SUPPLEMENT TO PROSPECTUS
AND STATEMENT OF ADDITIONAL INFORMATION
OF SELECT ADVISORS TRUST A AND TRUST C
IN CONNECTION WITH TOUCHSTONE GROWTH & INCOME FUND A AND FUND C
THIS SUPPLEMENT IS DATED AS OF JANUARY 1, 1998.
The Prospectuses and Statements of Additional Information of Select
Advisors Trust A and Trust C, each dated May 1, 1997, are hereby amended and
supplemented as follows:
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PORTFOLIO ADVISOR
As of January 1, 1998, Scudder Kemper Investments, Inc. ("Scudder
Kemper") became the Portfolio Advisor to the Growth and Income Portfolio (the
"Portfolio"). This change resulted from the completion of a strategic alliance
between Scudder, Stevens & Clark, Inc. ("Scudder"), the Portfolio's previous
portfolio advisor, and the Zurich Group ("Zurich"). As part of the strategic
alliance, the operations of Scudder and Zurich Kemper Investments, Inc., a
subsidiary of Zurich, were combined and the combined operations were named
Scudder Kemper Investments, Inc.
Scudder Kemper is owned 69.5% by Zurich and 30.5% by senior employees
of Scudder Kemper. Scudder Kemper provides investment advisory services to
mutual fund investors, retirement and pension plans, institutional and
corporate clients, insurance companies, and private family and individual
accounts. As of December 31, 1997, Scudder Kemper had assets under management
of more than $200 billion. Scudder Kemper's headquarters are located in New
York, New York.
Robert T. Hoffman, Lori Ensinger, Deborah Chaplin, Benjamin W.
Thorndike and Kathleen T. Millard are the individuals primarily responsible for
the day-to-day management of the Portfolio. Mr. Hoffman, Lead Product Manager,
joined Scudder in 1990. He has 13 years of experience in the investment
industry, including several years of pension fund management experience. Lori
Ensinger, Lead Portfolio Manager, focuses on stock selection and investment
strategy. She has worked as a portfolio manager since 1983, and joined Scudder
in 1993. Deborah Chaplin, Portfolio Manager, also focuses on stock selection
and investment strategy. Ms. Chaplin, who joined Scudder in 1996, has over
four years experience as a securities analyst and portfolio manager. Prior to
joining Scudder, Ms. Chaplin was a research fellow in the Faculty of Letters at
Kyoto University, Japan. Benjamin W. Thorndike, Portfolio Manager, is the
Portfolio's chief analyst and strategist for convertible securities. Mr.
Thorndike, who has 18 years of investment experience, joined Scudder in 1983.
Kathleen T. Millard, Portfolio Manager, has been involved in the investment
industry since 1983 and has worked as a portfolio manager since 1986. Ms.
Millard, who joined Scudder in 1991, focuses on strategy and stock selection.
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NEW PORTFOLIO ADVISORY AGREEMENT
A new Portfolio Advisory Agreement (the "New Agreement") with Scudder
Kemper became effective January 1, 1998. The terms of the New Agreement are
identical to the terms of the previous Portfolio Advisory Agreement with
Scudder, except for the effective date, the name of the portfolio advisor and
certain language that became inapplicable upon shareholder approval of the
previous Portfolio Advisory Agreement. Under the New Agreement, the Portfolio
Advisor pays Scudder Kemper a fee equal to an annual rate to 0.50% of the first
$150 million of the Portfolio's average net assets and 0.45% of the Portfolio's
average net assets in excess of $150 million. The New Agreement was approved
by the Board of Trustees of Select Advisors Portfolio (the "Portfolio Trust")
