WNL SERIES TRUST
497, 1996-05-28
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                               WNL SERIES TRUST
                          5555 SAN FELIPE, SUITE 900
                             HOUSTON, TEXAS 77056


WNL  Series  Trust (the "Trust") is an open-end, diversified series management
investment  company  which  currently  offers shares of beneficial interest of
eight  series  (the  "Portfolios"),  each  of which has a different investment
objective  and  represents  the  entire  interest  in  a separate portfolio of
investments.  The  Portfolios are: Van Kampen American Capital Emerging Growth
Portfolio (formerly American Capital Emerging Growth Portfolio), BEA Growth 
and Income Portfolio, Credit Suisse International Equity Portfolio, BlackRock
Managed Bond Portfolio, EliteValue Asset Allocation Portfolio (formerly Quest
for  Value  Asset  Allocation Portfolio), Salomon  Brothers  U.S.  Government
Securities  Portfolio,  Global  Advisors  Growth  Equity  Portfolio and Global
Advisors  Money  Market Portfolio. These Portfolios are currently available to
the  public only through variable annuity contracts ("VA Contracts") issued by
Western National Life Insurance Company ("Life Company").

This  Prospectus  sets  forth concisely the information about the Trust that a
prospective  investor  should  know before investing. Please read it carefully
and  retain  it  for  future  reference. A Statement of Additional Information
("SAI") dated May 1, 1996, is available without charge upon request and may be
obtained  by  calling  the Life Company at (800) 910-4455 or by writing to the
Life  Company,  Attention:  Variable  Annuity Service Center, P.O. Box 361, 95
Bridge  Street,  Haddam,  Connecticut  06438-0361.  Some  of  the  discussions
contained in this Prospectus refer to the more detailed descriptions contained
in  the  SAI,  which is incorporated by reference into this Prospectus and has
been filed with the Securities and Exchange Commission.

INVESTMENTS  IN THE TRUST ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED  BY,  ANY  BANK. SHARES OF THE TRUST ARE NOT FEDERALLY INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER
GOVERNMENTAL  AGENCY.  AN  INVESTMENT IN THE TRUST IS SUBJECT TO RISK THAT MAY
CAUSE  THE  VALUE  OF  THE INVESTMENT TO FLUCTUATE, AND WHEN THE INVESTMENT IS
REDEEMED, THE VALUE MAY BE HIGHER OR LOWER THAN THE AMOUNT ORIGINALLY INVESTED
BY THE INVESTOR.

PURCHASERS  SHOULD  BE  AWARE  THAT AN INVESTMENT IN THE GLOBAL ADVISORS MONEY
MARKET  PORTFOLIO  IS  NEITHER  INSURED NOR GUARANTEED BY THE U.S. GOVERNMENT.
THERE CAN BE NO ASSURANCE THAT THE GLOBAL ADVISORS MONEY MARKET PORTFOLIO WILL
BE ABLE TO MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER SHARE.

THESE  SECURITIES  HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE  COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND  EXCHANGE  COMMISSION  OR  ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.


                      Prospectus Dated May 1, 1996


                              TABLE OF CONTENTS

                                                                         PAGE

SUMMARY
The Trust
Investment Adviser and Sub-Advisers
The Portfolios
Van Kampen American Capital Emerging Growth Portfolio 
BEA Growth and Income Portfolio
Credit Suisse International Equity Portfolio
BlackRock Managed Bond Portfolio
EliteValue Asset Allocation Portfolio 
Salomon Brothers U.S. Government Securities Portfolio
Global Advisors Growth Equity Portfolio
Global Advisors Money Market Portfolio
Investment Risks
Sales and Redemptions

FINANCIAL HIGHLIGHTS

INVESTMENT OBJECTIVES AND POLICIES OF THE PORTFOLIOS
Van Kampen American Capital Emerging Growth Portfolio 
BEA Growth and Income Portfolio
Credit Suisse International Equity Portfolio
BlackRock Managed Bond Portfolio
EliteValue Asset Allocation Portfolio 
Salomon Brothers U.S. Government Securities Portfolio
Global Advisors Growth Equity Portfolio
Global Advisors Money Market Portfolio

MANAGEMENT OF THE TRUST
Investment Adviser
Advisory Fee Waiver and Expense Cap
Expenses of the Trust
Sub-Advisers
Sub-Advisory Fees
Sub-Advisory Fee Waiver

SALES AND REDEMPTIONS

NET ASSET VALUE

PERFORMANCE INFORMATION

TAX STATUS, DIVIDENDS, AND DISTRIBUTIONS

ADDITIONAL INFORMATION

APPENDIX

Securities And Investment Practices
American Depository Receipts and European Depository Receipts
Asset-Backed Securities
Bank Obligations
Borrowing
Common Stock and Other Equity Securities
Convertible Securities
Currency Management
Dollar Roll Transactions
Equity and Debt Securities Issued or Guaranteed by Supranational Organizations
Exchange Rate-Related Securities
Fixed-Income Securities
Foreign Currency Exchange Transactions
Foreign Investments
Futures and Options on Futures
Geographical and Industry Concentration
Government Stripped Mortgage-Backed Securities
Interest Rate Transactions
Illiquid Securities
Investment Companies
Lease Obligation Bonds
Lending of Securities
Lower-Rated Securities
Mortgage-Backed Securities
Collateralized Mortgage Obligations and Multiclass Pass-Through Securities
New Issuers
Options on Securities
Options on Foreign Currencies
Options on Indexes
Over the Counter Options
Repurchase Agreements
Reverse Repurchase Agreements
Small Companies
Strategic Transactions
U.S. Government Securities
When-Issued Securities and Delayed-Delivery Transactions


                                   SUMMARY

THE TRUST

The Trust is an open-end diversified management investment company established
as  a Massachusetts business trust under a Declaration of Trust dated December
12, 1994, as amended April 19, 1995. Each Portfolio issues a separate class of
shares.  The  Declaration  of Trust permits the Trustees to issue an unlimited
number of full or fractional shares of each class of stock.

Each  Portfolio  has  distinct  investment  objectives  and  policies.  (See
"Investment Objectives and Policies of the Portfolios.") Additional Portfolios
may be added to the Trust in the future.

INVESTMENT ADVISER AND SUB-ADVISERS

Subject to the authority of the Board of Trustees of the Trust, WNL Investment
Advisory  Services,  Inc.  (the  "Adviser")  serves  as the Trust's investment
adviser  and  has  responsibility for the overall management of the investment
strategies  and  policies  of  the  Portfolios.  The  Adviser  has  engaged
Sub-Advisers for each Portfolio to make investment decisions and place orders.
The Sub-Advisers for the Portfolios are:

<TABLE>
<CAPTION>
<S>                                                   <C>

Sub-Adviser                                           Name of Portfolio
- ----------------------------------------------------  ----------------------------------

Van Kampen American Capital Asset Management, Inc.    Van Kampen American Capital
                                                      Emerging Growth 

BEA Associates                                        BEA Growth and Income

Credit Suisse Investment Management Ltd.              Credit Suisse International Equity

BlackRock Financial Management                        BlackRock Managed Bond

OpCap Advisors, formerly Quest for Value Advisors     EliteValue Asset Allocation 

Salomon Brothers Asset Management Inc                 Salomon Brothers U.S. Government
                                                      Securities

State Street Global Advisors                          Global Advisors Growth Equity
 (A division of State Street Bank and Trust Company)  Global Advisors Money Market
</TABLE>

For  additional  information  concerning  the  Adviser  and  the Sub-Advisers,
including  a description of advisory and sub-advisory fees, see "Management of
the Trust."

                                THE PORTFOLIOS

VAN KAMPEN AMERICAN CAPITAL EMERGING GROWTH PORTFOLIO 

The  Portfolio's  investment  objective  is  to  seek  to  provide  capital
appreciation;  any  ordinary  income  received  from  portfolio  securities is
entirely  incidental.  The  Portfolio will, under normal conditions, invest at
least  65%  of  its  total  assets  in common stocks of small and medium-sized
companies,  both domestic and foreign, in the early stages of their life cycle
that  the Sub-Adviser believes have the potential to become major enterprises.
While  the  Portfolio  will  invest  primarily  in common stocks, to a limited
extent,  it  may  invest  in  other  securities  such  as  preferred  stocks,
convertible securities and warrants. The Portfolio may invest up to 20% of its
assets  in  securities  of  foreign  issuers.  Investing in foreign securities
generally  involves  risks  not  ordinarily  associated  with  investing  in
securities  of domestic issuers. (See "Appendix - Foreign Investments" and the
SAI for a discussion of the risks involved in foreign investing.)

BEA GROWTH AND INCOME PORTFOLIO

The  Portfolio's  fundamental  investment  objective  is  to provide long-term
capital  growth,  current  income  and  growth  of  income,  consistent  with
reasonable  investment  risk.  The Portfolio will invest primarily in domestic
equity  as well as domestic debt securities. The proportion of the Portfolio's
assets  to be invested in each type of security will vary from time to time in
accordance  with  the  Sub-Adviser's  assessment  of  economic  conditions and
investment  opportunities.  The  asset  allocation  strategy  is  based on the
premise  that,  from  time  to time, certain asset classes are more attractive
long-term  than  others.  The Sub-Adviser anticipates that under normal market
conditions,  between  35%  and  65%  of  the  Portfolio's total assets will be
invested  in  equity  securities,  and between 35% and 65% will be invested in
debt securities.

CREDIT SUISSE INTERNATIONAL EQUITY PORTFOLIO

The  Portfolio's  fundamental  investment  objective  is  long-term  capital
appreciation.  The  Portfolio  will seek to achieve its objective primarily by
investing  in  equity and equity-related securities of companies from at least
five  different  countries,  excluding  the  United  States. This Portfolio is
intended  for  investors  who  can accept the risks involved in investments in
equity  and  equity-related  securities  of  non-U.S.  issuers,  as well as in
foreign currencies, and in the active management techniques that the Portfolio
generally employs. Under normal conditions, the Portfolio will invest at least
65% of its total assets in equity securities of issuers whose principal places
of business (as determined by location of the issuer's principal headquarters)
are  located  in  countries  other  than the United States. The balance of the
Portfolio,  up  to  35% of its total assets, may be invested in equity or debt
securities  of  U.S.  issuers  or  foreign  entities.  Investing  in  foreign
securities  generally  involves risks not ordinarily associated with investing
in  securities  of domestic issuers. (See "Appendix - Foreign Investments" and
the SAI for a discussion of the risks involved in foreign investing.)

BLACKROCK MANAGED BOND PORTFOLIO

The  Portfolio's  fundamental  investment objective is to provide a high total
return  consistent with moderate risk of capital and maintenance of liquidity.
Total  return  will  consist  of  income, plus realized and unrealized capital
gains  and  losses.  Although  the  net  asset  value  of  the  Portfolio will
fluctuate,  the Portfolio attempts to preserve the value of its investments to
the extent consistent with its objective. The Sub-Adviser actively manages the
Portfolio's  duration, the allocation of securities across market sectors, and
the  selection  of  specific  securities  within sectors. The Sub-Adviser also
actively  allocates  the  Portfolio's  assets  among  the broad sectors of the
fixed-income market, including, but not limited to, U.S. Government and agency
securities,  corporate  securities,  private  placements, and asset-backed and
mortgage-related  securities,  including  residential  and  commercial
mortgage-backed  securities.  Under  normal  circumstances,  the  Sub-Adviser
intends  to keep the Portfolio essentially fully invested with at least 65% of
the Portfolio's assets invested in bonds.

ELITEVALUE ASSET ALLOCATION PORTFOLIO 

The  Portfolio's  fundamental  investment  objective  is  to achieve growth of
capital  over  time  through  investment  in  a portfolio consisting of common
stocks,  bonds  and cash equivalents, the percentages of which will vary based
on the Sub-Adviser's assessments of the relative outlook for such investments.
In seeking to achieve its investment objective, the types of equity securities
in  which  the  Portfolio  may  invest  are  likely  to  be primarily those of
companies  that  are  believed  by  the  Sub-Adviser  to be undervalued in the
marketplace  in relation to factors such as the companies' assets or earnings.
Debt  securities  are  expected  to  be  predominantly  investment-grade,
intermediate  to  long-term  U.S.  Government and corporate debt, although the
Portfolio  will  also invest in high-quality, short-term money market and cash
equivalent  securities  and  may  invest  almost  all  of  its  assets in such
securities  when  the  Sub-Adviser  deems  it  advisable  in order to preserve
capital.  In  addition,  the  Portfolio  may also purchase foreign securities,
provided  that they are listed on a domestic or foreign securities exchange or
are  represented by American Depository Receipts ("ADRs") listed on a domestic
securities exchange or traded in domestic or foreign over-the-counter markets.
Investing  in  foreign  securities  generally  involves  risks  not ordinarily
associated  with investing in securities of domestic issuers. (See "Appendix -
Foreign  Investments"  and  the  SAI for a discussion of the risks involved in
foreign  investing.)  The  allocation  of  the  Portfolio's  assets  among the
different  types  of  permitted  investments will vary from time to time based
upon  the  Sub-Adviser's  evaluation  of  economic  and  market trends and its
perception  of  the relative values available from such types of securities at
any  given  time.  There  is neither a minimum nor a maximum percentage of the
Portfolio's  assets  that  may,  at  any given time, be invested in any of the
types of investments identified above.

SALOMON BROTHERS U.S. GOVERNMENT SECURITIES PORTFOLIO

The  Portfolio's  fundamental  investment objective is to seek a high level of
current  income.  The  Portfolio  seeks to attain its objective by investing a
substantial  portion  of  its  assets  in debt obligations and mortgage-backed
securities  issued  or  guaranteed  by  the  U.S.  Government, its agencies or
instrumentalities  and  collateralized  mortgage  obligations  backed  by such
securities.  The  Portfolio  may  also  invest a portion of its assets in U.S.
dollar-denominated corporate debt securities.

GLOBAL ADVISORS GROWTH EQUITY PORTFOLIO

The  Portfolio's  fundamental investment objective is to provide total returns
that  exceed  over  time the Standard & Poor's 500 Composite Stock Price Index
through investment in equity securities. Equity securities will be selected on
the  basis  of  a proprietary analytical model of the Portfolio's Sub-Adviser.
Each  security  will  be  ranked  according  to  two separate and uncorrelated
measures:  value and the momentum of Wall Street sentiment. The Portfolio will
invest  at  least  65%  of its total assets in equity securities. However, the
Portfolio  may  invest temporarily for defensive purposes, without limitation,
in certain short-term, fixed-income securities. Such securities may be used to
invest uncommitted cash balances or to maintain liquidity.

GLOBAL ADVISORS MONEY MARKET PORTFOLIO

The  Portfolio's  fundamental  investment  objective  is  to  maximize current
income,  to  the  extent  consistent  with  the  preservation  of  capital and
liquidity, and the maintenance of a stable $1.00 per share net asset value, by
investing  in  dollar-denominated  securities with remaining maturities of one
year  or  less.  The  Portfolio  attempts  to meet its investment objective by
investing  in  high-quality  money  market  instruments. An investment in this
Portfolio is neither insured nor guaranteed by the U.S. Government.

The  investment  objectives,  policies  and  restrictions  of  a  Portfolio
specifically cited as fundamental may not be changed without the approval of a
majority  of  the  outstanding  shares  of  that  Portfolio.  Other investment
policies  and  practices  described  in  this  Prospectus  and the SAI are not
fundamental,  and  the  Board  of Trustees may change them without shareholder
approval.  A  complete  list  of  investment  restrictions,  including  those
restrictions  which  cannot  be  changed  without  shareholder  approval,  is
contained  in  the  SAI.  There is no assurance that a Portfolio will meet its
stated objective.

INVESTMENT RISKS

The  value  of  a  Portfolio's  shares  will  fluctuate  with the value of the
underlying  securities  in  its portfolio, and in the case of debt securities,
with  the  general  level  of interest rates. When interest rates decline, the
value  of  an  investment portfolio invested in fixed-income securities can be
expected  to  rise.  Conversely,  when  interest  rates  rise, the value of an
investment  portfolio  invested  in fixed-income securities can be expected to
decline.  In the case of foreign currency-denominated securities, these trends
may  be offset or amplified by fluctuations in foreign currencies. Investments
by  a  Portfolio  in  foreign securities may be affected by adverse political,
diplomatic,  and  economic  developments, changes in foreign currency exchange
rates,  taxes  or  other  assessments imposed on distributions with respect to
those  investments, and other factors generally affecting foreign investments.
High-yielding, high-risk, fixed-income securities, which are commonly known as
"junk  bonds,"  are subject to greater market fluctuations and risk of loss of
income  and  principal  than  investments  in  lower-yielding,  fixed-income
securities.  The  Emerging  Growth,  Growth Equity and Money Market Portfolios
will not invest in "junk bonds," while each of the other Portfolios may invest
up  to  5%  of its respective total assets in "junk bonds." Certain Portfolios
intend  to  employ, from time to time, certain investment techniques which are
designed to enhance income or total return or hedge against market or currency
risks  but which themselves involve additional risks. These techniques include
options  on  securities,  futures,  options  on  futures,  options on indexes,
options on foreign currencies, foreign currency exchange transactions, lending
of  securities  and  when-issued securities and delayed-delivery transactions.
The  Portfolios  may  have  higher-than-average  portfolio  turnover which may
result in higher-than-average brokerage commissions and transaction costs.

SALES AND REDEMPTIONS

The  Trust sells shares only to the separate accounts of the Life Company as a
funding  vehicle  for  the VA Contracts offered by the Life Company. No fee is
charged  upon  the  sale  or redemption of the Trust's shares. Expenses of the
Trust will be passed through to the separate accounts of the Life Company, and
therefore,  will be ultimately borne by VA Contract owners. In addition, other
fees and expenses will be assessed by the Life Company at the separate account
level.  (See  the Prospectus for the VA Contract for a description of all fees
and charges relating to the VA Contract.)


                             FINANCIAL HIGHLIGHTS

The  following  tables  include  selected  data,  derived  from  the financial
statements,  for  a  share outstanding throughout the period shown for each of
the  Portfolios.  The  tables should be read in conjunction with the financial
statements  and  notes  thereto  included  in  the  Trust's  Annual  Report to
Shareholders  which  are  included  in  the SAI in reliance upon the report of
Coopers & Lybrand L.L.P., independent auditors.

Further  information  about  the  performance of the Trust is contained in the
Trust's  December  31, 1995 Annual Report which may be obtained without charge
by calling the Life Company at (800) 910-4455.

                               WNL SERIES TRUST
                 FOR A SHARE OUTSTANDING FOR THE PERIOD ENDED
                                DECEMBER 31, 1995*

<TABLE>
<CAPTION>
<S>                                      <C>       <C>              <C>         <C>

                                         BEA       Credit           Global      Global
                                         Growth    Suisse           Advisors    Advisors
                                         and       International    Growth      Money
                                         Income    Equity           Equity      Market
                                         --------  ---------------  ----------  ----------

Net asset value, beginning of period...  $ 10.00   $        10.00   $   10.00   $    1.00 
                                         --------  ---------------  ----------  ----------
Net investment income(1)...............     0.14             0.06        0.05        0.01 
Net realized and unrealized gain on
   investments.........................     0.51             0.33        0.31        ---- 
                                         --------  ---------------  ----------  ----------
Total from investment operations.......     0.65             0.39        0.36        0.01 
                                         --------  ---------------  ----------  ----------
Distributions:
  From net investment income...........    (0.14)           (0.06)      (0.05)      (0.01)
  In excess of net realized gains......    (0.05)             ---        ---`         --- 
                                         --------  ---------------  ----------  ----------
Total distributions....................    (0.19)           (0.06)      (0.05)      (0.01)
                                         --------  ---------------  ----------  ----------
Net asset value, end of period.........  $ 10.46   $        10.33   $   10.31   $    1.00 
                                         --------  ---------------  ----------  ----------

TOTAL RETURN(2)........................     6.57%            3.93%       3.57%       1.17%

RATIOS/SUPPLEMENTAL DATA:
Operating expenses to average net
   assets(3)...........................     0.12%            0.12%       0.12%       0.12%
Net investment income to average net
   assets(4)...........................     6.99%             2.89%       2.46%      5.25%
Portfolio turnover rate(5).............       75%               2%           9%        N/A
Net assets, at end of period (000's)...  $ 2,136   $        2,083   $   2,073   $     126 
<FN>


     * The Money Market Portfolio commenced investment operations on October 10, 1995. The
Growth and Income, International Equity, and Growth Equity Portfolios commenced investment
operations on October 20, 1995.

     (1) Net investment income is after waiver of fees and reimbursement of certain
expenses by the Adviser, State Street Bank and Trust Company, as Sub-Administrator, and 
the Life Company, an affiliate of the Adviser (see Note 2 to the financial statements in 
the SAI). If the Adviser and State Street Bank and Trust Company, as Sub-Administrator, 
had not waived fees and the Life Company had not reimbursed expenses, net investment 
income (loss) per share would have been $(0.06) for the BEA Growth and Income Portfolio, 
$(0.18) for the Credit Suisse International Equity Portfolio, $(0.15) for the Global 
Advisors Growth Equity Portfolio, and $(0.35) for the Global Advisors Money Market 
Portfolio.

