<PAGE>
MASSMUTUAL INSTITUTIONAL FUNDS
Supplement dated October 3, 1995
to the Prospectus dated March 1, 1995
The following should be read in conjunction with the information in the current
Prospectus under the heading INVESTMENT MANAGER on page 22.
As of September 13, 1995, the Boards of Directors of Massachusetts Mutual Life
Insurance Company and Connecticut Mutual Life Insurance Company had approved the
merger of Connecticut Mutual into MassMutual. The companies executed a
definitive merger agreement on that same date. The merger is subject to certain
conditions, including member and regulatory approvals and is expected to be
completed on or about December 31, 1995. As a result of the merger, MassMutual
would become the nation's fifth largest mutual life insurance company with
estimated consolidated assets of $49 billion and estimated consolidated
contingency reserves of $2.5 billion. The companies believe that the merger of
MassMutual and Connecticut Mutual would be in the best interests of
policyholders because the combined enterprise will enjoy a strong capital
position, a diverse product portfolio and a competitive cost structure. The
merger will not affect any terms of contracts issued by MassMutual.
The information in the current Prospectus under the heading INVESTMENT
PERFORMANCE on pages 24-26 should be deleted and the attached supplement should
be substituted:
INVESTMENT PERFORMANCE
The Trust commenced operations on October 3, 1994 subsequent to the transfer of
assets by each of seven SIAs to the Fund having corresponding investment
objectives, policies and limitations in exchange for shares of such Fund. While
the SIAs continue to exist, their assets consist solely of the shares of the
corresponding Fund. Except for the seed capital provided by MassMutual, each
Fund's portfolio of investments on October 3, 1994 was the same as the portfolio
of the corresponding SIA immediately prior to the transfer.
The SIAs are not registered investment companies as they each are exempt from
registration under the Investment Company Act of 1940, as amended. Since, in a
practical sense, the SIAs constitute "predecessors" of the Funds, the Trust
calculates the performance for each Class of each Fund for periods commencing
prior to the transfer of the SIA assets to the Funds by including the
corresponding SIA's total return adjusted to reflect the deduction of fees and
expenses applicable to each Class as stated in the Fee Table of the Trust's
initial prospectus which was effective October 3, 1994 $ (i.e. adjusted to
reflect anticipated expenses, net of management fee waivers). These fees and
expenses include sales charges (if any should be imposed), Rule 12b-1 fees and,
in the case of Class 4, any charges at the SIA level.
continued...
October 3, 1995
Pape 1 of 4
<PAGE>
MASSMUTUAL INSTITUTIONAL FUNDS
Supplement dated October 3, 1995 to the Prospectus dated March 1, 1995 continued
The quoted performance data includes the performance of the SIAs for periods
before the Trust's Registration Statement became effective. As noted above, the
SIAs were not registered under the 1940 Act and thus were not subject to certain
investment restrictions that are imposed by the 1940 Act. If the SIAs had been
registered under the 1940 Act, the SIAs performance might have been adversely
affected. Employee benefit plans that invest plan assets in the SIAs may be
subject to certain charges as set forth in their respective Plan Documents.
Total return figures would be lower for the period if they reflected these
charges.
Each of the Funds from time to time may advertise certain investment performance
figures. These figures are based on historical earnings but past performance
data is not necessarily indicative of future performance of the Funds. All
performance information with respect to Class 4 shares will be provided net of
the Fund and SIA expenses. Each of the Funds may quote yield in conformance with
current SEC guidelines. Currently, the yield for each Fund refers to the net
investment income earned by the Fund over a 30-day period, as defined in the
advertisement. This income is then assumed to be earned for a full year and to
be reinvested each month for six months. The resulting semi-annual yield is
doubled.
Each of the Funds may advertise its total return and its holding period return
for various periods of time. Total return is calculated by determining, over a
period of time as stated in the advertisement, the average annual compounded
rate of return that an investment in the Fund earned over that period, assuming
reinvestment of all distributions. Holding period return refers to the
percentage change in the value of an investment in a Fund over a period of time
(as stated in the advertisement), assuming reinvestment of all distributions.
Total return and holding period return differ from yield in that the return
figures include capital changes in an investment while yield measures the rate
of net income generated by a Fund. Total return differs from holding period
return principally in that total return is an average annual figure while
holding period return is an aggregate figure for the entire period.
continued...
October 3, 1995
Pape 2 of 4
<PAGE>
AVERAGE ANNUAL TOTAL RETURN (ADJUSTED TO REFLECT ANTICIPATED EXPENSES, NET OF
- ---------------------------
MANAGEMENT FEE WAIVERS) FOR PERIODS ENDED DECEMBER 31, 1994.
================================================================================
1 YEAR
================================================================================
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
CLASS 1 CLASS 2 CLASS 3 CLASS 4
<S> <C> <C> <C> <C>
Prime Fund 2.86% 3.41% 3.76% 4.01%
Short-Term Bond Fund -2.15% -1.60% -1.25% -1.00%
Core Bond Fund -5.26% -4.71% -4.36% 4.11%
Balanced Fund 1.29% 1.84% 2.19% 2.44%
Value Equity Fund 2.92% 3.47% 3.82% 4.07%
Small Cap Value Equity Fund -5.57% -5.02% -4.67% -4.42%
International Equity Fund -6.11% -5.56% -5.31% -4.96%
- -------------------------------------------------------------------------------------------------
</TABLE>
================================================================================
3 YEARS
================================================================================
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
CLASS 1 CLASS 2 CLASS 3 CLASS 4
<S> <C> <C> <C> <C>
Prime Fund 2.41% 2.96% 3.31% 3.56%
Short-Term Bond Fund 3.30% 3.85% 4.20% 4.45%
Core Bond Fund 3.39% 3.94% 4.29% 4.54%
Balanced Fund 5.61% 6.16% 6.51% 6.76%
Value Equity Fund 6.87% 7.42% 7.77% 8.02%
Small Cap Value Equity Fund 7.34% 7.89% 8.24% 8.49%
International Equity Fund 12.89% 13.44 13.69% 14.04%
- -------------------------------------------------------------------------------------------------
</TABLE>
================================================================================
5 YEARS
================================================================================
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------
CLASS 1 CLASS 2 CLASS 3 CLASS 4
<S> <C> <C> <C> <C>
Prime Fund 3.83% 4.38 4.73% 4.98%
Short-Term Bond Fund 5.95% 6.50% 6.85% 7.10%
Core Bond Fund 6.64% 7.19% 7.54% 7.79%
Balanced Fund 7.83% 8.38% 8.73% 8.98%
Value Equity Fund 8.24% 8.79% 9.14% 9.39%
Small Cap Value Equity Fund 8.16% 8.71% 9.06% 9.31%
International Equity Fund N/A N/A N/A N/A
- ---------------------------------------------------------------------------------------------------
</TABLE>
================================================================================
10 YEARS (OR SINCE INCEPTION)
================================================================================
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------
CLASS 1 CLASS 2 CLASS 3 CLASS 4
<S> <C> <C> <C> <C>
Prime Fund 5.12% 5.67% 6.02% 6.27%
Short-Term Bond Fund (April 30, 1989) 6.14% 6.69% 7.04% 7.29%
Core Bond Fund 8.51% 9.06% 9.41% 9.66%
Balanced Fund (October 10, 1987) 8.99% 9.54% 9.89% 10.14%
Value Equity Fund 12.45% 13.00% 13.35% 13.60%
Small Cap Value Equity Fund 11.81% 12.36% 12.71% 12.96%
International Equity Fund (July 31, 1991) 12.74% 13.29% 13.54% 13.89%
- ----------------------------------------------------------------------------------------------------
</TABLE>
October 3, 1995
Pape 3 of 4
<PAGE>
CUMULATIVE TOTAL RETURN (ADJUSTED TO REFLECT ANTICIPATED EXPENSES, NET OF
- -----------------------
EXPENSE CAPS) FOR PERIODS ENDED DECEMBER-31, 1994.
================================================================================
1 YEAR
================================================================================
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------
CLASS 1 CLASS 2 CLASS 3 CLASS 4
<S> <C> <C> <C> <C>
Prime Fund 2.86% 3.41% 3.76% 4.01%
Short-Term Bond Fund -2.15% -1.60% -1.25% -1.00%
Core Bond Fund -5.26% -4.71% -4.36% -4.11%
Balanced Fund 1.29% 1.84% 2.19% 2.44%
Value Equity Fund 2.92% 3.47% 3.82% 4.07%
Small Cap Value Equity Fund -5.57% -5.02% -4.67% -4.42%
International Equity Fund -6.11% -5.56% -5.31% -4.96%
- ----------------------------------------------------------------------------------------------------
</TABLE>
================================================================================
3 YEARS
================================================================================
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------
CLASS 1 CLASS 2 CLASS 3 CLASS 4
<S> <C> <C> <C> <C>
Prime Fund 7.41% 9.15% 10.26% 11.07%
Short-Term Bond Fund 10.22% 11.99% 13.12% 13.94%
Core Bond Fund 10.53% 12.30% 13.44% 14.26%
Balanced Fund 17.80% 19.65% 20.84% 21.69%
Value Equity Fund 22.06% 23.95% 25.17% 26.04%
Small Cap Value Equity Fund 23.66% 25.57% 26.80% 27.68%
International Equity Fund 43.87% 45.99% 46.96% 48.32%
- ----------------------------------------------------------------------------------------------------
</TABLE>
================================================================================
5 YEARS
================================================================================
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------
CLASS 1 CLASS 2 CLASS 3 CLASS 4
<S> <C> <C> <C> <C>
Prime Fund 20.65% 23.88% 25.97% 27.48%
Short-Term Bond Fund 33.52% 37.03% 39.29% 40.93%
Core Bond Fund 37.92% 41.51% 43.83% 45.51%
Balanced Fund 45.75% 49.51% 51.94% 53.69%
Value Equity Fund 48.57% 52.38% 54.85% 56.63%
Small Cap Value Equity Fund 48.05% 51.85% 54.31% 56.09%
International Equity Fund N/A N/A N/A N/A
- ----------------------------------------------------------------------------------------------------
</TABLE>
================================================================================
10 YEARS (OR SINCE INCEPTION)
================================================================================
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------
CLASS 1 CLASS 2 CLASS 3 CLASS 4
<S> <C> <C> <C> <C>
Prime Fund 64.82% 73.65% 79.49% 83.76%
Short-Term Bond Fund (April 30, 1989) 40.17% 44.34% 47.04% 49.00%
Core Bond Fund 126.29% 138.02% 145.77% 151.45%
Balanced Fund (October 10, 1987) 85.97% 92.84% 97.32% 100.58%
Value Equity Fund 223.40% 239.57% 250.23% 258.03%
Small Cap Value Equity Fund 205.48% 220.84% 230.98% 238.39%
International Equity Fund (July 31, 1991) 50.64% 53.16% 54.32% 55.95%
- ----------------------------------------------------------------------------------------------------
</TABLE>
October 3, 1995
Pape 4 of 4
<PAGE>
MASSMUTUAL INSTITUTIONAL FUNDS
1295 State Street
Springfield, Massachusetts 01111
(413) 788-8411
MassMutual Institutional Funds (the "Trust") is a professionally managed
investment company consisting of seven separate series of shares (the "Funds").
The Trust is designed to offer investors both the opportunity to pursue
long-term investment goals and the flexibility to respond to changes in their
investment objectives and economic and market conditions. Each Fund has a
distinct investment objective.
(1) MassMutual Prime Fund - Seeks to maximize current income to the extent
consistent with liquidity and the preservation of capital by investing
in a diversified portfolio of money market instruments. The Prime Fund
is not a money market fund.
(2) MassMutual Short-Term Bond Fund - Seeks to achieve a high total rate of
return primarily from current income while minimizing fluctuations in
capital values by investing primarily in a diversified portfolio of
short-term investment grade fixed income securities.
(3) MassMutual Core Bond Fund - Seeks to achieve a high total rate of
return consistent with prudent investment risk and the preservation of
capital by investing primarily in a diversified portfolio of investment
grade fixed income securities.
(4) MassMutual Balanced Fund - Seeks to achieve a high total rate of return
over an extended period of time consistent with the preservation of
capital values by investing in a diversified portfolio of equity
securities, fixed income securities and money market instruments.
