MASSMUTUAL INSTITUTIONAL FUNDS, 485APOS, 1999-04-30

MASSMUTUAL INSTITUTIONAL FUNDS
485APOS, 1999-04-30

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<PAGE>

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM N-1A

REGISTRATION STATEMENT (NO. 33-73824) UNDER THE
SECURITIES ACT OF 1933
Investment Company Act File No. 811-8274

Pre-Effective Amendment No.

Post-Effective Amendment No. 12
and
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940

Amendment No. 14

MASSMUTUAL INSTITUTIONAL FUNDS
(Exact Name of Registrant as Specified in Declaration of Trust)
1295 State Street, Springfield, Massachusetts 01111
(Address of Principal Executive Office) (Zip Code)

Registrant's Telephone Number, including area code (413) 788-8411

Name and Address of Agent for Service
Stephen L. Kuhn, Esq.
Vice President and Secretary
MassMutual Institutional Funds
1295 State Street
Springfield, Massachusetts 01111

Copy to:
J.B. Kittredge, Esq.
Ropes & Gray
One International Place
Boston, MA 02110

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

It is proposed that this filing become effective (check appropriate line)

[_] immediately upon filing pursuant to paragraph (b)
[_] on May 3, 1999 pursuant to paragraph (b)
[X] 60 days after filing to pursuant to paragraph (a) of Rule 485
[_] on [date] pursuant to paragraph (a)(1) of rule 485
[_] 75 days after filing pursuant to paragraph (a)(2)
[_] on [date] pursuant to paragraph (a)(2) of rule 485

If appropriate, check the following box:

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

TO: THE SECURITIES AND EXCHANGE COMMISSION

Registrant submits this Post-Effective Amendment No. 12 to its Registration
Statement No. 33-73824 under the Securities Act of 1933 and this Amendment No.
14 to its Registration Statement No. 811-2224 under the Investment Company Act
of 1940. This Post-Effective Amendment relates to MassMutual Indexed Equity
Fund. No other information relating to any other series of Registrant is amended
or superceded hereby.

We have elected to register an indefinite number of shares pursuant to
Regulation 24f-2 under the Investment Company Act of 1940. We filed our Rule
24f-2 notice for the period ended February 28, 1999, on __________, 1999.
<PAGE>

MASSMUTUAL INDEXED EQUITY FUND

This Prospectus describes MassMutual Indexed Equity Fund (the "Fund"), one of
the portfolios of the MassMutual Institutional Funds.

The Fund seeks to approximate as closely as practicable (before fees and
expenses) the total return of publicly traded common stocks, represented by the
S&P 500 Index. The Fund is a "feeder" fund and seeks to achieve its investment
objective by investing in the S&P 500 Index Master Portfolio.

The Securities and Exchange Commission has not approved or disapproved these
securities or passed upon the adequacy of this Prospectus. Any statement to the
contrary is a crime.

PROSPECTUS July 1, 1999.
<PAGE>

Table Of Contents Page

Summary Information ..........................................................

About the Fund
A Further Discussion of Investment Objectives ...........................
A Further Discussion of Risks ...........................................
Principal Risks of Investing in the Master Portfolio ....................

Management and Administration Of The Fund

About the Classes of Shares - Multiple Class Information
Class S Shares ..........................................................
Class Y Shares ..........................................................
Class L Shares ..........................................................
Class A Shares ..........................................................
Compensation to Intermediaries ..........................................

Investing in the Funds
Buying, Redeeming and Exchanging Shares .................................
Determining Net Asset Value .............................................
How to Invest ...........................................................
Taxation and Distribution ...............................................

Financial Highlights .........................................................

Appendix - Additional Investment Policies and Risk Considerations ............

-2-
<PAGE>

Summary Information

The summary pages that follow describe the Fund's

o Investment objective.

o Principal Investment Strategies and Risks.

o Average annual total returns for Fund since its inception and the
inception of the S& P 500 Index Master Portfolio (the "Master
Portfolio") in which the Fund invests and how the Fund and the Master
Portfolio did against a comparable broad-based index.

o Fees and Expenses.

Past Performance is not an indication of future performance. There is no
assurance that the Fund's investment objective will be achieved, and you can
lose money by investing in the Fund.

In the table showing the Fund's Average Annual Total Returns, the average annual
total returns for Class A, Class L and Class Y shares of the Fund is based on
the performance of Class S Shares, adjusted for class specific expenses.

Investment returns for the Fund assume the reinvestment of dividends and capital
gains distributions.

Important Note about Performance

The performance information for the Fund includes the performance of Master
Portfolio in which the Fund invests, adjusted to reflect the fees and expenses
of the Fund.

Important Note about Expense Information

As an investor, you pay certain fees and expense in connection with your
investment. These fees and expenses will vary depending on the Fund in which you
invest and the class of shares you purchase. The fee table shown on the
following pages under "Expense Information" is meant to assist you in
understanding these fees and expenses. The fee table shows two categories of
expenses, Shareholder Fees and Annual Fund Operating Expenses. Shareholder Fees
refer to fees paid directly from your investment, such as up front or contingent
sales charges. The Fund does not charge any Shareholder Fees for any class of
share. Annual Fund Operating Expenses refer to the costs of operating the Fund.
These costs are deducted from the Fund's assets, which means you pay them
indirectly. These expenses include indirect expenses incurred by the Master
Portfolio in which the Fund invests.

Important Note about Standard & Poor's 500(R) Index

The Fund invests all of its assets in the Master Portfolio of Master Investment
Portfolio, an open-end management investment company, rather than in a portfolio
of securities. "Standard & Poor's(R)," "S&P(R)," "S&P 500(R)," and "Standard &
Poor's 500(R)," are trademarks of McGraw-Hill, Inc. and have been licensed for
use by the Fund and the Master Portfolio. The Fund and the Master Portfolio are
not sponsored, endorsed, sold, or promoted by Standard & Poor's, a division of
McGraw Hill Companies ("S&P"). S&P makes no representation or warranty, express
or implied, regarding the advisability of investing in the Fund and the Master
Portfolio.

-3-
<PAGE>

MassMutual Indexed Equity Fund

================================================================================
Investment Objective
================================================================================

The Fund seeks to approximate as closely as practicable (before fees and
expenses) the capitalization-weighted total rate of return of that portion of
the U.S. market for publicly-traded common stocks composed of larger-capitalized
companies.

Principal Investment Strategies and Risks

The Fund invests all of its assets in the S&P 500(R) Index Master Portfolio (the
"Master Portfolio") of Master Investment Portfolio, an open-end management
investment company, rather than in a portfolio of securities. The Master
Portfolio has substantially the same investment objective as the Fund and the
Fund's investment experience corresponds directly with that of the Master
Portfolio.

The Master Portfolio pursues its objectives by:

o investing in all the securities that make up the S&P 500 Index

o investing in these securities in proportions that match their Index weights

The principal risks of investing in this Fund are:

o Market Risk,

o Credit Risk,

o Derivatives Risk, and

o Growth Company Risk

These risks are described beginning on page 6.

Annual Performance*

The bar chart shows the risks of investing in the Fund because the returns vary
from year to year.

[THE FOLLOWING TABLE WAS REPRESENTED AS A BAR CHART IN THE PRINTED MATERIAL]

<TABLE>
<CAPTION>
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998
- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----

During the period shown above, the highest quarterly return for the Fund is
[21.24%] for the quarter ended 12/31/98 and the lowest quarterly return is
[-9.96%] for the quarter ended 9/30/98.

================================================================================
Average Annual Total Returns
================================================================================
(for the periods ended February 28, 1999)

The table shows the risk of investing in the Fund because the Fund's returns
will differ from the broad-based market index, due, in part, to the fees and
expenses of the Fund.

<TABLE>
<CAPTION>
- ----------------------------------------------------------------
One Five Ten
Year Years Years
- ----------------------------------------------------------------

<S> <C> <C> <C>
Class S 19.13% N/A N/A
Class Y+ 18.98% N/A N/A
Class L+ % N/A N/A
Class A+ 18.40% N/A N/A
S&P 500(R) Index++ 19.74% N/A N/A
</TABLE>

*The Fund commenced operations on March 1, 1998. The performance of the Class S
shares for periods commencing prior to March 1, 1998 is calculated by including
the corresponding total return of the Master Portfolio (which includes, for the
period from July 2, 1993 through May 25, 1994, the performance of its
predecessor) adjusted to reflect the class fees and expenses. The Master
Portfolio's predecessor, a regulated investment company that commenced
operations on July 2, 1993, converted into a master/feeder structure on May 25,
1994 by exchanging all of its assets for beneficial interests in the Master
Portfolio. The Master Portfolio commenced operations on May 26, 1994, with the
same investment adviser, the same investment objective and substantially similar
investment policies as its predecessor.

+ Performance for Class Y and Class A shares of the Fund is based on Class S
shares for the 5- and 10-year periods, adjusted to reflect Class Y and Class A
expenses. Performance for Class L shares of the Fund is based on Class S shares
for all periods shown, adjusted to reflect Class L expenses.

++The S&P 500(R) Index is a widely recognized, unmanaged index of common stock
of the 500 largest capitalized U.S. companies. This Index does not incur
expenses and cannot be purchased directly by Investors.

-4-
<PAGE>

Expense Information

<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------
Class A Class Y Class S Class L
Shares Shares Shares Shares
- ------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shareholder Fees None None None None
(fees paid
directly from
your investment)

Annual Fund
Operating
Expenses
(expenses that
are deducted from Fund
Assets)

Management
Fees .05% .05% .05% .05%
Service (Rule
12b-1) Fees .25% None None None

Other Expenses .55% .40% .37% .55%

Total Annual
Fund Operating
Expenses(1)(2) .85% .45% .42% .60%
- ------------------------------------------------------------------------------------
</TABLE>

(1) The expenses in the above table are based on expenses for the Fund for the
fiscal year ended February 28, 1999, but restated to give effect to a
change in the management fees and administrative fees effective on April 6,
1999, and estimates for the 1999 fiscal year.

(2) Employee benefit plans which invest in the Fund through MassMutual separate
investment accounts may pay additional charges under their group annuity
contract or services agreement. Investors who purchase shares directly from
the Fund may also be subject to charges imposed in their administrative
services or other agreement with MassMutual or MassMutual affiliate. None
of these charges are deducted from Fund assets.

EXAMPLES. These examples are intended to help you compare the cost of investing
in the Fund with the cost of investing in other mutual funds. The examples
assume that you invest $10,000 in each share class of the Fund for the time
periods indicated, that your investment earns a 5% return each year and that
each Fund's operating expenses remain the same. Although your actual costs may
be higher or lower, based on these assumptions your costs would be:

<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
1 Year 3 Years 5 Years 10 Years
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class S $43 $135 $235 $530
- --------------------------------------------------------------------------------
Class Y $46 $144 $252 $567
- --------------------------------------------------------------------------------
Class L $61 $192 $335 $750
- --------------------------------------------------------------------------------
Class A $87 $271 $471 $1,049
- --------------------------------------------------------------------------------
</TABLE>

Since the Fund does not impose any shareholder fees, the figures shown would be
the same whether you sold your shares at the end of a period or kept them.

-5-
<PAGE>

A Further Discussion of Investment Objectives

The Master Portfolio seeks to come within 95% of S&P 500(R) Index's total
return, before fees and expenses, in falling as well as rising markets. It does
not seek to "beat" the market it tracks. Barclays Global Fund Advisors (BGFA),
the Master Portfolio's Investment Adviser, makes no attempt to apply economic,
financial or market analysis when managing the Fund portfolios. BGFA selects
securities because they will help the Master Portfolio achieve returns
corresponding to index returns. Including a security among the Master
Portfolio's holdings implies no opinion as to its attractiveness as an
investment.

Defining Terms: The S&P 500 Index is a widely used measure of large US-company
stock performance. It consists of the common stocks of 500 major corporations
selected according to:

o their size

o the frequency and ease by which their stocks trade

o the range and diversity of the American economy

The stocks in the S&P 500 account for nearly three-quarters of the value of all
U.S. stock.

In capitalization-weighted total rate of return, each stock in an index
contributes to the index in the same proportion as the value of its shares.
Thus, if the shares of Company A are worth twice as much as the shares of
Company B, A's return will count twice as much as B's in calculating the index's
overall return. This method contrasts with equal weighted return, by which A's
performance and B's performance and the performance of every other stock in the
index would count the same.

Investors look to indexes as the standard of performance, but they cannot own
them. Indexes are model portfolios, groups of stocks or bonds selected to
represent not actual securities but an entire market. One way an index fund can
seek to match an index's performance, before fees and expenses, is through
buying all of the index's securities in the same proportion as they are
reflected in the index. This is what the Master Portfolio does.

A Further Discussion of Risks

The value of your investment in the Fund changes with the values of the
investments in the Fund's portfolio. Many factors can affect those values. The
factors that may affect the Fund's portfolio as a whole are called "principal
risks" and are summarized below. The Fund could be subject to additional
principal risks because the types of investments made by the Fund can change
over time. Your investment in the Fund may also be subject to certain other
risks, which are described in more detail in the Appendix under "Additional
Investment Policies and Risk Considerations". The Statement of Additional
Information contains additional information about the Master Portfolio's
investments and is incorporated by reference into this prospectus. Although the
Fund strives to reach its stated goals, it cannot offer guaranteed results.

o Derivatives Risk. The Master Portfolio may use derivatives, which are
financial contracts whose value depends on, or is derived from, the value
of an underlying asset, interest rate or index. In addition to other risks
such as the credit risk of the counterparty, derivatives involve the risk
of mispricing or improper valuation and the risk that changes in the value
of the derivative may not correlate perfectly with relevant assets, rates
and indices. In addition, the Master Portfolio's use of derivatives may
affect the timing and amount of taxes payable by shareholders. Some of the
derivatives that the Master Portfolio invests in are described in the
following paragraphs.

Futures and Options. The Master Portfolio may invest in index futures
contracts and options on futures contracts. This tactic can reduce the
costs associated with direct investing. It also allows the Master Portfolio
to approach the returns of a fully invested portfolio while keeping cash on
hand, either

-6-
<PAGE>

in anticipation of shareholder redemptions or because they have not yet
invested new shareholder money.

Index futures contracts are contracts to pay a fixed amount for each point
change in a particular market index between the purchase date and the
agreed-upon delivery date. The seller never actually delivers "shares" of
the index or shares of all the stocks in the index. Instead, the buyer and
the seller settle the difference in cash between the contract price and the
market price on the agreed-upon date--the buyer paying the difference if
the actual price is lower than the contract price and the seller paying the
difference if the actual price is higher.

Unlike futures, which obligate both buyer and seller, options obligate only
one of the parties to the transaction, either the buyer or the seller. They
grant the other party a right, for a price, either to buy or sell a
security, an index or a futures contract at a fixed sum any time up to an
agreed-upon expiration date.

Index futures contracts and options on index futures contracts are
generally considered derivatives--they derive their value from the prices
of the indexes. The floating rate or variable rate bonds that the Funds may
purchase are also considered derivatives. Compared to conventional
securities, derivatives can be more sensitive to changes in interest rates
or to sudden fluctuations in market prices. The Master Portfolio offsets
this exposure to increased loss with bank deposits or money market
investments, stable holdings that offset the potential volatility of their
derivative investments, as required by the Securities and Exchange
Commission.

o Equity Market Risk. The stock investments of the Master Portfolio are
subject to equity market risk. Equity market risk is the possibility that
stock market prices in general will decline over short or even extended
periods. Changes in the value of the Master Portfolio's investments will
result in changes in the value of its shares and affect the Fund's total
return to investors. Equity stock prices can fall for any number of
factors, including general economic and market conditions, prospects of the
securities issuer, changing interest rates, and real or perceived economic
and competitive industry conditions.

o Credit Risk. The Master Portfolio is subject to credit risk. This is the
risk that the issuer or the guarantor of a debt security, or the
counterparty to a derivatives contract or securities loan, will be unable
or unwilling to make timely principal and/or interest payments, or to
otherwise honor its obligations.

o Growth Company Risk. Market risk is also particularly pronounced for
"growth" companies. The prices of growth company securities may fall to a
greater extent than the overall equity markets (represented by the S&P 500
Index) due to changing economic, political or market factors. Growth
company securities tend to be more volatile in terms of price swings and
trading volume.

Principal Risks of Investing in the Fund: The following chart summarizes the
Principal Risks of investing in the Fund. The Fund may be subject to some risks
even if not marked.

<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Growth Foreign
Fund Market Credit Company Prepayment Liquidity Derivative Investment Currency Leveraging Smal Comp
Risk Risk Risk Risk Risk Risk Risk Risk Risk Risk
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Indexed Equity Fund X X X X
</TABLE>

-7-
<PAGE>

Management And Administration Of The Fund

MassMutual Indexed Equity Fund is a feeder fund that invests all of its assets
in a separate mutual fund, called the Master Portfolio. The Master Portfolio has
substantially the same investment objective as the Fund. Consequently, the Fund
does not have its own investment adviser. Barclays Global Fund Advisors (BGFA),
a subsidiary of Barclays Global Investors, serves as the Master Portfolio's
Investment Adviser and provides investment guidance and policy direction for the
Master Portfolio. For its services to the Fund in the last fiscal year, BGFA
received an annual fee of .05% based on the Master Portfolio's average daily net
assets.

Unlike many traditional active investment funds, there is no single portfolio
manager who makes investment decisions for the Master Portfolio. Instead, the
Master Portfolio tracks the S&P 500 Composite Index. The process reflects BGFA's
commitment to an objective and consistent investment management structure.

BGFA is located at 45 Fremont Street, San Francisco, California 94105. It is a
wholly owned subsidiary of Barclays Global Investors, N.A., which in turn is an
indirect subsidiary of Barclays Bank PLC. Barclays Global Investors is the
world's largest manager of institutional investment assets. As of December 31,
1998, Barclays Global Investors and its affiliates, including BGFA, provided
investment advisory services for assets worth $650 billion. Barclays Global
Investors, BGFA, Barclays Bank and their affiliates deal, trade and invest for
their own accounts in the types of securities in which the Funds' Master
Portfolios may also invest. BGFA does not obtain or use inside information in
making investment decisions on behalf of the Master Portfolios.

MassMutual is responsible for providing all administrative services for the
Fund. Founded in 1851, MassMutual is a mutual life insurance company that
provides a broad range of insurance, money management, retirement and asset
accumulation products and services for individuals and businesses. MassMutual,
together with its subsidiaries, has assets of $67 billion and assets under
management in excess of $176 billion. The Fund pays MassMutual an administrative
and shareholder services fee at an annual rate based on a percentage of its
average daily net assets for the applicable case of shares. For the fiscal year
ending February 28, 1999, the Fund paid fees of .3588% for Class S shares;
.3888% for Class Y shares; and .7688% for Class A shares.

-8-
<PAGE>

About the Classes of Shares - Multiple Class Information

The Fund offers four classes of shares: Class S, Class Y, Class L and Class A.
The shares offered by this Prospectus are Class S, Class Y, Class L and Class A
shares. None of the Classes of shares has up-front or deferred sales charges.
Only Class A shares charge a 12b-1 fee.

Class S, Class Y and Class L shares are primarily offered to institutional
investors through institutional distribution channels, such as
employer-sponsored retirement plans or through broker-dealers, financial
institutions or insurance companies. Class A shares are primarily offered
through retail distribution channels, such as broker-dealers or financial
institutions. The different Classes have different fees, expenses and/or minimum
investor size requirements. The difference in the fee structures among the
Classes is the result of their separate arrangements for shareholder and
distribution services and not the result of any difference in amounts charged by
the Adviser for core investment advisory services. Accordingly, core investment
advisory expenses do not vary by Class. Different fees and expenses of a Class
will affect performance of that Class. For additional information, call us at
1-888-743-5274 or contact a sales representative or financial intermediary who
offers the Classes.

Except as described below, all Classes of shares of the Fund have identical
voting, dividend, liquidation and other rights, preferences, terms and
conditions. The only differences among the various Classes are: (a) each Class
may be subject to different expenses specific to that Class; (b) each Class has
a different Class designation; (c) each Class has exclusive voting rights with
respect to matters solely affecting such Class; (d) each Class offered in
connection with a 12b-1 Plan will bear the expense of the payments that would be
made pursuant to that 12b-1 Plan, and only that Class will be entitled to vote
on matters pertaining to that 12b-1 Plan; and (e) each Class will have different
exchange privileges.

Each Class of the Fund's shares invests in the same portfolio of securities.
Because each Class will have different expenses, they will likely have different
share prices. All Classes of shares are available for purchase by insurance
company separate investment accounts. Each class of shares of the Fund may also
be purchased by the following Eligible Purchasers:

Class S Shares

Eligible Purchasers. Class S shares may be purchased by:

o Qualified plans under Section 401(a) of the Internal Revenue Code of 1986,
Code Section 403(b) plans, Code Section 457 plans and other retirement
plans, where plan assets of the employer generally or are expected to
exceed $100 million;

o Registered mutual funds; and

o Other institutional investors with assets generally in excess of $100
million.

These Eligible Purchasers must have an agreement with MassMutual or a MassMutual
affiliate to purchase Class S Shares.

Shareholder and Distribution Fees. Class S shares of the Fund are purchased
directly from the Trust without a front-end sales charge. Therefore, 100% of an
Investor's money is invested in the Fund. Class S shares do not have deferred
sales charges or any distribution or services fees.

Class Y Shares

Eligible Purchasers. Class Y shares may be purchased by:

o Non-qualified deferred compensation plans;

o Registered mutual funds;

o Qualified plans under Code Section 401(a), Code Section 403(b) plans, Code
Section 457 plans and other retirement plans, where

-9-
<PAGE>

plan assets of the employer generally or are expected to exceed $5 million;
and

o Other institutional investors with assets generally in excess of $5
million.

These Eligible Purchasers must have an agreement with MassMutual or a MassMutual
affiliate to purchase Class Y Shares.

Shareholder and Distribution Fees. The Class Y shares are 100% no load, so you
pay no fees (sales loads) when you buy or sell Class Y shares. Therefore, all of
your money is invested in the Fund. Class Y shares do not have any Rule 12b-1
distribution or service fees.

Class L Shares

Eligible Purchasers. Class L shares may be purchased by:

o Non-qualified deferred compensation plans;

o Qualified plans under Code Section 401(a), Code Section 403(b) plans, Code
Section 457 plans, and other retirement plans, where plan assets of the
employer generally or are expected to exceed $1 million; and

o Other institutional investors with assets generally in excess of $1
million.

