TRANSAMERICA INVESTORS INC, 497, 1998-04-07

TRANSAMERICA INVESTORS INC
497, 1998-04-07

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Transamerica Premier Funds -- Investor Shares

Prospectus: March 31, 1998

Transamerica Premier Aggressive Growth Fund Transamerica Premier Small
Company Fund Transamerica Premier Equity Fund Transamerica Premier
Value Fund Transamerica Premier Index Fund Transamerica Premier Bond
Fund Transamerica Premier Balanced Fund Transamerica Premier Cash
Reserve Fund

Your Guide
This guide (the "Prospectus") will provide you with helpful insights and details
about the Investor Class of shares of the Transamerica Premier Funds (a "Fund"
or collectively the "Funds"). It is intended to give you what you need to know
before investing. Please read it carefully and save it for future reference.

Transamerica Investors
Transamerica Investors, Inc. (the "Company") is an open-end, management
investment company offering a number of portfolios, known collectively as the
Transamerica Premier Funds. Each Fund is managed separately and has its own
investment objective, strategies and policies designed to meet different goals.
Each class of each Fund has its own levels of expenses and charges. The minimum
initial investment is $1,000 per Fund, or $250 to open an IRA.
See "Minimum Investments" on page 35 for more details.

Additional Information and Assistance
For additional details about the Funds, call 1-800-89-ASK-US (1-800-892-7587),
or write to Transamerica Premier Funds, P.O. Box 9232, Boston, Massachusetts
02205-9232. A Statement of Additional Information, which has been filed with the
Securities and Exchange Commission (the "SEC"), is available at no charge by
calling the above number. The Statement of Additional Information is a part of
this Prospectus by reference.

LIKE ALL MUTUAL FUND SHARES, 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.

AN INVESTMENT IN THE TRANSAMERICA PREMIER CASH RESERVE FUND IS NEITHER INSURED
NOR GUARANTEED BY THE U.S. GOVERNMENT, AND THERE CAN BE NO ASSURANCE THAT THIS
FUND WILL MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER SHARE.

Table of Contents

The Funds at a Glance 4
Fund Expenses 6
Financial Highlights 8
Investment Adviser's Performance Managing
Similar Accounts 10
The Management Team 14
The Funds In Detail 14
Transamerica Premier Aggressive Growth Fund 15
Transamerica Premier Small Company Fund 16
Transamerica Premier Equity Fund 17
Transamerica Premier Value Fund 18
Transamerica Premier Index Fund 20
Transamerica Premier Bond Fund 21
Transamerica Premier Balanced Fund 23
Transamerica Premier Cash Reserve Fund 24
A General Discussion About Risk 26
Investment Procedures and Risk Considerations 27
Shareholder Services 32
Opening Your Account 33
How to Buy Shares 34
How to Sell Shares 36
How to Exchange Shares 39
Other Investor Requirements and Services 40
Dividends and Capital Gains 41
What About Taxes? 42
Share Price 43
Organization and Management 43
General Information 47

The Funds at a Glance

The Transamerica Premier Funds consist of the following Funds with different
investment objectives and risk levels. There is no guarantee that these
investment objectives will be met. These brief descriptions will give you a
summary of each Fund. A more detailed description for each Fund is in "The Funds
in Detail" on page 14. For information on the risks associated with investment
in these Funds, see "Investment Procedures and Risk Considerations" on page 27.

Transamerica Premier Aggressive Growth Fund The Fund seeks to maximize long-term
growth.
It invests primarily in common stocks selected for their growth potential
resulting from growing franchises protected by high barriers to
competition. Under normal market conditions, the Fund will invest at least
90% of its total assets in a non-diversified portfolio of domestic equity
securities of any size, which may include securities of larger, more
established companies and/or smaller emerging companies selected for their
growth potential.
The Fund is intended for investors who have the perspective, patience, and
financial ability to take on above-average stock market volatility in a
focused pursuit of long-term capital growth.
See page 15 for more details.

Transamerica Premier Small Company Fund The Fund seeks to maximize long-term
growth.
It invests primarily in a diversified portfolio of domestic common stocks.
Under normal market conditions, at least 65% of the Fund will be invested
in companies with smaller market capitalizations (generally, under $1
billion) or annual revenues of no more than $1 billion.
The Fund is intended for investors who have the perspective, patience, and
financial ability to take on above-average stock market volatility in a
focused pursuit of long-term capital growth.
See page 16 for more details.

Transamerica Premier Equity Fund The Fund seeks to maximize long-term growth.
It invests primarily in common stocks of growth companies that are
considered to be premier companies that are under-valued in the stock
market.
The Fund is intended for investors who wish to participate primarily in
the common stock markets. Investors should have the perspective, patience,
and financial ability to take on above-average stock market volatility in a
focused pursuit of long-term capital growth.
See page 17 for more details.

Transamerica Premier Value Fund
The Fund seeks to maximize capital appreciation.
It invests primarily in securities of companies that the Investment
Adviser believes are "underfollowed" or "out-of-favor." The Investment
Adviser believes these securities are under-valued relative to the
intrinsic or private market value of the firm. The securities in the Fund
may include common and preferred stocks, warrants, and corporate debt
securities.
The Fund is intended for investors who wish to participate primarily in
the common stock markets. Investors should have the perspective, patience,
and financial ability to take on above-average stock market volatility in a
focused pursuit of long-term capital growth.
See page 18 for more details.

Transamerica Premier Index Fund
The Fund seeks to track the performance of the Standard & Poor's 500
Composite Stock Price Index, also known as the S&P 500 Index.
It attempts to reproduce the overall investment characteristics of the S&P
500 Index by using a combination of management techniques. Its stock
purchases reflect the S&P 500 Index, but it makes no attempt to forecast
general market movements.
The Fund is intended for investors who wish to participate in the overall
growth of the economy, as reflected by the domestic stock market. Investors
should have the perspective, patience, and financial ability to take on
average stock market volatility in pursuit of long-term capital growth.
See page 20 for more details.

Transamerica Premier Bond Fund
The Fund seeks to achieve a high total return (income plus capital
changes) from fixed income securities consistent with preservation of
principal.
It invests primarily in a diversified selection of investment grade
corporate and government bonds and mortgage-backed securities.
The Fund is intended for investors who wish to invest in a diversified
portfolio of bonds. Investors should have the perspective, patience, and
financial ability to take on above-average bond price volatility in pursuit
of a high total return produced by income from longer-term securities and
capital gains from under-valued bonds.
See page 21 for more details.

Transamerica Premier Balanced Fund
The Fund seeks to achieve long-term capital growth and current income with
a secondary objective of capital preservation, by balancing investments
among stocks, bonds, and cash (or cash equivalents).
It invests primarily in a diversified selection of common stocks, bonds,
and money market instruments and other short-term debt securities.
The Fund is intended for investors who wish to participate in both the
equity and debt markets, but who wish to leave the allocation of the
balance between them to professional management. Investors should have the
perspective, patience, and financial ability to take on average market
volatility in pursuit of long-term total return that balances capital
growth and current income.
See page 23 for more details.

Transamerica Premier Cash Reserve Fund
The Fund seeks to maximize current income from money market securities
consistent with liquidity and preservation of principal.
This is a money market fund. It invests primarily in high quality U.S.
dollar-denominated money market instruments with remaining maturities of 13
months or less.
The Fund provides a low risk, relatively low cost way to maximize current
income through high-quality money market securities that offer stability of
principal and liquidity. This Fund may be a suitable investment for
temporary or defensive purposes and may also be appropriate as part of an
overall long-term investment strategy.
See page 24 for more details.

Availability
Investor Shares are available on a no-load basis directly to individuals,
companies, Pension and Retirement Savings Programs, and other investors from
Transamerica Securities Sales Corporation ("TSSC"), the Distributor. For a
listing of applicable Pension and Retirement Savings Programs, see "Pension and
Retirement Savings Programs" on page 47.

This Prospectus provides information about the Investor Shares only.

Fund Expenses

Shareholder Transaction Expenses (as a percentage of offering price)
<TABLE>
<CAPTION>

Aggressive Small Cash
Transaction Expense Growth Company Equity Value Index Bond Balanced Reserve
Sales Charge
<S> <C> <C> <C> <C> <C> <C> <C> <C>
on Purchases1 None None None None None None None None
Redemption Fee None None None None None None None None
Sales Charge on
Reinvested Dividends None None None None None None None None
Contingent Deferred
Sales Charge None None None None None None None None
</TABLE>

Annual Fund Operating Expenses (as a percent of average net assets)
<TABLE>
<CAPTION>

Other Expenses Total Operating
Transamerica After Waiver and Expenses After Waiver
Premier Funds Adviser Fee2 12b-1 Fee3 Reimbursement4 and Reimbursement5
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Aggressive Growth 0.85% 0.25% 0.30% 1.40%
Small Company 0.85% 0.25% 0.30% 1.40%
Equity 0.85% 0.25% 0.25% 1.35%
Value 0.75% 0.25% 0.20% 1.20%
Index 0.30% 0.10% 0.30% 0.70%
Bond 0.60% 0.25% 0.45% 1.30%
Balanced 0.75% 0.25% 0.45% 1.45%
Cash Reserve 0.35% 0.10% 0.25% 0.70%
</TABLE>

The preceding tables summarize actual transaction expenses and Adviser fees and
anticipated operating expenses for 1998. The purpose of the tables is to assist
you in understanding the varying costs and expenses you will bear directly or
indirectly.

Example

Using the aforementioned transaction and operating expenses, the expenses for a
$1,000 investment using an assumed annual return of 5% would be:6
<TABLE>
<CAPTION>

Transamerica Premier Funds 1 Year 3 Years 5 Years 10 Years
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Aggressive Growth $14 $44 $77 $168
Small Company $14 $44 $77 $168
Equity $14 $43 $74 $162
Value $12 $38 $66 $146
Index $ 7 $22 $39 $ 87
Bond $13 $41 $71 $157
Balanced $15 $46 $79 $174
Cash Reserve $ 7 $22 $39 $ 87
</TABLE>

The information contained in the above examples should not be considered a
representation of future expenses. The actual expenses may be more or less than
those shown.

1 Although there is no sales charge, there is a 12b-1 fee. Over a long period of
time, the total amount of 12b-1 fees paid may exceed the amount of another
fund's sales charges. 2 The Investment Adviser may waive part or all of the
adviser fee to keep the total operating expenses from exceeding the amount shown
in the table. See footnote 3 below. See "Adviser Fee" on page 45 for additional
information. 3 12b-1 fees cover costs of advertising and marketing the Funds.
The distributor may waive the 12b-1 fee from time to time, at its discretion.
For more information on 12b-1 fees, see "Distribution Plan" on page 46. 4 "Other
Expenses" are those incurred after any reimbursements to the Fund by the
Administrator. See "The Management Team" on page 14. Other expenses include
expenses not covered by the adviser fee or the 12b-1 fee. Expenses shown for the
Value Fund are based on estimated expenses and estimated net assets for its
first fiscal year. 5 "Total Operating Expenses" include adviser fees, 12b-1
fees, and other expenses that a Fund incurs. The Investment Adviser has agreed
to waive part of its adviser fee and the Administrator has agreed to assume any
other operating expenses to ensure that annualized expenses for each Fund (other
than interest, taxes, brokerage commissions and extraordinary expenses) will not
exceed the following percentages: 1.40% for the Aggressive Growth Fund, 1.40%
for the Small Company Fund, 1.50% for the Equity Fund, 1.20% for the Value Fund,
0.70% for the Index Fund, 1.30% for the Bond Fund, 1.45% for the Balanced Fund,
and 0.70% for the Cash Reserve Fund. The Administrator may, from time to time,
assume additional expenses. Fee waivers and expense assumption arrangements,
which may be terminated at any time without notice, will increase a Fund's
yield. If the Investment Adviser had not waived fees and the Administrator had
not reimbursed expenses for the year ended December 31, 1997, the ratio of total
operating expenses to average net assets would have been 2.08% for the
Aggressive Growth Fund, 2.12% for the Small Company Fund, 1.51% for the Equity
Fund, 1.57% for the Index Fund, 1.64% for the Bond Fund, 1.62% for the Balanced
Fund, and 0.95% for the Cash Reserve Fund. It is estimated to be 1.29% for the
Value Fund based on estimated $75 million in assets. 6 The expenses in the
example assume no fees for IRA or SEP accounts.

Financial Highlights

The following information has been audited by Ernst & Young LLP, independent
certified public accountants, whose unqualified reports covering the fiscal
years ended December 31, 1995, 1996 and 1997 are incorporated by reference
herein and appear in the annual report to shareholders. This information should
be read in conjunction with the financial statements and accompanying notes
thereto which appear in the annual report. Further information about the Funds'
performance is included in the annual report which may be obtained without
charge by writing or calling the address or telephone number on page 2.
<TABLE>
<CAPTION>

Transamerica Premier Transamerica Premier Transamerica Premier
Transamerica Premier
Aggressive Growth Fund Small Company Fund Equity Fund Index Fund
Period Ended Period Ended Year Ended Year Ended Period
Ended Year Ended Year Ended Period Ended
December 31, 1997* December 31, 1997* December 31, 1997 December 31, 1996 December 31,
- -------------------------------------------------------------------------------------------------------------
1995* December 31, 1997 December 31, 1996 December 31, 1995*
- ---------------------------------------------------------------
Net Asset Value
<S> <C> <C> <C> <C> <C> <C>
Beginning of period $10.00 $10.00 $12.65 $9.82 $10.00 $11.96
----------------------------------------------------------------------------
$10.59 $10.00
Investment Operations
Net investment income
(loss)1 (0.03) (0.02) (0.04) (0.06) 0.02
0.32 0.27 0.06
Net realized and
unrealized gain (loss) 2.21 2.51 6.05 2.91 (0.20)
------------------------------------------------------------------
3.60 2.06 0.53
- -------------------------------------
Total from investment
Operations 2.18 2.49 6.01 2.85 (0.18)
--------------------------------------------------------------------
3.92 2.33 0.59
- --------------------------------------
Distributions to
Shareholders From:
Net investment income - - - - - - (0.02) - -
(0.32) (0.33) - -
Net realized gains - - - - (0.13) - - - -
--------------------------------------------------------------------------
(0.07) (0.63) - -
- ----------------------------------------
Total distributions - - - - (0.13) (0.02) - -
(0.39) (0.96) - -
Net Asset Value
End of period $12.18 $12.49 $18.53 $12.65 $9.82 $15.49 $11.96
------------------------------------------------------------------------------------------
$10.59
Total Return2 21.80% 24.90% 47.51% 29.07% (1.80)% 33.14% 22.33%
---------------------------------------------------------------------------------
5.90%
Ratios and
Supplemental Data
Expenses to average
net assets:
After reimbursement/
fee waiver 1.40%+ 1.40%+ 1.49% 1.50% 0.25% 0.25% 0.35%
0.25%
Before reimbursement/
fee waiver 2.08%+ 2.12%+ 1.51% 1.95% 2.39% 1.57% 2.29%
4.12%
Net investment income (loss),
after reimbursement/
fee waiver (0.59)%+ (0.43)%+ (0.71)% (0.66)% 1.51% 2.31% 2.48%
2.70%
Portfolio turnover rate 17% 74% 13% 60% - - 11%
94% 4%
Average commission rate 3 $0.0650 $0.0562 $0.0619 $0.0660 $0.0678 $0.0407 $0.0363 $0.0418
Net assets, end of period $12,780 $11,122 $111,567 $30,454 $11,070 $23,992 $10,814 $6,934
(in thousands)
</TABLE>

* Each Fund commenced operations on October 2, 1995, except for the Aggressive
Growth and Small Company funds which commenced operations on July 1, 1997.

+ Annualized
1 Net investment income (loss) is after waiver of fees by the Investment Adviser
and reimbursement of certain expenses by the Administrator. If the Investment
Adviser had not waived fees and the Administrator had not reimbursed expenses,
net investment income (loss) per share would have been $(0.06) for the
Aggressive Growth Fund and $(0.06) for the Small Company Fund for the period
ended December 31, 1997. If the Adviser had not waived fees and the
Administrator had not reimbursed expenses, net investment income (loss) per
share would have been $(0.04), $(0.10) and $(0.01) for the Equity Fund, and
$0.14, $0.06 and $(0.03) for the Index Fund for the periods ended December 31,
1997, 1996 and 1995, respectively.

2 Total return represents aggregate total return for the period indicated and is
not annualized for periods less than one year.

3 Represents the average commission rate paid on equity security transactions on
which commissions are charged.

Transamerica Premier Transamerica Premier Transamerica
Premier
Bond Fund Balanced Fund Cash Reserve Fund
Year Ended Year Ended Period Ended Year Ended Year Ended
Period Ended Year Ended Year Ended Period Ended
December 31, 1997 December 31, 1996 December 31, 1995* December 31, 1997 December 31, 1996 December
31, 1995* December 31, 1997 December 31, 1996December 31, 1995*

Net Asset Value
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Beginning of period $9.86 $10.37 $10.00 $11.57 $10.23 $10.00 $1.00 $1.00 $1.00
Investment Operations
Net investment income (loss)1 0.62 0.56 0.16 0.11 0.14 0.06 0.05 0.05 0.01
Net realized and
unrealized gain (loss) 0.33 (0.46) 0.32 3.97 1.40 0.17 - - -
- - - -
Total from investment
operations 0.95 0.10 0.48 4.08 1.54 0.23 0.05 0.05 0.01
Distributions to
Shareholders From:
Net investment income (0.62) (0.61) (0.11) (0.11) (0.20) - - (0.05) (0.05) (0.01)
Net realized gains - - - - - - - - -
- - - - - - - - - -
Total distributions (0.62) (0.61) (0.11) (0.11) (0.20) - - (0.05) (0.05) (0.01)
Net Asset Value
End of period $10.19 $9.86 $10.37 $15.54 $11.57 $10.23 $1.00 $1.00 $1.00
Total Return2 9.99% 1.16% 4.82% 35.38% 15.28% 2.30% 5.48% 5.34% 1.39%
Ratios and
Supplemental Data
Expenses to average
net assets :
After reimbursement/
fee waiver 1.30% 1.30% 0.25%+ 1.45% 1.45% 0.25%+ 0.25% 0.25% 0.25%+
Before reimbursement/
fee waiver 1.64% 1.81% 1.93%+ 1.62% 1.94% 2.12%+ 0.95% 1.09% 1.37%+
Net investment income (loss),
after reimbursement/
fee waiver 6.25% 5.66% 6.55%+ 0.83% 1.34% 3.12%+ 5.35% 5.21% 5.55%+
Portfolio turnover rate 99% 7% 19% 23% 19% 16% N/A N/A N/A
Average commission rate 3 - - - - - - $0.0638 $0.0656 $0.0662
- - - - - -
Net assets, end of period $14,236 $12,553 $11,827 $26,799 $16,041 $12,084 $51,246 $32,041 $27,996
(in thousands)
</TABLE>

* Each Fund commenced operations on October 2, 1995, except for the Aggressive
Growth and Small Company funds which commenced operations on July 1, 1997.

2 Total return represents aggregate total return for the period indicated and is
not annualized for periods less than one year.

3 Represents the average commission rate paid on equity security transactions on
which commissions are charged.

Investment Adviser's Performance Managing Similar Accounts

The Funds' Investment Adviser, Transamerica Investment Services, Inc., has been
managing segregated investment accounts (or "separate accounts") for pension
clients of Transamerica Corporation's affiliated companies for over ten years.

The Transamerica Premier Equity, Index, Bond, Balanced and Cash Reserve Funds
have the same investment adviser and have substantially the same investment
objectives, policies and strategies as the separate accounts from which they
were cloned. The separate accounts are not registered with the SEC nor are they
subject to Subchapter M of the Internal Revenue Code of 1986, as amended (the
"Code"). Therefore, they were not subject to the investment limitations,
diversification requirements, and other restrictions that apply to the Funds. If
the separate accounts had been subject to Subchapter M of the Code, their
performance may have been adversely affected at times. In addition, the separate
accounts are not subject to the same fees and expenses borne by the Funds. If
the Equity, Bond and Balanced separate accounts had been subject to the same
fees and expenses as their respective mutual funds, their performance would have
been lower. If the Equity Index and Cash Management separate accounts had been
subject to the same fees and expenses as their respective mutual funds, their
performance would have been higher. The separate account performance figures are
not the Funds' own performance and should not be considered a substitute for the
Funds' own performance; nor should they be considered indicative of any past or
future performance of the Funds.

For comparison purposes, the separate accounts from which the Premier Funds were
cloned are shown below.

Separate Accounts Premier Funds
Transamerica Equity Fund Transamerica Premier Equity Fund
Transamerica Equity Index Fund Transamerica Premier Index Fund
Transamerica Bond Fund Transamerica Premier Bond Fund
Transamerica Balanced Fund Transamerica Premier Balanced Fund
Transamerica Cash Management Fund Transamerica Premier Cash Reserve Fund

There are no corresponding separate accounts for the Transamerica Premier
Aggressive Growth Fund, the Transamerica Premier Small Company Fund, and the
Transamerica Premier Value Fund.

The following table illustrates the separate accounts' annualized performance1
as compared to the Premier Funds2 and recognized industry indexes since
inception and over the last one, five, and ten-year periods ending December 31,
1997.
<TABLE>
<CAPTION>

1 5 10 Since
Year Years Years Inception
<S> <C> <C> <C> <C> <C>
Equity Fund 45.70% 28.48% 27.79% 23.76%
Premier Equity Fund 47.51% --- --- 32.03%
S&P 500 Index4 33.36% 20.27% 18.07% 14.67%

Equity Index Fund 32.41% 19.63% 17.43% 16.56%
Premier Index Fund 33.14% --- --- 27.38%
S&P 500 Index4 33.36% 20.27% 18.07% 16.87%

Bond Fund 11.45% 9.29% 10.87% 12.41%
Premier Bond Fund 9.99% --- --- 7.07%
Lehman Brothers
Govt./Corporate Index5 9.76% 7.61% 9.15% 9.97%

Balanced Fund 29.61% --- --- 20.39%
Premier Balanced Fund 35.38% --- --- 23.09%
50% S&P 500 Index and
50% Lehman Brothers
Govt./Corporate Index 21.29% --- --- 13.60%

Cash Management Fund 5.07% 4.38% 5.45% 6.65%
Premier Cash Reserve Fund 5.48% --- --- 5.44%
IBC First Tier Index6 4.92% 4.32% 5.43% 6.58%

</TABLE>

1 Average Annual Total Performance calculated as shown in the Statement of
Additional Information. 2 The performance of the Premier Funds reflects that of
the Investor Shares, which are subject to Rule 12b-1 fees. 3 The inception date
of all Premier Funds shown in the table is October 2, 1995. Inception dates of
the separate accounts: Equity - 10/1/87; Equity Index - 10/1/86; Bond - 5/1/83;
Balanced - 4/1/93; Cash Management - 1/3/82. The inception dates shown for the
indexes match the dates of the separate accounts' inception. 4 The Standard and
Poor's 500 Index consists of 500 widely held, publicly traded common stocks. 5
The Lehman Brothers Government/Corporate Bond Index is a broad-based unmanaged
index of government and corporate bonds with maturities of 10 years or longer
that are rated investment grade or higher by Moody's Investor Services, Inc. or
Standard and Poor's Corporation. 6 IBC's Money Fund ReportTM-First Tier is a
composite of taxable money market funds that meet the SEC's definition of first
tier securities contained in Rule 2a-7 under the Investment Company Act of 1940.
These indexes do not reflect any commissions or fees which would be
incurred by an investor purchasing
the securities represented by each index. 0

The Investment Adviser has a history of successfully investing in the three
basic investment categories: equity, bond, and money market. Following are
graphs of the three separate accounts representing those categories, depicting
their performance since inception compared with the performance of a recognized
industry index for each investment category.

Equity Separate Account

The following graph depicts that $1,000 invested in the Equity Separate Account
at its inception, October 1, 1987, would have appreciated to $8,895 at December
31, 1997. This is an annualized return of 23.76% per year. By comparison, $1,000
invested for the same time period in S&P 500 Index securities would have grown
to only $4,071.

[Graph]

Bond Separate Account

The following graph depicts that $1,000 invested in the Bond Separate Account at
its inception, May 1, 1983, would have appreciated to $5,570 at December 31,
1997. This is an annualized return of 12.41% per year. By comparison, $1,000
invested for the same time period in Lehman Brothers Government/Corporate Index
securities would have grown to only $4,034.

[Graph]

Cash Management Separate Account

The following graph depicts that $1,000 invested in the Cash Management Separate
Account at its inception, January 3, 1982, would have appreciated to $2,800 at
December 31, 1997. This is an annualized return of 6.65% per year. By comparison
$1,000 invested for the same time period in IBC First Tier Index securities
would have grown to $2,774.

[Graph]

Performance for the separate accounts is shown after reduction for investment
management and administrative charges. The indexes shown in the previous graphs
are used for comparison purposes only. They are unmanaged indexes that have no
management fees or expense charges, and they are not available for investment.
Performance figures are based on historical earnings. They are not intended to
indicate future performance.

The performance of the Premier Funds may differ from the separate accounts'
performance for reasons such as timing of purchases and sales, availability of
cash for new investments, brokerage commissions, diversification of securities,
the investment restrictions, both regulatory and by prospectus, imposed on the
Funds, and the differences in fees and expenses between the Funds and the
separate accounts. In addition, it is possible that by using different
performance-determining methods than those used here, the results could vary.
This performance data should not be relied upon when deciding to invest in a
particular Premier Fund. Past performance of the separate accounts is no
guarantee of future results for the Funds.

The Management Team

Responsibility for the management and supervision of the Company and its Funds
rests with the Board of Directors of Transamerica Investors, Inc. (the "Board").
The Investment Adviser and the Administrator are subject to the direction of the
Board.

The Funds' Investment Adviser is Transamerica Investment Services, Inc. (the
"Investment Adviser"), 1150 South Olive Street, Los Angeles, California 90015.
The Investment Adviser's duties include, but are not limited to: (1) supervising
and managing the investments of each Fund and directing the purchase and sale of
its investments; and (2) ensuring that investments meet each Fund's investment
objectives, strategies, and policies and comply with government regulations.

