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SUPPLEMENT DATED AUGUST 25, 1999 TO BE ATTACHED TO THE
DIVERSIFIED INVESTORS VARIABLE FUNDS/THE DIVERSIFIED
INVESTORS STRATEGIC VARIABLE FUNDS PROSPECTUS
DATED MAY 3, 1999
Effective August 18, 1999, Diversified Investment Advisors, Inc.
("Diversified") terminated its Agreement with respect to the
Government/Corporate Bond Portfolio with 1740 Advisers, Inc. and entered into a
new Subadvisory Agreement with respect to the Government/Corporate Bond
Portfolio with Payden & Rygel. In addition, the name of the Government/Corporate
Bond Series was changed to the Core Bond Series. The name of the underlying
Portfolio in which the Core Bond Series invests all of its assets was changed to
the Core Bond Portfolio. Payden & Rygel was formed in 1984 and is owned by Joan
A. Payden, John P. Isaacson and Scott A. King. Payden & Rygel (or its
predecessors) has been a registered investment adviser since 1983. The principal
business address of Payden & Rygel is 222 South Grand Avenue, 32nd Floor, Los
Angeles, California 90071. Investment management decisions of Payden & Rygel are
made by committee and not by managers individually.
Payden & Rygel uses both "top down" and "bottom up" analysis to determine
sector, security and duration positions for the Core Bond Portfolio. These three
factors are jointly determined and are interdependent. The overall position in
the corporate sector, for example, is established in conjunction with
assessments of relative value for specific corporate securities. Extensive
bottom up analysis using a variety of valuation tools is conducted for sector
allocation and security selection. Duration policy is primarily a result of
sector allocations and expected long-term interest rate trends (rather than
short-term interest rate forecasting). Yield curve positioning is also a key
aspect of duration management. Security sales decisions are driven by the same
criteria as purchase decisions.
All information in the Diversified Investors Variable Funds/the Diversified
Investors Strategic Variable Funds prospectus dated May 3, 1999 relating to the
Government/Corporate Bond Series/Portfolio is hereby supplemented and/or
superseded, as appropriate, by the information set forth in the preceding
paragraphs of this Prospectus Supplement.
Form 2892(8/99) 33-73734
333-08543