These Eligible Purchasers must have an agreement with MassMutual or a MassMutual
affiliate to purchase Class L Shares. Class L shares are generally sold in
connection with the use of an intermediary performing third party administration
and/or other shareholder services.

Shareholder and Distribution Fees. Class L shares of the Fund are purchased
directly from the Trust without a front-end sales charge. Therefore, 100% of an
Investor's money is invested in the Fund. Class L shares do not have deferred
sales charges or any Rule 12b-1 distribution or service fees.

Class A Shares

Eligible Purchasers. Class A shares may be purchased by:

o Qualified plans under Code Section 401(a), Code Section 403(b) plans, Code
Section 457 plans and other retirement plans;

o Individual retirement accounts described in Code Section 408;

o Other institutional investors, nonqualified deferred compensation plans,
and voluntary employees' beneficiary associations described in Code Section
501(c)(9).

These Eligible Purchasers must have an agreement with MassMutual or a MassMutual
affiliate to purchase Class A Shares. There is no minimum plan or institutional
investor size to purchase Class A shares.

Class A shares may be offered to present or former officers, directors,
trustees, and employees (and their spouse, parents, children and siblings) of
the Funds, MassMutual and its affiliates and retirement plans.

Distribution and Service (Rule 12b-1) Fees. The Fund has adopted a Rule 12b-1
Plan for Class A shares of the Fund. Under the Plan, the Fund is permitted to
pay distribution and service fees at the annual rate of .25%, in the aggregate,
of the Fund's average daily net assets attributable to Class A shares.
Distribution fees may be paid to brokers or other financial intermediaries for
providing services in connection with the distribution and marketing of Class A
shares and for related expenses. Services fees may be paid to brokers or other
financial intermediaries for providing personal services to Class A shareholders
and/or maintaining Class A shareholder accounts and for related expenses.

All compensation under the Plan for service fees will be paid to MassMutual and
all compensation under the Plan for distribution fees will be paid to the
Distributor. MassMutual and the Distributor will be entitled to retain a portion
of the fees generated by an account, or may reallow the full amount to the
brokers or other intermediaries.

Compensation to Intermediaries

-10-
<PAGE>

MassMutual may directly, or through the Distributor, pay cash compensation to
persons who provide services on behalf of Class L or Class Y shares. This
compensation is paid by MassMutual, not from Fund assets. MassMutual may pay
intermediaries up to .15% of the amount invested for Class L shares, as
compensation for performing third party administration and/or other shareholder
services. MassMutual may also pay intermediaries up to .15% of the amount
invested for the servicing of Class Y shares. The payments on account of Class L
or Class Y shares will be based on criteria established by MassMutual.
Compensation paid to brokers or other intermediaries for selling or providing
services on account of Class A shares is described above under "Distribution and
Service (Rule 12b-1) Fees". Where Class L or Class Y shares are sold in
connection with nonqualified deferred compensation plans where the employer
sponsor has an administrative services agreement with MassMutual or its
affiliate, additional compensation may be paid as determined by MassMutual from
time to time according to established criteria. As of the date of this
Prospectus, aggregate annual compensation in such cases does not exceed .50%.
Annual compensation paid on account of Class A, Class L or Class Y shares will
be paid quarterly, in arrears.

The Fund may pay brokerage commissions to Advest, Inc. ("Advest") and Jefferies
& Co., Inc. ("Jefferies"). Jefferies and Advest are each wholly-owned
subsidiaries of companies for which one Trustee serves as director.

-11-
<PAGE>

Investing In The Fund

Buying, Redeeming and Exchanging Shares

The Fund sells its shares at a price equal to their net asset value (NAV). The
Fund generally determines its NAV at 4:00 p.m. Eastern standard time every day
the New York Stock Exchange is open. Your purchase order will be priced at the
next net asset value calculated after the transfer agent accepts your purchase
order. The Fund will suspend selling its shares during any period when the
determination of NAV is suspended. The Fund can reject any purchase order and
can suspend purchases if it is in its best interest.

The Fund redeems its shares at their next NAV computed after the Fund's transfer
agent receives your redemption request. You will usually receive payment for
your shares within 7 days after the transfer agent receives your written
redemption request. If, however, you request redemption of shares recently
purchased by check, you may not receive payment until the check has been
collected, which may take up to 15 days from receipt of the check. The Fund can
also suspend or postpone payment, when permitted by applicable law and
regulations.

You can exchange shares of one Fund for the same class of shares of another
Fund. An exchange is treated as a sale of shares in one Fund, and a purchase of
shares in another Fund at the NAV next determined after the transfer agent
received the exchange request. Your right to exchange shares is subject to
applicable regulatory requirements or contractual obligations. The Fund may
limit or refuse exchanges, if, in the opinion of MassMutual:

o you have engaged in excessive trading;

o the Fund receives or expects simultaneous orders affecting significant
portions of the Fund's assets;

o a pattern of exchanges occurs which coincides with a market timing strategy
which may be disruptive to the Fund; or

o the Fund would be unable to invest the Funds effectively based on its
investment objectives and policies, or if the Fund would be adversely
affected.

The Fund reserves the right to modify or terminate the exchange privilege on 60
days written notice.

The Fund does not accept purchase, redemption or exchange orders or compute its
NAV's on days when the NYSE is closed. This includes: weekends, Good Friday and
all federal holidays other than Columbus Day and Veterans Day. Certain foreign
markets may be open on days when the Funds do not accept orders or price their
shares. As a result, the NAV of the Fund's shares may change on days when you
will not be able to buy or sell shares.

Determining Net Asset Value

We calculate the net asset value of each class of shares of the Fund separately.
The net asset value (closing price) for shares of a Class of the Fund is
determined by adding the current value of all of the Fund's assets attributable
to that Class, subtracting the liabilities attributable to that Class and then
dividing the resulting number by the total outstanding shares of the Class. The
assets of this Fund include its investments in the Master Portfolio, plus cash
and any other assets. The Fund's investment in the Master Portfolio is valued at
the Fund's proportionate interest in the net asset value of the Master
Portfolio. The Master Portfolio calculates the net asset value of its shares on
the same days and at the same time as the Fund.

The Master Portfolio's assets are valued based on current market prices. If such
prices are not readily available, BGFA estimates the securities' fair value in
accordance with guidelines approved by the Master Portfolio's Board of Trustees.
Bonds and notes with remaining maturities of 60 days or less are valued using
the amortized cost method.

The amortized cost method marks down any premium on short-term debt that the
Master

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<PAGE>

Portfolio buys, or makes up any discount at a constant rate until maturity. It
does not reflect daily fluctuations in market value.

For further information regarding the methods employed in valuing the Master
Portfolio's investments, see "Valuation of Portfolio Securities" in the SAI.

How to Invest

When you buy shares of the Fund through an agreement with MassMutual, your
agreement will describe how you need to submit buy, sell and exchange orders.
Purchase orders must be accompanied by sufficient Funds. You can pay by check or
Federal Funds wire transfer. You must submit any buy, sell or exchange orders in
"good form" as described in your agreement.

Taxation and Distributions

The Fund intends to continue to qualify as a regulated investment company under
Subchapter M of the Internal Revenue Code. As a regulated investment company,
the Fund will not be subject to Federal income taxes on its ordinary income and
net realized capital gain distributed to its shareholders. In general, if the
Fund fails to distribute at least 98% of such income and gain in the calendar
year in which earned 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 the
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 the Fund, including
either directly or indirectly through a life insurance company separate
investment account, should consult its tax advisers about the federal, state,
local and foreign tax consequences particular to it, as should persons
considering whether to have amounts held for their benefit by such trusts or
other entities investing in shares of the 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 gains (i.e. gains from
capital assets held for one year or less) are taxable to the shareholder as
ordinary income whether received in cash or additional shares. Certain
designated dividends may be eligible for the dividends-received deduction for
corporate shareholders. Designated capital gain dividends (relating to gains
from capital assets held for more than one year) are taxable as long-term
capital gains in the hands of the investor whether distributed in cash or
additional shares and regardless of how long the investor has owned shares of
the Fund. The nature of the Fund's distributions will be affected by its
investment strategies. A Fund whose investment return consists largely of
interest, dividends and capital gains from short-term holdings will distribute
largely ordinary income. A Fund whose return comes largely from the sale of
long-term holdings will distribute largely capital gain dividends. Distributions
are taxable to a shareholder even though they are paid from income or gains
earned by the Fund prior to the shareholder's investment and thus were included
in the NAV paid by the shareholder.

Any gain resulting from the exchange or redemption of an investor's shares in
the Fund will generally be subject to tax. A loss incurred with respect to
shares of the Fund held for six months or less will be treated as a long-term
capital loss to the extent of capital gains dividend with respect to such
shares.

The Fund's investments in foreign securities may be subject to foreign
withholding taxes. In that case, the Fund's yield on those securities would be
decreased. Shareholders of the Fund generally will not be entitled to claim a
credit or deduction with respect to foreign taxes. In addition, the Fund's
investments in foreign securities or foreign currencies may increase or
accelerate the Fund's recognition of ordinary

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<PAGE>

income and may affect the timing or amount of the Fund's distributions.

Shareholders should consult their tax adviser for more information on their own
tax situation, including possible state, local and foreign taxes.

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<PAGE>

Financial Highlights

The financial highlights table is intended to help you understand the Fund's
financial performance since its inception on March 1, 1998. Certain information
reflects financial results for a single Fund share. The total returns in the
table represent the rate that an investor would have earned on an investment in
the Fund (assuming reinvestment of all dividends and distributions). This
information has been audited by Deloitte & Touche LLP, whose report, along with
the Fund's financial statements, are included in the Annual Report, which is
available on request.

[Insert Financial Highlight Tables Here]

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<PAGE>

APPENDIX
ADDITIONAL INVESTMENT POLICIES
AND RISK CONSIDERATIONS

The Fund 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 and
some associated risks are discussed below.

Year 2000 Issue

Like other businesses and governments around the world, the Fund and the Master
Portfolio could be adversely affected if the computer systems used by the Fund's
and the Master Portfolio's service providers and those with which they do
business do not properly recognize the year 2000. This is commonly known as the
"Year 2000 issue."

In 1996, MassMutual, the Fund's administrator, began an enterprise-wide process
of identifying, evaluating and implementing changes to its computer systems to
address the Year 2000 issue. MassMutual is addressing the Year 2000 issue
internally with modifications to existing programs and conversions to new
programs. MassMutual has advised the Fund that the Year 2000 issue is one of
MassMutual's highest business operational priorities. MassMutual is also seeking
assurances from the Fund's other service providers, including the Master
Portfolio, and others with which MassMutual and the Funds conduct business in
order to identify and resolve Year 2000 issues. The Master Portfolio has advised
MassMutual that its principal service providers are working on the changes
necessary and they expect their systems to be ready in time. But there can, of
course, be no assurance of success. Moreover, since the changes will affect
virtually every organization, the companies or entities in which the Master
Portfolio invests could also be negatively affected.

Investment Strategies

Asset allocation and modeling strategies are used by BGFA for other investment
companies and accounts advised or sub-advised by BGFA. If these strategies
indicate particular securities should be bought or sold at the same time by the
Master Portfolio and one or more of these investment companies or accounts,
available investments or opportunities for sales will be allocated equitably to
each by BGFA. In some cases, these procedures may adversely affect the size of
the position obtained or disposed of by the Master Portfolio or the price paid
or received by the Master Portfolio.

U.S. Government Securities

The Master Portfolio may invest securities issued or guaranteed by the U.S.
Treasury or other government agencies or federally-chartered corporate entities
referred to "instrumentalities." Obligations issues or guaranteed by U.S.
government agencies or instrumentalities include direct obligations and
mortgage-related securities that have different levels of credit support from
the U.S. Government. Some are backed by the full faith and credit of the United
States (e.g. direct pass through certificates of Government National Mortgage
Association); some are supported by the right of the issuer to borrow from the
U.S. Government (e.g., obligations of Federal Home Loan Mortgage Corporation).
Some are supported by the right of the issuer to borrower from the U.S. Treasury
in certain circumstances. Some are backed by only the credit of the issuer
itself (e.g., Federal National Mortgage Association). There is no guarantee that
the U.S. Government will pay interest and principal on securities on which it is
not legally obligated to do so.

As a general matter, the value of debt instruments, including U.S. Government
Securities, declines when market interest rates increase and rises when market
interest rates

-16-
<PAGE>

decrease. Certain types of U.S. Government obligations are subject to
fluctuations in yield or value due to their structure or contract terms.

Obligations of Foreign Governments, Banks and Corporations

The Master Portfolio may invest in U.S. dollar-denominated short-term
obligations issued or guaranteed by foreign governments or any of their
political subdivisions, agencies or instrumentalities that are determined by
BGFA to be of comparable quality to the other obligations in which the Master
Portfolio may invest. The Master Portfolio may also invest in debt obligations
of supranational entities, such as the World Bank, the European Coal and Steel
Community, the Asian Development Bank, and the InterAmerican Development Bank.
The percentage of the Master Portfolio's assets invested in obligations of
foreign governments and supranational entities will vary depending on the
relative yields of such securities, the economic and financial markets of the
countries in which the investments are made and the interest rate climate of
such countries.

The Master Portfolio may invest in high-quality, short-term (one year or less)
debt obligations of foreign branches of U.S. banks or U.S. branches of foreign
banks that are denominated in U.S. dollars. These types of securities are more
completely described in the Statement of Additional Information.

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 diversifying risks of fluctuations in
portfolio value.

Investments in foreign securities, however, entail certain risks, such as: the
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. The Master
Portfolio's ability and decision 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 the Master
Portfolio's agents to keep currently informed about corporate actions that 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.

American Depositary Receipts and Similar Instruments

To the extent necessary to replicate the investment characteristics of the S&P
500 Index, the Master Portfolio may invest in foreign securities through
American Depositary Receipts ("ADRs") and similar instruments convertible into
securities of foreign issuers. ADRs represent securities or a pool of securities
of an underlying foreign issuer. They are subject to many of the same risks as
foreign securities. ADRs are more completely described in the Statement of
Additional Information.

Repurchase Agreements

The Master Portfolio may enter into repurchase agreements. A repurchase
agreement is a contract pursuant to which the Master Portfolio agrees to
purchase a security and simultaneously agrees to resell it at an agreed-upon
price at a stated time. The Statement of Additional Information provides a
detailed description of repurchase agreements.

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<PAGE>

Cash Positions

The Master Portfolio 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, the Fund may invest in investment
grade debt securities, government obligations, or money market instruments.
Where cash is held for liquidity purposes, the Fund may invest in repurchase
agreements. The taking of such defensive positions may affect the Master
Portfolio's ability to achieve its investment objective.

Investment Company Securities

The Master Portfolio may invest in securities issued by other open-end
investment companies (mutual funds) that invest in the same type of securities
in which the Master Portfolio invests. Applicable regulatory requirements limit
the Master Portfolio's investment in such securities to, subject to certain
exceptions, (i) 3% of the total voting stock of any one investment company, (ii)
5% of the Master Portfolio's net assets with respect to any one investment
company and (iii) 10% of the Master Portfolio's net assets in the aggregate.
Investments in the securities of other investment companies generally will
involve duplication of advisory fees and certain other expenses. The Master
Portfolio may also purchase shares of exchange-listed closed-end funds.

Bank Obligations

The Master Portfolio may invest in bank obligations, including certificates of
deposit, time deposits, bankers' acceptances and other short-term obligations of
domestic banks, foreign subsidiaries of domestic banks, foreign branches of
domestic banks, and domestic and foreign branches of foreign banks, domestic
savings and loan associations and other banking institutions. The Statement of
Additional Information provides a more detailed description of these securities.

Commercial Paper and Short-Term Corporate Debt Instruments

The Master Portfolio may invest in commercial paper (including variable amount
master demand notes) consisting of short-term, unsecured promissory notes issued
by corporations to finance short-term credit needs. Commercial paper is usually
sold on a discount basis and has a maturity at the time of issuance not
exceeding nine months. Variable amount master demand notes are demand
obligations that permit the investment of fluctuating amounts at varying market
rates of interest pursuant to arrangements between the issuer and a commercial
bank acting as agent for the payee of such notes whereby both parties have the
right to vary the amount of the outstanding indebtedness on the notes. The
investment adviser to the Master Portfolio monitors on an ongoing basis the
ability of an issuer of a demand instrument to pay principal and interest on
demand.

The Master Portfolio also may invest in non-convertible corporate debt
securities (e.g., bonds and debentures) with not more than one year remaining to
maturity at the date of settlement. The Master Portfolio will invest only in
such corporate bonds and debentures that are rated at the time of purchase at
least "Aa" by Moody's or "AA" by S&P. Subsequent to its purchase by the Master
Portfolio, an issue of securities may cease to be rated or its rating may be
reduced below the minimum rating required for purchase by the Master Portfolio.
The investment adviser to the Master Portfolio will consider such an event in
determining whether the Master Portfolio should continue to hold the obligation.
To the extent the Master Portfolio continues to hold such obligations, it may be
subject to additional risk of default.

Illiquid Securities

The Master Portfolio may hold up to 15% of the value of its net assets in
restricted or illiquid securities. Such investments include securities that are
not readily marketable, such as privately issued securities and other securities
subject to legal or contractual restrictions on resale, or other types of
securities for which there is no secondary market.

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<PAGE>

Securities Lending

The Master Portfolio may seek additional income by making loans of portfolio
securities of not more than one-third of its total assets taken at current
value. 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. The Master Portfolio will not enter into any
portfolio security lending arrangement having a duration of longer than one
year.

Under applicable regulatory requirements and securities lending agreements
(which are subject to change), the loan collateral received by the Master
Portfolio when it lends portfolio securities must, on each business day, be at
least equal to the value of the loaned securities. The Master Portfolio may pay
reasonably administrative and custodial fees in connection with loans of
portfolio securities and may pay a portion of the interest or fee earned to the
borrower or a placing broker.

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<PAGE>

MASSMUTUAL INSTITUTIONAL FUNDS
1295 State Street
Springfield, Massachusetts 01111

Learning More About the Funds

You can learn more about the Funds by reading the Funds' Annual and Semiannual
Reports and the Statement of Additional Information (SAI). This information is
available free upon request. In the Annual and Semiannual Reports, you will find
a discussion of market conditions and investment strategies that significantly
affected each Fund's performance during the period covered by the Report and a
listing of portfolio securities. The SAI will provide you more detail regarding
the organization and operation of the Funds, including their investment
strategies. The SAI is incorporated by reference into this Prospectus and is
therefore legally considered a part of this Prospectus.

How to Obtain Information

From MassMutual Institutional Funds: You may request information about the Funds
(including the Annual/Semiannual Reports and the SAI) or make shareholder
inquiries by calling 1-888-743-5274 or by writing MassMutual Institutional Funds
c/o Massachusetts Mutual Life Insurance Company, 1295 State Street, Springfield,
Massachusetts 01111-0111, Attention: MassMutual Institutional Funds Coordinator,
MIP C218.

From the SEC: You may review information about the Funds (including the SAI) at
the SEC's Public Reference Room in Washington, D.C. (call 1-800-SEC-0330 for
information regarding the operation of the SEC's public reference room). You can
get copies of this information, upon payment of a copying fee, by writing to the
SEC's Public Reference Section, Washington, D.C. 20549-6009. Alternatively, if
you have access to the Internet, you may obtain information about the Funds from
the SEC's Internet site at http://www.sec.gov. When obtaining information about
the Funds from the SEC, you may find it useful to reference the Funds' SEC file
number: 881-8274.

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<PAGE>

MASSMUTUAL INDEXED EQUITY FUND
1295 State Street
Springfield, Massachusetts 01111

THIS STATEMENT OF ADDITIONAL INFORMATION ("SAI") IS NOT A PROSPECTUS. IT SHOULD
BE READ IN CONJUNCTION WITH THE PROSPECTUS OF MASSMUTUAL INDEXED EQUITY FUND
(THE "FUND"), A SERIES OF MASSMUTUAL INSTITUTIONAL FUNDS (THE "TRUST"), DATED
JULY 1, 1999, AS AMENDED FROM TIME-TO-TIME, (THE "PROSPECTUS"). THIS STATEMENT
OF ADDITIONAL INFORMATION INCORPORATES HEREIN THE FINANCIAL STATEMENTS OF THE
FUND BY REFERENCE TO THE FUND'S ANNUAL REPORT AS OF FEBRUARY 28, 1999 (THE
"ANNUAL REPORT"). TO OBTAIN A PROSPECTUS, CALL 1-888-743-5274, OR WRITE THE
TRUST AT THE ABOVE ADDRESS.

No dealer, salesman or any other person has been authorized to give any
information or to make any representations, other than those contained in this
SAI or in the related Prospectus, in connection with the offer contained herein,
and, if given or made, such other information or representation must not be
relied upon as having been authorized by the Trust or the Distributor. This SAI
and the related Prospectus do not constitute an offer by the Trust or by the
Distributor to sell or a solicitation of any offer to buy any of the securities
offered hereby in any jurisdiction to any person to whom it is unlawful to make
such offer in such jurisdiction.

DATED JULY 1, 1999

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<PAGE>

TABLE OF CONTENTS

Page
----

GENERAL INFORMATION ................................................... B-3

ADDITIONAL INVESTMENT POLICIES ........................................ B-3

FUNDAMENTAL INVESTMENT RESTRICTIONS OF THE FUND ....................... B-7

NON-FUNDAMENTAL INVESTMENT RESTRICTIONS OF THE FUND ................... B-8

FUNDAMENTAL INVESTMENT RESTRICTIONS OF THE MASTER PORTFOLIO ........... B-9

NON-FUNDAMENTAL INVESTMENT RESTRICTIONS OF THE MASTER PORTFOLIO ....... B-9

MANAGEMENT OF THE TRUST ............................................... B-10

COMPENSATION .......................................................... B-14

CONTROL PERSON AND PRINCIPAL HOLDER OF SECURITIES ..................... B-16

FUND ADMINISTRATOR AND SUB-ADMINISTRATOR .............................. B-16

THE DISTRIBUTOR ....................................................... B-16

CLASS A SERVICE PLAN .................................................. B-16

CUSTODIAN, DIVIDEND DISBURSING AGENT AND TRANSFER AGENT ............... B-17

INDEPENDENT PUBLIC ACCOUNTANT ......................................... B-17

INVESTMENT ADVISER AND OTHER MASTER PORTFOLIO SERVICE PROVIDERS ....... B-17

PORTFOLIO TRANSACTIONS AND BROKERAGE .................................. B-19

SHAREHOLDER INVESTMENT ACCOUNT ........................................ B-20

REDEMPTION OF SHARES .................................................. B-20

VALUATION OF PORTFOLIO SECURITIES ..................................... B-20

DESCRIPTION OF FUND SHARES ............................................ B-21

MASTER PORTFOLIO ORGANIZATION ......................................... B-21

INVESTMENT PERFORMANCE ................................................ B-22

TAXATION .............................................................. B-23

EXPERTS ............................................................... B-29

APPENDIX - DESCRIPTION OF SECURITIES RATINGS .......................... B-26

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<PAGE>

GENERAL INFORMATION

MassMutual Institutional Funds (the "Trust") is a professionally managed,
open-end investment company. This SAI describes MassMutual Indexed Equity Fund,
a separate, diversified series of shares of the Trust (the "Fund). 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 (the "Declaration of Trust").

