GE FUNDS
485APOS, 2000-11-22
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<PAGE>


              As filed with the Securities and Exchange Commission
                               on November 22, 2000


                        Securities Act File No. 33-51308
                    Investment Company Act File No. 811-7142

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM N-1A

          REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 /X/

                         Pre-Effective Amendment No. / /


                      Post-Effective Amendment No. 33 /X/


                                     and/or

      REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 /X/


                              Amendment No. 35 /X/
                        (Check appropriate box or boxes)


                                    GE FUNDS
         ...............................................................
               (Exact Name of Registrant as Specified in Charter)

                               3003 Summer Street
                           Stamford, Connecticut 06905
              ....................................................
               (Address of Principal Executive Office) (Zip Code)

               Registrant's Telephone Number, including Area Code:
                                 (203) 326-4040


                            Matthew J. Simpson, Esq.
         Vice President, Associate General Counsel & Assistant Secretary
                        GE Asset Management Incorporated
                               3003 Summer Street
                           Stamford, Connecticut 06905
            .........................................................
                     (Name and Address of Agent for Service)


                                   Copies to:

                             Burton M. Leibert, Esq.
                            Willkie Farr & Gallagher
                               787 Seventh Avenue
                          New York, New York 10019-6099


<PAGE>


Approximate Date of Proposed Public Offering: As soon as practicable after the
effective date of this Registration Statement.

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

o        immediately upon filing pursuant to paragraph (b)
                                                                        ---

o        on (date) pursuant to paragraph (b)

o        60 days after filing pursuant to paragraph (a)(1)
                                                                        ---
o        on January 29, 2001 pursuant to paragraph (a)(1)                X
                                                                        ---
o        75 days after filing pursuant to paragraph (a)(2)
                                                                        ---
o        on pursuant to paragraph (a)(2) of Rule 485
                                                                        ---


If appropriate, check the following box:


This post-effective amendment designates a new effective date
for a previously filed post-effective amendment
                                                                        ---



This post-effective amendment includes an updated prospectus only for those
series of Registrant (the shares of) which are currently offered to the public,
GE International Fixed Income Fund and GE Small-Cap Growth Equity Fund, series
of Registrant (the shares of) which are not currently being offered to the
public, remain registered and unaffected by this post-effective amendment.



<PAGE>

Prospectus
                                                                        --------
                                                                        GE Funds


January __, 2001


--------------------------------------------------------------------------------
Equity Funds
GE U.S. Equity Fund
GE Value Equity Fund
GE Mid-Cap Growth Fund
GE Mid-Cap Value Equity Fund
GE Small-Cap Value Equity Fund
GE Global Equity Fund
GE International Equity Fund
GE Europe Equity Fund
GE Emerging Markets Fund
Premier Funds
      GE Premier Growth Equity Fund
      GE Premier Research Equity Fund
      GE Premier International Equity Fund
      GE Premier Value Equity Fund

--------------------------------------------------------------------------------
Income Funds
GE Fixed Income Fund
GE Government Securities Fund
GE Short-Term Government Fund
GE Tax-Exempt Fund
GE High Yield Fund

--------------------------------------------------------------------------------
Asset Allocation Funds
GE Strategic Investment Fund

--------------------------------------------------------------------------------
Money Market Funds
GE Money Market Fund

--------------------------------------------------------------------------------
Like all mutual funds, the Funds' shares have not been approved or disapproved
by the Securities and Exchange Commission, nor has the Securities and Exchange
Commission passed upon the accuracy or adequacy of this prospectus. Any
representation to the contrary is a criminal offense.

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

                               [GRAPHIC OMITTED]

[GE LOGO]
-----------------
We bring good things to life.

--------------------------------------------------------------------------------
<PAGE>

                                         ---------------------------------------
                                         Contents


--------------------------------------------------------------------------------
GE Funds
Prospectus

                                         Equity Funds                          3
                                         ---------------------------------------
                                         GE U.S. Equity Fund                   4
                                         GE Value Equity Fund                  6
                                         GE Mid-Cap Growth Fund                8
                                         GE Mid-Cap Value Equity Fund         10
                                         GE Small-Cap Value Equity Fund       12
                                         GE S&P 500 Index                     14
                                         GE Global Equity Fund                16
                                         GE International Equity Fund         18
                                         GE Europe Equity Fund                20
                                         GE Emerging Markets Fund             21
                                         GE Premier Growth Equity Fund        22
                                         GE Premier Research Equity Fund      24
                                         GE Premier International
                                          Equity Fund                         25
                                         GE Premier Value Equity Fund         26

                                         Income Funds                         27
                                         ---------------------------------------
                                         GE Fixed Income Fund                 28
                                         GE Government Securities Fund        30
                                         GE Short-Term Government Fund        32
                                         GE Tax-Exempt Fund                   34
                                         GE High Yield Fund                   36

                                         Asset Allocation Funds               39
                                         ---------------------------------------
                                         GE Strategic Investment Fund         40

                                         Money Market Funds                   43
                                         ---------------------------------------
                                         GE Money Market Fund                 44

                                         Fund Expenses                        46
                                         ---------------------------------------

                                         More on Strategies and Risks         54
                                         ---------------------------------------
                                         Important Definitions                54
                                         More on Investment Strategies        57
                                         More on Risks                        62
                                         Other Risk Considerations            65

                                         About the Investment Adviser         66
                                         ---------------------------------------
                                         Investment Adviser and
                                           Administrator                      66
                                         About the Funds' Portfolio Managers  67
                                         About the Sub-Advisers               69
                                         Prior Performance Information        74

                                         How to Invest                        76
                                         ---------------------------------------
                                         How to Buy Shares                    76
                                         Choosing a Share Class               79
                                         How to Redeem Shares                 84
                                         How to Exchange Shares               86
                                         Distribution and Shareholder
                                           Service Fees                       87

                                         Dividends, Capital Gains and
                                           Other Tax Information              88
                                         ---------------------------------------

                                         Calculating Share Value              90
                                         ---------------------------------------

                                         Financial Highlights                 91
                                         ---------------------------------------


Additional information regarding the GE Funds ("Funds") is contained in the
Statement of Additional Information dated January __, 2001, which is
incorporated by reference into (legally forms a part of) this Prospectus.

<PAGE>
----------
2


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                     [This page intentionally left blank.]

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<PAGE>
                                                                      ----------
                                                                               3


----------------------------------------------------
GE Funds                                Equity Funds
Prospectus


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

An investment in a GE Equity Fund is not a deposit of any bank and is not
insured or guaranteed by the Federal Deposit Insurance Corporation or any other
government agency. An investment in a GE Fund is subject to risk, including
possible loss of principal invested.

Who may want to invest in a GE Equity Fund?

GE Equity Funds may be appropriate for your investment portfolio if you:

o have a long-term investment goal

o are willing to accept higher short-term risk for potential long-term returns

o want to diversify a portfolio composed mostly of fixed income investments

GE Equity Funds may not be appropriate if you want:

o to avoid potentially significant changes in share price

o a short-term investment

o regular income

Equity funds generally invest in equity securities. Equity securities may
include common stocks, preferred securities, depositary receipts, convertible
preferred securities, convertible bonds, convertible debentures, convertible
notes, and rights and warrants of U.S. and foreign companies. Stocks represent
an ownership interest in a corporation. Equity funds have more potential for
capital growth than other funds, but they have greater risk.

--------------------------------------------------------------------------------
<PAGE>
---------------
4  GE Funds
   Prospectus
   Equity Funds


--------------------------------------------------------------------------------
GE U.S. Equity Fund

---------------
Investment Objective: Long-term growth of capital.

The Strategy

GE U.S. Equity Fund invests primarily in equity securities of U.S. companies.
The portfolio managers use a Multi-Style(Registered) investment strategy that
combines growth and value investment management styles. As a result, the
portfolio has characteristics similar to the Standard & Poor's 500 Composite
Stock Index, including capital apprecia-tion and income potential. Stock
selection is key to the performance of the Fund.

Through fundamental company research, the portfolio managers seek to identify
securities of large companies with characteristics such as:

o attractive valuations

o financial strength

o high quality management focused on generating shareholder value

The Fund also may invest to a lesser extent in foreign securities and debt
securities. The portfolio managers may use various investment techniques to
adjust the Fund's investment exposure, but there is no guarantee that these
techniques will work.

The Risks

The principal risks of investing in the Fund are stock market risk and style
risk (mid-cap company risk). To the extent that the portfolio managers invest in
foreign securities or debt securities, the Fund would be subject to foreign
exposure risk or interest rate risk and credit risk.

If you would like additional information regarding the Fund's investment
strategies and risks, including a description of the terms in bold type, please
refer to "More on Strategies and Risks" later in this Prospectus.

--------------------------------------------------------------------------------
<PAGE>
                                                                      ----------
                                                                               5


--------------------------------------------------------------------------------
Fund Performance

The bar chart and table opposite illustrate the short-term variability in the
Fund's performance and the Fund's returns relative to a common measure of
performance.


The bar chart illustrates how the Fund's performance varies from year to year
over the periods shown. The bar chart does not reflect the impact of sales
charges, which lower the Fund's returns. During the periods presented in the bar
chart, Class A's highest return for a quarter was 19.82% for the quarter ended
December 31, 1998. The lowest return for a quarter was -10.11% for the quarter
ended September 30, 1998.


The table opposite illustrates how the Fund's average annual returns for
different calendar periods compare to the returns of the Standard & Poor's 500
Composite Stock Index (S&P 500 Index(Registered)). The table reflects the impact
of the Fund's expenses and sales charges for each share class. It assumes that
you sold your shares at the end of each period.

--------------------------------------------------------------------------------
Calendar Year Total Returns
Class A Shares*

                                  [BAR CHART]


                     1994  1995  1996  1997  1998  1999  2000
                     ----  ----  ----  ----  ----  ----  ----
                     -2%   35%   22%   32%   23%   19%


All mutual funds use a standard formula to calculate total return. Total return
measures the price change in a share assuming the reinvestment of all dividend
income and capital gain distributions.

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

Average Annual Total Return
(as of December 31, 1999)


                                                                 Since
                                         1 Year       5 Years  Inception**
                                        -------      --------  -----------
GE U.S. Equity Fund
  Class A*                              12.48%       24.88%        19.20%
  Class B                               14.47%       25.43%        20.34%
  Class C (level load)                     --           --            --
  Class Y***                            19.62%       26.68%        21.36%
S&P 500 Index                           21.07%       28.59%        21.73%****

Both the bar chart and table assume reinvestment of dividends and distributions.
If GE Asset Management had not reduced certain expenses during the periods
shown, the Fund's total returns would have been lower. As with all mutual funds,
past performance is not an indication of future performance.

*Returns are those of the predecessor Class C, which was combined with Class A
as of the close of business on September 17, 1999. Average annual total return
figures have been adjusted to reflect Class A expenses and sales charges.

** Inception date (commencement of investment operations):
Class A - February 22, 1993
Class B - December 22, 1993
Class C - September 30, 1999
Class Y - November 29, 1993

*** Formerly named Class D

**** Since March 1, 1993

--------------------------------------------------------------------------------
<PAGE>
---------------
6  GE Funds
   Prospectus
   Equity Funds


--------------------------------------------------------------------------------
GE Value Equity Fund

---------------
Investment Objective: Long-term growth of capital and future income.

The Strategy

GE Value Equity Fund invests primarily in equity securities of large U.S.
companies that the portfolio manager believes are undervalued by the market but
have solid growth prospects. A company may be undervalued for reasons such as
market overreaction to recent company, industry or economic problems. Stock
selection is key to the performance of the Fund.

The portfolio manager seeks to identify securities of companies with
characteristics such as:

o low prices in relation to their peers and the overall market

o the potential for long-term earnings growth

o above average dividend yields

o expectation of income in future periods

o strong management

o financial strength

o attractive upside potential and limited downside risk

The Fund also may invest to a lesser extent in foreign securities and debt
securities. The portfolio manager may use various investment techniques to
adjust the Fund's investment exposure, but there is no guarantee that these
techniques will work.

The Risks

The principal risks of investing in the Fund are stock market risk and style
risk (value investing risk). To the extent that the portfolio manager invests in
foreign securities or debt securities, the Fund would be subject to foreign
exposure risk or interest rate risk and credit risk.

If you would like additional information regarding the Fund's investment
strategies and risks, including a description of the terms in bold type, please
refer to "More on Strategies and Risks" later in this Prospectus.

--------------------------------------------------------------------------------
<PAGE>
                                                                      ----------
                                                                               7


--------------------------------------------------------------------------------
Fund Performance

The bar chart and table opposite illustrate the short-term variability in the
Fund's performance and the Fund's returns relative to a common measure of
performance.


The bar chart illustrates how the Fund's performance varies from year to year
over the periods shown. The bar chart does not reflect the impact of sales
charges, which lower the Fund's returns. During the periods presented in the bar
chart, Class A's highest return for a quarter was 20.39% for the quarter ended
June 30, 1997. The lowest return for a quarter was -10.22% for the quarter ended
September 30, 1998.


The table opposite illustrates how the Fund's average annual returns for
different calendar periods compare to the returns of the Standard & Poor's
500/Barra Value Index (S&P Value Index). The table reflects the impact of the
Fund's expenses and sales charges for each share class. It assumes that you sold
your shares at the end of each period.

--------------------------------------------------------------------------------
Calendar Year Total Returns
Class A Shares*

                                  [BAR CHART]


                     1994  1995  1996  1997  1998  1999  2000
                     ----  ----  ----  ----  ----  ----  ----
                     -2%   30%    23%  33%   24%   18%


All mutual funds use a standard formula to calculate total return. Total return
measures the price change in a share assuming the reinvestment of all dividend
income and capital gain distributions.

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

Average Annual Total Return
(as of December 31, 1999)


                                                                      Since
                                              1 Year     5 Years    Inception**
                                              ------     -------    -----------
GE Value Equity Fund
  Class A*                                     11.35%      23.95%    18.48%
  Class B                                      13.56%      24.61%    18.84%
  Class C (level load)                            --          --        --
  Class Y***                                   18.76%         --     21.72%
S&P Value Index                                12.69%      22.92%    17.65%****

Both the bar chart and table assume reinvestment of dividends and distributions.
If GE Asset Management had not reduced certain expenses during the periods
shown, the Fund's total returns would have been lower. As with all mutual funds,
past performance is not an indication of future performance.

* Returns reflect the impact of Distribution and Service Fees imposed at the
rate of 0.50% of average daily net assets. Effective September 17, 1999,
Distribution and Service Fees were reduced to 0.25% of average daily net assets.

** Inception date (commencement of investment operations):
Class A - September 8, 1993
Class B - September 8, 1993
Class C - September 30, 1999
Class Y - January 5, 1998

*** Formerly named Class D

**** Since September 1, 1993

--------------------------------------------------------------------------------
<PAGE>
---------------
8  GE Funds
   Prospectus
   Equity Funds


--------------------------------------------------------------------------------
GE Mid-Cap Growth Fund

---------------
Investment Objective: Long-term growth of capital.

The Strategy


GE Mid-Cap Growth Fund invests primarily in equity securities of mid-cap
companies that the portfolio manager believes have above-average growth
potential. The Fund defines a mid-cap company as one with a market
capitalization within the capitalization range of the Standard & Poor's 400
MidCap Index. As of December 31, 2000 the market capitalization of companies in
the index ranged from $___ million to $__ billion. The portfolio manager will
not sell a stock merely because the market capitalization of a company in the
portfolio moves above or below the maximum or minimum capitalization of the
index. Stock selection is key to the performance of the Fund.


The portfolio manager seeks to identify securities of growth companies with
characteristics such as:

o above-average revenue and earnings growth

o attractive products or services

o financial strength

o strong competitive positions within their industries

o high quality management focused on generating shareholder value

o reasonable valuation

The Fund also may invest to a lesser extent in securities with capitalizations
outside the Fund's mid-cap range, foreign securities and debt securities. The
portfolio manager may use various investment techniques to adjust the Fund's
investment exposure, but there is no guarantee that these techniques will work.

The Risks

The principal risks of investing in the Fund are stock market risk and style
risk (growth investing risk and mid-cap company risk). To the extent that the
portfolio manager invests in foreign securities or debt securities, the Fund
would be subject to foreign exposure risk or interest rate risk and credit risk.

If you would like additional information regarding the Fund's investment
strategies and risks, including a description of the terms in bold type, please
refer to "More on Strategies and Risks" later in this Prospectus.

--------------------------------------------------------------------------------
<PAGE>
                                                                      ----------
                                                                               9


--------------------------------------------------------------------------------
Fund Performance

The bar chart and table opposite illustrate the short-term variability in the
Fund's performance and the Fund's returns relative to a common measure of
performance.


The bar chart illustrates how the Fund's performance varies from year to year
over the periods shown. The bar chart does not reflect the impact of sales
charges, which lower the Fund's returns. During the periods presented in the bar
chart, Class A's highest return for a quarter was 22.83% for the quarter ended
December 31, 1999. The lowest return for a quarter was -18.52% for the quarter
ended September 30, 1998.

The table opposite illustrates how the Fund's average annual returns for
different calendar periods compare to the returns of the Standard & Poor's 400
MidCap Stock Index (S&P MidCap Index). The table reflects the impact of the
Fund's expenses and sales charges for each share class. It assumes that you sold
your shares at the end of each period.


--------------------------------------------------------------------------------
Calendar Year Total Returns
Class A Shares*

                                  [BAR CHART]


                     1994  1995  1996  1997  1998  1999  2000
                     ----  ----  ----  ----  ----  ----  ----
                     -1%   32%   18%   26%    3%   17%


All mutual funds use a standard formula to calculate total return. Total return
measures the price change in a share assuming the reinvestment of all dividend
income and capital gain distributions.

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

Average Annual
Total Return (as of December 31, 1999)


                                                                      Since
                                               1 Year    5 Years    Inception**
                                               ------    -------    -----------
GE Mid-Cap Growth Fund
  Class A*                                      10.72%     17.52%     14.20%
  Class B                                       12.81%     18.17%     14.54%
  Class C (level load)                             --         --         --
  Class Y***                                    17.98%        --      10.83%
S&P MidCap Index                                14.77%     23.02%     17.77%****

Both the bar chart and table assume reinvestment of dividends and distributions.
If GE Asset Management had not reduced certain expenses during the periods
shown, the Fund's total returns would have been lower. As with all mutual funds,
past performance is not an indication of future performance.

* Returns reflect the impact of Distribution and Service Fees imposed at the
rate of 0.50% of average daily net assets. Effective September 17, 1999,
Distribution and Service Fees were reduced to 0.25% of average daily net assets.

** Inception date (commencement of investment operations):
Class A - September 8, 1993
Class B - September 8, 1993
Class C - September 30, 1999
Class Y - January 5, 1998

*** Formerly named Class D

**** Since September 1, 1993

--------------------------------------------------------------------------------
<PAGE>
----------------
10  GE Funds
    Prospectus
    Equity Funds


--------------------------------------------------------------------------------
GE Mid-Cap Value Equity Fund

---------------
Investment Objective: Long-term growth of capital.

The Strategy


GE Mid-Cap Value Equity Fund invests primarily in equity securities of mid-cap
companies that the portfolio manager believes are undervalued by the market and
have above-average growth potential. The Fund defines mid-cap companies to mean
companies with capitalizations in the range included in the S&P MidCap Index,
$__ million to $__ billion as of December 31, 2000. The portfolio manager also
invests in companies that are considered "special situation companies" where due
to management turnaround, corporate or asset restructuring or significantly
undervalued assets, their securities may not have performed well in the recent
past, but appear to have potential for significant future earnings growth. Stock
selection is key to the performance of the Fund.


The Fund is value-oriented and seeks to identify undervalued companies where a
catalyst exists to recognize value or improve a company's profitability.
Examples of these catalysts are:

o new management

o industry consolidation

o company restructuring

o change in the company's fundamentals


The Fund also may invest to a lesser extent in foreign securities, initial
public offerings and debt securities. The portfolio manager may use various
investment techniques to adjust the Fund's investment exposure, but there is no
guarantee that these techniques will work.


The Risks

The principal risks of investing in the Fund are stock market risk and style
risk (value investing risk and mid-cap company risk). To the extent that the
portfolio manager invests in foreign securities or debt securities, the Fund
would be subject to foreign exposure risk or interest rate risk and credit risk.

If you would like additional information regarding the Fund's investment
strategies and risks, including a description of the terms in bold type, please
refer to "More on Strategies and Risks" later in this Prospectus.

--------------------------------------------------------------------------------
<PAGE>
                                                                      ----------
                                                                              11


--------------------------------------------------------------------------------
Fund Performance

The bar chart and table opposite illustrate the short-term variability in the
Fund's performance and the Fund's returns relative to a common measure of
performance.


The bar chart illustrates how the Fund's performance varies from year to year
over the periods shown. The bar chart does not reflect the impact of sales
charges, which lower the Fund's returns. During the periods presented in the bar
chart, Class A's highest return for a quarter was 13.86% for the quarter ended
June 30, 1999. The lowest return for a quarter was -14.52% for the quarter ended
September 30, 1999.

The table opposite illustrates how the Fund's average annual returns for
different calendar periods compare to the returns of the Standard & Poor's 400
MidCap Stock Index (S&P MidCap Index). The table reflects the impact of the
Fund's expenses and sales charges for each share class. It assumes that you sold
your shares at the end of each period.




--------------------------------------------------------------------------------
Calendar Year Total Returns
Class A Shares*

                                  [BAR CHART]


                                   1999  2000
                                   ----  ----
                                   9%


All mutual funds use a standard formula to calculate total return. Total return
measures the price change in a share assuming the reinvestment of all dividend
income and capital gain distributions.

--------------------------------------------------------------------------------
Average Annual Total Return
(as of December 31, 1999)

                                                                      Since
                                                      1 Year       Inception**
                                                      ------       -----------
GE Mid-Cap Value Fund
  Class A*                                              1.71%          1.70%
  Class B                                               3.12%          3.11%
  Class C (level load)                                    --             --
  Class Y***                                            8.08%          8.06%

S&P MidCap Index                                       14.77%         14.77%****


Both the bar chart and table assume reinvestment of dividends and distributions.
If GE Asset Management had not reduced certain expenses during the periods
shown, the Fund's total returns would have been lower. As with all mutual funds,
past performance is not an indication of future performance.

* Returns reflect the impact of Distribution and Service Fees imposed at the
rate of 0.50% of average daily net assets. Effective September 17, 1999,
Distribution and Service Fees were reduced to 0.25% of average daily net assets.

** Inception date (commencement of investment operations):
Classes A, B and Y - December 31, 1998
Class C - September 30, 1999

*** Formerly named Class D

**** Since January 1, 1999

--------------------------------------------------------------------------------
<PAGE>
----------------
12  GE Funds
    Prospectus
    Equity Funds


--------------------------------------------------------------------------------
GE Small-Cap Value Equity Fund

---------------
Investment Objective: Long-term growth of capital.

The Strategy


GE Small-Cap Value Equity Fund invests primarily in equity securities of
small-cap companies that the portfolio managers believe are undervalued by the
market but have solid growth prospects. A company may be undervalued for reasons
such as market overreaction to recent company, industry or economic problems.
The Fund defines a small-cap company as one with a market capitalization within
the capitalization range of the Russell 2000 Index. As of December 31, 2000 the
market capitalization of companies in the index ranged from $__ million to $____
billion. The portfolio managers will not sell a stock merely because the market
capitalization of a company in the portfolio moves above or below the maximum or
minimum capitalization of the index. Stock selection is key to the performance
of the Fund.


The portfolio managers seek to identify securities of companies with
characteristics such as:

o high quality management

o attractive products or services

o appropriate capital structure

o strong competitive positions in their industries

o management focused on generating shareholder value

The Fund also may invest to a lesser extent in securities with capitalizations
outside the Fund's small-cap range, debt securities and foreign securities. The
portfolio managers may use various investment techniques to adjust the Fund's
investment exposure, but there is no guarantee that these techniques will work.

The Risks

The principal risks of investing in the Fund are stock market risk and style
risk (value investing risk and small-cap company risk). To the extent that the
portfolio managers invest in foreign securities or debt securities, the Fund
would be subject to foreign exposure risk or interest rate risk and credit risk.

If you would like additional information regarding the Fund's investment
strategies, including a description of the terms in bold type, please refer to
"More on Strategies and Risks" later in this Prospectus.

--------------------------------------------------------------------------------
<PAGE>
                                                                      ----------
                                                                              13


--------------------------------------------------------------------------------
Fund Performance

The bar chart and table opposite illustrate the short-term variability in the
Fund's performance and the Fund's returns relative to a common measure of
performance.


The bar chart illustrates how the Fund's performance varies from year to year
over the periods shown. The bar chart does not reflect the impact of sales
charges, which lower the Fund's returns. During the periods presented in the bar
chart, Class A's highest return for a quarter was 22.64% for the quarter ended
June 30, 1999. The lowest return for a quarter was -18.52% for the quarter ended
March 31, 1999.


The table opposite illustrates how the Fund's average annual returns for
different calendar periods compare to the returns of the Russell 2000 Index. The
table reflects the impact of the Fund's expenses and sales charges for each
share class. It assumes that you sold your shares at the end of each period.

--------------------------------------------------------------------------------
Calendar Year Total Returns
Class A Shares*

                                  [BAR CHART]


                                   1999   2000
                                   ----   ----
                                   21%


All mutual funds use a standard formula to calculate total return. Total return
measures the price change in a share assuming the reinvestment of all dividend
income and capital gain distributions.

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

Average Annual Total Return
(as of December 31, 1999)


                                                                   Since
                                                 1 Year         Inception**
                                                 ------         -----------
GE Small-Cap Value Fund
  Class A*                                        14.17%           28.67%
  Class B                                         16.21%           31.65%
  Class C (level load)                               --               --
  Class Y***                                      21.40%           35.31%
Russell 2000 Index                                21.09%           31.53%****

Both the bar chart and table assume reinvestment of dividends and distributions.
If GE Asset Management had not reduced certain expenses during the periods
shown, the Fund's total returns would have been lower. As with all mutual funds,
past performance is not an indication of future performance.

* Returns reflect the impact of Distribution and Service Fees imposed at the
rate of 0.50% of average daily net assets. Effective September 17, 1999,
Distribution and Service Fees were reduced to 0.25% of average daily net assets.

** Inception date (commencement of investment operations):
Classes A, B and Y - September 30, 1998
Class C - September 30, 1999

*** Formerly named Class D

**** Since October 1, 1998

--------------------------------------------------------------------------------
<PAGE>
----------------
14  GE Funds
    Prospectus
    Equity Funds


--------------------------------------------------------------------------------
GE S&P 500 Index Fund

---------------
Investment Objective: Growth of capital and accumulation of income that
corresponds to the investment return of the Standard & Poor's 500 Composite
Stock Index.

The Strategy

GE S&P 500 Index Fund invests primarily in equity securities of companies
contained in the Standard & Poor's 500 Composite Stock Index (S&P 500
Index(Registered)).* The portfolio manager seeks to replicate the return of the
S&P 500 Index while holding transaction costs low and minimizing portfolio
turnover. The portfolio manager attempts to achieve a correlation between its
total return and that of the S&P 500 Index of at least .95, without taking
expenses into account.

The portfolio manager uses a passive management approach to select a
representative group of stocks within the S&P 500 Index. The portfolio manager
also may use statistical selection to determine which securities within the
Index to purchase or sell for the Fund. The Fund generally will not hold all the
securities that comprise the Index and, in some cases, the Fund's weightings in
particular industry segments represented in the Index may differ significantly
from those of the Index.

The Fund also may invest to a lesser extent in debt securities, foreign
securities and other securities that are not in the S&P 500 Index. Except for
debt securities, which are used to manage cash flows, all securities held by the
Fund are acquired to fulfill its investment objective. The portfolio managers
may use various investment techniques to adjust the Fund's investment exposure,
but there is no guarantee that these techniques will work. The Fund will not
adopt a temporary defensive strategy in times of declining stock prices and
therefore you will bear the risk of such declines.

The Risks

The principal risks of investing in the Fund are stock market risk and the risk
that the Fund's return may not correlate exactly with that of the S&P 500 Index.
To the extent that the portfolio manager invests in foreign securities and debt
securities, the Fund would be subject to foreign exposure risk, interest rate
risk and credit risk.

If you would like additional information regarding the Fund's investment
strategies and risks, including a description of the terms in bold type, please
refer to "More on Strategies and Risks" later in this Prospectus.

--------------------------------------------------------------------------------
Fund Background


Because the Fund recently commenced operations, performance information is
included in the Fund's annual report dated September 30, 2000.


*"Standard & Poor's(Registered)", "S&P(Registered)", "S&P 500(Registered)",
"Standard & Poor's 500" and "500(Registered)" are trademarks of The McGraw-Hill
Companies, Inc. and have been licensed for use by GE Asset Management
Incorporated. The S&P500 Index Fund is not sponsored, endorsed, sold or promoted
by Standard &Poor's, and Standard & Poor's makes no representation regarding the
advisability of investing in the Fund. Please see the Statement of Additional
Information for additional disclaimers and liabilities regarding Standard &
Poor's.

--------------------------------------------------------------------------------
<PAGE>
                                                                      ----------
                                                                              15


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

                     [This page intentionally left blank.]

--------------------------------------------------------------------------------
<PAGE>
----------------
16  GE Funds
    Prospectus
    Equity Funds


--------------------------------------------------------------------------------
GE Global Equity Fund

---------------
Investment Objective: Long-term growth of capital.

The Strategy

GE Global Equity Fund invests primarily in equity securities of companies in
developed and developing countries, including the United States. The portfolio
managers focus on companies that they expect will grow faster than relevant
markets and whose security price does not fully reflect their potential for
growth. Under normal circumstances, the Fund's assets are invested primarily in
countries included in the Morgan Stanley Capital International World Index and
in no fewer than three different countries. Stock selection is key to the
performance of the fund.

The portfolio managers seek to identify securities of growth companies with
characteristics such as:

o low prices relative to their long-term cash earnings potential

o potential for significant improvement in the company's business

o financial strength

o sufficient liquidity

The Fund also may invest to a lesser extent in debt securities. The portfolio
managers may use various investment techniques to adjust the Fund's investment
exposure, but there is no guarantee that these techniques will work.

The Risks

The principal risks of investing in the Fund are stock market risk, foreign
exposure risk, style risk (growth investing risk), and emerging markets risk. To
the extent that the portfolio managers invest in debt securities, the Fund would
be subject to interest rate risk and credit risk.

If you would like additional information regarding the Fund's investment
strategies and risks, including a description of the terms in bold type, please
refer to "More on Strategies and Risks" later in this Prospectus.

--------------------------------------------------------------------------------
<PAGE>
                                                                      ----------
                                                                              17


--------------------------------------------------------------------------------
Fund Performance

The bar chart and table opposite illustrate the short-term variability in the
Fund's performance and the Fund's returns relative to a common measure of
performance.


The bar chart illustrates how the Fund's performance varies from year to year
over the periods shown. The bar chart does not reflect the impact of sales
charges, which lower the Fund's returns. During the periods presented in the bar
chart, Class A's highest return for a quarter was 21.91% for the quarter ended
December 31, 1998. The lowest return for a quarter was -18.81% for the quarter
ended September 30, 1998.


The table opposite illustrates how the Fund's average annual returns for
different calendar periods compare to the returns of the Morgan Stanley Capital
International World Index (MSCIW Index). The table reflects the impact of the
Fund's expenses and sales charges for each share class. It assumes that you sold
your shares at the end of each period.

--------------------------------------------------------------------------------
Calendar Year Total Returns
Class A Shares*

                                  [BAR CHART]


                     1994  1995  1996  1997  1998  1999  2000
                     ----  ----  ----  ----  ----  ----  ----
                     -2%   14%   15%    7%   16%   36%


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

Average Annual Total Return
(as of December 31, 1999)


                                                                      Since
                                              1 year     5 years   Inception**
                                              ------     -------   -----------
GE Global Equity Fund
  Class A*                                     28.32%      15.91%    14.87%
  Class B                                      31.16%      16.43%    13.46%
  Class C (level load)                              -           -         -
  Class Y***                                   36.47%      17.60%    15.46%
MSCIW Index                                    24.94%      19.76%    17.93%****

Both the bar chart and table assume reinvestment of dividends and distributions.
If GE Asset Management had not reduced certain expenses during the periods
shown, the Fund's total returns would have been lower. As with all mutual funds,
past performance is not an indication of future performance.

* Returns are those of the predecessor Class C, which was combined with Class A
as of the close of business on September 17, 1999. Average annual total return
figures have been adjusted to reflect Class A expenses and sales charges.

**Inception date (commencement of investment operations):
Class A - February 22, 1993
Class B - December 22, 1993
Class C - September 30, 1999
Class D - November 29, 1993

*** Formerly named Class D

**** Since March 1, 1993

--------------------------------------------------------------------------------
<PAGE>
----------------------------------------
18  GE Funds                Equity Funds
    Prospectus
    Equity Funds


--------------------------------------------------------------------------------
GE International Equity Fund

---------------
Investment Objective: Long-term growth of capital.

The Strategy

GE International Equity Fund invests primarily in equity securities of companies
in developed and developing countries other than the United States. The
portfolio managers focus on companies that they expect will grow faster than
relevant markets and whose security price does not fully reflect their potential
for growth. Under normal circumstances, the Fund's assets are invested in
foreign securities of companies representing at least three different countries.
Stock selection is key to the performance of the Fund.

The portfolio managers seek to identify securities of growth companies with
characteristics such as:

o low prices relative to their long-term cash earnings potential

o potential for significant improvement in the company's business

o financial strength

o sufficient liquidity

The Fund also may invest to a lesser extent in debt securities. The Fund also
may invest in securities of companies located in the United States. The
portfolio managers may use various investment techniques to adjust the Fund's
investment exposure, but there is no guarantee that these techniques will work.

The Risks

The principal risks of investing in the Fund are stock market risk, foreign
exposure risk, style risk (mid-cap company risk and growth investing risk), and
emerging markets risk. To the extent that the portfolio managers invest in debt
securities, the Fund would be subject to interest rate risk and credit risk.

If you would like additional information regarding the investment strategies and
risks, including a description of the terms in bold type, associated with this
Fund, please refer to "More on Strategies and Risks" later in this Prospectus.

--------------------------------------------------------------------------------
<PAGE>
                                                                      ----------
                                                                              19


--------------------------------------------------------------------------------
Fund Performance

The bar chart and table opposite illustrate the short-term variability in the
Fund's performance and the Fund's returns relative to a common measure of
performance.


The bar chart illustrates how the Fund's performance varies from year to year
over the periods shown. The bar chart does not reflect the impact of sales
charges, which lower the Fund's returns. During the periods presented in the bar
chart, Class A's highest return for a quarter was 21.52% for the quarter ended
December 31, 1999. The lowest return for a quarter was -18.01% for the quarter
ended September 30, 1998.


The table opposite illustrates how the Fund's average annual returns for
different calendar periods compare to the returns of the Morgan Stanley Capital
International Europe Australasia Far East Index (MSCI EAFE Index). The table
reflects the impact of the Fund's expenses and sales charges for each share
class. It assumes that you sold your shares at the end of each period.

--------------------------------------------------------------------------------
Calendar Year Total Returns
Class A Shares*

                                  [BAR CHART]


                      1995  1996  1997  1998  1999  2000
                      ----  ----  ----  ----  ----  ----
                       15%   12%    6%   14%   31%


All mutual funds use a standard formula to calculate total return. Total return
measures the price change in a share assuming the reinvestment of all dividend
income and capital gain distributions.

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

Average Annual Total Return
(as of December 31, 1999)


                                                                        Since
                                               1 year      5 years   Inception**
                                               ------      -------   -----------
GE International
 Equity Fund
  Class A*                                      23.22%      13.94%    11.13%
  Class B                                       25.71%      14.44%    11.43%
  Class C (level load)                             --          --        --
  Class Y***                                    30.99%      15.66%    12.62%
MSCI EAFE Index                                 26.96%      12.83%    10.77%****

Both the bar chart and table assume reinvestment of dividends and distributions.
If GE Asset Management had not reduced certain expenses during the periods
shown, the Fund's total returns would have been lower. As with all mutual funds,
past performance is not an indication of future performance.

* Returns are those of the predecessor Class C, which was combined with Class A
as of the close of business on September 17, 1999. Average annual total return
figures have been adjusted to reflect Class A expenses and sales charges.

** Inception date (commencement of investment operations):
Classes A, B and Y - March 2, 1994
Class C - September 30, 1999

*** Formerly named Class D.

**** Since March 1, 1994.

--------------------------------------------------------------------------------
<PAGE>
----------------
20  GE Funds
    Prospectus
    Equity Funds


--------------------------------------------------------------------------------
GE Europe Equity Fund

---------------
Investment Objective: Long-term growth of capital.

---------------
Developed European countries currently include:
Austria
Belgium
Denmark
Finland
France
Germany
Greece
Ireland
Italy
Luxembourg
The Netherlands
Norway
Portugal
Spain
Sweden
Switzerland
United Kingdom

The Strategy

The GE Europe Equity Fund invests primarily in equity securities of issuers
located in developed European countries. The portfolio managers focus on
companies that are expected to grow faster than relevant markets and whose
security price does not fully reflect their potential for growth. Under normal
circumstances, the Fund's assets are invested in foreign securities of companies
representing at least three different countries. Stock selection is key to the
performance of the Fund.

The portfolio managers seek to identify securities of growth companies with
characteristics such as:

o low prices relative to their long-term cash earnings potential

o potential for significant improvement in the company's business

o financial strength

o sufficient liquidity

The Fund may also invest to a lesser extent in securities of companies
representing European emerging market countries, developed or emerging countries
outside of Europe (including the United States) and debt securities. European
emerging market countries include the Czech Republic, Poland, Hungary, Turkey,
Russia and other former republics of the Soviet Union. The portfolio managers
may use various investment techniques to adjust the Fund's investment exposure,
but there is no guarantee that these techniques will work.

The Risks

The principal risks of investing in the Fund are stock market risk, foreign
exposure risk and style risk (growth investing risk). To the extent that the
portfolio managers invest in securities of emerging market countries and debt
securities, the Fund would be subject to emerging markets risk, interest rate
risk and credit risk.

Because the Fund targets a single region, investors should expect the Fund to be
more volatile than a more geographically diversified equity fund. Fund
performance is closely tied to economic and political conditions within Europe.

If you would like additional information regarding the Fund's investment
strategies and risks, including a description of the terms in bold type, please
refer to "More on Strategies and Risks" later in this Prospectus.



--------------------------------------------------------------------------------
<PAGE>
                                                                      ----------
                                                                              21



--------------------------------------------------------------------------------
Fund Performance

The bar chart and table opposite illustrate the short-term variability in the
Fund's performance and the Fund's returns relative to a common measure of
performance.

The bar chart illustrates how the Fund's performance varies from year to year
over the periods shown. The bar chart does not reflect the impact of sales
charges, which lower the Fund's returns. During the periods presented in the bar
chart, Class A's highest return for a quarter was ____% for the quarter ended
_______________. The lowest return for a quarter was -____% for the quarter
ended ____________.

The table opposite illustrates how the Fund's average annual returns for
different calendar periods compare to the returns of the Morgan Stanley Capital
International Europe Index (MSCI Europe Index). The table reflects the impact of
the Fund's expenses and sales charges for each share class. It assumes that you
sold your shares at the end of each period.

--------------------------------------------------------------------------------
Calendar Year Total Returns
Class A Shares*


                                  Chart to come


All mutual funds use a standard formula to calculate total return. Total return
measures the price change in a share assuming the reinvestment of all dividend
income and capital gain distributions.

--------------------------------------------------------------------------------
Average Annual Total Return
(as of December 31, 2000)

                                                                        Since
                                               1 year                Inception**
                                               ------                -----------
GE Europe
 Equity Fund
  Class A*                                      __.__%      __.__%    __.__%
  Class B                                       __.__%      __.__%    __.__%
  Class C (level load)                             --          --        --
  Class Y***                                    __.__%      __.__%    __.__%
MSCI Europe Index                               __.__%      __.__%    __.__%****

Both the bar chart and table assume reinvestment of dividends and distributions.
If GE Asset Management had not reduced certain expenses during the periods
shown, the Fund's total returns would have been lower. As with all mutual funds,
past performance is not an indication of future performance.

* Returns are those of the predecessor Class C, which was combined with Class A
as of the close of business on September 17, 1999. Average annual total return
figures have been adjusted to reflect Class A expenses and sales charges.

** Inception date (commencement of investment operations):
Classes A, B and Y - January 29, 1999
Class C - September 30, 1999

*** Formerly named Class D.


--------------------------------------------------------------------------------
<PAGE>
-------------------------------------
22  GE Funds             Equity Funds
    Prospectus


--------------------------------------------------------------------------------
GE Emerging Markets Fund

---------------
Investment Objective: Long-term growth of capital.

The Strategy

The Emerging Markets Fund invests primarily in equity securities of issuers
located in emerging markets. The portfolio managers focus on companies that are
expected to grow faster than relevant markets and whose security price does not
fully reflect their potential for growth. Under normal circumstances, the Fund's
assets are invested in foreign securities of companies representing at least
three different countries. The portfolio managers consider which emerging market
countries in which to invest based on certain factors, including investment
restrictions, tax barriers, local market cycles, economic outlook for growth,
currency exchange rates and the political environment. The portfolio managers
consider the following factors in determining whether an issuer is located in an
emerging market country: country of organization, primary securities trading
market, location of assets, or country where the issuer derives at least half of
its revenues and profits.

An emerging market country is any country having an economy and market that are
(or would be) considered by the World Bank to be emerging or developing, or
listed in the Morgan Stanley Capital International Emerging Markets Index.
Emerging market countries are located in regions such as Asia, Latin America,
the Middle East, Southern Europe, Eastern Europe (including the former republics
of the Soviet Union and the Eastern Bloc) and Africa.

The portfolio managers seek to identify securities of growth companies with
characteristics such as:

o low prices relative to their long-term cash earnings potential

o potential for significant improvement in the company's business

o financial strength

o sufficient liquidity

The Fund may also invest to a lesser extent in securities of companies located
in countries other than emerging market countries (including the United States)
and debt securities. The portfolio managers may use various investment
techniques to adjust the Fund's investment exposure, but there is no guarantee
that these techniques will work.

The Risks

The principal risks of investing in this Fund are stock market risk, foreign
exposure risk, emerging markets risk and style risk (growth investing risk and
small-cap company risk). To the extent that the portfolio managers invest in
debt securities, the Fund would be subject to interest rate risk and credit
risk.

If you would like additional information regarding the Fund's investment
strategies and risks, including a description of the terms in bold type, please
refer to "More on Strategies and Risks" later in this Prospectus.



--------------------------------------------------------------------------------
<PAGE>
                                                                      ----------
                                                                              23



--------------------------------------------------------------------------------
Fund Performance

The bar chart and table opposite illustrate the short-term variability in the
Fund's performance and the Fund's returns relative to a common measure of
performance.

The bar chart illustrates how the Fund's performance varies from year to year
over the periods shown. The bar chart does not reflect the impact of sales
charges, which lower the Fund's returns. During the periods presented in the bar
chart, Class A's highest return for a quarter was ____% for the quarter ended
_______________. The lowest return for a quarter was ____% for the quarter
ended ____________.

The table opposite illustrates how the Fund's average annual returns for
different calendar periods compare to the returns of the Morgan Stanley Capital
International Emerging Markets Free Index (MSCI EMF Index). The table reflects
the impact of the Fund's expenses and sales charges for each share class. It
assumes that you sold your shares at the end of each period.

--------------------------------------------------------------------------------
Calendar Year Total Returns
Class A Shares*


                                  Chart to come


All mutual funds use a standard formula to calculate total return. Total return
measures the price change in a share assuming the reinvestment of all dividend
income and capital gain distributions.

--------------------------------------------------------------------------------
Average Annual Total Return
(as of December 31, 2000)

                                                                        Since
                                               1 year                Inception**
                                               ------                -----------
GE Europe
 Equity Fund
  Class A*                                      __.__%      __.__%    __.__%
  Class B                                       __.__%      __.__%    __.__%
  Class C (level load)                             --          --        --
  Class Y***                                    __.__%      __.__%    __.__%
MSCI EMF Index                                  __.__%      __.__%    __.__%

Both the bar chart and table assume reinvestment of dividends and distributions.
If GE Asset Management had not reduced certain expenses during the periods
shown, the Fund's total returns would have been lower. As with all mutual funds,
past performance is not an indication of future performance.

* Returns are those of the predecessor Class C, which was combined with Class A
  as of the close of business on September 17, 1999. Average annual total return
  figures have been adjusted to reflect Class A expenses and sales charges.

** Inception date (commencement of investment operations):
Classes A, B and Y - January 29, 1999
Class C - September 30, 1999

*** Formerly named Class D.


--------------------------------------------------------------------------------
<PAGE>
-------------------------------------
24  GE Funds             Equity Funds
    Prospectus
    Equity Funds


--------------------------------------------------------------------------------
GE Premier Growth Equity Fund

---------------
Investment Objective: Long-term growth of capital and future income rather than
current income.

The Strategy

GE Premier Growth Equity Fund invests primarily in a limited number of equity
securities of large- and medium-sized companies that the portfolio manager
believes have above average growth histories and/or growth potential. The
portfolio manager selects equity securities from a number of industries based on
the merits of individual companies. Stock selection is key to the performance of
the Fund.

The portfolio manager seeks to identify stocks of companies with characteristics
such as:

o above-average annual growth rates

o financial strength

o leadership in their respective industries

o high quality management focused on generating shareholder value

The Fund also may invest to a lesser extent in foreign securities and debt
securities. The portfolio manager may use various investment techniques to
adjust the Fund's investment exposure, but there is no guarantee that these
techniques will work.

The Risks

The principal risks of investing in the Fund are stock market risk,
diversification risk and style risk (growth investing risk and mid-cap company
risk). To the extent that the portfolio manager invests in foreign securities or
debt securities, the Fund would be subject to foreign exposure risk or interest
rate risk and credit risk.

If you would like additional information regarding the Fund's investment
strategies and risks, including a description of the terms in bold type, please
refer to "More on Strategies and Risks" later in this Prospectus.

--------------------------------------------------------------------------------
<PAGE>
                                                                      ----------
                                                                              25


--------------------------------------------------------------------------------
Fund Performance

The bar chart and table opposite illustrate the short-term variability in the
Fund's performance and the Fund's returns relative to a common measure of
performance.


The bar chart illustrates how the Fund's performance varies from year to year
over the periods shown. The bar chart does not reflect the impact of sales
charges, which lower the Fund's returns. During the periods presented in the bar
chart, Class A's highest return for a quarter was 23.47% for the quarter ended
December 31, 1998. The lowest return for a quarter was -6.71% for the quarter
ended September 30, 1998.


The table opposite illustrates how the Fund's average annual returns for
different calendar periods compare to the returns of the Standard & Poor's 500
Composite Stock Index (S&P 500 Index(Registered)), a widely recognized,
unmanaged index of common stock prices. The table reflects the impact of the
Fund's expenses and sales charges for each share class. It assumes that you sold
your shares at the end of each period.

--------------------------------------------------------------------------------
Calendar Year Total Returns
Class A Shares*

                                  [BAR CHART]


                            1997   1998   1999  2000
                            ----   ----   ----  ----
                             26%    35%    36%


All mutual funds use a standard formula to calculate total return. Total return
measures the price change in a share assuming the reinvestment of all dividend
income and capital gain distributions.

--------------------------------------------------------------------------------
Average Annual Total Return
(as of December 31, 1999)

                                                                      Since
                                                       1 Year       Inception**
                                                       ------       -----------
GE Premier Growth
Equity Fund
  Class A*                                             27.96%         29.83%
  Class B                                              30.72%         31.43%
  Class C (level load)                                    --             --
  Class Y***                                           36.09%         32.76%
  S&P 500 Index                                        21.07%         27.61%****

Both the bar chart and table assume reinvestment of dividends and distributions.
If GE Asset Management had not reduced certain expenses during the periods
shown, the Fund's total returns would have been lower. As with all mutual funds,
past performance is not an indication of future performance.

*Returns are those of the predecessor Class C, which was combined with Class A
as of the close of business on September 17, 1999. Average annual total return
figures have been adjusted to reflect Class A expenses and sales charges.

** Inception date (commencement of investment operations):
Classes A, B and Y - December 31, 1996
Class C - September 30, 1999

*** Formerly named Class D

**** Since December 31, 1996

--------------------------------------------------------------------------------
<PAGE>
-------------------------------------
26  GE Funds             Equity Funds
    Prospectus
    Equity Funds


--------------------------------------------------------------------------------
GE Premier Research Equity Fund

---------------
Investment Objective: Long-term growth of capital and future income rather than
current income.

The Strategy

GE Premier Research Equity Fund invests primarily in a limited number of equity
securities of large- and medium-sized companies located in the United States.
The portfolio managers select equity securities based on the recommendations of
a team of analysts. Each analyst is dedicated to particular industries. The
portfolio managers select securities from the industry analyst's recommendations
while keeping the Fund's sector weighting consistent with that of the S&P 500
Index. Stock selection is key to the performance of the Fund.

The portfolio managers seek to identify stocks of companies with characteristics
such as:

o above-average annual growth rates

o financial strength

o attractive valuations

o leadership in their respective industries

o high quality management focused on generating shareholder value

The Fund also may invest to a lesser extent in foreign securities and debt
securities. The portfolio managers may use various investment techniques to
adjust the Fund's investment exposure, but there is no guarantee that these
techniques will work.

The Risks

The principal risks of investing in the Fund are stock market risk,
diversification risk, and style risk (mid-cap company risk). To the extent that
the portfolio managers invest in foreign securities or debt securities, the Fund
would be subject to foreign exposure risk or interest rate risk and credit risk.

If you would like additional information regarding the Fund's investment
strategies and risks, including a description of the terms in bold type, please
refer to "More on Strategies and Risks" later in this Prospectus.

--------------------------------------------------------------------------------
Fund Background


Because the Fund recently commenced investment operations, performance
information is included in the Fund's annual report dated September 30, 2000.


--------------------------------------------------------------------------------
Prior Performance

Prior performance information of GE Asset Management, the Fund's investment
adviser, can be found under "Prior Performance Information" later in this
Prospectus.

--------------------------------------------------------------------------------
<PAGE>
                                                                      ----------
                                                                              27


--------------------------------------------------------------------------------
GE Premier International Equity Fund

---------------
Investment Objective: Long-term growth of capital and future income.

The Strategy

GE Premier International Equity Fund invests primarily in a limited number of
equity securities of companies located in developed and developing countries
other than the United States. The portfolio manager focuses on companies that he
expects will grow faster than relevant markets and whose security price does not
fully reflect their potential for growth. Under normal circumstances, the Fund's
assets are invested in foreign securities of companies representing at least
three different countries. Stock selection is key to the performance of the
Fund.

The portfolio manager seeks to identify securities of growth companies with
characteristics such as:

o low prices relative to their long-term cash earnings potential

o potential for significant improvement in the company's business

o financial strength

o sufficient liquidity

The Fund also may invest to a lesser extent in debt securities. The Fund may
invest in securities of companies located in the United States. The portfolio
manager may use various investment techniques to adjust the Fund's investment
exposure, but there is no guarantee that these techniques will work.

The Risks

The principal risks of investing in the Fund are stock market risk, foreign
exposure risk, style risk (growth investing risk and mid-cap company risk),
diversification risk, and emerging markets risk. To the extent that the
portfolio manager invests in debt securities, the Fund would be subject to
interest rate risk and credit risk.

If you would like additional information regarding the Fund's investment
strategies and risks, including a description of the terms in bold type, please
refer to "More on Strategies and Risks" later in this Prospectus.

--------------------------------------------------------------------------------
Fund Background


Because the Fund recently commenced investment operations, performance
information is included in the Fund's annual report dated September 30, 2000.


--------------------------------------------------------------------------------
Prior Performance

Prior performance information of GE Asset Management, the Fund's investment
adviser, can be found under "Prior Performance Information" later in this
Prospectus.

--------------------------------------------------------------------------------
<PAGE>
-------------------------------------
28  GE Funds             Equity Funds
    Prospectus
    Equity Funds


--------------------------------------------------------------------------------
GE Premier Value Equity Fund

---------------
Investment Objective: Long-term growth of capital and future income.

The Strategy

GE Premier Value Equity Fund invests primarily in a limited number of equity
securities of large U.S. companies that the portfolio manager believes are
undervalued by the market but have solid growth prospects. A company may be
undervalued for reasons such as market overreaction to recent company, industry
or economic problems. Stock selection is key to the performance of the Fund.

The portfolio manager seeks to identify securities of growth companies with
characteristics such as:

o low prices in relation to their peers and the overall market

o the potential for long-term earnings growth

o improving returns on capital

o improving cash flows

o strong management

o financial strength

o attractive upside potential and limited downside risk

The Fund also may invest to a lesser extent in foreign securities and debt
securities. The portfolio manager may use various investment techniques to
adjust the Fund's investment exposure, but there is no guarantee that these
techniques will work.

The Risks

The principal risks of investing in the Fund are stock market risk,
diversification risk, and style risk (value investing risk). To the extent that
the portfolio manager invests in foreign securities or debt securities, the Fund
would be subject to foreign exposure risk or interest rate risk and credit risk.

If you would like additional information regarding the Fund's investment
strategies and risks, including a description of the terms in bold type, please
refer to "More on Strategies and Risks" later in this Prospectus.

--------------------------------------------------------------------------------
Fund Background


Because the Fund recently commenced investment operations, performance
information is included in the Fund's annual report dated September 30, 2000.


--------------------------------------------------------------------------------
<PAGE>
                                                                      ----------
                                                                              29


                                        ----------------------------------------
                                        Income                        GE Funds
                                        Funds                         Prospectus


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

An investment in a GE Income Fund is not a deposit of any bank and is not
insured or guaranteed by the Federal Deposit Insurance Corporation or any other
government agency. An investment in a GE Fund is subject to risk, including
possible loss of principal invested.

Who may want to invest in a GE Income Fund?

GE Income Funds may be appropriate for your investment portfolio if you:

o seek regular income

o seek lower potential volatility than equity funds over the long term

o want to diversify a portfolio composed mostly of equity investments

The GE Tax-Exempt Fund may be appropriate for your investment portfolio if you

o are in a high tax bracket

o want income that is exempt from federal income tax

GE Income Funds may not be appropriate if you want:

o high potential capital appreciation

Income funds generally invest in debt securities. Debt securities are bonds and
other securities that are used by issuers to borrow money from investors.
Holders of debt securities have a higher priority claim to assets than do equity
holders. Typically, the debt issuer pays the investor a fixed, variable or
floating rate of interest and must repay the borrowed amount at maturity. Some
debt securities, such as zero coupon bonds, are sold at a discount from their
face values instead of paying interest. Income funds provide regular income and
some provide federally tax-exempt income.

--------------------------------------------------------------------------------
<PAGE>
--------------------
30 GE Funds
   Prospectus
   Income Funds


--------------------------------------------------------------------------------
GE Fixed Income Fund

---------------
Investment Objective: Maximum income consistent with prudent investment
management and the preservation of capital.

The Strategy

GE Fixed Income Fund invests primarily in a variety of investment grade debt
securities, such as mortgage-backed securities, corporate bonds, U.S. Government
securities, and money market instruments. The Fund normally has a weighted
average maturity of approximately five to ten years.

The portfolio managers seek to identify debt securities with characteristics
such as:

o attractive yields and prices

o the potential for capital appreciation

o reasonable credit quality

The Fund also may invest to a lesser extent in asset-backed securities and
foreign securities. The portfolio managers may use various investment techniques
to adjust the Fund's investment exposure, but there is no guarantee that these
techniques will work.

The Fund's investment strategy may result in a high portfolio turnover rate,
which may cause the Fund to experience increased transaction costs and
shareholders to incur increased taxes on their investment in the Fund.

The Risks

The principal risks of investing in the Fund are interest rate risk, credit risk
and prepayment risk. To the extent that the portfolio managers invest in foreign
securities, the Fund would be subject to foreign exposure risk. Certain
portfolio securities are derivative securities that carry derivative securities
risk.

If you would like additional information regarding the Fund's investment
strategies and risks, including a description of the terms in bold type, please
refer to "More on Strategies and Risks" later in this Prospectus.

--------------------------------------------------------------------------------
<PAGE>
                                                                      ----------
                                                                              31


--------------------------------------------------------------------------------
Fund Performance

The bar chart and table opposite illustrate the short-term variability in the
Fund's performance and the Fund's returns relative to a common measure of
performance.


The bar chart illustrates how the Fund's performance varies from year to year
over the periods shown. The bar chart does not reflect the impact of sales
charges, which lower the Fund's returns. During the periods presented in the bar
chart, Class A's highest return for a quarter was 5.92% for the quarter ended
June 30, 1995. The lowest return for a quarter was -2.59% for the quarter ended
March 31, 1994.


The table opposite illustrates how the Fund's average annual returns for
different calendar periods compare to the returns of the Lehman Brothers
Aggregate Bond Index (LB Aggregate Bond Index). The table reflects the impact of
the Fund's expenses and sales charges for each share class. It assumes that you
sold your shares at the end of each period.

--------------------------------------------------------------------------------
Calendar Year Total Returns
Class A Shares*

                                  [BAR CHART]


                 1994  1995  1996  1997  1998  1999  2000
                 ----  ----  ----  ----  ----  ----  ----
                  -3%   17%    3%    9%    8%   -2%


All mutual funds use a standard formula to calculate total return. Total return
measures the price change in a share assuming the reinvestment of all dividend
income and capital gain distributions.

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

Average Annual Total Return
(as of December 31, 1999)


                                                                       Since
                                                 1 year   5 years   Inception**
                                                 ------   -------   -----------
GE Fixed Income Fund
  Class A*                                        -5.76%     5.94%     4.66%
  Class B                                         -5.13%     6.08%     4.45%
  Class C (level load)                               --        --        --
  Class Y***                                      -1.44%     7.10%     5.44%
LB Aggregate Bond Index                           -0.83%     7.73%     6.01%****

Both the bar chart and table assume reinvestment of dividends and distributions.
If GE Asset Management had not reduced certain expenses during the periods
shown, the Fund's total returns would have been lower. As with all mutual funds,
past performance is not an indication of future performance.

* Returns are those of the predcessor Class C, which was combined with Class A
as of the close of business on September 17, 1999. Average annual total return
figures have been adjusted to reflect Class A expenses and sales charges.

** Inception date (commencement of investment operations):
Class A - February 22,1993
Class B - December 22, 1993
Class C - September 30, 1999
Class Y - November 29, 1993

*** Formerly named Class D

**** Since March 1, 1993

--------------------------------------------------------------------------------
<PAGE>
--------------------
32 GE Funds
   Prospectus
   Income Funds

--------------------------------------------------------------------------------
GE Government Securities Fund

---------------
Investment Objective: High level of current income consistent with safety of
principal.

The Strategy

GE Government Securities Fund invests primarily in U.S. Government securities,
including mortgage-backed securities, with remaining maturities of one year or
more. The Fund normally has an average duration of about three to six years. The
Fund invests in securities issued by the:

o U.S. Treasury

o Government National Mortgage Association (Ginnie Mae)

o Federal National Mortgage Association (Fannie Mae)

o Federal Home Loan Mortgage Corporation (Freddie Mac)

o other U.S. Government agencies

No more than 25% of the Fund's assets may be invested in debt securities rated A
or lower by Moody's or S&P or comparably rated by another nationally recognized
statistical rating organization, and no more than 10% of the Fund's assets may
be invested in debt securities rated Baa by Moody's or BBB by S&P or comparably
rated by another nationally recognized statistical rating organization.

The portfolio managers seek to identify debt securities with characteristics
such as:

o attractive yields and prices

o the potential for capital appreciation

o reasonable credit quality

The Fund also may invest to a lesser extent in corporate debt securities,
privately issued mortgage-backed securities, asset-backed securities and foreign
securities. The portfolio managers may use various investment techniques to
adjust the Fund's investment exposure, but there is no guarantee that these
techniques will work.

The Risks

The principal risks of investing in the Fund are interest rate risk, credit risk
and prepayment risk. To the extent that the portfolio managers invest in foreign
securities, the Fund also would be subject to foreign exposure risk. Certain
portfolio securities are derivative securities that carry derivative securities
risk.

If you would like additional information regarding the investment strategies and
risks associated with this Fund, including a description of the terms in bold
type, please refer to "More on Strategies and Risks" later in this Prospectus.

--------------------------------------------------------------------------------
<PAGE>
                                                                      ----------
                                                                              33


--------------------------------------------------------------------------------
Fund Performance

The bar chart and table opposite illustrate the short-term variability in the
Fund's performance and the Fund's returns relative to a common measure of
performance.


The bar chart illustrates how the Fund's performance varies from year to year
over the periods shown. The bar chart does not reflect the impact of sales
charges, which lower the Fund's returns. During the periods presented in the bar
chart, Class B's highest return for a quarter was 5.15% for the quarter ended
September 30, 1991. The lowest return for a quarter was -4.85% for the quarter
ended June 30, 1994.


The table opposite illustrates how the Fund's average annual returns for
different calendar periods compare to the returns of the Lehman Brothers
Government Bond Index (LB Government Bond Index). The table reflects the impact
of the Fund's expenses and sales charges for each share class. It assumes that
you sold your shares at the end of each period.

--------------------------------------------------------------------------------
Calendar Year Total Returns
Class B Shares

                                  [BAR CHART]


            1991  1992  1993  1994  1995  1996  1997  1998  1999  2000
            ----  ----  ----  ----  ----  ----  ----  ----  ----  ----
             14%    6%    8%   -9%   14%    2%    9%    8%   -3%


All mutual funds use a standard formula to calculate total return. Total return
measures the price change in a share assuming the reinvestment of all dividend
income and capital gain distributions.

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

Average Annual Total Return
(as of December 31, 1999)


                                                                        Since
                                         1 year    5 years  10 years  Inception*
                                         ------    -------  --------  ----------
GE Government
Securities Fund
   Class A**                              -6.54%      5.48%       --      2.70%
   Class B                                -5.87%      5.70%     5.54%       --
   Class C (level load)                      --         --        --
LB Government
Bond Index                                -2.25%      7.43%     7.48%       --

Both the bar chart and table assume reinvestment of dividends and distributions.
If GE Asset Management had not reduced certain expenses during the periods
shown, the Fund's total returns would have been lower. As with all mutual funds,
past performance is not an indication of future performance.

* Inception date (commencement of investment operations):
Class A - September 8, 1993
Class B - April 22, 1987 (inception date of predecessor fund which merged into
          GE Government Securities Fund on September 26, 1997)
Class C - September 30, 1999

** Returns reflect the impact of Distribution and Service Fees imposed at the
rate of 0.50% of average daily net assets. Effective September 17, 1999,
Distribution and Service Fees were reduced to 0.25% of average daily net assets.

--------------------------------------------------------------------------------
<PAGE>
--------------------
34 GE Funds
   Prospectus
   Income Funds


--------------------------------------------------------------------------------
GE Short-Term Government Fund

---------------
Investment Objective: High level of income consistent with prudent investment
management and the preservation of capital.

The Strategy

GE Short-Term Government Fund invests primarily in U.S. Government securities,
including mortgage-backed securities, and repurchase agreements secured by U.S.
Government securities. The Fund normally has a weighted average maturity of not
more than three years. The Fund invests in securities issued or secured by the:

o U.S. Treasury

o Government National Mortgage Association (Ginnie Mae)

o Federal National Mortgage Association (Fannie Mae)

o Federal Home Loan Mortgage Corporation (Freddie Mac)

o other U.S. Government agencies

The portfolio managers seek to identify debt securities with characteristics
such as:

o attractive yields and prices

o the potential for capital appreciation

o reasonable credit quality

The Fund also may invest to a lesser extent in a variety of debt securities
including corporate debt securities, privately issued mortgage-backed
securities, asset-backed securities and foreign securities. The portfolio
managers may use various investment techniques to adjust the Fund's investment
exposure, but there is no guarantee that these techniques will work.

The Fund's investment strategy may result in a high portfolio turnover rate,
which may cause the Fund to experience increased transaction costs and
shareholders to incur increased taxes on their investment in the Fund.

The Risks

The principal risks of investing in the Fund are interest rate risk, credit risk
and prepayment risk. To the extent that the Fund invests in foreign securities,
the fund would be subject to foreign exposure risk. Certain portfolio securities
are derivative securities that carry derivative securities risk.

If you would like additional information regarding the Fund's investment
strategies and risks, including a description of the terms in bold type, please
refer to "More on Strategies and Risks" later in this Prospectus.

--------------------------------------------------------------------------------
<PAGE>
                                                                      ----------
                                                                              35


--------------------------------------------------------------------------------
Fund Performance

The bar chart and table opposite illustrate the short-term variability in the
Fund's performance and the Fund's returns relative to a common measure of
performance.


The bar chart illustrates how the Fund's performance varies from year to year
over the periods shown. The bar chart does not reflect the impact of sales
charges, which lower the Fund's returns. During the periods presented in the bar
chart, Class A's highest return for a quarter was 3.15% for the quarter ended
June 30, 1995. The lowest return for a quarter was 0.19% for the quarter ended
March 31, 1996.


The table opposite illustrates how the Fund's average annual returns for
different calendar periods compare to the returns of the Lehman Brothers 1-3
Year Government Bond Index (LB 1-3 Year Government Bond Index). The table
reflects the impact of the Fund's expenses and sales charges for each share
class. It assumes that you sold your shares at the end of each period.

--------------------------------------------------------------------------------
Calendar Year Total Returns
Class A Shares*

                                  [BAR CHART]


                        1995  1996  1997  1998  1999  2000
                        ----  ----  ----  ----  ----  ----
                         10%    5%    6%    6%    3%


All mutual funds use a standard formula to calculate total return. Total return
measures the price change in a share assuming the reinvestment of all dividend
income and capital gain distributions.

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

Average Annual Total Return
(as of December 31, 1999)


                                                                        Since
                                                   1 year    5 Year  Inception**
                                                   ------    ------  -----------
GE Short-Term
Government Fund
  Class A*                                          -0.12%     5.35%   4.70%
  Class B                                           -0.90%     5.26%   4.52%
  Class C (level load)                                  -         -       -
  Class Y***                                         2.90%     6.16%   5.41%
LB 1-3 Year
Government Bond
Index                                                2.96%     6.47%   5.61%****

Both the bar chart and table assume reinvestment of dividends and distributions.
If GE Asset Management had not reduced certain expenses during the periods
shown, the Fund's total returns would have been lower. As with all mutual funds,
past performance is not an indication of future performance.

* Returns are those of the predecessor Class C, which was combined with Class A
as of the close of business on September 17, 1999. Average annual total return
figures have been adjusted to reflect Class A expenses and sales charges.

** Inception date (commencement of investment operations):
Classes A, B and Y - March 2, 1994
Class C - September 30, 1999

*** Formerly named Class D.

**** Since March 1, 1994

--------------------------------------------------------------------------------
<PAGE>
--------------------
36 GE Funds
   Prospectus
   Income Funds


--------------------------------------------------------------------------------
GE Tax-Exempt Fund

---------------
Investment Objective: As high a level of income exempt from Federal income
taxation as is consistent with preservation of capital.

The Strategy

GE Tax-Exempt Fund invests primarily in investment-grade municipal securities.
The portfolio manager manages the Fund so that at least 80% of the Fund's income
is exempt from federal personal income tax and the federal alternative minimum
tax.

The Fund generally will have an effective duration of 75% to 125% of the
duration of the Lehman Brothers 10-Year Municipal Index (Lehman Index). As of
March 31, 2000, the duration of the Lehman Index was 6.49 years.

The portfolio manager seeks to identify debt securities with characteristics
such as:

o attractive yields and prices

o the potential for income generation

o the potential for capital appreciation

o reasonable credit quality

The Fund also may invest to a lesser extent in tax-free or taxable money market
instruments and may hold cash and cash equivalents. The portfolio manager may
use various investment techniques to adjust the Fund's investment exposure, but
there is no guarantee that these techniques will work.

The Risks

The principal risks of investing in the Fund are municipal securities risk,
interest rate risk and credit risk. The Fund's income may be subject to state
and local taxes. Capital gains, if any, are subject to capital gains tax.

If you would like additional information regarding the Fund's investment
strategies and risks, including a description of the terms in bold type, please
refer to "More on Strategies and Risks" later in this Prospectus.

--------------------------------------------------------------------------------
<PAGE>
                                                                      ----------
                                                                              37


--------------------------------------------------------------------------------
Fund Performance

The bar chart and table opposite illustrate the short-term variability in the
Fund's performance and the Fund's returns relative to a common measure of
performance.


The bar chart illustrates how the Fund's performance varies from year to year
over the periods shown. The bar chart does not reflect the impact of sales
charges, which lower the Fund's returns. During the periods presented in the bar
chart, Class A's highest return for a quarter was 6.47% for the quarter ended
March 31, 1995. The lowest return for a quarter was -4.30% for the quarter ended
March 31, 1994.


The table opposite illustrates how the Fund's average annual returns for
different calendar periods compare to the returns of the Lehman Brothers 10-Year
Municipal Index (LB 10-Year Muni Index). The table reflects the impact of the
Fund's expenses and sales charges for each share class. It assumes that you sold
your shares at the end of each period.

The GE Tax-Exempt Fund changed its benchmark index during the fiscal year ended
September 30, 1999 from the Lehman Brothers 10-Year General Obligation Municipal
Bond Index to the LB 10-Year Muni Index because the Fund more closely tracks the
duration of the latter index.

--------------------------------------------------------------------------------
Calendar Year Total Returns
Class A Shares*

                                  [BAR CHART]

                     1994  1995  1996  1997  1998  1999  2000
                     ----  ----  ----  ----  ----  ----  ----
                      -4%   15%    4%    7%    5%   -3%

Tax-Exempt Investing-
Tax-exempt investing usually benefits investors in higher tax brackets.

All mutual funds use a standard formula to calculate total return. Total return
measures the price change in a share assuming the reinvestment of all dividend
income and capital gain distributions.