     (2) Total return represents aggregate total return for the period indicated.

     (3) If the Adviser and State Street Bank and Trust Company, as Sub-Administrator, 
had not waived fees and Life Company had not reimbursed expenses, the ratio of 
operating expenses to average net assets would have been 9.95% for the BEA Growth and 
Income Portfolio, 11.83% for the Credit Suisse International Equity Portfolio, 9.94% 
for the Global Advisors Growth Equity Portfolio, and 161.83% for the Global Advisors 
Money Market Portfolio.

     (4) Annualized.

     (5) Not annualized.
</TABLE>



             INVESTMENT OBJECTIVES AND POLICIES OF THE PORTFOLIOS

Each Portfolio of the Trust has a different investment objective or objectives
which  it pursues through separate investment policies as described below. The
differences in objectives and policies among the Portfolios can be expected to
affect  the  return  of  each Portfolio and the degree of market and financial
risk  to  which each Portfolio is subject. An investment in a single Portfolio
should  not  be  considered  a  complete  investment  program.  The investment
objective(s)  and  policies  of  each Portfolio, unless otherwise specifically
stated,  are  non-fundamental  and may be changed by the Trustees of the Trust
without  a  vote of the shareholders. There is no assurance that any Portfolio
will  achieve  its objective(s). United States Treasury Regulations applicable
to  portfolios  that  serve  as  the funding vehicles for variable annuity and
variable  life  insurance  contracts  generally  require  that such portfolios
invest no more than 55% of the value of their assets in one investment, 70% in
two  investments,  80%  in three investments, and 90% in four investments. The
Portfolios intend to comply with the requirements of these Regulations.

In  order to comply with regulations which may be issued by the U.S. Treasury,
the  Trust may be required to limit the availability, or change the investment
policies, of one or more Portfolios, or to take steps to liquidate one or more
Portfolios.  The  Trust will not change any fundamental investment policy of a
Portfolio without a vote of shareholders of that Portfolio.

In addition, the State of California currently imposes diversification
requirements  on  variable insurance products portfolios investing in non-U.S.
securities.  Under  these  requirements, a Portfolio investing at least 80% of
its assets in non-U.S. securities must be invested in at least five countries;
less  than 80% but at least 60%, in at least four countries; less than 60% but
at least 40%, in at least three countries; and less than 40% but at least 20%,
in  at  least two countries, except that up to 35% of a Portfolio's assets may
be  invested  in  securities  of  issuers  located  in  any  of  the following
countries:  Australia, Canada, France, Japan, the United Kingdom or Germany. A
Portfolio's  investments  in  United  States' issuers are not subject to these
diversification  requirements. The Trust intends to comply with the California
diversification  requirements  for  the  Portfolios  which  invest in non-U.S.
securities, to the extent applicable.

Except  as otherwise noted herein, if the securities rating of a debt security
held  by a Portfolio declines below the minimum rating for securities in which
the Portfolio may invest, the Portfolio will not be required to dispose of the
security,  but  the  Portfolio's  Sub-Adviser  will consider whether continued
investment  in  the  security  is  consistent  with the Portfolio's investment
objective.

In  implementing its investment objectives and policies, each Portfolio uses a
variety  of instruments, strategies and techniques which are described in more
detail  in  the  Appendix  and  the  SAI.  With  respect  to  each Portfolio's
investment  policies,  use  of  the  term  "primarily" means that under normal
circumstances,  at  least  65%  of such Portfolio's assets will be invested as
indicated.  A  description  of  the  ratings  systems  used  by  the following
nationally  recognized  statistical  rating  organizations  ("NRSROs") is also
contained  in the SAI: Moody's Investors Service, Inc. ("Moody's"), Standard &
Poor's  Corporation  ("S&P"),  Duff  &  Phelps, Inc. ("Duff"), Fitch Investors
Service,  Inc.  ("Fitch"), Thomson Bankwatch, Inc., IBCA Limited and IBCA Inc.
New  instruments, strategies and techniques, however, are evolving continually
and  the Trust reserves authority to invest in or implement them to the extent
consistent  with  its  investment objectives and policies. If new instruments,
strategies  or  techniques  would involve a material change to the information
contained  herein,  they  will  not  be  purchased  or  implemented until this
Prospectus is appropriately supplemented.

VAN KAMPEN AMERICAN CAPITAL EMERGING GROWTH PORTFOLIO

The  Portfolio seeks to provide capital appreciation for its shareholders; any
ordinary  income  received  from  portfolio securities is entirely incidental.
This  objective  is not fundamental and may be changed by the Trust's Board of
Trustees  without shareholder approval, but no change is anticipated. If there
is  a change in the investment objective of the Portfolio, shareholders should
consider  whether  the Portfolio remains an appropriate investment in light of
their  then  current financial position and needs. There can, of course, be no
assurance  that  the  objective  of  capital  appreciation  will  be realized;
therefore,  full  consideration  should  be given to the risks inherent in the
investment techniques that the Sub-Adviser may use to achieve such objective.

As  a  fundamental  investment  policy,  the Portfolio under normal conditions
invests  at  least  65%  of  its  total  assets  in common stocks of small and
medium-sized  companies,  both  domestic  and  foreign, in the early stages of
their  life  cycle  that the Sub-Adviser believes have the potential to become
major  enterprises.  Investments  in  such  companies  may  offer  greater
opportunities  for  growth of capital than larger, more established companies,
but  also  may  involve certain special risks. Emerging growth companies often
have  limited  product lines, markets, or financial resources, and they may be
dependent  upon  one person or a few key people for management. The securities
of  such  companies  may be subject to more abrupt or erratic market movements
than  securities  of larger, more established companies or the market averages
in  general.  While the Portfolio will invest primarily in common stocks, to a
limited  extent,  it may invest in other securities, such as preferred stocks,
convertible  securities  and  warrants.

The  Portfolio  does  not  limit  its investment  to  any  single  group or
type of security. The Portfolio may also invest  in  special  situations
involving new management, special products and techniques,  unusual
developments,  mergers  or  liquidations. Investments in unseasoned  companies
and special situations often involve much greater risks than  are  inherent in
ordinary  investments,  because  securities  of  such companies may be more 
likely to experience unexpected fluctuations in price.

The  Portfolio's  primary approach is to seek what the Sub-Adviser believes to
be unusually attractive growth investments on an individual company basis. The
Portfolio may invest in securities that have above-average volatility of price
movement.  Because prices of common stocks and other securities fluctuate, the
value  of  an investment in the Portfolio will vary based upon the Portfolio's
investment  performance.  The Portfolio attempts to reduce overall exposure to
risk from declines in securities prices by spreading its investments over many
different  companies  in  a  variety  of  industries.  There  is,  however, no
assurance that the Portfolio will be successful in achieving its objective.

The  Portfolio  may  invest  up  to  20%  of its total assets in securities of
foreign  issuers.  (See  "Appendix  -  Foreign  Investments" and the SAI for a
discussion  of  the  risks  involved  in foreign investing.) Additionally, the
Portfolio  may  invest  up  to  10%  of  the value of its assets in restricted
securities  (i.e., securities which may not be sold without registration under
the  Securities  Act  of 1933 ("1933 Act")) and in other securities not having
readily  available  market quotations. The Portfolio may enter into repurchase
agreements with domestic banks and broker-dealers which involve certain risks.
The  Portfolio  does not presently expect to commit as much as 5% of its total
assets  to  investments in either warrants or restricted securities. The risks
involved  in  investing  in  restricted  securities,  warrants  and repurchase
agreements  are  described  under  "Investment Objectives and Policies" in the
SAI.

The  Portfolio  may  invest in options, futures contracts and related options.
These  investments  and  transactions  are  described in greater detail in the
Appendix and SAI.

BEA GROWTH AND INCOME PORTFOLIO

     INVESTMENT OBJECTIVE

          The Portfolio's goal is to provide long-term capital growth, current
income  and growth of income, consistent with reasonable investment risk. This
investment  objective  is  fundamental  and  may  not  be  changed without the
affirmative  vote  of  a  majority  of  the Portfolio's outstanding shares (as
defined in the Investment Company Act of 1940, as amended ("1940 Act").

     MANAGEMENT POLICIES

       The Portfolio  will  invest  primarily  in domestic equity and debt
securities  and cash equivalent instruments. The Portfolio may also invest in
securities of foreign issuers. The proportion of the Portfolio's assets to 
be invested in each type of security will vary from time to time in 
accordance  with  the  Sub-Adviser's  assessment  of  economic  conditions and
investment  opportunities.  The  asset  allocation  strategy  is  based on the
premise  that,  from  time  to time, certain asset classes are more attractive
long-term investments than others. Timely shifts among equity securities, debt
securities,  and  cash equivalent instruments, as determined by their relative
over-valuation  or under-valuation, should produce superior investment returns
over  the  long  term.  In  general, the Portfolio will not attempt to predict
short-term  market movements or interest rate changes, focusing instead upon a
longer-term  outlook.  The  Sub-Adviser  anticipates  that under normal market
conditions,  between  35%  and  65%  of  the  Portfolio's total assets will be
invested  in  equity  securities,  and between 35% and 65% will be invested in
debt securities.

In  selecting  equity securities in which to invest, the Sub-Adviser generally
employs  a  value-oriented  approach  that combines "top-down" and "bottom-up"
elements.  The  process begins with a top-down thematic approach, by which the
Sub-Adviser  attempts  to  identify  the three or four macroeconomic variables
most  likely  to  drive  equity  returns  in the medium term, and the sectors,
industries  and  stocks most likely to benefit as those themes are played out.
This is combined with a bottom-up approach to stock selection which identifies
value  through  the  application  of  "cash on cash analysis." The Sub-Adviser
looks  at  the  free cash flow produced by a company within the context of the
total  cash  value  of  the enterprise. This ratio of cash flow to "enterprise
value"  permits  a  comparative  analysis  of  companies across industries and
sectors,  and provides a tool with which to analyze the quality and priorities
of  the  company's  management.  The  Portfolio's  approach  is based upon the
observation  that  a  company focusing upon cash flow will generally be one in
which  management's  overarching  concern  is  the maximization of shareholder
value.  Equity  securities  may  include  common stocks, preferred stocks, and
securities  which  are  convertible  into  common stock and readily marketable
securities,  such as rights and warrants, which derive their value from common
stock.

In  selecting  debt  securities  in which to invest, the Sub-Adviser generally
employs  an  approach  that  focuses  upon  the  exploitation  of  market
inefficiencies,  which  exist  primarily  due  to  the differing objectives of
various  investors and to the varying restrictions that limit their investment
choices.  In  determining  whether the Portfolio should invest in a particular
debt  security,  the  Sub-Adviser  reviews  the  terms  of  the instrument and
evaluates  the  creditworthiness  of the issuer of the instrument, considering
short-term  debt,  leverage,  capitalization,  the  quality  and  depth  of
management,  profitability, return on assets, and economic factors relative to
the issuer's industry or market sector. The Sub-Adviser then performs relative
valuation  analysis, comparing the value in sectors and securities with regard
to  price  as  well  as  yield. The Sub-Adviser generally does not rely on its
ability  to  correctly  predict  movements in the direction of interest rates.
Debt  securities  may  include  bonds,  debentures, notes, equipment lease and
trust  certificates,  mortgage-related  securities,  and obligations issued or
guaranteed  by  the  U.S. Government or its agencies or instrumentalities. The
Sub-Adviser's  Fixed-Income  Management  Team  will  manage  the  Fixed-Income
portion of the Portfolio, which will invest primarily in domestic fixed-income
securities  consistent with comparable broad market fixed-income indexes, such
as  the  Lehman  Brothers Aggregate Bond Index. The Sub-Adviser estimates that
the  average  weighted  maturity  of the debt securities held by the Portfolio
will  range  between  5  and  15  years.  Depending  upon  prevailing  market
conditions, the Portfolio may purchase debt securities at a discount from face
value,  which  produces  a  yield greater than the coupon rate. Conversely, if
debt  securities are purchased at a premium over face value, the yield will be
lower  than  the  coupon  rate.  An  increase in interest rates will generally
reduce  the  value  of  the  fixed-income  investments  in the Portfolio and a
decline  in  interest  rates  will  generally  increase  the  value  of  those
investments.

The  cash  equivalent instruments in which the Portfolio may invest consist of
U.S.  Government  securities, certificates of deposit, time deposits, bankers'
acceptances,  short-term  investment-grade corporate bonds and short-term debt
instruments, and repurchase agreements. While the Portfolio does not intend to
limit the amount of its assets invested in cash equivalent instruments, except
to  the extent believed necessary to achieve its investment objective, it does
not expect under normal market conditions to have a substantial portion of its
assets  invested  in  money  market instruments. However, when the Sub-Adviser
determines  that  adverse  market  conditions exist, the Portfolio may adopt a
temporary defensive posture and invest its entire portfolio in cash equivalent
instruments.  In  addition,  the  Portfolio  may  invest  in  cash  equivalent
instruments  in  anticipation  of  investing cash positions. To the extent the
Portfolio  is  so  invested,  the  Portfolio's investment objective may not be
achieved.  See  the  Appendix  and the SAI for a discussion of these and other
investment policies and strategies with respect to this Portfolio.

CREDIT SUISSE INTERNATIONAL EQUITY PORTFOLIO

The  Portfolio's  investment objective is long-term capital appreciation. This
investment  objective  is  fundamental  and  may  not  be  changed without the
affirmative  vote  of  a  majority  of  the Portfolio's outstanding shares (as
defined  in  the  1940  Act). The Portfolio will seek to achieve its objective
primarily  by  investing  in equity and equity-related securities of companies
from at least five different countries, excluding the United States.

The  Portfolio  is intended for investors who can accept the risks involved in
investments  in  equity  and equity-related securities of non-U.S. issuers, as
well as in foreign currencies and in the active management techniques that the
Portfolio generally employs.

Under  normal  conditions, the Portfolio will invest at least 65% of its total
assets  in equity securities of issuers whose principal places of business (as
determined by the location of the issuer's principal headquarters) are located
in countries other than the United States.

     FOREIGN EQUITY SECURITIES

       The Portfolio will invest, under normal conditions, at least 65% of its
total  assets  in  issuers  located  in  at  least  five  different countries,
excluding  the United States. The Sub-Adviser expects that the majority of the
Portfolio's  investments  will  be in issuers in the following markets: United
States,  Canada,  Japan,  the  United  Kingdom, Germany, France, Malaysia, the
Netherlands,  Italy,  Singapore,  Switzerland,  Spain,  Mexico, Australia, New
Zealand,  Hong  Kong  and  Sweden.  However, the Portfolio will also invest in
other European, Pacific Rim, African and Latin American markets. As market and
global  conditions change, the Portfolio will change its allocations among the
countries  of  the world and nothing herein will limit the Portfolio's ability
to  invest  in or avoid any particular countries or regions. The Portfolio may
also  invest  in  the  securities of issuers traded on quoted markets of other
countries.

The equity and equity-related securities in which the Portfolio will primarily
invest  are  common  stock,  preferred  stock,  convertible  debt obligations,
convertible  preferred  stock  and  warrants, or other rights to acquire stock
that  the  Sub-Adviser  believes  offer  the  potential  for long-term capital
appreciation.  The  Portfolio also may invest in securities of foreign issuers
in  the  form  of  sponsored  and unsponsored ADRs, GDRs, EDRs, IDRs, or other
similar  instruments  representing  securities  of  foreign  issuers.  See the
Appendix and the SAI for a description of these investments.

While  the  investment policy of the Portfolio is to be diversified as to both
countries and individual issuers, the Sub-Adviser selects individual countries
and  securities on the basis of several factors. In allocating the Portfolio's
assets  among various countries, the Sub-Adviser will seek economic and market
environments  favorable  for  capital  appreciation  and,  with  respect  to
developing  countries,  those  with  economic,  political,  and  stock  market
environments with prospects of stabilizing or improving.

In analyzing foreign companies for investment, the Sub-Adviser will ordinarily
look  for  one  or  more  of  the following characteristics in relation to the
prevailing  prices  of  the  securities  of  such  companies:  prospects  for
above-average  earnings  growth  per  share;  high return on invested capital;
sound  balance sheet, financial and accounting policies, and overall financial
strength;  strong  competitive  advantages;  effective  research,  product
development,  and  marketing; efficient service; pricing flexibility; strength
of  management;  and  general  operating  characteristics that will enable the
companies  to  compete  successfully  in  their  respective  marketplaces. The
Sub-Adviser  will  aim  to  invest in companies which have growth prospects or
whose value it believes is not fully reflected in the relevant markets.

     TEMPORARY INVESTMENTS

     The Portfolio may, when the Sub-Adviser determines that market conditions
warrant,  adopt a temporary defensive position and may hold cash (U.S. dollars
or foreign currencies) and may invest up to 100% of its assets in money market
instruments  or  debt securities of U.S. or foreign issuers. The Portfolio may
also  invest  cash held to meet redemption requests and expenses in such money
market  instruments and debt securities. For these purposes, such money market
instruments are: banker's acceptances, certificates of deposit, time deposits,
commercial  paper,  short-term  government and corporate-obligations. The debt
securities  of  U.S.  issuers  or foreign entities in which the Portfolio will
invest  primarily  will  be  investment-grade  debt securities except that the
Portfolio may invest up to 5% of its total assets in non-investment-grade debt
securities. Investment-grade debt securities include (i) bonds rated in one of
the  four highest rating categories by any NRSRO (e.g., BBB or higher by S&P);
(ii)U.S. Government securities; (iii) commercial paper rated in one of the two
highest rating categories of any NRSRO (e.g., A-2 or higher by S&P); (iv) bank
obligations (certificates of deposit, banker's acceptances, and time deposits)
with  a  long-term  rating  in one of the four highest categories by any NRSRO
(e.g.,  BBB  or  higher by S&P), with respect to bank obligations of more than
one year, or in one of the three highest categories by any NRSRO (e.g., A-3 or
higher by S&P), with respect to bank obligations maturing in one year or less;
(v)  repurchase  agreements  involving  these securities; or (vi) unrated debt
securities  which  are  deemed by the Sub-Adviser to be of comparable quality.
All  ratings are determined at the time of investment. Securities rated in the
fourth  highest  category,  although  considered  investment-grade,  have
speculative  characteristics  and  may  be  subject to greater fluctuations in
value  than  higher-rated  securities.  Non-investment-grade  debt  securities
include  (i)  securities  rated as low as C by S&P or their equivalents, which
are  commonly known as "junk bonds"; (ii) commercial paper rated as low as A-3
by  S&P  or their equivalents; and (iii) unrated debt securities determined to
be  of  comparable  quality  by the Sub-Adviser. (See "Appendix -- Lower-Rated
Securities" and the SAI for a discussion of the risks involved in investing in
non-investment-grade  securities.)  U.S.  Government securities are securities
issued  or  guaranteed  by  the  U.S.  Government  or  its  agencies  or
instrumentalities.

The  Portfolio  may  enter  into  repurchase  agreements  to  earn a return on
temporarily  available  cash.  The  Portfolio  will  not  invest in repurchase
agreements  maturing  in more than seven days if any such investment, together
with  any  other illiquid securities held by the Portfolio, exceeds 10% of the
value  of  the  Portfolio's  net assets. The Portfolio may also lend portfolio
securities  to  unaffiliated  brokers,  dealers  and  financial  institutions
provided that (a) immediately after any such loan, the value of the securities
loaned  does  not exceed 15% of the total value of the Portfolio's assets, and
(b)  any  securities  loan  is  collateralized  in  accordance with applicable
regulatory  requirements.

The Portfolio may invest in restricted securities and  other illiquid  assets.
See  the  Appendix  and  the  SAI  for  further information relating to
restricted and illiquid securities.

The  Portfolio  may  purchase  and  sell foreign currencies on a spot basis in
connection  with  the  settlement of transactions in securities traded in such
foreign  currencies.  The  Portfolio  may  enter into forward foreign currency
contracts  and  foreign  currency  futures  and option contracts primarily for
hedging  purposes.  This  includes  entering  into  forward  foreign  currency
contracts  and  foreign  currency  futures  contracts  in  anticipation  of
investments in companies whose securities are denominated in those currencies.

International  investing,  in  general,  may  involve  greater risks than U.S.
investments.  These  risks  may  be  intensified in the case of investments in
emerging markets or countries with limited or developing capital markets. (See
"Appendix  --  Foreign  Investments" and the SAI for a discussion of the risks
involved in foreign investing.)