ADDITIONAL INVESTMENT POLICIES

The Fund has a distinct investment objective which it pursues, as described in
the Prospectus and below. The investment objective, fundamental investment
policies and fundamental investment restrictions of the Fund may not be changed
without the vote of a majority of the Fund's outstanding shares (which, under
the Investment Company Act of 1940 (the "1940 Act") and the rules thereunder and
as used in this Statement of Additional Information and in the Prospectus, means
the lesser of (1) 67% of the shares of the Fund present at a meeting if the
holders of more than 50% of the outstanding shares of the Fund are present in
person or by proxy, or (2) more than 50% of the outstanding shares of the Fund).
The Board of Trustees of the Trust may adopt new or amend or delete existing
non-fundamental investment policies and restrictions without shareholder
approval.

The investment objective of the Fund is to seek to approximate as closely as
practicable (before fees and expenses) the capitalization-weighted total return
of that portion of the U.S. market for publicly-traded common stocks composed of
larger-capitalized companies. The Fund seeks to achieve its investment objective
by investing all of its assets in the S&P 500 Index Master Portfolio (the
"Master Portfolio"), which is a series of Master Investment Portfolio ("MIP"),
an open-end, management investment company, rather than in a portfolio of
securities. Investment of the Fund's assets in the Master Portfolio is not a
fundamental policy of the Fund and a shareholder vote is not required for the
Fund to withdraw its investment from the Master Portfolio.

The following discussion, when applicable, elaborates on the presentation of the
types of securities in which the Master Portfolio may invest and the Master
Portfolio's investment policies contained in the Prospectus. For a description
of the ratings of corporate debt securities and money market instruments in
which the Master Portfolio may invest, reference should be made to the Appendix.

Portfolio Securities

Bank Obligations. The Master Portfolio may invest in bank obligations, including
certificates of deposit, time deposits, bankers' acceptances and other
short-term obligations of domestic banks, foreign subsidiaries of domestic
banks, foreign branches of domestic banks, and domestic and foreign branches of
foreign banks, domestic savings and loan associations and other banking
institutions.

Certificates of deposit are negotiable certificates evidencing the obligation of
a bank to repay funds deposited with it for a specified period of time. Time
deposits are non-negotiable deposits maintained in a banking institution for a
specified period of time at a stated interest rate. Time deposits which may be
held by the Master Portfolio will not benefit from insurance from the Bank
Insurance Fund or the Savings Association Insurance Fund administered by the
Federal Deposit Insurance Corporation. Bankers' acceptances are credit
instruments evidencing the obligation of a bank to pay a draft drawn on it by a
customer. These instruments reflect the obligation both of the bank and of the
drawer to pay the face amount of the instrument upon maturity. The other
short-term obligations may include uninsured, direct obligations, bearing fixed,
floating- or variable-interest rates.

Domestic commercial banks organized under Federal law are supervised and
examined by the Comptroller of the Currency and are required to be members of
the Federal Reserve System and to have their deposits insured by the Federal
Deposit Insurance Corporation (the "FDIC"). Domestic banks organized under state
law are supervised and examined by state banking authorities but are members of
the Federal Reserve System only if they elect to join. In addition, state banks
whose certificates of deposit ("CDs") may be purchased by the Master Portfolio
are insured by the FDIC (although such insurance may not be of material benefit
to the Master Portfolio, depending on the

B-3
<PAGE>

principal amount of the CDs of each bank held by the Master Portfolio) and are
subject to Federal examination and to a substantial body of Federal law and
regulation. As a result of Federal or state laws and regulations, domestic
branches of domestic banks whose CDs may be purchased by the Master Portfolio
generally are required, among other things, to maintain specified levels of
reserves, are limited in the amounts which they can loan to a single borrower
and are subject to other regulation designed to promote financial soundness.
However, not all of such laws and regulations apply to the foreign branches of
domestic banks.

Obligations of foreign branches of domestic banks, foreign subsidiaries of
domestic banks and domestic and foreign branches of foreign banks, such as CDs
and time deposits ("TDs"), may be general obligations of the parent banks in
addition to the issuing branch, or may be limited by the terms of a specific
obligation and governmental regulation. Such obligations are subject to
different risks than are those of domestic banks. These risks include foreign
economic and political developments, foreign governmental restrictions that may
adversely affect payment of principal and interest on the obligations, foreign
exchange controls and foreign withholding and other taxes on interest income.
These foreign branches and subsidiaries are not necessarily subject to the same
or similar regulatory requirements that apply to domestic banks, such as
mandatory reserve requirements, loan limitations, and accounting, auditing and
financial record keeping requirements. In addition, less information may be
publicly available about a foreign branch of a domestic bank or about a foreign
bank than about a domestic bank. Obligations of United States branches of
foreign banks may be general obligations of the parent bank in addition to the
issuing branch, or may be limited by the terms of a specific obligation or by
Federal or state regulation as well as governmental action in the country in
which the foreign bank has its head office. A domestic branch of a foreign bank
with assets in excess of $1 billion may be subject to reserve requirements
imposed by the Federal Reserve System or by the state in which the branch is
located if the branch is licensed in that state.

In addition, Federal branches licensed by the Comptroller of the Currency and
branches licensed by certain states ("State Branches") may be required to: (1)
pledge to the regulator, by depositing assets with a designated bank within the
state, a certain percentage of their assets as fixed from time to time by the
appropriate regulatory authority; and (2) maintain assets within the state in an
amount equal to a specified percentage of the aggregate amount of liabilities of
the foreign bank payable at or through all of its agencies or branches within
the state. The deposits of Federal and State Branches generally must be insured
by the FDIC if such branches take deposits of less than $100,000.

In view of the foregoing factors associated with the purchase of CDs and TDs
issued by foreign branches of domestic banks, by foreign subsidiaries of
domestic banks, by foreign branches of foreign banks or by domestic branches of
foreign banks, Barclays Global Fund Advisors ("BGFA"), the Master Portfolio's
investment adviser, carefully evaluates such investments on a case-by-case
basis.

The Master Portfolio may purchase CDs issued by banks, savings and loan
associations and similar thrift institutions with less than $1 billion in
assets, which are members of the FDIC, provided the Master Portfolio purchases
any such CD in a principal amount of not more than $100,000, which amount would
be fully insured by the Bank Insurance Fund or the Savings Association Insurance
Fund administered by the FDIC. Interest payments on such a CD are not insured by
the FDIC. The Master Portfolio will own no more than one such CD per such
issuer.

Short-Term Instruments and Temporary Investments. The Master Portfolio may
invest in high-quality money market instruments on an ongoing basis to provide
liquidity or for temporary purposes when there is an unexpected level of
shareholder purchases or redemptions. The instruments in which the Master
Portfolio may invest include: (i) short-term obligations issued or guaranteed by
the U.S. Government, its agencies or instrumentalities (including
government-sponsored enterprises); (ii) CDs, bankers' acceptances, fixed time
deposits and other obligations of domestic banks (including foreign branches)
that have more than $1 billion in total assets at the time of investment and
that are members of the Federal Reserve System or are examined by the
Comptroller of the Currency or whose deposits are insured by the FDIC; (iii)
commercial paper rated at the date of purchase "Prime-1" by Moody's or "A-1+" or
"A-1" by S&P, or, if unrated, of comparable quality as determined by BGFA; (iv)
non-convertible corporate debt securities (e.g., bonds and debentures) with
remaining maturities at the date of purchase of not more than one year that are
rated at least "Aa" by Moody's or "AA" by S&P; (v) repurchase agreements; and
(vi) short-term, U.S. dollar-denominated obligations of foreign banks (including
U.S. branches) that, at the time of investment have more than $10 billion, or
the equivalent in other currencies, in total assets and in the opinion of BGFA
are of comparable quality to obligations of U.S. banks which may be purchased by
the Master Portfolio.

B-4
<PAGE>

Commercial Paper and Short-Term Corporate Debt Instruments. The Master Portfolio
may invest in commercial paper (including variable amount master demand notes)
consisting of short-term, unsecured promissory notes issued by corporations to
finance short-term credit needs. Commercial paper is usually sold on a discount
basis and has a maturity at the time of issuance not exceeding nine months.
Variable amount master demand notes are demand obligations that permit the
investment of fluctuating amounts at varying market rates of interest pursuant
to arrangements between the issuer and a commercial bank acting as agent for the
payee of such notes whereby both parties have the right to vary the amount of
the outstanding indebtedness on the notes. The investment adviser to the Master
Portfolio monitors on an ongoing basis the ability of an issuer of a demand
instrument to pay principal and interest on demand.

Obligations of Foreign Governments, Banks and Corporations. The Master Portfolio
may invest in U.S. dollar-denominated short-term obligations issued or
guaranteed by one or more foreign governments or any of their political
subdivisions, agencies or instrumentalities that are determined by BGFA to be of
comparable quality to the other obligations in which the Master Portfolio may
invest. The Master Portfolio may also invest in debt obligations of
supranational entities. Supranational entities include international
organizations designated or supported by governmental entities to promote
economic reconstruction or development and international banking institutions
and related government agencies. Examples include the International Bank for
Reconstruction and Development (the World Bank), the European Coal and Steel
Community, the Asian Development Bank, and the InterAmerican Development Bank.
The percentage of the Master Portfolio's assets invested in obligations of
foreign governments and supranational entities will vary depending on the
relative yields of such securities, the economic and financial markets of the
countries in which the investments are made and the interest rate climate of
such countries.

The Master Portfolio may invest a portion of its total assets in high-quality,
short-term (one year or less) debt obligations of foreign branches of U.S. banks
or U.S. branches of foreign banks that are denominated in and pay interest in
U.S. dollars.

American Depositary Receipts and Similar Instruments. To the extent necessary to
replicate the investment characteristics of the S&P 500 Index, the Master
Portfolio may invest in foreign securities through American Depositary Receipts
("ADRs") and similar instruments convertible into securities of foreign issuers.
ADRs represent securities or a pool of securities of an underlying foreign
issuer. They are subject to many of the same risks as foreign securities.

These securities may not necessarily be denominated in the same currency as the
securities into which they may be converted. ADRs (sponsored or unsponsored) are
receipts typically issued by a U.S. bank or trust company and traded on a U.S.
Stock Exchange, that evidence ownership of underlying foreign securities.
Issuers of unsponsored ADRs are not contractually obligated to disclose material
information in the U.S. and, therefore, such information may not correlate to
the market value of the unsponsored ADR.

Management Policies

Repurchase Agreements. The Master Portfolio may engage in a repurchase agreement
with respect to any security in which it is authorized to invest, although the
underlying security may mature in more than thirteen months. The Master
Portfolio may enter into repurchase agreements wherein the seller of a security
to the Master Portfolio agrees to repurchase that security from the Master
Portfolio at a mutually agreed-upon time and price that involves the acquisition
by the Master Portfolio of an underlying debt instrument, subject to the
seller's obligation to repurchase, and the Master Portfolio's obligation to
resell, the instrument at a fixed price usually not more than one week after

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its purchase. The Master Portfolio's custodian has custody of, and holds in a
segregated account, securities acquired as collateral by the Master Portfolio
under a repurchase agreement. Repurchase agreements are considered by the staff
of the Securities and Exchange Commissions (the "SEC") to be loans by the Master
Portfolio under the 1940 Act. The Master Portfolio may enter into repurchase
agreements only with respect to securities of the type in which it may invest,
including government securities and mortgage-related securities, regardless of
their remaining maturities, and requires that additional securities be deposited
with the custodian if the value of the securities purchased should decrease
below resale price. BGFA monitors on an ongoing basis the value of the
collateral to assure that it always equals or exceeds the repurchase price.
Certain costs may be incurred by the Master Portfolio in connection with the
sale of the underlying securities if the seller does not repurchase them in
accordance with the repurchase agreement. In addition, if bankruptcy proceedings
are commenced with respect to the seller of the securities, disposition of the
securities by the Master Portfolio may be delayed or limited. While it does not
presently appear possible to eliminate all risks from these transactions
(particularly the possibility of a decline in the market value of the underlying
securities, as well as delay and costs to the Master Portfolio in connection
with insolvency proceedings), it is the policy of the Master Portfolio to limit
repurchase agreements to selected creditworthy securities dealers or domestic
banks or other recognized financial institutions. The Master Portfolio considers
on an ongoing basis the creditworthiness of the institutions with which it
enters into repurchase agreements.

Floating- and Variable-Rate Obligations. The Master Portfolio may purchase
floating- and variable-rate obligations, which are debt instruments with
interest rates that are periodically adjusted at specified intervals or whenever
a benchmark rate or index changes. These adjustments generally limit the
increase or decrease in the amount of interest received on the debt instruments.
Floating- and variable-rate instruments are subject to interest-rate risk and
credit risk.

The Master Portfolio may purchase floating- and variable-rate demand notes and
bonds, which are obligations ordinarily having stated maturities in excess of
thirteen months, but which permit the holder to demand payment of principal at
any time, or at specified intervals not exceeding thirteen months. Variable rate
demand notes include master demand notes that are obligations that permit the
Master Portfolio to invest fluctuating amounts, which may change daily without
penalty, pursuant to direct arrangements between the Master Portfolio, as
lender, and the borrower. The interest rates on these notes fluctuate from time
to time. The issuer of such obligations ordinarily has a corresponding right,
after a given period, to prepay in its discretion the outstanding principal
amount of the obligations plus accrued interest upon a specified number of days'
notice to the holders of such obligations. The interest rate on a floating-rate
demand obligation is based on a known lending rate, such as a bank's prime rate,
and is adjusted automatically each time such rate is adjusted. The interest rate
on a variable-rate demand obligation is adjusted automatically at specified
intervals. Frequently, such obligations are secured by letters of credit or
other credit support arrangements provided by banks. Because these obligations
are direct lending arrangements between the lender and borrower, it is not
contemplated that such instruments generally will be traded, and there generally
is no established secondary market for these obligations, although they are
redeemable at face value. Accordingly, where these obligations are not secured
by letters of credit or other credit support arrangements, the Master
Portfolio's right to redeem is dependent on the ability of the borrower to pay
principal and interest on demand. Such obligations frequently are not rated by
credit rating agencies and the Master Portfolio may invest in obligations which
are not so rated only if BGFA determines that at the time of investment the
obligations are of comparable quality to the other obligations in which the
Master Portfolio may invest. BGFA, on behalf of the Master Portfolio, considers
on an ongoing basis the creditworthiness of the issuers of the floating- and
variable-rate demand obligations in the Master Portfolio's portfolio. The Master
Portfolio will not invest more than 10% of the value of its total net assets in
floating- or variable-rate demand obligations whose demand feature is not
exercisable within seven days. Such obligations may be treated as liquid,
provided that an active secondary market exists.

Futures Contracts and Options on Futures Contracts. The Master Portfolio may
enter into futures contracts and may purchase and write options thereon. The
Master Portfolio may use futures as a substitute for a comparable market
position in the underlying securities.

A futures contract is an agreement between two parties, a buyer and a seller, to
exchange a particular commodity or financial instrument at a specific price on a
specific date in the future. An option transaction generally involves a right,
which may or may not be exercised, to buy or sell a commodity or financial
instrument at a particular price on a specified future date. Futures contracts
and exchange-traded options are standardized and traded on exchanges,

B-6
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where the exchange serves as the ultimate counterparty for all contracts.
Consequently, the primary credit risk on futures contracts is the
creditworthiness of the exchange. Futures contracts are subject to market risk
(i.e., exposure to adverse price changes).

Upon exercise of an option on a futures contract, the writer of the option
delivers to the holder of the option the futures position and the accumulated
balance in the writer's futures margin account, which represents the amount by
which the market price of the futures contract exceeds, in the case of a call,
or is less than, in the case of a put, the exercise price of the option on the
futures contract. The potential loss related to the purchase of options on
futures contracts is limited to the premium paid for the option (plus
transaction costs). Because the value of the option is fixed at the time of
sale, there are no daily cash payments to reflect changes in the value of the
underlying contract; however, the value of the option does change daily and that
change would be reflected in the net asset value of the Master Portfolio.

Transactions by the Master Portfolio in futures contracts involve certain risks.
One risk in employing futures contracts as a hedge against cash market price
volatility is the possibility that futures prices will correlate imperfectly
with the behavior of the prices of the securities in the Master Portfolio's
investment portfolio. Similarly, in employing futures contracts as a substitute
for purchasing the designated underlying securities, there is a risk that the
performance of the futures contract may correlate imperfectly with the
performance of the direct investments for which the futures contract is a
substitute. Although the Master Portfolio intends to purchase or sell futures
contracts only if there is an active market for such contracts, no assurance can
be given that a liquid market will exist for any particular contract at any
particular time. Many futures exchanges and boards of trade limit the amount of
fluctuation permitted in futures contract prices during a single trading day.
Once the daily limit has been reached in a particular contract, no trades may be
made that day at a price beyond that limit or trading may be suspended for
specified periods during the trading day. Futures contract prices could move to
the limit for several consecutive trading days with little or no trading,
thereby preventing prompt liquidation of futures positions and potentially
subjecting the Master Portfolio to substantial losses. If it is not possible, or
if the Master Portfolio determines not to close a futures position in
anticipation of adverse price movements, the Master Portfolio will be required
to make daily cash payments on variation margin.

In order to comply with undertakings made by the Master Portfolio pursuant to
Commodity Futures Trading Commission ("CFTC") Regulation 4.5, the Master
Portfolio will use futures and option contracts solely for bona fide hedging
purposes within the meaning and intent of CFTC Reg. 1.3(z); provided, however,
that in addition, with respect to positions in commodity futures or commodity
option contracts which do not come within the meaning and intent of CFTC Reg.
1.3(z), the aggregate initial margin and premiums required to establish such
positions will not exceed 5% of the liquidation value of the Master Portfolio's
portfolio, after taking into account unrealized profits and unrealized losses on
any such contract it has entered into; and provided further, that in the case of
an option that is in-the-money at the time of purchase, the in-the-money amount
as defined in CFTC Reg. 190.01(x) may be excluded in computing such 5%.

Stock Index Futures and Options on Stock Index Futures. The Master Portfolio may
invest in stock index futures contracts and options on stock index futures
contracts as a substitute for a comparable market position in the underlying
securities.

A stock index future obligates the seller to deliver (and the purchaser to
take), effectively, an amount of cash equal to a specific dollar amount times
the difference between the value of a specific stock index at the close of the
last trading day of the contract and the price at which the agreement is made.
No physical delivery of the underlying stocks in the index is made. With respect
to stock indices that are permitted investments, the Master Portfolio intends to
purchase and sell futures contracts on the stock index for which it can obtain
the best price with consideration also given to liquidity. There can be no
assurance that a liquid market will exist at the time when the Master Portfolio
seeks to close out a futures contract or a futures option position. Lack of a
liquid market may prevent liquidation of an unfavorable position. Currently, the
Master Portfolio intends to limit its investments in such instruments to S&P 500
Index futures and options thereon.

Future Developments. The Master Portfolio may take advantage of opportunities in
the area of options and futures contracts and options on futures contracts and
any other derivative investments which are not presently contemplated for use by
the Master Portfolio or which are not currently available but which may be
developed, to

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<PAGE>

the extent such opportunities are both consistent with the Master Portfolio's
investment objective and legally permissible for the Master Portfolio. Before
entering into such transactions or making any such investment, the Master
Portfolio will provide appropriate disclosure in its prospectus.

Loans of Portfolio Securities. The Master Portfolio may lend securities from its
portfolio to brokers, dealers and financial institutions (but not individuals)
if cash, U.S. Government securities or other high quality debt obligations equal
to at least 100% of the current market value of the securities loaned (including
accrued interest thereon) plus the interest payable to the Master Portfolio with
respect to the loan is maintained with the Master Portfolio. In determining
whether or not to lend a security to a particular broker, dealer or financial
institution, the Master Portfolio's investment adviser, BGFA, considers all
relevant facts and circumstances, including the size, creditworthiness and
reputation of the broker, dealer, or financial institution. Any loans of
portfolio securities are fully collateralized based on values that are marked to
market daily. The Master Portfolio does not enter into any portfolio security
lending arrangements having a duration longer than one year. Any securities that
the Master Portfolio receives as collateral do not become part of its portfolio
at the time of the loan and, in the event of a default by the borrower, the
Master Portfolio will, if permitted by law, dispose of such collateral except
for such part thereof that is a security in which the Master Portfolio is
permitted to invest. During the time securities are on loan, the borrower will
pay the Master Portfolio any accrued income on those securities, and the Master
Portfolio may invest the cash collateral and earn income or receive an
agreed-upon fee from a borrower that has delivered cash-equivalent collateral.
The Master Portfolio will not lend securities having a value that exceeds
one-third of the current value of its total assets. Loans of securities by the
Master Portfolio are subject to termination at the Master Portfolio's or the
borrower's option. The Master Portfolio may pay reasonable administrative and
custodial fees in connection with a securities loan and may pay a negotiated
portion of the interest or fee earned with respect to the collateral to the
borrower or the placing broker. Borrowers and placing brokers are not permitted
to be affiliated, directly or indirectly, to the Master Portfolio, BGFA or
Stephens, Inc. ("Stephens"), the Master Portfolio's placement agent and
co-administrator.

Investments in Warrants. The Master Portfolio may invest up to 5% of its net
assets in warrants. Warrants represent rights to purchase securities at a
specific price valid for a specific period of time. The prices of warrants do
not necessarily correlate with the prices of the underlying securities. The
Master Portfolio may only purchase warrants on securities in which the Master
Portfolio may invest directly.