The Funds' Administrator is Transamerica Occidental Life Insurance Company (the
"Administrator"), 1150 South Olive Street, Los Angeles, California 90015. The
Administrator's duties include, but are not limited to: (1) providing the Funds
with administrative and clerical services, including the maintenance of the
Funds' books and records; (2) registering Fund shares with the SEC and with
those states and other jurisdictions where its shares are offered or sold; (3)
the periodic update of the Funds' prospectus; and (4) providing proxy materials
and reports to Fund shareholders and the SEC. The Administrator has contracted
with State Street Bank and Trust Company to perform certain administrative
functions.

The Investment Adviser and the Administrator are direct or indirect subsidiaries
of Transamerica Corporation, 600 Montgomery Street, San Francisco, California
94111, one of the nation's largest financial services companies. For more
information on Fund management, see "Organization and Management" on page 43.

The Funds in Detail

Fund Objectives, Strategies and Policies
The investment objectives, strategies, and policies of each Fund are described
on the following pages. In investing its portfolio assets, each Fund will follow
the general policies listed. The percentage limitations included in these
policies and elsewhere in this Prospectus apply at the time of purchase of the
security, unless otherwise indicated. For example, if a Fund exceeds a limit as
a result of market fluctuations or the sale of other securities, it will not be
required to dispose of any securities. The Funds have adopted certain investment
restrictions, which are described fully in the Statement of Additional
Information. Like each Fund's investment objective, certain of these
restrictions are fundamental and may be changed only by a majority vote of the
Fund's outstanding shares.

Fund Risks
For additional information on specific types of securities, investment
techniques, and their risks, see "Investment Procedures and Risk Considerations"
on page 27.

Transamerica Premier Aggressive Growth Fund

Investment Objective
The Fund seeks to maximize long-term growth.

Investment Strategies and Policies
The Fund generally invests at least 90% of its total assets in a non-diversified
portfolio of domestic equity securities of any size, which may include
securities of larger more established companies and/or smaller emerging
companies selected by the Investment Adviser for their growth potential.

The Fund primarily invests in domestic common stocks selected by the Investment
Adviser for their growth potential resulting from growing franchises protected
by high barriers to competition. The Fund may invest to a lesser degree in
common stocks of foreign issuers and in other types of domestic and foreign
securities, including preferred stocks, warrants, convertible securities and
debt securities. Debt securities that the Fund may purchase include investment
grade and non-investment grade corporate bonds and debentures, government
securities, mortgage and asset-backed securities, zero coupon bonds,
indexed/structured notes, high-grade commercial paper, certificates of deposit,
and repurchase agreements. Such securities may offer growth potential because of
anticipated changes in interest rates, credit standing, currency relationships
or other factors. The Fund may use a variety of investment techniques, including
derivatives and short sales.

While the Fund will generally be fully invested, should the Investment Adviser
determine that market conditions warrant, the Fund may invest without limit in
cash and cash equivalents for temporary defensive purposes. To the extent the
Fund is so invested, it is not achieving its investment objectives. This
practice is not expected to be used routinely. As part of the management of cash
and cash equivalents and to help maintain liquidity, the Fund may invest in the
same kind of money market and other short-term instruments and debt securities
as the Transamerica Premier Cash Reserve Fund does. See "Transamerica Premier
Cash Reserve Fund" on page 24.

The Fund is constructed one stock at a time. Although themes may emerge in the
Fund, securities are generally selected without regard to any defined industry
sector or other similarly defined selection procedure. Each company passes
through a research process and stands on its own merits as a viable investment
in the Investment Adviser's opinion. The Investment Adviser's research is
designed to identify companies with growing franchises protected by high
barriers to competition with potential for improvement in profitability and
acceleration of growth.

Some Points To Consider When Investing
Since the Fund invests primarily in common stocks, its investments are subject
to stock market price volatility. Price volatility means that stock prices can
go up or down due to a variety of economic and market conditions.

Since the Fund is a non-diversified investment company portfolio, it could
invest in a smaller number of individual issuers than a diversified investment
company, and the value of the Fund's investments could be impacted significantly
by any single adverse occurrence than would the value of the investments of a
diversified investment company.

The Fund is intended for investors who have the perspective, patience, and
financial ability to take on above-average stock market volatility in a focused
pursuit of long-term capital growth. Because of the uncertainty associated with
common stock investments, the Fund is intended to be a long-term investment.

Transamerica Premier Small Company Fund

Investment Objective
The Fund seeks to maximize long-term growth.

Investment Strategies and Policies
The Fund invests primarily in a diversified portfolio of domestic equity
securities (i.e., common stocks, preferred stocks, rights, warrants and
securities convertible into or exchangeable for common stocks) of companies with
small market capitalizations (under $1 billion) or annual revenues of up to $1
billion. The companies in which the Fund invests are those that the Adviser
believes to have the potential for significant long-term capital appreciation.
The Investment Adviser's research is designed to identify companies with
potential for improvement in profitability and acceleration of growth. The
average and median market capitalization of holdings in the Fund may, however,
fluctuate over time as a result of changes in stock prices and the companies
held by the Fund. In addition, the Fund may continue to hold securities of
companies whose market capitalization or revenues grow above $1 billion while
they are in the portfolio, if these companies continue to meet the other
investment policies of the Fund.

The securities of smaller companies are usually less actively followed by
analysts than those of larger companies and may be under-valued by the market.
This can provide significant opportunities for capital appreciation. However,
the securities of such smaller companies may also involve greater risks and may
be subject to more volatile market movements than securities of larger, more
established companies. See "Investment Procedures and Risk Considerations" on
page 27 for further information about small company investment.

The Fund primarily invests in domestic common stocks of small companies selected
by the Adviser for their growth potential resulting from growing franchises
protected by high barriers to competition. The Fund may invest to a lesser
degree in other types of domestic and foreign securities, including preferred
stocks, warrants, convertible securities and debt securities.

Debt securities that the Fund may purchase include investment grade and
non-investment grade corporate bonds and debentures, government securities,
mortgage and asset-backed securities, zero coupon bonds, indexed/structured
notes, high-grade commercial paper, certificates of deposit, and repurchase
agreements. Such securities may offer growth potential because of anticipated
changes in interest rates, credit standing, currency relationships or other
factors. The Fund may use a variety of investment techniques, including
derivatives and short sales.

Although the Fund is authorized to invest without limit in foreign equity and
debt securities, the Investment Adviser currently does not intend to invest in
foreign securities.

The Investment Adviser tries to keep the Fund fully invested. However, when the
Investment Adviser determines that market conditions warrant, the Fund may
invest without limit in cash and cash equivalents for temporary defensive
purposes. To the extent the Fund is so invested, it is not achieving its
investment objectives. This practice is not expected to be used routinely. As
part of the management of cash and cash equivalents and to help maintain
liquidity, the Fund may invest in the same kind of money market and other
short-term instruments and debt securities as the Transamerica Premier Cash
Reserve Fund does. See "Transamerica Premier Cash Reserve Fund" on page 24.

The Fund is constructed one stock at a time. Each company passes through a
research process and stands on its own merits as a viable investment in the
Investment Adviser's opinion.

Transamerica Premier Equity Fund

Investment Objective
The Fund seeks to maximize long-term growth.

Investment Strategies and Policies
The Fund invests primarily in a diversified portfolio of common stocks of growth
companies that are considered to be premier companies that are under-valued in
the stock market. The characteristics of premier companies include: o management
that demonstrate outstanding capabilities through a combination of superior
track records and well-defined plans for the future; o low-cost proprietary
products; o dominance in market share or specialized market niches; o strong
earnings and cash flows to finance future growth; or o shareholder orientation
by increasing dividends, stock repurchases, and strategic acquisitions.

Companies are also selected for their potential for growth based upon trends in
the U.S. economy. Some major
trends have included: a) the aging of baby boomers; b) the proliferation of
communication and information
technologies; c) the shift toward financial assets rather than real estate or
other tangible assets; and d) the
continuing increase in U.S. productivity.

The focus for this Fund is on growth stocks. Generally, at least 65% of the
Fund's assets will be invested in common stocks. The Fund may also invest in
preferred stocks, warrants, and bonds convertible into common stocks.

Foreign securities may be purchased if they meet the same criteria described
above for the Fund's investments in general. The Fund may invest up to 20% of
its assets in foreign securities. At times, the Fund may have no foreign
investments. Foreign securities purchased will be those traded on U.S.
exchanges.

Points To Consider When Investing
Since the Fund invests primarily in common stocks, its investments are subject
to stock market price volatility. Price volatility means that stock prices can
go up or down due to a variety of economic and market conditions.

Transamerica Premier Value Fund

Investment Objective
The Fund seeks to maximize capital appreciation.

Investment Strategies and Policies
The Fund is a diversified fund that invests primarily in securities of companies
that the Investment Adviser believes are "under-valued" relative to the
intrinsic or private market value of the firm. Intrinsic, or private market
value, is what an acquiring company might pay for the entire firm. The
determination of private market value is based on an analysis of the firm's
unrecognized balance sheet values and the discretionary cash flow the firm
generates. The securities in the Fund may include common and preferred stocks,
warrants, convertible securities, corporate and high-yield debt, and other
securities that the Investment Adviser believes are attractively priced. Income
is a secondary consideration of the Fund, although it is not part of the Fund's
fundamental investment objective.

The Fund has no pre-set limit as to the percentage of the portfolio which may be
invested in equity securities, debt securities, or cash equivalents. The
Investment Adviser's opinions are based upon analysis and research, taking into
account the valuation of the firm's securities relative to the fundamental
outlook for the firm's business and the comparable valuation of similar industry
competitors. These factors are not applied formulaically, as the Investment
Adviser examines each security separately; the Investment Adviser has no general
criteria as to asset size, earnings or industry type which would make a security
unsuitable for purchase by the Fund.

Although the Fund may invest in securities from any size issuer, the Fund will
generally invest in securities of issuers with market capitalizations in excess
of $500 million. The Fund may invest in securities that are traded on U.S. or
foreign exchanges, the National Association of Securities Dealers Automated
Quotations ("NASDAQ") national market system or in the over-the-counter ("OTC")
market.

Debt securities in which the Fund invests (such as corporate and U.S. government
bonds, debentures and notes) may or may not be rated by rating agencies such as
Moody's or S&P, and, if rated, such rating may range from the very highest to
the very lowest, currently C for Moody's and D for S&P. Securities rated D are
in default as to the payment of principal and interest. Medium and lower rated
debt securities in which the Fund expects to invest are commonly referred to as
"junk bonds." The Fund is limited to 35% of total assets for junk bonds and
other non-investment grade debt securites. See "High Yield (`Junk') Bonds" on
page 29 for further information.

The general investment policy for debt instruments, including junk bonds, is the
same as the investment policy for equity securities. The Fund seeks to invest in
debt instruments that are available at prices less than their intrinsic value.
Such instruments may include securities issued by reorganizing or restructuring
companies, or companies which recently emerged from, or are facing, the prospect
of a financial restructuring. It is under these circumstances, which usually
involve unrated or low rated securities that are often in, or about to, default,
that the Investment Adviser identifies securities which are sometimes available
at prices which it believes are less than their intrinsic value.

However, the Investment Adviser attempts to lessen price volatility by focusing
on the potential for each prospective holding (a "bottom up" approach) rather
than the economic and business cycle (a "top down" approach). The Fund is
constructed one stock at a time. Each company passes through the Investment
Adviser's research process and, in the Investment Adviser's opinion, stands on
its own merits as a viable investment. The Investment Adviser's proprietary
fundamental research is designed to identify companies that sell below their
intrinsic value. Intrinsic value is what an informed corporate or strategic
buyer would pay to purchase an entire company. The Investment Adviser will also
focus on companies that are restructuring or redeploying capital to improve
their return on investment. By focusing on intrinsic value and capital
redeployment, the Investment Adviser seeks to limit downside risk while
improving the chances for capital appreciation.

The Fund is intended for investors who have the perspective and patience to seek
competitive stock market returns in a focused pursuit of long-term capital
growth. Because of the uncertainty associated with common stock investments, the
Fund is intended to be a long-term investment.

Transamerica Premier Index Fund

Investment Objective
The Fund seeks to track the performance of the Standard & Poor's 500 Composite
Stock Price Index, also known as the S&P 500 Index (the "Index").

Investment Strategies and Policies
To achieve the Fund's objective, a combination of management techniques are
employed. The Fund purchases common stocks, S&P 500 Stock Index futures, S&P 500
Stock Index options, and short-term instruments in varying proportions. For
common stocks, investment decisions are based solely on the proportions of
securities which are included in the Index. The only exception is that
Transamerica Corporation common stock will not be purchased. Because stock
purchases reflect the Index, no attempt is made to forecast general market
movements. The correlation between the performance of the Fund and the S&P 500
Index is expected to be 0.95 or higher (a correlation of 1.00 would indicate
perfect correlation). There is no assurance that the Fund will achieve the
expected correlation.

The S&P 500 Index is an unmanaged index which assumes reinvestment of dividends
and is generally considered representative of U.S. large capitalization stocks.
The Index is composed of 500 common stocks of large capitalization companies
that are chosen by Standard and Poor's Corporation on a statistical basis. The
inclusion of a stock in the Index in no way implies that Standard & Poor's
Corporation believes the stock to be an attractive investment. The 500 stocks,
most of which trade on the New York Stock Exchange, represent approximately 70%
of the market value of all U.S. common stocks. Each stock in the Index is
weighted by its market value.

Due to the market value weighting, the 50 largest companies in the Index
currently account for approximately 50% of the Index. Typically, companies
included in the Index are the largest and most dominant firms in their
respective industries. The Investment Adviser routinely compares the Fund's
composition to the Index and rebalances the Fund as required.

The Fund may invest in instruments, other than common stocks, whose return
depends on stock market prices. They include S&P 500 Stock Index futures
contracts, options on the Index, and options on futures contracts. These are
derivative securities whose returns are linked to the returns of the S&P 500
Index. These investments are made primarily to help the Fund track the total
return of the Index. The use of S&P 500 Index derivatives allows the Fund to
achieve close correlation with the Index on a cost-effective basis while
maintaining liquidity. Purchase of futures and options requires only a small
amount of cash to cover the Fund's position and approximate the price movement
of the Index. In order to avoid leverage, any cash which the Fund does not
invest in stocks or in futures and options is invested in short-term debt
securities of the same type as the Transamerica Premier Cash Reserve Fund can
invest. See "Transamerica Premier Cash Reserve Fund" on page 24. These
short-term debt investments allow the Fund to approximate the dividend yield of
the Index, to cover the Fund's open positions in the S&P 500 Index derivatives,
and to help offset transaction costs and other expenses not incurred by the
unmanaged Index. For more information on derivatives, see the section on
"Options, Futures, and Other Derivatives" on page 30 of this Prospectus, and
also in the Statement of Additional Information.

The Transamerica Premier Index Fund is not affiliated with, sponsored, endorsed,
sold or promoted by Standard & Poor's Corporation.

Points to Consider When Investing
The performance of the Transamerica Premier Index Fund will reflect the
performance of the S&P 500 Index although it may not match it precisely.
Generally, when the Index is rising, the value of shares in the Fund should also
rise. When the index is declining, the value of the Fund's shares should also
decline. The Index's returns are not reduced by investment or operating
expenses. So, the Fund's ability to match the Index will be impeded by such
expenses. The Fund's return versus that of the Index, and its monthly
correlation with the movement of the Index, will be reviewed by the Fund's
management and reported to the Board.

The Fund's portfolio turnover rate may be as high as 200%. This may result in
higher transaction costs and tax consequences than for a less actively traded
fund, but the Investment Adviser believes that such turnover will not adversely
affect the Fund's performance. See "Investment Procedures and Risk
Considerations" on page 27 for more information on turnover.

The Fund is intended for investors who wish to participate in the overall growth
of the economy, as reflected by the domestic stock market. By owning shares of
the Fund, you indirectly own shares of the largest U.S. companies, according to
their proportional representation in the Index. Investors should have the
perspective, patience, and financial ability to take on average stock market
volatility in pursuit of long-term capital growth. Because of the uncertainty
associated with common stock investments, the Fund is intended to be a long-term
investment.

Transamerica Premier Bond Fund

Investment Objective
The Fund seeks to achieve a high total return (income plus capital changes) from
fixed income securities consistent with preservation of principal.

Investment Strategies and Policies
The Fund invests in a diversified portfolio of corporate and government bonds
and mortgage-backed securities. Through its proprietary evaluation and credit
research, the Investment Adviser attempts to identify bonds whose potential to
outperform other similar bonds, by virtue of underlying credit strength and
market mispricing, is not fully reflected in current bond market valuations. By
actively managing the Fund, the Investment Adviser seeks to capitalize on these
opportunities by finding price advantages as they occur in the market.

Generally, at least 65% of the Fund's assets is invested in investment grade
bonds. Investment grade bonds are rated Baa or higher by Moody's Investors
Service ("Moody's") or BBB or higher by Standard & Poor's Corporation ("S&P").
Maturities of these bonds are primarily between 10 and 30 years. In addition,
the Fund may invest in lower-rated securities (currently not expected to exceed
20% of the Fund's total assets). Those securities are rated Ba1 or lower by
Moody's or BB+ or lower by S&P. The Fund may also invest in unrated securities
of similar quality, as determined by the Investment Adviser. For more
information on lower-rated securities, see "High-Yield (eJunk') Bonds" on page
29 of the Prospectus and see the Statement of Additional Information. For more
information on S&P and Moody's ratings, see "Summary of Bond Ratings" on page
47.

Investments for this Fund may include securities issued or guaranteed by the
U.S. government or its agencies and instrumentalities, publicly traded corporate
securities, as well as municipal obligations. The Fund may also invest in
mortgage-backed securities issued by various federal agencies and government
sponsored enterprises and in other mortgage-related or asset-backed securities.
The investments in mortgage-related securities can be subject to the risk of
early repayment of principal. For more information, see "Mortgage-Backed and
Asset-Backed Securities" on page 31 and the Statement of Additional Information.

The Fund may buy foreign securities and other instruments if they meet the same
criteria described above for the Fund's investments in general. As much as 20%
of the Fund's total assets may be invested in foreign securities.
For more information see "Foreign Securities" on page 30.

If a security in the Fund that was rated investment grade at the time of
purchase is downgraded by a rating service, it may or may not be sold. An
assessment of the issuer's prospects will be made by the Investment Adviser.
However, the Fund will not purchase below-investment-grade securities if that
would increase their representation in the Fund to more than 35%. See "Summary
of Bond Ratings" on page 47 and "High Yield (`Junk') Bonds" on page 29 for a
description of bond ratings and high-yield bonds.

As part of the management of cash and cash equivalents and to help maintain
liquidity, the Fund may purchase and sell the same kind of money market and
other short-term instruments and debt securities as the Transamerica Premier
Cash Reserve Fund does. See "Transamerica Premier Cash Reserve Fund" on page 24.
The Fund may also invest in options and futures contracts on securities or
groups of securities and preferred stock. See "Options, Futures and Other
Derivatives" on page 30 and in the Statement of Additional Information. The Fund
ordinarily invests in common stock only as a result of conversion of bonds,
exercise of warrants, or other extraordinary business events.

Points to Consider When Investing
The Transamerica Premier Bond Fund is intended for investors who have the
perspective, patience, and financial ability to take on above-average bond price
volatility in pursuit of a high total return produced by income from longer-term
securities and capital changes from under-valued credit strength. The longer
maturity bonds in which the Fund primarily invests tend to produce higher income
than bonds with shorter maturities. However, due to the long maturity of the
Fund's assets, the price of the Fund's securities can fluctuate more sharply
than shorter-term securities when interest rates go up or down. An increase in
interest rates will cause prices to fall. A decrease in rates will cause prices
to rise. Because of the uncertainty associated with long-term bond investments,
the Fund is intended to be a long-term investment.

The basic quality of the bonds, which are primarily investment grade, tends to
provide some safety of principal.
In general, lower-rated bonds, which are a much lesser component of the Fund,
offer higher returns than
investment grade bonds. But they also carry higher risks. These can include: a)
a higher risk of insolvency,
especially during economic downturns; b) a lower degree of liquidity; and c) a
higher degree of price volatility.

Transamerica Premier Balanced Fund

Investment Objective
The Fund seeks to achieve long-term capital growth and current income with a
secondary objective of capital preservation, by balancing investments among
stocks, bonds, and cash and cash equivalents.

Investment Strategies and Policies
The Fund invests in a diversified selection of common stocks, bonds, and money
market instruments and other short-term debt securities. The Fund attempts to
achieve reasonable asset appreciation during favorable market conditions and
conservation of principal in adverse times. This requires flexibility in
managing the Fund's assets. Therefore, the proportion of investments in bonds
and stocks will be adjusted according to business and investment conditions.
While the Fund may hold equity, fixed income, and cash securities in any
proportion, at no time will it hold less than 25% of its assets in
non-convertible debt securities. When the Investment Adviser determines that
market conditions warrant, the Fund may invest without limit in cash or cash
equivalents for temporary defensive purposes. To the extent that the Fund is so
invested, it is not achieving its investment objectives.

In general, common stocks represent 60% to 70% of the Fund's total assets, with
the remaining 30% to 40% of the Fund's assets primarily invested in investment
grade bonds as rated by either Moody's or S&P and cash and cash equivalents. The
Fund holds common stocks primarily to provide long-term growth of capital and
income. Changes in the asset mix may be made to increase the bond position of
the Fund and to help achieve the Fund's objectives of long-term growth as well
as capital preservation.

The stocks in the Fund are generally growth companies that are considered to be
premier companies and under-valued in the stock market. Equity securities may be
selected based on growth potential and dividend paying properties since income
is a consideration. The equity portion of the Fund may be managed in a similar
manner as the Transamerica Premier Equity Fund, although the selection of
securities may differ. See "Transamerica Premier Equity Fund" on page 17.

The fixed income portion of the Fund is invested in a diversified selection of
corporate and U.S. government bonds and mortgage-backed securities. This portion
of the Fund is managed in a similar manner as the Transamerica Premier Bond
Fund, although the selection of securities may differ. See "Transamerica Premier
Bond Fund" on page 21. The fixed income assets are normally at least 65% high
quality, investment grade bonds with maturities between 5 and 30 years.
Non-investment grade bonds held in the fixed income portion of the Fund will be
less than 20% of the Fund's total net assets. For more information on
non-investment grade bonds, see "High-Yield (`Junk') Bonds" on page 29 and the
Statement of Additional Information. The Fund may also hold certain short-term
fixed income securities. As part of the management of cash and cash equivalents
and to help maintain liquidity, the Fund may invest in the same kind of money
market and other short-term instruments and debt securities as the Transamerica
Premier Cash Reserve Fund does. See "Transamerica Premier Cash Reserve Fund" on
page 24.

The fund may buy foreign securities and other instruments if they meet the same
criteria described above for the Fund's investments in general. As much as 20%
of the Fund's assets may be invested in foreign securities. Foreign securities
purchased by the Fund will be those traded on the U.S. exchanges as American
Depositary Receipts ("ADRs"). The Fund may also invest in stock and bond index
futures and options to a limited extent, as well as preferred stocks.

Points To Consider When Investing
In general, the Fund holds equities for long-term capital appreciation, and
holds bonds for stability of principal and income as well as a reserve for
investment opportunities. This balance often creates a situation where some of
the market risks offset one another. But investment risks cannot totally be
avoided. The expected performance of such a fund would normally lie somewhere
between the performance of an equity fund (holding the same stocks) and the
performance of a bond fund (holding the same bonds). But this depends on the
actual proportion of stocks and bonds. Since the Fund has flexibility in
changing the balance between asset classes, the Fund may increase exposure to
the current advantages or disadvantages of one or more of the asset classes. Or
the Fund may avoid the current disadvantages of one or more of the asset
classes.

The Transamerica Premier Balanced Fund is intended for investors who wish to
participate in both the equity and debt markets, but who wish to leave the
allocation of the balance between them to professional management. The Fund is
intended for investors who have the perspective, patience, and financial ability
to take on average market volatility in pursuit of long-term total return that
balances capital growth and current income. Because of the uncertainties
associated with common stock and bond investments, the Fund is intended to be a
long-term investment.

Transamerica Premier Cash Reserve Fund

Investment Objective
The Fund seeks to maximize current income from money market securities
consistent with liquidity and preservation of principal.

Investment Strategies and Policies
This is a money market fund which invests primarily in high quality U.S.
dollar-denominated money market instruments of U.S. and foreign issuers with
remaining maturities of 13 months or less, including: o Obligations issued or
guaranteed by the U.S. and foreign governments and their agencies or
instrumentalities; o Obligations of U.S. and foreign banks, or their foreign
branches, and U.S. savings banks; o Short-term corporate obligations, including
commercial paper, notes, and bonds; o Other short-term debt obligations with
remaining maturities of 397 days or less; and o Repurchase agreements involving
any of the securities mentioned above. The Fund may also purchase other
marketable, non-convertible corporate debt securities of U.S. issuers. These
investments include bonds, debentures, floating rate obligations, and issues
with optional maturities. See the Statement of Additional Information for a
description of these securities and other requirements under Rule 2a-7 of the
Investment Company Act of 1940.

Bank obligations are limited to U.S. or foreign banks having total assets
greater than $1.5 billion. Investments in savings association obligations are
limited to U.S. savings banks with total assets greater than $1.5 billion.
Investments in bank obligations can include instruments issued by foreign
branches of U.S. or foreign banks or domestic branches of foreign banks.

In addition, the Fund may invest in U.S. dollar-denominated obligations issued
or guaranteed by foreign governments or their political subdivisions, agencies,
or instrumentalities. The Fund may buy these foreign securities and other
instruments if they meet the same criteria described above for the Fund's
investments in general. The Fund can invest up to 25% of its total assets in
obligations of Canadian and other foreign issuers.

