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SUPPLEMENT DATED NOVEMBER 20, 1996 TO BE ATTACHED TO
DIVERSIFIED INVESTORS VARIABLE FUNDS PROSPECTUS
DATED OCTOBER 18, 1996
Effective November 15, 1996, Diversified Investment Advisors, Inc.
("Diversified") terminated its Subadvisory Agreement with respect to the Equity
Growth Series with Jundt Associates, Inc. ("Jundt") and entered into a new
Subadvisory Agreement with respect to the Equity Growth Series with Chancellor
LGT Asset Management, Inc. ("Chancellor"). Under the terms of this new
Subadvisory Agreement, Chancellor receives a per annum subadvisory fee equal to
0.50% on the first $50 million of assets; 0.30% on the next $75 million of
assets; 0.25% on the next $75 million of assets; and 0.20% on assets in excess
of $200 million. In addition, the Investment Advisory Agreement between
Diversified and Diversified Investors Portfolios, on behalf of the Equity Growth
Series, was amended effective November 15, 1996 to provide for a per annum
investment advisory fee payable to Diversified of 0.62% on all assets. The
principal address of Chancellor is 1166 Avenue of the Americas, New York, New
York 10036. Total assets under management for Equity Growth clients at September
30, 1996 were approximately $1.5 billion, none of which were assets of
registered investment companies. Investment management decisions of Chancellor
are made by committee and not by managers individually. The Equity Growth Series
invests primarily in stocks of companies that have a market value of all their
issued and outstanding common stock of $1 billion or greater. The Series'
weighted average market capitalization is expected to be $10 billion or greater.
The average annual total returns at December 31, 1995 for all private accounts
and collective investment vehicles managed by Chancellor with investment
objectives, policies and restrictions substantially similar to the Equity Growth
Fund, adjusted to assume that all charges, expenses and fees of the Equity
Growth Fund presently in effect were deducted, are as follows: 1 year -- 37.1%;
3 years -- 11.1%; 5 years -- 17.8%; 10 years -- 17.6%; and Since
Inception -- 17.6%.
On October 24, 1996, Liberty Investment Management, Inc. ("Liberty"), one
of the Subadvisers with respect to the Special Equity Series, announced that it
had entered into a definitive agreement to be acquired by Goldman Sachs Asset
Management, a division of Goldman Sachs & Co. This transaction is expected to
occur in January 1997.
All information in the Diversified Investors Variable Funds prospectus
dated October 18, 1996 relating to Jundt and the Equity Growth Portfolio and
Liberty and the Special Equity Portfolio, including, without limitation, fee
information on page 54, the first and fourth paragraphs on page 56 and the
performance information on page 31, is hereby supplemented and/or superseded, as
appropriate, by the information set forth in the preceding paragraphs of this
Prospectus Supplement.
2529-10/96A 33-73734