Unrated, Downgraded and Below Investment Grade Investments. The Master Portfolio
may purchase instruments that are not rated if, in the opinion of BGFA, such
obligations are of investment quality comparable to other rated investments that
are permitted to be purchased by the Master Portfolio. After purchase by the
Master Portfolio, a security may cease to be rated or its rating may be reduced
below the minimum required for purchase by the Master Portfolio. Neither event
will require a sale of such security by the Master Portfolio provided that the
amount of such securities held by the Master Portfolio does not exceed 5% of the
Master Portfolio's net assets. To the extent the ratings given by Moody's or S&P
may change as a result of changes in such organizations or their rating systems,
the Master Portfolio will attempt to use comparable ratings as standards for
investments in accordance with the investment policies contained in the
Prospectus and in this Statement of Additional Information. The ratings of
Moody's and S&P are more fully described in the Appendix to this Statement of
Additional Information.

Because the Master Portfolio is not required to sell downgraded securities, the
Master Portfolio could hold up to 5% of its net assets in debt securities rated
below "Baa" by Moody's or below "BBB" by S&P or in unrated, low quality (below
investment grade) securities. Although they may offer higher yields than do
higher rated securities, low rated, and unrated, low quality debt securities
generally involve greater volatility of price and risk of principal and income,
including the possibility of default by, or bankruptcy of, the issuers of the
securities. In addition, the markets in which low rated and unrated, low quality
debt are traded are more limited than those in which higher rated securities are
traded. The existence of limited markets for particular securities may diminish
the Master Portfolio's ability to sell the securities at fair value either to
meet redemption requests or to respond to changes in the economy or in the
financial markets and could adversely affect and cause fluctuations in the daily
net asset value of the Master Portfolio's shares.

Adverse publicity and investor perceptions, whether or not based on fundamental
analysis, may decrease the values and liquidity of low rated or unrated, low
quality debt securities, especially in a thinly traded market. Analysis of the
creditworthiness of issuers of low rated or unrated, low quality debt securities
may be more complex than for issuers of higher rated securities, and the ability
of the Master Portfolio to achieve its investment objective may, to

B-8
<PAGE>

the extent it holds low rated or unrated low quality debt securities, be more
dependent upon such creditworthiness analysis than would be the case if the
Master Portfolio held exclusively higher rated or higher quality securities.

Low rated or unrated low quality debt securities may be more susceptible to real
or perceived adverse economic and competitive industry conditions than
investment grade securities. The prices of such debt securities have been found
to be less sensitive to interest rate changes than higher rated or higher
quality investments, but more sensitive to adverse economic downturns or
individual corporate developments. A projection of an economic downturn or of a
period of rising interest rates, for example, could cause a decline in low rated
or unrated, low quality debt securities prices because the advent of a recession
could dramatically lessen the ability of a highly leveraged company to make
principal and interest payments on its debt securities. If the issuer of the
debt securities defaults, the Master Portfolio may incur additional expenses to
seek recovery.

Letters of Credit. Certain of the debt obligations (including municipal
securities, certificates of participation, commercial paper and other short-term
obligations) which the Master Portfolio may purchase may be backed by an
unconditional and irrevocable letter of credit of a bank, savings and loan
association or insurance company which assumes the obligation for payment of
principal and interest in the event of default by the issuer. Only banks,
savings and loan associations and insurance companies which, in the opinion of
BGFA, as investment advisor, are of comparable quality to issuers of other
permitted investments of the Master Portfolio may be used for letter of
credit-backed investments.

Forward Commitments, When-Issued Purchases and Delayed-Delivery Transactions.
The Master Portfolio may purchase or sell securities on a when-issued or
delayed-delivery basis and make contracts to purchase or sell securities for a
fixed price at a future date beyond customary settlement time. Securities
purchased or sold on a when-issued, delayed-delivery or forward commitment basis
involve a risk of loss if the value of the security to be purchased declines, or
the value of the security to be sold increases, before the settlement date.
Although the Master Portfolio will generally purchase securities with the
intention of acquiring them, the Master Portfolio may dispose of securities
purchased on a when-issued, delayed-delivery or a forward commitment basis
before settlement when deemed appropriate by the BGFA.

The Master Portfolio may purchase securities on a when-issued basis, in which
case delivery and payment normally take place within 45 days after the date of
the commitment to purchase. When-issued securities are subject to market
fluctuation, and no income accrues to the purchaser during the period prior to
issuance. The purchase price and the interest rate that will be received on debt
securities are fixed at the time the purchaser enters into the commitment.
Purchasing a security on a when-issued basis can involve a risk that the market
price at the time of delivery may be lower than the agreed-upon purchase price,
in which case there could be an unrealized loss at the time of delivery. The
Master Portfolio currently does not intend on investing more than 5% of its
assets in when-issued securities during the coming year. The Master Portfolio
will establish a segregated account in which it will maintain cash or liquid
securities in an amount at least equal in value to the Master Portfolio's
commitments to purchase when-issued securities. If the value of these assets
declines, the Master Portfolio will place additional liquid assets in the
account on a daily basis so that the value of the assets in the account is equal
to the amount of such commitments.

Borrowing Money. As a fundamental policy, the Master Portfolio is permitted to
borrow to the extent permitted under the 1940 Act. However, the Master Portfolio
currently intends to borrow money only for temporary or emergency (not
leveraging) purposes, and may borrow up to one-third of the value of its total
assets (including the amount borrowed) valued at the lesser of cost or market,
less liabilities (not including the amount borrowed) at the time the borrowing
is made. While borrowings exceed 5% of the Master Portfolio's total assets, the
Master Portfolio will not make any new investments.

Glass-Steagall Act Considerations. Independent legal counsel to MIP and special
counsel to BGFA has advised MIP and BGFA that BGFA and its affiliates may
perform the services contemplated by the Investment Advisory Contract and this
Prospectus without violation of the Glass-Steagall Act. However, there are no
controlling judicial or administrative interpretations or decisions and that
future interpretations of, or decisions relating to, present federal or state
statutes, including the Glass-Steagall Act, and relating to the permissible
activities of banks and their subsidiaries or affiliates, as well as future
changes in such statutes, regulations and judicial or administrative decisions
or interpretations, could prevent such entities from continuing to perform, in
whole or in part, such services. If any such entity were prohibited from
performing any such services, it is expected that new agreements

B-9
<PAGE>

would be proposed or entered into with another entity or entities qualified to
perform such services.

Banking Relationships. BGFA, Barclays and their affiliates deal, trade and
invest for their own account in the types of securities in which the Master
Portfolio may invest and may have deposit, loan and commercial banking
relationships with the issuers of securities purchased by the Master Portfolio.

Disclaimer

NEITHER THE FUND NOR THE MASTER PORTFOLIO IS SPONSORED, ENDORSED, SOLD OR
PROMOTED BY STANDARD & POOR'S ("S&P"). S&P MAKES NO REPRESENTATION OR WARRANTY,
EXPRESS OR IMPLIED, TO THE FUND, THE MASTER PORTFOLIO OR ANY MEMBER OF THE
PUBLIC REGARDING THE ADVISABILITY OF INVESTING IN SECURITIES GENERALLY OR IN THE
FUND PARTICULARLY OR THE ABILITY OF THE S&P 500 INDEX TO TRACK GENERAL STOCK
MARKET PERFORMANCE. S&P'S ONLY RELATIONSHIP TO THE FUND IS THE LICENSING OF
CERTAIN TRADEMARKS AND TRADE NAMES OF S&P WITHOUT REGARD TO THE FUND. S&P HAS NO
OBLIGATION TO TAKE THE NEEDS OF THE FUND INTO CONSIDERATION IN DETERMINING,
COMPOSING OR CALCULATING THE S&P 500 INDEX. S&P IS NOT RESPONSIBLE FOR AND HAS
NOT PARTICIPATED IN THE DETERMINATION OF THE PRICES AND AMOUNT OF THE FUND'S
SHARES OR THE TIMING OF THE ISSUANCE OR SALE OF THE FUND'S SHARES OR IN THE
DETERMINATION OR CALCULATION OF THE EQUATION BY WHICH THE FUND'S SHARES ARE TO
BE CONVERTED INTO CASH. S&P HAS NO OBLIGATION OR LIABILITY IN CONNECTION WITH
THE ADMINISTRATION, MARKETING OR TRADING OF THE FUND'S SHARES.

S&P DOES NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF THE S&P 500 INDEX
OR ANY DATA INCLUDED THEREIN AND S&P SHALL HAVE NO LIABILITY FOR ANY ERRORS,
OMISSIONS, OR INTERRUPTIONS THEREIN. S&P MAKES NO WARRANTY, EXPRESS OR IMPLIED,
AS TO RESULTS TO BE OBTAINED BY THE FUND, OR ANY OTHER PERSON OR ENTITY FROM THE
USE OF THE S&P 500 INDEX OR ANY DATA INCLUDED THEREIN. S&P MAKES NO EXPRESS OR
IMPLIED WARRANTIES, AND EXPRESSLY DISCLAIMS ALL WARRANTIES OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE OR USE WITH RESPECT TO THE S&P 500 INDEX OR ANY
DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL
S&P HAVE ANY LIABILITY FOR ANY SPECIAL, PUNITIVE, INDIRECT, OR CONSEQUENTIAL
DAMAGES (INCLUDING LOST PROFITS), EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH
DAMAGES.

FUNDAMENTAL INVESTMENT RESTRICTIONS OF THE FUND
-----------------------------------------------

The Fund is subject to certain fundamental restrictions on its investments,
which may not be changed without the affirmative vote of a majority of the
outstanding shares of the Fund. Investment restrictions that appear below or
elsewhere in this Statement of Additional Information and in the Prospectus
which involve a maximum percentage of securities or assets shall not be
considered to be violated (except with respect to restriction No. 7 below)
unless an excess over the percentage occurs immediately after, and is caused by,
an acquisition or encumbrance of securities or assets of, or borrowings by or on
behalf of, the Fund. The Trust may not, on behalf of the Fund:

(1) purchase the securities of issuers conducting their principal business
activity in the same industry if, immediately after the purchase and as a
result thereof, the value of the Fund's investments in that industry would
be 25% or more of the current value of the Fund's total assets, provided
that there is no limitation with respect to investments in (i) obligations
of the U.S. Government, its agencies or instrumentalities and (ii) any
industry in which the S&P 500 Index becomes concentrated to the same degree
during the same period, and provided further, that the Fund may invest all
its assets in a diversified open-end management

B-10
<PAGE>

investment company, or series thereof, with substantially the same
investment objective, policies and restrictions as the Fund, without regard
for the limitations set forth in this paragraph (1);

(2) purchase or sell real estate or real estate limited partnerships (other
than securities secured by real estate or interests therein or securities
issued by companies that invest in real estate or interests therein);

(3) purchase commodities or commodity contracts, except that the Fund may
purchase securities of an issuer which invests or deals in commodities or
commodity contracts, and except that the Fund may purchase and sell (i.e.,
write) options, forward contracts, futures contracts, including those
relating to indexes, and options on futures contracts or indexes;

(4) purchase securities on margin (except for short-term credits necessary
for the clearance of transactions and except for margin deposits in
connection with options, forward contracts, futures contracts, including
those related to indexes, and options on futures contracts or indexes);

(5) act as an underwriter of securities of other issuers, except to the
extent that the Fund may be deemed an underwriter under the Securities Act
of 1933, as amended (the "1933 Act"), by virtue of disposing of portfolio
securities and provided further, that the purchase by the Fund of
securities issued by a diversified, open-end management investment company,
or a series thereof, with substantially the same investment objective,
policies and restrictions as the Fund shall not constitute an underwriter
for purposes of this paragraph (5);

(6) issue senior securities, except as permitted by the 1940 Act;

(7) borrow money, except as permitted by the 1940 Act. The 1940 Act
currently permits the Fund to borrow from any bank; provided, that
immediately after any such borrowing there is an asset coverage of at least
300 per centum for all borrowings of the Fund; and provided further, that
in the event that such asset coverage shall at any time fall below 300 per
centum the Fund shall, within three days thereafter (not including Sundays
and holidays) or such longer period as the SEC may prescribe by rules and
regulations, reduce the amount of its borrowings to an extent that the
asset coverage of such borrowings shall be at least 300 per centum. For
purposes of this investment restriction, the Fund's entry into options,
forward contracts, futures contracts, including those relating to indexes,
and options on futures contracts or indexes shall not constitute borrowing
to the extent certain segregated accounts are established and maintained by
the Fund;

(8) purchase securities of any issuer (except securities issued or
guaranteed by the U.S. Government, its agencies and instrumentalities or
other investment companies) if, as a result, with respect to 75% of its
total assets, (i) more than 5% of the value of the Fund's total assets
would be invested in the securities of that issuer or, (ii) the Fund's
ownership would be more than 10% of the outstanding voting securities of
such issuer; or

(9) make loans, except that the Fund may purchase or hold debt instruments
or lend its portfolio securities in accordance with its investment
policies, and may enter into repurchase agreements.

NON-FUNDAMENTAL INVESTMENT RESTRICTIONS OF THE FUND
---------------------------------------------------

In addition to the fundamental investment restrictions described above, the
Trustees of the Trust have voluntarily adopted certain policies and restrictions
which are observed in the conduct of the affairs of the Fund. These represent
intentions of the Trustees based upon current circumstances. They differ from
fundamental investment restrictions in that the following additional investment
restrictions may be changed or amended by action of the Trustees without
requiring prior notice to or approval of shareholders.

In accordance with such policies and guidelines, the Fund:

(1) may not, unless required by its investment strategy of replicating the
composition of a published market index, purchase securities of
issuers who, with their predecessors, have been in existence less than
three years, unless the securities are fully guaranteed or insured by
the U.S. Government, a state, commonwealth, possession, territory, the
District of Columbia or by an entity in existence at least three
years, or the securities are backed by the assets and revenues of any
of the foregoing if, by reason thereof, the value of its aggregate
investments in such securities will exceed 5% of its total assets,
provided that this restriction does not affect the Fund's ability to
invest all or a portion of its assets in the Master Portfolio;

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<PAGE>

(2) reserves the right to invest up to 15% of the current value of its net
assets in fixed time deposits that are subject to withdrawal penalties
and that have maturities of more than seven days, repurchase
agreements maturing in more than seven days or other illiquid
securities, provided that in circumstances where fluctuations in value
result in the Fund's investment in illiquid securities constituting
more than 15% of the current value of its net assets, the Fund will
take reasonable steps to reduce its investments in illiquid securities
until such investments constitute no more than 15% of the Fund's net
assets;

(3) may not purchase, sell or write puts, calls or combinations thereof,
except as may be described in this Statement of Additional Information
and the Fund's Prospectus; and

(4) may invest in shares of other open-end, management investment
companies, subject to the limitations of Section 12(d)(1) of the 1940
Act.

FUNDAMENTAL INVESTMENT RESTRICTIONS OF THE MASTER PORTFOLIO
-----------------------------------------------------------

The Master Portfolio is subject to the following investment limitations which
cannot be changed without approval of a majority (as defined in the 1940 Act) of
the Master Portfolio's outstanding voting securities.

The Master Portfolio may not:

(1) invest more than 5% of its assets in the obligations of any single
issuer, except that up to 25% of the value of its total assets may be
invested, and securities issued or guaranteed by the U.S. Government,
or its agencies or instrumentalities may be purchased, without regard
to any such limitation;

(2) hold more than 10% of the outstanding voting securities of any single
issuer. This investment restriction applies only with respect to 75%
of its total assets;

(3) invest in commodities, except that the Master Portfolio may purchase
and sell (i.e., write) options, forward contracts, futures contracts,
including those relating to indexes, and options on futures contracts
or indexes;

(4) purchase, hold or deal in real estate, or oil, gas or other mineral
leases or exploration or development programs, but the Master
Portfolio may purchase and sell securities that are secured by real
estate or issued by companies that invest or deal in real estate;

(5) borrow money, except to the extent permitted under the 1940 Act, and
except that the Master Portfolio may borrow up to 20% of the current
value of its net assets for temporary purposes only in order to meet
redemptions, and these borrowings may be secured by the pledge of up
to 20% of the current value of its net assets (but investments may not
be purchased while any such outstanding borrowing in excess of 5% of
its net assets exists);

(6) make loans to others, except through the purchase of debt obligations
and the entry into repurchase agreements. However, the Master
Portfolio may lend its portfolio securities in an amount not to exceed
one-third of the value of its total assets. Any loans of portfolio
securities will be made according to guidelines established by the SEC
and MIP's Board of Trustees;

(7) act as an underwriter of securities of other issuers, except to the
extent the Master Portfolio may be deemed an underwriter under the
1933 Act by virtue of disposing of portfolio securities;

(8) invest 25% or more of its total assets in the securities of issuers in
any particular industry or group of closely related industries and
except that there shall be no limitation with respect to investments
in (i) obligations of the U.S. Government, its agencies or
instrumentalities; and (ii) any industry in which the S&P 500 Index
becomes concentrated to the same degree during the same period (the
Master Portfolio will be concentrated as specified above only to the
extent the percentage of its assets invested in those categories of
investments is sufficiently large that 25% or more of its total assets
would be invested in a single industry);

(9) issue any senior security (as such term is defined in Section 18(f) of
the 1940 Act), except to the extent the activities permitted in
paragraphs (3) and (5) above, and in paragraphs (2) and (3) below, may
be deemed to give rise to a senior security; or

(10) purchase securities on margin, but the Master Portfolio may make
margin deposits in connection with transactions in options, forward
contracts, futures contracts, including those related to indexes, and
options on futures contracts or indexes.

B-12
<PAGE>

NON-FUNDAMENTAL INVESTMENT RESTRICTIONS OF THE MASTER PORTFOLIO
---------------------------------------------------------------

The Master Portfolio is subject to the following non-fundamental operating
policies which may be changed by the Board of Trustees of the Master Portfolio
without the approval of the holders of the Master Portfolio's outstanding
securities.

The Master Portfolio may not:

(1) invest in the securities of a company for the purpose of exercising
management or control, but the Master Portfolio will vote the
securities it owns in its portfolio as a shareholder in accordance
with its views;

(2) pledge, mortgage or hypothecate its assets, except to the extent
necessary to secure permitted borrowings and to the extent related to
the purchase of securities on a when-issued or forward commitment
basis and the deposit of assets in escrow in connection with writing
covered put and call options and collateral and initial or variation
margin arrangements with respect to options, forward contracts,
futures contracts, including those relating to indexes, and options on
futures contracts or indexes;

(3) purchase, sell or write puts, calls or combinations thereof, except as
may be described in the Master Portfolio's offering documents;

(4) purchase securities of any company having less than three years'
continuous operations (including operations of any predecessors)
unless the securities are fully guaranteed or insured by the U.S.
Government, a state, commonwealth, possession, territory, the District
Columbia or by an entity in existence at least three years, or the
securities are backed by the assets and revenues of any of the
foregoing, if such purchase would cause the value of its investments
in all such companies to exceed 5% of the value of its total assets;

(5) enter into repurchase agreements providing for settlement in more than
seven days after notice or purchase securities which are illiquid, if,
in the aggregate, more than 15% of the value of the Master Portfolio's
net assets would be so invested;

(6) purchase securities of other investment companies, except to the
extent permitted under the 1940 Act; or

(7) purchase or retain securities of any issuer if the officers or
Trustees of the Company, the Trusts or the investment adviser owning
beneficially more than one-half of one percent (0.5%) of the
securities of the issuer together owned beneficially more than 5% of
such securities.

MANAGEMENT OF THE TRUST
-----------------------

The Trust has a Board of Trustees, a majority of which must not be "Interested
Persons" as defined in the 1940 Act. The Trustees and principal officers of the
Trust are listed below together with information on their positions with the
Trust, address, age, principal occupations during the past five years and other
principal business affiliations.

Stuart H. Reese/*/ Chairman, Trustee and President of the Trust
1295 State Street
Springfield, MA 01111
Age: 44

Chief Investment Officer (since 1999), Chief Executive Director
(1997-1999), Executive Director (1996-1997), Senior Vice President
(1993-1997), MassMutual; President (since 1995), Executive Vice President
(1993-1995), MassMutual Corporate Investors and MassMutual Participation
Investors (closed-end investment companies); Director (since 1996), Antares
Capital Corporation (finance company) and Charter Oak Capital Management,
Inc. (investment adviser); President and Director (since 1996), HYP
Management, Inc. (managing member of MassMutual High Yield Partners LLC),
and MMHC Investment, Inc. (investor in funds sponsored by MassMutual);
Director (since 1994), MassMutual Corporate Value Partners Limited
(investor in debt and equity securities) and MassMutual Corporate Value
Limited (parent of MassMutual Corporate Value Partners Limited);
Supervisory Director (since 1994), MassMutual/Carlson CBO (collateralized
bond fund); Director (1994-1996), Pace Industries (aluminum die

- ----------
/*/ Trustee who is an "interested person of the Trust within the definition set
forth in Section 2(a)(19) of the 1940 Act.

B-13
<PAGE>

caster); Advisory Board Member (since 1995), Kirtland Capital Partners;
President (since 1994), Chairman and Trustee (since 1999) MML Series
Investment Fund (open-end investment company).

Ronald J. Abdow Trustee of the Trust
1400 Elm Street
West Springfield, MA 01089
Age: 68

President, Abdow Corporation (operator of restaurants); General Partner,
Grove Investment Group (apartment building syndicator); Trustee, Abdow G&R
Trust and Abdow G&R Co. (owners and operators of restaurant properties);
Partner, Abdow Partnership, Abdow Auburn Associates, and Abdow Hazard
Associates (owners and operators of restaurant properties); Trustee (since
1993), MML Series Investment Fund (open-end investment company).

Richard H. Ayers Trustee of the Trust
176 Sewall Road
Wolfreboro, NH 03894
Age: 57

Retired; former adviser to Chairman (since 1997), Chairman and Chief
Executive Officer (1989-1996) and Director (1985-1996), The Stanley Works
(manufacturer of tools, hardware and specialty hardware products);
Director, Southern New England Telecommunications Corp. and Perkin Elmer
Corp.; Trustee (since 1999), Advisory Board Member (1996-1999), MML Series
Investment Fund (open-end investment company).

Mary E. Boland Trustee of the Trust
67 Market Street
Springfield, MA 01102
Age: 60

Attorney at Law, Egan, Flanagan and Cohen, P.C. (law firm), Springfield,
MA; Director (1995-1999), Trustee (until 1995), SIS Bank (formerly,
Springfield Institution for Savings); Director (since 1999), SIS and Family
Bank, F.S.B. (formerly SIS Bank); Trustee (since 1973), MML Series
Investment Fund (open-end investment company).

