from 1986
until 1990. Mr. Plautz received his M.S. in Finance from the University of
Wisconsin.

LARGE CAP PORTFOLIO
SUBADVISER: FIDELITY MANAGEMENT & RESEARCH COMPANY

Fidelity Management & Research Company, ("FMR") serves as the investment
Subadviser to the Large Cap Portfolio. FMR is an investment adviser registered
as such with the SEC. Its principal office is located at 82 Devonshire Street,
Boston, MA 02109-3614.

At present, the principal operating activities of FMR Corp. are those conducted
by three of its divisions as follows: FMR, which is the transfer and
shareholder servicing agent for certain of the funds advised by FMR; Fidelity
Investments Institutional Operations Company, which performs shareholder
servicing functions for institutional customers and funds sold through
intermediaries; and Fidelity Investments Retail Marketing Company, which
provides marketing services to various companies within the Fidelity
organization.

FMR serves as Subadviser to the Large Cap Portfolio pursuant to an agreement
between itself and TGAM dated ____________. Pursuant to this agreement, FMR
will continually conducts investment research and supervision for the Portfolio
and is responsible for the purchase or sale of portfolio instruments. For
these services, FMR will receive an annual fee of .75% of 1% from the
Portfolio.

<PAGE> 127

and advice on issuers based outside the United States. Under the
sub-subadvisory agreements, FMR pays FMR U.K. and FMR Far East fees equal to
110% and 105%, respectively, of the costs of providing these services.

The sub-Subadvisers may also provide investment management services. In
return, FMR pays FMR U.K. and FMR Far East a fee equal to 60% of its
management fee rate with respect to a Portfolio's investments that the
sub-Subadviser manages on a discretionary basis.

EQUITY INCOME PORTFOLIO
SUBADVISER: FIDELITY MANAGEMENT & RESEARCH COMPANY

FRM also serves as the Subadviser to the Equity Income Portfolio. See "Large
Cap Portfolio--Fidelity Resource Management--Background" above for a discussion
of FMR.

FMR serves as Subadviser to the Equity Income Portfolio pursuant to an
agreement between itself and TGAM dated ____________. Pursuant to this
agreement, FMR will continually conducts investment research and supervision
for the Portfolio and is responsible for the purchase or sale of portfolio
instruments. For these services, FMR will receive an annual fee of .75% of 1%
from the Portfolio.

MANAGEMENT OF EQUITY INCOME PORTFOLIO

The management of the Equity Income Portfolio is the same as that described
above for the Large Cap Portfolio. See "Large Cap Portfolio--Fidelity
Management Resource" above for a discussion of FMR's Management.

SBMFM

Smith Barney Mutual Funds Management Inc. (SBMFM) an indirect wholly owned
subsidiary of The Travelers Inc., furnishes investment management and advisory
services to the Social Awareness Stock Portfolio through Greenwich Street
Advisors, a division of SBMFM, in accordance with the terms of an Investment
Advisory Agreement dated May 1, 1995 which was approved by shareholders at a
meeting held on April 28, 1995. Prior to May 1, 1995, The Travelers Investment
Management Company (TIMCO) provided investment management and advisory
services. For furnishing investment management and advisory services to the
Fund, SBMFM is paid any amount equivalent on an annual basis to the advisory
fee schedule set forth in the table below. The fee is computed daily and paid
weekly.

<TABLE>
<CAPTION>
AGGREGATE NET ASSET VALUE
ANNUAL MANAGEMENT FEE OF THE PORTFOLIO
--------------------- -------------------------
<S> <C> <C>
0.65% of the first $ 50,000,000, plus
0.55% of the next $ 50,000,000, plus
0.45% of the next $100,000,000, plus
0.40% of amounts over $200,000,000.
</TABLE>

The total advisory fees paid to TIMCO by the Social Awareness Stock
Portfolio for the period ended December 31, 1993, and for the year ended
December 1994 and for the period January through April 1995 were $15,961,
$23,474 and $ 9,877, respectively. The total advisory fee paid to SBMFM for
the period May 1, 1995 through December 31, 1995 was $28,613.