The commercial paper and other short-term corporate obligations purchases are
deemed by the Investment Adviser to present minimal credit risks. They are
either: a) rated in the highest short-term rating category by at least two
nationally recognized statistical rating organizations; b) rated in the highest
short-term rating category by a single rating organization if only one
organization has assigned the obligation a short-term rating; or c) unrated, but
determined by the Investment Adviser to be of comparable quality (also called
"First Tier Securities").

The Fund seeks to maintain a stable net asset value of $1.00 per share by
investing in securities which present minimal credit risk as defined above, by
maintaining the average maturity of the Fund's portfolio at 90 days or less, and
by valuing the Fund's securities on an amortized cost basis.

Points to Consider When Investing
The Fund provides a low risk, relatively low cost way to maximize current income
through high quality money market securities that offer stability of principal
and liquidity. The rates on short-term investments and the daily dividend will
vary, rising or falling with short-term rates generally. The Fund's yield will
tend to lag behind the changes in interest rates. The speed with which the
Fund's yield reflects current market rates will depend on how quickly its
securities mature and the amount of money available for new investment. This
Fund may be a suitable investment for temporary or defensive purposes. It may
also be appropriate as part of an overall long-term investment strategy. The
Transamerica Premier Cash Reserve Fund is neither insured nor guaranteed by the
United States Government, and there can be no assurance that the Fund will be
able to maintain a stable net asset value of $1.00 per share.

What is Fundamental?
The investment objectives given for each Fund are fundamental. This means they
can be changed only with the approval of a majority of shareholders. No
assurance can be given that these objectives will be met. Strategies and
policies are not fundamental. This means strategies and policies can be changed
by the Board without your approval.

If any investment objectives of a Fund change, you should decide if the Fund
still meets your financial needs. More information about this is in the
Statement of Additional Information.

A General Discussion About Risk

There are risks inherent in investing in different kinds of funds, such as the
Premier Funds, just as there are inherent risks in making any type of
investment. Each of the Funds is subject to the following risks:

Market or Price Volatility Risk
For stocks, this refers to the price fluctuations, or volatility, caused by
changing conditions in the financial markets. For bonds and other debt
securities, this refers to the change in market price caused by interest rate
movements. Longer-maturity bond funds and stock funds are more subject to this
risk than money market funds and shorter-maturity bond funds.

Financial or Credit Risk
For stocks and other equity securities, financial risk comes from the
possibility that current earnings of the company will fall or that its overall
financial circumstances will decline. Either of these could cause the security
to lose value. For bonds and other debt securities, financial risk comes from
the possibility that the issuer will be unable to pay principal and interest on
time. Funds with low quality bonds and speculative stock funds are more subject
to this risk than funds with government or high quality bonds. For more
information, see "High-Yield (`Junk') Bonds" on page 29 and "Summary of Bond
Ratings" on page 47.

Current Income Risk
The Funds receive income, either as interest or dividends, from the securities
in which they invest. Each Fund pays out substantially all of this income to its
shareholders as dividends. See the footnote for "What About Taxes?" on page 42.
The dividends paid to shareholders are considered "current income." Current
income risk refers to how much and how quickly overall interest rate or dividend
rate changes affect the Fund's ability to maintain the current level of income
paid to its shareholders.

Inflation or Purchasing Power Risk
Inflation risk is the uncertainty that dollars invested may not buy as much in
the future as they do today. Longer-maturity bond funds are more subject to this
risk than money market or stock funds.

Sovereign Risk
Sovereign risk is the potential loss of assets or earning power due to
government actions, such as taxation, expropriation, or regulation. Funds with
large investments overseas or funds with tax-advantaged investments are more
subject to this risk than other funds.

More in-depth information about risk is provided in the following section and in
the Statement of Additional Information.

Investment Procedures and Risk Considerations

Buying and Selling Securities
In general, the Funds purchase and hold securities for capital growth, current
income, or a combination of those purposes. Investment decisions are made in
order to achieve the Fund's investment objective. Portfolio changes can result
from liquidity needs, securities reaching a price objective, anticipated changes
in interest rates, a change in the creditworthiness of an issuer, or from
general financial or market developments. Because investment changes usually are
not tied to the length of time a security has been held, a significant number of
short-term transactions may result.

The Funds may sell one security and simultaneously purchase another of
comparable quality. The Funds may simultaneously purchase and sell the same
security to take advantage of short-term differentials and bond yields. In
addition, the Funds may purchase individual securities in anticipation of
relatively short-term price gains. The rate of portfolio turnover will not be a
determining factor in these decisions.

Portfolio turnover has not been and will not be a consideration. The Investment
Adviser buys and sells securities for each Fund whenever it believes it is
appropriate to do so. Increased turnover results in higher costs. These costs
result from brokerage commissions, dealer mark-ups and other transaction costs
on the sale of securities and reinvestment in other securities.

For the calendar year 1997, the portfolio turnover rate for each Fund was: 17%
for the Transamerica Premier Aggressive Growth Fund; 74% for the Transamerica
Premier Small Company Fund; 13% for the Transamerica Premier Equity Fund; 11%
for the Transamerica Premier Index Fund; 99% for the Transamerica Premier Bond
Fund; and 23% for the Transamerica Premier Balanced Fund. The expected turnover
rate for 1998 for the new Transamerica Premier Value Fund is 50%. The turnover
rate for the Transamerica Premier Cash Reserve Fund is considered to be zero for
regulatory purposes. A 100% annual turnover rate would occur if all of a Fund's
securities were replaced one time during a one year period.

Short-term gains are taxable to shareholders as ordinary income, except for
tax-qualified accounts (such as IRAs and employer sponsored pension plans). In
addition, higher turnover rates can result in corresponding increases in
brokerage commissions and other transaction costs. For more information, see
"What About Taxes?" on page 42, and the Statement of Additional Information.

Securities Lending
As a way to earn additional income, the Funds may lend their securities to
creditworthy persons not affiliated with the Funds. Such loans must be secured
by cash collateral or by irrevocable letters of credit maintained on a current
basis in an amount at least equal to the market value of the securities loaned.
During the existence of the loan, the Funds must continue to receive the
equivalent of the interest and dividends paid by the issuer on the securities
loaned and interest on the investment of the collateral. The Fund must have the
right to call the loan and obtain the securities loaned at any time on three
days notice. This includes the right to call the loan to enable the Fund to
execute shareholder voting rights. Such loans cannot exceed one-third of the
Fund's net assets taken at market value. Interest on loaned securities cannot
exceed 10% of the annual gross income of the Fund (without offset for realized
capital gains). The lending policy described in this paragraph is a fundamental
policy that can only be changed by a vote of a majority of shareholders.

Lending securities to broker-dealers and institutions could result in a loss or
a delay in recovering the Fund's securities.

Borrowing Policies of the Funds
The Funds can borrow money from banks or engage in reverse repurchase
agreements, for temporary or emergency purposes. A Fund can borrow up to
one-third of the Fund's total assets. To secure borrowings, the Funds can
mortgage or pledge securities in an amount up to one-third of a Fund's net
assets. If a Fund borrows money, the Fund's share price may be subject to
greater fluctuation until the borrowing is paid off. The Fund will not make any
additional investments, other than through reverse repurchase agreements, while
the level of borrowing exceeds 5% of the Fund's total assets. For more
information on reverse repurchase agreements see the "Reverse Repurchase
Agreements and Leverage" section on page 29.

Small Capitalization Stocks
The Transamerica Premier Aggressive Growth Fund , the Transamerica Premier Small
Company Fund, and the Transamerica Premier Value Fund can purchase securities of
small companies. The securities of small companies are usually less actively
followed by analysts and may be under-valued by the market, which can provide
significant opportunities for capital appreciation; however, the securities of
such small companies may also involve greater risks and may be subject to more
volatile market movements than securities of larger, more established companies.
The securities of small companies are often traded in the over-the counter
market, and might not be traded in volumes typical of securities traded on a
national securities exchange. Thus, the securities of small companies are likely
to be subject to more abrupt or erratic market movements than securities of
larger, more established companies.

Over-The-Counter-Market
The Transamerica Premier Aggressive Growth and Transamerica Premier Small
Company Funds may invest in over-the-counter stocks. Generally, the volume of
trading in an unlisted or over-the-counter common stock is less than the volume
of trading in a listed stock. Low trading volumes may make it difficult to find
a buyer or seller for the securities of some companies. This will have an effect
on the purchase or selling price of a stock.

Special Situations
The Transamerica Premier Aggressive Growth Fund, the Transamerica Premier Small
Company Fund, and the Transamerica Premier Value Fund may invest in "special
situations" from time to time. A special situation arises when, in the opinion
of a Fund's portfolio manager, the securities of a particular issuer will be
recognized and appreciate in value due to a specific development with respect to
that issuer. Developments creating a special situation might include, among
others, a merger proposal or buyout, a leveraged recapitalization, a new product
or process, a technological breakthrough, a management change or other
extraordinary corporate event, or differences in market supply of and demand for
the security. Investment in special situations may carry an additional risk of
loss in the event that the anticipated development does not occur or does not
attract the expected attention.

Repurchase Agreements
The Funds may enter into repurchase agreements with Federal Reserve System
member banks or U.S. securities dealers. A repurchase agreement occurs when, at
the time a Fund purchases an interest-bearing debt obligation, the seller agrees
to repurchase the debt obligation on a specified date in the future at an
agreed-upon price. The repurchase price reflects an agreed-upon interest rate
during the time the Fund's money is invested in the security. Since the security
constitutes collateral for the repurchase obligation, a repurchase agreement can
be considered a collateralized loan. The risk to the Fund is the ability of the
seller to pay the agreed-upon price on the delivery date. If the seller is
unable to make a timely repurchase, the expected proceeds could be delayed, or
the Fund could suffer a loss in principal or current interest, or incur costs in
liquidating the collateral. The Funds have established procedures to evaluate
the creditworthiness of parties making repurchase agreements.

The Funds will not invest in repurchase agreements maturing in more than seven
days, if that would result in more than 10% of the Fund's net assets being so
invested when taking into account the remaining days to maturity of its existing
repurchase agreements.

Reverse Repurchase Agreements and Leverage
The Funds may enter into reverse repurchase agreements with Federal Reserve
member banks and U.S. securities dealers from time to time. In a reverse
repurchase transaction the Fund sells securities and simultaneously agrees to
repurchase them at a price which reflects an agreed-upon rate of interest. The
proceeds from reverse repurchase agreements are used to make other investments
which either mature or are under an agreement to resell at a date simultaneous
with or prior to the expiration of the reverse repurchase agreement. The Fund
may utilize reverse repurchase agreements only if the interest income to be
earned from the investment proceeds of the transaction is greater than the
interest expense of the reverse repurchase transaction.

Reverse repurchase agreements are a form of leverage which increases the
opportunity for gain and the risk of loss for a given change in market value. In
addition, the gains or losses will cause the net asset value of the Fund's
shares to rise or fall faster than may otherwise be the case. There may also be
a risk of delay in the recovery of the underlying securities, if the counter
party has financial difficulties. A Fund's obligations under all borrowings,
including reverse repurchase agreements, will not exceed one-third of the Fund's
net assets.

When-Issued Securities
Occasionally the Funds may purchase new issues of securities on a when-issued
basis. The price of when-issued securities is established at the time the
commitment to purchase is made. Delivery of and payment for these securities
typically occur 15 to 45 days after the commitment to purchase. The market price
of the securities at the time of delivery may be higher or lower than that
contracted for on the when-issued security, and there is some risk the
transaction may not be consummated. The Funds maintain a segregated account
consisting of liquid securities in an amount at least equal to the when-issued
commitments.

Short Sales
The Funds may sell securities which they do not own, or intend to deliver to the
buyer if they do own ("sell short") if, at the time of the short sale, a Fund
owns or has the right to acquire an equal amount of the security being sold
short at no additional cost. These transactions allow the Funds to hedge against
price fluctuations by locking in a sale price for securities they do not wish to
sell immediately.

A Fund may make a short sale when it decides to sell a security it owns at a
currently attractive price. This allows the Fund to postpone a gain or loss for
federal income tax purposes and to satisfy certain tests applicable to regulated
investment companies under the Internal Revenue Code of 1986, as amended, (the
"Code"). The Funds will only make short sales if the total amount of all short
sales does not exceed 10% of the total assets of the Fund. This limitation can
be changed at any time.

Municipal Obligations
Any of the Funds, except the Transamerica Premier Index Fund, may invest in
municipal obligations. This includes the equity Funds as part of their cash
management techniques. In addition to the usual risks associated with investing
for income, the value of municipal obligations can be affected by changes in the
actual or perceived credit quality. The credit quality of a municipal obligation
can be affected by, among other factors: a) the financial condition of the
issuer or guarantor; b) the issuer's future borrowing plans and sources of
revenue; c) the economic feasibility of the revenue bond project or general
borrowing purpose; d) political or economic developments in the region or
jurisdiction where the security is issued; and e) the liquidity of the security.
Because municipal obligations are generally traded over the counter, the
liquidity of a particular issue often depends on the willingness of dealers to
make a market in the security. The liquidity of some municipal issues can be
enhanced by demand features which enable the Fund to demand payment from the
issuer or a financial intermediary on short notice.

High-Yield ("Junk") Bonds
High-yield bonds (also known as "junk" bonds) are lower-rated bonds that involve
higher current income than investment grade bonds but are predominantly
speculative because they present a higher degree of credit risk. Credit risk is
the risk that the issuer of the bonds will be unable to make interest or
principal payment on time. If this occurs, the Fund would lose income, and could
expect a decline in the market value of the securities affected. Careful
analysis of the financial condition of companies issuing junk bonds is required.
The prices of junk bonds tend to be more reflective of prevailing economic and
industry conditions, the issuers' unique financial situations, and the bonds'
coupon than to small changes in the level of interest rates. But during an
economic downturn or a period of rising interest rates, highly leveraged
companies may have trouble making principal and interest payments, meeting
projected business goals, and obtaining additional financing.

The Funds may also invest in unrated debt securities. Unrated securities, while
not necessarily of lower quality than rated securities, may not have as broad a
market. Because of the size and perceived demand for the issue, among other
factors, certain municipalities may decide not to pay the cost of getting a
rating for their bonds. An analysis of the creditworthiness of the issuer, as
well as any financial institution or other party responsible for payments on the
security, is made to determine whether to purchase unrated municipal bonds.

Unrated debt securities are included in the 35% limit on non-investment grade
debt of the applicable Funds, unless such securities are deemed by the
Investment Adviser to be the equivalent of investment grade securities. See
"Summary of Bond Ratings" on page 47 and the Statement of Additional Information
for a description of bond rating categories.

Foreign Securities
All the Premier Funds may invest in foreign securities. Foreign equity
investments for the Transamerica Premier Equity Fund, Transamerica Premier Index
Fund and Transamerica Premier Balanced Fund are limited to the purchase of
dollar denominated registered stocks of foreign companies which trade on the
U.S. exchanges (e.g. American Depository Receipts ("ADRs")). The Transamerica
Premier Index Fund will invest only in those ADRs that are selected by the
Standard Poor's Corporation to be included in the S&P 500 Index.

Investing in the securities of foreign issuers involves special risks and
considerations not typically associated with investing in U.S. companies. These
risks and considerations include differences in accounting, auditing and
financial reporting standards, generally higher commission rates on foreign Fund
transactions, the possibility of expropriation or confiscatory taxation, adverse
changes in investment or exchange control regulations, political instability
which could affect U.S. investment in foreign countries and potential
restrictions on the flow of international capital and currencies. Foreign
issuers may also be subject to less government regulation than U.S. companies.
Moreover, the dividends and interest payable on foreign securities may be
subject to foreign withholding taxes, thus reducing the net amount of income
available for distribution to the Fund's shareholders. Further, foreign
securities often trade with less frequency and volume than domestic securities
and, therefore, may exhibit greater price volatility. Changes in foreign
exchange rates will affect, favorably or unfavorably, the value of those
securities which are denominated or quoted in currencies other than the U.S.
dollar.

Options, Futures, and Other Derivatives
The Funds may use options, futures, forward contracts, and swap transactions
("derivatives"). However, the Transamerica Premier Cash Reserve Fund does not
currently use, or anticipate using, derivatives. Derivatives are used to protect
a Fund against potential unfavorable movements in interest rates or securities
prices. If those markets do not move in the direction anticipated, the Funds
could suffer losses. The Funds may purchase, or write, call or put options on
securities or on indexes ("options"). The Funds may also enter into futures
contracts for the purchase or sale of instruments based on interest rates or
financial indexes ("futures contracts"), options on futures contracts, forward
contracts, and interest rate swaps and swap-related products. These instruments
are used primarily to adjust a Fund's exposure to changing securities prices,
interest rates, or other factors that affect securities values. The strategy is
to attempt to reduce the overall investment risk. However, the Transamerica
Premier Index Fund will use derivatives as part of its strategy to match the
performance of the S&P 500 Index.

Risks in the use of these derivatives include, in addition to those referred to
above: a) the risk that interest rates and securities prices do not move in the
directions being hedged against, in which case the Fund has incurred the cost of
the derivative (either its purchase price or, by writing an option, losing the
opportunity to profit from increases in the value of the securities covered)
with no tangible benefit; b) imperfect correlation between the price of
derivatives and the movements of the securities' prices or interest rates being
hedged; c) the possible absence of a liquid secondary market for any particular
derivative at any time; d) the potential loss if the counterparty to the
transaction does not perform as promised; and e) the possible need to defer
closing out certain positions to avoid adverse tax consequences. More
information on derivatives is contained in the Statement of Additional
Information.

Mortgage-Backed and Asset-Backed Securities
The Funds may invest in mortgage-backed and asset-backed securities. The
Transamerica Premier Bond Fund is more likely to invest in such securities than
the other Funds. Mortgage-backed and asset-backed securities are generally
securities evidencing ownership or interest in pools of many individual
mortgages or other loans. Part of the cash flow of these securities is from the
early payoff of some of the underlying loans. The specific amount and timing of
such prepayments is difficult to predict, creating "prepayment risk." For
example, prepayments on Government National Mortgage Association certificates
("GNMAs") are more likely to increase during periods of declining long-term
interest rates because borrowers tend to refinance when interest rates drop. In
the event of very high prepayments, the Funds may be required to invest these
proceeds at a lower interest rate, causing them to earn less than if the
prepayments had not occurred. Prepayments are more likely to decrease during
periods of rising interest rates, causing the expected average life of the
underlying mortgages to become longer. This variability of prepayments will tend
to limit price gains when interest rates drop and to exaggerate price declines
when interest rates rise.

Zero Coupon Bonds
The Funds may invest in zero coupon bonds and strips. Zero coupon bonds do not
make regular interest payments. Instead, they are sold at a discount from face
value. A single lump sum which represents both principal and interest is paid at
maturity. Strips are debt securities whose interest coupons are taken out and
traded separately after the securities are issued, but otherwise are comparable
to zero coupon bonds. The market value of zero coupon bonds and strips generally
is more sensitive to interest rate fluctuations than interest-paying securities
of comparable term and quality.

Indebtedness
From time to time, the Funds may purchase the direct indebtedness of various
companies ("Indebtedness") or participation in such Indebtedness. The
Transamerica Premier Value Fund is more likely to invest in such securities than
the other Funds. Indebtedness represent a specific commercial loan or portion of
a loan which has been given to a company by a financial institution such as a
bank or insurance company ("Bank Claims"). The company is typically obligated to
repay such commercial loan over a specified time period. By purchasing the Bank
Claims, a Fund steps into the shoes of the financial institution which made the
loan to the company prior to its restructuring or refinancing. Such Bank Claims
purchased by a Fund may be in the form of loans, notes or bonds.

The Funds normally invest in the Indebtedness of a company which Indebtedness
has the highest priority in terms of payment by the company, although on
occasion, lower priority Indebtedness also my be acquired.

Indebtedness of companies may also include Trade Claims. Trade Claims generally
represent money due to a supplier of goods or services to the companies issuing
indebtedness. Company Indebtedness, including Bank Claims and Trade Claims, may
be illiquid (as defined below).

Illiquid Securities
Up to 15% of a Fund's net assets may also be invested in securities that are
illiquid, except that the Transamerica Premier Cash Reserve Fund may only invest
10% of its net assets in such securities. Securities are considered illiquid
when there is no readily available market or when they have legal or contractual
restrictions. Repurchase agreements which mature in more than seven days are
included as illiquid securities. These investments may be difficult to sell
quickly for their fair market value.

Certain restricted securities that are not registered for sale to the general
public but that can be resold to institutional investors under Rule 144A may not
be considered illiquid if a dealer or institutional trading market exists. The
institutional trading market is relatively new. However, liquidity of the Funds'
investments could be impaired if trading for these securities does not further
develop or declines. The Investment Adviser determines the liquidity of Rule
144A securities under guidelines approved by the Transamerica Investors, Inc.
Board of Directors ("Board").

Variable Rate, Floating Rate, or Variable Amount Securities
Any of the Funds, except the Transamerica Premier Equity Fund, may invest in
variable rate, floating rate, or variable amount securities. These are
short-term unsecured promissory notes issued by corporations to finance
short-term credit needs. They are interest-bearing notes on which the interest
rate generally fluctuates on a scheduled basis.

Investments in Other Investment Companies
Up to 10% of a Fund's total assets may be invested in the shares of other
investment companies, but only up to 5% of its assets may be invested in any one
other investment company. In addition, the Funds cannot purchase more than 3% of
the outstanding shares of any one investment company. It is intended that these
investments be kept to a minimum.

Shareholder Services

The Company's goal is to make your investment in the Funds, and the ongoing
account servicing, as simple as possible by offering the following shareholder
services:

o Simple application form with service representatives to assist you.
o Purchases, exchanges and redemptions by phone.
o Purchases and redemptions by wire.
o Automatic Investment Plan - you designate an amount of $50 or more to be
automatically withdrawn from your
checking, savings or other bank account and deposited into the Fund you select.
o Automatic Exchange Plan - allows you to specify an amount to be automatically
withdrawn from one Fund and
deposited into another Fund on a regular basis, once or twice a month.
o Automatic Income Plan - you can receive automatic monthly payments from your
Fund account to your checking or
savings account.
o Automatic investment of dividends.
o Uniform Gifts or Transfers to Minors (UGMA or UTMA).
o Transmission of redemption proceeds by electronic funds transfer.
o Check Writing - checks can be written for $250 or more against the
Transamerica Premier Cash Reserve Fund.
o Individual Retirement Accounts (IRAs) are administered.

Opening Your Account

To open an account, complete the application and mail it with a check or money
order, or wire for the amount you want to invest to:

Transamerica Premier Funds
P.O. Box 9232
Boston, MA 02205-9232

If you need help in filling out your application, call one of the customer
service representatives at 1-800-89-ASK-US (1-800-892-7587), option 3. The
representative can walk you through the application and answer any questions you
have.

IRA Accounts
You can establish an Individual Retirement Account ("IRA"), either Regular or
Roth IRA, or a Simplified Employee Pension ("SEP") or SIMPLE IRA with your
employer, or an Education IRA for a child. Contributions to an IRA may be
deductible from your taxable income or earnings may be tax-free, depending on
your personal tax situation and the type of IRA. Please call 1-800-89-ASK-US
(1-800-892-7587) for your IRA application kit, or for additional information.
The kit has information on who qualifies for which type of IRA.

If you are receiving a distribution from your pension plan, or you would like to
transfer your IRA account from another financial institution, you can continue
to get tax-deferred growth by transferring these proceeds to a Transamerica
Premier Fund IRA. If you want to rollover distributions from your pension plan
to an IRA in one or more of the Funds, the money must be paid directly by your
pension plan administrator to Transamerica Premier Funds to avoid a 20% federal
withholding tax. See "What About Taxes?" on page 42.

There is an annual fee of $10 per Fund in which you own shares for administering
your IRA. This is limited to a maximum annual fee of $40 per taxpayer
identification number. This fee is waived if the combined value of all shares in
your IRA accounts is $5,000 or more when the fee is due. Alternatively, you can
pay a one-time, non-refundable fee of $100 for all IRA accounts that are
maintained under the same taxpayer identification number. You may pay the fee,
otherwise it will be deducted ordinarily during December of each year or at the
time you fully redeem your shares in a Fund, if before then. The Company
reserves the right to change the fee, but you will be notified at least 30 days
in advance of any change.

Uniform Gifts to Minors
A Uniform Gifts/Transfers to Minors Act (UGMA/UTMA) account allows an adult to
put assets in the name of a minor child. The adult maintains control over these
assets until the child reaches the age of majority, which is generally 18 or 21.
State laws dictate which type of account can be used and the age of majority. An
adult must be appointed as custodian for the account and will be legally
responsible for administering the account, but the child's Social Security
number must be used. Generally, the person selected as custodian is one of the
parents or grandparents, but may be some other adult relative or friend. By
shifting assets to a custodial account, you may benefit if the child's tax rate
is lower.

How to Buy Shares

Shares may be purchased as follows:

1. By Check
All investments made by check should be in U.S. dollars and made payable to
Transamerica Premier Funds. Third party checks will not be accepted, nor checks
drawn on credit card accounts. Purchases made by check may not be redeemed until
the investment being redeemed has been in the account for 15 business days.

Fill out an investment coupon from a previous confirmation statement, or
indicate your account number on your check, and mail it to:

Transamerica Premier Funds
P.O. Box 9232
Boston, MA 02205-9232

2. By Automatic Investment Plan
You can make investments automatically by electing this service in your
application. This will authorize regular, automatic withdrawals to be taken from
your bank account. These periodic investments must be at least $50 for each Fund
in which you are automatically investing. You can change the date or amount of
your monthly investment, or terminate the Automatic Investment Plan, at any time
by letter or telephone call (with prior authorization).
Allow at least 20 business days for the change to become effective.

Call 1-800-89-ASK-US (1-800-892-7587) for more information.

3. By Telephone
If you elect the telephone purchasing service on your application, you can make
occasional electronic withdrawals from your designated bank account by calling
1-800-89-ASK-US (1-800-892-7587). Reasonable precautions are taken to make sure
that telephone instructions are from genuine shareholders. Precautions include
requiring positive identification, tape recording the conversation, and sending
written confirmations to the shareholder's address of record. All telephone
instructions are accepted that are reasonably believed to be accurate and
genuine.