David E.A. Carson Trustee of the Trust
850 Main Street
Bridgeport, CT 06604
Age: 65

Chairman and Chief Executive Officer (since 1997), President and Chief
Executive Officer (1985-1997), People's Bank; Director, United Illuminating
Co. (electric utility); Trustee, American Skandia Trust (open-end
investment company); Trustee (since 1999), Advisory Board Member
(1996-1999), MML Series Investment Fund (open-end investment company).

B-14
<PAGE>

Richard G. Dooley/*/ Trustee of the Trust
1295 State Street
Springfield, MA 01111
Age: 70

Consultant (since 1993), MassMutual; Director (since 1996), Investment
Technology Group Inc.; Director, The Advest Group, Inc. (financial services
holding company), HSB Group Inc. (formerly known as Hartford Steam Boiler
Inspection and Insurance Co.), Nellie Mae; Director, Kimco Realty Corp.
(shopping center ownership and management); Director (since 1993),
Jefferies Group, Inc. (financial services holding company); Vice Chairman
(since 1995), Chairman (1982-1995), Director (since 1974), MassMutual
Corporate Investors, and Vice Chairman (since 1995), Director (since 1988),
Chairman (1988-1995), MassMutual Participation Investors (closed-end
investment companies); Vice Chairman (since 1995), Chairman (1988-1995),
Trustee (since 1995) MML Series Investment Fund (open-end investment
company); Director (since 1996), Charter Oak Capital Management, Inc.

Richard W. Greene Trustee of the Trust
University Of Rochester
Rochester, NY 14627
Age: 63

Vice President for Investments and Treasurer (since 1998); Executive Vice
President and Treasurer (1986-1998), University of Rochester (private
university); Trustee (since 1999), Advisory Board Member (1996-1999), MML
Series Investment Fund (open-end investment company).

Beverly L. Hamilton Trustee of the Trust
515 South Flower Street
Los Angeles, CA 90017
Age: 53

President (since 1991), ARCO Investment Management Co.; Director,
Connecticut Natural Gas; Director, Emerging Markets Growth Fund (closed-end
investment company); Director (since 1997), United Asset Management Corp.
(investment management); Trustee (since 1999), Advisory Board Member
(1996-1999), MML Series Investment Fund (open-end investment company).

F. William Marshall, Jr. Trustee of the Trust
1441 Main Street
Springfield, MA 01102
Age: 57

Chairman, SIS and Family F.S.B. (formerly SIS Bank); President, Chief
Executive Officer and Director (1993-1999), SIS Bancorp, Inc. and SIS Bank
(formerly, Springfield Institution for Savings); Director (since 1999),
People's Heritage Financial Group; Chairman and Chief Executive Officer
(1990-1993), Bank of Ireland First Holdings, Inc. and First New Hampshire
Banks; Trustee (since 1996), MML Series Investment Fund (open-end
investment company).

Charles J. McCarthy Trustee of the Trust
181 Eton Road
Longmeadow, MA 01106

- ----------
/*/ Trustee who is an "interested person of the Trust within the definition set
forth in Section 2(a)(19) of the 1940 Act.

B-15
<PAGE>

Age: 76

Proprietor, Synectics Financial Company (venture capital activities,
business consulting and investments); Trustee, MML Series Investment Fund
(open-end investment company).

Robert J. O'Connell/*/ Trustee of the Trust
1295 State Street
Springfield, MA 01111
Age: 56

President, Chief Executive Officer, Director, Member, Board Affairs
Committee and Dividend Policy Committee, Chairman Investment Committee of
MassMutual Life Insurance Company; Director, C.M. Life Insurance Company
and MML Bay State Life Insurance Company (wholly-owned insurance company
subsidiaries of MassMutual), Cornerstone Real Estate Advisers, Inc.
(wholly-owned real estate investment advisory subsidiary of MassMutual
Holding Trust I), One Financial Plaza, Suite 1700, Hartford, Connecticut;
DLB Acquisition Corporation (holding company for investment advisers),
MassMutual Holding MSC, Inc., Trustee, MassMutual Holding Trust II
(wholly-owned holding company subsidiaries of MassMutual Holding Co.),
MassMutual Holding Trust I (wholly-owned holding company subsidiary of
MassMutual Holding Co.), Director, MassMutual International, Inc.,
(wholly-owned subsidiary of MassMutual Holding Company to act as service
provider for international insurance companies, MassMutual Holding Company
(wholly-owned holding company subsidiary of MassMutual), MassMutual
Benefits Management, Inc., Life Office Management Association; Director,
President and Chief Executive Officer (1991-1998), AIG Life Insurance
Company, American International Life Assurance of New York, Delaware
American Life Insurance Co., Pacific Union Assurance Company; Director
(1991-1998) AIG Life Insurance Company of Puerto Rico; Senior Vice
President (1991-1998), Life Insurance of American International Group,
Inc., American Life Insurance Company, DE; Senior Vice President, Group
Management Division (1991-1998) of American International Group, Inc.;
Trustee (since 1999), MML Series Investment Fund (open-end investment
company).

John H. Southworth Trustee of the Trust
195 Eton Road
Longmeadow, MA 01106
Age: 71

Chairman (since 1994), Southworth Company (manufacturer of paper and
calendars); Director (since 1995), Trustee (until 1995), SIS Bank
(formerly, Springfield Institution for Savings); Trustee, MML Series
Investment Fund (open-end investment company).

Michael D. Hays Chief Financial Officer of the Trust
1295 State Street
Springfield, MA 01111
Age: 56

Senior Vice President (since 1998), Senior Vice President and Actuary
(1986-1998), MassMutual.

Mary Wilson Kibbe Senior Vice President of the Trust
1295 State Street
Springfield, MA 01111
Age: 45

- ----------
/*/ Trustee who is an "interested person of the Trust within the definition set
forth in Section 2(a)(19) of the 1940 Act.

B-16
<PAGE>

Executive Director (since 1982), Senior Managing Director (1996-1997), Vice
President and Managing Director (1991-1996), MassMutual; Senior Vice
President (since 1996), HYP Management, Inc. (managing member of MassMutual
High Yield Partners LLC) and MMHC Investment, Inc. (investor in funds
sponsored by MassMutual); Senior Vice President (since 1994), MML Series
Investment Fund (open-end investment company); Vice President, MassMutual
Participation Investors and MassMutual Corporate Investors (closed-end
investment companies); Vice President (1991-1995), Oppenheimer Investment
Grade Bond Fund (open-end investment company).

Stephen L. Kuhn Vice President and Secretary of the Trust
1295 State Street
Springfield, MA 01111
Age: 52

Vice President and Deputy General Counsel (since 1998), MassMutual; Vice
President and Associate General Counsel (1992-1998), MassMutual; Vice
President and Secretary, MassMutual Participation Investors and MassMutual
Corporate Investors (closed-end investment companies); Assistant Secretary
(since 1996), Antares Capital Corporation (finance company); Chief Legal
Officer and Assistant Secretary (since 1995), DLB Acquisition Corporation
(holding company for investment advisers); Assistant Secretary (since
1997), Oppenheimer Acquisition Corporation (holding company for investment
advisers); Vice President and Secretary (since 1989), MML Series Investment
Company (open-end investment company).

Charles C. McCobb, Jr. Vice President of the Trust
1295 State Street
Springfield, MA 01111
Age: 55

Managing Director (since 1997), MassMutual; Managing Director and Vice
President (1994-1997), Citicorp, Inc. (banking); Managing Director
(1985-1994), Aetna Life & Casualty Company (insurance company); Vice
President (since 1996), and Chief Financial Officer (since 1998),
MassMutual Corporate Investors and MassMutual Participation Investors
(closed-end investment companies); Chief financial Officer (since 1998)
MMHC Investment Inc., HYP Management, Inc. MMCI Subsidiary Trust and MMPI
Subsidiary Trust (wholly-owned subsidiaries of MassMutual Corporate
Investors and MassMutual Participation Investors, respectively).

Edmond F. Ryan Vice President of the Trust
1295 State Street
Springfield, MA 01111
Age: 40

Senior Vice President (since 1995), Vice President (1985-1995), MassMutual.

Vernon J. Meyer Vice President of the Trust
1295 State Street
Springfield, MA 01111
Age: 34

Vice President (since 1998); Second Vice President (1994-1998), Assistant
Vice President and Director (1993-1994), MassMutual.

Mark B. Ackerman Treasurer of the Trust
1295 State Street
Springfield, MA 01111

B-17
<PAGE>

Age: 33

Investment Director (since 1996), Associate Investment Director
(1994-1996), MassMutual; Controller (1998), Treasurer (since 1998),
Associate Treasurer (1995-1997), MassMutual Participation Investors and
MassMutual Corporate Investors (closed-end investment companies);
Comptroller (since 1997), Associate Treasurer (1995-1996), MML Series
Investment Fund (open-end investment company); Vice President (since 1998),
HYP Management, Inc.; Comptroller (1998), Treasurer (since 1998), MMCI
Subsidiary Trust and MMPI Subsidiary Trust (wholly-owned subsidiaries of
MassMutual Corporate Investors and MassMutual Participation Investors,
respectively).

The Audit Committee makes recommendations to the Trustees as to the engagement
or discharge of the Trust's independent auditors, supervises investigations into
matters relating to audit functions, reviews with the Trust's independent
auditors the results of the audit engagement, and considers the audit fees. The
Nominating Committee consists of Trustees who are not "interested persons" (as
defined in the 1940 Act) of the Trust or any adviser and considers making all
nominations for non-interested members of the Board of Trustees. The selection
and nomination of management nominees for such vacancies is committed to the
discretion of the Nominating Committee. The Investment Pricing Committee
determines the fair value of securities for which market quotations are not
readily available.

COMPENSATION

The Trust, on behalf of the Fund, pays each of its Trustees who is not an
officer or employee of Massachusetts Mutual Life Insurance Company
("MassMutual") a fee of $2,000 per quarter plus $2,000 per meeting attended.
Such Trustees who serve on the Audit Committee of the Trust are paid an
additional fee of $1,000 per year. Such Trustees who serve on the Nominating
Committee or the Investment Pricing Committee are paid an additional fee of $500
per meeting attended. In addition, the Trust reimburses out-of-pocket business
travel expenses to such Trustees. Trustees who are officers or employees of
MassMutual receive no fees from the Trust.

The following table discloses the compensation paid to the Registrant's
non-interested trustees for the fiscal year ended December 31, 1998. The
Registrant has no pension, retirement, or deferred compensation plans. All of
the non-interested Trustees also serve as Trustees or Advisory Board Members of
one other investment company managed by MassMutual. Total Compensation from
Registrant and Fund Complex reflects compensation paid in the fiscal year ended
December 31, 1998.

B-18
<PAGE>

- --------------------------------------------------------------------------------
Total Compensation
Aggregate From Registrant and
Name/Position Compensation from Registrant Fund Complex
- --------------------------------------------------------------------------------
Ronald J. Abdow
Trustee $16,000 $32,000
- --------------------------------------------------------------------------------
Richard H. Ayers
Trustee 16,000 32,000
- --------------------------------------------------------------------------------
Mary E. Boland
Trustee 16,000 32,000
- --------------------------------------------------------------------------------
David E. A. Carson
Trustee 16,000 32,000
- --------------------------------------------------------------------------------
Richard W. Greene
Trustee 16,000 32,000
- --------------------------------------------------------------------------------
Beverly C. L. Hamilton
Trustee 16,000 32,000
- --------------------------------------------------------------------------------
F. William Marshall, Jr.
Trustee 16,000 32,000
- --------------------------------------------------------------------------------
Charles J. McCarthy
Trustee 17,000 34,000
- --------------------------------------------------------------------------------
John H. Southworth
Trustee 17,000 34,000
- --------------------------------------------------------------------------------

The officers and Trustees of the Trust as a group own less than 1% of any class
of any series of outstanding shares of the Trust.

The Trust's shareholders have the right, upon the declaration in writing or vote
of at least two-thirds of the votes represented by its outstanding shares, to
remove a Trustee. The Trustees shall call a meeting of shareholders to vote on
the removal of a Trustee upon the written request of the record holders of
shares representing at least 10% of all of the votes represented by all
outstanding shares of the Trust. In addition, whenever ten or more shareholders
of record who have been such for at least six months preceding the date of
application, and who hold in the aggregate either shares having a net asset
value of at least $25,000 or at least 1% of the Trust's outstanding shares,
whichever is less, shall apply to the Trustees in writing, stating that they
wish to communicate with other shareholders with a view to obtaining signatures
for a request for a meeting for the purpose of voting upon the question of
removal of any Trustee or Trustees and accompanied by the form of communication
and request which they wish to transmit, the Trustees shall within five business
days after receipt of such application either: (1) afford to such applicants
access to a list of the names and addresses of all shareholders as recorded on
the books of the Trust; or (2) inform such applicants as to the approximate
number of shareholders of record, and the approximate cost of mailing to them
the proposed communication and form of request. If the Trustees elect to follow
the latter course, the Trustees, upon the written request of such applicants,
accompanied by a tender of the material to be mailed and of the reasonable
expenses of mailing, shall, with reasonable promptness, mail such material to
all shareholders of record at their addresses as recorded on the books of the
Trust, unless within five business days after such tender the Trustees shall
mail to such applicants and file with the SEC, together with a copy of the
material to be mailed, a written statement signed by at least a majority of the
Trustees to the effect that in their opinion either such material contains
untrue statements of fact or omits to state facts necessary to make the
statements contained therein not misleading, or would be in violation of
applicable law, and specifying the basis of such opinion.

After opportunity for hearing regarding the objections specified in the written
statement so filed, the SEC may, and if demanded by the Trustees or by such
applicants shall, enter an order either sustaining one or more of such
objections, or refusing to sustain any of them. If the SEC shall enter an order
refusing to sustain any such objections

B-19
<PAGE>

or if, after the entry of an order sustaining one or more of such objections,
the SEC shall find, after notice and opportunity for hearing, that all
objections so sustained have been met, and shall enter an order so declaring,
the Trustees shall mail copies of such material to all shareholders with
reasonable promptness after the entry of such order and the renewal of such
tender.

On any matters submitted to a vote of shareholders, all shares of the Trust then
entitled to vote shall be voted in the aggregate as a single class without
regard to series of the Trust or class, except that: (i) when required by the
1940 Act or when the Trustees shall have determined that the matter affects one
or more of the series or classes materially differently, shares will be voted by
individual series or class; and (ii) when the Trustees have determined that any
matter affects only the interests of one or more series or classes, then only
shareholders of such series or class shall be entitled to vote thereon.
Shareholder inquiries should be directed to MassMutual Institutional Funds, 1295
State Street, Springfield, Massachusetts 01111.

CONTROL PERSON AND PRINCIPAL HOLDER OF SECURITIES
-------------------------------------------------

MassMutual, through its separate investment accounts and any direct investment
in the Trust, owned 100% of the shares of each class of each series of the Trust
as of June 1, 1999.

MANAGEMENT OF THE FUND
----------------------

The Fund has not retained the services of an investment adviser because the
Fund's assets are invested in the Master Portfolio, which has retained
investment advisory services. See "Investment Adviser to the Master Portfolio"
below. The Fund bears a pro rata portion of the investment advisory and certain
other fees paid by the Master Portfolio, such as accounting, legal and SEC
registration fees. The Fund is also responsible for its own expenses relating
to, among other things, administrative, custodial and fund accounting services,
and transfer and dividend-disbursing agency services.

FUND ADMINISTRATOR AND SUB-ADMINISTRATOR
----------------------------------------

MassMutual has entered into an administrative services agreement
("Administrative Services Agreement") with the 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. MassMutual may, at its expense, employ others to supply
all or any part of the services to be provided to the Fund pursuant to the
Administrative Services Agreement. The Trust, on behalf of the Fund, pays
MassMutual an administrative services fee monthly at an annual rate based upon
the average daily net assets of the applicable class of shares of the Fund equal
to .7688% for Class A shares; .5688% for Class Y shares; and .3588% for Class S
shares. MassMutual has entered into a sub-administration agreement with
Investors Bank & Trust Company ("IBT"). As sub-administrator, IBT generally
assists in all aspects of fund administration. IBT is compensated by MassMutual
for providing administrative services to the Fund. IBT also serves as the
sub-administrator to the Master Portfolio and is compensated by BGI (defined
below) for providing administrative services to the Master Portfolio.

The Fund commenced operations on March 1, 1998, and for fiscal year ending
February 28, 1999, the Fund paid $884,446 in administrative fees to MassMutual.

THE DISTRIBUTOR
---------------

The Trust's shares are continuously distributed by MML Distributors, LLC (the
"Distributor") pursuant to an Distribution Agreement with the Trust dated May 3,
1999 (the "Distribution Agreement"). The Distributor pays commissions to its
selling dealers as well as the cost of printing and mailing Prospectuses to
potential investors and of any advertising incurred by it in connection with
distribution of shares of the Fund.

The Distribution Agreement has an initial two-year term and will continue in
effect for successive one-year periods, provided that each such continuance is
specifically approved (i) by the vote of a majority of the Trustees or by a vote
of a majority of the shares of the Trust; and (ii) by a majority of the Trustees
who are not parties to the Distribution Agreement or interested persons (as
defined in the 1940 Act) of any such person, cast in person at a meeting called
for the purpose of voting on such approval.

B-20
<PAGE>

CLASS A DISTRIBUTION AND SERVICE PLAN
-------------------------------------

The Trust has adopted, with respect to the Class A shares of the Fund, an
Amended and Restated Distribution and Service Plan and Agreement (the "Plan")
pursuant to Rule 12b-1 under the 1940 Act. The Trustees of the Trust, including
a majority of the Trustees who are not interested persons of the Trust and who
have no direct or indirect financial interest in the operation of the Plan, by
vote cast in person at a meeting called for the purpose of voting on the Plan,
approved the Plan on May 3, 1999. Under the terms of the Plan, the Trust is
permitted to compensate, out of the assets attributable to the Class A shares of
the Fund, in an amount up to .25%, in the aggregate, on an annual basis of the
average daily net assets attributable to that Class, (i) the Distributor for
services provided and expenses incurred by it in connection with the
distribution of Class A shares of the Fund ("Distribution Fee") and (ii)
MassMutual for services provided and expenses incurred by it for purposes of
maintaining or providing personal services (the "Servicing Fee") to Class A
shareholders. The Distribution Fee may be spent by the Distributor on any
activities or expenses primarily intended to result in the sale of Class A
shares of the Fund, including, but not limited to, compensation to, and expenses
(included overhead and telephone expenses) of, financial consultants or other
employees of the Distributor or of participating or introducing brokers who
engage in the distribution of Class A shares, preparing, printing and delivering
prospectuses and reports for other than existing Class A shareholders, providing
facilities to answer questions from other than existing Class A shareholders,
advertising and preparation, printing and distribution of sales literature,
receiving and answering correspondence, including requests for prospectuses and
statements of additional information, and complying with Federal and state
securities laws pertaining to the sale of Class A shares.

The Servicing Fee may be spent by MassMutual on personal services rendered to
Class A shareholders of the Fund and/or maintenance of Class A shareholder
accounts. MassMutual's Servicing Fee expenditures may include, but shall not be
limited to, compensation to, and expenses (included overhead and telephone
expenses) of, financial consultants or other employees of the Distributor or of
participating or introducing brokers and other financial intermediaries who
assist investors in completing account forms and selecting dividend and other
account options; who aid in the process of redemption requests for Class A
shares or the processing of dividend payments with respect to Class A shares;
who prepare, print and deliver prospectuses of Class A shares; who provide
information periodically to Class A shareholders showing their position in Class
A shares; who issue account statements to Class A shareholders; who furnish
shareholding sub-accounting; who forward communications from the Fund to Class A
shareholders; who render advice regarding particular shareholder account options
offered by the Fund in light of shareholder needs; who provide and maintain
elective shareholder services; who provide and maintain pre-authorized
investment plans for Class A shareholders; who respond to inquiries from Class A
shareholders relating to such services; and/or who provide such similar services
as permitted under applicable statutes, rules or regulations.

The Plan provides that it may not be amended to materially increase the costs
which Class A shareholders may bear under the Plan without the approval of a
majority of the outstanding Class A shares of the Fund.

The Plan provides that it may not take effect until approved by vote of a
majority of both (i) the Trustees of the Trust and (ii) the Trustees of the
Trust who are not interested persons of the Trust and have no direct or indirect
financial interest in the operation of the Plan or any agreements related to it.
The Plan provides that it shall continue in effect so long as such continuance
is specifically approved at least annually by (i) Trustees of the Trust and (ii)
the Trustees of the Trust who are not interested persons of the Trust and have
no direct or indirect financial interest in the operation of the Plan or any
agreements related to it. The Plan provides that MassMutual shall provide to the
Trustees, and the Board shall review at least quarterly, a written report of the
amounts so expended and the purposes for which such expenditures were made.

The Conduct Rules of the NASD limit the amount of distribution fees that may be
paid by mutual funds. "Service fees," defined to mean fees paid for providing
shareholder services or the maintenance of accounts (but not transfer agency
services) are not subject to the limits. The Trust believes that the fees paid
to MassMutual pursuant to the Plan will qualify as "service fees" and therefore
will not be limited by NASD rules.

The Plan was not in effect prior to the fiscal year ended February 28, 1998 and
no payments were made thereunder in prior fiscal periods. Under the 12b-1 Plan
for Class A chares of the Fund, the Trust paid service fees for the fiscal year
ending February 28, 199 of approximately $266.

B-21
<PAGE>

CUSTODIAN, DIVIDEND DISBURSING AGENT AND TRANSFER AGENT
-------------------------------------------------------

IBT, located at 200 Clarendon Street, Boston, Massachusetts 02116, is the
custodian of the Fund's investments (the "Custodian") and is the Fund's transfer
agent and dividend disbursing agent (the "Transfer Agent"). The Custodian and
the Transfer Agent do not assist in, and are not responsible for, the investment
decisions and policies of the Fund.

INDEPENDENT PUBLIC ACCOUNTANT
-----------------------------

Deloitte & Touche LLP, located at New York, New York, is the Trust's independent
public accountant.

INVESTMENT ADVISER AND OTHER MASTER PORTFOLIO SERVICE PROVIDERS
---------------------------------------------------------------

The following information supplements and should be read in conjunction with
information set forth in the Prospectus regarding the investment adviser and
other service providers of the Master Portfolio.