(5) MassMutual Value Equity Fund - Seeks to achieve long-term growth of
capital and income by investing primarily in a diversified portfolio of
equity securities of larger well-established companies.
(6) MassMutual Small Cap Value Equity Fund - Seeks to achieve long-term
growth of capital and income by investing primarily in a diversified
portfolio of equity securities of smaller companies.
(7) MassMutual International Equity Fund - Seeks to achieve a high total
rate of return over the long term by investing in a diversified
portfolio of foreign and domestic securities, primarily common stocks
and securities having the characteristics of common stocks, such as
convertible securities.
This Prospectus sets forth concisely the information about the Funds and the
Trust that a prospective investor should know before investing. Please read it
carefully and retain it for future reference. Certain additional information
about the Funds and the Trust is contained in a Statement of Additional
Information dated October 3, 1994, which has been filed with the Securities and
Exchange Commission and is incorporated herein by reference. This additional
information is available without charge by writing to the Secretary, MassMutual
Institutional Funds, 1295 State Street, Springfield, MA 01111.
Massachusetts Mutual Life Insurance Company ("MassMutual") is the investment
manager to each of the Funds. Concert Capital Management, Inc. ("Concert
Capital") is the investment sub-adviser to the Value Equity Fund, the Small Cap
Value Equity Fund and the Value Equity Sector of the Balanced Fund. HarbourView
Asset Management Corporation ("HarbourView") is the investment sub-adviser to
the International Equity Fund.
Each of the Funds offers four classes of shares. Class 1, Class 2 and Class 3
shares of each Fund are intended to be purchased primarily by defined
contribution plans that satisfy the qualification requirements of Section 401(a)
of the Internal Revenue Code of 1986, including 401(k) plans, profit sharing
plans, money purchase plans and target benefit plans. Class 4 shares of each
Fund are available only to separate investment accounts of MassMutual in which
corporate qualified plans including defined contribution plans and defined
benefit plans are permitted to invest pursuant to the issuance of group annuity
contracts.
As of December 31, 1994, MassMutual Prime Fund had net assets of approximately
$171 million, MassMutual Short-Term Bond Fund had net assets of approximately
$107 million, MassMutual Core Bond Fund had net assets of approximately $194
million, MassMutual Balanced Fund had net assets of approximately $350 million,
MassMutual Value Equity Fund had net assets of approximately $1,564 million,
MassMutual Small Cap Value Equity Fund had net assets of approximately $311
million, and MassMutual International Equity Fund had net assets of
approximately $150 million.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
DISTRIBUTOR
OPPENHEIMER FUNDS DISTRIBUTOR, INC.
Two World Trade Center
New York, New York 10048
PROSPECTUS March 1, 1995.
<PAGE>
Table Of Contents
<TABLE>
<CAPTION>
Page
<S> <C>
Expense Information.................................................... 3
Financial Highlights................................................... 6
The Trust.............................................................. 14
Investment Objectives And Policies Of The Funds........................ 14
Investment Practices Of The Funds And Related Risks.................... 18
How To Purchase, Exchange, Convert And Redeem Shares................... 20
Investment Manager And Sub-advisers.................................... 22
Distributor, Transfer Agent, Shareholder Servicing Agent, Custodian.... 23
Description Of Shares.................................................. 23
How Fund Shares Are Priced............................................. 23
Distributions And Taxation............................................. 24
Investment Performance................................................. 24
Glossary............................................................... 27
</TABLE>
2
<PAGE>
Expense Information
These tables should help you understand the kinds of expenses you will bear
directly or indirectly. The Expense Information provides estimates of how much
it will cost to operate the Funds for a year, based on projected 1995 fiscal
year expenses and any applicable expense limitations.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
CLASS 1
- -----------------------------------------------------------------------------------------------------------------------------
Small Cap
Short-Term Core Value Value International
Prime Bond Bond Balanced Equity Equity Equity
Fund Fund Fund Fund Fund Fund Fund
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Shareholder Transaction Expenses
(As a percentage of offering price)
Maximum Sales Charge
Imposed on Purchases
and Reinvested Dividends.......... None None None None None None None
Annual Operating Expenses
(As a percentage of average
net assets)
Management Fees.................... .45% .45% .45% .45% .45% .55% .85%
Waiver/(1)/....................... (.04%) (.04%) (.04%) (.04%) (.05%) (.05%) (.06%)
12b-1 Fees......................... .65% .65% .65% .65% .65% .65% .65%
Other Expenses..................... .59% .59% .59% .59% .60% .60% .71%
- -----------------------------------------------------------------------------------------------------------------------------
TOTAL OPERATING EXPENSES/(1)/ 1.65% 1.65% 1.65% 1.65% 1.65% 1.75% 2.15%
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Through at least the first year of the Trust's operations, any expenses that
would cause Total Operating Expenses to exceed the estimated amounts will be
absorbed by MassMutual. Without the Management Fees Waiver shown above,
Total Operating Expenses for the Prime Fund, Short-Term Bond Fund, Core Bond
Fund and Balanced Fund would be 1.69% each; Value Equity Fund 1.70%; Small
Cap Value Equity Fund 1.80%; and International Equity Fund 2.21%.
EXAMPLE: An investor would pay the following expenses on an investment of
$1,000 in the Fund assuming: (a) 5% annual return and (b) redemption
at the end of each time period.
<TABLE>
<CAPTION>
Small Cap
Short-Term Core Value Value International
Prime Bond Bond Balanced Equity Equity Equity
Fund Fund Fund Fund Fund Fund Fund
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 Year $16.78 $16.78 $16.78 $16.78 $16.78 $17.79 $21.84
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
3 Years $52.01 $52.01 $52.01 $52.01 $52.01 $55.09 $67.37
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
The example should not be considered a representation of past or future expenses
and actual expenses may be greater or less than those shown.
Long-term shareholders may pay more in Rule 12b-1 fees than the equivalent of
the maximum front-end sales charges otherwise permitted by the National
Association of Securities Dealers' Rules. These fees are detailed on page 20.
3
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
CLASS 2
- -----------------------------------------------------------------------------------------------------------------------------
Small Cap
Short-Term Core Value Value International
Prime Bond Bond Balanced Equity Equity Equity
Fund Fund Fund Fund Fund Fund Fund
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Shareholder Transaction Expenses
(As a percentage of offering price)
Maximum Sales Charge
Imposed on Purchases
and Reinvested Dividends.......... None None None None None None None
Annual Operating Expenses
(As a percentage of average
net assets)
Management Fees.................... .45% .45% .45% .45% .45% .55% .85%
Waiver/(1)/....................... (.04%) (.04%) (.04%) (.04%) (.05%) (.05%) (.06%)
12b-1 Fees......................... .15% .15% .15% .15% .15% .15% .15%
Other Expenses..................... .54% .54% .54% .54% .55% .55% .66%
- -----------------------------------------------------------------------------------------------------------------------------
TOTAL OPERATING EXPENSES/(1)/ 1.10% 1.10% 1.10% 1.10% 1.10% 1.20% 1.60%
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Through at least the first year of the Trust's operations, any expenses
that would cause Total Operating Expenses to exceed the estimated amounts
will be absorbed by MassMutual. Without the Management Fees Waiver shown
above, Total Operating Expenses for the Prime Fund, Short-Term Bond Fund,
Core Bond Fund and Balanced Fund would be 1.14% each; Value Equity Fund
1.15%; Small Cap Value Equity Fund 1.25%; and International Equity Fund
1.66%.
EXAMPLE: An investor would pay the following expenses on an investment of
$1,000 in the Fund assuming: (a) 5% annual return and (b) redemption
at the end of each time period.
<TABLE>
<CAPTION>
Small Cap
Short-Term Core Value Value International
Prime Bond Bond Balanced Equity Equity Equity
Fund Fund Fund Fund Fund Fund Fund
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 Year $11.20 $11.20 $11.20 $11.20 $11.20 $12.21 $16.28
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
3 Years $34.91 $34.91 $34.91 $34.91 $34.91 $38.03 $50.50
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
The example should not be considered a representation of past or future expenses
and actual expenses may be greater or less than those shown.
Long-term shareholders may pay more in Rule 12b-1 fees than the
equivalent of the maximum front-end sales charges otherwise permitted by the
National Association of Securities Dealers' Rules. These fees are detailed
on page 20.
4
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
CLASS 3
- -----------------------------------------------------------------------------------------------------------------------------
Small Cap
Short-Term Core Value Value International
Prime Bond Bond Balanced Equity Equity Equity
Fund Fund Fund Fund Fund Fund Fund
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Shareholder Transaction Expenses
(As a percentage of offering price)
Maximum Sales Charge
Imposed on Purchases
and Reinvested Dividends.......... None None None None None None None
Annual Operating Expenses
As a percentage of average
net assets)
Management Fees.................... .45% .45% .45% .45% .45% .55% .85%
Waiver/(1)/....................... (.04%) (.04%) (.04%) (.04%) (.05%) (.05%) (.06%)
12b-1 Fees........................ None None None None None None None
Other Expenses.................... .34% .34% .34% .34% .35% .35% .56%
- -----------------------------------------------------------------------------------------------------------------------------
TOTAL OPERATING EXPENSES/(1)/ .75% .75% .75% .75% .75% .85% 1.35%
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Through at least the first year of the Trust's operations, any expenses
that would cause Total Operating Expenses to exceed the estimated amounts
will be absorbed by MassMutual. Without the Management Fees Waiver shown
above, Total Operating Expenses for the Prime Fund, Short-Term Bond Fund,
Core Bond Fund and Balanced Fund would be .79% each; Value Equity Fund
.80%; Small Cap Value Equity Fund .90%; and International Equity Fund
1.41%.
EXAMPLE: An investor would pay the following expenses on an investment of
$1,000 in the Fund assuming: (a) 5% annual return and (b) redemption
at the end of each time period.
<TABLE>
<CAPTION>
Small Cap
Short-Term Core Value Value International
Prime Bond Bond Balanced Equity Equity Equity
Fund Fund Fund Fund Fund Fund Fund
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 Year $ 7.66 $ 7.66 $ 7.66 $ 7.66 $ 7.66 $ 8.68 $13.75
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
3 Years $23.97 $23.97 $23.97 $23.97 $23.97 $27.12 $42.76
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
The example should not be considered a representation of past or future expenses
and actual expenses may be greater or less than those shown.
5
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
CLASS 4
- -----------------------------------------------------------------------------------------------------------------------------
Small Cap
Short-Term Core Value Value International
Prime Bond Bond Balanced Equity Equity Equity
Fund Fund Fund Fund Fund Fund Fund
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Shareholder Transaction Expenses
(As a percentage of offering price)
Maximum Sales Charge
Imposed on Purchases
and Reinvested Dividends.......... None None None None None None None
Annual Operating Expenses
As a percentage of average
net assets)
Management Fees.................... .45% .45% .45% .45% .45% .55% .85%
Waiver/(1)/....................... (.041%) (.038%) (.044%) (.045%) (.0503%) (.046%) (.057%)
12b-1 Fees......................... None None None None None None None
Custody............................ .016% .019% .013% .012% .0067% .011% .102%
Other Expenses..................... .091% .088% .094% .095% .1003% .096% .107%
- -----------------------------------------------------------------------------------------------------------------------------
TOTAL OPERATING EXPENSES/(2)/ .516% .519% .513% .512% .5067% .611% 1.002%
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) MassMutual for an indefinite period has agreed to absorb management fees in
an amount necessary to result in Total Operating Expenses being equal to
current separate account investment management and custody fees. Absent
these waivers, Total Operating Expenses would be as follows: Prime Fund
.557%; Short-Term Bond Fund .557%; Core Bond Fund .557%; Balanced Fund
.557%; Value Equity Fund .557%; Small Cap Value Equity Fund .657%; and
International Equity Fund 1.059%.
(2) There are no current client expenses for separate accounts, but
employee benefit plans that invest in the separate accounts are subject to
charges imposed in their group annuity contracts, as set forth in their
respective Plan Documents. See the Glossary for a definition of Plan
Documents.
EXAMPLE: An investor would pay the following expenses on an investment of
$1,000 in the Fund assuming: (a) 5% annual return and (b) redemption
at the end of each time period.
