B-1 STATEMENT OF ADDITIONAL INFORMATION Dated May 1 ...

4. Real Estate. A Portfolio may not purchase or sell real estate. (Note: This restriction does notprevent a Portfolio from investing in securities issued by companies, including real estateinvestment trusts, which invest in real estate or interests therein.)5. Commodities. A Portfolio may not purchase or sell physical commodities, unless acquired as aresult of ownership of securities or other instruments. (Note: This restriction does not prohibit aPortfolio from engaging in transactions involving foreign currency, futures contracts and options,forward contracts, swaps, caps, floors, collars, securities purchased on a forward commitment ordelayed delivery basis, or other derivative instruments, or other financial instruments that aresecured by physical commodities, in accordance with the 1940 Act and the rules and regulationsthereunder, or pursuant to any exemptive relief that may be granted by the SEC, so long as suchactivities do not cause it to violate its operating policy prohibiting the Portfolio from being deemeda commodity pool.).6. Senior Securities. A Portfolio may not issue securities senior to the presently authorized shares ofthe Portfolio except to the extent permitted by the 1940 Act and the rules and regulationsthereunder, or pursuant to any exemptive relief that may be granted by the SEC. (Note: Thisrestriction shall not be deemed to prohibit a Portfolio from engaging in the following activitiesprovided liquid assets are earmarked (or margin, collateral or escrow arrangements are establishedto cover the related obligations) (a) making any permitted borrowings, loans, mortgages or pledges;(b) entering into options, futures contracts, forward contracts, repurchase transactions or reverserepurchase transactions, (c) engaging in when issued and delayed delivery transactions, or (d)making short sales of securities to the extent permitted by the 1940 Act and the rules andregulations thereunder, or pursuant to any exemptive relief that may be granted by the SEC.)7. Borrowing. A Portfolio may not borrow money, except that a Portfolio may borrow money to theextent permitted by the 1940 Act and the rules and regulations thereunder, or to the extentpermitted by any exemptive relief that may be granted by the SEC. (Note: A Portfolio’sborrowings for leverage and investment are further limited by its operating policies discussedbelow.)8. Diversification. All of the Portfolios, except the Index 500 Stock Portfolio and Index 400 StockPortfolio, shall be diversified investment companies as defined under the 1940 Act. The Index 500Stock Portfolio and Index 400 Stock Portfolio shall be non-diversified investment companies asdefined under the 1940 Act. (Note: The term “non-diversified,” means that more than 25% of aPortfolio’s total assets may be invested in securities (excluding cash, government securities andsecurities of other investment companies) each of which represents more than 5% of suchPortfolio’s total assets or more than 10% of such securities’ outstanding voting securities.) AnyPortfolio that is non-diversified would still intend to comply with the applicable assetdiversification requirements under the Internal Revenue Code discussed in this SAI under “Taxes.”For purposes of applying Fundamental Investment Restriction number 1, above, the Fund willapply its concentration limitation in a manner that captures the Fund’s economic exposure to an industryby virtue of its investments in derivative securities (i.e., by looking through to the reference instrumentthat underlies the derivative securities.)Operating PoliciesThe investment restrictions of the Portfolios set forth in this section are operating policies whichmay be changed without shareholder approval.1. Securities of Single Issuer. With respect to 75% of its total assets, a Portfolio, other than the Index500 Stock Portfolio and the Index 400 Stock Portfolio, may not purchase securities of an issuer(other than the U.S. government, its agencies, instrumentalities or authorities or repurchaseB-6