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

Average Annual Total Return
(as of December 31, 1999)


                                                                       Since
                                                1 Year   5 Years    Inception**
                                                ------   -------    -----------
GE Tax-Exempt Fund
  Class A*                                       -6.76%     4.71%      3.37%
  Class B                                        -5.90%     5.32%      3.75%
  Class C (level load)                              --        --         --
  Class Y***                                     -2.12%       --       2.41%
LB 10-Year Muni Index                            -1.24%     7.12%      5.21%****
LB 10-Year GO Muni Index                         -1.32%     7.20%      5.23%****

Both the bar chart and table assume reinvestment of dividends and distributions.
If GE Asset Management had not reduced certain expenses during the periods
shown, the Fund's total returns would have been lower. As with all mutual funds,
past performance is not an indication of future performance.

* Returns reflect the impact of Distribution and Service Fees imposed at the
rate of 0.50% of average net assets. Effective September 17, 1999, Distribution
and Service Fees were reduced to 0.25% of average daily net assets.

** Inception date (commencement of investment operations):
Class A - September 8, 1993
Class B - September 8, 1993
Class C - September 30, 1999
Class Y - September 26, 1997

*** Formerly named Class D.

**** Since September 1, 1993

--------------------------------------------------------------------------------
<PAGE>
--------------------
38 GE Funds
   Prospectus
   Income Funds


--------------------------------------------------------------------------------
GE High Yield Fund

---------------
Investment Objective: Above-average total return over a market cycle of three to
five years, consistent with reasonable risk.

The Strategy

The GE High Yield Fund invests primarily in high yield securities (including
bonds rated below investment grade, sometimes called "junk bonds"). The
portfolio managers will not sell a particular security only because it is no
longer classified as high yield. The Fund may also invest in U.S. Government
securities, mortgage-backed securities, investment grade securities, municipal
obligations, agency securities (securities that are not guaranteed by the U.S.
Government, but which are issued, sponsored or guaranteed by a federal agency or
federally sponsored agency), and short-term fixed income securities, such as
certificates of deposit, treasury bills and commercial paper. The Fund expects
to achieve its objective by earning a high rate of current income, although the
Fund may seek capital growth opportunities when consistent with its objective.
The Fund's weighted average maturity will ordinarily be greater than five years.

The portfolio managers use equity and fixed income valuation techniques,
analyses of economic and industry trends and maturity and duration management to
determine the portfolio's structure. Individual securities are selected and
monitored by fixed income portfolio managers who specialize in corporate bonds
and use in-depth financial analysis to uncover opportunities in undervalued
issues.

The Fund also may invest to a lesser extent in foreign debt securities,
including high yield securities of foreign issuers. The Fund also may use
derivatives to pursue its portfolio strategy. The portfolio managers may use
various investment techniques to adjust the Fund's investment exposure, but
there is no guarantee that these techniques will work.

The Risks

The principal risk of investing in the Fund is high yield securities risk. The
Fund is also subject to interest rate risk, credit risk, prepayment risk and
style risk (high yield investing risk). To the extent that the Fund invests in
foreign securities and derivative securities, the Fund would be subject to
foreign exposure risk, emerging markets risk and derivative securities risk.

Because the Fund invests primarily in high yield securities that are considered
speculative, investment in the Fund may not be suitable for all investors.

If you would like additional information regarding the Fund's investment
strategies and risks, including a description of the terms in bold type, please
refer to "More on Strategies and Risks" later in this Prospectus.

--------------------------------------------------------------------------------
<PAGE>
                                                                      ----------
                                                                              39


--------------------------------------------------------------------------------
Fund Performance

The bar chart and table opposite illustrate the short-term variability in the
Fund's performance and the Fund's returns relative to a common measure of
performance.


The bar chart illustrates how the Fund's performance varies from year to year
over the periods shown. The bar chart does not reflect the impact of sales
charges, which lower the Fund's returns. During the periods presented in the bar
chart, Class A's highest return for a quarter was 3.80% for the quarter ended
December 31, 1999. The lowest return for a quarter was -0.87% for the quarter
ended June 30, 1999.

The table opposite illustrates how the Fund's average annual returns for
different calendar periods compare to the returns of the CS First Boston High
Yield Index ("CSFB Index") and the Salomon High Yield Index ("High Yield
Index"). The GE High Yield Fund changed its benchmark index during the fiscal
year ended September 30, 2000 from the High Yield Index to the CSFB Index. The
table reflects the impact of the Fund's expenses and sales charges for each
share class. It assumes that you sold your shares at the end of each period.


--------------------------------------------------------------------------------
Prior Performance Information

Prior performance information of Miller Anderson & Sherrerd, LLP, the Fund's
sub-adviser, can be found under "Prior Performance Information" later in this
Prospectus.

--------------------------------------------------------------------------------
Calendar Year Total Returns
Class A Shares*

                                  [BAR CHART]


                                   1999  2000
                                   ----  ----
                                     4%


All mutual funds use a standard formula to calculate total return. Total return
measures the price change in a share assuming the reinvestment of all dividend
income and capital gain distributions.

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

Average Annual Total Return
(as of December 31, 1999)


                                                                       Since
                                                     1 Year         Inception**
                                                     ------         -----------
GE High Yield Fund
  Class A*                                            -0.04%          -0.04%
  Class B                                              0.67%           0.67%
  Class C                                                --              --
  Class Y***                                           4.61%           4.60%

High Yield Index                                       1.74%           1.74%****
CSFB Index


Both the bar chart and table assume reinvestment of dividends and distributions.
If GE Asset Management had not reduced certain expenses during the periods
shown, the Fund's total returns would have been lower. As with all mutual funds,
past performance is not an indication of future performance.

*Returns are those of the predecessor Class C, which was combined with Class A
as of the close of business on September 17, 1999. Average annual total return
figures have been adjusted to reflect Class A expenses and sales charges.

** Inception date (commencement of investment operations):
Classes A, B and Y - December 31, 1998
Class C - September 30, 1999

*** Formerly named Class D

**** Since January 1, 1999

--------------------------------------------------------------------------------
<PAGE>
----------
40


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

                      [This page intentionally left blank.]

--------------------------------------------------------------------------------
<PAGE>
                                                                      ----------
                                                                              41


                                  ----------------------------------------------
                                  Asset Allocation                    GE Funds
                                  Funds                               Prospectus


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

An investment in a GE Asset Allocation Fund is not a deposit of any bank and is
not insured or guaranteed by the Federal Deposit Insurance Corporation or any
other agency. An investment in a GE Fund is subject to risk, including possible
loss of principal invested.

Who may want to invest in a GE Asset Allocation Fund?

An Asset Allocation Fund may be appropriate for your investment portfolio if
you:

o seek both capital appreciation and current income

o want a single diversified investment

Asset allocation funds are designed to meet the needs of investors who prefer to
have their asset allocation decisions made by professional money managers. They
provide an investor with a means to diversify by investing in a core portfolio
that typically holds both equity securities and debt securities. Although an
investor may achieve the same level of diversification by buying individual GE
Equity or Income Funds, the GE Strategic Investment Fund presents a
diversification alternative within one fund. An investor should not expect
capital appreciation or current income levels comparable to funds for which
either capital appreciation or current income is their sole objective.

--------------------------------------------------------------------------------
<PAGE>
--------------------
42 GE Funds
   Prospectus
   Asset Allocation
   Funds


--------------------------------------------------------------------------------
GE Strategic Investment Fund

---------------
Investment Objective: Maximum total return.

The Strategy

The GE Strategic Investment Fund invests primarily in a combination of equity
securities and investment grade debt securities. The portfolio managers follow
an asset allocation process established by GE Asset Management's Asset
Allocation Committee to diversify holdings across asset classes. The Fund
adjusts its weightings among U.S. equity securities, debt securities and foreign
securities based on the relative attractiveness of the asset classes. The Fund
invests in equity securities principally for their capital appreciation
potential and debt securities principally for their income potential. Within
each asset class, the portfolio managers use active security selection to choose
securities based on the merits of individual issuers.

The portfolio managers seek to identify equity securities of companies with
characteristics such as:

o strong earnings growth

o attractive prices

o a presence in successful industries

o high quality management

The portfolio managers seek to identify debt securities with characteristics
such as:

o attractive yields and prices

o the potential for capital appreciation

o reasonable credit quality

The portion of the Fund invested in debt securities normally has a weighted
average maturity of approximately five to ten years.

The portfolio managers may use various investment techniques to adjust the
Fund's investment exposure, but there is no guarantee that these techniques will
work.

The Fund's asset allocation process may result in a high portfolio turnover
rate, which may cause the Fund to experience increased transaction costs and
shareholders to incur increased taxes on their investment in the Fund.

The Risks

The principal risks of investing in the Fund are stock market risk, foreign
exposure risk, interest rate risk, credit risk and prepayment risk. To the
extent the portfolio managers invest in high yield securities, the Fund would be
subject to high yield securities risk. Certain portfolio securities are
derivative securities that carry derivative securities risk.

If you would like additional information regarding the Fund's investment
strategies and risks, including a description of the terms in bold type, please
refer to "More on Strategies and Risks" later in this Prospectus.

--------------------------------------------------------------------------------
<PAGE>
                                                                      ----------
                                                                              43


--------------------------------------------------------------------------------
Fund Performance

The bar chart and table opposite illustrate the short-term variability in the
Fund's performance.


The bar chart illustrates how the Fund's performance varies from year to year
over the periods shown. The bar chart does not reflect the impact of sales
charges, which lower the Fund's returns. During the periods presented in the bar
chart, Class A's highest return for a quarter was 11.74% for the quarter ended
December 31, 1998. The lowest return for a quarter was -5.81% for the quarter
ended September 30, 1998.


The table opposite illustrates how the Fund's average annual returns for
different calendar periods compare to the return of the Standard & Poor's 500
Composite Stock Index (S&P 500 Index) and the return of the Lehman Brothers
Aggregate Bond Index (LB Aggregate Bond Index). The table reflects the impact of
the Fund's expenses and sales charges for each share class. It assumes that you
sold your shares at the end of each period.

--------------------------------------------------------------------------------
Calendar Year Total Returns
Class A Shares*

                                  [BAR CHART]


                     1994  1995  1996  1997  1998  1999  2000
                     ----  ----  ----  ----  ----  ----  ----
                      -2%   27%   14%   18%   16%   13%


All mutual funds must use the same formula to calculate total return. Total
return measures the price change in a share assuming the reinvestment of all
dividend income and capital gain distributions.

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

Average Annual Total Return
(as of December 31, 1999)


                                                                       Since
                                               1 Year     5 Years   Inception**
                                               ------     -------   -----------
GE Strategic
Investment Fund
  Class A*                                       6.77%      16.26%    12.76%
  Class B                                        8.42%      16.73%    13.35%
  Class C (level load)                             --          --        --
  Class Y***                                    13.53%      17.94%    14.49%
S&P 500 Index                                   21.07%      28.59%    21.73%****
LB Aggregate Bond Index                         -0.83%       7.73%     6.01%****
S&P 500 Index &
LB Aggregate Bond Index+                        12.01%      20.10%    15.41%****

Both the bar chart and table assume reinvestment of dividends and distributions.
If GE Asset Management had not reduced certain expenses during the periods
shown, the Fund's total returns would have been lower. As with all mutual funds,
past performance is not an indication of future performance.

* Returns are those of the predecessor Class C, which was combined with Class A
as of the close of business on September 17, 1999. Average annual total return
figures have been adjusted to reflect Class A expenses and sales charges.

** Inception date (commencement of investment operations):
Class A - February 22, 1993
Class B - December 22, 1993
Class C - September 30, 1999
Class Y - November 29, 1993

*** Formerly named Class D.

**** Since March 1, 1993

+ The S&P 500 Index and the LB Aggregate Bond Index simulates a blended return
which is representative of the approximate asset allocation mix of the GE
Strategic Investment Fund for the periods presented (composed of 60% S&P 500
Index, 40% LB Aggregate Bond Index). The actual asset allocation mix of the Fund
may have varied from time to time.

--------------------------------------------------------------------------------
<PAGE>
----------
44


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

                      [This page intentionally left blank.]

--------------------------------------------------------------------------------
<PAGE>
                                          --------------------------------------
                                          Money                    GE Funds   45
                                          Market Funds             Prospectus


--------------------------------------------------------------------------------
Who may want to invest in a GE Money Market Fund?

A Money Market Fund may be appropriate for your portfolio if you:

O want regular income

O are investing for a short period of time

O want an investment that seeks to maintain a stable share price

A Money Market Fund may not be appropriate if you:

O want a potentially higher rate of income

O want a long-term investment

O seek capital appreciation

Money market funds invest in short-term, high quality debt securities. They seek
to provide stability of principal and regular income. The income provided by a
money market fund varies with interest rate movements.

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

<PAGE>
---------------------
46 GE Funds
   Prospectus
   Money Market
   Funds


--------------------------------------------------------------------------------
GE Money Market Fund

---------------
Investment Objective: High level of current income consistent with the
preservation of capital and maintenance of liquidity.

The Strategy

The GE Money Market Fund invests primarily in short-term, U.S.
dollar-denominated money market instruments. The Fund's investments may include
U.S. Government securities, repurchase agreements, commercial paper,
certificates of deposit, variable rate securities, foreign debt securities,
Eurodollar deposits and domestic and foreign bank deposits.

The Fund invests consistent with regulatory standards governing security
quality, maturity and portfolio diversification. For example, the portfolio
manager limits investments to high quality securities with maturities of up to
13 months and limits the average maturity of the Fund's portfolio to 90 days.The
Fund may invest more than 25% of its total assets in the banking industry.
Changes in banking regulations or the economy can have a significant negative
impact on the banking industry.

All of the Fund's assets are rated in the two highest short-term rating
categories (or their unrated equivalents), and at least 95% of its assets are
rated in the highest rating category (or its unrated equivalent), by a
nationally recognized statistical rating organization. Additional information
about the money market securities in which the Fund may invest, including rating
categories, is contained in the statement of additional information.

The Risks

The principal risks of investing in the Fund are interest rate risk, credit risk
and foreign exposure risk.

An investment in the Fund is not a bank deposit and is not insured or guaranteed
by the Federal Deposit Insurance Corporation (FDIC) or any other government
agency. Although the Fund seeks to maintain a net asset value of $1.00 per
share, it is possible to lose money by investing in the Fund. The Fund's yield
will change due to movements in current short-term interest rates and market
conditions. A change in interest rates or default on the Fund's investments
could cause the Fund's share price to decline below $1.00.

If you would like additional information regarding the investment strategies and
risks associated with this Fund, including a description of the terms in bold
type, please refer to "More on Strategies and Risks" later in this Prospectus.

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

<PAGE>
                                                                      ----------
                                                                              47


--------------------------------------------------------------------------------
Fund Performance

The bar chart and table opposite illustrate the short-term variability in the
Fund's performance and the Fund's returns relative to a common measure of
performance.


The bar chart illustrates how the Fund's performance varies from year to year
over the periods shown. During the periods presented in the bar chart, the
Fund's highest return for a quarter was 1.42% for the quarter ended March 31,
1995. The Fund's lowest return for a quarter was 0.69% for the quarter ended
March 31, 1994. The Fund's seven day yield was 5.36% and the seven day effective
yield was 5.50% for the calendar quarter ended December 31, 1999. "Effective
yield" reflects the compounding effect of earnings on reinvested dividends.


The table opposite illustrates how the Fund's average annual returns for
different calendar periods compare to the returns of the 90 Day Treasury Bill
Rate (90 Day T-Bill). The table reflects the impact of the Fund's expenses. It
assumes that you sold your shares at the end of each period.

--------------------------------------------------------------------------------
Calendar Year Total Returns

                                  [BAR CHART]


                     1994  1995  1996  1997  1998  1999  2000
                     ----  ----  ----  ----  ----  ----  ----
                       4%    6%    5%    5%    5%    5%


All mutual funds use a standard formula to calculate total return. Total return
measures the price change in a share assuming the reinvestment of all dividend
income and capital gain distributions.

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

Average Annual Total Return
(as of December 31, 1999)


                                                                         Since
                                               1 Year       5 Years   Inception*
                                               ------       -------   ----------
GE Money Market Fund                             4.80%       5.17%       4.67%
90 Day T-Bill                                    4.83%       5.14%       4.77%**

Both the bar chart and table assume reinvestment of dividends and distributions.
If GE Asset Management had not reduced certain expenses during the periods
shown, the Fund's total returns would have been lower. As with all mutual funds,
past performance is not an indication of future performance.

* Inception date (commencement of investment operations): February 22, 1993

** Since March 1, 1993

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

<PAGE>
---------------------------------------                                ---------
48 GE Funds               Fund Expenses                                       49
   Prospectus


--------------------------------------------------------------------------------
The following tables describe the fees and expenses that you may pay if you buy
and hold shares of a Fund.

Shareholder

Fees (paid directly from your investment,
not reflected in share price)*

<TABLE>
<CAPTION>
                                                                                                                        GE Mid-Cap
                                                                      GE U.S.        GE Value         GE Mid-Cap        Value Equity
                                                                      Equity Fund    Equity Fund      Growth Fund       Fund
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                                      <C>             <C>             <C>            <C>
Maximum Sales Charge (load) Imposed on Purchases
of Shares (as a percentage of offering price):
 Class A**                                                               5.75%           5.75%           5.75%          5.75%
 Classes B, C and Y                                                       None            None            None           None
------------------------------------------------------------------------------------------------------------------------------------
Maximum Sales Charge (load) Imposed on Reinvested
Dividends (as a percentage of offering price): All Classes                None            None            None           None
------------------------------------------------------------------------------------------------------------------------------------
Maximum Contingent Deferred Sales Charge
(as a percentage of redemption proceeds):**
Class A***                                                                1.0%            1.0%            1.0%           1.0%
Class B                                                                   4.0%            4.0%            4.0%           4.0%
Class C+                                                                  1.0%            1.0%            1.0%           1.0%
Class Y                                                                   None            None            None           None
------------------------------------------------------------------------------------------------------------------------------------
Redemption Fee: All Classes                                               None            None            None           None
------------------------------------------------------------------------------------------------------------------------------------
Exchange Fee: All Classes                                                 None            None            None           None
------------------------------------------------------------------------------------------------------------------------------------

<CAPTION>
                                                                       GE Small-Cap
                                                                       Value Equity    GE S&P 500      GE Global
                                                                       Fund            Index Fund++    Equity Fund
------------------------------------------------------------------------------------------------------------------
<S>                                                                    <C>               <C>           <C>
Maximum Sales Charge (load) Imposed on Purchases
of Shares (as a percentage of offering price):
 Class A**                                                             5.75%              N/A          5.75%
 Classes B, C and Y                                                     None               N/A          None
------------------------------------------------------------------------------------------------------------------
Maximum Sales Charge (load) Imposed on Reinvested
Dividends (as a percentage of offering price): All Classes              None               N/A          None
------------------------------------------------------------------------------------------------------------------
Maximum Contingent Deferred Sales Charge
(as a percentage of redemption proceeds):**
Class A***                                                              1.0%              N/A           1.0%
Class B                                                                 4.0%              N/A           4.0%
Class C                                                                 1.0%              N/A           1.0%
Class Y                                                                 None               N/A          None
------------------------------------------------------------------------------------------------------------------
Redemption Fee: All Classes                                             None              None          None
------------------------------------------------------------------------------------------------------------------
Exchange Fee: All Classes                                               None              None          None
------------------------------------------------------------------------------------------------------------------

<CAPTION>
                                                                                                                    GE Premier
                                                               GE International     GE Europe       GE Emerging     Growth
                                                               Equity Fund          Equity Fund     Markets Fund    Equity Fund
-------------------------------------------------------------------------------------------------------------------------------
<S>                                                                <C>                 <C>              <C>            <C>
Maximum Sales Charge (load) Imposed on Purchases
of Shares (as a percentage of offering price):
 Class A**                                                         5.75%               5.75%            5.75%          5.75%
 Classes B, C and Y                                                 None                None             None           None
-------------------------------------------------------------------------------------------------------------------------------
Maximum Sales Charge (load) Imposed on Reinvested
Dividends (as a percentage of offering price): All Classes          None                None             None           None
-------------------------------------------------------------------------------------------------------------------------------
Maximum Contingent Deferred Sales Charge
(as a percentage of redemption proceeds):**
Class A***                                                          1.0%                1.0%             1.0%           1.0%
Class B                                                             4.0%                4.0%             4.0%           4.0%
Class C                                                             1.0%                1.0%             1.0%           1.0%
Class Y                                                             None                None             None           None
-------------------------------------------------------------------------------------------------------------------------------
Redemption Fee: All Classes                                         None                None             None           None
-------------------------------------------------------------------------------------------------------------------------------
Exchange Fee: All Classes                                           None                None             None           None
-------------------------------------------------------------------------------------------------------------------------------

<CAPTION>
                                                               GE Premier     GE Premier       GE Premier
                                                               Research       International    Value          GE Fixed
                                                               Equity Fund    Equity Fund      Equity Fund    Income Fund
-----------------------------------------------------------------------------------------------------------------------------
<S>                                                               <C>            <C>              <C>            <C>
Maximum Sales Charge (load) Imposed on Purchases
of Shares (as a percentage of offering price):
 Class A**                                                        5.75%          5.75%            5.75%          4.25%
 Classes B, C and Y                                                None           None             None           None
-----------------------------------------------------------------------------------------------------------------------------
Maximum Sales Charge (load) Imposed on Reinvested
Dividends (as a percentage of offering price): All Classes         None           None             None           None
-----------------------------------------------------------------------------------------------------------------------------
Maximum Contingent Deferred Sales Charge
(as a percentage of redemption proceeds):**
Class A***                                                         1.0%           1.0%             1.0%           1.0%
Class B                                                            4.0%           4.0%             4.0%           3.0%
Class C                                                            1.0%           1.0%             1.0%           1.0%
Class Y                                                            None           None             None           None
-----------------------------------------------------------------------------------------------------------------------------
Redemption Fee: All Classes                                        None           None             None           None
-----------------------------------------------------------------------------------------------------------------------------
Exchange Fee: All Classes                                          None           None             None           None
-----------------------------------------------------------------------------------------------------------------------------

<CAPTION>
                                                               GE Government     GE Short-term     GE Tax-Exempt   GE High Yield
                                                               Securities Fund   Government Fund   Fund            Fund
--------------------------------------------------------------------------------------------------------------------------------
<S>                                                               <C>                  <C>              <C>              <C>
Maximum Sales Charge (load) Imposed on Purchases
of Shares (as a percentage of offering price):
 Class A**                                                        4.25%                2.50%            4.25%            4.25%
 Classes B, C and Y                                                None                 None             None             None
--------------------------------------------------------------------------------------------------------------------------------
Maximum Sales Charge (load) Imposed on Reinvested
Dividends (as a percentage of offering price): All Classes         None                 None             None             None
--------------------------------------------------------------------------------------------------------------------------------
Maximum Contingent Deferred Sales Charge
(as a percentage of redemption proceeds):**
Class A***                                                         1.0%                 1.0%             1.0%             1.0%
Class B                                                            3.0%                 3.0%             3.0%             3.0%
Class C                                                            1.0%                 1.0%             1.0%             1.0%
Class Y                                                            None                 None             None             None
--------------------------------------------------------------------------------------------------------------------------------
Redemption Fee: All Classes                                        None                 None             None             None
--------------------------------------------------------------------------------------------------------------------------------
Exchange Fee: All Classes                                          None                 None             None             None
--------------------------------------------------------------------------------------------------------------------------------

<CAPTION>
                                                               GE Strategic      GE Money
                                                               Investment Fund   Market Fund++
----------------------------------------------------------------------------------------------
<S>                                                                   <C>               <C>
Maximum Sales Charge (load) Imposed on Purchases
of Shares (as a percentage of offering price):
 Class A**                                                            5.75%               N/A
 Classes B, C and Y                                                    None               N/A
----------------------------------------------------------------------------------------------
Maximum Sales Charge (load) Imposed on Reinvested
Dividends (as a percentage of offering price): All Classes             None               N/A
----------------------------------------------------------------------------------------------
Maximum Contingent Deferred Sales Charge
(as a percentage of redemption proceeds):**
Class A***                                                             1.0%               N/A
Class B                                                                4.0%               N/A
Class C                                                                1.0%               N/A
Class Y                                                                None               N/A
----------------------------------------------------------------------------------------------
Redemption Fee: All Classes                                            None              None
----------------------------------------------------------------------------------------------
Exchange Fee: All Classes                                              None              None
----------------------------------------------------------------------------------------------
</TABLE>

* Certain broker-dealers and financial institutions also may charge their
clients fees not reflected in the table above in connection with investments in
the Funds.

** The sales charge and contingent deferred sales charge ("CDSC") set out in the
above table are the maximum charges imposed on purchases or redemptions of
shares. Investors may pay actual charges that are less. See "How To Invest."

*** Expenses shown above would be increased by the imposition of the 1% CDSC for
redemption of shares within one year of purchase that were not subject to a
front-end sales charge by virtue of being part of a purchase of $1 million or
more. This CDSC does not apply to redemptions under a systematic withdrawal
plan.

+ Expenses shown above would be increased by the imposition of the 1% CDSC for
redemption of shares within one year of purchase. This CDSC does not apply to
redemptions under a systematic withdrawal plan.

++ GE Money Market Fund and GE S&P 500 Index Fund do not currently offer
multiple classes of shares. No sales charges, redemption fees or exchange fees
are assessed by these Funds.

--------------------------------------------------------------------------------
<PAGE>
--------------------------                                           -----------
50  GE Funds                                                                  51
    Prospectus
    Fund Expenses


--------------------------------------------------------------------------------
Annual fund operating expenses come out of a Fund's assets and are reflected in
the Fund's share price and dividends.

The figures below are based upon operating expenses anticipated to be incurred
during the current fiscal year.

Accordingly, these figures may not be the same as figures that appear in the
Annual Report dated September 30, 1999.

--------------------------------------------------------------------------------
Annual Fund Operating Expenses
(as a percentage of average net assets)

<TABLE>
<CAPTION>
                                                                                                   GE Mid-Cap      GE Snall-Cap
                                                  GE U.S.         GE Value        GE Mid-Cap       Value           Value
                                                  Equity Fund     Equity Fund     Growth Fund*     Equity Fund     Equity Fund
-------------------------------------------------------------------------------------------------------------------------------
<S>                                                     <C>             <C>              <C>             <C>              <C>
 Management Fees:***
 All Classes                                             .40%            .55%             .60%            .80%             .70%
-------------------------------------------------------------------------------------------------------------------------------


 Distribution and Service (12b-1) Fees:****

 Class A                                                 .25%            .25%             .25%            .25%             .25%
 Class B                                                1.00%           1.00%            1.00%           1.00%            1.00%
 Class C                                                1.00%           1.00%            1.00%           1.00%            1.00%
 Class Y                                                 None            None             None            None             None
-------------------------------------------------------------------------------------------------------------------------------

 Other Expenses:****
 All Classes                                             .18%            .27%             .37%            .49%             .46%
-------------------------------------------------------------------------------------------------------------------------------

 Total Annual Fund Operating Expenses:
 Class A                                                 .83%           1.07%            1.22%           1.54%            1.41%
 Class B                                                1.58%           1.82%            1.97%           2.29%            2.16%

 Class C+++                                             1.58%           1.82%            1.97%           2.29%            2.16%

 Class Y                                                 .58%            .82%             .97%           1.29%            1.16%
-------------------------------------------------------------------------------------------------------------------------------

 Waiver and/or Reimbursement:                            .00%            .00%             .07%            .24%             .26%


 Net Annual Fund Operating Expenses: ++

 Class A                                                 .83%           1.07%            1.15%           1.30%            1.15%
 Class B                                                1.58%           1.82%            1.90%           2.05%            1.90%
 Class C++                                              1.58%           1.82%            1.90%           2.05%            1.90%
 Class Y                                                 .58%            .82%             .90%           1.05%             .90%
-------------------------------------------------------------------------------------------------------------------------------

<CAPTION>
                                                                                   GE
                                                  GE S&P 500       GE Global       International
                                                  Index Fund**     Equity Fund     Equity Fund
------------------------------------------------------------------------------------------------
<S>                                                       <C>            <C>              <C>
 Management Fees:***
 All Classes                                              .30%            .75%             .80%
------------------------------------------------------------------------------------------------


 Distribution and Service (12b-1) Fees:****

 Class A                                                  None            .25%             .25%
 Class B                                                  None           1.00%            1.00%
 Class C                                                  None           1.00%            1.00%
 Class Y                                                  None            None             None
------------------------------------------------------------------------------------------------

 Other Expenses:****
 All Classes                                              .40%            .37%             .34%
------------------------------------------------------------------------------------------------

 Total Annual Fund Operating Expenses:                    .70%
 Class A                                                                 1.37%            1.39%
 Class B                                                                 2.12%            2.14%

 Class C+++                                                              2.12%            2.14%

 Class Y                                                                 1.12%            1.14%
------------------------------------------------------------------------------------------------

 Waiver and/or Reimbursement:                             .25%            .02%             .04%


 Net Annual Fund Operating Expenses: ++                   .45%

 Class A                                                                 1.35%            1.35%
 Class B                                                                 2.10%            2.10%
 Class C++                                                               2.10%            2.10%
 Class Y                                                                 1.10%            1.10%
------------------------------------------------------------------------------------------------

<CAPTION>
                                                                               GE Premier        GE Premier        GE Premier
                                              GE Europe       GE Emerging      Growth            Research          International
                                              Equity Fund     Markets Fund     Equity Fund**     Equity Fund**     Equity Fund**
--------------------------------------------------------------------------------------------------------------------------------
<S>                                                <C>             <C>              <C>                 <C>              <C>
 Management Fees:***
 All Classes                                       1.05%           1.20%             .60%                .70%             .80%
--------------------------------------------------------------------------------------------------------------------------------



 Distribution and Service (12b-1) Fees:****

 Class A                                            .25%            .25%             .25%                .25%             .25%
 Class B                                           1.00%           1.00%            1.00%               1.00%            1.00%
 Class C                                           1.00%           1.00%            1.00%               1.00%            1.00%
 Class Y                                            None            None             None                None             None
--------------------------------------------------------------------------------------------------------------------------------

 Other Expenses:****
 All Classes                                        .61%            .45%             .25%                .70%             .70%
--------------------------------------------------------------------------------------------------------------------------------

 Total Annual Fund Operating Expenses:
 Class A                                           1.91%           1.90%            1.10%               1.65%            1.75%
 Class B                                           2.66%           2.65%            1.85%               2.40%            2.50%

 Class C+++                                        2.66%           2.65%            1.85%               2.40%            2.50%

 Class Y                                           1.66%           1.65%             .85%               1.40%            1.50%
--------------------------------------------------------------------------------------------------------------------------------

 Waiver and/or Reimbursement:                       .31%            .15%             .00%                .45%             .45%



 Net Annual Fund Operating Expenses: ++

 Class A                                           1.60%           1.75%            1.10%               1.20%            1.30%
 Class B                                           2.35%           2.50%            1.85%               1.95%            2.05%
 Class C++                                         2.35%           2.50%            1.85%               1.95%            2.05%
 Class Y                                           1.35%           1.50%             .85%                .95%            1.05%
--------------------------------------------------------------------------------------------------------------------------------

<CAPTION>
                                                  GE Premier
                                                  Value             GE Fixed         GE Government      GE Short-Term
                                                  Equity Fund**     Income Fund      Securities Fund    Government Fund*
------------------------------------------------------------------------------------------------------------------------
<S>                                                       <C>             <C>                  <C>                  <C>
 Management Fees:***
 All Classes                                               .60%            .35%                 .40%                .30%
------------------------------------------------------------------------------------------------------------------------


 Distribution and Service (12b-1) Fees:****

 Class A                                                   .25%            .25%                 .25%                .25%
 Class B                                                  1.00%           1.00%                1.00%                .85%
 Class C                                                  1.00%           1.00%                1.00%               1.00%
 Class Y                                                   None            None                 None                None
------------------------------------------------------------------------------------------------------------------------

 Other Expenses:****
 All Classes                                               .70%            .23%                 .23%                .46%
------------------------------------------------------------------------------------------------------------------------

 Total Annual Fund Operating Expenses:
 Class A                                                  1.55%            .83%                 .88%               1.01%
 Class B                                                  2.30%           1.58%                1.63%               1.61%

 Class C+++                                               2.30%           1.58%                1.63%               1.76%

 Class Y                                                  1.30%            .58%                 .63%                .76%
------------------------------------------------------------------------------------------------------------------------

 Waiver and/or Reimbursement:                              .45%            .03%                 .03%                .31%


 Net Annual Fund Operating Expenses: ++

 Class A                                                  1.10%            .80%                 .85%                .70%
 Class B                                                  1.85%           1.55%                1.60%               1.30%
 Class C++                                                1.85%           1.55%                1.60%               1.45%
 Class Y                                                   .85%            .55%                 .60%                .45%
------------------------------------------------------------------------------------------------------------------------

<CAPTION>

                                                  GE Tax-         GE High        GE Strategic        GE Money
                                                  Exempt Fund     Yield Fund     Investment Fund     Market Fund
-----------------------------------------------------------------------------------------------------------------
<S>                                                     <C>            <C>                 <C>              <C>
 Management Fees:***
 All Classes                                             .35%           .60%                .35%            .25%
-----------------------------------------------------------------------------------------------------------------



 Distribution and Service (12b-1) Fees:****                                                                 None

 Class A                                                 .25%           .25%                .25%
 Class B                                                1.00%          1.00%               1.00%
 Class C                                                1.00%          1.00%               1.00%
 Class Y                                                 None           None                None
-----------------------------------------------------------------------------------------------------------------

 Other Expenses:****
 All Classes                                             .40%           .31%                .27%            .25%
-----------------------------------------------------------------------------------------------------------------

 Total Annual Fund Operating Expenses:                                                                      .50%
 Class A                                                1.00%          1.16%                .87%
 Class B                                                1.75%          1.91%               1.62%

 Class C+++                                             1.75%          1.91%               1.62%

 Class Y                                                 .75%           .91%                .62%
-----------------------------------------------------------------------------------------------------------------

 Waiver and/or Reimbursement:                            .15%           .11%                .00%            .00%


 Net Annual Fund Operating Expenses: ++                                                                     .50%

 Class A                                                 .85%          1.05%                .87%
 Class B                                                1.60%          1.80%               1.62%
 Class C++                                              1.60%          1.80%               1.62%
 Class Y                                                 .60%           .80%                .62%
-----------------------------------------------------------------------------------------------------------------
</TABLE>

* With respect to GE Premier Growth Equity Fund, GE Mid-Cap Growth Fund, GE
International Equity Fund and GE Short-Term Government Fund, "Management Fees"
include administration fees (amounting to .05%) which are imposed pursuant to a
separate contract.

** "Other Expenses" for GE S&P 500 Index Fund, GE Premier Research Equity Fund,
GE Premier International Equity Fund and GE Premier Value Equity Fund are based
on estimated amounts to be charged in the current fiscal year.

*** The nature of the services provided to, and the advisory and administration
fees paid by, each Fund are described under "About the Investment Adviser."


**** Because the Funds pay distribution and service fees, long-term shareholders
of Class A, Class B and Class C shares may pay more than the economic equivalent
of the maximum front-end sales charge currently permitted by the National
Association of Securities Dealers, Inc.

+ "Other expenses" includes fees for shareholder services other than those
borne by a Fund (under a shareholder servicing and distribution plan or an
advisory and administration agreement adopted by the GE Funds). Such fees
include custodial fees, legal and accounting fees, printing costs and
registration fees.

++ The fee table reflects contractual arrangements with GE Asset Management
effective January 29, 2001 ("Expense Limitation Agreement") to limit "Other
Expenses" of each class of each Fund on an annualized basis. [Under the Expense
Limitation Agreement, GEAM has agreed to waive its management fee and/or assume
certain other operating expenses of the Funds to maintain net expense levels at
or below predetermined limits. Expenses borne by GEAM may be reimbursed by the
Funds up to five years from the date the expense was incurred. A reimbursement
payment will not be made if it would cause a Fund to exceed its expense limit.
To date, no reimbursement payments have been made by any Fund. The Expense
Limitation Agreement may be terminted by either party, without penalty, upon 60
days' prior notice.]

+++ Expenses for Class C shares are based on estimated amounts to be charged in
the first year of operations.


================================================================================
<PAGE>
----------------                                                      ----------
52 GE Funds                                                                   53
   Prospectus
   Fund Expenses

--------------------------------------------------------------------------------
The Impact of Fund Expenses

The following examples are intended to help you compare the cost of investing in
a Fund with the cost of investing in other mutual funds. Although actual costs
may be higher or lower, you would pay the following expenses on a $10,000
investment, assuming a 5% annual return and that each Fund's operating expenses
remain the same. The examples also assume that you either redeemed all of your
shares at the end of each period shown or you did not redeem your shares.

--------------------------------------------------------------------------------
Examples+

<TABLE>
<CAPTION>
                                                       You would pay the following                    You would pay the following
                                                 expenses on a $10,000 investment,              expenses on a $10,000 investment,
                                                              assuming redemption:                        assuming no redemption:

                                     1 Year*     3 Years    5 Years     10 Years**   1 Year*    3 Years     5 Years    10 Years**
---------------------------------------------------------------------------------------------------------------------------------
<S>                                  <C>         <C>         <C>         <C>         <C>         <C>         <C>         <C>
GE U.S. Equity Fund:
Class A                              $  655      $  825      $1,009      $1,541      $  655      $  825      $1,009      $1,541
Class B                              $  561      $  699      $  860      $1,492      $  161      $  499      $  860      $1,492
Class C                              $  261      $  499      $  860      $1,878      $  161      $  499      $  860      $1,878
Class Y                              $   59      $  186      $  324      $  726      $   59      $  186      $  324      $  726
---------------------------------------------------------------------------------------------------------------------------------
GE Value Equity Fund:
Class A                              $  678      $  896      $1,131      $1,806      $  678      $  896      $1,131      $1,806
Class B                              $  585      $  773      $  985      $1,760      $  185      $  573      $  985      $1,760
Class C                              $  285      $  573      $  985      $2,137      $  185      $  573      $  985      $2,137
Class Y                              $   84      $  262      $  455      $1,014      $   84      $  262      $  455      $1,014
---------------------------------------------------------------------------------------------------------------------------------
GE Mid-Cap Growth Fund:
Class A                              $  685      $  933      $1,200      $1,962      $  685      $  933      $1,200      $1,962
Class B                              $  593      $  812      $1,056      $1,918      $  193      $  612      $1,056      $1,918
Class C                              $  293      $  612      $1,056      $2,290      $  193      $  612      $1,056      $2,290
Class Y                              $   92      $  302      $  533      $1,206      $   92      $  302      $  533      $1,206
---------------------------------------------------------------------------------------------------------------------------------
GE Mid-Cap Value Equity Fund:
Class A                              $  700      $1,011      $1,345      $2,285      $  700      $1,011      $1,345      $2,285
Class B                              $  608      $  892      $1,203      $2,246      $  208      $  692      $1,203      $2,246
Class C                              $  308      $  692      $1,203      $2,607      $  208      $  692      $1,203      $2,607
Class Y                              $  107      $  385      $  685      $1,535      $  107      $  385      $  685      $1,535
---------------------------------------------------------------------------------------------------------------------------------
GE Small-Cap Value Equity Fund:
Class A                              $  685      $  971      $1,278      $2,147      $  685      $  971      $1,278      $2,147
Class B                              $  593      $  851      $1,136      $2,107      $  193      $  651      $1,136      $2,107
Class C                              $  293      $  651      $1,136      $2,473      $  193      $  651      $1,136      $2,473
Class Y                              $   92      $  343      $  613      $1,386      $   92      $  343      $  613      $1,386
---------------------------------------------------------------------------------------------------------------------------------
GE S&P 500 Index Fund

                                     $   46      $  199      $  365      $  847      $   46      $  199      $  365      $  847
---------------------------------------------------------------------------------------------------------------------------------
GE Global Equity Fund:
Class A                              $  705      $  982      $1,280      $2,125      $  705      $  982      $1,280      $2,125
Class B                              $  613      $  862      $1,137      $2,084      $  213      $  662      $1,137      $2,084
Class C                              $  313      $  662      $1,137      $2,450      $  213      $  662      $1,137      $2,450
Class Y                              $  112      $  354      $  615      $1,361      $  112      $  354      $  615      $1,361
---------------------------------------------------------------------------------------------------------------------------------
GE International Equity Fund:
Class A                              $  705      $  986      $1,288      $2,144      $  705      $  986      $1,288      $2,144
Class B                              $  613      $  866      $1,146      $2,103      $  213      $  666      $1,146      $2,103
Class C                              $  313      $  666      $1,146      $2,469      $  213      $  666      $1,146      $2,469
Class Y                              $  112      $  358      $  624      $1,383      $  112      $  358      $  624      $1,383
---------------------------------------------------------------------------------------------------------------------------------

<CAPTION>
                                                         You would pay the following                     You would pay the following
                                                   expenses on a $10,000 investment,               expenses on a $10,000 investment,
                                                                assuming redemption:                         assuming no redemption:

                                        1 Year*    3 Years     5 Years    10 Years**    1 Year*    3 Years     5 Years    10 Years**
------------------------------------------------------------------------------------------------------------------------------------
<S>                                     <C>         <C>         <C>         <C>         <C>         <C>         <C>         <C>
GE Europe Equity Fund:
Class A                                 $  728      $1,112      $1,520      $2,656      $  728      $1,112      $1,520      $2,656
Class B                                 $  638      $  997      $1,382      $2,622      $  238      $  797      $1,382      $2,622
Class C                                 $  338      $  797      $1,382      $2,970      $  238      $  797      $1,382      $2,970
Class Y                                 $  137      $  493      $  873      $1,939      $  137      $  493      $  873      $1,939
------------------------------------------------------------------------------------------------------------------------------------
GE Emerging Markets Fund:
Class A                                 $  743      $1,124      $1,529      $2,658      $  743      $1,124      $1,529      $2,658
Class B                                 $  653      $1,009      $1,392      $2,624      $  253      $  809      $1,392      $2,624
Class C                                 $  353      $  809      $1,392      $2,972      $  253      $  809      $1,392      $2,972
Class Y                                 $  153      $  506      $  883      $1,942      $  153      $  506      $  883      $1,942
------------------------------------------------------------------------------------------------------------------------------------
GE Premier Growth Equity Fund:
Class A                                 $  681      $  905      $1,146      $1,838      $  681      $  905      $1,146      $1,838
Class B                                 $  588      $  782      $1,001      $1,793      $  188      $  582      $1,001      $1,793
Class C                                 $  288      $  582      $1,001      $2,169      $  188      $  582      $1,001      $2,169
Class Y                                 $   87      $  271      $  471      $1,049      $   87      $  271      $  471      $1,049
------------------------------------------------------------------------------------------------------------------------------------
GE Premier Research Equity Fund:
Class A                                 $  690      $1,024      $1,380      $2,382      $  690      $1,024      $1,380      $2,382
Class B                                 $  598      $  906      $1,240      $2,344      $  198      $  706      $1,240      $2,344
Class C                                 $  298      $  706      $1,240      $2,702      $  198      $  706      $1,240      $2,702
Class Y                                 $   97      $  399      $  723      $1,641      $   97      $  399      $  723      $1,641
------------------------------------------------------------------------------------------------------------------------------------
GE Premier International Equity Fund:
Class A                                 $  700      $1,053      $1,430      $2,484      $  700      $1,053      $1,430      $2,484
Class B                                 $  608      $  936      $1,290      $2,448      $  188      $  736      $1,290      $2,448
Class C                                 $  308      $  736      $1,290      $2,802      $  208      $  736      $1,290      $2,802
Class Y                                 $  107      $  266      $  776      $1,752      $  107      $  266      $  776      $1,752
------------------------------------------------------------------------------------------------------------------------------------
GE Premier Value Equity Fund:
Class A                                 $  681      $  995      $1,331      $2,278      $  681      $  995      $1,331      $2,278
Class B                                 $  588      $  875      $1,189      $2,239      $  188      $  675      $1,189      $2,239
Class C                                 $  288      $  675      $1,189      $2,601      $  188      $  675      $1,189      $2,601
Class Y                                 $   87      $  368      $  670      $1,528      $   87      $  368      $  670      $1,528
------------------------------------------------------------------------------------------------------------------------------------
GE Fixed Income Fund:
Class A                                 $  503      $  676      $  863      $1,404      $  503      $  676      $  863      $1,404
Class B                                 $  458      $  696      $  858      $1,489      $  158      $  496      $  858      $1,489
Class C                                 $  258      $  496      $  858      $1,876      $  158      $  496      $  858      $1,876
Class Y                                 $   56      $  183      $  321      $  723      $   56      $  183      $  321      $  723
------------------------------------------------------------------------------------------------------------------------------------
GE Government Securities Fund:
Class A                                 $  508      $  691      $  889      $1,461      $  508      $  691      $  889      $1,461
Class B                                 $  463      $  711      $  884      $1,546      $  163      $  511      $  884      $1,546
Class C                                 $  263      $  511      $  884      $1,930      $  163      $  511      $  884      $1,930
Class Y                                 $   61      $  199      $  348      $  783      $   61      $  199      $  348      $  783
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

+ The expenses shown above for each Fund reflect GE Asset Management's agreement
to reduce or otherwise limit the Fund's expenses for the first year of each
period noted.
* Class A expenses shown above would be increased by the imposition of the 1%
CDSC for redemptions of Class A shares which were part of a purchase of $1
million or more.
** Expenses for Class B shares shown above reflect the conversion of Class B
shares into Class A shares after six years (eight years for Class B shares
originally purchased through the Investors Trust Funds).

--------------------------------------------------------------------------------
<PAGE>
--------------------------
54  GE Funds
    Prospectus
    Fund Expenses


--------------------------------------------------------------------------------
The Impact of Fund Expenses

--------------------------------------------------------------------------------
Examples+

<TABLE>
<CAPTION>
                                                     You would pay the following                     You would pay the following
                                               expenses on a $10,000 investment,               expenses on a $10,000 investment,
                                                            assuming redemption:                         assuming no redemption:

                                    1 Year*    3 Years     5 Years    10 Years**   1 Year*     3 Years     5 Years    10 Years**
--------------------------------------------------------------------------------------------------------------------------------
<S>                                 <C>         <C>         <C>         <C>         <C>         <C>         <C>         <C>
GE Short-Term Government Fund:
Class A                             $  320      $  533      $  765      $1,428      $  320      $  533      $  765      $1,428
Class B                             $  432      $  678      $  847      $1,577      $  132      $  478      $  847      $1,577
Class C                             $  248      $  524      $  925      $2,048      $  148      $  524      $  925      $2,048
Class Y                             $   46      $  212      $  392      $  913      $   46      $  212      $  392      $  913
--------------------------------------------------------------------------------------------------------------------------------
GE Tax-Exempt Fund:
Class A                             $  508      $  716      $  940      $1,585      $  508      $  716      $  940      $1,585
Class B                             $  463      $  736      $  935      $1,669      $  163      $  536      $  935      $1,669
Class C                             $  263      $  536      $  935      $2,050      $  163      $  536      $  935      $2,050
Class Y                             $   61      $  225      $  402      $  916      $   61      $  225      $  402      $  916
--------------------------------------------------------------------------------------------------------------------------------
GE High Yield Fund:
Class A                             $  528      $  767      $1,026      $1,765      $  528      $  767      $1,026      $1,765
Class B                             $  483      $  789      $1,021      $1,849      $  183      $  589      $1,021      $1,849
Class C                             $  283      $  589      $1,021      $2,224      $  183      $  589      $1,021      $2,224
Class Y                             $   82      $  279      $  493      $1,109      $   82      $  279      $  493      $1,109
--------------------------------------------------------------------------------------------------------------------------------
GE Strategic Investment Fund:
Class A                             $  659      $  837      $1,029      $1,586      $  659      $  837      $1,029       $1586
Class B                             $  565      $  711      $  881      $1,537      $  165      $  511      $  881      $1,537
Class C                             $  265      $  511      $  881      $1,922      $  165      $  511      $  881      $1,922
Class Y                             $   63      $  199      $  346      $  774      $   63      $  199      $  346      $  774
--------------------------------------------------------------------------------------------------------------------------------
GE Money Market Fund                $   51      $  160      $  280      $  628      $   51      $  160      $  280      $  628
--------------------------------------------------------------------------------------------------------------------------------
</TABLE>

+ The expenses shown above for each Fund reflect GE Asset Management's agreement
to reduce or otherwise limit the Fund's expenses for the first year of each
period noted.
* Class A expenses shown above would be increased by the imposition of the 1%
CDSC for redemptions of Class A shares which were part of a purchase of $1
million or more.
** Expenses for Class B shares shown above reflect the conversion of Class B
shares into Class A shares after six years (eight years for Class B shares
originally purchased through the Investors Trust Funds).

--------------------------------------------------------------------------------
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56 GE Funds                  More on
   Prospectus                Strategies
                             and Risks


--------------------------------------------------------------------------------
Important Definitions

This section defines important terms that may be unfamiliar to an investor
reading about the GE Funds:

Asset-backed securities represent a participation in, or are secured by and
payable from, a stream of payments generated by particular assets, such as
credit card receivables or auto loans.

Bank deposits are cash, checks or drafts deposited in a financial institution
for credit to a customer's account. Banks differentiate between demand deposits
(checking accounts on which the customer may draw) and time deposits, which pay
interest and have a specified maturity or require 30 days' notice before
withdrawal.

Cash and cash equivalents are highly liquid and highly rated instruments such as
commercial paper and bank deposits.

Certificates of deposit include short-term debt securities issued by banks.

Commercial paper includes short-term debt securities issued by banks,
corporations and other borrowers.

Convertible securities may be debt or equity securities that pay interest or
dividends or are sold at a discount and that may be converted on specified terms
into the stock of the issuer.

Corporate bonds are debt securities issued by companies.

Debt obligations of supranational agencies are obligations of
multi-jurisdictional agencies that operate across national borders (e.g., the
World Bank).

Debt securities are bonds and other securities that are used by issuers to
borrow money from investors. Holders of debt securities have a higher priority
claim to assets than do equity holders. Typically, the debt issuer pays the
investor a fixed, variable or floating rate of interest and must repay the
borrowed amount at maturity. Some debt securities, such as zero coupon bonds,
are sold at a discount from their face values instead of paying interest.

Depositary receipts represent interests in an account at a bank or trust company
which holds equity securities. These interests may include American Depositary
Receipts (held at U.S. banks and traded in the United States), European
Depositary Receipts, Global Depositary Receipts or other similar instruments.

Derivative securities are securities whose values are based on other securities,
currencies or indices and include options (on stocks, indices, currencies,
futures contracts or bonds), forward currency exchange contracts, futures
contracts, swaps, interest-only and principal-only debt securities, certain
mortgage-backed securities like collateralized mortgage obligations ("CMOs"),
and structured securities.

Duration represents a mathematical calculation of the average life of a bond (or
portfolio of bonds) based on cash flows that serves as a useful measure of the
security's sensitivity to changes in interest rates. Each year of duration
approximates an expected one percent change in the bond's price for every one
percent change in the interest rate.

Equity securities may include common stocks, preferred securities, depositary
receipts, convertible securities and rights and warrants of U.S. and foreign
companies. Stocks represent an ownership interest in a corporation.

Eurodollar deposits are deposits issued in U.S. dollars by foreign banks and
foreign branches of U.S. banks.

Floating and variable rate instruments are securities with floating or variable
rates of interest or dividend payments.

Foreign debt securities are issued by foreign corporations and governments. They
may include the following:

o     Eurodollar Bonds, which are dollar-denominated securities issued outside
      the U.S. by foreign corporations and financial institutions and by foreign
      branches of U.S. corporations and financial institutions

o     Yankee Bonds, which are dollar-denominated securities issued by foreign
      issuers in the U.S.

o     Securities denominated in currencies other than U.S. dollars.


--------------------------------------------------------------------------------
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                                                                              57


--------------------------------------------------------------------------------
Foreign securities include interests in or obligations of entities located
outside of the United States. The determination of where an issuer of a security
is located will be made by reference to the country in which the issuer (a) is
organized, (b) derives at least 50% of its revenues or profits from goods
produced or sold, investments made or services performed, (c) has at least 50%
of its assets situated, or (d) has the principal trading market for its
securities. Foreign securities may be denominated in non-U.S. currencies and
traded outside the United States or may be in the form of depositary receipts.

Forward currency transactions involve agreements to exchange one currency for
another at a future date.

Futures are agreements to buy or sell a specific amount of a commodity,
financial instrument or index at a particular price and future date. Options on
futures give the purchaser the right, in return for the premium paid, to assume
a position in a futures contract at a specified exercise price at any time prior
to the expiration date of the option.

Growth investing involves buying stocks with above-average growth rates.
Typically, growth stocks are the stocks of faster growing companies in more
rapidly growing sectors of the economy. Generally, growth stock valuation levels
will be higher than those of value stocks and the market averages.

High yield securities are debt securities of corporations, preferred stock and
convertible bonds and convertible preferred stock rated Ba through C by Moody's
or BB through D by S&P (or comparably rated by another nationally recognized
statistical rating organization) or, if not rated by Moody's or S&P, are
considered by portfolio management to be of equivalent quality. High yield
securities include bonds rated below investment grade, sometimes called "junk
bonds," and are considered speculative by the major credit rating agencies.

Investment-grade securities are rated Baa or better by Moody's and BBB or better
by S&P or are comparably rated by another nationally recognized statistical
rating organization, or, if not rated, are of similar quality to such
securities. Securities rated in the fourth highest grade have some speculative
elements.

Maturity represents the date on which a debt security matures or when the issuer
must pay back the principal amount of the security.

Money market securities are short-term debt securities of the U.S. government,
banks and corporations. The Funds may invest in money market securities through
investments in the GEI Short-Term Investment Fund (Investment Fund), The
Investment Fund is advised by GE Investment Management, which charges no
advisory fee for such services.

Mortgage-backed securities include securities issued by the Government National
Mortgage Association (Ginnie Mae), the Federal National Mortgage Association
(Fannie Mae), the Federal Home Loan Mortgage Corporation (Freddie Mac) and other
government agencies and private issuers. They may also include collateralized
mortgage obligations which are derivative securities that are fully
collateralized by a portfolio of mortgages. Government stripped mortgage-related
securities are mortgage-backed securities that have been stripped into their
interest and principal components. They represent interests in distributions of
interest on or principal underlying mortgage-backed certificates. Mortgage
dollar rolls are transactions involving the sale of a mortgage-backed security
with a simultaneous contract (with the purchaser) to buy similar, but not
identical, securities at a future date.

Municipal obligations are debt obligations issued by or on behalf of states,
territories and possessions of the United States and the District of Columbia
and their political subdivisions, agencies and instrumentalities, or multi-state
agencies or authorities. They include: (i) municipal leases, which pay interest
that is exempt from federal, and in certain cases, state, income tax; (ii)
participation interests in municipal obligations, which are proportionate,
undivided interests in municipal obligations; (iii) municipal obligation
components, which are


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58  GE Funds
    Prospectus
    More on Strategies
    and Risks


--------------------------------------------------------------------------------
Municipal Obligations that have been divided into two components (one component
pays interest at a rate adjusted periodically through an auction process, the
second pays the residual rate after the auction rate is deducted from total
interest payable); and (iv) Custodial receipts on municipal obligations, which
evidence ownership of future interest payments, principal payments, or both, on
certain Municipal Obligations.

Preferred securities are classes of stock that pay dividends at a specified
rate. Dividends are paid on preferred stocks before they are paid on common
stocks. In addition, preferred stockholders have priority over common
stockholders as to the proceeds from the liquidation of a company's assets.

Purchasing and writing options are permitted investment strategies for certain
Funds. An option is the right to buy (i.e., a "call") or sell (i.e., a "put")
securities or other interests for a predetermined price on or before a fixed
date. An option on a securities index represents the option holder's right to
obtain from the seller, in cash, a fixed multiple of the amount by which the
exercise price exceeds (in the case of a call) or is less than (in the case of a
put) the closing value of the securities index on the exercise date. An option
on a foreign currency represents the right to buy or sell a particular amount of
that currency for a predetermined price on or before a fixed date.

Repurchase agreements (repos) are used to invest cash on a short-term basis. A
seller (bank or broker-dealer) sells securities, usually government securities,
to the Fund, agreeing to buy them back at a designated price and time -- usually
the next day.

Restricted securities (which include Rule 144A Securities) may have contractual
restrictions on resale, or cannot be resold publicly until registered. Certain
restricted securities may be illiquid. Illiquid securities may be difficult or
impossible to sell when a Fund wants to sell them at a price at which the Fund
values them. Rule 144A securities are restricted securities that may be sold to
certain institutional purchasers under Rule 144A.

Reverse repurchase agreements involve selling securities held and concurrently
agreeing to repurchase the same securities at a specified price and future date.

Rights represent a preemptive right of stockholders to purchase additional
shares of a stock at the time of a new issuance, before the stock is offered to
the general public, allowing the stockholder to retain the same ownership
percentage after the new stock offering.

Short Sales Against the Box involve selling short securities actually owned or
otherwise covered at all times during the period the short position is open.

Structured and Indexed Securities are securities whose prinicpal and/or interest
rate is determined by reference to changes in the value of one or more specific
currencies, interest rates, commodities, indices or other financial indicators.

U.S. Government securities are issued or guaranteed as to principal or interest
by the U.S. Government or one of its agencies or instrumentalities. Some U.S.
Government securities are backed by the full faith and credit of the federal
government. Other U.S. Government securities are backed by the issuer's right to
borrow from the U.S. Treasury and some are backed only by the credit of the
issuing organization. All U.S. Government securities are considered highly
creditworthy.

Value investing involves buying stocks that are out of favor and/or undervalued
in comparison to their peers and/or their prospects for growth. Generally, value
stock valuation levels are lower than those of growth stocks.

Variable rate securities carry interest rates that may be adjusted periodically
to market rates. Interest rate adjustments could increase or decrease the income
generated by the securities.

Various investment techniques are utilized by a Fund to increase or decrease its
exposure to changing security prices, interest rates, currency exchange rates,
commodity prices or other factors that affect security values. For certain
Funds, these techniques may involve derivative


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                                                                              59


--------------------------------------------------------------------------------
securities and transactions such as buying and selling options and futures
contracts, entering into currency exchange contracts or swap agreements and
purchasing indexed securities. These techniques are designed to adjust the risk
and return characteristics of a Fund's portfolio of investments and are not used
for leverage. No Fund is under any obligation to use any of these techniques at
any given time or under any particular economic condition. To the extent that a
Fund employs these techniques, the Fund would be subject to derivative
securities risk.

Warrants are securities that are usually issued together with a bond or
preferred stock, that permits the holder to buy a proportionate amount of common
stock at a specified price that is usually higher than the stock price at the
time of issue.

Weighted average maturity represents the length of time in days or years until
the average security in a money market or bond fund will mature or be redeemed
by its issuer. The average maturity is weighted according to the dollar amounts
invested in the various securities in the fund. This measure indicates an income
fund's sensitivity to changes in interest rates. In general, the longer a fund's
average weighted maturity, the more its share price will fluctuate in response
to changing interest rates.

When-issued and delayed delivery securities are securities that are purchased or
sold for delivery and payment at a future date, i.e., beyond normal settlement
date.

Zero coupon obligations pay no interest to their holders prior to maturity.
Instead, interest is paid in a lump sum at maturity. They are purchased at a
discount from par value, and generally are more volatile than other fixed income
securities.

--------------------------------------------------------------------------------
More on Investment Strategies

In addition to each Fund's principal investment strategies described earlier in
this Prospectus, a Fund is permitted to use other securities and investment
strategies in pursuit of its investment objective. No Fund is under any
obligation to use any of these techniques or strategies at any given time or
under any particular economic condition. Certain instruments and investment
strategies may expose the Funds to other risks and considerations, which are
discussed later in this Prospectus or in the Funds' SAI.

Holding Cash and Temporary Defensive Positions: Under normal circumstances, each
Fund may hold cash and/or money market securities (i) pending investment, (ii)
for cash management purposes, and (iii) to meet operating expenses. A Fund
(other than the GE S&P 500 Index Fund) may from time to time take temporary
defensive positions when the portfolio manager believes that adverse market,
economic, political or other conditions exist. In these circumstances, the
portfolio manager may (i) without limit hold cash and cash equivalents and/or
invest in money market instruments, or (ii) restrict the securities markets in
which a Fund's assets are invested by investing those assets in securities
markets deemed to be conservative in light of the Fund's investment objective
and strategies. The Funds, other than the Money Market Fund, may invest in money
market instruments directly or indirectly through investment in the GEI
Short-Term Investment Fund ("Investment Fund"). The Investment Fund is advised
by GE Asset Management, which charges no advisory fee to the Investment Fund.

To the extent that a Fund, other than the GE Money Market Fund, holds cash or
invests in money market instruments, it may not achieve its investment
objective.

The following tables summarize some of the investment techniques that may be
employed by a Fund. Certain techniques and limitations may be changed at the
discretion of GE Asset Management. Percentage figures refer to the percentage of
a Fund's assets that may be invested in accordance with the indicated technique.


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60  GE Funds
    Prospectus
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<TABLE>
<CAPTION>
                                                                                                         Purchasing    Purchasing
                                                                Reverse      Restricted     Structured   and Writing   and Writing
                                       Borrowing   Repurchase   Repurchase   and Illiquid   and Indexed  Securities    Securities
                                                   Agreements   Agreements   Securities     Securities   Options       Index Options
------------------------------------------------------------------------------------------------------------------------------------
<S>                                     <C>            <C>         <C>           <C>           <C>         <C>           <C>
GE U.S. Equity Fund                     33 1/3%        Yes          No           Yes            No         Yes           Yes
------------------------------------------------------------------------------------------------------------------------------------
GE Value Equity Fund                    33 1/3%        Yes         Yes           Yes            No         Yes           Yes
------------------------------------------------------------------------------------------------------------------------------------
GE Mid-Cap Growth Fund                  33 1/3%        Yes          No           Yes            No         Yes           Yes
------------------------------------------------------------------------------------------------------------------------------------
GE Mid-Cap Value Equity Fund            33 1/3%        Yes          No           Yes           Yes         Yes           Yes
------------------------------------------------------------------------------------------------------------------------------------
GE Small-Cap Value Equity Fund          33 1/3%        Yes         Yes           Yes            No         Yes           Yes
------------------------------------------------------------------------------------------------------------------------------------
GE S&P 500 Index Fund                   33 1/3%        Yes         Yes           Yes            No         Yes           Yes
------------------------------------------------------------------------------------------------------------------------------------
GE Global Equity Fund                   33 1/3%        Yes          No           Yes            No         Yes           Yes
------------------------------------------------------------------------------------------------------------------------------------
GE International Equity Fund            33 1/3%        Yes          No           Yes            No         Yes           Yes
------------------------------------------------------------------------------------------------------------------------------------
GE Europe Equity Fund                   33 1/3%        Yes         Yes           Yes           Yes         Yes           Yes
------------------------------------------------------------------------------------------------------------------------------------
GE Emerging Markets Fund                33 1/3%        Yes         Yes           Yes            No         Yes           Yes
------------------------------------------------------------------------------------------------------------------------------------
GE Premier Growth Equity Fund           33 1/3%        Yes          No           Yes            No         Yes           Yes
------------------------------------------------------------------------------------------------------------------------------------
GE Premier Research Equity Fund         33 1/3%        Yes         Yes           Yes            No         Yes           Yes
------------------------------------------------------------------------------------------------------------------------------------
GE Premier International Equity Fund    33 1/3%        Yes         Yes           Yes            No         Yes           Yes
------------------------------------------------------------------------------------------------------------------------------------
GE Premier Value Equity Fund            33 1/3%        Yes         Yes           Yes            No         Yes           Yes
------------------------------------------------------------------------------------------------------------------------------------
GE Fixed Income Fund                    33 1/3%        Yes          No           Yes           Yes         Yes           Yes
------------------------------------------------------------------------------------------------------------------------------------
GE Government Securities Fund           33 1/3%        Yes         Yes           Yes           Yes         Yes           Yes
------------------------------------------------------------------------------------------------------------------------------------
GE Short-Term Government Fund           33 1/3%        Yes          No           Yes           Yes         Yes           Yes
------------------------------------------------------------------------------------------------------------------------------------
GE Tax-Exempt Fund                          10%        Yes         Yes           Yes            No         Yes           Yes
------------------------------------------------------------------------------------------------------------------------------------
GE High Yield Fund                      33 1/3%        Yes         Yes           Yes           Yes         Yes           Yes
------------------------------------------------------------------------------------------------------------------------------------
GE Strategic Investment Fund            33 1/3%        Yes          No           Yes           Yes         Yes           Yes
------------------------------------------------------------------------------------------------------------------------------------
GE Money Market Fund                    33 1/3%        Yes         Yes            No            No          No            No
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>


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<TABLE>
<CAPTION>
                                                                                       Maximum
                                                                       Maximum         Investment in       Maximum      When-Issued
                                Futures and  Forward       Options on  Investment      Below-Investment    Investment   and Delayed
                                Options on   Currency      Foreign     in Debt         Grade Debt          in Foreign   Delivery
                                Futures      Transactions  Currencies  Securities      Securities          Securities   Securities
-----------------------------------------------------------------------------------------------------------------------------------
<S>                                  <C>        <C>          <C>  <C>                 <C>                        <C>          <C>
GE U.S. Equity Fund                  Yes        Yes           Yes                35%                 5%           15%*        Yes
-----------------------------------------------------------------------------------------------------------------------------------
GE Value Equity Fund                 Yes        Yes           Yes                35%                 5%           25%*        Yes
-----------------------------------------------------------------------------------------------------------------------------------
GE Mid-Cap Growth Fund               Yes        Yes           Yes    35% (maximum of  10% in BB or B by           35%*        Yes
                                                                  25% in BBB by S&P,  S&P or Ba or B by
                                                                   Baa by Moody's or         Moody's or
                                                                         equivalent)         equivalent
-----------------------------------------------------------------------------------------------------------------------------------
GE Mid-Cap Value Equity Fund         Yes        Yes           Yes                35%  15% in securities           15%*        Yes
                                                                                     rated BBB or below
                                                                                       by S&P or Baa or
                                                                                       below by Moody's
                                                                                          or equivalent
-----------------------------------------------------------------------------------------------------------------------------------
GE Small-Cap Value Equity Fund        No         No            No                35%                10%           10%*        Yes
-----------------------------------------------------------------------------------------------------------------------------------
GE S&P 500 Index Fund                Yes        Yes           Yes                35%                 5%           35%         Yes
-----------------------------------------------------------------------------------------------------------------------------------
GE Global Equity Fund                Yes        Yes           Yes                35%                 5%          100%         Yes
-----------------------------------------------------------------------------------------------------------------------------------
GE International Equity Fund         Yes        Yes           Yes                35%                 5%          100%         Yes
-----------------------------------------------------------------------------------------------------------------------------------
GE Europe Equity Fund                Yes        Yes           Yes                35%                15%          100%         Yes
-----------------------------------------------------------------------------------------------------------------------------------
GE Emerging Markets Fund             Yes        Yes           Yes                35%  10% in BB or B by          100%         Yes
                                                                                      S&P or Ba or B by
                                                                                             Moody's or
                                                                                             equivalent
-----------------------------------------------------------------------------------------------------------------------------------
GE Premier Growth Equity Fund        Yes        Yes            No                35%                 5%           25%*        Yes
-----------------------------------------------------------------------------------------------------------------------------------
GE Premier Research Equity Fund      Yes        Yes            No                35%                 5%           25%*        Yes
-----------------------------------------------------------------------------------------------------------------------------------
GE Premier International Equity Fund Yes        Yes           Yes                35%                 5%          100%         Yes
-----------------------------------------------------------------------------------------------------------------------------------
GE Premier Value Equity Fund         Yes        Yes           Yes                35%                 5%           25%*        Yes
-----------------------------------------------------------------------------------------------------------------------------------
GE Fixed Income Fund                 Yes        Yes           Yes   100% (maximum of  10% in BB or B by           35%*        Yes
                                                                   25% in BBB by S&P  S&P or Ba or B by
                                                                   or Baa by Moody's         Moody's or
                                                                      or equivalent)         equivalent
-----------------------------------------------------------------------------------------------------------------------------------
GE Government Securities Fund        Yes        Yes           Yes   100% (maximum of               None           35%*        Yes
                                                                   10% in BBB by S&P
                                                                or Baa by Moody's or
                                                                 equivalent; maximum
                                                                of 25% in A or lower
                                                                  by S&P, Moody's or
                                                                         equivalent)
-----------------------------------------------------------------------------------------------------------------------------------
GE Short-Term Government Fund        Yes        Yes           Yes               100%               None           35%*        Yes
-----------------------------------------------------------------------------------------------------------------------------------
GE Tax-Exempt Fund                   Yes         No            No   100% (maximum of         5% in debt          None         Yes
                                                                   10% in BBB by S&P   downgraded below
                                                                   or Baa by Moody's   investment grade
                                                                      or equivalent)      subsequent to
                                                                                               purchase
-----------------------------------------------------------------------------------------------------------------------------------
GE High Yield Fund                   Yes        Yes           Yes               100%               100%           35%*        Yes
-----------------------------------------------------------------------------------------------------------------------------------
GE Strategic Investment Fund         Yes        Yes           Yes   100% (maximum of     10% in BB or B           30%*        Yes
                                                                   25% in BBB by S&P    by S&P or Ba or
                                                                   or Baa by Moody's       B by Moody's
                                                                      or equivalent)      or equivalent
-----------------------------------------------------------------------------------------------------------------------------------
GE Money Market Fund                  No         No            No               100%               None           25%*        Yes
-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

*This limitation excludes ADRs and securities of a foreign issuer with a class
of securities registered with the Securities and Exchange Commission and listed
on a U.S. national securities exchange or traded on the Nasdaq National Market
or the Nasdaq Small Cap Market.