Greenwich Street Advisors, a division of SBMFM, also manages the
day-to-day investment operations of the Utilities Portfolio pursuant to an
Investment Advisory Agreement approved by the Board of Trustees. Under the
Advisory Agreement, SBMFM is responsible for furnishing or causing to be
furnished to the Utilities Portfolio advice and assistance with respect to the
acquisition, holding or disposal of securities and recommendations with

<PAGE> 128

respect to other aspects and affairs of the Portfolio. The Utilities Portfolio
pays SBMFM an advisory fee equal to 0.65% on an annual basis for its services
as investment adviser. The fee is computed daily and paid monthly.

The total advisory fees paid to SBMFM by the Utilities Portfolio for the
period ended December 1994 and for the year ended December 1995 were $21,804
and $67,791, respectively.

THE ADVISORY AGREEMENTS

Under the terms of their respective Advisory and Subadvisory Agreements,
the Parties to such agreements shall:

(1) obtain and evaluate pertinent economic, statistical and
financial data and other information relevant to the investment
policy of the Portfolios, affecting the economy generally and
individual companies or industries, the securities of which are
included in the Portfolios or are under consideration for inclusion
therein;

(2) be authorized to purchase supplemental research and other
services from brokers at an additional cost to the Portfolios;

(3) regularly furnish recommendations to the Board of Trustees
with respect to an investment program for approval, modification or
rejection by the Board of Trustees;

(4) take such steps as are necessary to implement the investment
programs approved by the Board of Trustees; and

(5) regularly report to the Board of Trustees with respect to
implementation of the approved investment programs and any other
activities in connection with the administration of the assets of
the Portfolios.

As required by the Investment Company Act of 1940, as amended, each
Advisory Agreement will continue in effect for a period more than two years
from the date of its execution only so long as its continuance is specifically
approved at least annually (i) by a vote of a majority of the Board of
Trustees, or (ii) by a vote of a majority of the outstanding voting securities
of the Portfolios. In addition, and in either event, the terms of the Advisory
Agreements must be approved annually by a vote of a majority of the Board of
Trustees who are not parties to, or interested persons of any party to, the
Advisory Agreements, cast in person at a meeting called for the purpose of
voting on such approval and at which the Board of Trustees is furnished such
information as may be reasonably necessary to evaluate the terms of the
Advisory Agreements. The Advisory Agreements further provide that they will
terminate automatically upon assignment; may be amended only with prior
approval of a majority of the outstanding voting securities of the Portfolios;
may be terminated without the payment of any penalty at any time upon sixty
days' notice by the Board of Trustees or by a vote of a majority of the
outstanding voting securities of the Portfolios; and may not be terminated by
TAMIC without prior approval of a new investment advisory agreement by a vote
of a majority of the outstanding voting securities of the Portfolios.

REDEMPTIONS IN KIND

If conditions arise that would make it undesirable for the Fund to pay for
all redemptions in cash, the Fund may authorize payment to be made in portfolio
securities or other property.

However, the Fund has obligated itself under the 1940 Act to redeem for
cash all shares presented for redemption by any one shareholder up to $250,000,
or 1% of the Fund's net assets if that is less, in any 90-day period.
Securities delivered in payment of redemptions would be valued at the same
value assigned to them in computing the net asset value per share.
Shareholders receiving such securities would incur brokerage costs when these
securities are sold.