BLACKROCK MANAGED BOND PORTFOLIO

The  Portfolio's  investment  objective  is  to  provide  a  high total return
consistent  with  moderate  risk of capital and maintenance of liquidity. This
investment  objective  is  fundamental  and  may  not  be  changed without the
affirmative  vote  of  a  majority  of  the Portfolio's outstanding shares (as
defined  in  the 1940 Act). Total return will consist of income, plus realized
and  unrealized  capital gains and losses. Although the net asset value of the
Portfolio  will fluctuate, the Portfolio attempts to preserve the value of its
investments to the extent consistent with its objective.

The Portfolio  is designed for investors who seek a total return over time that
is higher  than  that  generally  available  from  a  portfolio  of  shorter-
term obligations  while  recognizing  the  greater price fluctuation of 
longer-term instruments.  It  may also be a convenient way to add fixed-income
exposure to diversify an existing portfolio.

The  Sub-Adviser  actively manages the Portfolio's duration, the allocation of
securities  across  market  sectors,  and the selection of specific securities
within sectors. The Sub-Adviser also actively allocates the Portfolio's assets
among  the broad sectors of the fixed-income market, including but not limited
to,  U.S.  Government  and  agency  securities,  corporate securities, private
placements,  and  asset-backed  and  mortgage-related  securities,  including
residential  and  commercial  mortgage-backed  securities. Specific securities
which  the  Sub-Adviser  believes  are  undervalued  are selected for purchase
within the sectors using advanced quantitative tools, analysis of credit risk,
the  expertise  of  a dedicated trading desk, and the judgment of fixed-income
portfolio  managers  and analysts. Under normal circumstances, the Sub-Adviser
intends  to keep the Portfolio essentially fully invested with at least 65% of
the Portfolio's assets invested in bonds.

Duration  is  a  measure of the weighted average maturity of the bonds held in
the  Portfolio  and  can  be  used  as  a  measure  of  the sensitivity of the
Portfolio's  market  value  to  changes in interest rates. Under normal market
conditions,  the  Portfolio's duration will range between one year shorter and
one  year  longer than the duration of the U.S. investment-grade, fixed-income
universe,  as  represented  by  Salomon  Brothers  Broad Investment Grade Bond
Index,  the  Portfolio's  benchmark.  Currently,  the  benchmark's duration is
approximately 4.6  years. The maturities of the individual securities in the
Portfolio may vary widely, however.

The  Sub-Adviser  intends  to  manage its portfolio actively in pursuit of its
investment  objective.  Portfolio  transactions  are undertaken principally to
accomplish  the Portfolio's objective in relation to expected movements in the
general  level  of  interest  rates,  but  the  Portfolio  may  also engage in
short-term  trading consistent with its objective. To the extent the Portfolio
engages in short-term trading, it may incur increased transaction costs.

       CORPORATE BONDS, ETC. The Portfolio may invest in a broad range of debt
securities  of  domestic and foreign issuers. These include debt securities of
various  types  and  maturities, e.g., debentures, notes, mortgage securities,
equipment  trust  certificates  and  other  collateralized securities and zero
coupon  securities.  Collateralized  securities are backed by a pool of assets
such  as  loans  or receivables which generate cash flow to cover the payments
due on the securities. Collateralized securities are subject to certain risks,
including  a  decline  in  the  value  of the collateral backing the security,
failure of the collateral to generate the anticipated cash flow, or in certain
cases,  more rapid prepayment because of events affecting the collateral, such
as accelerated prepayment of mortgages or other loans backing these securities
or  destruction  of  equipment subject to equipment trust certificates. In the
event  of  any such prepayment, the Portfolio will be required to reinvest the
proceeds  of  prepayments  at  interest  rates  prevailing  at  the  time  of
reinvestment,  which  may  be  lower.  In  addition,  the value of zero coupon
securities  that  do  not  pay  interest  is  more  volatile  than  that  of
interest-bearing  debt  securities  with the same maturity. The Portfolio does
not  intend  to  invest  in common stock but may invest to a limited extent in
convertible  debt  or preferred stock. The Portfolio does not expect to invest
more than 25% of its assets in securities of foreign issuers. If the Portfolio
invests  in  non-U.S.  dollar-denominated  securities,  it  hedges the foreign
currency  exposure  into  the  U.S.  dollar.  See the Appendix and the SAI for
further  information  on  foreign  investments  and  convertible  securities,
including a discussion of risks.

        GOVERNMENT  OBLIGATIONS,  ETC. The Portfolio may invest in obligations
issued  or  guaranteed by the U.S. Government and backed by the full faith and
credit  of  the  United  States. These securities include Treasury securities,
obligations  of  the  Government  National  Mortgage  Association  ("GNMA
Certificates"),  the  Farmers  Home Administration and the Export Import Bank.
GNMA  Certificates  are mortgage-backed securities which evidence an undivided
interest  in  mortgage  pools.  These  securities  are  subject  to more rapid
repayment  than  their  stated  maturity would indicate because prepayments of
principal  on  mortgages  in  the pool are passed through to the holder of the
securities.  During  periods  of  declining  interest  rates,  prepayments  of
mortgages  in  the pool can be expected to increase. The pass-through of these
prepayments  would  have  the  effect of reducing the Portfolio's positions in
these  securities  and  requiring the Portfolio to reinvest the prepayments at
interest  rates prevailing at the time of reinvestment. The Portfolio may also
invest  in  obligations  issued  or  guaranteed by U.S. Government agencies or
instrumentalities  where the Portfolio must look principally to the issuing or
guaranteeing  agency  for  ultimate  repayment;  some  examples of agencies or
instrumentalities  issuing  these  obligations  are  the  Federal  Farm Credit
System, the Federal Home Loan Banks, the Federal National Mortgage Association
("FNMA")  and  the  Federal Home Loan Mortgage Corporation ("FHLMC"). Although
these  governmental issuers are responsible for payments on their obligations,
they do not guarantee their market value.

The  Portfolio  may  invest  in  debt  securities  of  foreign governments and
governmental  entities. International investing may involve greater risks than
U.S.  investments.  (See  "Appendix  -- Foreign Investments" and the SAI for a
discussion of the risks involved in foreign investing.)

          MONEY  MARKET  INSTRUMENTS.  The Portfolio may purchase money market
instruments to invest temporary cash balances or to maintain liquidity to meet
withdrawals.  However,  the  Portfolio may also invest up to 100% of its total
assets  in  money  market  instruments  as a temporary defensive measure taken
during,  or  in anticipation of, adverse market conditions. To the extent that
the  Portfolio  is invested in temporary defensive instruments, it will not be
pursuing  its investment objective. The money market investments permitted for
the  Portfolio include obligations of the U.S. Government and its agencies and
instrumentalities,  other  debt securities, commercial paper, bank obligations
and  repurchase  agreements.  For  more detailed information about these money
market investments, see Investment Objectives and Policies in the SAI.

       QUALITY INFORMATION. It is a current policy of the Portfolio that under
normal  circumstances  at  least  65%  of  its  total  assets  will consist of
securities  that are rated at least "A" by Moody's or S&P or that are unrated,
and  in  the  Sub-Adviser's opinion, are of comparable quality. In the case of
30% of the Portfolio's investments, the Portfolio may purchase debt securities
that  are  rated  Baa  or  better  by  Moody's  or BBB or better by S&P or are
unrated,  and  in  the  Sub-Adviser's  opinion, are of comparable quality. The
remaining 5% of the Portfolio's assets may be invested in debt securities that
are  rated  Ba or better by Moody's or BB or better by S&P or are unrated, and
in  the Sub-Adviser's opinion, are of comparable quality. Securities rated Baa
by  Moody's  or  BBB  by  S&P, although considered investment-grade, have some
speculative characteristics and such bonds, along with bonds rated below these
ratings,  are  commonly  referred  to as "junk bonds." "Investment-grade" debt
securities  are  those receiving one of the four highest ratings from Moody's,
S&P  or  another  NRSRO  or, if unrated by any NRSRO, deemed comparable by the
Sub-Adviser to such rated securities under guidelines established by the Board
of  Trustees of the Trust. Bonds in the lowest rating categories may involve a
substantial  risk  of  default  or  may  be  in  default.  Changes in economic
conditions,  or  developments regarding the individual issuer, are more likely
to  cause  price  volatility  and  weaken  the capacity of the issuers of such
securities  to  make  principal  and  interest  payments  than is the case for
higher-grade  debt  securities.  An economic downturn affecting the issuer may
result  in  an  increased  incidence  of  default.  The market for lower-rated
securities  may  be  thinner and less active than for higher-rated securities.
The Sub-Adviser will invest in such securities only when it concludes that the
anticipated return to the Portfolio on such an investment warrants exposure to
the  additional  level of risk. Rating standards must be satisfied at the time
an  investment  is  made. If the quality of the investment later declines, the
Portfolio  may  continue to hold the investment. See the SAI for more detailed
information on these ratings.

The  Portfolio  may  also  purchase  obligations  on  a  when-issued  or
delayed-delivery  basis,  enter  into  repurchase  and  reverse  repurchase
agreements,  loan  its portfolio securities, purchase certain privately-placed
securities  and  enter  into  certain  hedging  transactions  that may involve
options on securities and securities indexes, futures contracts and options on
futures  contracts.  For  a  discussion  of  these  investments and investment
techniques, see the Appendix and the SAI.

ELITEVALUE ASSET ALLOCATION PORTFOLIO 

The investment objective of the Portfolio is to achieve growth of capital over
time  through investment in a portfolio consisting of common stocks, bonds and
cash equivalents, the percentage of which will vary based on the Sub-Adviser's
assessments  of  the  relative  outlook  for such investments. This investment
objective  is  fundamental and may not be changed without the affirmative vote
of  a  majority  of the Portfolio's outstanding shares (as defined in the 1940
Act).  In  seeking  to  achieve  its investment objective, the types of equity
securities in which the Portfolio may invest are likely to be primarily equity
securities of companies that are believed by the Sub-Adviser to be undervalued
in  the  marketplace  in  relation to factors such as the companies' assets or
earnings.  It  is  the  Sub-Adviser's  intention  to  invest  in securities of
companies  which  in  the  Sub-Adviser's  opinion  possess  one or more of the
following characteristics: undervalued assets, valuable consumer or commercial
franchises, securities valuation below peer companies, substantial and growing
cash flow and/or a favorable price to book value relationship. Investments for
the  equity  portion  of  the  Portfolio  will  primarily  consist  of  equity
securities,  such  as common stocks, preferred stocks, convertible securities,
rights  and  warrants  in  proportions  which will vary from time to time. The
equity portion of the Portfolio will be invested primarily in stocks listed on
the  New  York  Stock  Exchange.  In addition, the Portfolio may also purchase
securities listed on other domestic securities exchanges, securities traded in
the  domestic  over-the-counter  market  and foreign securities, provided that
they are listed on a domestic or foreign securities exchange or represented by
American  depository  receipts  listed  on  a  domestic securities exchange or
traded in domestic or foreign over-the-counter markets.

To  a  lesser  extent, the equity portion of the Portfolio will be invested in
equity  securities  of  companies  with market capitalizations of less than $1
billion.  Smaller-capitalization  companies  are  often  under-priced  for the
following  reasons:  (i)  institutional investors, which currently represent a
majority of the trading volume in the shares of publicly-traded companies, are
often less interested in such companies, because in order to acquire an equity
position  that  is large enough to be meaningful to an institutional investor,
such  an  investor  may be required to buy a large percentage of the company's
outstanding  equity  securities,  and (ii) such companies may not be regularly
researched  by  stock  analysts, thereby resulting in greater discrepancies in
valuation.  The  Portfolio  may  also  purchase  securities  in initial public
offerings,  or  shortly  after  such  offerings  have been completed, when the
Sub-Adviser  believes  that  such  securities have greater-than-average market
appreciation  potential.  Debt  securities  invested  in  by the Portfolio are
expected  to  be predominantly investment-grade intermediate to long-term U.S.
Government  and  corporate  debt,  although  the Portfolio will also invest in
high-quality,  short-term  money market and cash equivalent securities and may
invest  almost all of its assets in such securities when the Sub-Adviser deems
it advisable in order to preserve capital.

The  allocation  of  the  Portfolio's  assets  among  the  different  types of
permitted investments will vary from time to time based upon the Sub-Adviser's
evaluation  of  economic  and market trends and its perception of the relative
values  available  from  such  types of securities at any given time. There is
neither a minimum nor a maximum percentage of the Portfolio's assets that may,
at  any  given time, be invested in any of the types of investments identified
above.  Consequently, while the Portfolio will earn income to the extent it is
invested  in  bonds  or  cash  equivalents,  the  Portfolio  does not have any
specific income objective.

The  Portfolio may dispose of investments (including money market instruments)
regardless  of  the  holding  period if, in the opinion of the Sub-Adviser, an
issuer's creditworthiness or perceived changes in a company's growth prospects
or  asset  value  make selling them advisable. Such an investment decision may
result  in  capital  gains  or  losses  and  could  result in a high portfolio
turnover  rate during a given period, resulting in increased transaction costs
related  to  equity  securities.  Disposing  of  debt  securities  in  these
circumstances  should  not  increase  direct  transaction  costs,  since  debt
securities  are  normally  traded  on  a  principal  basis  without  brokerage
commissions.  However,  such transactions do involve a mark-up or mark-down of
the price.

It  is  anticipated  that  the  Portfolio  will  have  an annual turnover rate
(excluding  turnover  of  securities having a maturity of one year or less) of
100% or less. A 100% annual turnover rate would occur, for example, if all the
securities  in  the  Portfolio's  investment portfolio were replaced once in a
period of one year. An investment in the Portfolio will entail both market and
financial  risk,  the extent of which depends on the amount of the Portfolio's
assets  which  are  committed  to  equity,  longer-term  debt  or money market
securities  at  any  particular  time.  As  the  Portfolio  may  invest  in
mortgage-backed  securities,  such  securities,  while  similar  to  other
fixed-income  securities,  involve  the  additional risk of prepayment because
mortgage  prepayments  are passed through to the holder of the mortgage-backed
security  and must be reinvested. Prepayments of mortgage principal reduce the
stream  of  future  payments  and generate cash which must be reinvested. When
interest rates fall, prepayments tend to rise. As such, the Portfolio may have
to  reinvest  that  portion  of  its  assets  invested in such securities more
frequently when interest rates are low than when interest rates are high.

There  is  no limit to the amount of foreign securities that the Portfolio may
acquire.  Certain  factors  and  risks  are presented by investment in foreign
securities  which  are  in  addition  to  the usual risks inherent in domestic
securities. (See "Appendix - Foreign Investments" and the SAI for a discussion
of the risks involved in foreign investing.)

It  is  the  present intention of the Sub-Adviser to invest no more than 5% of
the  Portfolio's net assets in bonds rated below Baa3 by Moody's or BBB by S&P
(commonly known as "junk bonds"). In the event that the Sub-Adviser intends in
the future to invest more than 5% of the Portfolio's net assets in junk bonds,
appropriate disclosures will be made to existing and prospective shareholders.
For  information  about  the  possible  risks  of investing in junk bonds, see
"Appendix - Lower-Rated Investments" and the SAI.

The  Portfolio  may  also  engage  in  repurchase  agreements,  lend portfolio
securities  (up  to  10%  of the value of the Portfolio's total assets), enter
into  forward  foreign  currency contracts and invest in modified pass-through
certificates.  These  investments  and  transactions  are described in greater
detail in the Appendix and the SAI.

SALOMON BROTHERS U.S. GOVERNMENT SECURITIES PORTFOLIO

The  investment  objective of the Portfolio is to seek a high level of current
income.  This  investment  objective  is  fundamental  and  may not be changed
without  the  affirmative  vote  of  a majority of the Portfolio's outstanding
shares  (as  defined  in  the  1940  Act). The Sub-Adviser seeks to attain the
Portfolio's objective by investing a substantial portion of its assets in debt
obligations  and  mortgage-backed  securities issued or guaranteed by the U.S.
Government  and its agencies or instrumentalities, and collateralized mortgage
obligations backed by such securities.

At least 80% of the total assets of the Portfolio will be invested in:

     (1)  U.S. Treasury obligations;

     (2)  Obligations issued or guaranteed by agencies or instrumentalities of
the U.S. Government which are backed by their own credit and may not be backed
by the full faith and credit of the U.S. Government;

     (3)  Mortgage-backed securities guaranteed by the Government National
Mortgage  Association  ("GNMA"),  popularly  known  as "Ginnie Maes," that are
supported  by  the  full  faith  and  credit  of  the  U.S.  Government  and
mortgage-backed  securities guaranteed by agencies or instrumentalities of the
U.S.  Government,  which  are  supported  by their own credit but not the full
faith and credit of the U.S. Government,such as the Federal Home Loan Mortgage
Corporation ("FHLMC") and the Federal National Mortgage Association ("FNMA"); 
and 

     (4)  Collateralized mortgage obligations issued by private issuers for
which  the  underlying  mortgage-backed  securities  serving as collateral are
backed  (i)  by  the  credit  alone  of  the  U.S.  Government  agency  or
instrumentality  which issues or guarantees the mortgage-backed securities, or
(ii) by the full faith and credit of the U.S. Government.

Up  to  20%  of  the  total  assets  of  the Portfolio may be invested in U.S.
dollar-denominated  marketable  corporate  debt  securities (such as bonds and
debentures)  of domestic and foreign issuers rated at the time of purchase "A"
or better by Moody's or S&P, or of comparable quality thereto as determined by
the  Sub-Adviser.  The risks associated with such investments are described in
greater detail in the Appendix.

From time to time, a  significant portion of the Portfolio's assets may be
invested  in  mortgage-backed  securities.  The  mortgage-backed securities in
which  the  Portfolio  invests  represent  participating interests in pools of
fixed rate and adjustable rate residential mortgage loans issued or guaranteed
by  agencies  or  instrumentalities  of  the  U.S.  Government.  However,  any
guarantee of these types of securities runs only to the principal and interest
payments  on  the securities and not to the market value of such securities or
the  principal and interest payments on the underlying mortgages. In addition,
the  guarantee only runs to the portfolio securities held by the Portfolio and
not to the purchase of shares of the Portfolio.

Mortgage-backed  securities  are  issued  by lenders such as mortgage bankers,
commercial  banks,  and  savings  and  loan  associations.  Mortgage-backed
securities  generally  provide  monthly  payments  which  are,  in  effect,  a
"pass-through"  of  the monthly interest and principal payments (including any
prepayments)  made  by  the individual borrowers on the pooled mortgage loans.
Principal  prepayments  result from the sale of the underlying property or the
refinancing  or  foreclosure  of underlying mortgages.

The yield of mortgage-backed securities is based on the prepayment rates of 
the underlying pool of securities. Prepayments tend to increase during periods 
of falling interest rates,  while  during  periods  of rising interest rates 
prepayments will most likely decline. Reinvestments by the Portfolio of 
scheduled principal payments and  unscheduled  prepayments may occur at higher 
or lower rates than the original  investment, thus  affecting  the  yield of 
the Portfolio. Monthly interest  payments  received  by the Portfolio have a 
compounding effect which will  increase  the yield to shareholders as 
compared to debt obligations that pay  interest  semiannually. For a further 
description of mortgage-backed securities, see the Appendix and the SAI.

The  Portfolio will not knowingly invest in a high-risk mortgage security. The
term  "high-risk  mortgage  security"  is  defined  generally  as any mortgage
security that exhibits significantly greater price volatility than a benchmark
security,  the  FNMA  current  coupon  30-year  mortgage-backed  pass-through
security.  Shares  of  the Portfolio are neither insured nor guaranteed by the
U.S.  Government,  its agencies or instrumentalities. Neither the issuance by,
nor  the  guarantee  of,  a  U.S. Government agency for a security constitutes
assurance  that the security will not significantly fluctuate in value or that
the Portfolio will receive the originally anticipated yield on the security.

The  Portfolio  may engage in various hedging and other strategic transactions
including  that  it  may:  write  covered  call  options  and  put  options on
securities and purchase call and put options on securities, write covered call
and  put  options  on  securities indexes and purchase call and put options on
securities  indexes,  and,  may  enter  into  futures  contracts  on financial
instruments  and  indexes  and write and purchase put and call options on such
futures  contracts.  It  is  not  presently  anticipated  that  any  of  these
strategies will be used to a significant degree by the Portfolio. The Appendix
and  the  SAI  contain  a description of these strategies and of certain risks
associated therewith.

The  Portfolio  may  purchase  debt  securities  on  a  "when-issued"  or
"forward-delivery"  basis,  loan  portfolio  securities  (up  to  20% of total
Portfolio  assets),  engage  in  repurchase  agreements,  reverse  repurchase
agreements and dollar roll transactions, and invest in illiquid securities (up
to  15% of the Portfolio's net assets, not including restricted securities for
which  a ready market is available pursuant to exemption provided by Rule 144A
under  the  1933  Act.)  These  investments  and transactions are described in
greater detail in the Appendix and the SAI.

GLOBAL ADVISORS GROWTH EQUITY PORTFOLIO

The  Portfolio's  investment objective is to provide total returns that exceed
over  time  the  S&P  500  Index through investment in equity securities. This
objective  may  be  changed  only  with  the  approval  of  a  majority of the
Portfolio's shareholders as defined by the 1940 Act.