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    Prospectus
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<TABLE>
<CAPTION>
                                                          Debt                        Securities
                                  Lending                 Obligations of              of Other               Floating and
                                  Portfolio   Rule 144A   Supranational   Depositary  Investment  Municipal  Variable Rate
                                  Securities  Securities  Agencies        Receipts    Funds       Leases     Instruments
--------------------------------------------------------------------------------------------------------------------------
<S>                                  <C>        <C>          <C>            <C>          <C>        <C>          <C>
GE U.S. Equity Fund                   Yes        Yes          Yes           Yes           No         No           No*
--------------------------------------------------------------------------------------------------------------------------
GE Value Equity Fund                  Yes        Yes          Yes           Yes          Yes         No           No*
--------------------------------------------------------------------------------------------------------------------------
GE Mid-Cap Growth Fund                Yes        Yes          Yes           Yes          Yes         No           No*
--------------------------------------------------------------------------------------------------------------------------
GE Mid-Cap Value Equity Fund          Yes        Yes          Yes           Yes          Yes         No           No*
--------------------------------------------------------------------------------------------------------------------------
GE Small-Cap Value Equity Fund        Yes        Yes          Yes           Yes          Yes         No           No*
--------------------------------------------------------------------------------------------------------------------------
GE S&P 500 Index Fund                 Yes        Yes          Yes           Yes          Yes         No           No*
--------------------------------------------------------------------------------------------------------------------------
GE Global Equity Fund                 Yes        Yes          Yes           Yes          Yes         No           No*
--------------------------------------------------------------------------------------------------------------------------
GE International Equity Fund          Yes        Yes          Yes           Yes          Yes         No           No*
--------------------------------------------------------------------------------------------------------------------------
GE Europe Equity Fund                 Yes        Yes          Yes           Yes          Yes         No           Yes
--------------------------------------------------------------------------------------------------------------------------
GE Emerging Markets Fund              Yes        Yes          Yes           Yes          Yes         No           No*
--------------------------------------------------------------------------------------------------------------------------
GE Premier Growth Equity Fund         Yes        Yes          Yes           Yes          Yes         No           No*
--------------------------------------------------------------------------------------------------------------------------
GE Premier Research Equity Fund       Yes        Yes          Yes           Yes          Yes         No           No*
--------------------------------------------------------------------------------------------------------------------------
GE Premier International Equity Fund  Yes        Yes          Yes           Yes          Yes         No           No*
--------------------------------------------------------------------------------------------------------------------------
GE Premier Value Equity Fund          Yes        Yes          Yes           Yes          Yes         No           No*
--------------------------------------------------------------------------------------------------------------------------
GE Fixed Income Fund                  Yes        Yes          Yes           Yes          Yes         No           Yes
--------------------------------------------------------------------------------------------------------------------------
GE Government Securities Fund         Yes        Yes          Yes           Yes          Yes         No           Yes
--------------------------------------------------------------------------------------------------------------------------
GE Short-Term Government Fund         Yes        Yes          Yes           Yes          Yes         No           Yes
--------------------------------------------------------------------------------------------------------------------------
GE Tax-Exempt Fund                    Yes        Yes          Yes            No          Yes        Yes           Yes
--------------------------------------------------------------------------------------------------------------------------
GE High Yield Fund                    Yes        Yes          Yes           Yes          Yes         No           Yes
--------------------------------------------------------------------------------------------------------------------------
GE Strategic Investment Fund          Yes        Yes          Yes           Yes          Yes        Yes           Yes
--------------------------------------------------------------------------------------------------------------------------
GE Money Market Fund                  Yes        Yes          Yes            No           No         No           Yes
--------------------------------------------------------------------------------------------------------------------------

<CAPTION>
                                       Participation
                                       Interests in
                                       Municipal
                                       Obligations
----------------------------------------------------
<S>                                        <C>
GE U.S. Equity Fund                         No
----------------------------------------------------
GE Value Equity Fund                        No
----------------------------------------------------
GE Mid-Cap Growth Fund                      No
----------------------------------------------------
GE Mid-Cap Value Equity Fund                No
----------------------------------------------------
GE Small-Cap Value Equity Fund              No
----------------------------------------------------
GE S&P 500 Index Fund                       No
----------------------------------------------------
GE Global Equity Fund                       No
----------------------------------------------------
GE International Equity Fund                No
----------------------------------------------------
GE Europe Equity Fund                       No
----------------------------------------------------
GE Emerging Markets Fund                    No
----------------------------------------------------
GE Premier Growth Equity Fund               No
----------------------------------------------------
GE Premier Research Equity Fund             No
----------------------------------------------------
GE Premier International Equity Fund        No
----------------------------------------------------
GE Premier Value Equity Fund                No
----------------------------------------------------
GE Fixed Income Fund                        No
----------------------------------------------------
GE Government Securities Fund               No
----------------------------------------------------
GE Short-Term Government Fund               No
----------------------------------------------------
GE Tax-Exempt Fund                         Yes
----------------------------------------------------
GE High Yield Fund                          No
----------------------------------------------------
GE Strategic Investment Fund               Yes
----------------------------------------------------
GE Money Market Fund                        No
----------------------------------------------------
</TABLE>

* Excludes commercial paper and notes with variable and floating rates of
interest


--------------------------------------------------------------------------------
<PAGE>
                                                                      ----------
                                                                              63


--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                        Government  Asset Backed
                                                           Custodial    Mortgage        Stripped    Securities
                                              Municipal    Receipts on  Related         Mortgage    and
                                 Zero Coupon  Obligations  Municipal    Securities,     Related     Receivable-Backed  Mortgage
                                 Obligation   Components   Obligations  including CMOs  Securities  Securities         Dollar Rolls
------------------------------------------------------------------------------------------------------------------------------------
<S>                                  <C>         <C>          <C>            <C>           <C>           <C>              <C>
GE U.S. Equity Fund                  Yes          No           No             No            No            No               No
------------------------------------------------------------------------------------------------------------------------------------
GE Value Equity Fund                  No          No           No             No            No            No               No
------------------------------------------------------------------------------------------------------------------------------------
GE Mid-Cap Growth Fund                No          No           No             No            No            No               No
------------------------------------------------------------------------------------------------------------------------------------
GE Mid-Cap Value Equity Fund         Yes          No           No             No            No            No               No
------------------------------------------------------------------------------------------------------------------------------------
GE Small-Cap Value Equity Fund        No          No           No             No            No            No               No
------------------------------------------------------------------------------------------------------------------------------------
GE Global Equity Fund                 No          No           No             No            No            No               No
------------------------------------------------------------------------------------------------------------------------------------
GE S&P 500 Index Fund                 No          No           No             No            No            No               No
------------------------------------------------------------------------------------------------------------------------------------
GE International Equity Fund          No          No           No             No            No            No               No
------------------------------------------------------------------------------------------------------------------------------------
GE Europe Equity Fund                 No          No           No             No            No            No               No
------------------------------------------------------------------------------------------------------------------------------------
GE Emerging Markets Fund              No          No           No             No            No            No               No
------------------------------------------------------------------------------------------------------------------------------------
GE Premier Growth Equity Fund         No          No           No             No            No            No               No
------------------------------------------------------------------------------------------------------------------------------------
GE Premier Research Equity Fund       No          No           No             No            No            No               No
------------------------------------------------------------------------------------------------------------------------------------
GE Premier International Equity Fund  No          No           No             No            No            No               No
------------------------------------------------------------------------------------------------------------------------------------
GE Premier Value Equity Fund          No          No           No             No            No            No               No
------------------------------------------------------------------------------------------------------------------------------------
GE Fixed Income Fund                 Yes          No           No            Yes           Yes           Yes              Yes
------------------------------------------------------------------------------------------------------------------------------------
GE Government Securities Fund        Yes          No           No            Yes           Yes           Yes              Yes
------------------------------------------------------------------------------------------------------------------------------------
GE Short-Term Government Fund        Yes          No           No            Yes           Yes           Yes              Yes
------------------------------------------------------------------------------------------------------------------------------------
GE Tax-Exempt Fund                   Yes         Yes          Yes             No            No            No               No
------------------------------------------------------------------------------------------------------------------------------------
GE High Yield Fund                   Yes          No           No            Yes           Yes           Yes              Yes
------------------------------------------------------------------------------------------------------------------------------------
GE Strategic Investment Fund         Yes         Yes          Yes            Yes           Yes           Yes              Yes
------------------------------------------------------------------------------------------------------------------------------------
GE Money Market Fund                  No          No           No             No            No            No              No
------------------------------------------------------------------------------------------------------------------------------------

<CAPTION>
                                      Short Sales
                                      Against the Box
-----------------------------------------------------
<S>                                        <C>
GE U.S. Equity Fund                         No
-----------------------------------------------------
GE Value Equity Fund                       Yes
-----------------------------------------------------
GE Mid-Cap Growth Fund                     Yes
-----------------------------------------------------
GE Mid-Cap Value Equity Fund               Yes
-----------------------------------------------------
GE Small-Cap Value Equity Fund             Yes
-----------------------------------------------------
GE Global Equity Fund                      Yes
-----------------------------------------------------
GE S&P 500 Index Fund                       No
-----------------------------------------------------
GE International Equity Fund               Yes
-----------------------------------------------------
GE Europe Equity Fund                      Yes
-----------------------------------------------------
GE Emerging Markets Fund                   Yes
-----------------------------------------------------
GE Premier Growth Equity Fund               No
-----------------------------------------------------
GE Premier Research Equity Fund             No
-----------------------------------------------------
GE Premier International Equity Fund       Yes
-----------------------------------------------------
GE Premier Value Equity Fund               Yes
-----------------------------------------------------
GE Fixed Income Fund                        No
-----------------------------------------------------
GE Government Securities Fund              Yes
-----------------------------------------------------
GE Short-Term Government Fund               No
-----------------------------------------------------
GE Tax-Exempt Fund                         Yes
-----------------------------------------------------
GE High Yield Fund                         Yes
-----------------------------------------------------
GE Strategic Investment Fund                No
-----------------------------------------------------
GE Money Market Fund                        No
-----------------------------------------------------
</TABLE>


--------------------------------------------------------------------------------
<PAGE>
--------------------------
64  GE Funds
    Prospectus
    More on Strategies
    and Risks


--------------------------------------------------------------------------------
More on Risks

Like all mutual funds, investing in the GE Funds involves risk factors and
special considerations. A Fund's risk is defined primarily by its principal
investment strategies, which are described earlier in this Prospectus.
Investments in a Fund are not insured against loss of principal. As with any
mutual fund, there can be no assurance that a Fund will achieve its investment
objective. Investing in shares of a Fund should not be considered a complete
investment program. The share value of the Equity Funds, Income Funds and Asset
Allocation Funds will rise and fall. Although the GE Money Market Fund seeks to
preserve the value of your investment at $1.00 per share, it is possible to lose
money by investing in the Fund.

One of your most important investment considerations should be balancing risk
and return. Different types of investments tend to respond differently to shifts
in the economic and financial environment. So, diversifying your investments
among different asset classes -- such as stocks, bonds and cash -- and within an
asset class -- such as small-cap and large-cap stocks -- can help you manage
risk and achieve the results you need to comfortably reach your financial goals.

The primary risks of particular investments are summarized below, For more
information about the risks associated with the Funds, please see the Statement
of Additional Information (SAI), which is incorporated by reference into this
Prospectus.

Credit Risk: The price of a bond is affected by the issuer's or counterparty's
credit quality. Changes in financial condition and general economic conditions
can affect the ability to honor financial obligations and therefore credit
quality. Lower quality bonds are generally more sensitive to these changes than
higher quality bonds. Even within securities considered investment grade,
differences exist in credit quality and some investment grade debt securities
may have speculative characteristics. A security's price may be adversely
affected by the market's opinion of the security's credit quality level even if
the issuer or counterparty has suffered no degradation in ability to honor the
obligation.

Derivative Securities Risk: A Fund's use of various investment 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 may involve derivative securities and contracts. Derivative securities
and contracts (securities and contracts whose values are based on other
securities, currencies or indices) include option contracts (on stocks, indices,
currencies, futures contracts or bonds), forward currency exchange contracts,
futures contracts, currency and interest rate swap contracts and structured
securities.

Derivative securities and contracts may be used as a direct investment or as a
hedge for a Fund's portfolio or a portion of a portfolio. Hedging involves using
a security or contract to offset investment risk. Hedging may include reducing
the risk of a position held in a portfolio. Hedging and other investment
techniques also may be used to increase a Fund's exposure to a particular
investment strategy. If the portfolio manager's judgment of market conditions
proves incorrect or the strategy does not correlate well with a Fund's
investments, the use of derivatives could result in a loss regardless of whether
the intent was to reduce risk or increase return and may increase a Fund's
volatility. In addition, in the event that non-exchange traded derivatives are
used, these derivatives could result in a loss if the counterparty to the
transaction does not perform as promised. A Fund is not obligated to pursue any
hedging strategy. In addition, hedging techniques may not be available, may be
too costly to be used effectively or may be unable to be used for other reasons.
These investments may be considered speculative.

Diversification Risk: The Premier Funds may invest in securities of a limited
number of issuers to achieve a potentially greater investment return than a Fund
that invests in a larger number of issuers. As a result, price movements of a
single issuer's securities will have a greater impact on such Fund's net asset
value causing it to fluctuate more than that of a more widely diversified Fund.


--------------------------------------------------------------------------------
<PAGE>
                                                                      ----------
                                                                              65


--------------------------------------------------------------------------------
Emerging Markets Risk: Emerging market securities bear most foreign exposure
risks discussed below. In addition, there are greater risks involved in
investing in emerging markets than in developed foreign markets. Specifically,
the economic structures in emerging market countries are less diverse and mature
than those in developed countries, and their political systems are less stable.
Investments in emerging market countries may be affected by national policies
that restrict foreign investment. Emerging market countries may have less
developed legal structures, and the small size of their securities markets and
low trading volumes can make investments illiquid and more volatile than
investments in developed countries. As a result, a Fund investing in emerging
market countries may be required to establish special custody or other
arrangements before investing.

Foreign Exposure Risk: Investing in foreign securities, including depositary
receipts, or securities of U.S. entities with significant foreign operations,
involves additional risks which can affect a Fund's performance. Foreign
markets, particularly emerging markets, may be less liquid, more volatile and
subject to less government supervision than U.S. markets. There may be
difficulties enforcing contractual obligations, and it may take more time for
transactions to clear and settle in foreign countries than in the U.S. Less
information may be available about foreign issuers. The costs of buying and
selling foreign securities, including tax, brokerage and custody costs,
generally are higher than those involving domestic transactions. The specific
risks of investing in foreign securities include:

o Currency Risk: The values of foreign investments may be affected by changes in
currency rates or exchange control regulations. If the local currency gains
strength against the U.S. dollar, the value of the foreign security increases in
U.S. dollar terms. Conversely, if the local currency weakens against the U.S.
dollar, the value of the foreign security declines in U.S. dollar terms. U.S.
dollar-denominated securities of foreign issuers, including Depositary Receipts,
also are subject to currency risk based on their related investments.

o Political/Economic Risk: Changes in economic, tax or foreign investment
policies, government stability, war or other political or economic actions may
have an adverse effect on a Fund's foreign investments.

o Regulatory Risk: Foreign companies often are not subject to uniform
accounting, auditing and financial reporting standards or to other regulatory
practices and requirements common to U.S. companies.

High Yield Securities Risk: Below investment-grade securities, sometimes called
"junk bonds," are considered speculative. These securities have greater risk of
default than higher rated securities. The market value of below investment-grade
securities is more sensitive to individual corporate developments and economic
changes than higher rated securities. The market for below investment-grade
securities may be less active than for higher rated securities, which can
adversely affect the price at which these securities may be sold. Less active
markets may diminish a Fund's ability to obtain accurate market quotations when
valuing the portfolio securities and calculating a Fund's net asset value. In
addition, a Fund may incur additional expenses if a holding defaults and a Fund
has to seek recovery of its principal investment. Below investment-grade
securities may also present risks based on payment expectations. For example,
these securities may contain redemption or call provisions. If an issuer
exercises these provisions in a declining interest rate market the Fund would
have to replace the security with a lower yielding security resulting in a
decreased return for investors.

Illiquid Securities Risk: Illiquid securities may be difficult to resell at
approximately the price they are valued in the ordinary course of business in
seven days or less. When investments cannot be sold readily at the desired time
or price, a Fund may have to accept a lower price or may not be able to sell the
security at all, or forego other investment opportunities, all of which may have
an impact on the Fund.


--------------------------------------------------------------------------------
<PAGE>
--------------------------
66  GE Funds
    Prospectus
    More on Strategies
    and Risks


--------------------------------------------------------------------------------
Interest Rate Risk: Bond prices generally rise when interest rates decline and
decline when interest rates rise. The longer the duration of a bond, the more a
change in interest rates affects the bond's price. Short-term and long-term
interest rates may not move the same amount and may not move in the same
direction.

Municipal Securities Risk: Municipal securities are backed by the entities that
issue them and/or other revenue streams. Like other debt securities, prices of
municipal debt securities are affected inversely by changes in interest rates
and by changes in the credit rating or financial condition of the issuer. Income
derived from investments in municipal securities typically is exempt from
Federal income tax, however capital gains are subject to Federal tax. The
municipal securities market is volatile and may be significantly affected by
tax, legislative or political changes. Some municipal securities are insured and
guarantee the timely payment of interest and repayment of principal.

Prepayment Risk: Prices and yields of mortgage-backed securities assume the
securities will be redeemed at a given time. When interest rates decline,
mortgage-backed securities experience higher prepayments because the underlying
mortgages are repaid earlier than expected. A Fund's portfolio manager may be
forced to invest the proceeds from prepaid mortgage-backed securities at lower
rates, which results in a lower return for the Fund. When interest rates
increase, mortgage-backed securities experience lower prepayments because the
underlying mortgages may be repaid later than expected. This typically reduces
the value of the underlying securities.

Repurchase and Reverse Repurchase Agreements Risk: A Fund entering into a
repurchase agreement may suffer a loss if the other party to the transaction
defaults on its obligations and could be delayed or prevented from exercising
its rights to dispose of the underlying securities. The value of the underlying
securities might decline while the Fund seeks to assert its rights. The Fund
could incur additional expenses in asserting its rights or may lose all or part
of the income from the agreement. A reverse repurchase agreement involves the
risk that the market value of the securities retained by a Fund may decline
below the price of the securities the Fund has sold but is obligated to
repurchase at a higher price under the agreement.

Restricted Securities Risk: Restricted securities (including Rule 144A
securities) may be subject to legal restraints on resale and, therefore, are
typically less liquid than other securities. The prices received from reselling
restricted securities in privately negotiated transactions may be less than
those originally paid by a Fund. Companies whose securities are restricted are
not subject to the same investor protection requirements as publicly traded
securities.

Stock Market Risk: Stock market risk is the risk that the value of equity
securities may decline. Stock prices change daily in response to company
activity and general economic and market conditions. Stock prices may decline in
value even during periods when equity securities in general are rising, or may
not perform as well as the market in general. Additional stock market risk may
be introduced when a particular equity security is traded on a foreign market.
For more detail on the related risks involved in foreign markets, see Foreign
Exposure Risk.

Style Risk: Securities with different characteristics tend to shift in and out
of favor depending upon market and economic conditions as well as investor
sentiment. A Fund may underperform other funds that employ a different style. A
Fund also may employ a combination of styles that impact its risk
characteristics. Examples of different styles include growth and value
investing, as well as those focusing on large, medium, or small company
securities.

o Growth Investing Risk: Growth stocks may be more volatile than other stocks
because they are more sensitive to investor perceptions of the issuing company's
growth potential. Growth oriented funds will typically underperform when value
investing is in favor.

o Value Investing Risk: Undervalued


--------------------------------------------------------------------------------
<PAGE>
                                                                      ----------
                                                                              67


--------------------------------------------------------------------------------
stocks may not realize their perceived value for extended periods of time or may
never realize their perceived value. Value stocks may respond differently to
market and other developments than other types of stocks. Value oriented funds
will typically underperform when growth investing is in favor.

o High Yield Value Investing Risk: The GE High Yield Fund uses value-based
criteria to select securities. Such securities may not realize their perceived
value for extended periods of time or may never realize their perceived value.

o Mid-Cap Company Risk: Investments in securities of mid-cap companies entail
greater risks than investments in larger, more established companies. Mid-cap
companies tend to have more narrow product lines, more limited financial
resources and a more limited trading market for their stocks, as compared with
larger companies. As a result, their stock prices may decline significantly as
market conditions change.

o Small-Cap Company Risk: Investing in securities of small-cap companies may
involve greater risks than investing in larger, more established issuers.
Smaller companies may have limited product lines, markets or financial
resources. Their securities may trade less frequently and in more limited volume
than securities of larger, more established companies. In addition, smaller
companies are typically subject to greater changes in earnings and business
prospects than are larger companies. Consequently, the prices of small company
stocks tend to rise and fall in value more than other stocks. Although investing
in small-cap companies offers potential for above-average returns, the companies
may not succeed and their stock prices could decline significantly.

--------------------------------------------------------------------------------
Other Risk Considerations

EURO Conversion: The introduction of the EURO, a new common currency in Europe,
may result in uncertainties for European companies and markets. Individual
issuers may suffer increased costs and decreased earnings due to the long-term
impact of EURO conversion. Market disruptions may occur that could adversely
affect the value of European securities and currencies.




--------------------------------------------------------------------------------
<PAGE>
-----------------------------------
68  GE Funds            About the
    Prospectus          Investment
                        Adviser


--------------------------------------------------------------------------------
Investment Adviser and Administrator


GE Asset Management Incorporated ("GE Asset Management"), located at 3003 Summer
Street, P.O. Box 7900, Stamford, Connecticut 06904, is the investment adviser
and administrator of each Fund. GE Asset Management is a wholly-owned subsidiary
of General Electric Company (GE) and a registered investment adviser. As of
December 31, 2000, GE's investment advisory firms oversaw $      billion and
managed individual and institutional assets of $     billion, of which more than
$     billion was invested in mutual funds.


For many years, GE's tradition of ingenuity and customer focus has included
financial services. In the late 1920s, through a desire to promote the financial
well-being of its employees, GE began managing assets for its employee pension
plan. By the mid-1930s, GE pioneered some of the nation's earliest mutual funds,
the Elfun Funds -- to be followed years later by the GE Savings and Security
Program Funds. The success of these Funds spurred growth; eventually GE expanded
its mutual fund offerings to include a wide variety of investment products
called the GE Family of Funds, created specifically for the general public.

GE Asset Management bases its investment philosophy on two enduring principles.
First, GE Asset Management believes that a disciplined, consistent approach to
investing can add value to an investment portfolio over the long term. Its
commitment to in-depth research, sound judgment and hard work provides investors
with an opportunity to take advantage of attractive investments around the
world. Second, GE Asset Management follows the same principles of integrity and
quality that have guided GE over the past century and have made it the
world-class company that it is today.


For their services, GE Asset Management pays (out of the advisory fee that it
receives) Palisade, MAS and SSGA monthly compensation in the form of an
investment sub-advisory fee. The fee is paid by GE Asset Management monthly and
is based upon the average daily net assets of the Fund that each sub-adviser
manages.


--------------------------------------------------------------------------------
Investment Management Fee:

Each Fund pays GE Asset Management an investment management fee. The fee is
accrued daily and paid monthly up to the following maximum annual fee rates:

GE U.S. Equity Fund                                                        0.40%
--------------------------------------------------------------------------------
GE Value Equity Fund                                                       0.55%
--------------------------------------------------------------------------------
GE Mid-Cap Growth Fund                                                     0.60%
--------------------------------------------------------------------------------
GE Mid-Cap Value Equity Fund                                               0.80%
--------------------------------------------------------------------------------
GE Small-Cap Value Equity Fund                                             0.70%
--------------------------------------------------------------------------------
GE S&P 500 Index Fund                                                      0.30%
--------------------------------------------------------------------------------
GE Global Equity Fund                                                      0.75%
--------------------------------------------------------------------------------
GE International Equity Fund                                               0.80%
--------------------------------------------------------------------------------
GE Europe Equity Fund                                                      1.05%
--------------------------------------------------------------------------------
GE Emerging Markets Fund                                                   1.20%
--------------------------------------------------------------------------------
GE Premier Growth Equity Fund                                              0.60%
--------------------------------------------------------------------------------
GE Premier Research Equity Fund                                            0.70%
--------------------------------------------------------------------------------
GE Premier International Equity Fund                                       0.80%
--------------------------------------------------------------------------------
GE Premier Value Equity Fund                                               0.60%
--------------------------------------------------------------------------------
GE Fixed Income Fund                                                       0.35%
--------------------------------------------------------------------------------
GE Government Securities Fund                                              0.40%
--------------------------------------------------------------------------------
GE Short-Term Government Fund                                              0.30%
--------------------------------------------------------------------------------
GE Tax-Exempt Fund                                                         0.35%
--------------------------------------------------------------------------------
GE High Yield Fund                                                         0.60%
--------------------------------------------------------------------------------
GE Strategic Investment Fund                                               0.35%
--------------------------------------------------------------------------------
GE Money Market Fund                                                       0.25%
--------------------------------------------------------------------------------


--------------------------------------------------------------------------------
<PAGE>
                                                                      ----------
                                                                              69


--------------------------------------------------------------------------------
About the Funds' Portfolio Managers

Eugene K. Bolton is a Director and Executive Vice President of GE Asset
Management. He manages the overall U.S. equity investments for GE Asset
Management. He leads a team of portfolio managers for GE U.S. Equity Fund. He
has served in this capacity since the Fund's commencement. Mr. Bolton joined GE
Asset Management in 1984 as Chief Financial Officer and has been a portfolio
manager since 1986.

Christopher D. Brown is a Senior Vice President of GE Asset Management and a
co-portfolip manager of GE Premier Research Equity Fund. He has served in that
capacity since the Fund's commencement. Mr. Brown joined GE Asset Management in
1985 and has been a portfolio manager since 1992.


David B. Carlson is a Senior Vice President of GE Asset Management. He is
portfolio manager for GE Premier Growth Equity Fund and manages equity
investments for GE Strategic Investment Fund. He has served in those capacities
since each Fund's commencement. Mr. Carlson joined GE Asset Management in 1982
as a Securities Analyst for Investment Operations. He became a Vice President
for Mutual Fund Portfolios and a Senior Vice President in 1989.

Michael J. Caufield is a Senior Vice President of GE Asset Management ("GEAM").
Mr. Caufield is Portfolio Manager of the Tax Exempt Fund beginning October 1,
2000. Mr. Caufield joined GEAM in 1987 as Vice President, Manager Fixed Income
Research & Analysis.


Peter J. Hathaway is a Senior Vice President of GE Asset Management and
portfolio manager for GE Value Equity Fund. Mr. Hathaway has served in that
capacity since September 1997 and has over 36 years of investment experience. He
joined GE Asset Management in 1985 as a Vice President for Pension Fund
Portfolios. He became a Senior Vice President in 1987.

Brian Hopkinson is a Senior Vice President of GE Asset Management and portfolio
manager of GE Premier International Equity Fund. He has served in that capacity
since the Fund's commencement. Mr. Hopkinson joined the International Equities
Team at GE Asset Management in 1996 as a portfolio manager. Prior to joining GE
Asset Management, Mr. Hopkinson was a portfolio manager with Fiduciary Trust
Company International.


Ralph R. Layman is a Director and Executive Vice President of GE Asset
Management. He manages the overall international equity investment for GE Asset
Management. Mr. Layman leads a team of portfolio managers for GE International
Equity Fund and GE Emerging Markets Fund and serves as co-portfolio manager for
GE Global Equity Fund. He has served in those capacities since each Fund's
commencement. Mr. Layman has also managed foreign investments for GE Strategic
Investment Fund since September 1997. Mr. Layman joined GE Asset Management in
1991 as Executive Vice President for International Investments.


Robert A. MacDougall is a Director and Executive Vice President of GE Asset
Management. He manages the overall fixed income investments for GE Asset
Management. He leads a team of portfolio managers for GE Government Securities
Fund, GE Fixed Income Fund, GE Short-Term Government Fund and GE Money Market
Fund. Mr. MacDougall also manages fixed income investments for GE Strategic
Investment Fund. He has served in those capacities since each Fund's
commencement. Mr. MacDougall joined GE Asset Management in 1986 as Vice
President. He became a Senior Vice President of Fixed Income in 1993 and a
Director and Executive Vice President of Fixed Income in 1997.

Paul C. Reinhardt is a Senior Vice President of GE Asset Management and
portfolio manager of GE Premier Value Equity Fund. He has served in that
capacity since the Fund's commencement. Mr. Reinhardt joined GE Asset Management
in 1982 as an Equity Analyst and has been a portfolio manager since 1987.




--------------------------------------------------------------------------------
<PAGE>
--------------------------
70  GE Funds
    Prospectus
    About the
    Investment
    Adviser


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

Richard L. Sanderson is a Senior Vice President of GE Asset Management and
co-portfolio manager of GE Premier Research Equity Fund. He has served in that
capacity since the Fund's commencement. Mr. Sanderson joined GE Asset Management
in 1995 as a Vice President and Equity Analyst and was appointed Director of
Investment. Research, Domestic Equities, in 1997. Prior to that time, Mr.
Sanderson was a Senior Analyst with Alliance Capital Management.


Michael J. Solecki is a Senior Vice President of GE Asset Management, and
portfolio manager of GE Europe Equity Fund. He has served in that capacity since
the Fund's commencement. Mr. Solecki also serves as co-portfolio manager of GE
Global Equity Fund and has served in that capacity since September 1997. He
joined GE Asset Management in 1990 as an International Equity Analyst. He became
a Vice President for International Equity Portfolios in 1996.


Ralph E. Whitman is a Senior Vice President of GE Asset Management and portfolio
manager of the GE Mid-Cap Growth Fund (since December 1998) and the GE Mid-Cap
Value Equity Fund (beginning October 2000). He has served in that capacity since
December 1998. He joined GE Asset Management in 1987 as an Equity Analyst. He
became Vice President for U.S. Equity Investments in 1995 and Senior Vice
President for U.S. Equity Portfolios in 1998.



--------------------------------------------------------------------------------
<PAGE>
                                                                      ----------
                                                                              71


--------------------------------------------------------------------------------
About the Sub-Advisers

GE Asset Management seeks to make the best managers available to Fund
shareholders, whether that means accessing GE Asset Management's wealth of
internal talent or using external talent (Sub-Advisers). When GE Investment
Management feels the need to access specialists outside, it investigates and
engages Sub-Advisers with strong performance records and styles that match the
investment objectives of the Funds. GE Asset Management is proud to engage the
following Sub-Advisers to conduct the investment programs for the following
Funds.

--------------------------------------------------------------------------------
GE Small-Cap Value Equity Fund

Palisade Capital Management, L.L.C. (Palisade)
One Bridge Plaza
Fort Lee, NJ 07024

Palisade has a history of managing small-cap equity portfolios and for several
years has provided pension fund services to GE. The company has managed various
institutional and private accounts with total assets in excess of $2.1 billion
as of December 31, 1999. Palisade has managed the Small-Cap Value Equity Fund
since inception. Although Palisade has no previous experience managing mutual
fund portfolios, Palisade translates its experience from various institutional
and private accounts to mutual funds.

The Fund is managed by an investment advisory committee (Senior Investment
Committee) composed of the following members: Jack Feiler, Martin L. Berman,
Steven E. Berman and Richard Meisenberg. Mr. Feiler, Chief Investment Officer at
Palisade, has day-to-day responsibility for managing the Fund and works with the
Senior Investment Committee in developing and executing the Fund's investment
program. Mr. Feiler has more than 30 years of investment experience and has
served as the principal small-cap portfolio manager at Palisade since the
commencement of Palisade's operations in April 1995. Prior to joining Palisade,
Mr. Feiler was a Senior Vice President-Investments at Smith Barney from 1990 to
1995.




--------------------------------------------------------------------------------
<PAGE>
--------------------------
72  GE Funds
    Prospectus
    About the
    Investment
    Adviser


--------------------------------------------------------------------------------
GE S&P 500 Index Fund

State Street Global Advisors (SSGA)
Two International Place
Boston, MA 02110

SSGA has served as the sub-adviser of GE S&P 500 Index Fund since its inception.
SSGA, a division of State Street Bank and Trust Company, is a wholly-owned
subsidiary of State Street Corporation, a publicly held bank holding company.
State Street managed more than $627.4 billion in assets as of December 31, 1999.
State Street provides complete global investment management services from
offices in the United States, London, Sydney, Hong Kong, Tokyo, Toronto,
Montreal, Luxembourg, Melbourne, Paris, Dubai, Munich and Brussels.

The Fund is managed by a team of portfolio managers led by James B. May, CFA.
Mr. May is a Principal of State Street Global Advisors and a Senior Portfolio
Manager in the U.S. Passive Equity Group. He joined the firm in 1991. Before
joining the U.S. Passive Equity Group, Mr. May worked in the firm's Passive U.S.
Equity Operations department as a Senior Analyst. He has been working in the
investment management field since 1989 when he joined State Street's Custody
Operation.

Mr. May holds an MBA from Boston College and a BS in Finance from Bentley
College. He is a member of the Boston Security Analysts Society and the
Association for Investment Management and Research (AIMR).

--------------------------------------------------------------------------------
GE High Yield Fund

Miller Anderson & Sherrerd, LLP (MAS)
One Tower Bridge
West Conshohocken, PA 19428

MAS is a Pennsylvania limited liability partnership founded in 1969, and is
wholly-owned by subsidiaries of Morgan Stanley Dean Witter & Co. As of December
31, 1999, MAS and its affiliates had $66.6 billion of assets under management.

Robert E. Angevine, Stephen F. Esser, Gordon W. Loery and Deanna L. Loughnane
are co-portfolio managers of the GE High Yield Fund and have served in that
capacity since the Fund's inception. Mr. Angevine has more than 18 years of
investment experience and joined Morgan Stanley Dean Witter Investment
Management Inc., an affiliate of MAS, in 1988. Mr. Angevine is currently a
Principal of Morgan Stanley & Co. Incorporated. Mr. Esser has more than 13 years
of investment experience and joined MAS in 1988. Mr. Esser is currently a
Managing Director of Morgan Stanley & Co. Incorporated. Mr. Loery joined MAS in
1996 and is currently a Principal of Morgan


--------------------------------------------------------------------------------
<PAGE>
                                                                      ----------
                                                                              73


--------------------------------------------------------------------------------
Stanley Dean Witter. He served as a Fixed Income Analyst at Morgan Stanley Asset
Management Inc. from 1990 to 1996, and was a Fixed Income Analyst at MAS from
1996 to 1999. Ms. Loughnane joined MAS in 1997 and is currently a Principal of
Morgan Stanley Dean Witter. She served as a Financial Analyst at MAS from 1997
to 1999 and was a Senior Corporate Bond Analyst at Putnam Investments from 1993
to 1997.




--------------------------------------------------------------------------------
<PAGE>
----------
74


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



                      [This page intentionally left blank.]



--------------------------------------------------------------------------------
<PAGE>
                                                                      ----------
                                                                              75


--------------------------------------------------------------------------------
Prior Performance Information of
GE Asset Management
Incorporated
(Investment Adviser to the GE
Premier Research Equity Fund)


The bar chart and table opposite illustrate the performance of a composite of
certain private and mutual fund accounts ("Accounts") managed by GE Asset
Management, the investment adviser to the GE Premier Research Equity Fund. For
more information about GE Asset Management, see "About the Investment Adviser."
Each of the Accounts included in the composite has objectives, policies and
strategies substantially similar to those of the Fund.


Unlike management of the private accounts included in the composite, GE Asset
Management's management of the GE Premier Research Equity Fund is subject to
certain regulatory restrictions (e.g., limits on percentage of assets invested
in a single issuer and industry and requirements on distributing income to
shareholders) that do not apply to the private accounts. In addition, the Fund
generally experiences cash flows that are different from those of the private
accounts. All of these factors may adversely affect the performance of the Fund
and cause it to differ from that of the composite described opposite.

GE Asset Management composite results represent the performance of the Accounts,
net of the annual rate of total operating expenses of the GE Premier Research
Equity Fund, but do not reflect the imposition of sales charges. The composite
results do not represent the performance of the GE Premier Research Equity Fund,
and should not be considered an indication of future performance of the Fund.

--------------------------------------------------------------------------------
Calendar Year Total Return

                                   [BAR CHART]


                        Composite(2)        S&P 500 Index
                        ------------        -------------
1998(1)                      11%                 20%
1999                          9%                 21%
2000

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

Average Annual Total Return
(as of December 31, 2000)

                       Account--             S&P 500
Period                Class A(2)               Index
                      ----------             -------
1 Year                       %                    %
Since 7/1/98                 %                    %


(1) Represents performance from 7/1/98 through 12/31/98

(2) The composite performance results shown reflect the deduction of the annual
    rate of total operating expenses of the Fund Class A shares.


Note A. The composite performance results shown reflect the deduction of the
annual rate of total operating expenses of the Fund; actual expenses of the
Accounts may have been more or less than those of the Fund. The composite
results are not required to be, and were not calculated in accordance with, SEC
mandated mutual fund performance calculation methodology. The use of such
methodology could yield a different result. As of December 31, 2000, the total
assets in the composite were $ million. The composite performance is compared to
the performance of the S&P 500 Index, which is a composite of the price and
dividend performance of 500 widely held U.S. stocks recognized by many investors
to be representative of the stock market in general. The information provided
above for the composite and the Index reflects the reinvestment of dividends and
distributions.



--------------------------------------------------------------------------------
<PAGE>
--------------------------
76  GE Funds
    Prospectus
    About the
    Investment
    Adviser


--------------------------------------------------------------------------------
Prior Performance Information of
GE Asset Management
Incorporated
(Investment Adviser to the GE
Premier International Equity Fund)


The bar chart and table opposite illustrate the performance of certain private
and mutual fund accounts ("Accounts") managed by GE Asset Management, the
investment adviser to the GE Premier International Equity Fund. For more
information about GE Asset Management, see "About the Investment Adviser." The
Accounts have objectives, policies and strategies substantially similar to those
of the Fund.

Unlike management of the Accounts, GE Asset Management's management of the GE
Premier International Equity Fund is subject to certain regulatory restrictions
(e.g., limits on percentage of assets invested in a single issuer and industry
and requirements on distributing income to shareholders) that do not apply to
the Accounts. In addition, the Fund generally experiences cash flows that are
different from those of the Accounts. All of these factors may adversely affect
the performance of the Fund and cause it to differ from that of the Accounts
described opposite.

GE Asset Management results represent the performance of the Accounts, net of
the annual rate of total operating expenses of the GE Premier International
Equity Fund, but do not reflect the imposition of sales charges. The Accounts'
results do not represent the performance of the GE Premier International Equity
Fund, and should not be considered an indication of future performance of the
Fund.


--------------------------------------------------------------------------------
Calendar Year Total Return

                                   [BAR CHART]


                                        1998          1999         2000
                  Composite(1)           22%           29%
                  MSCI EAFE Index        20%           27%

--------------------------------------------------------------------------------
Average Annual Total Return
(as of December 31, 2000)

                       Account--            MSCI EAFE
Period                 Class A(1)             Index
                       ----------           ---------
1 Year                       %                    %
Since 1/1/98                 %                    %


(1) The composite performance results shown reflect the deduction of the annual
    rate of total operating expenses of the Fund - Class A shares.


Note A. The composite performance results shown reflect the deduction of the
annual rate of total operating expenses, including the maximum advisory and
administration fee, of the Fund; actual expenses of the Account may have been
more or less than those of the Fund. The composite/account results are not
required to be, and were not calculated in accordance with, SEC mandated mutual
fund performance calculation methodology. The use of such methodology could
yield a different result. As of December 31, 2000, the total assets in the
composite were $ million. The account performance is compared to the performance
of the MSCI EAFG Index, which is a composite of foreign securities traded in 22
developed markets in Europe, Australasia and Far East. The information provided
above for the Account, and the Index reflects the reinvestment of dividends and
distributions.



--------------------------------------------------------------------------------
<PAGE>
                                                                 ---------------
                                                                              77


--------------------------------------------------------------------------------
Prior Performance Information
of Miller Anderson & Sherrerd, LLP

(Sub-adviser to the
GE High Yield Fund)

The bar chart and table opposite illustrate the performance of a composite of
certain mutual funds ("MAS Managed Funds") managed by Miller Anderson &
Sherrerd, LLP ("MAS"), the sub-adviser of the GE High Yield Fund. Each of the
MAS Managed Funds included in the composite has objectives, policies and
strategies substantially similar to those of the Fund.


The Sub-Adviser Composite results represent the performance of the MAS Managed
Funds net of fees and other expenses, but do not reflect the imposition of sales
charges. The Composite results do not represent the performance of the GE High
Yield Fund, and should not be considered an indication of future performance of
the Fund.


--------------------------------------------------------------------------------
Calendar Year Total Returns

                                   [BAR CHART]


                           Salomon Brothers
                           High Yield Market
       Composite                  Index
       ---------           -----------------
1989*     -6%                       1%
1990     -11%                      -7%
1991      44%                      40%
1992      19%                      18%
1993      25%                      17%
1994      -7%                      -1%
1995      24%                      20%
1996      15%                      11%
1997      16%                      13%
1998       3%                       4%
1999       8%                       2%
2000


* Represents performance from February 28, 1989, the date the initial MAS
Managed Fund commenced operations, through December 31, 1989.

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

Average Annual Total Return
(as of December 31, 2000)

                                      Salomon Brothers
                                     High Yield Market
Period                 Composite            Index
                       ---------     -----------------
1 Year                       %                 %
3 Years                      %                 %
5 Years                      %                 %
10 Years                     %                 %
Since 2/28/89                %                 %

Note A -- As of December 31, 2000, the total assets of the composite was $
billion. The composite performance is compared to the performance of the Salomon
Brothers High Yield Market Index, which is a broad based unmanaged index that
includes below investment grade corporate bonds issued in the U.S. and publicly
traded with remaining maturities of at least one year. The information provided
above for both the composite and the Index reflect the reinvestment of dividends
and distributions. Unlike the Index performance information, however, the
performance of the composite is net of fees and other expenses applicable to the
MAS Managed Funds. Expenses of the GE High Yield Fund are expected to be higher
than those of the MAS Managed Funds and may adversely affect the performance of
the Fund and cause it to differ from that of the composite. The
composite/account results are not required to be, and were not calculated in
accordance with SEC mandated mutual fund performance calculation methodology.
The use of such methodology could yield a different result.



--------------------------------------------------------------------------------
<PAGE>
-----------------------------------
78  GE Funds          How to Invest
    Prospectus


--------------------------------------------------------------------------------
How to Buy Shares

The GE Funds offer several ways to purchase shares. You may open an account and
make an investment through your investment professional, or directly through GE
Investment Distributors, Inc. (the "Distributor"), the Funds' distributor. You
may purchase Class A shares by mail, bank wire, electronic funds transfer, or by
telephone. You may obtain an application from your investment professional or
from the Distributor by calling 1-800-242-0134 or directly by visiting the GE
Funds Website at www.ge.com/mutualfunds.


The Funds and the Distributor may reject any purchase order or exchange request
for any reason. Excessive or short-term trading in Fund shares may harm
performance by compromising portfolio management strategies and increasing Fund
expenses. Although there is no current limit on transactions in Fund shares, the
Funds or the Distributor may reject a purchase order and may terminate or
restrict the exchange privilege of any investor, or person acting on behalf of
any investor or investors, whose pattern of trading or transaction history
involves, in the opinion of the Funds or the Distributor, actual or potential
harm to the Funds. The decision to reject a purchase order or exchange request
may be based upon dollar amount and/or frequency of trading. The Funds or the
Distributor may notify the investor that a purchase order or an exchange has
been rejected after the day the order is placed.


--------------------------------------------------------------------------------
Minimum Investments

                             By mail            By wire      Automatically
                             -------            -------      -------------
Initial Investment              $500             $1,000                $25
Subsequent Investments          $100             $1,000                $25

Minimums are reduced for accounts with active Direct Deposit, Automatic
Investment and Payroll Savings Plans. Accounts that fall below the $500 account
minimum may be automatically redeemed by a Fund on 30 days' notice.


--------------------------------------------------------------------------------
<PAGE>
                                                                      ----------
                                                                              79


--------------------------------------------------------------------------------
Opening an Account

o Read this Prospectus.

o Complete and sign an application. You may obtain an application from your
investment professional or from the Distributor by calling 1-800-242-0134 or by
visiting the GE Funds Website at www.ge.com/mutual funds.

o If you are opening an account directly through the Distributor, send a check
drawn on a U.S. bank in U.S. dollars payable to GE Funds. Third party checks,
endorsed checks, cash, money orders, travelers cheques or credit card checks are
not accepted by the Funds.

o If adding to an existing account, include your account number on the check.

o If a check used to open or add to an account does not clear, you may be
assessed an additional charge.

Mail to:
GE Funds
P.O. Box 219631
Kansas City, MO 64121-9631

Overnight delivery:
GE Funds
c/o National Financial Data Services Inc.
330 West 9th Street
Kansas City, MO 64105

--------------------------------------------------------------------------------
Once You Have Opened
an Account -- You Have
Additional Options

By Wire

o You may have your financial institution electronically transfer ("wire")
monies to your account. Wire to the address below. Include your name, the name
of the Fund and your account number.

Wire Address:
State Street Bank and Trust Company
ABA No. 0110-0002-8
DDA No. 9904-641-9

o Your financial institution may change a fee for wire transactions.

o Wire orders received by the close of regular trading on the New York Stock
Exchange (NYSE) are executed at that day's offering price. Wire orders received
after the close of regular trading on the NYSE receive the next business days'
offering price.

Electronic Funds Transfer

You may transfer money between your bank account and your fund account by
electronic funds transfer if you have completed the appropriate section of the
application. Electronic funds transfers are similiar to wires but are not
processed as quickly. Most transfers are completed within three business days of
your request. Prior to your first transfer, call the GE Funds at (800) 242-0134
to confirm that electronic transfer has been enabled on your account.

Direct Deposit or Payroll
Savings Plan

o You must have an existing account.

o You may invest automatically with money deducted from your Federal paycheck,
Social Security check, GE employee payroll check or through your company's
payroll savings plan.

o To establish a direct deposit arrangement or to invest through a payroll
savings plan, contact your payroll department or Federal agency.

o You may elect to modify or terminate your participation in the Direct Deposit
or Payroll Savings Plans by notifying the Funds in writing.

o The Funds may modify or terminate your participation in a Plan upon notice.

Automatic Investment Plan


o You may have money transferred directly from your bank account each month.
Call 1-800-242-0134 or your investment professional to make arrangements.

o Money transferred using the automatic investment plan will not be available
from your Fund account for 10 business days.

o If an automatic monthly investment transaction fails because there is an
insufficient balance in your account, you may be assessed an additional charge.
The Funds may modify or terminate the Plan at any time.



--------------------------------------------------------------------------------
<PAGE>
--------------------------
80  GE Funds
    Prospectus
    How to Invest


--------------------------------------------------------------------------------
Retirement Plans

Shares of the Funds, other than the Tax-Exempt Fund, are available for purchase
through individual retirement accounts ("IRAs") and other retirement plans. An
IRA application and further details about IRAs and other retirement plans are
available from your investment professional, the Distributor, or the GE Funds
Website at www.ge.com/mutual funds.

Purchases in Kind - If You Invest More than $10 Million

Large investments in a Fund ($10 million or more) may be detrimental to existing
shareholders because they can significantly increase transaction costs charged
to existing shareholders. In these circumstances, the Fund may require that you
purchase Fund shares "in kind," or provide the Fund with securities instead of
cash. The Funds' distributor would inform you of the securities acceptable to
the Fund. The securities would be accepted by the Fund at their market value in
return for Fund shares of equal value. You may have to pay associated brokerage
commissions for the securities that you purchase. An in kind purchase of Fund
shares will be a taxable event.


--------------------------------------------------------------------------------
<PAGE>
                                                                      ----------
                                                                              81


--------------------------------------------------------------------------------
Choosing a Share Class

Each GE Fund (other than the GE S&P 500 Index Fund, GE Money Market Fund and GE
Government Securities Fund) offers four share classes to investors. You should
select the share class that best suits your needs. Sales charges and expenses
are determined by the share class you select and manner in which you purchase.
Offering price is equal to the net asset value next determined after receipt of
your order in good form plus any applicable sales charge.

--------------------------------------------------------------------------------
Investing through an Authorized Firm

You may invest through authorized broker-dealers, financial institutions or
investment advisers that have entered into sales agreements with the Distributor
("Authorized Firms").

If you invest through an Authorized Firm with an investment professional, they
can provide investment advice, determine the suitability of a particular Fund or
Funds, help you set up your new account and make subsequent investments for you.
Your investment professional will forward your investment details and payment to
the Fund. Your investment professional may charge fees not described in this
Prospectus.

Class A shares carry an initial sales charge. Certain investors listed below
under "Sales Charge Waivers for Class A Shares" may purchase Class A shares on a
load-waived basis. Class B shares are subject to a contingent deferred sales
charge (CDSC) based on the amount of time you hold your shares, Class C shares
are subject to a CDSC for one year after purchase, and finally, Class Y shares
are available only to certain institutional investors. The Funds may modify the
manner in which shares are offered, minimum investments, or sales charge rates
or waivers.

--------------------------------------------------------------------------------
Investing in Class A shares directly through the Distributor

If you choose to make your own investment decisions , you may purchase Class A
shares directly from the Distributor via the Internet, by mail or other direct
means without paying the initial sales charge. Subsequent purchases of Class A
shares in accounts initially established with a purchase through the Distributor
also may be made without paying any initial sales charge.

For additional information, call the Distributor at 1-800-242-0134 or visit the
GE Funds Website at www.ge.com/mutualfunds

--------------------------------------------------------------------------------
If You Work for GE

As a GE Employee, as defined below, you and your family members may purchase
Class A shares directly from the Distributor without paying the sales charge
typically associated with buying Class A shares of a Fund through an investment
professional. If a GE Employee purchases Fund shares through an investment
professional other than the Distributor, they may pay transaction fees including
any applicable sales charges.

The following persons ("GE Employees") are eligible for the employee Class A
sales charge waiver if they purchase shares through the Distributor:

o employees, retirees, officers or directors of GE, or affiliated companies and
members of their families (including your spouse, parents, children, siblings,
grandparents and grandchildren)

o investors and their family members who purchased shares of the Funds issued
before November 29, 1993.

Please call 1-800-242-0134 or visit the GE Funds Website at
www.ge.com/mutualfunds for details.


--------------------------------------------------------------------------------
<PAGE>
--------------
82


--------------------------------------------------------------------------------
Purchasing Class A Shares
(through an Authorized Firm)

Class A shares may be appropriate for long-term investors who compensate their
investment professional for the services they provide with traditional front-end
sales charges and for investors who are eligible for quantity discounts or
waivers.

When purchased through an Authorized Firm, Class A shares have initial sales
charges, which are included in the offering price. Initial sales charges on
Class A shares may be reduced, waived or may vary with the amount invested. The
initial sales charge varies with the amount invested, as shown below:

--------------------------------------------------------------------------------
GE U.S. Equity Fund, GE Value Equity Fund, GE Mid-Cap Growth Fund, GE Mid-Cap
Value Equity Fund, GE Small-Cap Value Equity Fund, GE Global Equity Fund, GE
International Equity Fund, GE Europe Equity Fund, GE Emerging Markets Fund, GE
Premier Growth Equity Fund, GE Premier Research Equity Fund, GE Premier
International Equity Fund, GE Premier Value Equity Fund, and GE Strategic
Investment Fund

<TABLE>
<CAPTION>
                                                                                                  Maximum Dealers'
           Your Investment**                      Front-End Sales Charge                            Reallowance*
           -----------------                      ----------------------                            ------------
                                 (As a % of Offering Price)  (As a % of Your Net Investment)  (As a % of Offering Price)
<S>                                        <C>                          <C>                            <C>
Less than $50,000                          5.75%                        6.10%                          5.25%
------------------------------------------------------------------------------------------------------------------------
$50,000 but less than $100,000             4.25%                        4.44%                          3.75%
------------------------------------------------------------------------------------------------------------------------
$100,000 but less than $250,000            3.25%                        3.36%                          2.75%
------------------------------------------------------------------------------------------------------------------------
$250,000 but less than $500,000            2.50%                        2.56%                          2.00%
------------------------------------------------------------------------------------------------------------------------
$500,000 but less than $1,000,000          2.00%                        2.04%                          1.55%
------------------------------------------------------------------------------------------------------------------------
$1,000,000 or more***                      0                            0                              +
------------------------------------------------------------------------------------------------------------------------
</TABLE>

--------------------------------------------------------------------------------
GE Fixed Income Fund, GE Government Securities Fund, GE Tax-Exempt Fund and GE
High Yield Fund

<TABLE>
<CAPTION>
                                                                                                  Maximum Dealers'
           Your Investment**                      Front-End Sales Charge                            Reallowance*
           -----------------                      ----------------------                            ------------
                                 (As a % of Offering Price)  (As a % of Your Net Investment)  (As a % of Offering Price)
<S>                                         <C>                          <C>                            <C>
Less than $100,000                          4.25%                        4.44%                          3.75%
------------------------------------------------------------------------------------------------------------------------
$100,000 but less than $250,000             3.25%                        3.36%                          2.75%
------------------------------------------------------------------------------------------------------------------------
$250,000 but less than $500,000             2.50%                        2.56%                          2.00%
------------------------------------------------------------------------------------------------------------------------
$500,000 but less than $1,000,000           2.00%                        2.04%                          1.55%
------------------------------------------------------------------------------------------------------------------------
$1,000,000 or more***                       0                            0                              +
------------------------------------------------------------------------------------------------------------------------
</TABLE>

--------------------------------------------------------------------------------
GE Short-Term Government Fund

<TABLE>
<CAPTION>
                                                                                                  Maximum Dealers'
           Your Investment**                      Front-End Sales Charge                            Reallowance*
           -----------------                      ----------------------                            ------------

                                 (As a % of Offering Price)  (As a % of Your Net Investment)  (As a % of Offering Price)
------------------------------------------------------------------------------------------------------------------------
<S>                                         <C>                          <C>                              <C>
Less than $100,000                          2.50%                        2.56%                            2.25%
------------------------------------------------------------------------------------------------------------------------
$100,000 but less than $250,000             2.25%                        2.30%                            2.00%
------------------------------------------------------------------------------------------------------------------------
$250,000 but less than $500,000             1.75%                        1.78%                            1.50%
------------------------------------------------------------------------------------------------------------------------
$500,000 but less than $1,000,000           1.25%                        1.27%                            1.00%
------------------------------------------------------------------------------------------------------------------------
$1,000,000 or more***                       0                            0                                +
------------------------------------------------------------------------------------------------------------------------
</TABLE>

*     For the Premier Funds, and for the other Funds in certain circumstances,
      the full amount of the front-end sales charge may be reallowed to dealers.
      Dealers who receive more than 90% of the sales charge may be considered
      "underwriters" under the U.S. securities laws.
**    Under the Distributor's guidelines, purchases of $250,000 or more intended
      for Class B shares and purchases of $1,000,000 or more ($500,000 for the
      Short-Term Government Fund) intended for Class C shares should be made in
      Class A shares.
***   Purchases through an Authorized Firm of $1 million or more in Class A
      shares at net asset value are subject to a 1% contingent deferred sales
      charge if redeemed within one year of purchase. The CDSC is calculated by
      multiplying the CDSC percentage by the lesser of the share class' net
      asset value at the time of purchase or its net asset value at the time of
      redemption.
+     For purchases through an Authorized Firm of a single Fund that exceed $1
      million, the Distributor will pay a concession of 1.00% of any amounts
      under $5 million, 0.50% of the next $45 million and 0.25% thereafter, to
      the selling dealer.


--------------------------------------------------------------------------------
<PAGE>
                                                               -----------------
                                                               GE Funds       83
                                                               Prospectus
                                                               How to Invest

--------------------------------------------------------------------------------
Reduced Sales Charges for
Class A Shares

Purchases of Class A shares have reduced sales charges in the following
situations:

o "Combined Right Of Accumulation" Policy--you may group prior investments made
by you and/or members of your immediate family in Class A shares of the same or
other GE Funds to count towards volume discounts on new purchases.

o "Letter Of Intent" Purchase--if you intend to make purchases in GE Funds of
over $50,000 in the Equity Funds or $100,000 in the Fixed Income Funds within a
13 month period, you may sign a letter of intent and receive a volume discount
on each purchase as if you were making a single purchase. (Please complete and
sign the letter of intent section on the Fund application.) If you fail to
satisfy the letter of intent, the higher sales charges applicable to your
investment will be assessed retroactively. The Funds' Transfer Agent will hold a
portion of the amount specified in the letter of intent as Fund shares in
escrow, which will be used to cover the applicable sales charge if the letter is
not satisfied.

Additional information about sales charge reductions is contained in the SAI or
you may contact your investment professional or the Distributor for details.

--------------------------------------------------------------------------------
Sales Charge Waivers for
Class A Shares

The sales charge on Class A shares is waived if the purchase:

o is at least $1 million

o represents reinvested dividends or capital gains received on Fund shares

o is made by banks, insurance companies and corporations purchasing shares for
their own account

o is made by employee retirement plans that seek the additional services
provided or paid by GE Asset Management or its affiliates ("Class A Retirement
Plans")

o is made by investment companies not managed or sponsored by GE Asset
Management or any of its affiliates

o is made through the Distributor by participants of defined contribution plans
which include GE Funds as investment options

o is made by officers, directors, employees and registered representatives of
authorized firms that have agreements with the Distributor or other financial
institutions selling Fund shares

o is made directly through the Distributor

o is made through an account with a broker-dealer with which the Distributor has
an agreement for the use of GE Funds in particular investment products or
programs on a load-waived basis

o is made by employees and their family members of certain vendors of GE's
employee retirement plan

o is made by certain investors who previously purchased shares during special
limited offerings

o is made through certain GE LifeStyle Funds

o is made through broker-dealers for supplemental savings plans for individuals
who are employed by a single employer with 750 or more eligible investors

o is made through certain broker-dealers, financial institutions, recordkeepers
and other financial intermediaries who charge a management, consulting or other
fee for their services and who have an agreement with or among the Funds, GE
Asset Management, and the Distributor to compensate them for certain services.

Purchases of $1 million or more in Class A shares at NAV are subject to a 1%
CDSC if redeemed within one year of purchase. The Class A CDSC is calculated in
the same manner and is subject to the same waivers as the CDSC on Class B
shares. The Class A CDSC does not apply to investors purchasing $1 million or
more of any fund's Class A shares if such investors are otherwise eligible to
purchase Class A shares pursuant to a sales charge waiver. For more information
on Class A sales charge waivers, please contact the Distributor or your
investment professional.


--------------------------------------------------------------------------------
<PAGE>
-----------------
84  GE Funds
    Prospectus
    How to Invest


--------------------------------------------------------------------------------
Purchasing Class B Shares

Class B Shares may be appropriate if you are opposed to front-end sales charges
or if you are not planning to redeem shares in the short term.


Class B shares have no initial sales charge but may be subject to a contingent
deferred sales charge (CDSC). Class B shares convert automatically to Class A
shares after six years to take advantage of lower expenses.


Class B shares acquired initially through Investors Trust Funds convert to Class
A shares after eight years. Intended purchases of Class B shares by investors
not eligible for Class Y shares of $250,000 or more should be made in Class A
shares.

Redemptions subject to CDSC

The CDSC on Class B shares declines based on the amount of time you hold your
shares. Class B shares redeemed during each of the time periods described at
right will have a CDSC. Shares purchased initially through Investors Trust Funds
are subject to a longer CDSC period.

The CDSC is calculated by multiplying the CDSC percentage by the lesser of the
share class' net asset value of the block of shares being redeemed at the time
of their purchase or its net asset value at the time of redemption. To ensure
that you pay the lowest CDSC possible, the Funds use the shares with the lowest
CDSC to fill your redemption requests.


CDSC Waivers on Certain Redemptions of Class A, Class B and Class C Shares

CDSCs are waived on shares:

o acquired through dividends or capital gains reinvestment

o redeemed because of death or disability (as defined in the Internal Revenue
Code of 1986, as amended)

o that are mandatory retirement distributions on IRA accounts that represent
the minimum required distribution from an IRA effected pursuant to a Systematic
Withdrawal Plan

o that are redemptions of Class B or Class C shares effected through the
Systematic Withdrawal Plan, not to exceed 10% of an investor's account value

o   that are redemptions of Class A

Contingent Deferred Sales Charges

Funds                                          Contingent Deferred Sales Charge
--------------------------------------------------------------------------------
GE U.S. Equity Fund                            o 4% in the first year
GE Value Equity Fund                           o 3% in the second year
GE Mid-Cap Growth Fund                         o 2% in the third year
GE Mid-Cap Value Equity Fund                   o 1% in the fourth year
GE Small Cap Value Equity Fund                 o 0% in the fifth and sixth years
GE Global Equity Fund                          o converts to Class A shares
GE International Equity Fund
GE Europe Equity Fund
GE Emerging Markets Fund
GE Premier Growth Equity Fund
GE Premier Research Equity Fund
GE Premier International Equity Fund
GE Premier Value Equity Fund
GE Strategic Investment Fund
--------------------------------------------------------------------------------
GE Fixed Income Fund                          o 3% in the first and second years
GE Government Securities Fund                 o 2% in the third year
GE Short-Term Government Fund                 o 1% in the fourth year
GE Tax-Exempt Fund                            o 0% in the fifth and sixth years
GE High Yield Fund                            o converts to Class A shares

--------------------------------------------------------------------------------
If you initially purchased through Investors Trust Funds:
--------------------------------------------------------------------------------
Funds                                         Contingent Deferred Sales Charge

Any Fund's Class B shares acquired as a       o 5% in the first year
result of the merger of Investors Trust       o 4% in the second year
Funds with certain GE Funds.                  o 3% in the third year
                                              o 2% in the fourth year
                                              o 1% in the fifth year
                                              o 0% in the sixth year
                                              o converts to Class A shares


--------------------------------------------------------------------------------
<PAGE>

                                                                      ----------
                                                                              85


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

shares originally purchased in amounts of $1 million or more without paying an
initial sales charge and are being redeemed within one year pursuant to a
Systematic Withdrawal Plan. The sales charge waiver in this instance is limited
to the first $100,000 redeemed.

o that represent "substantially equal periodic payments" as described under
Section 72(t)(2) of the Internal Revenue Code of 1986, as amended.

--------------------------------------------------------------------------------
Purchasing Class C Shares (Level load class)

Class C shares may be appropriate if you are opposed to traditional front-end
sales charges or are unsure of the length of time you will hold your investment.
Because you may purchase Class C shares at the NAV next determined without
paying an initial sales charge, your entire investment in Class C shares is
available to work for you. However, Class C shares pay a higher distribution and
service fee (Rule 12b-1 fee) than Class A shares (or Class B shares after
conversion to Class A shares).

Class C shares may be subject to a 1% CDSC if redeemed within one year of
purchase. Proceeds from the CDSC may be used to defray the expenses of GE
Investment Distributors related to the sale of Class C shares, including the
payment of compensation to authorized firms. The CDSC on Class C shares is
calculated in the same manner and is subject to the same waivers as the CDSC on
Class B shares.

Intended purchases of Class C shares by investors not eligible for Class Y
shares of $1,000,000 ($500,000 for the Short-Term Government Fund) should be
made in Class A shares. An amount up to 1% of the amount invested in Class C
shares is paid by the Distributor to authorized firms.

--------------------------------------------------------------------------------
Purchasing Class Y Shares
(formerly Class D Shares) --
Institutional Investors

Class Y shares have no initial sales charges or CDSC. Class Y shares may be
purchased by:

o financial institutions and corporations purchasing shares for their own
account

o fiduciaries investing on behalf of clients

o certain tax-exempt investors including defined contribution plans that do not
seek additional services provided or paid by GE Asset Management

o investment companies not managed by GE Asset Management

o clients of certain financial intermediaries who invest at least $250,000

Investors eligible to purchase Class Y shares may not purchase any other class
of shares, except as described under Class A shares.

How to Redeem Shares

You may take money out of your account by redeeming (selling) some or all of
your shares.

If You Invested With an Investment Professional

Shares purchased with the assistance of an investment professional may be
redeemed either by the investment professional or the shareholder of record.
Please see your account statement for the telephone number of your investment
professional.

By Mail

Send a signed written request, stating the share class and number of shares or
specific dollar amount you want to sell. Your signature(s) must appear exactly
as it does on the account registration.

Mail to:

GE Funds
P.O. Box 219631
Kansas City, MO 64121-9631

Overnight Delivery:
GE Funds
c/o National Financial Data Services Inc.
330 West 9th Street
Kansas City, MO 64105
Telephone: (816) 843-7335

Signature(s) must each be guaranteed for any redemption:

o exceeding $50,000

o mailed to a different address from that on record

o paid to someone else

o wired to a financial institution

o mailed to an address that has been changed within the last 30 days


--------------------------------------------------------------------------------
<PAGE>
--------------
86


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

By Telephone

Shares may be redeemed by telephone up to a maximum of $50,000 per day utilizing
the Funds' automated Voice Response system or by an agent during business hours.
The telephone option must have been selected during initial account setup or
subsequently by written request signed by all registered shareholders. Call
toll-free 1-800-242-0134.

The Distributor will not be responsible for losses resulting from unauthorized
telephone transaction instructions if it follows reasonable procedures to verify
the identity of the investor.

By Wire

You may redeem your shares by telephone and have the proceeds of the sale wired
to your bank instead of receiving a check.

o Minimum wire amount: $1,000

o A $10 fee per wire will be charged to your account (in addition to any
applicable sales charges)

o Include your account number, share class and specific dollar amount you want
to redeem in your wire request Wire instructions must have been provided during
initial account setup or subsequently by written request signed by all
registered shareholders with a signature guarantee.

Mail your signed, signature guaranteed written request to establish wire
privileges to:

GE Funds
P.O. Box 219631
Kansas City, MO 64121-9631
Or call the Distributor at 1-800-242-0134.

By Systematic Withdrawal Plan

You may select a specific amount to be redeemed from your account on a regular
basis.

o Your account balance must be at least $10,000

o Maximum of 10% of the value of your account each year and a minimum of $50 per
withdrawal

o You may sell shares monthly or quarterly

Checkwriting

Checkwriting privileges may be elected at no cost by shareholders of the Money
Market Fund. Checks may be made payable to any person in amounts of $100 or
more. The Transfer Agent will redeem shares in an amount sufficient to cover the
amount of a check. If the amount of the check is greater than the value of the
shares in your account, the check will be returned marked "insufficient funds"
and you may be assessed an additional charge. Please contact the Distributor at
the number listed on the back cover for additional details.

Special Considerations for Selling Shares

o If you own more than one share class of a Fund, specify which share class you
want to sell. Otherwise, the selling transaction may be delayed.

o When using a check to sell shares of GE Money Market Fund, the minimum check
amount is $100.

o If you have purchased shares of a Fund by personal check, redemption of these
shares, under normal circumstances, can only be processed after 15 calendar days
have passed in order to provide the Fund with sufficient time to make sure that
your check clears.

o If your account balance falls below $500, the transfer agent may request that
you bring your balance up to the $500 minimum or request that you close your
account. If you take no action within 30 days, the transfer agent may sell your
shares and mail the proceeds to you. This $500 minimum balance requirement is
waived for qualified plans, Direct Deposit accounts, Payroll Savings Plan
accounts and Automatic Investment Plan accounts.

o Normally, redemption requests are processed by the next business day, but may
take up to seven business days if making immediate payment would adversely
affect the fund.

o Redemptions may be suspended or payment postponed when the NYSE is closed,
when trading on the NYSE is restricted, or as permitted by the Securities and
Exchange Commission.


--------------------------------------------------------------------------------
<PAGE>
                                                                      ----------
                                                                              87


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Reinstatement of Shares

For 60 days after you sell shares, you have the right to "reinstate" your
investment at the then current NAV and pay no sales charge. For Class A, Class B
and Class C shares, any CDSC associated with the redemption will be reinstated
to your account in direct proportion to the amount reinvested. Reinstatement
will occur at the then-current net asset value and may have tax consequences.
You must request share reinstatement in writing.

Redemptions in Kind

Large redemptions that exceed $250,000 or 1% of a Fund's assets may be
considered detrimental to the Fund's existing shareholders. Therefore, the Fund
may require that you take a "distribution in kind" upon redemption and may give
you portfolio securities instead of cash proceeds. Such Fund portfolio
securities will have to be sold through a broker and you may incur transaction
costs when you sell them.

How to Exchange Shares

You can exchange shares of a class of one GE Fund for the same class of another
GE Fund. You can also exchange shares from GE Money Market Fund for Class A,
Class B, Class C or Class Y shares of another GE Fund. An exchange is a sale and
purchase of shares for tax purposes. You may have a taxable gain or loss when
you exchange your shares. To exchange shares:

o by phone, call 1-800-242-0134. (This option is not available for certain
corporate or trust accounts.)

o through the GE Funds Website at www.ge.com/mutual funds. (This option is not
available for certain corporate or trust accounts.)

o in writing, send your request to GE Funds:

Mail to:
GE Funds
P.O. Box 219631
Kansas City, MO 64121-9631

Overnight Delivery:
GE Funds
c/o National Financial Data Services Inc.
330 West 9th Street
Kansas City, MO 64105
Telephone: (816) 843-7335

You must be eligible to purchase the shares that you wish to exchange into and
should review the description of the Fund that you wish to purchase. If you
exchange Class A, Class B or Class C shares for Money Market Fund shares, you
will be subject to the applicable CDSC at the time that you sell your Money
Market Fund shares. The time that you hold Money Market Fund shares is not
included in the holding period for purposes of calculating the applicable CDSC
on a redemption.

When We Receive Your Transaction Order

Purchase and redemption requests received in good order will be executed at the
next offering price calculated after receipt of transaction instructions.
Offering price is equal to the net asset value next determined plus any
applicable sales charge.

o Purchase and redemption orders are executed only on days when the NYSE is open
for trading. If the NYSE closes early, the deadlines for purchase and redemption
orders will be accelerated to the earlier closing time.

o If you hold more than one Class of shares of a Fund, you must specify which
class you intend to purchase or sell.

o For Funds declaring daily income dividends, you will begin to earn income as
of the first business day after payment for your order has been received by the
Fund.