<PAGE> 129

BROKERAGE

Subject to approval of the Board of Trustees, it is the policy of TAMIC,
TIMCO and SBMFM (collectively, the "investment advisers"), in executing
transactions in portfolio securities of the Portfolios, to seek best execution
of orders at the most favorable prices. The determination of what may
constitute best execution and price in the execution of a securities
transaction by a broker involves a number of considerations, including, without
limitation, the overall direct net economic result to the Portfolios, involving
both price paid or received and any commissions and other cost paid, the
efficiency with which the transaction is effected, the ability to effect the
transaction at all where a large block is involved, the availability of the
broker to stand ready to execute potentially difficult transactions in the
future, and the financial strength and stability of the broker. Such
considerations are judgmental and are weighed by management in determining the
overall reasonableness of brokerage commissions paid. Subject to the
foregoing, a factor in the selection of brokers is the receipt of research
services, analyses and reports concerning issuers, industries, securities,
economic factors and trends, and other statistical and factual information.
Any such research and other statistical and factual information provided by
brokers to the Portfolios and the investment advisers is considered to be in
addition to and not in lieu of services required to be performed by the
investment advisers under their respective Investment Advisory Agreements. The
cost, value and specific application of such information are indeterminable and
hence are not practicably allocable among the Portfolios and other clients of
either TAMIC, TIMCO or SBMFM who may indirectly benefit from the availability
of such information. Similarly, the Portfolios may indirectly benefit from
information made available as a result of transactions for such clients.

Purchases and sales of bonds and money market instruments will usually be
principal transactions and will normally be purchased directly from the issuer
or from the underwriter or market maker for the securities. There usually will
be no brokerage commissions paid for such purchases. Purchases from the
underwriters will include the underwriting commission or concession and
purchases from dealers serving as market makers will include the spread between
the bid and asked prices. Where transactions are made in the over-the-counter
market, the Portfolios will deal with primary market makers unless more
favorable prices are otherwise obtainable. Brokerage fees will be incurred in
connection with futures transactions, and the Portfolios will be required to
deposit and maintain funds with brokers as margin to guarantee performance of
future obligations.

Each of the investment advisers may follow a policy of considering the
sale of shares of the Series Trust a factor in the selection of broker-dealers
to execute portfolio transactions, subject to the requirements of best
execution described above.

The investment advisers' policies with respect to brokerage are and will
be reviewed by the Board of Trustees periodically. Because of the possibility
of further regulatory developments affecting the securities exchanges and
brokerage practices generally, the foregoing practices may be changed, modified
or eliminated.

The total brokerage commissions paid by the U.S. Government Securities
Portfolio to TAMIC for the years ended December 31, 1993, 1994 and $1995 were
$35,756, $13,363 and $119,817, respectively. For the year ended December 31,
1995, no portfolio transactions were directed to certain brokers because of
research services. No formula is used in placing portfolio transactions with
brokers which provide research services and no specific amount of transactions
is allocated for research services. No brokerage business was placed with any
brokers affiliated with TAMIC during 1995.

The total brokerage commissions paid by the Social Awareness Stock
Portfolio to TIMCO and SBMFM for the years ended December 31, 1993, 1994 and
1995 were $2,121, $6,302 and $14,657, respectively. (SBMFM became the
investment adviser on May 1, 1995.) For the year ended December 31, 1995,
portfolio transactions in the amount of $8,984,565 were placed with certain
brokers because of research services, of which $13,803 was paid in commissions
with respect to such services. No formula was used in placing such
transactions, and no specific amount of transactions was allocated for research
services. No brokerage business was placed with any brokers affiliated with
TIMCO during 1995.

<PAGE> 130

The total brokerage commission paid by the Utilities to SBMFM for the
period ended December 31, 1994 and the year ended December 31, 1995 were $8,611
and $20,686. For the year ended December 31, 1995, no portfolio transactions
in the amount of $9,792,394 were placed with certain brokers because of
research services, of which $20,686 was paid in commissions with respect to
such services. No formula was used in placing such transactions, and no
specific amount of transactions was allocated for research services. No
brokerage business was placed with any brokers affiliated with SBMFM during
1995.