Investment Adviser to the Master Portfolio

BGFA provides investment advisory services to the Master Portfolio pursuant to
an Investment Advisory Contract (the "BGFA Advisory Contract") with MIP, dated
January 1, 1996. For providing these investment advisory services, BGFA is
entitled to receive monthly fees at the annual rate of 0.05% of the average
daily net assets of the Master Portfolio. As to the Master Portfolio, the BGFA
Advisory Contract is subject to annual approval by (i) MIP's Board of Trustees
or (ii) vote of a majority of the outstanding voting securities of the Master
Portfolio, provided that in either event the continuance also is approved by a
majority of MIP's Board of Trustees who are not "interested persons" (as defined
in the 1940 Act) of MIP or BGFA, by vote cast in person at a meeting called for
the purpose of voting on such approval. As to the Master Portfolio, the BGFA
Advisory Contract is terminable without penalty, on 60 days' written notice, by
either party. The BGFA Advisory Contract will terminate automatically, in the
event of its assignment (as defined in the 1940 Act).

Prior to January 1, 1996, Wells Fargo Bank provided investment advisory services
to the Master Portfolio pursuant to an Investment Advisory Agreement (the
"Advisory Agreement") dated February 25, 1994 with MIP. The terms of the
Advisory Agreement were identical in all material respects, other than the
identity of the parties, to the BGFA Advisory Contract. For the period beginning
March 1, 1995 and ended December 31, 1995, the Master Portfolio paid the
following advisory fees to Wells Fargo Bank, without waivers.

For the period beginning January 1, 1996 and ended February 29, 1996, and the
fiscal years ended February 28, 1997 and 1998, the Master Portfolio paid the
following advisory fees to BGFA, without waivers:

March 1, 1995 - January 1, 1996 - Year Ended Year Ended
December 31, 1995 February 29, 1996 February 28, 1997 February 28, 1998
- ----------------- ----------------- ----------------- -----------------
$279,843 $73,598 $577,637 $939,051

Sub-Investment Adviser. The Master Portfolio does not currently engage a
sub-adviser. However, prior to January 1, 1996, Wells Fargo Nikko Investment
Advisers ("WFNIA") provided sub-investment advisory services to the Master
Portfolio pursuant to a Sub-Investment Advisory Agreement dated February 25,
1994 with Wells Fargo Bank and MIP. For the period beginning March 1, 1995 and
ended December 31, 1995, Wells Fargo Bank paid sub-advisory fees (without
waivers) of $224,069, to WFNIA for services provided on behalf of the Master
Portfolio.

Other Service Providers

Co-Administrators. Stephens and Barclays Global Investors, N.A. ("BGI") are the
Master Portfolio's co-administrators. Stephens and BGI provide the Master
Portfolio with administrative services, including general supervision of the
Master Portfolio's non-investment operations, coordination of the other services
provided to the Master Portfolio, compilation of information for reports to the
SEC and the state securities commissions, preparation of proxy statements and
shareholder reports, and general supervision of data compilation in connection
with preparing periodic reports to MIP's trustees and officers. Stephens also
furnishes office space and certain facilities to conduct the Master Portfolio's
business, and compensates MIP's trustees, officers and employees who are

B-22
<PAGE>

affiliated with Stephens. Stephens and BGI are not entitled to compensation for
providing administration services to the Master Portfolio. BGI has delegated
certain of its duties as co-administrator to IBT. IBT, as sub-administrator, is
compensated by BGI for performing certain administration services.

Prior to October 21, 1996, Stephens alone provided administration services to
MIP pursuant to an Administration Agreement dated February 25, 1994. Stephens
was not entitled to compensation for providing administrative services to the
Master Portfolio so long as Stephens received fees for providing similar
services to a feeder fund of another investment company investing all of its
assets in the Master Portfolio. The Master Portfolio did not pay any
administration fees to Stephens.

Placement Agent. Stephens is the placement agent for the Master Portfolio.
Stephens is a full service broker/dealer and investment advisory firm located at
111 Center Street, Little Rock, Arkansas 72201. Stephens and its predecessor
have been providing securities and investment services for more than 60 years,
including discretionary portfolio management services since 1983. Stephens
currently manages investment portfolios for pension and profit sharing plans,
individual investors, foundations, insurance companies and university
endowments. Stephens does not receive compensation for acting as placement
agent. Registered broker/dealers and investment companies, insurance company
separate accounts, common and commingled trust funds, group trust and similar
organizations and entities which constitute accredited investors, as defined in
the regulations adopted under the Securities Act of 1933, as amended, may
continuously invest in the Master Portfolio of MIP.

Custodian. IBT currently acts as the Master Portfolio's custodian. The principal
business address of IBT is 200 Clarendon Street, Boston, Massachusetts 02116.
Prior to October 21, 1996, BGI acted as the Master Portfolio's custodian. The
principal business address of BGI is 45 Fremont Street, San Francisco,
California 94105. BGI did not receive compensation for its custodial services.

Transfer and Dividend Disbursing Agent. IBT also acts as the Master Portfolio's
transfer and dividend disbursing agent. Prior to March 2, 1998, Wells Fargo Bank
served as transfer and dividend disbursing agent. IBT is not entitled to receive
compensation for providing such services to MIP so long as it receives fees for
providing similar services to the funds which invest substantially all of their
assets in the Master Portfolio. To date, the Master Portfolio has not paid any
transfer and dividend disbursing agency fees.

Independent Auditor. KPMG Peat Marwick LLP has been selected as the independent
auditor for MIP. KPMG Peat Marwick LLP's address is Three Embarcadero Center,
San Francisco, California 94111.

PORTFOLIO TRANSACTIONS AND BROKERAGE
------------------------------------

BGFA assumes general supervision over placing orders on behalf of the Master
Portfolio for the purchase or sale of portfolio securities. Allocation of
brokerage transactions, including their frequency, is made in the best judgment
of BGFA and in a manner deemed fair and reasonable to shareholders. In executing
portfolio transactions and selecting brokers or dealers, BGFA seeks to obtain
the best overall terms available for the Master Portfolio. In assessing the best
overall terms available for any transaction, BGFA considers factors deemed
relevant, including the breadth of the market in the security, the price of the
security, the financial condition and execution capability of the broker or
dealer, and the reasonableness of the commission, if any, both for the specific
transaction and on a continuing basis. The primary consideration is prompt
execution of orders at the most favorable net price. Certain of the brokers or
dealers with whom the Master Portfolio may transact business offer commission
rebates to the Master Portfolio. BGFA considers such rebates in assessing the
best overall terms available for any transaction. The overall reasonableness of
brokerage commissions paid is evaluated by BGFA based upon its knowledge of
available information as to the general level of commissions paid by other
institutional investors for comparable services. Prior to January 1, 1996, WFNIA
exercised general supervision over placing orders on behalf of the Master
Portfolio for the purchase or sale of portfolio securities and the brokerage
allocation practices described herein were applicable to WFNIA and the Master
Portfolio prior to January 1, 1996.

Brokers also are selected because of their ability to handle special executions
such as are involved in large block trades or broad distributions, provided the
primary consideration is met. Portfolio turnover may vary from year to year, as
well as within a year. High turnover rates over 100% are likely to result in
comparatively greater brokerage expenses.

B-23
<PAGE>

Brokerage Commissions. For the fiscal years ended February 28, 1997, February
28, 1998 and February 28, 1999, the Master Portfolio paid the dollar amounts of
brokerage commissions indicated below. None of these brokerage commissions were
paid to affiliated brokers.

Commissions Paid

Year Ended Year Ended Year Ended
February 29, 1997 February 27, 1998 February 28, 1999
----------------- ----------------- -----------------
$69,826 $112,100 $366,484

Securities of Regular Broker/Dealers. As of February 28, 1998, the Master
Portfolio owned securities of its "regular brokers or dealers" or their parents,
as defined in the 1940 Act, as follows:

Broker/Dealer Amount
------------- ------
American Express Company $16,850,701
Bear Stearns Co. Inc. $ 1,738,572
Chase Manhattan Corp. $23,126,364
Lehman Brothers Holding Inc. $ 2,116,979
Merrill Lynch & Co. $ 9,327,888
J.P. Morgan $ 6,682,126
Morgan Stanley Dean Witter $17,950,675
Charles Schwab & Co. Inc. $10,273,594
Well Fargo & Co. $20,414,625

SHAREHOLDER INVESTMENT ACCOUNT
------------------------------

A Shareholder Investment Account is established for each Investor in the
Fund./1/ Each account contains a record of the shares of the Fund maintained by
the Fund's Transfer Agent. No share certificate will be issued. Whenever a
transaction takes place in the Shareholder Investment Account, the Investor will
be mailed a statement showing the transaction and the status of the account.

REDEMPTION OF SHARES
--------------------

With respect to the Fund, the Trustees may suspend the right of redemption,
postpone the date of payment or suspend the determination of net asset value (a)
for any period during which the New York Stock Exchange ("NYSE") is closed
(other than for customary weekend and holiday closing), (b) for any period
during which trading in the markets the Fund normally uses is restricted, (c)
when an emergency exists as determined by the SEC so that disposal of the Fund's
investments or a determination of its net asset value is not reasonably
practicable, or (d) for such other periods as the SEC by order may permit for
the protection of the Trust's shareholders. While the Trust's Declaration of
Trust would permit it to redeem shares in cash or other assets of the Fund or
both, the Trust has filed an irrevocable election with the SEC to pay in cash
all requests for redemption received from any shareholder if the aggregate
amount of such requests in any 90-day period does not exceed the lesser of
$250,000 or 1% of the Fund's net assets.

VALUATION OF PORTFOLIO SECURITIES
---------------------------------

The net asset value per share of the Fund is determined by the Fund's Custodian
at 4:00 p.m., Eastern Time, on each day the NYSE is open for trading and the
Custodian is open for business. The NYSE currently is not open for trading on
New Year's Day, Martin Luther King, Jr. Day, President's Day, Good Friday,
Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day
and on occasion is closed early or entirely due to weather or other conditions.

- ----------
/(1)/ "Investor" includes a plan sponsor, plan fiduciary, trustee,
institutional investor, insurance company separate investment account
and/or any other person or entity described in the Prospectus as an
eligible purchaser of shares, that purchases shares of the Trust. An
Investor that is a separate investment account of MassMutual is referred
to as a "SIA Investor." Investors that are purchasing shares of the Fund
on behalf of a Plan are sometimes referred to as "Plan Investors." The
term Investor does not include a Plan Participant.

B-24
<PAGE>

The securities of the Master Portfolio, including covered call options written
by the Master Portfolio, are valued as discussed below. Domestic securities are
valued at the last sale price on the domestic securities or commodities exchange
or national securities market on which such securities primarily are traded.
Securities not listed on a domestic exchange or national securities market, or
securities in which there were no transactions, are valued at the most recent
bid prices. Portfolio securities which are traded primarily on foreign
securities or commodities exchanges generally are valued at the preceding
closing values of such securities on their respective exchanges, except that
when an occurrence subsequent to the time a value was so established is likely
to have changed such value, then the fair value of those securities is
determined by BGFA in accordance with guidelines approved by MIP's Board of
Trustees. Short-term investments are carried at amortized cost, which
approximates value. Any securities or other assets for which recent market
quotations are not readily available are valued at fair value as determined in
good faith by BGFA in accordance with such guidelines.

Restricted securities, as well as securities or other assets for which market
quotations are not readily available, or are not valued by a pricing service
approved by MIP's Board of Trustees, are valued at fair value as determined in
good faith by BGFA in accordance with guidelines approved by MIP's Board of
Trustees. BFGA and MIP's Board of Trustees periodically review the method of
valuation. In making its good faith valuation of restricted securities, BGFA
generally takes the following factors into consideration: restricted securities
which are, or are convertible into, securities of the same class of securities
for which a public market exists usually will be valued at market value less the
same percentage discount at which purchased. This discount is revised
periodically if it is believed that the discount no longer reflects the value of
the restricted securities. Restricted securities not of the same class as
securities for which a public market exists usually are valued initially at
cost. Any subsequent adjustment from cost is based upon considerations deemed
relevant by MIP's Board of Trustees.

The proceeds received by the Fund for each issue or sale of its shares, and all
net investment income, realized and unrealized gain will be specifically
allocated to the Fund and constitute the underlying assets of the Fund. The
underlying assets of the Fund will be segregated on the books of account, and
will be charged with the liabilities in respect of the Fund and with a share of
the general liabilities of the Trust. Expenses with respect to any two or more
series of the Trust are to be allocated in proportion to the net asset values of
the respective series except where allocations of direct expenses can otherwise
be fairly made. Each class of shares of the Fund will be charged with
liabilities directly attributable to such class, and other Fund expenses are to
be allocated in proportion to the net asset values of the respective classes.

DESCRIPTION OF FUND SHARES
--------------------------

Under Massachusetts law, shareholders could, under certain circumstances, be
held personally liable for the obligations of the Trust. However, the Trust's
Declaration of Trust disclaims liability of the shareholders, Trustees, or
officers of the Trust for acts or obligations of the Trust, which are binding
only on the assets and property of the Trust, and requires that notice of such
disclaimer be given in each agreement, obligation, or instrument entered into or
executed by the Trust or the Trustees. The Trust's Declaration of Trust provides
for indemnification out of the Trust property for all loss and expense of any
shareholder held personally liable for the obligations of the Trust. Thus, the
risk of a shareholder incurring financial loss on account of shareholder
liability is considered remote since it is limited to circumstances in which the
disclaimer is inoperative and the Trust itself is unable to meet its
obligations.

MASTER PORTFOLIO ORGANIZATION
-----------------------------

The Master Portfolio is a series of MIP, an open-end, series management
investment company organized as a Delaware business trust. MIP was organized on
October 21, 1993. In accordance with Delaware law and in connection with the tax
treatment sought by MIP, MIP's Declaration of Trust provides that its investors
are personally responsible for MIP liabilities and obligations, but only to the
extent MIP's property is insufficient to satisfy such liabilities and
obligations. MIP's Declaration of Trust also provides that MIP must maintain
appropriate insurance (for example, fidelity bonding and errors and omissions
insurance) for the protection of MIP, its investors, trustees, officers,
employees and agents covering possible tort and other liabilities, and that
investors will be indemnified to the extent they are held liable for a
disproportionate share of MIP's obligations. Thus, the risk of an investor
incurring financial loss on account of investor liability is limited to
circumstances in which both inadequate insurance existed and MIP itself was
unable to meet its obligations.

B-25
<PAGE>

MIP's Declaration of Trust further provide that obligations of MIP are not
binding upon its trustees individually but only upon the property of MIP and
that the trustees will not be liable for any action or failure to act, but
nothing in the Declarations of Trust protects a trustee against any liability to
which the trustee would otherwise be subject by reason of willful misfeasance,
bad faith, gross negligence, or reckless disregard of the duties involved in the
conduct of the trustee's office.

Pursuant to MIP's Declaration of Trust, MIP's Trustees are authorized to issue
shares of beneficial interests in the Master Portfolio. Investors are entitled
to participate pro rata in distributions of taxable income, loss, gain and
credit of the Master Portfolio. Upon liquidation or dissolution of the Master
Portfolio, investors are entitled to share pro rata in the Master Portfolio's
net assets available for distribution to its investors. Investments in the
Master Portfolio have no preference, preemptive, conversion or similar rights
and are fully paid and non-assessable, except as set forth below. Investments in
the Master Portfolio may not be transferred. No certificates are issued.

Each investor is entitled to vote, with respect to matters affecting MIP's
portfolios, in proportion to the amount of its investment in MIP. Investors in
MIP do not have cumulative voting rights, and investors holding more than 50% of
the aggregate beneficial interest in MIP may elect all of the Trustees of MIP if
they choose to do so and in such event the other investors in MIP would not be
able to elect any Trustee. MIP is not required to hold annual meetings of
investors but MIP may hold special meetings of investors when in the judgment of
MIP's Trustees it is necessary or desirable to submit matters for an investor
vote.

Rule 18f-2 under the 1940 Act provides that any matter required to be submitted
under the provisions of the 1940 Act or applicable state law or otherwise to the
holders of the outstanding voting securities of an investment company, such as
MIP, will not be deemed to have been effectively acted upon unless approved by
the holders of a majority of the outstanding shares of each series of MIP
affected by such matter. Rule 18f-2 further provides that the Master Portfolio
shall be deemed to be affected by a matter unless it is clear that the interests
of the Master Portfolio in the matter are identical or that the matter does not
affect any interest of the Master Portfolio. However, the Rule exempts the
selection of independent accountants and the election of trustees from the
separate voting requirements of the Rule.

Whenever the Fund is requested to vote on a matter with respect to the Master
Portfolio, the Fund will either hold a meeting of Fund shareholders and will
cast its votes as instructed by such shareholders, or vote the shares of the
Master Portfolio held by it in the same proportion as the vote of all other
holders of such security. If the Fund is requested to vote on matters pertaining
to the Master Portfolio and the Fund holds a meeting of the Fund's shareholders,
the Trustees of the Trust will vote shares for which they receive no voting
instructions in the same proportion as the share for which they do receive
voting instructions.

As of June 1, 1998, the S&P 500 Stock Fund of MasterWorks Funds, Inc., 111
Center Street, Little Rock, Arkansas 72201, owned approximately 88.41% of the
outstanding voting securities of the Master Portfolio and could be considered a
"controlling person" of the Master Portfolio for purposes of the 1940 Act.

INVESTMENT PERFORMANCE
----------------------

The total return figures for the Fund may be provided in reports, sales
literature and advertisements. Total return quotations will be based upon a
stated period and will be computed by determining the average annual compounded
rate of return over the stated period that would equate an initial amount
invested to the ending redeemable value of the investment (assuming reinvestment
of all distributions), according to the following formula:

P(1 + T)/n/ = ERV

Where: P = a hypothetical initial payment of $1000.
T = average annual total return.
n = number of years.
ERV = ending redeemable value at the end of the stated period of a
hypothetical $1000 payment
ERV = made at the beginning of the stated period.

For periods prior to March 1, 1998 (the commencement of the Fund's operations),
the Fund calculates the performance of each class by including the corresponding
total return of the Master Portfolio and its predecessor

B-26
<PAGE>

adjusted to reflect the deduction of anticipated fees and expenses applicable to
each class of the Fund as stated in the Fee Table contained in the Prospectus.

The Fund's total return is not fixed or guaranteed and the Fund's principal is
not insured. Investment performance quotations should not be considered to be
representations of the performance for any period in the future. Total return is
a function of the value of the Fund's investment in the Master Portfolio over
time, which may be expected to fluctuate, as well as of income earned by the
Fund on such securities and of the Fund's operating expenses.

Performance Comparisons. From time-to-time and only to the extent the comparison
is appropriate for the Fund, the Trust may quote the performance of the Fund in
advertising and other types of literature and may compare the performance of the
Fund to the performance of various indices and investments for which reliable
performance data is available. The performance of the Fund may be compared in
advertising and other literature to averages, performance rankings and other
information prepared by recognized mutual fund statistical services.

Performance information for the Fund may be compared, in reports and promotional
literature, to the S&P 500 Index, the Russell 2000 Index, the Lehman Brothers
20+ Treasury Index, Donoghue's Money Fund Averages, the Lehman Brothers 5-7 Year
Treasury Index, Lehman Brothers Government Bond Index, Lehman Brothers Treasury
Bond Index, Lipper Balanced Fund Average, Lipper Growth Fund Average, Lipper
Flexible Portfolio Fund Average, Lehman Brothers Intermediate Treasury Index,
91-Day Treasury Bill Average, Morgan Stanley Capital International Index for
Europe, Australia and the Far East ("MSCI EAFE Index") or other appropriate
managed or unmanaged indices of the performance of various types of investments,
so that investors may compare the Fund's results with those of indices widely
regarded by investors as representative of the security markets in general.
Unmanaged indices may assume the reinvestment of dividends, but generally do not
reflect deductions for administrative and management costs and expenses. Managed
indices generally do reflect such deductions.

The Trust also may use the following information in advertisements and other
types of literature, only to the extent the information is appropriate for the
Fund: (1) the Consumer Price Index may be used to assess the real rate of return
from an investment in the Fund; (2) other government statistics, including, but
not limited to, The Survey of Current Business, may be used to illustrate
investment attributes of the Fund or the general economic, business, investment,
or financial environment in which the Fund operates; (3) the effect of
tax-deferred compounding on the investment returns of the Fund, or on returns in
general, may be illustrated by graphs, charts, etc., where such graphs or charts
would compare, at various points in time, the return from an investment in the
Fund (or returns in general) on a tax-deferred basis (assuming reinvestment of
capital gains and dividends and assuming one or more tax rates) with the return
on a taxable basis; and (4) the sectors or industries in which the Fund invests
may be compared to relevant indices of stocks or surveys (e.g., S&P Industry
Surveys) to evaluate the Fund's historical performance or current or potential
value with respect to the particular industry or sector.

The Fund's performance also may be compared to those of other mutual funds
having similar objectives. This comparative performance could be expressed as a
ranking prepared by Lipper Analytical Services, Inc., (including the Lipper
General Bond Fund Average, the Lipper Intermediate Investment Grade Debt Fund
Average, the Lipper Bond Fund Average, the Lipper Growth Fund Average, the
Lipper Flexible Fund Average), Donoghue's Money Fund Report, including
Donoghue's Taxable Money Market Fund Average, or Morningstar, Inc., independent
services which monitor the performance of mutual funds. The Fund's performance
will be calculated by relating net asset value per share at the beginning of a
stated period to the net asset value of the investment, assuming reinvestment of
all gains distributions and dividends paid, at the end of the period. Any such
comparisons may be useful to investors who wish to compare the Fund's past
performance with that of its competitors. Of course, past performance cannot be
a guarantee of future results.

In addition, MIP also may use, in advertisements and other types of literature,
information and statements: (1) showing that bank savings accounts offer a
guaranteed return of principal and a fixed rate of interest, but no opportunity
for capital growth; and (2) describing BGFA, and its affiliates and
predecessors, as one of the first investment managers to advise investment
accounts using asset allocation and index strategies. MIP also may include in
advertising and other types of literature information and other data from
reports and studies

B-27
<PAGE>

prepared by the Tax Foundation, including information regarding federal and
state tax levels and the related "Tax Freedom Day." MIP also may disclose in
advertising and other types of sales literature the assets and categories of
assets under management by the Master Portfolio's investment adviser, any
sub-investment adviser or their affiliates.