4. By Wire
You can make your initial or subsequent investments in the Funds by wire. To do
so:

1. Submit your application form (initial investment only); 2. Call
1-800-89-ASK-US (1-800-892-7587) for a wire number; 3. Give your bank the
following:
Wire Instructions:
a) send to State Street Bank, ABA number 011000028, DDA number 9905-1344;
a) payable to "Transamerica Premier Funds;"
b) your account number, if you have one;
c) identify the Funds being purchased, and the amount to be allocated
to each Fund;
d) your name and address; and
e) your wire number.
Wired funds are considered received when the wire and all the required
information listed above are received by the Funds' transfer agent. Wires
received in good order before the close of the New York Stock Exchange (usually
4:00 p.m. eastern time) are credited to the shareholder that same day.
<TABLE>
<CAPTION>

Minimum Investments
Minimum Minimum
Initial Subsequent
Type of Account Investment Investment
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Regular Accounts $1,000 $100 / $50*
Pension or Retirement Saving Programs $250 None
Uniform Gift to Minors (UGMA) or
Transfer to Minors (UTMA) $250 $100 / $50*
Automatic Investment Plans $50 $50
</TABLE>

Your investment must be a specified dollar amount. We cannot accept purchase
requests specifying a certain price, date, or number of shares; these
investments will be returned. The price you pay for your shares will be the next
determined net asset value after your purchase order is received. See "Share
Price" on page 43. The Company reserves the right to reject any application or
investment. There may be circumstances when the Company will not accept new
investments in one or more of the Funds. If you have a securities dealer, bank,
or other financial institution handle your transactions with us you may be
charged a fee by them.

* Minimum subsequent investment is $50 per month if utilizing the
Automatic Investment Plan.

How to Sell Shares

You can sell your shares to the Company (called "redeeming") at any time. You'll
receive the net asset value next determined after your redemption request is
received, assuming all requirements have been met. Before redeeming, please read
"When Share Price Is Determined" on page 43 and "Points to Remember When
Redeeming" on page 38.

You have several options for receiving your redemption: By check; By
electronic transfer to your bank; or By wire transfer.

If your wire transfer is $2,500 or less, there is a $10 fee. Also, some banks
may charge a fee to receive the wire transfer.

If you call before the close of the New York Stock Exchange, usually 4:00 p.m.,
eastern time, you will receive the price determined as of the close of that
business day. See "Share Price" on page 43.

You May Sell Shares in One of Four Ways:

1. By Mail
Your written instructions to redeem shares can be in any one of the following
forms: o By redemption form, available by calling 1-800-89-ASK-US
(1-800-892-7587); o By letter; or o By assignment form or other authorization
granting power with respect to your shares in one of the Funds.

Once mailed, your redemption request is irrevocable and cannot be modified or
canceled.

If the amount redeemed is over $50,000, all signatures must be guaranteed. See
"Signature Guarantee" on page 40. The request must be signed by each registered
owner. All owners must sign the request exactly as their names appear in the
registration. For example, if the owner's name appears in the registration as
John Michael Smith, he must sign that way and not as John M. Smith.

2. By Telephone
Instructions authorizing redemptions by telephone may be pre-established in the
initial application or in writing. You can redeem your shares by calling
1-800-89-ASK-US (1-800-892-7587). Be careful in calling, since once made,
telephone requests cannot be modified or canceled.

Reasonable precautions are taken to make sure that telephone instructions are
from genuine shareholders. Precautions include requiring positive
identification, tape recording the conversation, and sending written
confirmations to the shareholder's address of record. All telephone instructions
are accepted that are reasonably believed to be accurate and genuine.

3. By Check
(Transamerica Premier Cash Reserve Fund only)
Redemptions can be made from the Transamerica Cash Reserve Fund by check. To be
eligible, you must have applied for the check writing feature on your account
application. The signature(s) you designated must appear on the check for it to
be honored. If you close your account by check, we will send you any accrued
dividends by check. You can write an unlimited number of checks, as long as each
check is for $250 or more, and as long as the Fund account balance does not drop
below $500. See "Minimum Account Balances" on page 40.

This option is not available for Pension or Retirement Savings Program accounts
(including IRA's), or any other account controlled by a fiduciary.

4. By Automatic Income Plan
Under the Automatic Income Plan, enough shares are automatically redeemed each
month to provide you with a check
or automatic deposit to your bank account. The minimum is $50 per Fund. Please
advise: a) when you want to be
paid each month; b) how much you want to be paid; and c) from which Fund(s). To
set up an Automatic Income Plan,
call 1-800-89-ASK-US (1-800-892-7587).

If your monthly income payments exceed the dividends, interest, and capital
appreciation on your shares, the payments will deplete your investment.

You can specify the Automatic Income Plan when you make your first investment.
If you sign up for the plan later, the request for the Automatic Income Plan or
any increase in payment amount must be signed by all owners of your account.

You can request payments to be sent to an address other than the address of
record at the time of your first investment. After that, a request to send
payments to an address other than the address of record must be signed by all
owners of your account, with their signatures guaranteed.

The Automatic Income Plan option can be terminated at any time. If it is, you
will be notified. You can terminate the Plan or change the amount of the
payments by writing or calling. Termination or change will become effective
within 15 days after your instructions are received.

How Long Will it Take?
Generally redemptions made by check are mailed on the second business day after
the request is received, but not later than seven days afterwards.

The Company may postpone such payment if: (a) the New York Stock Exchange is
closed for other than usual weekends or holidays, or trading on the New York
Stock Exchange is restricted; (b) an emergency exists as defined by the SEC, or
the SEC requires that trading be restricted; or (c) the SEC permits a delay for
the protection of investors.

When a redemption occurs shortly after a recent check purchase, the redemption
proceeds may be held beyond seven days but only until the purchase check clears,
which may take up to 15 days.

Points to Remember When Redeeming
o All redemptions are made and the price is determined on the day all necessary
documentation is received. See "When Share Price Is Determined" on page 43. o
Redemptions specifying a certain date or dollar price per share cannot be
accepted. It must be a redemption amount in dollars. Incorrect requests will be
returned. o For redemptions greater than $250,000 the Company reserves the right
to give you marketable securities instead of cash. See the Statement of
Additional Information, or call 1-800-89-ASK-US (1-800-892-7587). o If you
request a redemption check within 30 days of your address change, you must
submit your request in writing with a signature guarantee. Keep your address
current by writing or calling in your new address as soon as possible. o Except
for a transfer of redemption proceeds to the custodian of a tax-qualified plan,
all payments will be made to the registered owner of the shares, unless you
request otherwise. o All checks will be mailed to the address of record, unless
requested otherwise. Requests to mail checks to another address must be in
writing with a signature guarantee. o If the redemption request is made by a
corporation, partnership, trust, fiduciary, agent, or unincorporated
association, the individual signing the request must be authorized. If the
redemption is from an account under a qualified pension plan, spousal consent
may be required. o A request to redeem shares in an IRA or 403(b) plan must be
accompanied by an IRS Form W4-P (pension income tax withholding form, which will
be provided) and a reason for withdrawal. This is required by the IRS.

Please call 1-800-89-ASK-US (1-800-892-7587) or write to Transamerica Premier
Funds, P.O. Box 9232, Boston, MA 02205-9232 for further information.

How to Exchange Shares

Between Funds
Shares in any Fund can be exchanged for shares of any other Fund within the same
class. You can exchange shares by any of the following methods:
By mail;
By telephone; or
By the Automatic Exchange Plan

By Mail or Telephone
The procedures relating to exchanges in writing and by telephone are the same as
for purchases. Exchanges are available to any resident of any state in which
shares of the Fund are legally sold.

By Automatic Exchange Plan
You can make automatic share exchanges either once or twice a month. You can
request the service in writing. Your request must be signed by all registered
owners of the account. Call 1-800-89-ASK-US (1-800-892-7587) for information.

Points to Remember When Making Exchanges
o Make sure you understand the investment objective of the Fund into which you
are exchanging shares. The exchange service is not designed to give shareholders
the opportunity to "time the market." It gives you a convenient way to change
the balance between the accounts so that it more closely matches your overall
investment objectives and risk tolerance level. o You can make an unlimited
number of exchanges between the Funds. However, unless you are using the
Automatic Exchange Plan, further exchanges may be suspended for the remainder of
any calendar year during which you make more than four exchanges involving a
single Fund. This limitation is designed to keep each Fund's asset base stable
and to reduce its administrative expenses. o An exchange is treated as a sale of
shares from one Fund and the purchase of shares in another Fund. Exchanges are
taxable events. See "What About Taxes?" on page 42. o Exchanges into or out of
the Funds are made at the next determined net asset value per share after all
necessary information for the exchange is received. o Exchanges are accepted
only if the ownership registrations of both accounts are identical. o The
Company reserves the right to reject any exchange request and to modify or
terminate the exchange option at any time.

Other Investor Requirements and Services

Tax Identification Number
A taxpayer identification number and a certification as to whether or not you
are subject to backup withholding must be furnished to open an account. If you
don't furnish your tax I.D. number, redemptions or exchanges of shares, as well
as dividends and capital gains distributions, will be subject to federal
withholding tax.

Changing Your Address
Address changes can be made by phone or written notification signed by all
registered owners of your account. Include the name of the Fund(s), the account
number(s), the name(s) on the account and both the old and new addresses. Within
the first 30 days after an address change, telephone redemptions are permissible
only if the redemption proceeds are wired or electronically transferred to a
pre-established bank account. See "How to Sell Shares" on page 36.

Signature Guarantee
When a signature guarantee is required, e.g., when the redemption amount is more
than $50,000, the signature of each owner of record must be guaranteed by a bank
or trust company (or savings bank, savings and loan association, or a member of
a national stock exchange).

The policy to waive the signature guarantee for amounts of $50,000 or less can
be amended or discontinued at any time. A signature guarantee may be required
with regard to any particular redemption transaction.

Minimum Account Balances
You must maintain a minimum balance of $500 in each Fund in which you own
shares. If a Fund's value falls below $500 as a result of your action, we will
notify you. You will have 30 days to increase your balance to or above the
minimum. If you do not increase your balance, we will redeem your shares and pay
the value to you.

This minimum does not apply if you are actively contributing to that Fund
through an Automatic Investment Plan or if your Fund is for a Pension or
Retirement Savings Program (including IRAs), or for an UGMA/UTMA.

How You Will Receive Ongoing Information About Your Account and the Funds
You will receive a consolidated, quarterly statement of your account showing all
transactions since the beginning of the current quarter. You can request a
statement of your account activity at any time. Also, each time you invest,
redeem, transfer or exchange shares, you will receive a confirmation of the
transaction.

You will receive an annual report that includes audited financial statements for
the fiscal year. It will include a list of securities in each Fund on that date.
You will also receive a semi-annual report that includes unaudited financial
statements for the previous six months. It will also include a list of
securities in each Fund on that date.

You will receive a new Prospectus each year. The Statement of Additional
Information is also revised each year. You can receive a Statement of Additional
Information by request only.

How to Transfer Your Shares to Another Person
You can transfer ownership of your shares to another person or organization, or
change the name on an account, by sending us written instructions. The request
must be signed by all registered owners of your account. To change the name on
an account, the shares must be transferred to a new account. The request must
include a signature guarantee. See "Signature Guarantee" on this page. This
option is not available for Pension or Retirement Savings Programs. Please call
us at 1-800-89-ASK-US (1-800-892-7587) for additional information.

The Company reserves the right to amend, suspend, or discontinue offering any of
these options at any time without prior notice.

Dividends and Capital Gains

Substantially all of the Funds' net investment income will be distributed in the
form of dividends to you. The following table shows how often dividends are paid
on each Fund.

Fund Dividend Paid
Transamerica Premier Aggressive Growth Fund Annually
Transamerica Premier Small Company Fund Annually
Transamerica Premier Equity Fund Annually
Transamerica Premier Value Fund Annually
Transamerica Premier Index Fund Annually
Transamerica Premier Bond Fund Monthly
Transamerica Premier Balanced Fund Annually
Transamerica Premier Cash Reserve Fund Monthly

Although dividends are paid monthly on the Transamerica Premier Cash Reserve
Fund, dividends are determined daily. You will begin to earn Premier Cash
Reserve dividends on the business day that your purchase is effective, and you
will earn dividends on the day your redemption request is received.

Net capital gains, if any, are distributed on all of the Funds annually.

Unless another option is specifically requested in your application, all
dividends and capital gains distributions will be reinvested in additional
shares of the same Fund. Other options available are to have either your
dividends or your capital gains paid in cash and the other will be reinvested in
additional shares in the same Fund or both dividends and capital gains
distributions paid in cash.

Distributions for each Fund are made on a per share basis to the shareholders of
record as of the distribution date of that Fund. This is done regardless of how
long the shares have been held.

What About Taxes?

Federal Taxes*
Dividends paid by a Fund from net investment income, the excess of net
short-term capital gain over net long-term capital loss, and original issue
discount or certain market discount income will be taxable to you as ordinary
income. Distributions paid by a Fund from the excess of net long-term capital
gain over net short-term capital loss will be taxable as long-term capital gains
regardless of how long you have held your shares. These tax consequences will
apply regardless of whether distributions are received in cash or reinvested in
shares. A portion of the dividends paid to corporate shareholders may qualify
for the corporate dividends-received deduction to the extent the Fund earns
qualifying dividends. You will be notified after each calendar year of the
amount and character of distributions you received from each Fund for federal
tax purposes.

For IRAs and pension plans, dividends and capital gains are reinvested and not
taxed until you receive a qualified distribution from your IRA or pension plan.

The tax implications of buying shares immediately prior to a dividend or capital
gain distribution should be considered. Investors who purchase shares shortly
before the record date for a distribution will pay a per share price that
includes the value of the anticipated distribution. The shareholder will be
taxed on the distribution received even though the distribution represents a
return of a portion of the purchase price.

Redemptions and exchanges of shares may result in a capital gain or a loss for
tax purposes.

Individuals and certain other classes of shareholders may be subject to backup
withholding of federal income tax on distributions, redemptions and exchanges if
they fail to furnish the Funds their correct taxpayer identification number.
Individuals, corporations and other shareholders that are not U.S. persons under
the Internal Revenue Code of 1986, as amended, are subject to different tax
rules. They may be subject to nonresident alien withholding on amounts
considered ordinary dividends from the Fund.

When you sign your account application, you will be asked to certify that your
social security or taxpayer identification number is correct. You will also be
asked to certify that you are not subject to backup withholding for failure to
report income to the Internal Revenue Service.

Pension and Retirement Savings Programs
The tax rules applicable to participants and beneficiaries in Pension and
Retirement Savings Programs vary according to the type of plan and the terms and
conditions of the plan. In general, distributions from these plans are taxed as
ordinary income. Special favorable tax treatment may be available for certain
types of contributions and distributions. Adverse tax consequences may result
from contributions in excess of specified limits: 1. distributions prior to age
59 1/2 (subject to certain exceptions); 2. distributions that do not conform to
specified commencement and minimum distribution rules; 3. aggregate
distributions in excess of a specified annual amount; and 4. in other specified
circumstances. You should consult a qualified tax adviser for more information.

Other Taxes
In addition to federal taxes, state and local taxes may apply to payments
received. Depending on the state tax rules pertaining to a shareholder, a
portion of the dividends paid by a Fund that come from direct obligations of the
U.S. Treasury and certain agencies may be exempt from state and local taxes. A
tax adviser should be consulted regarding specific questions as to federal,
state and local taxes.

* For each taxable year, each Fund intends to qualify as a regulated investment
company under Subchapter M of the Internal Revenue Code of 1986, as amended.
Qualifying regulated investment companies distributing substantially all of
their ordinary income and capital gains are not subject to federal income or
excise tax on any net investment income and net realized capital gains
distributed to shareholders. However, the Fund's shareholders are subject to tax
on these distributions.

Share Price

How Share Price Is Determined
Fund securities, traded on a domestic securities exchange or NASDAQ, are valued
at the last sale price on that exchange on the day the valuation is made. If no
sale is reported, the mean of the latest bid and asked prices is used.
Securities traded over-the-counter are valued at the mean of the latest bid and
asked prices. When market quotations are not readily available, securities and
other assets are valued at fair value pursuant to procedures adopted by the
Fund's Board of Directors.

All securities held by the Transamerica Premier Cash Reserve Fund, and any
short-term investments of the other Funds with maturities of 60 days or less at
the time of purchase, are valued on the basis of amortized cost. Amortized cost
requires constant amortization to maturity of any discount or premium,
regardless of the effect of assuming movements in interest rates. For more
information, see the Statement of Additional Information.

When Share Price Is Determined
Except for the Transamerica Premier Cash Reserve Fund, the net asset value of
each Fund is determined only on days that the New York Stock Exchange (the
"Exchange") is open. The net asset value of the Transamerica Premier Cash
Reserve Fund is determined only on days that the Federal Reserve is open.

Investments or redemption requests received before the close of business on the
Exchange, usually 4:00 p.m. eastern time, receive the share price determined at
the close of the Exchange that day. When investment and redemption requests are
received after the Exchange is closed, the share price at the close of the
Exchange the next day the Exchange is open is used. Investments and redemption
requests by telephone are deemed received at the time of receipt of the
telephone call.

Organization and Management

Transamerica Investors, Inc.
Transamerica Investors, Inc. was organized as a Maryland corporation on February
22, 1995. The Company is registered with the SEC under the 1940 Act as an
open-end management investment company of the series type. Each Fund constitutes
a separate series. All series, except the Transamerica Premier Aggressive Growth
Fund, are diversified companies. There are two classes of shares, Investor
Shares and Institutional Shares. This Prospectus describes the Investor Class of
shares for the Funds. The Company reserves the right to issue additional classes
of shares in the future without the consent of shareholders, and can allocate
any remaining unclassified shares or reallocate any unissued classified shares.
The fiscal year-end of the Company is December 31.

Except for the differences, noted each share of a Fund has equal dividend,
redemption and liquidation rights with other shares of the Fund and when issued,
is fully paid and nonassessable. Each share of each class of a Fund represents
an identical legal interest in the investments of the Fund. Each class has
certain other expenses related solely to that class. Each class will have
exclusive voting rights under any 12b-1 distribution plan related to that class.
In the event that a special meeting of shareholders is called, separate votes
are taken by each class only if a matter affects, or requires the vote of, that
class. Although the legal rights of holders of each class of shares are
identical, it is likely that the difference in expenses will result in different
net asset values and dividends. The classes may have different exchange
privileges.

As a Maryland corporation, the Company is not required to hold regular annual
meetings of shareholders. Ordinarily there will be no shareholder meetings,
unless requested by shareholders holding 10% or more of the outstanding shares,
or unless required by the 1940 Act or Maryland law. You are entitled to cast one
vote for each share you own of each Fund. At a special shareholders meeting, if
one is called, issues that affect all the Funds in substantially the same way
will be voted on by all shareholders, without regard to the Funds. Issues that
do not affect a Fund will not be voted on by that Fund. Issues that affect all
Funds, but in which their interests are not substantially the same, will be
voted on separately by each Fund.

Investment Adviser
The Investment Adviser is responsible for making investment decisions for the
Funds. The Investment Adviser is also responsible for the selection of brokers
and dealers to execute transactions for each Fund. Some of these brokers or
dealers may be affiliated persons of the Company, the Investment Adviser, the
Administrator, or the Distributor. Since it is the Investment Adviser's policy
to seek the best price and execution for each transaction, the Investment
Adviser may give consideration to brokers and dealers who provide statistical
information and other services in addition to transaction services. Additional
information about the selection of brokers and dealers is provided in the
Statement of Additional Information.

Trading decisions for each of the Funds described in this Prospectus are made by
a team of expert managers and analysts headed by a team leader. The team leaders
are primarily responsible for the day-to-day decisions related to their Fund.
They are supported by the entire group of managers and analysts. The team leader
of any one Fund may be on another Fund team. The transactions and performance of
the Funds are reviewed periodically by the Investment Adviser's senior officers.

Here's a listing and brief biography of the team leaders for each of the Funds:

Transamerica Premier Aggressive Growth Fund and Transamerica Premier
Small Company Fund
Philip Treick, Vice President and Fund Manager, Transamerica Investment
Services. B.S., University of South
Florida, 1987. Financial Analyst, Raymond James Financial Corporation, 1987 -
1988. Joined Transamerica
in 1988.

Transamerica Premier Equity Fund
Glen E. Bickerstaff, Vice President and Senior Fund Manager, Transamerica
Investment Services. B.S., University
of Southern California, 1980. Vice President, Fish & Lederer Investment Counsel,
1986-1987. Vice President,
Pacific Century Advisers, 1980-1986. Joined Transamerica in 1987.

Transamerica Premier Value Fund
Jeffrey S. Van Harte, C.F.A. Vice President and Senior Fund Manager,
Transamerica Investment Services. Member of
San Francisco Society of Financial Analysts. B.A., California State University
at Fullerton, 1980. Securities
Analyst and Trader, Transamerica Investment Services, 1980-1984. Joined
Transamerica in 1980.

Transamerica Premier Index Fund
Christopher J. Bonavico, Assistant Vice President and Fund Manager, Transamerica
Investment Services. B.S.,
University of Delaware, 1987. Equity Research Analyst, Salomon Brothers,
1989-1993. Business Analyst, Planning &
Financial Management, Chase Manhattan Bank, 1988-1989. Joined Transamerica in
1993.

Transamerica Premier Bond Fund
Sharon K. Kilmer, C.F.A. Vice President and Director of Fixed Income Portfolio
Management, Transamerica
Investment Services. Member of the Los Angeles Society of Financial Analysts.
M.B.A., University of Southern
California, 1982. B.A., University of Southern California (Magna Cum Laude, Phi
Beta Kappa), 1980. Joined
Transamerica in 1982.

Transamerica Premier Balanced Fund
BONDS - Sharon K. Kilmer, C.F.A. (see above).
STOCKS - Jeffrey S. Van Harte, C.F.A. (see above).

Transamerica Cash Reserve Fund
Kevin J. Hickam, C.F.A. Assistant Vice President and Fund Manager, Transamerica
Investment Services. Member of
Los Angeles Society of Financial Analysts. M.B.A., Cornell University, 1989.
B.S., California State University at
Chico, 1984. Senior Accountant, Santa Clara Savings, 1984-1987. Joined
Transamerica in 1989.

Adviser Fee
For its services to the Funds, the Investment Adviser receives an Adviser Fee.
This fee is based on an annual percentage of the average daily net assets of
each Fund. It is accrued daily, and paid monthly.

The annual fee percentages for the Transamerica Premier Aggressive Growth Fund
are .85% on the first $1 billion of assets. This reduces to .82% on the next $1
billion, and finally .80% on assets over $2 billion. The corresponding fee
percentages for the Transamerica Premier Small Company Fund are .85%, .82%, and
.80% respectively. The corresponding fee percentages for the Transamerica
Premier Equity Fund are .85%, .82%, and .80% respectively. The corresponding fee
percentages for the Transamerica Premier Value Fund are .75%, .72%, and .70%
respectively. The corresponding fee percentages for the Transamerica Premier
Index Fund are .30%, .30%, and .30% respectively. The corresponding fee
percentages for the Transamerica Premier Bond Fund are .60%, .57%, and .55%,
respectively. The corresponding fee percentages for the Transamerica Premier
Balanced Fund are .75%, .72%, and .70%, respectively. The corresponding fee
percentages for the Transamerica Premier Cash Reserve Fund are .35%, .35%, and
.35%, respectively.

The Investment Adviser may waive some or all of these fees from time to time at
its discretion.

Administrator Services
The Investment Adviser pays part of the Adviser Fee to the Administrator. The
Administrator provides office space for the Company and pays the salaries, fees
and expenses of all Company officers and those directors affiliated with
Transamerica Corporation not already paid by the Investment Adviser. Each Fund
pays all of its expenses not assumed by the Investment Adviser or the
Administrator. This includes transfer agent and custodian fees and expenses,
legal and auditing fees, printing costs of reports to shareholders, registration
fees and expenses, 12b-1 fees, and fees and expenses of directors unaffiliated
with Transamerica Corporation.

The Administrator may from time to time reimburse the Funds for some or all of
their operating expenses. Such reimbursements will increase a Fund's return.
This is intended to make the Funds more competitive. This practice may be
terminated at any time.

Custodian and Transfer Agent
Under a Custodian Agreement, State Street Bank and Trust Company ("State
Street"), 225 Franklin Street, Boston, Massachusetts 02110, holds all securities
and cash assets of the Funds, provides recordkeeping services, and serves as the
Funds' custodian. State Street is authorized to deposit securities in securities
depositories or to use services of sub-custodians.

Under a Transfer Agency Agreement, State Street Bank also serves as the Funds'
transfer agent. The transfer agent
is responsible for: a) opening and maintaining your account; b) reporting
information to you about your account;
c) paying you dividends and capital gains; and d) handling your requests for
exchanges, transfers and
redemptions.

Distributor
Transamerica Securities Sales Corporation ("TSSC") is the principal underwriter
and distributor of the shares of each of the Funds.

TSSC is a wholly-owned subsidiary of Transamerica Insurance Corporation of
California, which is a wholly-owned subsidiary of Transamerica Corporation. TSSC
is registered with the SEC as a broker-dealer. TSSC is also a member of the
National Association of Securities Dealers - Regulation, Inc.

Distribution Plan
Each Fund makes payments to TSSC according to a plan adopted to meet the
requirements of Rule 12b-1 under the Investment Company Act of 1940, as amended.
These fees accrue daily and are based on an annual percentage of the daily
average net assets.

The 12b-1 plan of distribution and related distribution contracts require the
Funds to pay distribution and service fees to TSSC as compensation for its
activities, not as reimbursement for specific expenses. If TSSC's expenses are
more than its fees for any Fund, the Fund will not have to pay more than those
fees. If TSSC's expenses are less than the fees, it will keep the excess. The
Company will pay the distribution and service fees to TSSC until the
distribution contracts are terminated or not renewed. In that event, TSSC's
expenses over and above any fees through the termination date will be TSSC's
sole responsibility and not the obligation of the Company. The Board will review
the distribution plan, contracts and TSSC's expenses.

