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GE Funds
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Supplement Dated August 27, 1997
To Prospectus Dated December 30, 1996
On May 15, 1997, the Board of Trustees of GE Funds (the "Trust") unanimously
approved a proposed transaction (the "Reorganization") whereby the Trust will
acquire all or substantially all of the assets of the five existing series of
the Investors Trust Funds. In connection with the Reorganization, GE Tax-Exempt
Fund will declare a stock dividend, payable on each currently outstanding Class
A and Class B share of GE Tax-Exempt Fund. Such dividend will be in an amount
sufficient to increase the number of outstanding Class A and Class B shares of
GE Tax-Exempt Fund so that the net asset value per share of the Class A and
Class B shares of GE Tax-Exempt Fund will be equal to the net asset value per
share of the Class A and Class B shares of Investors Trust Tax Free Fund,
respectively. The value of a shareholder's account will remain unchanged as a
result of the stock dividend; however, a shareholder may receive additional
shares of stock.
Since July 18, 1996, GE Investment Management Incorporated ("GEIM"), the
investment adviser and administrator of the Trust, has voluntarily waived its
advisory and administration fee with respect to GE Tax-Exempt Fund. On or about
September 26, 1997, GEIM intends to commence charging the full amount of its
fee, which is equal to 0.35%. GEIM intends to continue to reimburse a portion of
the expenses of GE Tax-Exempt Fund so that the "Total Operating Expenses" of the
Fund will not exceed the following amounts: Class A, 1.10%; Class B, 1.60%;
Class C, 0.85%; and Class D, 0.60%.
On page 37 of the Trust's Prospectus, in the first paragraph, subsection (6) is
deleted. The following is inserted following the first paragraph on page 37 of
the Trust's Prospectus:
In addition, Class A shares are offered without any sales charge for all
purchases made through certain broker-dealers, financial institutions,
recordkeepers and other financial intermediaries who charge a management,
consulting or other fee for their services (each, a "Financial Intermediary,"
collectively, the "Financial Intermediaries") and who have an agreement with or
among the Trust, GEIM or GEIS, requiring the Trust, GEIM or GEIS to compensate
the Financial Intermediary for administrative, subaccounting, transfer agency
and/or other services (hereinafter, the "Service Fee"). To the extent that a
Financial Intermediary provides transfer agency services to the Funds, the
Service Fee may be paid by the Trust as a sub-transfer agency fee. In no event,
however, will the "Total Operating Expenses" of any Fund after reimbursement
exceed the amounts set forth in the "Fee Table" in the Prospectus; provided,
that GEIM continues to voluntarily reduce or otherwise limit "Other Expenses" as
provided in the Prospectus. Any portion of the Service Fee not borne by the
Trust will be paid by GEIM or its affiliates.
The following on page 38 of the Trust's Prospectus in the first sentence under
the sub-heading "Class D Shares" is deleted: "investment management programs of
financial institutions that contemplate purchasing shares of investment
companies managed by an adviser unaffiliated with the financial institution."
The following is inserted following the existing paragraph on page 38 of the
Trust's Prospectus under the sub-heading "Class D Shares":
In addition, Class D shares are offered without imposition of a sales charge,
CDSC, service fee or distribution fee to Financial Intermediaries that have an
agreement with the Trust, GEIM or GEIS which does not require the Trust, GEIM or
GEIS to compensate the Financial Intermediary for its services, for initial
purchases by their clients or customers equal to or exceeding $250,000 per
Participant Fund. Subsequent purchases may be made without imposition of a
minimum purchase requirement. The minimum purchase requirement for clients or
customers of Financial Intermediaries is waived for purchases by certain
non-qualified deferred compensation plans (including supplemental employee
retirement plans) and tax-exempt customers, including, but not limited to,
defined benefit or defined contribution plans meeting the requirements of
Section 401(a) of the Code (including 401(k) plans ), retirement plans for
self-employed individuals, plans established under Section 403(b) of the Code
and plans meeting the requirements of Section 457(b) of the Code. See "Purchase
of Shares -- Class D Shares" in the Prospectus for other eligible investors in
Class D Shares.
Purchases Through Intermediaries. Class A and Class D shares of each Participant
Fund and shares of GE Money Market Fund are available to clients and customers
of Financial Intermediaries as provided above. Certain features of each Fund,
such as initial and subsequent investment minimums, redemption fees and certain
operational procedures, may be modified or waived subject to agreement with or
among the Trust, GEIM or GEIS and such Financial Intermediaries. Financial
Intermediaries may impose transaction or administrative charges or other direct
fees, which charges or fees would not be imposed if Fund shares are purchased or
redeemed directly from the Trust. Therefore, a client or customer should contact
their investment adviser and/or Financial Intermediary acting on his or her
behalf concerning the fees (if any) charged in connection with a purchase or
redemption of Fund shares and should read this Prospectus in light of the terms
governing his or her account with the Financial Intermediary. Financial
Intermediaries will be responsible for promptly reporting client or customer
purchase and redemption orders to the Trust in accordance with their agreements
with their clients or customers and their agreements with or among the Trust,
GEIM or GEIS.
GEF-PRO-36B 8/97