on August 15, 1997 and by the shareholders of the Portfolio on September 18,
1997. The Portfolio is a separate portfolio of the Portfolio Trust.
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AMENDMENT TO INVESTMENT ADVISORY AGREEMENT
In connection with the assumption by Scudder of the role of Portfolio
Advisor to the Portfolio, the Board of Trustees of the Portfolio Trust, at a
meeting held on August 15, 1997, approved an amendment (the "Amendment") to the
investment advisory agreement (the "Investment Advisory Agreement"), dated
September 9, 1994, between the Portfolio Trust, on behalf of the Portfolio, and
the Advisor. On September 18, 1997, the shareholders of the Portfolio also
approved the Amendment. The Amendment increased the fee paid by the Portfolio
Trust, on behalf of the Portfolio, to the Advisor. The Amendment increased the
fee on the first $150 million of average daily net assets of the Portfolio, on
an annual basis, from 0.75% of such average daily net assets of the Portfolio,
to 0.80% of such average daily net assets of the Portfolio. The fee on average
daily net assets of the Portfolio in excess of $150 million remains 0.75% of
such assets. The Amendment did not change the Investment Advisory Agreement in
any other respect.
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INVESTMENT OBJECTIVES, POLICIES AND RESTRICTIONS
In connection with the assumption by Scudder of the role of Portfolio
Advisor to the Portfolio, the Board of Trustees of the Portfolio Trust, at a
meeting held on August 15, 1997, approved certain changes and additions to the
investment objectives, policies and restrictions of the Portfolio. The text
that follows replaces or adds to the corresponding text in the Prospectus or
Statement of Additional Information. Unless otherwise specified, the following
changes became effective on October 1, 1997.
AMENDMENT TO INVESTMENT OBJECTIVES AND POLICIES
PROSPECTUS - "INVESTMENT OBJECTIVES, POLICIES AND RISKS -- GROWTH & INCOME
PORTFOLIO"
The investment objective of the Portfolio is long term capital
appreciation and dividend income by investing primarily in a diversified
portfolio of dividend-paying common stocks, preferred stock and securities
convertible into common stocks. The Fund may also purchase such securities
which do not pay current dividends but which offer prospects for growth of
capital and future income. Convertible securities (which may be current coupon
or zero coupon securities) are bonds, notes, debentures, preferred stocks and
other securities which may be converted or exchanged at a stated or
determinable exchange ratio into underlying shares of common stock. The
Portfolio may also invest in non-convertible preferred stocks consistent with
the Portfolio's objective. Under normal conditions, at least 80% of the
Portfolio's total assets will be invested in common stocks and at least 65% of
the Portfolio's total assets will be invested in common stocks that, at the
time of investment, will be expected to pay regular dividends.
The Portfolio will generally invest a majority of its assets in common
stocks of issuers with total market capitalization of $1 billion or greater at
the time of purchase, but may invest in securities of companies having various
levels of market capitalization, including smaller companies whose securities
may be more volatile and less liquid than securities issued by larger companies
with higher levels of net worth. Investments will be in companies in various
industries.
The Portfolio may also invest up to 20% of its total assets in foreign
securities, including securities of foreign issuers in the form of ADRs. The
Portfolio may not invest more than 5% of its total assets in the securities of
companies based in an emerging market. See "Risk Factors and Certain
Investment Techniques -- Foreign Securities" and "--Risks Associated with
'Emerging Markets' Securities."
The Portfolio may invest under normal circumstances up to 20% of its
total assets in preferred stocks, convertible preferred stock, bonds,
convertible debentures and other fixed-income instruments (the "Fixed Income
Instruments"). Within this 20% limitation, the Portfolio may invest in any
combination of Fixed Income Instruments subject to the following additional
limitations: (1) the Portfolio may invest up to 20% of its total assets in
convertible preferred stock and convertible debentures
rated at least Ba by Moody's or BB by S&P, (2) the Portfolio may invest up to
20% of its total assets in non-convertible fixed income instruments rated at
least Baa by Moody's or BBB by S&P and (3) the Portfolio may invest up to 5% of
its total assets in non-convertible debt rated below Baa by Moody's or BBB by
S&P. See "Risk Factors and Certain Investment Techniques -- Convertible
Securities" and "Medium and Lower Rated ("Junk Bonds") and Unrated Debt
Securities."