The total brokerage commission paid by the Zero Coupon Bond Portfolios,
Series 1998, 2000 and 2005 for the period ended December 31, 1995 was $2,064,
$2,808 and $3,309, respectively. For the year ended December 31, 1995, no
portfolio transactions were directed to certain brokers because of research
services. No formula is used in placing portfolio transactions with brokers
which provide research services and no specific amount of transactions is
allocated for research services. No brokerage business was placed with any
brokers affiliated with TAMIC during 1995.

ADDITIONAL INFORMATION

The Travelers Insurance Company acts as transfer agent and dividend
disbursing agent for the Portfolios. The Travelers Insurance Company is a
stock insurance company chartered in 1864 in Connecticut and continuously
engaged in the insurance business since that time. It is a wholly owned
subsidiary of The Travelers Insurance Group Inc., which is indirectly owned,
through a wholly owned subsidiary, by Travelers Group Inc., a financial
services holding company. The Company's Home Office is located at One Tower
Square, Hartford, Connecticut 06183, telephone number 860-422-3985. On April
1, 1996, the Company owned 100% of the Series Trust's outstanding shares.

Chase Manhattan Bank, N.A., Chase MetroTech Center, Brooklyn, New York
11245, serves as the custodian of all securities and cash of the Portfolios.

Coopers & Lybrand L.L.P., independent accountants, 100 Pearl Street,
Hartford, Connecticut 06103, are the independent auditors for the Series Trust
and its Portfolios. The services provided by Coopers & Lybrand L.L.P., include
primarily the examination of the Series Trust's financial statements. The
financial statements included or incorporated by reference in the Prospectus,
SAI and Registration Statement have been audited by Coopers & Lybrand L.L.P.,
as indicated in their report thereon, and are incorporated herein by reference
in reliance upon the authority of said firm as experts in accounting and
auditing.

Except as otherwise stated in its prospectus or as required by law, the
Series Trust reserves the right to change the terms of the offer stated in its
prospectus without shareholder approval, including the right to impose or
change fees for services provided.

No dealer, salesman or other person is authorized to give any information
or to make any representation not contained in the Series Trust's prospectus,
this SAI or any supplemental sales literature issued by the Series Trust, and
no person is entitled to rely on any information or representation not
contained therein.

The Series Trust's prospectus and this SAI omit certain information
contained in the Series Trust's registration statement filed with the
Securities and Exchange Commission which may be obtained from the Commission's
principal office in Washington, D.C. upon payment of the fee prescribed by the
Rules and Regulations promulgated by the Commission.

<PAGE> 131

APPENDIX

COMMERCIAL PAPER RATINGS

The Portfolio's investments in commercial paper are limited to those rated
A-1 by Standard & Poor's Corporation (S&P) or Prime-1 by Moody's Investors
Service, Inc. (Moody's). These ratings and other money market instruments are
described as follows.

Commercial paper rated A-1 by Standard & Poor's has the following
characteristics: liquidity ratios are adequate to meet cash requirements. The
issuer's long-term senior debt is rated "A" or better, although in some cases
"BBB" credits may be allowed. The issuer has access to at least two additional
channels of borrowing. Basic earnings and cash flow have an upward trend with
allowance made for unusual circumstances. Typically, the issuer's industry is
well established and the issuer has a strong position within the industry.

The rating Prime-1 is the highest commercial paper rating assigned by
Moody's. Among the factors considered by Moody's in assigning ratings are the
following: (1) evaluation of the management of the issuer; (2) economic
evaluation of the issuer's industry or industries and an appraisal of
speculative-type risks which may be inherent in certain areas; (3) evaluation
of the issuer's products in relation to competition and customer acceptance;
(4) liquidity; (5) amount and quality of long-term debt; (6) trend of earnings
over a period of ten years; (7) financial strength of a parent company and the
relationships which exist with the issuer; and (8) recognition by the
management of obligations which may be present or may arise as a result of
public preparations to meet such obligations. Relative strength or weakness of
the above factors determines how the issuer's commercial paper is rated within
various categories.