--------------------------------------------------------------------------------
<PAGE>

-----------------
88


--------------------------------------------------------------------------------
Distribution and
Shareholder
Service Fees

To pay for the cost of promoting the Funds and servicing your shareholder
account, Class A, Class B and Class C shares of the Funds have adopted Rule
12b-1 plans which requires that fees be paid out of the assets of each class.
Over time the fees will increase your cost of investing and may exceed the cost
of paying other types of sales charges. The following table shows the
distribution and service fees associated with investing in each class of shares.

--------------------------------------------------------------------------------
Distribution and Shareholder Service Fee Rates

<TABLE>
<CAPTION>
               All GE Funds except GE S&P 500 Index Fund,
                    GE Short-Term Government Fund
                      and GE Money Market Fund*                          GE Short-Term Government Fund
               ---------------------------------------------      -------------------------------------------------
                    Distribution Fee     Service Fee                 Distribution Fee           Service Fee
-------------------------------------------------------------------------------------------------------------------
<S>                      <C>               <C>                            <C>                     <C>
Class A                  0.00%             0.25%**                        0.00%                   0.25%**
-------------------------------------------------------------------------------------------------------------------
Class B                  0.75%              0.25%                         0.60%                   0.25%
-------------------------------------------------------------------------------------------------------------------
Class C                  0.75%              0.25%                         0.75%                   0.25%
-------------------------------------------------------------------------------------------------------------------
Class Y                  None               None                          None                    None
-------------------------------------------------------------------------------------------------------------------
</TABLE>

* No distribution and service fees are paid by the GE S&P 500 Index Fund or GE
Money Market Fund.

**The amount paid by Class A Shares under the Rule 12b-1 plan may be used for
both distribution and shareholder service expenses.

Investment Through Intermediaries

If you invest through a third party (rather than directly through the
Distributor), the fees may be different than those described in this Prospectus.
Banks, brokers, financial advisers and financial supermarkets may charge
transaction fees and may set different minimum investments or limitations on
buying or selling shares. Consult a representative from your financial
institution if you have questions.


Financial services firms selling significant amounts of Class A, Class B or
Class Y Shares may receive extra compensation. This compensation, which GE Asset
Management will pay out of its own resources, may include reimbursement for
marketing costs, distribution and servicing of shares of the Funds. Additional
compensation may also be paid to broker-dealers who offer certain Funds as part
of a special preferred-list program. Such additional compensation may, but is
currently not expected to, annually exceed .50% of the amount invested. GE Asset
Management also may use its own resources to compensate third parties that sell
shares of the Funds in connection with certain investment programs.



--------------------------------------------------------------------------------
<PAGE>
                                                                      ----------
                                                                              89


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                      [This page intentionally left blank.]



--------------------------------------------------------------------------------
<PAGE>
---------------------------------------
90  GE Funds              Dividends,
    Prospectus            Capital Gains
                          and Other Tax
                          Information


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

Most GE Funds pay dividends from net investment income and from net capital
gains once each year. Unless you instruct a Fund to mail dividends from net
investment income and net capital gains to you, they will be reinvested in your
account. There are no fees or charges to reinvest dividends.

GE Funds are subject to a 4% excise tax on undistributed net investment income
and net capital gains. To avoid this tax, the Funds may pay dividends from net
investment income and net capital gains more frequently.

--------------------------------------------------------------------------------
Fund                                           Distribution Schedule
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
<S>                                            <C>
GE U.S. Equity Fund                            o Dividends are typically declared and
GE Value Equity Fund                           paid annually.
GE Mid-Cap Growth Fund
GE Mid-Cap Value Equity Fund                   o Short-term and long-term capital
GE Small-Cap Value Equity Fund                 gains, if any, are typically declared
GE S&P 500 Index Fund                          and paid annually.
GE Global Equity Fund
GE International Equity Fund
GE Europe Equity Fund
GE Emerging Markets Fund
GE Premier Growth Equity Fund
GE Premier Research Equity Fund
GE Premier International Equity Fund
GE Premier Value Equity Fund
GE Strategic Investment Fund

----------------------------------------------------------------------------------------
GE Fixed Income Fund                           o Dividends are declared daily and paid
GE Government Securities Fund*                 monthly.
GE Short-Term Government Fund
GE Tax-Exempt Fund                             o Short-term and long-term capital
GE High Yield Fund                             gains, if any, are typically declared
GE Money Market Fund                           and paid annually.
</TABLE>

*The Government Securities Fund pays a dividend based on periodic projections.
Total distributions could exceed taxable income earned by the Fund potentially
creating a return of capital.


--------------------------------------------------------------------------------
<PAGE>
                                                                      ----------
                                                                              91


--------------------------------------------------------------------------------
Taxes

Tax issues can be complicated. We suggest you see your investment professional
or tax advisor for any questions you may have.

Except for investments in tax-deferred accounts, you generally will owe taxes on
amounts distributed to you. Dividends and distributions from net investment
income and short-term capital gains are taxed as ordinary income. Long-term
capital gains distributions are taxed at the long-term capital gains rate.
Distributions generally will be taxed in the same manner whether they are
received in cash or reinvested.

In addition, if you sell or redeem Fund shares, you generally will realize a
capital gain or loss, which will be long-term or short-term, depending upon how
long you hold those shares. If you exchange shares for the same class of another
GE Fund, the exchange will be treated as a sale and purchase of shares for tax
purposes.

--------------------------------------------------------------------------------
Distributions from GE Tax-Exempt Fund

In general, income from the GE Tax-Exempt Fund is exempt from Federal income tax
but may be subject to state and local taxes. Because the Fund may invest in
taxable securities, some dividends from net investment income may be subject to
Federal and state income taxes. Short-term and long-term capital gains
distributed by the Fund are taxable.

--------------------------------------------------------------------------------
Tax Statement

You will receive an annual statement summarizing your dividend and capital gains
distributions. Please consult a tax advisor if you have questions about your
specific tax situation.

--------------------------------------------------------------------------------
Backup Withholding

If you do not provide complete and certified taxpayer identification
information, each Fund is obligated by law to withhold 31% of most Fund
distributions.


--------------------------------------------------------------------------------
<PAGE>
---------------------------------------
92  GE Funds              Calculating
    Prospectus            Share Value


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

Fund shares are sold at net asset value ("NAV") plus any applicable sales
charge. The NAV of each share class is calculated at the close of regular
trading on the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time,
each day the NYSE is open for trading. The NAV per share class for Funds (other
than the Money Market Fund) is determined by adding the value of the Fund's
investments, cash, and other assets attributable to that class, subtracting its
liabilities, and then dividing the result by the number of that class'
outstanding shares.

A Fund's portfolio securities are valued most often on the basis of market
quotations. Foreign securities are valued on the basis of quotations from the
primary market in which they are traded. Some debt securities are valued using
dealers and pricing services. Municipal bond valuations are based on prices
supplied by a qualified municipal pricing service.

The prices are composed of the mean average of the bid and ask prices on the
secondary market. All portfolio securities of the Money Market Fund and any
short-term securities held by any other Fund with remaining maturities of sixty
days or less are valued on the basis of amortized cost or original cost plus
accrued interest. A Fund's written or purchased options are valued at the last
sales price, or if no sales occurred that day, at the last traded bid price. A
Fund's NAV may change on days when shareholders will not be able to purchase or
redeem the Fund's shares.


If quotations are not readily available for any security, or if the value of a
security has been materially affected by events occurring after the closing of
the security's primary market, the security may be valued using procedures
approved by a Fund's Board of Trustees that they believe accurately reflect
"fair value". Security values may differ depending on the procedures used to
determine value.



--------------------------------------------------------------------------------
<PAGE>
                                         ---------------------------------------
                                         Financial                GE Funds    93
                                         Highlights               Prospectus


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

The financial highlights tables that follow are intended to help you understand
a Fund's financial performance for the fiscal years ended September 30. Certain
information reflects financial results for a single Fund share. The total
returns in the table represent the rate that an investor would have earned or
lost on an investment in the Fund (assuming reinvestment of all dividends and
distributions). Fiscal year end information has been audited by
PricewaterhouseCoopers LLP, whose report, along with the Funds' financial
statements, are included in the Funds' Annual Report, which is available on
request.


--------------------------------------------------------------------------------
<PAGE>
-----------------                                                     ----------
94  GE Funds                                                                  95
    Prospectus
    Financial
    Highlights


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

<TABLE>
<CAPTION>
GE U.S. Equity
Fund                                                          CLASS A

Years ended September 30                                             2000     1999(b,c)   1998(b)    1997(b)   1996(b)
<S>                                                                    <C>   <C>         <C>        <C>       <C>
Inception date                                                         --          --          --        --    1/5/93
Net Asset Value, Beginning of Period                                           $27.82      $29.00    $23.02    $19.98
Income (Loss) from Investment Operations:
   Net Investment Income (Loss)                                                  0.18        0.27      0.30      0.36

Net Gains (Losses) on Investments (both realized and unrealized)                 7.26        1.22      8.19      3.30
Total Income (Loss) From Investment Operations                                   7.44        1.49      8.49      3.66
Less Distribution
   Dividends (from net investment income)                                        0.23        0.24      0.32      0.35
   Distributions (from capital gains)                                            2.50        2.43      2.19      0.27
Total Distributions                                                              2.73        2.67      2.51      0.62

Net Asset Value, End of Period                                                 $32.53      $27.82    $29.00    $23.02

Total Return (a)                                                               27.79%       5.62%    39.76%    18.70%
Ratios/Supplemental Data
   Net Assets, End of Period (in thousands)                                  $311.958    $124,714   $97,886   $50,035
   Ratio of Net Expenses to Average Net Assets*                                 0.81%       0.75%     0.75%     0.75%
   Ratio of Net Investment Income (Loss) to Average Net Assets*                 0.56%       0.92%     1.18%     1.66%
   Ratio of Gross Expenses to Average Net Assets*                               0.83%       0.84%     0.93%     1.06%
   Portfolio Turnover Rate                                                        46%         29%       38%       49%

<CAPTION>
                                                                        CLASS B

Years ended September 30                                                2000    1999(b)  1998(b)  1997(b)  1996(b)
<S>                                                                       <C>  <C>      <C>      <C>       <C>
Inception date                                                            --        --       --       -- 12/22/93
Net Asset Value, Beginning of Period                                            $27.11   $28.35   $22.57   $19.71
Income (Loss) from Investment Operations:                                       (0.06)     0.05     0.11     0.19
   Net Investment Income (Loss)

Net Gains (Losses) on Investments (both realized and unrealized)                  7.08     1.20     8.03     3.25
Total Income (Loss) From Investment Operations                                    7.02     1.25     8.14     3.44
Less Distribution
   Dividends (from net investment income)                                         0.05     0.06     0.17     0.31
   Distributions (from capital gains)                                             2.50     2.43     2.19     0.27
Total Distributions                                                               2.55     2.49     2.36     0.58

Net Asset Value, End of Period                                                  $31.58   $27.11   $28.35   $22.57

Total Return (a)                                                                26.83%    4.80%   38.75%   17.78%
Ratios/Supplemental Data
   Net Assets, End of Period (in thousands)                                    $36.921  $21,407  $14,380   $7,194
   Ratio of Net Expenses to Average Net Assets*                                  1.56%    1.50%    1.50%    1.50%
   Ratio of Net Investment Income (Loss) to Average Net Assets*                (0.19)%    0.17%    0.44%    0.90%
   Ratio of Gross Expenses to Average Net Assets*                                1.58%    1.63%    1.88%    2.08%
   Portfolio Turnover Rate                                                         46%      29%      38%      49%

<CAPTION>
                                                                            CLASS Y

Years ended September 30                                                2000   1999(b)   1998(b)    1997(b)  1996(b)
<S>                                                                       <C> <C>       <C>       <C>       <C>
Inception date                                                            --        --        --        --  11/29/93
Net Asset Value, Beginning of Period                                            $27.78    $28.99    $23.03    $19.98
Income (Loss) from Investment Operations:                                         0.26      0.34      0.37      0.40
   Net Investment Income (Loss)

Net Gains (Losses) on Investments (both realized and unrealized)                  7.25      1.21      8.19      3.31
Total Income (Loss) From Investment Operations                                    7.51      1.55      8.56      3.71
Less Distribution
   Dividends (from net investment income)                                         0.31      0.33      0.41      0.39
   Distributions (from capital gains)                                             2.50      2.43      2.19      0.27
Total Distributions                                                               2.81      2.76      2.60      0.66

Net Asset Value, End of Period                                                  $32.48    $27.78    $28.99    $23.03

Total Return (a)                                                                28.14%     5.86%    40.16%    18.97%
Ratios/Supplemental Data
   Net Assets, End of Period (in thousands)                                   $358.583  $281,071  $212,957  $144,470
   Ratio of Net Expenses to Average Net Assets*                                  0.56%     0.50%     0.50%     0.50%
   Ratio of Net Investment Income (Loss) to Average Net Assets*                  0.81%     1.16%     1.45%     1.90%
   Ratio of Gross Expenses to Average Net Assets*                                0.58%     0.56%     0.52%     0.59%
   Portfolio Turnover Rate                                                         46%       29%       38%       49%
</TABLE>

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
GE Premier
Growth Equity
Fund                                                          CLASS A

Years ended September 30                                             2000     1999(b,c)   1998(b)   1997(b)
<S>                                                                    <C>    <C>        <C>         <C>
Inception date                                                         --          --         --   12/31/96
Net Asset Value, Beginning of Period                                           $20.44     $18.35     $15.00
Income (Loss) from Investment Operations
   Net Investment Income (Loss)                                                (0.08)       0.03       0.00
   Net Gains (Losses) Investments (both realized and unrealized)                 7.83       2.38       3.35
Total Income (Loss) From Investment Operations                                   7.75       2.41       3.35
Less Distributions
   Dividends (from net investment income)                                        0.03       0.03       0.00
   Distributions (from capital gains)                                            0.66       0.29       0.00
Total Distributions                                                              0.69       0.32       0.00

Net Asset Value, End of Period                                                 $27.50     $20.44     $18.35

Total Return (a)                                                               38.54%     13.35%     22.33%
Ratios/Supplemental Data
   Net Assets, End of Period                                                  $67.311    $15,044     $7,287
   Ratio of Net Expenses to Average Net Assets                                  1.10%      1.12%      1.15%
   Ratio of Net Investment Income (Loss) to Average Net Assets                (0.29)%      0.17%    (0.03)%
   Ratio of Gross Expenses to Average Net Assets*                               1.10%      1.16%      1.62%
   Portfolio Turnover Rate                                                        26%        35%        17%

<CAPTION>
                                                                CLASS B                           CLASS Y

Years ended September 30                                       2000   1999(b)  1998(b)   1997(b)  2000    1999(b)  1998(b)   1997(b)
<S>                                                              <C> <C>       <C>          <C>     <C> <C>        <C>       <C>
Inception date                                                   --       --       --   12/31/96    --       --        --  12/31/96
Net Asset Value, Beginning of Period                                  $20.20   $18.25     $15.00         $20.50    $18.38    $15.00
Income (Loss) from Investment Operations:
   Net Investment Income (Loss)                                       (0.27)   (0.12)     (0.09)         (0.01)      0.09      0.04
   Net Gains (Losses) on Investments
    (both realized and unrealized)                                      7.73     2.36       3.34           7.84      2.37      3.34
   Total Income (Loss) From Investment Operations                       7.46     2.24       3.25           7.83      2.46      3.38
   Less Distribution
   Dividends (from net investment income)                               0.00     0.00       0.00           0.07      0.05      0.00
   Distributions (from capital gains)                                   0.66     0.29       0.00           0.66      0.29      0.00
Total Distributions                                                     0.66     0.29       0.00           0.73      0.34      0.00

Net Asset Value, End of Period                                        $27.00   $20.20     $18.25         $27.60    $20.50    $18.38

Total Return (a)                                                      37.53%   12.47%     21.67%         38.92%    13.65%    22.53%
Ratios/Supplemental Data
   Net Assets, End of Period                                         $15,501   $2,076       $447        $20,704    $7,580    $5,770
   Ratio of Net Expenses to Average Net Assets                         1.84%    1.90%      1.90%          0.85%     0.88%     0.90%
   Ratio of Net Investment Income (Loss) to Average Net Assets       (1.03)%  (0.62)%    (0.76)%        (0.03)%     0.47%     0.31%
   Ratio of Gross Expenses to Average Net Assets*                      1.84%    2.27%      9.30%          0.85%     0.89%     1.17%
   Portfolio Turnover Rate                                               26%      35%        17%            26%       35%       17%
</TABLE>



--------------------------------------------------------------------------------
<PAGE>
-----------------                                                     ----------
96  GE Funds                                                                  97
    Prospectus
    Financial
    Highlights


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


<TABLE>
<CAPTION>
GE Value Equity
Fund                                                   CLASS A

Years ended September 30                                                 2000   1999(b,c)   1998(b)  1997(e)  10/31/96
<S>                                                                        <C>    <C>       <C>      <C>        <C>
Inception date                                                             --          --       --      --      9/8/93
Net Asset Value, Beginning of Period                                                $9.93    $13.58  $10.83      $8.95
Income (Loss) from Investment Operations
   Net Investment Income (Loss)                                                      0.18      0.05    0.07       0.05
   Net Gains (Losses) on Securities (both realized and unrealized)                   2.66      0.46    3.59       1.99
Total Income (Loss) From Investment Operations                                       2.68      0.51    3.66       2.04
Less Distributions
   Dividends (from net investment income)                                            0.03      0.00    0.04       0.09
   Distributions (from capital gains)                                                0.40      4.16    0.87       0.07
Total Distributions                                                                  0.43      4.16    0.91       0.16

Net Asset Value, End of Period                                                     $12.18     $9.93  $13.58     $10.83

Total Return (a)                                                                   27.34%     5.86%  36.18%     23.10%
Ratios/Supplemental Data
   Net Assets, End of Period (in thousands)                                       $29,607   $14,276  $8,236     $5,833
   Ratio of Net Expenses to Average Net Assets*                                     1.29%     1.31%   1.30%      1.35%
   Ratio of Net Investment Income (Loss) to Average Net Assets*                     0.02%     0.50%   0.63%      1.03%
   Ratio of Gross Expenses to Average Net Assets*                                   1.30%     1.33%   1.33%      1.73%
   Portfolio Turnover Rate                                                            31%       40%    131%       100%

<CAPTION>
                                                                    CLASS B

Years ended September 30                                             2000    1999(b)  1998(b)  1997(e)  10/31/96
<S>                                                                    <C>  <C>      <C>      <C>        <C>
Inception date                                                         --        --       --       --     9/8/93
Net Asset Value, Beginning of Period                                          $9.77   $13.48   $10.79      $8.93
Income (Loss) from Investment Operations
   Net Investment Income (Loss)                                              (0.04)     0.00   (0.01)       0.04
   Net Gains (Losses) on Securities (both realized and unrealized)             2.61     0.45     3.57       1.93
Total Income (Loss) From Investment Operations                                 2.57     0.45     3.56       1.97
Less Distributions
   Dividends (from net investment income)                                      0.00     0.00     0.00       0.04
   Distributions (from capital gains)                                          0.40     4.16     0.87       0.07
Total Distributions                                                            0.40     4.16     0.87       0.11

Net Asset Value, End of Period                                               $11.94    $9.77   $13.48     $10.79

Total Return (a)                                                             26.67%    5.32%   35.23%     22.30%
Ratios/Supplemental Data
   Net Assets, End of period (in thousands)                                 $51,369  $44,655  $46,035    $33,318
   Ratio of Net Expenses to Average Net Assets*                               1.81%    1.81%    2.05%      2.10%
   Ratio of Net Investment Income (Loss) to Average Net Assets*             (0.32)%    0.00%  (0.12)%      0.23%
   Ratio of Gross Expenses to Average Net Assets*                             1.82%    1.81%    2.07%      2.40%
   Portfolio Turnover Rate                                                      31%      40%     131%       100%

<CAPTION>
                                                                      CLASS Y(d)

Years ended September 30                                                 2000   1999(b)  1998(b)
<S>                                                                        <C>   <C>      <C>
Inception date                                                             --        --   1/5/98
Net Asset Value, Beginning of Period                                             $10.38    10.00
Income (Loss) from Investment Operations
   Net Investment Income (Loss)                                                    0.81     0.08
   Net Gains (Losses) on Securities (both realized and unrealized)                 2.76     0.30
Total Income (Loss) From Investment Operations                                     2.84     0.38
Less Distributions
   Dividends (from net investment income)                                          0.08     0.00
   Distributions (from capital gains)                                              0.40     0.00
Total Distributions                                                                0.48     0.00

Net Asset Value, End of Period                                                   $12.74   $10.38

Total Return (a)                                                                 27.85%    3.80%
Ratios/Supplemental Data
   Net Assets, End of period (in thousands)                                      $2,292   $1,580
   Ratio of Net Expenses to Average Net Assets*                                   0.08%    0.81%
   Ratio of Net Investment Income (Loss) to Average Net Assets*                   0.68%    0.98%
   Ratio of Gross Expenses to Average Net Assets*                                 0.82%    0.81%
   Portfolio Turnover Rate                                                          31%      40%
</TABLE>

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

<TABLE>
<CAPTION>
GE Mid-Cap
Growth Fund                                            CLASS A

Years ended September 30                                                2000    1999(b,c)  1998(b) 1997(e) 10/31/96
<S>                                                                       <C>     <C>      <C>     <C>       <C>
Inception date                                                            --           --       --      --   9/8/93
Net Asset Value, Beginning of Period                                                $8.27   $17.61  $13.16   $11.38
Income (Loss) from Investment Operations
   Net Investment Income (Loss)                                                    (0.04)   (0.04)  (0.07)     0.00
   Net Gains (Losses) on Securities (both realized and unrealized)                   1.19   (1.86)    4.52     1.78
Total Income (Loss) From Investment Operations                                       1.15   (1.90)    4.45     1.78
Less Distributions
   Dividends (from net investment income)                                            0.00     0.00    0.00     0.00
   Distributions (from capital gains)                                                0.00     7.37    0.00     0.00
   Returns of Capital                                                                0.00     0.07    0.00     0.00
Total Distributions                                                                  0.00     7.44    0.00     0.00

Net Asset Value, End of Period                                                      $9.42    $8.27  $17.61   $13.16

Total Return (a)                                                                   13.91% (16.11)%  33.81%   15.64%
Ratios/Supplemental Data
   Net Assets, End of period (in thousands)                                       $15.943  $10,134 $10,885   $8,222
   Ratio of Net Expenses to Average Net Assets*                                     1.38%    1.40%   1.31%    1.35%
   Ratio of Net Investment Income (Loss) to Average Net Assets*                   (0.41)%  (0.35)% (0.51)%    0.03%
   Ratio of Gross Expenses to Average Net Assets*                                   1.46%    1.45%   1.46%    1.70%
   Portfolio Turnover Rate                                                            48%      13%    139%      41%

<CAPTION>
                                                                   CLASS B

Years ended September 30                                               2000    1999(b)  1998(b)  1997(e)  10/31/96
<S>                                                                      <C>   <C>      <C>      <C>       <C>
Inception date                                                           --         --       --       --    9/8/93
Net Asset Value, Beginning of Period                                             $7.80   $17.11   $12.87    $11.21
Income (Loss) from Investment Operations
   Net Investment Income (Loss)                                                 (0.08)   (0.08)   (0.18)    (0.09)
   Net Gains (Losses) on Securities (both realized and unrealized)                1.12   (1.79)     4.42      1.75
Total Income (Loss) From Investment Operations                                    1.04   (1.87)     4.24      1.66
Less
Distributions
   Dividends (from net investment income)                                         0.00     0.00     0.00      0.00
   Distributions (from capital gains)                                             0.00     7.40     0.00      0.00
   Returns of Capital                                                             0.00     0.04     0.00      0.00
Total Distributions                                                               0.00     7.44     0.00      0.00

Net Asset Value, End of Period                                                   $8.84    $7.80   $17.11    $12.87

Total Return (a)                                                                13.33% (16.62)%   33.02%    14.81%
Ratios/Supplemental
Data
   Net Assets, End of period (in thousands)                                    $18,073  $22,038  $32,280   $27,616
   Ratio of Net Expenses to Average Net Assets*                                  1.90%    1.90%    2.06%     2.10%
   Ratio of Net Investment Income (Loss) to Average Net Assets*                (0.91)%  (0.86)%  (1.26)%   (0.73)%
   Ratio of Gross Expenses to Average Net Assets*                                1.97%    1.93%    2.21%     2.41%
   Portfolio Turnover Rate                                                         48%      13%     139%       41%

<CAPTION>
                                                                    CLASS Y(d)

Years ended September 30                                               2000      1999(b)     1998(b)
<S>                                                                      <C>       <C>        <C>
Inception date                                                           --           --     1/5/98
Net Asset Value, Beginning of Period                                               $8.71     $10.00
Income (Loss) from Investment Operations
   Net Investment Income (Loss)                                                     0.01       0.01
   Net Gains (Losses) on Securities (both realized and unrealized)                  1.26     (1.30)
Total Income (Loss) From Investment Operations                                      1.27     (1.29)
Less
Distributions
   Dividends (from net investment income)                                           0.00       0.00
   Distributions (from capital gains)                                               0.00       0.00
   Returns of Capital                                                               0.00       0.00
Total Distributions                                                                 0.00       0.00

Net Asset Value, End of Period                                                     $9.98      $8.71

Total Return (a)                                                                  14.58%   (12.90)%
Ratios/Supplemental
Data
   Net Assets, End of period (in thousands)                                         $783       $471
   Ratio of Net Expenses to Average Net Assets*                                    0.90%      0.89%
   Ratio of Net Investment Income (Loss) to Average Net Assets*                    0.09%      0.21%
   Ratio of Gross Expenses to Average Net Assets*                                  0.97%      0.89%
   Portfolio Turnover Rate                                                           48%        13%
</TABLE>



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<PAGE>

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98  GE Funds
    Prospectus
    Financial
    Highlights


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<TABLE>
<CAPTION>
GE Mid-Cap
Value Equity
Fund                                                         CLASS A                      CLASS B                    CLASS Y(d)

Years ended September 30                                2000       1999(b,c)            2000     1999(b)        2000       1999(b)
<S>                                                       <C>       <C>                   <C>   <C>               <C>     <C>
Inception date                                            --        12/31/98              --    12/31/98          --      12/31/98
Net Asset Value, Beginning of Period                                  $10.00                      $10.00                    $10.00
Income (Loss) from Investment Operations
   Net Investment Income (Loss)                                         0.04                      (0.02)                      0.06
   Net Gains (Losses) on Securities
    (both realized and unrealized)                                    (0.21)                      (0.21)                    (0.22)
Total Income (Loss) From Investment Operations                        (0.17)                      (0.23)                    (0.16)
Less Distributions
   Dividends (from net investment income)                               0.00                        0.00                      0.00
   Returns of Capital                                                   0.00                        0.00                      0.00
Total Distributions                                                     0.00                        0.00                      0.00

Net Asset Value, End of Period                                         $9.83                       $9.77                     $9.84

Total Return (a)                                                     (1.70)%                     (2.30)%                   (1.60)%
Ratios/Supplemental Data
   Net Assets, End of Period (in thousands)                             $708                        $177                   $10,103
   Ratio of Net Expenses to Average Net Assets*                        1.15%                       1.90%                     0.90%
   Ratio of Net Investment Income (Loss) to
     Average Net Assets*                                               0.47%                     (0.21)%                     0.79%
   Ratio of Gross Expenses to Average Net Assets*                      1.54%                       2.38%                     1.36%
   Portfolio Turnover Rate                                               17%                         17%                       17%
</TABLE>

<TABLE>
<CAPTION>
GE Small-Cap
Value Equity
Fund                                                         CLASS A                      CLASS B                    CLASS Y(d)

Years ended September 30                                2000       1999(b,c)            2000     1999(b)        2000      1999(b)
<S>                                                       <C>        <C>                  <C>    <C>              <C>     <C>
Inception date                                            --         9/30/98              --     9/30/98          --      9/30/98
Net Asset Value, Beginning of Period                                  $10.00                      $10.00                   $10.00
Income (Loss) from Investment Operations
   Net Investment Income (Loss)                                       (0.02)                      (0.06)                     0.05
   Net Gains (Losses) on Securities
    (both realized and unrealized)                                      2.24                        2.19                     2.19
Total Income (Loss) From Investment Operations                          2.22                        2.13                     2.24
Less Distributions
   Dividends (from net investment income)                               0.03                        0.01                     0.03
   Distributions (from capital gains)                                   0.03                        0.03                     0.03
Total Distributions                                                     0.06                        0.04                     0.06

Net Asset Value, End of Period                                        $12.16                      $12.09                   $12.18

Total Return (a)                                                      22.28%                      21.37%                   22.53%
Ratios/Supplemental Data
   Net Assets, End of Period (in thousands)                          $14,561                      $8,505                     $293
   Ratio of Net Expenses to Average Net Assets*                        1.15%                       1.90%                    0.90%
   Ratio of Net Investment Income (Loss) to
     Average Net Assets*                                             (0.15)%                     (0.56)%                    0.41%
   Ratio of Gross Expenses to Average Net Assets*                      1.41%                       2.19%                    1.71%
   Portfolio Turnover Rate                                              182%                        182%                     182%
</TABLE>


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100  GE Funds                                                                101
     Prospectus
     Financial
     Highlights


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<TABLE>
<CAPTION>
GE Global
Equity Fund                                                                  CLASS  A

Years ended September 30                                                      2000    1999(b,c) 1998(b)    1997     1996
<S>                                                                             <C>     <C>      <C>     <C>     <C>
Inception date                                                                  --          --       --      --   1/5/93
Net Asset Value, Beginning of Period                                                    $19.72   $24.81  $22.18   $20.31
Income (Loss) from Investment Operations
   Net Investment Income (Loss)                                                           0.06     0.05    0.04     0.06
   Net Gains (Losses) on Investments (both realized and unrealized)                       7.05   (2.65)    3.94     2.22
Total Income (Loss) From Investment Operations                                            7.11   (2.60)    3.98     2.28
Less Distributions
   Dividends (from net investment income)                                                 0.00     0.02    0.06     0.04
   Distributions (from capital gains)                                                     0.97     2.47    1.29     0.37
Total Distributions                                                                       0.97     2.49    1.35     0.41

Net Asset Value, End of Period                                                          $25.86   $19.72  $24.81   $22.18

Total Return (a)                                                                        36.89% (10.86)%  18.82%   11.44%
Ratios/Supplemental Data:
   Net Assets, End of Period (in thousands)                                            $39,245  $28,412 $35,120  $28,682
   Ratio of Net Expenses to Average Net Assets*                                          1.35%    1.34%   1.35%    1.35%
   Ratio of Net Investment Income (Loss) to Average Net Assets*                          0.23%    0.22%   0.24%    0.33%
   Ratio of Gross Expenses to Average Net Assets*                                        1.35%    1.35%   1.45%    1.60%
   Portfolio Turnover Rate                                                                 64%      71%     70%      46%

<CAPTION>
                                                                        CLASS B

Years ended September 30                                                2000     1999(b)   1998(b)    1997      1996
<S>                                                                       <C>    <C>      <C>      <C>       <C>
Inception date                                                            --          --       --       --  12/22/93
Net Asset Value, Beginning of Period                                              $19.17   $24.32   $21.87    $20.14
Income (Loss) from Investment Operations
   Net Investment Income (Loss)                                                   (0.12)   (0.11)   (0.08)    (0.04)
   Net Gains (Losses) on Investments (both realized and unrealized)                 6.84   (2.57)     3.82      2.14
Total Income (Loss) From Investment Operations                                      6.72   (2.68)     3.74      2.10
Less Distributions
   Dividends (from net investment income)                                           0.00     0.00     0.00      0.00
   Distributions (from capital gains)                                               0.97     2.47     1.29      0.37
Total Distributions                                                                 0.97     2.47     1.29      0.37

Net Asset Value, End of Period                                                    $24.92   $19.17   $24.32    $21.87

Total Return (a)                                                                  35.85% (11.44)%   17.92%    10.61%
Ratios/Supplemental Data:
   Net Assets, End of Period (in thousands)                                       $1,477     $989     $877      $600
   Ratio of Net Expenses to Average Net Assets*                                    2.10%    2.10%    2.10%     2.10%
   Ratio of Net Investment Income (Loss) to Average Net Assets*                  (0.51)%  (0.48)%  (0.52)%   (0.34)%
   Ratio of Gross Expenses to Average Net Assets*                                  2.12%    2.45%    3.33%     3.50%
   Portfolio Turnover Rate                                                           64%      71%      70%       46%

<CAPTION>
                                                                          CLASS Y(d)

Years ended September 30                                                     2000     1999(b)  1998(b)      1997    1996
<S>                                                                            <C>   <C>       <C>       <C>      <C>
Inception date                                                                 --         --        --        -- 11/29/93
Net Asset Value, Beginning of Period                                                  $19.72    $24.83    $22.25   $20.37
Income (Loss) from Investment Operations
   Net Investment Income (Loss)                                                         0.12      0.09      0.10     0.13
   Net Gains (Losses) on Investments (both realized and unrealized)                     7.04    (2.63)      3.94     2.21
Total Income (Loss) From Investment Operations                                          7.16    (2.54)      4.04     2.34
Less Distributions
   Dividends (from net investment income)                                               0.07      0.10      0.17     0.09
   Distributions (from capital gains)                                                   0.97      2.47      1.29     0.37
Total Distributions                                                                     1.04      2.57      1.46     0.46

Net Asset Value, End of Period                                                        $25.84    $19.72    $24.83   $22.25

Total Return (a)                                                                      37.20%  (10.59)%    19.14%   11.71%
Ratios/Supplemental Data:
   Net Assets, End of Period (in thousands)                                          $23,086   $15,039   $22,642  $10,123
   Ratio of Net Expenses to Average Net Assets*                                        1.10%     1.07%     1.10%    1.10%
   Ratio of Net Investment Income (Loss) to Average Net Assets*                        0.50%     0.37%     0.48%    0.56%
   Ratio of Gross Expenses to Average Net Assets*                                      1.12%     1.07%     1.10%    1.12%
   Portfolio Turnover Rate                                                               64%       71%       70%      46%
</TABLE>

<TABLE>
<CAPTION>
GE International
Equity Fund                                                               CLASS A

Years ended September 30                                                      2000   1999(b,c) 1998(b)    1997     1996
<S>                                                                             <C>    <C>      <C>     <C>      <C>
Inception date                                                                  --         --       --      --   3/2/94
Net Asset Value, Beginning of Period                                                   $15.11   $20.36  $17.65   $15.88
Income (Loss) from Investment Operations
   Net Investment Income (Loss)                                                          0.05     0.09    0.05     0.11
   Net Gains (Losses) on Investments (both realized and unrealized)                      3.74   (1.60)    3.19     1.72
Total Income (Loss) From Investment Operations                                           3.79   (1.51)    3.24     1.83
Less Distributions
   Dividends (from net investment income)                                                0.00     0.00    0.03     0.06
   Distributions (from capital gains)                                                    0.57     3.74    0.50     0.00
Total Distributions                                                                      0.57     3.74    0.53     0.06

Net Asset Value, End of Period                                                         $18.33   $15.11  $20.36   $17.65

Total Return (a)                                                                       25.48%  (8.71)%  18.79%   11.54%
Ratios/Supplemental Data:
   Net Assets, End of Period (in thousands)                                           $32,938   $6,114  $6,152   $3,230
   Ratio of Net Expenses to Average Net Assets*                                         1.35%    1.35%   1.35%    1.35%
   Ratio of Net Investment Income (Loss) to Average Net Assets*                         0.29%    0.50%   0.45%    0.68%
   Ratio of Gross Expenses to Average Net Assets*                                       1.39%    1.42%   1.58%    1.96%
   Portfolio Turnover Rate                                                                51%      93%     51%      36%

<CAPTION>
                                                                        CLASS B

Years ended September 30                                                      2000   1999(b)   1998(b)    1997  996(b)
<S>                                                                             <C>  <C>      <C>      <C>       <C>
Inception date                                                                  --        --       --       --  3/2/94
Net Asset Value, Beginning of Period                                                  $14.68   $20.02   $17.47  $15.77
Income (Loss) from Investment Operations
   Net Investment Income (Loss)                                                       (0.07)   (0.05)   (0.06)    0.05
   Net Gains (Losses) on Investments (both realized and unrealized)                     3.62   (1.55)     3.11    1.65
Total Income (Loss) From Investment Operations                                          3.55   (1.60)     3.05    1.70
Less Distributions
   Dividends (from net investment income)                                               0.00     0.00     0.00    0.00
   Distributions (from capital gains)                                                   0.57     3.74     0.50    0.00
Total Distributions                                                                     0.57     3.74     0.50    0.00

Net Asset Value, End of Period                                                        $17.66   $14.68   $20.02  $17.47

Total Return (a)                                                                      24.56%  (9.39)%   17.86%  10.78%
Ratios/Supplemental Data:
   Net Assets, End of Period (in thousands)                                           $1,488     $948     $455    $272
   Ratio of Net Expenses to Average Net Assets*                                        2.10%    2.10%    2.10%   2.10%
   Ratio of Net Investment Income (Loss) to Average Net Assets*                      (0.40)%  (0.26)%  (0.30)%   0.28%
   Ratio of Gross Expenses to Average Net Assets*                                      2.14%    2.59%    4.12%   3.50%
   Portfolio Turnover Rate                                                               51%      93%      51%     36%

<CAPTION>
                                                                           CLASS Y(d)

Years ended September 30                                                     2000     1999(b)   1998(b)      1997  1996(b)
<S>                                                                            <C>    <C>       <C>       <C>      <C>
Inception date                                                                 --          --                  --   3/2/94
Net Asset Value, Beginning of Period                                                   $15.18    $20.43    $17.76   $15.94
Income (Loss) from Investment Operations
   Net Investment Income (Loss)                                                          0.11      0.01      0.13     0.17
   Net Gains (Losses) on Investments (both realized and unrealized)                      3.73    (1.46)      3.18     1.73
Total Income (Loss) From Investment Operations                                           3.84    (1.45)      3.31     1.90
Less Distributions
   Dividends (from net investment income)                                                0.01      0.06      0.14     0.08
   Distributions (from capital gains)                                                    0.57      3.74      0.50     0.00
Total Distributions                                                                      0.58      3.80      0.64     0.08

Net Asset Value, End of Period                                                         $18.44    $15.18    $20.43   $17.76

Total Return (a)                                                                       25.72%   (8.34)%    19.16%   11.97%
Ratios/Supplemental Data:
   Net Assets, End of Period (in thousands)                                           $21,952   $15,367   $75,098  $63,225
   Ratio of Net Expenses to Average Net Assets*                                         1.10%     1.04%     1.01%    1.03%
   Ratio of Net Investment Income (Loss) to Average Net Assets*                         0.60%     0.08%     0.76%    0.99%
   Ratio of Gross Expenses to Average Net Assets*                                       1.14%     1.06%     1.01%    1.03%
   Portfolio Turnover Rate                                                                51%       93%       51%      36%
</TABLE>



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<PAGE>
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102  GE Funds
     Prospectus
     Financial
     Highlights

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


<TABLE>
<CAPTION>
GE Europe
Equity Fund
                                                                         CLASS A            CLASS B              CLASS Y(d)

Years ended September 30                                                 2000  1999(b,c)    2000    1999(b)      2000    1999(b)
<S>                                                                        <C>   <C>          <C>  <C>             <C>   <C>
Inception date                                                             --    1/29/99      --   1/29/99         --    1/29/99
Net Asset Value, Beginning of Period                                              $10.00            $10.00                 10.00
Income (Loss) from Investment Operations
   Net Investment Income (Loss)                                                     0.06              0.02                  0.09
   Net Gains (Losses) on Securities (both realized and unrealized)                (0.13)            (0.14)                (0.15)
Total Income (Loss) From Investment Operations                                    (0.07)            (0.12)                (0.06)
Less Distributions
   Dividends (from net investment income)                                           0.00              0.00                  0.00
   Returns of Capital                                                               0.00              0.00                  0.00
Total Distributions                                                                 0.00              0.00                  0.00

Net Asset Value, End of Period                                                     $9.93             $9.88                 $9.94

Total Return (a)                                                                 (0.70)%           (1.20)%               (0.60)%
Ratios/Supplemental Data
   Net Assets, End of Period (in thousands)                                         $669              $144               $10,051
   Ratio of Net Expenses to Average Net Assets*                                    1.45%             2.20%                 1.20%
   Ratio of Net Investment Income (Loss) to Average Net Assets*                    0.88%             0.24%                 1.36%
   Ratio of Gross Expenses to Average Net Assets*                                  1.91%             2.69%                 1.71%
   Portfolio Turnover Rate                                                           47%               47%                   47%
</TABLE>

<TABLE>
<CAPTION>
GE Emerging
Markets Fund                                                             CLASS A            CLASS B              CLASS Y(d)

Years ended September 30                                                 2000  1999(b,c)    2000   1999(b)       2000    1999(b)
<S>                                                                        <C>   <C>          <C>  <C>             <C>   <C>
Inception date                                                             --    1/29/99      --   1/29/99         --    1/29/99
Net Asset Value, Beginning of Period                                              $10.00            $10.00                $10.00
Income (Loss) from Investment Operations
   Net Investment Income (Loss)                                                   (0.05)            (0.10)                (0.01)
   Net Gains (Losses) on Securities (both realized and unrealized)                  3.52              3.50                  3.50
Total Income (Loss) From Investment Operations                                      3.47              3.40                  3.49
Less Distributions
   Dividends (from net investment income)                                           0.00              0.00                  0.00
   Distributions (from capital gains)                                               0.00              0.00                  0.00
Total Distributions                                                                 0.00              0.00                  0.00

Net Asset Value, End of Period                                                    $13.47            $13.40                $13.49

Total Return (a)                                                                  34.70%            34.00%                34.90%
Ratios/Supplemental Data
   Net Assets, End of Period (in thousands)                                         $900              $225               $13,651
   Ratio of Net Expenses to Average Net Assets*                                    1.60%             2.35%                 1.35%
   Ratio of Net Investment Income (Loss) to Average Net Assets*                  (0.56)%           (1.26)%               (0.18)%
   Ratio of Gross Expenses to Average Net Assets*                                  1.90%             2.71%                 1.74%
   Portfolio Turnover Rate                                                           59%               59%                   59%
</TABLE>



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104  GE Funds                                                                105
     Prospectus
     Financial
     Highlights


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<TABLE>
<CAPTION>
GE Fixed
Income Fund                                                             CLASS A

Years ended September 30                                                  2000   1999(b,c)  1998(b)    1997     1996
<S>                                                                         <C>    <C>      <C>     <C>      <C>
Inception date                                                              --          --       --      --   1/5/93
Net Asset Value, Beginning of Period                                                $12.55   $12.06  $11.70   $11.92
Income (Loss) from Investment Operations
   Net Investment Income (Loss)                                                       0.64     0.68    0.72     0.69
   Net Gains (Losses) on Securities (both realized and unrealized)                  (0.79)     0.50    0.35   (0.21)
Total Income (Loss) From Investment Operations                                      (0.15)     1.18    1.07     0.48
Less Distributions
   Dividends (from net investment income)                                             0.64     0.67    0.71     0.70
   Distributions (from capital gains)                                                 0.00     0.00    0.00     0.00
   Returns of Capital                                                                 0.00     0.02    0.00     0.00
Total Distributions                                                                   0.64     0.69    0.71     0.70

Net Asset Value, End of Period                                                      $11.76   $12.55  $12.06   $11.70

Total Return (a)                                                                   (1.20)%   10.06%   9.45%    4.10%
Ratios/Supplemental Data
   Net Assets, End of Period (in thousands)                                        $92,217  $49,736 $35,097  $28,115
   Ratio of Net Expenses to Average Net Assets*                                      0.80%    0.80%   0.85%    0.85%
   Ratio of Net Investment Income (Loss) to Average Net Assets*                      5.27%    5.53%   6.17%    5.84%
   Ratio of Gross Expenses to Average Net Assets*                                    0.83%    0.83%   0.96%    0.99%
   Portfolio Turnover Rate                                                            246%     219%    258%     275%

<CAPTION>
                                                                      CLASS B

Years ended September 30                                                 2000    1999(b)  1998(b)     1997      1996
<S>                                                                        <C>   <C>       <C>      <C>       <C>
Inception date                                                             --         --       --       --  12/22/93
Net Asset Value, Beginning of Period                                              $12.55   $12.06   $11.70    $11.91
Income (Loss) from Investment Operations
   Net Investment Income (Loss)                                                     0.55     0.58     0.63      0.60
   Net Gains (Losses) on Securities (both realized and unrealized)                (0.78)     0.50     0.36    (0.20)
Total Income (Loss) From Investment Operations                                    (0.23)     1.08     0.99      0.40
Less Distributions
   Dividends (from net investment income)                                           0.55     0.57     0.63      0.61
   Distributions (from capital gains)                                               0.00     0.00     0.00      0.00
   Returns of Capital                                                               0.00     0.02     0.00      0.00
Total Distributions                                                                 0.55     0.59     0.63      0.61

Net Asset Value, End of Period                                                    $11.77   $12.55   $12.06    $11.70

Total Return (a)                                                                 (1.85)%    9.24%    8.64%     3.41%
Ratios/Supplemental Data
   Net Assets, End of Period (in thousands)                                       $2,854   $1,855   $1,401    $1,673
   Ratio of Net Expenses to Average Net Assets*                                    1.55%    1.55%    1.56%     1.60%
   Ratio of Net Investment Income (Loss) to Average Net Assets*                    4.54%    4.79%    5.17%     5.19%
   Ratio of Gross Expenses to Average Net Assets*                                  1.58%    1.85%    2.19%     2.44%
   Portfolio Turnover Rate                                                          246%     219%     258%      275%

<CAPTION>
                                                                       CLASS Y(d)

Years ended September 30                                                    2000  1999(b)  1998(b)    1997     1996
<S>                                                                           <C> <C>      <C>     <C>      <C>
Inception date                                                                --       --       --      -- 11/29/93
Net Asset Value, Beginning of Period                                               $12.54    12.05  $11.69   $11.92
Income (Loss) from Investment Operations
   Net Investment Income (Loss)                                                      0.67     0.71    0.75     0.72
   Net Gains (Losses) on Securities (both realized and unrealized)                 (0.78)     0.50    0.35   (0.22)
Total Income (Loss) From Investment Operations                                     (0.11)     1.21    1.10     0.50
Less Distributions
   Dividends (from net investment income)                                            0.67     0.70    0.74     0.73
   Distributions (from capital gains)                                                0.00     0.00    0.00     0.00
   Returns of Capital                                                                0.00     0.02    0.00     0.00
Total Distributions                                                                  0.67     0.72    0.74     0.73

Net Asset Value, End of Period                                                     $11.76   $12.54  $12.05   $11.69

Total Return (a)                                                                  (0.87)%   10.33%   9.74%    4.32%
Ratios/Supplemental Data
   Net Assets, End of Period (in thousands)                                       $36,152  $30,067 $16,229  $19,098
   Ratio of Net Expenses to Average Net Assets*                                     0.55%    0.55%   0.56%    0.55%
   Ratio of Net Investment Income (Loss) to Average Net Assets*                     5.51%    5.58%   5.97%    6.14%
   Ratio of Gross Expenses to Average Net Assets*                                   0.58%    0.57%   0.59%    0.57%
   Portfolio Turnover Rate                                                           246%     219%    258%     275%
</TABLE>

--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GE Government
Securities Fund                                                   CLASS A

Years ended September 30                                                   2000  1999(b,c)  1998(b) 1997(e) 10/31/96
<S>                                                                          <C>   <C>      <C>     <C>      <C>
Inception date                                                               --       --       --       --    9/8/93
Net Asset Value, Beginning of Period                                                 $8.90    $8.53   $8.48    $8.70

Income (Loss) from Investment Operations
   Net Investment Income (Loss)                                                       0.50     0.56    0.53     0.62
   Net Gains (Losses) on Securities (both realized and unrealized)                  (0.68)     0.39    0.05   (0.22)
Total Income (Loss) From Investment Operations                                      (0.18)     0.95    0.58     0.40
Less Distributions
   Dividends (from net investment income)                                             0.58     0.53    0.53     0.54
   Distributions (from capital gains)                                                 0.00     0.00    0.00     0.00
   In Excess of Net Investment Income                                                 0.00     0.05    0.00     0.00
   Returns of Capital                                                                 0.00     0.00    0.00     0.08
Total Distributions                                                                   0.58     0.58    0.53     0.62

Net Asset Value, End of Period                                                       $8.14    $8.90   $8.53    $8.48

Total Return (a)                                                                   (2.01)%   11.61%   7.13%    4.80%
Ratios/Supplemental Data
   Net Assets, End of Period (in thousands)                                        $42,723  $24,541 $24,027  $29,090
   Ratio of Net Expenses to Average Net Assets*                                      1.07%    1.10%   0.88%    0.90%
   Ratio of Net Investment Income (Loss) to Average Net Assets*                      5.89%    6.52%   6.91%    6.59%
   Ratio of Gross Expenses to Average Net Assets*                                    1.11%    1.16%   0.88%    0.90%
   Portfolio Turnover Rate                                                            101%      64%    110%     334%

<CAPTION>
                                                                      CLASS B

Years ended September 30                                                    2000    1999(b)  1998(b)  1997(e)  10/31/96
<S>                                                                           <C> <C>       <C>      <C>       <C>
Inception date                                                                --         --       --       --   4/22/87
Net Asset Value, Beginning of Period                                                  $8.93   $8.54    $8.49      $8.71

Income (Loss) from Investment Operations
   Net Investment Income (Loss)                                                        0.46     0.52     0.47      0.55
   Net Gains (Losses) on Securities (both realized and unrealized)                   (0.67)     0.39     0.05    (0.22)
Total Income (Loss) From Investment Operations                                       (0.21)     0.91     0.52      0.33
Less Distributions
   Dividends (from net investment income)                                              0.52     0.48     0.47      0.48
   Distributions (from capital gains)                                                  0.00     0.00     0.00      0.00
   In Excess of Net Investment Income                                                  0.00     0.04     0.00      0.00
   Returns of Capital                                                                  0.00     0.00     0.00      0.07
Total Distributions                                                                    0.52     0.52     0.47      0.55

Net Asset Value, End of Period                                                        $8.20    $8.93    $8.54     $8.49

Total Return (a)                                                                    (2.42)%   10.99%    6.36%     4.00%
Ratios/Supplemental Data
   Net Assets, End of Period (in thousands)                                       $269,409  $399,675 $523,303  $767,216
   Ratio of Net Expenses to Average Net Assets*                                       1.59%    1.60%    1.63%     1.69%
   Ratio of Net Investment Income (Loss) to Average Net Assets*                       5.34%    6.00%    6.15%     5.77%
   Ratio of Gross Expenses to Average Net Assets*                                     1.63%    1.61%    1.63%     1.69%
   Portfolio Turnover Rate                                                             101%      64%     110%      334%
</TABLE>



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106  GE Funds                                                                107
     Prospectus
     Financial
     Highlights

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<TABLE>
<CAPTION>
GE Short-Term
Government                                                           CLASS A
Fund

Years ended September 30                                                  2000   1999(b,c) 1998(b)    1997     1996
<S>                                                                         <C>   <C>       <C>     <C>      <C>
Inception date                                                              --         --       --      --   3/2/94
Net Asset Value, Beginning of Period                                               $12.02   $11.86  $11.79   $11.91
Income (Loss) from Investment Operations
   Net Investment Income (Loss)                                                      0.55     0.65    0.67     0.63
   Net Gains (Losses) on Investments (both realized and unrealized)                (0.25)     0.19    0.08   (0.05)
Total Income (Loss) From Investment Operations                                       0.30     0.84    0.75     0.58
Less Distributions
   Dividends (from net investment income)                                            0.56     0.66    0.67     0.64
   Distributions (from capital gains)                                                0.05     0.02    0.01     0.06
Total Distributions                                                                  0.61     0.68    0.68     0.70

Net Asset Value, End of Period                                                     $11.71   $12.02  $11.86   $11.79

Total Return (a)                                                                    2.52%    7.36%   6.57%    4.98%
Ratios/Supplemental Data
   Net Assets, End of Period (in thousands)                                       $23,106   $8,199  $5,319   $3,653
   Ratio of Net Expenses to Average Net Assets*                                     0.70%    0.70%   0.70%    0.70%
   Ratio of Net Investment Income (Loss) to Average Net Assets*                     4.70%    5.47%   5.57%    5.28%
   Ratio of Gross Expenses to Average Net Assets*                                   1.01%    0.95%   1.07%    1.34%
   Portfolio Turnover Rate                                                           118%     185%    265%     201%

<CAPTION>
                                                                           CLASS B

Years ended September 30                                                      2000     1999(b)  1998(b)     1997      1996
<S>                                                                             <C>     <C>      <C>      <C>       <C>
Inception date                                                                  --         --        --       --    3/2/94
Net Asset Value, Beginning of Period                                                    $12.01   $11.84   $11.78    $11.90
Income (Loss) from Investment Operations
   Net Investment Income (Loss)                                                           0.48     0.58     0.61      0.56
   Net Gains (Losses) on Investments (both realized and unrealized)                     (0.26)     0.20     0.06    (0.05)
Total Income (Loss) From Investment Operations                                            0.22     0.78     0.67      0.51
Less Distributions
   Dividends (from net investment income)                                                 0.48     0.59     0.60      0.57
   Distributions (from capital gains)                                                     0.05     0.02     0.01      0.06
Total Distributions                                                                       0.53     0.61     0.61      0.63

Net Asset Value, End of Period                                                          $11.70   $12.01   $11.84    $11.78

Total Return (a)                                                                         1.91%    6.83%    5.84%     4.35%
Ratios/Supplemental Data
   Net Assets, End of Period (in thousands)                                               $641     $895   $1,031      $145
   Ratio of Net Expenses to Average Net Assets*                                          1.30%    1.30%    1.30%     1.30%
   Ratio of Net Investment Income (Loss) to Average Net Assets*                          4.10%    4.87%    4.84%     4.67%
   Ratio of Gross Expenses to Average Net Assets*                                        1.61%    1.88%    7.77%     3.35%
   Portfolio Turnover Rate                                                                118%     185%     265%      201%

<CAPTION>
                                                                            CLASS Y(d)

Years ended September 30                                                         2000   1999(b)  1998(b) 1997(b)  1996(b)
<S>                                                                                <C>   <C>      <C>     <C>      <C>
Inception date                                                                     --        --       --      --   3/2/94
Net Asset Value, Beginning of Period                                                     $12.01   $11.85  $11.78   $11.90
Income (Loss) from Investment Operations
   Net Investment Income (Loss)                                                            0.58     0.68    0.70     0.66
   Net Gains (Losses) on Investments (both realized and unrealized)                      (0.25)     0.19    0.08   (0.05)
Total Income (Loss) From Investment Operations                                             0.33     0.87    0.78     0.61
Less Distributions
   Dividends (from net investment income)                                                  0.58     0.69    0.70     0.67
   Distributions (from capital gains)                                                      0.05     0.02    0.01     0.06
Total Distributions                                                                        0.63     0.71    0.71     0.73

Net Asset Value, End of Period                                                           $11.71   $12.01  $11.85   $11.78

Total Return (a)                                                                          2.87%    7.65%   6.83%    5.24%
Ratios/Supplemental Data
   Net Assets, End of Period (in thousands)                                              $3,140   $9,444  $7,717   $7,786
   Ratio of Net Expenses to Average Net Assets*                                           0.45%    0.45%   0.45%    0.45%
   Ratio of Net Investment Income (Loss) to Average Net Assets*                           4.91%    5.74%   5.80%    5.54%
   Ratio of Gross Expenses to Average Net Assets*                                         0.76%    0.68%   0.68%    0.83%
   Portfolio Turnover Rate                                                                 118%     185%    265%     201%
</TABLE>

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

<TABLE>
<CAPTION>
GE Tax-Exempt
Fund                                                              CLASS A

Years ended September 30                                                    2000  1999(b,c)  1998(b) 1997(e) 10/31/96
<S>                                                                           <C>   <C>       <C>    <C>      <C>
Inception date                                                                --         --       --      --   9/8/93
Net Asset Value, Beginning of Period                                                 $11.83   $11.63  $11.42   $11.31
Income (Loss) from Investment Operations
   Net Investment Income (Loss)                                                        0.49     0.51    0.53     0.62
   Net Gains (Losses) on Investments (both realized and unrealized)                  (0.69)     0.20    0.22     0.05
Total Income (Loss) From Investment Operations                                       (0.20)     0.71    0.75     0.67
Less Distributions
   Dividends (from net investment income)                                              0.49     0.51    0.54     0.56
   Distributions (from capital gains)                                                  0.00     0.00    0.00     0.00
Total Distributions                                                                    0.49     0.51    0.54     0.56

Net Asset Value, End of Period                                                       $11.14   $11.83  $11.63   $11.42

Total Return (a)                                                                    (1.84)%    6.33%   6.77%    6.13%
Ratios/Supplemental Data
   Net Assets, End of Period (in thousands)                                         $22,228   $5,730 $16,542  $16,169
   Ratio of Net Expenses to Average Net Assets*                                       1.08%    1.10%   0.35%    0.00%
   Ratio of Net Investment Income (Loss) to Average Net Assets*                       4.28%    4.32%   5.01%    5.42%
   Ratio of Gross Expenses to Average Net Assets*                                     1.21%    1.23%   1.57%    1.52%
   Portfolio Turnover Rate                                                              48%      74%     13%       6%

<CAPTION>
                                                                           CLASS B

Years ended September 30                                                        2000    1999(b)  1998(b)  1997(e)  10/31/96
<S>                                                                               <C>   <C>       <C>      <C>       <C>
Inception date                                                                    --         --       --       --    9/8/93
Net Asset Value, Beginning of Period                                                     $11.83   $11.63   $11.44    $11.32
Income (Loss) from Investment Operations
   Net Investment Income (Loss)                                                            0.43     0.44     0.51      0.62
   Net Gains (Losses) on Investments (both realized and unrealized)                      (0.70)     0.21     0.21      0.06
Total Income (Loss) From Investment Operations                                           (0.27)     0.65     0.72      0.68
Less Distributions
   Dividends (from net investment income)                                                  0.43     0.45     0.53      0.56
   Distributions (from capital gains)                                                      0.00     0.00     0.00      0.00
Total Distributions                                                                        0.43     0.45     0.53      0.56

Net Asset Value, End of Period                                                           $11.13   $11.83   $11.63    $11.44

Total Return (a)                                                                        (2.34)%    5.68%    6.46%     6.12%
Ratios/Supplemental Data
   Net Assets, End of Period (in thousands)                                              $7,269   $8,905  $10,133    $9,184
   Ratio of Net Expenses to Average Net Assets*                                           1.60%    1.60%    0.57%     0.00%
   Ratio of Net Investment Income (Loss) to Average Net Assets*                           3.72%    3.81%    4.79%     5.43%
   Ratio of Gross Expenses to Average Net Assets*                                         1.75%    1.71%    2.32%     2.26%
   Portfolio Turnover Rate                                                                  48%      74%      13%        6%

<CAPTION>
                                                                          CLASS Y

Years ended September 30                                                       2000   1999(b)  1998(b)    1997

Inception date                                                                   --        --       --  9/26/97
Net Asset Value, Beginning of Period                                                   $12.30   $12.10   $12.09
Income (Loss) from Investment Operations
   Net Investment Income (Loss)                                                          0.57     0.58     0.02
   Net Gains (Losses) on Investments (both realized and unrealized)                    (0.72)     0.27     0.00
Total Income (Loss) From Investment Operations                                         (0.15)     0.85     0.02
Less Distributions
   Dividends (from net investment income)                                                0.57     0.65     0.01
   Distributions (from capital gains)                                                    0.00     0.00     0.00
Total Distributions                                                                      0.57     0.65     0.01

Net Asset Value, End of Period                                                         $11.58   $12.30   $12.10

Total Return (a)                                                                      (1.37)%    7.30%    0.11%
Ratios/Supplemental Data
   Net Assets, End of Period (in thousands)                                               $24      $24   $3,216
   Ratio of Net Expenses to Average Net Assets*                                         0.59%    0.60%    0.54%
   Ratio of Net Investment Income (Loss) to Average Net Assets*                         4.72%    4.74%    4.31%
   Ratio of Gross Expenses to Average Net Assets*                                       0.74%    1.25%    0.56%
   Portfolio Turnover Rate                                                                48%      74%      13%
</TABLE>



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<PAGE>
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108  GE Funds                                                                109
     Prospectus
     Financial
     Highlights


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<TABLE>
<CAPTION>
GE Strategic
Investment Fund                                                        CLASS A

Years ended September 30                                                 2000    1999(b,c) 1998(b)  1997(b)  1996(b)
<S>                                                                        <C>   <C>       <C>     <C>      <C>
Inception date                                                             --          --       --      --   1/5/93
Net Asset Value, Beginning of Period                                               $24.15   $24.11  $20.38   $18.46
Income (Loss) from Investment Operations
   Net Investment Income (Loss)                                                      0.55     0.61    0.59     0.54
   Net Gains (Losses) on Investments (both realized and unrealized)                  2.98     0.73    3.88     1.92
Total Income (Loss) From Investment Operations                                       3.53     1.34    4.47     2.46
Less Distributions
   Dividends (from net investment income)                                            0.56     0.52    0.49     0.46
   Distributions (from capital gains)                                                2.08     0.78    0.25     0.08
Total Distributions                                                                  2.64     1.30    0.74     0.54

Net Asset Value, End of Period                                                     $25.04   $24.15  $24.11   $20.38

Total Return (a)                                                                   15.28%    5.88%  22.45%   13.58%
Ratios/Supplemental Data
   Net Assets, End of Period (in thousands)                                      $107,034  $49,540 $40,516  $26,467
   Ratio of Net Expenses to Average Net Assets*                                     0.87%    0.85%   0.90%    0.90%
   Ratio of Net Investment Income (Loss) to Average Net Assets*                     2.17%    2.49%   2.66%    2.81%
   Ratio of Gross Expenses to Average Net Assets*                                   0.87%    0.85%   0.94%    1.05%
   Portfolio Turnover Rate                                                           109%     119%    106%      93%

<CAPTION>
                                                                           CLASS B

Years ended September 30                                                    2000   1999(b)    1998(b)    1997(b)    1996(b)
<S>                                                                           <C>    <C>        <C>         <C>       <C>
Inception date                                                                --          --         --         --  12/22/93
Net Asset Value, Beginning of Period                                                  $23.65     $23.70     $20.04    $18.26
Income (Loss) from Investment Operations
   Net Investment Income (Loss)                                                         0.35       0.42       0.42      0.41
   Net Gains (Losses) on Investments (both realized and unrealized)                     2.93       0.69       3.82      1.87
Total Income (Loss) From Investment Operations                                          3.28       1.11       4.24      2.28
Less Distributions
   Dividends (from net investment income)                                               0.40       0.38       0.33      0.42
   Distributions (from capital gains)                                                   2.08       0.78       0.25      0.08
Total Distributions                                                                     2.48       1.16       0.58      0.50

Net Asset Value, End of Period                                                        $24.45     $23.65     $23.70    $20.04

Total Return (a)                                                                      14.44%      4.91%     21.57%     12.73%
Ratios/Supplemental Data
   Net Assets, End of Period (in thousands)                                          $16,372    $11,158     $5,685    $3,701
   Ratio of Net Expenses to Average Net Assets*                                        1.62%      1.63%      1.65%     1.65%
   Ratio of Net Investment Income (Loss) to Average Net Assets*                        1.44%      1.72%      1.92%     2.11%
   Ratio of Gross Expenses to Average Net Assets*                                      1.62%      1.63%      1.93%     2.10%
   Portfolio Turnover Rate                                                              109%       119%       106%       93%

<CAPTION>
                                                                            CLASS Y(d)

Years ended September 30                                                     2000     1999(b)  1998(b)   1997(b)  1996(b)
<S>                                                                            <C>    <C>      <C>      <C>       <C>
Inception date                                                                 --          --       --       --  11/29/93
Net Asset Value, Beginning of Period                                                   $24.20   $24.16   $20.44    $18.49
Income (Loss) from Investment Operations
   Net Investment Income (Loss)                                                          0.61     0.67     0.64      0.63
   Net Gains (Losses) on Investments (both realized and unrealized)                      2.99     0.72     3.89      1.90
Total Income (Loss) From Investment Operations                                           3.60     1.39     4.53      2.53
Less Distributions
   Dividends (from net investment income)                                                0.62     0.57     0.56      0.50
   Distributions (from capital gains)                                                    2.08     0.78     0.25      0.08
Total Distributions                                                                      2.70     1.35     0.81      0.58

Net Asset Value, End of Period                                                         $25.10   $24.20   $24.16    $20.44

Total Return (a)
Ratios/Supplemental Data                                                               15.56%    6.10%   22.76%    13.95%
   Net Assets, End of Period (in thousands)                                           $62,714  $51,802  $37,924   $36,162
   Ratio of Net Expenses to Average Net Assets*                                         0.62%    0.64%    0.65%     0.58%
   Ratio of Net Investment Income (Loss) to Average Net Assets*                         2.41%    2.70%    2.90%     3.16%
   Ratio of Gross Expenses to Average Net Assets*                                       0.62%    0.64%    0.65%     0.59%
   Portfolio Turnover Rate                                                               109%     119%     106%       93%
</TABLE>

--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GE High
Yield Fund                                                       CLASS A             CLASS B             CLASS Y

Years Ended September 30                                            2000   1999(b,c)    2000     1999(b)   2000     1999(b)
<S>                                                                   <C>   <C>           <C>   <C>          <C>   <C>
Inception Date                                                        --    12/31/98      --    12/31/98     --    12/31/98
Net Asset Value, Beginning of Period                                          $10.00              $10.00             $10.00
Income (Loss) from Investment Operations
   Net Investment Income (Loss)                                                 0.55                0.48               0.55
   Net Realized and Unrealized Gains (Losses) on Investments                  (0.49)              (0.48)             (0.48)
Total Income (Loss) From Investment Operations                                  0.06                0.00               0.07
Less Distributions from:
   Net Investment Income                                                        0.53                0.47               0.54
   Net Realized Gains                                                           0.00                0.00               0.00
Total Distributions                                                             0.53                0.47               0.54

Net Asset Value, End of Period                                                 $9.53               $9.53              $9.53

Total Return (a)                                                               0.53%             (0.03)%              0.71%
Ratios/Supplemental Data
   Net Assets, End of Period (in thousands)                                   $1,931                $154            $20,126
   Ratio of Net Expenses to Average Net Assets*                                0.89%               1.70%              0.70%
   Ratio of Net Investment Income (Loss) to Average Net Assets*                7.57%               6.53%              7.49%
   Ratio of Gross Expenses to Average Net Assets*                              1.16%               2.05%              0.98%
   Portfolio Turnover Rate                                                       27%                 27%                27%
</TABLE>

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

GE Money
Market Fund

<TABLE>
<CAPTION>
Years ended September 30                                               2000    1999(b)   1998(b)      1997    1996
<S>                                                                      <C>  <C>       <C>       <C>      <C>
Inception date                                                           --         --        --        --  1/5/93
Net Asset Value, Beginning of Period                                             $1.00     $1.00     $1.00   $1.00

Income (Loss) from Investment Operations

   Net Investment Income (Loss)                                                   0.05      0.05      0.05    0.05
   Net Gains (Losses) on Investments (both realized and unrealized)               0.00      0.00      0.00    0.00
Total Income (Loss) From Investment Operations                                    0.05      0.05      0.05    0.05
Less Distributions:
   Dividends (from net investment income)                                         0.05      0.05      0.05    0.05
   Distributions (from capital gains)                                             0.00      0.00      0.00    0.00
Total Distributions                                                               0.05      0.05      0.05    0.05

Net Asset Value, End of Period                                                   $1.00     $1.00     $1.00   $1.00

Total Return (a)                                                                 4.68%     5.23%     5.14%   5.18%
Ratios/Supplemental Data:
   Net Assets, End of Period (in thousands)                                   $196,155  $153,665  $114,030 $85,842
   Ratio of Expenses to Average Net Assets*                                      0.49%     0.50%     0.47%   0.45%
   Ratio of Net Investment Income (Loss) to Average Net Assets*                  4.58%     5.11%     5.04%   5.06%
   Ratio of Gross Expenses to Average Net Assets*                                0.50%     0.52%     0.56%   0.66%
</TABLE>



--------------------------------------------------------------------------------
<PAGE>
-----------------
110  GE Funds
     Prospectus
     Financial
     Highlights


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

Notes to
Financial
Highlights

(a)   Total returns are historical and assume changes in share price,
      reinvestment of dividends and capital gains distribution, and assume no
      sales charge. Had GE Asset Management not absorbed a portion of expenses,
      total returns would have been lower. Periods less than one year are not
      annualized.

(b)   Per share data is based on average shares outstanding during the period.

(c)   Effective as of the close of business September 17, 1999, Class C shares
      of GE Funds were combined with Class A shares. The current year and prior
      years' per share information, total return, and ration/supplemental data
      reflect the relevant information of the predecessor Class C shares for all
      Funds except for the GE Value Equity Fund, GE Mid-Cap Growth Equity Fund,
      GE Government Securities Fund and GE Tax-Exempt Fund where the relevant
      information for Class A shares was retained. Also see Note 10 of Notes to
      Financial Statements in the Funds' Annual Report.

(d)   Effective as of the close of business September 17, 1999, Class D shares
      are renamed Class Y shares.

(e)   For the period November 1, 1996 through September 30, 1997.

*     Annualized for periods less than one year.


--------------------------------------------------------------------------------
<PAGE>

GE Funds
Prospectus

--------------------------------------------------------------------------------
If you wish to know more           You will find additional information about
                                   the GE Funds in the following documents:

                                   Annual/Semi-Annual Reports to Shareholders:
                                   These reports detail the Funds' actual
                                   investments as of the report date. Reports
                                   include performance numbers and a discussion
                                   of market conditions and investment
                                   strategies that significantly affected Fund
                                   performance during the Funds' last fiscal
                                   year.