<TABLE>
<CAPTION>
Small Cap
Short-Term Core Value Value International
Prime Bond Bond Balanced Equity Equity Equity
Fund Fund Fund Fund Fund Fund Fund
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 Year $ 5.28 $ 5.31 $ 5.25 $ 5.24 $ 5.18 $ 6.25 $10.23
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
3 Years $16.55 $16.64 $16.45 $16.42 $16.25 $19.57 $31.90
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
Financial Highlights
The information in the following tables has been derived from the financial
statements audited by Coopers & Lybrand L.L.P., independent accountants, whose
report on the financial statements of the Funds is included in the Trust's
Annual Report and in its Statement of Additional Information. Further
information about the performance of the Funds is contained in the Annual
Report. The Statement of Additional Information and the Annual Report may be
obtained without charge by writing the Trust's Secretary.
6
<PAGE>
MassMutual Prime Fund
Financial
Highlights
(For a share outstanding
throughout the period)
For the period from October 3, 1994+
through December 31, 1994
<TABLE>
<CAPTION>
Class 1 Class 2 Class 3 Class 4
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Net asset value, beginning of period (Note 7)(S) $ 150.00 $ 150.00 $ 150.00 $ 150.00
--------- --------- --------- ---------
Income from investment operations:
Net investment income 1.02 1.16 1.21 1.55
Net realized and unrealized gain on investments 0.42 0.57 0.61 0.34
--------- --------- --------- ---------
Total from investment operations 1.44 1.73 1.82 1.89
--------- --------- --------- ---------
Less distributions to shareholders:
From net investment income (1.05) (1.17) (1.21) (1.53)
--------- --------- --------- ---------
Net asset value, end of period $ 150.39 $ 150.56 $ 150.61 $ 150.36
========= ========= ========= =========
Total Return 0.96% 1.15% 1.21% 1.26%++
Ratios / Supplemental Data:
Net assets, end of period (000's) $ 101 $ 101 $ 101 $ 170,548
Net expenses to average daily net assets 1.65%#* 1.10%#* 0.75%#* 0.5160%#*
Net investment income to average daily net assets 4.07%* 4.62%* 4.99%* 5.01%*
# Computed after giving effect to the reduction in
management fee by MassMutual. Without this reduction of
fees by the investment manager, the ratio of expenses
to average daily net assets would have been: 1.69%* 1.14%* 0.79%* 0.5605%*
</TABLE>
* Annualized
(S) All per share amounts for the period have been restated to reflect a 1-for-
15 reverse stock split effective December 16, 1994.
++ Employee retirement benefit plans that invest plan assets in the SIAs may be
subject to certain charges as set forth in their respective Plan Documents.
Total return figures would be lower for the period if they reflected these
charges.
+(commencement of operations)
7
<PAGE>
MassMutual Short-Term Bond Fund
Financial
Highlights
(For a share outstanding
throughout the period)
For the period October 3, 1994+
through December 31, 1994
<TABLE>
<CAPTION>
Class 1 Class 2 Class 3 Class 4
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $ 10.00 $ 10.00 $ 10.00 $ 10.00
--------- --------- --------- ---------
Income from investment operations:
Net investment income 0.09 0.10 0.10 0.16
Net realized and unrealized loss on investments (0.11) (0.11) (0.09) (0.15)
--------- --------- --------- ---------
Total from investment operations (0.02) (0.01) 0.01 0.01
--------- --------- --------- ---------
Less distributions to shareholders:
From net investment income (0.09) (0.10) (0.10) (0.16)
In excess of net realized gains** -- -- -- --
--------- --------- --------- ---------
Total distributions (0.09) (0.10) (0.10) (0.16)
--------- --------- --------- ---------
Net asset value, end of period $ 9.89 $ 9.89 $ 9.91 $ 9.85
========= ========= ========= =========
Total Return (0.17)% (0.09)% 0.13% 0.13%++
Ratios / Supplemental Data:
Net assets, end of period (000's) $ 100 $ 101 $ 100 $ 106,846
Net expenses to average daily net assets 1.65%#* 1.10%#* 0.75%#* 0.5190%#*
Net investment income to average daily net assets 5.45%* 5.99%* 6.36%* 6.37%*
Portfolio turnover rate 15% 15% 15% 15%
# Computed after giving effect to the reduction in
management fee by MassMutual. Without this reduction of
fees by the investment manager, the ratio of expenses
to average daily net assets would have been: 1.70%* 1.15%* 0.80%* 0.5654%*
</TABLE>
* Annualized
** The distribution in excess of net realized gains amounted to $ 0.00004 per
share
++ Employee retirement benefit plans that invest plan assets in the SIAs may be
subject to certain charges as set forth in their respective Plan Documents.
Total return figures would be lower for the period if they reflected these
charges.
+(commencement of operations)
8
<PAGE>
MassMutual Core Bond Fund
Financial
Highlights
(For a share outstanding
throughout the period)
For the period October 3, 1994+
through December 31, 1994
<TABLE>
<CAPTION>
Class 1 Class 2 Class 3 Class 4
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $ 10.00 $ 10.00 $ 10.00 $ 10.00
--------- --------- --------- ---------
Income from investment operations:
Net investment income 0.10 0.11 0.11 0.18
Net realized and unrealized loss on investments (0.10) (0.10) (0.10) (0.16)
--------- --------- --------- ---------
Total from investment operations -- 0.01 0.01 0.02
--------- --------- --------- ---------
Less distributions to shareholders:
From net investment income (0.10) (0.11) (0.11) (0.18)
--------- --------- --------- ---------
Net asset value, end of period $ 9.90 $ 9.90 $ 9.90 $ 9.84
========= ========= ========= =========
Total Return 0.00% 0.08% 0.09% 0.20%++
Ratios/Supplemental Data:
Net assets, end of period (000's) $ 101 $ 101 $ 101 $ 194,150
Net expenses to average daily net assets 1.65%#* 1.10%#* 0.75%#* 0.5130%#*
Net investment income to average daily net assets 5.91%* 6.46%* 6.83%* 6.86%*
Portfolio turnover rate 7% 7% 7% 7%
# Computed after giving effect to the reduction in
management fee by MassMutual. Without this reduction
of fees by the investment manager, the ratio of expenses
to average daily net assets would have been. 1.71%* 1.16%* 0.81%* 0.5672%*
</TABLE>
* Annualized
++ Employee retirement benefit plans that invest plan assets in the SIAs may be
subject to certain charges as set forth in their respective Plan Documents.
Total return figures would be lower for the period if they reflected these
charges.
+(commencement of operations)
9
<PAGE>
MassMutual Balanced Fund
Financial
Highlights
(For a share outstanding
throughout the period)
For the period October 3, 1994+
through December 31, 1994
<TABLE>
<CAPTION>
Class 1 Class 2 Class 3 Class 4
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $ 10.00 $ 10.00 $ 10.00 $ 10.00
--------- --------- --------- ---------
Income from investment operations:
Net investment income 0.06 0.06 0.07 0.11
Net realized and unrealized loss on investments (0.06) (0.04) (0.04) (0.08)
--------- --------- --------- ---------
Total from investment operations -- 0.02 0.03 0.03
--------- --------- --------- ---------
Less distributions to shareholders:
From net investment income (0.06) (0.07) (0.07) (0.11)
In excess of net realized gains** -- -- -- --
--------- --------- --------- ---------
Total distributions (0.06) (0.07) (0.07) (0.11)
--------- --------- --------- ---------
Net asset value, end of period $ 9.94 $ 9.95 $ 9.96 $ 9.92
========= ========= ========= =========
Total Return 0.00% 0.17% 0.28% 0.29%++
Ratios / Supplemental Data:
Net assets, end of period (000's) $ 100 $ 100 $ 100 $ 349,688
Net expenses to average daily net assets 1.65%#* 1.10%#* 0.75%#* 0.5120%#*
Net investment income to average daily net assets 3.39%* 3.94%* 4.32%* 4.29%*
Portfolio turnover rate 2% 2% 2% 2%
# Computed after giving effect to the reduction in
management fee by MassMutual. Without this reduction of
fees by the investment manager, the ratio of expenses
to average daily net assets would have been: 1.71%* 1.16%* 0.81%* 0.5650%*
</TABLE>
* Annualized
** The distribution in excess of net realized gains amounted to $0.00121 per
share
++ Employee retirement benefit plans that invest plan assets in the SIAs may be
subject to certain charges as set forth in their respective Plan Documents.
Total return figures would be lower for the period if they reflected these
charges.
+ (commencement of operations)
10
<PAGE>
MassMutual Value Equity Fund
Financial
Highlights
(For a share outstanding
throughout the period)
For the period October 3, 1994+
through December 31, 1994
<TABLE>
<CAPTION>
Class 1 Class 2 Class 3 Class 4
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $ 10.00 $ 10.00 $ 10.00 $ 10.00
---------- ---------- ---------- ----------
Income from investment operations:
Net investment income 0.04 0.05 0.05 0.08
Net realized and unrealized loss on investments (0.08) (0.07) (0.07) (0.09)
---------- ---------- ---------- ----------
Total from investment operations (0.04) (0.02) (0.02) (0.01)
---------- ---------- ---------- ----------
Less distributions to shareholders:
From net investment income (0.04) (0.05) (0.05) (0.08)
In excess of net realized gains** -- -- -- --
---------- ---------- ---------- ----------
Total distributions (0.04) (0.05) (0.05) (0.08)
---------- ---------- ---------- ----------
Net asset value, end of period $ 9.92 $ 9.93 $ 9.93 $ 9.91
========== ========== ========== ==========
Total Return (0.39)% (0.22)% (0.18)% (0.10)%++
Ratios / Supplemental Data:
Net assets, end of period (000's) $ 99 $ 99 $ 99 $1,563,563
Net expenses to average daily net assets 1.65%#* 1.10%#* 0.75%#* 0.5067%#*
Net investment income to average daily net assets 2.31%* 2.86%* 3.23%* 3.20%*
Portfolio turnover rate 3% 3% 3% 3%
# Computed after giving effect to the expense reduction in
management fee by MassMutual. Without this reduction of
fees by the investment manager, the ratio of expenses to
average net assets would have been: 1.71%* 1.16%* 0.81%* 0.5681%*
</TABLE>
* Annualized
** The distribution in excess of net realized gains amounted to $.00074 per
share
++ Employee retirement benefit plans that invest plan assets in the SIAs may be
subject to certain charges as set forth in their respective Plan Documents.
Total return figures would be lower for the period if they reflected these
charges.
+ (commencement of operations)
11
<PAGE>
MassMutual Small Cap Value Equity
Financial
Highlights
(For a share outstanding
throughout the period)
For the period October 3, 1994+
through December 31, 1994
<TABLE>
<CAPTION>
Class 1 Class 2 Class 3 Class 4
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $ 10.00 $ 10.00 $ 10.00 $ 10.00
--------- --------- --------- ---------
Income from investment operations:
Net investment income 0.02 0.03 0.03 0.04
Net realized and unrealized loss on investments (0.31) (0.30) (0.30) (0.31)
--------- --------- --------- ---------
Total from investment operations (0.29) (0.27) (0.27) (0.27)
--------- --------- --------- ---------
Less distributions to shareholders:
From net investment income (0.02) (0.03) (0.03) (0.04)
--------- --------- --------- ---------
Net asset value, end of period $ 9.69 $ 9.70 $ 9.70 $ 9.69
========= ========= ========= =========
Total Return (2.89)% (2.72)% (2.68)% (2.66)%++
Ratios / Supplemental Data:
Net assets, end of period (000's) $ 99 $ 99 $ 99 $ 310,789
Net expenses to average daily net assets 1.75%#* 1.20%#* 0.85%#* 0.6110%#*
Net investment income to average daily net assets 1.14%* 1.69%* 2.09%* 1.78%*
Portfolio turnover rate 4% 4% 4% 4%
# Computed after giving effect to the reduction in
management fee by MassMutual. Without this reduction of
fees by the investment manager, the ratio of expenses
to average daily net assets would have been: 1.81%* 1.26%* 0.91%* 0.6681%*
</TABLE>
* Annualized
++ Employee retirement benefit plans that invest plan assets in the SIAs may be
subject to certain charges as set forth in their respective Plan Documents.