There is an annual 12b-1 distribution fee of .25% of the average daily net
assets of each Fund, except the Transamerica Premier Index and Cash Reserve
Funds. The distribution fee for the Index and Cash Reserve Funds is .10%. This
fee covers such expenses as preparation, printing and mailing of the Prospectus
and Statement of Additional Information, as well as sales literature and other
media advertising, and related expenses. It can also be used to compensate sales
personnel involved with selling the Funds.

From time to time, and for one or more Funds, the Distributor may waive all or
any portion of these fees at its discretion.

General Information

Performance Information
The Company may publish performance information about the Funds. Fund
performance usually will be shown either as cumulative total return or average
periodic total return compared with other mutual funds by public ranking
services, such as Lipper Analytical Services, Inc. Cumulative total return is
the actual performance over a stated period of time. Average annual total return
is the hypothetical return, compounded annually, that would have produced the
same cumulative return if the Fund's performance had been constant over the
entire period. Each Fund's total return shows its overall dollar or percentage
change in value. This includes changes in the share price and reinvestment of
dividends and capital gains.

The performance of a Fund can also be measured in terms of yield. Each Fund's
yield shows the rate of income the Fund earns on its investments as a percentage
of the Fund's share price.

A Fund can also separate its cumulative and average annual total returns into
income results and capital gains or losses. Each Fund can quote its total
returns on a before-tax or after-tax basis.

The performance information which may be published for the Funds is historical.
It is not intended to represent or guarantee future results. The value of your
Fund shares can be more or less than their original cost when they are redeemed.

From time to time, the Transamerica Premier Cash Reserve Fund advertises its
"yield" and "effective yield." Both yield figures are based on historical
earnings and are not intended to indicate future performance. The "yield" of the
Fund refers to the income generated by an investment in the Fund 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 Fund
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, see the Statement of Additional Information.

Summary of Bond Ratings
Following is a summary of the grade indicators used by two of the most
prominent, independent rating agencies (Moody's Investors Service, Inc. and
Standard & Poor's Corporation) to rate the quality of bonds. The first four
categories are generally considered investment quality bonds. Those below that
level are of lower quality, commonly referred to as "junk bonds."

Standard
Investment Grade Moody's & Poor's
Highest quality Aaa AAA
High quality Aa AA
Upper medium A A
Medium, speculative features Baa BBB

Lower Quality
Moderately speculative Ba BB
Speculative B B
Very speculative Caa CCC
Very high risk Ca CC
Highest risk, may not be
paying interest C C
In arrears or default C D

For more detailed information on bond ratings, including gradations within each
category of quality, see the Statement of Additional Information.

Year 2000 Issue
Many computer software systems in use today cannot distinguish the year 2000
from the year 1900 because dates are encoded using the standard six-place format
that allows entry of only the last two digits of the year. This is commonly
known as the "Year 2000 Problem." This issue could adversely impact the Funds if
the computer systems used by the Funds' Administrator, Custodian, Transfer Agent
and Investment Adviser (including service providers' systems) do not accurately
process date information after January 1, 2000. The Administrator and Investment
Adviser are addressing this issue by testing the computer systems they use to
ensure that those systems will operate properly after January 1, 2000. The
Administrator and Investment Adviser are also seeking assurances from the
Custodian, Transfer Agent and other service providers they use that their
computer systems will be adapted to address the Year 2000 Problem in time to
prevent adverse consequences after January 1, 2000.

Pension and Retirement Savings Programs
Following is a listing of Pension and Retirement Savings Programs. Provided you
have the necessary plan documents, you can use the Transamerica Premier Funds as
investment options for:

o 401(a), 401(k), profit sharing, or money purchase pension plans (including
KEOGH/HR 10 Plans) designed to benefit employees of corporations, partnerships,
and sole proprietors. o Section 403(b)(7) (Tax-Sheltered Annuity) Plans* for
employees of educational organizations or other qualifying, tax exempt
organizations. o Individual Retirement Account ("IRA"), or comparable program, o
Individuals and Simplified Employee Pension ("SEP") Plans for employers
(including sole proprietors) and their employees. o Section 457 deferred
compensation plans for employees of state governments and tax-exempt
organizations. o Employers' non-qualified plans or savings programs, that do not
qualify for federal tax advantages. o Other retirement plans or savings programs
allowed by the Board.

*You may be required to have your own custodian for this plan.

Transamerica Securities Sales Corporation, Distributor
1-800-89-ASK-US (1-800-892-7587)
http://funds.transamerica.com
e-mail: [email protected]

TPF 211-498
<PAGE>
1

Transamerica Premier Funds --- Institutional Shares
Prospectus: March 31, 1998

Transamerica Premier Aggressive Growth Fund Transamerica Premier Small Company
Fund Transamerica Premier Equity Fund Transamerica Premier Value Fund
Transamerica Premier Index Fund Transamerica Premier Bond Fund Transamerica
Premier Balanced Fund Transamerica Premier Cash Reserve Fund

Your Guide
This guide (the "Prospectus") will provide you with helpful insights and details
about the Institutional Class of shares of the Transamerica Premier Funds (a
"Fund" or collectively the "Funds"). It is intended to give you what you need to
know before investing. Please read it carefully and save it for future
reference.

Transamerica Investors, Inc.
Transamerica Investors, Inc. (the "Company") is an open-end, management
investment company offering a number of portfolios, known collectively as the
Transamerica Premier Funds. Each Fund is managed separately and has its own
investment objective, strategies and policies designed to meet different goals.
Each class of each Fund has its own levels of expenses and charges. The minimum
initial investment is $250,000 and the minimum subsequent investment is $1,000.
See "Minimum Investments" on page 28 for more details.

Contents

The Funds at a Glance 2
Fund Expenses 4
Investment Adviser's Performance Managing
Similar Accounts 5
The Management Team 9
The Funds In Detail 9
Transamerica Premier Aggressive Growth Fund 10
Transamerica Premier Small Company Fund 11
Transamerica Premier Equity Fund 12
Transamerica Premier Value Fund 13
Transamerica Premier Index Fund 14
Transamerica Premier Bond Fund 16
Transamerica Premier Balanced Fund 17
Transamerica Premier Cash Reserve Fund 18
A General Discussion About Risk 19
Investment Procedures and Risk Considerations 20
Shareholder Services 25
Opening Your Account 26
How to Buy Shares 27
How to Sell Shares 28
How to Exchange Shares 30
Other Investor Requirements and Services 31
Dividends and Capital Gains 31
What About Taxes? 32
Share Price 33
Organization and Management 34
General Information 36

The Funds at a Glance

The Transamerica Premier Funds consist of the following Funds with different
investment objectives and risk levels. There is no guarantee that these
investment objectives will be met. These brief descriptions will give you a
summary of each Fund. A more detailed description for each Fund is in "The Funds
in Detail" on page 9. For information on the risks associated with investment in
these Funds, see "Investment Procedures and Risk Considerations" on page 20.

Transamerica Premier Value Fund
o The Fund seeks to maximize capital appreciation.
o It invests primarily in securities of companies that the Investment Adviser
believes are "underfollowed" or "out-of-favor." The Investment Adviser
believes these securities are under-valued relative to the intrinsic or
private market value of the firm. The securities in the Fund may include
common and preferred stocks, warrants, and corporate debt securities.
o The Fund is intended for investors who wish to participate primarily in the
common stock markets. Investors should have the perspective, patience, and
financial ability to take on above-average stock market volatility in a
focused pursuit of long-term capital growth.
o See page 13 for more details.

Availability
Institutional Shares are available on a no-load basis directly to high net worth
individuals, qualified retirement plans, and other institutional clients, and
require a minimum initial investment of $250,000. The shares may also be offered
through financial planners, broker-dealers, and other financial intermediaries.
These shares are distributed by Transamerica Securities Sales Corporation
("TSSC"), the Distributor.

Investor Shares are available on a no-load basis directly to individuals,
companies, Pension and Retirement Savings Programs, and other investors from
TSSC. You may obtain an Investor Shares Prospectus by calling 1-800-89-ASK-US
(1-800-892-7587).

This Prospectus provides information about the Institutional Shares only.

Fund Expenses

Shareholder Transaction Expenses (as a percentage of offering price)
<TABLE>
<CAPTION>

Aggressive Small Cash
Transaction Expense Growth Company Equity Value Index Bond Balanced Reserve
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Sales Charge on Purchases None None None None None None None None
Redemption Fee None None None None None None None None
Sales Charge on Reinvested
Dividends None None None None None None None None
Exchange Fee None None None None None None None None
Contingent Deferred Sales
Charge None None None None None None None None
</TABLE>

Annual Fund Operating Expenses (as a percent of average net assets)
<TABLE>
<CAPTION>

Other Expenses Total Operating
Transamerica After Waiver and Expenses After Waiver
Premier Funds Adviser Fee1 12b-1 Fee Reimbursement2 and Reimbursement3
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C>
Aggressive Growth 0.85% - - 0.30% 1.15%
Small Company 0.85% - - 0.30% 1.15%
Equity 0.85% - - 0.40% 1.25%
Value 0.75% - - 0.20% 1.00%
Index 0.30% - - 0.30% 0.60%
Bond 0.60% - - 0.45% 1.05%
Balanced 0.75% - - 0.45% 1.20%
Cash Reserve 0.35% - - 0.25% 0.60%
</TABLE>

Example
Using the aforementioned transaction and operating expenses, the expenses for a
$1,000 investment using an assumed annual return of 5% would be:
<TABLE>
<CAPTION>

Transamerica Premier Funds 1 Year 3 Years 5 Years 10 Years
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Aggressive Growth $12 $37 $63 $140
Small Company $12 $37 $63 $140
Equity $13 $40 $69 $151
Value $10 $32 $55 $122
Index $ 6 $19 $33 $ 75
Bond $11 $33 $58 $128
Balanced $12 $38 $66 $145
Cash Reserve $ 6 $19 $33 $ 75
</TABLE>

The information contained in the above examples should not be considered a
representation of future expenses. The actual expenses may be more or less than
those shown.

1 The Investment Adviser may waive part or all of the adviser fee to keep the
total operating expenses from exceeding the amount shown in the table. See
footnote 3 below. See "Adviser Fee" on page 35 for additional information. 2
"Other Expenses" are those incurred after any reimbursements to the Fund by the
Administrator. See "The Management Team" on page 9. Other expenses include
expenses not covered by the adviser fee. Expenses shown for the Value Fund are
based on estimated expenses and estimated net assets for its first fiscal year.
3 "Total Operating Expenses" include adviser fees and other expenses that a Fund
incurs. The Investment Adviser has agreed to waive that part of its adviser fee
and the Administrator has agreed to assume any other operating expenses to
ensure that annualized expenses for each Fund (other than interest, taxes,
brokerage commissions and extraordinary expenses) will not exceed the following
percentages: 1.00% for the Aggressive Growth Fund, 1.00% for the Small Company
Fund, 0.95% for the Equity Fund, 1.00% for the Value Fund, 0.50% for the Index
Fund, 0.65% for the Bond Fund, 0.80% for the Balanced Fund, and 0.50% for the
Cash Reserve Fund. The Administrator may, from time to time, assume additional
expenses. Fee waivers and expense assumption arrangements, which may be
terminated at any time without notice, will increase a Fund's yield. If the
Investment Adviser does not waive fees and the Administrator does not reimburse
expenses for the first fiscal year, the ratio of total operating expenses to
average net assets is estimated to be 1.48% for the Aggressive Growth Fund,
1.48% for the Small Company Fund, 1.65% for the Equity Fund, 1.04% for the Value
Fund, 1.99% for the Index Fund, 1.51% for the Bond Fund, 1.64% for the Balanced
Fund, and 0.79% for the Cash Reserve Fund.

Investment Adviser's Performance Managing Similar Accounts

For comparison purposes, the separate accounts from which the Premier Funds were
cloned are shown below.

There are no corresponding separate accounts for the Transamerica Premier
Aggressive Growth Fund, the Transamerica Premier Small Company Fund, and the
Transamerica Premier Value Fund.

<TABLE>
<CAPTION>
1 5 10 Since
Year Years Years Inception3
<S> <C> <C> <C> <C>
Equity Fund 45.70% 28.48% 27.79% 23.76%
Premier Equity Fund 47.51% --- --- 32.03%
S&P 500 Index4 33.36% 20.27% 18.07% 14.67%

Equity Index Fund 32.41% 19.63% 17.43% 16.56%
Premier Index Fund 33.14% --- --- 27.38%
S&P 500 Index4 33.36% 20.27% 18.07% 14.67%

Bond Fund 11.45% 9.29% 10.87% 12.41%
Premier Bond Fund 9.99% --- --- 7.07%
Lehman Brothers
Govt./Corporate Index5 9.76% 7.61% 9.15% 9.97%

Balanced Fund 29.61% --- --- 20.39%
Premier Balanced Fund 35.38% --- --- 23.09%
50% S&P 500 Index and
50% Lehman Brothers
Govt./Corporate Index 21.29% --- --- 13.60%

Cash Management Fund 5.07% 4.38% 5.45% 6.65%
Premier Cash Reserve Fund 5.48% --- --- 5.44%
IBC First Tier Index6 5.04% 4.32% 5.43% 6.58%
</TABLE>

1 Average Annual Total Performance calculated as shown in the Statement of
Additional Information. 2 The performance of the Premier Funds reflects that of
the Investor Shares, which are subject to Rule 12b-1 fees, because the
Institutional Shares were not offered during the periods shown. 3 The inception
date of all Premier Funds shown in the table is October 2, 1995. Inception dates
of the separate accounts: Equity - 10/1/87; Equity Index - 10/1/86; Bond -
5/1/83; Balanced - 4/1/93; Cash Management - 1/3/82. The inception dates shown
for the indexes match the dates of the separate accounts' inception. 4 The
Standard and Poor's 500 Index consists of 500 widely held, publicly traded
common stocks. 5 The Lehman Brothers Government/Corporate Bond Index is a
broad-based unmanaged index of government and corporate bonds with maturities of
10 years or longer that are rated investment grade or higher by Moody's Investor
Services, Inc. or Standard and Poor's Corporation. 6 IBC's Money Fund
ReportTM-First Tier is a composite of taxable money market funds that meet the
SEC's definition of first tier securities contained in Rule 2a-7 under the
Investment Company Act of 1940. These indexes do not reflect any commissions or
fees which would be incurred by an investor purchasing the securities
represented by each index.

Equity Separate Account
The following graph depicts that $1,000 invested in the Equity Separate Account
at its inception, October 1, 1987, would have appreciated to $8,895 at December
31, 1997. This is an annualized return of 23.76% per year. By comparison, $1,000
invested for the same time period in S&P 500 Index securities would have grown
to only $4,071.

<PAGE>
31

Transamerica Premier Funds - Investor and Institutional Classes of Shares

Statement of Additional Information - March 31, 1998

Transamerica Premier Aggressive Growth Fund
The Fund seeks to maximize long-term capital appreciation by investing
in common stocks selected for high growth potential.
Transamerica Premier Small Company Fund
The Fund seeks to maximize long-term growth by investing in small
company stocks.
Transamerica Premier Equity Fund
The Fund seeks to maximize long-term capital appreciation by investing
in medium and large company stocks.
Transamerica Premier Value Fund
The Fund seeks to capital appreciation.
Transamerica Premier Index Fund
The Fund seeks to track the performance of the Standard & Poor's 500
Composite Stock Price Index,
also known as the S&P 500 Index (the "Index").
Transamerica Premier Bond Fund
The Fund seeks to achieve a high total return (income plus capital
changes) consistent with
preservation of principal.
Transamerica Premier Balanced Fund
The Fund seeks to achieve long-term capital growth and current income
with a secondary objective of capital preservation, by balancing its
investments among stocks, bonds, and cash.
Transamerica Premier Cash Reserve Fund
This is a money market fund that seeks to maximize current income
consistent with liquidity and preservation of principal.

Contents

Investment Objectives and Policies 2
Investment Restrictions 11
Management of the Company 14
Investment Advisory and Other Services 17
Purchase and Redemption of Shares 19
Brokerage Allocation 21
Determination of Net Asset Value 22
Performance Information 23
Taxes 26
Other Information 27
Financial Statements 27
Appendix A:
Description of Corporate Bond Ratings 28
Appendix B:
Description of Fixed-Income Instruments 30

Your Guide
This Statement of Additional Information pertains to the Investor Class and the
Institutional Class of the Transamerica Premier Funds (a "Fund" or collectively
the "Funds") listed above. It will provide you with details beyond what is
available in the Prospectus. Please refer to the Prospectus first, then to this
document. Please read it carefully. Save it for future reference.

About the Prospectus
This Statement of Additional Information is not a prospectus. It should be read
in connection with the current Prospectus dated March 31, 1998. The Prospectus
is available without charge by calling, 1-800-89-ASK-US (1-800-892-7587).

Terms used in the Prospectus are incorporated by reference in this Statement of
Additional Information.

No person has been authorized to give any information or to make any
representations other than those contained in this Statement of Additional
Information and the Prospectus dated March 31, 1998, as revised from time to
time, and if given or made, such information or representations may not be
relied upon as having been authorized by the Funds.

Investment Objectives and Policies

The investment objectives and policies of the Funds are described in the
Prospectus. The achievement of each Fund's investment objectives will depend on
market conditions generally and on the analytical and portfolio management
skills of the Investment Adviser. There can be no assurance that the investment
objective of any of the Funds can be achieved.

High-Yield ("Junk") Bonds
High-yield bonds (commonly called "junk" bonds) are lower rated bonds that
involve a higher degree of credit risk. See "Appendix A" for a description of
credit ratings. Credit risk is the risk that the issuer of the bonds will not be
able to make interest or principal payment on time. If this happened to a bond
in a Fund, the Fund would lose some of its income, and could expect a decline in
the market value of the securities affected. So the Investment Adviser needs to
carefully analyze the financial condition of companies issuing junk bonds. The
prices of junk bonds tend to be more reflective of prevailing economic and
industry conditions, issuers' unique financial situations, and the bonds' coupon
than to small changes in the level of interest rates. But during an economic
downturn or a period of rising interest rates, highly leveraged companies may
have trouble making principal and interest payments, meeting projected business
goals, and obtaining additional financing. Junk bonds' values will generally
decrease in a rising interest rate market.

Junk bonds may contain "call" provisions, which enable the issuers of the bond
to redeem the bond at will. If the issuer exercises this privilege during a
declining interest rate market, the Fund would most likely replace the bond with
a lower yield bond, resulting in a lower return for investors.

Periods of economic or political uncertainty and change can create some
volatility for junk bonds. Since the last major economic recession, there has
been a substantial increase in the use of high-yield debt securities to fund
highly leveraged corporate acquisitions and restructurings. Past experience with
high-yield securities in a prolonged economic downturn may not provide an
accurate indication of future performance during such periods. Lower rated
securities may also be harder to sell than higher rated securities because of
negative publicity and investor perceptions of this market, as well as new or
proposed laws dealing with high yield securities. For many junk bonds, there is
no established retail secondary market. As a result, it may be difficult for the
Investment Adviser to accurately value the bonds because they cannot rely on
available objective data.

Each Fund may also invest in unrated debt securities. Unrated debt, while not
necessarily of lower quality than rated securities, may not have as broad a
market. Since bond ratings do not consider factors relevant to each issue, and
may not be updated regularly, the Investment Adviser may treat high yield
securities as unrated debt.

Because of the size and perceived demand of the issue, among other factors,
certain municipalities may decide not to pay the cost of getting a rating for
their bonds. The Investment Adviser will analyze the creditworthiness of the
issuer, as well as any financial institution or other party responsible for
payments on the security, to determine whether to purchase unrated municipal
bonds. See "Appendix B" for a description of fixed income instruments.

Restricted and Illiquid Securities
A Fund may purchase certain restricted securities of U.S. issuers (securities
that are not registered under the Securities Act of 1933, as amended [the "1933
Act"] but can be offered and sold to "qualified institutional buyers" under Rule
144A of that Act) and limited amounts of illiquid investments, including
illiquid restricted securities.

Illiquid investments include restricted securities, repurchase agreements that
mature in more than seven days, fixed time deposits that mature in more than
seven days and participation interests in loans.

Certain repurchase agreements which provide for settlement in more than seven
days, however, can be liquidated before the nominal fixed term of seven days.
The Investment Adviser will consider such repurchase agreements as liquid.
Likewise, restricted securities (including commercial paper issued pursuant to
Section 4(2) of the 1933 Act) that the Board or the Investment Adviser have
determined to be liquid will be treated as such.

The SEC staff has taken the position that fixed time deposits maturing in more
than seven days, that cannot be traded on a secondary market, and participation
interests in loans are illiquid and not readily marketable. A considerable
amount of time may elapse between a Fund's decision to dispose of restricted or
illiquid securities and the time which such Fund is able to dispose of them,
during which time the value of such securities (and therefore the value of the
Fund's shares) could decline.

Derivatives
Each Fund, except for Transamerica Premier Cash Reserve Fund and Transamerica
Premier Equity Fund, may use options, futures, forward contracts, and swap
transactions ("derivatives"). The Funds may purchase, or write, call or put
options on securities or on indexes ("options") and may enter into interest rate
or index futures contracts for the purchase or sale of instruments based on
financial indexes ("futures contracts"), options on futures contracts, forward
contracts, and interest rate swaps and swap-related products.

By investing in derivatives, the Investment Adviser may seek to protect a Fund
against potentially unfavorable movements in interest rates or securities'
prices, or attempt to adjust a Fund's exposure to changing securities prices,
interest rates, or other factors that affect securities values. This is done in
an attempt to reduce a Fund's overall investment risk. Although it will not
generally be a significant part of a Fund's strategies, the Investment Adviser
may also use derivatives to enhance returns. Opportunities to enhance returns
arise when the derivative does not reflect the fair value of the underlying
securities. None of the Funds will use derivatives for leverage.

Risks in the use of derivatives include, in addition to those referred to above:
(1) the risk that interest rates and securities prices do not move in the
directions being hedged against, in which case the Fund has incurred the cost of
the derivative (either its purchase price or, by writing an option, losing the
opportunity to profit from increases in the value of the securities covered)
with no tangible benefit; (2) imperfect correlation between the price of
derivatives and the movements of the securities' prices or interest rates being
hedged; (3) the possible absence of a liquid secondary market for any particular
derivative at any time (some derivatives are not actively traded but are custom
designed to meet the investment needs of a narrow group of institutional
investors and can become illiquid if the needs of that group of investors
change); (4) the potential loss if the counterparty to the transaction does not
perform as promised; and (5) the possible need to defer closing out certain
positions to avoid adverse tax consequences.

The Transamerica Premier Bond Fund and Transamerica Premier Balanced Fund may
invest in derivatives with respect to less than 20% of each Fund's assets;
Transamerica Premier Index Fund may invest with respect to no more than 35% of
its assets. The Board will closely monitor the Investment Adviser's use of
derivatives in each of the Funds to assure they are used in accordance with the
investment objectives of each Fund.

Options on Securities and Securities Indexes
A Fund may write (i.e.; sell) covered call and put options on any securities in
which it may invest. A call option written by a Fund obligates the Fund to sell
specified securities to the holder of the option at a specified price if the
option is exercised at any time before the expiration date. All call options
written by a Fund are covered, which means that the Fund will own the securities
subject to the option so long as the option is outstanding. A Fund's purpose in
writing covered call options is to realize greater income than would be realized
on securities transactions alone. However, by writing the call option a Fund
might forgo the opportunity to profit from an increase in the market price of
the underlying security.

A put option written by a Fund would obligate the Fund to purchase specified
securities from the option holder at a specified price if the option is
exercised at any time before the expiration date. All put options written by a
Fund would be covered, which means that such Fund would have deposited with its
custodian cash or liquid securities with a value at least equal to the exercise
price of the put option. The purpose of writing such options is to generate
additional income for the Fund. However, in return for the option premium, a
Fund accepts the risk that it might be required to purchase the underlying
securities at a price in excess of the securities' market value at the time of
purchase.

In addition, a written call option or put option may be covered by maintaining
liquid securities in a segregated account with its custodian or by purchasing an
offsetting option or any other option which, by virtue of its exercise price or
otherwise, reduces a Fund's net exposure on its written option position.

A Fund may also write (sell) covered call and put options on any securities
index composed of securities in which it may invest. Options on securities
indexes are similar to options on securities, except that the exercise of
securities index options requires cash payments and does not involve the actual
purchase or sale of securities. In addition, securities index options are
designed to reflect price fluctuations in a group of securities or segment of
the securities market rather than price fluctuations in a single security.

A Fund may cover call options on a securities index by owning securities whose
price changes are expected to be similar to those of the underlying index, or by
having an absolute and immediate right to acquire such securities without
additional cash consideration (or for additional cash consideration held in a
segregated account by its custodian) upon conversion or exchange of other
securities in the Fund. A Fund may cover call and put options on a securities
index by maintaining cash or liquid securities with a value equal to the
exercise price in a segregated account with its custodian.

A Fund may terminate its obligations under an exchange traded call or put option
by purchasing an option identical to the one it has written. Obligations under
over-the-counter options may be terminated only by entering into an offsetting
transaction with the counterparty to such option. Such purchases are referred to
as "closing purchase" transactions.

A Fund may purchase put and call options on any securities in which it may
invest or options on any securities index based on securities in which it may
invest. A Fund would also be able to enter into closing sale transactions in
order to realize gains or minimize losses on options it had purchased.

A Fund would normally purchase call options in anticipation of an increase in
the market value of securities of the type in which it may invest. The purchase
of a call option would entitle a Fund, in return for the premium paid, to
purchase specified securities at a specified price during the option period. A
Fund would ordinarily realize a gain if, during the option period, the value of
such securities exceeded the sum of the exercise price, the premium paid and
transaction costs; otherwise the Fund would realize a loss on the purchase of
the call option.