                                   Statement of Additional Information (SAI):
                                   The SAI contains additional information about
                                   the Funds and their investment strategies and
                                   policies and is incorporated by reference
                                   (legally considered part of the prospectus).

                                   You may visit the SEC's Internet Website
                                   (http://www.sec.gov) to view the
                                   Annual/Semi-Annual Reports, the SAI and other
                                   information about the GE Funds. Also, you can
                                   obtain copies of this information, after
                                   paying a duplicating fee, by sending your
                                   request electronically to the following
                                   e-mail address: [email protected], or
                                   writing to the SEC's Public Reference
                                   Section, Washington, D.C. 20549-0102. You may
                                   review and copy information about the Funds,
                                   including the SAI, at the SEC's Public
                                   Reference Room in Washington, D.C. To find
                                   out more about the Public Reference Room,
                                   call the SEC at 1-202-942-8090.

--------------------------------------------------------------------------------
GE Funds                           You may obtain a free copy of the SAI or the
                                   Funds' annual/semiannual report and make
                                   shareholder inquiries by contacting:

                                   GE Investment Distributors, Inc.
                                   P.O. Box 7900
                                   3003 Summer Street
                                   Stamford, CT 06904

                                   Telephone 1-800-242-0134

                                   Website http://www.ge.com/mutualfunds
--------------------------------------------------------------------------------
Investment Adviser                 GE Asset Management Incorporated
                                   P.O. Box 7900
                                   3003 Summer Street
                                   Stamford, CT 06904

--------------------------------------------------------------------------------
Transfer Agent and Custodian       State Street Bank and Trust Company
                                   225 Franklin Street
                                   Boston, MA 02101

--------------------------------------------------------------------------------
Distributor                        GE Investment Distributors, Inc.
                                   777 Long Ridge Road, Building B
                                   Stamford, CT 06927

                  Investment Company Act file number: 811-7142
--------------------------------------------------------------------------------
GEF-PRO-1

<PAGE>


                       STATEMENT OF ADDITIONAL INFORMATION


                                January ___, 2001

GE FUNDS

3003 Summer Street, Stamford, Connecticut 06905
For information, call (800) 242-0134

*  GE U.S. Equity Fund                  *  GE Premier Research Equity Fund
*  GE Value Equity Fund                 *  GE Premier International Equity Fund
*  GE Mid-Cap Growth Fund               *  GE Premier Value Equity Fund
*  GE Mid-Cap Value Equity Fund         *  GE International Fixed Income Fund
*  GE Small-Cap Growth Equity Fund      *  GE Fixed Income Fund
*  GE Small-Cap Value Equity Fund       *  GE Government Securities Fund
*  GE S&P 500 Index Fund                *  GE Short-Term Government Fund
*  GE Global Equity Fund                *  GE Tax-Exempt Fund
*  GE International Equity Fund         *  GE High Yield Fund
*  GE Europe Equity Fund                *  GE Strategic Investment Fund
*  GE Emerging Markets Fund             *  GE Money Market Fund
*  GE Premier Growth Equity Fund



                  This Statement of Additional Information ("SAI") supplements
the information contained in the current Prospectus of GE Funds (the "Trust")
dated January ___, 2001 (the "Prospectus"), and should be read in conjunction
with the Prospectus. This SAI, although not a prospectus, is incorporated in its
entirety by reference into the Prospectus. Copies of the Prospectus describing
each series of the Trust listed above ("Funds") may be obtained without charge
by calling the Trust at the telephone number listed above. The Trust's financial
statements for the fiscal year ended September 30, 2000 and the Auditor's Report
thereon are incorporated by reference to the Trust's Annual Report. In addition,
the annual report dated October 31, 1996 for certain Investor Trust Funds which
are predecessor funds to the GE Mid-Cap Growth Fund, GE Value Equity Fund, GE
Tax-Exempt Fund, and GE Government Securities Fund is incorporated herein by
reference. Each of these Reports may be obtained without charge by calling the
Trust at the telephone number listed above. Information regarding the status of
shareholder accounts may be obtained by calling the Trust at the telephone
number listed above or by writing to the Trust at P.O. Box 120065, Stamford, CT
06912-0065. Terms that are defined in the Prospectus shall have the same
meanings in this SAI.


                                      -1-
<PAGE>



                             Table of Contents Page

Investment Strategies and Risks............................................3
Investment Restrictions...................................................45
Portfolio Transactions and Turnover.......................................51
Management of the Trust...................................................55
Purchase, Redemption and Exchange of Shares...............................66
Net Asset Value...........................................................81
Dividends, Distributions and Taxes........................................83
The Funds' Performance....................................................89
Principal Stockholders....................................................96
Fund History and Additional Information...................................97
Financial Statements......................................................99
Appendix...................................................................1




                                      -2-
<PAGE>


                         INVESTMENT STRATEGIES AND RISKS

                  The Prospectus discusses the investment objectives and
principal investment strategies of the following diversified open-end Funds: GE
Premier Growth Equity Fund (the "Premier Fund"), GE Premier Research Equity Fund
("Premier Research Fund"), GE Premier International Equity Fund ("Premier
International Fund"), GE Premier Value Equity Fund ("Premier Value Fund"), GE
S&P 500 Index Fund ("S&P 500 Index Fund"),1 GE U.S. Equity Fund (the "U.S.
Equity Fund"), GE Small-Cap Value Equity Fund (the "Small-Cap Value Fund"), GE
Mid-Cap Growth Fund (the "Mid-Cap Growth Fund"), GE Mid-Cap Value Equity Fund
(the "Mid-Cap Value Fund"), GE Value Equity Fund (the "Value Equity Fund"), GE
Global Equity Fund (the "Global Fund"), GE International Equity Fund (the
"International Fund"), GE Europe Equity Fund (the "Europe Fund"), GE Emerging
Markets Fund (the "Emerging Markets Fund"), GE Strategic Investment Fund (the
"Strategic Fund"), GE Tax-Exempt Fund (the "Tax-Exempt Fund"), GE High Yield
Fund (the "High Yield Fund"), GE Fixed Income Fund (the "Income Fund"), GE
Government Securities Fund (the "Government Securities Fund"), GE Short-Term
Government Fund (the "Short-Term Government Fund") and GE Money Market Fund (the
"Money Market Fund"). GE International Fixed Income Fund (the "International
Income Fund") and GE Small-Cap Growth Equity Fund (the "Small-Cap Growth Fund"),
each an additional series of the Trust, are not currently offered by the Trust.

                  Premier Fund. The investment objective of the Premier Fund is
long-term growth of capital and future income rather than current income. The
Fund seeks to achieve this objective through investment primarily in
growth-oriented equity securities which, under normal market conditions, will
represent at least 65% of the Fund's assets.

----------
1     The S&P 500 Index Fund is not sponsored, endorsed, sold or promoted by
      Standard & Poor's, a division of The McGraw-Hill Companies, Inc. ("S&P").
      S&P makes no representation or warranty, express or implied, to the
      investors of the Fund or any member of the public regarding the
      advisability of investing in securities generally or in this Fund
      particularly or the ability of the S&P 500 Index to track general stock
      market performance. S&P's only relationship to the Fund is the licensing
      of certain trademarks and trade names of S&P and of the S&P 500 Index
      which is determined, composed and calculated by S&P without regard to the
      Fund. S&P has no obligation to take the needs of the Fund or the investors
      in the Fund into consideration in determining, composing or calculating
      the S&P 500 Index. S&P is not responsible for and has not participated in
      the determination of the prices or composition of the S&P 500 Index Fund
      or the timing of the issuance or sale of the shares of that Fund. S&P has
      no obligation or liability in connection with the administration,
      marketing or trading of the Fund.

      S&P DOES NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF THE S&P 500
      INDEX OR ANY DATA INCLUDED THEREIN AND S&P SHALL HAVE NO LIABILITY FOR ANY
      ERRORS, OMISSIONS, OR INTERRUPTIONS THEREIN. S&P MAKES NO WARRANTY,
      EXPRESS OR IMPLIED, AS TO THE RESULTS TO BE OBTAINED BY THE FUND,
      INVESTORS IN THE FUND, OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE
      S&P 500 INDEX OR ANY DATA INCLUDED THEREIN. S&P MAKES NO EXPRESS OR
      IMPLIED WARRANTIES, AND EXPRESSLY DISCLAIMS ALL WARRANTIES OF
      MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE WITH RESPECT TO
      THE S&P 500 INDEX OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF
      THE FOREGOING, IN NO EVENT SHALL S&P HAVE ANY LIABILITY FOR ANY SPECIAL,
      PUNITIVE, INDIRECT OR CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS), EVEN
      IF NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.

                                      -3-
<PAGE>

                  Premier Research Fund. The investment objective of the Premier
Research Fund is long-term growth of capital and future income. The Fund seeks
to achieve this objective through investment primarily in a limited number
equity securities which, under normal market conditions, will represent at least
65% of the Fund's assets.

                  Premier International Fund. The investment objective of the
Premier International Fund is long-term growth of capital and future income. The
Fund seeks to achieve its objective by investing primarily in foreign equity
securities. The Fund, under normal conditions, invests at least 65% of its
assets in a limited number of equity securities.

                  Premier Value Fund. The investment objective of the Premier
Value Fund is long-term growth of capital and future income. The Fund seeks to
achieve its objective by investing primarily in a limited number of equity
securities of companies GE Asset Management Incorporated ("GEAM"), the Fund's
investment adviser, considers to be undervalued by the market. Undervalued
securities are those selling for low prices given the fundamental
characteristics of their issuers. Under normal market conditions, the Fund
invests at least 65% of its assets in equity securities.

                  S&P 500 Index Fund. The investment objective of the S&P 500
Index Fund is growth of capital and accumulation of income that corresponds to
the investment return of the Standard and Poor's 500 Composite Stock Index. The
Fund seeks to achieve this objective by investing in common stocks comprising
that Index. Under normal market conditions, the Fund invests at least 65% of its
assets in equity securities.

                  U.S. Equity Fund. The investment objective of the U.S. Equity
Fund is long-term growth of capital, which objective the Fund seeks to achieve
through investment primarily in equity securities of U.S. companies. In pursuing
its objective, the Fund, under normal conditions, invests at least 65% of its
assets in equity securities.

                  Small-Cap Value Fund. The investment objective of the
Small-Cap Value Fund is long-term growth of capital. The Fund seeks to achieve
its objective by investing, under normal market conditions, at least 65% of its
total assets in a portfolio of equity securities of small-capitalization
companies traded on U.S. securities exchanges or in the U.S. over-the-counter
market. The Fund defines a small-cap company as one with a market capitalization
within the capitalization range of the Russell 2000 Index. As of December 31,
1999, the market capitalization of companies in the Index ranged from $10
million to $13.04 billion.

                  Mid-Cap Growth Fund. The investment objective of the Mid-Cap
Growth Fund is long-term growth of capital. The Fund seeks to achieve this
objective by investing primarily in the equity securities of companies with
medium-sized market capitalizations ("mid-cap") that have the potential for
above-average growth. The Fund, under normal market conditions, invests at least
65% of its total assets in a portfolio of equity securities of mid-cap companies
traded on U.S. securities exchanges or in the U.S. over-the-counter market.

                  Mid-Cap Value Fund. The investment objective of the Mid-Cap
Value Fund is long-term growth of capital. In seeking its investment objective,
the Fund will invest primarily in equity securities of mid-cap companies that
the portfolio manager believes are undervalued by the market and have
above-average growth potential.

                                      -4-
<PAGE>

                  Value Equity Fund. The investment objective of the Value
Equity Fund is long-term growth of capital and future income. The Fund seeks to
achieve its objective by investing primarily in equity securities of companies
with large sized market capitalizations that GE Asset Management Incorporated
("GEAM"), the Fund's Investment Adviser, considers to be undervalued by the
market. Undervalued securities are those selling for low prices given the
fundamental characteristics of their issuers. During normal market conditions,
the Fund invests at least 65% of its assets in common stocks, preferred stocks,
convertible bonds, convertible debentures, convertible notes, convertible
preferred stocks and warrants or rights issued by U.S. and foreign companies.

                  Global Fund. The investment objective of the Global Fund is
long-term growth of capital, which the Fund seeks to achieve by investing
principally in foreign equity securities. In seeking its objective, the Fund
invests primarily in a portfolio of securities issued by companies located in
developed and developing countries throughout the world. Although the Fund is
subject to no prescribed limits on geographic asset distribution, under normal
circumstances, at least 65% of the Fund's assets are invested in the aggregate
in no fewer than three different countries.

                  International Fund. The investment objective of the
International Fund is long-term growth of capital, which the Fund seeks to
achieve by investing primarily in foreign equity securities. The Fund may invest
in securities of companies and governments located in developed and developing
countries outside the United States. The Fund intends to position itself broadly
among countries and, under normal circumstances, at least 65% of the Fund's
assets will be invested in securities of issuers collectively in no fewer than
three different countries other than the United States. The International Fund,
under normal conditions, invests at least 65% of its assets in common stocks,
preferred stocks, convertible debentures, convertible notes, convertible
preferred stocks and warrants or rights issued by companies believed by GEAM to
have a potential for superior growth in sales and earnings.

                  Europe Fund. The investment objective of the Europe Fund is
long-term growth of capital. In seeking its investment objective, the Fund will
invest, under normal conditions, at least 65% of its total assets in equity
securities of companies located in developed European countries.

                  Emerging Markets Fund. The investment objective of the
Emerging Markets Fund is long-term growth of capital. In seeking its investment
objective, the Fund will invest, under normal conditions, at least 65% of its
total assets in equity securities of issuers that are located in emerging
markets countries.

                  Income Fund. The investment objective of the Income Fund is to
seek maximum income consistent with prudent investment management and the
preservation of capital. Capital appreciation with respect to the Fund's
portfolio securities may occur but is not an objective of the Fund. In seeking
its investment objective, the Fund invests primarily in a variety of investment
grade debt securities, such as mortgage-backed securities, corporate bonds, U.S.
Government securities and money market instruments. The Fund normally has a
weighted average maturity of approximately five to ten years.


                                      -5-
<PAGE>

                  Government Securities Fund. The investment objective of the
Government Securities Fund is a high level of current income consistent with
safety of principal. The Fund invests at least 65% of the value of its total
assets in U.S. Government Securities, except during times when it adopts a
temporary defensive position by investing more heavily in cash or high-quality
money market instruments due to prevailing market or economic conditions.

                  Short-Term Government Fund. The investment objective of the
Short-Term Government Fund is to seek a high level of income consistent with
prudent investment management and the preservation of capital. In seeking to
achieve its investment objective, the Fund will invest at least 65% of its total
assets in Government Securities including repurchase agreements secured by
Government Securities.

                  Tax-Exempt Fund. The investment objective of the Tax-Exempt
Fund is to seek as high a level of income exempt from Federal income taxation as
is consistent with preservation of capital. The Tax-Exempt Fund operates subject
to a fundamental investment policy providing that it will invest its assets so
that, during any fiscal year, at least 80% of the income generated by the Fund
is exempt from Federal personal income taxes and the Federal alternative minimum
tax. Under normal conditions, the Fund may hold up to 10% of its total assets in
cash or money market instruments, including taxable money market instruments.

                  High Yield Fund. The investment objective of the High Yield
Fund is to seek above-average total return over a market cycle of three to five
years, consistent with reasonable risk. In seeking to achieve its investment
objective, the Fund generally will invest at least 65% of its total assets in
high yield securities (including bonds rated below investment grade, sometimes
called "junk bonds").

                  The portfolio managers of the High Yield Fund seek to identify
undervalued sectors and securities through analysis of credit quality, option
characteristics and liquidity. Quantitative models are used in conjunction with
judgment and experience to evaluate and select securities with imbedded put or
call options which are attractive on a risk- and option-adjusted basis.
Successful value investing will permit the Fund to benefit from the price
appreciation of individual securities during periods when interest rates are
unchanged.

                  The maturity and duration structure of the Fund is actively
managed in anticipation of cyclical interest rate changes. Adjustments are not
made in an effort to capture short-term, day-to-day movements in the market, but
instead are implemented in anticipation of longer-term shifts in the levels of
interest rates. Adjustment made to shorten portfolio maturity and duration are
made to limit capital losses during periods when interest rates are expected to
rise. Conversely, adjustments made to lengthen maturity are intended to produce
capital appreciation in periods when interest rates are expected to fall. The
foundation for maturity and duration strategies lies in analysis of the U.S. and
global economies, focusing on levels of real interest rates, monetary and fiscal
policy actions, and cyclical indicators.

                  The Fund may invest in foreign bonds and other fixed income
securities denominated in foreign currencies, where, in the opinion of the
portfolio managers, the combination of current yield and currency value offer
attractive expected returns. When the total

                                      -6-
<PAGE>

return opportunities in a foreign bond market appear attractive in local
currency terms, but where in the portfolio managers' judgment unacceptable
currency risk exists, currency futures and options, forwards and swaps may be
used to hedge the currency risk. In addition, the Fund may invest in securities
of issuers located in emerging markets based on the portfolio managers'
evaluation of both short- and long-term international economic trends and the
individual emerging market securities.

                  Strategic Fund. The investment objective of the Strategic Fund
is to maximize total return, consisting of capital appreciation and current
income. In seeking its objective, the Fund follows an asset allocation strategy
that provides diversification across a range of asset classes and contemplates
shifts among them from time to time.

                  GEAM has broad latitude in selecting the classes of
investments to which the Strategic Fund's assets are committed. Although the
Fund has the authority to invest solely in equity securities, solely in debt
securities, solely in money market instruments or in any combination of these
classes of investments, GEAM anticipates that at most times the Fund will be
invested in a combination of equity and debt instruments.

                  Money Market Fund. The investment objective of the Money
Market Fund is to seek a high level of current income consistent with the
preservation of capital and the maintenance of liquidity. In seeking its
objective, the Fund invests in the following U.S. dollar denominated, short-term
money market instruments: (i) Government Securities; (ii) debt obligations of
banks, savings and loan institutions, insurance companies and mortgage bankers;
(iii) commercial paper and notes, including those with floating or variable
rates of interest; (iv) debt obligations of foreign branches of U.S. banks, U.S.
branches of foreign banks and foreign branches of foreign banks; (v) debt
obligations issued or guaranteed by one or more foreign governments or any of
their political subdivisions, agencies or instrumentalities, including
obligations of supranational entities; (vi) debt securities issued by foreign
issuers; and (vii) repurchase agreements.

                                    * * * * *

                  Supplemental information concerning certain of the securities
and other instruments in which the Funds may invest, the investment policies and
strategies that the Funds may utilize and certain risks attendant to those
investments, policies and strategies is provided below. Unless otherwise
indicated, all Funds are permitted to engage in the following investment
strategies and techniques. The Funds are not obligated to pursue the following
strategies or techniques and do not represent that these strategies or
techniques are available now or will be available at any time in the future. A
Fund will not purchase all of the following types of securities or employ all of
the following strategies unless doing so is consistent with its investment
objective.

                  The following tables summarize the investment techniques that
may be employed by a fund. Certain techniques and limitations may be changed at
the discretion of GE Asset Management. Percentage figures refer to the
percentage of a Fund's assets that may be invested in accordance with the
indicated technique.


                                      -7-
<PAGE>



<TABLE>
<CAPTION>
          []
---------------------   -----    ---------------- ---------------- ----------------   ---------------- ---------------- -----------
                                                                                                       Purchasing       Purchasing
                                                                                                       and Writing      and Writing
                      Borrowing  Repurchase        Reverse         Restricted and    Structured        Securities       Securities
                                 Agreements       Repurchase        Illiquid         and Indexed       Options          Index
                                                  Agreements       Securities        Securities                         Options
---------------------   -----    ---------------- ---------------- ----------------   ---------------- ---------------- -----------
<S>                     <C>      <C>              <C>              <C>                <C>              <C>              <C>
U.S. Equity Fund        33.33%         Yes               No              Yes                 No              Yes            Yes
---------------------   -----    ---------------- ---------------- ----------------   ---------------- ---------------- -----------

Value Equity Fund       33.33%         Yes              Yes              Yes                 No              Yes            Yes
---------------------   -----    ---------------- ---------------- ----------------   ---------------- ---------------- -----------

Mid-Cap Growth Fund     33.33%         Yes               No              Yes                 No              Yes            Yes
---------------------   -----    ---------------- ---------------- ----------------   ---------------- ---------------- -----------

Mid-Cap Value           33.33%         Yes               No              Yes                Yes              Yes            Yes
Equity Fund
---------------------   -----    ---------------- ---------------- ----------------   ---------------- ---------------- -----------

Small-Cap Value         33.33%         Yes              Yes              Yes                 No              Yes            Yes
Equity Fund
---------------------   -----    ---------------- ---------------- ----------------   ---------------- ---------------- -----------

GE S&P 500 Index        33.33%         Yes              Yes              Yes                 No              Yes            Yes
Fund
---------------------   -----    ---------------- ---------------- ----------------   ---------------- ---------------- -----------

Global Equity Fund      33.33%         Yes               No              Yes                 No              Yes            Yes
---------------------   -----    ---------------- ---------------- ----------------   ---------------- ---------------- -----------

International           33.33%         Yes               No              Yes                 No              Yes            Yes
Equity Fund
---------------------   -----    ---------------- ---------------- ----------------   ---------------- ---------------- -----------

Europe Equity Fund      33.33%         Yes              Yes              Yes                Yes              Yes            Yes
---------------------   -----    ---------------- ---------------- ----------------   ---------------- ---------------- -----------

Emerging Markets        33.33%         Yes              Yes              Yes                 No              Yes            Yes
Fund
---------------------   -----    ---------------- ---------------- ----------------   ---------------- ---------------- -----------

Premier Growth          33.33%         Yes               No              Yes                 No              Yes            Yes
Equity Fund
---------------------   -----    ---------------- ---------------- ----------------   ---------------- ---------------- -----------

GE Premier Research     33.33%         Yes              Yes              Yes                 No              Yes            Yes
Equity Fund
---------------------   -----    ---------------- ---------------- ----------------   ---------------- ---------------- -----------

GE Premier              33.33%         Yes              Yes              Yes                 No              Yes            Yes
International
Equity Fund
---------------------   -----    ---------------- ---------------- ----------------   ---------------- ---------------- -----------

GE Premier Value        33.33%         Yes              Yes              Yes                 No              Yes            Yes
Equity Fund
---------------------   -----    ---------------- ---------------- ----------------   ---------------- ---------------- -----------

Fixed Income Fund       33.33%         Yes               No              Yes                Yes              Yes            Yes
---------------------   -----    ---------------- ---------------- ----------------   ---------------- ---------------- -----------

Government              33.33%         Yes              Yes              Yes                Yes              Yes            Yes
Securities Fund
---------------------   -----    ---------------- ---------------- ----------------   ---------------- ---------------- -----------
</TABLE>
                                      -8-
<PAGE>

<TABLE>
<CAPTION>
          []
---------------------   -----    ---------------- ---------------- ----------------   ---------------- ---------------- -----------
                                                                                                       Purchasing       Purchasing
                                                                                                       and Writing      and Writing
                      Borrowing  Repurchase        Reverse         Restricted and    Structured        Securities       Securities
                                 Agreements       Repurchase        Illiquid         and Indexed       Options          Index
                                                  Agreements       Securities        Securities                         Options
---------------------   -----    ---------------- ---------------- ----------------   ---------------- ---------------- -----------
<S>                     <C>      <C>              <C>              <C>                <C>              <C>              <C>
---------------------   -----    ---------------- ---------------- ----------------   ---------------- ---------------- -----------
Short-Term              33.33%         Yes               No              Yes                Yes              Yes            Yes
Government Fund
---------------------   -----    ---------------- ---------------- ----------------   ---------------- ---------------- -----------

Tax-Exempt Fund            10%         Yes              Yes              Yes                 No              Yes            Yes
---------------------   -----    ---------------- ---------------- ----------------   ---------------- ---------------- -----------

High Yield Fund         33.33%         Yes              Yes              Yes                Yes              Yes            Yes

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

Strategic               33.33%         Yes               No              Yes                Yes              Yes            Yes
Investment Fund
---------------------   -----    ---------------- ---------------- ----------------   ---------------- ---------------- -----------

Money Market Fund       33.33%         Yes              Yes               No                 No               No             No
---------------------   -----    ---------------- ---------------- ----------------   ---------------- ---------------- -----------
</TABLE>



                                      -9-
<PAGE>


<TABLE>
<CAPTION>
--------------------- -------------- -------------- -------------- ---------------- -------------- -------------- ---------------
                                                                                      Maximum
                                                                                     Investment
                       Futures and    Forward        Options on      Maximum          in Below-      Maximum        When-Issued
                       Options on     Currency        Foreign      Investment in     Investment    Investment      and Delayed
                         Futures     Transactions    Currencies        Debt          Grade Debt    in Foreign        Delivery
                                                                     Securities      Securities    Securities       Securities
--------------------- -------------- -------------- -------------- ---------------- -------------- -------------- ---------------
<S>                  <C>             <C>            <C>            <C>              <C>            <C>            <C>
U.S. Equity Fund           Yes            Yes            Yes             35%             5%            15%*            Yes
--------------------- -------------- -------------- -------------- ---------------- -------------- -------------- ---------------

Value Equity Fund          Yes            Yes            Yes             35%             5%            25%*            Yes
--------------------- -------------- -------------- -------------- ---------------- -------------- -------------- ---------------

Mid-Cap Growth Fund        Yes            Yes            Yes       35% (maximum     10% in BB or       35%*            Yes
                                                                   of 25% in BBB    B by S&P or
                                                                   by S&P,  Baa     Ba or B by
                                                                   by Moody's or    Moody's or
                                                                   equivalent)      equivalent
--------------------- -------------- -------------- -------------- ---------------- -------------- -------------- ---------------

Mid-Cap Value              Yes            Yes            Yes             35%        15% in             15%*            Yes
Equity Fund                                                                         securities
                                                                                    rated BBB or
                                                                                    below by S&P
                                                                                    or Baa or
                                                                                    below by
                                                                                    Moody's or
                                                                                    equivalent
--------------------- -------------- -------------- -------------- ---------------- -------------- -------------- ---------------

Small-Cap Value            No             No             No              35%             10%           10%*            Yes
Equity Fund
--------------------- -------------- -------------- -------------- ---------------- -------------- -------------- ---------------

GE S&P 500 Index           Yes            Yes            Yes             35%             5%            35%*            Yes
Fund
--------------------- -------------- -------------- -------------- ---------------- -------------- -------------- ---------------
Global Equity Fund         Yes            Yes            Yes             35%             5%            100%            Yes
--------------------- -------------- -------------- -------------- ---------------- -------------- -------------- ---------------

International              Yes            Yes            Yes             35%             5%            100%            Yes
Equity Fund
--------------------- -------------- -------------- -------------- ---------------- -------------- -------------- ---------------

Europe Equity Fund         Yes            Yes            Yes             35%             15%           100%            Yes
--------------------- -------------- -------------- -------------- ---------------- -------------- -------------- ---------------

Emerging Markets           Yes            Yes            Yes                        10% in BB or       100%            Yes
Fund                                                                                B by S&P or
                                                                                    Ba or B by
                                                                                    Moody's or
                                                                                    equivalent
--------------------- -------------- -------------- -------------- ---------------- -------------- -------------- ---------------

Premier Growth             Yes            Yes            No              35%             5%            25%*            Yes
Equity Fund
--------------------- -------------- -------------- -------------- ---------------- -------------- -------------- ---------------

GE Premier Research        Yes            Yes            No              35%             5%            25%*            Yes
Equity Fund
--------------------- -------------- -------------- -------------- ---------------- -------------- -------------- ---------------

GE Premier                 Yes            Yes            Yes             35%             5%            100%            Yes
International
Equity Fund
--------------------- -------------- -------------- -------------- ---------------- -------------- -------------- ---------------

GE Premier Value           Yes            Yes            Yes             35%             5%            25%*            Yes
Equity Fund
--------------------- -------------- -------------- -------------- ---------------- -------------- -------------- ---------------

Fixed Income Fund          Yes            Yes            Yes       100% (maximum    10% in BB or       35%*            Yes
                                                                   of 25% in BBB    B by S&P or
                                                                   by S&P or Baa    Ba or B by
                                                                   by Moody's or    Moody's or
                                                                   equivalent)      equivalent
--------------------- -------------- -------------- -------------- ---------------- -------------- -------------- ---------------
</TABLE>


                                      -10-
<PAGE>

<TABLE>
<CAPTION>
--------------------- -------------- -------------- -------------- ---------------- -------------- -------------- ---------------
                                                                                      Maximum
                                                                                     Investment
                       Futures and    Forward        Options on      Maximum          in Below-      Maximum        When-Issued
                       Options on     Currency        Foreign      Investment in     Investment    Investment      and Delayed
                         Futures     Transactions    Currencies        Debt          Grade Debt    in Foreign        Delivery
                                                                     Securities      Securities    Securities       Securities
--------------------- -------------- -------------- -------------- ---------------- -------------- -------------- ---------------
<S>                  <C>             <C>            <C>            <C>              <C>            <C>            <C>
Government                 Yes            Yes            Yes       100% (maximum       None           35%*            Yes
Securities Fund                                                    of 10% in BBB
                                                                   by S&P or Baa
                                                                   by Moody's or
                                                                   equivalent;
                                                                   maximum of 25%
                                                                   in A or lower
                                                                   by S&P,
                                                                   Moody's or
                                                                   equivalent)
--------------------- -------------- -------------- -------------- ---------------- -------------- -------------- ---------------
Short-Term                 Yes            Yes            Yes            100%            None           35%*            Yes
Government Fund
--------------------- -------------- -------------- -------------- ---------------- -------------- -------------- ---------------
Tax-Exempt Fund            Yes            No             No         100% (maximum    5% in debt        None            Yes
                                                                    of 10% in BBB    downgraded
                                                                    by S&P or Baa       below
                                                                    by Moody's or    investment
                                                                     equivalent)        grade
                                                                                     subsequent
                                                                                     to purchase
--------------------- -------------- -------------- -------------- ---------------- -------------- -------------- ---------------
High Yield Fund            Yes            Yes            Yes            100%            100%           35%*            Yes
--------------------- -------------- -------------- -------------- ---------------- -------------- -------------- ---------------

Strategic                  Yes            Yes            Yes       100% (maximum    10% in BB or       30%*            Yes
Investment Fund                                                    of 25% in BBB    B by S&P or
                                                                   by S&P or Baa    Ba or B by
                                                                   by Moody's or    Moody's or
                                                                   equivalent)      equivalent
--------------------- -------------- -------------- -------------- ---------------- -------------- -------------- ---------------

Money Market Fund          No             No             No             100%            None           25%*            Yes
--------------------- -------------- -------------- -------------- ---------------- -------------- -------------- ---------------
</TABLE>
*This limitation excludes ADRs, and securities of a foreign issuer with a class
of securities registered with the Securities and Exchange Commission and listed
on a U.S. national securities exchange or traded on the Nasdaq National Market
or the Nasdaq Small-Cap Market.


                                      -11-
<PAGE>



<TABLE>
<CAPTION>
------------------ ----------- ------------ ------------- ------------ ------------ -------------- -------------- --------------
                                                Debt                   Securities                  Floating and    Participation
                                            Obligations                    of                        Variable      Interests in
                    Lending     Rule 144A        of       Depositary      Other       Municipal        Rate         Municipal
                   Portfolio   Securities   Supranational  Receipts    Investment      Leases       Instruments    Obligations
                   Securities                 Agencies                    Funds
------------------ ----------- ------------ ------------- ------------ ------------ -------------- -------------- --------------
<S>                <C>         <C>          <C>           <C>          <C>          <C>            <C>            <C>
U.S. Equity Fund      Yes          Yes          Yes           Yes          No            No             No*            No
------------------ ----------- ------------ ------------- ------------ ------------ -------------- -------------- --------------

Value Equity Fund     Yes          Yes          Yes           Yes          Yes           No             No*            No
------------------ ----------- ------------ ------------- ------------ ------------ -------------- -------------- --------------

Mid-Cap Growth        Yes          Yes          Yes           Yes          Yes           No             No*            No
Fund
------------------ ----------- ------------ ------------- ------------ ------------ -------------- -------------- --------------

Mid-Cap Value         Yes          Yes          Yes           Yes          Yes           No             No*            No
Equity Fund
------------------ ----------- ------------ ------------- ------------ ------------ -------------- -------------- --------------

Small-Cap Value       Yes          Yes          Yes           Yes          Yes           No             No*            No
Equity Fund
------------------ ----------- ------------ ------------- ------------ ------------ -------------- -------------- --------------
GE S&P 500 Index      Yes          Yes          Yes           Yes          Yes           No             No*            No
Fund
------------------ ----------- ------------ ------------- ------------ ------------ -------------- -------------- --------------
Global Equity         Yes          Yes          Yes           Yes          Yes           No             No*            No
Fund
------------------ ----------- ------------ ------------- ------------ ------------ -------------- -------------- --------------

International         Yes          Yes          Yes           Yes          Yes           No             No*            No
Equity Fund
------------------ ----------- ------------ ------------- ------------ ------------ -------------- -------------- --------------

Europe Equity         Yes          Yes          Yes           Yes          Yes           No             Yes            No
Fund
------------------ ----------- ------------ ------------- ------------ ------------ -------------- -------------- --------------

Emerging Markets      Yes          Yes          Yes           Yes          Yes           No             No*            No
Fund
------------------ ----------- ------------ ------------- ------------ ------------ -------------- -------------- --------------

Premier Growth        Yes          Yes          Yes           Yes          Yes           No             No*            No
Equity Fund
------------------ ----------- ------------ ------------- ------------ ------------ -------------- -------------- --------------

GE Premier            Yes          Yes          Yes           Yes          Yes           No             No*            No
Research Equity
Fund
------------------ ----------- ------------ ------------- ------------ ------------ -------------- -------------- --------------

GE Premier            Yes          Yes          Yes           Yes          Yes           No             No*            No
International
Equity Fund
------------------ ----------- ------------ ------------- ------------ ------------ -------------- -------------- --------------

GE Premier Value      Yes          Yes          Yes           Yes          Yes           No             No*            No
Equity Fund
------------------ ----------- ------------ ------------- ------------ ------------ -------------- -------------- --------------

Fixed Income Fund     Yes          Yes          Yes           Yes          Yes           No             Yes            No
------------------ ----------- ------------ ------------- ------------ ------------ -------------- -------------- --------------
Government            Yes          Yes          Yes           Yes          Yes           No             Yes            No
Securities Fund
------------------ ----------- ------------ ------------- ------------ ------------ -------------- -------------- --------------
Short-Term            Yes          Yes          Yes           Yes          Yes           No             Yes            No
Government Fund
------------------ ----------- ------------ ------------- ------------ ------------ -------------- -------------- --------------
Tax-Exempt Fund       Yes          Yes          Yes           No           Yes           Yes            Yes            Yes
------------------ ----------- ------------ ------------- ------------ ------------ -------------- -------------- --------------
High Yield Fund       Yes          Yes          Yes           Yes          Yes           No             Yes            No
------------------ ----------- ------------ ------------- ------------ ------------ -------------- -------------- --------------

</TABLE>


                                      -12-
<PAGE>



<TABLE>
<CAPTION>
----------------- ---------- ----------- ------------- ----------- ------------- ---------- ------------- -------------------
                                               Debt                 Securities                Floating       Participation
                                           Obligations                 of                       and          Interests in
                   Lending   Rule 144A        of       Depositary     Other      Municipal    Variable        Municipal
                  Portfolio  Securities  Supranational  Receipts    Investment    Leases        Rate         Obligations
                  Securities                Agencies                  Funds                 Instruments
----------------- ---------- ----------- ------------- ----------- ------------- ---------- ------------- -------------------
<S>               <C>        <C>         <C>           <C>         <C>           <C>        <C>           <C>
Strategic            Yes        Yes          Yes          Yes          Yes          Yes         Yes              Yes
Investment Fund
----------------- ---------- ----------- ------------- ----------- ------------- ---------- ------------- -------------------

Money Market         Yes        Yes          Yes           No           No          No          Yes               No
Fund
----------------- ---------- ----------- ------------- ----------- ------------- ---------- ------------- -------------------
</TABLE>

* Excludes commercial paper and notes with variable and floating rates of
interest.



                                      -13-
<PAGE>

<TABLE>
<CAPTION>

----------------------- ------------ ------------ ------------- ------------ ------------ ------------ ----------- -----------
                                                                             Government   Asset-Backed
                                                                 Mortgage    Stripped     Securities
                                                   Custodial     Related      Mortgage        and
                           Zero       Municipal   Receipts on   Securities,    Related    Receivable-   Mortgage    Short
                          Coupon     Obligations   Municipal     including   Securities      Backed      Dollar      Sales
                        Obligations  Components   Obligations      CMOs      Securities      the Box      Rolls     Against
----------------------- ------------ ------------ ------------- ------------ ------------ ------------ ----------- -----------
<S>                    <C>           <C>          <C>           <C>          <C>          <C>          <C>         <C>
U.S. Equity Fund            Yes          No            No           No           No           No           No          No
----------------------- ------------ ------------ ------------- ------------ ------------ ------------ ----------- -----------

Value Equity Fund           No           No            No           No           No           No           No         Yes
----------------------- ------------ ------------ ------------- ------------ ------------ ------------ ----------- -----------

Mid-Cap Growth Fund         No           No            No           No           No           No           No         Yes
----------------------- ------------ ------------ ------------- ------------ ------------ ------------ ----------- -----------

Mid-Cap Value Equity        Yes          No            No           No           No           No           No         Yes
Fund
----------------------- ------------ ------------ ------------- ------------ ------------ ------------ ----------- -----------

Small-Cap Value             No           No            No           No           No           No           No         Yes
Equity Fund
----------------------- ------------ ------------ ------------- ------------ ------------ ------------ ----------- -----------

GE S&P 500 Index Fund       No           No            No           No           No           No           No          No
----------------------- ------------ ------------ ------------- ------------ ------------ ------------ ----------- -----------
Global Equity Fund          No           No            No           No           No           No           No         Yes
----------------------- ------------ ------------ ------------- ------------ ------------ ------------ ----------- -----------

International Equity        No           No            No           No           No           No           No         Yes
Fund
----------------------- ------------ ------------ ------------- ------------ ------------ ------------ ----------- -----------

Europe Equity Fund          No           No            No           No           No           No           No         Yes
----------------------- ------------ ------------ ------------- ------------ ------------ ------------ ----------- -----------

Emerging Markets Fund       No           No            No           No           No           No           No         Yes
----------------------- ------------ ------------ ------------- ------------ ------------ ------------ ----------- -----------

Premier Growth Equity       No           No            No           No           No           No           No          No
Fund
----------------------- ------------ ------------ ------------- ------------ ------------ ------------ ----------- -----------

GE Premier Research         No           No            No           No           No           No           No          No
Equity Fund
----------------------- ------------ ------------ ------------- ------------ ------------ ------------ ----------- -----------

GE Premier                  No           No            No           No           No           No           No         Yes
International Equity
Fund
----------------------- ------------ ------------ ------------- ------------ ------------ ------------ ----------- -----------

GE Premier Value            No           No            No           No           No           No           No         Yes
Equity Fund
----------------------- ------------ ------------ ------------- ------------ ------------ ------------ ----------- -----------

Fixed Income Fund           Yes          No            No           Yes          Yes          Yes         Yes          No
----------------------- ------------ ------------ ------------- ------------ ------------ ------------ ----------- -----------
Government Securities       Yes          No            No           Yes          Yes          Yes         Yes         Yes
Fund
----------------------- ------------ ------------ ------------- ------------ ------------ ------------ ----------- -----------
Short-Term Government       Yes          No            No           Yes          Yes          Yes         Yes          No
Fund
----------------------- ------------ ------------ ------------- ------------ ------------ ------------ ----------- -----------
Tax-Exempt Fund             Yes          Yes          Yes           No           No           No           No         Yes
----------------------- ------------ ------------ ------------- ------------ ------------ ------------ ----------- -----------
High Yield Fund             Yes          No            No           Yes          Yes          Yes         Yes         Yes
----------------------- ------------ ------------ ------------- ------------ ------------ ------------ ----------- -----------
</TABLE>

                                      -14-
<PAGE>
<TABLE>
<CAPTION>

----------------------- ------------ ------------ ------------- ------------ ------------ ------------ ----------- -----------
                                                                             Government   Asset-Backed
                                                                 Mortgage    Stripped     Securities
                                                   Custodial     Related      Mortgage       and
                           Zero       Municipal   Receipts on   Securities,    Related    Receivable-   Mortgage    Short
                          Coupon     Obligations   Municipal     including   Securities    Backed        Dollar      Sales
                        Obligations  Components   Obligations      CMOs      Securities    the Box        Rolls     Against
----------------------- ------------ ------------ ------------- ------------ ------------ ------------ ----------- -----------
<S>                     <C>          <C>          <C>           <C>          <C>          <C>          <C>         <C>

Strategic Investment        Yes          Yes          Yes           Yes          Yes          Yes         Yes          No
Fund
----------------------- ------------ ------------ ------------- ------------ ------------ ------------ ----------- -----------

Money Market Fund           No           No            No           No           No           No           No          No
----------------------- ------------ ------------ ------------- ------------ ------------ ------------ ----------- -----------
</TABLE>

                  Money Market Fund Investments. The Money Market Fund limits
its portfolio investments to securities that the Trust's Board of Trustees
determines present minimal credit risk and that are "Eligible Securities" at the
time of acquisition by the Fund. "Eligible Securities" means securities rated by
the requisite nationally recognized statistical rating organizations ("NRSROs")
in one of the two highest short-term rating categories, consisting of issuers
that have received these ratings with respect to other short-term debt
securities and comparable unrated securities. "Requisite NRSROs" means (i) any
two NRSROs that have issued ratings with respect to a security or class of debt
obligations of an issuer or (ii) one NRSRO, if only one NRSRO has issued such a
rating at the time that the Fund acquires the security. Currently, five
organizations are NRSROs: S&P, Moody's Investors Service, Inc. ("Moody's"),
Fitch Investors Service, Inc., Duff and Phelps, Inc. and Thomson BankWatch Inc.
A discussion of the ratings categories is contained in the appendix to this SAI.
By limiting its investments to Eligible Securities, the Fund may not achieve as
high a level of current income as a fund investing in lower-rated securities.

                  The Money Market Fund may not invest more than 5% of its total
assets in the securities of any one issuer, except for Government Securities and
except to the extent permitted under rules adopted by the Securities and
Exchange Commission ("SEC") under the Investment Company Act of 1940, as amended
("1940 Act"). In addition, the Fund may not invest more than 5% of its total
assets in Eligible Securities that have not received the highest short-term
rating for debt obligations and comparable unrated securities (collectively,
"Second Tier Securities"), and may not invest more than the greater of
$1,000,000 or 1% of its total assets in the Second Tier Securities of any one
issuer. The Fund may invest more than 5% (but not more than 25%) of the
then-current value of the Fund's total assets in the securities of a single
issuer for a period of up to three business days, so long as (i) the securities
either are rated by the Requisite NRSROs in the highest short-term rating
category or are securities of issuers that have received such ratings with
respect to other short-term debt securities or are comparable unrated securities
and (ii) the Fund does not make more than one such investment at any one time.
Determinations of comparable quality for purchases of unrated securities are
made by GEAM in accordance with procedures established by the Board of Trustees.
The Fund invests only in instruments that have (or, pursuant to regulations
adopted by the SEC, are deemed to have) remaining maturities of 13 months or
less at the date of purchase (except securities subject to repurchase
agreements), determined in accordance with a rule promulgated by the SEC. Up to
25% of the Fund's total assets may be invested in foreign securities, excluding,
for purposes of this limitation, ADRs, U.S., and securities of a foreign issuer


                                      -15-
<PAGE>

with a class of securities registered with the SEC and listed on a U.S. national
securities exchange or traded on the Nasdaq Small-Cap Market. The Fund will
maintain a dollar-weighted average portfolio maturity of 90 days or less. The
assets of the Fund are valued on the basis of amortized cost, as described below
under "Net Asset Value." The Fund also may hold liquid Rule 144A Securities (see
"Non-Publicly Traded and Illiquid Securities").

                  Money Market Instruments. The types of money market
instruments in which each Fund, other than the Money Market Fund, may invest
directly or indirectly through its investment in the GEI Short-Term Investment
Fund (the "Investment Fund"), described below, are as follows: (i) securities
issued or guaranteed by the U.S. Government or one of its agencies or
instrumentalities ("Government Securities"), (ii) debt obligations of banks,
savings and loan institutions, insurance companies and mortgage bankers, (iii)
commercial paper and notes, including those with variable and floating rates of
interest, (iv) debt obligations of foreign branches of U.S. banks, U.S. branches
of foreign banks and foreign branches of foreign banks, (v) debt obligations
issued or guaranteed by one or more foreign governments or any of their
political subdivisions, agencies or instrumentalities, including obligations of
supranational entities, (vi) debt securities issued by foreign issuers and (vii)
repurchase agreements.

                  Each Fund, other than the Money Market Fund, may also invest
in the Investment Fund, an investment fund created specifically to serve as a
vehicle for the collective investment of cash balances of the Funds (other than
the Money Market Fund) and other accounts advised by GEAM. The Investment Fund
invests exclusively in the money market instruments described in (i) through
(vii) above. The Investment Fund is advised by GEAM. No advisory fee is charged
by GEAM to the Investment Fund, nor will a Fund incur any sales charge,
redemption fee, distribution fee or service fee in connection with its
investments in the Investment Fund. Each Fund, other than the Money Market Fund,
may invest up to 25% (5% in the case of the Tax-Exempt Fund) of its assets in
the Investment Fund).

                  Each of the Funds may invest in the following types of
Government Securities: debt obligations of varying maturities issued by the U.S.
Treasury or issued or guaranteed by the Federal Housing Administration, Farmers
Home Administration, Export-Import Bank of the United States, Small Business
Administration, Government National Mortgage Association ("Ginnie Mae"), General
Services Administration, Central Bank for Cooperatives, Federal Farm Credit
Banks Funding Corporation, Federal Home Loan Banks, Federal Home Loan Mortgage
Corporation ("Freddie Mac"), Federal Intermediate Credit Banks, Federal Land
Banks, Federal National Mortgage Association ("Fannie Mae"), Federal Deposit
Insurance Corporation, Maritime Administration, Tennessee Valley Authority,
District of Columbia Armory Board, Student Loan Marketing Association and
Resolution Trust Corporation. Direct obligations of the U.S. Treasury include a
variety of securities that differ in their interest rates, maturities and dates
of issuance. Certain of the Government Securities that may be held by the Funds
are instruments that are supported by the full faith and credit of the United
States, whereas other Government Securities that may be held by the Funds are
supported by the right of the issuer to borrow from the U.S. Treasury or are
supported solely by the credit of the instrumentality. Because the U.S.
Government is not obligated by law to provide support to an instrumentality that
it sponsors, a Fund will invest in obligations issued by an instrumentality of
the U.S. Government only if the

                                      -16-
<PAGE>

Investment Manager(2) determines that the instrumentality's credit risk does not
make its securities unsuitable for investment by the Fund.

                  Each Fund, other than the Money Market Fund, may invest in
money market instruments issued or guaranteed by foreign governments or by any
of their political subdivisions, authorities, agencies or instrumentalities.
Money market instruments held by a Fund, other than the Money Market Fund, may
be rated no lower than A-2 by Standard & Poor's ("S&P") or Prime-2 by Moody's
Investor's Service ("Moody's") or the equivalent from another NRSRO, or if
unrated, must be issued by an issuer having an outstanding unsecured debt issue
then rated within the three highest categories. A description of the rating
systems of Moody's and S&P is contained in the Appendix. At no time will the
investments of a Fund, other than the Tax-Exempt Fund and the Money Market Fund,
in bank obligations, including time deposits, exceed 25% of the value of the
Fund's assets.

                  Temporary Defensive Positions. During periods when the
Investment Manager believes there are unstable market, economic, political or
currency conditions domestically or abroad, the Investment Manager may assume,
on behalf of a Fund other than the S&P 500 Index Fund, a temporary defensive
posture and (i) without limitation hold cash and/or invest in money market
instruments, or (ii) restrict the securities markets in which the Fund's assets
will be invested by investing those assets in securities markets deemed by the
Investment Manager to be conservative in light of the Fund's investment
objective and policies. Under normal circumstances, each Fund may invest a
portion of its total assets in cash and/or money market instruments for cash
management purposes, pending investment in accordance with the Fund's investment
objective and policies and to meet operating expenses. To the extent that a
Fund, other than the Money Market Fund, holds cash or invests in money market
instruments, it may not achieve its investment objective. For temporary
defensive purposes, the Premier Growth Fund may invest in fixed income
securities without limitation.

                  Bank Obligations. Domestic commercial banks organized under
Federal law are supervised and examined by the U.S. Comptroller of the Currency
and are required to be members of the Federal Reserve System and to be insured
by the Federal Deposit Insurance Corporation ("FDIC"). Foreign branches of U.S.
banks and foreign banks are not regulated by U.S. banking authorities and
generally are not bound by mandatory reserve requirements, loan limitations,
accounting, auditing and financial reporting standards comparable to U.S. banks.
Obligations of foreign branches of U.S. banks and foreign banks are subject to
the risks associated with investing in foreign securities generally. These
obligations entail risks that are different from those of investments in
obligations in domestic banks, including foreign economic and political
developments outside the United States, foreign governmental restrictions that
may adversely affect payment of principal and interest on the obligations,
foreign exchange controls and foreign withholding or other taxes on income.

----------

(2)  As used in this SAI, the term "Investment Manager" shall refer to GEAM, the
     Funds' investment adviser and administrator,  State Street Global Advisors,
     Palisade Capital Management,  L.L.C., Miller Anderson & Sherrerd,  LLP, the
     sub-advisers  to the S&P 500 Index Fund,  the Small-Cap  Value Fund and the
     High Yield Fund respectively.

                                      -17-
<PAGE>

                  A U.S. branch of a foreign bank may or may not be subject to
reserve requirements imposed by the Federal Reserve System or by the state in
which the branch is located if the branch is licensed in that state. In
addition, branches licensed by the Comptroller of the Currency and branches
licensed by certain states ("State Branches") may or may not be required to: (i)
pledge to the regulator by depositing assets with a designated bank within the
state, an amount of its assets equal to 5% of its total liabilities; and (ii)
maintain assets within the state in an amount equal to a specified percentage of
the aggregate amount of liabilities of the foreign bank payable at or through
all of its agencies or branches within the state. The deposits of State Branches
may not necessarily be insured by the FDIC. In addition, less information may be
available to the public about a U.S. branch of a foreign bank than about a U.S.
bank.

                  Debt Instruments. A debt instrument held by a Fund will be
affected by general changes in interest rates that will in turn result in
increases or decreases in the market value of those obligations. The market
value of debt instruments in a Fund's portfolio can be expected to vary
inversely to changes in prevailing interest rates. In periods of declining
interest rates, the yield of a Fund holding a significant amount of debt
instruments will tend to be somewhat higher than prevailing market rates, and in
periods of rising interest rates, the Fund's yield will tend to be somewhat
lower. In addition, when interest rates are falling, money received by such a
Fund from the continuous sale of its shares will likely be invested in portfolio
instruments producing lower yields than the balance of its portfolio, thereby
reducing the Fund's current yield. In periods of rising interest rates, the
opposite result can be expected to occur.

                  Ratings as Investment Criteria. The ratings of "NRSROs" such
as S&P or Moody's represent the opinions of those organizations as to the
quality of securities that they rate. Although these ratings, which are relative
and subjective and are not absolute standards of quality, are used by the
Investment Manager as initial criteria for the selection of portfolio securities
on behalf of the Funds, the Investment Manager also relies upon its own analysis
to evaluate potential investments.

                  Subsequent to its purchase by a Fund, an issue of securities
may cease to be rated or its rating may be reduced below the minimum required
for purchase by the Fund. Although neither event will require the sale of the
securities by a Fund, other than the Money Market Fund, the Investment Manager
will consider the event in its determination of whether the Fund should continue
to hold the securities. In the event the rating of a security held by the Money
Market Fund falls below the minimum acceptable rating or the issuer of the
security defaults, the Money Market Fund will dispose of the security as soon as
practicable, unless the Board determines that disposal of the security would not
be in the best interests of the Money Market Fund. To the extent that a NRSRO's
ratings change as a result of a change in the NRSRO or its rating system, the
Funds will attempt to use comparable ratings as standards for their investments
in accordance with their investment objectives and policies.

                  Certain Investment Grade Debt Obligations. Although
obligations rated BBB by S&P or Baa by Moody's are considered investment grade,
they may be viewed as being subject to greater risks than other investment grade
obligations. Obligations rated BBB by S&P are regarded as having only an
adequate capacity to pay principal and interest and those rated Baa by Moody's


                                      -18-
<PAGE>

are considered medium-grade obligations that lack outstanding investment
characteristics and have speculative characteristics as well.

                  Below Investment-Grade Debt Securities. Certain Funds are
authorized to invest in securities rated lower than investment grade (sometimes
referred to as "junk bonds"). Below investment-grade and comparable unrated
securities (collectively referred to as "below investment-grade" securities)
likely have quality and protective characteristics that, in the judgment of a
rating organization, are outweighed by large uncertainties or major risk
exposures to adverse conditions, and are predominantly speculative with respect
to the issuer's capacity to pay interest and repay principal in accordance with
the terms of the obligation. Securities in the lowest rating categories may be
in default or may present substantial risks of default.

                  The market values of certain below investment-grade securities
tend to be more sensitive to individual corporate developments and changes in
economic conditions than higher-rated securities. In addition, below
investment-grade securities generally present a higher degree of credit risk.
Issuers of below investment-grade securities are often highly leveraged and may
not have more traditional methods of financing available to them, so that their
ability to service their debt obligations during an economic downturn or during
sustained periods of rising interest rates may be impaired. The risk of loss due
to default by these issuers is significantly greater because below
investment-grade securities generally are unsecured and frequently are
subordinated to the prior payment of senior indebtedness. A Fund may incur
additional expenses to the extent that it is required to seek recovery upon a
default in the payment of principal or interest on its portfolio holdings. The
existence of limited markets for below investment-grade securities may diminish
the Trust's ability to obtain accurate market quotations for purposes of valuing
the securities held by a Fund and calculating the Fund's net asset value.

                  Repurchase and Reverse Repurchase Agreements. Each Fund may
engage in repurchase agreement transactions with respect to instruments in which
the Fund is authorized to invest. The Funds may engage in repurchase agreement
transactions with certain member banks of the Federal Reserve System and with
certain dealers listed on the Federal Reserve Bank of New York's list of
reporting dealers. Under the terms of a typical repurchase agreement, which is
deemed a loan for purposes of the 1940 Act, a Fund would acquire an underlying
obligation for a relatively short period (usually from one to seven days)
subject to an obligation of the seller to repurchase, and the Fund to resell,
the obligation at an agreed-upon price and time, thereby determining the yield
during the Fund's holding period. This arrangement results in a fixed rate of
return that is not subject to market fluctuations during the Fund's holding
period. The value of the securities underlying a repurchase agreement of a Fund
are monitored on an ongoing basis by the Investment Manager to ensure that the
value is at least equal at all times to the total amount of the repurchase
obligation, including interest. The Investment Manager also monitors, on an
ongoing basis to evaluate potential risks, the creditworthiness of those banks
and dealers with which a Fund enters into repurchase agreements. Income derived
by the Tax-Exempt Fund when engaging in a repurchase agreement is not exempt
from Federal income taxation.

                  Certain Funds may engage in reverse repurchase agreements,
subject to their investment restrictions. A reverse repurchase agreement, which
is considered a borrowing by a Fund, involves a sale by the Fund of securities


                                      -19-
<PAGE>

that it holds concurrently with an agreement by the Fund to repurchase the same
securities at an agreed upon price and date. A Fund uses the proceeds of reverse
repurchase agreements to provide liquidity to meet redemption requests and to
make cash payments of dividends and distributions when the sale of the Fund's
securities is considered to be disadvantageous. Cash, Government Securities or
other liquid assets equal in value to a Fund's obligations with respect to
reverse repurchase agreements are segregated and maintained with the Trust's
custodian or designated sub-custodian.

                  In the event the buyer of securities under a reverse
repurchase agreement files for bankruptcy or becomes insolvent, a Fund's use of
the proceeds of the agreement may be restricted pending a determination by the
party, or its trustee or receiver, whether to enforce the Fund's obligation to
repurchase the securities.

                  Non-Publicly Traded and Illiquid Securities. Each Fund, other
than the Money Market Fund, may invest up to 10% of its assets in non-publicly
traded securities. Non-publicly traded securities are securities that are
subject to contractual or legal restrictions on transfer, excluding for purposes
of this restriction, Rule 144A Securities that have been determined to be liquid
by the Board based upon the trading markets for the securities. In addition,
each Fund, other than the Money Market Fund, may invest up to 15% (10% in the
case of the Tax-Exempt Fund) of its assets in "illiquid securities"; the Money
Market Fund may not, under any circumstance, invest in illiquid securities.
Illiquid securities are securities that cannot be disposed of by a Fund within
seven days in the ordinary course of business at approximately the amount at
which the Fund has valued the securities. Illiquid securities that are held by a
Fund may take the form of options traded over-the-counter, repurchase agreements
maturing in more than seven days, certain mortgage related securities and
securities subject to restrictions on resale that the Investment Manager has
determined are not liquid under guidelines established by the Board.

                  Non-publicly traded securities may be less liquid than
publicly traded securities. Although these securities may be resold in privately
negotiated transactions, the prices realized from these sales could be less than
those originally paid by a Fund. In addition, companies whose securities are not
publicly traded are not subject to the disclosure and other investor protection
requirements that may be applicable if their securities were publicly traded. A
Fund's investments in illiquid securities are subject to the risk that should
the Fund desire to sell any of these securities when a ready buyer is not
available at a price that the Investment Manager deems representative of their
value, the value of the Fund's net assets could be adversely affected.

                  Rule 144A Securities. Each of the Funds may purchase Rule 144A
Securities. Certain Rule 144A Securities may be considered illiquid and
therefore subject to a Fund's limitation on the purchase of illiquid securities,
unless the Board determines on an ongoing basis that an adequate trading market
exists for the Rule 144A Securities. A Fund's purchase of Rule 144A Securities
could have the effect of increasing the level of illiquidity in the Fund to the
extent that qualified institutional buyers become uninterested for a time in
purchasing Rule 144A Securities held by the Fund. The Board has established
standards and procedures for determining the liquidity of a Rule 144A Security
and monitors the Investment Manager's implementation of the standards and
procedures. The ability to sell to qualified institutional buyers under Rule
144A is a recent development and GEAM cannot predict how this market will
develop.

                                      -20-
<PAGE>

                  When-Issued and Delayed-Delivery Securities. To secure prices
or yields deemed advantageous at a particular time, each Fund may purchase
securities on a when-issued or delayed-delivery basis, in which case, delivery
of the securities occurs beyond the normal settlement period; no payment for or
delivery of the securities is made by, and no income accrues to, the Fund,
however, prior to the actual delivery or payment by the other party to the
transaction. Each Fund will enter into when-issued or delayed-delivery
transactions for the purpose of acquiring securities and not for the purpose of
leverage. When-issued securities purchased by a Fund may include securities
purchased on a "when, as and if issued" basis under which the issuance of the
securities depends on the occurrence of a subsequent event, such as approval of
a merger, corporate reorganization or debt restructuring. Cash or other liquid
assets in an amount equal to the amount of each Fund's when-issued or
delayed-delivery purchase commitments will be segregated with the Trust's
custodian, or with a designated subcustodian, in order to avoid or limit any
leveraging effect that may arise in the purchase of a security pursuant to such
a commitment.

                  Securities purchased on a when-issued or delayed-delivery
basis may expose a Fund to risk because the securities may experience
fluctuations in value prior to their delivery. Purchasing securities on a
when-issued or delayed- delivery basis can involve the additional risk that the
return available in the market when the delivery takes place may be higher than
that applicable at the time of the purchase. This characteristic of when-issued
and delayed-delivery securities could result in exaggerated movements in a
Fund's net asset value.

                  When a Fund engages in when-issued or delayed-delivery
securities transactions, it relies on the selling party to consummate the trade.
Failure of the seller to do so may result in the Funds incurring a loss or
missing an opportunity to obtain a price considered to be advantageous.

                  Warrants. Because a warrant, which is a security permitting,
but not obligating, its holder to subscribe for another security, does not carry
with it the right to dividends or voting rights with respect to the securities
that the warrant holder is entitled to purchase, and because a warrant does not
represent any rights to the assets of the issuer, a warrant may be considered
more speculative than certain other types of investments. In addition, the value
of a warrant does not necessarily change with the value of the underlying
security and a warrant ceases to have value if it is not exercised prior to its
expiration date. The investment by a Fund in warrants valued at the lower of
cost or market, may not exceed 5% of the value of the Fund's net assets. The
Money Market Fund may not invest in any form of warrants. Warrants acquired by a
Fund in units or attached to securities may be deemed to be without value.

                  Foreign Securities. Investing in securities issued by foreign
companies and governments, including securities issued in the form of depositary
receipts, involves considerations and potential risks not typically associated
with investing in obligations issued by the U.S. Government and U.S.
corporations. Less information may be available about foreign companies than
about U.S. companies, and foreign companies generally are not subject to uniform
accounting, auditing and financial reporting standards or to other regulatory
practices and requirements comparable to those applicable to U.S. companies. The
values of foreign investments are affected by changes in currency rates or


                                      -21-
<PAGE>

exchange control regulations, restrictions or prohibitions on the repatriation
of foreign currencies, application of foreign tax laws, including withholding
taxes, changes in governmental administration or economic or monetary policy (in
the United States or abroad) or changed circumstances in dealings between
nations. Costs are also incurred in connection with conversions between various
currencies. In addition, foreign brokerage commissions are generally higher than
those charged in the United States and foreign securities markets may be less
liquid, more volatile and less subject to governmental supervision than in the
United States. Investments in foreign countries could be affected by other
factors not present in the United States, including expropriation, confiscatory
taxation, lack of uniform accounting and auditing standards, limitations on the
use or removal of funds or other assets (including the withholding of
dividends), and potential difficulties in enforcing contractual obligations, and
could be subject to extended clearance and settlement periods.

                  Depositary Receipts. Certain Funds may invest in securities of
foreign issuers in the form of ADRs and European Depositary Receipts ("EDRs"),
which are sometimes referred to as Continental Depositary Receipts ("CDRs").
ADRs are publicly traded on exchanges or over-the-counter in the United States
and are issued through "sponsored" or "unsponsored" arrangements. In a sponsored
ADR arrangement, the foreign issuer assumes the obligation to pay some or all of
the depositary's transaction fees, whereas under an unsponsored arrangement, the
foreign issuer assumes no obligations and the depositary's transaction fees are
paid directly by the ADR holders. In addition, less information is available in
the United States about an unsponsored ADR than about a sponsored ADR. Each of
these Funds may invest in ADRs through both sponsored and unsponsored
arrangements. EDRs and CDRs are generally issued by foreign banks and evidence
ownership of either foreign or domestic securities.

                  EURO Conversion. The recent introduction of a single European
currency, the EURO, on January 1, 1999 for participating European countries in
the Economic Monetary Union ("Participating Countries") presents unique risks
and uncertainties for investors in those countries, including (i) whether the
payment and operational systems of banks and other financial institutions will
perform as expected; (ii) the creation of suitable clearing and settlement
payment schemes for the EURO; (iii) the legal treatment of outstanding financial
contracts after January 1, 1999 that refer to existing currencies rather than
the EURO; (iv) the fluctuation of the EURO relative to non-EURO currencies
during the transition period from January 1, 1999 to December 31, 2000 and
beyond; and (v) whether the interest rate, tax and labor regimes of the
Participating Countries will converge over time. Further, the conversion of the
currencies of other Economic Monetary Union countries, such as the United
Kingdom, and the admission of other countries, including Central and Eastern
European countries, to the Economic Monetary Union could adversely affect the
EURO. These or other factors may cause market disruptions and could adversely
affect the value of European securities and currencies held by the Funds.

                  Currency Exchange Rates. A Fund's share value may change
significantly when the currencies, other than the U.S. dollar, in which the
Fund's portfolio investments are denominated, strengthen or weaken against the
U.S. dollar. Currency exchange rates generally are determined by the forces of
supply and demand in the foreign exchange markets and the relative merits of
investments in different countries as seen from an international perspective.
Currency exchange rates can also be affected unpredictably by intervention by


                                      -22-
<PAGE>

U.S. or foreign governments or central banks or by currency controls or
political developments in the United States or abroad.

                  Developing Countries. Investing in securities issued by
companies located in developing countries involves not only the risks described
above with respect to investing in foreign securities, but also other risks,
including exposure to economic structures that are generally less diverse and
mature than, and to political systems that can be expected to have less
stability than, those of developed countries. Other characteristics of
developing countries that may affect investment in their markets include certain
national policies that may restrict investment by foreigners in issuers or
industries deemed sensitive to relevant national interests and the absence of
developed legal structures governing private and foreign investments and private
property. The typically small size of the markets for securities issued by
companies located in developing countries and the possibility of a low or
nonexistent volume of trading in those securities may also result in a lack of
liquidity and in price volatility of those securities.

                  Lending Portfolio Securities. Each Fund is authorized to lend
its portfolio securities to well-known and recognized U.S. and foreign brokers,
dealers and banks. These loans, if and when made, may not exceed 30% (5% in the
case of the Tax-Exempt Fund) of a Fund's assets taken at value. The Fund's loans
of securities will be collateralized by cash, letters of credit or Government
Securities. Cash or instruments collateralizing a Fund's loans of securities are
segregated and maintained at all times with the Trust's custodian, or with a
designated sub-custodian, in an amount at least equal to the current market
value of the loaned securities. In lending securities, a Fund will be subject to
risks, which, like those associated with other extensions of credit, include
possible loss of rights in the collateral should the borrower fail financially.
Income derived by the Tax-Exempt Fund on any loan of its portfolio securities
will not be exempt from Federal income taxation.

                  If a Fund loans its portfolio securities, it will adhere to
the following conditions whenever its portfolio securities are loaned: (i) the
Fund must receive at least 100% cash collateral or equivalent securities from
the borrower; (ii) the borrower must increase the collateral whenever the market
value of the securities loaned rises above the level of the collateral; (iii)
the Fund must be able to terminate the loan at any time; (iv) the Fund must
receive reasonable interest on the loan, as well as any dividends, interest or
other distributions on the loaned securities, and any increase in market value;
(v) the Fund may pay only reasonable custodian fees in connection with the loan;
and (vi) voting rights on the loaned securities may pass to the borrower except
that, if a material event adversely affecting the investment in the loaned
securities occurs, the Trust's Board of Trustees (the "Board") must terminate
the loan and regain the right to vote the securities. From time to time, a Fund
may pay a part of the interest earned from the investment of collateral received
for securities loaned to the borrower and/or a third party that is unaffiliated
with the Fund and is acting as a "finder."

                  Securities of Other Investment Companies. Certain Funds may
invest in investment funds that invest principally in securities in which the
Fund is authorized to invest. Currently, under the 1940 Act, a Fund may hold
securities of another investment company in amounts which (a) do not exceed 3%
of the total outstanding voting stock of such company, (b) do not exceed 5% of


                                      -23-
<PAGE>

the value of the Fund's total assets and (c) when added to all other investment
company securities held by the Fund, do not exceed 10% of the value of the
Fund's total assets. Investments by a Fund (other than the Money Market Fund) in
the Investment Fund is not considered an investment in another investment
company for purposes of this restriction. To the extent a Fund invests in other
investment companies, the Fund's shareholders will incur certain duplicative
fees and expenses, including investment advisory fees.

                  Purchasing Put and Call Options on Securities. Each Fund,
other than the Money Market Fund, may purchase put and call options that are
traded on a U.S. or foreign securities exchange or in the over-the-counter
market. A Fund may utilize up to 10% of its assets to purchase put options on
portfolio securities and may do so at or about the same time that it purchases
the underlying security or at a later time. By buying a put, a Fund will seek to
limit its risk of loss from a decline in the market value of the security until
the put expires. Any appreciation in the value of the underlying security,
however, will be partially offset by the amount of the premium paid for the put
option and any related transaction costs. A Fund may utilize up to 10% of its
assets to purchase call options on portfolio securities. Call options may be
purchased by a Fund in order to acquire the underlying securities for a price
that avoids any additional cost that would result from a substantial increase in
the market value of a security. A Fund may also purchase call options to
increase its return at a time when the call is expected to increase in value due
to anticipated appreciation of the underlying security. Prior to their
expirations, put and call options may be sold by a Fund in closing sale
transactions, which are sales by the Fund, prior to the exercise of options that
it has purchased, of options of the same series. Profit or loss from the sale
will depend on whether the amount received is more or less than the premium paid
for the option plus the related transaction costs. The aggregate value of the
securities underlying the calls or obligations underlying the puts, determined
as of the date the options are sold, shall not exceed 25% of the net assets of a
Fund. In addition, the premiums paid by a Fund in purchasing options on
securities, options on securities indices, options on foreign currencies and
options on futures contracts will not exceed 20% of the Fund's net assets.

                  Covered Option Writing. Each Fund, other than the Money Market
Fund, may write covered put and call options on securities. A Fund will realize
fees (referred to as "premiums") for granting the rights evidenced by the
options. A put option embodies the right of its purchaser to compel the writer
of the option to purchase from the option holder an underlying security at a
specified price at any time during the option period. In contrast, a call option
embodies the right of its purchaser to compel the writer of the option to sell
to the option holder an underlying security at a specified price at any time
during the option period.