Total return figures would be lower for the period if they reflected these
charges.
+(commencement of operations)
12
<PAGE>
MassMutual International Equity Fund
Financial
Highlights
(For a share outstanding
throughout the period)
For the period October 3, 1994+
through December 31, 1994
<TABLE>
<CAPTION>
Class 1 Class 2 Class 3 Class 4
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $ 10.00 $ 10.00 $ 10.00 $ 10.00
--------- --------- --------- ---------
Income from investment operations:
Net investment income (loss) (0.02) (0.01) (0.00) 0.00
Net realized and unrealized loss on
investments and foreign currency (0.73) (0.73) (0.73) (0.72)
--------- --------- --------- ---------
Total from investment operations (0.75) (0.74) (0.73) (0.72)
--------- --------- --------- ---------
Net asset value, end of period $ 9.25 $ 9.26 $ 9.27 $ 9.28
========= ========= ========= =========
Total Return (7.50)% (7.40)% (7.30)% (7.20)%++
Ratios / Supplemental Data:
Net assets, end of period (000's) $ 93 $ 93 $ 93 $ 150,199
Net expenses to average daily net assets 2.15%#* 1.60%#* 1.35%#* 1.0020%#*
Net investment income (loss) to average daily net assets (1.10%)* (0.55%)* (0.30%)* 0.04%*
Portfolio turnover rate 18% 18% 18% 18%
# Computed after giving effect to the expense reduction in
management fee by MassMutual. Without this reduction of
fees by the investment manager, the ratio of expenses to
average net assets would have been: 2.24%* 1.69%* 1.44%* 1.0877%*
</TABLE>
* Annualized
++ Employee retirement benefit plans that invest plan assets in the SIAs may be
subject to certain charges as set forth in their respective Plan Documents.
Total return figures would be lower for the period if they reflected these
charges.
+(commencement of operations)
13
<PAGE>
The Trust
The Trust is an open-end, diversified management investment company (a "mutual
fund") designed to offer investors both the opportunity to pursue long-term
investment goals and the flexibility to respond to changes in their investment
objectives and economic and market conditions. The Trust consists of seven
separate series of shares (the "Funds"), each having four classes of shares.
. Class 1, Class 2 and Class 3 shares of each Fund are offered primarily
to employer-sponsored defined contribution plans that satisfy the
qualification requirements of Section 401(a) of the Internal Revenue
Code of 1986, as amended (the "Code"). Defined contribution plans -
which establish an individual account for each plan participant -
include 401(k) plans, profit sharing plans, money purchase plans and
target benefit plans. Class 1, Class 2 and Class 3 shares may become
available to defined benefit plans, to other retirement and employee
benefit plans, such as tax sheltered annuities and non-qualified plans,
IRAs, and to other institutional or sophisticated investors.
. Class 4 shares of each Fund are available only to separate investment
accounts ("SIAs") of MassMutual in which corporate qualified plans
including defined contribution plans and defined benefit plans are
permitted to invest pursuant to the issuance of group annuity contracts.
The Trust is organized under the laws of the Commonwealth of Massachusetts as a
Massachusetts business trust pursuant to an Agreement and Declaration of Trust
dated May 28, 1993, as amended from time to time. Each share of a Fund
represents an investment in that Fund's portfolio of securities. The value of
an investment in a Fund will vary as the value of the underlying portfolio
increases or decreases. Dividends paid by a class of the Fund will vary in
relation to the pro rata return received from the Fund's investments and the
expenses each class incurs.
The Board of Trustees of the Trust is generally responsible for management of
the business and affairs of the Trust. Trustees formulate the general policies
of the Trust and the Funds, approve contracts and authorize Trust officers to
carry out the decisions of the Board. As advisers to the Funds, MassMutual,
Concert Capital and HarbourView may be considered part of the management of the
Trust. For more information concerning the management of the Trust, reference
should be made to the Statement of Additional Information.
Investment Objectives And Policies Of The Funds
Each Fund has a separate investment objective, which may not be changed without
the vote of a majority of that Fund's outstanding voting shares./1/ There can
be no assurance that a Fund will achieve its investment objective; the success
of a Fund depends to a great extent upon changes in market conditions.
(1) MassMutual Prime Fund
The investment objective of the Prime Fund is to maximize current income to the
extent consistent with liquidity and the preservation of capital by investing in
a diversified portfolio of money market instruments.
The Fund invests in high quality debt instruments having a remaining maturity
not exceeding 397 days. It is the Fund's policy to invest in the following
types of short-term instruments:
(a) Commercial paper and obligations of corporate issuers that at the date
of acquisition are rated in one of the two highest ratings of at least
one nationally recognized statistical rating organization ("NRSRO")
or, if unrated, are judged by MassMutual to be of equivalent
quality./2/
(b) U.S. Government Securities./3/
(c) Bank participation certificates that represent interests in all or
part of specific bank loans, provided that at the date of acquisition
(1) they have a remaining maturity of 397 days or less; and (2) each
of the underlying loans is made to an issuer of securities rated in
one of the two highest ratings of at least one NRSRO or, if unrated,
are judged by MassMutual to be of equivalent quality.
(d) Certificates of deposit and bankers' acceptances of banks and savings
and loan associations having deposits of at least $1 billion as of
their most recently published financial statements.
- ---------------
/1/ As used in this Prospectus, a majority of the outstanding voting shares
of any Fund means the lesser of (a) 67% of that Fund's outstanding shares
present at a meeting of shareholders if more than 50% of the outstanding shares
are present in person or by proxy, or (b) more than 50% of that Fund's
outstanding shares.
/2/ For a description of the ratings of two NRSROs, Standard & Poor's
Corporation ("S&P") and Moody's Investors Service, Inc. ("Moody's"), see the
Appendix to the Statement of Additional Information. For example, the two
highest ratings of Moody's for commercial paper are P-1 and P-2.
/3/ See the Glossary for a definition of U.S. Government Securities.
14
<PAGE>
(e) Obligations of foreign issuers, payable in U.S. dollars, provided that
no such investment will be made if as a result more than 25% of the
Fund's total assets would be invested in such securities.
The Fund will make portfolio investments primarily in response to changing
economic and money market conditions and trends. Trading activity is expected
to be low. It is anticipated, however, that from time to time the Fund will
take advantage of temporary disparities in the yield relationships among the
different segments of the money market or among particular instruments within
the same segment of the market to make purchases and sales when management deems
that such transactions will improve the yield or the quality of the portfolio.
The Fund is not a money market fund as defined in Rule 2a-7 under the Investment
Company Act of 1940. The portfolio of the Fund is managed by Mary E. Wilson,
Vice President and Managing Director of MassMutual, with which she has been
associated since 1982.
(2) MassMutual Short-Term Bond Fund
The investment objective of the Short-Term Bond Fund is to achieve a high total
rate of return primarily from current income while minimizing fluctuations in
capital values by investing primarily in a diversified portfolio of short-term
investment grade fixed income securities.
The Fund invests in investment grade fixed income securities. Investment grade
fixed income securities are securities that at the date of acquisition are rated
in one of the four highest ratings of at least one NRSRO or, if unrated, are
judged by MassMutual to be of equivalent quality./4/ For example, the Fund may
invest in the following types of debt instruments:
(a) Corporate securities.
(b) U.S. Government Securities.
(c) Obligations issued or guaranteed as to principal and interest by the
Government of Canada, a Province of Canada, or any instrumentality or
political subdivision thereof, provided that no such investment will
be made if as a result more than 25% of the Fund's total assets would
be invested in such securities.
(d) Obligations (including certificates of deposit, time deposits or
bankers' acceptances) of U.S. or Canadian chartered banks having total
deposits in excess of $1 billion, U.S. branches of foreign banks
having total deposits in excess of $1 billion, U.S. savings and loan
associations having total deposits in excess of $1 billion, and
Eurodollar certificates of deposit issued by foreign branches of U.S.
banks having total deposits in excess of $1 billion.
(e) Publicly traded debt securities issued or guaranteed by a national or
state bank or bank holding company (as defined in the Federal Bank
Holding Company Act, as amended) that at the date of acquisition are
rated in one of the three highest ratings of at least one NRSRO or, if
unrated, are judged by MassMutual to be of equivalent quality, and
certificates of deposit of such banks.
(f) Commercial paper that at the date of investment is rated in the two
highest ratings of at least one NRSRO or, if unrated, is judged by
MassMutual to be of equivalent quality.
(g) Bank participation certificates that represent interests in all or
part of specific bank loans, provided that at the date of investment
each of the underlying loans is made to an issuer of securities rated
in one of the two highest short-term debt ratings of at least one
NRSRO or, if unrated, are judged by MassMutual to be of equivalent
quality.
(h) Certificates of deposit and bankers' acceptances of banks and savings
and loan associations having deposits of at least $1 billion as of
their most recently published and audited financial statements.
(i) Securities of foreign issuers (other than those listed in (c) or (d)
above) that meet credit quality requirements similar to those above,
provided that no such investment will be made if as a result more than
25% of the Fund's total assets would be invested in such securities.
Under normal market conditions, the Fund generally will have an average
effective portfolio Duration of no more than three years. Portfolio
Duration changes may be accomplished primarily through the
reinvestment of cash flows and selective trading. See the Glossary on
page 27 for a definition of Duration. Neither market timing nor interest
rate anticipation methods are employed in managing the Fund. The portfolio of
the Fund is managed by Ronald E. Desautels, Assistant Vice President of
MassMutual, with which he has been associated since 1989.
(3) MassMutual Core Bond Fund
The investment objective of the Core Bond Fund is to achieve a high total rate
of return consistent with prudent investment risk and the preservation of
capital by investing primarily in a diversified portfolio of investment grade
fixed income securities.
The Fund invests in investment grade, publicly traded, readily marketable, fixed
income securities of such maturities as Mass-
- ------------
/4/ For example, the four highest ratings of Moody's for debt obligations are
Aaa, Aa, A, and Baa (including Baa3).
15
<PAGE>
Mutual deems appropriate from time to time in light of market conditions and
prospects. Investment grade fixed income securities are securities that at the
date of acquisition are rated in one of the four highest ratings of at least one
NRSRO or, if unrated, are judged by MassMutual to be of equivalent quality. For
example, the Fund may invest in the following types of debt instruments:
(a) Corporate securities.
(b) U.S. Government Securities.
(c) Obligations issued or guaranteed as to principal and interest by the
Government of Canada, a Province of Canada, or any instrumentality or
political subdivision thereof, provided that no such investment will
be made if as a result more than 25% of the Fund's total assets would
be invested in such securities.
(d) Obligations (including certificates of deposit, time deposits or
bankers' acceptances) of U.S. or Canadian chartered banks having total
deposits in excess of $1 billion, U.S. branches of foreign banks
having total deposits in excess of $1 billion, U.S. savings and loan
associations having total deposits in excess of $1 billion, and
Eurodollar certificates of deposit issued by foreign branches of U.S.
banks having total deposits in excess of $1 billion.
(e) Publicly traded debt securities issued or guaranteed by a national or
state bank or bank holding company (as defined in the Federal Bank
Holding Company Act, as amended) having a rating within the three
highest ratings as determined by at least one NRSRO or, if unrated,
are judged by MassMutual to be of equivalent quality, and certificates
of deposit of such banks.
(f) Securities of foreign issuers (other than those listed in (c) or (d)
above) that at the date of acquisition are rated in one of the four
highest ratings of at least one NRSRO or, if unrated, are judged by
MassMutual to be of equivalent quality provided that no such
investment will be made if as a result more than 25% of the Fund's
total assets would be invested in such securities.
Normally, the Fund's portfolio Duration will range from four to seven
years. Portfolio Duration changes will be accomplished primarily through
the reinvestment of cash flows and selective trading. See the Glossary on
page 27 for a definition of Duration. The portfolio of the Fund is managed
by Mary E. Wilson, Vice President and Managing Director of MassMutual, with
which she has been associated since 1982.
(4) MassMutual Balanced Fund
The investment objective of the Balanced Fund is to achieve a high total rate of
return over an extended period of time consistent with the preservation of
capital by investing in a diversified portfolio of equity securities, fixed
income securities and money market instruments.