The Portfolio may invest up to 10% of its total assets in real estate
investment trusts ("REITs"), which pool investors' funds for investment
primarily in income-producing real estate or real estate-related loans or
interests. See "Risk Factors and Certain Investment Techniques -- Real Estate
Investment Trusts."
The Portfolio may also invest up to 5% of its total assets in Standard
& Poor's Depositary Receipts ("SPDRs") in order to invest uncommitted cash
balances, to maintain liquidity to meet shareholder redemptions, or to minimize
trading costs. SPDRs represent ownership in a unit investment trust that holds
a portfolio of stocks designed to track the performance of the S&P 500 Index.
SPDRs are traded on the American Stock Exchange. See "Risk Factors and Certain
Investment Techniques -- Standard & Poor's Depositary Receipts."
ADDITIONAL DISCLOSURE ABOUT CONVERTIBLE SECURITIES, REITS AND SPDRS AND
ASSOCIATED RISK FACTORS
PROSPECTUS - "RISK FACTORS AND CERTAIN INVESTMENT TECHNIQUES"
CONVERTIBLE SECURITIES. Convertible securities may offer higher income than
the common stocks into which they are convertible and include fixed-income or
zero coupon debt securities, which may be converted or exchanged at a stated or
determinable exchange ratio into underlying shares of common stock. Prior to
their conversion, convertible securities may have characteristics similar to
both non-convertible debt securities and equity securities.
While convertible securities generally offer lower yields than
non-convertible debt securities of similar quality, their prices may reflect
changes in the value of the underlying common stock. Convertible securities
entail less credit risk than the issuer's common stock.
REAL ESTATE INVESTMENT TRUSTS. REITs can generally be classified as equity
REITs, mortgage REITs and hybrid REITs. Equity REITs, which invest the
majority of their assets directly in real property, derive their income
primarily from rents. Equity REITs can also realize capital gains by selling
properties that have appreciated in value. Mortgage REITs, which invest the
majority of their assets in real estate mortgages, derive their income
primarily from interest payments on real estate mortgages in which they are
invested. Hybrid REITs combine the characteristics of both equity REITs and
mortgage REITs.
Investment in REITs is subject to risks similar to those associated
with the direct ownership of real estate (in addition to securities markets
risks). REITs are sensitive to factors such as changes in real estate values
and property taxes, interest rates, cash flow of underlying real estate assets,
supply and demand, and the management skill and creditworthiness of the issuer.
REITs may also be affected by tax and regulatory requirements.
STANDARD & POOR'S DEPOSITARY RECEIPTS ("SPDRS"). The Growth & Income
Portfolio may invest in SPDRs. SPDRs typically trade like a share of common
stock and provide investment results that generally correspond to the price and
yield performance of the component common stocks of the S&P 500 Index. There
can be no assurance that this can be accomplished as it may not be possible for
the Portfolio to replicate and maintain exactly the composition and relative
weightings of the S&P 500 Index securities. SPDRs are subject to the risks of
an investment in a broadly based portfolio of common stocks, including the risk
that the general level of stock prices may decline, thereby adversely affecting
the value of such investment.
REVISIONS TO INVESTMENT RESTRICTION FOR GROWTH & INCOME PORTFOLIO
STATEMENT OF ADDITIONAL INFORMATION - "INVESTMENT OBJECTIVES, POLICIES,
RESTRICTIONS AND RISKS -- INVESTMENT RESTRICTIONS"
As of September 18, 1997, investment restriction number 4 relating to
investments in real estate no longer applies with respect to the Portfolio.
The following two investment restrictions replace investment restriction number
4 only with respect to the Portfolio:
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"As a matter of fundamental policy, the Growth & Income Portfolio (Growth &
Income Fund) may not:
4a) purchase or sell real estate (except that (a) the Portfolio may
invest in (i) securities of entities that invest or deal in real
estate, mortgages, or interests therein and (ii) securities secured
by real estate or interests therein and (b) the Portfolio may hold and
sell real estate acquired as a result of the Portfolio's ownership of
securities;
4b) purchase or sell interests in oil, gas or mineral leases,
commodities or commodity contracts (except futures and option
contracts) in the ordinary course of business."