                  The Funds with option-writing authority will write only
options that are covered. A call option written by a Fund will be deemed covered
(i) if the Fund owns the securities underlying the call or has an absolute and
immediate right to acquire those securities without additional cash
consideration upon conversion or exchange of other securities held in its
portfolio, (ii) if the Fund holds a call at the same exercise price for the same
exercise period and on the same securities as the call written, (iii) in the
case of a call option on a stock index, if the Fund owns a portfolio of
securities substantially replicating the movement of the index underlying the
call option, or (iv) if at the time the call is written, an amount of cash,
securities issued or guaranteed by the U.S. Government or one of its agencies or
instrumentalities ("Government Securities") or other liquid assets equal to the


                                      -24-
<PAGE>

fluctuating market value of the optioned securities, is segregated with the
Trust's custodian or with a designated sub-custodian. A put option will be
deemed covered (i) if, at the time the put is written, an amount of cash,
Government Securities or other liquid assets having a value at least equal to
the exercise price of the underlying securities is segregated with the Trust's
custodian or with a designated sub-custodian, or (ii) if the Fund continues to
own an equivalent number of puts of the same "series" (that is, puts on the same
underlying securities having the same exercise prices and expiration dates as
those written by the Fund), or an equivalent number of puts of the same "class"
(that is, puts on the same underlying securities) with exercise prices greater
than those that it has written (or if the exercise prices of the puts it holds
are less than the exercise prices of those it has written, the difference is
segregated with the Trust's custodian or with a designated sub-custodian).

                  The principal reason for writing covered call options on a
securities portfolio is to attempt to realize, through the receipt of premiums,
a greater return than would be realized on the securities alone. In return for a
premium, the writer of a covered call option forfeits the right to any
appreciation in the value of the underlying security above the strike price for
the life of the option (or until a closing purchase transaction can be
effected). Nevertheless, the call writer retains the risk of a decline in the
price of the underlying security. Similarly, the principal reason for writing
covered put options is to realize income in the form of premiums. The writer of
a covered put option accepts the risk of a decline in the price of the
underlying security. The size of the premiums that a Fund may receive may be
adversely affected as new or existing institutions, including other investment
companies, engage in or increase their option-writing activities.

                  Options written by a Fund will normally have expiration dates
between one and nine months from the date written. The exercise price of the
options may be below, equal to or above the market values of the underlying
securities at the times the options are written. In the case of call options,
these exercise prices are referred to as "in-the-money," "at-the-money" and
"out-of-the-money," respectively.

                  So long as the obligation of a Fund as the writer of an option
continues, the Fund may be assigned an exercise notice by the broker-dealer
through which the option was sold, requiring the Fund to deliver, in the case of
a call, or take delivery of, in the case of a put, the underlying security
against payment of the exercise price. This obligation terminates when the
option expires or the Fund effects a closing purchase transaction. A Fund can no
longer effect a closing purchase transaction with respect to an option once it
has been assigned an exercise notice. To secure its obligation to deliver the
underlying security when it writes a call option, or to pay for the underlying
security when it writes a put option, a Fund will be required to deposit in
escrow the underlying security or other assets in accordance with the rules of
the Options Clearing Corporation (the "Clearing Corporation") and of the
securities exchange on which the option is written.

                  A Fund may engage in a closing purchase transaction to realize
a profit, to prevent an underlying security from being called or put or, in the
case of a call option, to unfreeze an underlying security (thereby permitting
its sale or the writing of a new option on the security prior to the outstanding
option's expiration). To effect a closing purchase transaction, a Fund would


                                      -25-
<PAGE>

purchase, prior to the holder's exercise of an option that the Fund has written,
an option of the same series as that on which the Fund desires to terminate its
obligation. The obligation of a Fund under an option that it has written would
be terminated by a closing purchase transaction, but the Fund would not be
deemed to own an option as the result of the transaction. An option position may
be closed out only if a secondary market exists for an option of the same series
on a recognized securities exchange or in the over-the-counter market. In light
of the need for a secondary market in which to close an option position, the
Funds are expected to purchase only call or put options issued by the Clearing
Corporation. The Investment Manager expects that the Funds will write options,
other than those on Government Securities, only on national securities
exchanges. Options on Government Securities may be written by the Funds in the
over-the-counter market.

                  A Fund may realize a profit or loss upon entering into closing
transactions. When a Fund has written an option, for example, it will realize a
profit if the cost of the closing purchase transaction is less than the premium
received upon writing the original option; the Fund will incur a loss if the
cost of the closing purchase transaction exceeds the premium received upon
writing the original option. When a Fund has purchased an option and engages in
a closing sale transaction, whether the Fund realizes a profit or loss will
depend upon whether the amount received in the closing sale transaction is more
or less than the premium the Fund initially paid for the original option plus
the related transaction costs.

                  Option writing for a Fund may be limited by position and
exercise limits established by U.S. securities exchanges and the National
Association of Securities Dealers, Inc. and by requirements of the Internal
Revenue Code of 1986, as amended (the "Code") for qualification as a regulated
investment company. In addition to writing covered put and call options to
generate current income, a Fund may enter into options transactions as hedges to
reduce investment risk, generally by making an investment expected to move in
the opposite direction of a portfolio position. A hedge is designed to offset a
loss on a portfolio position with a gain on the hedge position; at the same
time, however, a properly correlated hedge will result in a gain on the
portfolio's position being offset by a loss on the hedge position.

                  A Fund will engage in hedging transactions only when deemed
advisable by the Investment Manager. Successful use by a Fund of options will
depend on the Investment Manager's ability to predict correctly movements in the
direction of the securities underlying the option used as a hedge. Losses
incurred in hedging transactions and the costs of these transactions will affect
a Fund's performance.

                  Securities Index Options. In seeking to hedge all or a portion
of its investments, each Fund, other than the Money Market Fund, may purchase
and write put and call options on securities indices listed on U.S. or foreign
securities exchanges or traded in the over-the-counter market, which indices
include securities held in the Fund's portfolio. The Funds with such option
writing authority may write only covered options. A Fund may also use securities
index options as a means of participating in a securities market without making
direct purchases of securities.

                  A securities index measures the movement of a certain group of
securities by assigning relative values to the securities included in the index.


                                      -26-
<PAGE>

Options on securities indexes are generally similar to options on specific
securities. Unlike options on securities, however, options on securities indices
do not involve the delivery of an underlying security; the option in the case of
an option on a securities index represents the holder's right to obtain from the
writer in cash a fixed multiple of the amount by which the exercise price
exceeds (in the case of a call) or is less than (in the case of a put) the
closing value of the underlying securities index on the exercise date. A Fund
may purchase and write put and call options on securities indexes or securities
index futures contracts that are traded on a U.S. exchange or board of trade or
a foreign exchange, to the extent permitted under rules and interpretations of
the Commodity Futures Trading Commission ("CFTC"), as a hedge against changes in
market conditions and interest rates, and for duration management, and may enter
into closing transactions with respect to those options to terminate existing
positions. A securities index fluctuates with changes in the market values of
the securities included in the index. Securities index options may be based on a
broad or narrow market index or on an industry or market segment.

                  The delivery requirements of options on securities indices
differ from options on securities. Unlike a securities option, which
contemplates the right to take or make delivery of securities at a specified
price, an option on a securities index gives the holder the right to receive a
cash "exercise settlement amount" equal to (i) the amount, if any, by which the
fixed exercise price of the option exceeds (in the case of a put) or is less
than (in the case of a call) the closing value of the underlying index on the
date of exercise, multiplied by (ii) a fixed "index multiplier." Receipt of this
cash amount will depend upon the closing level of the securities index upon
which the option is based being greater than, in the case of a call, or less
than, in the case of a put, the exercise price of the option. The amount of cash
received will be equal to the difference between the closing price of the index
and the exercise price of the option expressed in dollars times a specified
multiple. The writer of the option is obligated, in return for the premium
received, to make delivery of this amount. The writer may offset its position in
securities index options prior to expiration by entering into a closing
transaction on an exchange or it may allow the option to expire unexercised.

                  The effectiveness of purchasing or writing securities index
options as a hedging technique will depend upon the extent to which price
movements in the portion of a securities portfolio being hedged correlate with
price movements of the securities index selected. Because the value of an index
option depends upon movements in the level of the index rather than the price of
a particular security, whether a Fund realizes a gain or loss from the purchase
or writing of options on an index depends upon movements in the level of prices
in the market generally or, in the case of certain indices, in an industry or
market segment, rather than movements in the price of a particular security. As
a result, successful use by a Fund of options on securities indices is subject
to the Investment Manager's ability to predict correctly movements in the
direction of the market generally or of a particular industry. This ability
contemplates different skills and techniques from those used in predicting
changes in the price of individual securities.

                  Securities index options are subject to position and exercise
limits and other regulations imposed by the exchange on which they are traded.
The ability of a Fund to engage in closing purchase transactions with respect to
securities index options depends on the existence of a liquid secondary market.
Although a Fund will generally purchase or write securities index options only
if a liquid secondary market for the options purchased or sold appears to exist,
no such secondary market may exist, or the market may cease to exist at some


                                      -27-
<PAGE>

future date, for some options. No assurance can be given that a closing purchase
transaction can be effected when the Investment Manager desires that a Fund
engage in such a transaction.

                  Over-the-Counter ("OTC") Options. Certain Funds may purchase
OTC or dealer options or sell covered OTC options. Unlike exchange-listed
options where an intermediary or clearing corporation, such as the Clearing
Corporation, assures that all transactions in such options are properly
executed, the responsibility for performing all transactions with respect to OTC
options rests solely with the writer and the holder of those options. A listed
call option writer, for example, is obligated to deliver the underlying stock to
the clearing organization if the option is exercised, and the clearing
organization is then obligated to pay the writer the exercise price of the
option. If a Fund were to purchase a dealer option, however, it would rely on
the dealer from whom it purchased the option to perform if the option were
exercised. If the dealer fails to honor the exercise of the option by the Fund,
the Fund would lose the premium it paid for the option and the expected benefit
of the transaction.

                  Listed options generally have a continuous liquid market while
dealer options have none. Consequently, a Fund will generally be able to realize
the value of a dealer option it has purchased only by exercising it or reselling
it to the dealer who issued it. Similarly, when a Fund writes a dealer option,
it generally will be able to close out the option prior to its expiration only
by entering into a closing purchase transaction with the dealer to which the
Fund originally wrote the option. Although the Funds will seek to enter into
dealer options only with dealers who will agree to and that are expected to be
capable of entering into closing transactions with the Funds, there can be no
assurance that a Fund will be able to liquidate a dealer option at a favorable
price at any time prior to expiration. The inability to enter into a closing
transaction may result in material losses to a Fund. Until a Fund, as a covered
OTC call option writer, is able to effect a closing purchase transaction, it
will not be able to liquidate securities (or other assets) used to cover the
written option until the option expires or is exercised. This requirement may
impair a Fund's ability to sell portfolio securities or, with respect to
currency options, currencies at a time when such sale might be advantageous. In
the event of insolvency of the other party, the Fund may be unable to liquidate
a dealer option.

                  Futures and Related Options. Each Fund, other than the
Small-Cap Value Fund and the Money Market Fund, may enter into interest rate,
financial and stock or bond index futures contracts or related options that are
traded on a U.S. or foreign exchange or board of trade approved by the CFTC or
in the over-the-counter market. If entered into, these transactions will be made
solely for the purpose of hedging against the effects of changes in the value of
portfolio securities due to anticipated changes in interest rates and/or market
conditions, to gain market exposure for accumulating and residual cash
positions, for duration management, or when the transactions are economically
appropriate to the reduction of risks inherent in the management of the Fund
involved. No Fund will enter into a transaction involving futures and options on
futures for speculative purposes.

                  An interest rate futures contract provides for the future sale
by one party and the purchase by the other party of a specified amount of a
particular financial instrument (debt security) at a specified price, date, time


                                      -28-
<PAGE>

and place. Financial futures contracts are contracts that obligate the holder to
deliver (in the case of a futures contract that is sold) or receive (in the case
of a futures contract that is purchased) at a future date a specified quantity
of a financial instrument, specified securities, or the cash value of a
securities index. A municipal bond index futures contract is based on an index
of long-term, tax-exempt municipal bonds and a corporate bond index futures
contract is based on an index of corporate bonds. Stock index futures contracts
are based on indices that reflect the market value of common stock of the
companies included in the indices. An index futures contract is an agreement
pursuant to which two parties agree to take or make delivery of an amount of
cash equal to the difference between the value of the index at the close of the
last trading day of the contract and the price at which the index contract was
originally written. An option on an interest rate or index futures contract
generally gives the purchaser the right, in return for the premium paid, to
assume a position in a futures contract at a specified exercise price at any
time prior to the expiration date of the option.

                  A Fund may not enter into futures and options contracts for
which aggregate initial margin deposits and premiums paid for unexpired options
exceed 5% of the fair market value of the Fund's total assets, after taking into
account unrealized losses or profits on futures contracts or options on futures
contracts into which it has entered. The current view of the staff of the SEC is
that a Fund's long and short positions in futures contracts as well as put and
call options on futures written by it must be collateralized with cash or other
liquid assets and segregated with the Trust's custodian or a designated
sub-custodian or "covered" in a manner similar to that for covered options on
securities and designed to eliminate any potential leveraging.

                  No consideration is paid or received by a Fund upon trading a
futures contract. Upon entering into a futures contract, cash, short-term
Government Securities or other U.S. dollar-denominated, high-grade, short-term
money market instruments equal to approximately 1% to 10% of the contract amount
will be segregated with the Trust's custodian or a designated sub-custodian.
This amount, which is subject to change by the exchange on which the contract is
traded, is known as "initial margin" and is in the nature of a performance bond
or good faith deposit on the contract that is returned to the Fund upon
termination of the futures contract, so long as all contractual obligations have
been satisfied; the broker will have access to amounts in the margin account if
the Fund fails to meet its contractual obligations. Subsequent payments, known
as "variation margin," to and from the broker, will be made daily as the price
of the securities underlying the futures contract fluctuates, making the long
and short positions in the contract more or less valuable, a process known as
"marking-to-market." At any time prior to the expiration of a futures contract,
a Fund may elect to close a position by taking an opposite position, which will
operate to terminate the Fund's existing position in the contract.

                  If a Fund has hedged against the possibility of an increase in
interest rates and rates decrease instead, the Fund will lose part or all of the
benefit of the increased value of securities that it has hedged because it will
have offsetting losses in its futures positions. In addition, in such
situations, if the Fund had insufficient cash, it may have to sell securities to
meet daily variation margins requirements at a time when it may be
disadvantageous to do so. These sales of securities may, but will not
necessarily, be at increased prices that reflect the decline in interest rates.


                                      -29-
<PAGE>

                  An option on a futures contract, unlike a direct investment in
such a contract, gives the purchaser the right, in return for the premium paid,
to assume a position in the futures contract at a specified exercise price at
any time prior to the expiration date of the option. Upon exercise of an option,
the delivery of the futures position by the writer of the option to the holder
of the option will be accompanied by delivery of the accumulated balance in the
writer's futures margin account, which represents the amount by which the market
price of the futures contract exceeds, in the case of a call, or is less than,
in the case of a put, the exercise price of the option on the futures contract.
The potential loss related to the purchase of an option on futures contracts is
limited to the premium paid for the option (plus transaction costs). Because the
price of the option to the purchaser is fixed at the point of sale, no daily
cash payments are made to reflect changes in the value of the underlying
contract. The value of the option, however, does change daily and that change
would be reflected in the net asset value of the Fund holding the options.

                  The use of futures contracts and options on futures contracts
as a hedging device involves several risks. No assurance can be given that a
correlation will exist between price movements in the underlying securities or
index and price movements in the securities that are the subject of the hedge.
Furthermore, because any income earned from transactions in futures contracts
and related options will be taxable, the Investment Manager of the Tax-Exempt
Fund anticipates that the Fund will invest in these instruments only in unusual
circumstances, such as when the Investment Manager anticipates a significant
change in interest rates or market conditions. Losses incurred in hedging
transactions and the costs of these transactions will affect a Fund's
performance.

                  Although the Trust intends that the Funds enter into futures
contracts only if an active market exists for the contracts, positions in
futures contracts and options on futures contracts may be closed out only on the
exchange or board of trade on which they were entered and no assurance can be
given that an active market will exist for the contracts at any particular time.
Most U.S. futures exchanges and boards of trade limit the amount of fluctuation
permitted in futures contract prices during a single trading day. Once the daily
limit has been reached in a particular contract, no trades may be made on that
day at a price beyond that limit. Futures contract prices may move to the daily
limit for several consecutive trading days with little or no trading, thereby
preventing prompt liquidation of futures positions and subjecting some futures
traders to substantial losses. In such a case, and in the event of adverse price
movements, a Fund would be required to make daily cash payments of variation
margin. In such circumstances, an increase in the value of the portion of the
portfolio being hedged, if any, may partially or completely offset losses on the
futures contract.

                  Forward Currency Transactions. Certain Funds, may hold
currencies to meet settlement requirements for foreign securities and may engage
in currency exchange transactions to protect against uncertainty in the level of
future exchange rates between a particular foreign currency and the U.S. dollar
or between foreign currencies in which the Fund's securities are or may be
denominated. The use of forward currency contracts does not eliminate
fluctuations in the underlying prices of the securities, but it does establish a
rate of exchange that can be achieved in the future. No Fund will enter into
forward currency transactions for speculative purposes. A Fund will not enter
into a currency transaction if, as a result, it will fail to qualify as a


                                      -30-
<PAGE>

regulated investment company under the Internal Revenue Code of 1986, as amended
("Code"), for a given year.

                  Forward currency contracts are agreements to exchange one
currency for another at a future date. The date (which may be any agreed-upon
fixed number of days in the future), the amount of currency to be exchanged and
the price at which the exchange will take place will be negotiated and fixed for
the term of the contract at the time that a Fund enters into the contract.
Forward currency contracts (i) are traded in a market conducted directly between
currency traders (typically, commercial banks or other financial institutions)
and their customers, (ii) generally have no deposit requirements and (iii) are
typically consummated without payment of any commissions. A Fund, however, may
enter into forward currency contracts requiring deposits or involving the
payment of commissions. The cost to a Fund of engaging in currency transactions
varies with factors such as the currency involved, the length of the contract
period and the market conditions then prevailing. To assure that a Fund's
forward currency contracts are not used to achieve investment leverage, cash or
other liquid assets will be segregated with the Trust's custodian or a
designated sub-custodian in an amount at all times equal to or exceeding the
Fund's commitment with respect to the contracts.

                  Upon maturity of a forward currency contract, a Fund may (i)
pay for and receive the underlying currency, (ii) negotiate with the dealer to
roll over the contract into a new forward currency contract with a new future
settlement date or (iii) negotiate with the dealer to terminate the forward
contract into an offset with the currency trader providing for the Fund's paying
or receiving the difference between the exchange rate fixed in the contract and
the then current exchange rate. The Trust may also be able to negotiate such an
offset on behalf of a Fund prior to maturity of the original forward contract.
No assurance can be given that new forward contracts or offsets will always be
available to a Fund.

                  In hedging a specific portfolio position, a Fund may enter
into a forward contract with respect to either the currency in which the
position is denominated or another currency deemed appropriate by the Investment
Manager. A Fund's exposure with respect to forward currency contracts is limited
to the amount of the Fund's aggregate investments in instruments denominated in
foreign currencies.

                  In entering into forward currency contracts, a Fund will be
subject to a number of risks and special considerations. The market for forward
currency contracts, for example, may be limited with respect to certain
currencies. The existence of a limited market may in turn restrict the Fund's
ability to hedge against the risk of devaluation of currencies in which the Fund
holds a substantial quantity of securities. The successful use of forward
currency contracts as a hedging technique draws upon the Investment Manager's
special skills and experience with respect to those instruments and will usually
depend upon the Investment Manager's ability to forecast interest rate and
currency exchange rate movements correctly. Should interest or exchange rates
move in an unexpected manner, a Fund may not achieve the anticipated benefits of
forward currency contracts or may realize losses and thus be in a less
advantageous position than if those strategies had not been used. Many forward
currency contracts are subject to no daily price fluctuation limits so that
adverse market movements could continue with respect to those contracts to an
unlimited extent over a period of time. If a devaluation is generally
anticipated, a Fund may not be able to sell currency at a price above the


                                      -31-
<PAGE>

anticipated devaluation level. In addition, the correlation between movements in
the prices of those contracts and movements in the prices of the currencies
hedged or used for cover will not be perfect. Although forward currency
contracts limit the risk of loss due to a decline in the value of the hedged
currency, at the same time, they limit any potential gain that might result
should the value of the currency increase.

                  The ability to dispose of a Fund's positions in forward
currency contracts depends on the availability of active markets in those
instruments, and the Investment Manager cannot predict the amount of trading
interest that may exist in the future in forward currency contracts. Forward
currency contracts may be closed out only by the parties entering into an
offsetting contract. As a result, no assurance can be given that a Fund will be
able to utilize these contracts effectively for the intended purposes.

                  Options on Foreign Currencies. Certain Funds, may purchase and
write put and call options on foreign currencies for the purpose of hedging
against declines in the U.S. dollar value of foreign currency denominated
securities and against increases in the U.S. dollar cost of securities to be
acquired by the Fund. The Funds with such option writing authority may write
only covered options. No Fund will enter into a transaction involving options on
foreign currencies for speculative purposes. Options on foreign currencies to be
written or purchased by a Fund are traded on U.S. or foreign exchanges or in the
over-the-counter market. The Trust will limit the premiums paid on a Fund's
options on foreign currencies to 5% of the value of the Fund's total assets.

                  Certain transactions involving options on foreign currencies
are undertaken on contract markets that are not regulated by the CFTC. Options
on foreign currencies traded on national securities exchanges are within the
jurisdiction of the SEC, as are other securities traded on those exchanges. As a
result, many of the protections provided to traders on organized exchanges will
be available with respect to those transactions. In particular, all foreign
currency option positions entered into on a national securities exchange are
cleared and guaranteed by the Clearing Corporation, thereby reducing the risk of
counterparty default. In addition, a liquid secondary market in options traded
on a national securities exchange may exist, potentially permitting a Fund to
liquidate open positions at a profit prior to exercise or expiration, or to
limit losses in the event of adverse market movements.

                  The purchase and sale of exchange-traded foreign currency
options are subject to the risks of the availability of a liquid secondary
market as described above, as well as the risks regarding adverse market
movements, margining of options written, the nature of the foreign currency
market, possible intervention by governmental authorities and the effects of
other political and economic events. In addition, exercise and settlement of
exchange-traded foreign currency options must be made exclusively through the
Clearing Corporation, which has established banking relationships in applicable
foreign countries for this purpose. As a result, the Clearing Corporation may,
if it determines that foreign governmental restrictions or taxes would prevent
the orderly settlement of foreign currency option exercises, or would result in
undue burdens on the Clearing Corporation or its clearing members, impose
special procedures on exercise and settlement, such as technical changes in the


                                      -32-
<PAGE>

mechanics of delivery of currency, the fixing of dollar settlement prices or
prohibitions on exercise.

                  Like the writing of other kinds of options, the writing of an
option on a foreign currency constitutes only a partial hedge, up to the amount
of the premium received; a Fund could also be required, with respect to any
option it has written, to purchase or sell foreign currencies at disadvantageous
exchange rates, thereby incurring losses. The purchase of an option on a foreign
currency may constitute an effective hedge against fluctuation in exchange
rates, although in the event of rate movements adverse to a Fund's position, the
Fund could forfeit the entire amount of the premium plus related transaction
costs.

                  Options on foreign currencies may be traded on foreign
exchanges, to the extent permitted by the CFTC. These transactions are subject
to the risk of governmental actions affecting trading in or the prices of
foreign currencies or securities. The value of these positions could also be
adversely affected by (i) other complex foreign political and economic factors,
(ii) lesser availability of data on which to make trading decisions than in the
United States, (iii) delays in a Fund's ability to act upon economic events
occurring in foreign markets during non-business hours in the United States,
(iv) the imposition of different exercise and settlement terms and procedures
and margin requirements than in the United States and (5) lesser trading volume.

                  Structured and Indexed Securities. Certain Funds may also
invest in structured and indexed securities, the value of which is linked to
currencies, interest rates, commodities, indexes or other financial indicators
("reference instruments"). The interest rate or the principal amount payable at
maturity or redemption may be increased or decreased depending on changes in the
value of the reference instrument. Structured or indexed securities may be
positively or negatively indexed, so that appreciation of the reference
instrument may produce an increase or a decrease in interest rate or value at
maturity of the security. In addition, the change in the interest rate or value
at maturity of the security may be some multiple of the change in value of the
reference instrument. Thus, in addition to the credit risk of the security's
issuer, the Funds will bear the market risk of the reference instrument.

                  Mortgage Related Securities. Certain Funds may invest in
mortgage related securities which represent pools of mortgage loans assembled
for sale to investors by various governmental agencies, such as GNMA, by
government related organizations, such as FNMA and FHLMC, as well as by private
issuers, such as commercial banks, savings and loan institutions, mortgage
bankers and private mortgage insurance companies.

                  The average maturity of pass-through pools of mortgage related
securities in which certain of the Funds may invest varies with the maturities
of the underlying mortgage instruments. In addition, a pool's stated maturity
may be shortened by unscheduled payments on the underlying mortgages. Factors
affecting mortgage prepayments include the level of interest rates, general
economic and social conditions, the location of the mortgaged property and age
of the mortgage. Because prepayment rates of individual mortgage pools vary
widely, the average life of a particular pool cannot be predicted accurately.



                                      -33-
<PAGE>

                  Mortgage related securities may be classified as private,
governmental or government-related, depending on the issuer or guarantor.
Private mortgage related securities represent pass-through pools consisting
principally of conventional residential mortgage loans created by
non-governmental issuers, such as commercial banks, savings and loan
associations and private mortgage insurance companies. Governmental mortgage
related securities are backed by the full faith and credit of the United States.
Ginnie Mae, the principal U.S. guarantor of these securities, is a wholly-owned
U.S. government corporation within the Department of Housing and Urban
Development. Government-related mortgage related securities are not backed by
the full faith and credit of the United States. Issuers include Fannie Mae and
Freddie Mae. Fannie Mae is a government-sponsored corporation owned entirely by
private stockholders, which is subject to general regulation by the Secretary of
Housing and Urban Development. Pass-through securities issued by Fannie Mae are
guaranteed as to timely payment of principal and interest by Fannie Mae. Freddie
Mae is a corporate instrumentality of the United States, the stock of which is
owned by the Federal Home Loan Banks. Participation certificates representing
interests in mortgages from Freddie Mae's national portfolio are guaranteed as
to the timely payment of interest and ultimate collection of principal by
Freddie Mae.

                  Private, governmental or government-related entities may
create mortgage loan pools offering pass-through investments in addition to
those described above. The mortgages underlying these securities may be
alternative mortgage instruments, that is, mortgage instruments whose principal
or interest payments may vary or whose terms to maturity may be shorter than
previously customary. The Investment Manager assesses new types of mortgage
related securities as they are developed and offered to determine their
appropriateness for investment by the relevant Fund.

                  Several risks are associated with mortgage related securities
generally. The monthly cash inflow from the underlying loans, for example, may
not be sufficient to meet the monthly payment requirements of the mortgage
related security. Prepayment of principal by mortgagors or mortgage foreclosures
will shorten the term of the underlying mortgage pool for a mortgage related
security. Early returns of principal will affect the average life of the
mortgage related securities remaining in these Funds. The occurrence of mortgage
prepayments is affected by factors including the level of interest rates,
general economic conditions, the location and age of the mortgage and other
social and demographic conditions. In periods of rising interest rates, the rate
of prepayment tends to decrease, thereby lengthening the average life of a pool
of mortgage related securities. Conversely, in periods of falling interest rates
the rate of prepayment tends to increase, thereby shortening the average life of
a pool. Reinvestment of prepayments may occur at higher or lower interest rates
than the original investment, thus affecting the yield of these Funds. Because
prepayments of principal generally occur when interest rates are declining, the
Fund will likely have to reinvest the proceeds of prepayments at lower interest
rates than those at which its assets were previously invested, resulting in a
corresponding decline in the Fund's yield. Thus, mortgage related securities may
have less potential for capital appreciation in periods of falling interest
rates than other fixed income securities of comparable maturity, although those
other fixed income securities may have a comparable risk of decline in market
value in periods of rising interest rates. To the extent that these Funds
purchase mortgage related securities at a premium, unscheduled prepayments,
which are made at par, will result in a loss equal to any unamortized premium.



                                      -34-
<PAGE>

                  Adjustable rate mortgage related securities ("ARMs") have
interest rates that reset at periodic intervals, thereby allowing certain Funds
to participate in increases in interest rates through periodic adjustments in
the coupons of the underlying mortgages, resulting in both higher current yields
and lower price fluctuation than would be the case with more traditional
long-term debt securities. Furthermore, if prepayments of principal are made on
the underlying mortgages during periods of rising interest rates, these Funds
generally will be able to reinvest these amounts in securities with a higher
current rate of return. None of these Funds, however, will benefit from
increases in interest rates to the extent that interest rates rise to the point
at which they cause the current yield of ARMs to exceed the maximum allowable
annual or lifetime reset limits (or "caps") for a particular mortgage. In
addition, fluctuations in interest rates above these caps could cause ARMs to
behave more like long-term fixed rate securities in response to extreme
movements in interest rates. As a result, during periods of volatile interest
rates, these Funds' net asset values may fluctuate more than if they did not
purchase ARMs. Moreover, during periods of rising interest rates, changes in the
coupon of the adjustable rate mortgages will slightly lag behind changes in
market rates, creating the potential for some principal loss for shareholders
who redeem their shares of these Funds before the interest rates on the
underlying mortgages are adjusted to reflect current market rates.

                  Collateralized mortgage related securities ("CMOs") are
obligations fully collateralized by a portfolio of mortgages or mortgage related
securities. Payments of principal and interest on the mortgages are passed
through to the holders of the CMOs on the same schedule as they are received,
although certain classes of CMOs have priority over others with respect to the
receipt of prepayments on the mortgages. Therefore, depending on the type of
CMOs in which these Funds invest, the investment may be subject to a greater or
lesser risk of prepayment than other types of mortgage related securities.

                  Mortgage related securities may not be readily marketable. To
the extent any of these securities are not readily marketable in the judgment of
the Investment Manager, each of these Funds limits its investments in these
securities, together with other illiquid instruments, to not more than 15% (10%
in the case of the Tax-Exempt Fund) of the value of its net assets).

                  Supranational Agencies. Each Fund may invest up to 10% of its
assets in debt obligations of supranational agencies such as: the International
Bank for Reconstruction and Development (commonly referred to as the World
Bank), which was chartered to finance development projects in developing member
countries; the European Community, which is a twelve-nation organization engaged
in cooperative economic activities; the European Coal and Steel Community, which
is an economic union of various European nations' steel and coal industries; and
the Asian Development Bank, which is an international development bank
established to lend funds, promote investment and provide technical assistance
to member nations in the Asian and Pacific regions. Debt obligations of
supranational agencies are not considered Government Securities and are not
supported, directly or indirectly, by the U.S. Government.

                  Municipal Obligations. The term "Municipal Obligations" as
used in the Prospectus and this SAI means debt obligations issued by, or on
behalf of, states, territories and possessions of the United States and the


                                      -35-
<PAGE>

District of Columbia and their political subdivisions, agencies and
instrumentalities or multistate agencies or authorities, the interest from which
debt obligations is, in the opinion of bond counsel to the issuer, excluded from
gross income for Federal income tax purposes. Municipal Obligations generally
are understood to include debt obligations issued to obtain funds for various
public purposes, including the construction of a wide range of public
facilities, refunding of outstanding obligations, payment of general operating
expenses and extensions of loans to public institutions and facilities. Private
activity bonds that are issued by or on behalf of public authorities to finance
privately operated facilities are considered to be Municipal Obligations if the
interest paid on them qualifies as excluded from gross income (but not
necessarily from alternative minimum taxable income) for Federal income tax
purposes in the opinion of bond counsel to the issuer.

                  Opinions relating to the validity of Municipal Obligations and
to the exemption of interest on them from Federal income taxes are rendered by
bond counsel to the respective issuers at the time of issuance. Neither the
Trust nor the Investment Manager will review the proceedings relating to the
issuance of Municipal Obligations or the basis for opinions of counsel. The
Strategic Fund and Tax-Exempt Fund may invest without limit in debt obligations
that are repayable out of revenues generated from economically related projects
or facilities or debt obligations whose issuers are located in the same state.
Sizable investments in these obligations could involve an increased risk to the
Funds should any of the related projects or facilities experience financial
difficulties.

                  Municipal Obligations may be issued to finance life care
facilities, which are an alternative form of long-term housing for the elderly
that offer residents the independence of a condominium life-style and, if
needed, the comprehensive care of nursing home services. Bonds to finance these
facilities have been issued by various state industrial development authorities.
Because the bonds are secured only by the revenues of each facility and not by
state or local government tax payments, they are subject to a wide variety of
risks, including a drop in occupancy levels, the difficulty of maintaining
adequate financial reserves to secure estimated actuarial liabilities, the
possibility of regulatory cost restrictions applied to health care delivery and
competition from alternative health care or conventional housing facilities.

                  Even though Municipal Obligations are interest-bearing
investments that promise a stable flow of income, their prices are inversely
affected by changes in interest rates and, therefore, are subject to the risk of
market price fluctuations. The values of Municipal Obligations with longer
remaining maturities typically fluctuate more than those of similarly rated
Municipal Obligations with shorter remaining maturities. The values of fixed
income securities also may be affected by changes in the credit rating or
financial condition of the issuing entities.

                  Tax legislation in recent years has included several
provisions that may affect the supply of, and the demand for, Municipal
Obligations, as well as the tax-exempt nature of interest paid on those
obligations. Neither the Trust nor the Investment Manager can predict with
certainty the effect of recent tax law changes upon the Municipal Obligation
market, including the availability of instruments for investment by a Fund. In
addition, neither the Trust nor the Investment Manager can predict whether


                                      -36-
<PAGE>

additional legislation adversely affecting the Municipal Obligation market will
be enacted in the future. The Trust monitors legislative developments and
considers whether changes in the objective or policies of a Fund need to be made
in response to those developments. If any laws are enacted that would reduce the
availability of Municipal Obligations for investment by the Tax-Exempt Fund so
as to affect the Fund's shareholders adversely, the Trust will reevaluate the
Fund's investment objective and policies and might submit possible changes in
the Fund's structure to the Fund's shareholders for their consideration. If
legislation were enacted that would treat a type of Municipal Obligation as
taxable for Federal income tax purposes, the Trust would treat the security as a
permissible taxable money market instrument for the Fund within the applicable
limits set forth in the Prospectus.

                  The Strategic Fund and Tax-Exempt Fund intend to invest in
Municipal Obligations of a broad range of issuers, consistent with prudent
regional diversification. Investors in certain states may be subject to state
taxation on all or a portion of the income and capital gains produced by such
securities.

                  Municipal Obligation Components. Certain Funds may invest in
Municipal Obligations, the interest rate on which has been divided by the issuer
into two different and variable components, which together result in a fixed
interest rate. Typically, the first of the components (the "Auction Component")
pays an interest rate that is reset periodically through an auction process,
whereas the second of the components (the "Residual Component") pays a residual
interest rate based on the difference between the total interest paid by the
issuer on the Municipal Obligation and the auction rate paid on the Auction
Component. A Fund may purchase both Auction and Residual Components. Because the
interest rate paid to holders of Residual Components is generally determined by
subtracting the interest rate paid to the holders of Auction Components from a
fixed amount, the interest rate paid to Residual Component holders will decrease
as the Auction Component's rate increases and increase as the Auction
Component's rate decreases. Moreover, the extent of the increases and decreases
in market value of Residual Components may be larger than comparable changes in
the market value of an equal principal amount of a fixed rate Municipal
Obligation having similar credit quality, redemption provisions and maturity.

                  Municipal Leases. Municipal leases are Municipal Obligations
that may take the form of a lease or an installment purchase contract issued by
state and local governmental authorities to obtain funds to acquire a wide
variety of equipment and facilities such as fire and sanitation vehicles,
computer equipment and other capital assets. Interest payments on qualifying
municipal leases are exempt from Federal income taxes and state income taxes
within the state of issuance. Although municipal lease obligations do not
normally constitute general obligations of the municipality, a lease obligation
is ordinarily backed by the municipality's agreement to make the payments due
under the lease obligation. These obligations have evolved to make it possible
for state and local government authorities to acquire property and equipment
without meeting constitutional and statutory requirements for the issuance of
debt. Thus, municipal leases have special risks not normally associated with
Municipal Obligations. These obligations frequently contain "non-appropriation"
clauses that provide that the governmental issuer of the obligation has no
obligation to make future payments under the lease or contract unless money is
appropriated for those purposes by the legislative body on a yearly or other
periodic basis. In addition to the non-appropriation risk, municipal leases
represent a type of financing that has not yet developed the depth of


                                      -37-
<PAGE>

marketability associated with other Municipal Obligations. Some municipal lease
obligations may be, and could become, illiquid. Moreover, although municipal
leases will be secured by the leased equipment, the disposition of the equipment
in the event of foreclosure might prove to be difficult.

                  Municipal lease obligations may be deemed to be illiquid as
determined by or in accordance with methods adopted by the Board. In determining
the liquidity and appropriate valuation of a municipal lease obligation, the
following factors relating to the security are considered, among others: (i) the
frequency of trades and quotes; (ii) the number of dealers willing to purchase
or sell the security; (iii) the willingness of dealers to undertake to make a
market; (iv) the nature of the marketplace trades; and (v) the likelihood that
the obligation will continue to be marketable based on the credit quality of the
municipality or relevant obligor.

                  Municipal leases held by a Fund will be considered illiquid
securities unless the Board determines on an ongoing basis that the leases are
readily marketable. An unrated municipal lease with a non-appropriation risk
that is backed by an irrevocable bank letter of credit or an insurance policy
issued by a bank or insurer deemed by the Investment Manager to be of high
quality and minimal credit risk, will not be deemed to be illiquid solely
because the underlying municipal lease is unrated, if the Investment Manager
determines that the lease is readily marketable because it is backed by the
letter of credit or insurance policy.

                  Municipal leases that a Fund may acquire will be both rated
and unrated. Rated leases that may be held by a Fund include those rated
investment grade at the time of investment or those issued by issuers whose
senior debt is rated investment grade at the time of investment. A Fund may
acquire unrated issues that the Investment Manager deems to be comparable in
quality to rated issues in which a Fund is authorized to invest. A determination
that an unrated lease obligation is comparable in quality to a rated lease
obligation and that there is a reasonable likelihood that the lease will not be
canceled will be subject to oversight and approval by the Board.

                  To limit the risks associated with municipal leases, a Fund
will invest no more than 5% of its total assets in those leases. In addition, a
Fund will purchase lease obligations that contain non-appropriation clauses when
the lease payments will commence amortization of principal at an early date
resulting in an average life of five years or less for the lease obligation.

                  Floating and Variable Rate Instruments. Certain Funds may
invest in floating and variable rate instruments. Income securities may provide
for floating or variable rate interest or dividend payments. The floating or
variable rate may be determined by reference to a known lending rate, such as a
bank's prime rate, a certificate of deposit rate or the London InterBank Offered
Rate (LIBOR). Alternatively, the rate may be determined through an auction or
remarketing process. The rate also may be indexed to changes in the values of
interest rate or securities indexes, currency exchange rate or other
commodities. Variable and floating rate securities tend to be less sensitive
than fixed rate securities to interest rate changes and to have higher yields
when interest rates increase. However, during periods of rising interest rates,
changes in the interest rate of an adjustable rate security may lag changes in
market rates.

                                      -38-
<PAGE>

                  The amount by which the rates paid on an income security may
increase or decrease may be subject to periodic or lifetime caps. Fluctuations
in interest rates above these caps could cause adjustable rate securities to
behave more like fixed rate securities in response to extreme movements in
interest rates.

                  Floating and variable rate income securities include
securities whose rates vary inversely with changes in market rates of interest.
Such securities may also pay a rate of interest determined by applying a
multiple to the variable rate. The extent of increases and decreases in the
value of securities whose rates vary inversely with changes in market rates of
interest generally will be larger than comparable changes in the value of an
equal principal amount of a fixed rate security having similar credit quality,
redemption provisions and maturity.

                  Certain Funds may purchase floating and variable rate demand
bonds and notes, which are Municipal Obligations ordinarily having stated
maturities in excess of one year but which permit their holder to demand payment
of principal at any time or at specified intervals. Variable rate demand notes
include master demand notes, which are obligations that permit a Fund to invest
fluctuating amounts, which may change daily without penalty, pursuant to direct
arrangements between the Fund, as lender, and the borrower. These obligations
have interest rates that fluctuate from time to time and frequently are secured
by letters of credit or other credit support arrangements provided by banks. Use
of letters of credit or other credit support arrangements will not adversely
affect the tax-exempt status of variable rate demand notes. Because they are
direct lending arrangements between the lender and borrower, variable rate
demand notes generally will not be traded and no established secondary market
generally exists for them, although they are redeemable at face value. If
variable rate demand notes are not secured by letters of credit or other credit
support arrangements, a Fund's right to demand payment will be dependent on the
ability of the borrower to pay principal and interest on demand. Each obligation
purchased by a Fund will meet the quality criteria established by the Investment
Manager for the purchase of Municipal Obligations. The Investment Manager
considers on an ongoing basis the creditworthiness of the issuers of the
floating and variable rate demand obligations in the relevant Fund's portfolio.

                  Participation Interests. Certain Funds may purchase from
financial institutions participation interests in certain Municipal Obligations.
A participation interest gives the Fund an undivided interest in the Municipal
Obligation in the proportion that the Fund's participation interest bears to the
total principal amount of the Municipal Obligation. These instruments may have
fixed, floating or variable rates of interest. If the participation interest is
unrated, or has been given a rating below one that is otherwise permissible for
purchase by a Fund, the participation interest will be backed by an irrevocable
letter of credit or guarantee of a bank that the Board has determined meets
certain quality standards, or the payment obligation otherwise will be
collateralized by Government Securities. A Fund will have the right, with
respect to certain participation interests, to demand payment, on a specified
number of days' notice, for all or any part of the Fund's participation interest
in the Municipal Obligation, plus accrued interest. The Trust intends that a
Fund exercise its right to demand payment only upon a default under the terms of
the Municipal Obligation, or to maintain or improve the quality of its
investment portfolio. A Fund will invest no more than 5% of the value of its
total assets in participation interests.

                                      -39-
<PAGE>

                  Zero Coupon Obligations. Certain Funds may invest in zero
coupon obligations. Zero coupon securities generally pay no cash interest (or
dividends in the case of preferred stock) to their holders prior to maturity.
Accordingly, such securities usually are issued and traded at a deep discount
from their face or par value and generally are subject to greater fluctuations
of market value in response to changing interest rates than securities of
comparable maturities and credit quality that pay cash interest (or dividends in
the case of preferred stock) on a current basis. Although each of these Funds
will receive no payments on its zero coupon securities prior to their maturity
or disposition, it will be required for federal income tax purposes generally to
include in its dividends each year an amount equal to the annual income that
accrues on its zero coupon securities. Such dividends will be paid from the cash
assets of the Fund, from borrowings or by liquidation of portfolio securities,
if necessary, at a time that the Fund otherwise would not have done so. To the
extent these Funds are required to liquidate thinly traded securities, the Funds
may be able to sell such securities only at prices lower than if such securities
were more widely traded. The risks associated with holding securities that are
not readily marketable may be accentuated at such time. To the extent the
proceeds from any such dispositions are used by these Funds to pay
distributions, each of those Funds will not be able to purchase additional
income-producing securities with such proceeds, and as a result its current
income ultimately may be reduced.

                  The Tax-Exempt Fund, the Short-Term Government Fund, the High
Yield Fund and the Strategic Fund may each invest up to 10% of its assets in
zero coupon Municipal Obligations. Zero coupon Municipal Obligations are
generally divided into two categories: "Pure Zero Obligations," which are those
that pay no interest for their entire life and "Zero/Fixed Obligations," which
pay no interest for some initial period and thereafter pay interest currently.
In the case of a Pure Zero Obligation, the failure to pay interest currently may
result from the obligation's having no stated interest rate, in which case the
obligation pays only principal at maturity and is sold at a discount from its
stated principal. A Pure Zero Obligation may, in the alternative, provide for a
stated interest rate, but provide that no interest is payable until maturity, in
which case accrued, unpaid interest on the obligation may be capitalized as
incremental principal. The value to the investor of a zero coupon Municipal
Obligation consists of the economic accretion either of the difference between
the purchase price and the nominal principal amount (if no interest is stated to
accrue) or of accrued, unpaid interest during the Municipal Obligation's life or
payment deferral period.

                  Custodial Receipts. Certain Funds may acquire custodial
receipts or certificates underwritten by securities dealers or banks that
evidence ownership of future interest payments, principal payments, or both, on
certain Municipal Obligations. The underwriter of these certificates or receipts
typically purchases Municipal Obligations and deposits the obligations in an
irrevocable trust or custodial account with a custodian bank, which then issues
receipts or certificates that evidence ownership of the periodic unmatured
coupon payments and the final principal payment on the obligations. Custodial
receipts evidencing specific coupon or principal payments have the same general
attributes as zero coupon Municipal Obligations described above. Although under
the terms of a custodial receipt a Fund would be typically authorized to assert
its rights directly against the issuer of the underlying obligation, the Fund
could be required to assert through the custodian bank those rights as may exist
against the underlying issuers. Thus, in the event the underlying issuer fails
to pay principal and/or interest when due, a Fund may be subject to delays,
expenses and risks that are greater than those that would have been involved if


                                      -40-
<PAGE>

the Fund had purchased a direct obligation of the issuer. In addition, in the
event that the trust or custodial account in which the underlying security has
been deposited is determined to be an association taxable as a corporation,
instead of a non-taxable entity, the yield on the underlying security would be
reduced in recognition of any taxes paid.

                  Government Stripped Mortgage Related Securities. Certain Funds
may invest in government stripped mortgage related securities issued and
guaranteed by Ginnie Mae, Fannie Mae or Freddie Mae. These securities represent
beneficial ownership interests in either periodic principal distributions
("principal-only") or interest distributions ("interest-only") on mortgage
related certificates issued by Ginnie Mae, Fannie Mae or Freddie Mae. The
certificates underlying the government stripped mortgage related securities
represent all or part of the beneficial interest in pools of mortgage loans.
These Funds will invest in government stripped mortgage related securities in
order to enhance yield or to benefit from anticipated appreciation in value of
the securities at times when the Investment Manager believes that interest rates
will remain stable or increase. In periods of rising interest rates, the
expected increase in the value of government stripped mortgage related
securities may offset all or a portion of any decline in value of the securities
held by these Funds.

                  Investing in government stripped mortgage related securities
involves risks normally associated with investing in mortgage related securities
issued by government or government related entities. In addition, the yields on
government stripped mortgage related securities are extremely sensitive to
prepayment on the mortgage loans underlying the certificates collateralizing the
securities. If a decline in the level of prevailing interest rates results in a
rate of principal prepayments higher than anticipated, distributions of
principal will be accelerated, thereby reducing the yield to maturity on
interest-only government stripped mortgage related securities and increasing the
yield to maturity on principal-only government stripped mortgage related
securities. Sufficiently high prepayment rates could result in these Funds' not
fully recovering their initial investment in an interest-only government
stripped mortgage related security. The sensitivity of an interest-only security
that represents the interest portion of a particular class, as opposed to the
interest portion of an entire pool, to interest rate fluctuations, may be
increased because of the characteristics of the principal portion to which they
relate. Government stripped mortgage related securities are currently traded in
an over-the-counter market maintained by several large investment banking firms.
No assurance can be given that these Funds will be able to effect a trade of a
government stripped mortgage related security at a desired time. These Funds
will acquire government stripped mortgage related securities only if a secondary
market for the securities exists at the time of acquisition. Except for
government stripped mortgage related securities based on fixed rate FNMA and
FHLMC mortgage certificates that meet certain liquidity criteria established by
the Board, the Trust treats government stripped mortgage related securities as
illiquid and will limit each of these Funds' investments in these securities,
together with other illiquid investments, to not more than 15% of its net
assets.

                  Asset-Backed and Receivable-Backed Securities. Certain Funds
may invest in asset-backed and receivable-backed securities. To date, several
types of asset-backed and receivable-backed securities have been offered to


                                      -41-
<PAGE>

investors including "Certificates for Automobile Receivables" ("CARs(SM)") and
interests in pools of credit card receivables. CARs(SM) represent undivided
fractional interests in a trust, the assets of which consist of a pool of motor
vehicle retail installment sales contracts and security interests in the
vehicles securing the contracts. Payments of principal and interest on CARs(SM)
are passed through monthly to certificate holders and are guaranteed up to
certain amounts and for a certain time period by a letter of credit issued by a
financial institution unaffiliated with the trustee or originator of the trust.

                  An investor's return on CARs(SM) may be affected by early
prepayment of principal on the underlying vehicle sales contracts. If the letter
of credit is exhausted, these Funds may be prevented from realizing the full
amount due on a sales contract because of state law requirements and
restrictions relating to foreclosure sales of vehicles and the availability of
deficiency judgments following these sales, because of depreciation, damage or
loss of a vehicle, because of the application of Federal and state bankruptcy
and insolvency laws or other factors. As a result, certificate holders may
experience delays in payment if the letter of credit is exhausted. Consistent
with each of these Funds' investment objective and policies and subject to the
review and approval of the Board, these Funds may also invest in other types of
asset-backed and receivable-backed securities.

                  Mortgage Dollar Rolls. Certain Funds may, with respect to up
to 25% of their total assets, enter into mortgage "dollar rolls" in which the
Fund sells securities for delivery in the current month and simultaneously
contracts with the same counterparty to repurchase similar (same type, coupon
and maturity) but not identical securities on a specified future date. The Fund
loses the right to receive principal and interest paid on the securities sold.
However, the Fund would benefit to the extent of any price received for the
securities sold and the lower forward price for the future purchase (often
referred to as the "drop") or fee income plus the interest earned on the cash
proceeds of the securities sold until the settlement date of the forward
purchase. Unless such benefits exceed the income, capital appreciation and gain
or loss due to mortgage repayments that would have been realized on the
securities sold as part of the mortgage dollar roll, the use of this technique
will diminish the investment performance of the Fund compared with what such
performance would have been without the use of mortgage dollar rolls. The Fund
will hold and maintain in a segregated account until the settlement date cash or
liquid assets in an amount equal to the forward purchase price. The benefits
derived from the use of mortgage dollar rolls may depend upon the Investment
Manager's ability to predict correctly mortgage prepayments and interest rates.
There is no assurance that mortgage dollar rolls can be successfully employed.

                  For financial reporting and tax purposes, each of these Funds
proposes to treat mortgage dollar rolls as two separate transactions: one
involving the purchase of a security and a separate transaction involving a
sale. The Funds do not currently intend to enter into mortgage dollar rolls that
are accounted for as a financing.

                  Short Sales Against the Box. Certain Funds may sell securities
"short against the box." Whereas a short sale is the sale of a security a Fund
does not own, a short sale is "against the box" if at all times during which the
short position is open, the Fund owns at least an equal amount of the securities


                                      -42-
<PAGE>

or securities convertible into, or exchangeable without further consideration
for, securities of the same issue as the securities sold short.

                  WEBS and Other Index-Related Securities. Certain Funds may
invest in shares in an investment company whose shares are known as "World
Equity Benchmark Shares" or "WEBS." WEBS have been listed for trading on the
American Stock Exchange, Inc. The Funds also may invest in the CountryBaskets
Index Fund, Inc., or another fund the shares of which are the substantial
equivalent of WEBS. Certain Funds may invest in S&P Depositary Receipts, or
"SPDRs." SPDRs are securities that represent ownership in a long-term unit
investment trust that holds a portfolio of common stocks designed to track the
performance of the S&P 500 Index. A Fund investing in a SPDR would be entitled
to the dividends that accrue to the S&P 500 stocks in the underlying portfolio,
less trust expenses.

                             INVESTMENT RESTRICTIONS

                  Each Fund is subject to fundamental and non-fundamental
investment policies and limitations. Under the 1940 Act, fundamental investment
policies and limitations may not be changed without the vote of a majority of
the outstanding voting securities (as defined in the 1940 Act) of the Fund.


                                      -43-
<PAGE>


All Funds except the Tax-Exempt Fund:

                  The following policies and limitations supplement those
described in the Prospectus and this SAI. Investment restrictions numbered 1
through 10 below have been adopted by the Trust as fundamental policies of all
the Funds, except the Tax-Exempt Fund. Investment restrictions 11 through 17 are
not fundamental policies and may be changed by a vote of the Board at any time.

                  1. No Fund may borrow money, except that the Small-Cap Growth
Fund, Small-Cap Value Fund, the Value Equity Fund, the Europe Fund, the Emerging
Markets Fund, the High Yield Fund, the Government Securities Fund and the Money
Market Fund may enter into reverse repurchase agreements, and except that each
Fund may borrow from banks for temporary or emergency (not leveraging) purposes,
including the meeting of redemption requests and cash payments of dividends and
distributions that might otherwise require the untimely disposition of
securities, in an amount not to exceed 33-1/3% of the value of the Fund'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 of 5% or more of a Fund's total assets are outstanding, including
reverse repurchase agreements, the Fund will not make any additional
investments.

                  2. No Fund may lend its assets or money to other persons,
except through (a) purchasing debt obligations, (b) lending portfolio securities
in an amount not to exceed 30% of the Fund's assets taken at market value, (c)
entering into repurchase agreements (d) trading in financial futures contracts,
index futures contracts, securities indexes and options on financial futures
contracts, options on index futures contracts, options on securities and options
on securities indexes and (e) entering into variable rate demand notes.

                  3. No Fund, other than the International Income Fund, may
purchase securities (other than Government Securities) of any issuer if, as a
result of the purchase, more than 5% of the Fund's total assets would be
invested in the securities of the issuer, except that (a) up to 25% of the value
of the total assets of each Fund, other than the Money Market Fund, may be
invested without regard to this limitation, and (b) the Money Market Fund may
invest more than 5% of its total assets in the securities of an issuer to the
extent permitted by Rule 2a-7 under the 1940 Act. All securities of a foreign
government and its agencies will be treated as a single issuer for purposes of
this restriction.

                  4. No Fund, other than the International Income Fund, may
purchase more than 10% of the voting securities of any one issuer, or more than
10% of the outstanding securities of any class of issuer, except that (a) this
limitation is not applicable to a Fund's investments in Government Securities
and (b) up to 25% of the value of the assets of a Fund, other than the Money
Market Fund, may be invested without regard to these 10% limitations. All
securities of a foreign government and its agencies will be treated as a single
issuer for purposes of this restriction.

                  5. No Fund may invest more than 25% of the value of its total
assets in securities of issuers in any one industry. For purposes of this


                                      -44-
<PAGE>

restriction, the term industry will be deemed to include (a) the government of
any one country other than the United States, but not the U.S. Government and
(b) all supranational organizations. In addition, securities held by the Money
Market Fund that are issued by domestic banks are excluded from this
restriction.

                  6. No Fund may underwrite any issue of securities, except to
the extent that the sale of portfolio securities in accordance with the Fund's
investment objective, policies and limitations may be deemed to be an
underwriting, and except that the Fund may acquire securities under
circumstances in which, if the securities were sold, the Fund might be deemed to
be an underwriter for purposes of the Securities Act of 1933, as amended (the
"1933 Act").

                  7. No Fund may purchase or sell real estate or real estate
limited partnership interests, or invest in oil, gas or mineral leases, or
mineral exploration or development programs, except that a Fund may (a) invest
in securities secured by real estate, mortgages or interests in real estate or
mortgages, (b) purchase securities issued by companies that invest or deal in
real estate, mortgages or interests in real estate or mortgages, (c) engage in
the purchase and sale of real estate as necessary to provide it with an office
for the transaction of business or (d) acquire real estate or interests in real
estate securing an issuer's obligations, in the event of a default by that
issuer.

                  8. No Fund may make short sales of securities or maintain a
short position, unless at all times when a short position is open, the Fund owns
an equal amount of the securities or securities convertible into or exchangeable
for, without payment of any further consideration, securities of the same issue
as, and equal in amount to, the securities sold short.

                  9. No Fund may purchase securities on margin, except that a
Fund 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,
financial futures contracts or related options, and options on securities,
options on securities indexes and options on currencies will not be deemed to be
a purchase of securities on margin by a Fund.

                  10. No Fund may invest in commodities, except that each Fund
(other than the Money Market Fund) may invest in futures contracts (including
financial futures contracts, index futures contracts or securities index futures
contracts) and related options and other similar contracts (including foreign
currency forward, futures and options contracts) as described in this Statement
of Additional Information and in the Prospectus.

                  11. No Fund may purchase or sell put options, call options,
spreads or combinations of put options, call options and spreads, except that
(a) each Fund, other than the Money Market Fund, may purchase and sell covered
put and call options on securities and stock indexes and futures contracts and
options on futures contracts and (b) the Money Market Fund may acquire "puts"
and "unconditional puts" as defined in Rule 2a-7 under the 1940 Act.



                                      -45-
<PAGE>

                  12. No Fund may purchase securities of other investment
companies, other than a security acquired in connection with a merger,
consolidation, acquisition, reorganization or offer of exchange and except as
otherwise permitted under the 1940 Act.

                  13.  No Fund  may  invest  in  companies  for the  purpose  of
exercising control or management.

                  14. No Fund may purchase warrants (other than warrants
acquired by the Fund as part of a unit or attached to securities at the time of
purchase) if, as a result, the investments (valued at the lower of cost or
market) would exceed 5% of the value of the Fund's net assets. For purposes of
this restriction, warrants acquired by a Fund in units or attached to securities
may be deemed to be without value. The Money Market Fund may not invest in any
form of warrants.

                  15. No Fund may purchase illiquid securities if more than 15%
of the total assets of the Fund would be invested in illiquid securities; the
Money Market Fund will not purchase illiquid securities. For purposes of this
restriction, illiquid securities are securities that cannot be disposed of by a
Fund within seven days in the ordinary course of business at approximately the
amount at which the Fund has valued the securities.

                  16. No Fund may purchase restricted securities if more than
10% of the total assets of the Fund would be invested in restricted securities.
Restricted securities are securities that are subject to contractual or legal
restrictions on transfer, excluding for purposes of this restriction, restricted
securities that are eligible for resale pursuant to Rule 144A under the 1933 Act
("Rule 144A Securities"), that have been determined to be liquid by the Board
based upon the trading markets for the securities.

                  17. No Fund may issue senior securities except as otherwise
permitted by the 1940 Act and as otherwise permitted herein.

The Tax-Exempt Fund:

                  Investment restrictions numbered 1 through 9 below have been
adopted by the Trust as fundamental policies of the Tax-Exempt Fund. Investment
restrictions 10 through 15 are not fundamental policies and may be changed by a
vote of the Board at any time. The Tax-Exempt Fund may not:

                  1.  Purchase  more than 10% of any class of  securities of any
one issuer (except Government  Securities and securities fully collateralized by
Government Securities).

                  2. Invest more than 5% of its total assets in the securities
of any one issuer (except for Government Securities and securities fully
collateralized by Government Securities, and options thereon).

                  3. Issue senior securities, as defined in the 1940 Act, except
as permitted by Section 18(f)(2) of that Act or as permitted by an SEC exemptive
order.

                  4. Borrow amounts in excess of 10% of its total assets and
then only as a temporary measure for extraordinary or emergency purposes. This
restriction shall not prohibit entry into reverse repurchase agreements if as a
result the Tax-Exempt Fund's current obligations under such agreements would not


                                      -46-
<PAGE>

exceed one-third of the current market value of its total assets (less its
liabilities other than under reverse repurchase agreements).

                  5. Purchase or sell real estate or real estate limited
partnership interests, or invest in oil, gas or mineral leases, or mineral
exploration or development programs, except that the Tax-Exempt Fund may (a)
invest in securities secured by real estate, mortgages or interests in real
estate or mortgages, (b) purchase securities issued by companies that invest or
deal in real estate, mortgages or interests in real estate or mortgages, (c)
engage in the purchase and sale of real estate as necessary to provide it with
an office for the transaction of business or (d) acquire real estate or interest
in real estate securing an issuer's obligations, in the event of a default by
that issuer.

                  6. Invest in commodities, except that the Tax-Exempt Fund may
invest in futures contracts (including financial futures contracts, index
futures contracts or securities index futures contracts) and related options and
other similar contracts (including foreign currency forward, futures and options
contracts) as described in this Statement of Additional Information and in the
Prospectus.

                  7. Make loans, except that this restriction shall not prohibit
the purchase and holding of a portion of an issue of publicly distributed debt
securities, the lending of portfolio securities (not more than 5% of the
Tax-Exempt Fund's net assets), the entry into repurchase agreements (not more
than one-third of the current market value of the Tax-Exempt Fund's total assets
shall constitute secured "loans" by the Tax-Exempt Fund under repurchase
agreements), trading in financial futures contracts, index futures contracts,
securities indexes and options on financial futures contracts, options on index
futures contracts, options on securities and options on securities indexes and
investing in variable rate demand notes.

                  8. Invest more than 25% of the value of the Tax-Exempt Fund's
total assets in securities of issuers in any one industry, except securities
issued or guaranteed by a state, municipality or other political subdivision,
unless the securities are backed only by the assets and revenues of
non-governmental users. For purposes of this restriction, the term industry will
be deemed to include (a) the government of any one country other than the United
States, but not the U.S. Government, and (b) all supranational organizations.

                  9. Underwrite any issue of securities, except to the extent
that the sale of portfolio securities in accordance with the Tax-Exempt Fund's
investment objective, policies and limitations may be deemed to be an
underwriting, and except that the Tax-Exempt Fund may acquire securities under
circumstances in which, if the securities were sold, the Tax-Exempt Fund might
be deemed to be an underwriter for purposes of the 1933 Act.

                  10. Invest in the securities of an issuer for the purpose of
exercising control or management, but the Tax-Exempt Fund may do so where it is
deemed advisable to protect or enhance the value of an existing investment.

                  11. Purchase securities of any other investment company,
except in the open market in a transaction involving no commission or profit to


                                      -47-
<PAGE>

a sponsor or dealer (other than the customary brokerage commission) and only to
the extent of 10% of the Tax-Exempt Fund's assets or as part of a merger,
consolidation, acquisition, reorganization or offer of exchange and except as
otherwise permitted under the 1940 Act.

                  12. Purchase restricted securities if more than 10% of the
total assets of the Tax-Exempt Fund would be invested in restricted securities.
Restricted securities are securities that are subject to contractual or legal
restrictions on transfer, excluding, for purposes of this restriction,
repurchase agreements having less than seven days to maturity, reverse
repurchase agreements, firm commitment agreements, futures contracts and options
thereon, and Rule 144A Securities that have been determined to be liquid by the
Board based upon the trading markets for the securities.

                  13. Purchase securities on margin, except any short-term
credits which may be necessary for the clearance of transactions and the initial
or maintenance margin in connection with options and futures contracts and
related options.

                  14. Make short sales of securities, unless the Tax-Exempt Fund
owns an equal amount of the securities or securities convertible into or
exchangeable without further consideration for securities of the same issue as
the securities sold short; provided that this restriction shall not prohibit the
use of options and futures contracts for hedging purposes.

                  15. Purchase any security while borrowings representing more
than 5% of the Tax-Exempt Fund's net assets (including loans, reverse repurchase
agreements or other borrowings) are outstanding.

Notes to Investment Restrictions

                  With respect to investment restriction No. 12 (No. 11 in the
case of the Tax-Exempt Fund), investments by the Funds (other than the Money
Market Fund) in the Investment Fund is not considered an investment in another
investment company for purposes of this restriction.

                  The percentage limitations in the restrictions listed above
apply at the time of purchases of securities. For purposes of investment
restriction No. 5 (No. 8 in the case of the Tax-Exempt Fund), the Trust may use
the industry classifications reflected by the S&P 500 Composite Stock Index, if
applicable at the time of determination. For all other portfolio holdings, the
Trust may use the Directory of Companies Required to File Annual Reports with
the SEC and Bloomberg Inc. In addition, the Trust may select its own industry
classifications, provided such classifications are reasonable.



                                      -48-
<PAGE>

                       PORTFOLIO TRANSACTIONS AND TURNOVER

                  Decisions to buy and sell securities for each Fund are made by
the Investment Manager, subject to review by the Board. Transactions on domestic
stock exchanges and some foreign stock exchanges involve the payment of
negotiated brokerage commissions. On exchanges on which commissions are
negotiated, the cost of transactions may vary among different brokers. On many
foreign exchanges, commissions are fixed and may be higher than for securities
traded on U.S. exchanges. Generally, no stated commissions are applicable to
securities traded in U.S. over-the-counter markets, but the prices of those
securities include undisclosed commissions or mark-ups. The cost of securities
purchased from underwriters include an underwriting commission or concession,
and the prices at which securities are purchased from and sold to dealers
include a dealer's mark-up or mark-down. Government Securities generally will be
purchased on behalf of a Fund from underwriters or dealers, although certain
newly issued Government Securities may be purchased directly from the U.S.
Treasury or from the issuing agency or instrumentality.

The following table shows the total amount of brokerage commissions paid by each
Fund over the past three fiscal years. Variations in the amount of brokerage
commissions paid by a Fund from year to year may result from changing asset
levels, market conditions or changes in the Investment Manager's outlook.


<TABLE>
<CAPTION>
----------------------------------      -------------    -------------  --------------
Fund                                     Year ended      Year ended      Year ended
                                        September 30,    September 30,   September 30,
                                           2000             1999            1998
----------------------------------      -------------    -------------  --------------
<S>                                     <C>             <C>             <C>
U.S. Equity                                               $603,739        $347,560
----------------------------------        --------        --------        --------
Premier Growth                                            $ 88,942        $ 45,824
----------------------------------        --------        --------        --------
Value Equity                                              $ 63,854        $ 53,784
----------------------------------        --------        --------        --------
Mid-Cap Growth                                            $ 46,906        $ 29,220
----------------------------------        --------        --------        --------
Mid-Cap Value                                             $ 22,182             N/A
----------------------------------        --------        --------        --------
Small-Cap Value                                           $203,737             N/A
----------------------------------        --------        --------        --------
Global Equity                                             $154,978        $196,841
----------------------------------        --------        --------        --------
International Equity                                      $141,546        $261,481
----------------------------------        --------        --------        --------
Europe Equity                                             $ 37,935             N/A
----------------------------------        --------        --------        --------
Emerging Markets Equity                                   $ 89,704             N/A
----------------------------------        --------        --------        --------
Strategic Investment                                      $106,613        $135,540
----------------------------------        --------        --------        --------
</TABLE>




                                      -49-
<PAGE>

                  In selecting brokers or dealers to execute securities
transactions on behalf of a Fund, the Investment Manager seeks the most
favorable terms available under the circumstances ("best execution"). In
assessing the overall terms available to ensure best execution for any
transaction, the Investment Manager considers factors that it deems relevant,
including the breadth of the market in the security, the price of the security,
the financial condition and execution capability of the broker or dealer and the
reasonableness of the commission, if any, for the specific transaction and on a
continuing basis.

                  In addition, the investment advisory agreement between the
Trust and GEAM relating to each Fund authorizes the Investment Manager, on
behalf of the Fund, in selecting brokers or dealers to execute a particular
transaction and in evaluating the best overall terms available, to consider the
brokerage and research services (as those terms are defined in Section 28(e) of
the Securities Exchange Act of 1934) provided to the Fund and/or other accounts
over which the Investment Manager or its affiliates exercise investment
discretion. The fees under the investment advisory agreement relating to a Fund
will not be reduced by reason of the Fund's receiving brokerage and research
services. Such services include analyses and reports regarding issuers,
industries, economic trends, portfolio strategy, and may effect securities
transactions and perform certain functions related thereto. In addition, such
services may include advice concerning the advisability of investing in,
purchasing or selling securities and the availability of particular securities
or buyers or sellers of securities. The research services received from
broker-dealers that execute transactions on behalf of a Fund may be useful to
the Investment Manager in servicing that Fund as well as all of the Investment
Manager's accounts and not all of these services may be used in connection with
the particular Fund or Funds generating the commissions. Consistent with limits
established by the Federal Securities Laws, a Fund may pay a broker-dealer
commissions for agency transactions that exceed the amount of commissions
charged by other broker-dealers in recognition of their research and brokerage
services. In addition, subject to the overall policy of best execution, the
investment manager may consider sales of Fund shares in selecting brokers or
dealers to execute securities transactions on behalf of a Fund.


                  The following table shows the dollar amount of brokerage
commissions paid to firms that provided research and execution services and the
approximate dollar amount of transactions involved during the fiscal period
ended September 30, 2000.


<TABLE>
<CAPTION>
---------------------------------------- -------------------------------------- --------------------------------------
Fund                                     Commissions Paid to Firms for            Total Amount of Transactions for
                                         Brokerage and Research Services           Brokerage and Research Services
---------------------------------------- -------------------------------------- --------------------------------------
<S>                                      <C>                                    <C>
U.S. Equity

---------------------------------------- -------------------------------------- --------------------------------------
Premier Growth

---------------------------------------- -------------------------------------- --------------------------------------
Value Equity
</TABLE>



                                      -50-
<PAGE>


<TABLE>
<CAPTION>
---------------------------------------- -------------------------------------- --------------------------------------
Fund                                     Commissions Paid to Firms for            Total Amount of Transactions for
                                         Brokerage and Research Services           Brokerage and Research Services
---------------------------------------- -------------------------------------- --------------------------------------
<S>                                      <C>                                    <C>

---------------------------------------- -------------------------------------- --------------------------------------
Mid-Cap Growth

---------------------------------------- -------------------------------------- --------------------------------------
Mid-Cap Value

---------------------------------------- -------------------------------------- --------------------------------------
Global Equity

---------------------------------------- -------------------------------------- --------------------------------------
International Equity

---------------------------------------- -------------------------------------- --------------------------------------
Europe Equity

---------------------------------------- -------------------------------------- --------------------------------------
Emerging Markets Equity

---------------------------------------- -------------------------------------- --------------------------------------
Strategic Investment

---------------------------------------- -------------------------------------- --------------------------------------
</TABLE>


                  The Board periodically reviews the commissions paid by a Fund
to determine if the commissions paid over representative periods of time were
reasonable in relation to the benefits inuring to the Fund. Over-the-counter
purchases and sales on behalf of the Funds will be transacted directly with
principal market makers except in those cases in which better prices and
executions may be obtained elsewhere. A Fund will not purchase any security,
including Government Securities, during the existence of any underwriting or
selling group relating to the security of which any affiliate of the Fund or the
Investment Manager is a member, except to the extent permitted under rules,
interpretations or exemptions of the SEC.