<PAGE> 132

FINANCIAL STATEMENTS

34
<PAGE> 133

STATEMENT OF ADDITIONAL INFORMATION
FOR

THE TRAVELERS SERIES TRUST

U.S. GOVERNMENT SECURITIES PORTFOLIO

SOCIAL AWARENESS STOCK PORTFOLIO

UTILITIES PORTFOLIO

ZERO COUPON BOND FUND PORTFOLIOS
(SERIES 1998, 2000,2005)

<PAGE> 134
PART C

OTHER INFORMATION

Item 24. Financial Statements and Exhibits

The financial statements of the Registrant and the Report of Independent
Accountants are contained in the Statement of Additional Information.

To be filed by amendment.
<PAGE> 135
(b) Exhibits

1. Agreement and Declaration of Trust. (Incorporated herein by
reference to Exhibit 1 to Post-Effective Amendment No. 13 to
the Registration Statement on Form N-1A filed on April 3, 1996.)

2. By-Laws. (Incorporated herein by reference to Exhibit 2 to
Post-Effective Amendment No. 13 to the Registration Statement on
Form N-1A, filed April 3, 1996.)

5(a). Investment Advisory Agreement between the U.S. Government
Securities Portfolio and Travelers Asset Management
International Corporation. (Incorporated herein by reference to
Exhibit 5(a) to Post-Effective Amendment No. 13 to the
Registration Statement on Form N-1A, filed April 3, 1996.)

5(b). Investment Advisory Agreement between the Social Awareness Stock
Portfolio and Smith Barney Mutual Fund Management Inc.
(Incorporated herein by reference to Exhibit 5(b) to
Post-Effective Amendment No. 11 to the Registration Statement on
Form N-1A filed on April 25, 1995.)

5(c). Investment Advisory Agreement between the Utilities Portfolio
and Smith Barney Mutual Fund Management Inc. (Incorporated
herein by reference to Exhibit 5(c) to Post-Effective Amendment
No. 11 to the Registration Statement on Form N-1A filed on April
25, 1995.)

5(d). Form of Investment Advisory Agreement between the Zero Coupon
Bond Fund Portfolios of The Trust and Travelers Asset Management
International Corporation. (Incorporated herein by reference
to Exhibit 5(d) to Post-Effective Amendment No. 12 to the
Registration Statement on N-1A filed on June 2, 1995.)

5(e). Investment Advisory Agreements between the seven new portfolios
and their respective investment advisors to be filed by
amendment.

9. Transfer and Recordkeeping Agreement between the Registrant and
The Travelers Insurance Company. (Incorporated herein by
reference to Exhibit 9 to Post-Effective Amendment No. 13 to the
Registration Statement on Form N-1A, filed April 3, 1996.)

10. Opinion and Consent of Counsel. (Incorporated herein by
reference to the Registrant's most recent Form 24f-2 Notice
filed on February 27, 1996.)

11(a). Consent of Coopers & Lybrand L.L.P., Independent Accountants, to
the use of their name and opinion in Part A and Part B of this
Form N-1A and to the inclusion or incorporation by reference of
their reports. - To be filed by amendment.

11(b). Powers of Attorney authorizing Ernest J. Wright, Secretary or
Kathleen A. McGah, Assistant Secretary as signatory for Heath B.
McLendon, Knight Edwards, Robert E. McGill III, Lewis Mandell,
Frances M. Hawk and Ian R. Stuart. (Incorporated herein by
reference to Exhibit 11(b) to Post-Effective Amendment No. 13 to
the Registration Statement on Form N-1A, filed April 3, 1996.)
<PAGE> 136
27. Financial Data Schedule. (Incorporated herein by reference to
Exhibit 27 to Post-Effective Amendment No. 13 to the
Registration Statement on Form N-1A, filed on April 3, 1996.)
<PAGE> 137
Item 25. Persons Controlled By or Under Common Control With the Registrant

Not Applicable.