Equity  securities  will  be  selected  by  the  Portfolio  on  the basis of a
proprietary  analytical model of the Sub-Adviser. Each security will be ranked
according to two separate and uncorrelated measures: value and the momentum of
Wall  Street  sentiment.  The  value  measure  compares  a  company's  assets,
projected earnings growth and cash flow growth with its stock price within the
context  of  its  historical  valuation.  The measure of Wall Street sentiment
examines  changes in Wall Street analysts' earnings estimates and ranks stocks
by  the  strength  and  consistency  of  those changes. These two measures are
combined  to  create  a single composite score of each stock's attractiveness.
These  scores  are  then  plotted  on  a  matrix  according  to their relative
attractiveness.  Sector  weights  are maintained at a similar level to that of
the  S&P  500  Index  to  avoid  unintended  exposure  to  factors such as the
direction  of  the  economy,  interest  rates,  energy  prices  and
inflation.

The Portfolio  will  invest  at  least 65% of its total assets in equity
securities.  However,  the  Portfolio  may  invest  temporarily  for defensive
purposes,  without  limitation,  in  certain  high-quality,  short-term,
fixed-income  securities.  Such  securities  may be used to invest uncommitted
cash  balances or to maintain liquidity to meet shareholder redemptions. These
securities  include  obligations  issued  or  guaranteed  as  to principal and
interest  by  the  U.S.  Government,  its  agencies  and instrumentalities and
repurchase  agreements  collateralized by these obligations, commercial paper,
bank certificates of deposit, bankers' acceptances and time deposits.

The  Portfolio  may  invest  in U.S. Government securities, which include U.S.
Treasury  bills, notes and bonds and other obligations issued or guaranteed as
to  interest  and  principal  by  the  U.S.  Government,  its  agencies  and
instrumentalities.  Obligations  issued  or  guaranteed  as  to  interest  and
principal  by  the U.S. Government, its agencies and instrumentalities include
securities  that  are  supported  by  the  full faith and credit of the United
States  Treasury,  securities that are supported by the right of the issuer to
borrow  from  the  United States Treasury, discretionary authority of the U.S.
Government  agency  or instrumentality, and securities supported solely by the
creditworthiness of the issuer.

The  Portfolio  may  enter  into  or  invest in repurchase agreements, reverse
repurchase  agreements,  forward  commitments, when-issued transactions (up to
25%  of  the  Portfolio's  net  assets), illiquid securities (up to 15% of the
Portfolio'  s net assets), restricted securities (up to 10% of the Portfolio's
net  assets)  and  variable amount master demand notes. The Portfolio also may
enter into futures contracts, options on futures, covered put and call options
on securities in which it may directly invest, and purchase or sell options on
securities indexes that are comprised of securities in which the Portfolio may
directly  invest.  The Portfolio may lend portfolio securities with a value of
up to 33 1/3% of the Portfolio's total assets.

In addition to the policies noted above, the Portfolio may also invest in
obligations  of  foreign  issuers  which  are  U.S.  dollar-denominated, ADRs,
corporate  bonds,  debentures,  notes  and  warrants.  During the coming year,
investment  in each of these instruments will not exceed 5% of the Portfolio's
total net assets.

These  investments  and  transactions  are  described in greater detail in the
Appendix and the SAI.

GLOBAL ADVISORS MONEY MARKET PORTFOLIO

The  Portfolio's  investment  objective  is to maximize current income, to the
extent  consistent  with  the  preservation  of  capital and liquidity and the
maintenance  of  a  stable  $1.00  per  share net asset value, by investing in
dollar-denominated  securities  with remaining maturities of one year or less.
This  investment  objective  is fundamental and may not be changed without the
affirmative  vote  of  a  majority  of  the Portfolio's outstanding shares (as
defined in the 1940 Act).

The  Portfolio  attempts  to  meet  its  investment  objective by investing in
high-quality  money  market  instruments.  Such  instruments include: (1) U.S.
Treasury bills, notes and bonds; (2) other obligations issued or guaranteed as
to  interest  and  principal  by  the  U.S.  Government,  its  agencies  and
instrumentalities;  (3)  instruments  of  U.S.  and  foreign  banks, including
certificates  of  deposit,  banker's  acceptances  and  time  deposits;  these
instruments  may  include  Eurodollar  Certificates  of  Deposit  ("ECDs"),
Eurodollar Time Deposits ("ETDs") and Yankee Certificates of Deposit ("YCDs");
(4)  commercial  paper  of  U.S.  and  foreign  companies;  (5)  asset-backed
securities;  (6)  corporate  obligations;  (7)  variable  amount master demand
notes; and (8) repurchase agreements.

The  Portfolio  will  limit  its  portfolio  investments,  including  puts and
repurchase  agreements,  if  any,  to  those  United States dollar-denominated
instruments  which  at  the  time  of  acquisition  the Sub-Adviser determines
present minimal credit risk and which are: (a) rated as a First Tier or Second
Tier  security (as defined in Rule 2a-7 under the 1940 Act) by any two NRSROs;
(b)  long-term  securities  with  a remaining maturity of 397 days or less and
which  have  been  assigned  a  short-term  rating  in  the two highest rating
categories  by  any  two  NRSROs  or  whose  issuer has outstanding short-term
obligations  of  comparable  priority  and security which are rated in the two
highest  short-term  rating categories by any two NRSROs; (c) if rated by only
one  NRSRO, rated by the NRSRO as a First Tier or Second Tier security; or (d)
if  unrated,  determined by the Sub-Adviser to be of a quality comparable to a
First or Second Tier security.

The  Portfolio  may  invest  in  U.S. Government securities which include U.S.
Treasury  bills, notes and bonds and other obligations issued or guaranteed as
to  interest  and  principal  by  the  U.S.  Government,  its  agencies  and
instrumentalities.  Obligations  issued  or  guaranteed  as  to  interest  and
principal  by  the U.S. Government, its agencies and instrumentalities include
securities  that  are  supported  by  the  full faith and credit of the United
States  Treasury,  securities that are supported by the right of the issuer to
borrow  from  the  United States Treasury, discretionary authority of the U.S.
Government  agency  or instrumentality, and securities supported solely by the
creditworthiness of the issuer.

The  Portfolio  may  enter  into  or  invest in repurchase agreements, reverse
repurchase  agreements,  forward  commitments, when-issued transactions (up to
25%  of  the  Portfolio's  net  assets), illiquid securities (up to 10% of the
Portfolio's  net  assets), restricted securities (up to 10% of the Portfolio's
net assets) and variable amount master demand notes.

The Portfolio may also purchase asset-backed securities representing undivided
fractional  interests  in  pools  of  instruments, such as consumer loans. The
Portfolio  may  invest  in mortgage-related pass-through securities, including
GNMA  Certificates  ("Ginnie Maes"), FHLMC Mortgage Participation Certificates
("Freddie  Macs")  and  FNMA  Guaranteed  Mortgage  Pass-Through  Certificates
("Fannie  Maes").  Mortgage  pass-through  certificates  are  mortgage-backed
securities  representing  undivided  fractional  interests  in  pools  of
mortgage-backed  loans.  These  loans are made by mortgage bankers, commercial
banks,  savings  and  loan  associations  and  other  lenders. Ginnie Maes are
guaranteed  by  the  full faith and credit of the U.S. Government, but Freddie
Macs and Fannie Maes are not.

The  Portfolio  may invest in zero coupon securities and variable and floating
rate  securities. As stated above, the Portfolio may invest in ECDs, ETDs, and
YCDs.  ECDs  are  U.S.  dollar-denominated  certificates  of deposit issued by
foreign  branches of domestic banks. ETDs are U.S. dollar-denominated deposits
in  foreign  branches  of  U.S.  banks  and  foreign  banks.  YCDs  are  U.S.
dollar-denominated  certificates of deposit issued by U.S. branches of foreign
banks.

The  Portfolio  may lend portfolio securities with a value of up to 33 1/3% of
its total assets.

These  investments  and  transactions  are  described in greater detail in the
Appendix and the SAI.

The  Portfolio  must limit investments to securities with remaining maturities
of 397 days or less and must maintain a dollar-weighted average maturity of 90
days  or  less.  The  Portfolio normally holds instruments to maturity but may
dispose  of them prior to maturity if the Sub-Adviser finds it advantageous to
do so.

                           MANAGEMENT OF THE TRUST

INVESTMENT ADVISER

Under an Investment Advisory Agreement dated August 23, 1995, WNL Investment
Advisory Services, Inc., 5555 San Felipe, Suite 900, Houston, Texas 77056 (the
"Adviser"),  manages the business and affairs of the Portfolios and the Trust,
subject to the control of the Trustees.

The  Adviser  is  a  Delaware  corporation which was incorporated in 1994. The
Adviser  has had no previous experience in advising a mutual fund. The Adviser
is  a  subsidiary  of  Western  National  Corporation  ("Western National"), a
Delaware corporation organized in October 1993 to serve as the holding company
for the Life Company.

On  December  23,  1994,  AGC  Life Insurance Company ("AGC Life"), a Missouri
domiciled  life  insurer, purchased 24,947,500 shares (the "Shares") of common
stock, par value $.001 per share, of Western National, from Conseco Investment
Holding  Company,  a  wholly-owned  subsidiary  of Conseco, Inc., representing
approximately  40%  of  the  outstanding common stock of Western National. The
Shares  represent  all  of  the  common stock of Western National then held by
Conseco  and  its  subsidiaries.  AGC  Life  is  a  wholly-owned subsidiary of
American  General  Corporation,  a  Texas  corporation  ("AGC"). References to
"American  General"  are  references  to  AGC  and  its  direct  and  indirect
majority-controlled  subsidiaries.  Prior  to the above-described transaction,
American General held no voting securities of Western National.

Under the Investment Advisory Agreement, the Adviser is obligated to formulate
a continuing program for the investment of the assets of each Portfolio of the
Trust  in  a  manner  consistent  with each Portfolio's investment objectives,
policies  and restrictions and to determine from time to time securities to be
purchased,  sold,  retained  or  lent  by  the  Trust  and  to implement those
decisions.  The  Investment  Advisory Agreement also provides that the Adviser
shall  manage the Trust's business and affairs and shall provide such services
required  for  effective  administration  of  the Trust as are now provided by
employees  or  other  agents  engaged  by  the  Trust. The Investment Advisory
Agreement  further  provides  that  the  Adviser  shall furnish the Trust with
office  space  and  necessary personnel, pay ordinary office expenses, pay all
executive salaries of the Trust and furnish, without expense to the Trust, the
services  of  such members of its organization as may be duly elected officers
or  Trustees  of  the  Trust.  The Investment Advisory Agreement provides that
Adviser  may  retain  sub-advisers, at the Adviser's own cost and expense, for
the purpose of managing the investment of the assets of one or more Portfolios
of the Trust.

As full compensation for its services under the Investment Advisory Agreement,
the  Trust  will  pay  the Adviser a monthly fee at the following annual rates
shown  in  the  table  below  based  on  the  average daily net assets of each
Portfolio.

<TABLE>
<CAPTION>
<S>                                          <C>

Portfolio                                    Advisory Fee
- -------------------------------------------  ---------------------------

Van Kampen American Capital Emerging Growth  .75% of average net assets

BEA Growth and Income                        .75% of average net assets

Credit Suisse International Equity           .90% of average net assets

BlackRock Managed Bond                       .55% of average net assets

EliteValue Asset Allocation                  .65% of average net assets

Salomon Brothers U.S. Government Securities  .475% of average net assets

Global Advisors Growth Equity                .61% of average net assets

Global Advisors Money Market                 .45% of average net assets 
</TABLE>



ADVISORY FEE WAIVER AND EXPENSE CAP

The Adviser has agreed to waive its entire advisory fee for each of the
Portfolios  for  the  initial  six  (6)  months of each Portfolio's investment
operations.      Additionally, the Adviser has agreed to waive that portion of
its  advisory  fee  which is in excess of the amount payable by the Adviser to
each  sub-adviser  pursuant to the respective sub-advisory agreements for each
Portfolio until May 1, 1997.

For  the  period ended December 31, 1995, the Adviser waived its advisory fees
in the following amounts with respect to the Portfolios which were operational
for such period:

<TABLE>
<CAPTION>
<S>                   <C>

         PORTFOLIO    ADVISORY FEES WAIVED

Growth and Income     $               3,106
International Equity                  3,643
Growth Equity                         2,490
Money Market                            106
</TABLE>



In  addition,  Western  National  Life  Insurance Company, an affiliate of the
Adviser,  has  undertaken to bear until May 1, 1997, all operating expenses of
each Portfolio, excluding the compensation of the Adviser, that exceed .12% of
each Portfolio's average daily net assets.

The Adviser and the Life Company have entered into an Investment Advisory 
Services Agreement, dated August 23, 1995, the purpose of which is to ensure 
that the Adviser, which is minimally capitalized, has adequate facilities and
financing for the carrying on of its business. Under the terms of this 
Agreement, the Life Company is obligated to provide the Adviser with adequate
capitalization in order for the Adviser to meet any minimum capital 
requirements. The Life Company is further obligated to reimburse the Adviser
or assume payment for any obligation incurred by the Adviser. The Life 
Company is also obligated to provide the Adviser with facilities and 
personnel sufficient for the Adviser to perform its obligations under the 
Investment Advisory Agreement.

The Adviser retains State Street Bank and Trust Company, a Massachusetts 
trust company, to supervise various aspects of the Trust's administrative 
operations and to perform certain specific services including, but not 
limited to, the preparation and filing of Trust reports and tax returns, 
pursuant to a Subadministration Agreement for Reporting and Accounting 
Services between the Adviser, the Trust and State Street Bank and Trust 
Company.

EXPENSES OF THE TRUST

The organizational expenses of the Trust were paid for by the Life 
Company. The Life Company also contributed the initial  working capital to
the Trust.

SUB-ADVISERS

In  accordance  with  each  Portfolio's  investment objective and policies and
under  the  supervision  of  Adviser  and  the Trust's Board of Trustees, each
Portfolio's  Sub-Adviser  is  responsible  for  the  day-to-day  investment
management  of the Portfolio, makes investment decisions for the Portfolio and
places  orders  on  behalf of the Portfolio to effect the investment decisions
made  as  provided in separate Sub-Advisory Agreements among each Sub-Adviser,
the  Adviser and the Trust. The following organizations act as Sub-Advisers to
the Portfolios:

    VAN KAMPEN AMERICAN CAPITAL ASSET MANAGEMENT, INC. ("VAN KAMPEN 
AMERICAN CAPITAL"), 2800 Post Oak Boulevard, Houston, Texas 77056, is the 
Sub-Adviser for the Van Kampen American Capital Emerging Growth Portfolio 
of the Trust. Van Kampen American  Capital is a diversified asset management 
company with  more than two million  retail investor accounts, extensive 
capabilities for managing institutional portfolios, and nearly $50 billion 
under  management or supervision.  Van  Kampen  American  Capital's  more 
than 40 open-end and 38 closed-end funds and more than 2,800 unit investment 
trusts are professionally distributed by leading financial advisers 
nationwide.

Van Kampen American Capital is a wholly-owned subsidiary  of Van Kampen
American  Capital,  Inc., which is a wholly-owned subsidiary of VK/AC Holding,
Inc. VK/AC Holding, Inc. is controlled, through the ownership of a substantial
majority of its common stock, by The Clayton & Dubilier Private Equity Fund IV
Limited  Partnership ("C&D L.P."), a Connecticut limited partnership. C&D L.P.
is  managed  by  Clayton,  Dubilier  &  Rice,  Inc.,  a New York-based private
investment  firm.  The  General  Partner  of  C&D  L.P.  is Clayton & Dubilier
Associates  IV  Limited  Partnership  ("C&D  Associates  L.P.").  The  general
partners  of  C&D  Associates  L.P.  are  Joseph L. Rice III, B. Charles Ames,
Alberto  Cribiore,  William  Barbe,  Donald  J.  Gogel, Leon J. Hendrix, Jr., 
Hubbard  C.  Howe  and  Andrell  E.  Pearson,  each  of whom is a principal of
Clayton, Dubilier & Rice, Inc.

Gary  M.  Lewis  is primarily responsible for the day-to-day management of the
Portfolio's  investment  portfolio.  Mr.  Lewis  has  been  Vice  President  -
Portfolio Manager of Van Kampen American Capital since December 1987.

        BEA ASSOCIATES ("BEA"), One Citicorp Center, 153 East 53rd Street, New
York,  New  York  10022,  is  the  Sub-Adviser  for  the BEA Growth and Income
Portfolio  of the Trust. BEA is a general partnership organized under the laws
of  the  State  of New York and, together with its predecessor firms, has been
engaged  in  the investment advisory business for over 50 years. Credit Suisse
Capital  Corporation  ("CS  Capital")  is an 80% partner and Basic Appraisals,
Inc.  is  a  20%  partner  in  BEA. CS Capital is a wholly-owned subsidiary of
Credit  Suisse  Investment  Corporation, which is a wholly-owned subsidiary of
Credit Suisse, the second largest Swiss bank, which in turn is a subsidiary of
CS  Holding,  a  Swiss  corporation.  No  one  person  or  entity  possesses a
controlling interest in Basic Appraisals, Inc.

BEA is a diversified asset manager, handling  global  equity,  balanced,
fixed-income  and  derivative  securities accounts for private individuals, as
well as corporate pension and profit-sharing plans, state pension funds, union
funds,  endowments and other charitable institutions. As of December 31, 1995,
BEA managed approximately $27 billion in assets.

BEA currently acts as investment adviser for  74  registered  investment
companies and 40 offshore funds.

The portfolio is managed by teams of BEA managers, each dedicated to 
managing a  portion  of the Portfolio's assets. The BEA Domestic Equity 
Management Team manages  the  Equity Portion of the Portfolio. The BEA Fixed 
Income Management Team manages the Fixed-Income portion of the Portfolio.


         CREDIT SUISSE INVESTMENT MANAGEMENT, LTD. ("CSIM"), One Cabot Square,
London, England, is the Sub-Adviser for the Credit Suisse International Equity
Portfolio  of the Trust. CSIM is an indirect wholly-owned subsidiary of Credit
Suisse,  the  largest  global  financial  services group based in Switzerland,
which in turn is a subsidiary of CS Holding, a Swiss corporation.

The  firm, which prior to June 1995 was owned by an affiliate of Credit Suisse
and  was  doing  business under the name CS First Boston Investment Management
Limited,  has  been offering diverse global fixed-income and equity investment
strategies  for  institutional  clients  in  over 35 countries worldwide since
1983.  Clients  include central banks and other government entities, insurance
companies,  pension  funds,  multinational  corporations, commercial banks and
other institutions. Individual portfolio holdings are denominated in more than
15  currencies. The team of 51 investment professionals is dedicated to adding
value  to  the  investment  process  by  creating  and  implementing portfolio
strategies tailored to each client's needs.

At  December  31,  1995,  Credit  Suisse  Investment Management Group provided
investment advice for approximately $20 billion of assets.

The  day-to-day  management  of  the  Portfolio is the responsibility of Glenn
Wellman, who joined the firm in 1993 as a Managing Director and Head of Global
Equity  Portfolio  Management. Mr. Wellman has been investing in international
markets  since 1970. He has managed Europe Australia Far East (EAFE) benchmark
mutual funds as well as private accounts for Fortune 100 clients since 1982. A
worldwide  equity  team  of  24  professionals  supports Mr. Wellman. Prior to
joining  CSIM,  Mr. Wellman spent 14 years with Alliance Capital Limited, most
recently  as  Chief  Investment  Officer  with  responsibility  for developing
Alliance's  global  equity management service. He has been an Associate of the
Institute of Investment Management and Research since 1974. Mr. Wellman earned
a  BSc  (Hons)  in  Chemistry  from  the  University of London and an MBA from
Manchester Business School.

   BLACKROCK FINANCIAL MANAGEMENT ("BLACKROCK"), 345 Park Avenue, New York,
New  York,  10154, is the Sub-Adviser for the BlackRock Managed Bond Portfolio
of the Trust. BlackRock is an independent adviser that specializes in managing
high-quality,  fixed-income  portfolios.  BlackRock currently manages over $39
billion of government, mortgage-backed, corporate, asset-backed, and municipal
securities.

BlackRock  was  founded  in  1988 on the belief that experienced professionals
using  a  disciplined  process and advanced analytical tools will consistently
add  value  to  client portfolios. The firm has extensive experience creating,
analyzing  and  managing  high-quality, fixed-income portfolios. BlackRock has
over  110  professionals  including 16 portfolio managers and 25 quantitative,
credit  and  computer  analysts.  BlackRock  provides  fixed-income investment
management  services to public and private pension plans, insurance companies,
mutual funds and international investors.