                  The Investment Manager may select broker-dealers who are
affiliated with the Trust or the Investment Manager. All brokerage commissions
paid to affiliates will be fair and reasonable. The Board has determined that,
to the extent consistent with applicable provisions of the 1940 Act and rules
thereunder and procedures adopted by the Board, transactions for a Fund may be
executed through the Distributor, if, in the judgment of the Investment Manager,
the use of the Distributor is likely to result in price and execution at least
as favorable to the Fund as those obtainable through other qualified
broker-dealers, and if, in the transaction, the Distributor charges the Fund a
fair and reasonable rate consistent with that payable by the Fund to other
broker-dealers on comparable transactions. Under rules adopted by the SEC, the
Distributor generally may not execute transactions for a Fund on the floor of
any national securities exchange, but may effect transactions by transmitting
orders for execution providing for clearance and settlement, and arranging for
the performance of those functions by members of the exchange not associated
with the Distributor. The Distributor will be required to pay fees charged by
those persons performing the floor brokerage elements out of the brokerage
compensation that it receives from a Fund.


                  Certain of the Fund's investment strategies may result in the
Fund having a high portfolio turnover rate. Higher portfolio turnover may cause
a Fund to experience increased transaction costs, brokerage expenses and other
acquisition costs, and shareholders to incur increased taxes on their investment
in the Fund. The Investment Manager does not consider portfolio turnover rate a
limiting factor in making investment decisions on behalf of any Fund consistent


                                      -51-
<PAGE>

with the Fund's investment objective and policies. Variations in portfolio
turnover rate may be due to fluctuations in shareholder purchase, exchange and
redemption transactions, market conditions or changes in the Investment
Manager's outlook. The Money Market Fund may attempt to increase its yield by
trading to take advantage of short-term market variations, which trading would
result in the Fund's experiencing high portfolio turnover. Because purchases and
sales of money market instruments are usually effected as principal
transactions, however, this type of trading by the Money Market Fund will not
result in the Fund's paying higher brokerage commissions. The following table
provides the portfolio turnover rates for each Fund for the fiscal periods ended
September 30, 2000 September 30, 1999.




<TABLE>
<CAPTION>

---------------------------------------- -------------------------------------- --------------------------------------
Fund                                      Portfolio Turnover for Period Ended    Portfolio Turnover for Period Ended
                                                        9/30/00                                9/30/99

<S>                                      <C>                                    <C>
---------------------------------------- -------------------------------------- --------------------------------------
U.S. Equity                                                                                      46%
---------------------------------------- -------------------------------------- --------------------------------------
Premier Growth                                                                                   26%
---------------------------------------- -------------------------------------- --------------------------------------
Value Equity                                                                                     31%
---------------------------------------- -------------------------------------- --------------------------------------
Mid-Cap Growth                                                                                   48%
---------------------------------------- -------------------------------------- --------------------------------------
Mid-Cap Value                                                                                    17%
---------------------------------------- -------------------------------------- --------------------------------------
Small-Cap Value                                                                                 182%
---------------------------------------- -------------------------------------- --------------------------------------
Global Equity                                                                                    64%
---------------------------------------- -------------------------------------- --------------------------------------
International Equity                                                                             51%
---------------------------------------- -------------------------------------- --------------------------------------
Europe Equity                                                                                    47%
---------------------------------------- -------------------------------------- --------------------------------------
Emerging Markets Equity                                                                          59%
---------------------------------------- -------------------------------------- --------------------------------------
Fixed Income                                                                                    246%
---------------------------------------- -------------------------------------- --------------------------------------
Government Securities                                                                           101%
---------------------------------------- -------------------------------------- --------------------------------------
Short-Term Government                                                                           118%
---------------------------------------- -------------------------------------- --------------------------------------
Tax-Exempt                                                                                       48%
---------------------------------------- -------------------------------------- --------------------------------------
High Yield                                                                                       27%
---------------------------------------- -------------------------------------- --------------------------------------
Strategic Investment                                                                            109%
---------------------------------------- -------------------------------------- --------------------------------------
Money Market                                                                                     N/A
---------------------------------------- -------------------------------------- --------------------------------------

</TABLE>


                                      -52-

<PAGE>



                             MANAGEMENT OF THE TRUST

Trustees and Officers

                  The Board of Trustees oversees the business affairs of the
Trust. The Trustees approve all significant agreements between the Trust and the
persons and companies that furnish services to the Funds, including agreements
with the Funds' investment adviser and administrator, distributor, custodian and
transfer agent. The day-to-day operations of the Funds have been delegated to
GEAM.

                  The names of the Trustees and executive officers of the Trust,
their addresses and their principal occupations during the past five years and
their other affiliations are shown below. Each person named as a Trustee also
may serve in a similar capacity for other Funds advised by GEAM. The executive
officers of the Trust are employees of organizations that provide services to
the Funds. An asterisk appears before the name of each Trustee who is an
"interested person" of the Trust, as defined in the 1940 Act. The business
address of each Trustee and executive officer who is an "interested person" (as
defined in the 1940 Act) is 3003 Summer Street, Stamford, Connecticut 06905.


<TABLE>
<CAPTION>

                                 Position(s) Held       Age and Principal Occupation(s)
Name and Address                 With Trust             During Past Five Years
----------------                 -----------------      --------------------------------
<S>                             <C>                   <C>

*Michael J. Cosgrove             Chairman of the        Age 51.  President, GE Asset Management Services of GE
                                 Board and President    Financial Assurance Holdings, Inc. ("GEFA"), an indirect
                                                        wholly-owned subsidiary of General Electric Company ("GE"), since
                                                        February 1997; Vice President, GE Capital Corporation, an indirect
                                                        wholly-owned subsidiary of GE, since December 1999, Executive Vice
                                                        President - Mutual Funds of GEAM, a wholly-owned subsidiary of GE that
                                                        is registered as an investment adviser under the Investment Advisers
                                                        Act of 1940, as amended, since March 1993; Director of GEAM since 1988;
                                                        from 1988 until 1993, Mr. Cosgrove served as Executive Vice President -
                                                        Finance and Administration of GEAM; Chairman of the Board, Chief
                                                        Executive Officer and President of GE Investment Distributors, Inc., a
                                                        registered broker-dealer, since 1993; Chairman of the Board and Chief
                                                        Executive Officer of GE Investment Retirement Services, Inc., since
                                                        1998.

*Alan M. Lewis                   Trustee and            Age 54.  Executive Vice President, General Counsel and
                                 Executive Vice         Secretary of GEAM since 1988.
                                 President
</TABLE>


                                      -53-

<PAGE>


<TABLE>
<CAPTION>

                                 Position(s) Held       Age and Principal Occupation(s)
Name and Address                 With Trust             During Past Five Years
----------------                 -----------------      --------------------------------
<S>                             <C>                   <C>

John R. Costantino               Trustee                Age 54.  Managing Director, Walden  Partners, Ltd.,
150 East 58th Street                                    consultants and investors, since August 1992; President, CMG
New York, NY 10055                                      Acquisition Corp., Inc., a holding company, since 1988; Vice
                                                        Chairman, Acoustiguide Holdings, Inc., a holding company,
                                                        since 1989; President CMG/IKH, Inc., a holding company, since
                                                        1991; Director, Crossland Federal Savings Bank, a financial
                                                        institution; Director, Brooklyn Bankcorp, Inc., a financial
                                                        institution; Director, IK Holdings, Inc., a holding company
                                                        since 1991; Director, I. Kleinfeld & Son, Inc., a retailer,
                                                        since 1991; Director, High Performance Appliances, Inc., a
                                                        distributor of kitchen appliances ("HPA"), since 1991;
                                                        Director, HPA Hong Kong, Ltd., a service subsidiary of HPA,
                                                        since 1991; Director, Lancit Media Productions, Ltd., a
                                                        children's and family television film and videotape
                                                        production company, since 1995.

William J. Lucas                 Trustee                Age 53.  Vice President and Treasurer of Fairfield University
Fairfield University                                    since 1983.
North Benson Road
Fairfield, CT 06430

Robert P. Quinn                  Trustee                Age 64.  Retired since 1983 from Salomon Brothers Inc.;
45 Shinnecock Road                                      Director, GP Financial Corp., a holding company, since 1994;
Quogue, NY 11959                                        Director, The Greenpoint Savings Bank, a financial
                                                        institution, since 1987.

Michael Tansley                  Treasurer              Age 36.  Manager of Fund Administration at GEAM since May
                                                        1998; from 1990  to May 1998, Mr. Tansley held various
                                                        positions in the Investment Company Services Group of
                                                        PricewaterhouseCoopers LLP, New York (formerly Price
                                                        Waterhouse LLP).

Matthew J. Simpson               Secretary              Age 39.  Vice President and General Counsel, Asset Management
                                                        Services Group of GEFA since February 1997; Vice President,
                                                        Associate General Counsel and Assistant Secretary of GEAM
                                                        since October 1992.
</TABLE>

                                      -54-
<PAGE>


No employee of GE or any of its affiliates receives any compensation from the
Trust for acting as a Trustee or officer of the Trust. Each Trustee of the Trust
who is not a director, officer or employee of GEAM, GEID, GE, or any affiliate
of those companies, receives an annual fee of $10,000 for services as Trustee.
In addition, each Trustee receives $500 for each meeting of the Board attended
by the Trustee and is reimbursed for expenses incurred in connection with
attendance at Board meetings.

Trustees' Compensation
(for the fiscal year ended September 30, 2000)


<TABLE>
<CAPTION>

                                                                                Total Compensation from
                                                  Total Compensation            Investment Companies
Name of Trustee                                     From the Trust              Managed by GEAM or GEIC
---------------                                   ------------------            -----------------------
<S>                                             <C>                            <C>

Michael J. Cosgrove                                         None                                 None+
Alan M. Lewis                                               None                                 None+
John R. Costantino                                             $                                   $++
William J. Lucas                                               $                                   $++
Robert P. Quinn                                                $                                   $++
-----------------------
</TABLE>


+     As of September 30, 2000, Mr. Cosgrove served as Trustee or Director of
      twelve investment companies advised by GEAM. Mr. Lewis serves as Trustee
      of eleven investment companies advised by GEAM. They are considered to be
      interested persons of each investment company advised by GEAM, as defined
      under Section 2(a)(19) of the 1940 Act, and, accordingly, serve as
      Trustees thereof without compensation.

++    As of September 30, 2000, Messrs. Costantino, Lucas and Quinn served as
      Trustees or Directors of four investment companies advised by GEAM and the
      compensation is for their services as Trustees or Directors of these
      companies.

Investment Adviser and Administrator

                  GEAM serves as the Trust's investment adviser and
administrator. GEAM is registered as an investment adviser under the Investment
Advisers Act of 1940, as amended, and is located at 3003 Summer Street,
Stamford, Connecticut 06905. GEAM, which was formed under the laws of Delaware
in 1988, is a wholly owned subsidiary of GE. GE is a highly diversified
conglomerate comprised of 12 global manufacturing and service sector businesses.
GE's businesses include aircraft engines, appliances, capital services,
lighting, medical systems, broadcasting, plastic manufacturing, power systems,
electrical distribution and control systems, industrial control systems,
information services and transportation systems. GEAM currently provides
advisory services with respect to a number of other mutual funds and private
institutional accounts. The professionals responsible for the investment
operations of GEAM also provide investment advisory services with respect to
GE's pension and benefit plans and a number of funds offered exclusively to GE
employees, retirees and certain related persons.

                                      -55-
<PAGE>


These funds include the Elfun Family of Funds (the first of which, Elfun Trusts,
was established in 1935) and the funds offered as part of GE's 401(k) program
(also known as the GE Savings and Security Program), which are referred to as
the GE S&S Program Mutual Fund and the GE S&S Long Term Interest Fund. The
investment professionals at GEAM and its predecessors have managed GE's pension
assets since 1927. GEAM oversaw more than $[ ] billion and managed assets in
excess of $[ ] billion as of December 31, 2000, of which more than $[ ] billion
was invested in mutual fund assets.



                  Personnel of each of the Funds, GE Asset Management, and GE
Investment Distributors, Inc. are subject to a code of ethics, pursuant to Rule
17j-1 under the 1940 Act, which establishes procedures for personal investing
and restricts certain transactions by persons subject to the code. Personnel
subject to the code of ethics are permitted to invest in securities, including
securities that may be purchased or held by a Fund, if they follow procedures
outlined in the code.

GEAM Investment Advisory and Administration Agreements

                  The duties and responsibilities of GEAM are specified in
investment advisory and administration agreements (each, an "Advisory Agreement"
and collectively, the "Advisory Agreements") between GEAM and the Trust on
behalf of the respective Funds. Under each Advisory Agreement, GEAM, subject to
the supervision of the Trust's Board of Trustees, provides a continuous
investment program for the relevant Fund's assets, including investment research
and management. GEAM determines from time to time what investments are
purchased, retained or sold by the Fund and places purchase and sale orders for
the Fund's investments. GEAM provides the Trust with all executive,
administrative, clerical and other personnel necessary to operate each Fund, and
pays salaries and other employment-related costs of employing these persons.
GEAM furnishes the Trust and each Fund with office space, facilities, and
equipment and pays the day-to-day expenses related to the operation of such
space, facilities and equipment. GEAM, as administrator, also: (a) maintains the
books and records of each Fund; (b) prepares reports to shareholders of each
Fund; (c) prepares and files tax returns for each Fund; (d) assists with the
preparation and filing of reports and the Trust's registration statement with
the SEC; (e) provides appropriate officers for the Trust; (f) provides
administrative support necessary for the Board of Trustees to conduct meetings;
and (g) supervises and coordinates the activities of other service providers,
including independent auditors, legal counsel, custodians, accounting service
agents and transfer agents.

                  GEAM is generally responsible for employing sufficient staff
and consulting with other persons that it determines to be necessary or useful
in the performance of its obligations under each Advisory Agreement. Each
Advisory Agreement obligates GEAM to provide services in accordance with the
relevant Fund's investment objective, policies and restrictions as stated in the
Trust's current registration statement, as amended from time to time, and to
keep the Trust informed of developments materially affecting that Fund,
including furnishing the Trust with whatever information and reports the Board
of Trustees reasonably requests.



                                      -56-
<PAGE>

                  Each Advisory Agreement provides that GEAM may render similar
advisory and administrative services to other clients so long as when a Fund or
any other client served by GEAM are prepared to invest in or desire to dispose
of the same security, available investments or opportunities for sales will be
allocated in a manner believed by GEAM to be equitable to the Fund. The Advisory
Agreements also provide that GEAM shall not be liable for any error of judgment
or mistake of law or for any loss incurred by a Fund in connection with GEAM's
services pursuant to the Agreement, except for a loss resulting from willful
misfeasance, bad faith or gross negligence in the performance of its duties or
from reckless disregard of its obligations and duties under the Agreement.

                  Each Advisory Agreement is effective from its date of
execution, and continues in effect for an initial two-year term and will
continue from year to year thereafter so long as its continuance is approved
annually by (a) the Board of Trustees or (b) a vote of a majority of the
relevant Fund's outstanding voting securities, provided that in either event the
continuance also is approved by the vote of a majority of the Trustees who are
not parties to the Agreement or interested persons, as such term is defined in
the 1940 Act, of any party to the Agreement by a vote cast in person at meeting
called for the purpose of voting on such approval.

                  Each Advisory Agreement is not assignable and may be
terminated without penalty by either the Trust or GEAM upon no more than 60
days' nor less than 30 days' written notice to the other or by vote of holders
of a majority of the relevant Fund's outstanding voting securities.

                  The agreements governing the investment advisory services
furnished to the Trust by GEAM provide that, if GEAM ceases to act as the
investment adviser to the Trust, at GEAM's request, the Trust's license to use
the initials "GE" will terminate and the Trust will change the name of the Trust
and the Funds to a name not including the initials "GE."

Investment Advisory Fees

                  The Funds pay GEAM fees for advisory and administration
services provided under the Advisory Agreements that are accrued daily and paid
monthly at the following annual rates based upon the value of the Funds' average
daily net assets: the Premier Fund -- 0.60%, Premier Research Fund -- 0.70%,
Premier International Fund -- 0.80%, Premier Value Fund -- 0.60%, the U.S.
Equity Fund -- 0.40%, the Small-Cap Value Fund -- 0.70%, S&P 500 Index Fund --
0.30%, the Mid-Cap Growth Fund -- 0.60%, the Mid-Cap Value Fund -- 0.80%, the
Value Equity Fund -- 0.55%, the Global Fund -- 0.75%, the International Fund --
0.80%, the Europe Equity Fund -- 1.05%, the Emerging Markets Fund -- 1.20%, the
Strategic Fund -- 0.35%, the Tax-Exempt Fund -- 0.35%, the High Yield Fund --
0.60%, the Income Fund -- 0.35%, the Government Securities Fund -- 0.40%, the
Short-Term Government Fund -- 0.30% and the Money Market Fund -- 0.25%.

                  GEAM has agreed to waive or reimburse the Funds for operating
expenses that exceed specified limits (exclusive of interest, taxes, securities
lending fees, brokerage commissions and extraordinary expenses). GEAM retains
the right to be repaid for these expense reimbursements to the extent that a
Fund's expenses fall below the limit. Expense reimbursements by GEAM will
increase a Fund's return and repayment of the expense reimbursement by a Fund
will lower its return. The following table provides total investment advisory
and administration fees paid by each Fund, and, where applicable, total fees and
expenses waived for the last three fiscal years.

                                      -57-

<PAGE>


<TABLE>
<CAPTION>

------------------ ---------------- ---------------- --------------- ---------------- ---------------- ---------------
Fund               Total Fees for   Fees and         Total Fees      Fees and         Total Fees for   Fees and
                   Fiscal Year      expenses         for Fiscal      expenses         Fiscal Year      expenses
                   ended 9/30/00    waived 9/30/00   Year ended      waived 9/30/99   ended 9/30/98    waived 9/30/98
                                                     9/30/99
------------------ ---------------- ---------------- --------------- ---------------- ---------------- ---------------
<S>                <C>              <C>             <C>            <C>              <C>              <C>
U.S. Equity                                          $2,639,031      $137,157         $1,859,219       $305,619
------------------ ---------------- ---------------- --------------- ---------------- ---------------- ---------------
Premier Growth                                       $   392,543     $   4,986        $   143,798      $  11,424
------------------ ---------------- ---------------- --------------- ---------------- ---------------- ---------------
Value Equity                                         $   427,255     $   8,803        $343,640         $3,378
------------------ ---------------- ---------------- --------------- ---------------- ---------------- ---------------
Mid-Cap Growth                                       $   226,763     $ 29,544         $251,052         $18,322
------------------ ---------------- ---------------- --------------- ---------------- ---------------- ---------------
Mid-Cap Value                                        $   67,241      $ 39,172         N/A              N/A
------------------ ---------------- ---------------- --------------- ---------------- ---------------- ---------------
Small-Cap Value                                      $   135,264     $ 57,123         N/A              N/A
------------------ ---------------- ---------------- --------------- ---------------- ---------------- ---------------
Global Equity                                        $   430,835     $ 14,910         $405,430         $13,686
------------------ ---------------- ---------------- --------------- ---------------- ---------------- ---------------
Interna-                                             $   420,497     $ 23,259         $513,776         $18,400
tional Equity
------------------ ---------------- ---------------- --------------- ---------------- ---------------- ---------------
Europe Equity                                        $   72,259      $ 35,207         N/A              N/A
------------------ ---------------- ---------------- --------------- ---------------- ---------------- ---------------
Emerging Markets                                     $   103,321     $ 33,445         N/A              N/A
Equity
------------------ ---------------- ---------------- --------------- ---------------- ---------------- ---------------
Fixed Income                                         $   461,197     $38,513          $322,161         $24,174
------------------ ---------------- ---------------- --------------- ---------------- ---------------- ---------------
Government                                           $1,483,393      $144,751         $1,895,373       $68,899
Securities
------------------ ---------------- ---------------- --------------- ---------------- ---------------- ---------------
Short-Term                                           $   77,782      $   83,078       $72,503          $59,817
Government
------------------ ---------------- ---------------- --------------- ---------------- ---------------- ---------------
Tax-Exempt                                           $   107,280     $   48,378       $91,406          $35,084
------------------ ---------------- ---------------- --------------- ---------------- ---------------- ---------------
High Yield                                           $   94,653      $   45,089         N/A              N/A
------------------ ---------------- ---------------- --------------- ---------------- ---------------- ---------------
Strategic                                            $   611,538           --         $478,553            $0
Investment
------------------ ---------------- ---------------- --------------- ---------------- ---------------- ---------------
Money Market                                         $   436,186     $   20,979       $308,751         $18,762
------------------ ---------------- ---------------- --------------- ---------------- ---------------- ---------------
</TABLE>




                                      -58-
<PAGE>

Sub-Investment Advisers

                  Each Advisory Agreement permits GEAM, subject to the approval
of the Board of Trustees and other applicable legal requirements, to enter into
any advisory or sub-advisory agreement with affiliated or unaffiliated entities
whereby such entity would perform some or all of GEAM's responsibilities under
the Advisory Agreement. In this event, GEAM remains responsible for ensuring
that these entities perform the services that each undertakes pursuant to a
sub-advisory agreement. GEAM has engaged the following sub-advisers to manage
certain of the Funds.



                  Small-Cap Value Fund. Palisade Capital Management, L.L.C.
("Palisade"), located at One Bridge Plaza, Fort Lee, New Jersey 07024, has been
retained by GEAM to act as sub-investment adviser of the Small-Cap Value Fund.
Pursuant to the sub-investment advisory agreement between Palisade and GEAM,
Palisade bears all expenses in connection with the performance of its services
as the Small-Cap Value Fund's sub-investment adviser. Although Palisade has no
previous experience managing mutual fund portfolios, Palisade has managed
various institutional and private accounts. For its services as sub-investment
adviser to the Small-Cap Value Fund, GEAM (and not the Fund) pays Palisade a fee
equal to an annual rate of .45% of the first $25 million of the Fund's average
daily net assets, .40% of the next $50 million, .375% of the next $100 million
and .35% of amounts in excess of $175 million.

                  High Yield Fund. Miller Anderson & Sherrerd, LLP ("MAS"),
located at One Tower Bridge, West Conshohocken, PA 19428, has been retained to
act as sub-investment adviser of the High Yield Fund. MAS is wholly-owned by
indirect subsidiaries of Morgan Stanley Dean Witter & Co. Pursuant to the
sub-investment advisory agreement between MAS and GEAM, MAS bears all expenses
in connection with the performance of its services as the High Yield Fund's
sub-investment adviser. For its services as sub-investment adviser to the High
Yield Fund, GEAM (and not the Fund) pays MAS a fee equal to an annual rate of
 .375% of the Fund's average daily net assets.




                                      -59-
<PAGE>

                  S&P 500 Index Fund. GEAM has retained State Street Global
Advisors ("SSGA"), a division of State Street Bank and Trust Company ("State
Street"), as sub-adviser to the S&P 500 Index Fund. SSGA and State Street are
located at Two International Place, Boston, Massachusetts 02110. State Street is
a wholly-owned subsidiary of State Street Corporation, a publicly held bank
holding company. For SSGA's services, GEAM (and not the Fund) pays SSGA monthly
compensation in the form of an investment sub-advisory fee. The fee is paid by
GEAM monthly and is a percentage of the average daily net assets of the Fund at
the annual rate of .05% of the first $100 million, .04% of the next $200 million
and .03% for all amounts over $300 million.

Sub-Advisory Agreements


                  SSGA, Palisade and MAS serve as sub-advisers to the S&P 500
Index Fund, the Tax-Exempt Fund, the Small-Cap Value Fund, and the High Yield
Fund respectively, pursuant to sub-advisory agreements with GE Asset Management
(the "Sub-Advisory Agreements"). Each of the Sub-Advisory Agreements is not
assignable and may be terminated without penalty by either the sub-adviser or GE
Asset Management upon 60 days' written notice to the other or by the Board of
Trustees, or by the vote of a majority of the outstanding voting securities of a
Fund, on 60 days' written notice to the sub-adviser. The Sub-Advisory Agreements
provide that the sub-adviser may render similar sub-advisory services to other
clients so long as the services that it provides under the Agreement are not
impaired thereby. The Sub-Advisory Agreements also provide that the investment
sub-adviser shall not be liable for any error of judgment or mistake of law or
for any loss incurred by the Fund except for a loss resulting from willful
misfeasance, bad faith or gross negligence in the performance of its duties or
from reckless disregard of its obligations and duties under the Sub-Advisory
Agreement.


Securities Activities of the Investment Manager

                  Securities held by the Funds also may be held by other funds
or separate accounts for which the Investment Manager acts as an adviser.
Because of different investment objectives or other factors, a particular
security may be bought by the Investment Manager for one or more of its clients,
when one or more other clients are selling the same security. If purchases or
sales of securities for a Fund or other client of the Investment Manager arise
for consideration at or about the same time, transactions in such securities
will be made, insofar as feasible, for the Fund and other clients in a manner
deemed equitable to all. To the extent that transactions on behalf of more than
one client of the Investment Manager during the same period may increase the
demand for securities being purchased or the supply of securities being sold,
there may be an adverse effect on price.

                  On occasions when the Investment Manager (under the
supervision of the Board of Trustees) deems the purchase or sale of a security
to be in the best interests of the Trust as well as other funds or accounts for
which the Investment Manager acts as an adviser, it may, to the extent permitted
by applicable laws and regulations, but will not be obligated to, aggregate the
securities to be sold or purchased for the Trust with those to be sold or
purchased for other funds or accounts in order to obtain favorable execution and
low brokerage commissions. In that event, allocation of the securities purchased
or sold, as well as the expenses incurred in the transaction, will be made by
the Investment Manager in the manner it considers to be most equitable and
consistent with its fiduciary obligations to the Trust and to such other funds
or accounts. In some cases this procedure may adversely affect the size the
position obtainable for a Fund.


                                      -60-
<PAGE>


Shareholder Servicing and Distribution Plans

                  The Trust has adopted Shareholder Servicing and Distribution
Plans (the "Plans") pursuant to Rule 12b-1 under the 1940 Act with respect to
each Fund other than the S&P 500 Index Fund and the Money Market Fund
("Participant Funds").

                  The annual fees payable with respect to each Class of a
Participant Fund are intended to compensate GE Investment Distributors, Inc.
("GEID") or enable GEID to compensate other persons ("Service Providers") for
providing ongoing servicing and/or maintenance of the accounts of shareholders
of the Participant Fund ("Shareholder Services") and to compensate GEID, or
enable GEID to compensate Service Providers, including any distributor of shares
of the Participant Fund, for providing services that are primarily intended to
result in, or that are primarily attributable to, the sale of shares of the
Participant Fund ("Selling Services"). Shareholder Services means all forms of
shareholder liaison services, including, among other things, one or more of the
following: providing Class A, Class B or Class C shareholders of a Participant
Fund with (i) information on their investments; (ii) general information
regarding investing in mutual funds; (iii) periodic newsletters containing
materials relating to the Participant Fund or to investments in general in
mutual funds; (iv) periodic financial seminars designed to assist in the
education of shareholders with respect to mutual funds generally and the
Participant Fund specifically; (v) access to a telephone inquiry center relating
to the Participant Fund; and other similar services not otherwise required to be
provided by the Trust's custodian or transfer agent. Selling Services include,
but are not limited to: the printing and distribution to prospective investors
in the Participant Fund of prospectuses and statements of additional information
that are used in connection with sales of Class A, Class B and Class C shares of
the Participant Fund; the preparation, including printing, and distribution of
sales literature and media advertisements relating to the Class A, Class B or
Class C shares of the Participant Fund; and distributing Class A, Class B or
Class C shares of the Participant Fund. In providing compensation for Selling
Services in accordance with the Plans, GEID is expressly authorized (1) to make,
or cause to be made, payments reflecting an allocation of overhead and other
office expenses related to the distribution of the Class A, Class B or Class C
shares of a Participant Fund; (2) to make, or cause to be made, payments to, or
to provide for the reimbursement of expenses of, persons who provide support
services in connection with the distribution of the Class A, Class B or Class C
shares of the Participant Fund; and (3) to make, or cause to be made, payments
to broker-dealers who have sold Class A, Class B or Class C shares of the
Participant Fund.

                  Payments under the Plans are not tied exclusively to the
expenses for shareholder servicing and distribution expenses actually incurred
by GEID or any Service Provider, and the payments may exceed expenses actually
incurred by GEID and/or a Service Provider. The Board evaluates the
appropriateness of the Plans and its payment terms on a continuing basis and in
doing so considers all relevant factors, including the types and extent of
Shareholder Services and Selling Services provided by GEID and/or Service
Providers and amounts GEID and/or Service Providers receive under the Plans.


                                      -61-
<PAGE>



                  Under the Plans, the Trust pays GEID, with respect to each
Participant Fund, (1) for shareholder servicing (and for Class A distribution
services) provided to Class A, Class B and Class C shares of the Participant
Fund, an annual fee of 0.25% of the value of the average daily net assets
attributed to Class A, Class B and Class C shares of the Participant Fund,
respectively and (2) for distribution services provided to Class B and Class C
shares of each Participant Fund other than the Short-Term Government Fund, an
annual fee of 0.75% of the value of the average daily net assets of the
Participant Fund; or in the case of the Short-Term Government Fund, an annual
fee of 0.60% and 0.75% of the value of the average daily net assets of Class B
and Class C, respectively.

                  Under their terms, the Plans continue from year to year,
provided their continuance is approved annually by vote of the Trust's full
Board, as well as by a majority of the Trustees who are not interested persons
of the Trust and who have no direct or indirect financial interest in the
operation of the Plans or in any agreements related to them (the "Independent
Trustees"). The Plans may not be amended to increase materially the amount of
the fees paid under the Plans with respect to a Fund without approval of
shareholders of the Fund. In addition, all material amendments of the Plans must
be approved by the Trustees and Independent Trustees in the manner described
above. The Plans may be terminated with respect to a Fund at any time, without
penalty, by vote of a majority of the Independent Trustees or by a vote of a
majority of the outstanding voting securities of a Fund (as defined in the 1940
Act).

                  During the fiscal period ended September 30, 2000, $[ ] was
paid to GEID for distribution and shareholder servicing. During that same
period, GEAM paid $[ ] as additional compensation to intermediaries for
distribution out of its own resources. The Funds did not bear the expense for
such additional compensation.


                  In addition to distribution and shareholder servicing fees
paid under the Plans, GEAM, GEID or their affiliates may, at their own expense,
compensate certain broker-dealers or other financial intermediaries for
marketing, shareholder servicing, recordkeeping and other services performed
with respect to the Funds, or any class of shares of the Funds. Such fees may,
but are currently not expected to, exceed 0.50% of the average annual value of
accounts with the Funds maintained by such financial intermediaries. The entity
making such payments may do so out of its profits, revenues or other sources.

Custodian, Transfer Agent and Dividend Paying Agent

                  State Street Bank and Trust Company ("State Street"), located
at 225 Franklin Street, Boston, Massachusetts 02101, serves as custodian and
transfer agent of the Funds' investments. Under its custodian contract with the
Trust, State Street is authorized to appoint one or more banking institutions as
subcustodians of assets owned by each Fund. For its custody services, State
Street receives monthly fees charged to the Funds based upon the month-end,
aggregate net asset value of the Funds, plus certain charges for securities
transactions. The assets of the Trust are held under bank custodianship in
accordance with the 1940 Act. As transfer agent, State Street is responsible for
processing purchase and redemption requests and crediting dividends to the
accounts of shareholders of the Funds.



                                      -62-
<PAGE>

Distributor

                  GE Investment Distributors, Inc., located at 777 Long Ridge
Road, Building B, Stamford, Connecticut 06927, serves as the distributor of Fund
shares on a continuing best efforts basis. Michael J. Cosgrove, a member of the
Trust's board of trustees, is the Chairman of the Board, Chief Executive Officer
and President of GEID.


                   PURCHASE, REDEMPTION AND EXCHANGE OF SHARES

Purchases

                  Shares are offered to investors at the offering price, based
on the NAV next determined after receipt of an investment in good order by State
Street Bank and Trust Company, the Trust's custodian and transfer agent. The
offering price is equal to NAV plus any applicable initial sales charge imposed
at the time of purchase, as described below.

                  GEID and other persons remunerated on the basis of sales of
shares may receive different levels of compensation for selling one Class of
shares over another. In addition, trail commissions of up to 0.25% may be paid
to authorized broker-dealers, financial institutions or investment advisers
which have entered into sales agreements with the GEID ("Authorized Firms") for
providing on-going services with respect to Class A and Class B shares and up to
1.00% for Class C shares.

                  Class A Shares. Class A shares are sold at NAV per share plus
a maximum initial sales charge imposed at the time of purchase as discussed in
the Prospectus. The sales charge is retained by GEID, although a portion of the
sales charge may be paid to registered representatives or other dealers that
enter into selected dealer agreements with the GEID. The initial sales charge
may be reduced or waived for certain purchases. No sales charge is imposed on
Class A shares purchased through reinvestment of dividends or capital gains
distributions. In addition, Class A shares are offered without any sales charge
with respect to:

                  (1) purchases of $1 million or more of Class A shares, (2)
purchases representing reinvestment of dividends and capital gains on Fund
shares, (3) all purchases by an employee retirement plan that seeks the
additional services provided to Class A Shareholders ("Class A Retirement
Plans"), which have 250 or more eligible employees, (4) all purchases by Class A
Retirement Plans, including Plans purchasing less than $1 million of Class A
shares of the Funds and which have less than 250 employees if such Plans
purchase Class A shares exclusively through GEID and not through an Authorized
Firm, (5) purchases directly by participants in defined contribution plans that
currently include the Funds as investment options, and who purchase shares
exclusively through GEID and not through an Authorized Firm, (6) all purchases
directly through GEID, (7) all purchases by officers, directors, employees and
registered representatives of Authorized Firms which have entered into sales
agreements with GEID or financial institutions through which shares of the Funds
are being offered or made available for sale,


                                      -63-
<PAGE>

(8) 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, GEAM or GEID, requiring the Trust, GEAM or GEID to compensate
the Financial Intermediary for administrative, subaccounting, transfer agency
and/or other services, (9) all purchases resulting from offerings made to
certain vendors of GE's employee retirement plan, including any subsequent
purchases by persons who invest through such offerings, provided that any such
person maintains an account with the Trust in its, his or her name at the time
of the subsequent purchase and the investment is made in that name, or as
custodian for a minor or in an IRA for the customer, (10) all purchases by
certain customers of GE who previously purchased Class A shares during a special
limited offering of such shares by GEID, provided that the customer maintains an
account with the Trust in its, his or her name at the time of the current
purchase and the investment is made in that name, or as custodian for a minor or
in an IRA for the customer, (11) all purchases by certain of the GE LifeStyle
Funds, a "fund of funds" vehicle designed to invest in certain classes of the
Funds (13) all purchases made through certain broker-dealers that have entered
into an agreement with GEID for sales to supplemental savings plans at a single
employer with 750 or more eligible investors when such purchases are made
through the Payroll Savings Plan or other systematic investment plan, and (14)
all purchases made through an account with a broker-dealer with which the
Distributor has an agreement for the use of GE Funds in particular investment
products or programs on a load-waived basis.

                  As a GE employee, you and your family members may purchase
Class A shares directly from GEID without paying the sales charge typically
associated with buying Class A shares of a Fund through an investment
professional. The term "GE Employee" includes (1) current holders of shares of a
Participant Fund or of the Money Market Fund that were issued and outstanding on
November 29, 1993 ("Existing Shares") who are not eligible to be holders of
Class Y shares, (2) any family member of a holder of Existing Shares, (3)
employee, retirees, officers or directors, in each case, whether investing
directly or through their IRA and (4) certain other persons who previously
purchased former Class C shares (in existence prior to October 1, 1999) during a
special limited offering of such shares by GEID, provided that the person
maintains an account with the Trust in its, his or her name at the time of such
additional purchase or exchange and the investment is made in that name, or as
custodian for a minor or in an individual retirement account for such person.
The term "family member" includes spouses and by reason of blood or marriage,
parents, children, siblings, grandparents and grandchildren. Also, for purposes
of this SAI, the term "employees, retirees, officers or directors of GE or an
affiliate of GE" includes (i) persons who are currently employed by GE or an
affiliate of GE (GE and its affiliates are hereinafter referred to as "GE"),
(ii) persons who have retired or will retire from GE, or (iii) persons who are
no longer employed by GE, but who have either retained a balance in the GE S&S
Program or a defined contribution plan sponsored by GE or an affiliate of GE or
were employed by GE for at least 20 consecutive years. Any holder of Existing
Shares falling within subcategory (1) above, who fully redeems his or her shares
or whose shares are redeemed in accordance with the involuntary redemption
procedure set out below, will not have the right to reinvest in without paying
the sales change. Eligible investors may purchase shares directly from GEID.


                                      -64-
<PAGE>


                  Reduced sales charges are available under a combined right of
accumulation under which an investor may combine (1) the value of Class A shares
held in the Participant Fund, (2) the value of Class A shares held in another
Participant Fund with respect to which the investor has previously paid, or is
subject to the payment of, a sales charge, and (3) the value of Class A shares
being purchased. For example, if an investor owns shares of the Global Fund and
the Strategic Fund that have an aggregate value of $92,000, and makes an
additional investment in Class A shares of the Global Fund of $15,000, the sales
charge applicable to the additional investment would be 3.25% rather than the
5.75% normally charged on a $15,000 purchase. In addition, Class A Retirement
Plans may include, as part of the calculation of accumulation benefits,
purchases of shares of the Money Market Fund and interests in other pooled
investment vehicles, which are made available to such investors and specified by
GEID as eligible for accumulation benefits in sales agreements with Authorized
Firms.

                  By completing the appropriate section of the account
application and by fulfilling a Letter of Intent ("LOI"), an investor purchasing
through an investment professional becomes eligible for the reduced sales load
applicable to the total number of Participant Fund Class A shares purchased in a
13-month period. By marking the LOI section on the account application and by
signing the account application, the investor indicates that he or she
understands and agrees to the terms of the LOI and is bound by the provisions
described below.

                  Each purchase of shares of a Participant Fund made during the
13-month period will be made subject to the sales charge applicable to a single
transaction of the total dollar amount indicated by the LOI, as described in the
tables set out in the Prospectus. It is the investor's responsibility at the
time of purchase to specify the account numbers that should be considered in
determining the appropriate sales charge and to indicate that the purchase is
pursuant to an LOI. The applicable sales charge may be further reduced pursuant
to the "right of accumulation" described above provided State Street is advised
of all other accounts at the time of the investment. Shares acquired through
reinvestment of dividends and capital gains distributions will not be applied to
the LOI. At any time during the 13-month period after meeting the original
obligation, an investor may revise his or her intended investment amount upward
by submitting a written and signed request. In such event, all subsequent
purchases will be treated as a new LOI (including escrow of additional Fund
shares) except that the original expiration date of the LOI will remain
unchanged. Purchases made within 90 days before signing an LOI may be applied
toward completion of the LOI provided State Street is advised of the date of the
first purchase to be applied toward the completion of the LOI. The LOI effective
date will be the date of the first purchase within the 90-day period. Sales
charges previously paid will not be adjusted or refunded.

                  Out of the initial purchase (or subsequent purchases, if
necessary), State Street will hold in escrow a portion of the amount specified
in the LOI in the form of Fund shares which will be used to cover the applicable
sales charge if the letter is not satisfied. All dividends and capital gains on
the escrowed shares will be credited to the investor's account. All shares
purchased, including those escrowed, will be registered in the investor's name.
If the total investment specified under the LOI is completed within the 13-month
period, the escrowed shares will be promptly released. If the total number of
shares purchased within the period exceeds the amount specified in the LOI, an
adjustment will be made to reflect further reduced sales charges applicable to
such purchases. The investor or Investment Professional must notify State Street
prior to investment of the additional amounts and should specify the appropriate
sales charge rate as described in the Prospectus. All such adjustments will be
made in the form of additional shares credited to the shareholder's account at
the then current offering price.

                                      -65-

<PAGE>

                  If the intended investment is not completed, an investor will
be requested to remit an amount equal to the difference between the sales load
actually paid and the sales load applicable to the aggregate purchases actually
made. If GEID does not receive such unpaid sales charge within 20 days, the
investor, by marking the LOI section on the account application, irrevocably
constitutes and appoints State Street as his or her attorney-in-fact to redeem
any and all escrowed shares sufficient to cover the unpaid sales charge. Full
shares and any cash proceeds for a fractional share remaining after such
redemptions will be released from escrow.

                  If at any time before completing the LOI, an investor wishes
to cancel the agreement, an investor must give written notice to GEID. GEID may
withdraw an investor's LOI privilege for future purchases if an investor
requests State Street to liquidate or transfer beneficial ownership of Fund
shares. An LOI does not bind an investor to purchase, or the Trust to sell, the
full amount indicated at the sales load in effect at the time of signing, but an
investor must complete the intended purchase to obtain the reduced sales load.

                  Class B Shares. Investors are able to purchase Class B shares
at their net asset value per share next determined after a purchase order is
received, without imposition of any sales charge. Class B shares are sold
subject to a maximum 4.00% CDSC as disclosed in the Prospectus. For each year of
investment, the applicable CDSC declines in accordance with the tables set out
in the Prospectus.

                  Six years after the date of purchase (eight years in the case
of shares acquired or exchanged from shares of Investors Trust), Class B shares
will convert automatically to Class A shares, based on the relative net asset
values of shares of each Class, and will at that time be subject to a
distribution and service fee of 0.25% of the Participant Fund's net assets
attributable to the Class. The conversion of Class B shares into Class A shares
is subject to the continuing availability of an opinion of counsel to the effect
that the conversions will not constitute taxable events for Federal tax
purposes.

                  GEID has adopted guidelines, in view of the relative sales
charges, service fees and distribution fees, directing its representatives and
all selling agents that all purchases of shares should be for Class A shares
when the purchase amount for Class B shares is $250,000 or more by an investor
not eligible to purchase Class Y shares. GEID reserves the right to vary these
guidelines at any time. In addition, a dealer reallowance of up to 4% of the net
amount invested is paid to Authorized Firms selling Class B shares.

                  Class C Shares. Class C shares will be offered at their net
asset value per share next determined after a purchase order is received,
without imposition of an initial sales charge. Class C shares are sold subject
to a maximum 1.00% CDSC applicable for one year after purchase as disclosed in
the Prospectus. The CDSC is calculated in the same manner as that for Class B
shares. Unlike Class B shares, Class C shares do not convert to Class A shares
after a specified period of time.



                                      -66-
<PAGE>

                  GEID has adopted guidelines, in view of the relative sales
charges, service fees and distribution fees, directing its representatives and
all selling agents that all purchases of shares should be for Class A shares
when the purchase amount for Class C shares is $1,000,000 ($500,000 for the
Short-Term Government Fund) or more by an investor not eligible to purchase
Class Y shares. GEID reserves the right to vary these guidelines at any time. In
addition, a dealer reallowance of up to 1.00% of the net amount invested is paid
to Authorized Firms selling Class C shares.

                  Class Y Shares. Class Y shares will be offered without
imposition of a sales charge, CDSC, service fee or distribution fee exclusively
to: banks, insurance companies and industrial corporations each purchasing
shares for their own account; financial institutions investing in their
fiduciary capacity on behalf of clients or customers; tax-exempt investors,
including defined benefit or contribution plans (including plans meeting the
requirements of Section 401(k) of the Code), plans established under Section
403(b) of the Code, trusts established under Section 501(c)(9) of the Code to
fund the payment of certain welfare benefits, charitable, religious and
educational institutions, and foundations and endowments of those investors;
investment companies not managed or sponsored by GEAM or any affiliate of GEAM;
and Financial Intermediaries that have an agreement with the Trust, GEAM or GEID
which does not require the Trust, GEAM or GEID 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 (the "Minimum
Purchase Requirement") and any subsequent purchases by such clients or customers
who have already met the Minimum Purchase Requirement ("Institutional
Investors"). The Minimum Purchase Requirement for clients or customers of
Financial Intermediaries is waived for purchases by certain non-qualified
deferred compensation plans (such as 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. IRAs, simplified employee pension IRAs
("SEP-IRAs"), salary reduction SEP-IRAs and Keogh plans are only eligible to
purchase Class Y shares through Financial Intermediaries. For purposes of this
SAI, the term "industrial corporation" is intended to mean any corporate entity
employing 100 or more persons but does not include professional corporations or
corporations established under Subchapter S of the Code. Investors eligible to
purchase Class Y shares may not purchase any other Class of shares, except as
noted above under "Class A Shares." In addition, a dealer reallowance of up to
 .32% of the net amount invested is paid to Authorized Firms selling Class Y
shares.

                  Purchases Through Intermediaries. Class A, Class B and Class C
shares of each Participant Fund, Class Y shares of each Participant Fund other
than the Short-Term Government Fund and shares of the S&P 500 Index Fund and
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,



                                      -67-
<PAGE>

GEAM or GEID 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 or GEID. 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 the 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, GEAM or GEID.

                  The Trust has authorized certain Financial Intermediaries and
their authorized designees to accept purchase and redemption orders on behalf of
the Trust. The Trust is deemed to have received a purchase or redemption order
when a Financial Intermediary or it authorized designee accepts the order from
its client or customer. Orders received in such a manner will be priced
according to the net asset value of the Fund next determined after the order is
received by the Financial Intermediary or its authorized designee.

Subsequent Purchase of Shares.

                  Investors may purchase additional shares of a Fund at any time
in the manner outlined above. All payments should clearly indicate the
investor's account number, Fund number and desired Class. Subsequent purchases
of Class A shares in accounts initially established with a purchase through GEID
may be made without paying any initial sales charge.

Purchases In-Kind.

                  The Trust may, in its discretion, require that proposed
investments of $10 million or more in a particular Class of a Participant Fund,
or in the S&P 500 Index Fund or Money Market Fund, be made in kind. This
requirement is intended to minimize the effect of transaction costs on existing
shareholders of a Fund. Such transaction costs, which may include broker's
commissions and taxes or governmental fees, domestic or foreign, as the case may
be, may, in such event, be borne by the proposed investor in shares of the Fund.
Under these circumstances, the Trust would inform the investor of the securities
and amounts that are acceptable to the Trust. The securities would then be
accepted by the Trust at their current market value in return for shares in the
Fund of an equal value.

Redemptions

                  Shares of the Funds may be redeemed on any day on which the
Fund's net asset value is calculated as described below under "Net Asset Value."
Redemption requests received in proper form prior to the close of regular
trading on the NYSE will be effected at the net asset value per share determined
on that day. Redemption requests received after the close of regular trading on
the NYSE will be effected at the net asset value as next determined. The Trust
normally transmits redemption proceeds within seven days after receipt of a
redemption request. If a shareholder holds shares in more than one Class of a
Participant Fund, any request for


                                      -68-
<PAGE>

redemption must specify the Class being redeemed. In the event of a failure to
specify which Class or if the investor owns fewer shares of the Class than
specified, the redemption request will be delayed until the Trust receives
further instructions. Redemption proceeds will be subject to no charge, except
for certain redemptions of Class A and Class B shares of a Participant Fund. In
addition, if the shareholder has checkwriting privileges, redemption of $100 or
more may be made by writing a check either to the shareholder or to a third
party. A shareholder who pays for shares of a Fund by personal check will
receive the proceeds of a redemption of those shares when the purchase check has
been collected, which may take up to 15 days or more. Shareholders who
anticipate the need for more immediate access to their investment should
purchase shares with Federal funds or bank wire or by a certified or cashier's
check.

                  The right of redemption of shares of a Fund may be suspended
or the date of payment postponed (1) for any periods during which the NYSE is
closed (other than for customary weekend and holiday closings), (2) when trading
in the markets the Fund normally utilizes is restricted, or an emergency, as
defined by the rules and regulations of the SEC, exists, making disposal of a
Fund's investments or determination of its net asset value not reasonably
practicable or (3) for such other periods as the SEC by order may permit for the
protection of the Fund's shareholders. A shareholder who pays for Fund shares by
personal check will receive the proceeds of a redemption of those shares when
the purchase check has been collected, which may take up to 10 business days or
more. Shareholders who anticipate the need for more immediate access to their
investment should purchase shares with Federal funds or bank wire or by a
certified or cashier's check.

                  The Trust requires that a shareholder of a Fund maintain a
minimum investment in a Fund of $500, so care should be exercised to ensure that
redemptions do not reduce the shareholder's investment below this minimum. Two
exceptions exist to this minimum investment requirement for (1) an account
established by a Qualified Plan, and (2) new accounts established with the
Direct Deposit Privilege, Payroll Savings Plan or Automatic Investment Plan. If
the shareholder's account balance is less than $500 (except in the circumstances
described above), the Trust may automatically redeem the shares of the Fund in
the account and remit the proceeds to the shareholder so long as the shareholder
is given 30 days prior written notice of the action.

                  A holder of Existing Shares who fully redeems his account or
whose account balance is involuntarily redeemed by the Trust in the manner set
out below will not remain eligible for the load waiver thereafter, unless the
person is otherwise eligible to purchase Class A shares without paying a load.

                  A CDSC payable to the Distributor is imposed on certain
redemptions of Class A, Class B and Class C shares of a Participant Fund,
however effected. Class A, Class B and Class C shares that are redeemed will not
be subject to a CDSC to the extent that the value of such shares represents (1)
shares that were purchased more than a fixed number of years prior to the
redemptions, (2) reinvestment of dividends or capital gains distributions, (3)
shares purchased directly through GEID or (4) capital appreciation of shares
redeemed. The amount of any applicable CDSC will be calculated by multiplying
the applicable percentage charge by the lesser of (1) the net asset value of the
Class A, Class B or Class C shares at the time of purchase or


                                      -69-
<PAGE>

(2) the net asset value of the Class A, Class B or Class C shares at the time of
redemption. In circumstances in which the CDSC is imposed upon redemption of
Class B shares, the amount of the charge will depend on the number of years
since the shareholder made the purchase payment from which the amount is being
redeemed.

                  The CDSC on Class A and Class C shares is payable on the same
terms and conditions as would be applicable to Class B shares, except that the
CDSC on Class A and Class C shares is at a lower rate and for a shorter period
than that imposed on Class B shares (1% for redemptions only during the first
year after purchase) and except that Class A and Class C shares have no
automatic conversion feature. The CDSC applicable to Class A and Class C shares
is calculated in the same manner as the CDSC with respect to Class B shares and
is waived in the same situations as with respect to Class B shares.

                  The following table sets forth the CDSC rates applicable to
redemptions of Class B shares of the U.S. Equity Fund, the Premier Fund, the
Premier Research Fund, the Premier International Fund, the Premier Value Fund,
the Value Equity Fund, the Small-Cap Value Fund, the Mid-Cap Growth Fund, the
Mid-Cap Value Fund, the Global Fund, the International Fund, the Europe Fund,
the Emerging Markets Fund and the Strategic Fund:

                                                        CDSC as a %
Year Since Purchase                                     of Amount
Payment was Made                                        Redeemed
-------------------------------------------------------------------
Within First Year                                       4.00%
Within Second Year                                      3.00%
Within Third Year                                       2.00%
Within Fourth Year                                      1.00%
Within Fifth Year                                       0.00%
Within Sixth Year                                       0.00%
---------------------------------------------------------------------

                  The following table sets forth the CDSC rates applicable to
redemptions of Class B shares of the Tax-Exempt Fund, the Income Fund, the
Government Securities Fund, the High Yield Fund and the Short-Term Government
Fund:

                                                        CDSC as a %
Year Since Purchase                                     of Amount
Payment was Made                                        Redeemed
----------------------------------------------------------------------
Within First Year                                       3.00%
Within Second Year                                      3.00%
Within Third Year                                       2.00%
Within Fourth Year                                      1.00%
Within Fifth Year                                       0.00%
Within Sixth Year                                       0.00%
-----------------------------------------------------------------------


                                      -70-
<PAGE>


                  The following table sets forth the CDSC rates applicable to
redemptions of any Fund's Class B shares acquired, either by purchase or
exchange, as a result of the combination of the Investors Trust Funds with
certain Funds:

                                                        CDSC as a %
Year Since Purchase                                     of Amount
Payment was Made                                        Redeemed
---------------------------------------------------------------------
Within First Year                                       5.00%
Within Second Year                                      4.00%
Within Third Year                                       3.00%
Within Fourth Year                                      2.00%
Within Fifth Year                                       1.00%
Within Sixth Year                                       0.00%
Within Seventh Year                                     0.00%
Within Eighth Year                                      0.00%
----------------------------------------------------------------------

                  Class B shares will automatically convert to Class A shares
six years (eight years in the case of Class B shares acquired, either by
purchase or exchange, as a result of the combination of the Investors Trust
Funds with certain Funds) after the date on which they were purchased and
thereafter will no longer be subject to the higher distribution fee applicable
to such Class B shares, but will be subject to the 0.25% distribution fee
applicable with respect to Class A shares. See "Exchange Privilege" for the
effect of exchanges on the CDSC applicable to exchanged shares.

                  In determining the applicability and rate of any CDSC to a
redemption of shares of a Fund, the Distributor will assume that a redemption is
made first of shares representing reinvestment of dividends and capital gain
distributions and then of other shares held by the shareholder for the longest
period of time. This assumption will result in the CDSC, if any, being imposed
at the lowest possible rate.

                  The Trust will waive the CDSC on redemptions of Class A, Class
B or Class C shares of the Funds upon the death or disability of a shareholder
if the redemption is made within one year of death or disability of a
shareholder. The CDSC would be waived when the decedent or disabled person is
either an individual shareholder or, in the case of death, owns the shares with
his or her spouse as a joint tenant with right of survivorship, and when the
redemption is made within one year of the death or initial determination of
disability. This waiver of the CDSC would apply to a total or partial redemption
but only to redemptions of Class A, Class B or Class C shares held at the time
of the death or initial determination of disability. The Trust will also waive
the CDSC (1) on redemptions of Class A, Class B or Class C shares of the Funds
representing a minimum required distribution from an IRA effected pursuant to a
systematic withdrawal plan (see "Systematic Withdrawal Plan" below), (2) on
redemptions of Class A shares being redeemed within one year of purchase that
were subject to no front-end sales load upon purchase by virtue of being part of
a purchase of $1 million, (3) on redemptions that represent "substantially equal
periodic payments" as described under Section 72(t)(2) of the Internal Revenue
Code of 1986, as amended, and (4) on redemptions of Class B or Class C shares
effected through the Systematic Withdrawal Plan to the extent such redemptions
do not exceed 10% of investor's account value.



                                      -71-
<PAGE>

Redemptions through an Authorized Firm

                  An investor whose shares are purchased with the assistance of
an Investment Professional may redeem all or part of his or her shares in
accordance with the instructions pertaining to such accounts. It is the
responsibility of the Authorized Firm to transmit the redemption order (and
credit its customers' account with the redemption proceeds, if applicable) on a
timely basis. If such investor is also the shareholder of record of those
accounts on the books of State Street, he or she may redeem shares pursuant to
methods described below. Such an investor using the redemption by mail or wire
methods must arrange with the Authorized Firm for delivery of the required forms
to State Street. It is the responsibility of the Authorized Firm to transmit the
redemption order (and credit its customer's account with the redemption
proceeds, if applicable) on a timely basis.

Redemptions by Mail

                  Shares of a Fund may be redeemed by mail by making a written
request for redemption that (1) states the Class (if applicable) and the number
of shares or the specific dollar amount to be redeemed, (2) identifies the Fund
or Funds from which the number or dollar amount is to be redeemed, (3)
identifies the shareholder's account number and (4) is signed by each registered
owner of the shares exactly as the shares are registered and sending the request
to the Trust at:

                  GE Funds
                  P.O. Box 219631
                  Kansas City, MO  64121-9631

For overnight package delivery:

                  GE Funds
                  c/o National Financial Data Services Inc.
                  330 West 9th Street
                  Kansas City, MO  64105

                  Signature guarantees are required for all redemptions over
$50,000. In addition, signature guarantees are required for requests to have
redemption proceeds (1) mailed to an address other than the address of record,
(2) paid to someone other than the shareholder, (3) wired to a bank other than
the bank of record, or (4) mailed to an address that has been changed within 30
days of the redemption request. All signature guarantees must be guaranteed by a
commercial bank, trust company, broker, dealer, credit union, national
securities exchange or registered association, clearing agency or savings
association or by Managers of Personnel Accounting of GE or their designated
alternates. The Trust may require additional supporting documents for
redemptions made by corporations, executors, administrators, trustees, guardians
or persons utilizing a power of attorney. A request for redemption will not be
deemed to have been submitted until the Trust receives all documents in proper
order typically required to assure the safety of a particular account. The Trust
may waive the signature guarantee on a redemption of $50,000 or less if it is
able to verify the signatures of all registered owners from its accounts.



                                      -72-
<PAGE>

Redemption by Telephone

                  Shares of a Fund may be redeemed by telephone, unless the
investor has declined this option on the applicable section of the account
application form. Dividends will be earned through and including the date of
receipt of the redemption request. If the account is registered jointly in the
name of more than one shareholder, only one shareholder will be required to
authorize redemption of shares by telephone, and the Trust will be entitled to
act upon telephonic instructions of any shareholder of a joint account.
Redemptions of shares of a Fund by a Qualified Plan may not be effected by
telephone.

                  Proceeds from a telephonic wire redemption request placed
through a customer service representative will be transferred by wire to the
shareholder's bank account (which has previously been identified in writing to
the Trust). A transmission fee of $10 will be charged for wire transfers of
funds by the Trust. Wire transfers will be made directly to the account
specified by the shareholder if that bank is a member of the Federal Reserve
System or to a correspondent bank if the bank holding the account is not a
member. Fees on wire transfers may also be imposed by the bank and will be the
responsibility of the shareholder. Wire transfer of funds will be made within
two business days following the telephonic request.

                  Proceeds from a telephonic check redemption request placed
through the automated system will be sent by check to the shareholder's address
of record. The minimum telephonic wire redemption request is $1,000; the minimum
telephonic check redemption request is $500 and the maximum telephonic check
redemption request is $50,000.

                  Telephone redemption requests may be difficult to implement in
times of drastic economic or market changes. In the event shareholders of the
Funds are unable to contact the Trust by telephone, shareholders should write to
the Trust at:

                  GE Funds
                  P.O. Box 219631
                  Kansas City, MO  64121-9631

For overnight package delivery:

                  GE Funds
                  c/o National Financial Data Services Inc.
                  330 West 9th Street
                  Kansas City, MO  64105

                  By making a telephonic redemption request, a shareholder
authorizes the Trust to act on the telephonic redemption instructions by any
person representing himself or herself to be the shareholder and believed by the
Trust to be genuine. The Trust will employ reasonable procedures to confirm that
instructions communicated by telephone are genuine and the Trust's records of
such instructions will be binding. If the procedures, which include the use of a
personal identification number ("PIN") system and the provision of written
confirmation of transactions effected by telephone, were not employed by the
Trust, the Trust could be subject to liability for any loss resulting from
unauthorized or fraudulent instructions. As a result of compliance with this
policy, if the Trust follows the procedures outlined above and has a good faith
belief that the instructions it received were genuine, the shareholder will bear
the risk of loss in the event of a fraudulent redemption transaction.



                                      -73-
<PAGE>

Systematic Withdrawal Plan

                  The Trust's Systematic Withdrawal Plan permits investors in a
Fund to request withdrawal of a specified dollar amount (minimum of $50) on
either a monthly or quarterly basis if they have a $10,000 minimum account in a
Class of a Participant Fund or in the Money Market Fund. The maximum amount
which may be withdrawn under the Systematic Withdrawal Plan is 10% of the value
of a Shareholder's account on an annual basis. An application for the Systematic
Withdrawal Plan can be obtained from the Trust. The Systematic Withdrawal Plan
may be terminated at any time by the investor or the Trust.

Involuntary Redemptions

                  An account of a shareholder of a Fund with respect to a Class
of shares (if applicable) that is reduced by redemptions, and not by reason of
market fluctuations to a value of $500 or less may be redeemed by the Trust, but
only after the shareholder has been given notice of at least 30 days in which to
increase the balance in the account to more than $500. An account established
through a Qualified Plan or an account that has not yet reached the $500 minimum
through the Direct Deposit Privilege, Payroll Savings Plan or Automatic
Investment Plan will not be involuntarily redeemed.

Distributions In-Kind

                  If the Board determines that it would be detrimental to the
best interests of a Fund's shareholders to make a redemption payment wholly in
cash, the Trust may pay, in accordance with rules adopted by the SEC, any
portion of a redemption in excess of the lesser of $250,000 or 1% of the Trust's
net assets by a distribution in kind of portfolio securities in lieu of cash.
Redemptions failing to meet this threshold must be made in cash. Portfolio
securities issued in a distribution in kind will be deemed by GEAM to be readily
marketable. Shareholders receiving distributions in kind of portfolio securities
may incur brokerage commissions when subsequently disposing of those securities.

Checkwriting Privileges

                  A shareholder of the Money Market Fund may request in an
application form or by letter sent to the Trust that he or she would like
checkwriting privileges, which are provided at no cost to the shareholder. The
Trust will provide redemption checks ("Checks") drawn on the shareholder's
account. Checks will be sent only to the shareholder of the account and only to
the address of record. The application or written request must be manually
signed by the shareholder. Checks may be made payable to the order of any person
in an amount of $100 or more. Dividends are earned until the Check clears. When
a Check is presented to State Street for payment, State Street, as agent, will
cause the Money Market Fund to redeem a sufficient number of shares in the
shareholder's account to cover the amount of the Check. Checks will generally
not be returned to the shareholder after clearance, unless such return is
requested in writing by the shareholder. Shareholders generally will be subject
to the same rules and regulations that State Street applies to checking
accounts. Unless otherwise specified in writing to the Trust, only the signature
of one shareholder of a joint account is required on Checks.



                                      -74-
<PAGE>

                  Checks may not be written to redeem shares purchased by check
until the earlier of (1) the date that good funds are credited to State Street
by its correspondent bank or (2) 15 days from the date of receipt of the check
utilized to purchase shares. If the amount of the Check is greater than the
value of the shares in a shareholder's account, the Check will be returned
marked "insufficient funds." Checks should not be used to close an account.
Checks written on amounts subject to the hold described above will be returned
marked "uncollected." If the Check does not clear, the shareholder will be
responsible for any loss that the Money Market Fund or State Street incurs.

                  The Trust may modify or terminate the checkwriting privilege
at any time on 30 days' notice to participating shareholders. The checkwriting
privilege is subject to State Street's rules and regulations and is governed by
the Massachusetts Uniform Commercial Code. All notices with respect to Checks
drawn on State Street must be given to State Street. Stop payment instructions
may be given by calling the applicable toll free number listed on the back cover
of the Prospectus.

Reinstatement Privilege

                  Participant Funds also offer a reinstatement privilege under
which a shareholder that has redeemed Class A, Class B or Class C shares may
reinvest the proceeds from the redemption without imposition of a sales charge,
provided the reinvestment is made within 60 days of the redemption. A
shareholder wishing to exercise this privilege must do so in writing.

                  For purposes of determining the amount of any CDSCs payable on
any subsequent redemptions, the purchase payment made through exercise of the
reinstatement privilege will be deemed to have been made at the time of the
initial purchase (rather than at the time the reinstatement was effected). The
tax status of a gain realized on a redemption will not be affected by exercise
of the reinstatement privilege but a loss will be nullified if the reinvestment
is made within 30 days of redemption. Refer to the section titled "Dividends,
Distributions and Taxes" later in this SAI for the tax consequences when, within
90 days of a purchase of Class A, Class B or Class C shares, the shares are
redeemed and reinvested in a Participant Fund.

Exchange Privilege

                  The exchange privilege described in the Prospectus enables a
shareholder of a Fund to acquire shares in a Fund having a different investment
objective and policies when the shareholder believes that a shift between Funds
is an appropriate investment decision. Upon receipt of proper instructions and
all necessary supporting documents, shares submitted for exchange are redeemed
at the then-current net asset value and the proceeds are immediately invested in
shares of the Fund being acquired. The Trust reserves the right to reject any
exchange request.



                                      -75-
<PAGE>

                  Shares of each Class of a Participant Fund may be exchanged
for shares of the same Class of any other Participant Fund at their respective
net asset values. An Institutional Investor (other than a Class Y eligible
retirement plan) can exchange shares of the Money Market Fund for Class Y shares
of a Participant Fund. A Class Y eligible retirement plan can exchange shares of
the Money Market Fund for Class A or Class Y shares of a Participant Fund, as
selected by the plan sponsor, depending upon whether the plan sponsor desires
the additional services provided to Class A shareholders. All other Money Market
Fund shareholders will be given the choice of receiving either Class A, Class B
or Class C shares of a Participant Fund upon the completion of an exchange. The
privilege is available to shareholders residing in any state in which shares of
the Fund being acquired may legally be sold.

                  An exchange of shares is treated for Federal income tax
purposes as a redemption (that is, a sale) of shares given in exchange by the
shareholder, and an exchanging shareholder may, therefore, realize a taxable
gain or loss in connection with the exchange. An exchange of shares may be made
by calling or by writing the Trust. The Trust may, upon 60 days' prior written
notice to the shareholders of a Fund, materially modify or terminate the
exchange privilege with respect to the Fund or impose a charge of up to $5 for
exchanges of shares of the Fund.

                  Shareholders who exchange their Class A shares purchased
through a Financial Intermediary, and Class B or Class C shares for the S&P 500
Index Fund or Money Market Fund shares will be subject to the CDSC applicable to
Class A, Class B or Class C shares at the time the shareholder redeems such S&P
500 Index Fund or Money Market Fund shares. Upon an exchange of Class A, Class B
or Class C shares for Class A, Class B or Class C shares (as applicable) of
another Participant Fund, the new Class A, Class B or Class C shares will be
deemed to have been purchased on the same date as the Class A, Class B or Class
C shares of the Participant Fund which have been exchanged for CDSC calculation
purposes. However, a shareholder who exchanges his Class A, Class B or Class C
shares for shares of the S&P 500 Index Fund or Money Market Fund and then
exchanges those shares for Class A, Class B or Class C shares will be subject to
having the period of time in which his shares were invested in the S&P 500 Index
Fund or Money Market Fund tolled when computing the applicable CDSC. Likewise,
shareholders who exchange their Class A, Class B or Class C shares of a
Participant Fund with Class A, Class B or Class C shares of another Participant
Fund will be subject to the CDSC of the original Fund at the time of redemption
from the second Fund.

                  Class B shares of any Participant Fund acquired either by
purchase or exchange, as a result of the combination of the Investors Trust
Funds with certain Funds, will be charged the CDSC applicable to the Class B
shares that had been applicable to the relevant Investors Trust Fund before the
combination. Shareholders of the S&P 500 Index Fund or Money Market Fund who
acquired their shares by exchange from an Investors Trust Fund will be charged
the CDSC that had been applicable to the Class B shares of the relevant
Investors Trust Fund upon redemption from the S&P 500 Index Fund or Money Market
Fund. Shares of the Funds purchased through a Financial Intermediary may only be
exchanged for shares of another Fund which is offered by that Financial
Intermediary.


                                      -76-
<PAGE>


                  Shareholders exercising the exchange privilege should review
the Prospectus disclosure for the Fund they are considering investing in
carefully prior to making an exchange.

                                 NET ASSET VALUE

                  The Trust will not calculate net asset value on days that the
NYSE is closed. On those days, securities held by a Fund may nevertheless be
actively traded, and the value of the Fund's shares could be significantly
affected.

                  Because of the need to obtain prices as of the close of
trading on various exchanges throughout the world, the calculation of the net
asset value of the S&P 500 Index Fund, the Money Market Fund or a Class of
certain Participant Funds may not take place contemporaneously with the
determination of the prices of many of their portfolio securities used in the
calculation. A security that is listed or traded on more than one exchange is
valued at the quotation on the exchange determined to be the primary market for
the security. All assets and liabilities of the Funds initially expressed in
foreign currency values will be converted into U.S. dollar values at the mean
between the bid and offered quotations of the currencies against U.S. dollars as
last quoted by any recognized dealer. If these quotations are not available, the
rate of exchange will be determined in good faith by the Board. In carrying out
the Board's valuation policies, GEAM may consult with one or more independent
pricing services ("Pricing Service") retained by the Trust.

                  Debt securities of U.S. issuers (other than Government
Securities and short-term investments), including Municipal Obligations, are
valued by a dealer or by a pricing service based upon a computerized matrix
system, which considers market transactions and dealer supplied valuations.
Valuations for municipal bonds are obtained from a qualified municipal bond
pricing service; prices represent the mean of the secondary market. When, in the
judgment of the Pricing Service, quoted bid prices for investments of the
Tax-Exempt Fund are readily available and are representative of the bid side of
the market, these investments are valued at the mean between the quoted bid
prices and asked prices. Investments of the Tax-Exempt Fund that are not
regularly quoted are carried at fair value as determined by the Board, which may
rely on the assistance of the Pricing Service. The procedures of the Pricing
Service are reviewed periodically by GEAM under the general supervision and
responsibility of the Board.

                  The valuation of the portfolio securities of the Money Market
Fund is based upon amortized cost, which does not take into account unrealized
capital gains or losses. Amortized cost valuation involves initially valuing an
instrument at its cost and thereafter assuming a constant amortization to
maturity of any discount or premium, regardless of the effect of fluctuating
interest rates on the market value of the instrument. Although this method
provides certainty in valuation, it may result in periods during which value, as
determined by amortized cost, is higher or lower than the price the Money Market
Fund would receive if it sold the instrument.



                                      -77-
<PAGE>

                  The use of the amortized cost method of valuing the portfolio
securities of the Money Market Fund is permitted by a rule adopted by the SEC.
Under this rule, the Money Market Fund must maintain a dollar-weighted average
portfolio maturity of 90 days or less, purchase only instruments having
remaining maturities of 397 calendar days or less, and invest only in "eligible
securities" as defined in the rule, which are determined by GEAM to present
minimal credit risks. Pursuant to the rule, GEAM has established procedures
designed to stabilize, to the extent reasonably possible, the Fund's price per
share as computed for the purpose of sales and redemptions at $1.00. These
procedures include review of the Money Market Fund's portfolio holdings at such
intervals as GEAM may deem appropriate, to determine whether the Fund's net
asset value calculated by using available market quotations or market
equivalents deviates from $1.00 per share based on amortized cost.