The Fund invests in three market sectors:
The Prime Sector - The Prime Sector invests in accordance with the
investment objective and policies of the Prime Fund. The normal asset
allocation range for the Prime Sector is from 10% to 45% of the Balanced
Fund's total assets.
The Core Bond Sector - The Core Bond Sector invests in accordance with the
investment objective and policies of the Core Bond Fund. The normal asset
allocation range for the Core Bond Sector is from 10% to 25% of the
Balanced Fund's total assets.
The Value Equity Sector - The Value Equity Sector invests in accordance
with the investment objective and policies of the Value Equity Fund. The
normal asset allocation range for the Value Equity Sector is from 45% to
65% of the Balanced Fund's total assets.
The Fund adjusts the mix of investments among its three market sectors to
capitalize on perceived variations in return potential produced by the
interaction of changing financial market and economic conditions. The Fund
expects that such adjustments normally will be made in a gradual manner over a
period of time. Under normal circumstances at least 25% of the Fund's total
assets will be invested in senior fixed income securities (including short-term
money market instruments). In unusual circumstances, the Fund may invest up to
70% of its total assets in the Equity Sector or up to 50% of its total assets in
the Bond Sector. The portfolio of the Fund is managed by committee.
(5) MassMutual Value Equity Fund
The investment objective of the Value Equity Fund is to achieve long-term growth
of capital and income by investing primarily in a diversified portfolio of
equity securities of larger well-established companies.
The Fund invests primarily in common stocks, securities convertible into common
stocks, and other equity securities (such as warrants and stock rights) which
are normally cash dividend-paying and listed on a national securities exchange
or traded in the over-the-counter market. The issuers of securities in which
the Fund will invest generally are companies with market capitalizations in
excess of $2 billion and a history of operations of five years or more.
The Fund utilizes a value-oriented, risk-averse strategy in making investment
decisions. As such, investments are made in securities of companies which,
in the opinion of Concert Capital, are of high quality, offer above-average
dividend growth potential and are attractively valued in the marketplace.
Investment quality and dividend growth potential are evaluated using fundamental
analysis emphasizing each issuer's historical financial performance, balance
sheet strength, management capability and competitive position. Various
valuation param-
16
<PAGE>
eters are examined to determine the attractiveness of individual securities. On
average, the Fund's portfolio securities will have price/earnings ratios and
price/book value ratios below those of the Standard & Poor's 500 Composite Stock
Price Index (the "S&P 500 Stock Index"). Consideration also is given to
securities of companies whose current prices do not adequately reflect, in the
opinion of Concert Capital, the ongoing business value of the enterprise. While
MassMutual is the Fund's investment adviser, its investment sub-adviser is
Concert Capital. The portfolio of the Fund is managed by David B. Salerno,
Managing Director of the Value Equity Group of Concert Capital. He has been
associated with MassMutual since 1975 and with Concert Capital since January 1,
1993.
(6) MassMutual Small Cap Value Equity Fund
The investment objective of the Small Cap Value Equity Fund is to achieve
long-term growth of capital and income by investing primarily in a diversified
portfolio of equity securities of smaller companies.
The Fund invests primarily in common stocks, securities convertible into common
stocks and other equity securities (such as warrants and stock rights) which are
issued by companies with a market capitalization of less than $750 million and
which are listed on a national securities exchange or traded in the
over-the-counter market.
The Fund utilizes a value-oriented, risk-averse strategy in making investment
decisions. As such, investments are made in securities of companies that,
in the opinion of Concert Capital, are of high quality or possess a unique
product, market position or operating characteristics which result in
above-average levels of profitability or superior growth potential and are
attractively valued in the marketplace. Traditional fundamental research
techniques are employed to determine investment quality and growth potential,
emphasizing each issuer's historic financial performance, balance sheet
strength, management capability and competitive position. Valuation parameters
are examined to determine the attractiveness of individual securities. On
average, the Fund's holdings will have price/earnings ratios and price/book
value ratios below those of the S&P 500 Stock Index. Consideration also is
given to securities of companies whose current prices do not adequately reflect
the ongoing business value of the enterprise.
The Fund may purchase securities with above-average volatility relative to
indices like the S&P 500 Stock Index. While such volatility frequently may
involve the opportunity for greater gain, it also generally involves greater
risk of loss and, as a result, the Fund's shares are suitable only for those
investors who are in a financial position to assume such risk. While
MassMutual is the Fund's investment adviser, its investment sub-adviser is
Concert Capital. The Fund's portfolio is managed by George P. Ulrich,
Senior Vice President and Small Cap Portfolio Manager of Concert Capital. He
has been associated with MassMutual since 1984 and with Concert Capital since
January 1, 1993.
(7) MassMutual International Equity Fund
The investment objective of the International Equity Fund is to achieve a high
total rate of return over the long term by investing in a diversified portfolio
of foreign and domestic equity securities.
The Fund invests primarily in common stocks and securities having the
characteristics of common stocks, such as convertible securities, warrants and
stock rights. The Fund generally will have at least 75% of its total assets
invested in foreign securities, including securities of foreign issuers
represented by American Depository Receipts or traded in the U.S.
over-the-counter market or listed on a U.S. securities exchange. Under normal
market conditions, the Fund's assets will be invested in securities traded in
markets in at least three different countries, excluding the United States. In
an uncertain market or economic environment when it would be appropriate to
maintain a defensive position, the Fund may invest up to 100% of its assets in
debt securities, such as rated or unrated bonds and debentures, cash equivalents
and preferred stocks. It is expected that short-term debt securities (i.e.,
those maturing in one year or less from the date of purchase) will be emphasized
for defensive or liquidity purposes, since such securities usually may be
disposed of quickly at prices not involving significant losses. When
circumstances warrant, securities may be sold without regard to the length of
time held, although short-term trading may increase brokerage costs borne by the
Fund.
The share price of the International Equity Fund will reflect the movements of
both the prices of the portfolio securities and the currencies in which the
securities are denominated. Depending upon the extent of the Fund's investments
abroad, changes in the relative value of the U.S. dollar to the securities'
denominated currencies may have a positive or negative impact on the Fund's
share price.
The Fund's investment policies involve special risks. Risks of investing in
foreign securities include foreign taxation, changes in currency rates or
currency blockage, currency exchange costs, and differences between domestic and
foreign legal, accounting, auditing, brokerage and economic standards. See
"Foreign Securities" in the Statement of Additional Information for further
discussion of the possible risks and rewards of investing in foreign securities.
While MassMutual is the Fund's investment adviser, its sub-adviser is
HarbourView. The portfolio of the Fund is managed by a committee
composed of HarbourView investment professionals.
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Investment Practices Of The Funds And Related Risks
The Funds may invest in a wide range of investments and engage in various
investment-related transactions and practices. These practices
are pursuant to non-fundamental policies and therefore may be changed by
the Board of Trustees without the consent of shareholders. Some of the more
significant practices are discussed below.
Repurchase Agreements and Reverse Repurchase Agreements
Each Fund may engage in repurchase agreements and reverse repurchase agreements.
A repurchase agreement is a contract pursuant to which a Fund agrees to purchase
a security and simultaneously agrees to resell it at an agreed-upon price at a
stated time, thereby determining the yield during the Fund's holding period. A
reverse repurchase agreement is a contract pursuant to which a Fund agrees to
sell a security and simultaneously agrees to repurchase it at an agreed-upon
price at a stated time. For a more detailed description of repurchase
agreements and reverse repurchase agreements and related risks, see the
Statement of Additional Information.
Securities Lending
Each Fund may make loans of portfolio securities of not more than 33% of its
total assets taken at current value, thereby realizing additional income.
Although lending portfolio securities may involve the risk of delay in recovery
of the securities loaned or possible loss of rights in the collateral should the
borrower fail financially, loans will be made only to borrowers deemed by the
Adviser or Sub-Adviser to be in good standing.
Hedging Instruments and Derivatives
Each Fund may engage in hedging transactions and practices, as more fully
discussed in the Statement of Additional Information. For example, the Funds
may enter into financial futures contracts, write and purchase call and put
options (including options on debt and equity securities and futures contracts),
buy or sell forward contracts and other similar instruments (collectively
referred to as "hedging instruments" or "derivatives"). Derivatives normally
are used by a portfolio manager to (a) protect against possible declines in the
market value of a Fund's portfolio resulting from downward trends in the debt
securities markets generally due to increasing interest rates; (b) protect a
Fund's unrealized gains or limit its unrealized losses; and (c) manage a Fund's
exposure to changing security prices. Derivatives also may be used to establish
a position in the debt or equity securities markets as a temporary substitute
for purchasing or selling particular debt or equity securities and to manage the
effective maturity or duration of fixed income securities in a Fund's portfolio.
The Funds will not use derivatives for speculative purposes.
The Funds may use a number of hedging instruments and derivatives, including:
(1) Financial Futures - Each Fund may enter into exchange-traded futures
contracts for the purchase or sale of debt obligations in order to hedge
against anticipated changes in interest rates. The purpose of hedging in
debt obligations is to establish with more certainty than otherwise would
be possible the effective rate of return on a portfolio of fixed income
securities. The International Equity Fund may purchase or sell Stock Index
Futures to hedge against anticipated changes in the market price of the
underlying equity securities.
(2) Call and Put Options - Each Fund may write covered call options which are
traded on a national securities exchange or over-the-counter, provided that
at all times it will have in its portfolio the securities which it may be
obligated to deliver if the option is exercised or securities currently
convertible into those securities. Each Fund may write call options on
securities in its portfolio and on indices in an attempt to realize greater
current income than would be realized on the securities alone. Each Fund
also may write covered put options and straddles (combinations of calls and
puts on the same underlying security or index). If a Fund writes covered
put options, it will establish segregated accounts consisting of cash or
high quality debt instruments that can be liquidated quickly to ensure that
the Fund can meet its obligations.
(3) Forward Contracts - Each Fund may purchase or sell securities on a "when
issued" or delayed delivery basis or may purchase or sell securities on a
forward commitment basis ("forward contracts"). When such transactions are
negotiated, the price is fixed at the time of commitment, but delivery and
payment for the securities can take place a month or more after the
commitment date. The securities so purchased or sold are subject to market
fluctuations and no interest accrues to the purchaser during this period.
While a Fund also may enter into forward contracts with the initial
intention of acquiring securities for its portfolio, it may dispose of a
commitment prior to settlement if MassMutual deems it appropriate to do so.
(4) Interest Rate Swap Agreements - Each Fund may enter into interest rate swap
agreements and related contracts, such as interest rate caps and floors, in
an attempt to preserve a return or interest rate spread on a particular
investment or portion of its portfolio, or to protect against any increase
in the price of securities a Fund might consider purchasing at a later
date. Interest rate swaps involve the exchange by a Fund with another
party of their respective commitments to pay or receive interest, such as
an exchange of floating rate payments for fixed rate payments. To cover
the Fund's obligations under such agreements, up to 15% of the Fund's
liquid assets may be held in a segregated custodial account.
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(5) Currency Transactions - The International Equity Fund may engage in foreign
currency transactions with counterparties in order to hedge the value of
portfolio holdings denominated in particular currencies against
fluctuations in relative value. The Short-Term Bond Fund, the Core Bond
Fund and the Core Bond Sector of the Balanced Fund may invest in foreign
securities that are not denominated in U.S. dollars only if the Fund
contemporaneously enters into a foreign currency transaction to hedge the
currency risk associated with the particular foreign security.
Certain limitations apply to the use of hedging instruments and derivatives by
the Funds. For example, a Fund will not: (a) purchase a put or call option on
securities if as a result more than 5% of its total assets would be attributable
to premiums paid for such options; (b) write a covered call or put option if as
a result more than 25% of its total assets would be in segregated accounts
covering such options; (c) purchase put and call options on securities or on
futures if as a result more than 5% of its total assets would be invested in
such options; and (d) enter into a forward contract if as a result more than 25%
of its total assets would be held in a segregated account covering such
contracts. For more information about hedging instruments, derivatives and the
extent to which tax considerations may limit a Fund's use of such instruments,
see the Statement of Additional Information.