On  June  16, 1994, BlackRock announced a definitive agreement to merge with a
subsidiary  of  PNC Bank, the nation's tenth largest banking organization. The
transaction  closed  on February 28, 1995, and resulted in no change of senior
portfolio  management  or  client service personnel at BlackRock. In addition,
BlackRock  professionals  retained  a significant ongoing economic interest in
the  future  earnings  of  BlackRock.  BlackRock  also  retained  its name and
location.

The  day-to-day portfolio management of the Portfolio is the responsibility of
Keith Anderson and Glenn Henricksen.

Keith  Anderson  is  a  Partner  at  BlackRock,  and  co-head of the Portfolio
Management  Group.  Mr.  Anderson  is  a  member of both the firm's Management
Committee  and  its  Investment  Strategy  Committee. Mr. Anderson has primary
responsibility  for  managing client portfolios and for acting as a specialist
in  the  government  and  mortgage  sectors.  His  areas  of expertise include
Treasuries,  agencies, futures, options, swaps and a wide range of traditional
and non-traditional mortgage securities.

Prior  to  founding  BlackRock  in  1988, Mr. Anderson was a Vice President in
Fixed-Income  Research  at  The  First Boston Corporation. Mr. Anderson joined
First  Boston  in  1987  as  a  mortgage  securities  and  derivative products
strategist  working  with institutional money managers. From 1983 to 1987, Mr.
Anderson  was  a  Vice President and Portfolio Manager at Criterion Investment
Management  Company  where  he  had  primary responsibility for a $2.8 billion
fixed-income  portfolio  and  was  an  integral  part  of the firm's portfolio
management team.

Mr.  Anderson  has  published  numerous  articles  on fixed-income strategies,
including  two  articles  in  THE  HANDBOOK OF FIXED INCOME OPTIONS: "Scenario
Analysis  and  the  Use  of  Options in Total Return Portfolio Management" and
"Measuring,  Interpreting,  and  Applying  Volatility  within the Fixed Income
Market."  Mr. Anderson received a Bachelor of Science in Economics and Finance
from Nichols College in 1981 and an MBA from Rice University in 1983.

Glenn  Henricksen  is a Vice President and Portfolio Manager at BlackRock. Mr.
Henricksen  is  a  member of both the firm's Investment Strategy Committee and
its  Credit  Committee.  Mr.  Henricksen's  primary  responsibility  is  the
management of corporate securities in client portfolios.

Prior  to joining BlackRock in 1992, Mr. Henricksen was a Portfolio Manager at
New York Life Insurance Company.  Mr. Henricksen joined New York Life in 1988,
and  was responsible for managing over $6 billion in corporate debt securities
and  developing  a  Latin  and  emerging  markets  debt  unit.  Mr. Henricksen
previously  worked  as  a corporate bond trader at Prudential-Bache Securities
and as an equity research analyst at Value Line.

Mr.  Henricksen received a Bachelor of Science in Business in 1981, and an MBA
in Finance in 1982 from the State University of New York at Buffalo.

     OPCAP ADVISORS, FORMERLY QUEST FOR VALUE ADVISORS ("ADVISORS"), One World
Financial  Center,  200  Liberty  Street,  New  York,  New  York 10281, is the
Sub-Adviser  for  the  EliteValue  Asset  Allocation  Portfolio  of the Trust.
Advisors  is  a subsidiary of Oppenheimer Capital, a general partnership which
is  registered  as  an investment adviser under the Investment Advisers Act of
1940,  by  whose  employees all investment management services performed under
the  Sub-Advisory  Agreement  are  rendered  to  the  Portfolio.  Oppenheimer
Financial  Corp.,  a  holding  company,  holds  a  33% interest in Oppenheimer
Capital,  and  Oppenheimer  Capital,  L.P.,  a Delaware limited partnership of
which  Oppenheimer Financial Corp. is the sole general partner and whose units
are  traded  on  the New York Stock Exchange, owns the remaining 67% interest.
Advisors  and  its  affiliates  have  operated  as investment advisers to both
mutual  funds  and  other  clients  since 1968, and had over $39 billion under
management as of March 31, 1996.

The  investments  of  the  Portfolio  are managed by Richard J. Glasebrook II,
Managing Director for Oppenheimer Capital.

     SALOMON BROTHERS ASSET MANAGEMENT INC ("SBAM"), 7 World Trade Center, New
York,  New  York  10048,  is  the  Sub-Adviser  for  the Salomon Brothers U.S.
Government  Securities  Portfolio  of  the  Trust.  SBAM  is  an  indirect,
wholly-owned  subsidiary of Salomon Inc incorporated in 1987, and an affiliate
of  Salomon  Brothers  Inc.  Through  its office in New York and affiliates in
London,  Frankfurt,  Hong  Kong  and  Tokyo,  SBAM  provides  a  full range of
fixed-income  and  equity  investment advisory services for its individual and
institutional  clients  around  the  world,  including  central banks, pension
funds,  endowments,  insurance  companies,  and  various  investment companies
(including  portfolios  thereof). As of December 31, 1995, SBAM had investment
advisory  responsibility  for  approximately  $13  billion of assets. SBAM has
access  to  Salomon  Brothers  Inc's more than 400 economists, mortgage, bond,
sovereign and equity analysts.

Steven Guterman is primarily responsible for the day-to-day management of the
Portfolio.  Mr.  Guterman  is  assisted  in the management of the Portfolio by
Roger Lavan.

Mr.  Guterman,  who joined SBAM in 1990, is a Senior Portfolio Manager, and is
responsible  for  the  day-to-day  management of SBAM managed portfolios which
invest  primarily  in  mortgage-backed  and  U.S.  Government  securities. Mr.
Guterman  joined  Salomon  Brothers  Inc  in  1983. He initially worked in the
mortgage  research  group where he became a Research Director and later traded
derivative mortgage-backed securities for Salomon Brothers Inc.

Mr. Lavan, who joined SBAM in 1990, is a Portfolio Manager, and is responsible
for  investment  company  and  institutional  portfolios  which  invest  in
mortgage-backed  and  U.S.  Government  securities. Prior to joining SBAM, Mr.
Lavan  spent  four years analyzing portfolios for Salomon Brothers Inc's Fixed
Income  Sales  Group  and  Product Support Divisions. Mr. Lavan is a Chartered
Financial  Analyst, a member of the New York Society of Security Analysts, and
received his MBA from Fordham University in 1990.

      STATE STREET GLOBAL ADVISORS, Two International Place, Boston, MA 02110,
the  investment management division of State Street Bank and Trust Company, is
the  Sub-Adviser  for  the  Global  Advisors Growth Equity and Global Advisors
Money Market Portfolios of the Trust. State Street Bank and Trust Company, one
of  the  largest providers of securities processing and recordkeeping services
for U.S. mutual funds and pension funds, is a wholly-owned subsidiary of State
Street  Boston Corporation, a publicly held bank holding company. State Street
Global Advisors, with over $225 billion (U.S.) under management as of December
31,  1995 provides complete global investment management services from offices
in  the  United States, London, Sydney, Hong Kong, Tokyo, Toronto, Luxembourg,
Melbourne, Montreal and Paris.

Investment decisions regarding the Global Advisors Growth Equity Portfolio are
made  by  committee,  and  no  one  person is primarily responsible for making
recommendations to that committee.

SUB-ADVISORY FEES

Under  the  terms of the Sub-Advisory Agreements, the Adviser shall pay to the
Sub-Advisers,  as full compensation for services rendered under the respective
Agreements  with  respect  to  the  various  Portfolios,  monthly  fees at the
following annual rates shown in the table below based on the average daily net
assets of each Portfolio.

<TABLE>
<CAPTION>
<S>                                          <C>

Portfolio                                    Sub-Advisory Fee
- -------------------------------------------  ---------------------------

Van Kampen American Capital Emerging Growth   .50% of average net assets

BEA Growth and Income                        .50% of average net assets

Credit Suisse International Equity           .65% of average net assets

BlackRock Managed Bond                       .30% of average net assets

EliteValue Asset Allocation                  .40% of average net assets

Salomon Brothers U.S. Government Securities  .225% of average net assets

Global Advisors Growth Equity                .36% of average net assets

Global Advisors Money Market                 .20% of average net assets
</TABLE>



SUB-ADVISORY FEE WAIVER

Each  of  the Sub-Advisers has agreed to waive its sub-advisory fees due under
the  Sub-Advisory Agreements for the initial six (6) months of each respective
Portfolio's  investment operations.  The sub-advisory fee waivers with respect
to  the  Portfolios  sub-advised  by  BEA Associates, Credit Suisse Investment
Management, Ltd. and State Street Global Advisors have terminated as of May 1,
1996.

                            SALES AND REDEMPTIONS

The  separate account of the Life Company places orders to purchase and redeem
shares  of  each Portfolio based on, among other things, the amount of premium
payments  to be invested and surrender and transfer requests to be effected on
that  day  pursuant  to  the  VA  contracts issued by the Life Company. Orders
received  by  the  Trust  are  effected  on  days  on which the New York Stock
Exchange is open for trading, at the net asset value per share next determined
after  receipt  of  the order, except that, in the case of the Global Advisors
Money  Market  Portfolio,  purchases  will  not  be  effected  until  the next
determination  of net asset value after federal funds have been made available
to  the  Trust.  For  orders  received  before  4:00  p.m. New York time, such
purchases  and  redemptions  of  shares  of each Portfolio are effected at the
respective net asset values per share determined as of 4:00 p.m. New York time
on  that  day.  See  "Net Asset Value," below, and "Determination of Net Asset
Value"  in  the  Trust's  Statement  of  Additional  Information.  Payment for
redemptions  will  be  made  within  seven  days after receipt of a redemption
request  in  good  order.  No  fee is charged the separate account of the Life
Company  when  it  redeems Portfolio shares. The Trust may suspend the sale of
shares at anytime and may refuse any order to purchase shares.

The  Trust  may suspend the right of redemption of shares of any Portfolio and
may  postpone  payment  for  any  period:  (i) during which the New York Stock
Exchange  is  closed  other than for customary weekend and holiday closings or
during  which  trading on the New York Stock Exchange is restricted; (ii) when
the  Securities  and  Exchange Commission determines that a state of emergency
exists,  which  makes the sale of portfolio securities or the determination of
net  asset  value  not  reasonably  practicable;  (iii)  as the Securities and
Exchange  Commission  may  by  order permit for the protection of the security
holders  of the Trust; or (iv) at anytime when the Trust may, under applicable
laws and regulations, suspend payment on the redemption of its shares.

                               NET ASSET VALUE

Each Portfolio calculates the net asset value of a share by dividing the total
value  of  its  assets, less liabilities, by the number of shares outstanding.
Shares are valued as of 4:00 p.m. New York time on each day the New York Stock
Exchange is open.

The  Global  Advisors  Money Market Portfolio's securities are valued at their
amortized cost, which does not take into account unrealized gains or losses on
securities.  This  method involves initially valuing an instrument at its cost
and  thereafter  assuming  a  constant amortization to maturity of any premium
paid  or  discount received. For a more complete description of amortized cost
valuation, see "Determination of Net Asset Value" in the SAI.

Because  foreign  securities  are  quoted in foreign currencies, which will be
translated  into  U.S. dollars at the New York cable transfer rates or at such
other  rates  as  the  Trustees  may  determine  in computing net asset value,
fluctuations  in  the  value of such currencies in relation to the U.S. dollar
will  affect the net asset value of shares of a Portfolio investing in foreign
securities  even  though  there  has not been any change in the local currency
values of such securities.

                           PERFORMANCE INFORMATION

Global Advisors Money Market Portfolio: From time to time, the Global Advisors
Money  Market  Portfolio's  annualized  "yield"  and  "effective yield" may be
presented  in  advertisements  and  sales  literature. These yield figures are
based  on  historical  earnings  and  are  not  intended  to  indicate  future
performance.  The "yield" of the Global Advisors Money Market Portfolio refers
to  the income generated by an investment in the shares of that Portfolio over
a  seven-day  period  (which period will be stated in the advertisement). This
income  is  then  "annualized." That is, the amount of income generated by the
investment  during  that  week  is  assumed  to  be generated each week over a
52-week  period and is shown as a percentage of the investment. The "effective
yield"  is  calculated similarly but, when annualized, the income earned by an
investment  in  the  shares  of  the Global Advisors Money Market Portfolio is
assumed  to  be reinvested. The "effective yield" will be slightly higher than
the  "yield"  because  of the compounding effect of this assumed reinvestment.
For  more  information  regarding  the  computation  of "yield" and "effective
yield," see "Performance Information" in the SAI.

Other Portfolios: Performance information for each of the other Portfolios may
also  be  presented  from time to time in advertisements and sales literature.
The  Portfolios  may advertise several types of performance information. These
are  the  "yield," "average annual total return" and "aggregate total return."
Each  of these figures is based upon historical results and is not necessarily
representative of the future performance of any Portfolio.

The  yield of a Portfolio's shares is determined by annualizing net investment
income  earned  per  share for a stated period (normally one month or 30 days)
and  dividing  the  result  by the net asset value per share at the end of the
valuation  period.  The average annual total return and aggregate total return
figures measure both the net investment income generated by, and the effect of
any  realized  or  unrealized  appreciation  or depreciation of the underlying
investments in, the Portfolio's portfolio for the period in question, assuming
the  reinvestment  of all dividends. Thus, these figures reflect the change in
the  value of an investment in a Portfolio's shares during a specified period.
Average  annual  total  return will be quoted for at least the one-, five- and
ten-year  periods ending on a recent calendar quarter (or if such periods have
not  yet  elapsed, at the end of a shorter period corresponding to the life of
the  Portfolio).  Average  annual  total  return  figures  are annualized and,
therefore,  represent  the average annual percentage change over the period in
question.  Total return figures are not annualized and represent the aggregate
percentage  or  dollar  value  change  over  the  period in question. For more
information  regarding  the  computation of yield, average annual total return
and aggregate total return, see "Performance Information" in the SAI.

Any  Portfolio performance information presented will also include performance
information for the insurance company separate accounts investing in the Trust
which will take into account insurance-related charges and expenses under such
insurance policies and contracts.

Advertisements  concerning  the  Trust  may  from  time  to  time  compare the
performance  of  one or more Portfolios to various indexes. Advertisements may
also  contain  the  performance  rankings assigned certain Portfolios or their
advisers  by  various  publications  and  statistical services, including, for
example,  SEI, Lipper Analytical Services Mutual Funds Survey, Lipper Variable
Insurance  Products  Performance  Analysis  Service,  Morningstar,  Intersec
Research  Survey  of Non U.S. Equity Fund Returns, Frank Russell International
Universe,  Kiplinger's Personal Finance, and Financial Services Week. Any such
comparisons  or  rankings  are  based  on past performance and the statistical
computation  performed  by  publications and services, and are not necessarily
indications  of  future  performance.  Because  the  Portfolios  are  managed
investment  vehicles investing in a wide variety of securities, the securities
owned by a Portfolio will not match those making up an index.

                   TAX STATUS, DIVIDENDS, AND DISTRIBUTIONS

Each  Portfolio  of the Trust intends to qualify and elects to be treated as a
regulated  investment company that is taxed under the rules of Subchapter M of
the  Internal  Revenue  Code.  As  an electing regulated investment company, a
Portfolio will not be subject to federal income tax on its net ordinary income
and  net  realized  capital  gains  to  the  extent  such income and gains are
distributed  to  the  separate  account  of  the  Life Company which holds its
shares. For further information concerning federal income tax consequences for
the  holders of the VA Contracts of the Life Company, investors should consult
the prospectus used in connection with the issuance of their VA Contracts.

The  Global Advisors Money Market Portfolio will declare a dividend of its net
ordinary  income  daily  and  distribute  such  dividend  monthly.  The Global
Advisors  Money  Market  Portfolio  does  not anticipate that it will normally
realize  any long-term capital gains with respect to its portfolio securities.
Distributions  will be made shortly after the first business day of each month
following  declaration  of  the  dividend.  Each  of the other Portfolios will
declare  and  distribute  dividends from net ordinary income at least annually
and will distribute its net realized capital gains, if any, at least annually.
Distributions  of  ordinary income and capital gains will be made in shares of
such  Portfolios unless an election is made on behalf of a separate account to
receive  distributions  in  cash.  The  Life Company will be informed at least
annually  about  the  amount and character of distributions from the Trust for
federal income tax purposes.

                            ADDITIONAL INFORMATION

The  Trust was established as a Massachusetts business trust under the laws of
Massachusetts  by  a  Declaration of Trust dated December 12, 1994, as amended
April  19,  1995  (the  "Declaration  of  Trust").  Under  Massachusetts  law,
shareholders  of  such  a  trust  may,  under  certain  circumstances, be held
personally  liable  as  partners  for  the  obligations  of  the  trust.  The
Declaration  of  Trust contains an express disclaimer of shareholder liability
in  connection with Trust property or the acts, obligations, or affairs of the
Trust.  The  Declaration  of  Trust also provides for indemnification out of a
Portfolio's  property  of  any  shareholder  of that Portfolio held personally
liable  for  the  claims  and  liabilities  to  which a shareholder may become
subject  by  reason of being or having been a shareholder. Thus, the risk of a
shareholder's  incurring financial loss on account of shareholder liability is
limited to circumstances in which the Portfolio itself would be unable to meet
its  obligations.  A  copy  of  the  Declaration  of Trust is on file with the
Secretary of State of The Commonwealth of Massachusetts.

The Trust has an unlimited authorized number of shares of beneficial interest.
Shares  of  the  Trust  are  entitled to one vote per share (with proportional
voting for fractional shares) and are freely transferable, and, in liquidation
of a Portfolio, shareholders of the Portfolio are entitled to receive pro rata
the  net  assets  of  the Portfolio. Although no Portfolio is required to hold
annual  meetings  of  its  shareholders, shareholders have the right to call a
meeting  to  elect  or remove Trustees or to take other actions as provided in
the  Declaration of Trust. Shareholders have no preemptive rights. The Trust's
custodian, sub-administrator and  transfer and dividend-paying agent 
is  State Street Bank and Trust Company.

To  mitigate  the  possibility  that a Portfolio will be adversely affected by
personal  trading  of  employees,  the Trust, the Adviser and the Sub-Advisers
have adopted policies that restrict securities trading in personal accounts of
the  portfolio  managers  and  others  who  normally  come  into possession of
information on portfolio transactions.  These policies comply, in all material
respects, with the recommendations of the Investment Company Institute.


                                   APPENDIX
                     SECURITIES AND INVESTMENT PRACTICES

In  attempting  to achieve its investment objective or policies each Portfolio
employs  a  variety  of  instruments,  strategies  and  techniques,  which are
described  in  greater  detail  below.  Risks and restrictions associated with
these practices are also described. Policies and limitations are considered at
the  time  a  security  or  instrument  is  purchased or a practice initiated.
Generally,  securities  need not be sold if subsequent changes in market value
result in applicable limitations not being met.

A  Portfolio  might  not  buy  all  of  these  securities  or use all of these
techniques  to  the  full  extent permitted unless the Sub-Adviser, subject to
oversight  by  Adviser, believes that doing so will help the Portfolio achieve
its  goal.  As  a  shareholder,  you  will receive Portfolio reports every six
months  detailing  the  Trust's  holdings  and  describing  recent  investment
practices.

Except where noted otherwise, the investment guidelines set forth 
below may be changed at anytime without shareholder  consent by vote of the 
Board of Trustees of the Trust. A complete list  of  investment restrictions 
that identifies additional restrictions that cannot  be changed  without  the 
approval  of  a  majority of  an  affected Portfolio's outstanding shares is 
contained in the SAI.

AMERICAN DEPOSITORY RECEIPTS AND EUROPEAN DEPOSITORY RECEIPTS

Certain  Portfolios may invest in securities of foreign issuers directly or in
the  form  of  American  Depository  Receipts  ("ADRs"),  European  Depository
Receipts  ("EDRs")  or  other  similar  securities  representing securities of
foreign  issuers.  These  securities may not necessarily be denominated in the
same  currency  as  the securities they represent. ADRs are receipts typically
issued  by  a  United  States  bank  or  trust  company  evidencing beneficial
ownership  of the underlying foreign securities. EDRs are receipts issued by a
European  financial  institution  evidencing a similar arrangement. Generally,
ADRs, in registered form, are designed for use in the United States securities
markets, and EDRs, in bearer form, are designed for use in European securities
markets.

ASSET-BACKED SECURITIES

Certain  Portfolios  may  purchase  asset-backed securities, which represent a
participation  in,  or  are  secured by and payable from, a stream of payments
generated  by  particular  assets,  most often a pool of assets similar to one
another. Assets generating such payments may include motor vehicle installment
purchase  obligations,  company  receivables,   truck  and   auto loans,
leases,  credit  card  receivables  and home equity loans. Such securities are
generally  issued  as  pass-through  certificates,  which  represent undivided
fractional  ownership  interests  in  the  underlying  pools  of  assets. Such
securities  also  may  be  debt  instruments,  which  are  also  known  as
collateralized  obligations  and are generally issued as the debt of a special
purpose  entity,  such  as a trust, organized solely for the purpose of owning
such assets and issuing such debt.