Item 26. Number of Holders of Securities

Number of Record Holders
Title of Class as of February 16, 1996
- -------------- ------------------------
Shares of beneficial interest, Four (4)
without par value

Item 27. Indemnification

Provisions for the indemnification of the Series Trust's Trustees and officers
are contained in and are incorporated by reference to the Series Trust's
Declaration of Trust, which was filed with Post- Effective Amendment No. 13 to
this Registration Statement as Exhibit 1.

Rule 484 Undertaking

Insofar as indemnification for liability arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the securities
being registered, the registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
<PAGE> 138
Item 28. Business and Other Connections of Investment Advisers

U.S. GOVERNMENT SECURITIES PORTFOLIO
ZERO COUPON BOND PORTFOLIOS

Officers and Directors of Travelers Asset Management International Corporation
(TAMIC), the Investment Adviser for the U.S. Government Securities Portfolio of
the Series Trust, are set forth in the following table:

<TABLE>
<CAPTION>
Name Position with TAMIC Other Business
- ---- ------------------- --------------
<S> <C> <C>
Marc P. Weill Director, Chairman and Senior Vice President**
President

David A. Tyson Director and Senior Vice Senior Vice President*
President

F. Denney Voss Director and Vice President Senior Vice President*

David Amaral Vice President Assistant Director*

John R. Calcagni Vice President Second Vice President*

Gene Collins Vice President Vice President*

Phillip A. Duncan Vice President Second Vice President*

Kathryn D. Karlic Vice President Vice President*

David R. Miller Vice President Vice President*

Joseph Mullally Vice President Vice President*

Emil J. Molinaro Vice President Vice President*

Jordan M. Stitzer Vice President Vice President

Eddie Sanchez Assistant Vice President Assistant Director*

William H. White Treasurer Vice President and Treasurer*

Charles B. Chamberlain Assistant Treasurer Assistant Treasurer*

George C. Quaggin, Jr. Assistant Treasurer Assistant Treasurer*

John R. Britt Secretary Assistant Secretary*

Marla A. Berman Assistant Secretary Assistant Secretary**

Patricia A. Uzzel Compliance Officer Assistant Director*

Frank J. Fazzina Controller Director*

* Positions are held with The Travelers Insurance Group Inc., One Tower Square, Hartford,
Connecticut 06183.

** Positions are held with Travelers Group Inc., 388 Greenwich Street, New York, N.Y. 10013.
</TABLE>
<PAGE> 139
SOCIAL AWARENESS STOCK PORTFOLIO
UTILITIES PORTFOLIO

Officers and Directors of Smith Barney Mutual Funds Management Inc. (SBMFM), the
Investment Adviser for the Social Awareness Stock Portfolio and Utilities
Portfolio of the Series Trust, are set forth in the following table:

<TABLE>
<CAPTION>
Name Position with SBMFM* Other Business
- ---- -------------------- --------------
<S> <C> <C>
Heath B. McLendon Chairman Managing Director of Smith
Barney; Director of certain
investment companies sponsored
by Smith Barney

Jessica Bibliowicz President and Chief Executive Vice President of
Executive Officer Smith Barney Inc. ("Smith
Barney"); Director and/or
President of certain investment
companies sponsored
by Smith Barney

Lewis E. Daidone Director and Senior Managing Director of Smith
Vice President Barney; Senior Vice President
and Treasurer of certain
investment companies sponsored
by Smith Barney

A. George Saks Director Managing Director and General
Counsel of Smith Barney

Bruce D. Sargent Director and Vice Managing Director of Smith
President Barney; Vice President and
Director of certain investment
companies sponsored by Smith
Barney

Malcolm Van Arsdale Vice President Vice President of Smith Barney
in the Capital Management
Division

Peter M. Coffey Vice President Managing Director of Smith Barney

James Conahan Controller Managing Director of Smith Barney

Michael J. Day Treasurer Managing Director of Smith Barney

Christina T. Sydor General Counsel Managing Director of Smith Barney
and Secretary and Secretary of certain investment
companies sponsored by Smith Barney

