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SUPPLEMENT DATED JULY 1, 1996
TO PROSPECTUS DATED MAY 1, 1996
OF
THE SIERRA VARIABLE TRUST
9301 CORBIN AVENUE, SUITE 333
NORTHRIDGE, CALIFORNIA 91324
The Prospectus dated May 1, 1996 of The Sierra Variable Trust (the "Trust")
relating to shares of the GLOBAL MONEY, SHORT TERM HIGH QUALITY BOND, SHORT TERM
GLOBAL GOVERNMENT, U.S. GOVERNMENT, CORPORATE INCOME, GROWTH AND INCOME, GROWTH,
EMERGING GROWTH AND INTERNATIONAL GROWTH FUNDS of the Trust is hereby amended
and supplemented by the following:
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The "ADMINISTRATION" section under the heading "HIGHLIGHTS" on page 4 is amended
and restated as follows:
Sierra Fund Administration Corporation ("Sierra Administration") serves as
Administrator to the Trust and has responsibility for the Trust's administrative
functions. Sierra Administration has engaged First Data Investor Services Group,
Inc. ("FDISG") (formerly known as The Shareholders Services Group, Inc.), a
wholly-owned subsidiary of First Data Corporation, as sub-administrator. The
Trust has engaged FDISG as the Trust's Transfer Agent and Boston Safe Deposit &
Trust Company ("Boston Safe") as the Trust's custodian.
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In the section "U.S. GOVERNMENT FUND" under the heading "INVESTMENT POLICIES" on
pages 16 and 17, the fourth sentence of the first paragraph is amended and
restated as follows:
Depending on market conditions, the Fund's portfolio will consist of various
types of U.S. Government Securities in varying proportions. The Fund may invest
up to 35% of its assets in (i) commercial Mortgage-Backed Securities rated in
one of the two highest rating categories by an NRSRO, that is, at least Aa by
Moody's, at least AA by S&P, Duff or Fitch, or, if unrated, that are judged to
be of comparable quality by the Sub-Advisor; and (ii) the types of securities in
which the Corporate Income Fund may invest except as otherwise prohibited in
this Prospectus or the SAI, including preferred stock, Convertible Securities,
U.S. Government Securities (including Government Stripped Mortgage-Backed
Securities), Asset-Backed Securities and interests in Lease Obligations Bonds.
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In the section "INTERNATIONAL GROWTH FUND" under the heading "INVESTMENT
POLICIES" on page 19, the first sentence of the second paragraph is amended and
restated as follows:
The Fund may invest in securities of issuers located in a variety of different
foreign regions and countries which includes, but is not limited to, the
following: Argentina, Australia, Austria, Belgium, Canada, Chile, Denmark,
Finland, France, Germany, Greece, Hong Kong, Indonesia, Ireland, Italy, Japan,
Luxembourg, Malaysia, Mexico, The Netherlands, New Zealand, Norway, Philippines,
Poland, Portugal, Singapore, Spain, Sweden, Switzerland, Thailand and The United
Kingdom.
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In the section "BLACKROCK FINANCIAL MANAGEMENT, INC." under the heading
"MANAGEMENT OF THE TRUST" -- "INVESTMENT MANAGEMENT" -- "SUB-ADVISORS" on page
21, the second paragraph is amended and restated as follows:
The day-to-day management of the U.S. Government Fund's portfolio is the
responsibility of a committee composed of individuals who are officers of
BlackRock. This committee has managed the Fund since December, 1994, and is
supervised by Keith Anderson and Andrew J. Phillips. Mr. Anderson, a Managing
Director of BlackRock, has been co-head of the Portfolio Management Group since
1988. Mr. Phillips has been a portfolio manager of BlackRock since 1991 and a
Vice President of BlackRock since 1993.
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In the section "ADMINISTRATION" under the heading "MANAGEMENT OF THE TRUST" on
page 26, the first four sentences of the first paragraph are amended and
restated as follows:
Subject to the authority of the Board of Trustees, Sierra Administration is
responsible for all administrative and some recordkeeping functions of the
Trust. It provides office facilities and supplies; provides clerical, executive,
accounting and administrative services; prepares reports to shareholders and
filings with regulatory authorities; prepares materials for the Board of
Trustees' meetings; and provides securities accounting and calculates net
assets. As permitted by the terms of the Administration Agreement, Sierra
Administration has delegated certain of these functions to FDISG and Boston
Safe. Pursuant to arrangements effective July 1, 1996, FDISG acts as the Trust's
transfer and dividend paying agent, and in that capacity pays dividends to
shareholders.
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In the section "ADMINISTRATION" under the heading "MANAGEMENT OF THE TRUST" on
page 26, after the last sentence of the second paragraph the following is added:
In addition, the Trust pays FDISG a fee for its services as Transfer Agent.
FDISG is located at One Exchange Place, 53 State Street, Boston, Massachusetts
02109-2873.
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In the section "THE TRUST" under the heading "GENERAL INFORMATION AND HISTORY"
on page 26, the first sentence of the first paragraph is amended and restated as
follows:
The Trust is an open-end management investment company that offers diversified
and nondiversified series.
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In the section "PURCHASE THROUGH THE SAM PROGRAM" under the heading "GENERAL
INFORMATION AND HISTORY" on pages 27 and 28, the seventh sentence of the second
paragraph is amended and restated as follows:
In addition, Sierra Services is the Trust's Distributor and has contracted with
American General Securities Incorporated, the principal underwriter of the
Contracts, for Sierra Services to distribute the Contracts.
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In the section "MORTGAGE-BACKED SECURITIES" under the heading "SECURITIES AND
INVESTMENT PRACTICES" in the "APPENDIX" on page A-10, after the last sentence of
the first paragraph the following is added:
In addition, the U.S. Government Fund may invest in commercial Mortgage-Backed
Securities, which are similar to the above Mortgage-Backed Securities, except
they are issued by non-governmental entities and are created by pooling together
commercial and multifamily mortgage loans into trusts that are structured into
different classes or series based upon the prioritization of cash flows.
Commercial Mortgage-Backed Securities include Collateralized Mortgage
Obligations and real estate mortgage investment conduits ("REMICs"). While
commercial Mortgage-Backed Securities are generally structured with one or more
types of credit enhancement, they typically lack a guarantee by an entity having
the credit status of a governmental agency or instrumentality.
PLEASE RETAIN THIS SUPPLEMENT FOR FUTURE REFERENCE
ISVT:10M