Asset-backed  securities  are  not  issued  or guaranteed by the United States
Government  or  its  agencies  or  instrumentalities;  however, the payment of
principal  and  interest  on  such obligations may be guaranteed up to certain
amounts  and  for a certain period by a letter of credit issued by a financial
institution  (such  as  a  bank  or  insurance  company) unaffiliated with the
issuers  of  such  securities.  The purchase of asset-backed securities raises
risk  considerations  peculiar  to the financing of the instruments underlying
such securities. For example, there is a risk that another party could acquire
an  interest  in  the  obligations  superior  to  that  of  the holders of the
asset-backed  securities.  There  also  is  the possibility that recoveries on
repossessed  collateral  may  not,  in  some  cases,  be  available to support
payments  on those securities. Asset-backed securities entail prepayment risk,
which  may vary depending on the type of asset, but is generally less than the
prepayment  risk  associated  with  mortgage-backed  securities.  In addition,
credit card receivables are unsecured obligations of the card holder.

BANK OBLIGATIONS

All  of  the  Portfolios  may  invest  in  Bank  Obligations,  which  include
certificates  of  deposit,  time  deposits  and  bankers'  acceptances of U.S.
commercial  banks or savings and loan institutions which are determined by the
Sub-Advisers to present minimal credit risks. Certain Portfolios may invest in
foreign  currency-denominated  Bank  Obligations,  including    Eurocurrency
instruments and securities of U.S. and foreign banks and thrifts.

BORROWING

Each  of  the  Portfolios  may  borrow money    (including reverse repurchase
agreements, if permitted by the Portfolio's investment objectives and policies)
    (up to 33 1/3% of its assets) for temporary or emergency purposes. In 
addition, the Global Advisors Money Market Portfolio  may borrow to facilitate
redemptions.    A Portfolio may borrow for leveraging or investment with respect
to reverse repurchase agreements and dollar roll transactions (including covered
rolls), to the extent such investments are permitted under the Portfolio's 
investment objectives and policies.      If a Portfolio borrows money, 
its  share  price may be subject to greater fluctuation until the borrowing is
paid  off.  If the Portfolio makes additional investments while borrowings are
outstanding, this may be construed as a form of leverage.

Borrowing,  including  reverse  repurchase  agreements  and,  in  certain
circumstances,  dollar  rolls,  creates leverage which increases a Portfolio's
investment  risk. If the income and gains on the securities purchased with the
proceeds  of  borrowings  exceed the cost of the arrangements, the Portfolio's
earnings  or  net  asset  value  will  increase  faster than would be the case
otherwise.  Conversely,  if  the  income  and  gains fail to exceed the costs,
earnings  or  net  asset value will decline faster than would otherwise be the
case.

As a matter of operating policy, no Portfolio will borrow more than 10% of 
its total net asset value when borrowing for general purposes and none will 
borrow an amount equal to more than 25% of its total net asset value when 
borrowing as  a  temporary measure or to facilitate redemptions. For these 
purposes, net asset  value is the market value of all investments or assets 
less outstanding liabilities  at  the  time that the new or additional 
borrowing is undertaken. Also  for  these  purposes,  securities  purchased 
on a when-issued or delayed delivery basis and short sales of securities are 
considered borrowing.    Reverse repurchase agreements and dollar rolls
(including covered rolls), are not considered borrowings for purposes of this
operating policy.     A  Portfolio will  not  purchase investments  once 
borrowed funds (including reverse repurchase agreements) exceed 5% of its 
total assets. This 5% limitation is a fundamental investment restriction of 
the Trust which may not be changed without shareholder approval.

COMMON STOCK AND OTHER EQUITY SECURITIES

Common  Stocks represent an equity (ownership) interest in a corporation. This
ownership  interest  generally gives a Portfolio the right to vote on measures
affecting the company's organization and operations.

Certain Portfolios may also buy securities such as convertible debt, preferred
stock,  warrants  or other securities exchangeable for shares of Common Stock.
In  selecting equity investments for a Portfolio, each Portfolio's Sub-Adviser
will  generally invest the Portfolio's assets in industries and companies that
it  believes are experiencing favorable demand for their products and services
and which operate in a favorable competitive and regulatory climate.

Investments  in  equity securities in general are subject to market risks that
may cause their prices to fluctuate over time. The value of convertible equity
securities  is  also affected by prevailing interest rates, the credit quality
of  the  issuer  and  any  call provision. Fluctuations in the value of equity
securities  in  which  a Portfolio invests will cause the net asset value of a
Portfolio to fluctuate.

CONVERTIBLE SECURITIES

Convertible  securities  are  corporate securities that are exchangeable for a
set  number  of  another security at a prestated price. Convertible securities
typically  have  characteristics  similar  to  both  fixed  income  and equity
securities.

Because  of the conversion feature, the market value of convertible securities
tends  to  move  with the market value of the underlying stock. The value of a
convertible security is also affected by prevailing interest rates, the credit
quality of the issuer, and any call provisions.

CURRENCY MANAGEMENT

A  Portfolio's  flexibility  to  participate  in  higher-yielding debt markets
outside  of the United States may allow the Portfolio to achieve higher yields
than  those  generally  obtained by domestic money market funds and short-term
bond  investments.  When  a  Portfolio  invests  significantly  in  securities
denominated  in  foreign  currencies,  however,  movements in foreign currency
exchange  rates vs. the U.S. dollar are likely to impact the Portfolio's share
price  stability relative to domestic short-term income funds. Fluctuations in
foreign  currencies  can  have  a  positive  or  negative  impact  on returns.
Normally,  to the extent that the Portfolio is invested in foreign securities,
a weakening in the U.S. dollar relative to the foreign currencies underlying a
Portfolio's  investments  should  help  increase  the  net  asset value of the
Portfolio.  Conversely,  a  strengthening  in  the U.S. dollar vs. the foreign
currencies  in  which  a Portfolio's securities are denominated will generally
lower  the  net  asset  value  of  the Portfolio. Each Portfolio's Sub-Adviser
attempts  to  minimize exchange rate risk through active portfolio management,
including  hedging  currency  exposure through the use of futures, options and
forward  currency  transactions  and  attempting to identify bond markets with
strong  or stable currencies. There can be no assurance that such hedging will
be  successful  and  such  transactions,  if  unsuccessful,  could  result  in
additional losses or expenses to a Portfolio.

DOLLAR ROLL TRANSACTIONS

Certain  Portfolios  seeking  a  high  level  of current income may enter into
dollar  rolls  and  "covered  rolls"  in  which the Portfolio sells securities
(usually Mortgage-Backed Securities) and simultaneously contracts to purchase,
typically  in  30  to  60  days,  substantially  similar,  but  not  identical
securities,  on  a  specified future date. The proceeds of the initial sale of
securities  in  such transactions may be used to purchase long-term securities
which  will  be  held  during  the  roll  period.  During the roll period, the
Portfolio  forgoes  principal  and interest paid on the securities sold at the
beginning  of  the roll period. The Portfolio is compensated by the difference
between  the current sales price and the forward price for the future purchase
(often  referred  to  as  the "drop") as well as by the interest earned on the
cash  proceeds  of  the  initial  sale. A "covered roll" is a specific type of
dollar  roll for which there is an offsetting cash position or cash equivalent
securities  position  that matures on or before the forward settlement date of
the  dollar  roll transaction. As used herein the term "dollar roll" refers to
dollar  rolls  that are not "covered rolls." At the end of the roll commitment
period,  the  Portfolio  may  or  may  not take delivery of the securities the
Portfolio has contracted to purchase.

A Portfolio will establish a segregated account with its custodian in which it
will maintain cash, U.S. Government Securities or other liquid high-grade debt
obligations  equal  in  value  at  all  times to its obligations in respect of
dollar  rolls, and, accordingly, the Portfolio will not treat such obligations
as  senior  securities  for  purposes of the 1940 Act. "Covered rolls" are not
subject  to these segregation requirements. Dollar rolls and covered rolls may
be  considered  borrowings  and  are,  therefore,  subject  to  the  borrowing
limitations  applicable  to the Portfolios   , except that dollar rolls
(including covered rolls), shall not be considered to be "borrowed funds" for
purposes of the 5% limitation described under "Borrowing" above.     Dollar
rolls involve the risk that the  market  value  of the securities the 
Portfolio is obligated to repurchase under  the  agreement may decline below
the repurchase price. In the event the buyer  of  securities  under  a  dollar
roll  files for bankruptcy or becomes insolvent,  the  Portfolio's  use  of
proceeds  of  the  dollar  roll  may be restricted  pending  a  determination
by  the  other party, or its trustee or receiver,  whether  to  enforce  the
Portfolio's obligation to repurchase the securities.

EQUITY AND DEBT SECURITIES ISSUED OR GUARANTEED BY SUPRANATIONAL ORGANIZATIONS

Portfolios  authorized  to  invest in securities of foreign issuers may invest
assets  in  equity  and  debt securities issued or guaranteed by Supranational
Organizations,  such  as  obligations  issued  or  guaranteed  by  the  Asian
Development  Bank,  InterAmerican  Development  Bank,  International  Bank for
Reconstruction  and  Development  (World  Bank),  African  Development  Bank,
European  Coal  and  Steel  Community,  European  Economic Community, European
Investment Bank and the Nordic Investment Bank.

EXCHANGE RATE-RELATED SECURITIES

Certain  Portfolios  may  invest  in  securities  which are indexed to certain
specific  foreign  currency  exchange  rates. The terms of such security would
provide that the principal amount or interest payments are adjusted upwards or
downwards  (but  not  below  zero)  at  payment to reflect fluctuations in the
exchange  rate  between  two  currencies  while the obligation is outstanding,
depending  on  the  terms  of the specific security. A Portfolio will purchase
such  security  with  the currency in which it is denominated and will receive
interest  and  principal  payments  thereon in the currency, but the amount of
principal  or  interest  payable  by the issuer will vary in proportion to the
change  (if  any)  in  the  exchange  rate between the two specific currencies
between  the  date  the  instrument  is  issued  and the date the principal or
interest payment is due. The staff of the SEC is currently considering whether
a mutual fund's purchase of this type of security would result in the issuance
of  a "senior security" within the meaning of the 1940 Act. The Trust believes
that  such  investments do not involve the creation of such a senior security,
but  nevertheless  undertakes,  pending  the  resolution  of this issue by the
staff,  to establish a segregated account with respect to such investments and
to  maintain  in  such  account  cash  not  available  for  investment or U.S.
Government  Securities  or other liquid, high-quality debt securities having a
value  equal  to  the  aggregate principal amount of outstanding securities of
this type.


Investment in Exchange Rate-Related Securities entails certain risks. There is
the  possibility  of significant changes in rates of exchange between the U.S.
dollar  and any foreign currency to which an Exchange Rate-Related Security is
linked. In addition, there is no assurance that sufficient trading interest to
create  a  liquid  secondary  market  will  exist  for  a  particular Exchange
Rate-Related  Security  due  to  conditions  in  the debt and foreign currency
markets.  Illiquidity  in  the  forward  foreign  exchange market and the high
volatility  of  the  foreign  exchange market may from time to time combine to
make  it difficult to sell an Exchange Rate-Related Security prior to maturity
without incurring a significant price loss.

FIXED-INCOME SECURITIES

Fixed  income  securities  consist  of  bonds,  notes,  debentures  and  other
interest-bearing  securities  that represent indebtedness. The market value of
fixed-income  obligations  held  by  the Portfolios and, consequently, the net
asset  value  per share of the Portfolios can be expected to vary inversely to
changes in prevailing interest rates. Investors should also recognize that, in
periods of declining interest rates, the yields of the fixed-income Portfolios
will  tend  to be somewhat higher than prevailing market rates and, in periods
of  rising interest rates, the fixed-income Portfolios' yields will tend to be
somewhat  lower.  Also, when interest rates are falling, the inflow of net new
money to the fixed-income Portfolios from the continuous sales of their shares
will likely be invested in instruments producing lower yields than the balance
of  their  assets,  thereby  reducing  current  yields.  In  periods of rising
interest  rates,  the opposite can be expected to occur. Prices of longer-term
securities  generally  increase  or  decrease  more  sharply  than  those  of
shorter-term  securities  in  response  to interest rate changes. In addition,
obligations purchased by certain of the fixed-income Portfolios that are rated
in  the  lower  of the top four ratings (Baa by Moody's or BBB by S&P, Duff or
Fitch)  are  considered  to  have  speculative  characteristics and changes in
economic  conditions  or  other  circumstances  are  more  likely to lead to a
weakened  capacity  to  make  principal and interest payments than is the case
with higher-grade securities. (See "Lower-Rated Securities" in this Appendix.)


FOREIGN CURRENCY EXCHANGE TRANSACTIONS

Certain  Portfolios  may  engage  in  foreign  currency exchange transactions.
Portfolios  that  buy and sell securities denominated in currencies other than
the  U.S.  dollar,  and  receive  interest,  dividends  and  sale  proceeds in
currencies  other  than  the  U.S.  dollar,  may  enter  into foreign currency
exchange  transactions to convert to and from different foreign currencies and
to  convert  foreign  currencies  to and from the U.S. dollar. A Portfolio can
either  enter into these transactions on a spot (i.e., cash) basis at the spot
rate  prevailing  in  the  foreign  currency  exchange  market, or use forward
contracts to purchase or sell foreign currencies.

A  forward  foreign currency exchange contract is an obligation by a Portfolio
to  purchase  or  sell  a specific currency at a future date, which may be any
fixed  number  of days from the date of the contract. Forward foreign currency
exchange  contracts  establish  an  exchange  rate  at  a  future  date. These
contracts  are transferable in the interbank market conducted directly between
currency  traders  (usually  large  commercial  banks)  and their customers. A
forward  foreign  currency  exchange  contract  generally  has  no  deposit
requirement,  and is traded at a net price without a commission. The Portfolio
maintains  with  its  Custodian,  in  a  segregated account, high-grade liquid
assets  in  an  amount  at  least  equal to its obligations under each forward
foreign  currency  exchange  contract.  Neither  spot transactions nor forward
foreign  currency  exchange  contracts eliminate fluctuations in the prices of
the  Portfolio's portfolio securities or in foreign exchange rates, or prevent
loss if the prices of these securities should decline.

A  Portfolio may enter into foreign currency exchange transactions for hedging
purposes  as  well  as for non-hedging purposes. Transactions are entered into
for  hedging  purposes  in  an  attempt  to protect against changes in foreign
currency  exchange  rates  between  the trade and settlement dates of specific
securities  transactions  or  changes  in foreign currency exchange rates that
would  adversely  affect  a  portfolio  position  or  an anticipated portfolio
position. Although these transactions tend to minimize the risk of loss due to
a  decline  in the value of the hedged currency, at the same time they tend to
limit any potential gain that might be realized should the value of the hedged
currency  increase.  The  precise matching of the forward contract amounts and
the  value  of  the securities involved will not generally be possible because
the  future  value  of these securities in foreign currencies will change as a
consequence  of  market movements in the value of those securities between the
date  the  forward  contract  is  entered  into  and  the date it matures. The
projection  of  currency  market  movements  is  extremely  difficult, and the
successful  execution  of a hedging strategy is highly uncertain. In addition,
when  the  Sub-Adviser  believes  that  the currency of a specific country may
deteriorate  against another currency, it may enter into a forward contract to
sell  the less attractive currency and buy the more attractive one. The amount
in  question  could  be  less  than  or  equal to the value of the Portfolio's
securities denominated in the less attractive currency. The Portfolio may also
enter into a forward contract to sell a currency which is linked to a currency
or currencies in which some or all of the Portfolio's portfolio securities are
or could be denominated, and to buy U.S. dollars. These practices are referred
to as "cross hedging" and "proxy hedging."

A  Portfolio  may  enter into foreign currency exchange transactions for other
than  hedging  purposes  which  presents  greater  profit  potential  but also
involves  increased  risk.  For  example, if the Sub-Adviser believes that the
value  of  a particular foreign currency will increase or decrease relative to
the  value  of  the  U.S.  dollar,  the  Portfolio  may  purchase or sell such
currency,  respectively, through a forward foreign currency exchange contract.
If the expected changes in the value of the currency occur, the Portfolio will
realize  profits which will increase its gross income. Where exchange rates do
not move in the direction or to the extent anticipated, however, the Portfolio
may  sustain  losses  which  will  reduce its gross income. Such transactions,
therefore, could be considered speculative.

Forward  currency  exchange  contracts are agreements to exchange one currency
for another -- for example, to exchange a certain amount of U.S. dollars for a
certain  amount  of  Japanese  yen  --  at  a future date and specified price.
Typically,  the  other  party  to  a  currency  exchange  contract  will  be a
commercial  bank  or  other  financial institution. Because there is a risk of
loss  to  the  Portfolio if the other party does not complete the transaction,
the  Portfolio's  Sub-Adviser  will  enter  into  foreign  currency  exchange
contracts only with parties approved by the Trust's Board of Trustees.

A  Portfolio  may  maintain  "short"  positions  in  forward currency exchange
transactions  in  which  the  Portfolio  agrees  to  exchange currency that it
currently  does  not  own  for another currency -- for example, to exchange an
amount  of  Japanese  yen  that  it  does not own for a certain amount of U.S.
dollars  --  at a future date and specified price in anticipation of a decline
in  the  value  of  the  currency sold short relative to the currency that the
Portfolio has contracted to receive in the exchange.

While such actions are intended to protect the Portfolio from adverse currency
movements,  there  is  a  risk  that  currency  movements involved will not be
properly  anticipated.  Use  of  this  technique  may  also  be  limited  by
management's  need  to  protect  the  status  of  the Portfolio as a regulated
investment  company  under  the Internal Revenue Code of 1986, as amended. The
projection  of  currency  market  movements  is  extremely  difficult, and the
successful execution of currency strategies is highly uncertain.

FOREIGN INVESTMENTS

Certain  Portfolios  may  invest  in  securities of foreign issuers. There are
certain  risks  involved  in  investing in foreign securities, including those
resulting  from  fluctuations  in  currency  exchange  rates,  devaluation  of
currencies,  future  political  or  economic  developments  and  the  possible
imposition  of  currency exchange blockages or other foreign governmental laws
or  restrictions,  reduced  availability  of  public  information  concerning
issuers,  and  the  fact  that  foreign companies are not generally subject to
uniform  accounting,  auditing  and  financial reporting standards or to other
regulatory  practices  and  requirements  comparable  to  those  applicable to
domestic companies. Moreover, securities of many foreign companies may be less
liquid  and  the  prices  more volatile than those of securities of comparable
domestic  companies.  With  respect to certain foreign countries, there is the
possibility  of  expropriation,  nationalization,  confiscatory  taxation  and
limitations  on the use or removal of funds or other assets of the Portfolios,
including the withholding of dividends.

Because  foreign  securities  generally  are  denominated and pay dividends or
interest  in  foreign  currencies,  and  the  Portfolios  hold various foreign
currencies from time to time, the value of the net assets of the Portfolios as
measured  in U.S. dollars will be affected favorably or unfavorably by changes
in  exchange rates. The cost of the Portfolio's currency exchange transactions
will  generally  be  the difference between the bid and offer spot rate of the
currency  being  purchased or sold. In order to protect against uncertainty in
the  level  of  future  foreign  currency  exchange  rates, the Portfolios are
authorized  to  enter  into  certain  foreign  currency exchange transactions.
Investors  should be aware that exchange rate movements can be significant and
can  endure  for  long  periods  of  time. Extensive research of the economic,
political and social factors that influence global markets is conducted by the
Sub-Advisers.  Particular  attention  is  given  to country-specific analysis,
reviewing  the  strengths  or  weaknesses  of a country's overall economy, the
government  policies  influencing  business conditions and the outlook for the
country's  currency.  Certain  Portfolios  are authorized to engage in foreign
currency  options,  futures,  options on futures and forward currency contract
transactions for hedging and/or other permissible purposes.

In  addition,  while  the  volume  of  transactions  effected on foreign stock
exchanges  has increased in recent years, in most cases it remains appreciably
below  that  of the NYSE. Accordingly, the Portfolios' foreign investments may
be  less  liquid  and  their  prices  may  be  more  volatile  than comparable
investments  in securities of U.S. companies. Moreover, the settlement periods
for  foreign  securities,  which are often longer than those for securities of
U.S. issuers, may affect portfolio liquidity. In buying and selling securities
on  foreign  exchanges, the Portfolio normally pays fixed commissions that are
generally higher than the negotiated commissions charged in the United States.
In  addition,  there is generally less governmental supervision and regulation
of  securities exchanges, brokers and issuers in foreign countries than in the
United States.