* Address: 388 Greenwich Street, New York, N.Y. 10013
</TABLE>
<PAGE> 140
LARGE CAP PORTFOLIO
EQUITY INCOME PORTFOLIO
TRAVELERS QUALITY BOND PORTFOLIO
LAZARD INTERNATIONAL EQUITY PORTFOLIO
MFS EMERGING GROWTH PORTFOLIO
FEDERATED HIGH YIELD PORTFOLIO
FEDERATED STOCK PORTFOLIO

Officers and Directors of Smith Barney Mutual Funds Management Inc. (SBMFM),
the Investment Adviser for the above Portfolios of the Series Trust, are set
forth in the following table:

<TABLE>
<CAPTION>
Name Position with SBMFM* Other Business
- ---- -------------------- --------------
<S> <C> <C>

Heath B. McLendon Chairman Managing Director of Smith
Barney; Director of certain
investment companies sponsored
by Smith Barney

Lewis E. Daidone Director and Senior Managing Director of Smith
Vice President Barney, Senior Vice President
and Treasurer of certain
investment companies sponsored
by Smith Barney

A. George Saks Director Managing Director and General
Counsel of Smith Barney

Bruce D. Sargent Director and Vice Managing Director of Smith
President Barney; Vice President and
Director of certain investment
companies sponsored by Smith
Barney

Malcolm Van Arsdale Vice President Vice President of Smith Barney
in the Capital Management
Division

Peter M. Coffey Vice President Managing Director of Smith
Barney

James Conahan Controller Managing Director of Smith
Barney

Michael J. Day Treasurer Managing Director of Smith
Barney
</TABLE>
<PAGE> 141
<TABLE>
<S> <C> <C>
Christina T. Sydor General Counsel and Managing Director of Smith
Secretary Barney and Secretary of certain
investment companies sponsored
by Smith Barney
</TABLE>

* Address: 388 Greenwich Street, New York, N.Y. 10013
<PAGE> 142
Item 29. Principal Underwriter

Not Applicable.

Item 30. Location of Accounts and Records

(1) The Travelers Insurance Company
One Tower Square
Hartford, Connecticut 06183

(2) Chase Manhattan Bank, N.A.
Chase MetroTech Center
Brooklyn, New York

Item 31. Management Services

Not Applicable.

Item 32. Undertakings

The undersigned Registrant hereby undertakes to provide to each person to whom
a prospectus is delivered a copy of the Registrant's latest annual report to
shareholders, upon request and without charge.
<PAGE> 143
SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Registrant, The Travelers Series Trust certifies that
it meets all the requirements for effectiveness of this post-effective
amendment to this Registration Statement pursuant to Rule 485(b) under the
Securities Act of 1933 and has duly caused this amendment to this Registration
Statement to be signed on its behalf by the undersigned, thereto duly
authorized, in the City of Hartford, State of Connecticut, on June 26, 1996.

THE TRAVELERS SERIES TRUST
--------------------------
(Registrant)

By: *HEATH B. McLENDON
----------------------------
Heath B. McLendon
Chairman, Board of Trustees

Pursuant to the requirements of the Securities Act of 1933, this post-effective
amendment to this Registration Statement has been signed below by the following
persons in the capacities indicated on June 26, 1996.