There can be no assurance that the use of hedging instruments and derivatives by
a Fund will assist it in achieving its investment objective. Risks inherent in
the use of these instruments include: (a) the risk that interest rates and
securities prices will not move in the direction anticipated; (b) the imperfect
correlation between the prices of futures, options and forward contracts and the
prices of the securities being hedged; and (c) the fact that skills needed to
use these strategies are different from those needed to select portfolio
securities. As to forward contracts and interest rate swap agreements, the risk
exists that the counterparty to the transaction will be incapable of meeting its
commitment, in which case the desired hedging protection may not be obtained and
the Fund may be exposed to risk of loss. As to currency transactions, risks
exist that purchases and sales of currency and related instruments can be
negatively affected by government exchange controls, blockages, and
manipulations or exchange restrictions imposed by governments which could result
in losses to the Fund if it is unable to deliver or receive currency or funds in
settlement of obligations. It also could cause hedges it has entered into to be
rendered useless, resulting in full currency exposure as well as incurring
transaction costs.
Restricted and Illiquid Securities
None of the Funds currently expect to invest in restricted or illiquid
securities. However, each Fund may invest not more than 15% of its net assets
in illiquid securities. These policies do not limit the purchase of securities
eligible for resale to qualified institutional buyers pursuant to Rule 144A
under the Securities Act of 1933, as amended, provided that such securities are
determined to be liquid by the Board of Trustees, or by the Adviser or
Sub-Adviser if such determination is pursuant to Board-approved guidelines. If
there is a lack of trading interest in particular Rule 144A securities, a Fund's
holdings of those securities may be illiquid, resulting in the possibility of
undesirable delays in selling these securities at prices representing fair
value.
Foreign Securities
Investments in foreign securities offer potential benefits not available from
investing solely in securities of domestic issuers, such as the opportunity to
invest in foreign issuers that appear to offer growth potential, or to invest in
foreign countries with economic policies or business cycles different from those
of the United States or foreign stock markets that do not move in a manner
parallel to U.S. markets, thereby reducing fluctuations in portfolio value.
Investments in foreign securities entail certain risks, such as the possibility
of one or more of the following: imposition of dividend or interest withholding
or confiscatory taxes; currency blockages or transfer restrictions;
expropriation, nationalization, military coups or other adverse political or
economic developments; less government supervision and regulation of securities
exchanges, brokers and listed companies, and the difficulty of enforcing
obligations in other countries. Certain markets may require payment for
securities before delivery. A Fund's ability and decisions to purchase and sell
portfolio securities may be affected by laws or regulations relating to the
convertibility of currencies and repatriation of assets. Further, it may be
more difficult for a Fund's agents to keep currently informed about corporate
actions which may affect the prices of portfolio securities. Communications
between the United States and foreign countries may be less reliable than within
the United States, thus increasing the risk of delayed settlements of portfolio
transactions or loss of certificates for portfolio securities.
Portfolio Management
MassMutual and HarbourView may use trading as a means of managing the portfolios
of the Funds in seeking to achieve their investment objectives. Transactions
will occur when the advisers believe that the trade, net of transaction costs,
will improve interest income or capital appreciation potential, or will lessen
capital loss potential. Whether the goals discussed above will be
achieved through trading depends on the adviser's ability to evaluate particular
securities and anticipate relevant market factors, including interest rate
trends and variations from such trends. If the adviser's evaluations and
expectations prove to be incorrect, a Fund's income or capital appreciation may
be reduced and its capital losses may be increased. Under normal conditions,
Concert Capital expects annual portfolio turnover to range from 15% to 35% for
the Value Equity Fund, the Small Cap Fund, and the Value Equity Sector of the
Balanced Fund and, except in unusual circumstances, does not expect annual
portfolio turnover to exceed 75%. Under normal conditions, the annual portfolio
turnover
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rates for the Short-Term Bond Fund, the Core Bond Fund, the Core Bond Sector of
the Balanced Fund, and the International Equity Fund are not expected to exceed
100%.
Cash Positions
Each Fund may hold cash or cash equivalents to provide for expenses and
anticipated redemption payments and so that an orderly investment program may be
carried out in accordance with the Fund's investment policies. To provide
liquidity or for temporary defensive purposes, each Fund may invest in
investment grade debt securities, government obligations, or money market
instruments.
Industry Diversification
As a general rule, a Fund will not acquire securities of issuers in any one
industry (as determined by the Board of Trustees) if as a result more than 25%
of the value of the total assets of the Fund would be invested in such industry,
with the following exceptions:
(1) There is no limitation for U.S. Government Securities.
(2) In the case of the Prime Fund and the Short-Term Bond Fund, there is no
industry concentration limitation for certificates of deposit and bankers'
acceptances.
Certain Debt Securities
While the Funds, except for the Prime Fund, may invest in investment grade debt
securities that are rated in the fourth highest rating category by at least one
NRSRO (e.g., Baa3 by Moody's) or, if unrated, are judged by MassMutual to be of
equivalent quality, such securities have speculative characteristics, are
subject to greater credit risk, and may be subject to greater market risk than
higher rated investment grade securities.
Fundamental Investment Restrictions
For a description of fundamental investment restrictions of the Funds which may
not be changed without the affirmative vote of a majority of the outstanding
voting shares of the Fund, reference should be made to the Statement of
Additional Information.
How To Purchase, Exchange, Convert And Redeem Shares
Features and Eligibility Requirements of Each Class
No front-end or deferred sales charge is imposed on the Trust's shares.
Therefore, 100% of an Investor's money is invested in the Fund or Funds of its
choice.
Class 1, Class 2 and Class 3 Shares
These shares may be purchased only through registered broker-dealers.
Pursuant to a 12b-1 Plan adopted by the Trust, Class 1 and Class 2 shares of
each Fund are subject to distribution/service fees (12b-1 fees), as follows:
(1) Class 1 shares pay a distribution fee at the annual rate of .40% and a
service fee at the annual rate of .25% of the Fund's aggregate average net
assets attributable to the Class 1 shares.
(2) Class 2 shares pay a distribution fee at the annual rate of .15% of the
Fund's aggregate average net assets attributable to the Class 2 shares.
The Trust's Distributor receives distribution fees and may reallow all or
a portion of them as dealer discounts and brokerage commissions to dealers,
including MML Investors Services, Inc. ("MMLISI"), a wholly owned subsidiary of
MassMutual. From time to time, dealers who receive dealer discounts and
brokerage commissions from the Trust's Distributor may reallow all or a portion
of them to other dealers or brokers. The service fees will be paid to
MassMutual.
Class 3 shares of each Fund are "no load" because they are not subject to any
distribution/service fees.
No initial investment minimum applies to Class 1 shares. Investors in Class 2
and Class 3 shares must meet certain eligibility requirements. An initial
Investor may purchase Class 2 shares of a Fund only if the net asset value of
such shares equals at least $2 million. An initial Investor may purchase
Class 3 shares of a Fund only if the net asset value of such shares equals at
least $10 million. For purposes of determining whether a Plan Investor has
satisfied the initial investment minimum with respect to Class 2 or Class 3
shares, all assets invested with MassMutual and/or in the Trust for that Plan
will be recognized - except for life insurance assets. For purposes of this
determination, a Plan also shall include those plans established by entities of
the Plan Sponsor that satisfy Section 414(b), (c), (m), or (o) of the Internal
Revenue Code of 1986, as amended, provided that all such Plans have common
trustees. Additionally, the Plan Investor will be deemed to have satisfied the
$2 million and $10 million requirements if the Plan Investor certifies that at
least such amounts are available for transfer and will be transferred from the
Plan to MassMutual and/or the Trust no later than six months from the date of
initial purchase. Alternatively, an initial Investor may purchase Class 2 or
Class 3 shares if the Investor's employee retirement benefit plan with
MassMutual has 400 or more Participants (with respect to Class 2) or 750 or more
Participants (with respect to Class 3). All subsequent investments by an
Investor will be of the same Class of shares already held until shares are
converted from one Class to another (see Section on conversion on page
21).
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Class 4 Shares
Class 4 shares may be purchased only by separate investment accounts of
MassMutual ("SIA Investors"). SIA Investors purchase Class 4 shares directly
from the Fund without a front-end or deferred sales charge and pay no
distribution or service fees.
Purchase of Shares
Shares of the Trust are offered on each day the New York Stock Exchange ("NYSE")
is open for trading (a "Business Day"). Purchase orders received by the
Transfer Agent from MassMutual (as an agent of the Distributor) on a Business
Day prior to 4:00 p.m. Eastern Time will be processed based on that day's
closing net asset value.
Purchase orders must be placed in writing with MassMutual (as an agent of the
Distributor) at its home office and must be accompanied by sufficient funds.
Acceptable methods of payment include checks, federal funds wires, and automated
clearing house transactions ("ACH"). MassMutual, on behalf of the Distributor,
will not transmit a purchase order to the Trust's Transfer Agent until
MassMutual has determined that the purchase order is in good form. Generally, a
purchase order will be determined by MassMutual to be in good form if such
order: (a) includes all information and documentation necessary to make
appropriate Investor, Plan, trust and/or Plan Participant (if applicable)
allocations to the various Funds and/or Separate Accounts; and (b) is received
by MassMutual at its home office prior to 4:00 p.m. Eastern Time. Purchase
orders by wire will be in good form only upon receipt by MassMutual of (i) the
funds, deposited to the appropriate MassMutual account, and (ii) a confirmation
of the wire receipt. Any order to purchase Fund shares which is received by
MassMutual after 4:00 p.m. Eastern Time on a Business Day will be transmitted to
the Trust's Transfer Agent on the next Business Day. For more specific
information regarding what information and documentation are necessary for
MassMutual to determine that a purchase order is in good form with respect to a
particular plan, Plan Investors should refer to Plan Documents./5/
The sale of Trust shares will be suspended during any period when the
determination of net asset value is suspended. The sale of Trust shares also
may be suspended by the Board of Trustees whenever the Board determines that it
is in the Trust's best interest to do so. The Trust, in its complete
discretion, may reject any order for purchase of its shares.
Exchange Privileges and Procedures
Investors have the privilege of exchanging shares of one Fund for the same class
of shares of another Fund, subject to the provisions of Plan Documents and
applicable state insurance laws. However, exchanges may be restricted or
refused by a Fund if, in the opinion of its adviser, (i) an Investor has engaged
in excessive trading, (ii) the Fund receives or anticipates simultaneous orders
affecting significant portions of the Fund's assets, or (iii) a pattern of
exchanges coincides with a "market timing" strategy that might be disruptive to
the Fund. Each Fund also reserves the right to refuse exchange purchases by any
person or group of persons, if, in the adviser's judgment, the Fund would be
unable to invest the funds effectively in accordance with its investment
objectives and policies, or otherwise potentially would be adversely affected.
The Trust reserves the right on 60 days' written notice to modify or terminate
the exchange privilege. Furthermore, any exchange limits imposed by a Fund may
be modified, in the sole discretion of the Fund, for Plan Investors so that the
Fund's exchange privileges are consistent with Plan or group annuity contract
exchange limits as set forth in Plan Documents and Department of Labor
regulations. Plan Investors and Plan Participants should refer to Plan
Documents and related materials to determine what, if any, exchange limitations
apply to them.
Exchange requests must be delivered in writing to MassMutual at its home office.
Any exchange will involve the redemption of shares and the purchase of shares in
another Fund on the basis of the next calculated net asset value per share of
each Fund after the exchange request is received by the Trust's Transfer Agent
from MassMutual. MassMutual will not transmit exchange requests to the Trust's
Transfer Agent until MassMutual has determined that the request is in good
form./6/
Converting from Class 1 to Class 2 Shares or Class 2 to Class 3 Shares
Investors that hold Class 1 shares may qualify for an automatic conversion to
Class 2 shares and Investors that hold Class 2 shares may qualify for an
automatic conversion to Class 3 shares. Specifically, twice each year, as of
March 1 and September 1 or, (if not a Business Day, then the next Business Day),
MassMutual will determine whether a Class 1 or Class 2 Investor meets the
eligibility requirements for the purchase of Class 2 or Class 3 shares,
respectively. If the Investor meets the eligibility requirements of Class 2 or
Class 3, its Class 1 or Class 2 shares automatically will convert on March 31 or
September 30, as applicable, (or, if not a Business Day, then the next Business
Day) into Class 2 or Class 3 shares, using that day's net asset value.