Certain Portfolios may invest a portion of their assets in developing markets.
The  risks  of  investing  in  foreign  markets  are generally intensified for
investments  in  developing  markets.  Additional  risks  of investing in such
markets  include: (i) less social, political, and economic stability; (ii) the
smaller  size of the securities markets in such countries and the lower volume
of  trading,  which  may  result  in  a lack of liquidity and in greater price
volatility;  (iii)  certain national policies which may restrict a Portfolio's
investment  opportunities,  including restrictions on investment in issuers or
industries  deemed  sensitive  to  national  interest; and (iv) less developed
legal  structures  governing  private  or  foreign  investment or allowing for
judicial redress for injury to private property.

FUTURES AND OPTIONS ON FUTURES

When  deemed appropriate by its Sub-Adviser, certain Portfolios may enter into
financial  or  currency  futures and related options that are traded on a U.S.
exchange  or  board of trade or, to the extent permitted under applicable law,
on  exchanges  located  outside the United States, for hedging purposes or for
non-hedging  purposes  to  the extent permitted by applicable law. A Portfolio
may  not  enter into futures and options contracts for which aggregate initial
margin  deposits  and premiums paid for unexpired futures options entered into
for  purposes  other  than  "bona  fide  hedging"  positioning  as  defined in
regulations adopted by the Commodities Futures Trading Commission exceed 5% of
the fair market value of the Portfolio's net assets, after taking into account
unrealized  profits  and  unrealized losses on futures contracts into which it
has  entered.  With  respect  to  each  long position in a futures contract or
option thereon, the underlying commodity value of such contract will always be
covered  by  cash  and cash equivalents set aside plus accrued profits held at
the futures commission merchant.

A  financial  or currency futures contract provides for the future sale by one
party  and  the  purchase  by  the  other  party  of  a  specified amount of a
particular  financial  instrument or currency (e.g.,debt security or currency)
at  a  specified  price, date, time and place. An index futures contract is an
agreement  pursuant  to which two parties agree to take or make delivery of an
amount  of  cash equal to the difference between the value of the index at the
close of the last trading day of the contract and the price at which the index
contract  was  originally  written.  An option on a futures contract generally
gives  the  purchaser  the  right, in return for the premium paid, to assume a
position  in a futures contract at a specified exercise price at anytime prior
to the expiration date of the option.

The  purpose  of  entering into a futures contract by a Portfolio is to either
enhance  return  or to protect the Portfolio from fluctuations in the value of
its  securities  caused  by anticipated changes in interest rates, currency or
market  conditions  without  necessarily buying or selling the securities. The
use  of  futures  contracts  and options on futures contracts involves several
risks.  There  can  be  no  assurance that there will be a correlation between
price  movements in the underlying securities, currencies or index, on the one
hand,  and  price  movements  in  the  securities which are the subject of the
futures  contract  or option on futures contract, on the other hand. Positions
in  futures  contracts and options on futures contracts may be closed out only
on  the  exchange or board of trade on which they were entered into, and there
can be no assurance that an active market will exist for a particular contract
or  option  at  any  particular  time.  If  a Portfolio has hedged against the
possibility  of  an  increase  in  interest  rates  or  bond  prices adversely
affecting  the  value of securities held in its portfolio, and rates or prices
decrease  instead,  a  Portfolio  will  lose part or all of the benefit of the
increased  value  of  securities  that  it  has  hedged  because  it will have
offsetting  losses  in its futures positions. In addition, in such situations,
if  a  Portfolio had insufficient cash, it may have to sell securities to meet
daily  variation  margin requirements at a time when it may be disadvantageous
to  do  so.  These  sales  of  securities may, but will not necessarily, be at
increased prices that reflect the decline in interest rates or bond prices, as
the  case  may  be. In addition, the Portfolio would pay commissions and other
costs  in connection with such investments, which may increase the Portfolio's
expenses  and  reduce  its  return.  While  utilization  of  options,  futures
contracts and similar instruments may be advantageous to the Portfolio, if the
Portfolio's  Sub-Adviser  is  not  successful in employing such instruments in
managing  the  Portfolio's  investments,  the  Portfolio's performance will be
worse than if the Portfolio did not make such investments.

Losses  incurred in futures contracts and options on futures contracts and the
costs of these transactions will adversely affect a Portfolio's performance.

GEOGRAPHICAL AND INDUSTRY CONCENTRATION

Where  a Portfolio invests at least 25% of its assets in Bank Obligations, the
Portfolio's  investments  may be subject to greater risk than a Portfolio that
does  not concentrate in the banking industry. In particular, Bank Obligations
may  be subject to the risks associated with interest rate volatility, changes
in  federal and state laws and regulations governing banking and the inability
of  borrowers  to  pay  principal  and interest when due. In addition, foreign
banks  present  the risks of investing in foreign securities generally and are
not  subject to reserve requirements and other regulations comparable to those
of U.S. Banks.

GOVERNMENT STRIPPED MORTGAGE-BACKED SECURITIES

Certain Portfolios may invest in Government Stripped  Mortgage-Backed
Securities  issued  or  guaranteed  by  GNMA, FNMA and FHLMC. These securities
represent  beneficial  ownership  interests  in  either  periodic  principal
distributions  ("principal-only")  or interest distributions ("interest-only")
on mortgage-backed certificates issued by GNMA, FNMA or FHLMC, as the case may
be.  The  certificates  underlying  the  Government  Stripped  Mortgage-Backed
Securities  represent  all  or  part  of  the  beneficial interest in pools of
mortgage  loans.  The  Portfolios  will  invest  in  interest-only  Government
Stripped  Mortgage-Backed  Securities  in order to enhance yield or to benefit
from  anticipated  appreciation  in  value of the securities at times when the
appropriate  Sub-Adviser  believes  that  interest rates will remain stable or
increase.  In  periods  of  rising  interest rates, the value of interest-only
Government  Stripped  Mortgage-Backed  Securities  may be expected to increase
because  of  the  diminished expectation that the underlying mortgages will be
prepaid. In this situation the expected increase in the value of interest-only
Government  Stripped Mortgage-Backed Securities may offset all or a portion of
any  decline in value of the portfolio securities of the Portfolios. Investing
in  Government Stripped Mortgage-Backed Securities involves the risks normally
associated  with  investing in mortgage-backed securities issued by government
or  government-related  entities.  See  "Mortgage-Backed Securities" below. In
addition,  the  yields on interest-only and principal-only Government Stripped
Mortgage-Backed  Securities  are  extremely  sensitive  to  the  prepayment
experience  on  the mortgage loans underlying the certificates collateralizing
the securities. If a decline in the level of prevailing interest rates results
in  a  rate of principal prepayments higher than anticipated, distributions of
principal  will  be  accelerated,  thereby  reducing  the yield to maturity on
pped  Mortgage-Backed  Securities  and  increasing  the  yield  to maturity on
principal-only  Government Stripped Mortgage-Backed Securities. Conversely, if
an  increase  in  the  level of prevailing interest rates results in a rate of
principal  prepayments lower than anticipated, distributions of principal will
be  deferred,  thereby  increasing  the  yield  to  maturity  on interest-only
Government  Stripped  Mortgage-Backed  Securities  and decreasing the yield to
maturity  on  principal-only  Government  Stripped Mortgage-Backed Securities.
Sufficiently  high  prepayment  rates  could result in the Portfolio not fully
recovering  its  initial  investment  in  an interest-only Government Stripped
Mortgage-Backed  Security.  Government Stripped Mortgage-Backed Securities are
currently  traded  in  an  over-the-counter market maintained by several large
investment banking firms. There can be no assurance that the Portfolio will be
able  to effect a trade of a Government Stripped Mortgage-Backed Security at a
time  when it wishes to do so. The Portfolios will acquire Government Stripped
Mortgage-Backed  Securities  only  if  a  liquid  secondary  market  for  the
securities exists at the time of acquisition.

INTEREST RATE TRANSACTIONS

Certain  Portfolios  may engage in certain Interest Rate Transactions, such as
swaps, caps, floors and collars. Interest rate swaps involve the exchange with
another  party of commitments to pay or receive interest (e.g., an exchange of
floating  rate  payments for fixed rate payments). The purchase of an interest
rate  cap entitles the purchaser, to the extent that a specified index exceeds
a  predetermined  interest rate, to receive payments of interest on a notional
principal  amount  from the party selling such interest rate cap. The purchase
of  an  interest  rate  floor  entitles  the  purchaser,  to the extent that a
specified index falls below a predetermined interest rate, to receive payments
of  interest  on  a  notional  principal  amount  from  the party selling such
interest  rate  floor.  An  interest  rate  collar  combines  the  elements of
purchasing  a cap and selling a floor. The collar protects against an interest
rate  rise  above  the maximum amount but gives up the benefits of an interest
rate  decline  below the minimum amount. The net amount of the excess, if any,
of  a  Portfolio's  obligations  over  its  entitlements  with respect to each
interest  rate  swap will be accrued on a daily basis and an amount of cash or
liquid  securities  having  an aggregate net asset value at least equal to the
accrued  excess  will  be  maintained in a segregated account with the Trust's
custodian.  If  there  is a default by the other party to the transaction, the
Portfolio will have contractual remedies pursuant to the agreements related to
the transactions.

ILLIQUID SECURITIES

Up to 15% (10% for Credit Suisse International Equity Portfolio and for Global
Advisors  Money  Market  Portfolio)  of  the  net assets of a Portfolio may be
invested  in  securities  that  are  not  readily marketable, including, where
applicable:  (1)  Repurchase  Agreements  with  maturities  greater than seven
calendar  days;  (2)  time deposits maturing in more than seven calendar days;
(3)  to  the  extent  a  liquid  secondary  market  does  not  exist  for  the
instruments,  futures  contracts  and  options  thereon (except for the Global
Advisors  Money  Market  Portfolio);  (4) certain over-the-counter options, as
described  below and in the SAI; (5) certain variable rate demand notes having
a demand period of more than seven days; and (6) securities the disposition of
which  is  restricted  under  Federal  securities  laws  (excluding  Rule 144A
Securities,  described below). The Portfolios will not include for purposes of
the  restrictions  on  illiquid  investments, securities sold pursuant to Rule
144A  under the Securities Act of 1933, as amended, so long as such securities
meet  liquidity guidelines established by the Trust's Board of Trustees. Under
Rule  144A,  securities  which  would  otherwise  be restricted may be sold by
persons other than issuers or dealers to qualified institutional buyers.

INVESTMENT COMPANIES

When  a  Portfolio's  Sub-Adviser believes that it would be beneficial for the
Portfolio  and appropriate under the circumstances, the Sub-Adviser may invest
up  to  10%  of  the  Portfolio's  assets  in securities of mutual funds. As a
shareholder in any such mutual fund, the Portfolio will bear its ratable share
of  the  mutual  fund's  expenses,  including management fees, and will remain
subject  to  the  Portfolio's advisory and administration fees with respect to
the assets so invested.

LEASE OBLIGATION BONDS

Lease  Obligation  Bonds  are  mortgages  on a facility that is secured by the
facility  and  are  paid  by  a  lessee over a long term. The rental stream to
service  the  debt as well as the mortgage are held by a collateral trustee on
behalf  of  the public bondholders. The primary risk of such instrument is the
risk  of  default.  Under  the  lease indenture, the failure to pay rent is an
event  of default. The remedy to cure default is to rescind the lease and sell
the  assets.  If  the  lease  obligation  is  not readily marketable or market
quotations  are  not readily available, such lease obligations will be subject
to a Portfolio's limit on Illiquid Securities.

LENDING OF SECURITIES

All of the Portfolios have the ability to lend portfolio securities to brokers
and  other financial organizations. By lending its securities, a Portfolio can
increase its income by continuing to receive interest on the loaned securities
as  well  as by either investing the cash collateral in short-term instruments
or  obtaining  yield  in  the  form of interest paid by the borrower when U.S.
Government  Securities  are used as collateral. These loans, if and when made,
may  not  exceed  20%  (except  10%  with respect to the EliteValue Asset
Allocation  Portfolio,  15%  with  respect  to the Credit Suisse International
Equity  Portfolio and 33 1/3% with respect to the Global Advisors Money Market
Portfolio)  of  a  Portfolio's total assets taken at value. Loans of portfolio
securities by a Portfolio will be collateralized by cash, letters of credit or
U.S.  Government  Securities  that are maintained at all times in an amount at
least  equal to the current market value of the loaned securities. Any gain or
loss  in the market price of the securities loaned that might occur during the
term  of  the  loan  would  be for the account of the Portfolio involved. Each
Portfolio's  Sub-Adviser will monitor on an ongoing basis the creditworthiness
of the institutions to which the Portfolio lends securities.

LOWER-RATED SECURITIES

Certain  Portfolios  may invest in debt securities rated lower than BBB by S&P
or  Baa by Moody's, or of equivalent quality as determined by the Sub-Adviser.
Securities rated BB, Ba or lower are commonly referred to as "junk bonds."

Securities  rated  below  investment-grade  as  well as unrated securities are
often  considered to be speculative and usually entail greater risk (including
the  possibility  of  default  or  bankruptcy of the issuers). Such securities
generally  involve  greater price volatility and risk of principal and income,
and  may be less liquid than securities in higher-rated categories. Both price
volatility  and  illiquidity  may make it difficult for the Portfolio to value
certain  of  these  securities  at  certain  times and these securities may be
difficult to sell under certain market conditions. Prices for securities rated
below  investment-grade  may  be  affected  by  legislative  and  regulatory
developments.  (See  SAI  for additional information pertaining to lower-rated
securities including risks.)

MORTGAGE-BACKED SECURITIES

Certain  Portfolios  may invest in Mortgage-Backed Securities, which represent
an  interest  in  a  pool of mortgage loans. The primary government issuers or
guarantors  of  Mortgage-Backed  Securities  are  GNMA,  FHMA  and  FHLMC.
Mortgage-Backed  Securities  generally provide a monthly payment consisting of
interest  and  principal  payments.  Additional  payments  may  be made out of
unscheduled  repayments of principal resulting from the sale of the underlying
residential  property,  refinancing  or foreclosure, net of fees or costs that
may  be  incurred.  Prepayments of principal on Mortgage-Backed Securities may
tend  to  increase  due to refinancing of mortgages as interest rates decline.
Prompt  payment  of  principal  and  interest  on  GNMA  mortgage pass-through
certificates  is  backed  by the full faith and credit of the U.S. Government.
FNMA  guaranteed  mortgage  pass-through  certificates and FHLMC participation
certificates are solely the obligations of those entities but are supported by
the  discretionary  authority of the U.S. Government to purchase the agencies'
obligations.

If Mortgage-Backed Securities are purchased at a premium, faster than expected
prepayments  will  reduce  yield  to  maturity,  while  slower  than  expected
prepayments  will  increase  yield to maturity. Conversely, if Mortgage-Backed
Securities  are purchased at a discount, faster than expected prepayments will
increase yield to maturity, while slower than expected prepayments will reduce
yield  to  maturity.  Accelerated  prepayments  on  securities  purchased at a
premium  also  impose  a risk of loss of principal because the premium may not
have  been  fully  amortized  at  the  time  the principal is prepaid in full.
Because  of  the  reinvestment  of  prepayments of principal at current rates,
Mortgage-Backed  Securities  may  be  less  effective  than  Treasury bonds of
similar  maturity  at  maintaining yields during periods of declining interest
rates.  When  interest  rates rise, the value and liquidity of Mortgage-Backed
Securities  may  decline sharply and generally will decline more than would be
the  case  with  other  fixed-income  securities; however, when interest rates
decline,  the  value of Mortgage-Backed Securities may not increase as much as
other  fixed-income  securities  due to the prepayment feature. Certain market
conditions  may  result  in  greater than expected volatility in the prices of
Mortgage-Backed  Securities.  For  example,  in  periods  of supply and demand
imbalances  in  the  market  for  such  securities  and/or in periods of sharp
interest  rate  movements,  the  prices  of  Mortgage-Backed  Securities  may
fluctuate  to  a  greater  extent  than  would  be expected from interest rate
movements alone.

To  the  extent  that  a  Portfolio invests in adjustable rate Mortgage-Backed
Securities, the Portfolio will not benefit from increases in interest rates to
the  extent that interest rates rise to the point where they cause the current
coupon  of  the  underlying  adjustable  rate  mortgages to exceed any maximum
allowable  annual  or  lifetime reset limits (or "cap rates") for a particular
mortgage.  In  this  event,  the  value of the Mortgage-Backed Securities in a
Portfolio  would  likely  decrease.  Also, a Portfolio's net asset value could
vary  to the extent that current yields on adjustable rate mortgage securities
are  different  than market yields during interim periods between coupon reset
dates  or  if  the  timing of changes to the index upon which the rate for the
underlying  mortgages  is  based  lags  behind changes in market rates. During
periods  of  declining  interest  rates,  income  to  a Portfolio derived from
adjustable  rate  mortgages  which  remain in a mortgage pool will decrease in
contrast  to  the  income on fixed rate mortgages, which will remain constant.
Adjustable  rate  mortgages also have less potential for appreciation in value
as interest rates decline than do fixed rate investments.

COLLATERALIZED MORTGAGE OBLIGATIONS AND MULTICLASS PASS-THROUGH SECURITIES

A  Portfolio may invest in collateralized mortgage obligations. Collateralized
mortgage obligations or "CMOs" are debt obligations collateralized by mortgage
loans  or mortgage pass-through securities. Typically, CMOs are collateralized
by  Ginnie  Mae,  Fannie  Mae  or  Freddie  Mac  Certificates, but also may be
collateralized  by  whole  loans  or  private  pass-throughs  (such collateral
collectively  hereinafter  referred  to  as  "Mortgage  Assets").  Multiclass
pass-through  securities are interests in a trust composed of Mortgage Assets.
Unless  the context indicates otherwise, all references herein to CMOs include
multiclass  pass-through  securities. Payments of principal and of interest on
the Mortgage Assets, and any reinvestment income thereon, provide the funds to
pay debt service on the CMOs or make scheduled distributions on the multiclass
pass-through  securities.  CMOs may be issued by agencies or instrumentalities
of  the  U.S.  Government,  or  by  private  originators  of, or investors in,
mortgage  loans,  including  savings  and  loan  associations, mortgage banks,
commercial  banks,  investment  banks  and special purpose subsidiaries of the
foregoing.  CMOs  acquired  by the Salomon Brothers U.S. Government Securities
Portfolio  will  be  limited  to  those  issued  or  guaranteed by agencies or
instrumentalities  of the U.S. Government and, if available in the future, the
U.S. Government.

In  a  CMO,  a  series of bonds or certificates is issued in multiple classes.
Each class of CMOs, often referred to as a "tranche," is issued at a specified
fixed  or floating coupon rate and has a stated maturity or final distribution
date.  Principal  prepayments  on the Mortgage Assets may cause the CMOs to be
retired  substantially  earlier  than  their  stated  maturities  or  final
distribution  dates. Interest is paid or accrues on all classes of the CMOs on
a  monthly,  quarterly  or semi-annual basis. The principal of and interest on
the  Mortgage Assets may be allocated among the several classes of a series of
a  CMO in innumerable ways. In one structure, payments of principal, including
any  principal  prepayments, on the Mortgage Assets are applied to the classes
of  a  CMO  in  the  order  of  their  respective  stated  maturities or final
distribution  dates, so that no payment of principal will be made on any class
of  CMOs  until  all  other classes having an earlier stated maturity or final
distribution date have been paid in full. The Salomon Brothers U.S. Government
Securities  Portfolio  has no present intention to invest in CMO residuals. As
market  conditions  change,  and  particularly  during  periods  of  rapid  or
unanticipated  changes in market interest rates, the attractiveness of the CMO
classes and the ability of the structure to provide the anticipated investment
characteristics  may  be  significantly  reduced.  Such  changes can result in
volatility  in  the  market value, and in some instances reduced liquidity, of
the CMO class.

A  Portfolio  may  also invest in, among others, parallel pay CMOs and Planned
Amortization  Class  CMOs  ("PAC  Bonds"). Parallel pay CMOs are structured to
provide  payments  of  principal  on each payment date to more than one class.
These  simultaneous  payments are taken into account in calculating the stated
maturity  date  or final distribution date of each class, which, as with other
CMO  structures,  must  be  retired  by  its  stated  maturity date or a final
distribution  date  but  may  be  retired earlier. PAC Bonds are a type of CMO
tranche  or  series  designed  to  provide  relatively predictable payments of
principal  provided that, among other things, the actual prepayment experience
on  the  underlying  mortgage  loans  falls  within a predefined range. If the
actual  prepayment  experience  on  the underlying mortgage loans is at a rate
faster  or  slower  than  the  predefined  range,  or if deviations from other
assumptions  occur, principal payments on the PAC Bond may be earlier or later
than predicted. The magnitude of the predefined range varies from one PAC Bond
to  another;  a  narrower range increases the risk that prepayments on the PAC
Bond will be greater or smaller than predicted. Because of these features, PAC
Bonds  generally  are  less  subject to the risks of prepayment than are other
types of Mortgage-Backed Securities.

NEW ISSUERS

A  Portfolio  may  invest  up to 5% of its assets in the securities of issuers
which have been in continuous operation for less than three years.

