<PAGE> 1
SUPPLEMENT TO PROSPECTUS DATED MARCH 1, 1996
FOR JACKSON NATIONAL CAPITAL MANAGEMENT FUNDS
INCOME FUND
The second full paragraph in the right hand column on page 10 of the Prospectus
is amended to read as follows:
As least 80% of the Income Fund's total assets will be invested in
securities rated investment grade, including repurchase agreements thereon.
Investment grade is defined as a rating equivalent to or higher than BBB-
by S&P or Baa3 by Moody's for corporate debt and A-2 by S&P or P-2 by
Moody's for commercial paper. No more than 30% of the Income Fund's total
assets will consist of investment grade securities rated below A- or A3.
Up to 20% of the Income Fund's total assets may be invested in securities
rated below investment grade and rated CCC or above by S&P or Caa or above
by Moody's. Up to 10% of the Income Fund's total assets may be invested in
unrated securities.
TOTAL RETURN FUND
The third full sentence in the left hand column on page 12 of the Prospectus is
amended to read as follows:
The Fund currently intends to limit its investments in these securities to
securities rated or determined by the sub-investment adviser to be of
equivalent or higher quality than CCC by S&P or Caa by Moody's and to no
more than 20% of its assets.
HIGH YIELD BONDS
The following language is added on page 14 under the heading "High Yield Bonds":
During the year ended October 31, 1995, the dollar weighted average of the
Total Return Fund's bond holdings had the following credit quality
characteristics.
Moody's Investors Percent of
Service, Inc. Rating Net Assets
-------------------- ----------
Aaa 23.25%
Aa 0.08%
A 3.28%
Baa 5.98%
Ba 3.46%
B 5.57%
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS
The first sentence under the heading "When-Issued and Delayed Delivery
Transactions" on page 15 of the Prospectus is amended to read as follows in
order to permit the Growth Fund to engage in transactions on a "when-issued"
and "delayed delivery" basis:
Each Fund may purchase newly-issued securities appropriate for
its portfolio on a "when-issued" basis and may purchase or sell
securities appropriate for its portfolio on a "delayed delivery" basis.
This Supplement is dated May 24, 1996.