Class 1 or Class 2 Investors whose shares convert to Class 2 or Class 3 shares
will be subject to lower distribution/service fees (in the case of Class 2) or
no distribution/service fees (in the case of Class 3).
Redeeming Shares
Redemption requests must be in writing and sent to MassMutual at its home
office. Each Fund redeems its shares at their net asset value as next computed
after receipt by the Transfer Agent of a request for redemption from MassMutual.
- -------------
/6/ See the Glossary for a definition of Plan Documents.
/7/ See "Purchase of Shares" above for a discussion of the term "in good form."
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MassMutual will not transmit redemption requests to the Trust's Transfer Agent
until MassMutual has determined that the request is in good form. No contingent
deferred sales charge or any other fee is charged on redemptions from any Class
of shares. Redemption payments will be made within seven days after receipt of
the written request therefor by the Trust, except that the right of redemption
may be suspended or payments postponed when permitted by applicable law and
regulations. When redemption is requested of shares recently purchased by
check, payment may be delayed until the check has been collected, which may take
up to 15 days from receipt of the check.
Investment Manager And Sub-Advisers
Investment Manager
MassMutual is the investment manager to the Funds and is responsible for
providing all necessary investment management and administrative services.
MassMutual is a mutual life insurance company organized in 1851 under the laws
of the Commonwealth of Massachusetts. MassMutual is licensed to transact a life
and health insurance business in all states of the United States, the District
of Columbia and certain Provinces of Canada. As of December 31, 1994, MassMutual
had total assets of approximately $35.2 billion, including approximately $17.7
billion in debt securities, $3.0 billion in mortgage loans, $203.3 million in
common stocks (excluding investments in subsidiaries), $1.3 billion in real
estate and $2.5 billion in other investments. The persons responsible for
management of the bond and money market portfolios of MassMutual are also
responsible for managing such investments of the Funds. Gary E. Wendlandt,
Chairman, CEO and Trustee of the Trust, and John M. Naughton, Trustee of the
Trust, are officers of MassMutual, as are Stuart H. Reese, President of the
Trust, Hamline C. Wilson, Vice President and Chief Accounting and Financial
Officer of the Trust, Peter A. Feige, Vice President of the Trust, Stephen L.
Kuhn, Vice President and Secretary of the Trust, and Raymond B. Woolson,
Treasurer of the Trust.
MassMutual serves as investment manager of each Fund pursuant to a separate
investment management agreement pursuant to which MassMutual is responsible for
providing investment management of the Fund and is authorized to engage in
portfolio transactions on behalf of the Fund, subject to such general or
specific instructions as may be given by the Board of Trustees of the Trust.
MassMutual may, at its expense, employ sub-advisers to manage the investments of
the Funds.
The Trust, on behalf of each Fund, pays MassMutual an investment advisory fee
monthly for the investment advisory services performed and the facilities
furnished at an annual rate of the average daily net assets of that Fund as
follows:
(1) .45% for the Prime Fund, the Short-Term Bond Fund, the Core Bond
Fund, the Balanced Fund and the Value Equity Fund.
(2) .55% for the Small Cap Value Equity Fund.
(3) .85% for the International Equity Fund.
In addition, MassMutual has entered into a separate administrative services
agreement for each Fund pursuant to which MassMutual is obligated to provide all
necessary administrative and shareholder services and to bear some Class
expenses, such as federal and state registration fees, printing and postage.
The Funds are responsible for certain other expenses including brokerage, taxes,
interest, fees and expenses of non-interested trustees, legal fees, custody and
audit fees. MassMutual may, at its expense, employ others to supply all or any
part of the services to be provided to the Funds pursuant to the administrative
services agreements. The Trust, on behalf of each Fund, pays MassMutual an
administrative services fee monthly for the administrative services performed at
annual rates of the average daily net assets of the applicable class of shares
of the Fund which range from .55% to .59% for Class 1 shares, .50% to .54% for
Class 2 shares, .31% to .44% for Class 3 shares and .0782% to .0972% for Class 4
shares. MassMutual for an indefinite period has agreed to waive a portion of
its management fees. Refer to ``Expense Information'' on pages 3-7 for more
detailed information.
Investment Sub-Advisers
MassMutual has entered into investment sub-advisory agreements with Concert
Capital and HarbourView. These agreements provide that (1) Concert Capital
will manage the investment and reinvestment of the assets of the Value Equity
Fund, the Small Cap Value Equity Fund and the Value Equity Sector of the
Balanced Fund, and (2) HarbourView will manage the investment and reinvestment
of the assets of the International Equity Fund.
MassMutual pays Concert Capital a weekly fee equal to an annual rate of .13% of
the average daily net asset value of the Value Equity Fund and the Value Equity
Sector of the Balanced Fund and .25% of the average daily net asset value of the
Small Cap Value Equity Fund. MassMutual pays HarbourView a monthly fee equal to
an annual rate of .50% of the average daily net asset value of the International
Equity Fund.
Concert Capital is a wholly owned subsidiary of MassMutual Holding Company which
is a wholly owned subsidiary of MassMutual. HarbourView is a wholly owned
subsidiary of Oppenheimer Management Corporation which is a wholly owned
subsidiary of Oppenheimer Acquisition Corporation ("OAC"), a holding company
owned in part by senior management of OAC and ultimately controlled by
MassMutual by
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virtue of its ownership of 80% of OAC's voting stock. Concert Capital serves as
investment sub-adviser to Oppenheimer Value Stock Fund, and the MML Equity Fund
and the Equity Sector of MML Blend Fund of MML Series Investment Fund.
Distributor, Transfer Agent, Shareholder Servicing Agent, Custodian
Oppenheimer Funds Distributor, Inc. ("Oppenheimer") acts as Distributor to each
Fund. MML Investors Services, Inc. ("MMLISI") serves as Sub-Distributor for
each Fund. Investors Bank & Trust Company ("Investors Bank") serves as each
Fund's Sub-Administrator, Transfer Agent, and Custodian. MassMutual ultimately
has a controlling interest in Oppenheimer. MMLISI is a wholly owned subsidiary
of MassMutual. Both Oppenheimer and MMLISI may serve as distributors of
securities issued by other investment companies. As Custodian, Investors Bank
has custody of the Funds' securities, maintains certain financial and accounting
books and records, and generally assists in all aspects of the administration of
the Funds. Neither Oppenheimer, MMLISI nor Investors Bank assists in or is
responsible for the investment decisions and policies of the Funds. MassMutual
provides the Funds with certain shareholder services pursuant to its
administrative services agreements.
Description Of Shares
The Trust is a series company which is authorized to issue shares in separate
series of multiple classes. The Trust may issue an unlimited number of shares
of multiple classes, in one or more series as the Trustees may authorize, with
or without par value as the Trustees may prescribe. Each share of a particular
class of a Fund represents an equal proportionate interest in that Fund with
each other share of the same class, none having priority or preference over
another. Each Fund is preferred over all other Funds in respect of the assets
allocated to that Fund. Each share of a particular class of a Fund is entitled
to a pro rata share of any distributions declared in respect of that class and,
in the event of liquidation, a pro rata share of the net assets of that class
remaining after satisfaction of outstanding liabilities. When issued, shares
are fully paid and nonassessable and have no preemptive or subscription rights.
Under the Trust's Declaration of Trust, the Board of Trustees is authorized to
create new series and classes without shareholder approval. Shares of each Fund
entitle their holder to one vote for each dollar (or proportionate fractional
vote for each fraction of a dollar) of net asset value per share of each Fund or
class for each share held as to any matter on which such shares are entitled to
vote.
The Trust is not required to hold annual meetings of shareholders. Special
meetings may be called for such purposes as electing Trustees, voting on
management agreements and distribution plans, and with respect to such
additional matters relating to the Trust as may be required by the Trust's
Declaration of Trust and the 1940 Act.
How Fund Shares Are Priced
The net asset value (closing price) of each class of each Fund's shares is
determined once daily as of the normal close of trading on the NYSE (currently
4:00 p.m. Eastern Time) on each day on which the Exchange is open for trading.
Net asset value for a class of shares is determined by dividing the total market
value of a Fund's portfolio investments and other assets attributable to that
class, less any liabilities, by the total outstanding shares of the class.
Securities which are traded on a national securities exchange or on the NASDAQ
national market system generally are valued at the last sale price. Debt
securities normally are valued at the last reported bid price on the primary
market for those securities. To the extent authorized by the Board of Trustees,
portfolio securities may be valued by a pricing service that determines values
based on market transactions for normal institutional-size trading units. Money
market obligations having a maturity of 60 days or less are generally valued at
amortized cost when the Board of Trustees of the Trust believes that amortized
cost approximates market value. In all other cases, assets and other securities
for which no quotations are readily available (including restricted securities)
are valued at fair value as determined in good faith by the Board of Trustees,
although the actual calculations may be made by persons acting pursuant to the
direction of the Board.
A dealer or other organization selling shares of Classes 1, 2, or 3 may
receive different levels of compensation for selling one particular class of
shares over another. Certain shares of the Funds, which may be purchased
through the Distributor at the net asset value per share next determined after
receipt of a purchase request in good order, are subject to sales charges which
are part of the 12b-1 fees set forth and expressed on an annual basis beginning
on page 3. The fees are charged on a daily basis and paid over to the
Distributor monthly. Based on a 365-day year, the daily sales charge portion of
the 12b-1 fee, expressed as a gross percentage of total Fund assets at the end
of the day rounded to the nearest 1/10,000 of percent, is 0.0011% for Class 1
shares and 0.0004% for Class 2 shares. The same percentages would apply when
expressing the sales charge portion as a percentage of the amount available for
investment the next day net of the fee.
No sales charges are associated with the sale of shares of Class 3 or Class 4.
However, registered representatives who are not employees of MassMutual may
receive certain cash compensation from MassMutual in consideration of their
sales of Class 3 shares of the Funds. If investment in the Funds is equal to or
less than $10 million, the fee will be 0.10% of such investment. If the
investment in the Funds exceeds $10 million, the fee will be the sum of 0.10% of
the first $10 million invested and 0.05% on amounts in excess of $10 million.
23
<PAGE>
Distributions And Taxation
Each Fund intends to qualify as a regulated investment company under Subchapter
M of the Internal Revenue Code of 1986 (the "Code"). As a regulated investment
company, a Fund will not be subject to federal income taxes on its ordinary
income and net realized capital gain distributed to its shareholders. In
general, a Fund that fails to distribute at least 98% of such income and gain
will be subject to a 4% excise tax on the undistributed amount.
Many Investors, including most tax qualified Plan Investors, may be eligible for
preferential federal income tax treatment on distributions received from a Fund
and dispositions of Fund shares. This Prospectus does not attempt to describe
in any respect such preferential tax treatment. Any prospective Investor that
is a trust or other entity eligible for special tax treatment under the Code
that is considering purchasing shares of a Fund, either directly or indirectly
through a life insurance company separate account, should consult its tax
advisers about the federal, state and local tax consequences particular to it,
as should persons considering whether to have amounts held for their benefit in
dispositions such trusts or other entities invested in shares of a Fund.
Investors that do not receive preferential tax treatment are subject to federal
income taxes on distributions received in respect of their shares.
Distributions of the Fund's ordinary income and short-term capital gain are
taxable to the shareholder as ordinary income whether received in cash or
additional shares. Designated long-term capital gain distributions are taxable
as long-term capital gain whether distributed in cash or additional shares and
regardless of how long the Investor has owned shares of the Fund; however, a
loss recognized from the sale of Fund shares held for six months or less will be
treated as a long-term capital loss to the extent of long-term capital gains
distributions. Certain designated dividends may be eligible for the
dividends-received deduction for corporate shareholders. Investors should
consult with their tax advisers for additional information concerning the
federal, state and local tax consequences of purchasing shares of a Fund.
Dividends from net investment income and distributions of any net realized
capital gains of each Fund are declared and paid annually. Distributions shall
be paid in full and fractional shares of the applicable Class of the applicable
Fund at net asset value on the first Business Day after the record date for the
distribution, unless, subject to such terms and conditions of the underlying
Plan Documents, the Investor has elected to receive dividend payments in cash.