OPTIONS ON SECURITIES 

      OPTION PURCHASE. Certain Portfolios may purchase put and call options on
portfolio  securities  in  which  they may invest that are traded on a U.S. or
foreign securities exchange or in the over-the-counter market. A Portfolio may
utilize  up  to  10%  of  its  assets  to  purchase  put  options on portfolio
securities  and  may  do  so  at  or about the same time that it purchases the
underlying  security  or at a later time and may also utilize up to 10% of its
assets  to  purchase  call  options on securities in which it is authorized to
invest.  By  buying  a  put,  the  Portfolios  limit their risk of loss from a
decline  in  the  market  value  of  the  security  until the put expires. Any
appreciation  in  the  value  of  the  underlying  security,  however, will be
partially  offset by the amount of the premium paid for the put option and any
related  transaction  costs. Call options may be purchased by the Portfolio in
order  to  acquire the underlying securities for the Portfolio at a price that
avoids  any  additional  cost that would result from a substantial increase in
the  market value of a security. The Portfolios may also purchase call options
to  increase  their return to investors at a time when the call is expected to
increase  in value due to anticipated appreciation of the underlying security.
Prior  to  their  expiration, put and call options may be sold in closing sale
transactions (sales by the Portfolio, prior to the exercise of options that it
has  purchased,  of  options  of the same series), and profit or loss from the
sale  will  depend  on  whether  the  amount received is more or less than the
premium paid for the option, plus the related transaction costs.

     COVERED OPTION WRITING. Certain Portfolios may write put and call options
on  securities  for hedging purposes. The Portfolios realize fees (referred to
as  "premiums") for granting the rights evidenced by the options. A put option
embodies  the  right  of  its  purchaser to compel the writer of the option to
purchase from the option holder an underlying security at a specified price at
anytime  during  the  option  period.  In contrast, a call option embodies the
right  of  its  purchaser  to  compel  the writer of the option to sell to the
option  holder  an  underlying security at a specified price at anytime during
the option period.

Upon  the  exercise  of a put option written by a Portfolio, the Portfolio may
suffer a loss equal to the difference between the price at which the Portfolio
is  required  to  purchase the underlying security and its market value at the
time of the option exercise, less the premium received for writing the option.
Upon the exercise of a call option written by the Portfolio, the Portfolio may
suffer  a  loss equal to the excess of the security's market value at the time
of  the option exercise over the Portfolio's acquisition cost of the security,
less the premium received for writing the option.

The  Portfolios  will  comply  with regulatory requirements of the SEC and the
Commodities Futures Trading Commission with respect to coverage of options and
futures positions by registered investment companies and, if the guidelines so
require,  will set aside cash and/or appropriate liquid assets in a segregated
custodial  account  in  the amount prescribed. Securities held in a segregated
account  cannot  be sold while the futures or options position is outstanding,
unless  replaced  with  other  permissible  assets.  As  a  result, there is a
possibility that the segregation of a large percentage of a Portfolio's assets
may  force  the  Portfolio  to  close out futures and options positions and/or
liquidate  other  portfolio  securities,  any  of  which  may  occur  at
disadvantageous prices, in order for the Portfolio to meet redemption requests
or other current obligations.

The  principal reason for writing covered call and put options on a securities
portfolio is to attempt to realize, through the receipt of premiums, a greater
return  than  would  be  realized  on  the  securities  alone. In return for a
premium,  the  writer  of  a  covered  call  option forfeits the rights to any
appreciation  in  the  value of the underlying security above the strike price
for  the  life  of  the option (or until a closing purchase transaction can be
effected).  Nevertheless, the call writer retains the risk of a decline in the
price  of the underlying security. Similarly, the principal reason for writing
covered  put  options is to realize income in the form of premiums. The writer
of  the  covered  put option accepts the risk of a decline in the price of the
underlying  security. The size of the premiums that the Portfolios may receive
may  be  adversely  affected  as new or existing institutions, including other
investment companies, engage in or increase their option writing activities.

The  Portfolios  may  engage  in  closing  purchase  transactions to realize a
profit,  to prevent an underlying security from being called or put or, in the
case  of a call option, to unfreeze an underlying security (thereby permitting
its  sale  or  the  writing  of  a  new  option  on  the security prior to the
outstanding  option's  expiration).  To effect a closing purchase transaction,
the  Portfolios  would  purchase,  prior to the holder's exercise of an option
that  the Portfolio has written, an option of the same series as that on which
the  Portfolio  desires  to  terminate  its  obligation. The obligation of the
Portfolio under an option that it has written would be terminated by a closing
purchase  transaction,  but the Portfolio would not be deemed to own an option
as the result of the transaction. There can be no assurance that the Portfolio
will  be able to effect closing purchase transactions at a time when it wishes
to  do so. The ability of the Portfolio to engage in closing transactions with
respect  to  options  depends  on  the existence of a liquid secondary market.
While  the  Portfolio  will  generally purchase or write options only if there
appears to be a liquid secondary market for the options purchased or sold, for
some  options  no  such  secondary market may exist or the market may cease to
exist.  To  facilitate  closing  purchase transactions, however, the Portfolio
will  ordinarily  write  options  only  if  a secondary market for the options
exists on a U.S. securities exchange or in the over-the-counter market.

Option  writing  for  the  Portfolios  may be limited by position and exercise
limits  established  by U.S. securities exchanges and the National Association
of  Securities  Dealers, Inc. and by requirements of the Internal Revenue Code
of  1986,  as amended, for qualification as a regulated investment company. In
addition  to  writing covered put and call options to generate current income,
the  Portfolios  may  enter  into  options  transactions  as  hedges to reduce
investment  risk,  generally  by  making an investment expected to move in the
opposite  direction  of  a portfolio position. A hedge is designed to offset a
loss  on  a  portfolio position with a gain on the hedge position; at the same
time,  however,  a  properly  correlated  hedge  will  result in a gain on the
portfolio  position's  being  offset  by  a  loss  on  the hedge position. The
Portfolios  bear  the risk that the prices of the securities being hedged will
not  move  in the same amount as the hedge. A Portfolio will engage in hedging
transactions  only when deemed advisable by its Sub-Adviser. Successful use by
a  Portfolio  of options will depend on its Sub-Adviser's ability to correctly
predict  movements in the direction of the stock underlying the option used as
a  hedge.  Losses  incurred  in  hedging  transactions  and the costs of these
transactions will adversely affect the Portfolio's performance.

OPTIONS ON FOREIGN CURRENCIES

A  Portfolio may purchase and write put and call options on foreign currencies
for  the  purpose  of  hedging  against  declines  in the U.S. dollar value of
foreign currency-denominated portfolio securities and against increases in the
U.S.  dollar  cost  of such securities to be acquired. Generally, transactions
relating  to  Options  on  Foreign  Currencies  occur  in the over-the-counter
market.  As  in the case of other kinds of options, however, the writing of an
option  on  a  foreign  currency  constitutes  only a partial hedge, up to the
amount  of  the  premium  received,  and  the  Portfolio  could be required to
purchase or sell foreign currencies at disadvantageous exchange rates, thereby
incurring  losses.  The  purchase  of  an  option  on  a  foreign currency may
constitute  an  effective  hedge  against  fluctuations  in  exchange  rates,
although,  in the event of rate movements adverse to the Portfolio's position,
it  may  forfeit  the  entire  amount  of the premium plus related transaction
costs.  There  is  no  specific  percentage  limitation  on  the  Portfolio's
investments  in  Options  on  Foreign  Currencies.  See  the  SAI  for further
discussion  of  the  use, risks and costs of Options on Foreign Currencies and
Over the Counter Options.

OPTIONS ON INDEXES

A  Portfolio  may,  subject to applicable securities regulations, purchase and
write  put  and  call  options  on  stock  and fixed- income indexes listed on
foreign and domestic stock exchanges. A stock index fluctuates with changes in
the  market  values  of  the  stocks  included  in  the index. An example of a
domestic  stock  index is the Standard and Poor's 500 Stock Index. Examples of
foreign  stock indexes are the Canadian Market Portfolio Index (Montreal Stock
Exchange),  The  Financial Times -- Stock Exchange 100 (London Stock Exchange)
and  the  Toronto  Stock  Exchange  Composite  300  (Toronto Stock Exchange). 
Examples  of fixed-income indexes include the Lehman Government/Corporate Bond
Index  and  the  Lehman Treasury Bond Index.

Options on Indexes are generally similar  to  options  on  securities except
that the delivery requirements are different.  Instead of giving the right to
take or make delivery of a security at  a  specified  price,  an  option on an
index gives the holder the right to receive  a  cash "exercise settlement 
amount" equal to (a) the amount, if any, by which the fixed exercise price of
the option exceeds (in the case of a put) or  is  less  than (in the case of a
call) the closing value of the underlying index  on  the date of exercise,
multiplied by (b) a fixed "index multiplier."  Receipt  of  this  cash amount
will depend upon the closing level of the index upon  which  the option is
based being greater than, in the case of a call, or less  than, in the case of
a put, the exercise price of the option. The amount of cash received will be 
equal to such difference between the closing price of the  index  and  the  
exercise  price  of the option expressed in dollars or a foreign  currency,  
as the case may be, times a specified multiple. The writer of  the  option  
is  obligated,  in return for the premium received, to make a delivery  of  
this amount. The writer may offset its position in index options prior  to  
expiration by entering into a closing transaction on an exchange or the option
may expire unexercised.

The effectiveness of purchasing or writing options as a hedging technique will
depend  upon  the  extent  to  which  price  movements  in  the portion of the
securities  portfolio  of  a  Portfolio  correlate with price movements of the
stock  index  selected.  Because  the  value  of  an index option depends upon
movements  in  the  level  of  the index rather than the price of a particular
stock,  whether  a  Portfolio will realize a gain or loss from the purchase or
writing  of  options  on an index depends upon movements in the level of stock
prices in the stock market generally or, in the case of certain indexes, in an
industry or market segment, rather than movements in the price of a particular
stock.  Accordingly,  successful use of Options on Indexes by a Portfolio will
be  subject to its Sub-Adviser's ability to predict correctly movements in the
direction  of  the market generally or of a particular industry. This requires
different  skills  and  techniques  than  predicting  changes  in the price of
individual stocks.

Options on securities indexes entail risks in addition to the risks of options
on  securities.  Because  exchange trading of options on securities indexes is
relatively  new,  the  absence  of  a  liquid secondary market to close out an
option  position  is more likely to occur, although a Portfolio generally will
only  purchase  or write such an option if the Sub-Adviser believes the option
can be closed out. Because options on securities indexes require settlement in
cash,  a  Portfolio  may  be  forced to liquidate portfolio securities to meet
settlement  obligations.  A  Portfolio  will  engage  in  stock  index options
transactions only when determined by its Sub-Adviser to be consistent with its
efforts to control risk. There can be no assurance that such judgement will be
accurate or that the use of these portfolio strategies will be successful.

OVER THE COUNTER OPTIONS

Certain  Portfolios  may  write  or  purchase  options in privately negotiated
domestic  or  foreign transactions ("OTC Options"), as well as exchange traded
or  "listed" options. OTC Options can be closed out only by agreement with the
other  party  to  the  transaction,  and  thus  any OTC Options purchased by a
Portfolio  will  be  considered an illiquid security. In addition, certain OTC
Options on foreign currencies are traded through financial institutions acting
as market makers in such options and the underlying currencies.

The  staff  of  the SEC has taken the position that purchased over-the-counter
options and assets used to cover written over-the-counter options are illiquid
and,  therefore,  together  with  other illiquid securities, cannot exceed the
maximum  percentage of a Portfolio's assets allowed to be invested in illiquid
securities  (the  "illiquidity  ceiling").  (See "Illiquid Securities" in this
Appendix.)  Except  as  provided  below,  the  Portfolios  intend  to  write
over-the-counter  options only with primary U.S. Government securities dealers
recognized  by the Federal Reserve Bank of New York. Also, the contracts which
such Portfolios have in place with such primary dealers will provide that each
Portfolio has the absolute right to repurchase any option it writes at anytime
at a price which represents the fair market value, as determined in good faith
through  negotiation  between the parties, but which in no event will exceed a
price  determined pursuant to a formula in the contract. Although the specific
formula may vary between contracts with different primary dealers, the formula
will generally be based on a multiple of the premium received by the Portfolio
for  writing  the  option,  plus the amount, if any, of the option's intrinsic
value (i.e., the amount that the option is in the money). The formula may also
include  a  factor  to  account  for  the  difference between the price of the
security  and  the  strike  price  of  the  option  if  the  option is written
out-of-the-money. A Portfolio will treat all or a part of the formula price as
illiquid  for purposes of the illiquidity ceiling. Certain Portfolios may also
write  over-the-counter  options  with  nonprimary  dealers, including foreign
dealers, and will treat the assets used to cover these options as illiquid for
purposes of such illiquidity ceiling.

OTC  Options entail risks in addition to the risks of exchange traded options.
Exchange  traded  options  are  in  effect  guaranteed by the Options Clearing
Corporation,  while  a Portfolio relies on the party from whom it purchases an
OTC Option to perform if the Portfolio exercises the option. With OTC Options,
if  the transacting dealer fails to make or take delivery of the securities or
amount  of foreign currency underlying an option it has written, in accordance
with  the  terms  of that option, the Portfolio will lose the premium paid for
the option as well as any anticipated benefit of the transaction. Furthermore,
OTC Options are less liquid than exchange traded options.

REPURCHASE AGREEMENTS

Repurchase  Agreements  are agreements to purchase underlying debt obligations
from  financial institutions, such as banks and broker-dealers, subject to the
seller's  agreement  to  repurchase the obligations at an established time and
price.  The  collateral  for  such  Repurchase  Agreements will be held by the
Portfolio's  custodian  or  a duly appointed sub-custodian. The Portfolio will
enter  into Repurchase Agreements only with banks and broker-dealers that have
been  determined  to  be  creditworthy  by the Trust's Board of Trustees under
criteria established in consultation with the Adviser and the Sub-Adviser. The
seller under a Repurchase Agreement would be required to maintain the value of
the  obligations  subject  to  the  Repurchase  Agreement at not less than the
repurchase  price.  Default by the seller would, however, expose the Portfolio
to  possible  loss because of advers market action or delay in connection with
the  disposition  of  the  underlying  obligations. In addition, if bankruptcy
proceedings  are  commenced with respect to the seller of the obligations, the
Portfolio may be delayed or limited in its ability to sell the collateral.

REVERSE REPURCHASE AGREEMENTS

Reverse  Repurchase  Agreements  are  the same as repurchase agreements except
that,  in  this  instance,  the  Portfolios  would  assume  the  role  of
seller/borrower  in  the  transaction. The Portfolios will maintain segregated
accounts  with the Custodian consisting of U.S. Government Securities, cash or
money  market  instruments  that  at all times are in an amount equal to their
obligations under Reverse Repurchase Agreements. Reverse Repurchase Agreements
involve  the  risk that the market value of the securities sold by a Portfolio
may  decline below the repurchase price of the securities and, if the proceeds
from  the  reverse  repurchase  agreement are invested in securities, that the
market  value of the securities sold may decline below the repurchase price of
the  securities  sold.  Each  Portfolio's  Sub-Adviser,  acting  under  the
supervision  of  the  Board  of  Trustees,  reviews  on  an  ongoing basis the
creditworthiness  of  the parties with which it enters into Reverse Repurchase
Agreements.  Under  the  1940  Act,  Reverse  Repurchase  Agreements  may  be
considered  borrowings  by  the  seller.  Whenever  borrowings by a Portfolio,
including  Reverse  Repurchase  Agreements,  exceed  5%  of  the  value  of  a
Portfolio's total assets, the Portfolio will not purchase any securities.


SMALL COMPANIES

Certain  Portfolios  may  invest  in  small  companies,  some  of which may be
unseasoned. While smaller companies generally have potential for rapid growth,
investments in such companies often involve higher risks because the companies
may  lack  the  management  experience,  financial  resources,  product
diversification  and  competitive  strengths of larger corporations. Moreover,
the  markets  for  the shares of such companies typically are less liquid than
those for the shares of larger companies.

STRATEGIC TRANSACTIONS

Subject  to  the  investment  limitations  and  restrictions  for  each of the
Portfolios as stated elsewhere in the Prospectus and SAI of the Trust, each of
the  Portfolios  may,  but  is  not  required  to,  utilize various investment
strategies  as  described  in  this Appendix to hedge various market risks, to
manage  the  effective  maturity or duration of fixed-income securities, or to
seek  potentially  higher  returns. Utilizing these investment strategies, the
Portfolio  may  purchase  and  sell,  to  the  extent not otherwise limited or
restricted  for  such  Portfolio, exchange-listed and over-the-counter put and
call  options  on  securities,  equity  and  fixed-income  indexes  and  other
financial  instruments;  purchase  and  sell  financial  futures contracts and
options  thereon; enter into various Interest Rate Transactions such as swaps,
caps,  floors or collars; and enter into various currency transactions such as
currency  forward  contracts,  currency  futures  contracts, currency swaps or
options  on  currencies  or  currency futures (collectively, all the above are
called "Strategic Transactions").

Strategic  Transactions  may  be  used  to attempt to protect against possible
changes  in  the market value of securities held in or to be purchased for the
Portfolio's  portfolio  resulting from securities markets or currency exchange
rate fluctuations, to protect the Portfolio's unrealized gains in the value of
its  portfolio  securities,  to  facilitate  the  sale  of such securities for
investment  purposes,  to  manage  the  effective  maturity or duration of the
Portfolio's  portfolio,  or to establish a position in the derivatives markets
as  a  temporary  substitute  for purchasing or selling particular securities.
Some  Strategic  Transactions  may  also  be  used  to seek potentially higher
returns,  although  no  more than 5% of the Portfolio's assets will be used as
the  initial  margin  or  purchase price of options for Strategic Transactions
entered  into for purposes other than "bona fide hedging" positions as defined
in  the regulations adopted by the Commodities Futures Trading Commission. Any
or  all  of these investment techniques may be used at any time, as use of any
Strategic  Transaction  is  a function of numerous variables, including market
conditions.  The  ability  of  the  Portfolio  to  utilize  these  Strategic
Transactions successfully will depend on the Sub-Adviser's ability to predict,
which cannot be assured, pertinent market movements. The Portfolio will comply
with applicable regulatory requirements when utilizing Strategic Transactions.
Strategic Transactions involving financial futures and options thereon will be
purchased, sold or entered into only for bona fide hedging, risk management or
portfolio management purposes.

U.S. GOVERNMENT SECURITIES

U.S.  Government  Securities  include  direct obligations of the U.S. Treasury
(such as U.S. Treasury bills, notes and bonds) and obligations directly issued
or  guaranteed  by  U.S.  Government  agencies  or  instrumentalities.  Some
obligations  issued or guaranteed by agencies or instrumentalities of the U.S.
Government  are  backed  by  the  full faith and credit of the U.S. Government
(such as GNMA certificates). Others are backed only by the right of the issuer
to  borrow  from  the  U.S.  Treasury (such as securities of Federal Home Loan
Banks)  and  still others are backed only by the credit of the instrumentality
(such  as FNMA and FHLMC certificates). Guarantees of principal by agencies or
instrumentalities  of the U.S. Government may be a guarantee of payment at the
maturity of the obligation so that in the event of a default prior to maturity
there  might  not be a market and thus no means of realizing on the obligation
prior  to  maturity.  Guarantees  as  to  the  timely payment of principal and
interest  do  not  extend to the value or yield of these securities nor to the
value of a Portfolio's shares.

WHEN-ISSUED SECURITIES AND DELAYED-DELIVERY TRANSACTIONS

In  order  to secure yields or prices deemed advantageous at the time, certain
Portfolios  may  purchase  or  sell  securities  on  a  when-issued  or  a
delayed-delivery  basis.  The  Portfolios  will  enter  into  a  when-issued
transaction  for the purpose of acquiring portfolio securities and not for the
purpose  of  leverage,  although  a  Portfolio  may  dispose  of a when-issued
security or forward commitment prior to settlement if it is deemed appropriate
to  do  so. In such transactions, delivery of the securities occurs beyond the
normal  settlement  periods,  but  no  payment  or delivery is made by, and no
interest accrues to, the Portfolios prior to the actual delivery or payment by
the  other  party  to  the  transaction.  Due  to fluctuations in the value of
securities  purchased on a when-issued or a delayed-delivery basis, the yields
obtained  on  such securities may be higher or lower than the yields available
in  the market on the dates when the investments are actually delivered to the
buyers. Similarly, the sale of securities for delayed delivery can involve the
risk  that  the  prices  available  in  the  market  when delivery is made may
actually  be  higher  than  those  obtained  in  the  transaction  itself. The
Portfolios  will  establish a segregated account with the Custodian consisting
of cash, U.S. Government securities or other high-grade debt obligations in an
amount  equal  to  the  amount  of  its  when-issued  and  delayed-delivery
commitments.



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