<TABLE>
<S> <C>
*HEATH B. McLENDON Chairman of the Board
- ---------------------------------------
(Heath B. McLendon)

*KNIGHT EDWARDS Trustee
- ---------------------------------------
(Knight Edwards)

*ROBERT E. McGILL, III Trustee
- ---------------------------------------
(Robert E. McGill, III)

*LEWIS MANDELL Trustee
- ---------------------------------------
(Lewis Mandell)

*FRANCES M. HAWK Trustee
- ---------------------------------------
(Frances M. Hawk)

*IAN R. STUART Treasurer and Chief Accounting Officer
- ---------------------------------------
(Ian R. Stuart)
</TABLE>

*By: /s/ Ernest J. Wright
-----------------------------------------
Ernest J. Wright, Attorney-in-Fact
Assistant Secretary, Board of Trustees
<PAGE> 144
EXHIBIT INDEX

<TABLE>
<CAPTION>
Exhibit
No. Description Method of Filing
- ------- ----------- ----------------
<S> <C> <C>

1. Agreement and Declaration of Trust. (Incorporated
herein by reference to Exhibit 1 to Post-Effective
Amendment No. 13 to the Registration Statement on
Form N-1A, filed April 3, 1996.)

2. By-Laws. (Incorporated herein by reference to Exhibit 2
to Post-Effective Amendment No. 13 to the Registration
Statement on Form N-1A, filed April 3, 1996.)

5(a). Investment Advisory Agreement between the U.S.
Government Securities Portfolio and Travelers Asset
Management International Corporation. (Incorporated
herein by reference to Exhibit 5(a) to Post-Effective
Amendment No. 13 to the Registration Statement on
Form N-1A, filed April 3, 1996.)

5(b). Investment Advisory Agreement between the
Social Awareness Stock Portfolio and Smith Barney
Mutual Fund Management Inc. (Incorporated herein
by reference to Exhibit 5(b) to Post-Effective
Amendment No. 11 to the Registration Statement on
Form N-1A filed on April 25, 1995.)

5(c). Investment Advisory Agreement between the
Utilities Portfolio and Smith Barney Mutual Fund
Management Inc. (Incorporated herein by reference
to Exhibit 5(c) to Post-Effective Amendment No. 11
to the Registration Statement on Form N-1A filed on
April 25, 1995.)

5(d). Form of Investment Advisory Agreement between the
Zero Coupon Bond Fund Portfolios of The Trust and
Travelers Asset Management International Corporation.
(Incorporated herein by reference to Exhibit 5(d) to Post-
Effective Amendment No. 12 to the Registration
Statement on Form N-1A filed on June 2, 1995.)

5(e). Investment Advisory Agreements between the seven To be filed by amendment
new portfolios and their respective investment advisors

8. Custody Agreement dated February 1, 1995 between
the Registrant and Chase Manhattan Bank, N.A.,
Brooklyn, New York. (Incorporated herein by reference
to Exhibit 8 to Post-Effective Amendment No. 11 to the
Registration Statement on Form N-1A filed on April 25,
1995.)
</TABLE>
<PAGE> 145
<TABLE>
<S> <C> <C>
9. Transfer and Recordkeeping Agreement between the
Registrant and The Travelers Insurance Company.
(Incorporated herein by reference to Exhibit 9 to
Post-Effective Amendment No. 13 to the Registration
Statement on Form N-1A, filed April 3, 1996.)

10. Opinion and Consent of Counsel. (Incorporated herein by
reference to the Registrant's most recent Form 24f-2 Notice
filed on February 27, 1996.)

11(a). Consent of Coopers & Lybrand L.L.P., Independent To be filed by amendment
Accountants, to the use of their name and opinion in
Part A and Part B of this Form N-1A and to the
inclusion or incorporation by reference of their Reports.

11(b). Powers of Attorney authorizing Ernest J. Wright,
Secretary, or Kathleen A. McGah, Assistant Secretary
to be the signatory for Heath B. McLendon,
Knight Edwards, Robert E. McGill III, Lewis Mandell,
Frances M. Hawk and Ian R. Stuart. (Incorporated herein
by reference to Exhibit 11(b) to Post-Effective
Amendment No. 13 to the Registration Statement on
Form N-1A, filed April 3, 1996.)

27. Financial Data Schedule. (Incorporated herein
by reference to Exhibit 27 to Post-Effective
Amendment No. 13 to the Registration Statement
on Form N-1A, filed April 3, 1996.)
</TABLE>