A Fund would normally purchase put options in anticipation of a decline in the
market value of its securities ("protective puts") or in securities in which it
may invest. The purchase of a put option would entitle a Fund, in exchange for
the premium paid, to sell specified securities at a specified price during the
option period. The purchase of protective puts is designed to offset or hedge
against a decline in the market value of a Fund's securities. Put options may
also be purchased by a Fund for the purpose of affirmatively benefiting from a
decline in the price of securities which it does not own. A Fund would
ordinarily realize a gain if, during the option period, the value of the
underlying securities decreased below the exercise price sufficiently to cover
the premium and transaction costs; otherwise such a Fund would realize a loss on
the purchase of the put option.

A Fund would purchase put and call options on securities indexes for the same
purposes as it would purchase options on individual securities.

Risks Associated with Options Transactions
There is no assurance that a liquid secondary market will exist for any
particular exchange-traded option at any particular time. If a Fund is unable to
affect a closing purchase transaction with respect to covered options it has
written, the Fund will not be able to sell the underlying securities or dispose
of assets held in a segregated account until the options expire or are
exercised. Similarly, if a Fund is unable to effect a closing sale transaction
with respect to options it has purchased, it would have to exercise the options
in order to realize any profit and will incur transaction costs upon the
purchase or sale of underlying securities.

Reasons for the absence of a liquid secondary market on an exchange include the
following: (i) there may be insufficient trading interest in certain options;
(ii) restrictions may be imposed by an exchange on opening transactions or
closing transactions or both; (iii) trading halts, suspensions or other
restrictions may be imposed with respect to particular classes or series of
options; (iv) unusual or unforeseen circumstances may interrupt normal
operations on an exchange; (v) the facilities of an exchange or the Options
Clearing Corporation may not at all times be adequate to handle current trading
volume; or (vi) one or more exchanges could, for economic or other reasons,
decide or be compelled at some future date to discontinue the trading of options
(or a particular class or series of options), in which event the secondary
market on that exchange (or in that class or series of options) would cease to
exist, although outstanding options on that exchange that had been issued by the
Options Clearing Corporation as a result of trades on that exchange would
continue to be exercisable in accordance with their terms.

A Fund may purchase and sell both options that are traded on U.S., United
Kingdom, and other exchanges and options traded over-the-counter with
broker-dealers who make markets in these options. The ability to terminate
over-the-counter options is more limited than with exchange-traded options and
may involve the risk that broker-dealers participating in such transactions will
not fulfill their obligations. Until such time as the staff of the SEC changes
its position, a Fund will treat purchased over-the-counter options and all
assets used to cover written over-the-counter options as illiquid securities,
except that with respect to options written with primary dealers in U.S.
government securities pursuant to an agreement requiring a closing purchase
transaction at a formula price, the amount of illiquid securities may be
calculated with reference to the formula.

Transactions by a Fund in options on securities and securities indexes will be
subject to limitations established by each of the exchanges, boards of trade or
other trading facilities governing the maximum number of options in each class
which may be written or purchased by a single investor or group of investors
acting in concert. Thus, the number of options which a Fund may write or
purchase may be affected by options written or purchased by other investment
advisory clients of the Investment Adviser of the Funds. An exchange, board of
trade or other trading facility may order the liquidation of positions found to
be in excess of these limits, and it may impose certain other sanctions.

The writing and purchase of options is a highly specialized activity which
involves investment techniques and risks different from those associated with
ordinary securities transactions. The successful use of protective puts for
hedging purposes depends in part on an ability to anticipate future price
fluctuations and the degree of correlation between the options and securities
markets.

Futures Contracts and Options on Futures Contracts
A Fund may purchase and sell futures contracts and may also purchase and write
options on futures contracts. A Fund may purchase and sell futures contracts
based on various securities (such as U.S. government securities), securities
indexes, and other financial instruments and indexes. A Fund will engage in
futures or related options transactions only for bona fide hedging purposes as
defined below or to increase total returns to the extent permitted by
regulations of the Commodity Futures Trading Commission ("CFTC"). All futures
contracts entered into by a Fund are traded on U.S. exchanges or boards of trade
that are licensed and regulated by the CFTC.

Futures Contracts
A futures contract may generally be described as an agreement between two
parties to buy or sell particular financial instruments for an agreed price
during a designated month (or to deliver the final cash settlement price, in the
case of a contract relating to an index or otherwise not calling for physical
delivery at the end of trading in the contract).

When interest rates are rising or securities prices are falling, a Fund can seek
to offset a decline in the value of its current securities through the sale of
futures contracts. When rates are falling or prices are rising, a Fund, through
the purchase of futures contracts, can attempt to secure better rates or prices
than might later be available in the market when it effects anticipated
purchases. The Transamerica Premier Index Fund will use options and futures
contracts only to achieve its performance objective of matching the return on
the S&P 500.

Positions taken in the futures markets are not normally held to maturity, but
are instead liquidated through offsetting transactions which may result in a
profit or a loss. While a Fund's futures contracts on securities will usually be
liquidated in this manner, it may instead make or take delivery of the
underlying securities whenever it appears economically advantageous for a Fund
to do so. A clearing corporation associated with the exchange on which futures
on securities are traded guarantees that, if still open, the sale or purchase
will be performed on the settlement date.

Hedging Strategies
Hedging by use of futures contracts seeks to establish more certainty than would
otherwise be possible in the effective price or rate of return on securities
that a Fund owns or proposes to acquire. A Fund may, for example, take a "short"
position in the futures market by selling futures contracts in order to hedge
against an anticipated rise in interest rates or a decline in market prices that
would adversely affect the value of the Fund's securities. Such futures
contracts may include contracts for the future delivery of securities held by
the Fund or securities with characteristics similar to those of a Fund's
securities.

If, in the opinion of the Investment Adviser, there is a sufficient degree of
correlation between price trends for a Fund's securities and futures contracts
based on other financial instruments, securities indexes or other indexes, the
Fund may also enter into such futures contracts as part of its hedging strategy.
Although under some circumstances prices of a Fund's securities may be more or
less volatile than prices of such futures contracts, the Investment Adviser will
attempt to estimate the extent of this difference in volatility based on
historical patterns and to compensate for it by having a Fund enter into a
greater or lesser number of futures contracts or by attempting to achieve only a
partial hedge against price changes affecting the Fund's securities. When
hedging of this character is successful, any depreciation in the value of the
Fund's securities will be substantially offset by appreciation in the value of
the futures position. On the other hand, any unanticipated appreciation in the
value of the Fund's securities would be substantially offset by a decline in the
value of the futures position.

On other occasions, a Fund may take a "long" position by purchasing such futures
contracts. This would be done, for example, when a Fund anticipates the
subsequent purchase of particular securities when it has the necessary cash, but
expects the prices or interest rates then available in the applicable market to
be less favorable than prices or rates that are currently available.

Options on Futures Contracts
The acquisition of put and call options on futures contracts will give a Fund
the right (but not the obligation), for a specified price, to sell or to
purchase, respectively, the underlying futures contract at any time during the
option period. As the purchaser of an option on a futures contract, a Fund
obtains the benefit of the futures position if prices move in a favorable
direction but limits its risk of loss in the event of an unfavorable price
movement to the loss of the option premium and transaction costs.

The writing of a call option on a futures contract generates a premium which may
partially offset a decline in the value of a Fund's assets. By writing a call
option, a Fund becomes obligated, in exchange for the premium, to sell a futures
contract, which may have a value higher than the exercise price. Conversely, the
writing of a put option on a futures contract generates a premium, which may
partially offset an increase in the price of securities that a Fund intends to
purchase. However, a Fund becomes obligated to purchase a futures contract,
which may have a value lower than the exercise price. Thus, the loss incurred by
a Fund in writing options on futures is potentially unlimited and may exceed the
amount of the premium received. A Fund will increase transaction costs in
connection with the writing of options on futures.

The holder or writer of an option on a futures contract may terminate its
position by selling or purchasing an offsetting option on the same series. There
is no guarantee that such closing transactions can be effected. A Fund's ability
to establish and close out positions on such options will be subject to the
development and maintenance of a liquid market.

Other Considerations
Where permitted, a Fund will engage in futures transactions and in related
options transactions only for bona fide hedging or to increase total return to
the extent permitted by CFTC regulations. A Fund will determine that the price
fluctuations in the futures contracts and options on futures used for hedging
purposes are substantially related to price fluctuations in securities held by
the Fund or which it expects to purchase. Except as stated below, each Fund's
futures transactions will be entered into for traditional hedging purposes,
i.e., futures contracts will be sold to protect against a decline in the price
of securities that the Fund owns, or futures contracts will be purchased to
protect the Fund against an increase in the price of securities it intends to
purchase. As evidence of this hedging intent, a Fund expects that on 75% or more
of the occasions on which they take a long futures or option position (involving
the purchase of futures contracts), that Fund will have purchased, or will be in
the process of purchasing, equivalent amounts of related securities in the cash
market at the time when the futures or option position is closed out. However,
in particular cases, when it is economically advantageous for a Fund to do so, a
long futures position may be terminated or an option may expire without the
corresponding purchase of securities or other assets.

As an alternative to literal compliance with the bona fide hedging definition, a
CFTC regulation permits a Fund to elect to comply with a different test, under
which the aggregate initial margin and premiums required to establish positions
in futures contracts and options on futures for the purpose of increasing total
return, will not exceed 5% of the Fund's net asset value, after taking into
account unrealized profits and losses on any such positions and excluding the
amount by which such options were in-the-money at the time of purchase. As
permitted, each Fund will engage in transactions in futures contracts and in
related options transactions only to the extent such transactions are consistent
with the requirements of the Internal Revenue Code of 1986, as amended (the
"Code") for maintaining its qualification as a regulated investment company for
federal income tax purposes.

Transactions in futures contracts and options on futures involve brokerage
costs, require margin deposits and, in the case of contracts and options
obligating a Fund to purchase securities or currencies, require the Fund to
segregate with its custodian liquid securities in an amount equal to the
underlying value of such contracts and options.

While transactions in futures contracts and options on futures may reduce
certain risks, such transactions themselves entail certain other risks. Thus,
unanticipated changes in interest rates or securities prices may result in a
poorer overall performance for a Fund than if it had not entered into any
futures contracts or options transactions. In the event of an imperfect
correlation between a futures position and the position which is intended to be
protected, the desired protection may not be obtained and a Fund may be exposed
to risk of loss.

Perfect correlation between a Fund's futures positions and current positions may
be difficult to achieve because no futures contracts based on individual equity
securities are currently available. The only futures contracts available to
these Funds for hedging purposes are various futures on U.S. government
securities and securities indexes.

Interest Rate Swaps

A Fund may enter into interest rate swaps for hedging purposes and non-hedging
purposes. Since swaps are entered into for good faith hedging purposes or are
offset by a segregated account as described below, the Investment Adviser
believes that swaps do not constitute senior securities as defined in the 1940
Act and, accordingly, will not treat them as being subject to the Fund's
borrowing restrictions. The net amount of the excess, if any, of a Fund's
obligations over its "entitlement" with respect to each interest rate swap will
be accrued on a daily basis and an amount of cash or other liquid securities
having an aggregate net asset value at least equal to such accrued excess will
be maintained in a segregated account by the Fund's custodian. A Fund will not
enter into any interest rate swap unless the credit quality of the unsecured
senior debt or the claims-paying ability of the other party thereto is
considered to be investment grade by the Investment Adviser. If there is a
default by the other party to such a transaction, a Fund will have contractual
remedies pursuant to the agreement. The swap market has grown substantially in
recent years with a large number of banks and investment banking firms acting
both as principals and as agents utilizing standardized swap documentation. As a
result, the swap market has become relatively liquid in comparison with the
markets for other similar instruments which are traded in the interbank market.

Swap Transactions
The Funds may, to the extent permitted by the SEC, enter into privately
negotiated "swap" transactions with other financial institutions in order to
take advantage of investment opportunities generally not available in public
markets. In general, these transactions involve "swapping" a return based on
certain securities, instruments, or financial indexes with another party, such
as a commercial bank, in exchange for a return based on different securities,
instruments, or financial indexes.

By entering into swap transactions, a Fund may be able to protect the value of a
portion of its securities against declines in market value. A Fund may also
enter into swap transactions to facilitate implementation of allocation
strategies between different market segments or to take advantage of market
opportunities which may arise from time to time.

A Fund may be able to enhance its overall performance if the return offered by
the other party to the swap transaction exceeds the return swapped by the Fund.
However, there can be no assurance that the return a Fund receives from the
counterparty to the swap transaction will exceed the return it swaps to that
party.

While a Fund will only enter into swap transactions with counterparties it
considers creditworthy, a risk inherent in swap transactions is that the other
party to the transaction may default on its obligations under the swap
agreement. The Fund will monitor the creditworthiness of parties with which it
has swap transactions. If the other party to the swap transaction defaults on
its obligations, a Fund would be limited to contractual remedies under the swap
agreement. There can be no assurance that a Fund will succeed when pursuing its
contractual remedies. To minimize a Fund's exposure in the event of default, the
Funds will usually enter into swap transactions on a net basis (i.e., the
parties to the transaction will net the payments payable to each other before
such payments are made). When a Fund enters into swap transactions on a net
basis, the net amount of the excess, if any, of the Fund's obligations over its
entitlements with respect to each such swap agreement will be accrued on a daily
basis and an amount of liquid assets having an aggregate market value at least
equal to the accrued excess will be segregated by the Fund's custodian. To the
extent a Fund enters into swap transactions other than on a net basis, the
amount segregated will be the full amount of the Fund's obligations, if any,
with respect to each such swap agreement, accrued on a daily basis. See
"Segregated Accounts."

Swap agreements are considered to be illiquid by the SEC staff and will be
subject to the limitations on illiquid
investments. See "Restricted and Illiquid Securities."

To the extent that there is an imperfect correlation between the return a Fund
is obligated to swap and the securities or instruments representing such return,
the value of the swap transaction may be adversely affected. A Fund therefore
will not enter into a swap transaction unless it owns or has the right to
acquire the securities or instruments representative of the return it is
obligated to swap with the counterparty to the swap transaction. It is not the
intention of the Funds to engage in swap transactions in a speculative manner,
but rather primarily to hedge or manage the risks associated with assets held in
a Fund, or to facilitate the implementation of strategies of purchasing and
selling assets for a Fund.

Foreign Securities
All Funds can invest in foreign securities. The foreign equity investments for
the Transamerica Premier Equity Fund and the Transamerica Premier Balanced Fund
will be limited to the purchase of American Depositary Receipts ("ADRs").
Foreign securities, other than ADRs, will be held in custody by State Street
London Limited, who will handle transactions with the transnational depositories
Euroclear and Cedel.

Segregated Accounts
In connection with when-issued securities, firm commitment agreements, futures,
the writing of options, and certain other transactions in which a Fund incurs an
obligation to make payments in the future, a Fund may be required to segregate
assets with its custodian in amounts sufficient to settle the transaction. To
the extent required, such segregated assets will consist of liquid securities.

Purchase of "When-Issued" Securities
The Funds may enter into firm commitment agreements for the purchase of
securities on a specified future date. Thus, the Funds may purchase, for
example, new issues of fixed-income instruments on a "when-issued" basis,
whereby the payment obligation, or yield to maturity, or coupon rate on the
instruments may not be fixed at the time of the transaction. In addition, the
Funds may invest in asset-backed securities on a delayed delivery basis. This
reduces the Funds' risk of early repayment of principal, but exposes the Funds
to some additional risk that the transaction will not be consummated.

When the Funds enter into firm commitment agreements, liability for the purchase
price and the rights and risks of ownership of the securities accrue to the
Funds at the time they become obligated to purchase such securities, although
delivery and payment occur at a later date. Accordingly, if the market price of
the security should decline, the effect of the agreement would be to obligate
the Funds to purchase the security at a price above the current market price on
the date of delivery and payment. During the time the Funds are obligated to
purchase such securities they will be required to segregate assets. See
"Segregated Accounts," on this page. A Fund will not purchase securities on a
"when-issued" basis if, as a result, more than 15% of the Fund's net assets
would be so invested.

Lending of Securities
Subject to investment restriction number 2 titled "Lending" (relating to loans
of securities), a Fund may lend its securities to brokers and dealers that are
not affiliated with the Investment Adviser, are registered with the Commission
and are members of the NASD, and also to certain other financial institutions.
All loans will be fully collateralized. In connection with the lending of its
securities, a Fund will receive as collateral cash, securities issued or
guaranteed by the United States government (i.e., Treasury securities), or other
collateral permitted by applicable law, which at all times while the loan is
outstanding will be maintained in amounts equal to at least 102% of the current
market value of the loaned securities, or such lesser percentage as may be
permitted by applicable law, as reviewed daily. The Fund lending its securities
will receive amounts equal to the interest or dividends paid on the securities
loaned and in addition will expect to receive a portion of the income generated
by the short-term investment of cash received as collateral or, alternatively,
where securities or a letter of credit are used as collateral, a lending fee
paid directly to the Fund by the borrower of the securities. Such loans will be
terminable by the Fund at any time and will not be made to affiliates of the
Investment Adviser. A Fund may terminate a loan of securities in order to regain
record ownership of, and to exercise beneficial rights related to, the loaned
securities, including but not necessarily limited to voting or subscription
rights, and may, in the exercise of its fiduciary duties, terminate a loan in
the event that a vote of holders of those securities is required on a material
matter. The Fund may pay reasonable fees to persons unaffiliated with the Fund
for services or for arranging such loans. Loans of securities will be made only
to firms deemed creditworthy. As with any extension of credit, however, there
are risks of delay in recovering the loaned securities, should the borrower of
securities default, become the subject of bankruptcy proceedings, or otherwise
be unable to fulfill its obligations or fail financially.

Borrowing Policies of the Funds
The Funds can borrow money from banks or engage in reverse repurchase
agreements, for temporary or emergency purposes. The Funds can borrow up to
one-third of a Fund's total assets. To secure borrowings, the Funds can mortgage
or pledge securities in an amount up to one-third of a Fund's net assets. If a
Fund borrows money, its share price may be subject to greater fluctuation until
the borrowing is paid off. The Fund will not make any additional investments,
other than reverse repurchase agreements, while the level of the borrowing
exceeds 5% of the Fund's total assets.

Short-term corporate obligations may also include variable amount master demand
notes. Variable amount master notes are obligations that permit the investment
of fluctuating amounts by a Fund at varying rates of interest pursuant to direct
arrangements between the Fund, as lender, and the borrower. These notes permit
daily changes in the amounts borrowed. The Fund has the right to increase the
amount under the note at any time up to the full amount provided by the note
agreement, or to decrease the amount, and the borrower may repay up to the full
amount of the note without penalty. The borrower is typically a large industrial
or finance company which also issues commercial paper. Typically these notes
provide that the interest rate is set daily by the borrower. The rate is usually
the same or similar to the interest rate on commercial paper being issued by the
borrower. Because variable amount master notes are direct lending arrangements
between the lender and borrower, it is not generally contemplated that such
instruments will be traded, and there is no secondary market for these notes,
although they are redeemable (and thus immediately repayable by the borrower) at
the face value, plus accrued interest, at any time. Accordingly, a Fund's right
to redeem is dependent on the ability of the borrower to pay principal and
interest on demand. In connection with master demand note arrangements, the Fund
considers earning power, cash flow, and other liquidity ratios of the issuer.
The Funds will only invest in master demand notes of U.S. issuers. While master
demand notes, as such, are not typically rated by credit rating agencies, if not
so rated the Funds may invest in them only if at the time of an investment the
issuer meets the criteria set forth in the Prospectus for all other commercial
paper issuers. A Fund will not invest more than 25% of its assets in master
demand notes.

Repurchase Agreements
Repurchase agreements have the characteristics of loans by a Fund, and will be
fully collateralized (either with physical securities or evidence of book entry
transfer to the account of the custodian bank) at all times. During the term of
the repurchase agreement the Fund retains the security subject to the repurchase
agreement as collateral securing the seller's repurchase obligation, continually
monitors the market value of the security subject to the agreement, and requires
the seller to deposit with the Fund additional collateral equal to any amount by
which the market value of the security subject to the repurchase agreement falls
below the resale amount provided under the repurchase agreement. The Funds will
enter into repurchase agreements only with member banks of the Federal Reserve
System, and with primary dealers in United States government securities or their
wholly-owned subsidiaries whose creditworthiness has been reviewed and found
satisfactory by the Investment Adviser and who have, therefore, been determined
to present minimal credit risk.

Securities underlying repurchase agreements will be limited to certificates of
deposit, commercial paper, bankers' acceptances, or obligations issued or
guaranteed by the United States government or its agencies or instrumentalities,
in which the Fund may otherwise invest.

If a seller of a repurchase agreement defaults and does not repurchase the
security subject to the agreement, the Fund would look to the collateral
security underlying the seller's repurchase agreement, including the securities
subject to the repurchase agreement, for satisfaction of the seller's obligation
to the Fund; in such event the Fund might incur disposition costs in liquidating
the collateral and might suffer a loss if the value of the collateral declines.
In addition, if bankruptcy proceedings are instituted against a seller of a
repurchase agreement, realization upon the collateral may be delayed or limited.

Reverse Repurchase Agreements and Leverage
We may enter into reverse repurchase agreements with Federal Reserve member
banks and U.S. securities dealers from time to time. In a reverse repurchase
transaction we sell securities and simultaneously agree to repurchase them at a
price which reflects an agreed-upon rate of interest. We will use the proceeds
of reverse repurchase agreements to make other investments which either mature
or are under an agreement to resell at a date simultaneous with or prior to the
expiration of the reverse repurchase agreement. The Fund may utilize reverse
repurchase agreements only if the interest income to be earned from the
investment proceeds of the transaction is greater than the interest expense of
the reverse repurchase transaction.

Reverse repurchase agreements are a form of leverage which increases the
opportunity for gain and the risk of loss for a given change in market value. In
addition, the gains or losses will cause the net asset value of the Funds'
shares to rise or fall faster than would otherwise be the case. There may also
be a risk of delay in the recovery of the underlying securities if the opposite
party has financial difficulties. A Fund's obligations under all borrowings,
including reverse repurchase agreements, will not exceed one-third of the Fund's
net assets.

The use of reverse repurchase agreements is included in the Fund's borrowing
policy and is subject to the limits of Section 18(f)(1) of the Investment
Company Act of 1940, as amended. During the time a reverse repurchase agreement
is outstanding, each Fund that has entered into such an agreement maintains a
segregated account with its Custodian containing cash or other liquid securities
having a value at least equal to the repurchase price under the reverse
repurchase agreement.

Other Investment Techniques and Opportunities
The Funds may take certain actions with respect to merger proposals, tender
offers, conversion of equity-related securities and other investment
opportunities with the objective of enhancing overall return, irrespective of
how these actions may affect the weight of the particular securities in a Fund.
It is not the policy of any of the Funds to select investments based primarily
on the possibility of one or more of these investment techniques and
opportunities being presented.

Investment Restrictions

Investment restrictions numbered 1 through 10 below have been adopted by the
Company as fundamental policies of the Funds. Under the Investment Company Act
of 1940, as amended (the "1940 Act"), a fundamental policy may not be changed
with respect to a Fund without the vote of a majority of the outstanding voting
securities (as defined in the 1940 Act) of the Fund. Each Fund will operate as a
"diversified company" within the meaning of the 1940 Act, except the
Transamerica Premier Aggressive Growth Fund which will operate as a
nondiversified fund. The Transamerica Premier Aggressive Growth Fund reserves
the right to become a diversified company by limiting the investments in which
more than 5% of its total assets are invested. Investment restrictions 11
through 15 may be changed by a vote of the Board of Directors of the Company
(the "Board") at any time.

1. Borrowing
Each Fund may borrow from banks for temporary or emergency (not leveraging)
purposes, including the meeting of redemption requests and cash payments of
dividends and distributions that might otherwise require the untimely
disposition of securities, in an amount not to exceed 33.33% of the value of the
Fund's total assets (including the amount borrowed) valued at market less
liabilities (not including the amount borrowed) at the time the borrowing is
made. Whenever outstanding borrowings, not including reverse repurchase
agreements, represent 5% or more of a Fund's total assets, the Fund will not
make any additional investments.

2. Lending
No Fund may lend its assets or money to other persons, except through (a)
purchasing debt obligations, (b) lending securities in an amount not to exceed
33.33% of the Fund's assets taken at market value, (c) entering into repurchase
agreements (d) trading in financial futures contracts, index futures contracts,
securities indexes and options on financial futures contracts, options on index
futures contracts, options on securities and options on securities indexes and
(e) entering into variable rate demand notes.

3. 5% Fund Rule
Except for the Transamerica Premier Aggressive Growth Fund, no Fund may purchase
securities (other than government securities) of any issuer if, as a result of
the purchase, more than 5% of the Fund's total assets would be invested in the
securities of the issuer, except that up to 25% of the value of the total assets
of each Fund, other than the Transamerica Premier Cash Reserve Fund, may be
invested without regard to this limitation. All securities of a foreign
government and its agencies will be treated as a single issuer for purposes of
this restriction. With respect to the Transamerica Premier Aggressive Growth
Fund, no more than 25% of the Fund's total assets may be invested in the
securities of a single issuer (other than cash items and government securities);
and with respect to 50% of the Fund's total assets, no more than 5% may be
invested in the securities of a single issuer (other than cash items and
government securities). Transamerica Premier Cash Reserve Fund may invest more
than 5% of the Fund's total assets, but not more than 25% of the Fund's total
assets, in the securities of one issuer for a period not to exceed three
business days.

4. 10% Issuer Rule
No Fund may purchase more than 10% of the voting securities of any one issuer,
or more than 10% of the outstanding securities of any class of issuer, except
that (a) this limitation is not applicable to a Fund's investments in government
securities and (b) up to 25% of the value of the assets of a Fund may be
invested without regard to these 10% limitations. All securities of a foreign
government and its agencies will be treated as a single issuer for purposes of
this restriction. These limitations are subject to any further limitation under
the 1940 Act.