                  The rule regarding amortized cost valuation provides that the
extent of certain significant deviations between the Money Market Fund's net
asset value based upon available market quotations or market equivalents and the
$1.00 per share net asset value based on amortized cost must be examined by the
Board. In the event the Board determines that a deviation exists that may result
in material dilution or other unfair results to investors or existing
shareholders of the Money Market Fund, the Board must, in accordance with the
rule, cause the Fund to take such corrective action as the Board regards as
necessary and appropriate, including: selling portfolio instruments of the Fund
prior to maturity to realize capital gains or losses or to shorten average
portfolio maturity; withholding dividends or paying distributions from capital
or capital gains; redeeming shares in kind; or establishing a net asset value
per share by using available market quotations.

                                      -78-

<PAGE>



                       DIVIDENDS, DISTRIBUTIONS AND TAXES

Dividends and Distributions

                  Net investment income (that is, income other than long- and
short-term capital gains) and net realized long- and short-term capital gains
are determined separately for each Fund. Dividends of a Participant Fund, the
S&P 500 Index Fund or the Money Market Fund which are derived from net
investment income and distributions of net realized long- and short-term capital
gains paid by a Fund to a shareholder will be automatically reinvested in
additional shares of the same Class of the Participant Fund, the S&P 500 Index
Fund or the Money Market Fund, respectively, and deposited in the shareholder's
account, unless the shareholder instructs the Trust, in writing or by telephone,
to pay all dividends and distributions in cash. Shareholders may contact the
Trust for details concerning this election. However, if it is determined that
the U.S. Postal Service cannot properly deliver Fund mailings to a shareholder,
the Fund may terminate the shareholder's election to receive dividends and other
distributions in cash. Thereafter, the shareholder's subsequent dividends and
other distributions will be automatically reinvested in additional shares of the
Fund until the shareholder notifies the Fund in writing of his or her correct
address and requests in writing that the election to receive dividends and other
distributions in cash be reinstated. No interest will accrue on amounts
represented by uncashed dividend, distribution or redemption checks. Dividends
attributable to the Tax-Exempt Fund, the Income Fund, the Government Securities
Fund, the Short-Term Government Fund, the High Yield Fund and the Money Market
Fund are declared daily and paid monthly.

                  The Government Securities Fund will declare a distribution
each day in an amount based on periodic projections of its future net investment
income and will pay such distributions monthly. Consequently, the amount of each
daily distribution may differ from actual net investment income. The purpose of
these distribution procedures is to attempt to eliminate, to the extent
possible, fluctuations in the level of monthly distribution payments that might
result if such Fund declared dividends in the exact amount of its daily net
investment income.

                  It is possible, however, as a result of this policy that total
distributions in a year could exceed the total of the Government Securities
Fund's current year net investment income and capital gains. If this should
occur, a portion of the distributions received by shareholders of such Fund
could be a nontaxable "return of capital" for federal income tax purposes and
thereby reduce the shareholder's cost basis in shares of the Fund. If
distributions are received in additional shares rather than cash, the capital
"returned" would be automatically reinvested. In general, a shareholder's total
cost basis in the Fund will reflect the cost of the shareholders' original
investment plus the amount of any reinvestment.

                  Dividends attributable to the net investment income of the
Premier Growth Fund, the Premier Research Fund, the Premier International Fund,
the Premier Value Fund, the S&P 500 Index Fund, the U.S. Equity Fund, the
Small-Cap Value Fund, the Mid-Cap Value Fund, the Mid-Cap Growth Fund, the Value
Equity Fund, the Global Fund, the International Fund, the Europe Equity Fund,
the Emerging Markets Fund and the Strategic


                                      -79-


<PAGE>

Fund are declared and paid annually. If a shareholder redeems all of his shares
of the Tax-Exempt Fund, the Income Fund, the Government Securities Fund, the
Short-Term Government Fund, the High Yield Fund or the Money Market Fund at any
time during a month, all dividends to which the shareholders is entitled will be
paid to the shareholder along with the proceeds of his redemption. Written
confirmations relating to the automatic reinvestment of daily dividends will be
sent to shareholders within five days following the end of each quarter for the
Tax-Exempt Fund, the Income Fund, the Government Securities Fund, the Short-Term
Government Fund and the High Yield Fund, and within five days following the end
of each month for the Money Market Fund. Distributions of any net realized
long-term and short-term capital gains earned by a Fund will be made annually.
These dividends and distributions are determined in accordance with income tax
regulations which may differ from generally accepted accounting principles. All
expenses of the Tax-Exempt Fund, the Income Fund, the Government Securities
Fund, the Short-Term Government Securities Fund, the High Yield Fund and the
Money Market Fund are accrued daily and deducted before declaration of dividends
to shareholders. Earnings of the Tax-Exempt Fund, the Income Fund, the
Government Securities Fund, the Short-Term Government Securities Fund, the High
Yield Fund and the Money Market Fund for Saturdays, Sundays and holidays will be
declared as dividends on the business day immediately preceding the Saturday,
Sunday or holiday. As a result of the different service and distribution fees
applicable to the Classes, the per share dividends and distribution on Class Y
shares will be higher than those on Class A shares, which in turn will be higher
than those of Class B and Class C shares.

                  Each Fund is subject to a 4% non-deductible excise tax
measured with respect to certain undistributed amounts of net investment income
and capital gains. If necessary to avoid the imposition of this tax, and if in
the best interests of the Fund's shareholders, the Trust will declare and pay
dividends of the Fund's net investment income and distributions of the Fund's
net capital gains more frequently than stated above.

Tax Status of the Funds and their Shareholders

                  Set forth below is a summary of certain Federal income tax
considerations generally affecting the Funds and their shareholders. The summary
is not intended as a substitute for individual tax planning, and shareholders
are urged to consult their tax advisors regarding the application of Federal,
state, local and foreign tax laws to their specific tax situations.

                  Each Fund is treated as a separate entity for Federal income
tax purposes. Each Fund's net investment income and capital gains distributions
are determined separately from any other series that the Trust may designate.

                  The Trust intends for each Fund to elect to be treated as a
"regulated investment company" under the Code and to qualify as a "regulated
investment company" each year. If a Fund (1) qualifies as a regulated investment
company and (2) distributes to its shareholders at least 90% of its net
investment income (including for this purpose its net realized short-term
capital gains) and 90% of its tax-exempt interest income (reduced by certain
expenses), the Fund will not be liable for Federal income taxes to the extent
that its net investment income and its net realized long-term and short-term
capital gains, if any, are distributed to its shareholders. In


                                      -80-
<PAGE>

addition, in order to avoid a 4% excise tax, a Fund must declare, no later than
December 31 and distribute no later than the following January 31, at least 98%
of its taxable ordinary income earned during the calendar year and 98% of its
long-term and short-term capital gains for the 1-year period ending generally on
October 31 of such calendar year. One requirement for qualification as a
regulated investment company is that each Fund must diversify its holdings so
that, at the end of each quarter, (i) at least 50% of the market value of the
Fund's assets is represented by cash and cash items, securities of other
regulated investment companies, U.S. government securities and other securities,
with such other securities limited for purposes of this calculation in respect
of any one issuer to an amount not greater than 5% of the value of the Fund's
assets and not greater than 10% of the outstanding voting securities of such
issuer, and (ii) not more than 25% of the value of its total assets is invested
in the securities of any one issuer or of two or more issuers that are
controlled by the Fund (within the meaning of Section 851(b)(3)(B) of the Code)
that are engaged in the same or similar trades or businesses or related trades
or businesses (other than U.S. government securities or the securities of other
regulated investment companies).

                  Another requirement for qualification as a regulated
investment company is that each Fund must earn at least 90% of its gross income
from dividends, interest, payments with respect to securities loans, gains from
the disposition of stock or securities (including gains from related investments
in foreign currencies) and income (including gains from options, futures or
forward contracts) derived with respect to its business of investing in such
stocks, securities or currencies (the "90% Test").

                  If for any taxable year a Fund does not qualify for the
special Federal income tax treatment afforded regulated investment companies,
all of its taxable income will be subject to Federal income tax at regular
corporate rates (without any deduction for distributions to its shareholders).
In such event, dividend distributions, including amounts derived from interest
on tax-exempt obligations, would be taxable to shareholders to the extent of
current and accumulated earnings and profits, and would be eligible for the
dividends received deduction for corporations in the case of corporate
shareholders.


                  As of September 30, 2000, the following Funds have capital
loss carryforwards as indicated below. The capital loss carryforward of the
Tax-Exempt Fund includes a capital loss carryforward of $[ ] acquired as a
result of the Reorganization with the Investors Trust Tax Free Fund. The capital
loss carryforward is available to offset future realized capital gains to the
extent provided in the Code and regulations promulgated thereunder.


                                      -81-
<PAGE>


<TABLE>
<CAPTION>
                                                                                     Expiration Dates:
Fund                                                   Amount                           September 30,
----                                                   ------                           -------------
<S>                                                 <C>                             <C>
Tax-Exempt Fund                                     $

Income Fund                                         $
                                                    $
                                                    $

Government Securities Fund                          $
                                                    $
                                                    $

Money Market Fund                                   $
                                                    $

Mid-Cap Growth Fund                                 $
</TABLE>


                  As a result of the Reorganization, the Investors Trust Tax
Free Fund had a taxable year ending on the date of the Reorganization, and the
taxable year of each respective acquiring GE Fund in which the Reorganization
occurs will be a separate taxable year for purposes of determining the taxable
years in which carryforwards of the Investors Trust Tax Free Fund may be
applied. Accordingly, the Reorganization has the effect of reducing the
carryforward periods of the Investors Trust Tax Free Fund. Such reduced periods
are reflected in the foregoing table of expiration dates.

                  Net investment income or capital gains earned by a Fund
investing in foreign securities may be subject to foreign income taxes withheld
at the source. The United States has entered into tax treaties with many foreign
countries that entitle the Funds to a reduced rate of tax or exemption from tax
on this related income and gains. The effective rate of foreign tax cannot be
determined at this time since the amount of these Funds' assets to be invested
within various countries is not now known. The Trust intends that the Funds seek
to operate so as to qualify for treaty-reduced rates of tax when applicable. In
addition, if a Fund qualifies as a regulated investment company under the Code,
if certain distribution requirements are satisfied, and if more than 50% of the
value of the Fund's assets at the close of the taxable year consists of stocks
or securities of foreign corporations, the Trust may elect, for U.S. Federal
income tax purposes, to treat foreign income taxes paid by the Fund that can be
treated as income taxes under U.S. income tax principles as paid by its
shareholders. The Global Fund, the International Fund, the Europe Fund and the
Emerging Markets Fund each anticipates that it may qualify for and make this
election in most, but not necessarily all, of its taxable years. If a Fund were
to make an election, an amount equal to the foreign income taxes paid by the
Fund would be included in the income of its shareholders and the shareholders
would be entitled to credit their portions of this amount against their U.S. tax
liabilities, if any, or to deduct those portions from their U.S. taxable income,
if any. Shortly after any year for which it makes an election, the Trust will
report to the shareholders of the Fund, in writing, the amount per share of
foreign tax that must be included in each shareholder's gross income and the
amount that will be available as a deduction or credit. No deduction for foreign
taxes may be claimed by a shareholder who does not itemize deductions. Certain
limitations will be imposed on the extent to which the credit (but not the
deduction) for foreign taxes may be claimed.



                                      -82-
<PAGE>


                  A Fund's transactions in options and futures contracts are
subject to special provisions of the Code that, among other things, may affect
the character of gains and losses realized by the Fund (that is, may affect
whether gains or losses are ordinary or capital), accelerate recognition of
income to the Fund and defer losses of the Fund. These rules (1) could affect
the character, amount and timing of distributions to shareholders of a Fund, (2)
could require the Fund to "mark to market" certain types of the positions in its
portfolio (that is, treat them as if they were closed out) and (3) may cause the
Fund to recognize income without receiving cash with which to make distributions
in amounts necessary to satisfy the distribution requirements for avoiding
income and excise taxes described above and in the Prospectus. The Trust seeks
to monitor transactions of each Fund, will seek to make the appropriate tax
elections on behalf of the Fund and seeks to make the appropriate entries in the
Fund's books and records when the Fund acquires any option, futures contract or
hedged investment, to mitigate the effect of these rules and prevent
disqualification of the Fund as a regulated investment company.

                  In order for the Tax-Exempt Fund to pay exempt-interest
dividends for any taxable year, at the close of each taxable quarter, at least
50% of the aggregate value of the Fund's portfolio must consist of
exempt-interest obligations. Within 60 days after the close of the taxable year
of the Tax-Exempt Fund, the Trust will notify the Fund's shareholders of the
portion of the dividends paid that constitutes an exempt-interest dividend with
respect to that taxable year. The percentage of total dividends paid by the
Tax-Exempt Fund with respect to any taxable year that qualifies as Federal
exempt-interest dividends will be the same for all shareholders receiving
dividends from the Fund for that year.

                  Interest on indebtedness incurred by a shareholder to purchase
or carry shares of the Tax-Exempt Fund is not deductible for income tax purposes
if the Fund distributes exempt-interest dividends during the shareholder's
taxable year. In addition, if a shareholder of the Tax-Exempt Fund holds shares
for six months or less, any loss on the sale or exchange of those shares will be
disallowed to the extent of the amount of exempt-interest dividends received
with respect to the shares.

                  As a general rule, a shareholder's gain or loss on a sale or
redemption of shares of a Fund will be a long-term capital gain or loss if the
shareholder has held the shares for more than one year. The gain or loss will be
a short-term capital gain or loss if the shareholder has held the shares for one
year or less.

                  A Fund's net realized long-term capital gains are distributed
as described in the Prospectus. The distributions ("capital gain dividends"), if
any, are taxable to a shareholder of a Fund as long-term capital gains,
regardless of how long a shareholder has held the shares, and will be designated
as capital gain dividends in a written notice mailed by the Trust to the
shareholders of the Fund after the close of the Fund's prior taxable year. If a
shareholder receives a capital gain dividend with respect to any share of a
Fund, and if the share is sold before it has been held by the shareholder for
six months or less, then any loss on the sale or exchange of the share, to the
extent of the capital gain dividend, will be treated as a long-term capital
loss.


                                      -83-
<PAGE>


This rule will apply to a sale of shares of the Tax-Exempt Fund only to the
extent the loss is not disallowed under the provision described above. Investors
considering buying shares of a Fund on or just prior to the record date for a
taxable dividend or capital gain distribution should be aware that the amount of
the dividend or distribution payment will be a taxable dividend or distribution
payment.

                  Special rules contained in the Code apply when a shareholder
of a Fund disposes of shares of the Fund through a redemption or exchange within
90 days of purchase and subsequently acquires shares of a Fund on which a sales
charge normally is imposed without paying a sales charge in accordance with the
exchange privilege described in the Prospectus. In these cases, any gain on the
disposition of the shares of the Fund will be increased, or loss decreased, by
the amount of the sales charge paid when the shares were acquired, and that
amount will increase the adjusted basis of the shares of the Fund subsequently
acquired. In addition, if shares of a Fund are purchased within 30 days of
redeeming shares at a loss, the loss will not be deductible and instead will
increase the basis of the newly purchased shares.

                  If a shareholder of a Fund fails to furnish the Trust with a
correct taxpayer identification number, fails to report fully dividend or
interest income, or fails to certify that he or she has provided a correct
taxpayer identification number and that he or she is not subject to "backup
withholding," then the shareholder may be subject to a 31% "backup withholding"
tax with respect to (1) taxable dividends and distributions from the Fund and
(2) the proceeds of any redemptions of shares of the Fund (other than the Money
Market Fund). An individual's taxpayer identification number is his or her
social security number. The 31% backup withholding tax is not an additional tax
and may be credited against a taxpayer's regular Federal income tax liability.

Foreign Taxes

                  Foreign governments may impose taxes on a Fund's investments,
and these taxes generally will reduce the Fund's distributions. An eligible Fund
may elect to pass through to its shareholders foreign taxes paid from its
investments meeting certain holding period requirements. If you meet certain
holding period requirements with respect to your fund shares, an offsetting tax
credit may be available to you. If you do not meet such holding period
requirements, you may still be entitled to a deduction for certain foreign
taxes. In either case, your tax statement will show more taxable income than was
actually distributed by the Fund, but will also show the amount of the available
offsetting credit or deduction.


                                      -84-
<PAGE>



                             THE FUNDS' PERFORMANCE

                  The Trust, from time to time, may quote a Fund's performance,
in terms of the Money Market Fund's or a Class' yield and/or total return, in
reports or other communications to shareholders of a Fund or in advertising
material. Additional information regarding the manner in which performance
figures are calculated is provided below.

Yield for the Money Market Fund

                  The Trust may, from time to time, include the yield and
effective yield of the Money Market Fund in advertisements or reports to
shareholders or prospective investors. "Current yield" will be based upon the
income that a hypothetical investment in the Fund would earn over a stated
seven-day period. This amount would then be "annualized," which means the amount
of income generated over that week is assumed to be generated each week over a
52-week period and is shown as a percentage of the investment. The Money Market
Fund's "effective yield" will be calculated similarly, but, when annualized, the
income earned by an investment in the Fund is assumed to be reinvested. The
effective yield would be slightly higher than the current yield because of the
compounding effect of this presumed reinvestment.

                  The yield for the Money Market Fund is computed by (1)
determining the net change in the value of a hypothetical pre-existing account
in the Fund having a balance of one share at the beginning of a
seven-calendar-day period for which yield is to be quoted, (2) dividing the net
change by the value of the account at the beginning of the period to obtain the
base period return, and (3) annualizing the results (that is, multiplying the
base period return by 365/7). The net change in the value of the account
reflects the value of additional shares purchased with dividends declared on the
original share and any such additional shares less a hypothetical charge
reflecting deductions from shareholder accounts, but does not include realized
gains and losses or unrealized appreciation and depreciation. In addition, the
Trust may calculate a compound effective annualized yield by adding one to the
base period return (calculated as described above), raising the sum to a power
equal to 365/7 and subtracting one.


                  The Money Market Fund's seven-day current yield and effective
seven-day yield as of September 30, 2000 were [ ]% and [ ]%, respectively. Had
GEAM not absorbed a portion of the Money Market Fund's expenses, the Fund's
seven-day yield and effective seven-day yield as of September 30, 2000 would
have been lower.

Yield for Other Funds

                  The Trust may, from time to time, advertise a 30-day "yield"
for each Class of a Participant Fund and an "equivalent taxable yield" for each
Class of the Tax-Exempt Fund. The 30-day yield figures are calculated for a
Class of a Fund according to a formula prescribed by the SEC. The formula can be
expressed as follows:
                                                       6
                                    Yield = 2[(a-b + 1) -1]
                                               ---
                                               cd


                                      -85-
<PAGE>


Where:

         a =   dividends and interest earned during the period.

         b =   expenses accrued for the period (net of reimbursement).

         c =   the average daily number of shares outstanding
               during the period that were entitled to receive
               dividends.

         d =   the maximum offering price per share on the last day of the
               period.

                  For the purpose of determining the interest earned (variable
"a" in the formula) on debt obligations that were purchased by a Fund at a
discount or premium, the formula generally calls for amortization of the
discount or premium; the amortization schedule will be adjusted monthly to
reflect changes in the market values of the debt obligations.

                  Investors should recognize that, in periods of declining
interest rates, the yield will tend to be somewhat higher than prevailing market
rates, and in periods of rising interest rates the yield will tend to be
somewhat lower. In addition, when interest rates are falling, moneys received by
a Fund from the continuous sale of its shares will likely be invested in
portfolio instruments producing lower yields than the balance of the Fund's
portfolio, thereby reducing the current yield of the Fund. In periods of rising
interest rates, the opposite result can be expected to occur.

                  Yield information is useful in reviewing the performance of a
Fund, but because yields fluctuate, this information cannot necessarily be used
to compare an investment in shares of the Fund with bank deposits, savings
accounts and similar investment alternatives that often provide an agreed or
guaranteed fixed yield for a stated period of time. Shareholders of a Fund
should remember that yield is a function of the kind and quality of the
instruments in the Fund's portfolio, portfolio maturity, operating expenses and
market conditions.

                  The 30-day yield for the period ended September 30, 2000 for
Class A, Class B and Class Y shares, respectively, of the Tax-Exempt Fund,
Short-Term Government Fund, Government Securities Fund and Income Fund were as
follows:



<TABLE>
<CAPTION>
Fund                                           Class A          Class B          Class C          Class Y
----                                           -------          -------          -------          -------
<S>                                          <C>              <C>              <C>              <C>
Tax-Exempt Fund                                   %                %                -                %
Short-Term Government Fund                        %                %                -                %
Government Securities Fund                        %                %                -
Income Fund                                       %                %                -                %
</TABLE>


                  Had the Funds' investment adviser not absorbed a portion of
the above Funds' expenses, these Funds' 30-day yield for the period ended
September 30, 2000 class of shares would have been lower.


                                      -86-
<PAGE>



                  The equivalent taxable yield of the Tax-Exempt Fund
demonstrates the yield on a taxable investment necessary to produce an after-tax
yield equal to the Fund's tax-exempt yield. The Tax-Exempt Fund's tax equivalent
yield is computed for a Class by dividing that portion of the Fund's yield that
is tax-exempt by one minus a stated income tax rate and adding the product to
that portion, if any, of the Fund's yield that is not tax-exempt. Thus, the
equivalent taxable yield of a Class of the Tax-Exempt Fund will always exceed
the Class' yield. Assuming an effective tax rate of 39.6%, for the 30-day period
ended September 30, 2000, the equivalent taxable yield of the Tax-Exempt Fund
for Class A, Class B and Class Y shares, respectively, was [ ]%, [ ]%, and [ ]%.
Had the Tax-Exempt Fund's investment adviser not absorbed a portion of the
Fund's expenses, assuming an effective tax rate of 39.6%, the equivalent taxable
yield of the Tax-Exempt Fund for the indicated 30-day period for the relevant
Class of shares would have been lower.

Average Annual Total Return

                  From time to time, the Trust may advertise an "average annual
total return," which represents the average annual compounded rates of return
over one-, five- and ten-year periods, or over the life of the Fund (as stated
in the advertisement) for each class of shares of a Fund. This total return
figure shows an average percentage change in value of an investment in the Class
from the beginning date of the measuring period to the ending date of the
period. The figure reflects changes in the price of a class of shares and
assumes that any income, dividends and/or capital gains distributions made by
the Fund during the period are reinvested in shares of the same Class. When
considering average annual total return figures for periods longer than one
year, investors should note that a Fund's annual total return for any one year
in the periods might have been greater or less than the average for the entire
period.

                  The "average annual total return" figures for the Funds
described below are computed for a Class according to a formula prescribed by
the SEC. The formula can be expressed as follows:
                                   n
                           P(1 + T)  = ERV

Where:

                                      -87-

<PAGE>


                  P           =     a hypothetical initial payment of $1,000;
                  T           =     average annual total return;
                  n           =     number of years; and
                  ERV         =     Ending Redeemable Value of a hypothetical
                                    $1,000 investment made at the beginning of a
                                    1-, 5- or 10-year period at the end of a 1-,
                                    5- or 10-year period (or fractional portion
                                    thereof), assuming reinvestment of all
                                    dividends and distributions.

                  The ERV assumes the maximum applicable sales load is deducted
from the initial investment or redemption amount, in the case of CDSC, complete
redemption of the hypothetical investment at the end of the measuring period.

                  The average annual total return for the periods ended
September 30, 2000 for Class A, Class B and Class Y shares, respectively, of
each Participant Fund was as follows:



<TABLE>
<CAPTION>
------------------ --------- --------- -------- ---------- --------- --------- ----------
                                                              Load    Adjusted
------------------ --------- --------- -------- ---------- --------- -------- -------- ----------   ----------
                   One Year   Five      Ten       Since    One Year    Five     Ten      Since      Inception
      Fund                    Years     Years   Inception              Years    Years  Inception       Date
------------------ --------- --------- -------- ---------- --------- -------- -------- ----------   ----------
<S>               <C>        <C>       <C>     <C>         <C>       <C>      <C>      <C>          <C>
U.S. Equity
    Class A               %         %        -          %         %        %        -           %      2/22/93
    Class B               %         %        -          %         %        %        -           %     12/22/93
    Class C               -         -        -          -         -        -        -           -      9/30/99
    Class Y               %         %        -          %         %        %        -           %     11/29/93
------------------ --------- --------- -------- ---------- --------- -------- -------- ---------- ------------
Tax-Exempt
    Class A               %         %        -                     %       %        -           %       9/8/93
    Class B               %         %                              %       %        -           %       9/8/93
    Class C                         -        -          -          -       -        -           -      9/30/99
    Class Y               %         -        -                     %       -        -           %      9/26/97
------------------ --------- --------- -------- ---------- --------- -------- -------- ---------- ------------
S-T Government
    Class A               %         %        -          %          %       %        -           %       3/2/94
    Class B               %         %        -          %          %       %        -           %       3/2/94
    Class C               -         -        -          -          -       -        -           -      9/30/99
    Class Y               %         %        -          %          %       %        -           %       3/2/94
------------------ --------- --------- -------- ---------- --------- -------- -------- ---------- ------------
Income
    Class A               %         %        -          %         %        %        -           %      1/22/93
    Class B               %         %        -          %         %        %        -           %     12/22/93
    Class C               -         -        -          -         -        -        -           -      9/30/99
    Class Y               %         %        -          %         %        %        -           %     11/29/93
------------------ --------- --------- -------- ---------- --------- -------- -------- ---------- ----------
Global
    Class A               %         %        -          %         %        %        -           %      2/22/93
    Class B               %         %        -          %         %        %        -           %     12/22/93
    Class C               -         -        -          -         -        -        -           -      9/30/99
    Class Y               %         %        -          %         %        %        -           %     11/29/93
------------------ --------- --------- -------- ---------- --------- -------- -------- ---------- ------------
</TABLE>


                                      -88-

<PAGE>



<TABLE>
<CAPTION>

------------------ --------- --------- -------- ---------- --------- --------- ----------
                                                              Load    Adjusted
------------------ --------- --------- -------- ---------- --------- -------- -------- ----------   ----------
                   One Year   Five      Ten       Since    One Year    Five     Ten      Since      Inception
      Fund                    Years     Years   Inception              Years    Years   Inception    Date
------------------ --------- --------- -------- ---------- --------- -------- -------- ----------   ----------
<S>                <C>       <C>       <C>      <C>        <C>       <C>      <C>      <C>          <C>
International
    Class A               %        %         -          %          %        %       -            %     3/2/94
    Class B               %        %         -         8%          %        %       -            %     3/2/94
    Class C               -        -         -          -          -        -       -            -    9/30/99
    Class Y               %        %         -                     %        %       -            %     3/2/94
------------------ --------- --------- -------- ---------- --------- -------- -------- ---------- -----------
Strategic
    Class A               %         %        -          %          %        %       -            %    2/22/93
    Class B               %         %        -          %          %        %       -            %   12/22/93
    Class C               -         -        -          -          -        -       -            -    9/30/99
    Class Y               %         %        -          %          %        %       -            %   11/29/93
------------------ --------- --------- -------- ---------- --------- -------- -------- ---------- -----------
Premier
    Class A               %         -        -          %          %        -       -            %   12/31/96
    Class B               %         -        -          %          %        -       -            %   12/31/96
    Class C               -         -        -          -          -        -       -            -    9/30/99
    Class Y               %         -        -          %          %        -       -            %   12/31/96
------------------ --------- --------- -------- ---------- --------- -------- -------- ---------- -----------
Gov't Securities
    Class A               %         %        -          %          %        %       -            %     9/8/93
    Class B               %         %        %          -          %        %       %            -    4/22/87
    Class C               -         -        -          -          -        -       -            -    9/30/99
------------------ --------- --------- -------- ---------- --------- -------- -------- ---------- -----------
Mid-Cap Growth
    Class A               %         %        -          %          %        %       -            %     9/8/93
    Class B               %         %        -          %          %        %       -            %     9/8/93
    Class C               -         -        -          -          -        -       -            -    9/30/99
    Class Y               %         -        -          %          %        -       -            %   12/31/98
------------------ --------- --------- -------- ---------- --------- -------- -------- ---------- -----------
Value Equity
    Class A               %         %        -          %          %        %       -            %     9/8/93
    Class B               %         %        -          %          %        %       -            %     9/8/93
    Class C               -         -        -          -          -        -       -            -    9/30/99
    Class Y               %         -        -          %          %        -       -            %     1/5/98
------------------ --------- --------- -------- ---------- --------- -------- -------- ---------- -----------
Mid-Cap Value
      Class A             -         -        -          -          -        -       -            %   12/31/98
      Class B             -         -        -          %          -        -       -            %   12/31/98
      Class C             -         -        -          -          -        -       -            -    9/30/99
      Class Y             -         -        -          %          -        -       -            %   12/31/98
------------------ --------- --------- -------- ---------- --------- -------- -------- ---------- -----------
Small-Cap Value
      Class A             %         -        -          %          %        -       -            %    9/30/98
      Class B             %         -        -          %          %        -       -            %    9/30/98
      Class C             -         -        -          -          -        -       -            -    9/30/99
      Class Y             %         -        -          %          %        -       -            %    9/30/98
------------------ --------- --------- -------- ---------- --------- -------- -------- ---------- -----------
Europe Equity
      Class A             -         -        -          %          -        -       -            %    1/29/99
      Class B             -         -        -          %          -        -       -            %    1/29/99
      Class C             -         -        -          -          -        -       -            -    9/30/99
      Class Y             -         -        -          %          -        -       -            %    1/29/99
------------------ --------- --------- -------- ---------- --------- -------- -------- ---------- -----------
Emerging Mkts
      Class A             -         -        -          %          -        -       -            %    1/29/99
      Class B             -         -        -          %          -        -       -            %    1/29/99
      Class C             -         -        -          -          -        -       -            -    9/30/99
      Class Y             -         -        -          %          -        -       -            %    1/29/99
------------------ --------- --------- -------- ---------- --------- -------- -------- ---------- -----------
High Yield
      Class A             -         -        -          %          -        -       -            %   12/31/98
      Class B             -         -        -          %          -        -       -            %   12/31/98
      Class C             -         -        -          -          -        -       -            -    9/30/99
      Class Y             -         -        -          -          -        -       -            %   12/31/98
------------------ --------- --------- -------- ---------- --------- -------- -------- ---------- -----------
Money Market              %         %        -          %          %        %       -            %    2/22/93
------------------ --------- --------- -------- ---------- --------- -------- -------- ---------- -----------
</TABLE>



                                      -89-

<PAGE>



Notes to Performance

For periods prior to September 26, 1997, the performance data relating to Class
A and B shares of the Mid-Cap Growth Fund, Value Equity Fund, Tax-Exempt Fund
and Government Securities Fund reflect the prior performance and expense ratios
of Investors Trust Growth Fund, Investors Trust Value Fund, Investors Trust Tax
Free Fund and Investors Trust Government Fund, respectively, each a series of
Investors Trust, the assets of which were acquired by the corresponding GE Fund.
The Government Securities Fund has not offered Class Y shares since the Fund's
inception, therefore no performance data is shown for Class Y shares of this
Fund.

The performance data has been calculated to assume the current maximum sales
charges imposed by the Trust, which are generally higher than the sales charges
formerly imposed by the Trust.

The mutual fund results are net of fees and expenses and assume changes in share
price, reinvestment of dividends and capital gains, and, if applicable, the
deduction of any sales charges as set forth under the "Load Adjusted" column.
GEAM has voluntarily agreed to reduce or otherwise limit certain expenses of the
Trust. Also, certain of the results for funds that were series of Investors
Trust were favorably affected by expense waivers or limitations. Absent these
limits, the GE Funds' and Investors Trust Funds' performance would have been
lower. The S&P 500 Index Fund, the Premier Research Fund, the Premier
International Fund and the Premier Value Fund had not commenced operations as of
the date of this SAI and therefore no performance information is available at
this time.

                  The Funds may compare their average annual total returns to
the returns of the following securities market indices. The Standard & Poor's
("S&P") Composite Index of 500 stocks (S&P 500 Index), the S&P Composite Index
of 400 mid-cap stocks (S&P Mid-Cap 400 Index), the S&P/BARRA Composite Index of
500 value stocks (S&P 500 Value Index), Morgan Stanley Capital International
World Index (MSCI World), Morgan Stanley Capital International EAFE Index (MSCI
EAFE), Lehman Brothers Aggregate Bond Index (LB Aggregate), the Lehman Brothers
Municipal Bond Index (LBMI), Lehman Brothers 1-3 Year Government Bond Index (LB
1-3), the Lehman Brothers 10-Year Municipal Index and the Lehman Brothers
Government Bond Index are unmanaged indexes and do not reflect the actual cost
of investing in the instruments that comprise each index. The S&P 500 Index is a
composite of the prices of 500 widely held stocks recognized by investors to be
representative of the stock market in general. The S&P Mid-Cap 400 Index is a
capitalization-weighted index of 400 U.S. stocks with a median market
capitalization of approximately $700 million. The S&P 500 Value Index is a
capitalization-weighted index of all the stocks in the S&P 500 Index that have
low price-to-book ratios. The MSCI World Index is a composite of 1,561 stocks in
companies from 22 countries representing the European, Pacific Basin and
American regions. The MSCI EAFE Index is a composite of 1,103 stocks of
companies from 20 countries representing stock markets of Europe, Australasia,
New Zealand and the Far East. LB Aggregate is a composite index of short-,
medium-, and long-term bond performance and is widely recognized as a barometer
of the bond market in general. The LBMI is a composite of investment grade,
fixed-rate municipal bonds and is considered to be representative of the
municipal bond market. The LB 1-3 is a composite of government and U.S. Treasury
obligations with maturities of 1-3 years. The Lehman Brothers 10-Year Municipal
Index is comprised of 8,987 bonds with a nominal maturity from eight years up
to, but not including, 12 years. The Lehman Brothers Government Bond Index is
comprised of all U.S. dollar fixed-rate U.S. agency and Treasury bond issues
(excluding stripped issues) with remaining maturities greater than one year and
with at least $100 million in outstanding issuance. S&P 500 Index & LB Aggregate
Bond Index simulates a blended return which is representative of the approximate
asset allocation mix of the GE Strategic Investment Fund for the periods
presented (composed of 60% S&P 500 Index, 40% LB Aggregate). The actual
allocation mix of this Fund may have varied from time to time. The results shown
for the foregoing indexes assume the reinvestment of net dividends.


                                      -90-
<PAGE>

                  The Trust also may advertise the actual annual and annualized
total return performance data for various periods of time, which may be shown by
means of schedules, charts or graphs. Actual annual or annualized total return
data generally will be lower than average annual total return data because the
latter reflects compounding of return. Yield and total return figures are based
on historical earnings and are not intended to indicate future performance.

Aggregate Total Return

                  The Trust may use "aggregate total return" figures in
advertisements, which represent the cumulative change in value of an investment
in a class of shares of a Fund for a specific period, and which reflects changes
in the Fund's share price and reinvestment of dividends and distributions.
Aggregate total return may be shown by means of schedules, charts or graphs, and
may indicate subtotals of the various components of total return (that is, the
change in value of initial investment, income dividends and capital gains
distributions). Because distribution and shareholder service fees vary across
Classes, the total returns for each Class will differ. Aggregate total return
data reflects compounding over a longer period of time than does annual total
return data, and therefore aggregate total return will be higher.

                  "Aggregate total return" represents the cumulative change in
the value of an investment in a Class for the specified period are computed by
the following formula:

                  Aggregate Total Return = ERV - P
                                           -------
                                              P

                  Where P =  a hypothetical initial payment of $1,000; and

                  ERV  =     Ending Redeemable Value of a hypothetical
                             $1,000 investment made at the beginning of a
                             1-, 5- or 10-year period at the end of the
                             1-, 5- or 10-year period (or fractional
                             portion thereof), assuming reinvestment of
                             all dividends and distributions.

Distribution Rate

                  The Trust may advertise a Fund's distribution rate and/or
effective distribution rate. A Fund's distribution rate differs from yield and
total return and therefore is not intended to be a complete measure of
performance.

                  A Fund's distribution rate measures dividends distributed for
a specified period. A Fund's distribution rate is computed by dividing the most
recent monthly distribution per share annualized by the current net asset value
per share. A Fund's effective distribution rate is computed by dividing the
distribution rate by the ratio used to annualize the distribution and
reinvesting the resulting amount for a full year on the basis of such ratio. The
effective distribution rate will be higher than the distribution rate because of
the compounding effect of the assumed reinvestment. A Fund's yield is calculated
using the standardized formula described above. In contrast, the distribution
rate is based on the Fund's last monthly distribution, which tends to be
relatively stable and may be more or less than the amount of net investment
income and short-term capital gain actually earned by the Fund during the month.


                                      -91-

<PAGE>


Comparative Performance Information

                  In addition to the comparative performance information
included in the Prospectus and otherwise quoted in sales and advertising
materials, the Trust may compare the Fund's performance with (a) the performance
of other mutual funds as listed in the rankings prepared by Lipper Analytical
Services, Inc. or similar independent services that monitor the performance of
mutual funds, (b) various unmanaged indices, including the Russell Index, S&P
500 Index, and the Dow Jones Industrial Average or (c) other appropriate indices
of investment securities or with data developed by GEAM derived from those
indices.

                  Performance information also may include evaluations of a Fund
published by nationally recognized ranking services and by financial
publications that are nationally recognized, such as Barron's, Business Week,
Forbes, Fortune, Institutional Investor, Kiplinger's Personal Finance, Money,
Morningstar Mutual Fund Values, The New York Times, The Wall Street Journal and
USA Today. These ranking services or publications may compare a Fund's
performance to, or rank it within, a universe of mutual funds with investment
objectives and policies similar, but not necessarily identical, to that of the
Funds. Such comparisons or rankings are made on the basis of several factors,
including the size of the Fund, objectives and policies, management style and
strategy, and portfolio composition, and may change over time if any of those
factors change.

                             PRINCIPAL STOCKHOLDERS


                  The following persons are the only persons known by the Trust
to hold of record more than 5% of the outstanding shares of any class of the
Funds as of January __, 2000.




Name and Address                    Amount of               Percent
of Record Owner                     Ownership              of Class
----------------                    ---------              ---------
[To be updated]



                                      -92-

<PAGE>


                  As of January __, 2001: (i) the current Trustees and officers
of the Trust, as a group, beneficially owned less than 1% of each Fund's
outstanding shares; (ii) GE Capital Assurance ("GECA"), a Delaware corporation,
owned __% of the outstanding shares of the GE Small-Cap Value Fund; 81.74% of
the outstanding shares of the GE Emerging Markets Fund, and % of the outstanding
shares of the GE High Yield Fund, (iv) GE Life & Annuity Assurance Company
("GELAAC"), a Virginia corporation, owned __% of the outstanding shares of the
GE Europe Equity Fund, and (v) Colonial Penn Insurance Company ("Colonial
Penn"), a Pennsylvania corporation, owned __% of the outstanding shares of the
GE Mid-Cap Value Equity Fund. So long as GECA, GELAAC and Colonial Penn own more
than 25% of the outstanding shares of the referenced Funds, they may be deemed
to control these Funds.

                     FUND HISTORY AND ADDITIONAL INFORMATION

                  The Trust is an open-end management investment company
organized as an unincorporated business trust under the laws of the Commonwealth
of Massachusetts pursuant to a Declaration of Trust dated August 10, 1992, as
amended from time to time (the "Declaration").

                  Currently, there are twenty three funds in the Trust. The U.S.
Equity Fund was established as a series of the Trust on August 24, 1992. The
Global Fund, the Strategic Fund, the Tax-Exempt Fund, the Income Fund and the
Money Market Fund were added as series of the Trust on November 11, 1992. The
Short-Term Government Fund and the International Fund were added as series of
the Trust on March 1, 1994. The Mid-Cap Growth Fund and the International Income
Fund were added as series of the Trust on June 17, 1994. The Premier Fund was
added as a series of the Trust on July 22, 1996. The Value Equity Fund and the
Government Securities Fund were added as series of the Trust on June 2, 1997.
The Small-Cap Value Fund, the Small-Cap Growth Fund, the Mid-Cap Value Fund and
the High Yield Fund were added as series of the Trust on May 8, 1998. The Europe
Fund and the Emerging Markets Fund were added as series of the Trust on November
6, 1998. The Premier Research Fund, the Premier International Fund, the Premier
Value Fund and the S&P 500 Index Fund were added as series of the Trust on
December 13, 1999.

                  On September 26, 1997, the Trust, on behalf of GE Mid-Cap
Growth Fund, GE Value Equity Fund, GE Tax-Exempt Fund, GE Government Securities
Fund and GE Short-Term Government Fund, acquired all or substantially all of the
assets of Investors Trust Growth Fund, Investors Trust Value Fund, Investors
Trust Tax Free Fund, Investors Trust Government Fund and Investors Trust
Adjustable Rate Fund, respectively (each a series of Investors Trust).

                  In the interest of economy and convenience, physical
certificates representing shares of a Fund are not issued. State Street
maintains a record of each shareholder's ownership of shares of a Fund.


                                      -93-


<PAGE>


                  Shareholder Liability. Massachusetts law provides that
shareholders of the Funds may, under certain circumstances, be held personally
liable for the obligations of the Trust. The Declaration disclaims shareholder
liability for acts or obligations of the Trust, however, and permits notice of
the disclaimer be given in each agreement, obligation or instrument entered into
or executed by the Trust or a Trustee of the Trust. The Declaration provides for
indemnification from the property of a Fund for all losses and expenses of any
shareholder of the Fund held personally liable for the obligations of the Fund.
Thus, the risk of a shareholder of a Fund incurring financial loss on account of
shareholder liability is limited to circumstances in which the Fund would be
unable to meet its obligations, a possibility that the Trust's management
believes is remote. Upon payment of any liability incurred by a Fund, the
shareholder paying the liability will be entitled to reimbursement from the
general assets of the Fund. The Trustees intend to conduct the operations of the
Trust and the Funds in such a way so as to avoid, as far as practicable,
ultimate liability of the shareholders for liabilities of the Funds.

                  Shareholder Rights and Voting. When issued, shares of a Fund
will be fully paid and non-assessable. Shares are freely transferable and have
no preemptive, subscription or conversion rights. Each Class represents an
identical interest in a Fund's investment portfolio. As a result, each Class has
the same rights, privileges and preferences, except with respect to: (1) the
designation of each Class; (2) the sales arrangement; (3) certain expenses
allocable exclusively to each Class; (4) voting rights on matters exclusively
affecting a single Class; and (5) the exchange privilege of each Class. The
Board does not anticipate that there will be any conflicts among the interests
of the holders of the different Classes. The Trustees, on an ongoing basis, will
consider whether any conflict exists and, if so, will take appropriate action.
The Board of Trustees may amend the Declaration of Trust without the vote of
shareholders in order to conform the provisions to tax or regulatory
requirements, or to make other changes which do not materially affect the rights
of shareholders. In addition, the Trustees may reclassify and redesignate any
series or class of shares outstanding, as long as the action does not materially
adversely affect the rights of the affected shareholders.

                  When matters are submitted for shareholder vote, each
shareholder of each Fund will have one vote for each full share held and
proportionate, fractional votes for fractional shares held. In general, shares
of all Funds vote as a single class on all matters except (1) matters affecting
the interests of one or more of the Funds or Classes of a Fund, in which case
only shares of the affected Funds or Classes would be entitled to vote or (2)
when the 1940 Act requires the vote of an individual Fund. Normally, no meetings
of shareholders of the Funds will be held for the purpose of electing Trustees
of the Trust unless and until such time as less than a majority of the Trustees
holding office have been elected by shareholders of the Trust, at which time the
Trustees then in office will call a shareholders' meeting for the election of
Trustees. Shareholders of record of no less than a majority of the outstanding
shares of the Trust may remove a Trustee for cause through a declaration in
writing or by vote cast in person or by proxy at a meeting called for that
purpose. A meeting will be called for the purpose of voting on the removal of a
Trustee at the written request of holders of 10% of the Trust's outstanding
shares. Shareholders who satisfy certain criteria will be assisted by the Trust
in communicating with other shareholders in seeking the holding of the meeting.

                  Counsel. Willkie Farr & Gallagher, 787 Seventh Avenue, New
York, New York 10019-6099, serves as counsel for the Trust.



                                      -94-

<PAGE>

                  Independent Accountants. PricewaterhouseCoopers LLP, 160
Federal Street, Boston, Massachusetts 02110, serves as independent accountants
of the Trust. Coopers & Lybrand L.L.P. (one of the predecessor firms of
PricewaterhouseCoopers LLP), One Post Office Square, Boston, Massachusetts
02109, served as independent accountants to Investors Trust, all or
substantially all the assets of which were acquired by the Trust on September
26, 1997.

                              FINANCIAL STATEMENTS


                  The Annual Report dated [September 30, 2000], which either
accompanies this SAI or has previously been provided to the person to whom this
SAI is being sent, is incorporated herein by reference with respect to all
information other than the information set forth in the Letter to Shareholders
included in the Reports. On June 11, 1999, the Board of Trustees of GE Funds
approved a share class redesignation (the "Redesignation") for each of the
Funds, except the Money Market Fund, effective September 17, 1999. The
Redesignation will combine each Fund's respective Class A and Class C shares
into a single class and Class D shares will be renamed Class Y shares. At the
same time, the Trustees also approved, effective September 17, 1999, a 0.25%
reduction in the annual distribution and shareholder servicing fee rate for
Class A shareholders. The Annual Report dated October 31, 1996 for Investors
Trust Growth Fund, Investors Trust Value Fund, Investors Trust Tax Free Fund and
Investors Trust Government Fund, which are the predecessor funds to the Mid-Cap
Growth Fund, the Value Equity Fund, the Tax-Exempt Fund and the Government
Securities Fund, respectively (collectively with the Annual Report for GE Funds,
the "Financial Reports"), are incorporated herein by reference.


                  The International Income Fund and the Small-Cap Growth Equity
Fund have not yet commenced operations and have no assets as of the date of this
SAI. The Trust will furnish, without charge, a copy of the Financial Reports,
upon request to the Trust at P.O. Box 120065, Stamford, CT 06912-0065, (800)
242-0134.


                                      -95-

<PAGE>



                                    APPENDIX

                             DESCRIPTION OF RATINGS

Commercial Paper Ratings

                  The rating A-1+ is the highest, and A-1 the second highest
commercial paper rating assigned by S&P. Paper rated A-1+ must have either the
direct credit support of an issuer or guarantor that possesses excellent
long-term operating and financial strength combined with strong liquidity
characteristics (typically, such issuers or guarantors would display credit
quality characteristics that would warrant a senior bond rating of AA or higher)
or the direct credit support of an issuer or guarantor that possesses above
average long-term fundamental operating and financing capabilities combined with
ongoing excellent liquidity characteristics. Paper rated A-1 must have the
following characteristics: liquidity ratios are adequate to meet cash
requirements; long-term senior debt is rated A or better; 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; and the reliability and quality of management are
unquestioned. Capacity for timely payment on issues rated A-2 is satisfactory.
However, the relative degree of safety is not as high as issues designated
"A-1."

                  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: (a) evaluation of the management of the issuer; (b)
economic evaluation of the issuer's industry or industries and an appraisal of
speculative-type risks that may be inherent in certain areas; (c) evaluation of
the issuer's products in relation to competition and customer acceptance; (d)
liquidity; (e) amount and quality of long-term debt; (f) trend of earnings over
a period of ten years; (g) financial strength of parent company and the
relationships that exist with the issue; and (h) recognition by the management
of obligations that may be present or may arise as a result of public interest
questions and preparations to meet the obligations.

                  Issuers rated Prime-2 (or supporting institutions) have a
strong ability for repayment of senior short-term debt obligations. This
normally will be evidenced by many of the characteristics cited above, but to a
lesser degree. Earnings trends and coverage ratios, while sound, may be more
subject to variation. Capitalization characteristics, while still appropriate,
may be more affected by external conditions. Ample alternate liquidity is
maintained.

                  Short-term obligations, including commercial paper, rated A-1+
by IBCA Limited or its affiliate IBCA Inc. are obligations supported by the
highest capacity for timely repayment. Obligations rated A-1 have a very strong
capacity for timely repayment. Obligations rated A-2 have a strong capacity for
timely repayment, although that capacity may be susceptible to adverse changes
in business, economic and financial conditions.

                  Fitch Investors Services, Inc. employs the rating F-1+ to
indicate issues regarded as having the strongest degree of assurance of timely
payment. The rating F-1 reflects an assurance of timely payment only slightly
less in degree than issues rated F-1+, while the rating


                                      A-1


<PAGE>


F-2 indicates a satisfactory degree of assurance of timely payment although the
margin of safety is not as great as indicated by the F-1+ and F-1 categories.

                  Duff & Phelps Inc. employs the designation of Duff 1 with
respect to top grade commercial paper and bank money instruments. Duff 1+
indicates the highest certainty of timely payment: short-term liquidity is
clearly outstanding and safety is just below risk-free U.S. Treasury short-term
obligations. Duff 1- indicates high certainty of timely payment. Duff 2
indicates good certainty of timely payment; liquidity factors and company
fundamentals are sound.

                  Thomson BankWatch Inc. employs the rating TBW-1 to indicate
issues having a very high degree of likelihood of timely payment. TBW-2
indicates a strong degree of safety regarding timely payment, however, the
relative degree of safety is not as high as for issues rated TBW-1. While the
rating TBW-3 indicates issues that are more susceptible to adverse developments
than obligations with higher ratings, capacity to service principal and interest
in a timely fashion is considered adequate. The lowest rating category is TBW-4;
this rating is regarded as non-investment grade and, therefore, speculative.

                  Various NRSROs utilize rankings within ratings categories
indicated by a plus or minus sign. The Funds, in accordance with industry
practice, recognize such ratings within categories or gradations, viewing for
example S&P's ratings of A-1+ and A-1 as being in S&P's highest rating category.

Description of S&P Corporate Bond Ratings

                  AAA -- This is the highest rating assigned by S&P to a bond
and indicates an extremely strong capacity to pay interest and repay principal.

                  AA -- Bonds rated AA have a very strong capacity to pay
interest and repay principal and differ from AAA issues only in small degree.

                  A -- Bonds rated A have a strong capacity to pay interest and
repay principal although they are somewhat more susceptible to the adverse
effects of changes in circumstances and economic conditions than debt in higher
rated categories.

                  BBB -- Bonds rated BBB have an adequate capacity to pay
interest and repay principal. Adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity to pay interest and
repay principal for bonds in this category (even though they normally exhibit
adequate protection parameters) than for bonds in higher rated categories.

                  BB, B and CCC -- Bonds rated BB and B are regarded, on
balance, as predominately speculative with respect to capacity to pay interest
and repay principal in accordance with the terms of the obligation. BB
represents a lower degree of speculation than B, and CCC the highest degree of
speculation. While such bonds will likely have some quality and protective
characteristics, these are outweighed by large uncertainties or major risk
exposures to adverse conditions.


                                       A-2


<PAGE>


                  To provide more detailed indications of credit quality, the
ratings from AA to B may be modified by the addition of a plus or minus sign to
show relative standing within this major rating category.

Description of Moody's Corporate Bond Ratings

                  Aaa -- Bonds that are 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
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 that are 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 that make the long-term risks appear somewhat larger than in Aaa
securities.

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

                  Baa -- Bonds that are rated Baa are considered as medium-grade
obligations, that is, 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 that are 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 that are rated B generally lack characteristics of
desirable investments. Assurance of interest and principal payments or of
maintenance of other terms of the contract over any long period of time may be
small.

                  Caa -- Bonds that are rated Caa are of poor standing. These
issues may be in default, or present elements of danger may exist with respect
to principal or interest.

                  Moody's applies numerical modifiers (1, 2 and 3) with respect
to the bonds rated Aa through B, The modifier 1 indicates that the bond being
rated 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 bond ranks
in the lower end of its generic rating category.


                                       A-3
<PAGE>


Description of S&P Municipal Bond Ratings

                  AAA -- Prime -- These are obligations of the highest quality.
They have the strongest capacity for timely payment of debt service.

                  General Obligation Bonds -- In a period of economic stress,
the issuers will suffer the smallest declines in income and will be least
susceptible to autonomous decline. Debt burden is moderate. A strong revenue
structure appears more than adequate to meet future expenditure requirements.
Quality of management appears superior.

                  Revenue Bonds -- Debt service coverage has been, and is
expected to remain, substantial. Stability of the pledged revenues is also
exceptionally strong due to the competitive position of the municipal enterprise
or to the nature of the revenues. Basic security provisions (including rate
covenant, earnings test for issuance of additional bonds, debt service reserve
requirements) are rigorous. There is evidence of superior management.

                  AA -- High Grade -- The investment characteristics of bonds in
this group are only slightly less marked than those of the prime quality issues.
Bonds rated AA have the second strongest capacity for payment of debt service.

                  A -- Good Grade -- Principal and interest payments on bonds in
this category are regarded as safe although the bonds are somewhat more
susceptible to the adverse effects of changes in circumstances and economic
conditions than bonds in higher rated categories. This rating describes the
third strongest capacity for payment of debt service. The ratings differ from
the two higher ratings of municipal bonds, because:

                  General Obligations Bonds -- There is some weakness, either in
the local economic base, in debt burden, in the balance between revenues and
expenditures, or in quality of management. Under certain adverse circumstances,
any one such weakness might impair the ability of the issuer to meet debt
obligations at some future date.

                  Revenue Bonds -- Debt service coverage is good, but not
exceptional. Stability of the pledged revenues could show some variations
because of increased competition or economic influences on revenues. Basic
security provisions, while satisfactory, are less stringent. Management
performance appears adequate.

                  BBB -- Medium Grade -- Of the investment grade ratings, this
is the lowest. Bonds in this group are regarded as having an adequate capacity
to pay interest and repay principal. Adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity to pay interest and
repay principal for bonds in this category (even though they normally exhibit
adequate protection parameters) than for bonds in higher rated categories.

                  General Obligation Bonds -- Under certain adverse conditions,
several of the above factors could contribute to a lesser capacity for payment
of debt service. The difference between A and BBB ratings is that the latter
shows more than one fundamental weakness, or one very substantial fundamental
weakness, whereas, the former shows only one deficiency among the factors
considered.


                                       A-4

<PAGE>


                  Revenue Bonds -- Debt coverage is only fair. Stability of the
pledged revenues could show substantial variations, with the revenue flow
possibly being subject to erosion over time. Basic security provisions are no
more than adequate. Management performance could be stronger.

                  BB, B, CCC and CC -- Bonds rated BB, B, CCC and CC are
regarded, on balance, as predominately speculative with respect to capacity to
pay interest and repay principal in accordance with the terms of the obligation.
BB includes the lowest degree of speculation and CC the highest degree of
speculation. While these bonds will likely have some quality and protective
characteristics, these characteristics are outweighed by large uncertainties or
major risk exposures to adverse conditions.

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

                  D -- Bonds rated D are in default, and payment of interest
and/or repayment of principal is in arrears.

                  S&P's letter ratings may be modified by the addition of a plus
or a minus sign, which is used to show relative standing within the major rating
categories, except in the AAA-Prime Grade category.

Description of S&P Municipal Note Ratings

                  Municipal notes with maturities of three years or less are
usually given note ratings (designated SP-1, -2 or -3) to distinguish more
clearly the credit quality of notes as compared to bonds. Notes rated SP-1 have
a very strong or strong capacity to pay principal and interest. Those issues
determined to possess overwhelming safety characteristics are given the
designation of SP-1+. Notes rated SP-2 have satisfactory capacity to pay
principal and interest.

Description of Moody's Municipal Bond Ratings

                  Aaa -- Bonds that are rated Aaa are judged to be 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 that are 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 that make the long-term risks appear somewhat larger than in
Aaa securities.

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


                                       A-5
<PAGE>


                  Baa -- Bonds that are rated Baa are considered as medium grade
obligations, that is, 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 that are 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 characterize bonds in this class.

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

                  Caa -- Bonds that are rated 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 that are rated Ca represent obligations that are
speculative in a high degree. Such issues are often in default or have other
marked shortcomings.

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

                  Moody's applies the numerical modifiers 1, 2 and 3 in each
generic rating classification from Aa through B. The modifier 1 indicates that
the security ranks in the higher end of its generic ratings 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 ratings category.

Description of Moody's Municipal Note Ratings

                  Moody's ratings for state and municipal notes and other
short-term loans are designated Moody's Investment Grade (MIG) and for variable
rate demand obligations are designated Variable Moody's Investment Grade (VMIG).
This distinction recognizes the differences between short-term credit risk and
long-term risk. Loans bearing the designation MIG 1/VMIG 1 are the best quality,
enjoying strong protection from established cash flows of funds for their
servicing or from established and broad-based access to the market for
refinancing, or both. Loans bearing the designation MIG 2/VMIG 2 are of high
quality, with margins of protection ample, although not as large as the
preceding group. Loans bearing the designation MIG 3/VMIG3 are of favorable
quality, with all security elements accounted for but lacking the undeniable
strength of the higher grades. Market access for refinancing, in particular, is
likely to be less well established. Loans bearing the designation MIG 4/VMIG 4
are of adequate quality. Protection commonly regarded as required of an
investment security is present and although not distinctly or predominantly
speculative, there is specific risk.


                                      A-6

<PAGE>

                                     PART C
                                OTHER INFORMATION
                                -----------------

Item 23.    Exhibits
--------    --------
Exhibit No. Description of Exhibit
----------- ----------------------

(a)(1)      Declaration of Trust*

   (2)      Certificate of Amendment of Declaration of Trust and Change of
            Series Designation*

   (3)      Form of Amendment to Declaration of Trust to add GE Short-Term
            Government Fund ("Short-Term Government Fund") and GE
            International Equity Fund ("International Fund")*

   (4)      Form of Amendment to Declaration of Trust to add GE Mid-Cap
            Growth Fund ("Mid-Cap Growth Fund") and GE International Fixed
            Income Fund ("International Income Fund")*

   (5)      Form of Amendment to Declaration of Trust to add GE Premier
            Growth Equity Fund ("Premier Fund")*

   (6)      Form of Amendment to Declaration of Trust to add GE Value
            Equity Fund ("Value Equity Fund") and GE Government Securities
            Fund ("Government Securities Fund")*

   (7)      Form of Amendment to Declaration of Trust to add GE Small-Cap
            Value Equity Fund ("Small-Cap Value Fund"), GE Small-Cap
            Growth Equity Fund ("Small-Cap Growth Fund"), GE Mid-Cap Value
            Equity Fund ("Mid-Cap Value Fund") and GE High Yield Fund
            ("High Yield Fund")*

   (8)      Form of Amendment to Declaration of Trust to add GE Europe
            Equity Fund ("Europe Fund") and GE Emerging Markets Fund
            ("Emerging Markets Fund")*

   (9)      Certificate of Amendment to Declaration of Trust*


   (10)     Amendment to Establishment and Designation of Classes*

   (11)     Form of Amendment to Establishment and Designation of Classes*


   (12)     Form of Amendment to Declaration of Trust to add GE Premier Research
            Equity Fund ("Premier Research Fund"), GE Premier International
            Equity Fund ("Premier International Fund"), GE Premier Value Equity
            Fund ("Premier Value Fund") and GE S & P 500 Index Fund.*


(b)         By-Laws*

(c)         Not applicable


<PAGE>

(d)(1)      Form of Investment Advisory and Administration Agreement*

   (2)      Form of Investment Advisory Agreement for Short-Term
            Government Fund and International Fund*

   (3)      Form of Investment Advisory Agreement for Mid-Cap Growth Fund
            and International Income Fund*

   (4)      Form of Investment Advisory and Administration Agreement for
            Premier Fund*

   (5)      Form of Investment Advisory and Administration Agreement for
            Value Equity Fund and Government Securities Fund*

   (6)      Form of Amended and Restated Investment Advisory and
            Administration Agreement for Tax-Exempt Fund*

   (7)      Form of Investment Advisory and Administration Agreement for
            Small-Cap Value Fund and Small-Cap Growth Fund*

   (8)      Form of Amended and Restated Investment Advisory and
            Administration Agreement for Mid-Cap Value Fund*

   (9)      Form of Amended and Restated Investment Advisory and
            Administration Agreement for High Yield Fund*

   (10)     Form of Investment Advisory and Administration Agreement for
            Europe Fund*

   (11)     Form of Investment Advisory and Administration Agreement for
            Emerging Markets Fund*

   (12)     Form of Investment Advisory and Administration Agreement for Premier
            Research Fund*


   (13)     Form of Investment Advisory and Administrations Agreement for
            Premier International Fund*

   (14)     Form of Investment Advisory and Administration Agreement for Premier
            Value Fund*

   (15)     Form of Investment Advisory and Administration Agreement for S & P
            500 Index Fund*



   (16)     Form of Sub-Investment Advisory Agreement for Tax-Exempt Fund*



   (17)     Form of Sub-Investment Advisory Agreement for Small-Cap Value
            Fund*



   (18)     Form of Sub-Investment Advisory Agreement for Mid-Cap Value Fund*



   (19)     Form of Sub-Investment Advisory Agreement for High Yield Fund*

   (20)     Form of Sub-Investment Advisory Agreement for S & P 500 Index Fund*


(e)         Form of Distribution Agreement, as amended*

(f)         Not applicable

(g)         Form of Custodian Contract*

<PAGE>

(h)(1)      Form of Transfer Agency and Service Agreement*

   (2)      Form of Administration Agreement for Short-Term Government
            Fund and International Fund*

   (3)      Form of Administration Agreement for Mid-Cap Growth Fund and
            International Income Fund*

   (4)      Amended and Restated Expense Limitation Agreement*


(i)(1)      Opinion and Consent of Willkie Farr & Gallagher*

   (2)      Opinion and Consent of Bingham Dana LLP*


(j)         Consent of PricewaterhouseCoopers LLP**

(k)         Not applicable

(l)(1)      Purchase Agreement*

   (2)      Form of Purchase Agreement for Short-Term Government Fund and
            International Fund*

   (3)      Form of Purchase Agreement for Mid-Cap Growth Fund and
            International Income Fund*

(m)(1)      Form of Amended and Restated Shareholder Servicing and
            Distribution Plan*

   (2)      Form of Amended and Restated Shareholder Servicing and
            Distribution Plan for Short-Term Government Fund*

   (3)      Form of Amended and Restated Shareholder Servicing and
            Distribution Agreement*

   (4)      Form of Amended and Restated Shareholder Servicing and
            Distribution Agreement for Short-Term Government Fund*

(n)         Written Plan Adopted pursuant to Rule 18f-3 under the
            Investment Company Act of 1940, as amended*

(p)(1)      GEFA Code of Ethics (filed herewith).


------------
*     Previously filed.
**    To be filed by amendment.


Item 24. Persons Controlled by or Under
         Common Control with Registrant

         See Item 26.


<PAGE>

Item 25. Indemnification

         Reference is made to Article IV of the Declaration of Trust of GE Funds
("Registrant") filed as Exhibit (a) to this Registration Statement. Insofar as
indemnification for liability arising under the Securities Act, may be permitted
for Trustees, officers and controlling persons of Registrant pursuant to
provisions of Registrant's Declaration of Trust, or otherwise, Registrant has
been advised that, in the opinion of the Securities and Exchange Commission,
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by Registrant of expenses
incurred or paid by a Trustee, officer, or controlling person of Registrant in
the successful defense of any action, suit or proceeding) is asserted by such
Trustee, officer or controlling person in connection with the securities being
registered, 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 Securities Act and will be governed by the final
adjudication of such issue.

Item 26. Business and Other Connections of Investment Advisers

         Reference is made to "About the Investment Adviser" in the Prospectus
forming Part A, and "Management of the Trust" in the Statement of Additional
Information forming Part B, of this Registration Statement.


         The list required by this Item 26 of officers and directors of GE Asset
Management Incorporated ("GEAM"), the Funds' investment adviser, together with
information as to any other business, profession, vocation or employment of a
substantial nature engaged in by those officers and directors during the past
two years, is incorporated by reference to Schedules A and D of the Form ADV
filed by GEAM pursuant to the Investment Advisers Act of 1940, as amended (the
"Advisers Act") (SEC File No. 801-31947).



         The list required by this Item 26 of officers and directors of Palisade
Capital Management, L.L.C. ("Palisade"), the Small-Cap Value Fund's sub-adviser,
together with information as to any other business, profession, vocation or
employment of a substantial nature engaged in by those officers and directors


<PAGE>

during the past two years, is incorporated by reference to Schedules A and D of
the Form ADV filed by Palisade pursuant to the Advisers Act (SEC File No.
801-48401).



         The list required by this Item 26 of partners and officers of Miller
Anderson & Sherrerd, LLP ("MAS"), the High Yield Fund's sub-adviser, together
with information as to any other business, profession, vocation or employment of
a substantial nature engaged in by those partners and officers during the past
two years, is incorporated by reference to Schedules B and D of the Form ADV
filed by MAS pursuant to the Advisers Act (SEC File No. 801-10437).

         The list required by this Item 26 of officers and directors of State
Street Global Advisors ("SSGA"), the investement sub-adviser to the S&P 500
Index Fund, together with information as to any other business, profession,
vocation or employment of a substantial nature engaged in by those officers and
directors during the past two years, is incorporated herein by reference to
Schedules A and D of the Form ADV filed by SSGA pursuant to the Advisers Act
(SEC File No. 801-49368).

Item 27. Principal Underwriters


         (a) GE Investment Distributors, Inc. ("GEID") also serves as
distributor for GE Investments Funds, Inc., GE Institutional Funds, GE LifeStyle
Funds, Elfun Tax-Exempt Income Fund, Elfun Income Fund, Elfun International
Equity Fund, Elfun Money Market Fund, Elfun Trusts and Elfun Diversified Fund.


         (b) The information required by this Item 27 with respect to each
director and officer of GEID is incorporated by reference to Schedule A of Form
BD filed by GEID pursuant to the Securities Exchange Act of 1934 (SEC File No.
8-45710).

         (c) Not applicable.

Item 28. Location of Accounts and Records

         All accounts, books and other documents required to be maintained by
Registrant pursuant to Section 31(a) of the Investment Company Act of 1940, as
amended, and the rules thereunder, are maintained at the offices of: Registrant
located at 3003 Summer Street, Stamford, Connecticut 06905; 777 Long Ridge Road,
Stamford, Connecticut 06927; State Street Bank and Trust Company ("State
Street"), Registrant's custodian and transfer agent, located at 225 Franklin
Street, Boston, Massachusetts 02101; and National Financial Data Services Inc.,
a subsidiary of State Street, located at P.O. Box 419631, Kansas City, Missouri
64141-6631.

Item 29. Management Services

         Not applicable.


<PAGE>

Item 30. Undertakings

         Not applicable.


<PAGE>

                                   SIGNATURES


Pursuant to the requirements of the Securities Act of 1933, as amended, and the
Investment Company Act of 1940, as amended, the Registrant has duly caused this
Amendment to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Stamford, State of Connecticut, on this 21st day of
November, 2000.


                           By: /s/ Michael J. Cosgrove
                               -----------------------
                               Michael J. Cosgrove
                               President and Chairman
                               of the Board

Pursuant to the requirements of the Securities Act of 1933, as amended, this
Amendment to Registrant's Registration Statement on Form N-1A has been signed
below by the following persons in the capacities and on the dates indicated.


<TABLE>
<CAPTION>
Signature                                 Title                       Date
---------                                 -----                       ----
<S>                                       <C>                         <C>

/s/ Michael J. Cosgrove                   President and               November 21, 2000
-----------------------                   Chairman of the Board
    Michael J. Cosgrove                   (Chief Executive Officer)

           *                              Trustee                     November 21, 2000
---------------------------------------
    John R. Costantino

/s/ Alan M. Lewis                         Trustee                     November 21, 2000
---------------------------------------
    Alan M. Lewis

           *                              Trustee                     November 21, 2000
---------------------------------------
    William J. Lucas

           *                              Trustee                     November 21, 2000
---------------------------------------
    Robert P. Quinn

/s/ Michael Tansley                       Treasurer                   November 21, 2000
---------------------------------------   (Chief Financial and
    Michael Tansley                       Executive Officer

/s/ Matthew J. Simpson
---------------------------------------
    Matthew J. Simpson
</TABLE>


* Signature affixed by Matthew J. Simpson pursuant to a power of attorney dated
December 9, 1998 filed herewith.

<PAGE>



                                POWER OF ATTORNEY



         I, the undersigned Director and/or Trustee of GE Funds, GE
Institutional Funds, GE Lifestyles Funds and GE Investments Funds, Inc. plus any
other investment company for which GE Investment Management, Inc. or an
affiliate acts as investment adviser and for which the undersigned individual
serves as Director and/or Trustee (collectively, the "Funds"), hereby constitute
and appoint Michael J. Cosgrove, Matthew J. Simpson, Jeanne M. LaPorta and Marc
R. Bryant, each of them singly, my true and lawful attorneys-in-fact, with full
power and substitution, and with full power to each of them, to sign for me and
in my name in the appropriate capacities, all Registration Statements of the
Funds on Forms N-1A and N-8A or any successor(s) thereto, any and all subsequent
Amendments, Pre-Effective Amendments, or Post-Effective Amendments to said
Registration Statements, any Registration Statements on Form N-14, and any
supplements or other instruments in connection therewith, and generally to do
all such things in my name necessary or appropriate, to comply with the
provisions of the Securities Act of 1933 and the Investment Company Act of 1940,
and all related requirements of the Securities and Exchange Commission. I hereby
ratify and confirm all that said attorneys-in-fact or their substitutes may do
or cause to be done by virtue hereof. This power of attorney is effective for
all documents filed on or after the date hereof.



         IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney
as of the 9th day of December, 1998.



                                            /s/JOHN R. COSTANTINO
                                            ---------------------
                                            John R. Costantino



                                            /s/WILLIAM J. LUCAS
                                            ---------------------
                                            William J. Lucas



                                            /s/ROBERT P. QUINN
                                            ---------------------
                                            Robert P. Quinn




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