Investment Performance
The Trust commenced operations on October 3, 1994 subsequent to the transfer
of assets by each of seven SIAs to the Fund having corresponding investment
objectives, policies and limitations in exchange for shares of such Fund.
Except for the seed capital provided by MassMutual, each Fund's portfolio of
investments on October 3, 1994 was the same as the portfolio of the
corresponding SIA immediately prior to the transfer.
On the next two pages are certain performance data for each Fund's
corresponding SIA, which may be relevant because the SIAs are managed by the
same entities using substantially the same investment objectives, policies and
restrictions as those used by the Funds. However, the past performance data is
not necessarily indicative of future performance of the Funds. Because the
Funds are actively managed, their investments will vary from time to time and
are not identical to the past portfolio investments of the SIAs.
The SIAs do not incur expenses that correspond to the advisory, administrative
and other fees to which the Funds are subject. Accordingly, the following
performance information has been adjusted by applying the anticipated total
expense ratio for each class of each Fund, which reduces the actual performance
for the SIAs.
Each of the Funds from time to time may advertise certain investment
performance figures. These figures are based on historical earnings and are not
intended to indicate future performance. All performance information with
respect to Class 4 shares will be provided net of the Fund and SIA expenses.
Each of the Funds may quote yield in conformance with current SEC guidelines.
Currently, the yield for each Fund refers to the net investment income earned by
the Fund over a 30 - day period, as defined in the advertisement. This income
is then assumed to be earned for a full year and to be reinvested each month for
six months. The resulting semi-annual yield is doubled.
Each of the Funds may advertise its total return and its holding period return
for various periods of time. Total return is calculated by determining, over a
period of time as stated in the advertisement, the average annual compounded
rate of return that an investment in the Fund earned over that period, assuming
reinvestment of all distributions. Holding period return refers to the
percentage change in the value of an investment in a Fund over a period of time
(as stated in the advertisement), assuming reinvestment of all distributions.
Total return and holding period return differ from yield in that the return
figures include capital changes in an investment while yield measures the rate
of net income generated by a Fund. Total return differs from holding period
return principally in that total return is an average annual figure while
holding period return is an aggregate figure for the entire period.
24
<PAGE>
Average Annual Total Return (adjusted to reflect anticipated expenses, net of
- ---------------------------
management fee waivers) for periods ended December 31, 1994.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
1 YEAR
- -----------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------
Class 1 Class 2 Class 3 Class 4
<S> <C> <C> <C> <C>
SIA - G (predecessor of the Prime Fund) 2.86% 3.41% 3.76% 4.01%
SIA - F (predecessor of the Short-Term Bond Fund) -2.15% -1.60% -1.25% -1.00%
SIA - E (predecessor of the Core Bond Fund) -5.26% -4.71% -4.36% 4.11%
SIA - M (predecessor of the Balanced Fund) 1.29% 1.84% 2.19% 2.44%
SIA - A (predecessor of the Value Equity Fund) 2.92% 3.47% 3.82% 4.07%
SIA - S (predecessor of the Small Cap Value Equity Fund) -5.57% -5.02% -4.67% -4.42%
SIA - I (predecessor of the International Equity Fund) -6.11% -5.56% -5.31% -4.96%
- -----------------------------------------------------------------------------------------------------------------
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
3 YEARS
- -----------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------
Class 1 Class 2 Class 3 Class 4
<S> <C> <C> <C> <C>
SIA - G 2.41% 2.96% 3.31% 3.56%
SIA - F 3.30% 3.85% 4.20% 4.45%
SIA - E 3.39% 3.94% 4.29% 4.54%
SIA - M 5.61% 6.16% 6.51% 6.76%
SIA - A 6.87% 7.42% 7.77% 8.02%
SIA - S 7.34% 7.89% 8.24% 8.49%
SIA - I 12.89% 13.44% 13.69% 14.04%
- -----------------------------------------------------------------------------------------------------------------
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
5 YEARS
- -----------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------
Class 1 Class 2 Class 3 Class 4
<S> <C> <C> <C> <C>
SIA - G 3.83% 4.38% 4.73% 4.98%
SIA - F 5.95% 6.50% 6.85% 7.10%
SIA - E 6.64% 7.19% 7.54% 7.79%
SIA - M 7.83% 8.38% 8.73% 8.98%
SIA - A 8.24% 8.79% 9.14% 9.39%
SIA - S 8.16% 8.71% 9.06% 9.31%
SIA - I N/A N/A N/A N/A
- -----------------------------------------------------------------------------------------------------------------
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
10 YEARS (or since inception)
- -----------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------
Class 1 Class 2 Class 3 Class 4
<S> <C> <C> <C> <C>
SIA - G 5.12% 5.67% 6.02% 6.27%
SIA - F (April 30, 1989) 6.14% 6.69% 7.04% 7.29%
SIA - E 8.51% 9.06% 9.41% 9.66%
SIA - M (October 10, 1987) 8.99% 9.54% 9.89% 10.14%
SIA - A 12.45% 13.00% 13.35% 13.60%
SIA - S 11.81% 12.36% 12.71% 12.96%
SIA - I (July 31, 1991) 12.74% 13.29% 13.54% 13.89%
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
25
<PAGE>
Cumulative Total Return (adjusted to reflect anticipated expenses, net of
- -----------------------
expense caps) for periods ended December 31, 1994.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
1 YEAR
- -----------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------
Class 1 Class 2 Class 3 Class 4
<S> <C> <C> <C> <C>
SIA - G 2.86% 3.41% 3.76% 4.01%
SIA - F -2.15% -1.60% -1.25% -1.00%
SIA - E -5.26% -4.71% -4.36% -4.11%
SIA - I 1.29% 1.84% 2.19% 2.44%
SIA - A 2.92% 3.47% 3.82% 4.07%
SIA - S -5.57% -5.02% -4.67% -4.42%
SIA - M -6.11% -5.56% -5.31% -4.96%
- -----------------------------------------------------------------------------------------------------------------
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
3 YEARS
- -----------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------
Class 1 Class 2 Class 3 Class 4
<S> <C> <C> <C> <C>
SIA - G 7.41% 9.15% 10.26% 11.07%
SIA - F 10.22% 11.99% 13.12% 13.94%
SIA - E 10.53% 12.30% 13.44% 14.26%
SIA - M 17.80% 19.65% 20.84% 21.69%
SIA - A 22.06% 23.95% 25.17% 26.04%
SIA - S 23.66% 25.57% 26.80% 27.68%
SIA - I 43.87% 45.99% 46.96% 48.32%
- -----------------------------------------------------------------------------------------------------------------
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
5 YEARS
- -----------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------
Class 1 Class 2 Class 3 Class 4
<S> <C> <C> <C> <C>
SIA - G 20.65% 23.88% 25.97% 27.48%
SIA - F 33.52% 37.03% 39.29% 40.93%
SIA - E 37.92% 41.51% 43.83% 45.51%
SIA - M 45.75% 49.51% 51.94% 53.69%
SIA - A 48.57% 52.38% 54.85% 56.63%
SIA - S 48.05% 51.85% 54.31% 56.09%
SIA - I N/A N/A N/A N/A
- -----------------------------------------------------------------------------------------------------------------
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
10 YEARS (or since inception)
- -----------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------
Class 1 Class 2 Class 3 Class 4
<S> <C> <C> <C> <C>
SIA - G 64.82% 73.65% 79.49% 83.76%
SIA - F (April 30, 1989) 40.17% 44.34% 47.04% 49.00%
SIA - E 126.29% 138.02% 145.77% 151.45%
SIA - M (October 10, 1987) 85.97% 92.84% 97.32% 100.58%
SIA - A 223.40% 239.57% 250.23% 258.03%
SIA - S 205.48% 220.84% 230.98% 238.39%
SIA - I (July 31, 1991) 50.64% 53.16% 54.32% 55.95%
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
26
<PAGE>
Glossary
Business Day: each day the New York Stock Exchange is open for trading.
Currency Transactions: include forward currency contracts, exchange listed
currency futures, exchange listed and OTC options on currencies, and currency
swaps. A forward currency contract involves a privately negotiated obligation
to purchase or sell (with delivery generally required) a specific currency at a
future date, which may be any fixed number of days from the date of the contract
agreed upon by the parties, at a price set at the time of the contract. A
currency swap is an agreement to exchange cash flows based on the notional
difference among two or more currencies and operates similarly to an interest
rate swap.
Duration: indicates how interest rate changes will affect a
debt instrument's price.
Foreign Securities: include debt, equity, and hybrid instruments,
obligations and securities of foreign issuers, including governments of
countries other than the United States and companies organized under the laws of
countries other than the United States that are traded on foreign securities
exchanges or foreign over-the-counter markets. Foreign securities also include
securities of foreign issuers (i) represented by American Depository Receipts,
(ii) traded in the United States over-the-counter markets, or (iii) listed on a
U.S. securities exchange.
Investor: includes a plan sponsor, plan fiduciary, trust, institutional
investor, and/or insurance company separate investment account that purchases
shares of the Trust and is hereinafter referred to as Investor or collectively
referred to as Investors. An Investor that is a separate investment account of
MassMutual is referred to as an SIA Investor to the extent it invests in the
Trust. Investors that are purchasing shares of a Fund on behalf of a Plan are
sometimes referred to as Plan Investors. The term Investor does not include a
Plan Participant.
NRSRO: means a nationally recognized statistical rating organization. For a
description of the ratings of two NRSROs, Standard & Poor's Corporation ("S&P")
and Moody's Investors Service, Inc. ("Moody's"), see Appendix A to the Statement
of Additional Information. For example, the four investment grade ratings in
descending order for debt securities as rated by Moody's are Aaa, Aa, A and Baa
- - including Baa3. The four investment grade ratings for debt securities as
rated by S&P are AAA, AA, A and BBB - including BBB-. For commercial paper,
Moody's two highest ratings are P-1 and S&P's two highest ratings are A-1 and
A-2.
Plan: refers to all defined contribution and defined benefit retirement plans
and any other employee retirement arrangement that invests in the Funds.
Plan Assets: assets held by the Plan trustee of a particular qualified plan and
invested at MassMutual and/or in the Trust, exclusive of plan assets invested in
life insurance.
Plan Participant: includes active, deferred and suspended Plan Participants on
whose behalf Plan Assets are invested, as well as any other individual included
in the computation of active participants under the appropriate Form 5500 filed
with the Internal Revenue Service.
Plan Documents: refer to the documents that created and are related to a
particular employee retirement benefit plan. These documents might include
trust documents, insurance contracts (including group annuity contracts),
service agreements and other agreements providing for the provision of services
or benefits for the plan and its participants.
U.S. Government Securities: include obligations issued, sponsored, assumed or
guaranteed as to principal and interest by the Government of the United States,
its agencies and instrumentalities, and securities backed by such obligations,
including FHA\VA guaranteed mortgages.
The name MassMutual Institutional Funds is the designation of the Trust under a
Declaration of Trust dated May 28, 1993, as amended. The obligations of such
Trust are not personally binding upon, nor shall resort be had to the property
of, any of the Trustees, shareholders, officers, employees or agents of such
Trust, but the Trust's property only shall be bound.
27
<PAGE>
MASSMUTUAL INSTITUTIONAL FUNDS
1295 State Street
Springfield, Massachusetts 01111
INVESTMENT MANAGER
MASSACHUSETTS MUTUAL LIFE
INSURANCE COMPANY
1295 State Street
Springfield, Massachusetts 01111
INVESTMENT SUB-ADVISERS
HARBOURVIEW ASSET MANAGEMENT CORPORATION
Two World Trade Center
New York, New York 10048
CONCERT CAPITAL MANAGEMENT, INC.
125 High Street
Boston, Massachusetts 02110
DISTRIBUTOR
OPPENHEIMER FUNDS DISTRIBUTOR, INC.
Two World Trade Center
New York, New York 10048
SUB-ADMINISTRATOR, TRANSFER AGENT
and CUSTODIAN
INVESTORS BANK & TRUST COMPANY
Boston, Massachusetts 02205
INDEPENDENT ACCOUNTANTS
COOPERS & LYBRAND L.L.P.
Springfield, Massachusetts 01101
LEGAL COUNSEL
ROPES & GRAY
Boston, Massachusetts 02110
28