The quoted performance data includes the performance of the Master Portfolio
(adjusted as described above) for all periods before March 1, 1998. Past
performance is not predictive of future performance. Employee benefit plans that
invest Plan Assets in MassMutual SIAs that purchase Class S shares may be
subject to certain other charges as set forth in their respective Plan
Documents. Investors that enter into an administrative services or other
agreement with MassMutual may also be subject to certain charges as set forth in
their respective agreements. Total return figures would be lower if they
reflected these charges.

Average Annual Total Return for the year ended February 28, 1999.

- --------------------------------------------------------------------------------
Class A Class Y Class S
1 Year % % %
3 Years % % %
Since Inception (July 2, 1993) % % %
- --------------------------------------------------------------------------------

Other Advertising Items. The Trust may discuss in advertising and other types of
literature that the Fund has been assigned a rating by a nationally recognized
statistical rating organization ("NRSRO"), such as Standard & Poor's
Corporation. Such rating would assess the creditworthiness of the investments
held by the Fund. The assigned rating would not be a recommendation to purchase,
sell or hold the Fund's shares since the rating would not comment on the market
price of the Fund's shares or the suitability of the Fund for a particular
investor. In addition, the assigned rating would be subject to change,
suspension or withdrawal as a result of changes in, or unavailability of,
information relating to the Fund or its investments. The Trust may compare the
Fund's performance with other investments which are assigned ratings by NRSROs.
Any such comparisons may be useful to investors who wish to compare the Fund's
past performance with other rated investments. Of course past performance cannot
be a guarantee of future results. General mutual fund statistics provided by the
Investment Company Institute may also be used.

TAXATION
--------

The Fund intends to qualify each year and elect to be taxed as a regulated
investment company under Subchapter M of the Internal Revenue Code of 1986, as
amended (the "Code"). The Fund seeks to qualify as a regulated investment
company by investing all of its assets in the Master Portfolio and consequently,
all references to the Fund's assets and activities will be to those of the
Master Portfolio. In order to qualify as a "regulated investment company," the
Fund must, among other things: (a) derive at least 90% of its gross income from
dividends, interest, payments with respect to securities loans, gains from the
sale or other disposition of stock, securities, or foreign currencies, and other
income (including gains from forward contracts) derived with respect to its
business of investing in such stock, securities, or currencies; and (b)
diversify its holdings so that, at the close of each quarter of its taxable
year, (i) at least 50% of the value of its total assets consists of cash, cash
items, U.S. Government securities, and other securities limited generally with
respect to any one issuer to not more than 5% of the total assets of the Fund
and not more than 10% of the outstanding voting securities of such issuer, and
(ii) not more than 25% of the value of its total assets is invested in the
securities of any issuer (other than U.S. Government securities). If the Fund
fails to qualify as a regulated investment company, it will be treated as an
ordinary corporation for federal income tax purposes.

As a regulated investment company electing to have its tax liability determined
under Subchapter M, in general the Fund will not be subject to federal income
tax on its ordinary income or capital gains that are distributed. As a

B-28
<PAGE>

Massachusetts business trust, the Fund under present law will not be subject to
any excise or income taxes imposed by Massachusetts.

An excise tax at the rate of 4% will be imposed on the excess, if any, of the
Fund's "required distribution" over its actual distributions in any calendar
year. Generally, the "required distribution" is 98% of the Fund's ordinary
income for the calendar year plus 98% of its capital gain net income recognized
during the one-year period ending on October 31 (or December 31, if the Fund so
elects) plus undistributed amounts from prior years. The Fund intends to make
distributions sufficient to avoid imposition of the excise tax. Distributions
declared by the Fund during October, November or December to shareholders of
record on a date in any such month and paid by the Fund during the following
January will be treated for federal tax purposes as paid by the Fund and
received by shareholders on December 31 of the year in which declared.

Except in the case of certain shareholders eligible for preferential tax
treatment, e.g., qualified retirement or pension trusts, shareholders of the
Fund will be subject to federal income taxes on distributions made by the Fund
whether received in cash or additional shares of the Fund. Distributions by the
Fund of net income and short-term capital gains, if any, will be taxable to
shareholders as ordinary income. Designated distributions of long-term capital
gains, if any, will be taxable to shareholders as long-term capital gains,
without regard to how long a shareholder has held shares of the Fund. Under the
Taxpayer Relief Act of 1997, long-term capital gains generally will be subject
to a 28% or 20% tax rate, depending on the holding period in the portfolio
investment.

Dividends and distributions on Fund shares received shortly after their
purchase, although in effect a return of capital, are subject to federal income
taxes. Investment income and gains received by the Fund from sources outside the
United States might be subject to foreign taxes which are withheld at the
source. The effective rate of these foreign taxes cannot be determined in
advance because it depends on the specific countries in which its assets will be
invested, the amount of the assets invested in each such country and the
possible applicability of treaty relief.

Redemptions and exchanges of the Fund's shares are taxable events and,
accordingly, shareholders subject to federal income taxes may realize gains and
losses on these transactions. If shares have been held for more than one year,
gain or loss realized will be long-term capital gain or loss, provided the
shareholder holds the shares as a capital asset. Under the Taxpayer Relief Act
of 1997, long-term capital gains generally will be subject to a 28% or 20% tax
rate depending on the Investor's holding period in Fund shares. However, a loss
on the sale of shares held for six months or less will be treated as a long-term
capital loss to the extent of any long-term capital gain dividend paid to the
shareholder with respect to such shares. Furthermore, no loss will be allowed on
the sale of Fund shares to the extent the shareholder acquired other shares of
the same Fund within 30 days prior to the sale of the loss shares or 30 days
after such sale. The state and local tax effects of distributions received from
the Fund, and any special tax considerations associated with foreign investments
of the Fund, should be examined by investors with regard to their own tax
situation.

The Fund's transactions through the Master Portfolio in foreign
currency-denominated debt instruments and its hedging activities will likely
produce a difference between its book income and its taxable income. This
difference may cause a portion of the Fund's distributions of book income to
constitute returns of capital for tax purposes or require the Fund to make
distributions exceeding book income in order to permit the Fund to continue to
qualify, and be taxed under Subchapter M of the Code, as a regulated investment
company.

Under federal income tax law, a portion of the difference between the purchase
price of zero-coupon securities in which the Fund has invested through the
Master Portfolio and their face value ("original issue discount") is considered
to be income to the Fund each year even though the Fund will not receive cash
interest payments from these securities. This original issue discount (imputed
income) will make up a part of the net investment income of the Fund which must
be distributed to shareholders in order to maintain the qualification of the
Fund as a regulated investment company and to avoid federal income tax at the
level of the Fund.

The foregoing is a general and abbreviated summary of the applicable provisions
of the Code and regulations currently in effect. For the complete provisions,
reference should be made to the pertinent Code sections and regulations. The
Code and regulations are subject to change by legislative or administrative
action. This discussion of the federal income tax treatment of the Fund and its
shareholders does not describe in any respect the tax treatment of any
particular arrangement, e.g., tax-exempt trusts or insurance products, pursuant
to which or by which investments in the Fund may be made.

B-29
<PAGE>

EXPERTS

The financial statements of the Fund is set forth in the Fund's Annual Reports
as of February 28, 1999, and are incorporated herein by reference in reliance on
the report of Deloitte & Touche LLP, independent accountants, given on the
authority of that firm as experts in accounting and auditing. A copy of the
Fund's Annual Report as of February 28, 1999 is available, without charge, upon
request.

The name MassMutual Institutional Funds is the designation of the Trustees under
a Declaration of Trust dated May 28, 1993, as amended from time to time. The
obligations of the 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 the Trust, but only the property of the relevant series of the Trust
shall be bound.

B-30
<PAGE>

APPENDIX - DESCRIPTION OF SECURITIES RATINGS

Although the ratings of fixed-income securities by Standard & Poor's Ratings
Group ("S&P") and Moody's Investors Service, Inc. ("Moody's") are a generally
accepted measurement of credit risk, they are subject to certain limitations.
For example, ratings are based primarily upon historical events and do not
necessarily reflect the future. Furthermore, there is a period of time between
the issuance of a rating and the update of the rating, during which time a
published rating may be inaccurate.

The descriptions of the S&P and Moody's commercial paper, bond and municipal
securities ratings are set forth below.

Commercial Paper Ratings:

S&P commercial paper ratings are graded into four categories, ranging from A for
the highest quality obligations to D for the lowest. Issues assigned the highest
rating are regarded as having the greatest capacity for timely payment. Issues
in this category are further refined with the designations 1, 2, and 3 to
indicate the relative degree of safety. The A-1 and A-2 categories are described
as follows:

A-1 This designation indicates that the degree of safety regarding timely
payment is strong. Those issues determined to possess extremely strong
safety characteristics will be noted with a plus (+) sign designation.

A-2 Capacity for timely payment on issues with this designation is
satisfactory. However, the relative degree of safety is not as high as
for issues designated A-1.

Moody's employs three designations, all judged to be investment grade, to
indicate the relative repayment ability of rated issuers. The two highest
designations are as follows:

Issuers (or supporting institutions) rated Prime-1 (or P-1) have a superior
ability for repayment of senior short-term debt obligations. Prime-1 (or
P-1) repayment ability will normally be evidenced by many of the following
characteristics:

* Leading market positions in well-established industries.

* High rates of return on funds employed.

* Conservative capitalization structure with moderate reliance on
debt and ample asset protection.

* Broad margins in earnings coverage of fixed financial charges and
high internal cash generation.

* Well-established access to a range of financial markets and
assured sources of alternate liquidity.

Issuers (or supporting institutions) rated Prime-2 (or P-2) have a strong
ability for repayment of senior short-term debt obligations. This will normally
be evidenced by many of the characteristics cited above but to a lesser degree.
Earnings trends and coverage ratios, while sound, may be more subject to
variation. Capitalization characteristics, while still appropriate, may be more
affected by external conditions. Ample alternate liquidity is maintained.

Bond Ratings:

S&P describes its four highest ratings for corporate debt as follows:

AAA Debt rated AAA has the highest rating assigned by S&P. Capacity to pay
interest and repay principal is extremely strong.

AA Debt rated AA has a very strong capacity to pay interest and repay
principal and differs from the higher rated issues only in a small
degree.

A Debt rated A has a strong capacity to pay interest and repay principal
although it is somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions than debt in higher
rated categories.

BBB Debt rated BBB is regarded as having an adequate capacity to pay
interest and repay principal. Whereas such debt normally exhibits
adequate protection parameters, adverse economic conditions or
changing circumstances are more likely to lead to a weakened capacity
to pay interest and repay principal for debt in this category than in
higher rated categories.

B-31
<PAGE>

The ratings from AA to CCC may be modified by the addition of a plus or
minus sign to show relative standing within the major rating categories.

Moody's describes its four highest corporate bond ratings as follows:

Aaa Bonds which are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally
referred to as "gilt-edged." Interest payments are protected by a
large or by an exceptionally stable margin and principal is secure.
While the various protective elements are likely to change, such
changes as can be visualized are most unlikely to impair the
fundamentally strong position of such issues.

Aa Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they compose what are generally
known as high grade bonds. They are rated lower than the best bonds
because margins of protection may not be as large as in Aaa securities
or fluctuation of protective elements may be of greater amplitude or
there may be other elements present which make the long-term risks
appear somewhat larger than in Aaa securities.

A Bonds which are rated A possess many favorable investment attributes
and may be considered as upper medium grade obligations. Factors
giving security to principal and interest are considered adequate but
elements may be present which suggest a susceptibility to impairment
in the future.

Baa Bonds which are rated Baa are considered as medium grade obligations,
i.e., they are neither highly protected nor poorly secured. Interest
payments and principal security appear adequate for the present but
certain protective elements may be lacking or may be
characteristically unreliable over any great length of time. Such
bonds lack outstanding investment characteristics and in fact have
speculative characteristics as well.

Moody's applies numerical modifiers 1, 2 and 3 in each generic rating
classification from Aa through B in its corporate bond rating system. The
modifier 1 indicates that the security ranks in the higher end of its generic
rating category; the modifier 2 indicates a mid-range ranking; and the modifier
3 indicates that the issue ranks in the lower end of its generic rating
category.

B-32
<PAGE>

PART C: OTHER INFORMATION

ITEM 23 EXHIBITS

Exhibit A: Copy of Registrant's Agreement and Declaration of amended June 14,
1993./1/

Exhibit B: Copy of Registrant's By-Laws, as now in effect./1/

Exhibit C: None.

Exhibit D: None.

Exhibit E: (1) Copy of General Distributors Agreement between the Trust and MML
Distributors, LLC. /6/

Exhibit F: None.

Exhibit G: (1) Copy of Custodian Agreement between the Trust and Investors Bank
& Trust Company ("IBT")./1/

(2) Administrative and Shareholder Services Agreement between Registrant, on
behalf of MassMutual Indexed Equity Fund (the "Fund") and MassMutual for the
provision of administrative and shareholder services, incorporated by reference
to Exhibit E(1) to Registrant's PEA No. 11 to the Registration Statement filed
via EDGAR on April 30, 1999.

(3) Copy of Amended and Restated Transfer Agency Agreement among the Trust,
MassMutual and IBT./3/

Exhibit H: Third Party Feeder Fund Agreement with Master Investment Portfolio
and Barclays Global Fund Advisers./3/

Exhibit I: Opinion of Counsel./4/

Exhibit J:(1) Consent of Ropes & Gray./4/

(2) Consent of Independent Public Accountants./6/

(3) Powers of Attorney for Ronald J. Abdow, Charles J. McCarthy, John H.
Southworth, Mary E. Boland./1/

(4) Powers of Attorney for Richard H. Ayers, David E.A. Carson, Richard G.
Dooley, Richard W. Greene, Beverly L. Hamilton, and F. William Marshall, Jr./2/

(5) Powers of Attorney for Master Investment Portfolio./3/

Exhibit K: None.

Exhibit L: None.

Exhibit M:(1) Form of Rule 12b-1 Plan for Class A shares of the Fund./6/

(2) Form of Rule 12b-1 Plan for Class Y shares of the Fund, previously filed as
exhibit M(4) to Registrant's PEA No. 11 to the Registration Statement filed via
EDGAR on April 30, 1999.

(3) Form of Rule 12b-1 Plan for Class L shares of the Fund, previously filed as
exhibit M(5) to Registrant's PEA No. 11 to the Registration Statement filed via
EDGAR on April 30, 1999.

Exhibit N: To be filed by amendment.

Exhibit O: Amended Rule 18f-3 Plan./6/

- -------------
/1/Incorporated by reference to Registrant's Post-Effective Amendment ("PEA")
No. 4 to the Registration Statement filed via EDGAR on October 2, 1997.

/2/Incorporated by reference to Registrant's PEA No. 3 to the Registration

1
<PAGE>

Statement filed via EDGAR on April 28, 1997.

/3/Incorporated by reference to Registrant's PEA No. 7 to the Registration
Statement filed via EDGAR on February 6, 1998.

/4/Previously filed as Exhibit 10 to Registrant's PEA No. 7 to the Registration
Statement filed via EDGAR on February 6, 1998.

/5/Filed herewith.

/6/To be filed by amendment.

ITEM 24 PERSON CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT

At the date of this Post-Effective Amendment to the Registration Statement,
Registrant did not, directly or indirectly, control any person. Registrant was
organized by MassMutual primarily 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. Currently, the
Registrant provides a vehicle for the investment of assets of various separate
investment accounts established by MassMutual. The assets in such separate
accounts are, under state law, assets of the life insurance companies which have
established such accounts. Thus, at any time MassMutual and its life insurance
company subsidiaries will own such outstanding shares of Registrant's series as
are purchased with separate account assets. As a result, MassMutual will own
substantially all of the shares of Registrant, probably for a number of years.

The following entities are, or may be deemed to be, controlled by MassMutual
through the direct or indirect ownership of such entities' stock.

1. CM Assurance Company, a Connecticut corporation which operates as a life and
health insurance company, all the stock of which is owned by MassMutual. This
subsidiary is inactive.

2. CM Benefit Insurance Company, a Connecticut corporation which operates as a
life and health insurance company, all the stock of which is owned by
MassMutual. This subsidiary is inactive.

3. C.M. Life Insurance Company, a Connecticut corporation which operates as a
life and health insurance company, all the stock of which is owned by
MassMutual.

4. MML Bay State Life Insurance Company, a Connecticut corporation which
operates as a life and health insurance company, all the stock of which is owned
by MassMutual.

5. MML Distributors, LLC, a Connecticut limited liability company which operates
as a securities broker-dealer. MassMutual has a 99% ownership interest and G.R.
Phelps & Co. has a 1% ownership interest.

6. MassMutual Holding Company, a Delaware corporation which operates as a
holding company for certain MassMutual entities, all the stock of which is owned
by MassMutual.

7. MassMutual of Ireland, Limited, a corporation organized in the Republic of
Ireland which formerly operated to provide claims service to holders of
MassMutual group life and health insurance contracts. This subsidiary is
inactive and will be dissolved in the near future. All of the stock of which is
owned by MassMutual.

8. MML Series Investment Fund, a Massachusetts business trust which operates as
an open-end investment company. All the shares issued by the Trust are owned by
MassMutual and certain of its affiliates.

9. MassMutual Institutional Funds, a Massachusetts business trust which operates
as an open-end investment company, all of the shares of which are owned by
MassMutual.

2
<PAGE>

10. G.R. Phelps & Co., Inc., a Connecticut corporation which formerly operated
as a securities broker-dealer, all the stock of which is owned by MassMutual
Holding Company. This subsidiary is inactive and expected to be dissolved.

11. MassMutual Mortgage Finance, LLC, a Delaware limited liability company which
makes, acquires, holds and sells mortgage loans.

12. MML Investors Services, Inc., a Massachusetts corporation which operates as
a securities broker-dealer. MassMutual Holding Company owns 86% of the capital
stock and G.R. Phelps & Co. Inc., owns 14% of the capital stock of MML Investor
Services, Inc.

13. MassMutual Holding MSC, Inc., a Massachusetts corporation, which acts as a
holding company for MassMutual positions in investment entities organized
outside the United States. MassMutual Holding Company owns all the outstanding
shares of MassMutual Holding MSC, Inc. This subsidiary qualifies as a
"Massachusetts Security Corporation" under Chapter 63 of Massachusetts General
Laws.

14. MassMutual Holding Trust I, a Massachusetts business trust, which operates
as a holding company for separately staffed MassMutual investment subsidiaries.
MassMutual Holding Company owns all the outstanding shares of MassMutual Holding
Trust I.

15. MassMutual Holding Trust II, a Massachusetts business trust, which operates
as a holding company for non-staffed MassMutual investment subsidiaries.
MassMutual Holding Company owns all the outstanding shares of MassMutual Holding
Trust II.

16. MassMutual International, Inc., a Delaware corporation which operates as a
holding company for those entities constituting MassMutual's international
insurance operations, all of the stock of which is owned by MassMutual Holding
Company.

17. MML Insurance Agency, Inc., a Massachusetts corporation which operates as an
insurance broker, all of the stock of which is owned by MML Investors Services,
Inc.

18. MML Securities Corporation, a Massachusetts corporation which operates as a
"Massachusetts Securities Corporation", under Section 63 of the Massachusetts
General Laws, all of the stock of which is owned by MML Investors Services, Inc.

19. DISA Insurance Services of America, Inc., an Alabama corporation which
operates as an insurance broker. MML Insurance Agency, Inc. owns all the shares
of outstanding stock.

20. Diversified Insurance Services of America, Inc., a Hawaii corporation which
operates as an insurance broker. MML Insurance Agency, Inc. owns all the shares
of outstanding stock.

21. MML Insurance Agency of Mississippi, P.C., a Mississippi corporation that
operates as an insurance broker and is controlled by MML Insurance Agency, Inc.

22. MML Insurance Agency of Nevada, Inc., a Nevada corporation that operates as
an insurance broker, all of the stock of which is owned by MML Insurance Agency,
Inc.

23. MML Insurance Agency of Ohio, Inc., an Ohio corporation which operates as an
insurance broker and is controlled by MML Insurance Agency, Inc. through a
voting trust agreement.

24. MML Insurance Agency of Texas, Inc., a Texas corporation which operates as
an insurance broker and is controlled by MML Insurance Agency, Inc. through an
irrevocable proxy arrangement.

25. MassMutual Corporate Value Limited, a Cayman Islands corporation which holds
88.33% ownership interest in MassMutual Corporate Value Partners Limited,
another Cayman Islands Corporation operating as a high yield bond fund
(MassMutual Holding MSC, Inc. 46.41%).

3
<PAGE>

26. MassMutual Corporate Value Partners Limited, a Cayman Islands corporation
that operates as a high yield bond fund. MassMutual Corporate Value Limited
holds approximately 88% ownership interest in this company and MassMutual holds
approximately 5% ownership interest in this company.

27. 9048-5434 Quebec, Inc., a Canadian corporation, which operates as the owner
of Hotel du Parc in Montreal, Quebec, Canada. MassMutual Holding MSC, Inc. owns
all the shares of 9048-5434 Quebec, Inc.

28. 1279342 Ontario Limited, a Canadian corporation, which operates as the owner
of Deerhurst Resort in Huntsville Ontario, Canada. MassMutual Holding MSC, Inc.
owns all of the shares of 1279342 Ontario Limited.

29. Antares Capital Corporation, a Delaware corporation that operates as a
finance company. MassMutual Holding Trust I owns approximately 99% of the
capital stock of Antares.

30. Charter Oak Capital Management, Inc., a Delaware corporation that operates
as a manager of institutional investment portfolios. MassMutual Holding Trust I
owns 80% of the capital stock of Charter Oak.

31. Cornerstone Real Estate Advisers, Inc., a Massachusetts corporation which
operates as an investment adviser, all the stock of which is owned by MassMutual
Holding Trust I.

32. DLB Acquisition Corporation ("DLB") is a Delaware corporation, which
operates as a holding company for David L. Babson and Company Inc. MassMutual
Holding Trust I owns 85% of the outstanding capital stock of DLB.

33. Oppenheimer Acquisition Corporation ("OAC") is a Delaware corporation, which
operates as a holding company for the Oppenheimer companies. MassMutual Holding
Trust I owns 89% of the capital stock of OAC.

34. David L. Babson and Company Incorporated, a Massachusetts corporation which
operates as an investment adviser, all of the stock of which is owned by DLB.

35. Babson Securities Corporation, a Massachusetts corporation which operates as
a securities broker-dealer, all of the stock of which is owned by David L.
Babson and Company Incorporated.

