Supplement dated February 3, 1998 to the
                 Prospectus for the Pilgrim America Elite Series
                             Dated November 1, 1997



Change to Certain Investment Policies of Pilgrim America MagnaCap Fund

     On February 2, 1998, the Board of Directors of Pilgrim  America  Investment
Funds, Inc. (the "Company")  approved changes to certain investment  policies of
the Pilgrim America MagnaCap Fund ("MagnaCap  Fund"),  which became effective on
February 2. The investment  objective of MagnaCap Fund continues to be growth of
capital,  with  dividend  income as a  secondary  consideration.  The changes in
investment  policies revise to some degree the criteria generally used to select
portfolio companies. The investment objective and policies of the MagnaCap Fund,
as described on page 8 of the Prospectus, are changed to read as follows:

         MagnaCap Fund. The Fund's objective is growth of capital, with dividend
         income as a secondary  consideration.  In selecting investments for the
         Fund, preservation of capital is also an important  consideration.  The
         Fund normally  seeks its  objectives  by investing  primarily in equity
         securities issued by companies that the Investment  Manager  determines
         are of high quality based upon the selection  criteria described below.
         The  equity  securities  in which the Fund may  invest  include  common
         stocks,  securities  convertible into common stocks, rights or warrants
         to subscribe for or purchase common stocks, repurchase agreements,  and
         foreign securities  (including  American  Depository  Receipts (ADRs)),
         although it is  anticipated  that the Fund normally will be invested as
         fully as  practicable  in  equity  securities  in  accordance  with its
         investment  policies.  Assets  of  the  Fund  not  invested  in  equity
         securities  may  be  invested  in  high  quality  debt  securities,  as
         described  in  "Investment  Techniques--Temporary  Defensive  and other
         Short-Term Positions." In a period that the Investment Manager believes
         presents  weakness in the stock market or in economic  conditions,  the
         Fund may establish a defensive  position to attempt to preserve capital
         and increase its investment in these instruments.

         MagnaCap  Fund is  managed  in  accordance  with  the  philosophy  that
         companies that can best meet the Fund's objectives have paid increasing
         dividends or have had the capability to pay rising dividends from their
         operations.  Normally,  stocks are acquired only if at least 65% of the
         Fund's  assets  are  invested  in  companies  that  meet the  following
         criteria:

         1.       Consistent  dividends.  A  company  must  have paid or had the
                  financial  capability from its operations to pay a dividend in
                  8 out of the last 10 years.

         2.       Substantial dividend increases.  A company must have increased
                  its  dividend  or  had  the  financial   capability  from  its
                  operations  to have  increased its dividend at least 100% over
                  the past 10 years.


         3.       Reinvested  earnings.  Dividend  payout  must be less  than 
                  65% of current earnings.

         4.       Strong  balance  sheet.  Long term debt should be no more than
                  25% of the company's total capitalization or a company's bonds
                  must be rated at least A- or A-3.

         5.       Attractive price. A company's current share price should be in
                  the lower half of the stock's  price/earnings  ratio range for
                  the past ten  years,  or the ratio of the  share  price to its
                  anticipated  future  earnings must be an  attractive  value in
                  relation to the average for its industry peer group or that of
                  the Standard & Poor's 500 Composite Stock Price Index.

         The  Investment  Manager may also  consider  other factors in selecting
         investments  for the Fund.  The  remainder of the Fund's  assets may be
         invested in equity securities that the Investment Manager believes have
         growth potential because they represent an attractive  value.  MagnaCap
         Fund may not invest more than 5% of its total assets in the  securities
         of companies which, including predecessors, have not had a record of at
         least three years of  continuous  operations,  and it may not invest in
         any restricted securities.

         No change has been made to the investment objectives or policies of the
Pilgrim  America  High Yield Fund or the Pilgrim  Government  Securities  Income
Fund.