5. 25% Industry Rule
No Fund may invest more than 25% of the value of its total assets in securities
issued by companies engaged in any one industry, including non-domestic banks or
any foreign government. This limitation does not apply to securities issued or
guaranteed by the United States government, its agencies or instrumentalities.
For the Transamerica Premier Cash Reserve Fund, investments in the following are
not subject to the 25% limitation: repurchase agreements and securities loans
collateralized by United States government securities, certificates of deposit,
bankers' acceptances, and obligations (other than commercial paper) issued or
guaranteed by United States banks and United States branches of foreign banks.

6. Underwriting
No Fund may underwrite any issue of securities, except to the extent that the
sale of securities in accordance with the Fund's investment objective, policies
and limitations may be deemed to be an underwriting, and except that the Fund
may acquire securities under circumstances in which, if the securities were
sold, the Fund might be deemed to be an underwriter for purposes of the
Securities Act of 1933, as amended.

7. Real Estate
No Fund may purchase or sell real estate or real estate limited partnership
interests, or invest in oil, gas or mineral leases, or mineral exploration or
development programs, except that a Fund may (a) invest in securities secured by
real estate, mortgages or interests in real estate or mortgages, (b) purchase
securities issued by companies that invest or deal in real estate, mortgages or
interests in real estate or mortgages, (c) engage in the purchase and sale of
real estate as necessary to provide it with an office for the transaction of
business or (d) acquire real estate or interests in real estate securing an
issuer's obligations, in the event of a default by that issuer.

8. Short Sales
No Fund may make short sales of securities or maintain a short position, unless
at all times when a short position is open, the Fund owns an equal amount of the
securities or securities convertible into or exchangeable for, without payment
of any further consideration, securities of the same issue as, and equal in
amount to, the securities sold short.

9. Margin Purchases
No Fund may purchase securities on margin, except that a Fund may obtain any
short-term credits necessary for the clearance of purchases and sales of
securities. For purposes of this restriction, the deposit or payment of initial
or variation margin in connection with futures contracts, financial futures
contracts or related options, and options on securities, and options on
securities indexes will not be deemed to be a purchase of securities on margin
by a Fund.

10. Commodities
No Fund may invest in commodities, except that each Fund (other than the
Transamerica Premier Cash Reserve Fund) may invest in futures contracts
(including financial futures contracts or securities index futures contracts)
and related options and other similar contracts as described in this Statement
of Additional Information and in the Prospectus.

11. Securities of Other Investment Companies

No Fund may purchase securities of other investment companies, other than a
security acquired in connection with a merger, consolidation, acquisition,
reorganization or offer of exchange and except as permitted under the 1940 Act,
if as a result of the purchase: (a) more than 10% of the value of the Fund's
total assets would be invested in the securities of investment companies; (b)
more than 5% of the value of the Fund's total assets would be invested in the
securities of any one investment company; or (c) the Fund would own more than 3%
of the total outstanding voting securities of any investment company.

12. Invest for Control
No Fund may invest in companies for the purposes of exercising control or
management.

13. 3-Year Rule
No Fund may purchase securities (other than government securities) if, as a
result of the purchase, the Fund would then have more than 5% of its total
assets invested in securities of companies (including predecessors) that have
been in continuous operation for fewer than three years. This restriction will
apply to the entity supplying the revenues from which the issue is to be paid.

14. Warrants
The Transamerica Premier Cash Reserve Fund may not invest in any form of
warrants.

15. Restricted and Illiquid Securities
No Fund will invest more than 15% (10% for the Transamerica Premier Cash Reserve
Fund) of its net assets in illiquid investments, which includes most repurchase
agreements maturing in more than seven days, currency and interest rate swaps,
time deposits with a notice or demand period of more than seven days, certain
over-the-counter option contracts, participation interests in loans, securities
that are not readily marketable, and restricted securities, unless the
Investment Adviser determines, based upon a continuing review of the trading
markets and available reliable price information for the specific security, that
such restricted securities are eligible to be deemed liquid under Rule 144A. For
purposes of this restriction, illiquid securities are securities that cannot be
disposed of by a Fund within seven days in the ordinary course of business at
approximately the amount at which the Fund has valued the securities. In no
event will any Fund's investment in illiquid securities, in the aggregate,
exceed 15% (10% for the Transamerica Premier Cash Reserve Fund) of its assets.
If through a change in values, net assets, or other circumstances, any Fund were
in a position where more than 15% of its assets were invested in illiquid
securities, it would take appropriate steps to protect liquidity.

The Board has adopted guidelines and delegated to the Investment Adviser the
daily function of determining and monitoring the liquidity of restricted
securities. The Board, however, will retain sufficient oversight and be
ultimately responsible for the determinations. When no market, dealer, or matrix
quotations are available for a security, illiquid investments are priced at fair
value as determined in good faith by a committee appointed by the Board. Since
it is not possible to predict with assurance exactly how the market for
restricted securities sold and offered under Rule 144A will develop, the Board
will carefully monitor each Fund's investments in these securities, focusing on
such important factors, among others, as valuation, liquidity, and availability
of information. To the extent that qualified institutional buyers become for a
time uninterested in purchasing these restricted securities, this investment
practice could have the effect of decreasing the level of liquidity in a Fund.

The purchase price and subsequent valuation of restricted securities normally
reflect a discount from the price at which such securities would trade if they
were not restricted, since the restriction makes them less liquid. The amount of
the discount from the prevailing market prices is expected to vary depending
upon the type of security, the character of the issuer, the party who will bear
the expenses of registering the restricted securities, and prevailing supply and
demand conditions.

Management of the Company

The names of the directors and executive officers of the Company, their business
addresses and their principal occupations during the past five years are listed
below. Each of the officers listed below is an employee of an entity that
provides services to the Funds. An asterisk (*) appears after the name of each
director who is an "interested person" of the Company, as defined in the 1940
Act.
<TABLE>
<CAPTION>

Position
Held with
Name, Address Transamerica Principal Occupations
& Age Investors During Past 5 Year
- --------------------------------------------------------------------------------
<S> <C> <C>
Nooruddin S. Veerjee* Chief Executive President, Transamerica Life
Transamerica Center Officer and Insurance and Annuity Company
1150 S. Olive St. Chairman of ("TALIAC"), and President,
Los Angeles, CA 90015 the Board Insurance Products Division,
Age 39 Transamerica Occidental Life

Insurance Company ("TOLIC").

Gary U. Rolle'* Director Chairman and President,
Transamerica Center Transamerica Income Shares Inc.;
1150 S. Olive St. Executive Vice President & Chief
Los Angeles, CA 90015 Investment Officer, Transamerica
Age 56 Investment Services ("TIS"); and
Chief Investment
Officer, TOLIC and
TALIAC.

Sidney E. Harris Director Dean of College of Business
Georgia State University Administration, Georgia
35 Broad Street, Suite 718 State University since 1997.
Atlanta, Georgia 30303 Formerly Dean of the Peter F.
Age 48 Drucker Management Center,

Claremont Graduate School.

Charles C. Reed Director Vice Chairman of Aon Risk
Alexander & Alexander Services Inc. of Southern
801 S. Figueroa St, Suite 700 California (business risk
Los Angeles, CA 90017 management and insurance
Age 64 brokerage).

Carl R. Terzian Director Chairman of Carl Terzian
Carl Terzian Associates Associates (public relations).
12400 Wilshire Blvd, Suite 200
Los Angeles, CA 90025
Age 62

Nicki Bair President Senior Vice President, TOLIC &
Transamerica Center TALIAC since 1996. Formerly Vice
1150 S. Olive St. President, TOLIC & TALIAC.
Los Angeles, CA 90015
Age 42

E. Joy Heckendorf Senior Vice Marketing Director, TALIAC since
Transamerica Center President 1996. Formerly President, Dreyfus
1150 S. Olive St. Service Corporation in 1996.
Los Angeles, CA 90015 Formerly Vice President Marketing,
Age 41 Janus Capital Corporation.

</TABLE>

The directors are responsible for major decisions relating to the Funds'
objectives, policies and operations pursuant to the Funds' Bylaws, Articles of
Incorporation, Maryland law and the 1940 Act. Day-to-day decisions by the
officers of the Funds are reviewed by the directors on a quarterly basis. During
the interim between quarterly Board meetings, the Executive Committee is
empowered to act when necessary for the Board of Directors.
The Executive Committee members are Nooruddin S. Veerjee and Gary U. Rolle.'

No officer, director or employee of Transamerica Investment Services, Inc. or
Transamerica Occidental Life Insurance Company or any of their affiliates
receives any compensation from the Company for acting as a director or officer
of the Company. Each director of the Company who is not an "interested person"
of the Company receives an annual fee of $10,000, and $1,000 for each meeting of
the Company's Board attended, and $500 for each Board committee meeting
attended, and is reimbursed for expenses incurred in connection with such
attendance.

Following is a table of the compensation expected to be paid to each director
during the current fiscal year.

Estimated Total
Annual Compensation
Compensation Pension Benefits at All Related
Name Paid Benefits Retirement Funds
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Sidney E. Harris $15,000 $0 $0 $15,000
Charles C. Reed $15,000 $0 $0 $15,000
Carl R. Terzian $15,000 $0 $0 $15,000
Gary U. Rolle' $0 $0 $0 $0
Nooruddin S. Veerjee $0 $0 $0 $0
</TABLE>

As of February 28, 1998 the officers and directors of Transamerica Investors,
Inc. together owned 2.9% of the Premier Aggressive Growth Fund. The officers and
directors of Transamerica Investors, Inc. together owned less than 1% of the
shares of each of the following equity Funds: Premier Small Company Fund,
Premier Equity Fund, Premier Value Fund, Premier Index Fund, and Premier
Balanced Fund.

As of February 28, 1998 the following shareholders owned 25% or more of the
indicated Funds:

Transamerica Percent
Shareholder Premier Fund Owned
ARC Reinsurance Corporation Aggressive Growth Fund 33%
1149 S. Hill St., H-344, Los Angeles, CA 90015
ARC Reinsurance Corporation Small Company Fund 39%
1149 S. Hill St., H-344, Los Angeles, CA 90015
Charles Schwab & Company, Inc. Equity Fund 35%
101 Montgomery St., San Francisco, CA 94104
ARC Reinsurance Corporation Index Fund 35%
1149 S. Hill St., H-344, Los Angeles, CA 90015
Transamerica Corporation Index Fund 31%
600 Montgomery St., San Francisco, CA 94111-2702
Transamerica Real Estate Tax Service Bond Fund 81%
1150 S. Olive St., Suite T-2700, Los Angeles, CA 90015
Transamerica Corporation Balanced Fund 42%
600 Montgomery St., San Francisco, CA 94111-2702

In addition, as of February 28, 1998 the following shareholders owned 5% or more
of the shares of the indicated equity Funds:
Transamerica Percent
Shareholder Premier Fund Owned
Charles Schwab & Company, Inc. Aggressive Growth Fund 10%
101 Montgomery St., San Francisco, CA 94104
Donaldson Lufkin & Jenrette Aggressive Growth Fund 8%
1 Pershing Plaza, 7th Floor, Jersey City, NJ 07399
Transamerica Occidental Life Insurance Co. Aggressive Growth Fund 7%
P.O. Box 512101, Los Angeles, CA 90051-0101
John A Kanellitsas & Randi S. Josel Aggressive Growth Fund 5%
1052 Oenoke Ridge Rd., New Canaan, CT 06840
Charles Schwab & Company, Inc. Small Company Fund 19%
101 Montgomery St., San Francisco, CA 94104
Transamerica Occidental Life Insurance Co. Small Company Fund 6%
P.O. Box 2101, Los Angeles, CA 90051-0101
National Financial Services Small Company Fund 6%
1 World Trade Ctr., 200 Liberty St., New York, NY 10048
Donaldson Lufkin & Jenrette Small Company Fund 5%
1 Pershing Plaza, 7th Floor, Jersey City, NJ 07399
Transamerica Corporation Equity Fund 10%
600 Montgomery St., San Francisco, CA 94111
Transamerica Occidental Life Insurance Co. Equity Fund 10%
P.O. Box 512101, Los Angeles, CA 90051-0101
Transamerica Occidental Life Insurance Co. Index Fund 12%
P.O. Box 512101, Los Angeles, CA 90051-0101
Transamerica Occidental Life Insurance Co. Balanced Fund 22%
P.O. Box 512101, Los Angeles, CA 90051-0101
Charles Schwab & Company, Inc. Balanced Fund 12%
101 Montgomery St., San Francisco, CA 94104

Investment Advisory and Other Services

Investment Adviser and Administrator
Responsibility for the management and supervision of the Company and its Funds
rests with the Board of Directors of Transamerica Investors, Inc. (the "Board").
The Investment Adviser and the Administrator are subject to the direction of the
Board.

The Funds' Investment Adviser is Transamerica Investment Services, Inc. (the
"Investment Adviser"), 1150 South Olive Street, Los Angeles, California 90015.
The Investment Adviser will: (1) supervise and manage the investments of each
Fund and direct the purchase and sale of its investment securities; and (2) see
that investments follow the investment objectives and comply with government
regulations. The Investment Adviser is also responsible for the selection of
brokers and dealers to execute transactions for each Fund. Some of these brokers
or dealers may be affiliated persons of the Company, the Investment Adviser,
Administrator, or the Distributor. Since it is our policy to seek the best price
and execution for each transaction, the Investment Adviser may give
consideration to brokers and dealers who provide us with statistical information
and other services in addition to transaction services.

For its services to the Funds, the Investment Adviser receives an Adviser Fee.
This fee is based on an annual percentage of the average daily net assets of
each Fund. It is accrued daily, and paid monthly. Certain fees were waived by
the Investment Adviser. Following are the amounts of Adviser Fees earned,
amounts waived and net amounts received for each Fund over the last three fiscal
years.
<TABLE>
<CAPTION>

- --------------------------------------------------- ------------------- ------------------ -----------------
Transamerica Premier Fund Adviser Fee Adviser Fee Adviser Fee
Fiscal Year Earned Waived Net Received
Aggressive Growth Fund
<S> <C> <C> <C>
1995 - - - - - -
1996 - - - - - -
1997 $42,912 $34,278 $8,634
Small Company Fund
1995 - - - - - -
1996 - - - - - -
1997 $38,671 $32,982 $5,689
Equity Fund
1995 $12,015 $12,015 - -
1996 $194,101 $134,162 $59,939
1997 $540,485 $28,198 $512,287
Index Fund
1995 $4,161 $4,161 - -
1996 $25,718 $25,718 - -
1997 $52,012 $244,224 - -
Bond Fund
1995 $15,656 $15,656 - -
1996 $72,032 $72,032 - -
1997 $79,524 $59,121 $20,403
Balanced Fund
1995 $17,091 $17,091 - -
1996 $106,251 $98,079 $8,172
1997 $159,452 $49,663 $109,789
Cash Reserve Fund
1995 $20,801 $20,801 - -
1996 $102,415 $102,415 - -
1997 $147,809 $308,778 - -
- --------------------------------------------------- ------------------- ------------------ -----------------
</TABLE>

The Adviser Fee for any Fund may be reduced in any year if the Fund's expenses
exceed the limits on investment company expenses imposed by any statute or
regulatory authority of any jurisdiction in which shares of the Fund are
qualified to offer for sale. The term "expenses" is defined in the statutes or
regulations of such jurisdictions, but it generally excludes brokerage
commissions, taxes, interest, and extraordinary expenses.

The Funds' Administrator is Transamerica Occidental Life Insurance Company (the
"Administrator"), 1150 South Olive Street, Los Angeles, California 90015. The
Administrator will: (1) provide the Funds with administrative and clerical
services, including the maintenance of the Funds' books and records; (2) arrange
periodic updating of the Funds' prospectus and any supplements; (3) provide
proxy materials and reports to Fund shareholders and the Securities and Exchange
Commission; and (4) provide the Funds with adequate office space and all
necessary office equipment and services. The Administrator also provides
services for the registration of Fund shares with those states and other
jurisdictions where its shares are offered or sold.

Transamerica Occidental Life Insurance Company is a wholly-owned subsidiary of
Transamerica Insurance Corporation
of California. Both Transamerica Insurance Corporation of California and
Transamerica Investment Services, Inc.
are wholly-owned subsidiaries of Transamerica Corporation, 600 Montgomery
Street, San Francisco, California
94111, one of the nation's largest financial services companies.

Custodian and Transfer Agent
State Street Bank and Trust Company ("State Street"), located at 225 Franklin
Street, Boston, Massachusetts 02110, serves as custodian to the Funds. Under its
custodian contract with the Company, State Street is authorized to appoint one
or more banking institutions as subcustodians of assets owned by each Fund. For
its custody services, State Street receives monthly fees charged to the Funds
based upon the month-end, aggregate net asset value of the Funds, plus certain
charges for securities transactions. The assets of the Company are held under
bank custodianship in accordance with the 1940 Act.

Under a Foreign Subcustodian Agreement with State Street, State Street London
Limited is responsible for foreign assets and transactions with the
transnational depositories of Euroclear and Cedel.

Under a Transfer Agency Agreement, State Street Bank is also responsible for
processing redemption requests and crediting dividends to the accounts of
shareholders of the Funds.

Distribution of Shares of the Funds
Transamerica Securities Sales Corporation ("TSSC") serves as the principal
underwriter of shares of the Funds, which are continuously distributed.
Transamerica Financial Resources, Inc. ("TFR") will also distribute shares of
the Funds pursuant to a selling agreement with TSSC. Both TSSC and TFR are
wholly-owned subsidiaries of Transamerica Insurance Corporation of California,
which is a wholly-owned subsidiary of Transamerica Corporation. TSSC and TFR are
registered with the Securities and Exchange Commission as broker/dealers, and
are members of the National Association of Securities Dealers, Inc. TSSC may
also enter into arrangements whereby Fund shares may be sold by other
broker/dealers, which may or may not be affiliated with TFR or TSSC.

The Company has adopted a plan of distribution pursuant to Rule 12b-1 (the
"Plan") under the Investment Company Act of 1940, as amended (the "1940 Act").
Under the Plan, each Fund makes payments monthly to TSSC based on an annual
percentage of the average net value of the assets represented by each class of
shares.

For the Investor Shares class, there is an annual 12b-1 distribution fee of .25%
of the average daily net assets of the Investor shares of each Fund, except the
Transamerica Premier Index and Cash Reserve Funds. The distribution fee for the
Index and Cash Reserve Funds is .10%. This fee covers such expenses as
preparation, printing and mailing of the Prospectus and Statement of Additional
Information, as well as sales literature and other media advertising, and
related expenses. It can also be used to compensate sales personnel involved
with selling the Funds.

During 1997 TSSC received $323,977 in 12b-1 fees, of which approximately $48,597
was spent on telemarketing and prospectus distribution and approximately
$275,380 was spent on advertising and sales promotion. There was no sales
compensation paid in 1997.

There are no 12b-1 fees on the Institutional Shares.

From time to time, and for one or more Funds within each class of Shares, the
Distributor may waive any or all of these fees at its discretion.

Purchases and Redemptions of Shares

Detailed information on how to purchase and redeem shares of a Fund is included
in the Prospectus under "How to Buy Shares" and "How to Sell Shares."

The right of redemption of shares of a Fund may be suspended or the date of
payment postponed (1) for any periods during which the New York Stock Exchange
is closed (other than for customary weekend and holiday closings), (2) when
trading in the markets the Fund normally utilizes is restricted, or an
emergency, as defined by the rules and regulations of the SEC, exists, making
disposal of a Fund's investments or determination of its net asset value not
reasonably practicable, or (3) for such other periods as the Securities and
Exchange Commission by order may permit for the protection of the Fund's
shareholders. A shareholder who pays for Fund shares by personal check will
receive the proceeds of a redemption of those shares when the purchase check has
been collected, which may take up to 10 days or more. Shareholders who
anticipate the need for more immediate access to their investment should
purchase shares with Federal funds or bank wire or by a certified or cashier's
check.

Investor Share Redemptions in Excess of $250,000
If you request a redemption of up to $250,000, the amount will be paid in cash.
If you redeem more than $250,000 from any one Investor Shares account in any one
Fund in a 90-day period, the entire redemption will be paid in cash if you
provide us with an unconditional instruction to redeem at least 30 days prior to
the date on which the redemption transaction is to occur. The instruction must
specify the dollar amount or number of shares to be redeemed and the date of the
transaction. The date must be a minimum of 30 days after receipt of the
instruction by us. If you have authorized us to accept such instructions, your
instruction may be by telephone or in writing without a signature guarantee. If
you have not done so, the instruction must be in writing with all signatures
guaranteed. Your shares will be redeemed at the price determined on the date you
specify in your instruction and the proceeds will be sent by mail, wire or
electronic funds transfer in accordance with the procedures specified in the
Prospectus.

Receipt of your instruction to redeem 30 days prior to the transaction provides
the Fund with sufficient time to raise the cash in an orderly manner to pay the
redemption and thereby minimizes the effect of the redemption on the Fund and
its shareholders.

You may cancel your redemption instruction prior to the transaction date.
However, if you do so, we may not accept an instruction from you to redeem in
accordance with this alternative for a period of 90 days from the date of
cancellation.

If you do not provide your instruction to redeem 30 days prior to the
transaction, you have two alternatives:

(1)You may redeem up to $250,000 in cash the first day, and the remainder over
the next 20 business days at the rate of not less than $50,000 or more than
$500,000 per day (and such lesser amount on the last day to redeem all the
shares remaining), but not more than $10 million total. The redemption each day
will be at the price determined that day. For example, a request to redeem
$525,000, or a number of shares worth $525,000, will be effective at $250,000 on
the first day, and $50,000 per day for the next five business days, and $25,000
on the last day. A request to redeem $11 million would be effective at $250,000
the first day and $500,000 per day for the next 20 business days ($10.25 million
total) and the remaining $750,000 to be redeemed by the delivery of securities.

Since the share price is determined not on the date the redemption request is
received, but instead on succeeding business days when the redemption is
effected, the number of shares redeemed will vary from day to day. The total you
will receive over the entire period may be more or less than the amount that you
would have received had the redemption been effected on the day your redemption
request was received. In the first example above, falling per-share prices could
cause the value of the shares on the last day to be less than $25,000, and the
redemption on the last day would be only of the shares left in the account.

(2)In lieu of receiving cash as described earlier, you may elect to receive
securities from the Fund. The securities delivered will be selected at the sole
discretion of the Fund. They will be readily marketable with an active and
substantial secondary market given the type of companies involved and the
characteristics of the markets in which they trade, but will not necessarily be
representative of the entire Fund, and will be securities that the Fund may
regard as least desirable. You may incur brokerage costs in converting the
securities to cash.

The method of valuing securities used to make the redemptions will be the same
as the method of valuing securities described under "Determination of Net Asset
Value," page 22, and such valuation will be made as of the same time the
redemption price is determined.

These alternatives are designed to lessen the adverse effect of large
redemptions on the Fund and its non-redeeming shareholders. For example, assume
that a shareholder redeems $1 million on a given day and that the Fund pays him
$250,000 in cash and is required to sell securities for $750,000 to raise the
remainder of the cash to pay him. The securities valued at $750,000 on the day
of the redemption may bring a lower price when sold thereafter, so that more
securities may be sold to realize $750,000. In that case, the redeeming
shareholder's proceeds would be fixed at $750,000 and the market risk would be
imposed on the Fund and its remaining shareholders, who would suffer the loss.
By delivering securities instead of cash or staggering the payment of cash, the
market risk is imposed on the redeeming shareholder. If securities are
delivered, the redeeming shareholder (and not the Fund) bears the brokerage cost
of selling them.

This section does not apply to the Institutional Class of Shares.

Brokerage Allocation

Subject to the direction of the Board, the Investment Adviser has responsibility
for making a Fund's investment decisions, for effecting the execution of trades
for a Fund and for negotiating any brokerage commissions thereon. It is the
Investment Adviser's policy to obtain the best price and execution available,
giving attention to net price (including commissions where applicable),
execution capability (including the adequacy of a firm's capital position), and
other services related to execution; the relative priority given to these
factors will depend on all of the circumstances regarding a specific trade.

The Investment Adviser receives a variety of brokerage and research services
from brokerage firms in return for the execution by such brokerage firms of
trades on behalf of the Funds. These brokerage and research services include,
but are not limited to, quantitative and qualitative research information and
purchase and sale recommendations regarding securities and industries, analyses
and reports covering a broad range of economic factors and trends, statistical
data relating to the strategy and performance of the Funds and other investment
companies, services related to the execution of trades in a Fund's securities
and advice as to the valuation of securities. The Investment Adviser considers
the quantity and quality of such brokerage and research services provided by a
brokerage firm along with the nature and difficulty of the specific transaction
in negotiating commissions for trades in a Fund's securities and may pay higher
commission rates than the lowest available when it is reasonable to do so in
light of the value of the brokerage and research services received generally or
in connection with a particular transaction.

Consistent with federal legislation, the Investment Adviser may obtain such
brokerage and research services regardless of whether they are paid for (1) by
means of commissions, or (2) by means of separate, non-commission payments. The
Investment Adviser's judgment as to whether and how it will obtain the specific
brokerage and research services will be based upon its analysis of the quality
of such services and the cost (depending upon the various methods of payment
which may be offered by brokerage firms) and will reflect the Investment
Adviser's opinion as to which services and which means of payment are in the
long-term best interests of the Funds. The Investment Adviser will not effect
any brokerage transactions in the Funds' securities with any affiliate of the
Company, the Investment Adviser, or the Administrator except in accordance with
applicable SEC rules.

Certain executive officers of the Investment Adviser also have supervisory
responsibility with respect to the securities of the Investment Adviser's own
accounts. In placing orders for the purchase and sale of debt securities for a
Fund, the Investment Adviser will normally use its own facilities. A Fund and
another fund or another advisory client of the Investment Adviser, or the
Investment Adviser itself, may desire to buy or sell the same publicly traded
security at or about the same time. In such a case, the purchases or sales will
normally be allocated as nearly as practicable on a pro rata basis in proportion
to the amounts to be purchased or sold by each. In determining the amounts to be
purchased and sold, the main factors to be considered are the respective
investment objectives of a Fund and the other funds, the relative size of
holdings of the same or comparable securities, availability of cash for
investment by a Fund and the other funds, and the size of their respective
investment commitments.