36. Babson-Stewart-Ivory International, a Massachusetts general partnership,
which operates as an investment adviser. David L. Babson and Company
Incorporated holds a 50% ownership interest in the partnership.

37. Potomac Babson Incorporated, a Massachusetts corporation which operates as
an investment adviser. David L. Babson and Company Incorporated owns 60% of the
outstanding shares of Potomac Babson Incorporated.

38. OppenheimerFunds, Inc., a Colorado corporation which operates as an
investment adviser to the OppenheimerFunds, all of the stock of which is owned
by OAC.

39. Centennial Asset Management Corporation, a Delaware corporation that
operates as the investment adviser and general distributor of the Centennial
Funds. OppenheimerFunds, Inc. owns all the stock of Centennial Asset Management
Corporation.

40. HarbourView Asset Management Corporation, a New York corporation, which
operates as an investment adviser, all the stock of which is owned by
OppenheimerFunds, Inc.

41. OppenheimerFunds Distributor, Inc., a New York corporation, which operates
as a securities broker dealer, all the stock of which is owned by
OppenheimerFunds, Inc.

42. Oppenheimer Partnership Holdings, Inc., a Delaware corporation which
operates as a holding company, all the stock of which is owned by
OppenheimerFunds, Inc.

43. Oppenheimer Real Asset Management, Inc., a Delaware corporation which is the
sub-adviser to a mutual fund investing in the commodities markets, all the stock
of which is owned by OppenheimerFunds, Inc.

4
<PAGE>

44. Shareholder Financial Services, Inc., a Colorado corporation which operates
as a transfer agent for mutual funds, all the stock of which is owned by
OppenheimerFunds, Inc.

45. Shareholder Services, Inc., a Colorado corporation which operates as a
transfer agent for various Oppenheimer and MassMutual funds, all the stock of
which is owned by OppenheimerFunds, Inc.

46. Centennial Capital Corporation, a Delaware corporation that formerly
sponsored a unit investment trust. Centennial Asset Management Corporation owns
all the outstanding shares of Centennial Capital Corporation.

47. Cornerstone Office Management, LLC, a Delaware limited liability company
which serves as the general partner of Cornerstone Suburban Office, LP that is
50% owned by Cornerstone Real Estate Advisers, Inc. and 50% owned by MML Realty
Management Corporation.

48. Cornerstone Suburban Office Investors, LP, a Delaware limited partnership,
which operates as a real estate operating company. Cornerstone Office
Management, LLC holds a 1% general partnership interest in this fund and
MassMutual holds a 99% limited partnership interest.

49. CM Advantage, Inc., a Connecticut corporation that serves as a general
partner in real estate limited partnerships. This subsidiary is largely inactive
and will be dissolved in the near future. MassMutual Holding Trust II owns all
of the outstanding stock.

50. CM International,Inc., a Delaware corporation which is the issuer of
collateralized mortgage obligation securities. MassMutual Holding Trust II owns
all the outstanding stock of CM International, Inc.

51. CM Property Management, Inc., a Connecticut corporation which serves as the
General Partner of Westheimer 335 Suites Limited Partnership. The Partnership
holds a ground lease with respect to hotel property in Houston, Texas, all the
stock of which is owned by MassMutual Holding Trust II.

52. HYP Management, Inc., a Delaware corporation which operates as the "LLC
Manager" of MassMutual High Yield Partners II LLC, a high yield bond fund.
MassMutual Holding Trust II owns all the outstanding stock of HYP Management,
Inc.

53. MMHC Investment, Inc., a Delaware corporation which is a passive investor in
MassMutual/Darby CBO IM, Inc., MassMutual/Darby CBO, LLC, Somers CDO, Limited,
MassMutual High Yield Partners II, LLC and other MassMutual investments.
MassMutual Holding Trust II owns all the outstanding stock of MMHC Investment,
Inc.

54. MassMutual High Yield Partners II LLC, a Delaware limited liability company,
that operates as a high yield bond fund. MassMutual holds approximately 2.52%,
MMHC Investment Inc. holds approximately 34.87% , and HYP Management, Inc. holds
approximately 3.82%, for an approximate total of 41.21% of the ownership
interest in this company.

55. MML Realty Management Corporation, a Massachusetts Corporation which
formerly operated as a manager of properties owned by MassMutual, all the stock
of which is owned by MassMutual Holding Trust II.

56. MassMutual Benefits Management, Inc., (formerly Westheimer 335 Suites, Inc.)
a Delaware Corporation which supports MassMutual with benefit plan
administration and planning services. MassMutual Holding Trust II owns all of
the outstanding stock.

57. Somers CDO, Limited, a Cayman Islands corporation that operates as a fund
investing in high yield debt securities of primarily U.S. issues. MMHC
Investment Inc., holds 38.10% of the subordinated notes of this issue which are
treated as equity for tax purposes. Registrant is the collateral manager of
Somers CDO, Limited.

58. 505 Waterford Park Limited Partnership, a Delaware limited partnership,
which holds title to an office building in Minneapolis, Minnesota. MML Realty

5
<PAGE>

Management Corporation holds a 1% general partnership interest and MassMutual
holds a 99% limited partnership interest.

59. MassMutual/Darby CBO IM Inc., a Delaware corporation which operates as the
LLC Manager of MassMutual/Darby CBO LLC, a collateralized bond obligation fund.
MMHC Investment, Inc. owns 50% of the capital stock of this company.

60. MassMutual/Darby CBO LLC, a Delaware limited liability company that operates
as a fund investing in high yield debt securities of U.S. and emerging market
issuers. MassMutual holds 1.79%, MMHC Investment Inc. holds 44.91% and
MassMutual High Yield Partners LLC, holds 2.39% of the ownership interest in
this company.

61. Urban Properties, Inc., a Delaware corporation which serves as a General
Partner of real estate limited partnerships and as a real estate holding
company, all the stock of which is owned by MassMutual Holding Trust II.

62. Westheimer 335 Suites Limited Partnership, a Texas limited partnership of
which MassMutual Benefits Management is the general partner.

63. MassMutual Internacional (Argentina) S.A., a corporation organized in the
Argentine Republic, which operates as a holding company. MassMutual
International Inc. owns 99% of the outstanding shares and MassMutual Holding
Company owns the remaining 1% of the shares.

64. MassMutual Internacional (Chile) S.A., a corporation organized in the
Republic of Chile, which operates as a holding company. MassMutual International
Inc. owns 99% of the outstanding shares and MassMutual Holding Company owns the
remaining 1% of the shares.

65. MassMutual International (Bermuda) Ltd., a corporation organized in Bermuda,
which operates as a life insurance company, all of the stock of which is owned
by MassMutual International Inc.

66. MassMutual International (Luxembourg) S.A., a corporation organized in the
Grand Duchy of Luxembourg, which operates as a life insurance company.
MassMutual International Inc. owns 99% of the outstanding shares and MassMutual
Holding Company owns the remaining 1% of the shares.

67. MassLife Seguros de Vida S.A., a corporation organized in the Argentine
Republic, which operates as a life insurance company. MassMutual International
Inc. owns 99.9% of the outstanding capital stock of MassLife Seguros de Vida
S.A.

68. MassMutual Services, S.A., a corporation organized in the Argentine Republic
which operates as a service company. MassMutual Internacional (Argentina) S.A.
owns 99% of the outstanding shares and MassMutual International, Inc. owns 1% of
the shares.

69. Mass Seguros de Vida S.A., a corporation organized in the Republic of Chile,
which operates as a life insurance company. MassMutual International (Chile)
S.A. owns 33.5% of the outstanding capital stock of Mass Seguros de Vida S.A.

70. Origen Inversiones S.A., a corporation organized in the Republic of Chile
which operates as a holding company. MassMutual Internacional (Chile) S.A. holds
a 33.5% ownership interest in this corporation.

71. Compania de Seguros VidaCorp, S.A., a corporation organized in the Republic
of Chile, which operates as an insurance company. Origen Inversiones S.A. owns
99% of the outstanding shares of this company.

72. Oppenheimer Series Fund Inc., a Maryland corporation which operates as an
investment company of which MassMutual and its affiliates own a majority of
certain series of shares issued by the fund.

73. Panorama Series Fund, Inc., a Maryland corporation which operates as an
open-end investment company. All shares issued by the fund are owned by
MassMutual and certain affiliates.

74. The DLB Fund Group, a Massachusetts business trust which operates as an
open-end investment company advised by David L. Babson and Company

6
<PAGE>

Incorporated. MassMutual owns at least 25% of each series of shares issued by
the fund.

75. Saar Holdings CDO, Limited, a Cayman Islands corporation that operates as a
collateralized debt obligation fund investing in high yield debt securities of
primarily U.S. issuers including, to a limited extent, convertible high yield
bonds. MMHC Investment Inc. holds 40% of the mandatorily redeemable preferred
shares of this issuer. Such preferred shares are treated as equity for tax
purposes. Registrant is the collateral mananger of Saar Holdings CDO, Limited.

76. Enhanced Mortgage-Backed Securities Fund Limited, a special purpose company
incorporated with limited liability in the Cayman Islands investing primarily in
residential and commercial mortgage backed securities and through the
application of various portfolio optimization techniques. Massachusetts Mutual
Life Insurance Company is the Investment Manager and Valuation Agent and holds
all of the Class B notes and 48% of the Class C Certificates and at least 25% of
the aggregate principal amount of Class C Certificates directly or through a
wholly owned affiliate.

MassMutual acts as the investment adviser of the following investment companies,
and as such may be deemed to control them.

1. MML Series Investment Fund, a Massachusetts business trust which operates as
an open-end investment company. All shares issued by the trust are owned by
MassMutual and certain of its affiliates.

2. MassMutual Corporate Investors, A Massachusetts business trust which operates
as a closed-end investment company. MassMutual serves as Investment Adviser to
the Trust.

3. MassMutual Corporate Value Partners Limited, a Cayman Islands corporation
that operates as a high-yield bond fund. MassMutual Corporate Value Limited
holds an approximately 93% ownership interest in this company.

4. MassMutual High Yield Partners LLC, a Delaware limited liability company,
that operates as a high yield bond fund. MassMutual holds approximately 2.52%,
MMHC Investment Inc. holds approximately 34.87%, and HYP Management, Inc. holds
approximately 3.82% for an approximate total of 41.21% of the ownership interest
in this company.

5. MassMutual Institutional Funds, a Massachusetts business trust which operates
as an open-end investment company, all of the shares of which are owned by
MassMutual.

6. MassMutual Participation Investors, a Massachusetts business trust which
operates as a closed-end investment company. MassMutual serves as investment
adviser to the Trust.

7. MassMutual/Darby CBO, LLC, a Delaware limited liability Company that operates
as a fund investing in high yield debt securities of U.S. and emerging market
issuers. MassMutual owns 1.79%, MMHC Investment, Inc. owns 44.91% and MassMutual
High Yield Partners LLC owns 2.39% of the ownership interest in this company.

8. Somers CDO, Limited, a Cayman Islands corporation that operates as a fund
investing in high yield debt securities of primarily U.S. issues. MMHC
Investment Inc., holds 38.10% of the subordinated notes of this issue which are
treated as equity for tax purposes. Registrant is the collateral manager of
Somers CDO, Limited.

Item 25: Indemnification

Article VIII of Registrant's Agreement and Declaration of Trust provides for the
indemnification of Registrant's Trustees and officers. Registrant undertakes to
apply the indemnification provisions of its Agreement and Declaration of Trust
in a manner consistent with Securities and Exchange Commission Release No.
IC-11330 so long as the interpretation of Section 17(h) and 17(i) of the
Investment Company Act of 1940 (the "1940 Act") set forth in such Release shall
remain in effect and be consistently applied.

7
<PAGE>

Trustees and officers of Registrant are also indemnified by MassMutual pursuant
to its by-laws which apply to subsidiaries, including Registrant. No
indemnification is provided with respect to any liability to any entity which is
registered as an investment company under the 1940 Act or to the security
holders thereof, where the basis for such liability is willful misfeasance, bad
faith, gross negligence or reckless disregard of the duties involved in the
conduct of office.

MassMutual's directors' and officers' liability insurance program, which covers
Registrant's Trustees and officers, consists of two distinct coverages. The
first coverage reimburses MassMutual, subject to specified limitations, for
amounts which MassMutual is legally obligated to pay out under its
indemnification by-law, discussed above. The second coverage directly protects a
Trustee or officer of Registrant against liability from shareholder derivative
and similar lawsuits which are indemnifiable under the law. There are, however,
specific acts giving rise to liability which are excluded from this coverage.
For example, no Trustee or officer is insured against personal liability for
libel or slander, acts of deliberate dishonesty, fines or penalties, illegal
personal profit or advantage at the expense of Registrant or its shareholders,
violation of employee benefit plans, regulatory statutes, and similar acts which
would traditionally run contrary to public policy and hence reimbursement by
insurance.

MassMutual's present insurance coverage has an overall limit of $75 million
annually ($15 million of which is underwritten by Continental Casualty Company,
$20 million of which is underwritten by Executive Risk Indemnity, Inc., $25
million of which is underwritten by Federal Insurance Co. ("Chubb"), and $15
million of which is underwritten by Sargasso Mutual Insurance Company). There is
a deductible of $200,000 per claim under the corporate coverage. There is no
deductible for individual trustees or officers.

Insofar as indemnification for liabilities arising under the Securities Act of
1933 (the "1933 Act") may be permitted to trustees, officers and controlling
persons of Registrant pursuant to the foregoing provisions, or otherwise,
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
1933 Act, and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by Registrant
of expenses incurred or paid by a Trustee, officer or controlling person of
Registrant in the successful defense of any action, suit or proceeding) is
asserted by such Trustee, officer or controlling person in connection with the
securities being registered, Registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the 1933 Act and will be governed by the
final adjudication of such issue.

Item 26: Business and Other Connections of the Investment Adviser

The Fund currently does not retain an investment adviser because the Fund's
assets are invested in the S&P 500 Index Master Portfolio (the "Master
Portfolio") of Master Investment Portfolio ("MIP"). Barclays Global Fund
Advisors ("BGFA") serves as the investment adviser to the Master Portfolio.

BGFA's business is that of a registered investment adviser to certain
open-end, management investment companies and various other institutional
investors. The directors and officers of BGFA consist primarily of persons who
during the past two years have been active in the investment management business
of the former sub-adviser to the Master Portfolio, Wells Fargo Nikko Investment
Advisors ("WFNIA") and, in some cases, the service business of Barclays
GlobalInvestors, N.A. ("BGI"). Each of the directors and executive officers of
BGFA also have substantial responsibilities as directors and/or officers of BGI.
To the knowledge of the Registrant, except as set forth below, none of the
directors or executive officers of BGFA is or has been at any time during the
past two fiscal years engaged in any other business, profession, vocation or
employment of a substantial nature.

8
<PAGE>

Principal Business(es) During at Least the
Name and Position at BGFA Last Two Fiscal Years
- ------------------------- ------------------------------------------
Garrett Bouton Chairman and Chief Executive Officer of
Chairman and Chief BGFA; Director and Chief Operating
Executive Officer Officer of BGI.

Patricia C. Dunn Director of BGFA and Managing Director;
Director of BGFA and Chairman and Director of BGI.
Managing Director

Lawrence G. Tint Director and Managing Director of BGFA
Director and Managing Director and Managing Director of BGI
Director of BGFA

Geoffrey Fletcher Chief Financial Officer of BGFA and BGI.
Chief Financial Officer

Andrea M. Zulberti Chief Administrative Officer of BGFA and BGI.
Chief Administrative Officer

Joanne T. Medero Secretary of BGFA and BGI.
Secretary

Theda R. Haber Assistant Secretary of BGFA and BGI.
Assistant Secretary

Terri L. Slane Assistant Secretary of BGFA and BGI.
Assistant Secretary

ITEM 27: PRINCIPAL UNDERWRITERS

(a) Effective May 3, 1999, MML Distributors, LLC will become general
distributor for the MassMutual Institutional Funds (the "Trust"), a
Massachusetts business trust registered as an investment company under the
Investment Company Act of 1940. There are eleven separate series of the Trust:

(1) MassMutual Prime Fund

(2) MassMutual Short-Term Bond Fund

(3) MassMutual Core Bond Fund

(4) MassMutual Diversified Bond Fund

(5) MassMutual Balanced Fund

(6) MassMutual Core Equity Fund

(7) MassMutual Growth Equity Fund

(8) MassMutual Small Cap Value Equity Fund

(9) MassMutual Mid Cap Growth Equity Fund

(10) MassMutual Small Cap Growth Equity Fund

(11) MassMutual International Equity Fund

(b) The following are names and positions of Officers and Member
Representatives of MML Distributors, LLC:

KENNETH M. RICKSON

Member Representative, G.R. Phelps & Co., Inc., President (5/1/96), CEO
(12/22/97), Main OSJ Supervisor (12/22/97), One Monarch Place 1414 Main Street
Springfield, MA 01144-1013.

MARGARET SPERRY

Member Representative, Massachusetts Mutual Life Insurance Co.(5/1/96),
1295 State Street, Springfield, MA 01111.

RONALD E. THOMSON

Vice President (5/1/96), One Monarch Place 1414 Main Street Springfield, MA
01144-1013.

9
<PAGE>

JOHN E. FORREST

Vice President (12/22/97), One Monarch Place 1414 Main Street Springfield,
MA 01144-1013.

MICHAEL L. KERLEY

Vice President, Assistant Secretary, One Monarch Place 1414 Main Street,
Springfield MA 01144-1013

JAMES T. BAGLEY

Treasurer (12/22/97), One Monarch Place 1414 Main Street, Springfield MA
01144-1013.

BRUCE C. FRISBIE

Assistant Treasurer, 1295 State Street, Springfield MA 01111-0001.

RAYMOND W. ANDERSON

Assistant Treasurer, 140 Garden Street, Hartford CT 06154.

ANN F. LOMELI

Secretary, 1295 State Street, Springfield MA 01111-0001.

MARILYN A. SPONZO

Chief Legal Officer (12/22/97), Assistant Secretary (4/9/98), One Monarch
Place 1414 Main Street, Springfield MA 01144-1013.

ROBERT ROSENTHAL

Compliance Officer (12/22/97), One Monarch Place 1414 Main Street,
Springfield MA 01144.

KATHLEEN M. DANSEREAU

Registration Manager, 1414 Main Street, Springfield MA 01144.

RUTH HOWE

Director of Continuing Education (4/9/98), 1414 Main Street, Springfield MA
01144.

PETER CUOZZO

Variable Life Supervisor and Hartford OSJ Supervisor (4/9/98), 140 Garden
Street Hartford, CT 06154.

MAUREEN R. FORD

Variable Annuity Supervisor (4/9/98), 140 Garden Street, Hartford CT 06154.

ANNE MELISSA DOWLING

Large Corporate Marketing Supervisor, 140 Garden Street, Hartford CT 06154.

c) Not Applicable

ITEM 28: LOCATION OF ACCOUNTS AND RECORDS

Each account, book or other document required to be maintained by
Registrant pursuant to Section 31 (a) of the Investment Company Act of 1940 and
Rules 31a-1 to 31a-3 thereunder are maintained as follows:

(Declaration of Trust and Bylaws)
MassMutual Institutional Funds
1295 State Street
Springfield, Massachusetts 01111

10
<PAGE>

(With respect to its services as Administrator)
Massachusetts Mutual Life Insurance Company
1295 State Street
Springfield, Massachusetts 01111

(With respect to its services as Distributor)
MML Distributors, LLC.
1414 Main Street
Springfield, MA 01144

(With respect to its services as Sub-Administrator, Transfer Agent and
Custodian)
Investors Bank & Trust Company
200 Clarendon Street
Boston, Massachusetts 02116

(With respect to their services as counsel)
Ropes & Gray
One International Place
Boston, Massachusetts 02110

Item 29: Management Services

Not Applicable.

ITEM 30: UNDERTAKINGS

(a) The Registrant hereby undertakes to call a meeting of shareholders for
the purposes of voting upon the question of removal of a trustee or trustees,
and to assist in communications with other shareholders as required by Section
16(c) of the Securities Act of 1933, as amended, but only where it is requested
to do so by the holders of at least 10% of the Registrant's outstanding voting
securities.

(b) The Registrant undertakes to furnish each person to whom a prospectus
is delivered with a copy of the Registrant's latest annual report to
shareholders, upon request and without charge.

11
<PAGE>

Pursuant to the requirements of the Securities Act of 1933, as amended, and the
Investment Company Act of 1940, as amended, the Registrant has duly caused this
post-effective amendment to the Registration Statement to be signed on its
behalf by the undersigned, thereto duly authorized, in the City of Springfield
and the Commonwealth of Massachusetts on the 30th day of April, 1999.

MASSMUTUAL INSTITUTIONAL FUNDS

By: /s/ Stuart H. Reese
-------------------
Stuart H. Reese
President

Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities indicated on the 30th day of April, 1990.

Signature Title
--------- -----

/s/ Stephen L. Kuhn* Chairman &
- ---------------------------- Trustee
Richard G. Dooley

/s/ Stephen L. Kuhn* Trustee
- ----------------------------
Ronald J. Abdow

/s/ Stephen L. Kuhn* Trustee
- ----------------------------
Richard H. Ayers

/s/ Stephen L. Kuhn* Trustee
- ----------------------------
Mary E. Boland

/s/ Stephen L. Kuhn* Trustee
- ----------------------------
David E. A. Carson

/s/ Stephen L. Kuhn* Trustee
- ----------------------------
Richard W. Greene

/s/ Stephen L. Kuhn* Trustee
- ----------------------------
Beverly L. Hamilton

/s/ Stephen L. Kuhn* Trustee
- ----------------------------
F. William Marshall, Jr.

/s/ Stephen L. Kuhn* Trustee
- ----------------------------
Charles J. McCarthy

/s/ John V. Murphy Trustee
- ----------------------------
John V. Murphy

/s/ Stephen L. Kuhn* Trustee
- ----------------------------
John H. Southworth

/s/ Michael D. Hays Vice President
- ---------------------------- and Chief Financial Officer
Michael D. Hays

/s/ Mark B. Ackerman Treasurer
- ----------------------------
Mark B. Ackerman

/s/ Stephen L. Kuhn*
- ----------------------------

*Stephen L. Kuhn, as Attorney-in-fact pursuant to Powers of Attorney granted on
or about August 5, 1994, April 18, 1996, April 21, 1997, and April 12, 1999.