During the year ending December 31, 1997, all transactions were allocated to
brokers and dealers on the basis of the best execution and no commissions were
paid based on research or other services provided.

Over the last three fiscal years the Funds have paid the following brokerage
commissions:
<TABLE>
<CAPTION>

- ------------------------------------------------ --------------- -------------- ---------------
Transamerica Premier Fund 1997 1996 1995
- ------------------------------------------------ --------------- -------------- ---------------
<S> <C> <C> <C>
Aggressive Growth Fund $21,170 - - - -
Small Company Fund $48,326 - - - -
Equity Fund $127,954 $50,745 $44,132
Index Fund $7,134 $9,599 $16,636
Bond Fund $23,822 $2,828 $19,275
Balanced Fund $20,909 $13,424 $48,901
Total $251,312 $78,592 $130,939
- ------------------------------------------------ --------------- -------------- ---------------
</TABLE>

The Premier Aggressive Growth and Premier Small Company Funds were launched in
July 1997. High fees in 1995 reflect the start up costs of these Funds.
Increases in 1997 over 1996 for these Funds were due to a large increase in
sales in 1997, particularly for the Premier Equity Fund.

On December 31, 1997, the Premier Equity Fund held stock in Charles Schwab
Corporation with a value of $4,717,969 and stock in Merrill Lynch & Company
Incorporated with a value of $2,917,500. The Premier Index Fund held stock in
Charles Schwab Corporation with a value of $29,818, stock in Chase Manhattan
Corporation with a value of $115,413, and stock in Merrill Lynch & Company
Incorporated with a value of $60,830. The Premier Bond Fund held bonds issued by
Morgan Stanley, Dean Witter, Discover and Co. with a value of $542,035. The
Premier Balanced Fund held stock in Charles Schwab Corporation with a value of
$943,594. In 1997, Charles Schwab & Co., Merrill Lynch, Pierce, Fenner, & Smith,
Chase Securities, Morgan Stanley & Co., Inc. and J.P. Morgan were among these
Funds' regular brokers or dealers as defined in Rule 10b-1 under the Investment
Company Act of 1940.

Charles Schwab & Company is considered an affiliated broker, because the Chief
Executive Officer of its parent corporation is on the board of directors of the
parent corporation of the Investment Adviser and the Administrator of the Funds.
The amount of commissions paid by all Funds to Charles Schwab & Company over the
last three fiscal years was $0 in 1995, $0 in 1996 and $300 in 1997, totaling
$300 over the three years. For 1997, the business done through Charles Schwab &
Company represents 0.11% of the total commissions paid by the Funds to all
brokers, and 0.14% of the aggregate dollar amount of transactions made by the
Funds through all brokers.

Determination of Net Asset Value

Under the 1940 Act, the Board is responsible for determining in good faith the
fair value of securities of each Fund, and each class of each Fund. In
accordance with procedures adopted by the Board, the net asset value per share
is calculated by determining the net worth of each Fund (assets, including
securities at market value, minus liabilities) divided by the number of that
Fund's outstanding shares. All securities are valued as of the close of regular
trading on the New York Stock Exchange (normally 4:00 p.m. Eastern Time). Except
for the Transamerica Premier Cash Reserve Fund, each Fund will compute its net
asset value once daily at the close of such trading on each day that the New
York Stock Exchange is open for business (as described in the Prospectus). The
Transamerica Premier Cash Reserve Fund will determine its net asset value only
on days that the Federal Reserve is open.

In the event that the New York Stock Exchange, the Federal Reserve, or the
national securities exchange on which stock options are traded adopt different
trading hours on either a permanent or temporary basis, the Board will
reconsider the time at which net asset value is computed. In addition, the Funds
may compute their net asset value as of any time permitted pursuant to any
exemption, order or statement of the SEC or its staff.

Assets of the Funds (other than the Transamerica Premier Cash Reserve Fund) are
valued as follows: (a) equity securities and other similar investments
("Equities") listed on any U.S. or foreign stock exchange or the National
Association of Securities Dealers Automated Quotation System ("NASDAQ") are
valued at the last sale price on that exchange or NASDAQ on the valuation day;
if no sale occurs, Equities traded on a U.S. exchange or NASDAQ are valued at
the mean between the closing bid and closing asked prices. Equities traded on a
foreign exchange will be valued at the official bid price; (b) over-the-counter
securities not quoted on NASDAQ are valued at the last sale price on the
valuation day or, if no sale occurs, at the mean between the last bid and asked
prices; (c) debt securities purchased with a remaining maturity of 61 days or
more are valued on the basis of dealer-supplied quotations or by a pricing
service selected by the Investment Adviser and approved by the Board; (d)
options and futures contracts are valued at the last sale price on the market
where any such option or futures contract is principally traded; (e)
over-the-counter options are valued based upon prices provided by market makers
in such securities or dealers in such currencies; (f) forward foreign currency
exchange contracts are valued based upon quotations supplied by dealers in such
contracts; (g) all other securities and other assets, including those for which
a pricing service supplies no quotations or quotations are not deemed by the
Investment Adviser to be representative of market values, but excluding debt
securities with remaining maturities of 60 days or less, are valued at fair
value as determined in good faith pursuant to procedures established by the
Board; and (h) debt securities with a remaining maturity of 60 days or less will
be valued at their amortized cost, which approximates market value.

Equities traded on more than one U.S. national securities exchange or foreign
securities exchange are valued at the last sale price on each business day at
the close of the exchange representing the principal market for such securities.
The value of all assets and liabilities expressed in foreign currencies will be
converted into U.S. dollar values at the noon (Eastern Time) Reuters spot rate.
If such quotations are not available, the rate of exchange will be determined in
good faith by or under procedures established by the Board.

All of the assets of the Transamerica Premier Cash Reserve Fund are valued on
the basis of amortized cost in an effort to maintain a constant net asset value
of per share $1.00. The Board has determined that to be in the best interests of
the Transamerica Premier Cash Reserve Fund and its shareholders. Under the
amortized cost method of valuation, securities are valued at cost on the date of
their acquisition, and thereafter a constant accretion of any discount or
amortization of any premium to maturity is assumed, regardless of the impact of
fluctuating interest rates on the market value of the security. While this
method provides certainty in valuation, it may result in periods in which value
as determined by amortized cost is higher or lower than the price the Fund would
receive if it sold the security. During such periods, the quoted yield to
investors may differ somewhat from that obtained by a similar fund which uses
available market quotations to value all of its securities. The Board has
established procedures reasonably designed, taking into account current market
conditions and the Transamerica Premier Cash Reserve Fund's investment
objective, to stabilize the net asset value per share for purposes of sales and
redemptions at $1.00. These procedures include review by the Board, at such
intervals as it deems appropriate, to determine the extent, if any, to which the
net asset value per share calculated by using available market quotations
deviates from $1.00 per share. In the event such deviation should exceed one
half of one percent, the Board will promptly consider initiating corrective
action. If the Board believes that the extent of any deviation from a $1.00
amortized cost price per share may result in material dilution or other unfair
results to new or existing shareholders, it will take such steps as it considers
appropriate to eliminate or reduce these consequences to the extent reasonably
practicable. Such steps may include: (1) selling securities prior to maturity;
(2) shortening the average maturity of the fund; (3) withholding or reducing
dividends; or (4) utilizing a net asset value per share determined from
available market quotations. Even if these steps were taken, the Transamerica
Premier Cash Reserve Fund's net asset value might still decline.

Performance Information

Performance information for the Funds including the yield and effective yield of
the Transamerica Premier Cash Reserve Fund, the yield of the remaining Funds,
and the total return of all Funds, may appear in reports or promotional
literature to current or prospective shareholders.

Money Market Fund Yields
Current yield for the Transamerica Premier Cash Reserve Fund will be computed by
determining the net change, exclusive of capital changes at the beginning of a
seven-day period in the value of a hypothetical investment, subtracting any
deductions from shareholder accounts, and dividing the difference by the value
of the hypothetical investment at the beginning of the base period to obtain the
base period return. This base period return is then multiplied by (365/7) with
the resulting yield figure carried to at least the nearest hundredth of one
percent.

Calculation of "effective yield" begins with the same "base period return" used
in the calculation of yield, which is then annualized to reflect weekly
compounding pursuant to the following formula:

Effective Yield = [(Base Period Return + 1)365/7] - 1

30-Day Yield for Non-Money Market Funds
Quotations of yield for the remaining Funds will be based on all investment
income per share earned during a particular 30-day period, less expenses accrued
during the period ("net investment income"), and will be computed by dividing
net investment income by the value of a share on the last day of the period,
according to the following formula:

Yield = 2[({[a-b]/cd} + 1)6 - 1] Where:
a = dividends and interest earned during the period b = the expenses accrued for
the period (net of reimbursements) c = the average daily number of shares
outstanding during the period d = the maximum offering price per share on the
last day of the period

Average Annual Total Return for Non-Money Market Funds
Quotations of average annual total return for any Fund will be expressed in
terms of the average annual compounded rate of return of a hypothetical
investment in a Fund over a period of one, five and ten years (or, if less, up
to the life of the Fund), calculated pursuant to the formula:

P(1 + T)n = ERV Where:
P = a hypothetical initial payment of $1,000 T = an average annual total return
n = the number years
ERV = the ending redeemable value of a hypothetical $1,000 payment made at the
beginning of the 1, 5, or 10 year period at the end of the 1, 5, 10 year period
(or fractional portion thereof)

Any performance data quoted for a Fund will represent historical performance and
the investment return and principal value of an investment will fluctuate so
that an investor's shares, when redeemed, may be worth more or less than
original cost.

Published Performance
From time to time the Company may publish, or provide telephonically, an
indication of the Funds' past performance as measured by independent sources
such as (but not limited to) Lipper Analytical Services, Incorporated,
Weisenberger Investment Companies Service, IBC's Money Fund Report, Barron's,
Business Week, Changing Times, Financial World, Forbes, Fortune, Money, Personal
Investor, Sylvia Porter's Personal Finance and The Wall Street Journal. The
Company may also advertise information which has been provided to the NASD for
publication in regional and local newspapers.

In addition, the Company may from time to time advertise its performance
relative to certain indexes and benchmark investments, including:
the Lipper Analytical Services, Inc. Mutual Fund Performance Analysis,
Fixed-Income Analysis and Mutual
Fund Indexes (which measure total return and average current yield for the
mutual fund industry and rank
mutual fund performance);
the CDA Mutual Fund Report published by CDA Investment Technologies, Inc.
(which analyzes price, risk and
various measures of return for the mutual fund industry);
the Consumer Price Index published by the U.S. Bureau of Labor Statistics
(which measures changes in the
price of goods and services);
Stocks, Bonds, Bills and Inflation published by Ibbotson Associates (which
provides historical performance figures for stocks, government securities
and inflation);
the Hambrecht & Quist Growth Stock Index;
the NASDAQ OTC Composite Prime Return;
the Russell Midcap Index;
the Russell 2000 Index;
the ValueLine Composite;
the Wilshire 5000 Index;
the Salomon Brothers World Bond Index (which measures the total return in
U.S. dollar terms of government bonds, Eurobonds and foreign bonds of ten
countries, with all such bonds having a minimum maturity of five years);
the Shearson Lehman Brothers Aggregate Bond Index or its component indexes
(the Aggregate Bond Index
measures the performance of Treasury, U.S. government agencies, mortgage
and Yankee bonds);
the S&P Bond indexes (which measure yield and price of corporate,
municipal and U.S. government bonds);
the J.P. Morgan Global Government Bond Index;
IBC's Money Market Fund Report (which provides industry averages of 7-day
annualized and compounded yields
of taxable, tax-free and U.S. government money market funds);
historical investment data supplied by the research departments of Goldman
Sachs, Lehman Brothers, First Boston Corporation, Morgan Stanley (including
EAFE), Salomon Brothers, Merrill Lynch, Donaldson Lufkin and Jenrette or
other providers of such data;
the FT-Actuaries Europe and Pacific Index;
mutual fund performance indexes published by Morningstar, Inc., Variable
Annuity Research & Data Service, the Investment Company Institute, the
Investment Company Data, Inc., Media General Financial, and Value Line
Mutual Fund Survey; and
financial industry analytical surveys, such as Piper Universe.

The composition of the investments in such indexes and the characteristics of
such benchmark investments are not identical to, and in some cases are very
different from, those of a Fund. These indexes and averages are generally
unmanaged and the items included in the calculations of such indexes and
averages may be different from those of the equations used by the Company to
calculate a Fund's performance figures.

The Funds may also from time to time include in such advertising a total return
figure that is not calculated according to the formula set forth above in order
to compare more accurately the performance of a Fund with other measures of
investment return. For example, unmanaged indexes may assume the reinvestment of
dividends but generally do not reflect deductions for administrative and
management costs and expenses.

The Company may from time to time summarize the substance of discussions
contained in shareholder reports in advertisements and publish the Investment
Adviser's views as to markets, the rationale for a Fund's investments, and
discussions of the Fund's current asset allocation.

From time to time, advertisements or information may include a discussion of
certain attributes or benefits to be derived by an investment in a particular
Fund. Such advertisements or information may include symbols, headlines or other
material which highlight or summarize the information discussed in more detail
in the communication.

Such performance data will be based on historical results and will not be
intended to indicate future performance. The total return or yield of a Fund
will vary based on market conditions, expenses, investments, and other factors.
The value of a Fund's shares will fluctuate and an investor's shares may be
worth more or less than their original cost upon redemption. The Company may
also, at its discretion, from time to time make a list of a Fund's holdings
available to investors upon request.

Taxes

Each Fund intends to qualify and to continue to qualify as a regulated
investment company ("RIC") under the Internal Revenue Code of 1986, as amended
(the "Code"). The distribution requirement, in order to qualify for that
treatment, is that each Fund must distribute to its shareholders for each
taxable year at least 90% of its investment company taxable income, consisting
generally of net investment income, net short-term capital gains, and net gains
from certain foreign currency transactions. The Company must also meet the
following additional requirements: (1) The Fund must derive at least 90% of its
gross income each taxable year from dividends, interest, payments with respect
to securities loans, and gains from the sale or other disposition of securities
or foreign currencies, or other income (including gains from options, futures,
or forward contracts) derived with respect to its business of investing in
securities or those currencies ("Income Requirement"); (2) At the close of each
quarter of the Fund's taxable year, at least 50% of the value of its total
assets must be represented by cash and cash items, U.S. government securities,
securities of other RICs, and other securities that, with respect to any one
issuer, do not exceed 5% of the value of the Fund's total assets and that do not
represent more than 10% of the outstanding voting securities of the issuer; and
(3) At the close of each quarter of the Fund's taxable year, not more than 25%
of the value of its total assets may be invested in securities (other than U.S.
government securities or the securities of other RICs) of any one issuer.

Each Fund will be subject to a nondeductible 4% excise tax on amounts not
distributed to shareholders on a timely basis. The Fund intends to make
sufficient distributions to avoid this 4% excise tax.

Dividends and interest received by each Fund may be subject to income,
withholding, or other taxes imposed by foreign countries and U.S. possessions
that would reduce the yield on its securities. Tax conventions between certain
countries and the United States may reduce or eliminate these foreign taxes,
however, and foreign countries generally do not impose taxes on capital gains
with respect to investments by foreign investors.

Certain of the Funds may invest in the stock of "passive foreign investment
companies" ("PFICs"). A PFIC is a foreign corporation that, in general, meets
either of the following tests: (1) At least 75% of its gross income is passive;
or (2) An average of at least 50% of its assets produce, or are held for the
production of, passive income. Under certain circumstances, the Fund would be
subject to Federal income tax on a portion of any "excess distribution" received
on the stock of a PFIC or of any gain on disposition of that stock (collectively
"PFIC income"), plus interest thereon, even if the Fund distributes the PFIC
income as a taxable dividend to its shareholders. The balance of the PFIC income
would be included in the Fund's investment company taxable income, and
accordingly, will not be taxable to it to the extent that income is distributed
to its shareholders. If the Fund invests in a PFIC and elects to treat the PFIC
as a "qualified electing fund," then in lieu of the foregoing tax and interest
obligation, that Fund will be required to include income each year to its pro
rata share of the qualified electing fund's annual ordinary earnings and net
capital gain (the excess of net long-term capital gain over net short-term
capital loss), even if they are not distributed to the Fund; those amounts would
be subject to the Distribution Requirement. The ability of a Fund to make this
election may be limited.

The use of hedging strategies, such as writing (selling) and purchasing options
and futures contracts and entering into forward contracts, involves complex
rules that will determine for income tax purposes the character and timing of
recognition of the income received in connection therewith by a Fund. Income
from the disposition of foreign currencies (except certain gains therefrom that
may be excluded by future regulations), and income from transactions in options,
futures, and forward contracts derived by a Fund with respect to its business of
investing in securities or foreign currencies, will qualify as permissible
income under the Income Requirement.

The foregoing is only a general summary of some of the important Federal income
tax considerations generally affecting the Funds and their shareholders. No
attempt is made to present a complete explanation of the Federal tax treatment
of the Funds' activities. Potential investors are urged to consult their own tax
advisers for more detailed information and for information regarding any
applicable state, local, or foreign taxes.

Other Information

Legal Matters
An opinion of counsel as to the legality of the shares of the Funds has been
given by Reid A. Evers.

Independent Auditors
Ernst & Young LLP, 515 S. Flower Street, Los Angeles, California 90071, performs
audits of the Funds' financial statements.

Registration Statement
A Registration Statement has been filed with the Securities and Exchange
Commission, under the Securities Act of 1933 as amended, with respect to the
Company and the shares of the Funds discussed in this Statement of Additional
Information. Not all of the information set forth in the Registration Statement,
amendments and exhibits thereto has been included in the Prospectus or this
Statement of Additional Information. Statements contained herein concerning the
contents of certain other legal instruments are intended to be summaries. For a
complete statement of the terms of these documents, reference should be made to
the instruments filed with the Commission.

Financial Statements

The audited Annual Report for the fiscal year ended December 31, 1997 is a
separate report supplied with this Statement of Additional Information and is
incorporated herein by reference.

<PAGE>

Appendix A

Description of Corporate Bond Ratings

Moody's Investors Service, Inc. and Standard and Poor's Corporation are two
prominent independent rating agencies
that rate the quality of bonds. Following are expanded explanations of the
ratings shown in the Prospectus.

Moody's Investors Service, Inc.
Aaa: Bonds with this rating are judged to be of the best quality. They carry the
smallest degree of investment
risk. Interest payments are protected by a large or exceptionally stable margin
and principal is secure.

Aa: Bonds with this rating are judged to be of high quality by all standards.
Together with the Aaa group they comprise what are generally known as high grade
bonds. They are rated lower than the best bonds because margins of protection
may not be as large as in Aaa securities or fluctuation of protective elements
may be of greater amplitude.

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

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

Ba: Bonds with this rating are judged to have speculative elements; their future
cannot be considered as well-assured. Often the protection of interest and
principal payments may be very moderate and thereby not well safeguarded during
both good and bad times over the future. Uncertainty of position characterizes
bonds in this class.

B: Bonds with this rating generally lack characteristics of desirable
investments. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small.

Caa: Bonds with this rating are of poor standing. Such issues may be in default
or there may be present elements
of danger with respect to principal or interest.

Ca: Bonds with this rating represent obligations which are speculative to a high
degree. Such issues are often in
default or have other marked shortcomings.

C: Bonds with this rating are the lowest rated class of bonds. Issues so rated
can be regarded as having
extremely poor prospects of ever attaining any real investment standing.

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

Generally, investment-grade debt securities are those rated Baa3 or better by
Moody's.

Standard & Poor's Corporation
AAA: This rating is the highest rating assigned by Standard & Poor's. Capacity
to pay interest and repay
principal is very strong.

AA: This rating indicates a very strong capacity to pay interest and repay
principal and differs from the higher rated issues only by a small degree.

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

BBB: This rating indicates an adequate capacity to pay interest and repay
principal. Whereas it normally exhibits adequate protection parameters, adverse
economic conditions or changing circumstances are more likely to lead to a
weakened capacity to pay interest and repay principal for debt in this category
than in higher rated categories.

BB, B, CCC, CC: These ratings indicate, on balance, a predominantly speculative
capacity of the issuer to pay interest and repay principal in accordance with
the terms of the obligation. BB indicates the lowest degree of speculation and
CC the highest degree of speculation. While such debt will likely have some
quality and protective characteristics, these are outweighed by large
uncertainties or major risk exposures to adverse conditions.

C: This rating is reserved for income bonds on which no interest is being paid.

D: This rating indicates debt in default, and payment of interest and/or
repayment of principal are in arrears.

The ratings from "AA" to "B" may be modified by the addition of a plus or minus
sign to show relative standing within the major rating categories, for example A
or B+.

Generally, investment-grade debt securities are those rated BBB or better by
Standard & Poor's.

<PAGE>

Appendix B

Description of Fixed-Income Instruments

U.S. Government Obligations
Securities issued or guaranteed as to principal and interest by the United
States government include a variety of Treasury securities, which differ in
their interest rates, maturities and times of issuance. Treasury Bills have a
maturity of one year or less; Treasury Notes have maturities of one to ten
years; and Treasury Bonds can be issued with any maturity period but generally
have a maturity of greater than ten years. Agencies of the United States
government which issue or guarantee obligations include, among others, the
Export-Import Bank of the United States, Farmers Home Administration, Federal
Housing Administration, Government National Mortgage Association, Maritime
Administration, Small Business Administration and The Tennessee Valley
Authority. Obligations of instrumentalities of the United States government
include securities issued or guaranteed by, among others, banks of the Farm
Credit System, the Federal National Mortgage Association, Federal Home Loan
Banks, Federal Home Loan Mortgage Corporation, Student Loan Marketing
Association, Federal Intermediate Credit Banks, Federal Land Banks, Banks for
Cooperatives, and the U.S. Postal Service. Some of these securities are
supported by the full faith and credit of the U.S. Treasury; others are
supported by the right of the issuer to borrow from the Treasury, while still
others are supported only by the credit of the instrumentality.

Certificates of Deposit
Certificates of deposit are generally short-term, interest-bearing negotiable
certificates issued by banks, savings and loan associations or savings banks
against funds deposited in the issuing institution.

Time Deposits
Time deposits are deposits in a bank or other financial institution for a
specified period of time at a fixed interest rate for which a negotiable
certificate is not received. Certain time deposits may be considered illiquid.

Bankers' Acceptance
A bankers' acceptance is a draft drawn on a commercial bank by a borrower,
usually in connection with an international commercial transaction (to finance
the import, export, transfer or storage of goods). The borrower is liable for
payment as well as the bank, which unconditionally guarantees to pay the draft
at its face amount on the maturity date. Most acceptances have maturities of six
months or less and are traded in secondary markets prior to maturity.

Commercial Paper
Commercial paper refers to short-term, unsecured promissory notes issued by
corporations to finance short-term credit needs. Commercial paper is usually
sold on a discount basis and has a maturity at the time of issuance not
exceeding 270 days.

Variable Rate, Floating Rate, or Variable Amount Securities
Variable rate, floating rate, or variable amount securities are short-term
unsecured promissory notes issued by corporations to finance short-term credit
needs. These are interest-bearing notes on which the interest rate generally
fluctuates on a scheduled basis.

Corporate Debt Securities
Corporate debt securities are debt issued by a corporation that pays interest
and principal to the holders at specified times.

Asset-Backed Securities
Asset-backed securities are securities which represent an undivided fractional
interest in a trust whose assets generally consist of mortgages, motor vehicle
retail installment sales contracts, or other consumer-based loans.

Participation Interests in Loans
A participation interest in a loan entitles the purchaser to receive a portion
of principal and interest payments due on a commercial loan extended by a bank
to a specified company. The purchaser of such an interest has no recourse
against the bank if payments of principal and interest are not made by the
borrower and generally relies on the bank to administer and enforce the loan's
terms.

International Organization Obligations
International organization obligations include obligations of those
organizations designated or supported by U.S. or foreign government agencies to
promote economic reconstruction and development, international banking, and
related government agencies. Examples include the International Bank for
Reconstruction and Development (the World Bank), the European Coal and Steel
Community, the Asian Development Bank, and the InterAmerican Development Bank.

Custody Receipts
A Fund may acquire custody receipts in connection with securities issued or
guaranteed as to principal and interest by the U.S. government, its agencies,
authorities or instrumentalities. Such custody receipts evidence ownership of
future interest payments, principal payments or both on certain notes or bonds
issued by the U.S. government, its agencies, authorities or instrumentalities.
These custody receipts are known by various names, including "Treasury
Receipts," "Treasury Investors Growth Receipts" ("TIGRs"), and "Certificates of
Accrual on Treasury Securities" ("CATS"). For certain securities law purposes,
custody receipts are not considered U.S.
government securities.

Pass-Through Securities
The Funds may invest in mortgage pass-through securities such as Government
National Mortgage Association ("GNMA") certificates or Federal National Mortgage
Association ("FNMA") and other mortgage-backed obligations, or modified
pass-through securities such as collateralized mortgage obligations issued by
various financial institutions. In connection with these investments, early
repayment of investment principal arising from prepayments of principal on the
underlying mortgage loans due to the sale of the underlying property, the
refinancing of the loan, or foreclosure may expose the Fund to a lower rate of
return upon reinvestment of the principal. Prepayment rates vary widely and may
be affected by changes in market interest rates. In periods of falling interest
rates, the rate of prepayment tends to increase, thereby shortening the actual
average life of the mortgage-related security. Conversely, when interest rates
are rising, the rate of prepayment tends to decrease, thereby lengthening the
actual average life of the mortgage-related security. Accordingly, it is not
possible to accurately predict the average life of a particular pool of
pass-through securities. Reinvestment of prepayments may occur at higher or
lower rates than the original yield on the certificates. Therefore, the actual
maturity and realized yield on pass-through or modified pass-through
mortgage-related securities will vary based upon the prepayment experience of
the underlying pool of mortgages. For purposes of calculating the average life
of the assets of the relevant Fund, the maturity of each of these securities
will be the average life of such securities based on the most recent or
estimated annual prepayment rate.

TPF 223-398